The world is in the grip of a manufacturing delusion

Industry has an allure all of its own. “From manufacturing you may expect the two greatest ills of humanity, superstition and slavery, to be healed,” wrote Ferdinando Galiani, an Enlightenment thinker. More than 250 years on, governments share his view of factories as a cure for the ills of the age—including climate change, the loss of middle-class jobs, geopolitical strife and weak economic growth—with an enthusiasm and munificence surpassing anything seen in decades.

Nowhere is spending more than America. “Folks, where is it written that [we] can’t once again be the manufacturing capital of the world?” Joe Biden, the country’s president, has asked. In search of an answer, he has committed around $1trn, or almost 5% of American gdp. In response, the eu has tweaked state-aid rules, so that national governments can splash out. These initiatives follow the example of rising Asian powers. China’s “Made in China” strategy aims to turn the country from a big manufacturing player into a dominant one. India’s “Make in India” strategy hopes to boost the industrial share of the economy to 25% of value added by 2025. Emerging markets with bountiful natural resources, including Indonesia and Zimbabwe, are busy banning the export of raw materials as part of attempts to incubate home-grown industries.