ABSTRACT

Professor Minford is one of the leading exponents of supply-side measures as a way to stimulate economic performance in both developed and undeveloped markets. He is a vigorous supporter in particular of liberalization of labour markets. Here, he takes the example of the UK economy during the government of Margaret Thatcher to demonstrate how changes in the employment market led eventually to a lower ‘natural’ level of unemployment, and to higher productivity (see employment,minimum wage,Phillips Curve, Expectations-AdjustedPhillips Curve ). Professor Minford then examines the lessons for economies in a global context, and concludes that growth will be faster and productivity greater under the most laissez-faire regimes. To demonstrate this he subjects his empirical tables to a series of ‘shocks’ and concludes that for the developed economies, free market policies-combined with those that raise education and skill levels-are the best safeguard against rising unemployment, whilst for developing countries they provide the best hope for growth and expanding employment. (See Heckscher-Ohlin Factor Proportions Theory,Laffer Curve.)

Professor Minford’s opinions are expressed in characteristically robust style; behind that is plenty of rigorous analysis and a good insight into how empirical data can be used to test and demonstrate aspects of economic theory. Recently there has been a significant slowdown in some of the previously well-performing Asian economies mentioned by Professor Minford, leading to scepticism about extreme laissez-faire policies. There is also increased interest in some European countries in a more corporatist approach to industry and economic management. So it is important to stress that the Minford approach is not accepted by all economists or policymakers. For different perspectives, read the essay by Neil Mackinnon (‘The Limits to Global Markets’), and the more detailed analysis of ‘World Trade and Development’ in the essay by Dr Sanjaya Lall. Recent developments are examined in the ‘regional’ essays on Europe, Asia, and the United States, in ‘The Global Context’ section of the dictionary.