"Econ 102" with Noah Smith and Erik Torenberg A Debate with Scott Sumner: Industrial Policy, China, and National Security
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Jan 15, 2025 
In this engaging conversation, Scott Sumner, a renowned economist and former director at the Mercatus Center, dives into the shifting dynamics of U.S.-China relations and its impact on industrial policy. He critiques the retreat from neoliberalism towards more authoritarian approaches, especially in manufacturing green technology. The discussion also highlights China's role in global climate efforts, debates the effectiveness of tariffs, and underscores the essential link between manufacturing capabilities and national security amid rising geopolitical tensions.
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Industrial Policy Skepticism
- Scott Sumner is skeptical of industrial policy, citing potential counterproductivity, like trade barriers on Chinese green tech.
- He argues that tariffs don't work for reindustrialization, and effective policies should address savings-investment imbalances.
China's Green Tech Success
- Noah Smith notes China's success in green tech is partly due to industrial policies, which made them cheaper.
- He argues this inadvertently helped decarbonization globally, despite US tariffs partially blocking the benefits.
China's Manufacturing Advantage
- Scott Sumner questions the extent to which Chinese industrial policy drove its manufacturing success, citing other East Asian growth stories.
- He suggests China's comparative advantage in manufacturing plays a significant role, particularly in sectors like EVs.