Industrial Policy: The Peril of Rule by Deal
The current American approach to industrial policy relies on individualized negotiations rather than a unified strategy, which risks creating a system of “rule by deal.”
Critique by Chris Hughes
Chris Hughes, Facebook co-founder and co-chair of the Economic Security Project, highlighted this issue in an interview on CNBC’s Squawk Box. He pointed out that this trend appears across multiple sectors, including semiconductors and rare earth materials. According to Hughes, the method is less about economic nationalism or state capitalism and more about transactional government intervention.
Concerns About Transparency and Strategy
Hughes discussed the Trump administration’s industrial and tariff policies, as well as the government's possible role in investing in AI data centers. His main concern is a lack of transparency and clear strategic planning in these tailored deals.
“I see a group of dealmakers… going one by one, picking winners and losers.”
This improvised approach enables certain companies with direct White House access to secure significant public and private investment, often ignoring market factors, competition, and broader policy objectives.
Summary
The American industrial policy’s fragmented deal-based method risks favoring select companies over coherent long-term economic goals.
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