Monday, 22 December 2008

Bailing out Manufacturing

So this Times article got me thinking.
Bailing out manufacturing vs bailing out the high street.
Call this simplistic, but a person employed in woolworths serves the UK itself, however from a simplistic analysis they do nothing for anyone else in the world. If you use the old cliche of UK PLC, then they don't produce anything that someone outside the UK wants, in fact they consume vast quantities of goods manufactured abroad.

At least car manufacturers produce something that is exported.

This may be 1st year economics, but to the country as an export (i.e. to pay for imports) what use is any of the high street? The high street may make the country itself more efficient, but it doesn't actually contribute to the bottom line, whereas the car industry does.
Ah, you say: that business has been making a loss for years. Well once you take away subsidies farming makes a massive loss and yet there are plenty of arguments for having a local farming industry.

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