tag:blogger.com,1999:blog-32841798.post1479371873595275965..comments2024-03-28T09:55:42.123+00:00Comments on Capitalists@Work: The squeezed middlemarketCityUnslickerhttp://www.blogger.com/profile/15929544047783163175noreply@blogger.comBlogger5125tag:blogger.com,1999:blog-32841798.post-74819107625985962972012-08-31T23:28:36.457+01:002012-08-31T23:28:36.457+01:00CU: "We can't compete making shoes"
...CU: "We can't compete making shoes"<br /><br />Actually that's not what I was saying. My point was about the cheat factor: buying at third world prices yet retailing at UK made prices.<br /><br />In fact at the time (20 years ago) we probably could have made trainers (much easier to make than leather shoes) to retail at £80.<br /><br />Another fact: direct labour costs in UK mass manufacturing are often surprisingly low, typically 20% or less of the ex factory marginal price.<br /><br />The other 80%+ are the overheads: excessive regulation, taxes, expensive materials, bloated management, poor design, lack of investment in automation (and no, I don't mean fancy robots). And then there is the 5 times mark-up (inc VAT), so that an ex-factory price of 20p becomes 99p in the shops.<br /><br />If we wanted to the UK could compete profitably on a much wider range of manufactureds that most people imagine. It won't be simple and certainly won't turn a fast buck. Hard work and no politicians' wheezes.Budgienoreply@blogger.comtag:blogger.com,1999:blog-32841798.post-35963451501617259232012-08-31T12:55:13.174+01:002012-08-31T12:55:13.174+01:00I am less worried about this in some ways - and in...I am less worried about this in some ways - and in others preparing for a the next true industrial revolution.<br /> <br />There is always a tension between automation and human effort.<br /><br />In the same way that the infrastructure we spent so much on in the UK (fibre) may well be replicated for much less in other countries (wireless), the next generation of <a href="http://wadhwa.com/2012/07/23/forbes-the-end-of-chinese-manufacturing-and-rebirth-of-u-s-industry/" rel="nofollow">cheaper robot factories</a> and <a href="http://www.3dsystems.com/" rel="nofollow">3d printers</a> will start to push the balance towards it being more sensible to manufacture close to the place the product will be used.<br /> <br />In many ways, we will not need 'shops', but will want to go to places that provide a nice experience (apple shops) or the modern equivalent of the villiage smithy (someone who has a big 3d printer).<br /><br />Underneath it all, you can compete with chinese labor costs if the capital cost is enormous or the labor cost tends -> 0.0.<br /><br />what worries me is how many people will be needed in this brave new world - I have lived with the 'fixed lump of labor fallacy' for years, but <a href="http://andrewmcafee.org/2012/08/mcafee-robots-technology-employment-statistics/" rel="nofollow">some think</a>there may be issues that may lead to a <a href="http://av.r.ftdata.co.uk/files/2012/08/IS-U.S.-ECONOMIC-GROWTH-OVER-FALTERING-INNOVATION-CONFRONTS.pdf" rel="nofollow">long term lower rate of growth [pdf]</a>andrewhttps://www.blogger.com/profile/07311993288675111834noreply@blogger.comtag:blogger.com,1999:blog-32841798.post-81055730274884843862012-08-31T09:27:50.342+01:002012-08-31T09:27:50.342+01:00Budgie - China makes loads of stuff, Budgie - but ...Budgie - China makes loads of stuff, Budgie - but where would you rather be now in terms of a long-term economy?<br /><br />We cant compete making shoes ffs - Ricardian principles. <br /><br />Having said that, the idea that retailers are a good indicator of much is duff - they are middlemen in a consumer depression they will get whacked. Also what % of the high street was due to go anyway as we buy on line over the past few years.<br /><br />YOu have given me the idea for two posts though...thanks.CityUnslickerhttps://www.blogger.com/profile/15929544047783163175noreply@blogger.comtag:blogger.com,1999:blog-32841798.post-76086273146409718852012-08-30T22:17:54.747+01:002012-08-30T22:17:54.747+01:00On the nose Budgie, too right.On the nose Budgie, too right.phil5https://www.blogger.com/profile/15393353266959207870noreply@blogger.comtag:blogger.com,1999:blog-32841798.post-1155269766976686892012-08-30T20:37:09.503+01:002012-08-30T20:37:09.503+01:00These "sports" shops used to make their ...These "sports" shops used to make their money from trainers made in Vietnam for £1-00, and sold for £80-00. It was a bubble. It has burst. JJB hasn't adapted.<br /><br />But the fundamental problem is that the UK doesn't make so much now. Yet, for a time, management can wax fat on buying third world and selling at first world. And gulling people into thinking they are successful.Budgienoreply@blogger.com