3 thoughts on “There is no economic war – and we need no industrial policy”

  1. Posted 31/10/2012 at 19:21 | Permalink

    Great read Philip. Basically a lot of PR and publicity for nothing new. That’s Tarzan writ large.

  2. Posted 31/10/2012 at 23:19 | Permalink

    Tarzan’s last stand perhaps!

  3. Posted 01/11/2012 at 17:32 | Permalink

    Whilst I agree that getting governments to pick winners is a bad idea, especially if they do so in collaboration with established businesses, I don’t think it is because they have any more bad ideas than the general population. In general these people tend to be better informed and brighter than the average.
    The problem is that the vast majority of new ideas are not in fact improvements. Probably only 1% of new ideas are improvements, and even if government is twice as good as the general population that still leaves 98% that should be abandoned.
    Rather I think the problem is that the government can cross subsidise failing enterprises based on bad ideas for far longer than any private organisation can, and far far longer than a small private organisation can. If an idea isn’t working the organisation feels pain quickly, fears for its future existence, and either sorts out the snags or abandons the idea pretty quickly. After all the only consideration for an elected politician is whether he can keep enough “face” to win the next election, a civil servant doesn’t even have to worry about that, and both know that the taxes will keep rolling in and that future revenue is secure. The Owner of a business knows that his future revenue depends on pursuing good ideas whether new or not, and that he must drop bad ones as soon as possible. He would rather loose face than go out of business.

Comments are closed.