Is British economy fundamentally broken?

[Richard Hakluyt]

There is a certain fashion to these things, at the moment Germany is "in". As it happens I am an admirer of German economic virtues myself. But it should be borne in mind that the respect they are garnering for their economic performance was not forthcoming from the pundits in the period 1990-2006. Going further back I can recall a fashionable view (back in the 1970s) that the USA's glory days as an economic dynamo were over 

Not to say that the British economy does not have grave faults of course. But I don't think these can be resolved by emulating Germany.........we would make a very poor job of it; the best route out of a British mess is a British route.

[Tamas]

But I don't think these can be resolved by emulating Germany.........we would make a very poor job of it; the best route out of a British mess is a British route.

[Sheilbh]

It's actually interesting how in retrospect the German economy - for so many years called the "sick man of Europe" - proves to be the right model, based on domestic production (and hefty foreign trade surplus) coupled with some of the best social protections, ensuring solid redistribution of goods (not to mention making sure tax havens are not a valid option).

Well when Germany was the sick man of Europe - though I don't think anyone considered them that, just performing below potential - my understanding is that basically the German population accepted stagnating wages for the best part of a decade which is part of maintaining their competitiveness, it's not been without pain. 

Compare this to the UK model, where the tory government hires, as its "fiscal responsibility expert", a guy who got rich on a store chain by avoiding paying taxes in the UK thanks to his Monaco-resident wife.

There's more to Philip Green than that and, actually, I think retail's a sector where the UK's a world leader.  There aren't many retailers out there as good as him, or Stuart Rose, or Terry Leahy.

And I agree with RH that Germany's currently in, but Britain was a few years ago and before that so was Ireland.  But, of course, there are serious problems especially outside London that an 'enterprise zone' won't solve.  People want to invest in Shenzhen because it provides access to an enormous, growing market; people won't want to invest in Bradley because they pay slightly lower rates.

[Josquius]

The enterprise zone stuff is bollocks. Just means companies will concentrate their jobs in those areas (thus screwing over other places they might potentially have invested) and get away without contributing so much to the taxman as they would have done. Doubt it'll lead to many jobs that wouldn't otherwise have existed popping up.

[Berkut]

Manufacturing is still there, trouble is its not the mass employer it once was.

That was my point. If you create an economy where more than 5-10% or so of the working age populace simply has no option for gainful employment, and then decide to cut welfare to the "lazy ones", you are on a straight way to social unrest.

Having a "slimmed down" economy, that is not weighed down by mass employment of the working class has its advantages but you need to address social costs (and share the wealth with those who are left out) rather than sneer at them from your City/White Hall ivory tower for being unable to find a job.

What Germany does best is that they seem to factor social costs (and social "welfare", not necessarily meaning hand outs but the well-being of the populace at large) into their economic model. You can't build an economy that simply treats employees as a "resource" that is subject to the same rules of supply and demand as raw materials or manufacturing equipment - because sooner or later you will have a revolution on your hands. I think Brits have forgotten about it.

The brits have a revolution on their hands?

[Richard Hakluyt]

No fewer than 150 people had a sit-in at Fortnum and Masons (a posh grocer) during the recent demo, there were appalling scenes of the gentry being unable to access the cheese counter 

[Brazen]

No fewer than 150 people had a sit-in at Fortnum and Masons (a posh grocer) during the recent demo, there were appalling scenes of the gentry being unable to access the cheese counter 

There was chaos round the Earl Grey shelves. The anarchists wanted to prove that proper tea is theft.

[jamesww]

Well my friends who are bankers are doing well. 

The rest of us ? 

[Caliga]

No fewer than 150 people had a sit-in at Fortnum and Masons (a posh grocer) during the recent demo, there were appalling scenes of the gentry being unable to access the cheese counter 

I liked the high tea there.

[crazy canuck]

No fewer than 150 people had a sit-in at Fortnum and Masons (a posh grocer) during the recent demo, there were appalling scenes of the gentry being unable to access the cheese counter 

There was chaos round the Earl Grey shelves. The anarchists wanted to prove that proper tea is theft.

I do hope the army was called in.

[The Brain]

The worst 10% of the population does more harm than good when employed anyway. And as long as they live in clearly marked and avoidable ghettos what exactly is the problem?

[Sheilbh]

No fewer than 150 people had a sit-in at Fortnum and Masons (a posh grocer) during the recent demo, there were appalling scenes of the gentry being unable to access the cheese counter 

Why Fortnum and Masons?!   They've got a dedicated pate and terrine section

[jamesww]

No fewer than 150 people had a sit-in at Fortnum and Masons (a posh grocer) during the recent demo, there were appalling scenes of the gentry being unable to access the cheese counter 

Why Fortnum and Masons?!   They've got a dedicated pate and terrine section

Confused anti-lodge activists ?

[grumbler]

Changed the post title to reflect the real question.  Is Marti an anomaly or is every Polack hopelessly ignorant about the real state of countries in Europe?

[Zanza2]

Germany's economy has some very serious flaws too: extreme export dependence, massive current account surplus which creates extreme imbalances in the eurozone and saps capital from Germany, demographic decline, few "new" technologies like biotech, chips, software, consumer electronics left, etc.

I can't say how it compares to the British economy. From what I know, both countries seem to have roughly similarly rich economies, with Germany's a bit more equal in income distribution, while Britain's had higher growth and lower unemployment for most of the last decade. Germany might have fared a bit better in the last year or so, but that's not saying anything at all. Each country has to find its own economic model and there is no point in trying to emulate another country. Germany will not match the British finance industry and Britain will not match the German machine-building industry and neither will match the French luxury article industry.