America (still) has no industrial policy

RUMOURS of industrial policy in America have been greatly exaggerated. This may come as a surprise to some. The Biden administration has, after all, reasserted the role of the state in the US economy in ways we haven’t seen for half a century: supporting re-industrialisation, subsidising strategic industries, boosting unions, rethinking trade relations and rebooting competition policy.

Yet those are separate policies, not a fundamentally new operating system. At an intellectual level, it’s quite clear that there’s a big pendulum shift happening on the political left in America, and to a certain extent on the right, as well. Both have embraced tariffs, subsidies and other government interventions. The state will certainly be more dominant no matter who wins the US presidential election in November.

But industrial policy is about accomplishing certain things in the real world, such as rebalancing consumption and production within an economy, reducing inequality and promoting better and more sustainable kinds of growth, building a more globally competitive workforce, finding a middle ground between innovation and regulation and so on. To do that, you need real connections between the stakeholders that matter: namely business, labour, educational institutions, civic society and government at all levels.