Editing Industrial policy (section)

== History ==
The traditional arguments for industrial policies go back as far as the 18th century. Prominent early arguments in favor of selective protection of industries were contained in the 1791 ''[[Report on the Subject of Manufactures]]''{{sfn|Hamilton|1827}} of US statesman [[Alexander Hamilton]],<ref>{{Cite journal |last=Sylla |first=Richard |date=2024 |title=Alexander Hamilton's Report on Manufactures and Industrial Policy |url=https://www.aeaweb.org/articles?id=10.1257/jep.38.4.111 |journal=Journal of Economic Perspectives |language=en |volume=38 |issue=4 |pages=111–130 |doi=10.1257/jep.38.4.111 |issn=0895-3309}}</ref> as well as the work of German economist [[Friedrich List]].{{sfn|List|1909}} List's views on [[free trade]] were in explicit contradiction to those of [[Adam Smith]],{{sfn|List|1909|loc=Book III, [https://oll.libertyfund.org/title/lloyd-the-national-system-of-political-economy#lf0168_label_157]}} who, in ''[[The Wealth of Nations]]'', said that "the most advantageous method in which a landed nation can raise up artificers, manufacturers, and merchants of its own is to grant the most perfect freedom of trade to the artificers, manufacturers, and merchants of all other nations."{{sfn|Smith|1776|loc=Book IV, Chapter 9 [https://www.gutenberg.org/files/3300/3300-h/3300-h.htm#chap34]}}

According to [[New York University|NYU]] historians Prince & Taylor, "The relationship between government and industry in the United States has never been a simple one, and the labels used in categorizing these relationships at different times are often misleading if not false. In the early nineteenth century, for example, it is quite clear that the laissez faire label is an inappropriate one."{{sfn|Prince|Taylor|1982|p=283}}{{POV statement|date=March 2019}} In the US, an industrial policy was explicitly presented for the first time by the [[Jimmy Carter]] administration in August 1980, but it was subsequently dismantled with the election of [[Ronald Reagan]] the following year.{{sfn|Graham|1994|p=[https://books.google.com/books?id=My9sL1iKQm8C&pg=PA27 27]}}

Historically, there is a growing consensus that most developed countries, including United Kingdom, United States, Germany, and France, have intervened actively in their domestic economy through industrial policies.{{sfn|Chang|2002}} These early examples are followed by interventionist [[Import substitution industrialization|ISI]] strategies pursued in Latin American countries such as Brazil, Mexico or Argentina.{{sfn|Gereffi|Wyman|1990}} More recently, the rapid growth of East Asian economies, or the [[newly industrialized countries]] ([[Newly industrialized country|NICs]]), has also been associated with active industrial policies that selectively promoted manufacturing and facilitated technology transfer and industrial upgrading.{{sfn|Wade|2003}} The success of these state-directed industrialization strategies are often attributed to [[developmental state]]s and strong bureaucracies such as the Japanese [[Ministry of International Trade and Industry|MITI]].{{sfn|Johnson|1982}} According to [[Princeton University|Princeton]]'s [[Atul Kohli]], the reason Japanese colonies such as [[Korea under Japanese rule|South Korea]] developed so rapidly and successfully was down to Japan exporting to its colonies the same centralised state development that it had used to develop itself.{{sfn|Kohli|2004}} Precisely speaking, South Korea's development can be explained by the fact that it followed the similar industrial policies that UK, US and Germany implemented, and South Korea adopted Export-Oriented Industrialization (EOI) policy from 1964 based on its own decision contrary to the Import Substitution Industrialization (ISI) policy touted by international aid organizations and experts at that time.<ref>Koh 2018, pp. 28–39.</ref> Many of these domestic policy choices, however, are now seen as detrimental to free trade and are hence limited by various international agreements such as [[WTO]] [[Agreement on Trade-Related Investment Measures|TRIMs]] or [[TRIPS]]. Instead, the recent focus for industrial policy has shifted towards the promotion of local [[business cluster]]s and the integration into global [[value chain]]s.{{sfn|Humphrey|Schmitz|2000}}

During the [[Reagan administration]], an economic development initiative called [[Project Socrates]] was initiated to address US decline in ability to compete in world markets.  Project Socrates, directed by Michael Sekora, resulted in a computer-based competitive strategy system that was made available to private industry and all other public and private institutions that impact economic growth, competitiveness and trade policy.  A key objective of Socrates was to utilize advanced technology to enable US private institutions and public agencies to cooperate in the development and execution of competitive strategies without violating existing laws or compromising the spirit of "[[free market]]".   President Reagan was satisfied that this objective was fulfilled in the Socrates system.  Through the advances of innovation age technology, Socrates would provide "voluntary" but "systematic" coordination of resources across multiple "economic system" institutions including industry clusters, financial service organizations, university research facilities and government economic planning agencies.  While the view of one US President and the Socrates team was that technology made it virtually possible for both to exist simultaneously, the industrial policy vs. free market debate continued as later under the [[George H. W. Bush administration]], Socrates was labeled as industrial policy and de-funded.<ref>{{cite news | first = Esther | last = Smith | title = DoD Unveils Competitive Tool: Project Socrates Offers Valuable Analysis | date = 5 May 1988 | work = Washington Technology}}</ref><ref>{{cite news |last= Markoff |first= John |date= 10 May 1990 |title= Technology Official Quits At Pentagon |url= https://www.nytimes.com/1990/05/10/business/technology-official-quits-at-pentagon.html |newspaper= [[The New York Times]] |access-date= 25 August 2012 }}</ref>

Following the [[Financial crisis of 2007–2008|Financial Crisis of 2007–08]], many countries around the world  – including the US, UK, Australia, Japan and most countries of the European Union – have adopted industry policies. However contemporary industry policy generally accepts globalization as a given, and focuses less on the decline of older industries, and more on the growth of emergent industries. It often involves the government working collaboratively with industry to respond to challenges and opportunities.<ref>{{cite web|last1=Wear|first1=Andrew|title=Industry policy emerges from globalization resurgent and more important than ever|url=http://www.themandarin.com.au/74425-industry-policy-emerges-from-globalisation-resurgent/|website=The Mandarin|access-date=26 January 2017|date=2017-01-24}}</ref> China is a prominent case where the central and subnational governments participate in nearly all economic sectors and processes. Even though market mechanisms have gained importance, state guidance through state-directed investment and indicative planning plays a substantial role in the economy. In order to catch-up and even overtake industrialized countries technologically, China's "state activities even extend to efforts to prevent the dominance of foreign investors and technologies in areas considered to be of key significance such as the strategic industries and the new technologies"<ref>{{cite book |last= Heilmann |first= Sebastian |year= 2017 |title= China's Political System |page= 240 |url= https://www.merics.org/en/merics-analysis/chinas-political-system/ |publisher= Rowman & Littlefield |access-date= 2017-04-26 |archive-url= https://web.archive.org/web/20170426042242/http://www.merics.org/en/merics-analysis/chinas-political-system |archive-date= 2017-04-26 |url-status= dead }}</ref> including robotics and new energy vehicles.