How 'National Developmentalism' Built America

John F. Kennedy once stated: “The great enemy of truth is very often not the lie, deliberate, contrived and dishonest—but the myth—persistent, persuasive and unrealistic.” Nowhere is this perhaps truer than the myth that America’s laissez-faire tradition enabled America to lead the world economically. 

The reality is that from the founding of the American republic until the end of the Cold War, economic policy was guided by “national developmentalism,” where leaders used government to achieve economic independence from the British, then to become the leading industrial nation in the early 1900s, and later to crush the Soviet Union technologically. This tradition, not the embrace of laissez-faire, is why America became the richest nation on earth. Once again embracing national developmentalism will be critical to enabling America to meet the existential challenge that is China.

Despite a prevailing narrative to the contrary, the Founders were not followers of Adam Smith. In his history of early American economic policy, Frank Bourgin writes, “the doctrine of laissez-faire was hardly known to the framers of our Constitution.” Rather they understood that absent developmental policy, the republic was likely to remain a natural resources colony for Britain.  For example, the Continental Congress passed a resolution urging every colony to establish “a society for the improvement of agriculture, arts, manufacturers, and commerce."