A Modern Industrial Strategy? Sydney Williams
http://www.swtotd.blogspot.com
“A modern American industrial strategy identifies specific sectors that are foundational to economic growth, strategic from a national security perspective, and where private industry on its own isn’t poised to make the investments needed to secure our national ambitions.”Jake Sullivan, National Security Adviser Brookings Institution, April 27, 2023
The presumption in Jake Sullivan’s words, quoted above, are astounding – that there is a, yet-to-be-named, “modern American strategy,” which identifies “specific,” but unstated, “sectors that are foundational to economic growth,” which are “strategic from a national security perspective.” But since the private sector has neither the means nor the foresight to “secure our national ambitions” (whatever they are), then it must be left to the public sector to decide how much and where to invest, decisions prior administrations from both parties have left to markets. Sullivan refers to this as Bidenomics. In reality it is central planning.
Greg Ip, in last weekend’s edition of The Wall Street Journal, wrote of Mr. Sullivan’s speech: “Sullivan’s target was what some in the policy world call neoliberalism: the free trade, laissez faire economic priorities shared by Republican and Democratic administrations for decades.” “Executive policy-making,” wrote Christopher DeMuth, a distinguished fellow at the Hudson Institute, in the same issue, “has an ideological basis – that of ‘expertise,’ which holds that modern life demands government by expert administrators in place of amateur legislators.” When did Karl Marx replace Adam Smith?
Certainly, there have been times when government has had to take the lead – in times of war, in building the interstate highway system, DARPA, NASA, etc. But the concept that a state-mandated industrial policy is the wave of the future is to believe that Russia, China, North Korea, Cuba, Venezuela, etc. have brought to their people greater efficiencies, higher living standards, a cleaner environment, and greater financial opportunity and equality than the democracy and free market capitalism of the United States, and the West. Waste and inefficiencies are more common among government agencies than in private companies for which the threat of bankruptcy governs behavior. Shareholders can more easily dispose of their stock than taxpayers abandon their communities or states. Auditors from OpenTheBooks.com, an organization that accepts no government payments and uses forensic accounting and open records to hold government accountable, recently quantified that improper and mistaken payments admitted to by the 17 largest federal agencies in the U.S. since 2004 totaled $2.9 trillion.
Power is an aphrodisiac, and the power of the American presidency has grown over the years, as federal agencies have assumed more responsibilities and as Congress has forfeited some of theirs. It is generally conceded that Democrats are the party of government expansion, and that Republicans have the job of reining in federal power; though both parties are attracted to the magnetism of power. Nevertheless, it is unsurprising that twice as many federal employees are registered as Democrats than Republicans. As for political donations in 2020, Democrats out-scored Republicans about 5-1. In the June 23 issue of The Spectator, Roger Kimball wrote, in what is not a total exaggeration: “Every honest person understands that conservatives are allowed to take office but not allowed to take power in the United States.”
The claim by Mr. Sullivan is that free-trade and laissez-faire economics have, as Mr. Ip wrote, “hollowed out the U.S. industrial base, undermined America’s middle class and left the country dangerously vulnerable to climate change, Covid-19 and the weaponization of supply chains by hostile nations.” To deal with these problems, Mr. Sullivan urged a “modern” American industrial policy, in which “a more assertive federal government guides investment, industry and trade.” Keep in mind, these are the folks who destroyed our energy independence, locked down schools and businesses, bankrupted thousands of small businesses, spent trillions on Covid relief, raised the national debt by $3 trillion, and gave us the worst inflation in forty years. And these are the folks that have radicalized cultural and educational institutions. Should they be in charge of our industrial policy? And how does a government mandated and run industrial policy differ from central planning, the essential tenet of socialism? And which has been better for individual freedom, a rising standard of living and a cleaner environment – capitalism or socialism? Where are air, rivers, and lakes cleaner? In Russia, China, and Venezuela, or in the United States, Britain, and Canada?
Mr. Sullivan couched his words and terms in tones acceptable to those who proudly display their moral superiority: He wants to do away with Republican’s “regressive tax cuts;” (according to the OECD, the United States has the most progressive tax system in the world). He wants to replace “deep cuts to public investment” (this after passing the $1.85 trillion American Rescue Plan) and eliminate Republican measures that have “undermined the labor movement” (which measures he did not disclose). He claimed that Bidenomics would produce “a just and effective clean-energy transition,” “restore the middle class,” and repair “faith in democracy and liberty.” Just how this was to be done we were not told.
Mr. Sullivan might argue that I have misinterpreted and/or overstated his proposal, and perhaps I have. But his words remind me of the Arabian proverb: “If the camel once gets his nose in the tent, his body will soon follow.” Like climate and like all living things, governments are not static. They are run by individuals, and personal growth is achieved when the institution, whether a federal bureaucracy or a private enterprise, expands. So, expansion in government is natural. That said, government expansion should be done with care, not willfully. Our government was founded on the premise that its power would be limited, and that individual freedom would be paramount. Keep in mind, it was the over-reach of His Majesty’s government that sparked the American Revolution.
Over the past two hundred and fifty years, we have moved toward more government control, and that is probably to be expected as we have become a larger, more complex nation, with better communication and wider access to information. However, we are a nation founded on the principles that all men are created equal, there is a right to private ownership, we operate under the rule of law, one is innocent until proven guilty, and justice is meted equally. The risk is that we are moving away from those simple but eternal principles, toward more government control. And that is why Mr. Sullivan’s words are so frightening.
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