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Graham Cunningham's avatar

"The most important part of markets is the feedback mechanism" True.... but to be fair to the proponents of an “intellectual framework” of industrial policy" they are picking up - however misguidedly - on other societal "feedback mechanisms".

The idea of Globalisation as a solvent destroyer of social fabrics – as laissez-faire-gone-too-far - has been gestating in various (mainly American) conservative think-tanks for some years now. I share the sense that the fraying of community bonds is perhaps the greatest threat to the continued thriving of Western societies. But I have my doubts about the ability of anti-globalist politics to do much about this. I am not a great believer in political solutions....more a believer in unintended political consequences. My instinct is that neither the national nor the global economy is really controllable in the age of the internet. Things will be what they will be. https://grahamcunningham.substack.com/p/globalism-vs-national-conservatism

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Charles Pick's avatar

The issue with weak industrial competitiveness is that there are many, many causes for it, and many of those causes are third rails of American politics. Observing this, politicians instead propose laws that in effect just say "The US must produce Widgets, and we will appropriate a small fraction of the money needed to produce Widgets for the duration of this appropriation law. This will bring Rock Candy Mountain down to the people."

Maybe it is overstating the case, but it makes you think of Russia under serfdom. The Russians understood that they were backwards, but they lacked more things that they needed to unscrew themselves than could be listed. They did not have adequate 19th century legal training, sufficient professional civil servants, skilled laborers, scientists, merchants, primary schooling, or anything like that. And Russia had friendly relations for most of the 18th and 19th century with Great Britain, the central European states, and even France, so all those developed countries were exporting industrial goods, culture, and other goods to Backwards-stan.

The US problem is obviously different in many ways, but it is reminiscent. Saying a tariff and a round of appropriations can even start to solve the problem is like saying a tariff could industrialize Russia without doing anything about serfdom. Welfare backwardness is different from serfdom-backwardness, but I think the country needs to think in those terms to start to address the issues. We need an American Deng: tweaking around the edges will not do anything.

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