From Hope and Change to Industrial Policy?!

Dani Rodrik reports on Barack Obama's plans for engery policy and he argues that it is sounds like sensible industrial policy.  Despite protests from a variety of sources that Hayek's critique of "planning" doesn't apply to the modern left, I would argue that Hayek's ideas are as relevant today as ever.  And I should add that Don Lavoie's National Economic Planning: What is Left? is particularly useful for the current context.

The real problem with our political choices is not that we don't understand the policy goals of the left, it is that the alternatives on the right don't understand why those policy goals cannot be served by the policies of the left.  This just reaffirms the role of the economist in society.  Compromising with politicians of either party is NOT the path to improved understanding of what works and what doesn't work in public policy.  Only an uncompromising commitment to the logic of economic argument and to clarity in presentation will provide that.  The economists voice must be heard loud and clear, but it also must be an economists voice, not a politicians voice who happens to be an economist by training.

Comments

[Rafe]

Twice a much money for basic research!! If only it was that easy to stimulate creative thinking. Oh well, it will stimulate some creative grant applications.