There are many instances in the history of economic thought where economists did not use what today has become the concept of ‘national competitiveness’ but nonetheless wrote about things that look eerily familiar when viewed through the lens of the modern-day Competitiveness Agenda. Veblen’s 1904 Theory of Business Enterprise contains many important passages of this nature. Business leaders, he noted, had become remarkably successful at presenting themselves as the selfless foot soldiers in a national struggle for international economic pre-eminence. Yet for Veblen this was all a carefully constructed smokescreen. They could hardly be seen as guardians of the national interest, he argued, because they enacted significant damage on the economy’s social provisioning capacity in the self-serving desire to protect the social inequalities from which they benefited so handsomely. This latest post for Fools’ Gold by Matthew Watson captures the essence of Veblen’s original argument, while drawing out its implications for understanding the modern-day Competitiveness Agenda.
Fools’ Gold has generally urged extreme caution when considering using c-words such as ‘competitiveness’ or ‘compete,’ in the context of the behaviour of whole countries or states. As we’ve noted, a failed company that can’t compete is one thing: a failed state is quite another; and the processes that these words are normally trying to describe tend to be generically harmful.
A particular bugbear of ours is what we call the Competitiveness Agenda – the idea that it’s essential to shower tax cuts and other subsidies on footloose Capital and its owners, for fear that they’ll run away to more hospitable climes. It is a policy prescription (or set of policy prescriptions) dressed up as a threat.
Many politicians and vested interests know that the c-words (and their like) are a remarkably effective set of tool for bamboozlement: a way to get people to accept these prescriptions without really thinking about them. Who, after all, could be against something called “competitiveness?” Because of the risk of bamboozlement, we really don’t like using the c-words to talk about whole countries unless we really have to.
Yet of course ‘competitive’ is a word in the English language that people can choose to define in ways that don’t subscribe to the Competitiveness Agenda, and in some senses countries do ‘compete’ for investment. One thinker who does use the c-words in more progressive (and thoughtful) ways is Bob Jessop of Lancaster University. In conversations with FG, Jessop has talked of a “high road to competitiveness”, which might be summarised as ‘upgrading’, and a “low road” via deregulation. He dislikes critiques by Krugman and others (see here) because, he says, their starting point is neoclassical economics, which airbrushes out a lot of messy institutional and other factors from the real world. Jessop adds:
“My critique of competition is: be brutally clear about how competition works, and how competitiveness works, and don’t just dismiss it as so much rhetoric because it is misused by politicians and ideologues.”
Now Jack Copley of Warwick University has written us a guest post looking at his ideas in more detail.