Vivek Chibber (NYU sociologist, Catalyst editor) walks through the history of industrial policy on Jacobin Radio’s Confronting Capitalism — what it was, why it worked in Korea and Taiwan, why it died, and what a left revival would require. The provocation: the World Bank, which grudgingly acknowledged state intervention in 1993 and fought it for a quarter century, published a largely supportive report on industrial policy in 2026.
Industrial policy means two things, both temporary by design:
- Protection from international competition (tariffs, exchange-rate and interest-rate management)
- Subsidies that cheapen inputs and hothouse investment
Its central contradiction: shielding firms from competition removes their incentive to upgrade. Success hinged on state discipline — institutions that monitored firms and sanctioned those that pocketed subsidies without building capability. Korea and Taiwan worked because export-led industrialization exposed their firms to cutthroat competition and made them need the state; India, Turkey, and Egypt got middling results because their firms rejected it. And the developmental state’s death wasn’t mainly imposed from abroad — local capitalist classes turned on it once they were big enough to go global.
The current revival (CHIPS Act, Green New Deal) is mostly “nanny state” indicative planning — subsidies without conditionality, socializing risk while privatizing profit. And the discipline problem is harder than ever: Western firms are far more powerful than the postwar firms of the Global South.
Chibber’s two levers for a different outcome: lift tariffs and invite foreign competition so firms need state help (China’s model), or flip the ruling coalition — a state-labor alliance where subsidies come with union rights, collective bargaining, and social insurance. His core claim: the constraint on industrial policy isn’t technical, it’s political — whether the state can exercise power over capital, and on whose behalf.