Economics/Class Relations

The Strange Career of Paul Krugman

By Michael Lind, Tablet

How a trash-talking neoliberal economist harmed America by vilifying strategic trade and industrial policy.

Strategic trade and national industrial policy are back. Growing U.S. military and economic competition with China, along with the COVID-19 pandemic, have revealed the dependence of the United States on manufacturing supply chains in China and other foreign sources. The neoliberal consensus in favor of indiscriminate trade liberalization and against government support for strategic industries is evaporating: The Biden administration, in a more nuanced way, has continued many of Donald Trump’s nationalist economic policies, including some tariffs and programs to promote reshoring. In an era of extreme polarization, there is a high degree of bipartisan support for measures like the CHIPS for America Act, which seeks to reduce U.S. reliance for semiconductors on a few Asian sources like the Taiwan Semiconductor Manufacturing Company (TSMC) and South Korea’s Samsung Electronics.

The last time these issues were at the center of public debate was during the 1980s and early 1990s. At that time, both the industrial revival of Japan and West Germany after the devastation of World War II and the increasing offshoring of production to low-wage countries by U.S. corporations were challenging America’s manufacturing sector and its workers.

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