Thursday, August 12, 2010

Industrial Policy

The Economist for this week has several articles related to the question of industrial policy. They observe that industrial policy is being revived in many countries, including the U.S. The also observe that industrial policy can claim as many failures as successes. Another part of the change in policy is that manufacturing is being stressed. From Obama's talk of strategic industries like autos to France's help of a toy manufacture, there is an emphasis on aiding manufacturing. While this is not exactly the same as the beggar-thy-neighbor policies of tariff increases that occurred during the Great Depression, it can generate a similar kind of conflict. Another popular area receiving government support in many countries is "green technology." We can only hope that people soon realize the waste of taxpayers dollars that these policies generate.