People have moved away from an activity that no longer adds value to other occupations that do add value. And so does the human species become ever richer, as we move capital and labour from low...activities to higher value adding ones.
The same is true of the manufacturing in the North that people so decry the disappearance of. The game is all about adding value and if it turns out that staffing an old folks home adds more that humans value than does making thing to drop on your foot then we're richer for the change in what people do.
In saying this, Tim is committing the error I've accused some classical liberals of making; he's mistaking the map for the terrain. He gives a good account of how a well-working labour market should work. But he fails to ask: is this how the market works in reality? And the answer is: maybe not. The fact unemployment rates are high in many areas that experienced a lot of deindustrialization alerts us to the possibility that labour isn't completely fungible; workers made redundant in heavy industry don't swiftly become care home workers. One study of the effect of pit closures in the 1980s found (pdf):
Between 1981 and 2004, 222,000 male jobs were lost from the coal industry in [mining] areas; this was offset by an increase of 132,400 in male jobs in other industries and services in the same areas.
You might object that 132,400 out of 222,000 means Tim is more than half-right. But this omits the fact that unemployment is a massive source of misery. Even if the transition from miner to care home worker does eventually occur, the temporary joblessness during the shift isn't just a waste of resources, but a big loss of happiness.
In this context, Tim is too sanguine about relative decline. He says: "going from being a comparatively rich part of the country to being a comparatively poor one is not the same as becoming poorer or impoverished." This overlooks the fact that relative poverty matters. As Adam Smith - who gave his name if not much else to the Adam Smith Institute - wrote:
By necessaries I understand not only the commodities which are indispensably necessary for the support of life, but whatever the custom of the country renders it indecent for creditable people, even of the lowest order, to be without. A linen shirt, for example, is, strictly speaking, not a necessary of life. The Greeks and Romans lived, I suppose, very comfortably though they had no linen. But in the present times, through the greater part of Europe, a creditable day-labourer would be ashamed to appear in public without a linen shirt, the want of which would be supposed to denote that disgraceful degree of poverty which, it is presumed, nobody can well fall into without extreme bad conduct.
In saying all this, I don't mean that Tim is entirely wrong. He's right that, over time, labour must shift; we need care workers more than a stovepipe hat factory. Tim's error, instead, is to understate the pain - and time - involved in this shift.
In doing this, and in writing of the human species becoming richer, Tim is coming close to the view that the happiness of some individuals must be sacrified for the welfare of the collective. Which seems to me to be nearer to Stalinism than to classical liberalism.