Maybe they really were the good times. The last few years didn't feel like it, but at least the Government was subtle enough in its winner-picking that I would have to explain how its targeted measures were really supporting losers.
Now, our supposedly conservative and liberal government plans to pick its winners overtly and proudly.
Mr Cameron says that we need to target government support at “those industries where Britain enjoys competitive advantage”.
If they already enjoy competitive advantage, why should we tax industries with fewer advantages in order to support industries that don't need it?
The distinction between free markets and managed markets is, according to Dave, “a sterile debate between laissez-faire and hands-on government”.
What a pity Maggie wasted so much of her time on such a sterile issue.
“The question” he says “isn't 'Should government be involved?' - because it is involved. It taxes, it regulates, it invests. The real question is, 'What is the right kind of involvement?'”
i.e. “If I choose not to pick winners, I am effectively penalising them, so even non-intervention is intervention in my sophisticated, Oxbridge-addled, looking-glass world.”
“In America, President Obama is ramming home the advantage they already enjoy in clean technology worth $38bn of investment.”
Would that be their advantage in bioethanol from corn, for example, which produces at great expense oil that is barely less carbon-intensive than mineral oil, has little exportable application, can supply no more than a tiny fraction of national demand, and drives up food prices, all for the sake of buying the votes of the agricultural lobby? Or is it all those other American clean technologies that have made them global environmental leaders - exporters of technologies that we see in all aspects of our European lives? Thank goodness all that clean-tech spending is converting into such significant economic benefit.
“And Germany is building on the success of their car industry by investing €500m in electric car technology.”
Which is presumably why the Japanese have been first to market, with the French and Americans following up, and the Germans safely in the rear. And what about the marvellous success of the German Feed-in Tariff for renewable energy (the model for your RE policies), which encouraged massive investment that couldn't be supported ad infinitum, and now threatens bankruptcy to many of the suckers that were lured in, as support for still-uneconomic technology is inevitably reduced?
“What they understand is that when you're stuck looking for growth opportunities, you don't stick a pin in a map and drop down a research centre here or arbitrarily back an industry there – you go with the grain of what is already working. We understand that too.”
Because it's the job of government, not businessmen, to “look for growth opportunities”, and governments know not just “what is working”, but also where it should be made to work even better.
Notice the accidental admission that the government is "stuck looking for growth opportunities". In other words, the government doesn't know where growth will come from, even though it has declared itself the expert and the party with primary responsibility for delivery. So it's going to bet on more of a good thing, although (a) it hasn't got a clue what a good thing is, and (b) more of a good thing usually, at best, incurs diminishing returns, and at worst can make you sick.
And "the grain of what is already working" encompasses CCS and offshore wind, does it (see below)? Exactly how do you define "working"?
“We have great industrial strengths across our country, underpinned by world-beating companies:”
“Green technologies in the North East.”
Are you kidding? World-beating clean-tech companies from the North-East like...? Name them? Isn't the government the main employer, and an accounting software company just about the only world-class company left in the area?
“Financial services in Edinburgh.”
Seriously? You are going to claim that the home of RBS and HBOS (not to mention John Law and the Darien scheme) is somehow evidence of a regional British “strength”?
“In retail, pharmaceuticals and advanced engineering. We have made the strategic decision to get behind these strengths.”
Sorry, Dave. You forgot to specify the regional strength for those sectors. Do you plan to throw money at Tesco, Sainsbury's, Walmart and co in just some parts of the country or all over? Do you plan to back GlaxoSmithKline and AstraZeneca – the one and a half British members of the top 20 pharmaceutical companies in the world, by the way – just where they are currently located, or in every town where their jobs would be welcome? How much money should we throw at the effort to create new Rolls-Royce subsidiaries dotted around the country where the Government judges would be best for them?
“We have made the strategic decision to get behind these strengths.”
Very brave of you. Innovation always did spring from the government throwing money at established businesses.
“We are also investing £220 million in a new world-class Centre for Medical Research and Innovation, £1 billion to create one of the world’s first Carbon Capture and Storage demonstration plants, with three more projects to follow and £200 million in low carbon technology, including offshore wind. The potential for Britain to lead in this industry is immense.”
If you don't know quite how badly this stinks of bullshit, you've obviously never been to this site before. Have a scan of some earlier posts. CCS, for example, is the most efficient way yet devised for a government to burn money to destructive effect, as those numbers suggest. The industry is only playing along with it because it's the only way they can get permission to build the coal-fired power-stations they need to keep the lights on without increasing dependency on imported gas. And as for offshore wind, don't get me started. The potential for Britain to waste money developing technology that is no good to anyone is immense.
“But here’s the problem. We need thousands of offshore turbines in the next decade and beyond – each one as tall as the Gherkin. And manufacturing these needs large factories which have to be on the coast. Yet neither the factories nor these large port sites currently exist. And that, understandably, is putting off private investors. So we’re stepping in.”
Run that by me again. There is going to be massive demand for a supposedly high-value product over a sustained period, but industry is incapable of building the factories where they are needed without the government “stepping in”, because the factories don't yet exist. How on earth did business in the industrial revolution manage to put the mills where the water was, and the foundries where the coal was? How did Henry Ford work out where to put his factories? If only they'd had such a far-seeing and benevolent government to help, how much better off would we be?
“To help secure private sector investment in this technology, we’re providing up to £60 million to meet the needs of offshore wind infrastructure at our ports... It’s a triple win. It will help secure our energy supplies, protect our planet and the Carbon Trust says it could create 70,000 jobs.”
Would that be the same Carbon Trust whose advice is so valuable that you have yet to confirm whether they will be saved from the axe?
And “secure our energy supplies”? Oh, please. Intermittent power makes our supplies less, not more, secure. It's fine, so long as we can rely on the energy-exporting nations to only tighten their supplies when the wind is blowing.
“It wasn’t long ago that Apple, Cisco and Google didn’t even exist – now each one has a market value of over $100 billion.”
And each of them the product of carefully-targeted government incubation too. Oh, hang on...
“Skype, Facebook and Twitter have generated billions of dollars and reached a global scale more quickly and with less capital than any companies before.”
And yet more state-funded success-stories. Amazing what a great job the American government has done picking our winning technologies for us...
You total and utter prat. You don't even realise the glaring contradiction of your arguments that is dangling in front of your nose.
“And the most innovative firms are growing twice as fast, both in terms of employment and sales, than those that fail to innovate.”
Surely an Oxbridge education ought to teach you basic English - “twice as fast than” - though little else, it seems. Talk about a statement of the bleeding obvious. What has this got to do with whether government winner-picking is helpful to commercial innovation?
“In 1950, the average life of a company in the S&P index was forty-seven years. By 2020, it will fall to just ten years.”
And your evidence for that claim is... Can I have a ride in your time-machine, please? And once I've confirmed your prediction, what conclusion am I supposed to draw from it? Perhaps that government investment in “winners” will, even if it succeeds, have insufficient time to recoup the investment before the “winner” is superseded?
“It’s astonishing to think that between 1980-2005, nearly all net job creation in the United States occurred in firms less than five years old.”
But in the UK, we think it's a good idea to target support at those industries that are already established and strong, or so you just said.
“And here in Britain, just six per cent of UK businesses are high-growth but they generated over half of the net employment growth between 2005 and 2008.”
I thought you had claimed previously that most of the employment growth in that period was in the public sector? And a good chunk of the private-sector growth in that period was in financial services, you berk: debt-fuelled, artificial, unproductive, trouble-storing growth on the back of government stupidity and complicity. You think that provides any reasonable justification for reinvigorated industrial policy?
When do we get to the reference to the “white heat of technology”? This isn't the heir to Blair, or Thatcher, or even Heath. This is the heir to Wilson! Move over Milliband. You've got a fight on your hands for the well-to-the-left-of-centre ground.
I can't stand to fisk this to the end. It's pushing my blood pressure through the roof. You get the drift. If you want more, see Irwin Stelzer's recent Spectator article on "Picking Losers" (great title).
Let's bury once and for all the hope of some classical-liberals that Cameron is really “one of us”, but is hiding his dryness behind clever language that would get him elected and in a position to implement the economically-rigorous programme he secretly believes in. He is an appalling, limp, woolly-minded, experience-starved power-seeker with delusions of competence, and unerring ability to pick the worst advice (this speech stinks of Fink).
Who would have thought that we would have had a new contender for the title of most delusional, meddlesome Prime Minister so soon after the departure of the current record-holder? Someone who could actually make Brown look relatively sensible and harmless...