Prosperity With Principles: Some Policies for Economic Growth

The recession has sparked a debate about the renewal of manufacturing and it is now generally accepted that the government should create the conditions in which manufacturing can flourish. But, how it should do so is strongly disputed. Dr Green advocates 'prosperity policy', not to be confused with 'selective industrial policy' (measures intended to assist particular companies or economic sectors, or the discredited anti-competitive policies of national plans, national champions or 'picking winners' pursued in the 1960s and 1970s). Moreover, to speak of industrial policy implies that manufacturing industry is the main concern and, while a renewal is long overdue and indispensable for any economic revival, it is not the only consideration. The folly of welcoming post-industrial society and denigrating 'metal bashing' is now obvious, but our future prosperity depends on encouraging every kind of productive activity, manufacturing included. Dr Green suggests some public policies that would encourage manufacturing without compromising our commitment to free enterprise. Success in manufacturing, especially in all-important export markets, depends on having a comparative advantage. Such advantages - including the price, availability and quality - often depend on individual companies, but they also depend on the government. Above all, some such advantages can only be created by the government as part of its inescapable responsibility for creating conditions consistent with productive enterprise, including taxation, regulation, the cost of energy, and much more.