Industrial Policy In The Mixed Economy

The mixed economy, for purposes of this paper, is taken to encompass, in varying form and degree, the economies of all non-communist societies. For purposes of comparison and contrast attention is here centred for the most part upon the mixed economies of the United Kingdom and the United States of America. In certain respects, this paper departs sharply from approaches which still dominate UK writings in the field of industrial economics, arguably with significant policy implications. Specifically, in Section A account is taken of recent developments in public choice analysis in analysing the actual policy interventions of governments and their bureaucracies, of recent developments in the economics of rent-seeking in analysing the actual responses of firms to regulatory initiatives, and of recent developments in the theory of property rights in analysing the predictable economic performance of corporate enterprise. In Section B, the paper explores the implications for industrial policy in its various aspects which are influenced by these perspectives and which render the development of an acceptable industrial policy ever more complex in the mixed economies. Some relevant proposals for long-term industrial policy are then outlined.