Ho hum, it\’s not just the stringing together of the buzzwords, it\’s not just the ignorance, it\’s the simple failure of logic.
We may be deluded enough to think that successful manufacturing is still about making things, and that growth is about making more of them more profitably, but in fact for the last decade \”growth\” has meant freeing up more and more cash to be handed out to shareholders and top executives in the form of share buy-backs, dividends and bonuses. It has been achieved by taking on debt, closing factories, even profitable ones, selling off assets, and eliminating direct employment. In the upside-down world of impatient finance capitalism, manufacturers\’ \”growth\” has actually required the destruction of companies\’ productive capacity.
That last clause.
So, taking as our examples Kraft and Cadbury (for they are who is being talked about). Has their output (measured either by value or tonnage) been decreasing?
If it has been decreasing then perhaps we might indeed conclude that their productive capacity has been destroyed (whether this is a good thing or a bad thing is another matter. If they\’re making less because fewer people want to buy it then it would be a good thing.).
If however their output has been increasing then it would be impossible for us to conclude that their productive capacity had been destroyed. For the amount of production of course depends upon the capacity to produce.
Now I\’m pretty sure that both Kraft and Cadbury have been growing. Thus all the layoffs, the factory closures, the handing money back to shareholders, these have been happening while productive capacity has been growing.
That is, they are becoming more efficient at using resources to make their end product: they are becoming more productive.
And as Paul Krugman says, productivity may not be everything but in the long run it\’s pretty much everything. So this is a good thing.
But back to Dear Felicity. How can anyone write like this without testing the most basic part of the logical chain? \”Destruction of companies\’ productive capacity\” depends upon those companies actually having less productive capacity than formerly. And they don\’t, they have more.