Introduction: The Industrial Policy Debate — Jefferson versus Hamilton

Abstract

For nearly four centuries, Americans have debated the government’s proper role in developing the economy. Most Americans would agree in principle with Thomas Jefferson’s maxim that “the government that governs least, governs best.”1 Jeffersonians champion a radical individualism in which the government is restricted to guarding law, order, and, especially, private property. The government’s sole role in the economy is to leave it alone. Markets should be completely free. The “free market,” paradoxically, is not anarchical; the natural laws of supply and demand determine outcomes. Consumers desire something. Entrepreneurs supply it. “Greed is good” because in striving to serve one’s own needs through work, innovation, buying, and selling, one inadvertently serves others. Thus does the “invisible hand” of the market solve all of society’s problems and desires.KeywordsFree MarketIndustrial PolicyInvisible HandVisible HandEmergency AgencyThese keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.