Saturday, 23 January 2016

Microwave economics or Macroeconomics.

Everything is falling apart here, now our microwave died. I was particularly annoyed because I bought it exactly 4 years ago so that it would see me out. I even threw out the old one when it was still working.

Well, don't buy Sharp because it never ventilated properly and rusted because it got so wet.

Then last week the light went.

Then, the next day it gave a few sparks, fizzed and died.

I didn't feel like driving over to the council recycling centre because it's a long way, I'm not so well and we had lots of things to do. I decided to carry out an experiment - I put the old Microwave out on the grass verge;

Around here there are lots of people who make a good living driving around picking up scrap metal that no one wants and then selling it on to a scrapyard for recycling.

Now once upon a time we made things here. We dug coal, shovelled up iron ore and limestone. We made steel as well as textiles, cars, ships and everything else.

Then Margaret Thatcher came along and everyone except me decided that it was fine to import everything and waste all our North Sea Oil on paying for it all.

Now everybody is unemployed and our microwaves come from China or some other low wage economy. The shop where you buy it takes at least 50% of what we pay.......that's our's a retail economy.

Of the rest of the money, most goes to whichever non taxpaying multinational company has it's logo on the microwave. A pitifully small amount ends up with the people who made the thing (only pennies), the rest goes to middle men and wholesalers.

What changed all this was the growth of cheap container transport. Nowadays our old microwave goes off to a scrap metal merchant where it's broken down into bits, cleaned up a bit and then shipped off across the sea to China where it gets melted down to make more microwaves.

Then they get shipped back here all over again.

As a result, for the last decade, commodity prices have rocketed; oil was at record levels, the same with iron ore, copper etc.

Recently, China has had a slow down, the worlds stock exchanges have taken fright and fallen and oil prices have fallen to lows not seen for a decade.

I put the old microwave out at 1035am Monday morning - not long ago it would have been picked up within about an hour.

This time?

It took exactly four days - about the longest I can remember.

It's possible this was distorted because early in the week it was freezing cold but generally I would say that commodity prices are falling but there is still some residual demand.

Anyway, at least I got out of dragging the thing to the council dump.

Neil Harris
(a don't stop till you drop production)

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