With all the grief that Bill and Kevin give the US government about its misguided interventions in the free market (quite often deservedly), it's also important to note when the government should be more activist in order to help rebuild American manufacturing.
In today's NY Times Tom Friedman tells a disheartening story about Applied Materials. Since 2004 they set up 14 factories to manufacture the machines that make solar panels. Unfortunately,
Let’s see: five are in Germany, four are in China, one is in Spain, one is in India, one is in Italy, one is in Taiwan and one is even in Abu Dhabi. I suggested a new company motto for Applied Materials’s solar business: “Invented here, sold there.”
As a result,
Friedman doesn't consider Applied Materials an outsourcing lemming. As he says, in reference to the company's new research center opening in China, "Gotta go where the customers are." He lays the blame at the feet of the US government:
Unfortunately, the fragmented and stuttering solar subsidies in the US make those three requirements far from certain. And that makes it financially impractical for Applied Materials to build a factory here.
I know that many people don't think that the government has a role to play in industrial policy. But we wouldn't have today's computer industry if the government (NASA and the Air Force) in the 1960s didn't commit to buying all the semiconductors from no matter how expensive. We wouldn't have the internet if it weren't for DARPA. Hell, we wouldn't have an interstate highway system that allows for inexpensive and rapid transport of goods if it weren't for the government.
So, if it's fair to attack the government for its stupid market interventions, it's also fair to give credit when its due. Its also important to point out places where some intervention would be a good thing. Even if solar power isn't yet cost effective compared to fossil fuels, it will be eventually. And it would be good to have those jobs — and those manufacturing skills — here.
david foster says
It’s not at all clear that rooftop solar will ever be an economically viable energy technology. It lacks the inherent storage capability of concentrating thermal solar power, and the geographic diversity of grid-connected photovoltaic (when it’s cloudy in location “A”, the sun may be shining in location “B”) It may well be that the only effect of the government subsidies will be to reduce standards of living and economic competitiveness via higher energy prices. Meanwhile, France, which is less afflicted by political correctness (at least in the field of energy) is doing fine with nuclear.
True that government R&D paid for ARPANET, but if the government had decided to actually fund the deployment of the “national information infrastructure” (as it was once called) it would most likely have not looked at all like the Internet but rather would have been something built under contract by AT&T or Lockheed Martin, with the role of “content provider” being played by politically-well-connected corporations and educational institutions.
Jason says
I had this argument just last week. People complain about big government and how we need to get the gov out of our lives. They never stop to think about the things that the government does do that benefit and change our lives. Things like, the national highway system, computers, aerospace, just about every facet of medical technology has been funded through government grants. Renewable energy is another step in that direction. A a better direction. Rid us of our dependence on non renewable energy sources and reduce our overall energy burden.