Governments, Industry and Intervention

Abstract

Since the early 1960s it has been fashionable among a wide variety of writers to designate the role of government within the economy as state intervention.¹The term has gained such currency in the literature that it is difficult to avoid using it. However, unfortunately, it also presents a number of problems. Among the most important is that the word ‘intervention’ tends to imply a mechanistic understanding of the political and social relations associated with government involvement in economic affairs. In particular, it suggests that government is engaged in a series of ‘push — pull’ confrontations with elements of the private sector with the object of expanding its sphere of economic influence. Moreover, there is also the implication that if the state succeeds in pushing back the boundary separating public from private, it enters realms in which it has no natural place. Intervention generally refers to the entry of something extraneous into an arena of interest. Thus, when applied to the position of government within the economic sphere, it infers that the use of political or administrative criteria in areas formerly governed by the market is intrinsically inappropriate, inefficient, counter-productive and perhaps ultimately conducive to loss of freedom.² Here, and in the following chapters, it is argued that this understanding of government involvement in the economy misrepresents both the process whereby government becomes engaged in new economic arenas and the relations which result between government and various ‘private-sector’ groupings. The term ‘intervention’ is employed in what follows, but in a sense very different from the one outlined above.