Isn’t Left Wing Economics Fascinating?

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The Senior Lecturer tells us that Amazon must – just must – be expecting the same return on capital from its UK operations as it gets from its American:

We can presume – because economic theory tells us that this is what a company will seek – that they expect equal returns on capital across their portfolio unless they explain to the contrary, and as far as I know they don’t explain in that way.

We get more too:

The logic is simple If they’re maximisers – and that’s what economic theory says – and they can choose where they work – and they can – they will only work in the places where there is maximum reward They seek to show that is not Europe over many years And that makes no sense

If you’re not making money somewhere then you stop. You don’t continue, you don’t invest. You just throw up your hands and stop.

Hmm, OK, fair enough. Not that I agree or that we should but there’s the claim at least.

So, let’s now look at the British economy:

London’s economy has outstripped all other English regions with a 19% surge in growth since 2012, highlighting the divide between the capital and the rest of England. The Office for National Statistics underlined the city’s disproportionate economic heft in its first set of regional GDP figures for England and Wales, which showed the north-east with the slowest growth over the same period at 5.9%. The West Midlands economy, home to the UK’s biggest carmaker Jaguar Land Rover, came second to London after it expanded 16.5% over six years from 2012 to the end of 2018.

Loosely put, the bits of the British economy that are working are London and the West Midlands. Which therefore means that’s where we should be investing, the other areas which aren’t so working should be closed down and that’s that.

If we use the logic that we’re supposed to use over Amazon that is.

Carys Roberts, chief economist at the IPPR thinktank and head of the Centre for Economic Justice, said: “The fact that growth from all regions of England has consistently lagged behind that from London is a clear indicator that something is wrong in the economy. Such regional inequalities hold back productivity, wages and people’s standard of living and quality of life. “We need a new industrial strategy act setting out clear goals that focus on putting this right. We should be building high-tech industrial clusters around our many world-leading research-based universities. And we should set up a new national investment bank to invest in infrastructure, innovation and business growth across England.”

Hmm, what’s that? We’ve got to invest in failure? Not draw back from things that don’t work, but pump ever more resources into that failure?

Gosh, isn’t lefty economics fun? One of those parts of life where if you don’t have double standards you’ve no standards at all.