In the Providence Journal Mackubin Owens makes a point of which I definitely approve. If you’re looking for an historical analogy for the situation between the United States and China, Athens and Sparta (“the Thucidydes trap”) or Russia and Japan in 1904 are the wrong analogies to make. The right analogy is between Britain and Germany in the 19th and early 20th centuries:
For six decades after the defeat of Napoleon in 1815, Great Britain was able to underwrite a liberal world order based on freedom of navigation and free trade. The unification of Germany in the early 1870s threatened this system. Although Great Britain was willing to accommodate Germany, Germany did not wish to be accommodated. Instead, it followed a mercantilist trade policy and sought to challenge Great Britain at sea.
The resulting tensions arising from Germany’s trade policies and its decision to build a navy capable of challenging the Royal Navy set the world on the path to the Great War of 1914.
and I think this is exactly right:
For a number of reasons, these warnings have not been seriously addressed. First, the optimists have successfully resisted a tougher line against China, making a fetish out of “free trade.†But free trade works only when the parties to trade agreements act in good faith. China has not done so, and indeed, has gamed the system to change trade from a positive-sum game, in which both parties benefit, to a zero-sum game, in which there is no reciprocity.
Over the period of the last 40 years we have made a series of unforced errors with respect to China. It’s not too late for us to reverse course. We shouldn’t kid ourselves into thinking there won’t be winners and losers by doing so. The losers will be everyone who has benefited by our terrible decisions and the winners will be those who have lost by them. IMO that wouldn’t be such a bad thing. But today’s winners are extremely powerful and want us to stay on the same self-destructive course.
And I’ve said this before. we don’t need to change China’s behavior. We need to change our own.
The nutty trade policies we have pursued with China we previously pursued with Japan and the other Tigers. American industry was well on its way overseas before we opened up to China, but they have really put the kibosh on us.
We need, ourselves, a mercantilist protectionist trade policy We should heavy restrict imports, not only by tariffs, but by quotas. The ultimate goal should be to rebuild American industry.
It is true that free trade and open borders reduces costs by (1) transferring manufacturing to low cost areas and (2) by providing excess labor to drive down local costs. But the result is the immiseration of our own working class, and the opioid epidemic is one result of that immiseration, which has spread from our urban black underclass to our rural white underclass.
For the last 40 years, our working class has seen a steady decline in real income, and middle class incomes have stagnated. The Ruling Class has captured all the economic growth of the last 40 years and has even stolen income from the working class.
If you don’t like Trump or don’t understand him or what happened, you are an idiot. Next in the batters box is our very own Pinochet. People can be disappeared over Lake Michigan, too.
I can’t think of any society managed to control the appetites of their ruling class through mere regulation.
I read Massie’s Dreadnaught last year, and was appalled by the similarities between the British/German situation then and the USA/China situation now. I have little doubt that this will also end poorly.
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As to today’s winners wanting “us” to stay on the same self-destructive course. I posit that “they” don’t see themselves as “us”, and have no problem at all with the direction we’re headed.
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Gray Shambler, there are many ways of cutting such people down to size, if you catch my meaning.