How Capitalism Works, part 348

Once there were a lot of British car manufacturers. They made nice-looking, affordable and popular vehicles. Like this one.

But the companies were run very badly indeed. The owners wouldn't invest or innovate. Nor would they pay their workers properly. Eventually, the government - when the UK had governments interested in industrial policy and full employment - nationalised them all as Austin Rover. But the government didn't have the political or technical skills to invest in new design or technology and the cars were absolutely rubbish. Like this one.

or this one, which my grandfather drove:

When sales declined as drivers bought reliable foreign cars, the owners blamed the unions and the unions pushed back, only to find themselves demonised by a Thatcher government which hated state intervention in the market and hate the workers even more.

So the shrivelled remains of Austin Rover were flogged off for £10 (yes, ten pounds) to a particularly disgusting band of financial speculators who just happened to be prominent donors to the Conservative Party. They reduced production and wages, then bailed out.

The 5 Phoenix speculators removed £42 million from the corpse of Rover Group through financial trickery - critical reports have come and gone, they've been banned from holding directorships, but nobody's ever going to prison and they're still active in the City. They flogged the remaining patents and land to a Chinese state car manufacturer (ironic: we've got nationalised car-making again, only owned by a foreign government) who use the site to assemble Chinese-built vehicles. Today, after seven years of negotiations, the redundant workers have been offered £3 in redundancy payments. £3 each, mind!

So there we have it. Mass employment - gone. Balance of trade - wrecked. Entire cities' industries - devastated. A group of Tory speculators: further enriched. Workers - dumped on the scrapheap alongside the terrible cars they were forced to build by greedy, uncaring management. Just one example of the way financial speculation has replaced industry in the hearts of government and the City - and its consequences.

Did I mention that today is local elections day? Keep it in mind.