COMMERCIAL REALITY

The world is sometimes an unforgiving place and the iron laws of economics are not easily defied. We are basically compassionate people and hate seeing families uprooted, lives compromised and security undermined. Yet the economic prospects of large numbers of people since time immemorial have been at the mercy of “the market”, of supply and demand, of overcapacity or of technological change. The challenge for modern society is how sensibly to manage this inevitable process.

Britain has seen this process in action many times. In the 18^th century a mainly agricultural society was transformed by the Industrial Revolution, mechanising weaving, stimulating coal mining and the production of iron. In time, great industries were developed – cotton in Manchester, wool in Bradford, iron in Glasgow, coal in South Wales. Trade hugely expanded and tobacco, sugar and tea came to be processed in Bristol, shipbuilding boomed on the Clyde and the Tyne – railways spread prosperity around the country, although working conditions in “the dark, satanic mills” were often appalling. By the 20^th century many of these great enterprises were in sharp decline, thanks to competition from Europe and America as the developed world caught up, lower labour costs from Japan, India, Korea and China as they joined the industrial league.

Poverty and overcrowding in early 20th century Britain

Successive governments failed to stem the tide. Coal, shipbuilding and steel were nationalised but still lost dominance, at last effectively collapsing. The UCS shipyard, the Meriden motor-cycle works and other visionary projects quickly failed. Not only basic industries were effected: the British motor industry, once well respected, failed to adapt to changing markets and fell to German, Japanese and even Indian buyers. North Sea Oil enjoyed a boom but excessive oil supply and falling prices has seriously stalled this industry.


Britain is not alone facing these problems. The French coal industry has disappeared too and the German steel production much diminished. Throughout Europe, in Italy, Spain and Greece, large employers have shut their gates forever. In the USA a great steel city like Gary, Indiana has closed down and fabled Motown, Detroit, Michigan is a desert of closed auto factories and abandoned neighbourhoods. Spare a thought even for the demonised UK bankers, devastated by the 2008 Crisis, where the big 4 banks cut 189,000 jobs.

In Britain the hot topic is the fate of Port Talbot a massive steel plant in Wales, losing £1m a day for its Indian owner Tata, who has decided to withdraw from / close or sell the plant. In the present steel slump there are unlikely to be buyers and the unions and the Labour Party are calling for some kind of nationalisation to protect the jobs threatened. This sounds like a bad idea, to invest vast sums in a failing industry. I would expect the Government to encourage and even to incentivise new industries to set up nearby and retrain the 7,000-strong workforce. Probably the sad fact is that the sooner Port Talbot is shut down the better.

Hugely loss-making Port Talbot

We live in a post-industrial world and the steel workers, no more than the coal miners of old, cannot be held immune from economic reality. There are new industries in pharmaceuticals, information technology and aerospace, not to mention the resilient financial services and retail sectors.   Currently the most pampered sacred cow is the NHS. Cameron and Osborne, knowing where the votes are, solemnly “ring-fence” spending on the NHS protecting it from the disciplines of the market. We all love the NHS, I do as a pensioner, but inevitably some hospitals become redundant, departments need to be amalgamated, new equipment bought, the qualified workforce reduced here or expanded there. This vast enterprise needs to be managed carefully and if the taxpayer can spend less on it without damage, so much the better. Yet nurses and junior doctors, egged on by the infamous and militant BMA, squeal loudly for ever-improved pay and conditions, whatever the cost to the public purse or the health of patients.

Noisy but deluded junior hospital doctors

Thus another selfish state-dependant profession joins the teachers and the civil servants as an almost immoveable vested interest, blackmailing the feeble government and squeezing the suffering taxpayer. We must resist or lose control of our finances – quite a dilemma.

SMD,
17.04.16,
Text Copyright © Sidney Donald 2016