The current development policy focus on poverty reduction is erroneous. Historically, successful development policy -- from the late fifteenth century until the beginning of the twenty-first -- has achieved structural change away from dependence on raw materials and agriculture, adding specialized manufacturing and services subject to increasing returns with a complex division of labour. In contrast, the Millennium Development Goals are heavily biased in favour of palliative economics: alleviating the symptoms of poverty, rather than attacking its real causes. This creates a system of ‘welfare colonialism’ increasing the dependence of poor countries, thereby hindering, rather than promoting, long-term structural change. How we used to deal with problems of development -- The present situation -- Arguments against industrial policy -- The Washington Consensus and sequential single-issue management -- Creating 'welfare colonialism' -- Europe’s present problems reflect the problems of globalization -- Diversity as a precondition for development -- Policy implications.