Old ideas about industries and about how industrial policy is made will have to be unlearnt
The Washington Consensus forced changes in government policies around the world. International trade had to be free. ‘Industrial policy’ to nurture domestic industries was taboo. It was a tide that lifted many boats with growth and reduction of poverty in many countries. Now the tide is running out. Protectionism is rearing its head, even in Washington. Both US presidential candidates are harrumphing about saving American jobs. Brexit has hit the European Union where it hurts. The trade deal between Europe and the US is in jeopardy. And it is once again kosher to talk about ‘industrial policy’ to nurture sectors that will create more employment—even in the UK and the US, where Margaret Thatcher and Ronald Reagan had fuelled ideologies that propelled the Washington Consensus.