An interesting statement here:
There has been no sustained increase in British manufacturing output since the 1970s
And then the truth:
Oh, right. So there has been a sustained increase in UK manufacturing output since the 1970s then.
At which point we can ignore everything else that is being said here because he’s obviously operating in an entirely alternative reality.
This is not an argument against industrial policy per se, but against the antidote fallacy which encourages the unreal expectation that an industrial policy focused on an aspirational economy can deliver the competitive success that has eluded British manufacturing since the war. This will end in disappointment and right now does not start the necessary debate in the UK about what kind of private sector we want and the policies that can get us there.
It would make much more sense to start with the foundational economy, which sustains the infrastructure of everyday life via utilities, food and supermarkets, health, education and welfare. The foundational economy currently employs nearly half the workforce distributed throughout the UK. For example, the foundational economy includes food processing: our largest manufacturing sector and a powerful lever for import substitution. And the foundational economy is all that’s left across large areas of the north and west of the UK which need industrial policy in a way that the Thames Valley and the M11 corridor do not.
The UK needs a different kind of industrial policy. First, to stop the disorganisation of health and education provision in the name of competition which covers corporate looting of the contracting state. Second, to curb point-value calculations like those of the supermarkets who deliver shareholder value and low prices by capturing the margins of British food processors and producers. Out of this kind of industrial policy would come a learning which ensured we did more than vary Thatcher’s mistakes.
Sigh. That desire for “competitive success”. ‘S’ funny how none of those desiring that or looking for it ever seem to note the one area of the economy in which the UK is in fact world beating. The City.
And absolutely everything they complain about about The City is exactly what you get if you have any economic sector at all which is world beating.
Increased inequality? Well, if any sector is indeed making money off the 7 billion around the world then yes, wages there will be higher than in the economy which serves the 60 million of us. This would be true if we had a globally competitive textiles industry.
That all the bright people go off to make their fortunes in this sector? Sure, same would be true if it were British car manufacturing exporting to the world.
The government in that sector’s pocket? Why wouldn’t that happen if it was farming, or pottery, that was the one bright spot in the UK’s value added landscape?
For all of these things are just what happens when you’ve got one sector which is indeed, head and shoulders above everyone else, globally competitive. That it happens to be finance now is just that, happenstance. The effects would be the same whatever sector it was.
Karel Williams is professor of accounting and political economy, Manchester Business School
Ah, yes. A follower of the Ritchiebollocks school of economics. Heavy on the accounting and politics and knowing little about the economics.