Why Britain needs Hard Industries.
Alan Goodacre BNP team
One of the biggest myths holding the British economy back is that we can - even must - forget about manufacturing, and stake our future prosperity on service industries. The images used to peddle this are easy enough to understand: one the one hand, the glitz of London 's financial centre, on the other, some abandoned factory in the North of England. The tacit implication is: here are your choices; which would you rather have?
The Blair government, and most of the rest of the establishment, are great enthusiasts for the post-industrial economy, probably because it makes Labour feel modern, and makes Tories feel that the old nightmare at the base of their brains - a militant industrial working class - can never again rise from the dead. The establishments of both parties are deeply intertwined with the owners and managers of the service industries, from investment banking to advertising, so they also have strong purely material interests in the post-industrial myth, too.
Too bad it isn't true. For in fact, empirical evidence from other nations makes quite clear that not only is manufacturing not , as we are told, a 'sunset' part of the economy, even in the developed world, it is in fact one of the best economic sectors for a nation to have a strong presence in, because of its ability to produce sustainable well-paid jobs for ordinary workers. In this, it significantly surpasses the service economy.
Please note this isn't true for all manufacturing. It's true for advanced , that is high-tech, manufacturing. Most of what you've heard about the obsolescence of manufacturing is indeed true, if you're talking about primitive forms of it. The stamping out of plastic toys and similar items is indeed an intrinsically low-paying industry, because it can be performed by illiterate peasants in Shanghai , and therefore anyone else performing it is in competition with such low-paid people. Such industries are very difficult for a high-wage (by world standards) nation like Britain to retain, and don't pay very well, simply because what they produce is so cheap that little money per worker is generated. So while there is no excuse for abandoning workers in our older industries to their fate, we can't look to such industries as motors of future prosperity.
But it is an entirely different story for the manufacture of things like computer chips, aeroplane parts, and medical devices. Companies can't do this with illiterate peasant labour. This is why it tends to get done, even today, with highly-skilled and well-paid labour, in places likes Bavaria , California , and Kyushu . This is the kind of manufacturing we need. Below is a partial list of advanced manufacturing industries, to make clear how vast the opportunities are:
1. Flat-panel displays for laptops, TVs and other devices.
2. Steel-alloy pipes for transporting oil, which sound primitive but are in fact very sophisticated due to the subtle corrosion-resistant alloys involved and the difficulty of making them in the large sizes that require the least final assembly.
3. Synthetic fibers. Although sewing clothes is low-tech, turning a barrel of crude oil into convincing synthetic silk is not.
4. Photolithographic steppers, the machines used to turn the designs of silicon chips into actual chips.
5. Bearings, ball and otherwise, are a classic seemingly old and dull product that has quietly adapted with the times to become frequently very high-tech.
6. Electric power generators, which are unseen but expensive and ubiquitous.
7. Capacitors, and other obscure but important electronic components.
8. Textile-making machinery like ultra-fast modern looms.
9. Laser diodes, which make CD players work.
10. Nickel hydride batteries, the tiny high-quality ones that are vital for cell phones, camcorders, etc.
11. Robotics, an industry that is not only valuable in itself, but buttresses other manufacturing industries by making readily available the know-how to automate production of other things.
12. Cameras, both conventional and digital, still and motion.
13. Machine tools, which are, of course, the ultimate key to making other manufactured goods.
14. Avionics and aeroplane parts.
15. Watch movements.
16. Ship engines. How do you think all those imports get here?
17. Photocopiers, especially their key electro-optical components.
18. Carbon fibre, an emerging material that is replacing metals in key applications.
19. Construction equipment, which is often a lot more sophisticated than it looks.
20. Titanium, an emerging metal.
21. Medical devices.
22. Equipment for nuclear power plants.
23. High-tech weaponry, including counter-terrorist equipment like bomb sniffers.
24. Green power devices, like fuel cells and the generators, control units, towers and blades of windmills.
25. Pollution control equipment, like sulphur dioxide scrubbers, and pollution detection devices.
(This list is adapted from Eamonn Fingleton's In Praise of Hard Industries , the best, and very readable, book on this topic).
Note that much advanced manufacturing involves products - fibres, pipes, bulldozers - that one would not think of as advanced, but are in fact more subtly made than one imagines. Advanced manufacturing often centers on the key components of products rather than the products themselves. Many consumer products, for example, consist of technically-advanced components surrounded by a commonplace plastic package that is easy to make. The outside of a fax machine, for example, will say 'made in China ', simply because final assembly was done there, with unskilled labour. But the bit that really matters - and accounts for most of the cost, and wages paid - is the electro-optical read-write head. This is a sophisticated piece of equipment, made by highly-trained and well-paid labour in some developed country, like Japan .
Also note - especially in reference to the last five items - that these products are very much not 'sunset industries', but things for which demand will boom for years to come, due to fundamental trends like the rising cost of energy, the increasing need to protect the environment, and the threat of terrorism.
The whole 'sunset industries' concept is an excuse for national failure in manufacturing. The only real 'sunset industries' in manufacturing are ones that run on unskilled labour, and they're not setting as such; they're just moving where labour is cheap. Any other industries we've lost, it's our own fault. Automobile manufacturing, for example, is very much not a sunset industry, and Rover might be where Toyota is today if not for the short-termism of its owners, the bloody-mindedness of its unions, and government indifference to its decline. In 1968, British Leyland was the 3 rd -largest carmaker in the world!
Flaws of the post-industrial economy
Enthusiasts of the post-industrial economy are simply not honest about its drawbacks:
1. Jobs in computer software, finance, management consulting, and similar fields may be highly paid, but it usually takes a college degree to get one. 56% percent of college-age Britons are not going to get a college degree (Source: Higher Education Statistics Agency). And exactly half the population, by definition, has a below-average IQ, so many people probably can't be college educated, even if they can afford it, are still young enough, and have sufficient school preparation. Without alternatives to the information economy, many of these people are doomed to a low standard of living for their entire lives.
In contrast, advanced manufacturing reliably creates a wide spectrum of jobs at all skill levels, and is particularly rich in the crucial category of the skilled blue-collar jobs that ordinary working-class people have a plausible chance of holding. Good jobs in advanced manufacturing require training, but they require the kind of training that one can get in specialized courses at community college, at a technical institute, or through an on-the-job apprenticeship program run by the company or the union. (By the way, perhaps this would be a better occupation for unions than class warfare, party politics, or the promotion of multiculturalism?)
2. The information economy is intrinsically limited in terms of how many good jobs it can create, simply because it is limited in how large a portion of the economy it can be. This is because information is only a limited part of the 'value chain' that makes up the final price of any product. The value of a programmer who creates a website to sell DVD players is necessarily limited to some fraction of the value-added of retailing the product, which is only a small part of its overall value. That value is made up of researching, designing, manufacturing, distributing, marketing, wholesaling, retailing and servicing it. If we cede the manufacturing link of the value chain to foreigners, this means ceding a large piece of potential economic activity and the jobs that flow to whomever performs that activity. Worse, it often also means ceding related jobs, like design, parts and materials procurement, and logistics, plus jobs in supplier industries.
3. Britain is limited in what share of the world market for internationally-traded services it can win. Other nations want this business too, and they are getting better at winning it all the time. The Internet only makes this easier. For example, many societies whose overall economies are still primitive, like Russia and India , have developed elites of computer programmers whose salaries are a fraction of British levels.
The current strength of the City of London is vulnerable to the growth in sophistication of the financial sectors of other nations. It is also vulnerable, even if the top jobs stay in London , to 'hollowing out' as the 'back office' jobs get relocated abroad.
The more globalised our economy, and the more dependent on foreign markets for the services we produce, the more vulnerable we are to this.
4. A related problem is that post-industrial jobs may be highly paid, but many of them have limited export potential. British advertising agencies and accounting firms may have branches all over the world, but the need to handle local languages and other peculiarities guarantees that they mostly employ foreigners, most of the value-added takes place overseas, and only a relatively small trickle of profits and jobs come back to Britain . And the highest reaches of British finance, which really can export services all over the world, are simply not big enough, in relation to our entire economy, to make up for our trade deficit in manufactured goods. A trade deficit means that we must either gradually sell off the country's existing assets to foreigners, or sink into debt to them.
There is an emerging hierarchy in the world economy in which the best-paid jobs are clustered in certain nations. If Britain wants to be a sustainably prosperous nation with well-paid workers, we must explicitly compete for these jobs. This cannot possibly be a matter of laissez-faire indifference in any sane society. It cannot be repeated often enough that the free market has no loyalty to this country, and does not care if we thrive or starve. One must respect the genuine insights of free-market thinking, but always remember that the market is a game to be played to win. It is neither a divine law to be passively submitted to in the naïve expectation that all is for the best, as the Tories and New Labour say, or an arbitrary invention of capitalists that can be casually over-thrown, as socialists say.
So why does Britain , once the workshop of the world, lag so badly in the field of advanced manufacturing?
1. A culture of disrespect for the field
Even though the old British 'gentlemen don't go into trade' nonsense more-or-less died in the Thatcher years, it did huge damage from about 1800 to 1980, and was then replaced by a slick yuppie version of the same attitude, which considered manufacturing to be a dead-end and unfashionable industry. Engineers - the officer class of manufacturing - are low in status, compared with lawyers, bankers, consultants, or advertising men. They are assumed to be dull, unimpressive personalities. How many famous manufacturers does one ever hear about? Everyone knows who wrote the most trivial pop songs, but who can name the engineers who designed even our greatest technological achievements, like the Concorde or the Severn Bridge ? This is not so in other countries: in Germany , engineering is associated with the glamour of BMW, Mercedes, and other top automobile producers. The profession is similarly respected in Japan , Korea , and other East Asian nations. Naturally, in these nations, manufacturing attracts some of the best minds in the country, and the results show it.
2. Lack of government attention
British governments, past and present, have simply not taken the needs of the manufacturing sector seriously. Labour governments allowed the unions to run amok and destroy entire industries, like automobiles. Conservative ones despised the people who worked in manufacturing, wrote off manufacturing regions as places that didn't vote for them, and allowed the pound to rise on the back of oil revenues, pricing British manufactures out of the world market. Both governments built poor road and rail infrastructure, compared with other European nations.
When our governments have taken manufacturing seriously, as in the attempt of the Wilson government to broker mergers to create national champions in key industries, they have often employed dubious economic strategies, infected with half-baked socialist ideas, about what makes an industry internationally competitive. They applied the anti-monopoly laws in a manner that hinders crucial intra-industry cooperation in such things as shared research and development, rather than helping create the institutions for same. And they practiced doctrinaire free trade, giving producers in other nations open access to the British market without extracting real market access in return.
3. Our poor education system.
Skilled workers are one of the biggest factors that draw advanced manufacturing jobs to high-wage nations. But British policy has tended to assume that only white-collar jobs are desirable and that all blue-collar jobs are undesirable. It would be far better to have strong industrial-arts and apprenticeship programs, like Germany has, than to divide every high school into "college-bound" and "loser" tracks. And without solid basic education, you can forget apprenticing later on to learn numerically-controlled machine tool operation, or anything like it. Part of our problem is the New Labour myth that the class system has vanished, which causes us to be in denial about the fact that 40% of this country is working class and is going to have blue-collar jobs. Such people's can't just be told to become something they're not.
4. Our low savings rate.
This may seem to have nothing to do with advanced manufacturing per se , but this is wrong, because it is of the very essence of advanced manufacturing that it is highly capitalized. It requires vast capital both for research and development and for plant and equipment. This money has to come from somewhere, i.e. from somebody's decision to save and invest part of their income. It is a globalist myth that it doesn't matter if Britain doesn't generate enough investment capital domestically, because we can just import the stuff. This is wrong because:
- blog slar
Unrecognisable - the UK broken up by Labour traitors
There are eight of them in England, their activities are largely unknown to the vast majority of British taxpayers despite using a lot of taxpayers’ money, they work behind the scenes, they even have the hired services of the Church of England, they are accountable only to the EU and they are the fledgling institutions which will see the total demise and break up of Britain – they are the unelected regional assemblies.
It has been known for several decades that the Labour Party has intended to introduce regional government into this country in order to destroy the nation state of the United Kingdom. The institutions which were the precursors to the EU were other players who wanted to achieve the same goal. As long ago as 1965 the then Common Market issued its 'First Commission Communication on Regional Policy'. The combination of the 10 year old Labour regime and the growing influence of the EU have created the conditions by which their goals are gradually being achieved.
The 1992 Maastricht Treaty, signed by Conservative Prime Minister, Margaret Thatcher, gave authority to establish the EU's Committee of the Regions (COR) which came into being in November 1993. Its stated purpose is 'to ensure that the public authorities closest to the citizen are consulted on EU proposals of direct interest to them, especially when they are responsible for implementing these policies after they are adopted'.
But the smoke screen of consultation ignores the fact that the Regions will be responsible to Brussels. In 1996 the idea of Regions was given further substance with the publication of the European Commission's regional booklets. In these booklets all Regions are described in the same way. i.e. London in Europe, Scotland in Europe, Wales in Europe etc., making it clear that their allegiance is to the EU and that they are not free and independent.
Soon after the Labour Party took office in 1997 it started the process of devolution in Scotland, Wales, Northern Ireland and London. Devolution is another term for regionalisation. This has unbalanced the Constitution in that MPs representing the regions with assemblies can legislate for England but English MPs cannot reciprocate for those regions.
Now that the break-up process has started, the aggrieved English regions are seeking this illusion of independence. Probably the most active area is the North East Region which will comprise Northumberland, Tyne & Wear, Durham and Cleveland and is likely to be the first English Region.
In 1998 the Labour Government launched 'the Democratic Renewable Debate' and in the same year enacted the Regional Development Agencies Act (1998). The Act brought about the establishment of Regional Development Agencies (RDAs) in each of the English Regions. RDA members are appointed by the government. They co-ordinate land use, transport, economic development, agriculture, energy and waste. All RDAs have Brussels offices.
Each region will ultimately have two layers of government: an elected assembly and a development agency. For the time being the assemblies are not elected and are referred to as 'chambers'. Regional Assemblies or Chambers first met in 1999. They oversee Regional Development Agencies in the 8 English regions. They are: East Midlands, West Midlands, North-West, North East, Eastern, South East, South-West and Yorkshire & Humber. Each Region will have a local capital and a seat of the elected assembly. In the South East it will be in Winchester and in the South West, Exeter. It can be seen that as these Regions acquire authority, the cohesion of England as a unit of Government within the UK will be eroded.
With the encouragement of the RDAs, those supporting regionalisation have been holding meetings called Constitutional Conventions. Their aim is to convince people living within a region that they believe in a regional identity. Many churchgoers will find it surprising that the Church of England takes a leading role in this process. The, then, Bishop of Durham (Rt. Rev. Michael Turnbull) chaired the Archbishop's Committee on the organisation and regional structure of the Church of England which started its deliberations in 1995.
Additionally, the Bishop of Liverpool chairs the North West Constitutional Convention; the Bishop of Birmingham chairs the West Midlands Constitutional Convention, and the Bishop of Exeter chairs the South West Constitutional Convention. In 1996, the newsletter of the Church of England's organisation 'Christianity and the Future of Europe' admitted that it had received in the previous four years, annual grants of between 5,000 - 9,000 Euros from the Secretariat General of the EU, plus a grant of 20,000 Euros from the EU's 'Soul for Europe' programme.
The net result will be less democracy, less accountability by those institutions we the taxpayers fund and transfer even more sovereignty to Brussels.
More about the break-up of Britain can be seen here.