A terminal sickness?

The decline of Britain’s manufacturing industry

FIFTEEN YEARS ago, eight million people worked in Britain’s factorie; now this has fallen to below four million for the first time ever. Is this a terminal decline? What effect is de-industrialisation having on Britain’s economy? BILL MULLINS, Socialist Party industrial organiser explains.

IT’S FASHIONABLE for economists, political commentators and New Labour politicians to claim that British manufacturing’s decline is really not that important. A short “history lesson” shows they are mistaken.

At the dawn of modern capitalism, the British ruling class enthusiastically developed, for the first time on the planet, the methods of industrial mass production.

As a result Britain became the world’s first industrial country. This “industrial revolution” and the wealth it produced enabled Britain’s ruling class to become very powerful, most noticeably by enslaving one-third of the world’s population in its empire by the end of the 19th century.

The capitalist class used the empire as a means of gaining cheap raw material production to feed its factories in Britain.

Ruthlessly using its military power, it ensured its “terms of trade” between the “motherland” and its overseas empire were favourable to British industry. At the same time it stopped industry developing in those countries it controlled eg in Ireland and India.

Amidst all the horrors of capitalism at home and abroad, the creation of factories and the methods of mass production of consumer products led, as Marx explained, to the creation of the gravedigger of capitalism – the proletariat.

The interests of the proletariat (or working class) were diametrically opposed to those of the factories’ capitalist owners. The capitalists’ pursuit of profit at the expense of the workers inevitably led to conflict and the development of the first trade unions.

The unions’ growth, especially the organising of the unskilled and semi-skilled masses, enabled the working class to began consciously to develop its own political demands and the means to attain them, the Labour Party.

On the European continent France’s ruling class, who had been through the searing experience of a revolution in 1789, consciously held back the development of industry, so fearful were they of the development of a French working class.

French capitalism became a “rentier” capitalism which drew its profits from overseas industrial investments amongst other things.

‘Money men’ rule

IN DENYING the importance of de-industrialisation, capitalist politicians, perhaps half consciously, reflect the thinking of the 19th-century French ruling class and see the rundown of manufacturing as a means of weakening the working class’s ability to organise in trade unions and in political parties.

Manufacturing’s decline in Britain has allowed finance capital and the City of London to dominate the ruling class’s economic policies. Modern-day British capitalism shows many of the features of “rentier” capitalism.

Today, the short-term interests of the shareholder hold sway over the average boardroom’s thinking. The threat of take-over by predator firms becomes all too real if the parasitic finance capitalists shift their capital from one company to another when they feel that the profits being declared are too low.

This was the main reason behind the ongoing crisis of Corus steel. Corus made £1 billion profit in 1995 and were still profitable until recently, but its share value fell on the stock exchange by 30%.

The Corus steel bosses are sacking thousands of workers primarily to prop up its share value. After Corus announced its closure programme, the company’s shares on the stock exchange went up by 10%. This only added to the rage of the steelworkers who face a lifetime on the dole.

This is the brutal truth behind recent events. Any capitalist company that suffers a fall in share prices becomes vulnerable to asset-strippers and other predators. A sense of crisis sets in and the board itself becomes fearful for their jobs.

After the outcry against his closure plans Corus chairman Brian Moffat said “we make money not steel”. His outburst revealed the thinking of the modern British capitalist – answerable first and last to his shareholders.

Not for them any “long-term thinking” about the effect on the national economy or the “long-term interests of Britain” (read British capitalism). Instead they worry “how can we boost profits as fast as possible and keep the shareholders sweet?”

If they take any other path, the shareholders will, at the touch of a computer key, take their money elsewhere.

With share prices in the company falling, a take-over becomes probable and the company becomes a target for the asset stripper.

Unemployment hidden

IF WHOLE communities are wrecked, that’s neither here nor there for Corus’ capitalist bosses or the lickspittle New Labour politicians who worship at the altar of “the market.”

Guardian writer Stephen Moss went back to Motherwell where the Ravenscraig steel site shut a decade ago. Ravenscraig used to dominate the town.

He spoke to a group of “evangelists for the new economy” from Scottish Enterprise and PR company Shandwick. When he asked what had replaced the old sense of community founded on steel production, he met with blank stares. For them, as for Margaret Thatcher, “there is no such thing as society.”

It’s not sentimentality to say that the workplace gave a sense of community. As one sympathetic economist told Stephen Moss: “The community would perceive it had lost some of their strength and focus… 20 years ago entire families, entire streets were bonded through working within this proud industry.”

The economist pointed out that “it is what happens to a community when you strip away its reason for existing”.

Real unemployment in the town stands at 27% as opposed to the official figure of 9.2%, according to the Lanarkshire economic bulletin. But the Labour government, like the last Tory one, hides the real levels by sleight of hand.

The number of workers now signing on as long-term sick has grown four-fold from 500,000 to two million, but this is not included in the unemployment count.

This growth of long-term sickness is a direct result of the demoralisation that has hit communities like Motherwell. This in turn is a result of de-industrialisation as well as the enormous pressure on the workforce over the last 20 years.

In the last year alone 106,000 manufacturing jobs have gone from cars, engineering and textiles. Corus is the latest in a long line of companies running for cover.

Steel demand has declined as factory after factory has been shut down. Steel consumption in Britain, unlike its European rivals, has been falling throughout the 90s and continues today.

The Independent on Sunday declared that the “smokestack industries …are in terminal decline”. They say that “the de-industrialisation of Britain was inevitable any way”. But what was inevitable about it?

Failed capitalism

THE TRUTH is that British capitalism has been defeated by its international rivals and has put up the white flag of surrender. Their “stewardship” of the economy, even on the basis of their own system, has completely failed.

Hundreds of thousands of working people are being consigned to the misery of unemployment. A new recession will turn this slippage into an avalanche.

Recently even a section of the capitalist class have noticed that something is wrong. The head-long dash for privatisation of the public sector is now seen as too hasty. Nearly everybody, except Blair and his cabinet, sees rail privatisation as a disaster.

The Guardian quotes New Zealand’s prime-minister Helen Clark as saying that market fundamentalism had failed. “The high priests of the right were telling us to keep throwing more meat at the beast, to privatise more and more until eventually the government would tax nothing, regulate nothing and do nothing”.

New Zealand, under right-wing governments including Labour governments, was the first to privatise in a big way. Now, according to the Guardian, this “left of centre government” has “halted the global trend towards privatisation” by threatening to renationalise the rail system and the banks.

Privatisation and de-industrialisation went hand in hand throughout the 1980s and 1990s. But experience has made most people question the whole process.

Planned economy

Marxists are not modern-day Luddites – the 19th century movement which smashed new machinery for destroying jobs. We understand the need to use the most modern methods of production and technique including computers, the Internet and other modern inventions.

The new economy’s “evangelists” claim, however, that de-industrialisation doesn’t matter as the unemployed will be “soaked up” by Silicon Valley and these new technologies.

But on the basis of a capitalist system heading towards a recession then de-industrialisation promises only mass unemployment, work in low-wage jobs such as those in call centres and declining living standards for the great majority.

A democratic socialist planned economy would start by asking “What do people need? What do we need to make to meet this needs? How many cars, buses, televisions, refrigerators, houses, roads, railways, does the national (and indeed the international) economy need to produce without harming the environment?

“What amount of services would be required? How many people should be engaged on each sector of the economy?”.

On the basis of anarchic capitalism, none of these questions could be answered. This can only be done by the mass of the population, through democratic debate and decision-making.

Participatory democracy, ie committees of delegates from the workplaces and the community in general, would decide what we need and what we would produce.

This process is far superior to the present one where Corus boss Moffat boasts that “we make money not steel”. It’s time to end the anarchy of capitalism and introduce a democratic socialist society where things are produced to meet the needs of the many not the profits of the few.