Arthur Kroeber: commitment

Transcript context

…How much was the $200-300 billion actually relevant given the fact that BYD, as you mentioned, is a private company? How much of that was actually necessary or counterfactually important to creating this outcome? It's like the old slogan about advertising: half of it works, but you don't know which half. Did China need to spend that much in subsidies? Probably not. But had they spent less, would they have had the same effect? Maybe, maybe not. They tried various different types of subsidies. Initially there were producer subsidies to just get companies to produce more. Then they had a lot of buyer subsidies at the individual level, but also the city government level to promote things like electric buses. I think all of that played a role. What was important was that the government set a very clear direction and they said, “We want this to happen, we really want it. We don't know how long it's going to take. We're just going to keep trying different things until it works. Because the goal of creating this electric vehicle sector and the whole supply chain for it, that's what we want at the end. ” Why are they able to identify these kinds of sectors in advance? Central planning isn't supposed to work. There's been many cases of countries which have tried to do this. Germany, Japan, and many other countries missed out on the Internet because there was a centrally directed effort towards these heavy industries or manufacturing, which actually turned out not to be relevant in the 21st century.…

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