John Redwood, normally so interesting, is reduced to bleating “why don’t we make things anymore?”.
Of course making a “thing” you can drop on your foot is no different economically to providing a service except that the latter cannot be outsourced to secretive slave-labour camps like China which because of “communism” gets a bye from the leftist-inclined world media despite its savage political repression. Unlike the slave-labour camp Myanmar which has the misfortune to be a military Junta with a personable opposition leader, there is no significant world profile for opposition leaders in China. A billion people live in bondage in part because people want cheap “things” and in part because almost all journalists think communism is somehow better than fascism or military rule, when all involve the same repression. In fact, my guess is communism’s worse. I doubt Aung San Suu Kyi would have survived had she had the misfortune to be Chinese. Can anyone think of anyone outside the identikit Grey men of the Politbureau who will be next leader. Clue: it’s not Liu Xiaobo. Though the communist economic choke-hold has been released a bit and the Chinese economy grows at a decent clip. China’s success in using her almost limitless labour supply to supply christmas lights to the west at £6 a time, is not a mark of success. It is the wages of half a century of failure of idiotic economic ideas and political savagery.
So poor countries like China with a highly centralised state CAN persue export-led growth by applying western developed technology and nailing them together using extremely cheap labour and currency manipulation. However, John Redwood would, presumably like her Majesty’s subjects in the UK to remain free? To remain rich? And he’s against currency manipulation. So how, exactly does he propose that we compete against the chinese? And who is going to buy our manufactured goods if we did persue this strategy? It’s not the average Chinese worker – he couldn’t becaue the Renminbi is kept artificially low and black market currency trading is punishable, as so much in China, by death.
If China’s exports aren’t a demonstration of the superiortity of Manufacturing, then what is? Manufacturing does not lead to stability – manufacturing goods is one of the most cyclical sectors. Nor does it generate many high-paid jobs, especially if you want high productivity too. Nor are manufactured goods any more “real” than services. How is cooking a steak in a resteraunt less “real” than making rubber dog shit? The real root of the wish for things to be made in the UK is ignorance of what a service economy actually is, xenophobia and nostalgia for an industrial working class, which has gone.
The idea that exporting manufactured goods is the most important economic measure is no less idiotic than the idea that Agricultural land is still the root of all wealth. Agriculture was indeed the root of wealth, until 1750 or so, then manufacturing took over until about 1965. Services – the businesses of ideas and information is the root of wealth now. It’s about who controls the information and has the ideas. And that is still the lucky people breathing free air – Britain, her old Commonwealth, Western Europe and North America who are designing things to be put together by slaves in China who get the most economic benefit from the process.
So John Redwood is wrong. The only way British people could supply those Chrismas lights for £6 would be if we were extremely poor – too poor, in fact to buy them. Like the Chinese who make them.