Industrial Policy: The Peril of Rule by Deal
The current American approach to industrial policy relies on individualized negotiations rather than a unified strategy, risking a system of “rule by deal.” This critique was presented by Chris Hughes, Facebook co-founder and Economic Security Project co-chair, in an interview on CNBC’s Squawk Box.
Hughes pointed out that this trend, seen across industries from semiconductors to rare earth minerals, reflects a transactional style of government intervention rather than traditional economic nationalism or state capitalism.
He discussed the Trump administration’s industrial and tariff policies and the government’s potential role in investing in AI data centers, emphasizing the absence of transparency and strategic planning in these customized agreements.
“I see a group of dealmakers… going one by one, picking winners and losers.”
Hughes warned that this ad-hoc system enables certain companies with direct White House access to receive substantial public funding and private capital, often without full consideration of market forces, competition, or broader industrial policy objectives.
Summary: Chris Hughes warns that America’s industrial policy, driven by individual deals rather than strategy, risks favoritism and lacks transparency and foresight.