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Well, currently "industrial policy" inside the EU is largely against EU law. At least if the EU is dismantled, the periphery could try to rebuild their economies. Without that they are sunk.

I disagree. I think that you are thinking of industrial policy in terms of protectionism, or more innoccously, trade policy, which is most often thought of as a zero-sum game.

Another way of thinking of industrial policy is considering how to create the institutional conditions that allow firms to compete more effectively. The EU does this in spades, what else is the purpose of cohesion and structural funds?  Moreover, the point of a broadened market is to allow an increased division of labor. Specialization matters.

Prior to the arrival of the NICs on the scene in the 1970s, the content of trade, where the volume was highest between developed countries, lay in intra-industry exchange. Rather than exchanging carrots for cars, trade was in things like catalytic converters for chasses. I would say the question is how to build a better chassis or catalytic converter rather than how to market than how to protect a domestic market for them.

And I'll give my consent to any government that does not deny a man a living wage-Billy Bragg

by ManfromMiddletown (manfrommiddletown at lycos dot com) on Mon Apr 9th, 2012 at 11:35:26 PM EST
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