During the 1980s the Marxist left in American politics attempted to impose a version of socialist central planning under the rubric of “industrial policy.” It was led by such non-economists as the Don Quixote-like Robert Reich. The debate, such as it was, was ended in Washington when the “libertarian” Cato Institute, the conservative Heritage Foundation, and the “liberal” Brookings Institution held a joint press conference to denounce the whole idea as crackpot.
But Stalinist central planners never give up. Once a totalitarian, always a totalitarian. So, there have been a few renewed calls for some kind of “industrial policy” once again, whereby the state will pretend to be capable of playing entrepreneur/venture capitalist.
When discussing this issue in my classes over the years, I ask the students who they think the politicians would have subsidized had there been an “industrial policy” in the mid/late seventies at the outset of the “high tech revolution.” I give them the following choices:
1. The company located in the congressional district of the chairman of the House Ways and Means Committee.
2. IBM.
3. Some young twentysomethings with no business experiences tinkering with computers over at Bill Gates’ and Steve Jobs’ parents’ houses.
No student has ever chosen #3.
12:28 pm on January 9, 2014
