The wealth of localities, regions and nations: Developing multinational economies

Abstract

In choosing development paths it is possible and advisable to learn from a variety of rich experience (of 'success' and 'failure') in the world's collective histories, and from experiments currently underway. But we cannot rely on the market to choose the most efficient spontaneously. The exercise of power and therefore control will disallow such outcomes. To imagine that a production system based on small firms organised in locally based networks will usurp the dominance of the large, vertically integrated corporation on the basis of any innate efficiency advantage is not tenable. The merger history of the US and British economies bears ample testimony to this reality. While the merger activity, orchestrated by the giants, was a disaster in efficiency terms, these giants remain dominant in the system. Only a purposive economic and industrial strategy aimed at a radical restructuring of the economy will achieve the displacement of the large and inefficient. At what level should the advocated strategy be articulated? We suggest that in Europe, for example, it is crucial that it be advanced simultaneously at local, regional, national and pan-European levels. This leads to advocacy of a Europe of the regions, a multinational European Union. These concerns will be the focus of our conclusion.