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Quotation of the Day…

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… is from page 43 of the May 9th, 2020, draft of the important forthcoming monograph from Deirdre McCloskey and Alberto Mingardi, The Illiberal and Anti-Entrepreneurial State of Mariana Mazzucato:

[Mariana] Mazzucato believes that the State is good at detecting “high growth, high risk areas.” The idea is that their evaluation by a Ministry of Innovation would not be affected by politics. Dream on, we would reply. The alternative mechanism of voluntary deals responds to the boring interests rather of customers – that is, citizens, as suppliers as demanders. When political considerations are allowed to tip the scale, and protect ill-advised products and incompetent producers, the result is of course bad. Every moderately alert adult knows this. It is surprising that Mazzucato the economist does not.

DBx: As the penultimate sentence of this quotation correctly suggests, it is laughably unrealistic to pretend that politics plays no large role in industrial policy. The entire point of industrial policy is to replace market processes with the commands of politicians and their hirelings – that is, to power markets, not with the profits and losses that emerge in the process of economic competition but, instead, with prescriptions and proscriptions issued by politicians. To assume that politics plays no large role in industrial policy makes no more sense than to assume that steam plays no large role in steam engines.

And of course in place of the name “Mazzucato” in the above quotation can be substituted the name of whatever proponent of industrial policy you wish – Marco Rubio, Ian Fletcher, Oren Cass, Elizabeth Warren, Robert Reich. The list of the believers in politician-performed miracles is distressingly long and getting longer.