From semiconductors to electric vehicles, governments are identifying the strategic industries of the future and intervening to support them – abandoning decades of neoliberal orthodoxy in the process. Are industrial policies the key to tackling twenty-first-century economic challenges or a recipe for market distortions and lower efficiency?
AMSTERDAM – Amid the horrifying news from Japan, the establishment of new standards of political leadership there is easy to miss – in part because the Japanese media follow old habits of automatically criticizing how officials are dealing with the calamity, and many foreign reporters who lack perspective simply copy that critical tone. But, compared to the aftermath of the catastrophic Kobe earthquake of 1995, when the authorities appeared to wash their hands of the victims’ miseries, the difference could hardly be greater.
This time, Prime Minister Naoto Kan’s DPJ (Democratic Party of Japan) government is making an all-out effort, with unprecedented intensive involvement of his cabinet and newly formed specialized task forces. The prime minister himself is regularly televised with relevant officials wearing the work fatigues common among Japanese engineers.
In 1995, Kobe citizens extricated from the rubble were looked after if they belonged to corporations or religious groups. Those who did not were expected to fend mostly for themselves. This reflected a ‘feudal’ like corporatist approach, in which the direct relationship between the citizen and the state played no role. This widely condemned governmental neglect of the Kobe earthquake victims was among the major sources of public indignation that helped popularize the reform movement from which Kan emerged.
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