What Japan Teaches Us About Industrial Policy

Toyota cars on the assembly line at the company’s Tsutsumi plant in Toyota, Japan, in 2017. (Toru Hanai/Reuters)
Right-wing advocates of increased government intervention in the economy might find that their platform creates its own set of economic problems.

NRPLUS MEMBER ARTICLE I ndustrial policy is back in vogue. On November 5, Senator Marco Rubio (R., Fla.) gave a speech at the Catholic University of America decrying the decline of American manufacturing. Rubio argued that shareholder primacy — whereby a corporation’s primary goal is to maximize value for its owners — caused the decline, and that American capitalism should instead focus on the “common good.” By this he meant that the federal government should promote high-paying, stable employment by investing in manufacturing.

Over the weekend, Sridhar Kota and Tom Mahoney sounded a similar tune in the Wall Street Journal. Kota and Mahoney, researchers at MForesight,

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