Why Industrial Policy Is (Almost) Always a Bad Idea (with Scott Sumner)

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🗓️ 9 December 2024

⏱️ 89 minutes

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Summary

Tariffs are in the air. Will they help or hurt Americans? Listen as economist Scott Sumner makes the case against tariffs and various other forms of government intervention that go by the name of industrial policy. Along the way he looks at some of the history of worrying about the economic and military dangers posed by foreign countries.

Transcript

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0:00.0	Welcome to Econ Talk, Conversations for the Curious, part of the Library of Economics and Liberty.
0:07.9	I'm your host, Russ Roberts, of Sholem College in Jerusalem and Stanford University's Hoover Institution.
0:13.8	Go to EconTalk.org, where you can subscribe, comment on this episode, and find links and other information related to today's conversation.
0:21.2	You'll also find our archives with every episode we've done going back to 2006.
0:26.7	Our email address is mail at econtalk.org.
0:30.0	We'd love to hear from you.
0:36.7	Today is November 12th, 2024.
0:39.0	My guest is economist Scott Sumner.
0:42.1	His substack is The Pursuit of Happiness.
0:45.3	This is Scott Sixth appearance on the program.
0:47.4	He was last year in April of 2015.
0:50.2	Talking about interest rates, our topic for today is his essay on government intervention versus free markets and industrial policy generally, the title, What Economists Don't Know, Why Industrial Policy Will Disappoint.
1:06.0	Scott, welcome back to Econ Talk.
1:08.7	Thanks for inviting me, Russ. It's good to be here.
1:11.5	What do you mean by industrial policy?
1:15.4	Well, that's an interesting question.
1:17.7	It's not precisely defined.
1:20.7	In some sense, almost any government policy could be viewed as an industrial policy,
1:25.3	but the term is usually used for policies that are
1:29.0	directed at changing, say, international trade flows or national security issues, environmental
1:37.8	issues like global warming, and maybe regional economic problems.
1:45.5	So policies that are directed at sort of reshaping the economy in a different way than a free market would produce to achieve some important national goal.
	...

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