VGChartz Europeans, I need your help.

[Kongfucius]

Kasz216 said:

Kongfucius said:

Kasz216 said:

 

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I would argue that austerity isn't the way to sustain growth in times of prosperity - your example of the UK actually works against you in many way because it was a lack of investment (i.e. government not spending enough and not spending it on the right things) which caused difficulties thorughout the whole of the 20th century (well, almost). It was obvious since the 1920s that British industry was innefficient and needed new funding to allow it to be competitive internationally and because the owners of those businesses had little incentive to invest the amounts necessary, this never happened all the wau until the late 1970s when Britain's economy was in a pretty poor state and there was no choice but to turn to the banking and services industries (and of course, our overspecialisation on the former then left us royally shafted in the recent recession). So ideally, carefully planned government spending in good times is I would argue the best course for sustainable growth and helping to weather tough periods when they arrive.

 

In short, businesses might not be stupid, but they are extremely self-centred, and that can cause harm to the economy over the long term

None of what you stated really makes sense.

Your premise is, British Industry lost it's prominence because British factories selfishly refused to upgrade, and therefore lost buisness.

Can you not see the illogical line of thinking in there?

I have a couple of questions

1)  Why didn't they have incentive to make sure they could compete internationally?  Your arguement seems to be they selfishly ran themselves out of buisness for selfish reasons.   Why was it that Brtish factories didn't have to compete?  (For half a century)

2) Why was it that other factory owners in places like Germany and the US receive no government money but DID upgrade their factories?

 

I know the answers to this, but I want to see if you do, or at least have a clue.  Otherwise writing a giant wall of text on how economies have changed since the 1920's, tarrifs, the british empire et al, would be a huge waste of time.

The reason why they did not invest was because those industries were in terminal decline and so their investment would ultimately have been fruitless - why pin you're hopes to a sinking ship? Therefore they were quite happy to sit on their mines and shipyards which although struggling, were still profitable without ploughing any money into them. At this point, if the government had spent wisely on researching new methods of production and attracting other businesses then Britain could have been weened off of these heavy industries, alternatives in light industries making consumer goods could have been found and Britain would have a much more resiliant, more diverse economy more like Germany's.

The reason why businesses in Germany in particular did better than in the UK was because when they were rebulding their economy after WW2, they had something of a clean slate and could focus on the most promising area of growth at that time, which was those light industries making consumer goods. This is compared to Britain, where we ended up attempting to salvage our heavy industry through nationalisation, which, though I consider myself reasonably left-wing in my views, I have to concede is seldom appropriate for most sectors and which is usually at best a way of buying time for the economy to change and develop new industries without creating a spike in unemployment. It also requires an enormous amount of money to do correctly which Britain was not able to provide even with such large loans and other sources of income (e.g. from the Marshall Plan)