Its not like the idea wasn't tried to destruction in the 60's and 70's. Perhaps it was a hang over from the centrally planned production of the early 40's. What it meant was heavy industrial plants placed where they could never be competitive ( see Car plants and Steel plants in Glasgow ), producing cars no one wanted and only those who worked themselves into an insane further of patriotism would buy.
Indeed one of Man in a Sheds first ever public speaking engagements was as a 5th former opposing the debating society motion that this house would buy British.
Saving that car plant or steel factory always made short term sense. Think of the communities who rely on the jobs. The argument about creative destruction and the reassignment of economic resources to productive areas of the economy was seen as barbarianism ( or as it would latter become know Thatcherism ).
Decisions were put of, inefficiency and poor quality florished and we tried oh so hard to buck the market ( which means to stick fingers in your ears, close your eyes and hum really loud when ever anyone tries to tell you something inconvenient ).
In the end the day of reckoning had to come, but only after everything else had been tried. Left wing commentators just can't understand how Margret Thatcher won elections to do what she did, just read the Lonely Planet guide (now owned by the BBC ) or Rough Guide to find out.
Not only did she win elections but with far higher voter turnouts that New Labour can ever achieve.
Because by then there was no denying how bad things had got and that reality and the market did matter after all. Everything else had been tried and the country had gone broke trying ( see Labour ministers having to turn around on the way to the airport as the country went bust having to beg the IMF to bail us out ).
And there was pain, lots of it. Two decades worth that had been put off, burdened on those who were unlucky in just a few years. Some have never recovered. but not even Gordon Brown or Tony Blair dared to say in 1997 that it had been unnecessary, we all knew it had and that the biggest burden to re-election for Labour was their part in creating those conditions.
But time seems to edit out the bad memories. In our case the left wing media of BBC commentators etc, many of whom grew up in the 80's as Thatcher haters, is now editing history to fit their fantasy.
We are continually warned about things being as bad or worse even than the 80's or 90's. ( The implication being almost as bad as under the Tories ). But that hides the far worse years in the 60's and 70's and how the 80's at least were all about sorting that mess out.
If in 1997 you'd have tried to paint the selective view of history that the BBC now transmits as received wisdom about Conservative Economic performance you'd have been sectioned under the mental health act for your own protection.
Why does any of this matter ?
Well government still can't pick winners or allocate capital well. Today we are told that the Indian owners of Jaguar and Range Rover are close to getting government money. If they get it then the same arguments will be used by other car producers and every other organised part of industry. Our economy won't improve, indeed it will destroy value. Government won't be able to avoid interference in management issues, like which car plant to keep open ( hint it'll be the Labour marginals that decide it ).
The mistakes of the 60's and 70's are to be repeated as we forgot what we leanrt as such a high cost. ( Indeed some on the left in the media and Labour are doing their best to make sure we never remember this recent history ).
The results will be the same or perhaps worse. But because Labour have taken to telling people what they want to hear again it will take years for the unavoidable, but temporally delayable, truth to dawn on a new electorate who never knew the 70's. ( Indeed I almost wonder if Labour might not be able to buy the next election - on debt of course - based on intervention ).
In short when the government picks winners everyone loses, eventually.
Its a crying shame we haven't remembered that.
Update: See Capitalists@Work for how Peter Mandelson's getting ready to "pick winners" on our behalf. ( I'm guessing it will be on his behalf, with the New Labour marginal constituency heat map borrowed of Hazel Blears much in evidence. )
Also Andrew Alison's letter to Gordon Brown and Matthew Parris remembering the times as a new MP he tried to deal with the state subsidy of cars no one wanted to buy.