Book contents
- Frontmatter
- Dedication
- Contents
- Chapter 16 The Economics of Reindeer Herding: Saami Entrepreneurship between Cyclical Sustainability and the Powers of State and Oligopolies
- Chapter 17 European Integration, Innovations and Uneven Economic Growth: Challenges and Problems of EU 2005
- Chapter 18 Institutionalism Ancient, Old and New: A Historical Perspective on Institutions and Uneven Development
- Chapter 19 European Eastern Enlargement as Europe’s Attempted Economic Suicide?
- Chapter 20 The Economics of Failed, Failing and Fragile States: Productive Structure as the Missing Link
- Chapter 21 Emulation vs. Comparative Advantage: Competing and Complementary Principles in the History of Economic Policy
- Chapter 22 The Terrible Simplifers: Common Origins of Financial Crises and Persistent Poverty in Economic Theory and the New ‘1848 Moment’
- Chapter 23 Industrial Restructuring and Innovation Policy in Central and Eastern Europe since 1990
- Chapter 24 Capitalist Dynamics: A Technical Note
- Chapter 25 Neo-Classical Economics: A Trail of Economic Destruction
- Chapter 26 Modernizing Russia: Round III. Russia and the Other BRIC Countries: Forging Ahead, Catching Up or Falling Behind?
- Chapter 27 Economics and the Public Sphere: The Rise of Esoteric Knowledge, Refeudalization, Crisis and Renewal
- Chapter 28 Three Veblenian Contexts: Valdres, Norway and Europe; Filiations of Economics; and Economics for an Age of Crises
- Chapter 29 Civilizing Capitalism: “Good” and “Bad” Greed from the Enlightenment to Thorstein Veblen (1857–1929)
- Chapter 30 Failed and Asymmetrical Integration: Eastern Europe and the Non-financial Origins of the European Crisis
- Chapter 31 Renewables, Manufacturing and Green Growth: Energy Strategies Based on Capturing Increasing Returns
- Chapter 32 Financial Crises and Countermovements: Comparing the Times and Attitudes of Marriner Eccles (1930s) and Mario Draghi (2010s)
- Chapter 33 The Inequalities That Could Not Happen: What the Cold War Did to Economics
- Chapter 34 Industrial Policy: A Long-term Perspective and Overview of Theoretical Arguments
- Index
Chapter 34 - Industrial Policy: A Long-term Perspective and Overview of Theoretical Arguments
Published online by Cambridge University Press: 13 April 2024
- Frontmatter
- Dedication
- Contents
- Chapter 16 The Economics of Reindeer Herding: Saami Entrepreneurship between Cyclical Sustainability and the Powers of State and Oligopolies
- Chapter 17 European Integration, Innovations and Uneven Economic Growth: Challenges and Problems of EU 2005
- Chapter 18 Institutionalism Ancient, Old and New: A Historical Perspective on Institutions and Uneven Development
- Chapter 19 European Eastern Enlargement as Europe’s Attempted Economic Suicide?
- Chapter 20 The Economics of Failed, Failing and Fragile States: Productive Structure as the Missing Link
- Chapter 21 Emulation vs. Comparative Advantage: Competing and Complementary Principles in the History of Economic Policy
- Chapter 22 The Terrible Simplifers: Common Origins of Financial Crises and Persistent Poverty in Economic Theory and the New ‘1848 Moment’
- Chapter 23 Industrial Restructuring and Innovation Policy in Central and Eastern Europe since 1990
- Chapter 24 Capitalist Dynamics: A Technical Note
- Chapter 25 Neo-Classical Economics: A Trail of Economic Destruction
- Chapter 26 Modernizing Russia: Round III. Russia and the Other BRIC Countries: Forging Ahead, Catching Up or Falling Behind?
- Chapter 27 Economics and the Public Sphere: The Rise of Esoteric Knowledge, Refeudalization, Crisis and Renewal
- Chapter 28 Three Veblenian Contexts: Valdres, Norway and Europe; Filiations of Economics; and Economics for an Age of Crises
- Chapter 29 Civilizing Capitalism: “Good” and “Bad” Greed from the Enlightenment to Thorstein Veblen (1857–1929)
- Chapter 30 Failed and Asymmetrical Integration: Eastern Europe and the Non-financial Origins of the European Crisis
- Chapter 31 Renewables, Manufacturing and Green Growth: Energy Strategies Based on Capturing Increasing Returns
- Chapter 32 Financial Crises and Countermovements: Comparing the Times and Attitudes of Marriner Eccles (1930s) and Mario Draghi (2010s)
- Chapter 33 The Inequalities That Could Not Happen: What the Cold War Did to Economics
- Chapter 34 Industrial Policy: A Long-term Perspective and Overview of Theoretical Arguments
- Index
Summary
The aim of this chapter is to give a brief overview of the historical arguments that have been used to argue for industrial policy in its widest sense, that is, that what a nation (or region) specializes in producing may be of key importance to the wealth and welfare of its inhabitants. Historically it has been generally agreed that symmetrical trade – trade in similar goods between nations at similar levels of technological development – has tended to be beneficial to both trading partners. In these cases, employing Ricardian trade theory has not been detrimental to the trading partners. This chapter explains the situations when Ricardian trade theory is not beneficial to one of the trading partners, and – at the same time – the economic mechanisms which have been identified as making industrial policy desirable. That manufacturing matters has, in various forms, been presented as a main reason for industrial policy, at least since England's import-substitution policies during the 1400s: adding value to English wool by spinning it into woollen cloth and garments. This was mainly achieved by raising export duties on raw wool, making English wool cheaper for domestic manufacturers than for foreign ones. However, the reasons why manufacturing matters have varied. And that understanding has gone from intuitive inferences to scientific evidence. This chapter will historically present this process and the most common arguments for industrial policy over time.
Wee felt it before in sense; but now wee know it by science.
Edward Misselden, The Circle of Commerce or the Balance of Trade, London, Dawson for Nicholas Bourne (1623: 130)New Perspectives on Cold War Economic Theory: Adam Smith, David Ricardo and Paul Samuelson Revisited
INITIALLY it is of some importance to gain a broader perspective of what has developed into ‘general truths’ of the neoclassical economics during the Cold War.
The fact that David Ricardo's theory of comparative advantage in international trade dates back to 1817 conveys an impression that this principle has been ruling economic theory since then. It is also assumed that David Ricardo merely solidified the free-trade principles of Adam Smith. However, the following quote from the young Adam Smith shows how far away his principles were from the logic of comparative advantage and neo-liberalism:
- Type
- Chapter
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- The Other Canon of EconomicsEssays in the Theory and History of Uneven Economic Development, pp. 947 - 990Publisher: Anthem PressPrint publication year: 2024