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INDUSTRIAL AND TECHNOLOGICAL POLICIES IN POSTWAR WESTERN EUROPE
Abstract
The structuralist thinking that generates industry and technology policies does not arise in a vacuum since all economic policies have structuralist implications. As economic policies change over time, so do the structuralist implications that can be drawn from them. An examination of specific major postwar Western European economic policies reveals that they do tend to influence the nature of industry and technology policies. But these industry and technology policies do not provide simple recipes for changing the industrial mix so that it is relevant to contemporary economic policy goals.
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NOTES AND REFERENCES
Similarly, we do not identify industry and technology policies with particular measures, whether implemented in a number of industries or confined to a specific industry.
For a statement of what might be regarded as the conventional position on demand management see P. McCracken et al., Towards Full Employment and Price Stability, OECD, Paris, June 1977, pp. 179–206.
See, for example, the summary in Economic Commission for Europe, Economic Survey of Europe in 1948, United Nations Department of Economic Affairs, Geneva, 1949 (the other issues in this series in the immediate postwar years are also relevant). A brief, but useful, overview is provided by E. B. Kapstein, ‘The Marshall Plan and industrial policy’, Challenge, 7, 2, 1984, pp. 55–9.
J. R. Houssiaux, ‘American influence on industrial policy in Western Europe since the Second World War’ in C.P. Kindleberger and A. Shonfeld (eds), North American and Western European Economic Policies, Macmillan, London, 1971, pp. 351–63.
Both the British and the French had bodies to encourage mergers, while the Italians had a large, active, state-owned holding company (see P. Siekman, ‘Europe's love affair with bigness’ reprinted in J. M. Samuels, Readings on Mergers and Takeovers, Paul Elek Books, London, 1972, pp. 248–59). However, the importance of a tolerant attitude to mergers and takeovers resulting from private initiatives must be stressed in this context since this is a policy instrument as much as more active interventions in the economy (see ‘Extracts from three speeches on aspects of mergers policy by the President of the Board of Trade (Mr. Anthony Crosland)’ in Board of Trade, Mergers: A Guide to Board of Trade Practice, HMSO, London, 1969, pp. 57–66). The implication of this policy — that it reduced competition — did not go unnoticed. For example, the Conservative government elected in June 1970 sought to encourage competition by undoing many of its predecessor‘s actions (see the editorial postscript (pp. 260–4) to the Siekman paper cited above). For a more recent overview of the impact of industrial policies in the 1960s and 1970s see A. P. Jacquemin, ‘European industrial policies and competition’ in P. Coffey (ed.), Economic Policies of the Common Market, St. Martin's Press, New York, 1979, pp. 22–51.
The anticipated economic advantages are discussed in N. Owen, Economies of Scale, Competitiveness and Trade Patterns within the European Community, Clarendon Press, Oxford, 1983, pp. 1–7; while the (ultimately) political advantages are discussed in G. Colonna Di Paliano, ‘Why Europe needs Continental-scale firms’, European Community, July-August 1968, pp. 4–5.
H. Menderhausen, Two Post War Recoveries of the German Economy, North-Holland, Amsterdam, 1955, pp. 22–31.
For a brief discussion of the new town movement and the impetus given to it by the needs of postwar reconstruction, see F. Schaffer, ‘The new town movement’ in Hazel Evans (ed.), New Towns: The British Experience, Charles Knight, London, 1972, pp. 14–19.
R.B. du Boff, ‘The decline of economic planning in France’, Western Political Quarterly, 21, 1968, pp. 98–109.
See the various essays in J. Hayward and M. Watson (eds), Planning, Politics and Public Policy, The British, French and Italian Experience, Cambridge University Press, London, 1975.
See, for example, Stout on the meaning of medium-term policy. D. K. Stout, ‘Medium term policies’ in D. Morris (ed.), The Economic System in the U.K., Oxford University Press, Oxford, 1979, pp. 487–8.
See O. Aukrust, ‘PRIM I: a model of the price and income distribution mechanism of an open economy’, Review of Income and Wealth, 16, 1, 1970, pp. 51–78; and O. Aukrust, ‘Wage-price interdependencies in open economies’, OECD Regional Trade Union Seminar on Prices Policy, Final Report, OECD, Paris, 1974, pp. 61–76. A recent assessment of this approach may be found in G. Bartoli, ‘An assessment of the Scandinavian model of inflation’, Economia Internazionale, 27, 3-4, 1984, pp. 221–35.
A well known example is the Japanese invasion of traditional Swiss markets in the watch industry. A brief overview of large scale employment dislocations in four major industries (textiles, steel, shipbuilding and automobiles) can be found in R.B. McKersie and W. Sengenberger, Job Losses in Major Industries. Manpower Strategy Responses, OECD, Paris, 1983, pp. 11–27. See also OECD, The Impact of the Newly Industrialising Countries on Production and Trade in Manufactures, Paris, 1979.
This work is particularly useful because it discusses the effects of alternative divisions of the economy into “(I) industrial and non-industrial sectors; (II) a sector which produces tradeable goods and services and one that produces non-tradeable; and (III) a sector that produces marketed goods and services and one that produces non-marketed outputs.” See R. Bacon and W. Eltis, Britain's Economic Problem: Too Few Producers, Macmillan, London, 1978, pp. 165–206.
ibid., p. 110.
See G. Hadjimatheou and A. Skouras, ‘The growth of the non-market sector and the Greek economy’, Greek Economic Review, 2, 2, 1980, p. 178.
For an attempt to expound rigorously the Group‘s ideas, see F. Cripps and W. Godley, ‘A formal analysis of the Cambridge Economic Policy Group model’, Economica, 43, 172, 1976, pp. 335–48.
One part of the literature on the group's policies concerns claims (and counter claims) as to the nature of the economic regularities which can be discerned in appropriate data. See, for example, T.F. Cripps and R.J. Tarling, Growth in Advanced Capitalist Economies, 1950-1970, Cambridge University Press, London, 1973; and M. Chatterji and M. Wickens, ‘Verdoorn's Law — the externalities hypothesis and economic growth in the U.K.’ in D. Currie, R. Nobay and D. Peel (eds), Macroeconomic Analysis: Essays in Macroeconomics and Econometrics, Croom Helm, London, 1981, pp. 405–29.
See, for example, V. H. Woodward, ‘Government policy and the structure of the economy’ in W. Leontief (ed.), Structure, System and Economic Policy, Cambridge University Press, London, 1977, pp. 57–73.
See, for example, T. Barker, ‘Depletion policy and de-industrialization of the UK economy’, Energy Economics, April 1981, pp. 71–9.
For example, in A. P. Thirl wall, ‘The balance of payments constraint as an explanation of international growth rate differences’, Banca Nazionale delLavoro Quarterly Review, 128, March 1979, pp. 45–53; idem, Balance-of-Payments Theory and the United Kingdom Experience, Macmillan, London, 1980; and idem, ‘Deindustrialisation in the United Kingdom’, Lloyds Bank Review, 144, April 1982, pp. 22–37.
ibid., p. 37.
Such as agriculture, manufacturing, mining, service — or even inward-looking, outward-looking, etc.
Such as coal, computers, finance, etc.
The articles of interest (92-94) are printed in S.J. Warnecke (ed.), International Trade and Industrial Policies. Government Intervention and an Open World Economy, Macmillan, London, 1978, pp. 239–40.
The previous paragraph, this and the next three paragraphs draw (to varying extents) on C. J. Aislabie, ‘Industrial policy in the European Economic Community’, Journal of Industrial Affairs, 8, 1, 1980, pp. 1–6.
The change in emphasis over time is captured quite well in the following brief extracts from the ‘Introduction and general guidelines’ to this document: In order to increase the common good, industry should primarily be allowed in the first place to make the most of the existence of the common market on its present scale … Secondly, the market must be kept dynamic by appropriate measures to enable organistions to adjust to change: to promote new technologies through scientific and technical policy; to supervise manufacturing organisation by means of a competition policy; … The industrial policy recommended in this memorandum is deliberately oriented towards the future …” Commission of the European Communities, Industrial Policy in the Community: Memorandum from the Commission to the Council, Commission of the European Communities, Brussels, 1970. A detailed history of the Commission‘s activity in this area is to be found in M. Hodges, ‘Industrial policy: a Directorate-General in search of a role’ in Helen Wallace, W. Wallace and Carole Webb, Policy-Making in the European Communities, John Wiley and Sons, London, 1977, pp. 113–35; and the Memorandum itself is summarised in D. Prag and E.D. Nicholson, Businessman's Guide to the Common Market, Pall Mall, 1973, pp. 251–9.
As can be seen from examining the Community's ambitions in 1982 as explained in P. Maillet, 77ie European Community's Industrial Strategy, Commission of the European Communities, Luxembourg, 1983, p. 54. It is important in selecting alternative approaches for study not only to concentrate on ‘successes’ and ‘failures’, but also to recognise that, in many cases, underneath the surface of the rhetoric comparatively little was being attempted.
See Aislabie, op. cit.
The Memorandum envisaged specific intervention involving the letting of contracts for industrial developments for new goods and equipment. Commission of the European Communities, op. cit., p. 357.
Note title of Hodges, op. cit. But, to keep matters in perspective, it cannot be denied that, within the constraints imposed upon it, the Commission has tried to force the pace of development in advanced technology by creating a number of institutions usually referred to by their acronyms. See M. Richonnier, ‘Europe's decline is not irreversible’, Journal of Common Market Studies, 22, 3, 1984, pp. 227–43; and P.A. Geroski and A. Jacquemin, ‘Industrial change, barriers to mobility and European industrial policy’, Economic Policy, 1, November 1985, pp. 170–218.
See N. Owen, op. cit.
Hodges, op. cit.
See Richard Clarke, ‘Mintech in retrospect’, Omega, 1, 1, 1973, pp. 26–8.
ibid., pp. 29–37. A further article (Richard Clarke, ‘Mintech in retrospect – II’, Omega, 1, 2, 1973, pp 137-63) is also of interest.
See J.-J. Bonnaud, ‘Planning and industry in France’, in J. Hayward and M. Watson (eds), op. cit., pp. 94–5. For an overview as to the success of the plans in meeting the forecasts, see J.-J. Carré, P. Dubois and E. Malinvaud (eds) (trans. J.P. Hatfield), French Economic Growth, Stanford University Press, Stanford, 1975, p. 463. Another useful summary of the early plans is to be found in J.S. Harlow, French Economic Planning: A Challenge to Reason, University of Iowa Press, Iowa City, 1966, pp. 35–70.
As Hough (J. R. Hough, The French Economy, Croom Helm, London, 1982, p. 113) points out, the Fifth Plan is sometimes referred to as ‘the high-water mark of French planning’, although it might be argued that the Sixth Plan (1971-1975) was equally extensive in scope.
See R. Gilpin, France in the Age of the Scientific State, Princeton University Press, Princeton, 1968, p. 3.
See Chapter 3, ‘The dimensions of the American challenge’ in ibid, pp. 39–76.
G. H. Kuster, ‘Germany’ in R. Vernon (ed.), Big Business and the State: Changing Relations in Western Europe, Harvard University Press, Cambridge, Massachusetts, 1974, p. 77.
See E. O. Smith, The West German Economy, St. Martin's Press, New York, 1983, pp. 94–5.
ibid., p. 73. For details of sources see fn. 23, p. 282 in this reference. Other useful papers are K.H. Oppenländer, ‘Starting points and problems of sectoral structural policy in the Federal Republic of Germany' (a translation provided by Oppenländer of a paper originally appearing in IFO-Studien, 20, 1, 1974, pp. 1–17); O. Keck, ‘West German science policy since the early 1960’s: trends and objectives’, Research Policy, 5, 2, 1976, pp. 116–57 and K. H. Oppenlander, ‘The role of business and government in the promotion of innovation and transfer of technology’ in C.T. Saunders (ed.), Industrial Policies and Technology Transfers between East and West, Springer-Verlag, Vienna, 1977, pp. 243–59.
G.H. Küster, op. cit., pp. 71–2.
Giselle Podbielski, Italy: Development and the Crisis in the Post-War Economy, Clarendon Press, Oxford, 1974, p. 90.
R. M. Stern, Foreign Trade and Economic Growth in Italy, Frederick A. Praeger, New York, 1967, p. 21.
ibid., pp. 53–67.
Podielski, op. cit., pp. 170–1.
ibid., pp. 171–4.