The Intelligence from The Economist Industrial waste: the world’s misguided manufacturing policies
Aug 3, 2023
Christian Odendael, European economics editor at The Economist, dives into the global industrial arms race as countries invest heavily in domestic manufacturing. He explores the potential economic pitfalls of aggressive subsidies, arguing for a reevaluation of policies that often lead to inefficiencies. The discussion also touches on Japan's stringent immigration policies, highlighting the struggles faced by asylum seekers. Additionally, the cultural revival of Los Alamos, driven by the Oppenheimer film, opens conversations about historical legacies and marginalized communities.
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Industrial Arms Race
- Governments worldwide are engaged in an industrial arms race, heavily subsidizing domestic manufacturing.
- This raises concerns about potential economic dangers if left unchecked.
Motivations Behind the Arms Race
- The industrial arms race is driven by political motivations, including climate change, reducing reliance on autocracies, and job creation.
- Emerging economies aim to secure their place in supply chains as Western companies diversify production.
Subsidy Examples
- America's green subsidies could cost over a trillion dollars over ten years.
- Germany increased subsidies for a single plant to €10 billion, while India is spending a quarter of its higher education budget on one chip factory.