Coal not dole

A new report on the legacy of pit closures suggests my old economics tutor was right all along.
During the miners' strike, Andrew Glyn argued that the slogan "coal not dole" made economic sense. He said unprofitable pits should be kept open because the  subsidy  the government gave them was less than  the tax-payer would spend on dole payments to unemployed miners; these, he thought, would not quickly find new jobs.
And it turns out that they didn't. Steve Fothergill says that, of the 213,000 mining jobs lost since 1985, 90,000 have not been replaced. What's more, many of the jobs that have been created in the former coalfields have come only recently; more than 50,000 since 2001.
And even these new jobs have required government help - so one set of subsidized jobs has replaced another. Fothergill says:

The coalfields have come this  far along the road to recovery  in part  because  of the intensive practical support they have received from local authorities, development agencies, central government and the European Union.

Does this mean we were right to march for "coal not dole?* Not necessarily. Perhaps the smashing of trades union morale and power contributed to the huge fall we've seen in the Nairu since the mid-80s. But that's another argument; one early and sceptical assessment of it is this pdf. (Leave global warming  out  of it -  I'm in nostalgia mode, and the thought of global warming never occurred to any Oxford student in the mid-80s.)
The lesson here is, I think, still important today. Maybe labour markets aren't as flexible as free-marketeers think, and are far slower to respond to shocks.
* I stress that my support for the miners at the time was not due to any excessive influence from Andrew; I was a Marxist before I met him. He was reticient about advancing the case to his students, only doing so when asked - which, admittedly, was often; he was far more dogmatic about asserting the genuis of Charlie Parker than any political issue. Also, whatever you think of the merits of the "coal not dole" argument, this slogan made (and makes) a hell of a lot more sense than a popular SWP one of the time: "miners and students - one struggle, one fight."   

Comments

[dearieme]

Did your chum compute the subsidy correctly i.e. adding on to the direct subsidy the huge extra subsidy that came from instructing the electricity generators to buy coal from the NCB at substantially above-market rates? Did he add in the cost of the hopeless insecurity of supply? Remember, the moment OPEC put up the oil price in the 70s, the miners were out on strike, helpfully reminding older folk of their strikes during WW2. British coal was a basket case: deep, sulphur-laden, cut from seams that were shallow and faulted, and entirely unreliable. The whole lot should have been sorted out decades earlier.

[CHris B]

From Alan Bennett's Diary:

7 December [1984]. To a party at the Department of the History of Medicine at Univeristy College. I talk to Alan Tyson, who's like a figure out of the eighteenth century: a genial, snuff-taking, snuff-coloured, easy-going aristocrat - Fox, perhaps, or one of the Bourbons. He is a fellow of All Souls, and when Mrs Thatcher came to the college for a scientific symposium Tyson was deputed to take her round the Common Room. This is hung with portraits and photographs of dead fellows, including some of the economist G. D. H. Cole. Tyson planned to take Mrs Thatcher up to it saying, "And this, Prime Minister, is a former fellow, G. D. H. Dole." Whereupon, with luck, Mrs Thatcher would have had to say, "Cole, not Dole." In the event he did take her round but lost his nerve.

[dearieme]

And it wasn't just the bloody NBC. I was once involved with a beautiful energy economy scheme that was scuppered because British Gas (ab)used its monopoly rights to stop a company exploiting North Sea gas intelligently: they ended up burning the bloody gas in a furnace and piping steam to the company next door, with a horribly reduced thermodynamic efficiency compared to the whizzo, but forbidden, alternative. The idiocies of nationalised energy companies are not mitigated by charming yarns of an economics don bottling out of twitting Mrs T.

[Blimpish]

With Dearieme - but even if proved, it's less an argument for continuing to subsidise the coalmines than one for better welfare policy. And as somebody who knows the alphabet soup of economic development land far better than his mental health can stand, I'd suggest that they might've stood in the way of adjustment by creating those subsidised jobs.

Plus, part of crushing the strike was about reasserting government authority against what had become a major challenge. Reducing regime uncertainty (wildcat strikes, unreliable energy supply, social instability) brings economic benefits, too.

[Snafu]

Seems to be a case for reducing the welfare payments to these ex coal miners to encourage them to find other jobs.

Simply suggesting that we should have kept coal mines in operation just to keep the miners busy is like arguing that unemployed people should dig holes in the road and fill them up to keep them busy!!

I am surprised that so few have found replacement jobs when so many are claiming incapactiy benefit. No doubt many were not prepared to move to areas with low unemployment. If the labour market was more flexible, then this excess labour should have been absorbed.

[Malthebof]

I am given to understand that there was about another 400 years of coal available. So we shut pits, make miners redundant (nobody will ever go down a pit again) and import coal. Gas is now being brought ashore from Liverpool Bay to North Wales and being burnt to generate electricity, truly madness. Surely it would not have been beyond our skills to have constructed coal burning power stations and 'scrubbed' the emissions clean.

[Ugg london]

Never frown, when you are sad, because you never know who is falling in love with your smile.

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