Monday, December 08, 2008

The Active State vs Protectionism

Work has generally kept me from doing too much writing, but I thought I'd write something about the Progress conference and what I felt was a fairly major contradiction: most of the government figures there had an acceptance of the need for a more active state, although at the same time they rejected the idea of protectionism (specifically mentioned in James Purnell's speech). I've always held that they are one and the same thing, and personally see no problem with protectionism provided it is applied in such a way to respect the economies of other nations.

Protectionism, as I see it involves interfering in your country's industrial and trade policies through the imposition of tarriffs, subsidies, exchange controls and a host of other measures with a view to giving advantage to specific industries.

An "activist state"? As far as I can tell it is exactly the same thing, we are told that Peter Mandelson has a list of firms he believes should be saved by government intervention if necessary. He is also working on a green industrial strategy, one that could be quite seriously interventionist.

Whether you call it "protectionism" or "the activist state" I very much like the idea of all of this. The missing piece in the current welfare puzzle is the need for decent jobs, a big problem with the economy at the moment is the weakness of British exports. A policy of strategic intervention and investment in certain industries could potentially kill 2 birds with one stone.

PS: To those unsure about protectionism, take a read of this

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