Would this be the same James Dyson who relocated his manufacturing to Malaysia?

London is high added-value services, including but not exclusively finance, or it is dead.

Or is Clerkenwell to become a light manufacturing distict again?

‘science and engineering’ != ‘manufacturing’.

But I guess you knew that. Just write ‘first’ next time, and save us all some time.

It’s worth (re)reading the recent speech Lord Turner made to City bankers on the subject of bonuses, among other issues:

“Lord Turner said bonuses were not a private matter for banks because of the billions of pounds of taxpayers’ money used to prop up the financial system since the collapse of Lehman Brothers a year ago. . . ”
http://www.guardian.co.uk/business/2009/sep/22/bonuses-g20-lord-turner-banks

You can’t run an entire economy on services – somebody, somewhere has to actually be involved in primary production. We can’t all be accountants.

Much better than Boris Johnson is this blogging on Tuesday by Robert Preston on: We’ll pay for the banks to be virtuous:
http://www.bbc.co.uk/blogs/thereporters/robertpeston/

#4: “We can’t all be accountants”

Britain has been running virtually regular annual deficits on our visible or merchandise trade with other countries since about half way through the 19th century. In good years, the annual surpluses on so-called “invisible” trade in services go a long way towards paying for the annual deficits on our mechandise trade but then Britain is the second largest exporter of services after America.

In principle, if we could sell enough services to the rest of the world, we needn’t actually make anything, although whether that would be a prudent course is another matter. Perhaps we should ask why we aren’t very good at making manufactured products in the quality or at prices customers in other countries want to buy.

Adam Smith – long before Napoleon – was saying something fundamental in his perennial classic: The Wealth of Nations (1776) when he wrote:

“To found a great empire for the sole purpose of raising up a people of customers, may at first sight, appear a project fit only for a nation of shopkeepers. It is, however, a project altogether unfit for a nation of shopkeepers, but extremely fit for a nation whose government is influenced by shopkeepers.”
Wealth of Nations: Book IV, section vii

“You can’t run an entire economy on services – somebody, somewhere has to actually be involved in primary production. ”

Be useful if you actually read that wikipedia entry. Primary production is not science, engineering or manufacturing. It’s farming and mining. So the idea (which isn’t true anyway) that we must have primary production does not lead to supporting anything James Dyson said.

And of course what he did say was stupid and ignorant anyway. There is no need for I as an individual to engage in primary production, in engineering, science or manufacturing. I can live very well indeed thank you (by any sort of global or historical comparison) by selling my services to those who do and purchasing their output in turn. The village I live can do the same: there are no mines here, precious little farming (the soil is shite) and no engineering or science. The town nearby can similarly live well by exporting and buying in what it does not produce: as can the county the province and the country.

You see there’s this thing called “trade”. Worth reading up on. There is precisely fuck all reason why people living in the UK should manufacture all the cars consumed in the UK, or the vacuum cleaners, or indeed any other manufacture: there’s no reason why the engineering required should be done by UK citizens. There are actually extremely good reasons (to do with public goods and the need to subsidise their production) why we should be delighted that all science is done elsewhere.

I don’t understand why anyone gives Dyson (or anyone else in a similar position) the time of day for such views. That someone is good at making vacuum cleaners is very interesting and their views on the making of vacuum cleaners should certainly be listened to. But why does that give him competence in talking about the economics of trade?

It’d be useful if you actually read what Dyson had to say.

Clue: It nothing to do with manufacturing.

Primary production is not science, engineering or manufacturing. It’s farming and mining. So the idea (which isn’t true anyway) that we must have primary production does not lead to supporting anything James Dyson said.

As the kids say nowadays, “Duh!” (Please visualise the lolling tongue and forehead slapping – I’m not sure that an appropriate smiley has been devised.) I wasn’t trying to support anything James Dyson said.

There is no need for I as an individual to engage in primary production, in engineering, science or manufacturing. I can live very well indeed thank you (by any sort of global or historical comparison) by selling my services to those who do and purchasing their output in turn.

Obviously. But is there not an argument to be made that making your entire national economy (to the extent such a thing exists) wholly dependant on foreign trade might not be the wisest strategic choice? That perhaps retaining some domestic primary and secondary production might be worthwhile, even if it’s not the most economically efficient arrangement?

So – if we don’t need scientists or engineers, why do we need bankers and hedge-fund traders?

“There are actually extremely good reasons (to do with public goods and the need to subsidise their production) why we should be delighted that all science is done elsewhere.”

Is that right, Tim? I’d love to hear them.

I think it’ll be especially good to hear why it’s good that ‘all science is done elsewhere’ on a day when a British-based scientist won the Nobel Prize for Physics for work done in the UK for a private company.

http://www.timesonline.co.uk/tol/news/science/genetics/article6863121.ece

Just write ‘first’ next time, and save us all some time.

Brilliant. This place is overrun by annoying Tories

“Obviously. But is there not an argument to be made that making your entire national economy (to the extent such a thing exists) wholly dependant on foreign trade might not be the wisest strategic choice? That perhaps retaining some domestic primary and secondary production might be worthwhile, even if it’s not the most economically efficient arrangement?”

No. Next question?

“Is that right, Tim? I’d love to hear them.”

Fine. Public goods, are, by their very definition, things which are non excludable and non rivalrous. No, really, that is the definition of them. It means that if there is a public good, then we cannot stop someone else from using it (non-excludable) and that their using it does not stop us from using it (non-rivalrous).

Basic science, basic research, is one of the very definitions of a public good. Because it is non-r and non-e, a pure market will not provide enough of it. For any private funder will not be able to make a profit because anyone can use it (non-r) and we cannot stop them (non-e). Thus we agree that this basic science should be publicly funded because it is a public good.

However, precisly because it is a public good, that is non-e and non-r, we would be very happy indeed if every other country’s tax money paid for it and we did not. For it is non-e and non-r. So we can use it when Germany, Italy, France, China, pays for it.

To the extent that we cannot use the basic science of China, France, Germany etc, then they are not public goods and thus the science should not be publicly subsidised…..for they are therefore not public goods, are they?

Your turn.

Actually, Tim, the idea that scientific research is a public good is a theory which is barely verified by empirical evidence: http://oxlib.blogspot.com/2009/05/myth-of-science-as-public-good.html

In essence, science is a good that is too complicated to be useful to people who haven’t done rather a lot of research for themselves. There is precious little evidence that government intervention, whether investment or protection, ever improves R&D, or the economy. I realise that wasn’t something you were suggesting.

Also, on lack of evidence for Boris’s claims about high taxes being counter-productive, it can be difficult during a speech to insert a footnote for everyone from Larry Laffer, the OECD and more recently the Institute for Fiscal Studies. I don’t think anyone has adequately supported the claim that you can simply tax your way into higher revenues.

Can anyone, please, explain why so many developed countries finance primary and secondary education out of general taxation?

If the life-time financial benefits of schooling are largely or entirely attributable to the extent of individual experience of schooling, why not leave provision of schooling to the “free market”?

Should we worry about adult literacy and numeracy if those skills are “private” and not “public” goods?

If the extent of adult literacy and numeracy are valid public concerns – network externalities, anyone, or reducing information asymmetries, both identified as potential sources of market failures? – how about the extent of scientific and technical “literacy”?

Just a thought.