New York, NY — For too long, Americans have allowed neoliberal ideology to tell us that the best public policy could do was correct market failures. Yet over the past two years, policymakers have countered this narrative, passing three large-scale economic policy programs that will organize markets for better outcomes: onshoring semiconductor manufacturing, updating the nation’s infrastructure for the 21st century, and accelerating technological development to combat climate change. These bold policies embrace an approach known as “marketcrafting”: the creation and implementation of frameworks of market governance and public investment to pursue certain social and economic goals. Designed well, marketcrafting policies can help create more equitable and stable industries, combat inflation, and ensure we have the resources we need to meet the challenges we face as a nation.
Marketcrafting: A 21st-Century Industrial Policy, a new Roosevelt Institute report authored by Chris Hughes, senior advisor at the Roosevelt Institute, and Peter Spiegler, senior researcher at the New Institute of Political Economy, articulates a framework for designing an effective, explicitly progressive marketcrafting policy—policy that supports robust growth and prosperity that is widely shared and fairly distributed. The report argues that a strong progressive marketcrafting policy requires a focus on three key areas:
- Mission: Policymakers must clearly articulate the goals of the policy and organize political and institutional coalitions to sustain support for it.
- Implementation, coordination, and maintenance: Policymakers must develop a plan both for the policy’s immediate implementation and for the ongoing actions necessary to maintain the conditions for its success.
- Accountability: The policy must be designed to effect a just distribution of economic and political gains and include mechanisms for ongoing review and revision to hold both political and market actors accountable.
The report goes on to explore how marketcrafting can be used to combat some of the most pressing political issues of our day, including the green energy transition and the housing crisis. Specifically, the authors examine the possibilities for progressive marketcrafting in practice, evaluating recent major economic policy initiatives through a marketcrafting framework.
Insight from the Authors:
“The state has regularly been involved in shaping markets to achieve certain social and political goals, even if it has not always done so openly and transparently. Because of a perceived need to adhere to so-called free-market principles—especially in the neoliberal environment of the past several decades—US policymakers have often hidden or de-emphasized the market-shaping effects of their policies. What is different about the present moment is not that policymakers are marketcrafting, but rather that they are attempting to do so openly and systematically,” said Spiegler.
“Safety-net economics is now fading, and a new policy approach of marketcrafting is emerging. This shift reaffirms the autonomy and power of policymakers to shape markets toward public ends. It is a move from an ideology that fosters resignation to one of autonomy and direction. It is also a recognition of the power and promise of markets to more equitably deliver prosperity if appropriately structured,” said Hughes.