Here are a few recent articles that I found to be quite interesting.
1. The first is from Reason magazine:
When Trade War Threatens Real War
Biden is blurring the lines between economic policy and military action.
This excerpt caught my eye:
But the Biden administration is building on the Trump administration’s attempts to blur that line. Some former Trump administration officials are giving cover to the effort. In an October interview with The New York Times, the Trump-era national security adviser Matt Pottinger not only echoed Sullivan’s framing of the U.S.-China relationship as one where America must maintain “as large of a lead as possible” but argued that doing so will mean actively inhibiting China’s technological advancement.
“The Biden administration understands now that it isn’t enough for America to run faster—we need to actively hamper the [People’s Republic of China]’s ambitions for tech dominance,” Pottinger said. “This marks a serious evolution in the administration’s thinking.”
For such officials, it is no longer enough for trade to make America more prosperous. They think it’s at least equally important to prevent certain other countries from prospering too. It’s an inherently militaristic outlook, one that views the entire global economy as part of a battlefield.
2. In the past, I’ve tried to explain the difference between patriotism and nationalism. The Economist has an article on European sports that illustrates the difference:
For years politicians of the hard right in France grumbled about the national football team being, in their chauvinist eyes, not quite French. Many of its most dazzling stars hailed from the banlieues, sporting names like Zinedine and Karim.
French patriots root for the French team. French nationalists root for players that share their ethnicity.
3. People used to roll their eyes when I suggested that anti-smoking regulations were the first step toward an outright ban. Now the bans are beginning to happen. The UK is copying New Zealand’s decision to gradually phase in a total ban on cigarettes. The Economist points out that the nanny state is a good example of how political power corrupts:
This intoxicating mix of ease, price and instant legacy means even libertine politicians become statist in power. For years Boris Johnson, a former editor of the Spectator, took aim at the fusspot nature of New Labour. It was the inalienable right of an Englishman to stuff his face with chocolate, crisps and cheese if he so chose. “Face it: it’s all your own fat fault”, ran one of his columns in 2004. But once in power, it was Mr Johnson who pushed an anti-obesity scheme that would ban daytime advertising of junk food. Outside a few columnists and the occasional Tory mp, there are few libertarians in British politics.
READER COMMENTS
Richard W Fulmer
Jan 20 2024 at 12:22pm
Is there a line between preventing another country from prospering and refusing to contribute to that country’s crimes or enabling its aggression against ourselves and our allies? For example, some people blame FDR’s 1941 oil embargo for forcing Japan into war with the United States. But wouldn’t continuing to sell oil to Japan have served to support – both materially and morally – that country’s horrific actions in China?
Are we currently obligated to purchase slave-made products from China to prevent war? Should we continue to buy computer equipment featuring back doors that would enable the Chinese to shut down key infrastructure? Should we sell the Chinese equipment that will enhance their military capability?
Is there a line, and if so, what is it?
vince
Jan 21 2024 at 1:08pm
And would the answer be the same if, in many of those questions, China was changed to Russia?
Richard Fulmer
Jan 21 2024 at 2:58pm
Why would the answer be different for Russia, or for any country like China, Russia, Iran, North Korea, Cuba, or Venezuela whose leaders routinely threaten us with destruction and who regularly act on those threats with disinformation campaigns, cyber attacks, and even the occasional missile launch?
vince
Jan 21 2024 at 5:19pm
Exactly. It shouldn’t.
Scott Sumner
Jan 21 2024 at 11:44pm
We are not trying to hurt China’s economy because we don’t like their human rights situation. Do you see us trying to harm the Saudi economy?
Richard W Fulmer
Jan 22 2024 at 11:15am
Western companies have been pulling out of China, but that hasn’t been driven by government policy. Instead, it’s been driven by the hostile business environment that Xi Jinping created. Is the pullout waging a “trade war” or an attempt to “hurt China,” or is it a case of independent businessmen making rational decisions by adapting to the changing political and business climate within China?
Is it waging a trade war to refuse to purchase Chinese computer and communications equipment equipped with back doors? Is it waging a trade war to refuse to sell technology with military applications to Chinese companies owned and operated by the CCP? Is it waging a trade war to refuse to buy goods created by slave labor?
Naked Chinese aggression has led the West to take reasonable defensive actions – actions that you worry might provoke China into a war that it is already waging. China is actively working to expand its territory – both on land and at sea – at the expense of India, Taiwan, Vietnam, the Philippines, Japan, Nepal, Bhutan, Indonesia, Malaysia, Laos, South Korea, Mongolia, Myanmar, Tibet, Singapore, and Brunei.
Not everything is driven by economics. If it were, Xi Jinping would not have begun renationalizing Chinese industry or clamping down on domestic trade.
vince
Jan 22 2024 at 12:58pm
Dare we call this an example of free-trade failure?
Richard W Fulmer
Jan 22 2024 at 3:01pm
While free trade eliminates any economic excuse for war, it doesn’t eliminate other excuses such as territorial disputes, fear, honor, ethnic and religious differences, or simply a political leader’s desire to distract people’s attention from domestic problems. I don’t think that this represents a market failure any more than my toaster oven’s inability to write a symphony represents a product failure.
I do think, though, that some free-market economists refuse to admit that free trade is neither a panacea nor a hammer that will drive every nail.
Their refusal is categorically different, however, from market critics’ penchant for ascribing every one of the world’s ills to market failure.
Warren Platts
Jan 22 2024 at 1:57pm
Do you see the Saudi economy embarking on history’s largest rearmament campaign and us the Saudi economy specifically rearming in order to fight and KILL Americans?
Pierre Lemieux
Jan 20 2024 at 2:47pm
Scott: Your point on smoking is paradigmatic. Once the state nationalizes the air (I think it’s Walter Williams who first used the expression) in restaurants and other private venues where the public is admitted, to which extremes is it not going to go to prevent people from ingesting other stuff including in their own houses?
vince
Jan 21 2024 at 1:05pm
Pierre: Do you believe the state shouldn’t impose air pollution standards in general?
Mactoul
Jan 20 2024 at 11:31pm
That’s the question, isn’t it. Which is not quite answered in a summary fashion.
vince
Jan 21 2024 at 1:03pm
A problem with obesity is the huge cost to the health care system. It’s an externality whose cost could be easily put where it belongs.
Richard Fulmer
Jan 21 2024 at 2:51pm
Meaning that obese people pay more for healthcare or healthcare insurance? But can we single out the obese while still paying full fare for smokers, people who don’t exercise, people who don’t put on sunscreen, those who take unnecessary risks like scuba diving or skateboarding, and anyone else with unhealthy habits or hobbies?
And what sort of surveillance state would be needed to determine who isn’t leading a healthy lifestyle? Have you drunk your eight glasses of water today?
Nationalization creates moral hazard; I can live however I want because someone else pays the price. Instead of picking which unhealthy lifestyles we want to subsidize (or not subsidize), why not let people pay for their own medical care and choose their own lifestyles accordingly?
vince
Jan 21 2024 at 5:29pm
Exactly. Obesity is a relevant lifestyle choice and it’s easy to measure. Any other lifestyle choice that is relevant and easy to measure should be included in the premium. Where is the freedom in being forced to subsidize the lifestyle choice of another? And don’t let perfection be the enemy of the good.
Mactoul
Jan 21 2024 at 8:01pm
Obesity isn’t a lifestyle disorder but an hormonal disorder promoted by an erroneous paradigm promoted by the medical establishment.
vince
Jan 21 2024 at 9:03pm
Who said it was a disorder?
Walter Boggs
Jan 21 2024 at 3:50pm
Can you elaborate on how it could easily be done?
vince
Jan 21 2024 at 5:25pm
Sure, Walter. BMI, a simple formula based on height and weight. If an outlier disputes the result, they can follow up with a simple but more accurate bodyfat test.
Trina Halppe
Jan 21 2024 at 11:09pm
The solution to the China problem is to increase restrictions on trade and investment gradually if milestones on freedom of expression are not met. What will need to be monitored are restrictions on all forms of media including the internet, restrictions on visiting foreign and China-based reporters, and the treatment of dissidents. Just help the Chinese get what they want and the long-term threats to the United States from China will be diminished.
Scott Sumner
Jan 21 2024 at 11:48pm
How has that worked in Cuba?
Warren Platts
Jan 22 2024 at 2:06pm
The Cuba treatment has worked wonders in terms of keeping the Cuban economy down compared to what it otherwise would be, and thus has had a limiting effect on their military power. You no longer hear stories about Cuba sending soldiers to Africa or South America anymore.
Meantime, we can also see what happens when you lift the Cuba treatment on a Communist adversary in the case of China. That had the effect of giving them the economic power to expand their military power by orders of magnitude in a very short time.
After World War III happens, if there’s anyone left around to write it, history will judge the “opening” of China as the most suicidally stupid strategic error in all of American history. And I hate to say this, but free trade economist will share a good part of the blame for that decision…
vince
Jan 22 2024 at 4:15pm
Then it’s too late to apologize. Sure, international trade is good. But it’s just religion to say it has no limits.
https://www.politico.com/news/magazine/2022/10/05/free-markets-dont-buy-peace-00060236
International trade just led to our military strike in Yemen. The Taiwan risk couldn’t be clearer. It amazes me that we let another country tell us when we are allowed to acknowledge another country–Putin hasn’t even done that. What will tip us into a world war?
Richard W Fulmer
Jan 22 2024 at 3:32pm
What is your solution for dealing with China and its territorial ambitions? If your solution is to remove all trade restrictions, how will that translate into, say, keeping Taiwan free?
Is it possible that trying to limit China’s power by, at a minimum, not contributing to its economic strength, might be the least bad way to deal with that country’s aggression?
Warren Platts
Jan 23 2024 at 3:52pm
The solution is simply to acquiesce to the People’s Republic’s claims and declare that their territorial ambitions are legitimate. Then no problem, no war.
Scott Sumner
Jan 22 2024 at 12:37am
Everyone, Think about the relationship between human rights and wealth in the world’s more than 200 countries. Is the correlation positive or negative? How does that pattern make you feel about those who claim, “The best way to improve human rights in country X is by making it poorer?”
vince
Jan 22 2024 at 12:57pm
One might expect a positive relationship, but correlation is not causation. Has China displayed the relationship? I’m not sure. Hong Kong for one would deny it.
You can’t get a more current article than this: https://www.eastasiaforum.org/2024/01/23/china-set-to-dodge-accountability-at-its-un-human-rights-review/
Warren Platts
Jan 22 2024 at 2:50pm
Improving human rights is wrong frame for thinking about this. Rather, we should say, “The best way to reduce the military capacity in country X is by making it poorer.”
Warren Platts
Jan 23 2024 at 5:54am
There is another method to reduce Country X’s ability to make war. If you can monopolize the world’s manufacturing capacity, according to trade theory, you can actually make the other country richer, while hollowing out their industrial capacity. Thus, even if Country X is made richer as a result of consuming the subsidized exports you dumped on them at great cost to your own home citizens, their capacity to wage war will have been reduced because they simply do not have the capacity to manufacture the number of ships & 155 mm artillery shells that’s necessary to wage a major modern war.
Richard W Fulmer
Jan 22 2024 at 4:44pm
What is the mechanism by which helping to enrich China will lead it to abandon its serial land grabs?
Richard W Fulmer
Jan 22 2024 at 4:50pm
I don’t believe that we are morally obligated to try to slay every dragon or oppose every evil. But I do believe that we are obligated to not support evil. How do we trade with China without helping to bankroll their enslavement of the Uyghurs, their territorial ambitions, or their oppressive surveillance state?
Richard Fulmer
Jan 22 2024 at 7:29pm
Reason magazine’s title, “When Trade War Threatens Real War,” is wildly misleading. The “trade war” is a rational response to China’s crackdown on foreign aid domestic businesses and its implacable belligerence.
What is threatening war is China’s very real, ongoing conflict with its neighbors. Blaming heightening tensions on the West’s reactions to China’s aggression is blaming the effect for its cause, as if the illness caused the germ.
Thus far, the policy of economic engagement has not reduced China’s desire for territorial gains. Why should we believe that continuing the engagement will change anything?
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