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AntiCapitalist MeetUp: Clean Energy Industrial Policy vs. broken promises of such industrial policy [1]

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Date: 2023-03-26

while the defense sector has long applied industrial policy, interventions have been limited in the civilian economy . Mainstream economists have long opposed industrial policy approaches.

​One novel feature of many successful 2022 campaigns (from both parties, to some extent) was the prominent celebration of a relatively new approach to lawmaking: the promise of industrial policy for containing inflation and delivering a green economic transition.

The primary neoliberal issue will be the diverting of capital to issue that do not contribute to Net Zero initiatives as well as hiding behind Greenwashing disinformation. Leaning into industrial policy will be essential and are contradicted by the reinvigoration of military Keynesianism from the Ukraine war.

The point will be to reconcile the military necessities in the short run against the total devastation of the planet. Ultimately it will be capital against demography as migration will as it always has, pressure social reproduction. Capital proliferation still matters when it’s military Keynesianism and will become obfuscated as defense needs fit into disinformation tropes like defending borders from environmental refugees.

America has yet to achieve a national industrial policy approaching that of a mobilized war economy. Darn that globalism.

Most broadly, the big spending bills of the last Congress—the American Rescue Plan Act (ARP), Infrastructure Investment and Jobs Act (IIJA), CHIPS and Science Act, and Inflation Reduction Act (IRA)— embody a national pivot. The U.S. has recommitted to a broad public investment agenda after decades of vacillation between “laissez-faire” economics at some times and redistributive efforts at others. The new goal: Raise the productive capacity of the U.S. economy and at the same time promote greater inclusion, a higher standard of living, and reduced carbon emissions. And yet, there is more to the new line of action. Specifically, key elements of the new approach are strongly place-based. www.brookings.edu/...

In short, weapons producers want governments to underwrite the profitability of their investments. This is precisely the alliance between industry and the state that formed the basis of the military Keynesianism that Michal Kalecki criticized during the 1950s. He showed how, at the height of the Cold War, Western governments subsidized private capital with arms contracts paid for by taxpayers. This arrangement lay at the heart of what has come to be described, somewhat misleadingly, as a ‘golden age’ by heterodox economists, who lament its replacement by “neoliberalism.” The real danger is not neo-liberalism but the takeover of the state by industrial interests which cannot be denied because of the external and internal threats to democracy. The advent of military Keynesianism is a warning against complacency about the moral superiority of the West in defending Ukrainian democracy. The resurgence of what President Eisenhower once called the military-industrial complex brings our industrial magnates closer to centers of power. In this respect, our oligarchs are no better than Russian oligarchs, even if we defend existing democracy because it offers more scope for progressive politics than autocratic nationalism. Military Keynesianism challenges democrats about the limits of the democracy that is being fought over in Ukraine. Is the future of that democracy assured by a state which underwrites industrial profits? Or does that future also require the extension of civil rights and welfare to all classes? If the struggle for democracy is just to save Ukraine for democracy, or to extend democracy in the Russian or Chinese spheres of influence, then that struggle will take the West down the path to the oligarchic capitalism of Russia. www.ineteconomics.org/...

The government is always practicing industrial policy, whether it acknowledges it or not. This series will explore how the government can directly shape markets to better serve Americans. There are many different flavors of industrial policy, and this series will focus on one in particular: government participating in and directly shaping markets, whereby managers employed by the state replace, compete with, or sharply limit the discretion of private managers. This can be contrasted with the hands-off industrial support of 2020’s CARES Act or Paycheck Protection Program, which were broadly available to all industries and contained minimal social conditions. It can also be contrasted with subsidies and other financial support from the state to strategically chosen private industries with more ambitious conditions, such as producing in America, producing sustainably, or producing with unionized labor. That is the approach contemplated in the Biden administration’s 100-day supply chain recommendations. Such tactics can complement those we consider in this series, but a few points are worth making. First, the oversight capacity of the state must be high to ensure that private firms comply with every requirement in a subsidies-with-conditions strategy. This task becomes more complicated the more prescriptive the conditions are, and indeed, other laws might be needed to enforce transparency. (Buy-American policies are a case in point here. While at first glance these laws impose a requirement for the government to procure goods that were made in America, a number of exceptions and other laws make it virtually impossible for procurement officials to know the true national origin of many products and components.) Second, at some point, firms may decide they would rather forego government support than change their labor or other practices. This leads to a final point: A subsidies-with-conditions approach may be more effective if there is a credible government threat to more directly shape or participate in the markets. Indeed, in many of the examples we will study in this series, milder interventions were made possible by the possibility of deploying stronger ones. This moment of anxiety around supply chains presents an opportunity to reflect on the old and new tools that can address today’s challenges—and those around the corner. rooseveltinstitute.org/... The sheer breadth of industrial policy messages in campaigns across the country suggests that both policymakers and voters are eager for a future that moves past neoliberalism. Rather than leaving it up to markets and economic elites to decide what gets made where and by whom, the public appears to be embracing a more active and engaged government role in ensuring America has good jobs in the industries the country needs to survive and thrive. Crucially, as the data in this blog post show, there are both material and discursive openings for both parties to lean into industrial policy. rooseveltinstitute.org/...

x NEW from me and @SunnysMalhotra at @rooseveltinst:



Clean Energy Industrial Policy: A Go-To Issue with Nascent Bipartisan Appeal in the Midterm Elections. https://t.co/U4wvZ4tgSm — Todd N. Tucker (@toddntucker) November 30, 2022

There were numerous wins for industrial policy in the most recent session of Congress, including the Inflation Reduction Act (IRA), the CHIPS and Science Act, the Infrastructure Investment and Jobs Act (IIJA), and the American Rescue Plan Act (ARPA). Last week, we examined the economic geography of clean energy supply chains. This week, we examine data from Department of Energy reports and 2022 election messages and outcomes, to shed light on the political geography and resonance of industrial policy. A Bipartisan Map of Clean Energy Opportunities As we previously noted, at least 208 facilities across 44 states and 141 congressional districts stand to gain from clean energy supply chain build out. This finding comes from a database of clean energy supply chain opportunities that we constructed through a thorough qualitative analysis of Department of Energy reports released earlier in 2022. It turns out that the majority of these economic development opportunities are in Republican districts. According to our calculations, the majority (60 percent) of the job opportunities for the clean energy transition are in districts that—as of 2022—were held by Republicans. For some sectors, the number is even higher: for example, 75 percent in production for the electric grid build out. This is notable, since 84 percent of congressional Republicans opposed the CHIPS Act, 89 percent opposed the IIJA, and 100 percent opposed the ARPA and IRA—all bills that represent iconic new developments of the industrial policy moment. rooseveltinstitute.org/... ​

x We find that, despite the GOP opposing industrial policy initiatives like the CHIPS Act, IIJA, ARPA, and IRA by (respectively) 84%, 89%, 100%, and 100% margins, the majority of current clean energy supply chain opportunities are in GOP-held districts. pic.twitter.com/IYSYn3wZt5 — Todd N. Tucker (@toddntucker) November 30, 2022

When it comes to transitioning away from fossil fuels, we need to cut with both arms of the scissors—demand and supply,”

x If the world's going to get a handle on the climate crisis, industrial nations must stop the spread of oil, gas, & coal projects. Now, an int'l campaign by climate organizations & activists to codify that goal into international law: https://t.co/ilIhx93FBa — Sierra Club (@SierraClub) December 9, 2022

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[1] Url: https://www.dailykos.com/stories/2023/3/26/2140417/-AntiCapitalist-MeetUp-Clean-Energy-Industrial-Policy-vs-broken-promises-of-such-industrial-policy

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