Karl Marx once observed that England was saved from ‘rural idiocy’ in the eighteenth century by the advent of the Industrial Revolution. The emergence of the first working class in history ‘saved’ Scotland and Wales from the same threatening condition as well. Because there was no Industrial Revolution in Ireland, it was condemned to bovine backwardness for the next two centuries.

Marx’s observation becomes relevant now that Australia’s car industry has come to a shuddering halt and the Abbott Government has declared its intention to end ‘corporate welfare’ to other endangered manufacturing industries. Without a manufacturing sector employing a skilled industrial workforce, Australia will be left with a mass of non-skilled, casualised, part-time, mostly non-unionised workers of all ages. In a few short years, their families, neighbourhoods and communities will plunge from ‘getting ahead’ to ‘falling behind’. All the Coalition talk about ‘retraining packages’ is a smokescreen.

In Britain in the 1980s, Prime Minister Margaret Thatcher employed the same ideological warfare to close coalmines, shipyards and steelworks and transfer ‘wealth creation’ to the City of London. The industrial towns and cities in the north of England, the Midlands, Kent, Scotland and South Wales never recovered. When the industries were wiped out, so were the jobs. It is a simple law of capitalism – and Australian car workers, as well as workers from the associated components industry, will be feeling its consequences very soon.

Not many years ago, Ford Australia had plants in Victoria at Geelong, Ballarat and Broadmeadows, another in Sydney and one in Brisbane, too. General Motors Holden owned plants in Victoria at Port Melbourne and Dandenong, and one in both Adelaide and Sydney, while Toyota has been producing cars at Altona since buying out British Leyland’s interest in Australian Motor Industries (AMI) in the late 1970s.

In a couple of years, the ‘Big Three’ will have closed their assembly lines and returned to either Detroit or Tokyo. Other foreign auto makers who have departed over the past 30 years include Mercedes Benz, Fiat, British Motor Corporation, Chrysler, Mitsubishi, International Harvester, Leyland Motors, Renault, Rootes, Rover and Volkswagen which once operated a plant at Clayton, Victoria.

These foreign-owned subsidiaries constituted what was misnamed ‘the Australian car-making industry’. They set up shop in Australia because of the generous subsidies, tax breaks and other incentives offered by federal and competing state governments.

When Prime Minister Abbott and his ministers condemn financial feather-bedding of the auto industry, they cynically omit the fact that car manufacturing is subsidised by governments all around the world. Fifty countries – out of 192 UN members – are making cars today. All of them do so with state subsidy.

One of the Coalition’s arguments is that while the auto industry recedes into history, fresh manufacturing jobs will arise from other parts of the sector. This ignores the submission made repeatedly to the Productivity Commission in the past two decades that automotive manufacture is the central element of all manufacture in Australia. Holden, Ford, Toyota, and their related components industries, hired and trained workers who became highly skilled in engineering, mechanics, computers, design, fitting and turning, and electronics.

Having a resilient manufacturing sector with a highly skilled workforce should be a nationbuilding objective, as it was to our forebears at the time of Federation. At that time, however, the purpose was to make White Australia self-sufficient, while vested overseas interests wanted to establish a permanent market for British – and later US, Japanese and Korean – profiteering.

Today’s national manufacturing project should be aimed at technical and training links with Asia and joint ventures in new industries to advance health, education, science and the protection of water, air, oceans and the natural environment. Factory workers used to be known as the industrial proletariat, and then blue-collar workers; now they’re more likely to wear white coats and work alongside women. The Abbott Government is proposing to destroy their livelihoods and turn them into service workers for Woolworths and Coles. Coincidentally, it will stage a 12-month royal commission costing an estimated $100 million to demonise the trade unions, perhaps the only organised defence they have to mount resistance.

Abbott is gambling on the continuation of the China-India resources boom. He mistakenly assumes that the super revenues generated from the sale of coal, iron and nickel will buoy the Australian economy into the future. But history and all competent economic theory show that tax and company revenues don’t make an economy – working people do. The bedrock of any robust and expanding economy is a fully employed society making goods, products and providing high-class services, and not one that collects dividends, derivatives and the dole.

A clever country is one with a universally educated population, a skilled working class, an enterprising middle class and a ruling class that works for a living on average wages. The Abbott Government is heading in the very opposite direction.