British Conservative Party finance spokesman George Osborne seems to have a blinkered approach to certain aspects of the economy:
“An economic strategy for the new global economy doesn’t just mean Government doing less. Laissez faire is not a serious answer to many of the challenges we face. Government should be doing more where it’s needed, like improved transport infrastructure, better skills, and more active support for businesses. I want the attitude of the Government to be a service to business, not a burden.”
Up to a point, Lord Copper. What George fails to realize is that the reason “laissez faire” does not seem to work in these areas is largely because of government-erected barriers to private sector activity. The railways weren’t built by government diktat. Isombard Kingdom Brunel did not have a short-term view of his infrastructure needs. There are huge regulatory barriers to private sector development of infrastructure. As for skills, it has been pretty well demonstrated that government money in education, r&d etc drives out private money. That’s just the influence of the money, never mind the regulatory barriers on top.
So if George wants government to be a service to business, he should recognize that perhaps the best service is to get out of the way. Then he should make it clear that it’s not, while he’s Chancellor, going to get in the way again. Some transitional arrangements will certainly be necessary, but a truly “laissez faire” government is likely to see genuine private sector involvement in providing infrastructure and skills. and given the lack of political constraints, that is likely to have more resources and show more vision than the government-directed alternative.
Cross posted from The Really Inconvenient Blog.