Concorde’s lesson for gov’t industry promotion efforts

Interventionist industry policies by governments, such as the Queensland Government’s current hydrogen industry strategy, are usually viewed sceptically by economists, because they often deliver poor value for money for taxpayers and don’t have logical rationales. One notorious example from history is the Concorde, which was an incredible technical achievement and a beautiful airplane, but cost the British and French governments 11 billion pounds (as calculated by the Economist in 2003, so it would be more now due to inflation), and the end result was an aircraft that ultimately proved uneconomic to operate. I tell the story of Concorde in my latest Economics Explored podcast episode.

You can listen to the conversation using the embedded player below or via Google PodcastsApple PodcastsSpotify, and Stitcher, among other podcast apps. 

Show notes and a transcript of the episode are available at:

Concorde’s economic lessons: a closer look – EP131

British Airways Concorde Aircraft, sometime in the 1976-2003 period when they were in service.

In my view, one of the main lessons from the Concorde experience is governments should avoid interventionist industry policies. Instead, they should focus on delivering essential services and setting competitive tax and regulatory policy settings.

Please feel free to comment below. Alternatively, you can email comments, questions, suggestions, or hot tips to contact@queenslandeconomywatch.com. Also please check out my Economics Explored podcast, which has a new episode each week.

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2 Responses to Concorde’s lesson for gov’t industry promotion efforts

  1. Arthur Hunt says:

    I agree that the Concorde project was poor use of taxpayers’ money. However there is a major difference between that and support for a hydrogen industry. The Concorde was only ever going to benefit a small minority of the population whereas a rapid transition to a hydrogen economy will have universal benefits by reducing carbon emissions and climate change.

  2. Katrina Drake says:

    I cannot agree with your conclusions. I think you vastly underestimate the economic benefits, prestige, innovation, tourism and foreign relations that Concorde generated. Concorde is exactly why governments should encourage interventionist industry policies.

    I wish I had had the opportunity to have flown her.

    I just wish the Australian Government would intervene and quickly transition us from fossil fuels. Just simple steps like addressing road space and safety for escooters and ebikes, and remove the Drift restaurant from the bike path ( now that would be an interesting blog ! )

    And of course intervene to stop all the rorts in child care, ndis and tax avoidance.

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