In his column for the Observer, James accuses Premier League clubs of seeking short-cuts instead of investing their time in local youngsters.
He wrote: "But when clubs attempt a shortcut, hoarding talent by increasing their squad sizes to ridiculous figures, as in Liverpool's 62 professional first-team players, they may as well throw in the towel on the development side of the game.
"That may sound harsh, but why then have Liverpool produced so few great English players in recent years? Who has come through since Steven Gerrard and Jamie Carragher? Two players in 12 odd years is a very low success rate."