[mpyne]

Why? The efficiency gains are a matter of size of the average company, not a matter of the total number of companies.

If what you said were true, it would be cheaper for there to be only one flavor of soda (as Bernie Sanders might have put it) rather than dozens.

Competition is better for consumers than monopoly, and that applies even when the consumers are nations.

[twoodfin]

The premise of this thread is that efficient markets and comparative advantage won’t leave even a large nation with enough of the right competitive local industries for national security or whatever objective.

Thus to sustain those industries (semiconductor fabrication in this case) industrial policy (subsidies, tariffs, government investment, “Buy American” rules, … ) is essential.

[mpyne]

I agree that industrial policy is essential for a nation that wants to ensure that competitive industries exist within the nation's economy.

But the justification I replied to was that the nation must inherently suffer material inefficiencies for a nation to do this, due to how economies work, which is not the case (or at least, no real justification was offered other than the heuristic that larger firms are somehow inherently more efficient, which if anything is opposite to my experience in a very large org).

A nation might well implement an industrial policy so as to pessimize its local industries that survive, but that is not required to happen either.