Louis MacNeice wrote as long ago as the '30s that the countryside was “a dwindling annexe to the town, squalid as an afterbirth”. Well, farming may be dirty but that’s life. How can these precious, fastidious townees live except by food?
In discussions of Britain’s economy the contribution of farming, now down to 0.5% of GDP, is treated with contempt. Left to the market, it is assumed that UK farming would disappear altogether. But there is something deeply obscene and almost suicidal about this attitude. Statistics can lie but here’s one that doesn’t: precisely 100% of the British people eat. So in a world in which global food supplies are now seriously at risk from climate change and Britain’s parlous balance of payments (-£15bn in foodstuffs alone), is about to get worse as the bloated financial service sector shrinks, shouldn’t the contribution of farming to the wellbeing of the country be evaluated on a different scale to this tyrannous yardstick of GDP?
Louis MacNeice wrote as long ago as the '30s that the countryside was “a dwindling annexe to the town, squalid as an afterbirth”. Well, farming may be dirty but that’s life. How can these precious, fastidious townees live except by food? On BBC TV's Question Time last night again and again panellists of all stripes consigned British industry of the 70s to the scrapheap once again. It was inefficient and had to be swept away. Did it occur to none of them that with Britain’s technological and scientific strength, reshaping them and promoting new hi-tech industries might have been a better option? The result is that both the private industries that replaced the nationalised ones and the car, train, plane and power-station makers who came in to fill the gap were almost all foreign-owned. Is this what the woman who wouldn’t eat French mustard wanted?
Certain assumptions are being made about Mrs Thatcher’s legacy that don’t stack up. Jonathan Freedland in the Guardian quotes Mrs Thatcher’s remark: “How absurd it will seem in a few years ‘ time that the state ran PIckford’s removals and Gleneagles Hotel “ and points to “the plethora of competing companies, replacing the single British Rail”. On Newsnight Jeremy Paxman jeered at the old order in which a monopoly telephone company kept you waiting for months for service.
Yes, many restrictive practices were swept away by Thatcher. But look again at the industries privatised by Thatcher or her successors. No major decision on the railways – whether it is building HS2 , electrifying existing routes or buying new trains – is made by anybody other than the government. The track, stations and signalling are all owned by Network Rail, a not-for-profit company (effectively, the government again) that replaced the failed private Railtrack. For the last two and a half years the key East Coast route has been run by the government again, following the collapse of the last private franchise. In energy, the private companies seem unable to make good the looming energy shortage. Of course, they blame it on government but if the market is so good, it would surely sort itself out without any reference to government at all, wouldn’t it? Just as Thatcher jeered at the dinosaur state running Pickfords and Gleneagles today we cast a baleful eye on the ludicrous incompetence and dodgy practices of many private enterprises and observe that once-private banks required part nationalisation to avoid collapse. Just as the state has to run railways when the private contractors run away. The last word on Thatcher, the Iron Lady of over-centralised government, should perhaps go to Shakespeare. In The Tempest, Gonzalo waxes eloquent on the freedoms he would introduce “Had I plantation of this Isle”: “Riches, poverty, use of service, none: contract, succession, borne, bound of land, tilth, vineyard none: no use of metal, corn, or wine, or oil: no occupation, all men idle, all: and women too, but innocent and pure: no sovereignty...” “And yet he would be King on’t”, Sebastian retorts. The same apples to Reagan, spending billions on defence that he refused to pay for in taxation because it offended his free market principles. It is shameful that opposition politicians and the media have let George Osborne set the agenda on the welfare changes. It is all about making the system fairer for those in work and thus encouraging people back into work. No, it isn’t. It is not the poor who create jobs and at the moment it is the rich who are destroying them. The government’s attack on the welfare system owes its origin to the failure of British industry and the consequent creation of a dependent underclass in place of the working class: the collapse and/or selling off of the country’s manufacturing base. The City and Tory Party actively encouraged this process and it is still going on.
Vodafone are the latest target in a process that turns former industrial bosses into rentiers, living off their cashed-in share options. As Alex Brummer, the sole voice to lament the destruction of ICI, put it: “As firms fell like ninepins around them, canny chief executives demanded new clauses in their contracts that guaranteed the equivalent of lottery wins if their firms were taken over. They did this by insisting that their share options — usually paid out only after a number of years — could instantly be converted to cash.” So arise serial sell-off merchants like Sir Nigel Rudd, knighted for services to industry. And a supine press and political class seemingly cannot even see this process for what it is, let alone try to halt it. I thought the news that Astra Zeneca was closing the legendary ex-ICI research facility at Alderley Park was bad enough but now they announce 2,300 more job cuts, UK portion unspecified. And it is refocusing: “It will cut spending on neuroscience and antibiotics”. Antibiotics? Those are the drugs the UK Chief Medical Officer says we separately need revived to cope with drug resistance.
Meanwhile, I hardly need to add, the CEO walks off with banker-style bonuses: a golden hello last year of £4m, and to come a 180% performance related annual bonus. So it’s all about him and not about the ostensible purpose of the company: to make the drugs we need. Having written only two weeks ago about the fate of ICI, once Britain’s’ largest industrial company, now no more, I discover that the story has got even worse. The demise of ICI began when in 1999, they hived off the more profitable pharmaceuticals wing to form Zeneca. The old ICI research centre at Alderley Park, source of the innovation that drove Zeneca lived on as a research base for the new company.
But no longer. Today we hear that the centre will close with the loss of 550 jobs. Another 1650 will be relocated to the new Astra Zeneca research HQ in Cambridge. Not all loss then but why should all of Britain's remaining hi-tech expertise be in Cambridge? George Osborne helped to secure a £5 million grant for Alderley only a few months ago and now the North will lose yet another of its major companies. For whom, quite, does this make sense? Perhaps the greatest surprise of the year so far has been the UK government boldly announcing that it will fund “Eight Great Technologies” to the tune of £464 million. Having proclaimed for three decades that governments cannot pick winners, the Tory wing of the Coalition (this policy is specifically David Willett’s baby) is putting money where its new-found mouth is on a Rabelaisian scale. The famous 8 are:
£464 of the £600 additional funding for science. 1.The big data revolution and energy-efficient computing 2. satellite data analysis 3. robots and other autonomous systems. 4. Synthetic biology 5. Regenerative Medicine 6. Agriscience 7. Advanced materials and nanotechnology 8. Energy and its Storage The policy paper, published by Policy Exchange, seems well-informed and the highlighted fields sound plausible. But, as in the past, the strengths that the government wishes to support lie largely in the universities. The number of world-class companies able to bring these technologies to market is limited. We must wish the strategy well but a similar report in 1950 could have pointed with real confidence to four much greater technologies in which Britain had world leadership or at least top-ranking status: commercial jet airliners; computing; electronics and telecommunications; nuclear power. These are massive industries, far bigger in scale than the Famous 8, and all failed miserably. Meanwhile, the government’s next big initiative is the £33 billion HS2 project, a large part of which will be sourced overseas because Britain’s pioneer railway manufacturing industry lost its way many decades ago. Coming in minutes into Paul Mason’s report on Newsnight I thought he seemed to be saying that the IMF had done a Dept of Transport: got its sums wrong. They had been working on the assumption that for every pound/dollar or euro cut in govt spending only half would be lost to the economy. Newsnight seemed to be saying that in fact the figure was 1.7, an enormous multiplier effect.
If true, this is a bombshell: what is at stake is not who will run the trains to Glasgow but the entire world economy. That 1.7, if true, means the savage cuts will increase the deficit. Pain in vain. I expected the papers and blogs to be heavy with it this morning but all I could find was an item tucked away on an Irish website to the effect that this wasn’t an IMF statement but a minority footnote by two people in the report suggesting that the multiplier might be 0.9 to 1.7. It always seemed likely that high-spending governments (which all the governments in crisis are) trying to make savage cuts would incur a double whammy from a decreased tax take and increased welfare spending. A multiplier of more than one seemed likely. But then I’m not an economist. I now eagerly away the expert enlightenment of Peston, Mason, Flanders et al. I think we should be told. With the long Olympics feelgood summer finally over, the harsh awakenings are coming thick and fast: the killing of the US Ambassador in Libya; the revelation of widespread corruption in British institutions following the Hillsborough tragedy 23 years ago. One that won’t be noticed by many is the startling revelation that BAE, Britain’s’ largest manufacturing company, wants to tie up with the European giant EADS. That would be 60% EADS/40% BAE. You need to know the back story that was completely ignored by the BBC News report last night.
BAE is the rump of Britain’s’ once diverse aviation industry. EADS is primarily a civil aircraft maker, parent company of the enormous and successful Airbus range of airliners. BAE is mainly a defence contractor (now also owning the UK warship and tank industry) . Six years ago it sold its 20% stake in Airbus because it wanted to concentrate on defence, especially in America. It is a subcontractor for work on the way-over-budget-and-schedule Joint Strike Fighter. BAE hoped, it seems, this would all lead to a full tie-up one day with Boeing. The American ambitions always looked dubious. The US has never had much respect for British military aircraft, the Harrier excepted. They bought the plane, adapted it, and built it under licence. When Britain foolishly decided to pension off the Harriers as a quick budget cut the US paid it the ultimate compliment of buying up the entire stock. But that’s about as far as it goes. Come the financial crash and all has changed. BAE is a weak exporter – it has just lost the contract to supply Typhoons to India. It is heavily reliant on supplying the UK armed forces. This of course is not a growth area at present. US defense budgets are similarly down. So now BAE wants to REBALANCE IN FAVOUR OF CIVIL AIRCRAFT! Six wasted years in other words. It should have upped the stake in Airbus 6 years ago, not sold it. BAE seems to be doing its best to follow in the wake of the British car industry and ICI. The latter, in a suicidal fit, sold all its heavy chemical businesses and bought into perfumery and flavours. “You’d never know us”, they crowed in an asinine advertising campaign. A few years later, the once giant of British industry had gone, the rump Dulux paint business sold to the Dutch Akzo Nobel. So where does this leave Britain’s rebalancing in favour of manufacturing industry? I ask the question. Aditya Chakrabortty writes in the Guardian today about “how the people at the top of some of our biggest businesses have used their positions to extract [my italics] money, rather than earn it, and how politicians and regulators have connived at this organised looting”.
This reminds me that the deepest analysis of what is happening in the world’s economies today comes from Why Nations Fail by Daron Acemoglu and James A. Robinson (see my review). Their message, in a nutshell is that there are two kinds of economy: inclusive and extractive. Inclusive economies are what the West possessed until recently, with wealth widely shared. Extractive economies are those of desperately poor dictator-ridden countries like Zimbabwe or slightly richer undemocratic countries like Russia. The concept of the extractive economy is an important one. As a few people like Chakrabortty have realised, Western societies are becoming extractive rather than inclusive. This is the road to ruin because to reconstitute an inclusive society from an extractive one is extremely difficult, as Acemoglu and Robinson point out in many vivid examples. |
AuthorI'm a writer whose interests include the biological revolution happening now, the relationship between art and science, jazz, and the state of the planet Archives
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