If economists are not already completely discredited, the fact that they have failed to predict any recession, ever should be their coup de grâce. What is happening to the steel industry is just one symptom of a much wider pattern of over-supply in the face of a drop in demand. Commodities generally are at a low ebb. – Saudi Arabia keeping the oil flowing with the price plummeting is another example. A major factor seems to be the slow down in the Chinese economy, one feature of which is that China is continuing to produce large amounts of steel for which there is no market . The BBC offers this account of what is happening to the steel industry
This could be seen as good news from two points of view: it should make things cheaper for ordinary people, but even more importantly, it could mean that the headlong rush towards climate change is not after all inevitable. I fear I must offer some very bad advice. Even if greens were in government, they would have to protect what is left of the British steel industry. Not only must they preserve all jobs and infrastructure, but they must ensure that the industry’s energy costs were at least as cheap as all other steel producers.
This is of course in flat contradiction to everything the Green Party should stand for, at least as it was founded, as distinct from its more recent stance as the Party Labour should have been until Corbyn stole that role. These policies are utter lunacy from a Green point of view. But all a Green government could do is stress that there is no alternative in the short term to utter ecological lunacy.
The problem is the Tragedy of the Commons. Briefly, in a competitive situation approaching ecological limits, even where the economic activity in question threatens disastrous consequences, in the short term each competitor must hold their nerve and continue. The first to do the ‘sane’ thing, and cease producing steel, or oil, or whatever does nothing to protect the global environment, they merely put themselves at a disadvantage, and that includes Britain, China and Saud Arabia . Only a comprehensive, reliable and trustworthy agreement between all players has any hope of success.
As the BBC link above discusses, there are complex issues such as EEC rules on protecting an industry, possible tariffs, and the industry is in private hands. Tata steel is not even a British company. It is answerable only to its shareholders. Leanne Wood (Plaid Cymru) did point out on Any Questions (Radio 4, 22nd January) that part nationalization had featured in other European nations’ approach to this problem, but anything approaching a satisfactory answer will remain impossible as long as the ethos world-wide remains competitive. That shows no sign of changing.
The Tragedy applies in many other areas. It is almost certainly true that there will be a brief economic upturn, regardless of the increased greenhouse gas emissions. So not only must the steel industry be ready, but Scotland cannot afford to ignore the economic benefits of hydraulic fracturing, however short lived – and harmful. It will be futile to oppose fracking as long as growth remains unquestioned – in that case the economic case for it is overwhelming.
Another London airport is just as stupid, but Britain will do nothing to save the environment by allowing another European airport to become the ‘Hub’. The most useful subject the assembled wisdom at Davos could discuss is how to manage the transition to a steady state, co-operative environment preserving economy, but that hardly seems likely. Another extreme weather event, due to the increased moisture, and energy, hence violence in weather systems might help.
Regular readers will be aware that I suggest the Basic income as one component in this transition. Not only will it allow a recession to be feasible for millions of ordinary people, it should facilitate a cultural shift from competition to co-operation, once sustainability does reach the agenda.