I have never been a fan of culture as an explanatory variable for most social phenomena. (Clearly, I am not a sociologist.) While I find the study of culture fascinating, too many times I have seen culture used as a variable in theories that seem to defy logic. The clearest example to me of this is the “clash of civilizations” thesis of Samuel Huntington. While as a historical theory it may yield some interesting anecdotes, did it help to predict 9/11? Or the War on Terror? I think not. When we add complexity to this theory, we can see it fall apart. Is Europe a Christian civilization? I guess – just tell me which Christianity (ignoring the non-Christian cultures that predate it, or ignoring the influence of Islamic Empires in large swaths of Europe).

And so with that context, we turn to industrial policy. Is the depth/breadth of industrial policy determined by cultural factors? Are East Asians more likely to engage in robust and highly-interventionist industrial policy behaviour because of their Confucian heritage? Or some other legacy of Asian culture? Do similar reasons explain the Anglosphere countries have generally weak industrial policy traditions?

I think in the Anglosphere, you can see the cultural argument meet much trouble. While outwardly, US rhetoric is blatantly anti-industrial policy, it is arguable that it has the most robust industrial policy amongst English-speaking countries. Even before the current administration, the history of Silicon Valley shows how much US government spending drove its development. Certainly the neoliberal revolution that swept through America and reached its peak in the Clinton-Bush years saw the deep embrace of free trade and “limited government.” But even then, the massive industrial policy that is US military research and procurement (through DARPA and ARPA-E etc.) was occurring alongside inventions like In-Q-Tel. 

What about in Europe? If the the UK had a centrally run global Victorian empire, why has its industrial policies been so volatile, and arguably weak? In the pre-Thatcher period, experiments like the Concorde and ARM were attempted. But with Thatcher onward, it seems to this author that the UK is one of the most unbalanced major economies on the continent, with an overly large financial services system glossing over the erosion of industry. One country, one (complex) culture – how could there be such a drastic change?

And that’s what I mean about culture. Did the election of Thatcher change British culture so much that the interventionist streak of 1945-1979 vanish into thin air? Did Mrs. Thatcher change the culture over night? Or is it safer to say that a mixture of events, many of which were external (e.g., OPEC Crisis #2, stagflation originating with LBJ’s Vietnam War + Great Society, etc.) led to a decision to abandon a more active industrial policy?

Rather than culture as an explanation of industrial policy variations, I think it is the ability of societies/bureaucracies/institutions to learn that has led to variations in industrial policy. For most countries post WW2, they had learned from the Great Depression that unbridled capitalism did not work. However, particularly for a handful of countries (e.g., South Korea/East Asian Tigers, Nordic Countries), they were able to ride the ebbs and flows of world events and pivot their economies to maintain a diverse mix of industries. While the Anglo countries have clearly had serious dalliances with industrial policy, it seems more like fashion rather than an inherent philosophy. Who knows how long in the Anglosphere how long the current preoccupation will last.

And before someone calls me on it, yes, I’m sure you’ll say that the ability for a society to learn and adapt is a cultural trait. Sure it is, but again, like Huntington, an oversimplification.