Industrial policy

I mean, I remember Sam Altman just coming right out and saying that the United States government should take a stake in open AI, right? And so there was a chipset under Biden, which has, I think, sort of transform the semiconductor industry in the United States.

This is all part of the new industrial policy that's coming up in the United States.

So I think that on the one side, you have this rush into this growth phase, but the societal impacts are much less certain.

And the policy outcomes must move beyond whether the government is too big or if the private sector is too powerful or, you know, because these conversations, I mean, right now, what is the situation? Right now, what we're connecting to our previous argument about government debt, governments are more in debt than they've ever been.

But one of the things you say in that essay is, This is not just a market failure that you are going to correct by turning a few knobs on your market, on your market approach, on your economic approach.

It's going to take industrial policy.

Just say a little bit about what motivates that, what you mean by that.

Yeah.

Yeah.

So what you're describing basically is, I mean, sort of the contrast to the market correction, tweak the externality approach.

The more active approach is generally known as industrial policy.

And I will just say I'm older than you.

Right.

Well, let's look at industrial policy in just a second.

Also, I want to look more about his approach to labour markets as well and what he tried to do unsuccessfully there as well.

We're looking at Paul Keating on the Debunking Economics podcast back in a second.

And they were both screwed by the Australian government and the Australian financial sector.

So there were buds that could have been built on that were destroyed instead, and tariffs are basically irrelevant to that, unfortunately.

So you don't care whether tariffs were here or not, or you feel like they should have been hung on to, but they should have been hung on to with some sort of industrial policy.

With an industrial

You know, it's just a trade block.

Noah, I want to come back to your point about cooperation between countries and segue into the idea of industrial policy, which you've written a lot about.

I think you are a supporter of industrial policy, you just don't like how it's defined by a lot of people.

As we kind of shift into this new economic age and see more efforts to re-globalize the world.

And I think that's a bit of what Carney is trying to do.

It inevitably requires more state involvement in the economy.

At least I think it will, because it's going to be hard to deliver the outcomes, certainly in the near term, that are being pledged without a fairly active hand of the state, ergo industrial policy.

What's your sense of where we're at in terms of industrial policy in the West? And I know there's very different definitions of industrial policy in Europe versus Asia versus North America.

this I'll quickly add.

This is a part of industrial policy.

this shows industrial policy expenditures uh by korea france brazil germany us and this shows that for example we are now getting so dicey about plis or which may not work in the short term for example the battery one has not worked yet uh some infrastructure we may be a bit ahead of time so this is showing that you a good state can also be an interventionist state, provided it helps the economy go ahead.

But again, what I would say, and I think Ajay would also say is, for all of that, Kushal, we need the basic credibility of the state to remain intact.

Yeah.

So now Indian auto ancillaries, while they still have a long way to go, at least can hold their own in this marquee manufacturing ecosystem.

I don't know what to say except that we are genuinely, genuinely beyond my own partisan sympathies and affiliations, whatever they may be.

Finally, we are getting industrial policy right along with basic liberalization at home.

The big thing to understand is that we don't have a sane policy.

As I've said many times before, the Chinese have industrial policy.

The United States has mean truths.

Mean truths.