The View | How US, China can recover and thrive by being more like each other
- Despite the abundance of heated rhetoric, the competition between the US and China is not between two political and economic systems
- The challenges each faces in economic development are similar, as are the levers each has at their disposal to improve the lives of their citizens
In fact, the US has had a long and successful tradition of industrial policies. Initiated by Alexander Hamilton, the first US treasury secretary, industrial policies in various guises have played an important role in America’s rise and expansion. After World War II, US government support continued in various space, defence and biotechnology-related initiatives, continuing even after Ronald Reagan’s neoliberal presidency.
State investments can be captured by special interests. In the Innovation and Competition Act, which is still subject to revisions in Congress, much of the funding originally slated for emerging technologies has been diverted away to parochial projects by pork barrel politics.
A poorly implemented industrial policy could make the US economy less efficient and less resilient. Still, Biden can do much good, in the spirit of Franklin D. Roosevelt, by turning away from neoliberalism and towards a more active state.