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Karl W. Smith and Noah Smith

Does Focusing on Manufacturing Make Sense for the U.S.?

An industrial renaissance is the centerpiece of presidential candidate Elizabeth Warren’s economic plan.

This probably isn’t the future.

This probably isn’t the future.

Photographer: Mark H. Milstein/Bloomberg

As part of her campaign for the Democratic presidential nomination, Senator Elizabeth Warren has proposed a broad effort to revive and expand American manufacturing. Bloomberg Opinion columnists Karl Smith and Noah Smith met recently online to debate her proposal.

Karl Smith: Noah, from what I can tell you’re a fan of Warren’s Economic Patriotism platform and you’ve written yourself in favor of industrial policy. My concerns are essentially two-fold. First, I think that given the U.S.’s strength in what we might call knowledge industries such as tech, biotech, fracking and finance, it's going to be difficult for U.S. manufacturing to thrive as a major employer.

Second, although industrial policy has a fantastic track record bringing countries to the technological frontier, it is precisely on the frontier where industrial policy is dangerous. Is it really possible or desirable for the U.S. government to predict the next winners in clean energy, or choose the right structure for U.S. retail or global social media?