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The Economist was founded in 1843 to champion the cause
of free trade. Open markets and limited government still lie at the
heart of our worldview. Our cover this week draws on those principles,
to warn of a looming threat to ideas that have helped bring about an
astonishing improvement in people’s lives.
An era of zero-sum thinking has begun.
Countries are racing to subsidise green industry, lure manufacturing
away from friend and foe and restrict the flow of goods and capital.
Mutual benefit is out and national gain is in.
For many in Washington, muscular industrial policy holds a
seductive appeal. America has unleashed vast subsidies, amounting to
$465bn, for green energy, electric cars and semiconductors. These are
bolstered with requirements that production should be local. Bureaucrats
tasked with scrutinising inward investments to prevent undue foreign
influence over the economy now themselves hold sway over sectors
accounting for 60% of the stockmarket’s value.
Fans argue that this will help seal America’s technological
ascendancy over China, which has long pursued self-sufficiency in vital
areas using state intervention. As carbon pricing is politically
unfeasible, it could also foster decarbonisation. And it reflects a hope
that government intervention will succeed where private enterprise
failed, by reindustrialising America’s heartlands and even reviving
support for market capitalism.
Such thinking is misguided. If zero-sum policies are seen as a
success, abandoning them will become only harder. In reality, even if
they do remake American industry, their overall effect is more likely to
cause harm by corroding global security, holding back growth and
raising the cost of the green transition. Even when it is inspired by
the best of motives, zero-sum thinking threatens to make everyone poorer
and the world more dangerous. | 
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