The Need for a Common Industrial Policy
| Author | John Pinder |
| Published date | 01 April 1981 |
| Date | 01 April 1981 |
| DOI | http://doi.org/10.1177/004711788100700102 |
| Subject Matter | Articles |
998
THE NEED
FOR
A
COMMON
INDUSTRIAL
POLICY
by
JOHN
PINDER
How
can
we
restore
the
economies
of
the
advanced
industrial
countries
to
full
employment,
stable
prices
and
steady
growth?
The
question
is
not
often
put
in
such
plain
terms,
because
the
answer
would
usually
be
too
painful
or
too
unconvincing.
The
painful
answer
is
&dquo;we
cannot&dquo;.
The
unconvincing
answer
is
that
a
tight
enough
monetary
squeeze
applied
for
long
enough
will
stop
the
inflation,
after
which
monetary
policy
can
be
relaxed
to
allow
satisfactory
employment
and
growth.
This
answer
is
unconvincing
because
throughout
the
western
world
stagflation
has
for
well
over
a
decade
been
getting
worse,
with
few
exceptions
and
with
varying
monetary
policies.
Softer
money
lets
inflation
rise;
harder
money
brings
it
down
(though
not
to
the
old
annual
rates
of
less
than
3
per
cent)
but
forces
un-
employment
up,
to
rates
that
have
been
unknown
since
the
1930s.
Why
does
macroeconomic
policy,
which
was
so
successful
in
the
1950s
and
1960s
in
combining
price
stability
with
production
growth,
now
have
such
miserable
results?
&dquo;Structural&dquo;
features
of
the
modern
economy
are
usually
blamed,
though
without
a
precise
definition
of
this
fashionable
adjective.
Structural
has
the
merit
of
sounding
as
if
the
problems
are
so
hard
to
shift
that
not
much
can
be
done
about
them;
and
if
one
has
no
idea
what
to
do,
that
is
a
convenient
impression
to
give.
A
similar
function
is
performed
by
the
adjective
in
the
like-
wise
fashionable
term,
the
&dquo;natural&dquo;
rate
of
unemployment.
Implicitly,
if
these
adjectives
are
allowed
to
act
as
a
buffer
against
thinking
about
the
structures
in
the
contemporary
economy,
the
mind
is
guided
towards
reliance
on
macroeconomic
policies
alone,
which
most
advocates
of
contemporary
economic
nostrums
have
in
common.
The
argument
of
this
article
is
that
such
policies
cannot
prevent
stagflation;
that
the
failure
to
prevent
it
would
lead
to
the
break-up
of the
international
economy;
and
that
a
new
concept
of
international
as
well
as
national
economic
man-
agement
is
required.
Imperfect
markets
and
microeconomic
policies
Oligopoly
and
monopoly
have
become
normal
in
both
pro-
duct
and
labour
markets,
not
because
people
have
become
more
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