Cooking the Books 1 – A fool’s errand
‘Farage woos red wall with vow to reindustrialise UK’, read a headline in the Times (16 April). According to the journalist:
‘At a working men’s club in Newton Aycliffe, Co Durham, the Reform leader made his most audacious attempt yet to outflank Labour to its left on the economy, praising trade unions and calling for the return of nationalised heavy industry, coal mining and oil and gas extraction.’
This could be read as saying that Farage called for the return of nationalised coal and oil and gas. Actually, he has only called for the nationalisation of one steelworks called ‘British Steel’ and not even for the nationalisation of all steelworks in Britain. It is true, though, that he has called for more manufacturing and heavy industry in Britain and for allowing privately-owned coal mining and more drilling for oil and gas in the North Sea.
It is a long time since the Labour Party has committed itself to trying to revive heavy industry in Britain. They have accepted the evolution of British capitalism towards capturing a share of world surplus value through financial services. Only its rather reduced left wing still dream of this. Here is Eddie Dempsey, Mick Lynch’s successor as General Secretary of the RMT union, writing in the Morning Star (3/4 May):
‘Thatcherism ripped up the industrial foundations of this country… We were left with a service and big-finance-dominated economy with communities stripped of stable work, identity and any real power to determine the course of their lives… The antidote is an organised economy and a wider society with a strategic role for the state driving investment with credible industrial planning to bring back high-quality jobs and good housing’ (tinyurl.com/4psv882s).
It can be seriously doubted that Farage wants to see such a state-capitalist system introduced. If he did, he would indeed ‘outflank the Labour Party to its left’. His is just populist demagoguery. What he is plainly trying to do is to exploit for vote-catching purposes the loss of ‘stable work, identity and real power to determine the course of their lives’ felt by people living in areas formerly dominated by heavy manual work.
Farage has given no details of how he would bring about a reindustrialisation of Britain. Understandably, since private enterprise, which he favours, will only invest if there is a prospect of making a profit that is more than minimal. The domination of heavy industry in parts of Britain ended precisely because the industries concerned (coal mining, steel making, shipbuilding) were no longer profitable in the face of competition from cheaper producers in other parts of the world.
He could say he would follow Trump and seek to make heavy industry profitable by erecting a tariff wall around it but dares not because this would make no sense in a country so heavily dependent on international trade as Britain. Besides, it is not what those who fund Reform UK want. They are financiers whose priority is to be able to carry on their financial wheelings and dealings, internationally as much as nationally, without state regulation.
Dempsey will be sincere. But if tariffs are ruled out (to which he might not be opposed), then the only other way to try to make heavy industry, whether nationalised or private, profitable again would be through government subsidies but this would be at the expense of other sectors of the economy.
The economic law of capitalism of ‘no profit, no production’ cannot be bucked. The government could try to go against it by protective tariffs or large subsidies but the result would be to undermine the competitiveness of British industry generally, leading to loss of jobs elsewhere in the economy. Anybody seeking to reindustrialise Britain is on a fool’s errand.