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There's a way to do it. This playbook has been used repeatedly throughout the 20th century. First you invite industry to reshore via subsidies and preferentia

There's a way to do it. This playbook has been used repeatedly throughout the 20th century. First you invite industry to reshore via subsidies and preferential access to government contracts. If necessary, the government must directly invest in new firms. (They already do this in a very small way with In-Q-Tel and others, so it's not totally beyond the pale. For a time there was even a US Army VC firm.) If you talk to a Chinese factory owner or mine boss, many of them will tell you that they got their start with a >$2M direct investment from their government. Second you gradually tighten the screws on foreign finished products, not industrial inputs like metals, plastics, ores, etc. Third you streamline export paperwork requirements and relax things like ITAR. Then, when that's all humming along and the factories are working, you can launch blanket tariffs to protect your nascent industries, if need be. But you must exempt necessary industrial inputs from tariffs. What's happening now is completely backwards/inverted and it's going to lead to total chaos.

whatshisface 2y ago
Don't forget the step where you ignore intellectual property law so that it becomes temporarily legal to start companies without a "war chest" of patents to ward off disputes with.
- A_D_E_P_T 2y ago
  I mean, patents only apply in the nation where they're granted. So "ignoring" IP is just a matter of refusing to recognize foreign patents, which is something that all nations do implicitly. Also, in most foreign countries, court cases are cheap. (They could literally be 100x cheaper to litigate than they would be in the US.) If you're talking about in a US context specifically, then if absolutely necessary the federal government could either buy or nationalize the patents in dispute, just as all states nationalize land from time to time under eminent domain. Zvi recently wrote about this in the context of the state buying the Ozempic patent: https://thezvi.wordpress.com/2025/01/21/sleep-diet-exercise-and-glp-1-drugs/ https://thezvi.wordpress.com/2025/01/21/sleep-diet-exercise-... > [The US Government] should buy out the patents to such drugs. > This solves the consumption side. It removes the deadweight loss triangle from lost consumption. It removes the hardship of those who struggle to pay, as we can then allow generic competition to do its thing and charge near marginal cost. It would be super popular. It uses government’s low financing costs to provide locked-in up front cold hard cash to Novo Nordisk, presumably the best way to get them and others to invest the maximum in more R&D. > There are lots of obvious gains here, for on the order of $100 billion. Cut the check.
  - whatshisface 2y ago
    >So "ignoring" IP is just a matter of refusing to recognize foreign patents, which is something that all nations do implicitly. That's not true at all. US companies register patents in all foreign jurisdictions as well. It wasn't legal for Chinese companies to copy all that US IP, they were just able to do it because to stop them, our diplomats would have basically had to persuade the Chinese government not to develop.
ferguess_k 2y ago
I think the playbook is easy, as you described multiple countries went through more or less the same process. The difficulty lies in political will and execution. Either fails then the whole scheme fails.
- A_D_E_P_T 2y ago
  Direct government investment in new firms is politically complicated in the US, I think. Also, yeah, execution could be a problem. There'd need to be some sort of compliance mechanism to ensure that people don't just take the money and buy fancy cars. At the same time, it can't be too heavy-handed, or bureaucratic checks-and-balances will bog down the entire program and destroy any momentum it might have had.

whatshisface 2y ago

Don't forget the step where you ignore intellectual property law so that it becomes temporarily legal to start companies without a "war chest" of patents to ward off disputes with.

A_D_E_P_T 2y ago
I mean, patents only apply in the nation where they're granted. So "ignoring" IP is just a matter of refusing to recognize foreign patents, which is something that all nations do implicitly. Also, in most foreign countries, court cases are cheap. (They could literally be 100x cheaper to litigate than they would be in the US.) If you're talking about in a US context specifically, then if absolutely necessary the federal government could either buy or nationalize the patents in dispute, just as all states nationalize land from time to time under eminent domain. Zvi recently wrote about this in the context of the state buying the Ozempic patent: https://thezvi.wordpress.com/2025/01/21/sleep-diet-exercise-and-glp-1-drugs/ https://thezvi.wordpress.com/2025/01/21/sleep-diet-exercise-... > [The US Government] should buy out the patents to such drugs. > This solves the consumption side. It removes the deadweight loss triangle from lost consumption. It removes the hardship of those who struggle to pay, as we can then allow generic competition to do its thing and charge near marginal cost. It would be super popular. It uses government’s low financing costs to provide locked-in up front cold hard cash to Novo Nordisk, presumably the best way to get them and others to invest the maximum in more R&D. > There are lots of obvious gains here, for on the order of $100 billion. Cut the check.
- whatshisface 2y ago
  >So "ignoring" IP is just a matter of refusing to recognize foreign patents, which is something that all nations do implicitly. That's not true at all. US companies register patents in all foreign jurisdictions as well. It wasn't legal for Chinese companies to copy all that US IP, they were just able to do it because to stop them, our diplomats would have basically had to persuade the Chinese government not to develop.

ferguess_k 2y ago

I think the playbook is easy, as you described multiple countries went through more or less the same process. The difficulty lies in political will and execution. Either fails then the whole scheme fails.

A_D_E_P_T 2y ago
Direct government investment in new firms is politically complicated in the US, I think. Also, yeah, execution could be a problem. There'd need to be some sort of compliance mechanism to ensure that people don't just take the money and buy fancy cars. At the same time, it can't be too heavy-handed, or bureaucratic checks-and-balances will bog down the entire program and destroy any momentum it might have had.