On Oren Cass and Industrial Policy

A lot of “national conservatives” and those sympathetic to their economic goals have been pushing for the federal government to adopt an explicit “industrial policy.” Chief among themhas been Oren Cass, a thoughtful scholar at the Manhattan Institute, whose writings on the dignity of workI ’ve written briefly about before.Though a lot of his arguments echothose heard historically or in other countries, his specific case is worth addressing directly, as it seems to be resonating in conservative circles. So today I ’ve published an extensive critique of his recent speech at the National Conservatism conference asa Cato commentary.In short, I ’m disappointed by the lack of empirical grounding to his arguments. And I think he makes a fundamental mistake in assuming that, even if an industrial policy was feasible and could be faithfully executed, it would generate both “stable employment” for low-skilled workers and high productivity growth.I conclude:Oren Cass asserts that markets cannot generally allocate resources efficiently by industry. Yet he provides no meaningful metrics to show this is the case, nor shows why his policies would deliver better outcomes. His two main claims about the benefits of a manufacturing sector — “stable employment” and “strong productivity growth” — are directly contradictory. A plethora of evidence suggests as countries’ get richer due to automation and technological improvements, they demand relatively more services...
Source: Cato-at-liberty - Category: American Health Authors: Source Type: blogs