Thursday, March 23, 2006

The Free Market's Massacre of Britain

Commentary by Martin Kelly
July 2, 2004

On June 29, the University of Sheffield published a report on the demographic and economic changes that occurred in the UK during the ‘90’s, using census data from 1991 and 2001. Its conclusions is that we are not one country but two, and the lessons to be learned from this are as pertinent for the USA as for ourselves.

The report states that the country is now effectively divided in a line running between two rivers, the Severn in the West and the Humber in the North. So great is the power of London’s financial services sector that everything below that line is classed as ‘Greater London’, everything above it ‘The Rest’. During the ‘90’s, 1.5million financial service sector jobs were created in London, together with a loss of 500,000 skilled trades jobs in The Rest. During the last decade, the populations of cities in The Rest have declined sharply – Birmingham (heavy industry) down 3%, Liverpool (shipbuilding/automotive) and Glasgow (ships/coal/steel) both down 8% and Manchester down 10%. London now has 20% more college graduates within its city limits than it had ten years ago.

The poorest place in the UK is officially, the City of Glasgow. Out of a workforce of 400,000, 100,000 are either unemployed or receive long-term sickness benefit, and 13% of high school students leave full-time education with no qualifications whatsoever, in a country where no one need pay for any service if they are without sufficient means.

The decline of the manufacturing sector bears the brunt of the blame for this demographic catastrophe. However, the manufacturing sector would not have declined if it had not been for the aggressive pursuit of free market economics by the governments of Margaret Thatcher, John Major and Tony Blair – it’s been on Blair’s watch that the corporatists who have been the beneficiaries of this state-sponsored economic Darwinism have started exporting call centre and financial services jobs to India.

In the meantime, the cheap political mantras of ‘creating jobs’, ‘urban development’ and ‘regeneration’ led to the area called The Rest being filled to overflowing with cheap, disposable jobs like call-centres and telesales. A service sector job will always pay less than a skilled or a manufacturing job, so the region’s economic health suffers accordingly. So deeply has free-market Thatcherism sunk into the psyche of the British body politic that no one seems to question the harm it has obviously caused the country’s mental and physical fabric. The right of London’s self-selecting corporate elites to make money is now the rationale of our economy. Now, even light manufacturing is being sent to the new tigers of Eastern Europe, where wage rates are lower and profit opportunities greater, taking jobs away from the UK without regard to the fact that wages were comparatively higher here because of the prices they charged.

Could this happen in America? It already has. According to a fascinating article for in the Chronicles Extra of June 21 called The Jobs That Aren’t, the always-reliable Paul Craig Roberts paints the bleakest of pictures. To quote

‘In the past 40 months (three previous graduating classes) the US economy lost 376,000 jobs in professional and business services, and 200,000 jobs in professional and technical services.

Since January 2001, the United States has 64,000 fewer accounting and book-keeping jobs, 16,000 fewer architectural and engineering jobs, 223,000 fewer computer systems design and related jobs, 123,000 fewer management jobs, 532,000 fewer information jobs (including telecommunications, ISP’s, search portals and data processing), 117,000 fewer jobs in air transportation, 80,000 fewer jobs in chemicals, 122,000 fewer jobs in plastics and rubber products, 178,000 fewer jobs in apparel, 128,000 fewer jobs in textile mills, 523,000 fewer jobs making computer and electronic products, 297,000 fewer jobs making machinery, 134,000 fewer jobs making electrical equipment and appliances, and 209,000 fewer jobs making transportation equipment.

If job disappearance of this magnitude continues, textile engineers, mechanical engineers, chemical engineers, electrical engineers and computer engineers will disappear as American occupations’

Grisly stuff, but not as bad as the other, perfectly possible scenario. The decline in prosperity in California is already causing emigration from that state, which will in time lead to a Hispanic majority. There is already a vocal minority who call for the secession of the South Western states to form Aztlan. Although this sort of garbage is the product of 1960’s Baby Boomer pseudo-Marxism, the aggressive push for the free market may just create the economic conditions that would make it possible.

I can envisage a future for my wee country in which its economic disparities become so severe that its current economic split will solidify into a political one. My leaders are so in thrall to the free market, like dogs with a bone, that they will paint this as a greater good, when it will do nothing but deepen despair even further. The question for you guys is, would a President ever let that happen to you?