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Minding its business
It is widely believed that Margaret Thatcher's election ushered in a continuing policy of non-intervention in British industry.
It was recently reported, for example, that EEF, the manufacturers' organisation, had called on the Government "to rethink the laissez faire approach to industry" introduced in 1979 (The Guardian, 1 July 2009).
Yet the assumption is simply untrue. Every government since 1979 has intervened in industry: Thatcher with British Leyland in 1983, John Major with the coal industry in 1992, Tony Blair with Rover in 2005, and Gordon Brown with the banks and the motor industry (again) in 2009.
British governments have never given up on economic interventionism, any more than industrial failure has gone away. As long as the latter continues, politics will dictate when the former will follow. The myth of non-intervention is often linked to the belief that laissez faire policies explain the relative success of the British economy since the 1980s.
Although it is based on false premises, this prevalent view makes it far harder to make the case for intervention. As a result, we see, for example, governments failing to support industries such as renewable energy, which may yet prove crucial to the nation's future.
About the author
Niall G. MacKenzie is a research fellow in enterprise and innovation at Judge Business School, University of Cambridge.