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0 sats \ 7 replies \ @didiplaywell 7 Aug \ parent \ on: To tariff or not to tariff econ
It absolutely does, in the most extreme way possible for it's the limit case: tariffs are not being imposed in an almost non-existent internal industry. Should your tariff logic apply, importing said products should be directly forbidden, and it's not, so your logic is false.
It's not, and indeed your cherry picked examples of leading industries are proof of that. You named 7 examples out of the literally millions the economy is composed off, and left outside equally important industries like, to name the most obvious, space launchers.
God forbid the US tries to "invest" in mining and processing. Any state-dirven policy can only end in massive catastrophe. If the US is to do this right, it will simply reduce taxes and allow for free export and imports, and the industry will thrive quickly. The tech is already in place and operative, scaling might take time but with the help of Chinese imports it will be steadily sustainable. At that scale, 10 years are a blink of an eye, and if the US government makes sure entrepreneurship can develop freely and at low taxes, it will develop as fast.
Which is why China is still decades away from it's true potential. The day said politburo stops intervening, China will thrive in ways unprecedented in history.
The day the US gets rid of its crony capitalism and embraces the full free market, it will get back to its old glory days, indeed.
it relies on slave labor.
Which is why said markets must never be developed by state intervention, for it can only lead to a predictable disaster like Evergrande which is, by the way, a blatant example of crony capitalism at the extreme in China.
I have no resistance either way, I'm ready to embrace China whenever it develops freely, for it will only be good for all. There is not and has never been anything remotely close to a "crucial role" of governments on economy other than causing damage to it, and China is an excellent example of a great population permanently hindered by interventionism. If today's China is what's left, imagine what it would be if the state would once and for all take off their boots from China's head! It would be the most epic revival in history. Just a glimpse of that is exactly what happened on Guangdong, which thrived exponentially only by being freed from the boot of the politburo.
There hasn't been a single time since its inception in which the US dominance wasn't contested, and if everything goes well, this tendency will remain and hopefully equilibrate, for an equilibrium would mean that another power is at its level of producing goods and leading commerce, which is a good thing for all involved. Thinking in terms of "winners and losers" is a classical socialist fixed-pie fallacy. In reality, everyone wins, which is what's happening right now, in real time, right in front of you, otherwise China wouldn't sell and the US wouldn't buy, and vice versa. The only thing hindering further prosperity is the nefarious interventionism from both governments.
1- No it does not- you have identified where tariffs are exempted on imports where there is no significant US production- this is an except, it is not the broader role and purpose of the tariffs- again these are exceptions and the exceptions are anyway to preserve supply for remain US producers who need the materials as inputs for for consumers.
2-The 'free market' cannot and will not produce refined rare earths outside of China because China has the competitive advantage in the refining! Please read the article I linked where Japan faced exactly the same problem in 2010 and could not fix it even with a large investment in one supplier in Australia- it is not a problem 'free markets' can fix! That is the problem with your blind faith in 'free markets'!
3-Chinese wages have increased in real terms at an astounding rate- far exceeding any western economy. Certainly there are low wages relative to western values still but women can recieve a state funded pension at 50, and men at 55 and a lot of basic goods are still much more affordable. The US economy is heavily reliant upon illegal immigrants for domestic help and manual labour.
4-US wealth and power is not and never was solely derived from 'free markets' Remember the Banana Republics and the how many foreign interventions since the democratically elected leader of Iran was removed in the 1950s. The US is an empire built upon power projection and resource and trade hegemony.
5- I suspect you do not have a deep understanding of China (please see Hesslers excellent and informative book/s on China!) and what a Chinese global dominance could mean. IMO its a bit like predicting the future price of Bitcoin- there are a very wide range of potential outcomes. Yes Chinese hegemony could be better in some ways to western imperialism, but in some ways it could be worse.
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again these are exceptions and the exceptions are anyway to preserve supply for remain US producers who need the materials as inputs for for consumers.
Which proves that tariffs are not driven by a "recognition of lack of competence", otherwise those products would be either forbidden or have the highest tariffs. Thus tariffs are exactly like the Berlin Wall: not a way to prevent others from getting in but only a way to keep the US citizens from breaking free from the governmental caste.
The 'free market' cannot and will not produce refined rare earths outside of China
Already doing it and on it's way to scale up operations. Natural consequence of allowing the free market to take the lead once and for all.
The US economy is heavily reliant upon illegal immigrants for domestic help and manual labour.
Which in all cases are always much better off than an average chinese citizen, both in terms of wages and workload. Wages are nothing if you can not live and the chinese people have been indoctrinated by the state to be willing slaves with the 996 slave work culture.
US wealth and power is not and never was solely derived from 'free markets'
Do the math. Do you really think that current US wealth and power comes from the fact it harvested bananas from Guatemala? Really? It doesn't, it comes from the fact it established itself as a world free-trade leader, of which even China benefited from greatly.
and what a Chinese global dominance could mean
I don't need to know anything to certainly predict that any dominance established on the basis of governmental intervention will be bad from any country. That's why I praise Chinese openness and condemn Trump's brute protectionism. But I'm certain both powers will equilibrate at some point, the key factor being that they depend heavily on each other.
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Exempting tariffs on some products which US does not or cannot produce does not disprove that tariffs generally are designed to protect un-competitive US manufacturing. That is simply flawed logic.
US is investing in some rare earths processing but if you read about the topic with any depth including the article I linked earlier you will understand experts say it will not be competitive and will take decades to get supply of the full suite of rearte earths essential to military and high tech application- at that would come at huge cost to government and is impossible without subsides! The 'free market' cannot and will not fix this problem despite your blind faith in it.
US imperialist strong arming other nations has been absolutely fundamental to current US wealth and dominance...ever since and increasingly since the Banana Republics era set the pattern. Post WW2 US took over the operations of the Britsh Empire in a relatively peaceful transition- do not expect Chinas rise to dominance, if it occurs, to be so amicable.
Your blind faith in free markets solving all problems is flawed- just look at history- there has never been sustained wealth anywhere without government leadership, providing property rights, security, strategy and infrastructure.
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Exempting tariffs on some products which US does not or cannot produce does not prove that tariffs are designed to protect uncompetitive US manufacturing. That is simply flawed logic.
Yes, that's exactly what I'm saying. That's the opposite of what you where affirming at first.
is impossible without subsides! The 'free market' cannot and will not fix this problem despite your blind faith in it.
I just showed you it's already happening. The "free market" is about pure reality only. I just showed you that what's happening, in real life, is the opposite of what your articles cite in imaginary theory. Imaginary theory is for socialism and state-driven policies. Free market is about real life and actual facts.
ever since and increasingly since the Banana Republics era set the pattern
Please give me an example. Harvesting bananas once from Guatemala 100 years ago do not justifies the US today's wealth and dominance. Give me a modern day example.
do not expect Chinas rise to dominance to be so amicable
It will have to or it will fail. And as of now, in its actions, China shows it understands it can only rise on amicable terms.
just look at history
I did, that's why I know from the facts that only free markets are capable of producing wealth. Anything that says different is invariably government propaganda, and indeed comes only from government. Stop reading government propaganda, start reading history books, and you will see by yourself.
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The article I referenced refers to rare earth processing/refining being uneconomic in the west compared to Chinas efficiencies. Where have you shown the free market developing refining capacity for these rare earths without the help of government subsidies- such developments simply do not exist or are so small they will never credibly provide a viable alternative to the multiple rare earths Chinas mixed economy produces as part of it strategic mercantile government led economy. Please read the article about Japans experience with this and how now, 15 years later they have not developed their own supplies but are instead dependent upon China for most refined rare earths supply.
China is increasingly bold in its approach especially since Trump was forced to back down on his absurd 100+% tariffs. As soon as the Chinese responded by cutting of supply of rare earths Trump was forced to go begging for a return to more amicable negotiations- it is USA that is now on the back foot in many ways- with its decimated productive and infrastructure capacity and its chronic addiction to debt- while China continues to enjoy Trillion dollar annual trade surpluses compare to USAs 50 plus years of chronic trade and fiscal deficits.
Yes free markets do produce wealth- but nowhere in modern history has enduring wealth and prosperity existed without strong stable government, rule of law and centralised power projection enabling resource and market access.
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The Party told you to ignore the evidence of your eyes and ears. It was their final, most essential command.
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Am certainly not beholden in any way to the CCP.
You are now just shooting the messenger instead of addressing the facts and issues.
Am born and bred westerner but just appalled at the inability of most in the west to understand what is happening- to ignore it is to betray any fealty you may have for western values like free markets and democracy, as compromised as they are in practice!
The west is IMO sleep walking toward losing its hundreds of years of global hegemony.
Remember 6-700 years China was the most advanced and wealthy economy and government in the world.
I am much more comfortable with western values and culture ( I understand our culture better whereas Chinese culture is quite foreign) but not to the extent that I cannot see our decline and Chinas rise is a real current trend.
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