Can Government Pick Winners?

Robert Atkinson is an unusual liberal who does not support smart growth. In fact, he believes in automobility and in using market tools such as congestion pricing to reduce traffic congestion.

But he is still a liberal and as such he has much more faith in government than the Antiplanner. The Antiplanner believes government can only work if people watchdog it to keep in small and unintrusive. Atkinson believes government can and should pick winners. That, he explains, “means government identifying industries and technologies where the country needs to be competitive globally, (i.e. health IT, nanotechnology, green energy, biotech, robotics, broadband) and then developing and implementing policies to work with the private sector to ensure that we grow and retain high-end jobs at home in these key sectors.”

It may be possible, if you search hard enough, to find an example of a government successfully picking and promoting a winner. Atkinson specifically mentions “Internet, the web browser, the search engine, computer graphics, semiconductors, and a host of others.” One problem with these examples is that government did not pick any of these technologies with the aim of promoting the industries. Instead, it help develop these technologies because they were useful to government (mainly defense) agencies.

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