place-based subsidies are a start! but with Federal subsidies, geography alone places very few limits on consolidation, where in China, local governments subsidize and effectively own champions they mean to keep local. 1/

the next big step is to condition subsidy on market structure, by for example requiring subsidy to be returned immediately if the subsidized firm is acquired or sells a substantial fraction the assets for which the subsidy was provided. 2/

this is a hard-sell in the US, where antitrust is mostly reactive, treated as a consequence of malfeasance rather than just wise rules of the game. 3/

many economists will claim the market for corporate control is an important guard against poor management, and that consolidation is often "efficient", as discussed here: drafts.interfluidity.com/2024/09/17/a... in the press, this becomes "economists say" or "experts say". 4/

if subsidizing competitive industries—rather than just firms that ultimately consolidate—is to succeed, it will also be important to design the subsidies in a way that allows firms to survive despite vigorous competition. i offer a proposal for that here: drafts.interfluidity.com/2024/09/04/i... 5/

(sorry to self-link so much! this line of thinking has been my obsession of late.) /fin