Varieties of liberalism: Anglo-Saxon capitalism in crisis?

‘Global financial crisis’ is an inaccurate description of the current upheaval in the world’s financial markets. The initial banking crisis did not affect all countries to the same degree. Notably, while the US and UK banking systems were badly hit, those of the other two major Anglo-Saxon economies, Canada and Australia, remain largely unscathed and have even gained in terms of global market share. The national business systems and comparative corporate governance literatures underscore the similarities among these four ‘liberal market economies’ (LMEs) and would predict similar trajectories. This paper investigates the reasons behind the differing performance of the Anglo-Saxon banking systems, which defy a verdict of failure of the LME variety of capitalism as such

'Picking winners' in a liberal market economy: modern day heresy - or essential strategy for competitive success?

This paper explores the current debate about industrial strategy and the UK’s hesitant acceptance of a possible role for the state in addressing the challenges confronting British industry in the wake of the 2007/8 financial crisis. In this context – and following the 2012 London Summer Games – political leaders have been pointing to the strategy that succeeded in reversing the British Olymic team’s fortunes following its nadir at the 1996 Atlanta Summer Games; and they are suggesting that there may be lessons for industry. However, the political rhetoric has yet to be translated into action. Analysis of the elite sport strategy, in the light of the evolving literature on industrial strategy and policy suggests that although there are details that are specific to sport, there are also aspects of the general strategic approach that can be used to inform the design and implementation of a strategy aimed at developing and improving the international competitive performance of UK industrial sectors and manufacturers. The significance of the UK elite sport strategy is that it was evolved and successfully implemented in the British social, political and economic context, building on and improving existing institutional capabilities

Time to stop playing games with industrial policy? What government and business might learn from Team GB

This paper investigates the degree to which the British elite sport policy model might inform a strategy for building international competiveness in UK industry. The methodology is qualitative, based on in-depth interviews with key figures in the British elite sport system, including UK Sport’s CEO, Performance Directors of National Sport Governing Bodies whose athletes competed in London 2012 and Rio 2016 and Olympic athletes. The analysis also draws upon detailed case studies of sectors that are currently competing successfully in international markets – despite decades of ill-informed industrial policy, if not neglect. Areas standing out as key to the UK elite sport policy model’s success include: an institutional structure to provide strategic leadership, identify talent and support the development of internationally competitive athletes and teams, whilst at the same time insulating them from interference by short-term political (and sporting) interests; an enabling competitive environment with access to a reliable source of finance; and an institutional system that encourages learning, innovation and responsiveness to opportunities and constraints. Taken together, these – if available to British businesses, clusters and sectors – would likely facilitate improvement in the UK’s industrial performance. The significance of the elite sport case is that not only was it developed and successfully implemented in the British cultural, institutional and political context, in many respects elite sport can be considered a high performance industrial sector. It therefore offers a starting point for evolving strategy for building international competitiveness in comparable sectors of British industry

Britain's industrial evolution: the structuring role of economic theory

This paper traces the co-evolution of industrial organization and the ideas and policies that have influenced Britain’s industrial development from Alfred Marshall’s pioneering work on the English industrial districts to the present. It then examines four contemporary districts – in footwear, motorsport, sparkling wine and cyber security – that are internationally competitive, despite decades of ill-informed policy choices, if not neglect. We then investigate the case of British elite sport as a high-performance industrial cluster with potentially transferrable institutional arrangements, particularly with regard to the nature and role of the strategic lead body and the state as well as relationships within the system. We conclude that Marshall’s methodological and theoretical approach to understanding industrial organization – and his belief that industrial districts would co-exist with other forms of industrial organization (rather than be super-ceded by them) – helps to explain the dynamism of contemporary British industrial districts, with important implications for Britain’s industrial revitalization

Shareholder value or public purpose? from John Maynard Keynes and Adolf Berle to the modern debate

The debate about corporate purpose is a recurring one that has re-emerged today. What should be the guiding principles of business: the pursuit of profit or a contribution to public interest? We trace key elements in this debate in Britain and America, from the interwar years, when John Maynard Keynes and Adolf Berle made important contributions, to the 1970s, when events ushered in a return to laissez-faire and the rise to dominance of the shareholder primacy model of corporate governance and purpose, to today. Both the earlier and the current debates are centered around whether we see business institutions as strictly private entities, transacting with their suppliers, workers, and customers on terms agreed with or imposed upon these groups, or as part of society at large and therefore expected to contribute to what society deems to be its interests. Whether current developments will ultimately produce a shift in corporate purpose akin to the one that followed the Second World War remains to be seen. But the parallels to the interwar debates, and the uncertain economic, political and social environment in which they took place, are striking. Our objective is to see what might be learned from the past to inform the current direction of thought concerning capitalism and corporate purpose

Governance, regulation and financial market instability: the implications for policy

Just as the 1929 Stock Market Crash discredited Classical economic theory and policy and opened the way for Keynesianism, a consequence of the collapse of confidence in financial markets and the banking system—and the effect that this has had on the global macro economy—is currently discrediting the ‘conventional wisdom’ of neo-liberalism. This paper argues that at the heart of the crisis is a breakdown in governance that has its roots in the co-evolution of political and economic developments and of economic theory and policy since the 1929 Stock Market Crash and the Great Depression that followed. However, while many are looking back to the Great Depression and to the theories and policies that seemed to contribute to recovery during the first part of the twentieth century, we argue that the current context is different from the earlier one; and there are more recent events that may provide better insight into the causes and contributing factors giving rise to the present crisis and to the implications for theory and policy that follow

Industrial strategy for post-Covid Britain: a renewed public purpose for the state and business?

Book synopsis: This book offers both a vision of a future Britain and a roadmap to getting there. It is now clear that the Covid-19 pandemic hit the UK harder than other countries in Europe not least because of the government’s ill-timed and ill-conceived response, but also because of the chronic failure of the state to fund public services adequately and to reduce societal inequality in the neoliberal decades since 1979. Pushed by crisis, the government has borrowed massively to save jobs, businesses and the economy from collapse, making a mockery of the austerity policies that it had vocally championed for a decade – policies that undoubtedly created a divided country and precipitated a Brexit vote that has since consumed parliament and stymied social progress. The role of the state is now in sharp focus: the contributors to this book assesses what that role should be and how it should be harnessed for the good of the British people in all four of its nations. They call for nothing short of a new settlement and a complete redesign of the economy. The contributors argue passionately and persuasively for a state that is properly funded, one that looks after its citizens regardless of age, class or ethnicity and enables them to live well. To do this requires the establishment of a functional, fair and green economy managed with a social and public purpose. Bringing together some of the brightest and most-engaged scholars and thinkers in the UK, this book offers solutions and suggestions for how to re-establish the strong state, how to generate a new social settlement and how to manage a long-term and equitable economic recovery post-pandemic

A "United States of Europe" -- An idea whose time has come (or gone)? The insecurity cycle in Europe and America

Our starting point is the resonance between the economic and social conditions and policies of the interwar years and those of today, with a view to understanding not only the forces that gave rise to extreme nationalist tendencies – especially in Italy and Germany, but also in Britain and America. During the 1920s and 1930s, these ultimately gave rise to dictators and another world war. But perhaps more importantly, we are interested in understanding the forces that helped to prevent such tendencies from taking hold in Britain and America. Revisiting the ideas about the economic role, social purpose and relationship between the state and both sides of industry, which informed the interwar debate about corporatism, in the light of social, economic and political developments since, has the potential to offer some much-needed perspective for today

Public policy working: catalyst for olympic success

Book synopsis: Examines the relationship between finance and industrial development Reviews current studies of banking policy, regulation, and reform Analyses how to achieve sustainable economic recovery in Europe in the post-crisis era Clear and accessible presentation of complex ideas The 2008 global financial crisis, together with the experience of de-industrialization across Western Europe over the last three decades, has focussed attention on financial regulation and industrial policy. Industry and finance policies have largely been discussed separately, and this book argues that the two should be considered together, in both analysis and policy formulation that deals with critical questions of how finance has intervened in industrial restructuring and how it might better serve the real economy. Moreover, policy debates have paid relatively little attention to the heterogeneous economic structures and growth trajectories of European economies, and the interconnectedness and interdependencies of growth paths that present specific challenges to policy and highlight the need for cooperation across the region. This book brings together leading scholars and policy makers to contribute to policy debates in three ways. First, it includes current discussions of banking policy, regulation, and reform to reassert the need for financial institutions that will back up and finance an industrial policy to revive the European economy. Second, it reviews the role of industrial and investment policy in supporting innovation, creating jobs, and generating sustainable economic growth. Third, it advances alternative policy proposals aimed at generating sustainable economic growth and employment in Europe. Part I analyses the nature of growth, industrial, and economic restructuring in relation to finance in the lead up to the crisis, at regional, national, and sector levels. Part II presents alternative and progressive policy proposals for growth and employment in Europe in light of the analysis presented in Part I

Shareholder value or public purpose? From John Maynard Keynes and Adolf Berle to the modern debate

The debate about corporate purpose is a recurring one that has re-emerged today. What should be the guiding principles of business: the pursuit of profit or a contribution to public well-being? We trace key elements in this debate in the UK and the US from the interwar years, when John Maynard Keynes and Adolf Berle made important contributions, to the present. Both the earlier and the current debates are centred around whether we see business institutions as strictly private entities, transacting with their suppliers, workers and customers on terms agreed with or imposed upon these groups, or as part of society at large and therefore expected to contribute to what society deems to be its interests. Whether current developments will ultimately produce a shift in corporate purpose akin to the one that followed the Second World War remains to be seen. But the parallels to the interwar debates, and the uncertain economic, political and social environment in which they took place, are striking. Our objective is to see what might be learned from the past to inform the current direction of thought concerning capitalism and corporate purpose