As an economist Billy Bragg’s a great singer. Commenting on the 25th anniversary of the miners’ strike he asks:
Is there anybody out there willing to stand up – on this, of all days – and raise a toast to the wilful destruction of our manufacturing industry and its replacement by the financial services sector?
The first question has to be whether there has been a destruction of our manufacturing industry, whether wilful or not. Looking at the index of production, we see that it stood at 75.9 in 1984 and at 97.9 in 2008. A rise in output of some 29 % really doesn’t sound like “destruction” to me. In fact, claiming that manufacturing has been destroyed would lead me to accusing you of being ignorant of the facts.
What has actually been happening is that the production process in manufacturing has been getting ever more efficient, productive, in its use of labour. Thus production can rise but the labour used to create it falls: what is really being complained about is the loss of manufacturing jobs, not the despoilation of the manufacturing sector itself.
And this is where I might accuse people of being ignorant of theory. For in reality we’re absolutely delighted that we need to use less labour to get the physical goods we desire. That labour, newly freed up, can go off and do other things. Yes, work in financial services, or perhaps care for the rising number of elderly or even go and build more darn windmills.
As Paul Krugman has pointed out, productivity isn’t everything but in the long run it’s almost everything. Me, rather than drinking to the destruction of it, I’ll raise a toast to the increasing productivity of manufacturing. It’s one of the things making us all ever richer.