The third industrial revolution is here and it will affect politics

On the radio programme From Our Own Correspondent, he currently has a story he first picked up in Barcelona covering the Catalan referendum last October. We saw the consequences on our TV screens when the government in Madrid, proclaiming the democratic process illegal, took violent action to repress it.

READ MORE: Wha’s Like Us? Weel, No Catalonia

So how come, Niall asked himself while on the spot, that the mechanics seemed so well organised? A vote is not just a matter of a hand and a pencil. You need a polling station and a printed slip and a ballot box and a hall somewhere for the tallies to be totted up. The Spanish authorities had done everything possible to make sure all this apparatus would be unavailable, for example, by locking up the ballot boxes. Yet on the big day everything that was needed to allow the people to express their will in fact made its appearance, at least in most places. The referendum went ahead with a victory for the independence of Catalonia.

Niall’s subsequent investigation of those mechanics led him across the frontier into France. There a Catalan minority lives. They have no linguistic rights at all, because ever since the revolution of 1789 the French state has been one and indivisible, not to say ready to prove as much by cracking skulls. So the Catalans of this region keep their heads down, but are perhaps all the keener to aid their brothers and sisters on the opposite side of the Pyrenees.

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It was with these willing local helpers that the Catalan nationalists got the voting papers printed, but the ballot boxes had to come all the way from China. China manufactures ballot boxes for Europe? A rich irony, to say the least: no doubt they were surplus stock.

At any rate, all the materials for the referendum were gathered together in one small French town and then smuggled southwards. While I say smuggled, that is not quite the right word because in the EU there are, of course, no controls on the roads between France and Spain. It was just a matter of remaining undetected. One batch of voting papers did fall into the hands of the Spanish police. But a printer on the French side opened up in the middle of the night and made more. “They were driven across the border just in time,” said a gleeful old lady interviewed by Niall.

It is striking that she used a turn of phrase “just in time”, which is becoming familiar in commercial terminology. It refers to an important aspect of globalisation, once improvements in technology and transport relieve companies of the need to keep stocks, at a huge saving to costs. Instead raw materials and components arrive at the factories at the precise moment they are needed, and go straight into production.

The Catalan story is a good example of it. In the kind of open, trading economy typical of the EU, there is constant pressure for efficiency. It means old barriers are broken down, like at the Franco-Spanish frontier – and indeed at the Northern Irish frontier since the Good Friday Agreement. Cross-border communities benefit hugely from the extended market. Here is human fraternity in action in the capitalist system.

At the same time long supply chains can be constructed, in the Catalan case stretching to China on the other side of the world. It is today nothing unusual, and is again to be seen in this country too. Only half a century ago, most people bought and used goods that were Made in Britain. Take the car industry, which in the interim has probably been more exposed to global competition than any other. Now only about one-third of the components of a car built in the UK are sourced domestically, compared to more than 90% in 1973.

A Mini, for instance, is assembled in Oxford, supporting more than 4000 jobs in that city alone. Components coming from elsewhere in the EU and conforming to its rules of origin arrive at the assembly line, thanks to frictionless frontiers, just in time. Disruption or delay can bring the line to an abrupt halt. As this industry is so fiercely competitive, even the threat of small hold-ups may affect decisions as to which location is optimal for investment. And from next year we are menaced with huge traffic jams at the Channel ports! Here is the danger for UK industries after Brexit, because then the optimal locations will be somewhere else.

Whether in Scotland or in Catalonia, the trend is towards this outsourcing, the practice of a company hiring from outside some goods and services that traditionally had been provided in-house by its own managers and workers. Almost anything can be outsourced if the cost structure favours it, from units of manufacturing to management functions to customer service.

In the gig economy, speed of response and flexibility are vital, and through the internet all operations become easier. By focusing on just a few core processes and outsourcing the rest, entrepreneurs can start new companies with minimal investment: the economy, and workers’ employment, expand.

An example familiar by now is Amazon. It manages sales and customer relations through its own website. It relies on the parcel delivery service UPS for logistics. It uses Visa or Mastercard for revenue collection. It looks to book publishers and other suppliers to carry out its product development. In Scotland it provides jobs where there were none before, at Gourock and beside the M90 in Fife. Here on our own doorstep are authentic examples of the economy of the 21st century.

Yet even as recently as the 1990s the whole caboodle had hardly been heard of. It was then that outsourcing began as a business practice, and rapidly caught on. Not even mainstream Western economics, let alone orthodox Marxist dogma, has yet had time to take adequate account of it.

The students just starting on economics courses this autumn will learn nothing about it, because their lecturers know nothing about it. In fact the students will probably know more than the lecturers because today’s youngsters leave their elders standing when it comes to life online. At least this new global economy is already a subject of non-academic controversy in many countries. Those who hate it say it costs jobs, while its supporters – like this column – say it creates an incentive for companies and individuals to allocate resources where they are most effective, so as to make and maintain free markets on a global scale.

Some call all this the third industrial revolution. Like the previous two revolutions it will soon affect politics as well. In Catalonia, as reported by Niall O’Gallagher, it is already doing so.

Carles Puigdemont, the Catalan leader in exile since the Spanish government’s coup, headed a party of robust capitalist principles seeking to liberate his country from the shackles of regulation and corruption in the parent state. It is a different concept of the progressive as identified and practised in Scotland, but we would do well to follow his example in place of our usual preference for sclerotic socialism. Otherwise we will never be just in time for the steps to national independence.