A competitive economy can be a fair one too

The reaction to the Scottish Government's new economic strategy (especially by the private sector) has been fascinating. From a third sector perspective, the rhetoric is very encouraging. This is our territory and language. There isn’t much in the strategy in terms of practicalities. No surprise there but the direction of travel is certainly the right one. I can understand where the private sector’s grievances are coming from but they’re totally missing the point. The Institute of Economic Affairs wants us to focus on growth but look where that has got us. They still haven’t realised that trickle-down economics doesn’t work. I do agree with them that redistribution doesn't get people out of poverty but this new strategy is not about redistribution, it's about reshaping the economy to work for the many not just the few and creating opportunity for all. It's about combining competitiveness or growth, however you like to define it, with fairness. Governments can influence the economy but, despite their futile attempts, they can’t influence economic markets. Of course that old argument about government not interfering in the economy or markets only holds true with the private sector until it suits them.

It's about combining competitiveness or growth, however you like to define it, with fairness

Let's take the current “crisis” in the oil industry: over-supply and under demand mean a low oil price. Yet the large oil giants – who have kept prices artificially high for years - and the unions clamour for more public subsidy through tax cuts, as if that will really change things. It will in one sense: we'll have more oil to sell at low prices. The private sector talks a lot about letting the economy lead (the old market forces argument) and in the main I agree. But what really sticks in my craw - and I suspect everyone else’s – is that when the market changes to their disadvantage they want all too willing governments to try and buck the market forces. So, my piece of advice to all politicians who want to try to or think they can buck the global oil market. Number one you can’t. Number two think of the consequences. Low oil prices means low global inflation, lower fuel costs for thousands of businesses, more jobs being created and more money in people's pocket. Back to the new economic strategy. I could go on about the evidence from Joseph Stiglitz, the OECD, a surprisingly large number of banks and numerous pieces by Martin Wolf in the FT which all reach the same conclusion:               But I won't. The third sector is not naïve in thinking that creating a socially just economy which puts people at the heart of their economy and society is an easy task. It will take at least two generations. But let’s be clear that this agenda is not just a Scottish thing: the key battleground of the next US presidential election will be jobs and inequality. I want a competitive Scottish economy but I also want one that is fair and creates opportunities for all. And if you’re one of the people who thinks that inequality isn’t a problem for society and the economy, I’m ready to debate that with you. Find me on Twitter @JohnDs_View.