Foreign tyrants are leviathans with feet of clay, and our own government should not limit our liberties in order to supposedly protect us against them. This reflection is supported by a revelation of this morning’s Financial Times: Chinese billionaire Jack Ma, founder of Alibaba and Ant, has apparently more or less fled China to avoid both Covid lockdowns and his government’s crackdown on high-tech companies (“Alibaba Founder Jack Ma Living in Tokyo After China’s Tech Crackdown,” November 29, 2022).
It is strange that after the post-WW2 scare that the Soviet model inspired, so many people now fear the economic domination of China. It is even more strange that so many now think that the US government should strive to imitate the economic policies of these failed regimes. At least, the fear of Japanese competition in the 1980s involved a country with some economic freedom. People fear that somehow trade between Americans (or others in the West) and people living under the Chinese totalitarian regime could harm the former.
The current situation in both Russia, the remnant of the USSR, and in China illustrates how fragile are authoritarian states. The poor Russians are dominated by a dictator who have pushed them into an unwinnable war and made them international pariahs. The poor Chinese are living under the domination of a totalitarian government whose inherent desire to control “its” population has led to public-health lockdowns that threaten the economy, adding to the woes of government control of high-tech companies and the fragility of the real estate and financial sectors. (On the recent demonstrations in China, see Lingling Wei, “Chinese Protests Put Xi Jinping in a Bind,” November 28, 2022.)
If we exclude possible wars, there is only one reason why residents of a free, or more or less free, country should feel economically threatened by a foreign authoritarian state. It is that the subjects of the latter will have limited opportunities to trade, both among themselves and internationally, and will thus be poorer. And it is more beneficial to have trading partners, either as suppliers or customers, who are richer than poorer.
Incidentally, it is somewhat misleading to describe China as “the world’s second-largest” economy, as the Wall Street Journal and many others do. This is true only as far as total GDP is concerned because there are so many individuals living in China. But each of them has a relatively low productivity, so that GDP per capita or standard of living is low. On the basis of GDP per capita in purchasing power parity (IMF data), China comes at the 90th rank of 220 countries, between Belarus and Thailand.
It is true that leviathans like the Russian, Chinese, or North Korean states finance themselves out of the total production of all their subjects. Especially with nuclear weapons, they represent a security risk for other individuals in the world; I think that they would even be dangerously to an anarchic society if such a society ever exists. But trying to become like “them” in order to protect us against them provides only an illusion of security.
Protectionism is one big step in this fool’s errand, at least when an actual war is not raging. Interestingly, Peter Navarro, the former “economic” advisor of Donald Trump and protectionist tenor, defended anti-protectionist arguments before he became a politician. He even criticized the national-security excuse for protectionism. In his book The Policy Game: How Special Interests and Ideologues Are Stealing America (John Wiley & Sons, 1984), he wrote:
It is highly possible that our defense capability might actually be enhanced—not damaged—by import competition. Without the umbrella of protectionism, our defense-related industries would be forced to operate at lowest cost, engage in more research and development, aggressively innovate to stay one step ahead of the competition, and modernize their plants at a faster pace. Thus, while import competition might shrink these industries, they would be leaner, tougher, more efficient, and more modern and in all likelihood outperform a bigger and inefficient (protected) version of those same industries.
READER COMMENTS
John S
Nov 29 2022 at 12:27pm
According to this list on Wikipedia (which links to the IMF’s figures for 2022), China ranks #72, right above Thailand and below Belarus. Since it’s two spots above the world avg ($20,181), it seems fair to call it at least a middle-income country.
https://en.wikipedia.org/wiki/List_of_countries_by_GDP_(PPP)_per_capita
John S
Nov 29 2022 at 12:29pm
Based on this list on Wikipedia (which links to the IMF’s 2022 data), China ranks at #72 (one above Thailand and one below Belarus).
https://en.wikipedia.org/wiki/List_of_countries_by_GDP_(PPP)_per_capita
John S
Nov 29 2022 at 12:33pm
Oh nevermind, sorry — there are a lot of countries at the bottom (like Monaco) when you filter the sort the list on Wikipedia. At any rate, since China is above the world avg, it doesn’t quite seem accurate to call its standard of living “low.”
Brandon
Dec 1 2022 at 11:41am
It’s low if you live outside of Shanghai or Beijing…
Mactoul
Nov 29 2022 at 7:09pm
Lockdowns were implemented in all free countries as well and were particularly severe in such free country like Australia.
I don’t see why having covid lockdown makes China unfree. There were protests against lockdown in many free countries — Canada a particular example where the government reacted with particularly vicious manner.
Jon Murphy
Nov 30 2022 at 7:45am
Your second sentence answers your first sentence.
Lockdowns are inherently unfree. They are, to use a phrase from Adam Smith, a “manifest violation of natural liberty.” It doesn’t matter if all governments are doing them or just one. The act of locking people inside their homes in and of itself is an unfree act.
Jose Pablo
Dec 3 2022 at 1:54pm
Locking you down for 6 months makes a country “unfree”.
Locking you down for 2 3/4 years makes a country “insufferable”
Locking you down “Florida style” for 6 months is “liberty” compared to locking you down “Wuhan style” for 33 months
Pretending to not see this is not wanting to engage in an honest debate.
All countries with a government (so all countries) are unfree. Some governments are much more unfree than others.
Monte
Nov 29 2022 at 8:57pm
I’m not so sure. I think what the free world understandably fears most right now is the formation of a “Concert of Tyrants”, similar to the old Concert of Europe, and one in which the players are willing to set aside their differences to focus on a monopoly of power while providing each other with material support to develop their own sphere of influence.
We have the triumvirate of Putin, Xi, and Un leading what Dr. Christopher Rhodes, lecturer in government and social sciences at Harvard and Boston University, calls “a growing network of personal connections and cooperation between the world’s most notorious autocrats.” And we continue to see a precipitous decline in global democracies and the freedom index.
As long as we remain divided and ambivalent towards democracy (here and abroad), authoritarian regimes will continue to thrive and expand to the detriment of liberty and freedom everywhere.
Pierre Lemieux
Dec 2 2022 at 2:25pm
Monte: Thanks for your critique, but I am not sure how we disagree (except for your last paragraph, perhaps). My “If we exclude possible wars” was precisely meant to mention the danger that foreign tyrants will wage war against more or less free countries. Perhaps I could have been more explicit. But they are not at all threatening in terms of economic growth, innovation, entrepreneurship, and of course trade, which was my point.
As for your last paragraph, it depends on what you mean by “we” and by “democracy.” Those who rule and represent “us” have a non-liberal conception of democracy. See my review of Gideon Rachman’s The Age of the Strongman.
Monte
Dec 3 2022 at 10:37pm
Pierre,
In the long term, perhaps. My fear is that this “Concert of Tyrants” could potentially conquer what we’ve conventionally referred to as “democracies” militarily and subsequently destroy how they’re organized economically and initiate a cascade among other countries, at least in the short to intermediate term, as the Axis powers did pre-WWII:
As you point out, economies of authoritarian regimes ultimately collapse under the weight of their misguided policies before any recovery phase, but the pain and suffering experienced by the masses in the interim is incalculable.
By “we” and “democracy”, I mean countries like the US, Canada, Britain, Australia, and other more or less free states. I read your (very interesting) review, but I’m not inclined to include Trump in your pantheon of tyrants who are guilty of murdering and torturing their political opponents. He was (thankfully) constrained by our system of checks and balances, but, even in their absence, I doubt he would have stooped to this level of behavior, notwithstanding the delusionists who like to claim otherwise.
Jose Pablo
Dec 3 2022 at 4:45pm
“As long as we remain divided and ambivalent towards democracy”
“We” are inevitably “divided” since we are individuals physically separated (most of the time) from other individuals and each of us have a different way of pursuing our own happiness.
Putin, Xi, Kim (among others) made frequent calls to “unity” and to the idea of the citizens of their countries coming together in the pursue of their collective destiny.
This type of ideas scares me to death. Even if the “destiny” is “democracy” and particularly if it is avoiding the “ambivalence” towards the way somebody, for instance you, understand democracy.
Afterall, is not “pursuing democracy” and “avoiding ambivalence” what Putin, Xi, Kim and the likes are always advocating? I would not like to be using the same sentences they are using with the only difference that I think that “my” idea of “democracy” is, obviously, the right one.
It is worth reminding that the official name of China is “People Republic of China” and that the official name of East Germany was “German DEMOCRATIC Republic”.
Granted, American Republic is “better” than the People Republic of China, but if you are asking me to “unite” you in defending the western iliberal (in the right meaning) democracies as “free” or “desirable” regimes I have to respectfully reject your invitation to “unity”.
If (while) I am allowed to do so.
Monte
Dec 3 2022 at 10:58pm
Our current definition of democracy has become somewhat bastardized. Here in the US, it is a game played primarily by the wealthy based on capital and is fundamentally different from Lincoln’s ideal of government. Over a hundred years ago, Republican Senator Mark Hanna said of American politics, “There are two things that are important in politics. The first is money, and I can’t remember the second.” Sadly, money remains the uncompromising currency of politics.
To respond more specifically to your comment, I would ask only that you “unite” with me in defending the true definition of democracy: Government of the people, by the people, and for the people.
Pierre Lemieux
Dec 4 2022 at 8:22pm
Monte: We have to be very prudent here. Especially since the 18th century, two opposite conceptions of democracy have developed. One is the (classical) liberal conception, where democracy means individual rights or individual liberty under limited government and the rule of law. The other one is the Jacobin-socialist-populist conception, in which, as Montesquieu said, there is a confusion between the liberty of “the people,” taken as individuals, and the power of “the people,” taken collectively. The main problem with the slogan “a government of the people, by the people, and for the people” is that “the people” does not exist except as a collection of individuals with different preferences and values. My Independent Review article “The Impossibility of Populism” explore some aspects of what happens when the leaders of “the people” want it to rule.
Monte
Dec 5 2022 at 2:37pm
“One is the (classical) liberal conception, where democracy means individual rights or individual liberty under limited government and the rule of law.”
And it is this form of democracy of which Lincoln so eloquently spoke. A time in our nation’s history when pure democracy, a “government of the people”, was most tangible. Indeed, Lincoln’s open-door policy was a manifest illustration of this. “For myself” he insisted, “I feel – though the tax on my time is heavy – that no hours of my day are better employed than those which thus bring me again within the direct contact and atmosphere of the average of our whole people.”
Virtually from Lincoln’s first day in office, a crush of visitors besieged the White House stairways and corridors, climbed through windows at levees, and camped outside Lincoln’s office door “on all conceivable errands, for all imaginable purposes.”- Abe Lincoln’s White House (Harold Holzer)
Hmmm? This sounds eerily familiar to what many might call an insurrection! Democracy, as we know it today, is mere pretense. Our government no longer has an open-door policy. We’re left with only a peephole through which to scrutinize its actions.
Jose Pablo
Dec 4 2022 at 11:01pm
“Government of the people, by the people, and for the people.”
That is what I was fearing, Monte. “People” is also in the offical name of China. A bad omen, I would say.
Monte
Dec 5 2022 at 11:25am
The difference in governance is hardly subtle between “the people” referred to in “The People’s Republic of China” vs “the people” referred to by Lincoln in his famous address, don’t you think?
Jose Pablo
Dec 5 2022 at 1:05pm
Yes, it is. But the difference is far smaller than you seem to think and very easy to “cross” (01/06/2021 as a reference).
For instance, when The People (Lincoln style) “decides” that I have to send the government 45%+ of my income, the difference between both “People” disappears. If I refuse to be part of this robbery I would end up in jail in both cases.
Actually, any time that the government of the People, by the People for the People enacts a constitution without my explicit approval or pass a law without my explicit consent, the differences became extremely blurred (to me, for any practical purpose. Since I would be “obliged”, any difference on who is obliging me is totally irrelevant from a practical point of view).
The use of “People” in both cases (Lincoln and China) and with the same intend: namely providing legitimacy to the government; points to the same problem: the lack of legitimacy of any government (being it of the People, by the People, for the People, “a la Lincoln” or of the People, by the People, for the People “a la China”) to exert any kind of Political Authority over the individual.
Monte
Dec 5 2022 at 2:32pm
What you’re describing – the lack of legitimacy of any government – is anarchy. A prime example of it’s success: Utopia, Ohio.
Jose Pablo
Dec 5 2022 at 7:00pm
It was not a “description”. I was just stating a fact. See Huemer’s The Problem of Political Authority. “Democracy” (either Lincoln or East Germany style) does not solve this problem.
In both cases for the very same reasons: The People (50%+1 of the citizens of my country) have the same moral and philosophical right to “coerce” the individual that Xi Jimping or Putin.
If your argument is that the solution to this “problem” (either anarchy or democracy “a la Buchanan”) is not “practical”, this is, again, the same argument that Xi and Putin make to defend their regimes. You are still to close to them for my comfort.
Monte
Dec 5 2022 at 8:36pm
You’re the first person I’ve ever known to suggest that there’s not a dime’s worth of difference between Lincoln’s concept of democracy and that of East Germany, Putin, and Xi Jinping. I’m dumbfounded.
Jim Glass
Dec 2 2022 at 12:35pm
That’s a pretty dang big exclusion! Let’s recall some authoritarian state, fragile regime-economy, “feet of clay” examples of the past:
1914, Austria-Hungary, Russia, Germany, extremely fragile, very fragile, believed it was fragile (it wasn’t really, but it’s the thought that counts). We know what they set off in very short order – so short exactly because they were so fragile they all believed they had to act fast.
1939, Japan and Germany, an economy on the ropes (rationing almost everything), another plainly unsustainable. Both regimes believing (correctly) that they had to act fast to secure the resources they needed to survive.
Russia 2022, an economy sliding for a decade, a one-man regime aged 70 and ill, time running out. The Ukrainians should have been worried about the Russian peoples’ lack of trade?
China today feels it needs the largest military in the world, a navy larger than the USA’s, is claiming the international waters around it as is own private property. Peoples’ view of it is plunging all around the world.
Why the sudden plunge? Not fear of China’s growing economy. Not, Because China’s diplomats have gone all “wolf warrior” grossly insulting and attacking their own host countries. (Literally attacking. In Manchester, England, the Chinese consul and minions wearing riot gear(!) stormed out of the consulate and physically attacked protesters on the street. Then the consul proudly said that was his job as a Chinese diplomat.) Why did they suddenly start doing this? Uh, oh.
As to trade with such ‘feet of clay’ aggressive militant dictatorships, one can be fully pro-free trade and 100% anti-protectionism and still have the common sense not to sell them bombs they may drop on you or your friends. Beyond that, there is the moral issue of helping a tyranny suppress its people. (Libertarians of all people should be sensitive to this.)
IBM probably shouldn’t have done so much business helping the Nazis manage their Jewish problem. Boo, IBM. Google withdrew from China rather than support the social credit system and build a state monitored browser. Good for Google!
Where to draw the line? I dunno, complicated issues are complicated. But let’s not pretend there’s no serious issue to think about here.
Jim Glass
Dec 3 2022 at 4:22pm
As to free trade, Apple just threw freedom-seeking Chinese under the CCP bus with a very quiet “bug fix” update — obviously trading their freedom for its profits. (And now is lying about it.)
I’d think libertarians would be upset by this.
How do we balance giving the Chinese people gains from free trade with suppressing their freedom further on behalf of the CCP?
Jeff
Dec 4 2022 at 5:40am
Isn’t it obvious that free trade, engaged in naively, opens one up to exploitation? You don’t know what game the other participants are playing. In the real world markets are finite and can be cornered. Know-how is lost over time, more quickly than you might expect. Another entity may be happy to sell you something essential at a bargain price for many years or even decades until one day you wake up and realize they are holding all of the cards and everyone else is completely beholden to them. I don’t really see any substantive engagement with that argument here.
Jon Murphy
Dec 4 2022 at 8:47am
I’m not quite sure what you mean by “naively” here, but no. Free trade reduces the liklihood of exploitation as people have more options.
Economists have been arguing against this point for about three centuries. Most of us teach our Principles students the argument. Check out arguments against predatory pricing.
Jim Glass
Dec 4 2022 at 11:08am
Economists have been arguing against this point for about three centuries. Most of us teach our Principles students the argument.
What are y’all teaching about Germany and friends bringing in all that Nordstream gas from Russia, as Poland the Baltics and the USA warned “You’re give Putin a weapon to use against us all!”
That looking back now … it was a good idea?
(My whole adult life I’ve argued for “more free trade! more! free-er! Somehow libertarians get me arguing against it. 🙁 )
Pierre Lemieux
Dec 4 2022 at 11:49am
Jim: Free trade is not free trade among “Germany” and other political authorities. It is the freedom of every individual (and his voluntary associations and intermediaries) to trade as he wishes, over political borders as much as within. When you look at the problem this way (which is the economic way), many conventional ideas look very shaky and a whole new way of looking at the world opens before you.
Jim Glass
Dec 4 2022 at 3:50pm
Free trade is not free trade among “Germany” and other political authorities. It is the freedom of every individual …
Was it not private energy firms, serving millions of business and consumer customers, who contracted for the gas through the pipelines? With those parties using their voting power to get the democratically elected Merkel government to act in their interests by facilitating such?
If in 2011 Merkel had said to those markets, “No! No best-price available energy for you, it’s too dangerous!” wouldn’t libertarians have protested: Look, ‘the state’ is blocking free trade, leaving people the poorer for it, yet again!
I get your position that trade is truly “free trade” only if conducted purely by free individuals, state interference can spoil its benefits. But that seems an impossibly high bar in the real world — what international trade doesn’t pass through multi-state mediation? Peter Navarro might agree with you, but I’m much more pro-free trade than that.
Back in my econ grad school courses I learned the benefits from trade were much more robust to state interference. The other state wants to rig the game by subsiding its exports? Accept the gift from its taxpayers! By obstructing its imports (filling its harbors with rocks)? Let it choke on its productivity losses. Predatory free trade for me!
But even I draw a cautionary line when the other state has an aggressive authoritarian regime prone to use trade as a tool for predatory physical takings and suppression of peoples’ freedom. Say, Putin’s Russia.
And Xi’s China. Read: Xi Jinping in His Own Words: What China’s Leader Wants.
Such as his words about how the Soviet Union fell…
… and his CCP isn’t going to be weak like that! (The Soviet Communists didn’t have the tools of dictatorship. Yikes.)
He’s a hardline, world-ambition Leninist with Stalin and Mao. And do read how he’s planning to use trade to reach those ambitions — controlling the world’s key supply chains (like Putin did with energy and Europe). As Lenin said, sell them the rope we’ll use to hang them. (Like Putin sold them gas.)
In the meantime, use Apple technology to suppress all dissent, and revenue from Apple to help fund an internal security force even larger than the world’s largest military.
Predatory free trader that I am, methinks I see yellow flags here like Merkel should have seen when expanding trade with Putin in 2011.
Though I guess other opinions may vary.
Jon Murphy
Dec 4 2022 at 4:06pm
I do not understand your point here. You seem to be saying that because Germany did not peruse free trade, that proves free trade is a bad thing in certain situations.
If you want to argue that the German government made a bad deal, that’s fine. But it is erroneous to conclude that deal is free trade. Indeed, it would be like saying that because the USSR collapsed that proves markets are bad.
Jim Glass
Dec 4 2022 at 10:50pm
The Germans did pursue free trade. What’s not “free trade” about energy companies buying the lowest-cost energy available in as much volume as possible from producers in a neighboring country?
I say no such thing. You two seem to want to argue that.
Please explain: in your mind what was bad about what the German government did?
How is it not? Please explain.
If the energy companies didn’t voluntarily want to buy all that lowest-cost energy from abroad then then they wouldn’t have — and the pipelines would have sat empty.
Mutually voluntary transactions are beneficial trade, right? Free traders want countries to benefit from such voluntary, mutually beneficial trade as much as possible, right?
Or are you saying the German state somehow used force make the energy companies buy all that lowest-cost energy against their will? (That would *not* have been free trade, but c’mon, really?)
Seriously, what wasn’t free trade in all this?
If the German government made a mistake, what was it?
Jon Murphy
Dec 5 2022 at 5:17am
As I said, I’m having trouble following your point. Reading your comments, it seems you’re talking more about managed trade, calling it free trade, and then blaming free trade for the shortcomings of managed trade. Perhaps it’d be best if you describe 1) what you consider free trade, 2) the German situation and deal.
Jim Glass
Dec 6 2022 at 12:45am
[Replying to Jon Murphy]
You know, you fellows never answer even the simplest questions:
But you’re quite good at “not understanding” them in order to change the subject.
I truly don’t think those questions were too difficult for you to understand. Try answering, please.
And as to a couple more points I made previously that also went ignored…
How do you feel about Apple installing China-only patches on its phones specifically to suppress the freedom of dissenters to that Leninist regime?
How do you feel about IBM’s contribution to helping the Nazis manage their Jewish problem up to and during WWII (ghetto censuses, concentration camp management, military logistics, etc.)?
Surely you know your own feelings about such things.
I’m not being hostile, just asking.
Seeking thoughts, not arguments.
Pierre Lemieux
Dec 5 2022 at 11:34am
Jim: In your comments above, you forget that the Nord Stream pipelines were a political project organized by the Russian and the German government, the latter being also in the process of “phasing out” coal and nuclear. The private companies who invested in the construction pipelines did so because of the implicit guarantee of the German government–and because everybody knows that governments run what is called “energy policy.” Note how all this reflect the basic error of believing that free trade is trade between governments or “nations,” as opposed to trade by private parties over political borders. That was also the error of the German government, to answer your question “If the German government made a mistake, what was it?”
It is true that thinking of trade and free trade as an economist (with methodological individualism) represents a very different way to understand the world compared to the conventional collectivist way.
Jim Glass
Dec 6 2022 at 1:17am
Here’s the history of Nordstream since 1997:
https://en.wikipedia.org/wiki/Nord_Stream_1#1997%E2%80%93present
Please quote any part describing how it was a “political project organized by the German government”.
I see the parts describing how it was conceived, researched, organized, built, owned and financed by private western firms, & Gazprom. I must be overlooking the ‘German government political project’ part somewhere.
What guarantee? Do we read of any guarantee is in that description?
I tell you, it wasn’t much of a “government guarantee” with the full financial loss being eaten by the private insurers and private owners!
Oh, and that provides the “guarantee” that isn’t worth even one Euro when the whole thing blows up, literally. I thought markets were supposed to smart!? Yet the whole energy market bet on an “implicit guarantee” that actually guaranteed nothing? Markets must be truly stupid to fall for a “guarantee” like that!
Hey, I’ve been a Coasian, minarchist, free-market, kinda wannabe not-quite libertarian my whole life, and you all are turning me into a socialist! 🙂
Gee, I thought all those energy firms that owned, traded over, and are taking the loss on Nordstream were, and are, private parties.
But I get your point. Every government on Earth has an energy policy, food policy, auto policy, telecoms policy, etc. Thus there is no free individual-to-individual true “free trade” anywhere on the planet. Which is convenient for free traders, as if trade “blows up” it wasn’t free trade and was government’s fault. QED.
And yet I have seen you argue to protect and expand trade anyhow, for the mutual benefits it brings, just recently with China. So I’ll ask you the question I asked Jon:
Right? And that’s what those energy companies were striving hard to do since 1997 — maximize voluntary transactions producing the mutual benefits of trade. If it’s good doing it with the Chinese, why not the Russians?
So who did what wrong? If the German government did something wrong in not obstructing this privately financed, privately-sought voluntary trade, please explain what that was. Specifically. (Please don’t say ‘it acted like a government’.)
Jon Murphy
Dec 6 2022 at 5:56am
Jim:
This article does a quick and decent job highlighting the political nature of the projects. Of course, it’s way more complicated but it’s s starting point. Your Wikipedia article just focuses on the technical aspects of the pipeline (probably for simplicity sake).
Second, you write:
That doesn’t imply free trade. A necessary condition, but hardly sufficient. Surely as a Coasian you know that rules matter. The US steel industry is owned, operated, etc by private companies but we do not have free trade in steel. Steel is highly protected through tariffs now.
Pierre Lemieux
Dec 6 2022 at 1:34pm
Sorry, Jim, I don’t base my opinions on anonymous Wikipedia entries. It would certainly turn me into a socialist (not that I want to resist the truth, but I would want a turnaround to be based on something solid).
Jim Glass
Dec 7 2022 at 11:11pm
[Pierre Lemieux wrote:]
Sorry, Jim, I don’t base my opinions on anonymous Wikipedia entries.
Fine, show whatever else you based your opinion on. If Nord really was a ‘political project organized by the German government’, instead of by market actors, there ought to be documentation of that all over the place.
And if it was such a bad example, in trade terms, of a ‘political project’ or ‘managed trade’ or whatever, did you or someone else at Econlog or anywhere else criticize it as such, after 1997 and before the Ukraine war? Just curious. I was away from Econlog for years so I don’t know.
Oh, never mind, if you don’t want to. I’m moving on.
Jon Murphy
Dec 4 2022 at 1:19pm
I am glad you brought that up. I am teaching that this very week as proof positive of my point. Putin thought he could use Nordstream as an economic and political weapon. It backfired for him. As soon as he tried to weaponize it, Germany and friends sought out subsitutes (just as the Law of Demand predicts!). The US has been flooding Europe with natural gas and Germany is actively developing subsitutes. Putin has gained nothing and lost a source of revenue. Germany and the West continue to back Ukarine.
In short: good guys win, bad guys lose, and as always, freedom prevails.
Another good example is China and Japan. China tries to control the rare earth market. They supplied about 90% of rare earths to Japan. Back in 2010, there was a dispute with Japan over some islands. China tried to force Japan to relinquish claims over the islands by cutting off rare earths. Japan simply said “no problem” and started mining their own. China was forced to relent and they have lost Japan as a market.
Sanctions and embargos are very ineffectual weapons thanks to globalization, not because of it.
If you want a good listen, check out this podcast with Peter Van Doren on energy independence.
Jose Pablo
Dec 4 2022 at 11:08pm
If two parties are engaged in voluntary trading both are getting as much as they are giving from the trade. Otherwise …
I have never got what “sanctions” mean if this is the starting point.
Jim Glass
Dec 8 2022 at 10:31pm
Aw, it seems I’ve been censored!
And it was a friendly comment, complete with a smiley. 🙂
That’s it, no more nice comments with smileys from me.
From now, I be Mr. Nasty. 🙁
Comments are closed.