"Many Republicans support the bill pumping tax money into science and technology because they believe the U.S. needs to mimic Beijing's directed capital to defeat Beijing. But the U.S. strength has always been its capitalist system, which encourages private investment and innovation through market competition, strong intellectual property rights, and, yes, profits. That's how the U.S. transcended Japan's challenge in the 1980s and 1990s.
American businesses have nearly doubled R&D spending over the last decade and lead most areas of advanced technology. China's strategy has long been to subsidize inefficient state-owned enterprises and national champions like Huawei, which has hamstrung smaller potential competitors.
America's biggest competitive disadvantage is its failing K-12 schools, which are controlled by teachers unions and progressives who want to dumb down math education, as Williamson Evers described in these pages last week. Higher education has been a U.S. strength, but meritocracy is eroding there too. Meantime, Democrats want to weaken pharmaceutical IP and raise capital-gains and corporate taxes, both of which would reduce investment.
The China challenge requires a better response than the U.S. has mustered to date. But the industrial policy of this bill will waste taxpayer money and divert private capital to less efficient purposes. America can't out-compete China by imitating it." [1]
1. Industrial Policy, Same Old Politics
Wall Street Journal, Eastern edition; New York, N.Y. [New York, N.Y]26 May 2021: A.18.
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