\u201cIt\u2019s only when the tide goes out\u201d, says the legendary investor Warren Buffet, \u201cthat you find out who was swimming naked\u201d. Any second-rate trader can look like a financial whizzkid in a bull market \u2014 but when leaner times return we learn about everyone\u2019s true mettle. The same applies to countries. The chatterati despair, grasping their thinning, greying heads of hair: where has the easy charm of elected politicians gone; why does nothing work; why are we consumed by permacrisis; why can\u2019t we go back to normal? But the normalcy of which they speak, the end-of-history ascendency of liberal politics at home and global integration abroad, is gone and not returning. And without a post-Cold War peace dividend, the unipolar moment, Pax Americana, financialisation, free-flowing North Sea energy, and ever-more transnational markets, Britain has been caught skinny-dipping.<\/p>\n
We rely on the developmentalist economies of the Far East for our manufactured goods, on the Norwegians for our oil and gas-powered energy, on Europe for our food, Wall Street for our payments systems, Silicon Valley for our digital worlds, and on a diverse caste of cheap, subaltern labour to staff our care homes, serve us coffee, clean our offices, and deliver our meals. In light of the recent outbursts from a mercurial White House, British bank bosses have begun to plan<\/a> for an alternative to the US\u2019s Visa and Mastercard systems. And not a moment too soon: when the President threatened a Nato ally with annexation last month, all we could offer was bland platitudes, a humiliating prostration before hard power.<\/p>\n Even those few sectors in which we do excel \u2014 the consultancies, and the legal and financial services that we still export to the world \u2014 seem designed for a softer-edged era. Like Tony Blair himself<\/a>, the \u201cknowledge economy\u201d was the future once, or so we were told. The real value was created through the immaterial labour practiced in the metropoles. Globalisation was non-negotiable; \u201cyou might as well debate over whether autumn should follow summer\u201d, in the words of its leading evangelist, and Britain would ride the wave, prospering at the cutting edge of international bullshit artistry. Once the birthplace of the Industrial Revolution has surrendered its economic autonomy to the whims of global finance capital, there\u2019s nothing left to do but turn the art of corporate jargon and consultant-sophistry into its unique specialism \u2014 right before the glossy reports and PowerPoints are automated by AI.<\/p>\n But now the tide hasn\u2019t so much gone out as receded past the horizon. Not only is automation coming for the white-collar service class, but the transatlantic alliance is more frayed than in its whole history. The \u201cnormal\u201d of liberal-technocratic triumphalism looks like a one-time-only blip, a bubble punctured by the collapse of Lehman, its final illusions extinguished by Covid-19. A world of Great Power rivalry has returned \u2014 the Americans proving Lord Palmerston\u2019s old maxim<\/a> that there are \u201cno eternal allies or perpetual enemies, only eternal interests\u201d, and judging that it is not in Washington\u2019s eternal interests to simultaneously confront the rising giant of Beijing while being locked into conflict with Russia on a declining continent that cannot defend its own peripheries.<\/p>\n And so, a political consensus is forming: we must reindustrialise. We must rebuild our national productive capacities. Without a solid manufacturing base, we are dangerously exposed in a hostile world of geopolitical contestation. In his first speech as the putative \u201cshadow chancellor\u201d this week, Robert Jenrick told us<\/a> that Reform would \u201crestore our proud industrial heritage and create good jobs for British workers once again\u201d. \u201cWe do believe in industrial strategy\u201d, he assured any listeners confused by his about-turn away from the party of the sovereign individual and free and open markets.<\/p>\n In this, Jenrick is only echoing his leader Nigel Farage, a man who Maurice Glasman once described as \u201ca saloon-bar Thatcherite\u201d, but who has now taken to floating the idea of public ownership and equity stakes in British engineering firms, lamenting<\/a> the loss of \u201cshipbuilding, cement making, chemicals, steel\u201d. \u201cIt\u2019s all gone off to India and China\u201d, he says, articulating all the cultural-political sovereigntist themes of post-industrial Britain \u2014 lost identity, lost purpose, lost control. Yet all those on-the-ground resentments are ultimately the result of conscious macroeconomic decisions on the part of the monetarists: a strong sterling is a boon for the City but blows a hole in the UK\u2019s balance of trade that can only be filled by constant rounds of inward foreign investment; the unedifying and unending ritual of flogging the family silver<\/a>, until every old family firm and former national champion is in the portfolio of a Gulf state.<\/p>\n Gone are those days, Farage and Jenrick promise. Instead, Reform will pursue something called the \u201cpolitics of national preference\u201d, at least according to one of the party\u2019s ideological gurus, James Orr, the national-conservative theologian and disciple of the patrician, communitarian Toryism of Roger Scruton.<\/p>\n And if all of this sounds familiar, that might be because it echoes the lines of our current party of government. Chancellor Rachel Reeves promised<\/a> to \u201cmake, sell and buy more in Britain\u201d. Her economic philosophy would be rooted in \u201csecuronomics<\/a>\u201d: the doctrine of maximised efficiency would give way to the new watchword of resilience, and the local, national provenance of goods would be prioritised over their price. If Thatcher\u2019s heirs have seen the writing on the wall, the second-generation of Blairism have too: a country that makes things, that has a trade surplus in goods, will fare better in an age of chaotic, global fragmentation.<\/p>\n Yet if we\u2019re heavy on the diagnostics, we\u2019re light on the prescription. Jenrick might position his vision as a \u201cnew political economy\u201d, but nothing that\u2019s so far been proposed will go any further towards \u201creindustrialisation\u201d than Reeves\u2019 defunct \u201csecuronomics\u201d. The latter was, more-or-less, dead on arrival, always to be sacrificed on the altar of the Labour leadership\u2019s innate caution and overdue respect for established procedures. It is not in the nature of the apolitical, robotic meeting-chair-in-chief to challenge any of the orthodoxies repeated from the mouths of a recalcitrant, Treasury-brained senior civil servant, let alone the Confederation of British Industry.<\/p>\n \u201cIf we\u2019re heavy on the diagnostics, we\u2019re light on the prescription\u201d<\/p>\n To be fair, Jenrick\u2019s \u201cnew political economy\u201d differs from Labour\u2019s take on industrial renaissance in one crucial respect. For Reform, the net-zero project is the primary blockage to the resuscitation of heavy manufacturing, particularly in high-carbon, energy-intensive sectors being crushed under the weight of subsidised renewables and grid costs. For Labour, the green transition is the exact opposite: the catalyst for the transformation of the British economy. In place of the dark Satanic mills of Victorian industry, and the monotowns of Fordist mass production, the new industrial revolution will restore England\u2019s reputation as a green and pleasant land, a global leader in wind power with a sideline in batteries, solar cells and nuclear energy.<\/p>\n Both parties are peddling a fantasy. The seeds of deindustrialisation were sown long before decarbonisation became a uniparty dogma. The loss of much of Britain\u2019s heavy industry took place even as we were net energy exporters. Besides, the Chinese economic miracle was built on more than cheap coal. The aggressive industrial policy contained in the Communist Party\u2019s Made in China 2025<\/a>\u00a0 has transformed the country from the world\u2019s sweatshop into a high-tech centre of advanced manufacturing, with massive, state-directed investment into highly competitive, strategic and innovative sectors, complementing a long-term policy of strict capital controls, high tariff walls, and a central bank that militantly supports investment-led growth. That\u2019s reflected in Chinese exports: no more the crowded production lines of cliche, with the PRC instead becoming a global leader in high-tech sectors, robotics and AI.<\/p>\n In response, the US first mobilised debt-financed subsidies<\/a> to \u201creshore\u201d jobs to the American Rust Belt. \u201cBidenomics\u201d, as it was called, attempted to lure back manufacturers in high-tech sectors by handing them taxpayer bungs. The results were mixed. Hundreds of billions were spent, but restive voters rewarded the Democrats by electing Donald Trump. The irony, of course, is that Trump has continued with the same \u201cdecoupling\u201d strategy pursued by his predecessor, along the way hiding American industry behind a new and belligerent protectionism. That has now been hampered by the strength of the US constitution\u2019s separation of powers, and a Supreme Court ruling that the President\u2019s Liberation Day and subsequent tariffs are unconstitutional. Nevertheless, the idea that the UK, in this international context, could start a new industrial revolution simply by abandoning net zero targets is risible. Another latter-day Reformer Suella Bravermen might want us to believe<\/a> she has undergone a Damascene conversion to Reform\u2019s apparent \u201csocialism\u201d with a Faragist face, but Jenrick\u2019s desire to demonstrate subservience<\/a> to the strictures of the OBR and its originator George Osborne precludes any radical rupture with decades of economic failure.<\/p>\n Meanwhile, Labour\u2019s positioning of net zero as a catalyst for industrial growth is equally a chimera \u2014 our expensive adoption of renewables is destroying the margins of what remains of heavy industry while propping up Scandinavian social democracy and Chinese developmentalism via the rapid import of Danish wind turbines and Chinese solar cells and electric vehicles. All of this while our reliance on Norwegian and US shale gas continues unabated. As with many of the thin promises of Starmerism, \u201csecuronomics\u201d has never been translated from rhetoric to reality.<\/p>\n And so Britain remains buffeted by forces beyond its control, unwilling or unable to reassert itself. A genuine plan for national sovereignty would combine the dynamism of markets with the strategic direction that can only be provided by an agile, active state, one willing to do away with shibboleths that were built for a bygone world. In practice, yes, that means driving down energy costs as a matter of priority, but also supporting capital spending with unified fiscal and monetary policy. Primary budget surpluses would maintain market confidence while extra borrowing for long-term, pro-growth capital projects could be facilitated by a reformed Bank of England. The deep pools of capital in the nation\u2019s pension pots could be re-domesticated and mobilised towards infrastructure and industrial investment.<\/p>\n This would be shadowed by other changes. For one thing, chancellors would set budgets that move us away from short-term cash transfers and, again, towards long-term investments. Welfare and pensions bills would be brought under control, moving from means-tested to contributory systems, while the tax revenue burden would shift away from work and patient, productive capital, and towards rent-seeking, unproductive assets, land, and real estate.<\/p>\n Core to this project would be an empowered executive, with a restoration of ministerial authority unencumbered by unaccountable bureaucracies, or an activist judiciary, and unafraid of disciplining and managing footloose capital to direct it towards strategic goals. The era of free movement of capital, labour, goods and services is giving way to one in which nations prosper with enforced capital controls, tariffs and an industrial policy that maintains a strictly national economy. Here, the success of the national payments system will be instructive. But resilience on other spheres should follow. The government last year intervened to rescue domestic steel-making capacity in Scunthorpe, and has since made noises about defence-industrial rejuvenation as a fulcrum for manufacturing revival. But signs that they can turn words and sentiment into concrete action are few; the future will belong to those states that act, that \u201cjust do things\u201d, not those paralysed by their own ideological quietism.<\/p>\n Nations, like Buffet\u2019s investors, are truly tested when the tide goes out. It\u2019s only now, in an age of tumult, that we discover that our embrace of hyper-globalisation depended on geopolitical conditions that no longer exist. We bred over-dependency, and are now learning that true strategic autonomy is far harder to rebuild than it was to sell off to the highest bidder.<\/p>\n","protected":false},"excerpt":{"rendered":"\u201cIt\u2019s only when the tide goes out\u201d, says the legendary investor Warren Buffet, \u201cthat you find out who…\n","protected":false},"author":2,"featured_media":437590,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[84,4229,1294,1634,159454,39237,159455,13403,56,54,55],"class_list":["post-437589","post","type-post","status-publish","format-standard","has-post-thumbnail","category-economy","tag-business","tag-economics","tag-economy","tag-labour","tag-national-sovereignty","tag-reform","tag-reindustrialisation","tag-starmer","tag-uk","tag-united-kingdom","tag-unitedkingdom"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts\/437589","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/comments?post=437589"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts\/437589\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/media\/437590"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/media?parent=437589"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/categories?post=437589"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/tags?post=437589"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}