Government, Not Markets Can Best Pick Winners

China’s economic rise and the damage inflicted on U.S. industry has been a wakeup call to many U.S. policymakers. But most conventional economists continue to hold firm to their ideological notion that only the market can respond, and that any more proactive government action, particularly focused on key sectors or technologies, is doomed to fail.

Writing in American Compass, Rob Atkinson explains why this is not a choice between China’s command-and-control playbook and the market.

As the essays in “Rebooting the American System” show, the U.S. government has a long and proud tradition of “picking winners.” And multiple agencies today, including DOD’s DARPA, DOE’s ARPA-E and NIH, successfully identify and support technological innovations critical to our nation’s future. It’s time to recognize that and extend that support beyond national missions of defense, energy and health and make commercial competitive success against China a core national mission. If we don’t we can ensure that the market will adapt, leading to even more waste paper and soybean exports to China.