Monday, December 08, 2008

Trade, dependence and automobiles

They say that, after our homes, the biggest purchase most of us will ever make will be a car. Personally, I've never been certain that this is the case. For example, my parents bought their house in 1963 for the grand sum of £3,800, but in the years since my mother has bought a number of cars the net accumulated cost of which would be around £15,000.

The reason is that, unlike houses, cars rarely increase in value after you've bought them and people rarely hold onto the same car for most of their adult life. The reason for that is that cars simply don't last that long.

The average lifespan of a car is around 10 years which, given their purchase price, is pretty pathetic really, but more importantly it demonstrates that car manufacturing should be a lucrative business to be in. And when times are good it tends to be, but when money becomes tighter the first thing people tend to do is cut back on large purchases - and there aren't any purchases much larger than a new car.

The bailout of US car manufacturers is getting a lot of attention at the moment - will they or won't they, should they or should they not? Personally, I believe they should - but with certain conditions attached.

Before I go on, it is important to realise that, despite the plethora of different brands and leaving aside the niche manufacturers and those up and coming from China and India, there are are fewer independent car manufacturers worldwide than there were independent British car manufacturers 60 years ago or so. Even many of those which are not owned outright by some major group are often part-owned by one of them.

So if one (or all) of the US big three goes under it has serious implications around the world. That alone, though, is not a good enough reason for the US taxpayer to spend nearly $40 billion helping those manufacturers out. Why should the US taxpayer be expected to spend money to support jobs in Britain, Germany or Spain?

So, in my view, the US government should help out the US manufacturers to protect their industry and their jobs, but under the condition that part of the funding is used to split the companies up into individual brands once more. Of course, they will claim this will make them uncompetitive in the global market place - which it may well do - but that is why I believe that the US government should also impose import restrictions on foreign cars.

I know that many people will be aghast at such a protectionist policy, but I stand by it - and further more, I believe that we should do the same in this country. Those who claim that this is a restriction on free trade and the free market need to understand that there is no such thing as "the free market" on a global scale.

They also have to understand that you can not have free trade between nations and have those nations retain independence. A belief in free trade requires an acceptance of trans-nationalism, supra-nationalism and internationalism - and as a nationalist, all of these are unacceptable to me.

The markets and trade should be kept as free as possible at a national level - combined with strong anti-monopoly rules to prevent any one provider dominating a market where it is not in the national interest to permit that.

But if we are to return to being a nation that makes things again we need to protect our industries and that means restrictions on imports and foreign involvement in our industries. I know a lot of people will claim that didn't prevent our car industry going down the pan before, but that is an unfair claim.

Our car industry was killed by a succession of events - the amalgamation of independent manufacturers into large nationalised groups, the shop floor militancy of the sixties and seventies and our entry into the "Common Market". Before all this happened we had a reputation as manufacturers of innovative and high quality motor vehicles.

I can not stress this enough - a nation that makes nothing is nothing. Free trade, free markets are not only desirable, but essential for a nation to progress - but only internally. It is equally essential for any nation which is determined to remain independent to protect its major industries as these are the things which provide the lifeblood to internal trade.

The goods we sell need to be built and this means people to build them. The goods those people build need to be designed and this means designers and engineers. The engineers and designers need ideas to design and engineer and this means inventors and innovators. All of this needs an education system that produces the sort of people we need - whether it be the people who sell the goods, the people who build the goods, the people who engineer the goods or the people who invent the goods.

This is how it works. If you open your borders to "free trade" there will always be someone, somewhere who will make something which, if not necessarily better than what you make, will do it cheaper. A nation that manufactures things has a strong demand for highly educated and skilled workers. One that doesn't - doesn't.

It's no use pretending that we can just move on to building something else - the big thing these days is "high technology". What on earth makes anyone think we can do that better than anyone else especially when those other nations are producing much better qualified and educated people than we are?

Thirty years of "free trade" has not given us more choice in the second most expensive purchase we make - there is less - and where a 1962 base model Ford Cortina would have set you back less than £9000 at today's prices, the equivalent Ford Mondeo will cost you almost twice as much today.

Forget all the nonsense about nuance, global development, fair trade and all the other clap trap - we have a stark choice to make. We either protect our industries and national economy and become independent or we accept that we are just another dependency to some or other superpower.

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