Manufacturing and national strength

An article in the Telegraph today starts with the following:

"The decisive moment in securing the future of Vauxhall took place in the shadow of the Brandenburg Gate in Berlin, 64 years after Churchill tanks made by the company had helped to storm the German capital"

It was an old cliche a few years back about winning the war and losing the peace, but more specifically it shows that a nation's military strength depends on manufacturing. Britain could not have built tanks in World War II if it didn't have a healthy car industry, so that the peace-time expertise could be easily converted to war production. Manufacturing and technological development are linked. It is ironic that while we are spending billions on foreign wars, we are allowing our manufacturing base to be eroded, so limiting our military capability in the future. Not that we should be indulging in reckless, and strategically pointless foreign wars, but we need to be able to defend ourselves.


The other irony is that Vauxhall apparently makes a lot of money, but it might be political interests in Germany that skew the economics, so prejudicing Vauxhall's future. Our trade "partners" are always also our trade competitors, and this applies also to foreign ownership of British manufacturing facilities.

Nor is this about attacking the Germans, who have a lot to teach us. We should look at our own weaknesses.

political economy vs economics

In "Global political economy: understanding the international economic order" (2001), Robert Gilpin writes (p25-6):

'For Adam Smith, political economy was a "branch of the science of a statesman or legislator", or as John Stuart Mill, the last major classical economist commented, political economy was the science that teaches a nation how to become rich. These thinkers emphasised the "wealth of nations", and the term "political" was as significant as the term "economy".'

'In the late 19th Century, [Gilpin continues], this broad definition of what economists study was narrowed considerably. Alfred Marshall, the father of modern economics, ...substituted the present-day term "economics" for "political economy" and greatly restricted the domain of economic science. '

For Marshall, Economics was a 'value-free, empirical science'. In the modern terminology of Economics today, continues Gilpin, it is 'defined by economists as a universal science of decision-making under conditions of constraint and scarcity' .