PART I: THE UNDERLYING ECONOMICS

 

Chapter One, Why the Free Market Can’t Do Everything, explains why free markets on their own cannot deliver prosperity, and why purely free-market thinking cannot design industrial policies that can.

 

The next chapter, The Dynamics of Advantageous Industries, spells out the authors' concept of “advantageous” industries and the economics that derives from it.

​

The Industrial Policy Tool Kit describes the tools governments worldwide have used to implement industrial policy based on this alternative view of economics.

 

Trade, Currencies, and Industrial Policy explains how international trade, including comparative advantage and foreign exchange rates, fits into the book's economic theory and policy proposals.

 

PART II: COUNTRY CASE STUDIES

​

These studies:

​

• Exemplify the principles, practices, successes, and pitfalls of industrial policy more completely than the US on its own.

• Rebut critics who argue that industrial policy has never truly succeeded or, where its success is undeniable, that it is due to a culture or political structure so different from ours that Americans should not even bother to try

• Document how industrial policy has driven rapid, high-quality economic development using the same basic principles in many countries with widely differing cultures and governments

• Illustrate the many ways industrial policy must address a nation’s stage of economic development, its political structure, the sophistication of its industries, and the trade and exchange-rate policies of other countries

• Show that industrial policy failures are not due to unknowable causes, but to readily comprehensible and thus avoidable errors 

​

Each country chapter conveys the above ideas in a different way: 

 

Japan describes an outstanding case of successful, proactive industrial policy, the first that attracted American attention. This chapter introduces the all-important Asian economic model and how industrial policy plays out over time at national scale.

 

Korea discusses that country’s industrial policy, derived from Japan’s, showing how industrial policy has been transmitted around the world as a practitioners’ tradition, rather than a theoretical doctrine. This chapter is more historical, concrete, and industry-specific than Japan’s.

 

China explores how that country’s extremely proactive, systematic, and aggressive industrial policy – drawn from those of Japan and Korea – ups the ante to a full-blown economic challenge to the US. Geopolitics and national security enter the narrative here.

 

Germany extends the book's model beyond East Asia and introduces the idea of indirect multilevel industrial policies, in sharp contrast to the explicit, centralized East Asian approach.

 

France comes next because that country’s record of both success and failure, despite having all the ingredients for success, is very revealing.

 

Britain is the book's first example of a systematically unsuccessful industrial policy, chosen because Britain's familiarity to Americans makes its travails easier to grasp.

 

India is another failure case and a Third World example to show that the book's theory applies to radically different societies and levels of development. 

 

Argentina is discussed because its decades of catastrophic industrial policy failures give a sharp, readily understood picture of what not to do.

 

PART III: THE FORGOTTEN HISTORY

​​

The Renaissance Origins of Industrial Policy explains how the centuries-long, multi-continental record of industrial policy success bolsters its credibility today.

 

America 1750–1865 shows how, contrary to prevailing myth, the US was founded as protectionist nation and used industrial policy to develop economically.

 

America 1866–1939 describes the forgotten hand of industrial policy in well-known events from the Civil War to the Great Depression.

 

America 1940–1973 explains how the US abandoned its successful heritage of protectionism and, due to the Cold War, undertook massive governmental support for technology development.

 

America 1974–2007 describes how the US largely misdiagnosed its growing economic problems and, instead of returning to sound trade and industrial policies, chose increasingly extreme free-market strategies.

 

America 2008–Present tells how Obama tried, but failed, to fix these problems by doubling down on free-market policies, and how Trump challenged this consensus, breaking new ground that Biden built on.

 

PART IV: INNOVATION AS A SYSTEM

​

First, these chapters show that the US already has quite a lot of effective industrial policy, even if not recognized as such, supporting the book's argument that the US can design and execute coherent industrial policy.

 

Second, they highlight deficiencies of America’s current innovation system that need fixing.

 

The detail in these chapters makes clear the scope, diversity, and mechanisms of existing programs. These chapters show how innovation is not a one-size-fits-all process but requires institutions tailored to the needs of specific industries and contexts.

​​

Governmentally Supported Innovations provides striking counterexamples against the widely held belief that almost all innovation comes from the private sector.

​

Federal Science and Technology Programs describes the most established, least controversial, most widely understood federal programs supporting innovation.

​

Federal Proactive Innovation Programs turns to lesser known, more controversial institutions that exemplify what the authors would like to see happen, as opposed to what already exists.

 

Industrial Policy for Advanced Manufacturing looks at advanced manufacturing to elucidate the key battlefield where innovation rivalry will play out in American manufacturing.

 

Micro-governance of Industrial Policy examines the organization and management of day-to-day operations of industrial policy agencies for innovation and its commercialization.

 

The Crisis of the American Patent System describes the decline of our patent system that will be a major negative for US industrial policy unless reversed.

​

PART V: INDUSTRY CASE STUDIES

​

Automobiles introduces the reader to what failed US industrial policy looks like on a multi-decade, industry-specific level.

 

Semiconductors, Aviation, and Space covers military industrial policies in the three industries in which the post–World War II US has had the most success at industrial policy.

 

Robotics describes the superior scale and sophistication of foreign industrial policy in an industry that is already important and will only become more so.

 

Nanotechnology shows how much technological “wide open space” there is for new industries and industrial policy.

​

PART VI: CLUSTER CASE STUDIES

​​

The Massachusetts Life Sciences Cluster features a state-level industrial policy success story and a good illustration of how to tailor policies to the characteristics and needs of the industry being supported.

 

The Upstate New York Semiconductor Cluster shows how state-level policies require many different players and, ultimately, support from Washington.

​

RECOMMENDATIONS

​

Here are dozens of specific policy implications, covering everything from the tax code to geopolitics. Some are large and some are small. Some are within easy political reach, while others will be very controversial. All help illustrate the book's economic ideas.

​