Making Sense of Industrial Policy as Geopolitics

It’s a confusing time to be alive. I get it.

Most of us grew up in an era of seeming certainty—the unipolar moment generated all manner of taken-for-granted assumptions. Some were durable (US cultural capital). Some were fleeting (US primacy). And some were totally wrong (racism is “over,” supply-side economics, globalization is a path to equality).

I suspect that a lot of people who subscribe to this newsletter recognize that the old gods are inadequate to the task of making sense of our current historical conjuncture. I’m one of a few people filling a “don’t bullshit me” gap when it comes to how our governments are wielding power.

And right about now it’s really hard not to get bullshitted. Everything is industrial policy, and everything is done in the name of national security. So how to parse it all? Well, answering that is of course an ongoing theme in this newsletter.

But in the past week or so, there’s been a treasure trove of scholars and public intellectuals cutting through the noise to give us ways to think about the Inflation Reduction Act, the CHIPS & Science Act, neologisms like “friend-shoring,” and all the restrictions, export controls, and subsidies being put on the table as part of the not-so-new geopolitical economy. That trove includes research from me (!), as well as insights from Adam Tooze, JW Mason, the Kate Mackenzie-Tim Sahay team, and a good but problematic essay in New Left Review.

The general upshot, if I can state it with stylized simplicity: The United States is making some progressive, green-ish, growth-oriented moves in economic policy…but these moves have shades of a new imperialism, and are pushing the global North to imitate. America’s strategy of primacy—which puts China squarely in the crosshairs—is propelling all of it. Most of the world, but especially the global South, is increasingly being forced to eat shit to make all this happen (I can think of only two exceptions to that general truth).

Below are a few handy charts, as well as some good takes that broadly converge on this same understanding: