The Great Debate UK
It seems barely a week goes by without another shock report about the ever-widening gap between those at the top of the earnings distribution and the rest of us. The facts are by now well-established. Throughout the Western world, but most noticeably in Britain and America, the earnings of the top one or two percent are accelerating into the stratosphere, leaving the middle class a long way behind, and the working class completely out of sight. How can one explain this global phenomenon?
Academic economics seems to be taking a surprisingly long time to reach a definitive answer, but I suspect there will turn out to be two long term trends at work here.
First, globalisation has doubled or tripled the supply of unskilled and semi-skilled labour. As long as China remained locked in Maoist isolation and the Indian economy had to carry the full burden of the Licence Raj, their respective workforces were shut off from the global labour market. The fact that products could theoretically be manufactured far cheaper in those countries was unimportant, because in practice Western firms could never take advantage of their rock-bottom labour costs.
Now that they have opened up and it is possible to outsource manufacturing to China and the paperwork to India, there is less and less left for our workers and middle-managers to do – unless, of course, they are willing to work for more competitive (i.e. lower) wages.
This Sunday will decide the World Cup champion. Yet, most nations will ask themselves again what’s needed to build a world-class national team?
“Football is just a business nowadays, isn’t it?”
Well, actually no, it’s not, and it never has been – at least not if a business means an enterprise intended to maximise shareholder value.
In the “good old days” – so called because they were bloody awful – football clubs were financed by a Big Sugar Daddy, often the millionaire who owned the local mill or maybe a small chain of shops in the town.
-Professor Simon Chadwick, Director, Centre for the International Business of Sport, Coventry, UK. The opinions expressed are his own. -
There is a famous song, composed in the run-up to UEFA Euro 96, in which the Lightening Seeds, Frank Skinner and David Baddiel refer to England’s 30 years of hurt (the period at the time since England won its one and only World Cup).