And So It Goes…#755

It is axiomatic that Capitalism has a tendency toward over-production. In the delusional alternate-universe according the the acolytes and devotees of Adam Smith et al, the thaumaturgy of  ” Competition ” and ” efficiency ” and all the rest of the associated nonsense somehow exerts an influence that , again somehow, regulates any given market as if by an invisible hand.  And all this frenzied,remorseless competition takes place in some perfect anodyne set of historic / political /socio-economic circumstances that said acolytes and devotees don’t bother too much at all in in trying to understand and analyse rationally. ” Free market ! ” they exclaim interminably or “neoliberal ” ,whilst competition, competitiveness and competing are all too readily excreted from their ideological orifices. Except, of course when Realpolitik manifests itself and geo-strategic long term goals of rival sovereign nation-states with genuine clout bend the supposedly pristine operations of the capitalist free markets to their Will. The actual stuff of Human History and not the moribund, archaic piffle of the whiners and bleaters crying out for justice and fairness in the wilderness. There ain’t any, in case you haven’t noticed. Human History is not a cosy parlour game with rules.

Ambrose Evans-Pritchard, columnist non-pareil at the Daily Telegraph reports the following in the edition of 31 March.

The British are sacrificing an entire European industry to say thank you to China for signing up to the nuclear power project at Hinkley Point, and pretending it is about free trade,” said one official in Brussels bitterly.
What they are blocking is a change to an EU regulation intended to beef up Europe’s ‘trade defence instruments’ (TDI), enabling it to respond much more quickly to Chinese dumping and too impose much tougher penalties.
 The British have cobbled together a blocking minority in the council, much to the annoyance of the French, Italians, Spanish, and Germans.
The UK view is that the Commission mixed up good changes with bad changes, and that punitive tariffs merely hurt your own consumers, so you shoot yourself in the foot.
Yet the outcome is that it still takes Brussels 16 months to crank up full sanctions, twice as long as it takes the US. It is why the EU limits itself to a ‘Lesser Duty’ regime that often fails to reflects the full injury.
While Washington has slapped penalties of 267% on Chinese cold-rolled steel, the EU peashooter has so far managed just 13% .
Redcar has already paid the price for this ultra-free trade ideology, and Port Talbot is about to follow. There will eventually be little left if the current drift in trade policy is allowed to continue.
China’s share of global steel output has risen from 10% to 50% over the last decade. It has installed capacity of 1.2bn tonnes a year that it can never hope to absorb as the construction boom deflates.
On OECD estimates it has built up 400m tonnes of excess capacity, twice the EU’s entire steel production. China’s unwanted steel is finding its way systematically into Europe, greased by export subsidies, tax breaks, cheap state credit, and the panoply of measures used by a mercantilist power to rig global trade.
China has captured 45% of the UK market for high fatigue rebar steel, from near zero four years ago. The price of hot rolled steel in Europe has fallen to $369 a tonne from an average of $650 from 2009 to 2013.
There you go, quote from Capitalist-Ideology Central , “Redcar has already paid the price for this ultra-free trade ideology, “
They ought to be pleased by all of this , it’s free trade, it’s Darwinian, the strong exterminating the weak through the rigours of Competition and efficiency. And best of all it comes, fortuitously, right slap bang in the middle of the Referendum on Britain’s continued incarceration in the EU State Mental Hospital. Lovely !

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