![]() I have long argued for industrial policy as an effective way to achieve policy objectives, including those related to national security. The answer to the second question-is this change wise policy?-is again yes and no, but this time mostly no. Most peculiar, the administration seems to have little or no interest in promoting exports, which have long been the least controversial part of trade policy. The Biden administration has turned its back on traditional trade agreements that provide for more market access, is pursuing domestic industrial policy focused on reshoring production at the expense of foreign partners, and is blatantly rejecting the rules-based multilateral trading system that it has spent the last 75 years defending. Trade Representative’s (USTR) recent rejection of two World Trade Organization decisions that the United States lost. On the international side, the answer seems to be clearly yes, particularly after the Office of the U.S. Thanks to the CHIPS and Science Act and the Inflation Reduction Act, government intervention in the economy is more extensive than in the recent past, but it is hardly new. national security, which is the case today. ![]() It has waxed and waned according to the administration of the time, but the United States has for a long time been willing to devote government resources and direction in the interest of achieving national policy goals, particularly when they are linked to U.S. Elements of it have characterized government policy going back to at least the Lincoln administration. On the domestic side, industrial policy, or running faster, meaning government intervention in the economy, is not new. That leads to two questions: (1) Is that true? And (2) is such a policy change wise? The answer to the first question is yes and no, though more yes than no. The critics’ assumption seems to be that we have been pursuing those policies for a long time and have now tossed them into the trash can. Note that this applies to two areas: domestic economic policy and trade policy. Even after reading a definition of it, I am still not sure what neoliberalism is, but it appears to refer in this context to policies that promote market economics, including by lowering trade barriers avoiding price controls reducing regulation, particularly in capital markets and generally reducing government involvement in the economy. Lately, the debate has begun to focus more on government policy than on economics, as the Biden administration is accused of abandoning traditional “neoliberal” trade policy in favor of a more protectionist and domestic-oriented approach. ![]() I have maintained throughout that, although we may be in the second part of a “two steps forward, one step back” scenario, the fundamental enabling tools for globalization-enormous decreases in the price of communications and transportation and technological advances in both-are still here and are not going away. There has been an ongoing debate during the Trump and Covid eras as to whether globalization was in retreat, either as a matter of policy (from the Trump administration) or due to external events (the Covid-19 pandemic).
0 Comments
Leave a Reply. |