Economic rationalism - the key to national competitive advantage, restructuring and employment growth? : lessons drawn from the policies advocated and implemented under the Hawke and Keating governments of 1983 to 1996

Abstract

This thesis examines whether economic rationalist policies, as implemented by Labor, and as recommended by rationalists in the 1983 to 1996 period, are the key to achieving national competitive advantage, restructuring and employment growth. It is argued that, while the policies made some progress in this regard, more could have been achieved through the use of strategic industry policies. The key weakness of the rationalist policies advocated in the period is argued to be that they were based on an uncritical faith in market forces - almost alone - to produce economic prosperity. National competitive advantage is crucially dependent on the capacity to innovate. Markets fail to produce competence in a range of activities crucial to competing on the basis of innovation, such as research and development (R&D), technology diffusion, work organisation, management, education and training, finance and export marketing. This thesis argues that strategic industry policies can foster national excellence in such capabilities, and so bring improvements in national competitive advantage, restructuring and employment growth beyond that achievable by markets alone.