Gordon Brown, the most likely successor to Tony Blair, wants Britain to become "an evangelist for globalisation". Speaking to the CBI, the employers’ organisation, he argued that free trade, open markets and flexibility were the preconditions of success in the global economy. "I want globalisation's children - the coming generation - to enjoy the vastly increased opportunities it brings," Brown told the employers’ annual conference. You can be sure that he’s not talking about the lifetime of debt, the loss of pensions, or the decline in standards of healthcare and education experienced by the majority in the Britain. Or the housing crisis that has resulted from a market free-for-all. Nor does he mean the absolute decline in income in the early years of the new century experienced by the already impoverished 200 million Chinese people at the bottom of the pile, many of whom have to exist on less than £1 a week. Nor does he include the cleaners at Goldman Sachs in the City of London whose £5.35 per hour minimum wage compares badly with the $3.5 billion the US investment bank has set aside to pay Christmas bonuses. Nor was Brown talking about the devastating impact of climate change, even though a recent report commissioned by the Chancellor called it the "the greatest and widest-ranging market failure ever seen". Brown also did not refer to the resources wars that globalisation has produced, most notably the invasion of Iraq, nor the authoritarian, market states that have emerged over the last 30 years.
In fact, Brown did not even mention manufacturing, although he was speaking to an organisation that represents the country’s ever-declining production sector. The only sector he mentioned was the City, a point picked by up Jean-Louis Beffa, head of the French building materials giant Saint-Gobain and an adviser to President Jacques Chirac. He told the audience that the Anglo-Saxon, free-market model of globalisation led to short-term investment and greater volatility and instability than the less flexible, long-term attitude taken by continental European countries. His view that the UK system was based on the success of the British financial services sector is supported by the fact that overseas companies spent £50 billion buying UK firms in the last year, including the British airports Authority and Manchester United Football Club, while the City lashed out £33 billion buying overseas companies. And it is the turmoil in the international financial system that in turn signals the reality that the global economy is heading for recession and slump. One of the main consequences of globalisation is the interdependence of global and national economies. The accelerating decline of the dollar – having lost more than 31% of its value in the last four years as measured against a basket of other currencies, reflects a stream of figures which reveal that the US economy is in bad trouble. Orders for durable goods showed a massive 8.3% drop in one month, and house prices dropped 3.5% on a year earlier - the third straight month of decline and the worst year-on-year fall since records began in 1968. The US trade deficit is running at more than $800 billion a year, reflecting growing imports and a dramatic loss of manufacturing jobs at home. Brown can extol the alleged virtues of globalisation all he wants to. But the wheels are coming off the global economy in a big way and his friends in the City will be powerless to do anything about it.
Gerry Gold, economics editor
In fact, Brown did not even mention manufacturing, although he was speaking to an organisation that represents the country’s ever-declining production sector. The only sector he mentioned was the City, a point picked by up Jean-Louis Beffa, head of the French building materials giant Saint-Gobain and an adviser to President Jacques Chirac. He told the audience that the Anglo-Saxon, free-market model of globalisation led to short-term investment and greater volatility and instability than the less flexible, long-term attitude taken by continental European countries. His view that the UK system was based on the success of the British financial services sector is supported by the fact that overseas companies spent £50 billion buying UK firms in the last year, including the British airports Authority and Manchester United Football Club, while the City lashed out £33 billion buying overseas companies. And it is the turmoil in the international financial system that in turn signals the reality that the global economy is heading for recession and slump. One of the main consequences of globalisation is the interdependence of global and national economies. The accelerating decline of the dollar – having lost more than 31% of its value in the last four years as measured against a basket of other currencies, reflects a stream of figures which reveal that the US economy is in bad trouble. Orders for durable goods showed a massive 8.3% drop in one month, and house prices dropped 3.5% on a year earlier - the third straight month of decline and the worst year-on-year fall since records began in 1968. The US trade deficit is running at more than $800 billion a year, reflecting growing imports and a dramatic loss of manufacturing jobs at home. Brown can extol the alleged virtues of globalisation all he wants to. But the wheels are coming off the global economy in a big way and his friends in the City will be powerless to do anything about it.
Gerry Gold, economics editor
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