What Europe Could Learn From Joe Biden's "Productivism" Policy
Subsidies to green industries and the promotion of "quality" jobs: Joe Biden’s economic policy is driven by an American form of "productivism," which French business daily Les Echos says has allowed the country to regain the upper hand in both economics and politics.
PARIS — Joe Biden has three challenges: putting America on the right track for climate, not letting China impose its supremacy and rebuilding a middle class attracted to populism. To solve these three at once, he has implemented a statist, industrialist and protectionist policy representing a new post-liberal paradigm.
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Statist because the market isn’t "perfect", despite what fundamentalist liberals have been saying since the Ronald Reagan years. The financial crisis had already cast a doubt on this. In putting safety above free trade, the pandemic finished the job of undermining the idea.
The fight to preserve the climate has been allocated a $400 billion credit with a very "American" approach, meaning simple, intelligible and technological: there is no question of "European-style" standards or constraints, ecology will only sell if it is "cheaper". Hence the subsidies for green purchases and a revival of innovation research.
Leader of global warming industries
The Inflation Reduction Act (IRA) is in fact an industrialization plan. The "industrial policy" is being rehabilitated. Washington subsidizes green investments and attracts foreign groups without any embarrassment. Too bad for the Europeans who complain: protectionism is claimed in the name of the "good jobs" the middle class needs. America wants to be the leader not directly of the fight against global warming but of the global warming industries.
Logically, the comeback of the State has as a knock-on effect of tax increases on companies and large fortunes. At the same time, "social issues" were the subject of a series of laws on social security, healthcare and the role of trade unions.
President Joe Biden views the electric Hummer assembly line at the General Motors Detroit, Michigan, U.S.A, in 2021.
The limits of redistribution
However, the change is fundamental: the new paradigm shifts the point of reference, as MIT professor Daron Acemoglu explains. The social policy is shifting from downstream, redistributing aid to households in difficulty, to upstream, in the quality of employment and the associated wages. All the studies confirm that redistribution is no longer able to restore inequalities and that it is necessary to act differently from the "tax and spend" of the traditional left.
Rural America is experiencing an impressive revival under Biden.
A large amount of attention is given to pragmatism, particularly at the local level. Many American counties are succeeding in this reindustrialization thanks to subsidies, but mostly thanks to the commitment of political and economic actors together. Because housing in well-developed areas (the coasts) has become too expensive, and also because Covid has given people a desire for air and space, rural America is experiencing an impressive revival under Biden. Innovation has spread to the entire territory, which is obviously essential in the rust belt states that had started to vote Trump.
The surprising thing with Bidenism is that no one expected an 80-year-old man to be so intellectually innovative on political-economic doctrine. At the center of the Democratic Party, he was able to balance the Clinton centrist left (Bill Clinton’s Third Way), which believes in the market, and the new Warrenist left (Elizabeth Warren), which believes in the state.
He invented "productivism", according to the economist Deni Rodrik, a sort of "and-and" made of faith in science, pragmatism and a global political and geo-strategic vision.
The core of the doctrine is to create "good jobs". We are witnessing a worldwide struggle over quality jobs: China wants to "move upmarket", America is getting to it… only Europe, still stuck to liberalism, hasn’t yet picked up the idea.
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