Zakaria: The case for making it in the USA
Illustration by Oliver Munday for TIME.
January 26th, 2012
12:40 PM ET

Zakaria: The case for making it in the USA

Here's an excerpt from my latest column in TIME Magazine:

In theory, I am deeply skeptical of government industrial policy. Government doesn’t know how to pick winners and losers, it will make mistakes, and the process will get politicized. All this is true. And yet when I look at China and South Korea and also Germany and Japan, I see governments playing a crucial role. They do make mistakes - their versions of Solyndra - but they seem to view them the way venture capitalists would. Their role is to seed many companies, only a few of which will succeed. Once these companies are identified, government helps them compete against big U.S. multi nationals.

There used to be a joke about Marxist economists who would say of a deviation from pure communist economics: “It might work in practice, comrade, but it doesn’t work in theory.” That’s what industrial policy looks like these days. The theory doesn’t make sense, but it’s hard to argue with the result.

Read more here.

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Topics: From Fareed • Jobs • United States

soundoff (16 Responses)
  1. mgunn

    I'm glad Fareed limited the statement to industrial policy, and the collarary that we don't believe in it and don't do it too much. The opposite is true for financial policy. In theory we preach against it but in practice we do and in the most lying and incestuous way. And yes here our government fails us too.

    January 26, 2012 at 1:02 pm | Reply
  2. j. von hettlingen

    Pure theories are often perfect and too good to be true. We human beings are prone to make mistakes.
    That's why it's so exciting to put a theory into practice, as the trial and error process stimulates us to be innovative and inventive.

    January 26, 2012 at 6:20 pm | Reply
  3. Roy Dane

    If the current Republicans had been running the governments in the 1860's the Transcontinental Railroad would never have been built. If they had been running the country in the 1950's: we wouldn't have the Interstate Highway system today. It's hard to say if the internet would exist if the current Republicans had been running things in the 60's and 70's.

    January 27, 2012 at 12:18 am | Reply
  4. Rz

    Nice plug for "TIME" mister! That Fareed, what a salesman! First it's "pay for a copy of his shows" and now "become a subscriber" if you want read the rest of an article. " What kinda place are ya running here?"

    Ok, No problem. But I'm just curious as the impetus for all this? Drop in sales or profit margins? Simple greed? Hook, line and sinker capitalism? Policies, copyrights, or royalties ? Go figure....

    It seems it always comes down to the fact that if you really want something, you're just gonna have to pay for it. But if you don't have money, you'll just have to make do on your own. And that my friend, is incentive for innovation and entrepreneurialship (unless of course you're of dishonest or questionable character) which you can take to manufacturing and bank on it (just be careful about the bank of course).

    So, on one hand, I certainly don't mind listening to someone elses opinion, but if I really wanted it, "'l'd give to ya".

    Rz

    January 27, 2012 at 10:13 am | Reply
    • JahLove63

      Well said!

      January 27, 2012 at 10:35 pm | Reply
  5. Bob Hazy

    First, a rebuke to commenters: answer the question.

    As for the answer, we should have a proactive industrial policy, but it's difficult to conceive of in this political environment. This problem afflicts our ability to strategically plan in general. It would seem we need to create a group to do that, devoid of political appointees (ostensibly like most of the intelligence services), whose mission is to develop and then inject that guidance from outside our partisan process in a manner somehow compulsory. In this instance, the Chinese benefit from a general lack of partisan bickering which allows them to focus on goals and plans to achieve them. Our incessant switching of agendas (with the un-doing of policy in the process) requires such a counter-point these days to help us stay on track in spite of dysfunctional political machinery.

    January 27, 2012 at 1:08 pm | Reply
    • rou

      good info...... tks

      January 28, 2012 at 12:48 am | Reply
  6. marc gunn

    Fareed! Please be balanced. Financing is cheaper her in the US than anywhere else! Not only did the government inject several TRILLION dollars into our economy which pales all other subsidies in the history of the world combined by far!, but also by dollar dominance forces foreigners to park their earnings in... you got it, the US! This is a GIGANTIC subsidy which lowers interest rates and enables our entrepreneurs to finance better than any other country. The ONLY reason we fail is due to our own problems, not because some other country out-financed and out-subsidized us, which they didn't.

    January 27, 2012 at 1:45 pm | Reply
  7. rou

    gud idea keep the money flowing

    January 28, 2012 at 12:50 am | Reply
    • Michel

      Some nice reeasrch you're offering us here, Jaap. Thanks! I hope it inspires a lot of people to help in any way they can – and to add their views on this topic in the comments...

      February 11, 2012 at 9:08 pm | Reply
  8. cacuddeback

    Ideally you'd have clarity of vision that would allow for strong central manufacturing (as well as energy, etc.) policy by government that leveraged the assets of a capitalistic society. A realistic grand challenge approach (not men on the moon) that marshalls the natural greed of the private sector with the altruism of public good. This doesn't mean, necessarily more than essential "pump priming" by government. Unfortunately, in our current special interest and poll driven society where we focus on the message and not the substance, I see us limping along in ping pong fashion forcing a pendulum reversal every crisis and election cycle rather than a reasoned vector that true leadership demands.

    January 29, 2012 at 11:23 am | Reply
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