Britain Pays the Price for Decades of
Economic Failure
To listen to the British Prime
Minister and the leaders of the now-failed campaign to keep Britain
within the European Union, the British economy is a shining success
story. Employment is high, the government budget deficit is low and the
growth rate is the strongest of the major economies. To listen to the
leaders of the campaign for Britain to leave the EU, the so-called
Brexit movement, Britain's multiple woes have all been caused by
Britain's membership of the EU: cheap immigrant labour has entered the
island under the protection of the EU's free movement laws and has
taken jobs away from British nationals, restrictive EU legislation has
straitjacketed British society and British industry has somehow been
prevented from doing business with the rest of the world, whilst the
rest of the EU runs a huge trade surplus with Britain.
Where does the truth lie between these diametrically opposed viewpoints
that have so dramatically culminated in the British vote to leave the
European Union and the resulting political crisis within Britain. As
usual in such polarized arguments, the truth lies somewhere in the
middle, but in this case the middle ground may be considerably more
unpalatable for all Britons than either extreme.
In tiny Sierra Leone and the rest of West Africa, British industrial
presence is more or less non-existent. German and Japanese cars
dominate the streets, with a rising presence of China. Japanese and
Asian electronics are pervasive. America is strong in computers.
Toyota, Nissan, Mercedes, BMW, Sony, Sharp, Samsung are household
names. France
has the odd Renault and Peugeot, Italy the odd Fiat, Sweden the odd
Volvo and Saab. Hewlett-Packard of America dominates printers.
Microsoft Windows is a household name. One can not think of a single
serious British brand. The problem
stretches back decades to the colonial era. Britain dominated the
markets of its colonies in Africa, Asia and the Pacific in part perhaps
through
genuine technical prowess but mainly one suspects because it was the
ruling power.
Now-obscure names like Austin, Morris, Humber, Garrard, Pye ruled their
respective markets. As Britain lost her colonies in the fifties and
sixties, one by one these brands fell by the wayside, replaced by
stronger non-British competitors. The problem was exacerbated during
the Thatcher years of the eighties and nineties. Margaret Thatcher
determined to crush combative British labor unions that supported the
British
opposition Labor party, even if crushing them meant eliminating the
heavy industries
within which they worked. Thatcher, a right-wing conservative, daughter
of a shopkeeper, had little sympathy for government intervention in the
marketplace or government support for industrial production. The
British were told
that manufacturing was
passé, superfluous to a developed economy, that low-skilled industrial
jobs were the province of the third world and that the future of
developed countries was in the service sector. Hundreds of thousands of
British industrial jobs were eliminated. Instead of upgrading technical
skills and increasing capital equipment investment, as their
competitors were doing, the British withdrew from huge manufacturing
sectors like steel, vehicles, electronics and electrical appliances.
For decades, instead of insisting upon rigorous study of the critical
STEM subjects at secondary school, as their counterparts in Asia -
Singapore, Japan, South Korea, China - were doing, British educational
authorities encouraged alternative ("modern") curricula and soft
subjects like gender studies and photography. British exports of hard
goods dwindled to insignificance.
The jobs were lost, but the people
remained, as did the class
structure. Today Britain still has a large working class, but not much
of a manufacturing base to employ them. The much-vaunted service sector
has proved unequal to the task. The referendum revealed that large
swathes of British society, formerly industrial, have
become disaffected with the status quo. Prosperous areas like
London voted to remain within the EU, whilst poorer, formerly
industrial areas outside London voted to leave. Sharp divisions in
voting patterns have been revealed between rich and poor, well
educated and not-so-well educated, young and old. The fracture
threatens to split Britain apart, with Scotland, which voted in favour
of remaining within the EU, now exploring possibilities for remaining
in the union when the rest of Britain leaves.
Ultimately, the middle ground between the Brexit and Remain campaigns
finds serious flaws in both arguments. Yes, Britain has performed
poorly compared to its competitors and runs a large trade deficit with
the rest of the EU, but this has nothing to do with its
EU membership and everything to do with failed leadership and poor economic policies,
something the British establishment would be loathe to admit. The
"fifth largest economy in the world" with its dominant financial
services sector, is a paper tiger, waiting to be blown away by angry EU
legislators protecting their single market. It's much easier to put
together banks and insurance companies than Mercedes and Toyotas.
There are strong lessons in this
for Africa, thousands of miles away.
Decades of failed economic policies will eventually threaten the
survival of even strong states like Britain. Fledglings in Africa are
even more vulnerable. And former colonies need to scrutinize extremely
carefully the practices, policies and products of colonial masters
(never reluctant to offer them) who
may themselves have lost their way.