We need to rediscover the idea of a mixed economy

It seems rather bad manners to mention this, but what happened to the idea of a mixed economy?

The idea of wanting to achieve both a thriving private sector and a strong public sector seems to have become passé. Now, we are told, you can have one but not the other. And private sector growth is good, and public sector growth is bad.

This week we have heard of outline political manifestos stressing the need for local authorities to show “value for money”. Probably alongside their statements on apple pie. Innocent enough, but it comes from the same political song sheet as “more for less”.

Now, most economists who don’t fear for their job security would tell you that economic activity rates are agnostic about any private vs public sector ideology. Except that the private sector pays its economists more (in general) than the public sector, and the piper calls the tune. Worse, in some parts of the public sector the ideological requirement is to promote the private sector alone.

So who is there left to champion public sector growth? We need to stop apologising for the quality of life improvements that come from full employment, from diverse workforces, from social goods, from environmental protection, from lifelong learning and from rich cultural lives. These are not nice-to-haves. And in a mixed economy these are not conditional on the beneficence of a few wealthy individuals in a light-touch regulated private sector characterised by growing inequalities.

But these days to argue for a mixed economy is so left-wing that you might as well raise a red flag and call for world revolution. However, having a mixed economy does not require a five year plan for bread, or national targets for pizza production.

Surely with the UK housing market in crisis, with youth unemployment at record high levels, and with the wider London area overheating while many parts of the UK shiver, the days of private-good and public-bad must surely end soon. What is needed is a return to a more balanced, more equal, fairer economy which returns to its rightful place as a servant of society, not its controller. Public service, in fact.

More … http://en.wikipedia.org/wiki/Mixed_economy


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