The collapse of the British steel industry is not an easy process. The job losses from the closure of Port Talbot could cause serious social and economic problems for the local community, much as the loss of manufacturing industries around the UK has.
There is an important debate to be had about how to compensate the losers from trade. Perhaps deregulation and other market promoting policies will stimulate growth of new businesses and jobs. Perhaps the government should do more to fund and promote retraining programmes. Perhaps a basic income is the answer for easing transitional periods of structural unemployment that can result from creative destruction.
However, the notion that the government should step in and subsidise a private buyer or even nationalise Tata steel is absurd. The Port Talbot plant is out-dated and not profitable. Even without the present supply glut, British steel faces an uphill battle to be competitive. The money required to sustain the industry would astronomical. Imposing tariffs can and will cause a trade war and will harm industries that use steel. And, in the long run, the industry will collapse and the jobs will be lost anyway.
So why is there widespread enthusiasm for terrible industrial policy? At root, I suspect, it comes down to nostalgia. There’s an odd romanticism that surrounds heavy industry, which comes from several, equally ill-conceived, notions.
There’s the nationalist sentiment that bemoans the loss of Britain’s former glory as a manufacturing powerhouse. There’s the fetishisation of industries dominated by organised labour. And then there’s the eternal pull of strategic trade policy hubris and the vanity of thinking that economic policy can be strategised and directed.
Most of all, though, I think that manufacturing nostalgia stems from the belief that manual labour is inherently morally superior to the service industry and, especially, finance. This may represent a hangover from the labour theory of value, and an emotive mistrust of capital and exchange. ‘Real work’ is obviously more important, more honest, and more inherently valuable, than facilitating, administrating, and furthering networks of production and exchange. The idea that prices are determined by supply and demand, and that value cannot be measured by effort and exertion alone, is either an alien concept or offensive.
People losing their jobs and communities being faced with turbulence cannot be waved away. However, mythologizing manufacturing and propping up unviable plants is not only economically nonsensical but it creates and perpetuates a false and dangerous cultural narrative.