People who follow me know I have a bee in my bonnet about the way UK GDP growth is reported, how there seems to be a lot of UK GDP that is more fluff than substance.
Personally I am of the opinion there is good and bad GDP in the sense that there are economic activities that make us all more prosperous as a nation in that they create wealth, whereas other activities are more about the distribution of that wealth, how it is recycled across the wider population.
I am an economic conservative in that I am rather sceptic of the boast that “We in the UK are now a services oriented economy and this is where our economic future lies: Exports of services across the Globe rather than trading goods and services with our EU neighbours.
In that sense I am on the side of my grandmother, who used to say no neighbours in a street ever got richer by doing each other’s washing or scratching each other’s back for that matter.
There is a lot of mutual back scratching involved in the UK’s fabled services sector.
Remember the pie chart below? I used it in quite a few of my posted answers. I just found it on the web and have no reason to doubt its provenance. What I tried to achieve with my annotations in red colour is to map the UK’s fabled ‘Services Exports’ on the various UK economic sectors.
I tried to draw attention to the fact that just 20% of the UK economy was responsible for 50% of its goods exports. You know the ones that bring in foreign revenue to pay for our imports, which we can’t get enough of because we are not a self sufficient island. What are these important sectors?
Manufacturing 10%
Construction 6%
Water and energy 3%
Quarrying and Mining 1%
Agriculture and fishing 1%
To me that adds up to just over 20%
So what about the UK’s fabled exports of ‘Services’?
Pro-Brexit Leave voting so called economists like Barnaby Lane call these services exports “Our UK sweet spot”. Why? because people like Barnaby like their audience to confuse ‘services’ with ‘financial services’, not 80% of the UK economy but rather a mere 7%! The seven percent they have a personal interest in.
When it comes to making money, Financial Services at 7% of GDP indeed punch above their weight, taking care of 25.1% of UK services exports!
People like Barnaby will tell you services exports are not tied to the laws of gravity in international trade, you can flog them across the entire globe and the world is our oyster if you believe that lot.
Their message is clear : EU is not that important for trade, we’ll make it up elsewhere without costing an arm and a leg.
Before the usual Brexiteers gang up on me with false arguments that my graph and numbers from 2019 are now out of date, I tried to find an updated version. Unfortunately the graph above was one of a kind, so I had to recreate my own using ONS data downloaded into an excel spreadsheet, which I can share.
Note that the 2022 services export percentages in the last two diagrams are in the legend descriptions, while in the first pie chart the are added as red annotations.
A few things to note four further years into Brexit:
The contribution of financial and insurance services towards services exports has actually shrank from 25.1% to 23.3%. Not what was promised by Barnaby’s ilk.
The large blob of difficult to attribute ‘other business services’ has shot through the roof from 21.3% to 38.1%. But what are they actually? They don’t seem to be the kind of services where distance and belonging to the single market plays no role like City of London high finance. It semms to me you need actual work permits to deliver these kind of services, <freedom of Movement like we had in EU!
I can think of….
– Research and development services – Management consultancy services – Advertising and market research services – Legal and accounting services – Architectural, engineering, and other technical services – Wholesale and retail trade consultancy services – Transportation and storage consultancy services – Business services incidental to other services
The following graph is a bar chart of the same data, which actually works better visually
What’s again striking is that such large sectors of the UK economie don’t export at all or very little, but Brexiteers maintain these are the sectors of our economy we’re all going to live off in our retirement, level up the industrial wastelands ‘up North’ while at the same time keep our pound strong and the UK’s soft power out of proportion.
Have you noticed that when the BBC does a news item on ‘The economy’, they always show people going in and out of pubs, a ridiculously small sector of the UK economy that doesnt bring in any foreign revenue other than serving the odd tourist a beer and a meal maybe.
But what was Rishi Sunak’s flagship policy to get the UK economy going after lockdown?
This blog has been neglected because I spend all my time on the Social Media site Quora answering questions on Brexit.
I made the mistake also answering some questions about cryptocurrencies like Bitcoin. As a former engineering manager of public directories and PKI, I actually know about this stuff, or should do.
Below follow a collection of random answers about the topic of Bitcoins, Blockchain, Non-Fungible Tokens, you name it. I just wanted these answers accessible.
Crypto answers:
The following was an answer to the question if cryptocurrencies and Blockchain will become increasingly important in our daily lives and for businesses.
The answer is it (crypto and blockchain) hasn’t and it never will.
This very questionable question is just repeated over and over again to give this crypto scam an air of future respectability and credibility by the scammers who just want to offload their crypto currencies and NFTs on you.
What is Blockchain?
Blockchain is an encrypted automated ledger that in theory cannot be falsified. It can prove you own a piece of art (NFT) or a Bitcoin.
It also can provide without a shadow of a doubt you are gullible and when some scammer pulled you in and sold you something in essence worthless.
Question: Should Blockchains be regulated?
A blockchain isn’t something anyone can regulate.
The thing to remember is that the best known application that uses it are cryptocurrencies.
Cryptocurrencies are a highly speculative investment and it’s the markets on which they are traded that governments seek to regulate.
I think they’d be better off spending the money on a public information programme warning folk it’s all a scam.
Remember no cryptocurrency has any intrinsic value. Only speculators and scammers attribute any value to it.
In the Middle Ages Nutmeg once played this role as scammers made folk believe it was a cure for pestilence. Later the Dutch had their tulip mania. Today folk imagine pictures of monkeys in blockchains have any value.
What role do High Tech Venture Capital companies play?
The dodgy venture capitalists that finance these scam companies usually get an indecent amount of free coins for their stake.
What they then do is pay celebrities to say on social media that they bought these things when they in turn are given them for free rather than that they spend cash on them.
Paris Hilton and Jimmy Fallon aren’t the only A-list celebrities showing off their strange little Bored Apes – but what’s in it for them?
That’s when their gullible followers all pile in and drive the price up.
Scam completed.
Terraform Labs co-founder Do Kwon / Courtesy of Kwon’s LinkedIn page
Disgraced FTX founder Sam Bankman-Fried When FTX collapsed Bitcoin lost 82% of its value overnight.
Because crypto transactions need constant blockchain calculations in the cloud, recent estimates suggest that the Bitcoin network consumes more energy each year than the entire population of Argentina
Based on the number of Bitcoin transactions that took place over a 12 month period, a think tank estimated that the total energy usage to be roughly 123 Terawatt Hours (TWh) or 123 billion kWh. This means that Bitcoin alone uses more energy than 185 countries and is comparable to the annual energy consumption of Norway.[1]
This is of course an environmental scandal beyond proportions, for an activity that brings no value to the real economy and is considered by people not after a quick buck as a giant Ponzi scheme.[2]
Bitcoin is not currency. Bitcoin is a highly speculative investment. Most people with any brain go further than that and call it a Ponzi scheme.
There is a parallel virtual world out there in cyberspace, where young men sit in their mum’s basement alternating watching porn with gambling in in virtual casinos and tell each other you can get rich from this stuff without getting off your comfy chair , but really it is all a big con and I pity the simple minds that get sucked into this.
I get called a dinosaur sometimes for saying this, but I am in good company with people like Warren Buffett, arguably the most successful investor in the world.
Just open up YouTube and type what I did in the search bar. Buffett on Crypto or ‘Crypto scam’
If you offered me all the Bitcoin in the world for $25 I wouldn’t take it days the ‘Sage of Omaha’
Bitcoins are a virtual commodity and to trade anything you need a market, a virtual make believe market.
Where are bitcoins stored
The Bitcoins itself are stored in a virtual wallet. If your wallet is from a reliable source it’s fairly safe. The problem is there are so many fake, unsafe or hacked wallets on offer on the internet. How does a beginner investor know?
The problems with trading a virtual commodity usually occur when you try to cash in your virtual earnings in hard cash.
Sure, some players will tell you they became rich, but when a big group or large investor tries to take out their earnings the whole Ponzi scheme usually collapses.
Where to buy bitcoins?
Buy Bitcoins from family, good friends or neighbours and tell them never to buy cryptocurrency again.
This way you do something amazing.
Instead of some distant anonymous scammer stealing your money, you are giving your close ones a chance to get out of this Ponzi scheme.
Crypto casinos
I think it’s OK to gamble with Monopoly money. The danger is that people get sucked into the shady world of cryptocurrency cons via a back door.
It’s a bit like a drug dealer wanting a cannabis customer to switch to a more addictive drug and giving the first two injections of heroine for free.
By the way, with the collapse of the two only banks that were prepared to launder the money from these criminal syndicates, I hope that crypto mania will soon go the way of Tulip mania .
This Twitter thread by the way, is the scariest thing you will read this year if you are heavily invested in this shit.
I realize some people may be wondering WTF just happened so here's the unannotated short version…
The story begins when $SI, a small regional bank, decided to go full crypto.
— ⚯ M Cryptadamus ⚯ | @cryptadamist@universeodon.com (@Cryptadamist) March 4, 2023
Why did #SilvergateBank / $SI just implode?
What is Crypto?
Crypto is either short for cryptography or cryptocurrency.
I have nothing against cryptography, it’s been used since ancient times to keep information secure. I have a degree in Cryptography and was an engineering manager at BT and Verizon in Public Key Infrastructures(PKI). Cybertrust, owned by Verizon, the largest Telecom in the world, well they were my last employers. I advised governments around the world about digital forms if identity.
PKI is what keeps our communications on the web secure. You know when a padlock appears on the bottom of a web page and a web address starts with https:/? Well that is achieved with crypto.
More recently people have been starting to push these cryptocurrencies and blockchain technology as Web 3.0. It is quite possible that early adopters were idealists dreaming of creating a decentralised global finance system and I went along with it it the early days. Heck, I probably have a few twenty year old computers in my attic with early mined bitcoins worth a few Bob, just as I used my screensaver to look for extraterrestrial communications with the SETI programme.
Quite quickly I was turned off by the whole Bitcoin thing, as the only ones using and profiting from it were drug cartels for their international payments.
Today there are more than 21,000 different crypto coins in circulation. Some rely on the Etherum blockchain. Others are just records on a Microsoft Access data base and are pure scams not even bothered about encryption.
Warren Buffett, arguably the most respected billionaire investor in the world famously said: “If you offered me all the bitcoins in the world for $25, I’d decline the offer.
I’m with Warren Buffett, Steven Diehl and a growing range of experts: Crypto today is just a giant Ponzi scheme😒
But you do know more than you think about cryptocurrency:
* In the end they are just a hash of bits and bytes on a computer with no intrinsic value.
* It’s not something you can spend in shops
* The major exchanges where you can trade this stuff collapse one after another and the owners are wanted by the law for money laundering
* The only two banks (Silvergate and Signature Bank) where you could exchange crypto into real dollars went bust.
Is this something you would consider investing in?
Really?
Why is it that most people talking about Bitcoin in this platform are scammers?
My theory is that even the people that got into Cryptocurrency with the best intentions, by the time they are heavily invested in it they have to join the scammers.
The nature of a Ponzi scheme is that you can only get out by finding a few other suckers willing to pay even more for a worthless asset than you had.
A good example is Crypto Casey, who produced some training videos on Bitcoin and Blockchain which are well worth listening to. She’s pretty, amiable and has a flawless presentation.
But at the end of her presentation the usual click here to buy links.
Lately she has become all religious and extols the virtue of believing in personal wealth growth and that it’s all a mindset.
This is typical for a movement that has become almost a cult.
Lately Crypto Casey has gone all religious
What is Bitcoin mining?
I find ‘mining’ a misleading word for the quest for digital assets. It’s an insult to every man, woman or Tolkien dwarf that ever wielded a real pick axe.
Dwarf miner by Magali Millene
It is true that every bitcoin transactions requires others to verify that transaction on the bitcoin network.
Even tough that work is done by non human computer processing rather than actual accountants, somebody still has to pay for the electricity and bandwidth this consumes.
It is said that Bitcoin arbitration, a better word than mining, now consumes more power than a small country.
And all this for an asset that is essentially worthless.
It is clear that when people start realising this whole thing is essentially a Ponzi scheme, they’ll just turn their computers off.
In China they already made the practice illegal and the government has destroyed whole data centres simply dedicated to mining bitcoin.
What is the benefit of the determination of other currency in terms of dollar for USA?
It’s quite simple really. After all the US economy is the largest in the world.
It would be better though if all currencies were expressed in terms of a weighted basket of all the 150 odd currencies that exist in the world today.
I am sure such a concept already exists but is just not widely known. Can someone enlighten us all?
Remember that before the Euro came into existence the EU member states came together and created something similar called the Europe Exchange Rate Mechanism (ERM).
Part of that was a virtual currency called the ECU, which really was a representation of the weighted average of all the pre-Euro European currencies like D-Mark, Guilders, Kroner, Francs, Lira, Drachma and Pesetas.
Then one day, after this concept proved to be stable and working, they simply renamed this virtual coin Euro and started printing and distributing it at the pre-agreed ECU ERM rate.
This new currency is now the second most popular reserve currency in the world and has the highest circulation of any!
There is no reason why the United Nations (UN) couldn’t do a similar thing and then launch it to replace all these fake crypto currency scams we see in today’s world.
I propose we call this new currency ‘Universal Credit Coin’ or UCC for short.
We could put into it some of the good decentralised finance ideas behind bitcoin, while making all other crypto currencies counterfeit copies punishable by life imprisonment.
What do you guys think?
Blockchain revolutionizes the retail market through capital efficiency, someone posted on Quora.
Apart from capital efficiency being a made up bullshit term, Blockchain doesn’t revolutionise anything because there has been no adoption apart from 21,000 crypto currencies being launched on the Ethereum blockchain.
The only serious IT project ever undertaken to use this stuff was for the Australian Stock exchange in Melbourne and they gave it up after over a year of trying to make this work.
While tech crypto purists continue to tout the transformative potential of blockchain technology, the Web3 architecture that also supports the cryptocurrency ecosystem, leading enterprise organizations are quietly shuttering pilot projects and revising their own expectations around the technology’s supposedly revolutionary applications.
Two typical French fishermen (not the real Jean-Claude and Jean)
This is Jean-Claude and Jean-François. They live in Saint-Servan-sûr-mer on the Gulf of St. Malo, home also, for historic reasons, of the British Channel Islands.
A typical French sea town
This is where their boat is mored. The kind of town, tourists like to explore on their holidays.
Map of the disputed fisheries area
Barnaby Lane, along with just about every British newsreader, BBC Politics show and tin pot politician, wants you to think they are breaking the law by fishing here. I mean, where else are they are going to fish, if they want to be home for tea time?
According to Lord Frost, they must prove they have plied these waters using electronic logs from geo-navigation satellite systems and military grade radar transponders. Not that this requirement was ever mentioned in the TCA he signed.
Never mind they are only fishing using the same boat and techniques used by their fathers and grandparents. Barney goes as far as claiming, yet they must be one of two things: Fraudsters or without a doubt engaged in illegal fishing.
The harassment and vilification of Jean-Claude and Jean-François forms part of the Brexit promise to “take control of our borders and our fisheries” after leaving the EU.
Boats that Barnaby Lane, along with just about every British newsreader and political commentator have no problem with is this floating industrial Hover.
A big industrial trawler
Never mind that ….
that a this single Dutch trawler, the Cornelis Vrolijk, had the right to catch 23% of England’s entire fishing quota. To put this into perspective the entire small inshore fishing fleet for the whole of England is given 4% of the quota.
Next time you jump on the Brexiteer bandwagon and start accusing the perfidious French of overfishing UK waters, spare a thought for Jean-Claude and Jean-François from Saint-Servan-sûr-Mer, just like the Jersey and Guernsey skippers did, who already appealed on their behalf , providing the authorities with written testimonials that they have witnessed their boat fishing for many years prior to Brexit.
These Channel Island fishermen would like to retain the right to land their own catch in St.-Malo.
None of these hard working honest folk want to be used as pawns in a political chess game.
Don’t be like Barnaby Lane
PS: Almost as soon as I wrote this post, the news via Twitter reached me that the disputed licences were already granted.
This still leaves me with a sour taste in my mouth:
Why did all the UK news bulletins and media make such a fuss over this?
Do you think Barnaby Lane will apoligise to the French fishermen? Afterall he accused them of Fraud and illegal fishing
Why is it that even fervent pro Remain British feel the need to enthusiastically nod their heads in agreement when yet again some pseudo economist mansplains why Greece, Spain and Italy never should have joined the Eurozone, why you can’t have a currency union without fiscal union and the Euro only benefits Germany?
I don’t know why such answers are so often upvoted by people who should know better.
Sure some of those answers even start with impressive eye opening statistics, but then soon are followed by conclusions where the flag doesn’t begin to cover the cargo.
I am so fed up with this whole ‘must have fiscal union’ thing for the Euro to work and South European countries must have their own currency to devaluate themselves out of trouble time and time again because they can only survive on us rich north European tourists tipping the waiters over there.
These statements are so often repeated in certain echo chamber bubbles, but seldom explore what the actual relationship is.
On top of that throw in a Nobel winner like Stiglitz, who’se Prize winning work had nothing to do with the Eurozone and it must be true.
I am with another economist on this one who quite easily debunks this nonsense.
Today I am returning to my house in the French countryside after two Saturdays of anti Brexit protests in London, a radio interview on BBC Suffolk and many hours glued to the TV screen watching the antics in UK Parliament.
On Saturday a huge cry of Victory rose over Parliament Square when the Oliver Letwin amendment passed in the House of Commons.
This kicked Boris Johnson’s Brexit plans in the long grass.
Then on Wednesday he seemed to get his first victory in Parliament, when MPs allowed a Second Reading of his EU Withdrawal Bill. Had my trip been in vain?
Of course many MPs have their own individual reasons an fears, but it is Important to understand that the first vote last night, with the majority of 30, wasn’t a vote to support Johnson’s deal. It was a vote to create the opportunity to consider lots of alternative Brexit deals and a chance to append a second referendum.
The second vote was an emphatic defeat for Boris Johnson trying to push through this deal without scrutiny.
I am going home mission accomplished and the memory of holding my latest grandchild in my arms and the cuddles of the five others.
To hear the radio interview
Rewind to 7:40 and you’ll hear me being interviewed
There are some terribly naive Brexit voters, that think to increase trade, all you have to do is have half wits like Liam Fox and Liz Truss fly first class around the world signing bits of paper promising ‘Free Trade’.
They never explain what’s wrong with the sixty odd trade agreement we have with the world through our EU membership. What they mainly seem to achieve is to ‘roll over’ those deals, in other words continue them on the same terms as we had in EU. Is that what UK suffers this Brexit shambles for?
Anyway, before a country can benefit from exports, it has to have surplus production or at least the capacity to produce more than for its own internal needs and market. Let’s look at an example.
Britain is not self sufficient in food. It imports roughly 40% of the food it consumes in a year.
So increasing food exports seems counter productive, to say the least.
Yet it can be the case Britain has a surplus of a particular food while being short on another.
A good example is Welsh lamb. There we have a situation that nearly 60% is exported to EU. Apparently Brits are not fond of the taste of lamb. They prefer chicken nuggets and hamburgers.
But what do these economic dimwit voters say? We must import more lamb from our Commonwealth friends in New Zealand after Brexit. This would kill off every marginal Welsh hill farmer for good!
Same will apply to UK dairy industry. We cannot compete with the mega farms in New Zealand, but we can with French farmers in Normandy just across the channels. As long as we levy a bit of tax on New Zealand Milk. A small price to pay to keep our countryside folk in a job?
Meanwhile industrial producers like JCB and Rolls Royce Aerospace can export a success much as they like globally as well as to EU. The EU does not put tariffs on exports.
You really have to ask yourself: What planet are these Leave politicians on that keep repeating this mantra “UK must be able to strike its own trade deals”?
I have been asked many times on Quora and Twitter what I think of this last minute deal that has been struck between UK and EU negotiators just before we reach another deadline set for October 31st and UK would crash out of the EU without a deal in a disorderly fashion.
First of all this is nothing like the hard fought breakthrough that the Johnson administration would like you to believe it is. This reheated deal was already offered to Theresa May more than two years ago.
The main difference is that the border between EU and UK has been moved to the middle of the Irish sea for convenience. Items removed from the Political Declaration also pave the way for erosion of workers rights, environmental standards and consumer protection.
Boris’ famous deal will fall at the first hurdle and here’s why:
It is my understanding that EU, UK and Republic of Ireland are all co-signatories to the Good Friday Agreement (GFA) and they want to avoid at all costs breaking international law by imperilling that Agreement. Creating a hard border on the island of Ireland would require ‘security installations’ which are prohibited in the GFA. Now they have agreed that to all intents and purposes Northern Ireland stays in the regularly sphere of the EU, there is no need for that border. What checking that still needs to be done would take place in commercial ports and those customs posts presumably would not be considered ‘security installations’ and be considered worthy of attacks by IRA terrorists.
Mind you the Unionists have already said they’ll vote against this deal anyway, so the deal will not pass parliamentary scrutiny and fall at the first hurdle. Boris Just does not have the votes. He may try to suggest that he had a deal and that therefore no-deal comes up trump again. Legal minds much stronger than mine assure me that this is an illusion.
That means that in two days, we’ll be back to asking for an extension.
I always feel like banging my head against a brick wall, whenever Leave politicians utter the words ” we must have the ability to strike our own trade deals”.
Never in the last 3 years have I heard a single Leaver explain what’s actually wrong with the trade deals that the EU strikes on our behalf.
The only half valid point sometimes made, is that EU trade deals tend to focus on goodsf rather than services. But this is true for nearly all global trade deals. WTO trade talks in Doha on liberalising Services trade globally have been disappointing also. Countries just seem more protective when it comes to their services sector.
When I point out, the UK has the second largest trade deficit in the world, that doesn’t mean that I disrespect some of the world class industries the UK boasts. Rolls Royce Aerospace, Jaguar Landrover, JCB (I am sure I’ll think of others later) are world class and have no problem exporting globally while in the EU. The EU does not restrict them at all. That means leaving EU won’t liberate them.
The second thing that greatly annoys me of Leavers, is when they start reminiscing about their beloved Commonwealth.
Boris Johnson did it again during his conference speech. « We will trade more with the Commonwealth where billions of consumers await us. » he said to laud applause.
Doesn’t Mr. Johnson realise, that the average earnings of Commonwealth citizens are a tenth of the well heeled customers we serve throughout Europe?
If we take away the four richest Commonwealth members UK, Canada, Australia and New Zealand, Per Capita GDP drops below $900 per annum. These are hardly the same consumers our UK industry and service sector mainly caters for!
In Paris TGV terminals you can find smartly dressed commuters stocking up on Marks & Spencer’s ready meals retailing at €6.50 or two for a tenner.
Just in time supply lines powered by automated tellers can ensure their stocks are replenished from UK overnight, as most capitals in EU are only a eight hour truck drive away. When there’s no hold up at the border that is.
Just imagine how that would work for an equivalent M&S store in Delhi or Mumbay?
In other words, this let’s go global story is a Fata Morgana. Either we are already supplying these markets or the market is just not there for UK products. Too far and too dear for their purse.
I am going to answer this trade war question in a very roundabout way. I feel passionate about this so please bear with me.
Trade wars happen because people have forgotten the role of money and why we use it.
Money is a temporary token for value. A country has oil to trade and needs wheat. The wheat takes another three months to grow and ripen so they take dollars and buy US wheat three month later. The IOU, which really is what money is, has been honoured and trade balance has been restored.
Nowadays people are so in awe of money, they think it has intrinsic value. So when they have paid for their shiny German car or latest Chinese smartphone, they think they’re fully settled up. But in fact they’ve made German and Chinese factory workers sweat and labour for worthless bits of paper with the Queen’s or Benjamin Franklin’s Head on them. This is worse than fobbing natives off with coloured beads of glass for gold and spices in the colonial days.
Of course all these IOUs pile up in the vaults of central banks abroad and eventually they will wing their way back to the countries who’s citizens had forgotten all about them.
Now they are used to buy their prime real estate and most efficient factories and utilities.
People feel like they are loosing a massive monopoly game and don’t like it.
When their President or a loudmouth like Farage says he’ll do something about it, they welcome him as a saviour.
But neither have an answer, because they also are in love with bits of paper. They don’t say, maybe I should have a better industrial strategy and create things of value we can trade so we can get back all our IOUs and maybe invest them better ourselves.
Before you reply, I am just a neo-mercantilist, I do know the value of a knowledge based economy and services.
The problem with the uneducated lazy masses that vote for Trump and follow Farage is that they don’t. They are not spoilt, they are ruined. They’ll never create anything of value. They think consuming creates value.
So all they want to do is blame foreigners more hardworking and better educated and they’ll cheer any kind of war. Thank god it’s still only a pseudo trade war.
Proudly Looking at the biggest container ship at Felixstowe not many Leave voting types realise that most of the containers being loaded are in fact empty returns.
Having the largest trade deficit bar America, does have this effect.
Lately I have become more active on the Social Media siteQuora. Some of my answers are like mini blogs, so I’ll star sharing the best of them here on IdentitySpace.
After a no-deal Brexit Boris Johnson will try to pump up the UK economy with more hot air.
The British like to say they are special and have a ‘Services’ based economy, but what does that actually mean?
With a Masters in Business Administration, of course I have a good idea what goes on in those shiny skyscrapers in the City of London and how that brings in revenue from all over the world.
As an avid TV and movie watcher, I can also see how the BBC and other UK production companies produce brilliant content, music, film, drama, games and documentaries and how that copyrighted content is syndicated around the world and also brings in foreign revenues, not to be sneered at.
Where it all gets a bit hazy and incestuous is all these businesses where basically one UK citizen scratches another UK citizen’s back and they invoice each other. Again this total gets added to their GDP and makes the UK look big in nominal terms.
But how ‘real’ is this part of the UK’s GDP?
When I use a ‘Just Eat’ app on my iPhone to order a takeaway, that also adds to the ‘Services’ part of the UK economy and the Small and Medium sized Enterprises (SME) Sector is growing fast in numbers, but it doesn’t earn much foreign currency for UK plc. like the media industry, which is truly global. The ingredients of a typical UK pizza are probably mostly imported, so actually this activity worsens the UK trade deficit.
What we see with people like Boris Johnson and many Brexit voters is that they don’t distinguish between core economic activities that create wealth, like car manufacturing and farming, and secondary services sector activities that just multiply by recycling and distributing wealth other industries generate.
The Conservatives have no Industrial or trade policy. All they care about is their chums in the City of London.
With Brexit hitting the primary wealth generating industries of the UK first, there will be a huge knock-on effect for the secondary services industry in the UK. It will tumble like a house of cards, when British people tighten their belt in the Dunkirk spirit and stop spending.
All those Deliveroo and Uber drivers out of work! All the hair and nail salons. All the unaffordable childcare facilities closed.
To put it in simple terms, when the car plant shuts down, the hamburger van at the factory gate closes with it.
Because Johnson says “fuck industry” he will also deal a deadly blow to the Services sector, which now represents 80% of the UK’s GDP.
While in the EU, Britain was well placed to exploit their advantage in ‘Services’ with the advent of the Songle Market for digital services. Sadly with Brexit, that’s another sector where they’ll lose out.
There is no amount of hot air that can stop that. Brexit UK is heading for a catastrophic disaster. Most folk with half a brain can see this coming from miles away.
But some will make money out of this chaos.
Jacob Rees Mogg’s father even wrote a book about it!
IdentitySpace 