Thoroughly Questioning U.S. Industrial Policy

Scott LincicomeAs discussed here repeatedly, " industrial policy " is having a(nother) big moment in the United States. Just this month, for example, the Senate passed theU.S. Innovation and Competition Act, which provides tens of billions of dollars for domestic semiconductor manufacturing and the commercialization of " key technologies " ; the Biden administration released a lengthynew report urging new federal actions on “supply chain resiliency”; and lawmakersinched closer to a trillion-dollar infrastructure bill - each promising to counter China ' s rise and/or revitalize the U.S. economy and key industries in ways that the market supposedly can ' t or won ’t.As Huan Zhu and I explain in a new Catoworking paper, however, advocates for these and other federal interventions routinely leave unanswered several important questions about U.S. industrial policy ' s efficacy and necessity:What is “Industrial Policy”?Advocates of “industrial policy” often fail to define the term, thus permitting them to ignore past failures and embrace false successes while preventing a legitimate assessment of industrial policies’ costs and benefits. Yet U.S. industrial policy’s history of debate and implementation establishes sever al requisite elements – elements that reveal most “industrial policy successes” not to be “industrial policy” at all.What are the common obstacles to effective U.S. industrial policy? Several obstacles have prevented U.S. industrial polici...

Source: Cato-at-liberty - June 17, 2021 Category: American Health Authors: Scott Lincicome Source Type: blogs