Carlo Morelli (University of Dundee)
Abstract
This paper examines the diversification out of the jute industry by the two major jute firms Jute Industries and Low & Bonar in the period after 1945. Neo-liberal economic theory of price mechanisms suggests price distortions lead to sub-optimal welfare losses. In a globalising world economy the scope therefore for government action in the form of industrial policy is potentially severely curtailed. This paper utilises the experience of the major two firms in the jute industry to demonstrate that industrial development is more complex than economic theory suggests. The paper highlights that the diversification out of jute and continued survival for Jute Industries and Low & Bonar occurred in an environment whereby competitive market pressures were limited by government policy. As such it highlights the continuing relevance of industrial policy in a globalised industry.
