There’s a house on the way to the station whose occupant has been putting out books he or she is obviously trying to get rid of. So far they have been dull legal texts, but at the weekend I pounced on the trophy ofby Keith Smith. This was a 1989 Pelican paperback of a book first published in 1984 and reissued in 1986.
My first thought was, Hah! Call the 1980s an economic crisis! Then I started reading and grew gloomy. The essence of the problem Smith diagnosed was the weakness of manufacturing, and the absence of consistent R&D spending and investment – written against the backdrop of the North Sea Oil-driven rise in the exchange rate, which savaged export and industrial output in the early 80s. He also picks out other contributing problems such as the inadequate education and training of the UK workforce, the over-reliance on financial services and the failings of the welfare state.
His conclusion: “Sustainable improvement in British economic performance can only happen through a thorough-going reconstruction of the ‘supply side’ of the British economy.” In the 1990s we thought the Thatcher governments had tackled the supply side problems through privatisations, labour market reforms, and deregulation. But it would be hard, in the 2010s, to take any more cheerful a view of the country’s economic potential than Prof Smith did 30 years ago.