Thanks David for the link. I haven’t commented on this because like Dutch finance minister Zalm (who I imagine working away weblogging into the early hours under a dim light provided only by his mobile phone) I am tired. I can’t help feeling that everything that needs to be said has already been said, and many times over. Now all we can reasonably do is wait and see the consequences.
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Tag Archives: growth
The importance of economic integration (and some investment advice)
In the comments to one of the posts below, I raised the point that America’s prosperity owes a great deal more to its economic integration rather than to any particular shared value system, and that this was part of logic behind the founding of the EU. I want to demonstrate exactly how important a point that can be by using my own line of work as an example.
I work for a medium-sized Belgian translation firm. We have a handful of full-time staff and some 200 freelance translators who take work from us. Our freelancers can and do take work from other sources, what we do is mostly dealing with clients. Like all good middlemen, we make it possible for businesses to negotiate a single price for their translation work and we act as an insurance policy. Avoiding the middleman may sometimes cost less, but if your freelance translator is sick or busy and you have a deadline to deal with, you have to scramble to find a substitute. If you deal with us, we have many translators on tap and someone will always take your work. Few firms – only a few very large ones – still keep in-house translators. Translators generally agree to charge us less than they would charge clients directly because we can bring them a great deal of work, and we take away the cost of billing and accounting. We charge customers a bit more because we simplify billing and guarantee schedules. This is pretty much how modern translation firms operate.
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Anyone Want to Play Ball With Me?
Even though it may appear that this post runs along much the same lines as my last two or three, I should warn you: appearances are sometimes deceptive. The origins of what I want to say here stretch back in time two or three days to some comments I made on an earlier post and a subsequent piece which I have entitled the ‘Pele-Ronaldo’ effect. Surprising as it may seem, the topic here is only tangentially football. The real topic is the so-called brain drain, and how our initial intuitions may mislead us. The aforementioned effect is associated with the apparent detail that all those Brazilians ‘heading the ball’ here in Europe have not notedly had a detrimental effect on the rate at which Brazilian football produces outstanding new stars. In fact quite the contrary.
Now here’s the rub: just think of all those Indian IT ‘stars’ working at NASA, Microsoft and the like, and try to imagine the consequences back home in India. Well then try to imagine the consequences of the secondary effect in India on the employment situation in the US and now increasingly in Europe, and we get to the point of all this. We are experiencing a phenomenon which some are calling ‘hollowing out’. This has been noticed in the first place in the US, but with the EU structural reforms, and the relatively high euro, this tendency is going to make itself felt more and more over here. So this is the purpose of the post. To find out what people think.
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Europe as an economic irrelevancy
By 2050 Western Europe could be an economic irrelevancy, with its four leading economies, the UK, Germany, France and Italy (note the order?) enjoying a combined output of less than half India?s and a third of China?s. Both Brazil and Russia will be twice as large as any single Western European economy.
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