Here's a ridiculous obsession among the intelligentsia: rare earth minerals -- pew pew OMG.

Writes Tom Standage, deputy editor of this prime ~econ takeover target, in today's newsletter introducing the issue:

The Economist is a champion of free markets. But in this case, as we argue in our leader, intervening in commodity markets makes sense. The trouble is that America is going about it in the wrong way. Its spending is wasteful and poorly targeted.

Bagehot would probs be turning over in his grave, poor chap.

In 1973 a club of Arab petrostates held the world to ransom by halting crude-oil exports to countries they accused of supporting Israel. Petrol prices soared; Western economies buckled. Today the danger is that China will use its grip on other natural resources to achieve its aims, such as seizing Taiwan.

Because we all, uh, know that raw material resources is the key to dominance and prosperity. (For those of you not well versed in the econ/history literature, this is saaarcasm; "resources" are more often a curse than a boon, and with substitution and price system don't really matter -- except in the obsessive mind of the intelligentsia)

The battleground is the supply of “critical” metals, a group of minerals vital to making military, electrical and computing infrastructure—everything modern economies need to be safe, high-tech and green. China supplies most of these: it mines about 80% of the world’s tungsten, for instance, and refines 99% of its gallium.

My understanding, too, is that all these "critical" metals exist pretty abundantly (though in low-density) across the Earth's crust... we just don't want to -- emphasis on we because a lot of e.g., Europe's deposits are in Scandiland.

As so often is the case: You can just change your mind (in this case about environmental permits and local opposition etc) and the problem goes away.

First: lay out the obvious pro-market case:

It would be nice to say that the best defence against China’s tactics is to double down on global markets. They certainly have a part to play. The oil crises of the 1970s boosted the development of commodity trading—in which prices for key materials are set on exchanges by millions of buyers and sellers entering 40m derivatives contracts daily. Time and again, hit by wars, industrial strikes and natural disasters, markets have handled shocks better than government planners ever could.

THEN: undermine it because ugh, duh, exceptioN!

However, America is right. China’s dominance over critical minerals means that continuing to place full faith in the invisible hand would be naive and unsafe. China has spent decades building control over minerals, bankrolling projects at home and acquiring assets abroad. Its producers have consolidated into behemoths that the state can control and which have the market power to deter would-be competitors by flooding global markets—even if that means taking temporary losses.

Yeah, we need bitcoin mooooning so Undisc can take over this shit and right the ship.

archive: https://archive.md/eeUjJ