Pundits have lauded the Biden administration for replacing the free-market consensus with supply-side liberalism. But it is geopolitical tensions with China and labor’s weakness that have made elites feel comfortable with a milquetoast industrial policy.
ANDREJ MARKOVČIČ & NICK FRENCH
Even prior to his inauguration, there was talk that Joe Biden’s administration would mark a break with the neoliberal orthodoxy that has dominated both parties since the Ronald Reagan era. During the height of the pandemic, the president claimed that the “blinders have been taken off,” and his administration would have to address challenges that “may not dwarf but eclipse what FDR faced.”
The unexpectedly generous, albeit frustratingly temporary, COVID-19 relief package that Biden signed into law in March 2021 and, later, his passage of the Bipartisan Infrastructure Bill (BIB), the CHIPS Act, and the Inflation Reduction Act (IRA) seemed to confirm these initial estimates of his ambitions. The president has been, if not the second coming of Franklin D. Roosevelt, at least a Democrat in a different mold from that of either Bill Clinton or Barack Obama.
Perhaps the most distinctive feature of “Bidenism” is its embrace of what pundits have called “supply-side liberalism” or “supply-side progressivism”: giving the state a prominent role in directing investment in the form of tax incentives, direct subsidies, and tariffs to encourage domestic production of goods deemed strategically necessary. The IRA, for instance, offers subsidies for building renewable energy and green manufacturing; the CHIPS Act uses tariffs and subsidies to encourage domestic manufacturing of computer chips.
In April, Jake Sullivan, Biden’s national security advisor, outlined this new approach in remarks he delivered to the Brookings Institute think tank. The current administration, Sullivan claimed, was rejecting faith in “tax cutting and deregulation, privatization over public action, and trade liberalization as an end in itself” and instead “restor[ing] an economic mentality that champions building.”
What should socialists make of this turn away from neoliberal orthodoxy and the emergence of industrial policy? Biden’s ambitions do mark a step in the direction of rebuilding infrastructure and encouraging economic activity through government intervention. But this move away from the economic orthodoxy of the past forty years has not occurred as a result of the strength of the Left or any other progressive bloc. Despite the recent uptick in worker militancy, it is the weakness of organized labor and working-class political organizations that characterize the current moment.
Read full article at: https://jacobin.com/2023/07/joe-biden-supply-side-liberalism-industrial-policy/