Five ideas for a budget for growth

Article

The budget is at hand, and George Osborne has made clear that this will be a budget for growth. This is welcome, given the fourth-quarter 2010 growth figures which saw a shock fall in economic activity of 0.6 per cent. What is less reassuring, however, is the approach the government looks likely to take in an attempt to deliver this growth.

The cutting edge of economic thought makes clear that wealth creation has been driven by the development of a specific kind of capitalist market economy, combining relatively free markets with supportive state institutions. Removing restraints and 'liberating' people and businesses from the state is entirely misguided, because it incorrectly identifies the key players in the growth game. It isn't individuals that drive growth: it's ecology. More specifically, the right 'ecology' involves a configuration of state and markets that facilitates the process of economic evolution.

But what does this mean in practical terms? We suggest this understanding of growth and the conditions best suited to it has at least five implications, five ideas for growth, five things we would like to see come out of George Osborne's red box.

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