More ambitiously, Timothy Meyer and Ganesh Sitaraman of Vanderbilt Law School have proposed a large-scale reorganization of federal agencies, bringing domestic development, trade and export promotion under one Department of Economic Growth and Security, which would focus on both domestic economic policy and international competition. Ms. Warren has embraced a version of this idea. Similarly, Senator Gary Peters, Democrat of Michigan, has called for the creation of a National Institute of Manufacturing, taking inspiration from the National Institutes of Health. As America falls behind in key technologies, we may also have to use defense procurement, along with other carrots and sticks, to mobilize companies to compete in strategic sectors, such as 5G. America has a long and successful history of employing this sort of robust industrial policy.

In addition to improving competitiveness and productivity growth, industrial policy may be the only way to meaningfully increase economic opportunities for struggling regions and populations. More generally, during the last several decades, the benefits of productivity gains have mostly accrued to the largest capital holders. A successful industrial policy would aim to strengthen worker bargaining power while organizing and training a better skilled labor force. Industrial policy also involves, and even depends upon, rebuilding infrastructure.

Most debates concerning industrial policy have so far occurred within, rather than between, political parties. But as the issue gains prominence within both parties, differences over the priorities and content of industrial policy can be expected to fall along partisan lines. The right will be likely to prioritize technological competition and securing the defense industrial base. The left is likely to emphasize wages, environmental sustainability and using industrial policy to alter the “primary distribution” of wealth — rather than relying solely on secondary redistribution through taxes and transfers while leaving basic neoliberal structures intact — as can be seen in the Green New Deal. Just as Republicans and Democrats in the Bush-Clinton era had intense debates over issues like marginal tax rates, all the while advancing an underlying neoliberal agenda, so will future debates play out in an era of renewed industrial policy. Uniting both sides will be a desire to revitalize domestic industry and to use the state to ensure that the economy serves a broader set of stakeholders and public interests rather than only large shareholders.

Perhaps more important than any partisan debates will be the position of the corporate sector. There is no industrial policy without industry, after all, and this is especially true given the oligarchic character of American politics. For several decades, business leaders have been indoctrinated to believe that success is simply a matter of maximizing short-term profits for shareholders. Corporate America and its lobbyists have prioritized labor arbitrage over innovation and productivity, share buybacks over investment.

But as the disappointing economic performance of the last several years demonstrates, especially the failure of the staggering 2017 tax cuts to stimulate growth and investment, that model is exhausted. Business leaders are slowly beginning to recognize that they have more to gain from greater state support of domestic industry, as well as from a stronger and more stable labor force with greater spending power.

As a recent report from Mr. Rubio’s office makes clear, “the U.S. cannot escape or avoid decisions about industrial policy.” Refusal to consciously pursue a serious industrial policy simply means accepting a counterproductive one — and an economy shaped by the industrial policies of others. After decades of economic mismanagement, prominent figures in both parties are finally awakening to this reality, and a new consensus on the need for a strong industrial policy is beginning to emerge.