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Over the last weeks I’ve read much about the subject of welfare reform. The arguments about incapacity benefit and workfare. However all these strategies for welfare reform fail to answer one fundamental question. How are we going to get people into work? I believe all the proposed plans for welfare reform will fail because they do not tell us how we are to create the one million plus jobs needed to end welfare dependency. This is because the British economy no longer produces the jobs that the unemployed need. Lets face it, a person is either in work or they are on benefit, it really is that simple, the answer to unemployment is to create jobs.

You may well ask, why are there not enough jobs?

Well, for a start we are not making the goods to supply our domestic market anymore, we are importing those goods. So a radio that could have been made in Britain is being made in China instead and a Chinaman has work while the Briton that could have made that radio remains unemployed. We are also importing food and fuel that we could be producing ourselves too. This means that yet more of our people are unemployed and languishing on benefit.

So why are we not producing these goods ourselves?

The answer given by politicians is because it’s cheaper to buy them from abroad. So we get cheaper goods, but we pay for that in other ways, with unemployment, and we pay for that with higher interest rates too. When we have an economy that is reliant on imports it means that we have to pursue a strong pound policy to ensure that the foreign goods stay cheap. To have a strong currency we have to have higher interest rates. This means not only a burden on those that borrow to invest in business or those that want to buy a home but it also means our central bank cannot cut interest rates at times when we need to because that will push the cost of all those imports up. This in turn will lead to inflation, which in turn will lead to higher wage-demands. Which in turn leads us back to the high interest rates that quell that inflation.

Sound familiar? Sound like the same old rot that you have to put up with from every government no matter what party is in power?

So: What have our wonderful imports brought us? Permanent mass unemployment and high interest rates or inflation. Rather a high price to pay for cheap goods don’t you think?

What is the alternative?

Well, for a start we in Britain should stop importing goods that we can produce for ourselves. Why are we importing microwave ovens from Russia, radios from China? We can make such items here, the production of such items would create jobs, that would mean the people rotting away on benefit would no longer be on benefit, they would be working and actually contributing to the nation through tax rather than taking from the nation by being on benefit. They would also be earning money which they would spend to buy other British made goods and the wealth generated would stay in Britain rather than flowing out of the country to benefit another nation.

Already we can see that producing for our domestic market, that is having a home-market economic policy, has many advantages. The cheap Chinese radio may no longer be available but in its place we have people working, people no longer on benefit, people spending money that stays in Britain, money that British producers can use to re-invest.

Once the British economy begins to supply itself we will have no need to pursue a strong pound policy, that means interest rates can stay low, and without the trauma of currency differentials a home-market economy would have stable levels of pricing as demand and supply fall into sync, this would also lead to stable wages and house prices.

However, we are not allowed to supply our own needs, to create jobs, to have low interest rates, because politicians of all parties believe in something called ‘The Global Economy’ they believe in ‘Free-trade’ they cling to these concepts blindly. This free-trade ideology stops these politicians from thinking freely, their thought processes become conditioned. So they continue with the same economic failures time and time again.

Each new parliament, each new government brings the same old failures, unemployment, high interest-rates and inflation, around-and-around they go, unable to see cause and effect because they are blinded by the concept of completely free-trade. I’ve nothing against trade when it is in the national interest, there will always be things we will need to import, items like coffee, bananas, and so on. However most of what we need we can produce for ourselves and we should produce for ourselves. The reality of all this is that if we don’t change the way our economy is structured the problems we have will not go away, the huge welfare burden will not go away. We will be forced to live with the trade off between inflation and high interest rates, these problems will not go away. All these problems are caused by import dependency. To end this, we need to start producing for ourselves.

80 comments for: Anthony Makara: Britain imports too much