Britain has splashed out £350 million and won a stack of medals at the Olympics. naturally the Guardian's lesson from this is that we should spunk billions picking industrial winners and we will all be rich. Gold medals for all. Jeepers do folks like Martin Kettle never read history books?
Putting money into backing Olympic winners is not rocket science but there is a scientific element to it in that you pick the fastest/strongest/most proven in international competition few in each sport and train them intensively. If one starts to slow you drop him and if a new talent emerges you include him and you train really hard and we are all sing along to God Save the Queen as Team GB triumphs again.
Picking industrial winners is rather tougher. Who knows how the dynamics of an industry wll change. What makes a good manager to back? Even legendary private investors get that wrong sometimes but since they are playing with their own money not other people's - as is the State - their track record is better than that of Government stock pickers. The private sector always tends to invest in the prize picks anyway. The state is left with the best of the rest. If Mr Kettle wants to see State stock and sector picking at its worst he needs only look at the massive capital misallocation in China since 2008. And that is not exactly panning out well is it?
In a capitalist economy there is no need for the state to spunk cash on the winners as they are normally fully funded by wicked capitalists unless of course the State meddles so much in industry/makes taxation so prohibitive that evil capitalists move elsewhere.
Inevitably when politicians have to pick winners they end up picking losers who employ lots of people in order to "buy" those votes. So taxpayer cash is spent for an electoral rather than an economic return. In the end duff businesses go bust however much the taxpayer wastes on propping them up. Think British Leyland. Or De Lorean. But pro tem votes are bought using taxpayer's cash.
The state - in the UK and across the world - has a very poor record as an investor in businesses. One does not think of many Treasury Ministers in the same way as one thinks of Warren Buffett for example.
The Guardian's Kettle concludes:
May and her new business secretary, Greg Clark, will need to get serious about the industries that Britain can’t do without and those it needs to develop once politics resumes in the autumn. But they could hardly have a more pressing incentive. In the post-Brexit world, they may have little alternative.
Where to start? That would be the post Brexit UK where despite dire warnings from folks like Martin Kettle employment is surging. So in this world Kettle wants the Government to spend even more borrowed money on supporting industries Britain "cannot do without". Would that be firms the Government picks to generate an economic return or just industries that are losing money. It appears it is the latter. Maybe Mr Kettle should google search British Leyland before his next column?