We are driving into the 21st century under the influence of Galbraith’s neo-Marxist economic views

It is hardly news that national industrial policy is making a big comeback around the world, almost 60 years after John Kenneth Galbraith wrote The New Industrial State, a 1967 bestseller that proposed replacing market economics with state industrial planning. His theories failed to take hold in the 20th century but we are now driving into the 21st century under the influence of Galbraith’s neo-Marxist economic views.

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Recent reports include a column in the Financial Times which complained this week that while America under President Joe Biden has rolled out a plethora of tariffs, subsidies and regulations, the plan falls shamefully short of meeting the full official industrial policy status. For that to happen, America needs to move away from “the mythology of efficient and always self-correcting markets, to an age in which the public sector will have to do more nudging, or ‘marketcrafting’, as some would put it, to ensure economically and politically stable outcomes.”

Throughout the European Union, politicians and activists are constantly insisting on more state actions to bring in the green new deal and industrial development. EU government leaders are agitating for a more “proactive innovative industrial strategy” to fight off competition from China, France’s economic minister said last year.

In North America, industrial policy theory crashed in the 1980s as one economic camp after another shot it down as unworkable.........

© Financial Post