What do we think the problems are ?

[simg]

I'm not convinced that everyone will agree (or at least, I'm not sure
I will agree :) ) about what the problems are.

So, could we list the problems that we think we're trying to solve.
I'll start:

1. The UK is in dire financial difficulties.
2. The "Age of Oil" is coming to an end and we need to find new energy
sources
3. The UK economy (and standard of living) has been subsidised by
North Sea oil revenue for decades. This is coming to an end in the
next decade or so.
4. The UK is having to compete globally with developing countries with
vastly more "flexible" and cheaper labour markets.
5. The UK no longer has large reserves of natural resources (compared
to the size of the population)
6. UK housing is mostly overpriced, under quality and seems to be used
as the "main spring" of economic growth
7. Ironically, Global Warming is likely to result is a much colder UK
which will involve significant extra costs just when we need to reduce
costs.

[Burkhard Heim]

Hey,
sorry if I'm not being very constructive here, but there's a really
good report out from the Met Office in the last few weeks that
challenges #7 there. The blog linked to here is pretty good for
summarising the consensus (it's not pseudoscience and denial, don't
worry!) http://bit.ly/hyWjgd

I'd actually full-on argue with #1 too - it's in a bit of bother, but
there's not quite the political conviction to do anything about it,
apart from cut services. The published trend in GDP (http://bit.ly/
dJ3ZEa) is a bit misleading now - it's bounced again, so we're perhaps
in the clear for a little bit. Bear in mind how inefficient our
society is just now - give us a decade of stagnation (a la Japan) and
we'd probably see people doing more with less. Also bear in mind the
debt Britain had post WWII when the welfare state was created - it was
far larger than our current one (http://bit.ly/7YVWFd).

I'd really like to hear from any economics post-grads and professors
kicking around - I'd love an explanation of zero-growth economics, for
and against. I'm not convinced that current economics is scientific
enough as a discipline - its theories are quite difficult to falsify,
and hypotheses difficult to prove.

In a more constructive (but quite bittersweet) note, I think our best
bet to not have a long geriatric decline lies with a knowledge and
research economy. Universities, generous public academic funding,
public-private partnerships and foreign investment in them, that sort
of thing. we have little left (#3,4,5) but our reputations, the legacy
of well-funded state-supported universities and having a 100% english-
speaking public. I think I read somewhere that we already punch far
above our weight in science research at least, so we do have
potential. Shall we become the first technocracy? Germany is Europe's
factory; I think we should be its university.

BH

[Mike Shaw]

Burkhard, I absolutely agree with you on your final point. We have to
develop into a knowledge and research economy.

[Simon]

Burkhard, for what it's worth, I think your comments  are perfectly constructive.

I *think* my points are probably valid but I don't know for sure - disagreement is good :)

I also agree that education is one good option as an industry in which we can excel (although 

I think education is going to be done very differently in the "Internet Age".

However, my question stands: What do *you* think are the problems ?

[james]

I agree that your #1 is the most contentious. The 'dire'-ness of our
current economic situation is both not particularly worse than at
various times in the past (notably, post-ww2 as noted above), but more
importantly is the result of an economy based around banking and
houseprices rather than public spending issues.

A rough go at my list would be

#1. A financialised neo-liberal economy that relies on debt and growth
and is not 'efficient' in terms of environmental or egalitarian
objectives (is unsustainable in environmental and economic senses).
#2. The "Age of Oil" is coming to an end and we need to shift to
alternative energy sources, and invest in new ones (think it's
important to add that amendment. I'd also incorporate the North Sea
Oil issue in with this one)
#3. Global warming (and peak oil) are but the most talked about
examples of a global environmental crisis (of pollution and resource
constraints) that is beginning to bite - we drastically need to
remodel our production and consumption in order to reduce these
impacts/issues - nationally and globally (where the UK has historical
responsibility for emissions, as well as indirect responsibility for
emissions in the countries we buy our manufactured goods from). (an
aspect of this is the issues of cold winters and dry summers which
will cost, but I think global solidarity and responsibility are
important to emphasise too
#4. UK housing is mostly vastly overpriced, under quality and seems to
be used as the "main spring" of economic growth. ~The housing market
currently represents massive iniquity in the UK population - both
intergenerational and across social strata. This is however, but one
(perhaps the most obvious) example of the enormous and growing welath
inequality in the UK, increasingly becoming inequality of opportunity
as well.
#5. Over the last two decades we have arguably seen a trend towards
individualisation as opposed to social solidarity and community.
#6. We are seeing a rise in far-right racist and authoritarian
responses to some of these issues (and others), based on scapegoating
immigrants or minority religions.

and of course the democratic deficit... but I guess that's why we're
all here, right?

James

[james]

should add that I'm a PhD economics student (as requested!) - looking
into the differences between building societies and banks (role/value
of cooperative ownership). I want to relate it to steady-state/zero-
growth economics, but I don't have that much of a background in those
areas. I can forward a few links when I get a chance (should really be
busy with the PhD!)

James