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Beyond Industrial Policy

The emerging breed of industrial policies, which emphasize production, fair wages, and localism, could serve as the basis for post-neoliberal economies. But to tackle the challenges of the twenty-first century and ensure a sustainable future, we need a policy framework that recognizes the value of human connection.

WASHINGTON, DC – The United States has (re)discovered industrial policy. As President Joe Biden’s National Security Strategy puts it, the administration views “modern industrial and innovation strategy” as the backbone of the future economy. It is an economic policy, a trade philosophy, and a political strategy focused on making as much as selling, producing as much as buying, and dignity as much as efficiency.

As a foundation for a shift to a post-neoliberal economy and society, this policy framework has potential, particularly with its emphasis on strategic public investment. But to meet the full spectrum of challenges facing Americans, it must go further, embracing new ways of making goods and providing services that emphasize the value of relationships and healthy local economies.

As the name suggests, industrial policy is rooted in an era when the term “industry” was synonymous with making things at scale through mass production. Harvard University economist Dani Rodrik describes contemporary industrial policy as an illustration of a new doctrine of “productivism,” which emphasizes good jobs at good wages distributed “throughout all regions and all segments of the labor force.” Unlike neoliberalism, productivism recognizes the critical role of government and civil society when it comes to job creation; unlike Keynesianism, it focuses on supply-side measures that would enable workers to provide for themselves rather than rely on redistribution and social transfers.