Letter: What is to be done with employees made redundant in manufacturing?

Sir: Amex bank has kindly sent me a copy of the essay by Brown and Julius on 'Is Manufacturing Still Special in the New Order?', highlighted by Hamish McRea. I can only express my amazement that a distinguished panel of judges should have awarded a first prize to an essay that draws such far-reaching conclusions on the basis of superficial generalities and only the scantiest of evidence.

Improvements in technology, capital intensity and management do, of course, lead to decreases in employment per unit of output in manufacturing, as in agriculture. But it is a long step from this to argue that the industries producing manufactured goods are becoming less necessary. Agricultural output continued to grow (as employment decreased) because the need for agricultural products continued to grow, in both qualitative and quantitative terms. Are Brown and Julius arguing that our need for manufactured goods has reached saturation, or that it will even decrease?

The manufacturing and construction industries (Brown and Julius do not mention construction) provide the houses in which we live, the furniture that makes us comfortable, the cookers, washing machines and vacuum cleaners that have taken much of the drudgery out of housework. They provide the cars, buses, trains and ships that take us to work and to our holiday haunts; the tennis rackets, swimming pools, guitars and consumer electronics, newspapers and books that give form and purpose to our leisure hours. They build and furnish schools, theatres and hospitals, and roads and bridges; they manufacture the materials and components of which all these products are made. They provide the processed foods on which we have come to rely and which have played such a big part in releasing women for work outside the home.

Last but not least, they provide the productive capital, the plant and machinery and the factories for making all these things, the lorries and warehousing for storing them; together with the electric power stations and oil rigs without which our civilisation would collapse. It does not need economics, but only a look around us to indicate that the demand for all these products is likely to remain undiminished into the foreseeable future.

If Brown and Julius's case is to stand they would have to demonstrate either:

1. That these objects will in future play a smaller part in individual and national improvement than they have in the past, or

2. That the UK and the EU can ensure adequate and safe external supplies of these goods by the export of a sufficient volume of 'services' to reliable markets. Can they?

The more important practical question to which they and other economists might like to turn their attention is how to encourage the transfer of the employees released by productivity improvements in manufacturing, construction and in existing services (or by suppressed demand) into improved or new forms of socially beneficial employment.

Yours faithfully,

JOHN PICK

Sutton Coldfield,

West Midlands

20 November