The West’s Quiet Pivot to State Capitalism

Industrial policy is back. The only question is how far it goes.

For decades, Western economies defined themselves against the “state capitalism” practiced by China and other developmental states: the market would allocate capital, the government would set rules and provide public goods. Then came three shocks, the 2008 financial crisis, the 2020–21 pandemic, and an era of strategic rivalry and supply-chain insecurit…