6. Government policies to raise long-run living standards include raising the rate of saving and increasing productivity. Possible ways of increasing productivity involve investing in pub- lic capital (infrastructure), encouraging the for- mation of human capital, and increasing research and development. A more aggressive strategy is industrial policy, in which the gov- ernment uses subsidies and other tools to influ- ence the pattern of industrial development and, in particular, to stimulate high-tech industries. Critics of this approach contend that in practice, the government cannot successfully pick and subsidize only "winning" technologies. The most important source of productivity gains is via the effective use of market policies. Market policies include the choice between free and regulated markets and the choice between free trade and protectionism.