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Fruit cages and creative destruction.

THIS MORNING I spent about an hour taking down some of our fruit cage. I’ll probably finish the job next weekend. The fruit cage was here when we bought the house but has provided us with dwindling amounts of raspberries, gooseberries, grapes, etc, over the years. Only the redcurrants have never let us down; but they’ve been of limited use, only good for making juice.

So what with the rotting of the timber frame and my wife’s desire for a little summer house, we decided to raze the thing and relocate various plants. The rhubarb, for example, is now deeply embedded in some home-produced compost in a large tub and the blackcurrants are in a trough on the patio.

As I was busy this morning, enjoying the sound of rotten wood snapping apart and seeing a couple of ivy-covered corner posts coming down, I started to think about creative destruction and its part in our economic life.

TAKE THE BANKS, for instance. They should have been allowed to fail and collapse. They could have been sold off and asset-stripped and new organisations set up from their ashes. British politicians, however, at first clearly confused as to what to do settled for the state bailout formula which means that we are all now paying the price of bankers’ hubris and the idiocy of politicians who encouraged them in their hubris.

Northern Rock could have been sold to Branson and his consortium, including the bad debts, right at the beginning of the original crisis, thus saving us all a few quid. Instead it ended up being sold off at much the same price, without the ‘toxic’ assets, a couple of years after the state had kindly bailed them out with cash paid on our account.

The political class seem unable to learn from history; they should know from the examples of the 1970s that failing industries (such as British Leyland) fail for very good reasons, usually for not producing things people want, or for borrowing more than they can pay back. The best thing to do is let them collapse. The worst thing is to prop them up with taxpayer cash. Saving peoples’ jobs by pumping state funding in is a short-term fix. It won’t be long before the business folds or gets taken over anyway.

That also got me thinking about other companies, some of them big ones, that have vanished from national consciousness. Remember Beechams? I do. I worked for them once. As a group they sold more than just Beecham’s pills, but also cosmetics and deodorants, toothpaste (they created Aquafresh), tinned vegetables, Horlicks, antiobiotics, soft drinks and lots of other things I’ve forgotten about. Then they got merged or taken over (sometimes it’s the same thing), changed their name a couple of times and eventually vanished.

What about ICI, once Britain’s biggest manufacturing company, swallowed up and snuffed out? Or Lonrho, ‘Tiny’ (‘the unacceptable face of capitalism’) Rowland’s corporate fiefdom, now a forgotten name and making losses?

There is indeed something of the brutality of raw nature observable in the rise and fall of businesses, something organic and far more predictable than the fanciful forces of history talked about in Hegelian and Marxist maunderings. The problem Marxists have is that they can’t cope with anything that doesn’t fit neatly into their intellectual plan of the universe; that accounts for their difficulty dealing with reality. The problem with most politicians is that they are pretty stupid but think they aren’t – that and the fact that they’re inveterate meddlers who can’t leave anything alone. We’d all be better off if both groups were subject to frequent bouts of creative destruction. Or just destruction in the case of the former.

As for our fruit cage it was certainly nature that determined its fate. Destruction is just the current phase. Some of the wood will go to some friends to burn in the fire in their old farmhouse. The rest, including lots of chicken wire, will go to the dump.

We’ll be paying a number of people to level the ground, put down slabs, erect a summerhouse and paint it. Once it’s up we’ll be able to watch the days go by, nicely out of the wind. And we’ll buy our raspberries from the supermarket.

Michael Blackburn.

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