Partner Article

Working our way out of deficit

By John Elliott, Chairman, Ebac Group, and founder of the Stop Gap campaign (www.stopgapuk.com)

The GDP figures are lower than we expected and the circus starts. When will they – the politicians and economists whose voices are heard loudest when such figures are revealed - learn? Why can’t they see the bigger picture? When will they accept the cause of the current financial crisis?

On a positive note we don’t have a shortage of natural resources, nor do we have a shortage of the capacity to supply all we need – and more besides. In the UK, we have spare labour capacity and the knowhow on how to produce all we need.

The technology and manufacturing knowhow is much greater than, say, 20 years ago, but we just don’t put it to use. We’re seduced by cheap imported goods which we can only buy by borrowing. As a country, we’re trading short term pleasure for long term misery.

The holy grail of global trade needs to be questioned. Of course we need to import those things not available here. We can’t grow bananas so if we want to import them we need to export something of equivalent value.

The fundamental cause of the global financial crisis is unbalanced global trade. Most of the advanced economies are consuming more than they produce. It follows, therefore, that the emerging economies are producing more than they consume. This makes neither economic sense nor moral sense.

The people of the low cost economies are working long hours for low wages, while we have over one million young people doing nothing. It would be better if those in the low cost economies were paid more so that they could buy the goods they produce and we put our young people to work making the things we import.

This was posted in Bdaily's Members' News section by John Elliott .