Saturday, 27 March 2010

If Wales was like Llangwyllog...

 
Llangwyllog: our miniature Wales

Inspired by the Minature Earth project, I thought I'd have a go for Wales. So, if we could turn the population of Wales into a small village of 100 people (think of half of Llangwyllog), keeping the same proportions we have today, it would be something like this…

23 would be children aged between 0-16 years;
21 would be pensioners over the retirement ages of 60 or 65 years;
Leaving 66 who are of working age;

of those of working age:

16 are economically inactive, i.e. including those that have either chosen not to or given up looking for a job. They include students, parents staying at home to look after children, long-term sick, and the "discouraged", a euphemistic term used by the Office of National Statistics (ONS) to describe those that have given up the struggle to find a job.
6 would be unemployed (but looking for a job);
leaving only 44 people actually working;

Of those 44 workers:

34 work in the private sector; and
10 work in public sector

Which means that there are only 34 people working in our 100 person hamlet (i.e. Wales) to generate the wealth to pay for:

  • the pensions of the 21 people over retirement age
  • the free state education of the 23 children
  • the salaries and future pensions of the 10 who work in the public sector
  • the unemployment benefits for the 6 unemployed
  • the free NHS care for everyone
  • and the myriad other government schemes and programmes out there

Of course this isn't really the case, as we get helped out by some of the taxpayers living in the nearby town called 'England'. Still, it paints a worrying picture of just how unsustainable the Welsh economy, as currently constituted, is...
  

19 comments:

Anonymous said...

Worrying indeed

Anonymous said...

It paints a very grim picture, we seem to be on the verge of extinction as a nation.

La Pasionaria said...

You forget that those that work in the public sector pay tax, NIC and 6 to 11% of their salaries towards their pensions. Not to mention that public sector workers save and create wealth which goes to buy shares in private sector companies. Yours is a very pessimistic view of the future your blog reads like the author is a jealous envious little Briton who blames everyone else for the country's problems.

The Druid of Anglesey said...

La Pas - I've been missing you! Have you been trolling on some other website?

You're incorrect - although public sector workers also pay tax, NIC etc, this is essentially recycled tax money from the private sector. As the public sector does not 'create wealth' this is not 'new money'. Understand?

I'm not being pessimistic - I'm being realistic.

La Pasionaria said...

Druid,

Trolling is an interesting word I've come across before, haven't we crossed swords before?
I only come visiting occasionally in case I get taken in by the tory propaganda machine. How is this young boy candidate you got in Ynys Mon done, see much of him? Love to stay and chat but must do some blogging of my own!

La Pasionaria, xxxx

The Druid of Anglesey said...

La Pas - I'm sure I'll win you over eventually... You blog too? Now that's something I'd like to see.

Cibwr said...

And of course that recycled money from public sector workers buy goods and services from the private sector, so not all wasted money.

The Druid of Anglesey said...

Cibwr, I never said the money was wasted - I just said it was recycled (as your comment also shows). My aim with this post was not to attack the public sector (far from it) but to show that Wales's economy is unbalanced and needs to be corrected.

J. Vooght said...

One variable left out of the equation: who will pay the (high) salary of the parachuted-in Mr. David Bowles, contracted from a company run by, erm, council managing directors. They set their own pay, but they will try every trick in the book to not tell you what their salaries actually are. 'Confidential' they say. OK, I'll ask the Council how much money they dole out every day (allegedly £1200 a day) to said 'Solace' Enterprises (from which I take very little), and they then wait, and wait, and wait, for Solace to tell them if they'll ever reply to a Freedom of Information Act request. Over the 20 day time limit? So what, they say.

Your intrepid correspondent will continue his fight to extract the required information, which can hardly be said not to be in the public interest...

Welsh Ramblings said...

Druid, your post shows a heavily ideological view. But the village model is interesting.

Where do you think the public sector workers spend their wages? They buy food, clothes, bus tickets, train tickets, cars, they bank, they buy electronic goods, they go to cinemas and concerts.

And how many of the private sector jobs in our miniature village are being subsidised or grant-funded by taxpayers' money?

It's all money.

"Of course this isn't really the case, as we get helped out by some of the taxpayers living in the nearby town called 'England'."

What historical relationship has the nearby town of England had to explain the fact that apparently, our villagers are reliant on being helped?

Has our village done anything to earn such help? Or are they giving us help out of the goodness of their hearts? It would also help to know whether the nearby town, England, has 'helped' or had any other kind of relationships with other towns and villages, be they neighbouring or otherwise?

Finally, it might be wise to know for how long has the nearby town of England been helping us and have we always relied on that help or was there once a time when our long term sick worked in industries that were actually helping England, and not our little village?

I'd finally want to ask what about other villages around us. To the north what does the village that represents Norway look like? Or for a less oil-skewed view, Sweden? Don't they have more than 10 public sector workers in their representative villages? And aren't they happier, healthier and wealthier (though colder) than ours? How does that work?

It's an interesting model, that's for sure, and i'd appreciate a come back.

La Pasionaria said...

You wouldn't like my blog, it would be far too radical and progressive, it would only upset you!

Welsh Ramblings said...

Shame the Druid hasn't come back on my points yet.

I suspect he/she wouldn't be able to face up to the historic reasons that our little village economy is so unbalanced ; ). Or the fact that coal dug from our specific little village fuelled much of global capitalism across a considerable portion of the industrial world. Which might explain why we now have to depend on remittances.

Come on Druid, explain yourself.

The Druid of Anglesey said...

Bloody Hell, Ramblings - stop being so impatient! I'm working on it, okay?!?

Welsh Ramblings said...

Looking forward to it!

The Druid of Anglesey said...

Welsh Ramblings is demanding that I 'explain myself'. Bloody cheek! So here goes:

1. This post wasn't particularly intended to be ideological - I just thought the village analogy would make it easy to understand how the welsh economy is currently structured.

2. Ramblings says "Where do you think the public sector workers spend their wages? They buy food, clothes, bus tickets, train tickets, cars, they bank, they buy electronic goods, they go to cinemas and concerts. And how many of the private sector jobs in our miniature village are being subsidised or grant-funded by taxpayers' money? It's all money."

Its all money, yes, but it also ALL originates from the Private Sector. As I replied to a previous commenter, the money which public sector workers both pay in tax and spend in the wider economy was obtained by the government through taxing private sector profits and wages. The point I was making was that out of a village of 100 people, only the 34 private sector workers are actually 'creating wealth', i.e. per Adam Smith's definition of 'wealth creation' whereby materials, labour, land, and technology are combined in such a way as to capture a profit. This is what the "GDP growth' figures measure each year. Currently it can be argued that the Welsh economy has too few people actually creating the wealth for the rest of the county - particularly when you consider that currently Welsh private sector only accounts for 34% of the economy, the remainder is made up by public sector expenditure. This is dangerously unbalanced.

3. Ramblings goes on to ask what possible historical reasons are there behind the the fact that "we get helped out by some of the taxpayers living in the nearby town called 'England'". When I wrote the original post I only mentioned this as it is essential to understand that Wales does receive a substantial sum of tax money from across the border in England. I did not write this to suggest that Wales should be grateful for it; I wrote it because it is a fact - and needs to be considered if we are to move towards greater autonomy (or even independence). I don't want to debate historical rights or wrongs with Ramblings because, frankly, what's the point (he seems to want to make a point that Wales has been exploited in some way in the extraction of coal in S.Wales - and maybe he is right). We are were we are and I'm more interested in policies which provide for Wales's future rather than dwelling on its past.

4. Not sure who Ramblings is referring to when he says "our long term sick worked in industries that were actually helping England, and not our little village".

5. Ramblings final question is: "I'd finally want to ask what about other villages around us. To the north what does the village that represents Norway look like? Or for a less oil-skewed view, Sweden? Don't they have more than 10 public sector workers in their representative villages? And aren't they happier, healthier and wealthier (though colder) than ours? How does that work?"

Now that is an interesting question - and one I'd like to look in to (despite his impatience I'm sure Ramblings will understand that my Swedish is a little rusty and it might take more than just 24 hours to ferret out all the relevant demographics and employment data). Or perhaps Ramblings might want to consider a counter-post on his blog on this subject? It would provide the basis of an interesting debate.

In the meantime the Druid intends to blog about what policies, based on this above understanding of the Welsh economy, Wales can pursue to right the imbalance and achieve greater independent growth into the future.

Welsh Ramblings said...

Part 1
I appreciate that you have responded- but I fail to see how you can post up such correct conclusions about the Welsh economy without desiring the drastic improvements that only self-determination can deliver.

Your points responded to in kind:

1. There's nothing wrong with using the village analogy I really like it! I just dispute the ideology behind your points. You allege that having a public sector the size of Wales' is automatically a bad thing. It isn't. There are similar sized countries to ours that are wealthier than us AND have larger public sectors and higher public spending. I suspect you know this and will agree, but I will find the data if you dispute it. The size of the private sector is the problem. It is far far too small in Wales. But you don't have to reduce the public part to make the private part bigger.

2. It is unbalanced but i'm not sure if it is 'dangerously unbalanced'. It needs to be rectified, but gradually rather than instantly through cuts. The private sector being too small is one of three main factors identified by the economist Eurfyl ap Gwilym as to why Wales is comparatively poor. The other two factors are us having a large number of retirees and having a brain drain of talent away from Wales. I agree with the Adam Smith definition. Interestingly Adam Smith's economic thinking recognised the need for state intervention to a much larger extent than the economists who today pervert his legacy do.
We would both agree that creating a bigger Welsh private sector is THE key to unlocking Welsh economic potential. But you won't be able to create one unless you understand WHY our private sector is so comparatively small, which leads me on to-

3. You have to debate the historical rights and wrongs. Otherwise you will have no conception of why the Welsh economy, including Ynys Mon, is in a relatively poor state compared to neighbouring countries and especially the rest of the UK. History explains everything and helps inform the future. I suspect some people want to avoid Welsh economic history because it contains things they don't like and issues they don't want to escape. British unionists especially are guilty of this.

It is a fact that by the most recent study, Wales receives some £9bn more public expenditure than it generates within its own borders. Many nationalists raise problems with that study (not least that it can't be used to test independence, because a Welsh independent state could have completely different spending priorities to Britain), but let's go with it for now until the Holtham Commission presents better data.

Was Wales always a net drain on Britain's finances? Consider the past, briefly. No it wasn't. Wales was one of the first mass industrialised nations in the world. It was industrialised largely using capital from outside of Wales and also alot of workers from outside Wales. Welsh natural resources were exploited on a massive scale, effectively fuelling the British Empire. Wales had been subsumed into that Empire some time before through varying economic, political and cultural processes. Thus, in line with Lenin's theory of 'Imperialism as the highest form of capitalism' Wales was resource-stripped in the colonial fashion, the value of resource being exported from Wales being simply unimaginable. Suffice to say, the ports in the south of Wales were the largest of their kind in the world at the height of the coal boom. And then you've got north-east Wales as well, and the slate industries across the north-west and north. Workers from Ynys Mon figured in migrations to all of those focal points.

Welsh Ramblings said...

And part 2-
Which leads to-

4. The industrialised Welsh economy subsequently served imperial interests for successive decades until the global economy began to shift from heavy resources towards automobiles and manufacturing plants. To an extent, British economic policy saw Wales through those changes but obviously the vast majority of our heavy industries became unprofitable and were closed by the British state or by market forces.

The legacy is a massive amount of sick and ill people, a lack of replacement jobs, environmental scaring and a poverty of ambition. From the massive scale of extraction and exploitation of Wales over the years, the net benefit is barely visible. A few square miles of neo-classical architecture in Cardiff and that's it. No prosperity of our own except a small overspill from north-west England and in the south the M4. No Welsh capitalist class or indigenous enterprising class- there is no need for one in a colonial resource economy. A poverty of aspiration and ambition, especially as there is no real point in developing any new industries in Wales as Wales won't be a direct recipient of the profits.

If you want to learn more about this but don't want to delve into books (I can never be bothered), George Monbiot has an excellent article about Wales being one of the developed world's most extractive economies here-
http://www.monbiot.com/archives/2008/12/30/the-open-veins-of-wales/

Even if you disagree, it'll make you think. It'll also remind you that it's not all about the industrial revolution. The relatively modern Tory Beeching cuts had a profound impact on continuing this process.

5. I appreciate that and will consider a counter-post. It'll be difficult to bring all this stuff together though. Plus an attempt to share genuine ideas and explain why things happen will be met with predictable derision and ignorance from some of the more neanderthal parts of the blogosphere.

Still, it's worth a try, and I hope you realise Wales isn't poor for the sake of it.

I sincerely look forward to your posts about how to get the Welsh economy going. All of the powers required to do so reside at Westminster. Ieuan Wyn Jones' portfolio is effectively a budget of tax payers money that can be distributed to private companies, and that's it. He performs admirably within those constraints in my personal opinion, but there is no way such spending will impact on the headline economy statistics that we'll all be watching.

The Druid of Anglesey said...

Thanks for these comments, Ramblings. Allow me to reflect on them and I'll comment further.

evision said...
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