America Has No Alternative to Industrial Policy: PROJECT SYNDICATE
My September column is now live. As I said, it points to a problem—the problem of understanding and building state capacity—rather than offing a solution. But if there is to be a good future for America—and I would strongly argue, the world—we desperately need a good solution…
Here is a taste:
J. Bradford DeLong: America Has No Alternative to Industrial Policy
Sep 5, 2024
When the US economy ran aground in the late 1970s, the arguments for neoliberalism won out over the arguments for pursuing an activist industrial policy. Yet even if one remains convinced of the previous generation’s case against government-led development, industrial policy has become unavoidable.
BERKELEY – By the end of the 1970s, the US economy appeared to be in serious trouble. Years of inflation had caused deep discontent; measured productivity growth had fallen from its post-World War II pace of 2% per year to almost zero; and America’s resilience in the face of geopolitical and geoeconomic shocks seemed to be waning. The proposed solutions to these problems fell into two categories: neoliberalism and activist industrial policy. The neoliberals won….
But nothing in the Global North played out the way neoliberalism’s advocates had envisioned, unless you count the sharp increase in wealth and income inequality over the past four decades…. [But now] the most important economic-policy question for America today is not whether we should pursue an industrial policy. We have no choice…
READ MOAR at Project Syndicate: <https://www.project-syndicate.org/commentary/industrial-policy-now-necessary-even-if-one-accepts-standard-argument-against-it-by-j-bradford-delong-2024-09>
References:
Allen, Robert C. 2011. Global Economic History: A Very Short Introduction. Oxford: Oxford University Press. <https://www.oxfordreference.com/view/10.1093/actrade/9780199596652.001.0001/actrade-9780199596652>.
DeLong, J. Bradford. 2024. “America Has No Alternative to Industrial Policy.” Project Syndicate. September 5. <https://www.project-syndicate.org/commentary/industrial-policy-now-necessary-even-if-one-accepts-standard-argument-against-it-by-j-bradford-delong-2024-09>.
Schultze, Charles L. 1983. “Industrial Policy: A Dissent.” The Brookings Review. <https://www.brookings.edu/wp-content/uploads/2016/06/industrialpolicy_schultze.pdf>.
Smith, Adam. 1776. An Inquiry into the Nature & Causes of the Wealth of Nations. London: W. Strahan & T. Cadell. <https://www.gutenberg.org/ebooks/3300>.