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Thursday, 29 December 2011

Old and Useful?

Britain has passed half a century dismantling industry, and pensioning-off the people who understand it. I spent almost half of that time in Sheffield, mostly when it was still a city that provided jobs for more than 75,000 highly skillied artizans and several thousand of the world's leading metalurgical, ceramic and glass scientists. To see that accumulation of expertise dissipated was as big a tragedy as it was possible to experience in any economy. The world continues to need those skills: demands are growing for expertise in using old and new materials for ever more challenging applications in millions of structures and machines that are required to operate in space, in deep mines, under the oceans, in radioactivity and within the human body. A profoundly ill-advised view that 'smokestack industry' was a thing of the past prevailed, most notably in the nineteen-eighties. The twerps who adopted that view assumed that Lancashire mills which operated on the unsustainable [and always incredible] business model of importing raw cotton for processing and re-export were on a par with innovative firms that developed new forms of special steels or carbon fibre: the whole range of industries was considered dispensable. That delusion cost the country dear as the immaterial business of casino banking took pride of place in the limited perspective of the government, taking precedence over the solid virtues of the world's leading insurance market and the world's most effective system of commercial law. The City of London is important because it is of huge value to the real economy, especially for the things that it did well in 1700 and 1800 and 1900 and even in 2000: though by then sleight-of-hand betting had taken the top fashion spot and was by far the most lucrative area of 'finance' which attracted very clever people who made bonuses on the turnover that they could conjure into being; literally without the use of any material commodity other than computers and electricity.

While 'the City' only ever accounted for around the same proportion of the turnover of the economy as the construction sector, it was much more highly rated by bedazzled politicians: most notably Gordon Brown and his acolyte - who was duly promoted to be 'City minister' - Ed Balls. Having thrown off the image, and most of the substance, of being a trade-union dominated organisation the 'new' Labour Party embraced the adventurism of those who were later to be reviled as 'casino bankers'; while it still depended on finance from the unions. Tony Blair escaped criminal investigation into the means that had been used by his agents to obtain donations from people who were coincidentally ennobled, but when he had gone from office and his peculiar means of funding dried up almost completely the unions conspicuously remailed Labour's major funders. But these latter-day unions were very different from the unions that had ineffectively opposed de-industrialisation and the destruction of their own members' jobs in the 'eighties. Between 1985 and 2005 trade unionism ceased to be a significant force in the private sector even while the former nationalised industries passed into the private sector.

The new area of strength for 'organised labour' was in the expanding public sector, where [unlike most firms owned by shareholders] government departments and state agencies provided accommodation for union officers and allowed staff time off work for union activities. The coalition government has decided - probably correctly - that the future economy will not be able to bear the cost of the pension payments that had been provided for in state employees' contracts; so those entitlements are being reduced and the unions are planning to defend their members' contractual rights. This campaign by the unions attracts minimal sympathy, and virtually no support, from the mass of the population who are experiencing declining living standards while they learn that part of the increased cost of living is raised taxation from which [among many other things] civil service pensions are funded.

When trade unionism was based in industrial plant pretty simple arguments could be advanced about the division of the income that the operation generated. Political Economy taught that there were three factors of production: land, labour and capital. For industrial production, for wholesale and retail trade, and for catering and entertaining establishments, land was bought or rented by the providers of capital for the business and the cost of land was accounted as part of the fixed cost of the firm [which varied with the location, so that operators of shops on Oxford Street in London paid vastly higher rents per square metre than did the owners of wareouses on the fringes of Pennine mill towns]. Once the site was paid for the construction and adaptation of the buildings on it were components of the capital stock that the owner had to provide, along with the machinery inside and around the premises, the materials to be worked on, the fuel to power the operation and the services [such as water supply and lighting] without which it could not operate. The vast contribution that capital made to any business i the real economy was visible and could be recognised. But that investment was useless unless people possessed of the necessary skills, experience and strength made themselves available to work there. By an iterative process of debate, dispute and discussion -sometimes involving strikes, lock-outs, mass sackings, reinstatements, arbitration and intervention by the courts - mutually tolerable rates of pay to employees and rates of return to capital were settled. Workers realised that capital equipment and investment were necessary, even if the plant was owned by a socialist system, and they conceeded that any capital stock must be maintained by constant refreshment. Capitalism - as a system of economic organisation - recognised that a willing workforce was best to manage and so employers were in broad terms willing to agree with unions on fair terms and conditions of employment in that place at that time. The skilled gained relative to the unskilled, the fit relative to the less fit. The physically weak who were not able to compensate by developing intellectual skills were ill cared for by the system, as were the mentally less able. There was much unintended cruelty in the operation of the system, but there was also an opportunity for the majority to find a level of remuneration that they deemed acceptable.

In the present postindustrial era pay [for the employed] is the outcome of various forms of negotiation and 'comparison' of one category job description with another. It is widely accepted that jobs in the public sector are generally better paid that those that can be said to be broadly their equivalent in the private sector: and all sources agree that pensions expectations for public sector employees are better at almost all salary levels [except the most highly paid categories of business executives] than in the private sector. There are a few tens of thousands of people in Britain, a few hundreds of thousands in the European Union, perhaps a couple of million in the world, whose transcendant skills, talents and experience enable them to command whatever remuneration they demand. There are many others who are almost as well talented as the topmost elite, who are able to demand superior pay for their work. There are others who have created inventions or works of art that become so popular that the creators are massively enriched by the proceeds from their willing users: and yet others who have seized  the ownership of capital and access to natural resources by political manipulation [or even criminal activity that no state can prosecute] that legitimate commerce and industry need to buy from, to the enrichment of the owners. Much 'unfairness' is evident in the contemporary distribution of incomes and of wealth, especially in instances where executives fail to deliver the expected results for their employers and still walk away with huge remuneration. The widespread awareness of indefensible income differentials has created a sour mood through almost all of society, to a degree that it can poison progress in economic development.

The point to which this argument is trending is that if Britain is to adopt the one big Strategy that is readily accessible to the economy, it must recruit the people who can manage the greatest leap forward in marine technology in human history and it must take the risk of paying them whatever is necessary to engage them in the task.

My last blog set out trhe bare bones of the Strategy. Britain has the opportunity uniquely to exploit - in a sustainable manner, for the indefinite future - the massive surface area of the earth's oceans that are currently recognised internationally as the coastal waters surrounding the imperial lagacy of oceanic territories. To vindicate this Strategy The UK needs first the naval and military forces that can enforce the assertion of sovereignty, over the long term.  Then it would be absolutely essential to build the industries and develop the technologies on which the Strategy absolutely depends  for economic viability. It is inescapably necessary to recall scientists, engineers and artizans who were dumped unceremoneously from their careers up to four decades ago. To attract people from their retirement, or from the alternative careers into which they have settled, or to bring many back from the foreign states that benefit from the skills that Britain spurned, will require payments up-front from the hard-pressed national budget; of salaries and potential bonuses that are enough for the purpose. Some patriotically minded individuals  might chose to return some of their remuneration to the state; but that option should be left to them, it cannot be assumed that people who have been rejected will suddely embrace the political class who will be bidding for their skills.

Unless the nation can be motivated to recognise and to support the proposed Strategy, the concept does not have a hope of taking off. A first step in demonstrating that it can be implemented is to show that Britain's Got Talent: not just in ephemeral popular entertainment but in all the areas that must be drawn in to the greatest and most grimly serious venture in the nation's history. The young have been denied most of the skills and all of the experience that existed on the shop floor and in the works laboratories in Sheffield, Birmingham, Glasgow and hundreds of other urban centres throughout the United Kingdom. One motivation for Scottish Nationalism is a reasonable desire to cut free from the corpse of a failed state: and the best motive for Scots to remain in the United Kingdom would be the probability of benefit from participating in the Strategy.

I have been privileged for several years to support a charity called Age Exchange that [among other things] brings elderly people into contact with the young, including many who have no extended family and therefore no familiar folk traditions or reference-points outside their immediate experience, to let them begin to understand what life was like within living memory in the places they now inhabit and thus open up some perspective. Something similar needs to be done on a national scale to enable depressed young adults to believe that the capable and experienced people exist who can help them to develop themselves as contributors to a technical wonderland that can be the envy of the world: while it brings them a world class standard of living.

This is all feasible technically and organisationally. The political will to bring it into effect is much more problematic.

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