Coming from Cambridge University Press September
2024
America is losing the international competition
for good jobs and high-value industries because Washington believes trade should
be free, government should stay out of currency markets, and only basic science
deserves funding. But this laissez-faire approach has failed and industrial
policy is the only way for us to remain prosperous and secure. Trump and
Biden have enacted some, but we now need a coherent, all of government version
including tariffs, a competitive exchange rate, and federal support for the
commercialization, not just invention, of new technologies. Timely,
meticulously researched, and bipartisan, this book replaces misunderstandings
about industrial policy with lucid explanations of its underlying economic
theory, the tools that implement it, and its successes (and failures) in
America and abroad. It examines key industries of the present and future –
steel, automobiles, television, semiconductors, space, aviation, robotics, and
nanotechnology. It concludes with a policy roadmap designed for our politics and government.
A strong, vibrant manufacturing
sector is critical to the future prosperity of the United States and its
workers. The authors provide enormous background, case studies, and analysis
about how to implement strong trade and industrial policies to restore America’s
leadership in innovation and manufacturing – and the good jobs that come with
it. Even the most controversial policy recommendations are worthy of review and
consideration, no matter your position on trade policies. This should be
required reading for any policymaker working to increase America’s productive
capacity and strengthen our supply chains.
Earl Blumenauer (D-OR)—Ranking Member,
Subcommittee on Trade, House Ways and Means Committee
Industrial Policy for the United States is truly impressive. While
readers may disagree with some of its recommendations, almost all will find its
documentation of the practice over the last three centuries a source of
valuable historical perspective. And its assessments of past successes and failures
– overseas and in the US – will be helpful to policymakers in a world where
industrial policy is likely to become de rigueur.
Willy Shih—Robert & Jane Cizik Baker Foundation Professor
of Management Practice, Harvard Business School
Industrial
Policy for the United States is an indispensable guide for CEOs – multinationals to small and
medium-sized manufacturers – for understanding and taking full advantage of
America’s return to industrial policy. Equally valuable, it is also a guide to
what US business should ask of our government to help them succeed against
Chinese and other foreign competition. The book convincingly rebuts the “leave
everything to the market” argument against industrial policy and quantifies the
horrific damage done to our businesses, workers, and national security during
our decades-long pursuit of the free trade mirage. It explains, in theory and
through country and industry case studies, why government support of US
innovation and manufacturing, the strategic use of tariffs to ensure that
things are made as well as invented here, and ending the overvaluation of the
dollar are all necessary for sustained success. Its comprehensive,
well-thought-out, and coherent set of policy recommendations should be required
reading for every policymaker in Washington.
Dan DiMicco—Former Chairman and CEO, Nucor
In this remarkable and comprehensive book, Fasteau and Fletcher provide
a theoretical, historical and up-to-date review of industrial policies, in the
US and elsewhere, as well as a decent summary of the main Biden initiatives:
the Bipartisan Infrastructure Act, the Inflation Reduction Act and the CHIPS
Act, as of late 2023. Their goal is to justify, defend, and to extend the case
for industrial policies, which they do with admirably fair attention to
unsuccessful past cases.
James K. Galbraith—University
of Texas at Austin
There has been a global trend of
policymakers drifting away from laissez faire and free trade, because of
various reasons. And that story has not been explained rigorously enough by
most books and research papers that exist today. This in-depth treatise on
industrial policy fills in this huge gap in a scintillating manner with
references and explanations from across the world. The book provides the
readers with the intellectual ammunition needed to contrast and compare various
policy pathways and their potential impact on industries.
Badri Narayanan—Former Head
of Trade and Commerce, NITI Aayog, Lead Trade Advisor to PM Narendra Modi
State ownership and control of
industry have failed, as has leaving everything to the market. Instead,
governments need judicious and evidence-based industrial policies. This book
makes a brilliant case for the same, combining strategic guidance by the state
with the innovative potential of competitive enterprise. Everyone who cares
about our economic future should read this.
Geoffrey M Hodgson—Emeritus
Professor of Economics,
Loughborough University, Editor in Chief,
Journal of Institutional
Economics
Andrew Hastie—Member of
Parliament and Shadow Minister
for Defence,
Commonwealth of Australia
William Bonvillian—Lecturer, Massachusetts Institute
of Technology, Former Senior Policy Advisor, US Senate
As questions about technological competitiveness and the
accelerating loss of good jobs press themselves ever more intensely to the
front of public debate, industrial policy looms as a nearly inescapable
imperative for US policy makers. This extremely timely book is the most
thorough historical and comparative examination of industrial policy practice
and variants across the advanced political economies. No informed discussion of
our industrial options in the US moving forward should proceed without familiarity
with the arguments in this book.
Gary Herrigel—Paul Klapper Professor, College and
Division of Social Science, Department of Political Science, University of
Chicago
Without a doubt this is the most definitive analysis of industrial
policy ever written. For anyone interested in industrial policy and its
implications for the economy, this is the perfect source and a real triumph!
Barry Bluestone—Professor
Emeritus of Public Policy and Urban
Affairs, Russell B. and Andree B. Stearns Trustee Professor of
Political Economy, Northeastern University
Research, discussion, and policy initiatives advocating industrial
policy for the US are spreading in the wake of the failure of neoliberal
doctrines to deliver inclusive growth and technological leadership. Fasteau and
Fletcher’s seminal contribution advances this agenda and paves the way for a
proactive commonsensical set of industrial policies.
John Komlos—Professor
Emeritus of Economics
and Economic History, University of Munich
A well-written, well-reasoned, and remarkably
thorough case for a much more vigorous and targeted industrial policy. It
correctly argues that markets alone will not optimize output from the most
valuable industries because of significant market failures. Its detailed,
well-articulated proposal for a specific “industrial policy for the United
States” should give free-market acolytes pause and progressives ammunition in
the battle for an industrial revival.
Jeffrey Fuhrer—Non-Resident Fellow, Brookings Institution,
Foundation Fellow, Eastern
Bank Foundation
Oren Cass— Executive Director,
American Compass, author of The Once and Future Worker: A Vision for the
Renewal of Work in America
The authors demolish the illusion that our post–WWII economic
dominance was the result of the private sector on its own developing and
commercializing technologies from the underlying science. They address the need
for a multipronged growth policy targeting a portfolio of high technologies
with a market focus. They rightly advocate investment in R&D, capital
formation, labor upskilling, and technological infrastructure, and address the
quasi-public-good nature of much of this investment, necessitating a combined
government–industry approach. Although recent legislation offers hope for such
reforms, the jury is still out, making this book very timely.
Gregory
Tassey—Economic Policy Research Center,
University of Washington
The fight to control tomorrow’s strategic industries will not be
determined by market forces but by industrial policy. This superb and timely
book explains why and how America must act if it is to be a major player in the
world’s industrial future.
Stewart Paterson—Author, China, Trade and
Power:
Why the West’s Economic Engagement Has Failed
This book turns an opinion not
widely held not so long ago into a statement of the obvious through the logic
inherent in the wealth of facts it deploys. Its powerful argument for America
to adopt a coherent industrial policy is driven home by cataloguing the
deleterious impact unbridled globalized free trade has had on the US economy
and chronicling the successes (and failures) in this field of America’s
competitors. Fasteau and Fletcher have managed to cram more common sense into
one book than any author since Tom Paine.
Nicholas Comfort—Author, Surrender: How British
Industry Gave Up the Ghost,
1952-2012
A major cause of declining wages of non-elite workers over the past
decades has been the deindustrialization of America. In this remarkable volume
Fasteau and Fletcher present a powerful case for coherent industrial policy
that can reverse this disturbing trend. They discuss in detail both successful
and unsuccessful past experiences of governments implementing industrial policy
worldwide, and how industrial policy should be implemented in practice. Anybody
who worries about where America is heading needs to read this book.
Peter Turchin—Author, End Times: Elites,
Counter-elites,
and the Path of Political Disintegration
So much economic analysis and controversy misses the real heart of
our current crisis – America’s industries, especially manufacturing, and why
they keep losing ground to foreign competitors. This book finally gives a
complete picture of what went wrong and what we can do about it. I especially
appreciated the discussion of how the development and deployment of innovations
depend on not only the private sector, but also on crucial, underappreciated
programs like the Manufacturing Extension Partnership and Manufacturing USA. If
American industry is to convincingly recover its formerly world-leading
position, this country will need to support every step of the innovation
pipeline, not just pure science and defense-oriented technologies, across the
entire industrial spectrum.
Carroll Thomas—Former Director,
Manufacturing Extension
Partnership
This book illuminates the path through the
complexities and escalating costs of industry and advanced manufacturing, where
current US policy is insufficient. Presenting a detailed plan and advocating
for a whole-of-government industrial policy, it offers essential guidance for
students and policymakers to navigate and shape the future of American industry.
David Bourne—Principal Scientist, Robotics,
Carnegie Mellon
Associate Director,
Manufacturing Futures Institute
Ira Moskowitz—CEO, Advanced Robotics for
Manufacturing Institute, former Vice-President, General Manager of
US Operations, Analog Devices