On Mon, 16 Mar 1998, Mark Jones wrote:
> I have been looking at the way the stats were massaged by the Tories,
> and yes, you can add maybe three points to the UK rate.
> Nevertheless today the UK unemployment rate is 5-8 percentage points
> below the German and 6-9 points below the French. Hardly signs of UK failure.
Mark, I hate to break the news to you, but in 1990 a little thing called
the Berlin Wall was bulldozed by, well, some revolutionaries. Germany's
11% unemployment is due to the collapse of the GDR economy; unemployment
is 18% and higher in the ex-GDR, and many of those folks have moved to the
West, swelling the jobless rolls (also, there's been a huge wave of
immigrants from Eastern Europe and the CIS countries into Germany; ethnic
Germans from Russia are also amongst the newly-unemployed). Factor this
out, and we're talking 6-7% unemployment rates in Middle Europe.
> Dennis R. mentioned British education. The OECD 1992 figures show
> average time spent in education (both sexes) as 12 years in
> Germany and 14 years in the UK.
Very true. I'll be the first to admit that the UK has some fine schools,
excellent researchers and first-class scientists. The question is, given
Britain's marvelous and storied tradition of R & D, and the extensive
participation rate in colleges and universities (twice as high as the
German average) why isn't Britain also producing world-class cars,
microchips, or software? Where are the British versions of SAP and Baan,
Nokia and Ericsson? One clue why this might be so: about a third of all R
& D spending in the UK is done by the Government, about the same ratio as
Germany. But only 9% of such German Gov't funding is military-related,
while 41% of British R & D is for the military, one of the highest levels
in the world (this is also one of the causes, I suspect, of high French
unemployment: France spends 33% of its Gov't R & D on the military, and
pissed away a lot of francs on the force de frappe and related nuclear
boondoggles).
> UK and FRG governmental sources (the IMF DSBB website) show this:
> United Kingdom: Economic and financial data : Date of last update:
> 6 March 1998 (data correspond to the International Monetary Fund's DSBB):
> GDP at current market prices = UKP£ billion Q4 1997 200.9
> 3rd qtr 198.9 = UKP£399.8 bn = $667.66 bn
>
> FRG, ditto DSBB data updated 14.03.98: National accounts:
> gross domestic product DM bn at current prices:
> 4th quarter 1997: 955.60 [bn DM],
> 3rd qtr: 924.60 [bn DM] = 1880.2 bn = $1106bn
Wait just a second, I just checked the OECD website over at
www.oecd.org, and their per capita figures for 1997 in American
dollars reads like this:
Country Per cap $ % of Japanese level
Japan 33500 (100)
USA 29000 87%
Germany 25800 77%
France 23700 71%
UK 22200 66%
Italy 20200 60%
Canada 19500 58%
New Zealand 18200 54%
I think the numbers you quote, Mark, are actually in fixed currency units,
i.e. pegged to currency values for 1990, instead of being at current (i.e.
inflation-adjusted) prices; the above per cap figure for Germany would be
around $1.9 trillion of GDP, which you mentioned in your correction. (The
above chart also leaves out some really rich European countries, like
Austria, Switzerland, Norway and Denmark, who would be ranked somewhere
between Japan and the US).
One other point worth noting: exchange rates do bounce around a lot
nowadays, in the world of unfettered markets. Might this be skewing the
above chart? Could be. If you take volatility into account, you get the
following per cap GDP ranges:
Japan 40800-33500
USA 26600-29000
Germany 28700-25800 (West Germany only: 33500-28500)
France 26200-23000
Italy 23000-18500
UK 22800-17500
Canada 18800-16500
N.Zealand 18200-15500
According to the foreign exchange markets, the UK has become a second-rank
power; time will tell if George Soros and his ilk are wrong about this.
Okay. Now one last little chart in a post which is way too long already,
but which does validate Mark's point, that UK performance hasn't been so
awful in the postwar period. Here are the OECD per cap stats for 1965, at
the height of the postwar boom:
Country per cap $ % American levels
USA $3501 (100)
Canada $2459 70%
W. Germany $1909 55%
UK $1567 45%
Italy $1213 35%
Japan $863 25%
So the UK, for all its problems, did at least narrow the gap with the
Americans; still and all, the much-maligned German welfare state
performed superbly, yielding lots of social dividends to its citizens
while surpassing the Americans (we're talking West Germany now). Canada
did poorly by any standard. The US pretty much stagnated. And the
Italian and Japanese experiences are impressive indeed. More reasons to
buy up those supercheap Japanese equities!
-- Dennis
