The government’s response to the credit crunch crisis is taking it into strange places and forcing ministers to consider very fundamental issues. As Andrew Rawnsley wrote so pertinently in The Observer last week (Dec 14), does it really make sense to reduce VAT in order to allow people to keep spending their money on large quantities of imported goods.
Now we have a further interesting question highlighted in the same newspaper by Catherine Bennett yesterday: does it make sense for the government to bail out Land Rover Jaguar given that its main output is gas guzzling cars which have no place in any rational allocation of resources? Instinctively, I sympathise with Bennett. Range Rovers are the most terrifying vehicles to encounter in towns, especially when I am on my bike, and as far as I’m concerned, the fewer the better.
The trouble is that the issue is not that simple. Most of the products of capitalism are pretty useless. Who needs Rolex watches that cost £3,000 when my tenner job bought in the market keeps just as good time. Who needs champagne bottles that cost £160 as are on offer at the St Pancras champagne bar? Or frankly, who needs the computer games that are turning our children into brainless zombies with RSI? So where does it end? The problem is far greater. Capitalism, we are learning, is not really sustainable but we are all on a merry go round of having to spend more in order to keep the show on the road. At some stage it will stop spinning and we will all fall down. Perhaps not this time, but maybe when the oil does start to run out.
Bennett wanted the Land Rover workers to be retrained to produce more environmentally friendly goods, the kind of arms into ploughshares strategy that was popular in the 1970s. Rawnsley suggested a massive programme of improving railways and producing green energy.
None of this is simple. The workers might not have the right skills and gearing up programmes to improve the railways will take time. But at least these columnists are on the right lines. Simply pouring money into Land Rover Jaguar, a company owned by billionaire Indians, hardly seems sensible. There is no such coherent approach coming from government. Instead we have Mandelson promising to privatise the royal mail. Just possibly he should look at the experience of the railways before embarking on that programme. When will they ever learn?