British parliament denies people a referendum on leaving the EU

[Marla_Singer]

IMHO its best have heterogeneous economy for stability. But I dont see how Europe shall be competitive in industry with Chinese in next years...or agriculture with pretty much anyone...farm subsidies taking majority of EU budget are sign of it.

That's an irrelevant argument considering that the EU budget only represent 1% of the EU GDP. That means the CAP, which has largely been reformed, only represent 0.5% of the EU GDP. That's nothing.

And you're talking as if the EU was the only one to have an agricultural policy, but all world powers defend their agricultural interests, and the US more than anyone else.

The CAP has largely been reformed in the last decade. And despite this, I hardly see where has been the so-called positive price effect on what I buy in my grocery store. Thinking you would pay manufactured food necessarily cheaper if it comes from China than from Spain is dellusional. Wheat only represents 10% of the price of bread.

On the other hand, being dependent on Spanish supply is very different from being dependent on Chinese supply at a strategic level. It's really a matter of European sovereignty here.

And just to make things clear before I get accused of being the evil pro-CAP froggy, I'm from Paris. I couldn't care less of French farmers. And if Czech farmers are able to produce cheaper than French farmers, that's totally fine to me. As long as it comes from the EU, we don't increase our food dependency on the rest of the world. Do I need to remind you how Russia blackmailed Europe on gas supply? Do you really want the BRICS to do the same on us with food supply tomorrow?

 

[GoodSarmatian]

Farm subsidies have to go. They don't only cost us money, they also undermine our development aid. I don't mind being dependand on others for food. Should they decide not to sell, there's enough on the world market for nations as rich as the EU members and we can build up our own agriculture again.
Industry is another matter. Deindustrialisation would be a catasrophe. Youn can have a financial sector, but a country has to make stuff and sell it in order to be successful. You can only conjure so much money out of thin air. You can be competetive by making innovative high-quality products and leave the cheap junk to others.

 

[GoodSarmatian]

On the other hand, being dependent on Spanish supply is very different from being dependent on Chinese supply at a strategic level. It's really a matter of European sovereignty here.

There's a big difference between food and resources like oil and gas. Every country produces food. There are no monopolies, no oligopolies and no cartels. You'll never be dependend on China, you can always buy vegetables from Africa or America.

 

[Winner]

Farm subsidies have to go. They don't only cost us money, they also undermine our development aid. I don't mind being dependand on others for food. Should they decide not to sell, there's enough on the world market for nations as rich as the EU members and we can build up our own agriculture again.
Industry is another matter. Deindustrialisation would be a catasrophe. Youn can have a financial sector, but a country has to make stuff and sell it in order to be successful. You can only conjure so much money out of thin air. You can be competetive by making innovative high-quality products and leave the cheap junk to others.

It's funny since if you told the Japanese they're supposed to give up on industry and live from banking and other services, they'd probably cut you in five with their katanas No developed Asian country ignores industry as an essential part of their economic "mix". Why on Earth should Europe or the US? To commit a mass suicide and hand over the keys to the world to Asia? No, thanks.

About farm subsidies - only to maintain basic food independence in critical commodities. Which I don't think is even necessary, because the problem in Europe is vast overproduction of agricultural goods, which continues to harm our environment. In agriculture, we should focus on stuff which is profitable without subsidies, and there is plenty of it.

(I'd pay farmers to re-forest their lands. I think roughly a third of all farmed land in the EU could be returned to a semi-natural state without our food independence being compromised. This would be immensely beneficial, not to mention green and a great anti-carbon emissions strategy).

 

[Leoreth]

That agricultural subsidies preserve our ability to produce our own food is a myth anyway. At least it's severely overblown, as seen by the overproduction we have, and structurally favors only large corporations that are likely able to pull through on their own.

Oh, and it's a bad allocation of investments since it mainly benefits the richest EU countries.

At least the recent reforms in that area are pointing into the right direction.

 

[REDY]

It's funny since if you told the Japanese they're supposed to give up on industry and live from banking and other services, they'd probably cut you in five with their katanas No developed Asian country ignores industry as an essential part of their economic "mix". Why on Earth should Europe or the US? To commit a mass suicide and hand over the keys to the world to Asia? No, thanks.

Its not about decision.

 

[Mise]

Wheat only represents 10% of the price of bread.

I don't understand how you can know this fact and still believe that manufacturing, and not services, is where all the money lies. Why don't you understand that this applies not just to bread but to pretty much every single thing that we buy? The raw materials account for a tiny fraction of the total unit price of the item. The manufacturing accounts for a larger, but still small, percent of the item's total value. The vast majority of the value of the item comes from R&D, patents, designs, legal and regulatory compliance, marketing, and retailing. This graphic shows pretty clearly how the components of an iPhone 4 make up not even a third of the total cost of the phone:


(source: http://www.economist.com/blogs/dailychart/2011/08/apple-and-samsungs-symbiotic-relationship )

Apple doesn't manufacture the iPhone. It gets cheap Chinese and Korean factories to manufacture the components. The overwhelming majority of the value of the iPhone -- and the profit that comes from it -- is not from manufacturing the product, but from designing, marketing and retailing it. That's not manufacturing, that's servicing.

Nokia, Samsung, LG -- all these firms are primarily manufacturing outfits, quintessential "national champions" of Finland and Korea. Apple, by comparison, is primarily a design company. Surely a manufacturing company should be raking in the profits, right? I mean, they make the stuff -- Apple just design it and sell it. Surely manufacturing is where all the money is to be made? Surely manufacturing is what we should be doing more of, here in Europe?


(source: http://www.economist.com/blogs/dailychart/2011/02/mobile-phone_market )

Oh... Hmm... Looks like Apple managed to get 50% of the profits from 5% of the sales.

But wait! Apple probably don't employ as many people as Nokia or Samsung. Yes, that's true, but those "extra" jobs are low quality. They're low paid and easily lost to robots or BRICs. The high quality jobs are the same -- the R&D, the marketers, the retailers -- just that Apple employs more of those, and pays them better, than a company that sees itself as a manufacturer ever could. Those are the jobs that a well educated, well connected Europe should excel at. So why this focus on "manufacturing"? Why this 19th century focus on cars and machines? It's stupid and wrong. If you want to have your workforce competing for 1/3rd of the profit, then fine. But I'll happily follow companies like Apple into the 21st century, and chase the lion's share profits with high quality jobs.


Oh, and I may as well say Marla, listening to you talk about food as a "strategic resource" is hilarious

 

[Leoreth]

Well, I think you can count Apple, Nokia, Samsung etc. either as manufacturing or service sector corporations, depending on how you look at it. You're right that it's the innovation that counts, and the tangibly produced benefit (so let's disregard the marketing crap).

The point is, Britain doesn't have this kind of innovative corporations.

 

[Mise]

No, the point is, we do have those kinds of innovative companies, you just don't realise it. Every country in Western Europe does, but 99% of people don't realise it, because they aren't directly affected by the products and services that company sells. You see Renault cars all the time, but you really think that this is all France produces? Cars, cheese and wine? I use Apple as an example, because it's easy to recognise them for their products. But the vast majority of value-adding services don't get recognised. All people see is the banks, they don't see the rest of it. You think 85% of our GDP and 75% of our jobs can come from services if all we had were banks?!

 

[GinandTonic]

The mobile phone example is telling. ARM follows exactly the model Miese describes and has a global 95% share of the smartphone processor market. It doesnt matter if you buy an iPhone or from one of the national champions, you are using an ARM chip. It doesnt say ARM on the box, it's not built in Cambridge but the high end jobs and the money are there.

35% of the global digital TV market too. Not that it those boxes are badged ARM either.

 

[onedreamer]

I disagree Benefactor, I think the EU is an emotional issue for some people (both sides).

People are politically emotional as long as they are complaining. When they actually have to TAKE A DECISION, they prefer the Status Quo, just like Benefactor said.

 

[Marla_Singer]

Apple doesn't manufacture the iPhone. It gets cheap Chinese and Korean factories to manufacture the components. The overwhelming majority of the value of the iPhone -- and the profit that comes from it -- is not from manufacturing the product, but from designing, marketing and retailing it. That's not manufacturing, that's servicing.

Are you really that sure Apple benefits more to the US than it does to China?

Growth figures tend to prove the opposite. Of course Apple stocks skyrocketed, but this hasn't any single effect on the US GDP. On the other side, China's economy is so strong that it became now the creditor of the whole world.

In the end of the day, it's good to have companies growing huge profits, but it doesn't make an economy. All the innovation in the internet sector has been developed in California, a state of 30 million people which would have already defaulted if the Federal government wasn't there to put it under perfusion.

A solid economy needs solid and growing households at a nationwide level. Heavily indebted households as American's don't make a solid economy. I'm sorry.

As for the fact you find hilarious that commodities are strategic in the global economy, well what can I say... just play Civilization again.

 

[Leoreth]

No, the point is, we do have those kinds of innovative companies, you just don't realise it. Every country in Western Europe does, but 99% of people don't realise it, because they aren't directly affected by the products and services that company sells. You see Renault cars all the time, but you really think that this is all France produces? Cars, cheese and wine? I use Apple as an example, because it's easy to recognise them for their products. But the vast majority of value-adding services don't get recognised. All people see is the banks, they don't see the rest of it. You think 85% of our GDP and 75% of our jobs can come from services if all we had were banks?!

The numbers I've heard recently are that 60% of the British GDP are created by the City of London. By a correspondent of the Economist, no less.

If that's wrong, please educated me. Also, it would help the discourse if you could tone down your sarcastic rhetorical questions.

Edit: Furthermore, if the British economy isn't as dependent on the financial sector as everyone thinks, why does the government protect its privileges so stubbornly?

 

[Peck of Arabia]

Does it have to be a straight choice, this forbidden referendum, between wholly embracing Europe, submerging ourselves in European federalism, and cutting ties (up to and including diplomatic?) with the entire European continent widening the English channel and forbidding trade, with said European continent, so ferociously Tokugawa would be proud?

Personally I see no reason amicable trading relations can't be maintained, you know, like what the original 1975 European referendum was about; remaining in the Common Market, the European Economic Community. How do the Swiss manage trade with the EU? They seem to do alright

 

[luiz]

And you're talking as if the EU was the only one to have an agricultural policy, but all world powers defend their agricultural interests, and the US more than anyone else.

The US spends 20 billion dollars per year on agricultural subsidies, the EU spends 59 billin euros (over 80 billion dollars). So you guys are outspending the Americans on a 4 to 1 basis. That's not a pretty picture.

 

[Winner]

Our agricultural phallic symbol is bigger than their agricultural phallic symbol, yay!

 

[Benefactor]

Does it have to be a straight choice, this forbidden referendum, between wholly embracing Europe, submerging ourselves in European federalism, and cutting ties (up to and including diplomatic?) with the entire European continent widening the English channel and forbidding trade, with said European continent, so ferociously Tokugawa would be proud?

Personally I see no reason amicable trading relations can't be maintained, you know, like what the original 1975 European referendum was about; remaining in the Common Market, the European Economic Community. How do the Swiss manage trade with the EU? They seem to do alright

Of course we could trade with the EU, we would just sign up to the EEA or EFTA anyway. All the regulation, none of the say. I believe the term 'Fax Democracy' has been used in the past to describe the situation, new laws come through the fax direct from the EU and straight into British law.

 

[Takhisis]

The US spends 20 billion dollars per year on agricultural subsidies, the EU spends 59 billin euros (over 80 billion dollars). So you guys are outspending the Americans on a 4 to 1 basis. That's not a pretty picture.

But how large is the agricultural production of each?

 

[Quackers]

The numbers I've heard recently are that 60% of the British GDP are created by the City of London. By a correspondent of the Economist, no less.

If that's wrong, please educated me. Also, it would help the discourse if you could tone down your sarcastic rhetorical questions.

Edit: Furthermore, if the British economy isn't as dependent on the financial sector as everyone thinks, why does the government protect its privileges so stubbornly?

Where do you get that figure for 60%? It would be interesting to see the break down, sector by sector of British GDP.

 

[luiz]

But how large is the agricultural production of each?

The EU's agricultural output is larger, but it is not even twice as large (it is of 293 billion dollars vs 161 in the US). So yeah, the EU's subsidies still look disproportional.