I would submit the Apple TV+ series _For All Mankind_ as a product of the zeitgeist of this "we should make and do stuff again" moment. It's structured as an alternate history -- what if we _hadn't_ given up on the push for manned space exploration? But it's hard to come away from it without thinking, "Maybe we should start trying this again!" (I _strongly_ recommend the show if you haven't seen it yet.) _The Expanse_ definitely tapped into this a little bit, as a vision of a humanity that muddled through our problems, and still has serious inequality problems but has managed to implement a UBI that keeps the masses up to, at least, a _slightly_ better level of subsistence than many have today. But _For All Mankind_ feels more optimistic to me. There's one plot point towards the end of the first season I'm not thrilled with (like, the whole Mission Control team touched the idiot ball for a few seconds?) but overall it's excellent.
Seen it. And The Right Stuff, of course. I love the fact that the release of the movie adaptation is mentioned, in passing, in the series. The use of stock footage, and the mix of real events, as well as fictional ones that closely parallel real events, is just tremendously well-written.
"economic policy works best when the government gives the people a concrete vision of what they’ll be getting. If we simply throw up our hands and leave everything to the market, they argue, we’ll simply have an economy based on finance"
This is absolutely correct Noah. Here is the proof:
A. The EPA and DOT set time based techinical goals: mpg, %CO2 tailpipe emissions. This was economized by setting penalities for missing goals. The auto industry was then able to determine the economic value of things like - lighter weight (improves mpg), aerodynamic shapes (improves mpg), improved engine efficiency (mpg); on on-board CPU, sensors and actuators to measure - think - adjust engine performance to optimize fuel economy and engine power.
This is goal setting and leaving engineering and processes to industry. It worked very very well.
B. In contrast, we have the FDA Medical Device regulations. Here, the staturory requirements are NOT goals, but Process compliance. The Quality-Regulatory focus is often counter productive to engineering learning experience, continuous improvements.
I managed a lot in both industries so I speak from actual operational experience.
There were big consequences to the EPA mandates. There are both mandates to make the cars safer, (the easiest way to add weight) and mandates to make them more efficient (requiring expensive materials). The average new car is now $47,000, way out of reach of the poor in America who need to travel the farthest for jobs.
The examples you quoted as working great are doing exactly what the article points out, using regulation to limit supply, increasing the cost of living for the average American, and making it harder to get by.
I worked in the industry from about 1978 - 2000 in various stints as a supplier. Regulations do not set supply or price. In fact, the Automakers instead of light weighting trucks and SUVS, and selling more sedans, added features customers overall want for comfort/seating, sound, electronics, size and utility.
When I was poor I bought a car for $500 and drove it. Used car. Used cars are very long lasting today as are new cars.
I can tell with you experienced certainty, that light weight materials of plastics, aluminum, lightweighting steel, improved engine efficiency, transmission and drivetrain effiencey, computerized fuel injection and Air-Fuel mixture ratio managment as function of a. the vehicle and the driver and the load/need save weight, reduce emissions, improve fuel economy.
If you can not afford a "statement Truck" - then get a used 30-40mph highway mileage smaller car.
Thank you for writing this! I've been avidly following many of these writers for the past year or two. You used the phrase "not building enough productive capital" and I think something that is *way* under-discussed is what exactly "productive capital" means and how we should think about it. I'm sure you have a zillion things to write about, but I think a consistent problem is that runs through low-progress periods is that people think if they're making money, they're being "productive" and that might technically be true in an economic sense (or not, I'm not an economist...) but there's such a huge gap between like, a multi-level marketing scheme selling nutritional supplements, and a small factory making machine tools or whatever, even if they may have the exact same starting capital.
In the past few decades, there's been a massive push towards entrepreneurship, which seems good, but so much of that energy is directed towards literally anything that makes money, rather than things that make progress, if that makes sense? And obviously, individual people can't build dams and factories by themselves, but individual people can definitely learn a little about materials and infrastructure and agriculture, basically learn where prosperity comes from in order to hopefully move policy in a better direction as voters.
He's proposed and passed two of the five biggest investment bills in US history, and may still pass a third. The Biden administration has consistently wanted to add to these bills, while Manchin has consistently wanted to subtract. That's the difference that's being talked about.
The government does not invest, it takes away available capital to spend it on politically correct projects or gives it to connected folks. Sad the left wants another planned economy experiment. Note that it is precisely because such experiments did not work, that elements of the left became dejected with wealth and industry in the first place - see the environmentalist movement.
I dunno, I think government investment can be done right. Without the DoE loan program that came out of the ACA, Tesla would've gone bankrupt, and how many years would that have set back the advent of car electrification?
Government has no business in propping up companies. You sell Musk short if you thing the government was his only option besides bankruptcy. That’s comical. Im also guessing that’s why Biden did not invite Tesla to his meeting on battery powered cars. No politics played there, by golly!
The current debt is approaching $90,000 for every man, woman and child in the US. That’s why Manchin dug his heels in. The Biden administration has little in the way of common sense approach. Social engineering and woke equity politics have no place in any serious discussion.
So we have 2 cigarette makers, 1 beer company, 3 candy companies and a soft drink company along with a chicken, a milk/cheese and a ketchup company.
Notice a pattern? No wonder Americans are fat.
So even assuming the NAICS $ from these 10 companies are actually in the US - because they're all multinationals - we have ZERO manufacturing as defined as creating non-human-food/drink/smoke stuff.
I am 100% certain China's top 10 manufacturing companies by revenue look completely different. Zoominfo has a list which I don't know is accurate:
5 companies producing oil/gas, but also glass, gases, electricity, chemicals, petrochemicals
1 makes auto parts
1 makes consumer electronics
1 makes boats and subs
1 sells, repairs cars
1 "general manufacturing" as well as metals/minerals
Now, oil/gas/metal/mineral extraction isn't manufacturing but petrochemicals/oil & gas processing is so the lists aren't precisely comparable, but the US is the largest consumer of oil in the world yet we don't have a petrochemical company in the top 10?
Whatever. The point is: not a single food/drink/smoke stuff "manufacturing" company in Zoominfo's top 10 list.
This is what the end product of manufacturing hollowing out looks like: the US has clearly stopped making actual stuff in favor of food/drink/smoke and the like.
Let's not even get into the nonsense of alternative energy. China dominates production in that sector, dominates in sheer amount of alternative energy installed and is going to build 150 new nuclear reactors <-- that's how they plan to become carbon neutral as well as severely cut down their need to import energy.
To put this is perspective, there are 444 operating nuclear reactors in the entire world, last I looked and the West is net decommissioning them.
I sort of see Tyler Cowen as kind of the OG on this issue - really crystallized in his book Stubborn Attachments, bur found in a lot of his public writing. But then libertarianish people have been big on growth as good for a very long time, whereas what is new here is a more center left orientation. (Goodness, Yuval Levin, a conservative at AEI, came out with the aptly titled book "A Time to Build" - very on the nose!)
Do you see interesting points of connection between folks in the camp you describe and what other intellectual corners have been doing?
I would also wonder how much is a commitment to government industrial policy needed versus creating conditions for growth? That doesn't seem uniform across this group. (E.g. I could see both you and Tyler placing growth as important but disagreeing sharply about the role of state action)
I'm surprised to not see mention of Mazzucato, and her latest 2 books Mission Economy and Public Purpose: Industrial Policy's Comeback and Government's Role in Shared Prosperity (https://www.amazon.com/Public-Purpose-Industrial-Governments-Prosperity/dp/194651165X). The former provides more of a framework for government to present New Industrialist policies (around *missions*, obvs.).
I understand Yellen, since she is explaining an actual policy agenda, a.k.a Bidenomics, which can be understood by correlating her statements with actions taken or attempted. It definitely is a change from all previous administrations since the '70s. If somehow Democrats do much better than expected this fall, we might come to see Biden as an even bigger break from the past. So far it's more of a tinker than a rework. Here in NY we're getting a fair chunk of the infrastructure bill that has passed, including for an important new light rail project on an underused Amtrak line that comes in from Connecticut through the Bronx. But I don't see any reason to think the usual budget-bloat and delays won't happen again or that the overall pace of infrastructure construction will much accelerate over recent historical trends.
As for the rest of the voices, there's more wind than specific ideas and I'm not sure much will come of it. If proponents of big public investment don't talk about past attempts that have led to pocket-lining, inflation and white elephants, then they would probably lead down the same road. If proponents of deregulation and simplifying political decision-making processes don't talk about which regulations they want to jettison or how exactly the political process would be simplified, then I think it's just a kind of daydreaming.
Biden is certainly a “break from the past”. Three more years of social engineering. Btw, that underused rail line you speak of will not magically improve because Uncle Sam spends a few billion on it
Why do Govts keep paying the (as you call it) 'increasingly outrageous construction costs', my dad built a soccer club from scratch in his local area and it now has enough players that the local MP agreed to get funding for a new clubhouse and changing rooms, but the crazy part is that it costs 2 million dollars. Now that isn't huge money in Govt terms but if thats what they are costing in every suburb it starts to add up, so I checked and you can get 4 bedroom kit homes in Australia for $250k, why does it cost 8 times what it costs to build a McMansion than it costs to build a structure (with zero land costs) that is basically one big room (the clubrooms) 4-6 small rooms (the changing rooms) 3 bathrooms and a kitchen (the canteen) it makes zero sense to me
Alex Epstein's Center for Industial Progress and his talks and books about the need for abundant, reliable, cheap energy in order for humanity worldwide to flourish! This requires using fossil fuels and nuclear energy, and with this abundant energy we can easily adapt to any negative climate change effects. Adapting is what all species do, not martyring themselves for mother Earth.
A major problem with having industrial policy is that it essentially picks winners (and thus often creates losers) and this is a highly contentious political issue which in the United States basically means it's a non-starter. Yellen, using standard policy-speak illustrates this: "Importantly, the Biden Administration’s economic strategy embraces, rather than rejects, collaboration with the private sector through a combination of improved market-based incentives and direct spending based on empirically proven strategies. For example, a package of incentives and rebates for clean energy, electric vehicles, and decarbonization will incentivize companies to make these critical investments…" I think most economists would argue that the way to decarbonize is to implement a carbon tax (e.g. the Baker-Shultz plan). I think most physicists would argue the best way to decarbonize is using nuclear energy with the (eternal) hope for fusion energy at some point. When someone uses terms like "clean energy" they are either ignorant or lying since all energy production involves altering the environment. Considering just CO2 emissions (not other forms of altering the environment) an EV has 20% to 80% lifecycle reduction in CO2 so even just by this metric it is not "clean energy" but cleaner energy, and by all metrics (e.g. mining pollution etc.) perhaps less impressive.
A significant factor in our technological world today is the research and development done during the Cold War when our science funding increased substantially and we developed new and incredibly costly technology for defense. In general the public and both parties supported this increase. The original Silicon Valley was largely defense funded. Many of the things we can't live without today (the Internet, GPS) were for years pure military development. In grad school we had some DOD funding and thus had DARPANET in our lab when it was only available to the military, plus contractors and researchers with connection (funding) from the military.
Top down research direction can work, look at the Manhatten project, the greatest rapid research and development in history. But we also have to look at things like how GPU's, essentially developed for entertainment (thus something unlikely to get top-down funding) are largely used for something else today. Originally computational physicists realized they could write sections of their quantum mechanical codes to run orders of magnitude faster on GPU's, and a number of years later the Deep Learning coders exploited the same techniques. It is largely the GPU's, not used for display but only computation, that are dominating the gains in computing currently.
Without a common goal, like the Cold War, I don't see the US, with current divisions, as being able to come up with an intelligent industrial policy.
"Our task now is to refuse to let that era fizzle out — to refuse to allow it to fall prey to cynicism, social exhaustion, vetocratic obstructionism, or relentlessly destructive zero-sum ideological and partisan wars. Getting America building again has to be Job #1"
This is a particularly annoying form of opinion journalism. A complete separation from the realities of executing any of this. Proposing a new rule for pundits - each opinion piece must include at least 25% of word count on HOW WE DO THIS. Let's not fall prey to cynicism! Yay! Give me a break.
I veto your rule. :-D Seriously, though, I think Noah has written plenty on the how and will continue to do so. He also points at plenty of nuts and bolts resources. There's also still much to figure out about the how. The manual doesn't have to be in the same blog post.
As a board member of the Industry Studies Association, I've been co-producing a monthly federal industrial policy webinar series. From October through yesterday, we've had one session on each of the four supply chains assessed in the June report. Each leads with the White House or Commerce staff responsible for the assessment, followed by three academic/industry discussants. A recording for each session is available to you and your readers at https://www.industrystudies.org/webinar-series.
In addition, multiple individual federal departments and agencies are moving forward with their own industrial development initiatives. As a contractor to the American Economic Association, each day I post federal efforts -- particularly calls for public comments and requests for information -- that I think will be of interest to economists. You can see them here: https://www.aeaweb.org/forum/questions Regarding industrial development, just in the last few days see for instance:
From the 1790s to the 1920s, the federal government was quite engaged in industrial development. I have two publications that describe how aspects of these efforts -- in the realm of tariff-setting -- led to the development of today's federal economic statistics system built around the Census Bureau, the Bureau of Labor Statistics, and the Bureau of Economic Analysis.
An impediment to effective industrial policy today is the lack of analytical capacity. For decades, the government focused on creating the numbers to manage the business cycle (e.g., unemployment rate, GDP), but not on the competitiveness of U.S.-based firms in global markets. In 2012 for the Center for American Progress, I suggested ways to address this issue:
You leave out the sub Saharan population that is just now entering in to their own industrial revolution. They require fossil fuels. They have no infrastructure to enjoy what you describe. Coal fired plants are necessary for their relative low cost and proximity to what few population centers that do exist. Solar will not scale for Africa for the foreseeable future.
Listening to Jigar Shah on Dave Roberts podcast really pairs well with this. The DOE loan program is doing due diligence and supporting (via relatively low cost loans) a ton of very cool energy projects. And it's profitable!
I would submit the Apple TV+ series _For All Mankind_ as a product of the zeitgeist of this "we should make and do stuff again" moment. It's structured as an alternate history -- what if we _hadn't_ given up on the push for manned space exploration? But it's hard to come away from it without thinking, "Maybe we should start trying this again!" (I _strongly_ recommend the show if you haven't seen it yet.) _The Expanse_ definitely tapped into this a little bit, as a vision of a humanity that muddled through our problems, and still has serious inequality problems but has managed to implement a UBI that keeps the masses up to, at least, a _slightly_ better level of subsistence than many have today. But _For All Mankind_ feels more optimistic to me. There's one plot point towards the end of the first season I'm not thrilled with (like, the whole Mission Control team touched the idiot ball for a few seconds?) but overall it's excellent.
Great series! Also watch From the Earth to the Moon documentary for comparison.:)
Seen it. And The Right Stuff, of course. I love the fact that the release of the movie adaptation is mentioned, in passing, in the series. The use of stock footage, and the mix of real events, as well as fictional ones that closely parallel real events, is just tremendously well-written.
"economic policy works best when the government gives the people a concrete vision of what they’ll be getting. If we simply throw up our hands and leave everything to the market, they argue, we’ll simply have an economy based on finance"
This is absolutely correct Noah. Here is the proof:
A. The EPA and DOT set time based techinical goals: mpg, %CO2 tailpipe emissions. This was economized by setting penalities for missing goals. The auto industry was then able to determine the economic value of things like - lighter weight (improves mpg), aerodynamic shapes (improves mpg), improved engine efficiency (mpg); on on-board CPU, sensors and actuators to measure - think - adjust engine performance to optimize fuel economy and engine power.
This is goal setting and leaving engineering and processes to industry. It worked very very well.
B. In contrast, we have the FDA Medical Device regulations. Here, the staturory requirements are NOT goals, but Process compliance. The Quality-Regulatory focus is often counter productive to engineering learning experience, continuous improvements.
I managed a lot in both industries so I speak from actual operational experience.
There were big consequences to the EPA mandates. There are both mandates to make the cars safer, (the easiest way to add weight) and mandates to make them more efficient (requiring expensive materials). The average new car is now $47,000, way out of reach of the poor in America who need to travel the farthest for jobs.
The examples you quoted as working great are doing exactly what the article points out, using regulation to limit supply, increasing the cost of living for the average American, and making it harder to get by.
I worked in the industry from about 1978 - 2000 in various stints as a supplier. Regulations do not set supply or price. In fact, the Automakers instead of light weighting trucks and SUVS, and selling more sedans, added features customers overall want for comfort/seating, sound, electronics, size and utility.
When I was poor I bought a car for $500 and drove it. Used car. Used cars are very long lasting today as are new cars.
I can tell with you experienced certainty, that light weight materials of plastics, aluminum, lightweighting steel, improved engine efficiency, transmission and drivetrain effiencey, computerized fuel injection and Air-Fuel mixture ratio managment as function of a. the vehicle and the driver and the load/need save weight, reduce emissions, improve fuel economy.
If you can not afford a "statement Truck" - then get a used 30-40mph highway mileage smaller car.
Thank you for writing this! I've been avidly following many of these writers for the past year or two. You used the phrase "not building enough productive capital" and I think something that is *way* under-discussed is what exactly "productive capital" means and how we should think about it. I'm sure you have a zillion things to write about, but I think a consistent problem is that runs through low-progress periods is that people think if they're making money, they're being "productive" and that might technically be true in an economic sense (or not, I'm not an economist...) but there's such a huge gap between like, a multi-level marketing scheme selling nutritional supplements, and a small factory making machine tools or whatever, even if they may have the exact same starting capital.
In the past few decades, there's been a massive push towards entrepreneurship, which seems good, but so much of that energy is directed towards literally anything that makes money, rather than things that make progress, if that makes sense? And obviously, individual people can't build dams and factories by themselves, but individual people can definitely learn a little about materials and infrastructure and agriculture, basically learn where prosperity comes from in order to hopefully move policy in a better direction as voters.
"Biden represents a centrism of progress and dynamism " ???? Show your work.
He's proposed and passed two of the five biggest investment bills in US history, and may still pass a third. The Biden administration has consistently wanted to add to these bills, while Manchin has consistently wanted to subtract. That's the difference that's being talked about.
The government does not invest, it takes away available capital to spend it on politically correct projects or gives it to connected folks. Sad the left wants another planned economy experiment. Note that it is precisely because such experiments did not work, that elements of the left became dejected with wealth and industry in the first place - see the environmentalist movement.
I dunno, I think government investment can be done right. Without the DoE loan program that came out of the ACA, Tesla would've gone bankrupt, and how many years would that have set back the advent of car electrification?
Government has no business in propping up companies. You sell Musk short if you thing the government was his only option besides bankruptcy. That’s comical. Im also guessing that’s why Biden did not invite Tesla to his meeting on battery powered cars. No politics played there, by golly!
The current debt is approaching $90,000 for every man, woman and child in the US. That’s why Manchin dug his heels in. The Biden administration has little in the way of common sense approach. Social engineering and woke equity politics have no place in any serious discussion.
Yet another technotopian offering, but this leavened one with data unreality.
The problem with the Fed's "stats" is that it is clearly skewed by the units - NAICS $.
Among the NAICS "manufacturing": Printing and related activities - the Fed is NAICS manufacturing itself!
Just kidding.
However, what I am not kidding about is the top 10 NAICS "manufacturing" businesses:
https://www.naics.com/naics-code-description/?code=31-33#topbusinesses
Philip Morris Intl Inc
Mars Incorporated
Kraft Heinz Company
Mondelez International Inc
Altria Group Inc
Tyson Fresh Meats Inc
Pepsi-Cola Metro Btlg Co Inc
Anheuser-Busch Companies LLC
Nestle Holdings Inc
Dairy Farmers America Inc
So we have 2 cigarette makers, 1 beer company, 3 candy companies and a soft drink company along with a chicken, a milk/cheese and a ketchup company.
Notice a pattern? No wonder Americans are fat.
So even assuming the NAICS $ from these 10 companies are actually in the US - because they're all multinationals - we have ZERO manufacturing as defined as creating non-human-food/drink/smoke stuff.
I am 100% certain China's top 10 manufacturing companies by revenue look completely different. Zoominfo has a list which I don't know is accurate:
https://www.zoominfo.com/top-lists/top-10-companies-from-mfg-industry-in-CN-by-revenue
PetroChina Company Limited
Sinopec
Sinochem
Xinbao Group
CNOOC Limited
CSSC
China FAW Group
Hengli Group
AMER International Group
BAIC Group
5 companies producing oil/gas, but also glass, gases, electricity, chemicals, petrochemicals
1 makes auto parts
1 makes consumer electronics
1 makes boats and subs
1 sells, repairs cars
1 "general manufacturing" as well as metals/minerals
Now, oil/gas/metal/mineral extraction isn't manufacturing but petrochemicals/oil & gas processing is so the lists aren't precisely comparable, but the US is the largest consumer of oil in the world yet we don't have a petrochemical company in the top 10?
Whatever. The point is: not a single food/drink/smoke stuff "manufacturing" company in Zoominfo's top 10 list.
This is what the end product of manufacturing hollowing out looks like: the US has clearly stopped making actual stuff in favor of food/drink/smoke and the like.
Let's not even get into the nonsense of alternative energy. China dominates production in that sector, dominates in sheer amount of alternative energy installed and is going to build 150 new nuclear reactors <-- that's how they plan to become carbon neutral as well as severely cut down their need to import energy.
To put this is perspective, there are 444 operating nuclear reactors in the entire world, last I looked and the West is net decommissioning them.
I sort of see Tyler Cowen as kind of the OG on this issue - really crystallized in his book Stubborn Attachments, bur found in a lot of his public writing. But then libertarianish people have been big on growth as good for a very long time, whereas what is new here is a more center left orientation. (Goodness, Yuval Levin, a conservative at AEI, came out with the aptly titled book "A Time to Build" - very on the nose!)
Do you see interesting points of connection between folks in the camp you describe and what other intellectual corners have been doing?
I would also wonder how much is a commitment to government industrial policy needed versus creating conditions for growth? That doesn't seem uniform across this group. (E.g. I could see both you and Tyler placing growth as important but disagreeing sharply about the role of state action)
I'm surprised to not see mention of Mazzucato, and her latest 2 books Mission Economy and Public Purpose: Industrial Policy's Comeback and Government's Role in Shared Prosperity (https://www.amazon.com/Public-Purpose-Industrial-Governments-Prosperity/dp/194651165X). The former provides more of a framework for government to present New Industrialist policies (around *missions*, obvs.).
I think Sec. Pete understands this at least when saying things like the "U.S. ought to have the best high-speed rail": https://thehill.com/changing-america/sustainability/infrastructure/537571-newly-minted-transportation-secretary-pete
I understand Yellen, since she is explaining an actual policy agenda, a.k.a Bidenomics, which can be understood by correlating her statements with actions taken or attempted. It definitely is a change from all previous administrations since the '70s. If somehow Democrats do much better than expected this fall, we might come to see Biden as an even bigger break from the past. So far it's more of a tinker than a rework. Here in NY we're getting a fair chunk of the infrastructure bill that has passed, including for an important new light rail project on an underused Amtrak line that comes in from Connecticut through the Bronx. But I don't see any reason to think the usual budget-bloat and delays won't happen again or that the overall pace of infrastructure construction will much accelerate over recent historical trends.
As for the rest of the voices, there's more wind than specific ideas and I'm not sure much will come of it. If proponents of big public investment don't talk about past attempts that have led to pocket-lining, inflation and white elephants, then they would probably lead down the same road. If proponents of deregulation and simplifying political decision-making processes don't talk about which regulations they want to jettison or how exactly the political process would be simplified, then I think it's just a kind of daydreaming.
Biden is certainly a “break from the past”. Three more years of social engineering. Btw, that underused rail line you speak of will not magically improve because Uncle Sam spends a few billion on it
This type of stuff is when your substack is at its best. Thank you for all the links to check out.
Why do Govts keep paying the (as you call it) 'increasingly outrageous construction costs', my dad built a soccer club from scratch in his local area and it now has enough players that the local MP agreed to get funding for a new clubhouse and changing rooms, but the crazy part is that it costs 2 million dollars. Now that isn't huge money in Govt terms but if thats what they are costing in every suburb it starts to add up, so I checked and you can get 4 bedroom kit homes in Australia for $250k, why does it cost 8 times what it costs to build a McMansion than it costs to build a structure (with zero land costs) that is basically one big room (the clubrooms) 4-6 small rooms (the changing rooms) 3 bathrooms and a kitchen (the canteen) it makes zero sense to me
Alex Epstein's Center for Industial Progress and his talks and books about the need for abundant, reliable, cheap energy in order for humanity worldwide to flourish! This requires using fossil fuels and nuclear energy, and with this abundant energy we can easily adapt to any negative climate change effects. Adapting is what all species do, not martyring themselves for mother Earth.
The absolute truth, in my opinion. As the less developed world progresses, fossil fuels are a requirement to reach improved living conditions.
A major problem with having industrial policy is that it essentially picks winners (and thus often creates losers) and this is a highly contentious political issue which in the United States basically means it's a non-starter. Yellen, using standard policy-speak illustrates this: "Importantly, the Biden Administration’s economic strategy embraces, rather than rejects, collaboration with the private sector through a combination of improved market-based incentives and direct spending based on empirically proven strategies. For example, a package of incentives and rebates for clean energy, electric vehicles, and decarbonization will incentivize companies to make these critical investments…" I think most economists would argue that the way to decarbonize is to implement a carbon tax (e.g. the Baker-Shultz plan). I think most physicists would argue the best way to decarbonize is using nuclear energy with the (eternal) hope for fusion energy at some point. When someone uses terms like "clean energy" they are either ignorant or lying since all energy production involves altering the environment. Considering just CO2 emissions (not other forms of altering the environment) an EV has 20% to 80% lifecycle reduction in CO2 so even just by this metric it is not "clean energy" but cleaner energy, and by all metrics (e.g. mining pollution etc.) perhaps less impressive.
A significant factor in our technological world today is the research and development done during the Cold War when our science funding increased substantially and we developed new and incredibly costly technology for defense. In general the public and both parties supported this increase. The original Silicon Valley was largely defense funded. Many of the things we can't live without today (the Internet, GPS) were for years pure military development. In grad school we had some DOD funding and thus had DARPANET in our lab when it was only available to the military, plus contractors and researchers with connection (funding) from the military.
Top down research direction can work, look at the Manhatten project, the greatest rapid research and development in history. But we also have to look at things like how GPU's, essentially developed for entertainment (thus something unlikely to get top-down funding) are largely used for something else today. Originally computational physicists realized they could write sections of their quantum mechanical codes to run orders of magnitude faster on GPU's, and a number of years later the Deep Learning coders exploited the same techniques. It is largely the GPU's, not used for display but only computation, that are dominating the gains in computing currently.
Without a common goal, like the Cold War, I don't see the US, with current divisions, as being able to come up with an intelligent industrial policy.
"Our task now is to refuse to let that era fizzle out — to refuse to allow it to fall prey to cynicism, social exhaustion, vetocratic obstructionism, or relentlessly destructive zero-sum ideological and partisan wars. Getting America building again has to be Job #1"
This is a particularly annoying form of opinion journalism. A complete separation from the realities of executing any of this. Proposing a new rule for pundits - each opinion piece must include at least 25% of word count on HOW WE DO THIS. Let's not fall prey to cynicism! Yay! Give me a break.
I veto your rule. :-D Seriously, though, I think Noah has written plenty on the how and will continue to do so. He also points at plenty of nuts and bolts resources. There's also still much to figure out about the how. The manual doesn't have to be in the same blog post.
Thanks, Noah, for the comprehensive list of new industrialist thinkers. Under Biden, the federal government is moving forward more broadly and systematically than has been the case. For the first time in a century, the government is carrying out a systematic assessment of key supply chains. Assessments for four key products -- pharceuticals, semiconductors, advanced batteries, and critical minerals -- was completed last June. Assessments for six sectors -- IT, energy, transportation, public health, defense, and agricultural products -- are to be released in the next month. The June 2021 report: https://www.whitehouse.gov/briefing-room/statements-releases/2021/06/08/fact-sheet-biden-harris-administration-announces-supply-chain-disruptions-task-force-to-address-short-term-supply-chain-discontinuities/
As a board member of the Industry Studies Association, I've been co-producing a monthly federal industrial policy webinar series. From October through yesterday, we've had one session on each of the four supply chains assessed in the June report. Each leads with the White House or Commerce staff responsible for the assessment, followed by three academic/industry discussants. A recording for each session is available to you and your readers at https://www.industrystudies.org/webinar-series.
In addition, multiple individual federal departments and agencies are moving forward with their own industrial development initiatives. As a contractor to the American Economic Association, each day I post federal efforts -- particularly calls for public comments and requests for information -- that I think will be of interest to economists. You can see them here: https://www.aeaweb.org/forum/questions Regarding industrial development, just in the last few days see for instance:
National Artificial Intelligence R&D Strategic Plan -- OSTP invites input for update (by 3/4) https://www.aeaweb.org/forum/2341/national-artificial-intelligence-strategic-invites-update
Commerce Dept. Renewable Energy/Energy Efficiency Advisory Committee -- 2/17 public mtg. on findings/recommendations https://www.aeaweb.org/forum/2339/commerce-renewable-efficiency-committee-recommendations
National Travel and Tourism Strategy -- ITA seeks public input (by 2/11) https://www.aeaweb.org/forum/2336/national-travel-and-tourism-strategy-ita-seeks-public-input
Industrial Decarbonization Priorities -- DOE seeks information (by 2/28) https://www.aeaweb.org/forum/2335/industrial-decarbonization-priorities-seeks-information
Drug Supply Chain Security Act Implementation - FDA invites comments to OMB on proposal (by 2/25) https://www.aeaweb.org/forum/2334/supply-security-implementation-invites-comments-proposal
Commerce releases results of Semiconductor Supply Chain RFI (1/25/22) https://www.aeaweb.org/forum/2327/commerce-releases-results-semiconductor-supply-chain-rfi
Each week I roll new announcements and open comment items into a weekly update for ISA members. You can see this Sunday's here: https://www.dropbox.com/s/3loy9aex5xv7g7g/ISA%20Federal%20Industrial%20Policy%20Update%20--%20January%2030%2C%202022.pdf?dl=0
From the 1790s to the 1920s, the federal government was quite engaged in industrial development. I have two publications that describe how aspects of these efforts -- in the realm of tariff-setting -- led to the development of today's federal economic statistics system built around the Census Bureau, the Bureau of Labor Statistics, and the Bureau of Economic Analysis.
Before the U.S. Tariff Commission: Congressional Efforts to Obtain Statistics and Analysis for Tariff-setting, 1789–1916 in A Centennial History of the United States International Trade Commission (2017) https://www.usitc.gov/sites/default/files/publications/other/centennial_book/chapter2.pdf
The Origins of the Survey of Current Business: A Window on the Evolution of Economic Policy, Research, and Statistics, Survey of Current Business, October 2020 https://apps.bea.gov/scb/2020/10-october/1020-origins-scb.htm
An impediment to effective industrial policy today is the lack of analytical capacity. For decades, the government focused on creating the numbers to manage the business cycle (e.g., unemployment rate, GDP), but not on the competitiveness of U.S.-based firms in global markets. In 2012 for the Center for American Progress, I suggested ways to address this issue:
Economic Intelligence: Enhancing the Federal Statistical System to Support U.S. Competitiveness https://www.americanprogress.org/article/economic-intelligence/
Under Biden, the government is moving forward…. Please spare your shill platitudes of the worst administration in the history of our republic.
I nominate my own essays for your mix: "The Bigger, Better Boom" https://kk.org/thetechnium/the-bigger-better-boom/
You leave out the sub Saharan population that is just now entering in to their own industrial revolution. They require fossil fuels. They have no infrastructure to enjoy what you describe. Coal fired plants are necessary for their relative low cost and proximity to what few population centers that do exist. Solar will not scale for Africa for the foreseeable future.
Listening to Jigar Shah on Dave Roberts podcast really pairs well with this. The DOE loan program is doing due diligence and supporting (via relatively low cost loans) a ton of very cool energy projects. And it's profitable!
Show proof of “profitable “