Production, Territories and Structural Change
Edited by Patrizio Bianchi, Clemente R. Durán and Sandrine Labory
Chapter 4: Industry and government in the long run: on the true story of the American model
Throughout the history of the United States (US), the dichotomy between free market and government intervention has been a constant. On one hand, the mainstream rhetoric has tended to emphasize the strengths of free markets in guiding the country’s destiny, and persistent arguments have highlighted that government interference in markets would only lead to failures. On the other hand, it is possible to retrace an American model marked by substantial continuity of government intervention to support, protect and expand the national industry in a strategic competitive perspective. In this regard, the last two administrations following the world-wide recession of 2008 – even though adopting different rhetorical styles and sometimes targeting different industries – have both supported the manufacturing sector by means of industrial policies aimed at limiting the severity of the economic decline and at fostering the structural adjustment of the domestic industry. This chapter highlights the conflict between rhetoric and reality within the US industry_government relationship. The authors aim to inform the current debate about public intervention by comparing present practices to the country’s historical policy precedents, beyond an ideological perspective. In other words, they trace and discuss the development of government intervention through the various stages of the country’s industrialization – from the first years of political independence up to the present days of the Trump administration – to provide a long-run interpretation of the American model of industry_government relationship.
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