No one in Britain is really surprised at the rise in unemployment to over 2.5 million but reactions should go beyond a bald “I told you so”. The government’s rationale was that by cutting public sector jobs the private sector would make up the difference by some hitherto unknown “hidden hand”. But since a Tory government hollowed out the UK economy in the 1980s, almost obliterating the manufacturing sector, there has been no real private sector. Instead, governments have offered public sector industries to private companies as cash cows. First it was the utilities, then transport. Currently, it’s health and education being prepared for sacrifice.
The reason the private sector can’t take up the slack is that much of it is really the old public sector in disguise or it lives by supplying the private sector. A country cannot suddenly start making TVs, refrigerators, cameras and bathroom fittings in the teeth of efficient German and Japanese competition, having give up these industries 30 years ago. Ah, but we’re told service industries are all these days. Perhaps I should start another high-street nail parlour? That might be the answer.
The reason the private sector can’t take up the slack is that much of it is really the old public sector in disguise or it lives by supplying the private sector. A country cannot suddenly start making TVs, refrigerators, cameras and bathroom fittings in the teeth of efficient German and Japanese competition, having give up these industries 30 years ago. Ah, but we’re told service industries are all these days. Perhaps I should start another high-street nail parlour? That might be the answer.
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