Barry C. Lynn of the New America Foundation (not to be Google-fused with Barry W. Lynn) says in today’s FT:
It is time to admit that our grand experiment with radical laisser
faire management of industry has failed. … The corollary is that it
is time for governments to adjust the rules that shape how the private
sector runs the production infrastructures on which all countries
depend, to ensure that compartments are built back into these systems.
Lynn sees horizontal integration as bad, vertical integration as
good, and just-in-time production as too efficient because it has led
to “an unprecedented systematisation of single sourcing and the
elimination of inventory.” Among his recommendations are more
aggressive antitrust policy, requirements that companies dual source
all components, and limits on any one country’s share of the import
market for a component or service.
Why is it that someone is always there to suggest more aggressive
industrial policy and government restraint of trade as the way to deal
with uncertainty? Haven’t we tried that more often in the last century
than we’ve tried letting industries organize themselves?
The New Deal, the Great Society, MITI and the Japanese Miracle,
Voluntary Export Restraints, agriculture subsidies, steel subsidies in
some countries, auto subsidies in others, fifth-generation computers,
biotech, defined benefit private and public pensions, the list of
failed government programs to protect industries or individuals from
the vicissitudes of fate and competition goes on. The reason why the
Doha round of WTO is in danger a year after its deadline is because
governments have been too busy (to borrow his analogy) building levees
against the inevitable economic floodwaters. Wonder why there’s such
concern about global rebalancing? This is a good place to start.
Sorry, Barry, but the problem is more likely that we haven’t done
enough in the last fifteen years to allow industry to self-organize,
not that we’ve done too much.
