The state’s role in supporting economic growth is critical. Our wealth comes from industry, that is, from the ability to mass produce goods—more goods, better goods, cheaper goods, produced with fewer hours of labor. The biggest advances in industrial production have required massive investments and social transformations so large they can only succeed with the support of the state, including in countries where the state’s support comes largely via market mechanisms, like the United States and modern China. A well-designed industrial policy works by incubating new, better modes of production to move a nation from its current economic equilibrium to a new, wealthier equilibrium.
But how to treat noncompetitive industries needed to maintain production facilities that are critical to remain independent and sovereign as a nation? Where do you draw the line between letting go and keeping it alive?
But how to treat noncompetitive industries needed to maintain production facilities that are critical to remain independent and sovereign as a nation? Where do you draw the line between letting go and keeping it alive?