By Michael Lind, Salon.com, Feb. 22, 2012

Manufacturing is back in the news.  The combination of Obama administration initiatives to help American manufacturing with criticism of China’s unfair trade and industrial policies by candidates for the Republican presidential nomination has produced a bipartisan backlash by prominent academic economists including [Obama Dem] Christine Romer [....] and [Bush Republican] Michael Boskin [....]

Romer and Boskin agree that government should do nothing to save or promote the manufacturing sector in the United States.  Their critiques of industrial policy, in turn, have produced responses by prominent advocates of federal aid for technological innovation and manufacturing, including Clyde Prestowitz, a former Reagan administration official and founder of the Economic Strategy Institute.

This debate is not a contest between “free trade” and “protectionism.”  It is between dogmatists who argue that free trade and government indifference to industry are the best policies for all countries, at all levels of economic development, at all times, and pragmatists who argue that free trade, strategic trade or protectionism may make sense for one country rather than another—or for the same country, in different historical periods.

Nor is the debate between left and right.  As we see today, it often pits liberal and conservative policymakers and voters against academic economists, who on this issue, whether they are Democrats or Republicans, tend to take what in politics is the view of trade held only by the libertarian lunatic fringe.

Versions of this “industrial policy debate,” featuring many of the same players, have taken place every decade since the 1970s.   It is never resolved, because the two sides are talking past each other.  They do not agree on basic theory, basic facts, or even the basic rationales for the trade and manufacturing policies in dispute [....]