Can Europe craft an industrial policy that slows or reverses its decline into semi-peripheral position in the global economy? Can this policy help Europe adapt to the current disruption of the post-1992 status quo?
The Draghi Report (2024) on competitiveness is the most recent of a series of EU-level efforts to maintain Europe’s position as a core economy, to limit its dependency on other economic powers, and to adapt to a radically changing global economic environment.
In this session, Herman Mark Schwartz will examine Draghi’s proposals from two angles, contrasting the intellectual and epistemological origins of its diagnosis and proposed remedies with the empirical evidence about past EU and European national-level industrial policy outcomes. He will also explore the disjuncture between the normative and methodological assumptions underlying the Draghi report and the actual challenges facing the EU.
Put simply, the report reproduces some of the current pathologies of the EU, including, especially, the ongoing and incomplete response to the 2010 euro-crisis, and the relative weakness of the EU defense sector. While the report recognises the nature of the current challenge, it largely frames that recognition in terms of financial rather than productive and institutional problems. Drawing from his research, Schwartz will contextualise the analysis of the Draghi Report’s intellectual framework in the prior EU response to the US economic challenge of the 1950s-1970s, the current distribution of R&D activity and industrial production, and the degree to which the Report attempts to address the fundamental political and bureaucratic limits to an EU-wide industrial policy.
Herman Mark Schwartz is Professor Emeritus of Politics and Public Policy at the University of Virginia. He is the author of In the Dominions of Debt, States vs. Markets, and Subprime Nation: American Power, Global Capital, and the Housing Bubble.