Originally the works and the offices for a business were in the same building, with the master’s mansion on a salubrious hill nearby upwind from the works, and the workforce’s tenements downwind from the works. Each little region had a regional capital, with a corn exchange and a stock exchange, and some local banks.

Stage 2 was, once the original areas were poisoned and ruined, moving the offices, the exchanges, the banks to London or New York/Chicago/Dallas/LA, leaving the dirty works behind in the dilapidated rustbelt. That is separation of headquarters and factories, with dirty factories out of sight from the masters and their sycophantic trusties.

Stage 3 happened when the workforce in the rustbelt became uppity and expensive: replace them with cheap, docile serfs overseas, close down the works here and reopen them there, keeping the headquarters and the sycophantic trusties in and around London or New York/Chicago/Dallas/LA.
This is the “plantation economy”, like the in the 18th century with the lords and ladies living off the sugar plantations in the caribbeans or Ireland, the dream of the ruling class.

The problem is that stage 2 worked in the 20th century and the caribbeans plantations worked in the 18th century only because they were subject to the same government and its enforcers:

– If the factory is say in Glasgow, or the plantation is in Jamaica, why should the local trusties running them on behalf of the absentee London headquarters lords send all the profits to those headquarters? Why shouldn’t they just take them over and keep the profits?
– The only reason was that headquarters would then tell their sponsored Imperial Government, who would send the US marines or the King’s redcoats, and the gunboats, and teach a lesson to anybody who was being too clever with not sending the profits back to headquarters.

The problem with stage 3 in the late 20th and early 21st century is that today the factories are in India and China and Korea, which have nowadays their own powerful governments sponsored by the local trusties; they are not Jamaica or Honduras or Bangladesh. And if the local trusties steal all of the technologies and equipment and trade knowledge, the government in London or Washington can complain to the other government, who will smile and promise much and do nothing.

So today high end routers are not designed by eloi english engineers in luxurious Racal headquarters in Bracknell, and manufactured by morlock chinese serfs in the dirty and nasty Racal offshore factory near Shenzhen, with all the profits flowing to the english headquarters like in the golden age of the English Empire.

The whole headquarters have moved to Huawei in Shenzen, protected by the chinese government from “enforcement” by foreign headquarters, including enforcement of patents or copyrights or whatever; just like this happened with the USA in the 18th century, when Imperial Headquarters in London had forbidden the colonies from manufacturing even their own nails.

Where does this leave England? Drugged on property debt, this graph from Steve Keen is the story of the past 35 years:

The read line is total outstanding private debt (80% of which is mortgages), the blue line is new credit added every year. Yee-haw! 🙂

“Incompetence often looks like conspiracy so I try to fall on the side of incompetence. But whether it is incompetence or conspiracy it is working exactly to what our adversaries want. We are deindustrializing the western world.”
– John Kutsch, Director of the Thorium Energy Alliance