Everybody Is an Industrial Planner Now

Sara sat in her office, staring out the window at the city skyline. Her phone buzzed with notifications from sources around the world, each one another reminder of how quickly things had changed. She picked up a pen and began to jot down notes on the latest developments.

Two years earlier, Sara was covering an international trade conference where delegates were still preaching the gospel of free markets and open borders. The idea that governments would choose which industries to support seemed as outdated as the notion of planned economies from the Cold War era. But now, those same delegates were discussing how to protect domestic supply chains and invest in strategic sectors.

Sara turned her attention back to her notes. She had spoken with economists who once dismissed industrial policy as a relic of failed socialist experiments. Now they were drafting plans for government intervention that would rival anything seen since the post-war era. The shift was happening everywhere, from Washington to New Delhi to Brussels. Politicians who spent their careers extolling the virtues of open markets now spoke comfortably about resilience and strategic autonomy.

She remembered a conversation with a senator who had been a staunch free-trader for decades. He told her that after the pandemic exposed the vulnerabilities in supply chains, he realized something needed to change. "We can't be so reliant on other countries for critical supplies," he said, his voice tinged with frustration. "It's not just about economics anymore; it's about national security."

Sara nodded as she wrote down his words. The vocabulary had shifted from efficiency to security. Once a goal was framed as national security, the usual objections to spending tended to fall quiet. But there were still lingering doubts. Governments weren't known for their foresight when it came to economic planning. They were subject to lobbying and regional horse-trading. And once they committed to supporting an industry, closing down failed projects became politically impossible.

Sara thought back to a visit to a semiconductor factory that had recently opened with government backing. The plant was impressive, but she couldn't help wondering how long it would last if the market turned against it. Picking winners assumed the picker could see the future more clearly than thousands of competing firms. Governments weren't known for their ability to predict economic trends.

She recalled a conversation with an economist who had studied past industrial-policy successes and failures. The economies that succeeded, he said, tied support to performance and exposed favored firms to export competition. They were willing to let recipients fail if the results didn’t come. But today’s planners faced a subtler trap. When many countries subsidized the same sectors at once, there was a risk of overbuilding capacity in hopes of being the survivor.

Sara scribbled down notes about the need for independent evaluation and sunset clauses. A strategy that couldn't be wound down wasn't a strategy but a habit. The best outcomes would likely come from countries that treated their own enthusiasm with suspicion.

She put her pen down, looking out at the city once more. Industrial policy was neither a panacea nor a folly. It was a powerful and expensive tool that rewarded patience, candor, and self-restraint, qualities that political cycles rarely supplied. Everybody was an industrial planner now. The test of the coming years would be which planners could also be disciplined ones.

Sara knew she had more work to do. She needed to keep reporting on these changes and their consequences. Industrial policy might have become fashionable again, but it still required careful consideration and a clear-eyed view of its potential pitfalls.