Trying to compare the manufacture of cars to the manufacture of torture equipment is really fairly odd.

No, the possibility I describe means the government doing something to secure the quality of life for people that are made redundent in a failing market with no possibility to upskill or reskill themselves without getting further in to debt in a poor economic environment. It has nothing to do with whether the business itself fails or not, it’s to do with ensuring that where businesses do fail, *people* are protected in the short term from falling in to a cycle of welfare and desperation.

What there is *no* question of is no money being spent – unless you think perhaps we should stop paying unemployment benefits to those people? The question is whether it’s better to spend quite a lot of money now, short term, to allow those people to continue to be productive but in different industries, to spend the same amount of money to allow them to keep their jobs in a failing industry for an indefinite length of time, or to spend slightly less right now, but keep spending indefinitely, paying unemployment benefit (and additional spending on healthcare, income support for them when they reach pensionable age as they will have no savings, etc etc) for the same people.

Even discounting the horrific human cost of that much unemployment, even discounting the knock-on economic effects of entire communities losing their main employers, just on a pure cost-benefit analysis it makes sense for the government to do a little more now…

You’re being simplistic. One argument is that the government should pay cash to businesses that are failing to help workers…with a bit of an angle potentially on that business being long term viable…while the other argument is that the business is failing, but that shouldn’t meant the workers just get made redundant (we think it’s bad for society and the economy) and instead should get aid to help them in to a new industry. It’s two different arguments. The latter doesn’t keep the business propped up whatsoever, it’s just stops workers being the worst affected by management and business strategy screw ups.

Or you can invest it in such a way that the workers can get new jobs. But government is pretty poor at making those sort of investment decisions. If it happens upon a solution (whether it was a certain sort of re-retraining or inventing a new product to make and sell), it would be pretty much by random chance. At the same time, the cost of the government’s actions would have to be taken from somewhere – either from higher taxes now or through a debt which will inhibit recovery because people will be worried about tax increases in the future.

So the best option might be to do much less rather than more. Reduce corporate taxes and/or taxes on low incomes – or at the very least stop spending so much now so that people are less anxious about future tax increase. That way the economy has a better chance of recovery and taking advantage of the labour on offer. Or if you really want to nudge it in favour of those being laid off right now, reduce taxes in a more limited way in the form of a tax credit on training for new workers (r something along those lines). That way you can allow successful firms to co-ordinate the recovery without direct government intervention. The last thing you want is the government itself deciding where the money ought to go. It is more likely to sink it in a useless make-work scheme than something productive for the long term.

No we don’t, that’s pretty much the crux of the whole debate here.

“But for all that, I don’t think those criticisms touch trade liberalisation as such, merely emphasise the fundamental importance of having real property rights, the rule of law and equality before the law in place, rather than the skewed priorities of what Western transnational organisations have decided free markets and capitalism are about.”

But for all that, I don’t think those criticisms touch trade liberalisation as such, merely emphasise the fundamental importance of having real property rights, the rule of law and equality before the law in place, rather than the skewed priorities of what Western transnational organisation have decended free markets and capitalism are about.

Chang’s actual position is more nuanced than the article I linked to makes out, the article in question was intended to promote his book “Bad Samaritans” which is intended to present his ideas in an acessible way.

He is not 100% opposed to economic liberalisation, although he does appear (from what I’ve read of his work) to disapprove of some elements of it. He does advocate protectionism for developing nations although he believes such policies should be implemented in the context of an overall development strategy. I’ll try and write a little more on his work when I get a moment.

Obviously such a large body of work deserves more examination but if the above ripping apart of that Prospect article is anything to go by, he relies on very skewed readings of history to derive these ‘benefits’ from state intervention.

I am not saying there is anything wrong with having an economy that makes things people want. I am saying there is a problem with economies that make stuff people don’t want or need at all! The idea that state internvention can ever kick-start an econony is a weird notion in theory, and doesn’t seem to have ever worked in practice: http://www.cato-at-liberty.org/2008/12/15/are-we-all-keynesians-now/

On training, I agree with Alan in that jobs don’t always create themselves. Entepreneurs in Britain have a bias towards retail and services businesses and against industry. More generally I think the government should act to counter that balance.

Nick – A huge swathe of the economy is devoted to producing things we don’t need but someone wants, As far as spending other people’s money goes, state intervention has been incredibly effective in kickstarting economic development in the past. A reform of union/employer relations could also be useful as well as a reform of the banking system.

For those not so sure on the benefits of state intervention, I’d advise them to take a look at the work of Professor Ha-Joon Chang he’s written extensively on the subject and although much of what he writes is more centered on developing nations, there are some elements of his work that could be applied to advanced economies.

The problems of the west midlands car industry are similar to the problems facing Detroit. George Monbiot wrote a piece about this, (which was far harsher than Bennet’s) and it is easy enough to slam them both for being middle class greenies, etc. but how do you deal with their substantve argument?

As Larry Elliot said in yesterday’s Guardian “there needs to be a vision of the good society, the world the left wants to create. The free-market right has one. The Marxists have one. The greens have one. Unless the social democratic left has one – and can articulate it fully – it is finished.”

http://www.guardian.co.uk/business/2008/dec/22/keynes-left-economics-economy

Actually no, I have a “valid” complaint because I’m right about this IMO, and that would still be true whether I was a Jag assembly line worker or a surfer on a beach in California. These people are members of my own trade union and I seem to recall some concept called “solidarity” upon which the labour movement in this country was founded. Furthermore, I notice that none of the people who are so willing to say “sorry but they have to go to the wall” (as I understand it, it’s the “sorry” bit which makes one not a Thatcherite) appear to be car workers themselves. I don’t think that invalidates their right to comment about this, and nor does the fact that the London politico/media/NGO circuit is unlikely to be hard-hit by a further collapse in the West Mids economy. Although mind you, it does lead me to question whether the human aspect of the whole thing has properly been appreciated.

A few general points. As I said, I’m not in favour of simply chucking money at failing private firms. Indeed with the motor industry, more could be done by taking it into public owenership and then dealing properly with the environmental issues caused by Jaguar/Land Rover vehicles. Letting the firm go to the wall and creating economic devastation as a result is not a particularly “green solution”, in fact it is one of which the American Enterprise Institute or the Cato Foundation would heartily approve. It is also a cruel and unfeeling one, in my view.

Further, it always amazes me the way that people seem to believe that the magical capacity of “training” to produce new jobs out of dust. Bennett appears to think this in her original article, and it’s been mentioned several times in the course of this thread. The reality is that training prepares people for jobs that are already there, and if a region collapses economically then all of its residents could be qualified to PhD level without a single one necessarily becoming unemployed.

The green problem doesn’t really need a solution because it isn’t a real problem at all. The environment is important to people but we can deal with it just as soon as everyone agrees its important (when everyone is rich enough not to care about other things). The problem of people’s jobs becoming obsolete is much tougher. More people than ever have transferable skills and with smaller businesses and more self-employed individuals, we are seeing economic forms that are more immune to sudden changes develop.

But what about those that have yet to be opted in to such a scheme or lack the necessary potential to be so adaptable? I am not so sure. I know the European model of greater union/corporation co-operation has worked well where workers are damn near guaranteed a job for the whole of their lives but not necessarily THAT job, and corporations take on responsiblities to maintain their workers – if necessary paying to have them re-skilled for another line of work. I am sure some of these things could develop here if we weren’t so antagonistic when it comes to labour/business relations. But how to get from here to there is a difficult question.

This is daft. As you rightly imply, the Thatcherite worldview was flawed in two important ways (1) it artifically closed down individual businesses that were still, or had the potential to be, profitable and (2) it assumed the system would automatically pick up the slack in unemployment, despite the bleeding obvious square peg/round hole problems involved in throwing a manufacturing workforce at a burgeoning service economy.

If someone talks about “unsustainable industries” but then doesn’t then go on to say that therefore everything in the industry should be shut down regardless of individual circumstances and all the workers will be able to instantly get jobs as advertising execs then… well, they haven’t said it, have they. So what’s your problem? You might as well have a problem with people using the word “the” because it smacks of a Thatcherite world view. To deny that some industries may turn out to be unsustainable in pure business terms is ludicrous. How you decide to approach that reality – in terms of provision for workers etc – is surely more to the point.

In terms of Jaguar and Land Rover their failure isn’t really down to not anticipating the green revolution but the extraordinary economic situation we’re now in. The thing about the company as it stands is that a) it provides good, well paid jobs and b) it brings together a lot of expertise and infrastructure relating to car production that could potentially be used to take the company in a future green direction.

I personally believe that Jaguar’s current woes are temporary and that with appropriate support and investment it could become a sustainable future business.

Now that would strike a blow against the SWP from which they would never recover!