Should Government ‘Pick Winners’? It’s Worked Before

On both sides of the political aisle, U.S. leaders are becoming more interested in industrial policy -- government efforts to promote the growth of certain sectors of the economy. The idea has figured prominently in Senator Elizabeth Warren’s policy proposals, blueprints for a Green New Deal and conferences on the future of conservatism. Even the International Monetary Fund, long a bastion of economic orthodoxy, recently put out a paper entitled “The Return of the Policy That Shall Not Be Named: Principles of Industrial Policy.”

This is good. But because the idea was relegated for decades to the margins of economic thinking, debates about industrial policy can still degenerate into declarations that government “can’t pick winners,” or vague references to the success of East Asian economies. To help foster a more productive conversation, here are some books and papers to get people thinking about industrial policy.