As I’ve noted before, there are essentially four ways to respond to the rise of China: (a) acquiesce to it, and accept spheres of influence; (b) fight a war of annihilation; (c) engage in the same kind of mercantilist behavior, focusing on subsidies, forced technology transfers, and discriminatory regulations; or (d) double down on what made you great in the first place–an open capitalist system based on international law.
Warren’s “economic patriotism” approach, with its emphasis on subsidies and worker-friendly codes of conduct for corporations, is clearly a version of (c). It sounds a little like Hamilton, or, if you prefer more recent history, an updated version of FDR’s NRA.
Subsidies are probably going to play some role in this process regardless of who wins the election. My concerns about Warren’s plan, from a historical perspective, are: (a) our country is not the economic pygmy that it was in Hamilton’s day; (b) nor is it in the throes of the Great Depression; (c) the NRA was a failure even before it was rejected by the Supreme Court; and (d) it sounds like an effort to create highly-regulated national champions in selected areas of tech, which is inconsistent with her plan to break up the current tech giants, and which would create its own economic and political problems. If you don’t believe me, just ask the South Koreans about the uneasy relationships between their giant corporations and the government.
In short, I don’t think we need “Made in America 2025.” The Obama/Biden approach, which is (d), is more consistent with our system, and will work better in the long run. More on the politics of this issue in future posts.