When Joe Biden entered the White House in January 2021,some observers heralded the dawn of a new economic order. Trillions of dollars in stimulus, an enterprising industrial policy, and open talk of rewriting the rules of globalisation seemed to signal a decisive break with the neoliberal consensus that had shaped Western policymaking for decades. But as wars, inflation, and geopolitical rivalries have scrambled assumptions about how power and prosperity are built, the question has become more complicated: what, exactly, was “Bidenomics”?
In a wide‑ranging essay for the London Review of Books, the economic historian Adam Tooze sifts through the rhetoric, numbers and strategic choices of the Biden administration to disentangle promise from reality. Framing US domestic policy within a larger contest among great powers, he examines whether Biden’s agenda amounted to a coherent economic doctrine or a short‑lived improvisation under exceptional pressure. From pandemic recovery and climate investment to semiconductor subsidies and confrontation with China, Tooze asks how far Biden’s project really reoriented American capitalism-and what its limits reveal about the future of global power.
Dissecting Bidenomics Core Aims Industrial Policy Climate Investment and the New US Economic Statecraft
Far from being a mere stimulus package with a patriotic logo, Biden’s economic turn amounted to a retooling of the American state around production, power and precaution. Industrial policy, long treated as a heresy in Washington, reappeared in the form of targeted subsidies for semiconductors, batteries and clean-tech manufacturing, justified not only by jobs but by the language of national security and supply-chain resilience. Climate investment, meanwhile, was smuggled into law via a tax-code labyrinth: incentives for renewables, grid upgrades and electric vehicles were framed as pro-business rather than dirigiste, even as they quietly redrew the map of American industry toward the South and Midwest. The result was a hybrid model that blurred the line between green transition and strategic rearmament.
- Industrial policy as a tool of strategic competition, not just job creation
- Climate investment recast as infrastructure and security spending
- Supply-chain “friendshoring” to reduce dependence on China
- State-backed risk-taking via guarantees, tax credits and procurement
| Pillar | Instrument | Strategic Goal |
|---|---|---|
| Chips & Tech | Subsidies, export controls | Tech edge vs. rivals |
| Clean Energy | Tax credits, loans | Accelerate green build-out |
| Infrastructure | Public works, standards | Bind regions into new value chains |
This convergence of industrial strategy and climate policy created a new grammar of US economic statecraft, where trade, investment and technology rules were openly subordinated to geopolitical aims. Tariffs, outbound investment screening and “Buy American” rules were no longer framed as temporary distortions but as permanent fixtures of a more muscular state.What emerged under Biden was not a full departure from neoliberalism but a layered architecture: markets still allocate capital, yet the federal government now sets the direction of travel-toward decarbonisation, reshored manufacturing and contested technological frontiers.
Great Power Rivalry How Bidenomics Rewires Relations with China and Europe
In the name of resilience, Washington has turned macroeconomic strategy into an instrument of power politics, unsettling both adversaries and allies. The White House’s push for green subsidies, semiconductor reshoring and export controls functions as a de facto industrial blueprint aimed at containing Beijing’s technological ascent, while also forcing European capitals to choose between US security alignment and their own commercial interests. What once passed as technical trade policy now resembles a quiet arms race in supply chains, with chips, batteries and critical minerals treated like strategic assets rather than market commodities. The result is a new geometry of interdependence: thinner, more conditional, and weaponised through sanctions, investment screening and regulatory coordination among liberal democracies.
For Europe, the agenda coming out of Washington is both an invitation and a threat. Paris and Berlin see in the American spending spree a model for their own climate-industrial turn, yet they also fear capital and production draining across the Atlantic. Beijing,meanwhile,confronts an unprecedented coalition that links fiscal expansion to security doctrine,redefining what counts as legitimate state intervention. In practical terms this means:
- Selective decoupling in sensitive technologies, not a full break in trade.
- Subsidy races as states compete to anchor factories and research hubs.
- Coordinated pressure on Chinese overcapacity in green industries.
- Quiet bargaining with EU partners over tariffs, standards and data rules.
| Actor | Core Anxiety | Preferred Response |
|---|---|---|
| United States | Loss of tech primacy | Subsidies + export controls |
| European Union | Industrial hollowing-out | Green industrial policy |
| China | Containment in high-tech | State-led upgrading |
Winners Losers and the Social Contract Inside Americas New Political Economy
For all the high-minded rhetoric about rebuilding the middle class, the administration’s agenda sorted Americans into distinct camps. The most obvious beneficiaries were those positioned to ride the wave of public investment: clean-energy manufacturers, semiconductor firms, construction workers tied to federal infrastructure projects, and pockets of organized labor able to leverage the moment. But there were also quieter winners: homeowners insulated from rising interest rates by earlier refinancing; asset holders who watched stock indices swell on the back of industrial-policy optimism; and local governments suddenly flush with federal funds. Meanwhile, others were asked-implicitly-to absorb the costs. Renters facing rising housing prices, gig workers outside the reach of traditional labor protections, and small firms squeezed by tighter credit conditions discovered that prosperity was being reconstructed along selective, not global, lines.
- Industrial capital in strategic sectors
- Organised labor in unionised construction and manufacturing
- Consumers seeking cheap credit and low prices
- Precarious workers in low-wage services
| Group | Position | Key Pressure |
|---|---|---|
| Unionised workers | Conditional winners | Project pipeline & bargaining power |
| Financial sector | Divided | Higher rates vs. fiscal stimulus |
| Low-income households | Fragile gains | Inflation, housing costs |
The emerging bargain looked less like a renewed New Deal and more like a patchwork social contract, brokered in real time between the Treasury, the Federal Reserve, and a handful of corporate and labor actors. Instead of promising extensive security,the state offered targeted subsidies,tax credits and temporary relief,betting that strategic growth would trickle outward and stabilise the political center. But as rising prices eroded wage gains and regional disparities widened, the moral economy underpinning the project grew contested. The clash between macro-stability orthodoxies-inflation control, credible deficits-and demands for durable social protection exposed a deeper fault line: in America’s revamped political economy, citizenship continued to be mediated less by universal rights than by one’s location in the new geography of capital, carbon and care.
Policy Lessons for the Next Administration Making Bidenomics More Coherent Resilient and Fair
Whoever occupies the White House next will inherit not just a set of programmes but a fractured narrative: industrial strategy wrapped in anti-China hawkishness, social spending squeezed by deficit angst, and climate policy hostage to congressional swings. To weld this into a durable project, the administration must align its geopolitical ambitions with everyday economic security. That means treating trade, technology controls and defense supply chains as tools of a broader prosperity agenda rather than as stand‑alone security silos. It also requires institutionalising what worked under Biden – rapid-response fiscal support, targeted green investment, and a tighter labor market – so they cannot be casually unwound in the next downturn or midterm backlash.
- Lock in core gains through automatic stabilisers, not one-off emergency bills.
- Target public investment at regions and workers most exposed to geopolitical shocks.
- Make climate policy visible in lower bills, better transit and cleaner air, not just aggregate emissions charts.
- Constrain corporate power so reshoring and reindustrialisation deliver higher wages, not just higher margins.
| Challenge | Policy Lesson |
|---|---|
| Inflation shock | Pair stimulus with faster supply-side relief and clear messaging. |
| China rivalry | Use export controls sparingly; prioritise allied industrial coordination. |
| Polarised Congress | Design benefits that reach red and blue counties alike, and make them hard to repeal. |
| Voter distrust | Link macro wins to concrete gains: jobs, wages, childcare, housing costs. |
To Wrap It Up
what Tooze’s reading of Bidenomics makes clear is that this was never simply a technocratic adjustment to a flagging economy. It was,at least in aspiration,a bid to redesign the relationship between the American state,global markets and strategic rivals at a moment when the old certainties of liberalisation and free trade had already decayed. Whether one reads the Biden experiment as an overdue correction, a fleeting aberration, or the opening act of a more interventionist era, it marks a decisive break with the complacency that preceded it.
If the great-power contest with China is the stage on which these choices now play out, Bidenomics is one version of an answer to the question of how a late‑imperial power manages decline, risk and ambition. Its fiscal boldness, industrial policy and security framing may prove unsustainable, or be rapidly unwound by future administrations. But as Tooze suggests, the more crucial fact is that the terms of debate have shifted. The fantasy of a politics insulated from power, production and planetary limits is gone. What replaces it will depend less on the elegance of any given blueprint than on the coalitions able to impose their vision of national strength – and on how long the United States can afford to treat economic policy as another theater of great power politics.
