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March 04, 2007
Tragic, Tragic
Wasn't this simply scandalous?
At the heart of this immense darkness was the City: from the great finance houses of the Rothschilds and Barings to the scurrying Camberwell clerks caught so precisely in EM Forster's Howards End hero Leonard Bast. Yet like Goldman Sachs and Deutsche Bank today, the Edwardian corporate chieftains had ever less interest in their UK hinterland. The City looked out to the world - to the railways of Peru and the tea plantations of Ceylon. 'London is often more concerned with the course of events in Mexico than with what happens in the Midlands,' noted the Economist, 'and is more upset by a strike on the Canadian Pacific than by one in the Cambrian collieries.'
The result was a
massive outflow of capital. Between 1870-1914, the United Kingdom was
responsible for 44 per cent of global foreign investment - compared
with 19.9 per cent by France. The consequence was that funds which
might have gone into British manufacturing went on quick bucks abroad.
The needs of industry were forgotten as London's counting houses bought
low and sold high like the private equity funds of the day.
Quite disgusting, tragic even. One of the richest countries on the planet (as Britain was) sending its capital abroad to be invested in mines, railways, water systems, docks, mills and factories, where the poor of the world could find work and better life. I mean, really, who could possibly countenance the idea that the rich might spend their money improving the life of the poor? Ought to be a law against it, obviously.
March 4, 2007 in Make Poverty History | Permalink
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» The shame of it! from Stephen Pollard
Tim Wostall is a wonderful source of bracing sense. Here, he destroys a silly piece by Tristam Hunt: At the heart of this immense darkness was the City: from the great finance houses of the Rothschilds and Barings to the... [Read More]
Tracked on Mar 5, 2007 8:28:26 AM
Comments
"I mean, really, who could possibly countenance the idea that the rich might spend their money improving the life of the poor?"
The poor they fucked over back at home.
Posted by: Martin | Mar 4, 2007 11:09:56 AM
But things aren't like that with Tony Blair as prime minister and El Gordo as Chancellor . . :
"The UK received more inward investment than any other country last year [2005 - the latest year for which authoritative figures are available], according to newly released internationally-compiled figures. The Organisation of Economic Cooperation and Development (OECD) said foreign direct investment into the UK hit a record $165bn (£91bn) in 2005. It was driven up by the boom in takeovers of British companies."
http://news.bbc.co.uk/1/hi/business/5127006.stm
Remember the parable of the talents and that TB is a religious man?
"Take away therefore the talent from him, and give it to him who has the ten talents. For to everyone who has will be given, and he will have abundance, but from him who has not, even that which he has will be taken away. Throw out the unprofitable servant into the outer darkness, where there will be weeping and gnashing of teeth."
Matt 25: 14-30
Posted by: Bob B | Mar 4, 2007 11:50:23 AM
Governments think they can do it so much better than City financiers by investing taxes. The EU calls them structural funds.
Posted by: Albeytar | Mar 4, 2007 1:39:41 PM
The government had already established by the late 19th century that it was prepared to nick your capital - consider what happened to Irish landowners. So anyone taking the long view would naturally want to diversify by getting some of his capital abroad.
Posted by: dearieme | Mar 4, 2007 2:06:44 PM
Nonetheless this did lead to Britain's economy falling back compared to Germany's before WW1 & we were forced to sell off most of our overseas assets in WW2 before the US would agree to lend-lease.
Moreover it, together with the existence of the Empire as a whole, clearly played a part in the dissociation between Britain's moneyed & working classes.
In a purist way overall world GNP certainly benefitted from the ease of investment flow from Britain. Whether Britain did is a different matter.
Posted by: Neil Craig | Mar 4, 2007 2:28:36 PM
I've always taken the view that Hunt owes his prominence to having worked for the Labour party on their election campaigns. How else could someone who talks such nonsense advance so far?
Posted by: Bishophill | Mar 5, 2007 9:39:41 AM
The overseas investment brought in _income_: which helped to cover the trade deficit. I.e., income from overseas investment helped pay for food, raw materials, manufactured inputs -- which could _not_ be covered by exports. Other 'invisible' earnings (shipping, insurance, banking, etc) also helped to cover the trade deficit. This pattern goes back to probably the end of the 17th century.
Posted by: Sudha Shenoy | Mar 5, 2007 4:38:52 PM
Martin, the living standards of the poor improved during the full course of the 19th Century, arguably by the greatest extent in recorded human history. By the turn of the 20th century, there were automobiles - just - railways, electric light, postage systems, the conquest of smallpox, decent sewage and sanitation, etc. Of course many people were very poor by today's standards, but by the standards of the time, the 19th century can be regarded a great success.
In the first half of the 20th, we then did our best to throw all this away in the great Mad Socialist Experiment.
Posted by: Johnathan | Mar 5, 2007 5:21:45 PM
"...the living standards of the poor improved during the full course of the 19th Century, arguably by the greatest extent in recorded human history."
Indeed.
Which makes' the financial elites' concurrent interest in enriching Inca coolies all the more puzzling.
Posted by: Martin | Mar 5, 2007 8:24:31 PM
Do you understand the concept of 'non-zero sum'?
Posted by: David Gillies | Mar 6, 2007 5:05:52 PM
Probably not.
Posted by: Martin | Mar 6, 2007 5:56:08 PM
Probably not.
Posted by: Martin | Mar 6, 2007 5:56:18 PM
