ABSTRACT
During the 1980s, an apparent intellectual consensus emerged in much of Western Europe which held that the main function of government in its relations with industry was the maintenance of a ‘level playing field’ on which industrial and economic activity could take place without further state intervention (see also Chapter 7). This consensus-always more real in ideology than in practice-has now clearly evaporated. By nineteenth century standards the modern economy has always demanded a high level of intervention, but practice varies substantially in the form that intervention takes. It can be through banks and the ‘coordination’ of sectors and large conglomerates, as in Japan and Germany, or conducted through weak central institutions and powerful regional activity as in Italy and, to a lesser extent, Spain. Intervention can operate through the development of joint state/industry collaborative mechanisms, as in Ireland, Italy and the five former GDR lander of Germany. It includes an element of defence or high technology planning in every country, and this indeed is the main form of intervention in the US. It now scarcely ever encompasses macro-economic Keynesian policies, large scale subsidy to nationalized firms, and large scale corporatism of the kind common in the 1960s and 1970s. But sectoral intervention, focused training policies, and the use of more targeted regional policies have become widespread. The development of sophisticated mechanisms of negotiating order in industry has evolved in Europe, if not always in the UK.
