Mr Coates, like Mr Cable, may believe that the setbacks of the last few years are proof of the failure of free-market capitalism and indeed of the Thatcher revolution. But let us check the facts, and remember that the Thatcher reforms began in the early 1980s and have been reversed over the last decade. Let us take it that the benefits of the Thatcher revolution started to take effect in, say, 1985 and had been played out by the start of the Great Recession in 2007. How in that period did the UK's growth record compare with its neighbours? The average annual growth rate of UK output in the 22 years was 2.9 per cent, clearly above that in France (2.2 per cent), Germany (2.1 per cent) and Italy (1.9 per cent). On the face of it, the Thatcher revolution's repudiation of "industrial" policy worked quite well.
Indeed, that 22-year period saw a healthy rebalancing of the economy away from manufacturing industries towards service industries, with the UK achieving strong market shares in global trade in high-value-added international business services (such as finance, accounting, law and advertising).
Was the boom in exports of financial services in that period attributable to Whitehall's attempts "to revive the private sector"? Did the success of our accountants, lawyers and advertising executives in advising foreign companies owe anything to a government "industrial strategy"? Of course not. Yet it was exactly the dynamism of these business service exports — unforeseen and unplanned by anyone, and certainly not foreseen or planned by Whitehall — that was responsible for the UK's growth leadership in Europe.
Also on September 11 the Centre for Policy Studies, the think tank sometimes said to have been the intellectual launching pad for the Thatcher revolution, held an evening seminar, at which Nicholas Wapshott introduced the paperback version of his best-selling book, Keynes Hayek (W.W. Norton, £12.99). Wapshott had done a nice job in arguing that a theoretical spat between Keynes and Hayek in 1931 was, as the book's subtitle has it, "the clash that defined modern economics", and was paid respectful attention.
