Saturday, August 27, 2005

Protectionism and Hollow Economies

Chris at Stumbling and Mumbling gives a good analogy to show that pretectionist fears of lost manufacturing and agricultural jobs 'hollowing out' developed economies are misguided.
But what would an economy look like with its manufacturing "hollowed out"?
It'd look like my street, that's what. Almost no-one in Belsize Park Gardens, to my knowledge, works in manufacturing. And there are loads of service industries where no-one's employed either - and certainly, no agricultural jobs (though some do grow their own herbs).
This isn't jsut true of my street. It's true of most of the area. The people round my way work pretty much in just two industries: entertainment/meeja and financial services.
And are we poor? No. Sure, we have problems with single parents and drug users. But we're pretty rich, despite a catastrophic hollowing out of manufacturing, and despite the fact that almost all the food and clothing we buy is imported, sometimes from as far away as Camden Town.
What, then, is the difference between my area and a country that makes hollowing out a problem in the latter but not in the former?
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