An examination of ‘industrial policy’ in the US, UK and a number of other Western countries is confused by the prism through which it is viewed. After WW2 the US dominated every industry sector and now it dominates none. A better approach would be to understand why this happened. Trying to get anything sensible from economists with respect to this is a waste of time as they are unable to answer what is s straightforward question – how does a national economy generate economic wealth? You will hear the sound of crickets as they have no idea. This is confirmed via the recommendation that government and business should operate removed from each other. As the author points out much of the foundation of modern industry has its genus in R&D funded by and undertaken by government entities such as DARPA, MIT, etc.



After WW2 the practised what is called ‘Technology-Based Planning’ which is the acquisition and manipulation of technology to create ‘competitive advantage’. The Japanese and Germans used variants of this to rapidly rebuild their economies. During this period there was a symbiosis between industry and government. However the focus shifted to what is called ‘Finance-Based Planning’ where everything was increasingly view through the prism of funding and debt – get the lowest cost input from anywhere instead of creating value within your national economy. Throw enough money at a problem and you will get a good outcome so went the thinking. This never happens as it’s a myth. Conventional economic and business thinking (the financial myopia of the MBA) is ingrained with this thinking and contributes to US continued decline in US national competitiveness.



The only way for the US to generate economic wealth is to become more ‘competitive’ via a readoption of Technology-Based Planning which is to ‘out-compete’ national rivals via the superior acquisition, manipulation and management of technology. This is the ONLY way to create industrial mass, create jobs and balance trade. Without this other initiatives are futile. China practices a form technology planning – ‘Centralised Technology-Based Planning’ and is waging a ‘soft’ technology war on all other nations. Japan, South Korea and Germany are also using variants of Technology-Based Planning to maintain the competitiveness of their economies. Ironically, the US does have the tools and capability (Project Socrates) to revert to Technology-Based Planning in a manner that would be superior to China’s centralised planning approach. If Trump adopted this I would say the US would have a chance but if not China will become an unchallengeable economic giant.

