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Today we’re publishing a debate about industrial policy between Noah and Mike Bird, the Asia business and finance editor at The Economist.
Today we’re publishing a debate about industrial policy between Noah and Mike Bird, the Asia business and finance editor at The Economist. Noah highlights the importance of steering the economy to ensure that industries align with national goals and priorities. Bird questions the effectiveness of industrial policy, especially in developed countries. He argues that market forces and competition should determine the allocation of resources, rather than government intervention. Where do you stand?
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TIMESTAMPS:
(00:00) Episode Preview
(01:23) How this debate came about
(02:25) Why doesn’t The Economist have bylines?
(04:55) Chris Odendahl of The Economist’s article saying the focus on manufacturing policy is a delusion
(09:15) Is Korea the paragon of industrial policy?
(11:20) Overlooking military spending and the chip industry
(15:19) Industrial policy crucial for national security
(17:42) Sponsor: NetSuite
(18:45) Gish Gallop: https://en.wikipedia.org/wiki/Gish_gallop
(19:14) Complexity of policy implementation
(20:30) The exercise metaphor: multiple benefits
(29:34) Subsidies may not ensure resilience
(40:33) Balancing goals in geopolitics
(43:40) Carbon pricing
(51:45) Manufacturing jobs
(53:35) Leveraging local multipliers (agglomeration effects)
(1:00:56) Industrial policy can have multiple benefits
(1:03:02) Local multipliers benefit economic activity
(1:09:24) Need for rigorous economic analysis
(1:19:27) Determined optimism drives progress
(1:20:05) Friend-shoring is often highly preferable to reshoring
TWITTER:
@birdyword (Mike)
@noahpinion (Noah)
@eriktorenberg (Erik)
LINKS:
Money Talks Podcast: https://podcasts.apple.com/gb/podcast/money-talks-from-the-economist/id420929545
Mike Bird’s piece on Alt-Asia: https://www.economist.com/graphic-detail/2023/03/03/these-countries-could-lure-manufacturing-away-from-china
Chris Odendahl on the industrial policy delusion: https://www.economist.com/finance-and-economics/2023/07/13/the-world-is-in-the-grip-of-a-manufacturing-delusion
Noah's Substack: https://www.noahpinion.blog/
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