The Return of Industrial Policy and the No-longer Hidden Developmental State in the United States

• In Event: The Geopolitics of Technology and Innovation

Abstract

After four decades of market fundamentalism, the global resurgence of industrial policy has marked a significant shift in economic governance. In the United States, this process began under the Biden administration with the enactment of four landmark legislations – the American Rescue Plan, the CHIPS and Science Act, the Infrastructure Investment and Jobs Act, and the Inflation Reduction Act – which have put industrial policy squarely back at the center of national economic strategy. To what extent did this wave of activism mark a new departure? Skeptics have suggested that recent industrial policies, especially in the case of the US – often referred to as Bidenomics – did not signal a dramatic shift from previous regimes. One group of studies argues that Bidenomics marked a continuation of pro-business policies that merely “derisked” private investment, while a second camp contends that U.S. industrial policy never disappeared but persisted in “hidden” forms. In this paper, I propose an alternative perspective. I argue that Bidenomics announced a fundamental reconfiguration of the state’s relationship with private industry, setting the stage for the emergence of a twenty-first-century American developmental state. Three features distinguish contemporary industrial policy from earlier paradigms: (1) directionality, targeting strategic sectors such as green energy and semiconductor manufacturing as well as specific regions and communities; (2) conditionality, linking corporate support to social, environmental, and geopolitical goals enforced by the state’s capacity to discipline private actors; and (3) politicization, as these initiatives generate visible contestation at both domestic and international levels. Drawing on policy analysis, expert interviews, and media sources, I trace how this emerging industrial strategy is reshaping the architecture of state–market relations in the post-neoliberal era.

Author

• Erez Maggor, Ben-Gurion University