When the idea first surfaced in the late 1970s that the United States should adopt a national industrial policy, mainstream “free market” conservatives decried it as one step away from handing the reins of the economy over to a state planning committee like the Soviet Gosplan. But as Rob Atkinson writes in an article for Daily Caller's "American Renewal," the idea has been getting a fresh look among some conservatives who argue that, absent an industrial strategy, America will be at a competitive disadvantage against economic and national security challenges posed by China.
This debate boils down to a fundamental choice for conservatives: small government and liberty versus stronger, but still constrained, government that delivers economic security, national security, and freedom. We chose the latter in the Cold War and had elements of the kind of industrial policy we need today. However, the fall of the Soviet Union created a unique interregnum, at least in recent American history: a United States without an external threat. The receding of economic and military adversaries let liberty rise to be the top economic concern. But now American economic freedom and national security doesn’t look so unassailable, and while our principal adversary today may not be as imperialist as the Soviets, China is potentially an even greater threat given its size and much more successful technology economy. China’s determination to dominate the global marketplace changes everything, especially how industrial policy is viewed. Increasingly leaders across the political spectrum are returning to a notion that we should put the national interest at the center of economic policies, and that free-market globalization doesn’t necessarily do that, especially when it enables China to challenge the United States for global leadership in an array of advanced industries, many critical for national security.
New times require new thinking, and that is what an increasing number of Republican members of Congress are providing. Rather than attempt to squelch these ideas and proposals with ideologically constrained thinking, scholars, pundits, and advocates should embrace them and engage in pragmatic policy discussions to make today’s industrial proposals even better.