Despite heightened partisan squabbling, politicians from all parties have found a surprising area of agreement: industrial policy. While President Joe Biden attempts to bring back semiconductor manufacturing from Asia, Sen. Marco Rubio is allying with a bipartisan group of senators to subsidize 5G telecommunication chips and other U.S. industries. They’ve been joined by state and local politicians who’ve long complained about the decline of manufacturing and who are now trying to create new technology industries in their own backyards.
Yet government efforts to spark new industries are counterproductive. The emergence of industry in one place and not another is often due to happenstance or to long-standing historical ties not understood by contemporary politicians. To understand the peculiar problems of U.S. manufacturing, we need to recognize the entrepreneurial culture that made it thrive and help it revive.
