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  • Originally posted by Snowygerry View Post
    Well that could be a benefit, you can import cheaper manufactured goods from around the world without EU restrictions, which will probably push consumer prices in the UK down.

    Selling your own products around the world has become harder though, and without full access to the EU market (and others), commercial profit will suffer.

    The balance is hard to predict, like so many things in economics, the only way to know for sure is to try
    Pushing consumer prices down will make the costs of production of UK goods and services more lower. Thus improving our exports. A virtuous circle.
    "To be free is better than to be unfree - always."

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    • Originally posted by Surrey View Post

      Pushing consumer prices down will make the costs of production of UK goods and services more lower. Thus improving our exports. A virtuous circle.
      That implies lower wages for your citizens though…

      We'll see soon enough, if nothing else, this is an interesting experiment
      Lambert of Montaigu - Crusader.

      Bolgios - Mercenary Game.

      Comment


      • Originally posted by Surrey View Post

        Using either of the Chamberlains as a positive example is a bit dubious to say the least.

        Trade brings prosperity and has done so since the earliest times. The British Empire was built on trade, mostly with the Americas and the Far East. Brexit frees us to do this again.
        The question is not that trade brings prosperity, everyone agrees on this, but what is the best solution in 2020 for Britain and the other developped countries .While Free Trade brings cheap products for the consumer, it destroys jobs at home ,and consumers are also producers .What is the benefit of having cheap imports,if you can no longer export ?
        See the cheap T-Shirts from Bengladesh .
        See the cheap products from Poland, when Britain was a member of the EU .
        The developped countries must protect themselves against the cheap imports from the underdevelopped countries ,otherwise all our industries will disappear .

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        • Originally posted by Snowygerry View Post

          That implies lower wages for your citizens though…

          We'll see soon enough, if nothing else, this is an interesting experiment
          Lower nominal wages but higher real wages. So people are better off.

          "To be free is better than to be unfree - always."

          Comment


          • Originally posted by ljadw View Post

            The question is not that trade brings prosperity, everyone agrees on this, but what is the best solution in 2020 for Britain and the other developped countries .While Free Trade brings cheap products for the consumer, it destroys jobs at home ,and consumers are also producers .What is the benefit of having cheap imports,if you can no longer export ?
            See the cheap T-Shirts from Bengladesh .
            See the cheap products from Poland, when Britain was a member of the EU .
            The developped countries must protect themselves against the cheap imports from the underdevelopped countries ,otherwise all our industries will disappear .
            Cheap products for the consumer increases real income. This further increases demand for all goods and services including those produced domestically. As previous post a virtuous circle.
            "To be free is better than to be unfree - always."

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            • Originally posted by Surrey View Post
              Lower nominal wages but higher real wages. So people are better off.
              Actually if the overall production drops then also the real wages too. You do understand that lower expenses mean lower profits for UK producers? Furthermore it would mean less taxes and more debt for the country.
              It is by caffeine alone I set my mind in motion, it is by the beans of Java that thoughts acquire speed. The hands acquire shaking, the shaking becomes a warning. It is by caffeine alone I set my mind in motion

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              • Originally posted by Vaeltaja View Post
                Actually if the overall production drops then also the real wages too. You do understand that lower expenses mean lower profits for UK producers? Furthermore it would mean less taxes and more debt for the country.
                No. Lower costs of production mean more goods and services can be produced with the same resources. Making us richer.
                "To be free is better than to be unfree - always."

                Comment


                • Originally posted by Surrey View Post

                  Lower nominal wages but higher real wages. So people are better off.
                  Truly fascinating theory. Do you have any evidence that this works in real life? What I have seen, experienced and participated in as a member of the C-suite is the desire to squeeze the most profit as possible out of production. The easiest place to save money for a business is labour. Hence layoffs and transfer of production overseas. Trickle down doesn't work as a rule. When we received tax breaks or production cost cuts, the extra profits stopped at the shareholder level (more dividends/bonuses) rather than lower prices to consumers.

                  I have participated in shutting (union) factories down then reopening them with cheaper non-union labour. Moving from full-time employees to contract employees (no benefits, asier to let go). Watched the move to the gig economy. Offshored and outsourced countless jobs usually handled in house (HR, payroll, IT support) to cheaper locales. Good for the old bottom line and shareholders love it.

                  The only thing that is a possible challenge to this process is demographics. Bodies are still needed for certain jobs, but with falling birthrates there is some leverage for employees there. If they're willing to take service jobs usually handled by the uneducated/lower class/immigrant.

                  It's a delusion to think high paying jobs are coming back any time soon. High paying manufacturing jobs are done and dusted. With governments moving to weaken legislation or failing to respond to new business model (gig economy/contract employees), precarious employment is going to increase, not decrease.

                  Comment


                  • Originally posted by CarpeDiem View Post

                    Truly fascinating theory. Do you have any evidence that this works in real life? What I have seen, experienced and participated in as a member of the C-suite is the desire to squeeze the most profit as possible out of production. The easiest place to save money for a business is labour. Hence layoffs and transfer of production overseas. Trickle down doesn't work as a rule. When we received tax breaks or production cost cuts, the extra profits stopped at the shareholder level (more dividends/bonuses) rather than lower prices to consumers.

                    I have participated in shutting (union) factories down then reopening them with cheaper non-union labour. Moving from full-time employees to contract employees (no benefits, asier to let go). Watched the move to the gig economy. Offshored and outsourced countless jobs usually handled in house (HR, payroll, IT support) to cheaper locales. Good for the old bottom line and shareholders love it.

                    The only thing that is a possible challenge to this process is demographics. Bodies are still needed for certain jobs, but with falling birthrates there is some leverage for employees there. If they're willing to take service jobs usually handled by the uneducated/lower class/immigrant.

                    It's a delusion to think high paying jobs are coming back any time soon. High paying manufacturing jobs are done and dusted. With governments moving to weaken legislation or failing to respond to new business model (gig economy/contract employees), precarious employment is going to increase, not decrease.
                    It is standard economic theory taught at business schools and universities throughout the world.

                    If you are able to lower your input costs then you can lower your prices giving you a competitive advantage.

                    "To be free is better than to be unfree - always."

                    Comment


                    • Originally posted by Surrey View Post

                      It is standard economic theory taught at business schools and universities throughout the world.

                      If you are able to lower your input costs then you can lower your prices giving you a competitive advantage.

                      Thank you. I am aware how economic theory works having studied and now teaching courses in business principles and economic theory at a post secondary level (my escape from the corporate world).

                      It's important to note the word "can" in the phrase "can lower prices". Can, not will.

                      My experience has shown me that reality differs quite a lot from theory.

                      As I mentioned previously, price cuts don't necessarily get passed on to the end consumer. Frequently savings go to increased dividends to shareholders or board bonuses. It is the shareholder who decides the board's renumeration and tenure. They tend to hold more sway. Trickle down stops at shareholder level.

                      Then let's look at co-operative retailing or to be blunt price fixing.
                      Ever notice how all gas stations from whatever company sell gas for basically the same price? And tend to raise or lower their prices at the same time. You'd think that a wily competitor would lower the prices to corner the market. However, there is an understanding this is not going to happen and it doesn't. Other industries operate at the same level. Here in Canada we had an issue with bread price fixing at national grocery stores. The big bakers and some grocery chains set prices to their advantage not the consumer.

                      Then we have the category killer businees (Amazon/Walmart) who comes in with lower prices, then once the dust is settled, sets their own prices for customer/retailer in a market with drastically reduced competition. Look at the case study of Vlasic pickles and their dealing with Walmart if you want to see how that business model works. Being a vendor for Walmart is a devil's deal for a manufacturer.

                      Finally let me use the examples of new cars.
                      Has the cost of new cars dropped substanially over the last decade?
                      Sure there's new technology but there's also been huge cost savings in labour, manufacturing, material, automation, outsourcing and offshoring.
                      So has there been a drastic drop in car prices?
                      If not, where is the extra money going? Hint: shareholders and to make up for the "lost profit" years of the last recession. Not the consumer.

                      Theory is well and good but it's best to look how theory functions in actual case studies.
                      Trickle down doesn't work because it ignores some basic aspects of human nature.

                      Good luck though if that's what you're relying on to make things run smoothly.
                      You will definitely need it.
                      Last edited by CarpeDiem; 20 Feb 20, 12:31.

                      Comment


                      • Originally posted by CarpeDiem View Post


                        Thank you. I am aware how economic theory works having studied and now teaching courses in business principles and economic theory at a post secondary level (my escape from the corporate world).

                        It's important to note the world "can" in the phrase "can lower prices". Can not will.

                        My experience has shown me that reality differs quite a lot from theory.

                        As I mentioned previously, price cuts don't necessarily get passed on to the end consumer. Frequently savings go to increased dividends to shareholders. It is the shareholder who decides the board's renumeration and tenure. They tend to hold more sway. Trickle down stops at shareholder level.

                        Then let's look at co-operative retailing or to be blunt price fixing.
                        Ever notice how all gas stations from whatever company sell gas for basically the same price. And tend to raise or lower their prices at the same time. You'd think that a wily competitor would lower the prices to corner the market. However there is an understanding this is not going to happen and it ndoesn't. Other industries operate at the same level. Here in Canada we had an issue with bread price fixing at national grocery stores.

                        Then we have the category killer businees (Amazon/Walmart) who comes in with lower prices, then once the dust is settled, sets their own prices for customer/retailer in a market with drastically reduced competition. Look at the case study of Vlasic pickles and their dealing with Walmart if you want to see how that business model works. Being a vendor for Walmart is a devil's deal for a manufacturer.

                        Finally let me use the examples of new cars.
                        Has the cost of new cars dropped substanially over the last decade?
                        Sure there's new technology but there's also been hugh cost savings in labour, manufacturing, material, automation, outsourcing and offshoring.
                        So has there been a drastic drop in car prices?
                        If not where is the extra money going? Hint: shareholders and to make up for the lost profit years of the last recession. Not the consumer.

                        Theory is well and good but it's best to look how theory functions in actual case studies.
                        Trickle down doesn't work because it ignores some basic aspects of human nature.

                        Good luck though if that's what you're relying on to make things run smoothly.
                        You will definitely need it.
                        There have been massive drops in the real costs of technological products such as computers, TVs etc. All passed to consumers.
                        Even car prices tend to go up at less then the average rate of inflation.
                        In the U.K. there are often significant differences in petrol prices that reflect supply and demand. E.g prices at motorway service stations are significantly more than at Sainsbury's. However the price at Tesco will be the same as Sainsbury's because that's how the market works. If you are selling an identical product then people aren't going to pay you more than your competitor.

                        Of course the benefit of lower costs of production benefit shareholders as well as consumers. But shareholders are people too. Millions of people own shares either directly or through their pensions.
                        Last edited by Surrey; 20 Feb 20, 12:45.
                        "To be free is better than to be unfree - always."

                        Comment


                        • Originally posted by Surrey View Post
                          No. Lower costs of production mean more goods and services can be produced with the same resources. Making us richer.
                          It is not quite that simplistic. Reduced prices - especially if caused by cheap imports - does not translate into reduced production costs of equivalent domestic products. It only means that you will be losing your domestic industries and production and replacing those with imports. While that may reduce the costs it will not be a virtual circle but rather of the opposite type. With less production, and more unemployment.
                          It is by caffeine alone I set my mind in motion, it is by the beans of Java that thoughts acquire speed. The hands acquire shaking, the shaking becomes a warning. It is by caffeine alone I set my mind in motion

                          Comment


                          • Originally posted by Surrey View Post
                            But shareholders are people too..
                            Not necessary *British* people though.

                            One should take care to distinguish between private, individual and national "profit" in any macro-economic operation like Brexit,

                            rarely do they follow national borders these days…..

                            Lambert of Montaigu - Crusader.

                            Bolgios - Mercenary Game.

                            Comment


                            • Originally posted by Surrey View Post
                              Of course the benefit of lower costs of production benefit shareholders as well as consumers. But shareholders are people too. Millions of people own shares either directly or through their pensions.
                              In my business we lower the cost of production by investing in technology which allows us to increase output per unit labour cost. That means we can upskill through training, improve processes and thereby increase wages while increasing margin and profit. If costs are reduced by squeezing margin rather than increasing productivity then there no real net wealth creation but rather a redistribution of that existing wealth.
                              "The thing about quotes on the internet is that you cannot confirm their
                              validity." - Abraham Lincoln.
                              "Nothing's going to change while one side it lying about the cause and the other is lying about the solution" - Me

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                              • Interesting graphic. So the much feares impact of WTO tariffs on the UK will be a massive 325 quid a year per household. BFD

                                https://www.nimblefins.co.uk/eu-impo...ential-tariffs



                                325 a year is merely a modest rise in the interest rate or a small spike in oil prices.
                                But this is with the benefit that that money ends up as lovely tax for the Government. Who can then do intelligent things with it - like cutting taxes on UK businesses which should lower costs of UK goods ...

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