In the past few weeks, the Trump administration has “deleted” USAID, torn through the Department of Education and Treasury, and shut down the active work of the Consumer Financial Protection Bureau (“Musk’s assault on the US federal bureaucracy”, FT View, February 11). The administration has also gone after federal employees, purging probationary and term employees across all departments. Already weak from decades of underinvestment, what Donald Trump, Elon Musk and his band of vandals have accomplished is a grievous assault on state capacity, the ability for government to serve the American people, business and our allies abroad.
This catastrophic attack calls for a drastic reimagining of how to revive government when wiser heads once more prevail. The answer lies in the lessons of industrial policymaking. The last few years have sparked a renaissance in the theory and practice of industrial policy. Through the American Rescue Plan, the bipartisan infrastructure law, the US Chips Act, and most importantly, the Inflation Reduction Act, academics and policymakers have acquired valuable lessons on how to build up industry sectors and secure their resilience.
If we can do this for semiconductor chips and renewable energy, why not government itself? To devise an industrial policy for state capacity will require research. We would need to identify the “meta-government” that funds and coordinates the rest of government. Fortunately, as Musk and team pull out the wires at the Office of Management and Budget and the General Services Administration, which manages procurement for the US government, they will have inadvertently done this for us.
We would need to make government work attractive to skilled experts, and to decentralise it to make it more resilient. Nevertheless, industrial policy gives us a lens through which to reorganise how we see government, not as mere regulator, but as an agile market maker staffed with the best and brightest, dedicated to building state capacity to get things done.
Sarang Shah
PhD candidate in Political Science,
University of California, Berkeley;
Coordinator, UC Berkeley’s Industrial
Policy Working Group
San Francisco, CA, US
