Must-read: Justin Fox: “The U.S. Could Use a New Economic Strategy”
Must-Read: Some very nice thoughts about our Concrete Economics from the extremely-sharp Justin Fox:
: The U.S. Could Use a New Economic Strategy: “In his four-plus years as the country’s first treasury secretary…
…Alexander Hamilton crafted an economic strategy that helped the U.S. rise from agrarian former colony to global economic power… [write] Stephen S. Cohen and J. Bradford DeLong write in their brand-new book, Concrete Economics: The Hamilton Approach to Economic Growth and Policy…. No U.S. leader since has articulated and then put in place an all-encompassing economic plan in quite the way Hamilton did. But the country has always followed some sort of economic strategy, even if it has seldom been clearly defined…. It is at least possible that this last era has come to an end…. It’s not at all clear, though, what’s going to replace it.
DeLong… and Cohen… simply recommend that discussion of economic policy focus on the concrete–what works…. Still, it’s not easy to figure out what the U.S. should do next. Nations playing catch-up… have concrete examples…. But the U.S. of 2016 is the biggest economy on the planet…. In the latest World Economic Forum global competitiveness rankings, for example, it trailed only Switzerland and Singapore. There is surely much we can learn… but… the U.S. remains largely sui generis. I’m almost certain that more infrastructure investment would be a smart part of any new U.S. economic strategy. But I’m not so sure what should be built and where, or what else…. Got any suggestions?…
I would say that our book has two big lessons to teach. The first is that, in America, economic policy has been successful when it has been pragmatic. Hamilton is our first example. But “Hamiltonianism” is not the right economic policy configuration for the ages. The United States did not stay with Hamilton’s policy configuration. The post-Civil War Gilded Age’s focus on homesteading, truly massive infrastructure subsidies, and mass immigration had little to do with Hamilton’s debt, finance, bank, tariff, and manufacturing focus. The Progressive Era had different concerns and policies. As did the other Roosevelt’s New Deal. As did Eisenhower. And our recent age–which Justin Fox calls “financialization”, but which we might as well call “neoliberalism” (it’s what everyone else calls it)—has been broadly unsuccessful not because it has deviated from Hamiltonianism but because it has been ideological.