Polly Toynbee’s assertion that it is hard to see where US and European growth or exports are to come from is a massive understatement. While the coalition’s oxymoronic call for simultaneous austerity and growth has been widely discussed, the delusion of export-led growth has received less scrutiny.
It’s not just that our biggest export markets, Europe and the US, consist of customers who will be saving more and importing less; it ignores the fact that China and India will rapidly ascend the hi-tech ladder and will supply more of their domestic needs as well as global export markets. The UK will be left with a ragbag of niche exports like Range Rovers, Scotch and Beatles lyrics.
Once export-led growth is recognised as a pipe dream, then the centrality of a local emphasis on rebuilding national markets can be grasped. China is doing this as it increasingly prioritises its own domestic economy to see off economic and political upheaval.
Such an approach can improve the lot of all nations, but will first need the introduction of barriers to the damaging flow of feral capital and cheap goods. Only then can nation states help provide a more secure future for their citizens, the environment and at last see off any chance of Credit Crunch Three.