I’m not on Twitter and never will be. And every time I go on Twitter, I realize that my decision not to be on Twitter was a smart one.
because of Yesterday I came across a research review – by my intrepid Mercatus Center colleague Véronique de Rugy – on the recent American Compass study. In an effort to demonstrate an example of successful industrial policy, two people (not Vero) emailed me. This link. A Twitter thread was started by the study’s author, Gabriela Rodríguez Vero, in response to her (Ms. Rodríguez’s) argument and conclusions.
A few things speak to me on this topic. One is a reminder of how weak the arguments put forward by advocates of protective tariffs and industrial subsidies are. It should be embarrassing for people like Ms. Rodriguez to miss the crux of the argument presented by Vero. She still misses and by several thousand miles. As Vero said in response, on Twitter (see below) to Ms. Rodriguez, she did not rule out the possibility that any strong opponent of industrial policy could create a successful company or an entire industry if the government moved to that company or industry. Adequate allowances and other special privileges.
The arguments against industrial policy – which Mrs Rodriguez seems to be unaware of – are (1) that there is value in using industrial policy to create a successful company or industry and (2) that the resource allocation effected by industrial policy is not driven by market signals, whereas in industrial policy the information that drives resource allocation is the same as employment. There is good reason to believe that innovators and investors believe that market-driven information is unreliable, (3). The cost to the people of the country of creating and sustaining a successful enterprise or industry in industrial policy is higher than the value of that enterprise or industry to the people.
In order for Ms. Rodriguez’s argument to be valid, she would first, acknowledge the true allegation of industrial policy, and second, then at least try to present an argument or evidence that would prove the benefit to the public. The cost of the country’s industrial policy to the people of the country is greater. But she does no such thing. Instead, what we got from Ms. Rodriguez on Twitter was proof of her cluelessness.
A reason liberals love @veroderugy Go so far as to respond to clear examples of successful industrial policy *know* the examples are fatal to their thinking.
It’s b/c they got to the bottom of it and said, “Okay, but the policy seems to have worked.”
As Vero posted tweets in response to Ms. Rodriguez:
This is an absurd response. No one can deny that you can build a company with hundreds of billions in subsidies and special treatment, especially in a market with few competitors and where politics plays a big role. The question is, does it work, but at what cost to taxpayers, consumers, growth, innovation, workers and other industry investors? Show me this was good for the French economy as a whole or the European economy. It’s not just Airbus shareholders, suppliers and employees. and the effects of trade wars on subsidies and corruption issues, while addressing common features of both industrial policies.
And Scott Lincicom in response to Ms. Rodriguez:
Coming soon: “My Arctic greenhouse policy is a huge success. Look at all these oranges.”
(Incidentally, Vero’s initial response — like the Twitter response — to Ms. Rodriguez was not so much “libertarian” or ideological as it was that it pointed to the concrete realities of straight economics.)
That’s the second thing that struck me when I read this tweet. This tweetOne Towgc aimed at Vero:
To be clear, you are at Mercatus, funded by the Koch Bros family, one of the most subsidized industries in American history. LOL and you wonder why no one takes you seriously.
seriously? If only you have ad hominem, then you have nothing. (This particular obscenity of ad hominem The Mercatus Center rightly points out that most of its funding comes from Kochs. Trusted people ad hominem (They tend to be argumentative, not upset by logic, and not upset by facts.)
