As an industrial policy specialist, I’ve been spoiled this week. On Tuesday, at the TUC’s After Austerity conference, Ha-Joon Chang and Mariana Mazzucato, from Cambridge and Sussex Universities respectively, were every bit as creative and provocative as we’ve come to expect them to be. And this morning, I’ve had time to read a new Fabian essay by Labour’s Shadow Business Secretary, Chuka Umunna, on the role of government in industry, ‘Stepping Up, Not Stepping Back’.
Chuka’s key concern is how to recast the relationship between governments and markets. He moves beyond the orthodox thinking that the role of government is simply to correct market failure, speaking of “steering markets towards additional goals that we value as a society”. He is right, of course. I would expect a progressive government to have a number of objectives for its economy, including ensuring that new (and existing) industries are increasingly sustainable, that they create good jobs that pay decent wages and, in particular, that they provide jobs for those young people who do not go to university. Expecting markets to deliver these objectives without government direction or intervention would be so much pie in the sky.
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