Saturday, April 09, 2005


When I was a child, every other house in my street contained someone who worked at "the Austin". The nearby Charford council estate was divided between Austin workers and employees of Garringtons, at the time the world's largest drop forging manufacturer, whose hammers lulled me to sleep. Those were the days when 'social housing' contained people who worked for a living, the days when the middle-class complaint was of a working class earning too much - the Jag parked outside the council house syndrome. Garringtons closed in 2002, leaving a large hole in its pension fund. The site is a housing estate for Native Brits fleeing Birmingham. And Charford is now the kind of place where they kick disabled people to death for fun.

Many free-market, libertarian bloggers have seen the Rover receivership, if not as a good thing, at least not as a bad one. Only Mr S&M has reservations. After all, if other people can make cars cheaper than we can, so much the better. We get cheap cars out of it - good for us. Let people do what they're good at. The workers ? They can get other jobs - perhaps those fabled high added value jobs that I hear about every time a cheese factory closes in Goole.

As the ASI Blog said, "Adam Smith's dictum that the end of all production is consumption is now more widely accepted, and the main purpose of industry is seen as the production of goods and services which people will freely and willingly buy.

This no longer, alas, includes Rover cars, but there are new products and services taking their place every year for which the UK can find ready markets. Better, perhaps, to be part of a viable and vibrant future than to lock ourselves into a past of outmoded and unwanted products.

Well, yes. Better indeed to be part of a vibrant future. It's just that isn't the place where the Rover employees and their suppliers find themselves. That little weasel word, 'perhaps'. After all, it's better to have a nice Georgian house with an acre of lawn than a three bedroomed semi. Try knocking dowm someone's semi and then telling them what an opportunity they have.

So, the good folk of Bromsgrove, Rubery and Longbridge can create the new products and services "for which the UK can find ready markets". Let's start by taking a look at the new products, shall we ?

Well ?

I'm waiting.

Can anybody tell me what these new products are ? That we're going to sell to the world ? My new Pentax comes from the Philippines. My PC was assembled in Thailand from Chinese components. When we do invent something, like the Dyson vacuum cleaner, production is offshored and the UK operation consists of 50 highly paid designers and a few bean counters and marketing men. Actually I made those figures up. Halve the number of designers and add 50 marketers !

In the 20s and 30s, the height of the Depression, huge new industries were emerging in the UK. Chemicals, aircraft, electronics, cars. Where are today's equivalents ? Double-glazing that we don't export ? Perhaps pharmaceuticals and biotech stuff, if the animal rights boyos can be kept at bay. Anything else ?

"Oh alright then - we meant services. Look at the City."

I suppose the theory is that a combination of lethargy and convenience (between time zones) will keep the dosh rolling into the City, even when world manufacturing is centred in Asia. Just the way that Florence and Antwerp remained the capitals of world banking despite the rise of Britain, the USA and Germany, eh ? It may take time, but inevitably the services will follow the manufacturing. Ah, but think of the expertise we've built up ! I don't know about you, but when I've opened my commercial insurance company in China I think I'll get the underwriting done by Chinese rather than imported Brits. Who's likely to be able to gauge the risk best ?
Already lower and middle level (like research) City and legal jobs are being outsourced to India. IT jobs are going there too.

"We mean cultural services - books, music, plays, films"

The Churchillian phrase is "the acme of gullibility". The reason American popular culture dominates the globe is connected with the fact that the US is currently the most powerful nation, economically and militarily, on earth. Lose that and see how many people want to see your movies. Percentage wise, it'll be something like the European audience for Chinese films. The market for our stuff in Asia in 50 years will be on a par with, say, the Edwardian Brit market for Spanish novels and music. It'll be interesting to see how a nation of 75 million (remember the new immigrants have a high birth rate) survive on selling the equivalent of So Solid Crew CDs.

And we'll be as a nation on a par with Edwardian Spain. If we're very, very lucky.

Let's just revisit the "high value jobs" theory. This, of course, presumes a highly educated nation. Next question ?

Last, the "cheaper cars" idea. From that perspective, Burkina Faso must be a fantastic place to live. You see, just about everywhere in the world can make cars cheaper that the Burkinistas. What a paradise !

Trouble is, no one in Burkina Faso has got any money.

UPDATE - I posted this, on a similar theme, nearly two years ago. Spot-on with the prediction about call centres, less so on Labour's doom.

UPDATE 2 - the future ? Via Black Informant, the World Intercollegiate Programming Championship results paint a gloomy picture. Nice to see Bangladesh in the top 30, but China, India and the old Eastern Bloc seem to be where the cleverclogs are.

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