BLESSED ARE THE METAL BASHERS
John Kay argues that manufacturing has become a cult, long after it has outlived its usefulness
MANUFACTURING is back in fashion. John Major, we are told, 'believes passion- ately' in the need to expand our industrial base. He was, he says, in a minority in the Thatcherite 1980s (not many people recall his expressing these minority views). But he is in a minority no longer. Under his predecessor, the director-general of the Confederation of British Industry was once a barely tolerated visitor to Downing Street; today, the CBI's leader, Howard Davies, has an open door to No. 10. A report in Saturday's Daily Telegraph quot- ed a Treasury mandarin as saying, 'He's almost a member of the Cabinet. Some- times it seems like it.'
The cult of manufacturing is one of the strangest of economic phenomena. It is a funny thing for people to 'become passion- ate' about. As with all religions, manufac- turing worshippers have their creed, their rules and their responses. 'It is time for the government to recognise the importance of manufacturing industry.' (The congrega- tion, clad in grey suits, will nod and mur- mur assent.) 'You cannot build an economy on insurance and hairdressing.' (The congregation will snort and throw its hands in the air.) The cult has infiltrated deeply into society. It has its Department of State, its select committees, its trade associations.
Not all manufactured objects are equally revered. Pharmaceuticals and computers will just about do, but not films or books. The manufacture that is prized above all others is steel. Eastern Europe, where the cult was particularly influential, has so much steel-making capacity that if operat- ed efficiently it would destabilise the world market for decades to come. In its last year pf existence, the former Soviet Union produced more steel than the United States (and perhaps a tenth of US output of other things). Goodness knows what they did with it all. Presumably it is still rusting away somewhere. It is all bad luck on people for whom making steel is an ordinary business activity; their com- mercial steel is squeezed out by the plan- ners' steel. Few cults have as their prophets both Lenin and Andrew Carnegie.
Now Lenin and perhaps also Carnegie were influenced by the labour theory of value: output is measured by the amount of hard physical toil that goes into it. That is why steel is the cult's most important symbol. Think of a steelworks and imme- diately the mind is filled with images of flaming furnaces, muscled men stripped to the waist and covered in a mixture of sweat and grease, wrestling to bring nature under control. Actually a modern steel plant is not like that at all, but since few manufacturing worshippers have ever been to one it does not matter.
In common with many other religions, the cult of manufacturing is irredeemably masculine. It is male manual labour that counts. George Orwell's account of the life of a plongeur describes work as physically
demanding as can be imagined. But no manufacturing worshipper would ever think that washing-up was real work (even though, properly costed and accounted for, it would be one of Britain's largest indus- tries). Washing-up is a woman's job. It is no accident that the service industry which heads the list for derision is hairdressing, a profession entered only by men of ques- tionable masculinity.
And that explains why some non-manu- facturing activities are ranked on a par with steel-making: mining, for example. Recall the extraordinary reaction last autumn to the planned pit closures. The Govern- ment's plaintive cries that the coal was not needed, that there was already more stock- piled coal than anyone could use, were uni- versally dismissed as irrelevant or absurd. The economic value of coal is self-evident. To question it is to devalue the efforts of the men who seize it from the ground. Arthur Scargill's repeated references to `the cheapest deep-mined coal in Europe' is characteristic of the debate. Only deep- mined coal really counts. The effete coal that can be shovelled from a hill by a man with a bulldozer is not real coal, even though it burns just as well and the electric- ity it produces is just the same.
The activities that manufacturing wor- shippers value have a clear group of com- mon characteristics. They involve arduous and unpleasant labour and they are mainly produced by men. Ideally man is set against the elements. So steel-making and vehicle- assembly are key manufacturing activities, and pharmaceuticals and publishing (prof- itable export industries though they may be) do not really count. The people who work for them probably wear suits, and are as likely to be women as men.
Mining and agriculture meet the criteria that define real work; insurance, tourism and hairdressing do not. As a result, gov- ernments around the world protect and subsidise their car and steel industries, their farms and their mines. The world has a surplus of car- and steel-making capacity, agricultural products and coal. It is very difficult to make a profitable living in any of these businesses. Drugs and books, insurance and hair salons, which are not deemed to be equally important, can be left to the ordinary laws of supply and demand. They are businesses you can make money in.
In primitive societies, men hunted for food, made simple implements and gath- ered fuel. Women stayed behind to rear their (preferably male) children. Securing sufficient food and fuel took all the hours of the day. The families of men who were vigorous and proficient in these activities thrived, while those with idle or inept hus- bands did not. There was then a real sense in which agriculture, energy and basic man- ufacturing were primary activities and oth- ers secondary. If the primary ones were insufficiently successful, the secondary ones could not take place at all. But the world, believe it or not, has changed. In Britain in 1993 it is no longer necessary to hunt all day in order to find enough to eat. As a matter of fact, in order to be able to hunt at all you need to spend the rest of the year earning a great deal of money in a merchant bank, and most of the people who hunt have already eaten far too much. The value of economic activ- ities no longer turns on what they con- tributed to the Stone Age man's needs for food and shelter. They are derived from what other people are willing to pay for them. That is why Bill Clinton's hair stylist earns more than a steel worker.
Yet the spread of economic ideas lags far behind. As Keynes observed, practical men who believe themselves exempt from any intellectual influence are usually the slaves of some defunct economist — about 10,000 years defunct in this case.
John Kay is the Professor of Economics at the London Business School.
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