Ganesh Sitaraman (Vanderbilt Law School) and Joel Dodge (Vanderbilt Law School) have posted Public Factories on SSRN. Here is the abstract:
The United States is confronting a new era of recurring shortages and risky geopolitical dependencies in essential goods, from medical supplies to semiconductors, revealing vulnerabilities in globalized supply chains and market-driven production. Scholars and policymakers have debated a range of tools to address scarcity: from tariffs and derisking subsidies and tax credits to reshore production, to deregulation and de-proceduralization to speed production, to competition policies to diversify production. In this Article, we offer another approach to the problem of scarcity and at-risk supply: public factories. Public factories are government-owned production facilities that exist to provide (or expand) the supply of important goods. Perhaps surprisingly, throughout American history the U.S. federal government, states, and localities have regularly turned to public factories to produce important goods across defense, steel, agriculture, healthcare, and other sectors. We describe this forgotten American tradition from the founding of the country until the present. As a policy tool, public factories have a variety of benefits, and some drawbacks and tradeoffs. Drawing on historical examples, we offer a theory of public factories, including explaining why public factories have been deployed and how they have been and can be designed. We argue, again surprisingly, that when implemented well, public factories may be more efficient and effective than subsidizing private manufacturing. Public factories are also a particularly ripe tool for policymakers today. In the post-Cold War, post-neoliberal era, policymakers may be more willing to embrace public action to improve supply than they have been in decades. Public factories also address many of the drawbacks of tariffs and derisking policies like subsidies. And they offer a path through the abundance-antimonopoly debate, by providing a strategy that can increase supply while enhancing competition. We conclude by outlining a few pathways by which public factories could also be adopted with and without new federal legislation, thus making them a practical and politically viable addition to the production toolkit.
Highly recommended!
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