The possible closure of Tata Steel’s operations in Port Talbot casts a deep shadow over the area. There’s something familiar about this depressing story. The shipyards of the Clyde and the cotton mills of Manchester have faded. The coalfields of Derbyshire, Nottinghamshire and South Yorkshire were all around me as I grew up in Chesterfield during the miners’ strike of 1984-85. Now the mining jobs are gone. Further afield, there are the job losses in the automobile production lines of Detroit, for the shoemakers of Kobe in Japan, or at Eastman Kodak in Rochester, New York.
So what should be done when communities are wounded by such blows? One tempting answer is “everything”; that the government should nationalise troubled operations or adopt similar big-bazooka tactics, such as high trade barriers or large subsidies. It’s easy enough to make the emotional case for this but the practical case isn’t so plausible. Would nationalisation have saved Kodak’s film business? Is Manchester the place for a 21st-century Cottonopolis?
Sometimes, government can help restructure a troubled business — as with the Obama administration’s interventions in the case of General Motors, or the long but ultimately successful nationalisation of Rolls-Royce in the 1970s.