When I left the R.A.F., in 1970 we lived in Wootton Bassett just outside of Swindon, there was plenty of work around so no problems, but then the government decided to close the railway yards. This meant that because Swindon, like so many other towns and cities in Britain was a ‘one industry’ town – shoes were made in one place, steel in another, cotton mills were in Lancashire, chocolate in Bourneville – one company or organisation controlled the life blood of an entire community.
So Swindon and other places decided to re-organise themselves. Branch offices, distribution warehouses, so they enticed companies employing 500 people not the vast organisations with thousands of employees whose loss could destroy a city. Today however, in Britain if a company goes broke it’s a sad loss but not the end of the world. Look at the Footsie 100, and you see that most of the giant companies are foreign or at least domiciled in a number of countries except for financial services. When RBS and Bank of Scotland went broke the alarm bells really started ringing. Perhaps other countries were no longer big enough to save an economy with giant companies whose value was greater than Britain’s G.D.P. What if HSBC went broke???
Perhaps they could re-domicile to China, they have got loads of money.
Could be the time is coming where Giant Companies need a greater form of insurance than Britain can supply on its own. The same conundrum that faced towns and cities in the 1970’s will need to be faced up to by these countries. Britain and the Netherlands have jointly owned companies and it is now time to spread the load. the question is at what point are companies so big they become un-saveable. Perhaps then capitalists will let nature take its course and not come running to governments for a bail out.
I often wonder if a few more banks had gone broke in 2007 we would have an interest rate today.
(c) Michael Douglas Bosc