Industrial Policy: The Peril of Rule by Deal
The current American approach to industrial policy relies heavily on individualized negotiations instead of a unified strategy. This method risks evolving into a system of “rule by deal.”
Critique by Chris Hughes
Chris Hughes, Facebook co-founder and co-chair of the Economic Security Project, shared this critique during an interview on CNBC’s Squawk Box. He observed that this transactional government intervention spans sectors like semiconductors and rare earths. Hughes noted the approach is less about economic nationalism or state capitalism and more about bargaining through specific deals.
Concerns About Transparency and Strategy
Discussing his article in The American Prospect, Hughes engaged with CNBC hosts on the consequences of the Trump administration’s industrial and tariff policies, as well as potential government investment in AI data centers. He expressed worry over the lack of transparency and long-term strategic planning in these tailored arrangements.
“I see a group of dealmakers… going one by one, picking winners and losers.”
Hughes argued this piecemeal approach enables companies with direct White House access to gain significant public funds and private investments, often without sufficient regard for market forces, competition, or comprehensive industrial goals.
Summary
The reliance on ad-hoc deals in American industrial policy undermines transparency and strategic coherence, risking an uneven and opaque system of government intervention.
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