[The Economist] Warnings from history for a new era of industrial policy

Summary

1. Recent interventions are mostly "in an economy wheere it is nascent or absent"

2. As firms discover something and they fear for information leakage, (when the product is in the nascent stage) governments support those firms to mature.

3. Those kind of subsidies from governments "influenced the global distribution of production." "Interventions often raise costs and thus hurt consumers" "interventions sharply cut the export competitiveness of downstream industries."

4. Soft intervention of the state (govt.) is expected to be important to solve the "co-ordination failure"; governments' intervention often disrupted "cross-border supply chains," leaving everyone worse off.

5. "Indeed, the most pressing concern may be less that America’s gambit will fail, than that it will succeed in boosting domestic industry—and leave a fractured world worse off for it." → there is a concern about negative impact of the state on the industries of friendly countries.

 

Vocab (definition from Dictionary.com)

fraught	- full of, accompanied by, or involving something specified, usually something unpleasant (often followed by with):a task fraught with danger;her pain-fraught body;emotionally fraught lyrics;a gathering fraught with joyful sounds. - characterized by or causing tension or stress:He has always been overweight, so his relationship with food is fraught.
	"But worries about supply-chain security in a fraught world are prompting experimentation"
nascent	beginning to exist or develop
	"The idea is that, if the state corrects a market failure, a particular industry might thrive on its own in an economy where it is nascent or absent"
in order	In proper sequence or arrangement
	"Yet an abundance of caution is in order"
reshore	(of a company or organization) to return offshored jobs or business activities to the home territory:
	"This does not mean the “harder” parts of America’s policy mix will doom its reshoring enterprise."
gambit	- Chess. an opening in which a player seeks to obtain some advantage by sacrificing a pawn or piece. - any maneuver by which one seeks to gain an advantage.
	"Indeed, the most pressing concern may be less that America’s gambit will fail, than that it will succeed in boosting domestic industry—and leave a fractured world worse off for it."

Reference

- The Economist, Warnings from history for a new era of industrial policy

- Dictionary.com