Yes and…39% of cumulative CO2 emissions are from our two nations. A 50% chance of reaching the 1.5° Paris goal leaves a remaining budget of 275GtCO2, 16 years of only US + China emissions at current levels. (Friedlingstein, 2023). Why does it matter?
1) China started down the cap and trade path of US SO2 in around 2007 If you remember US CAP or Kerry Graham Lieberman…it looked like US corporates were all-in and Republican support in the Senate seemed not impossible. China geared up for green. We took a pass.
2. China actually prepared for the Nordhaus climate club\/aligned co2 price framework - EVs, batteries, solar panels, wind turbines…these were new industries so China bet big on global leadership.
3) Meanwhile, the US quit the 193-nation Paris Agreement, became global #1 oil & gas producer, made a huge bet on LNG export capacity, and later legislated all kinds of carrots for domestic manufacturers of green products. US LNG competing in EU & EMDCs with Chinese cleantech! Then shut out China cleantech in IRA legislation. China built a bubble in EVs after their real estate bubble - and we stuck it to them (even though their cheaper goods would make up for our error in not acquiring industrial capacity in cleantech). All because a bunch of supposedly conservative politicians do not believe the earth has an energy imbalance of 3.4 watts per square meter (see NOAA AGGI). Hey wait…shut down NOAA except weather forecasting (see 2025 plan)! Imbecilic.
4) China is subsidizing green exports and Republicans are suspending belief in physics. Two spoiled children who will bake the planet if the US goes isolationist. Republicans…please have a lunch with on this with Hank Paulson and Billy Pizer... or even take a peak at the distribution shape of potential climate damages as the Military has - think about hedging the mother of all fat tails.
Bottom Line - engage on climate - and trade with - China. We will be richer. And cooler. With fewer immigrants and failed states.
I know I'm late to this, but I wanted to say (source: writing a book which is in part about this) that the important thing to realize about the immediate post-1945 U.S. commitment to an open, free trade-oriented, multilateral economic order is that it was not primarily driven by domestic economic considerations at all. It was primarily a foreign policy gambit with a few aims. The first was to help get Europe, Japan and other allies on their feet after the devastation of WW2, by giving them access to the U.S. market and some way to alleviate the dollar gap, which was a huge economic problem in the 1940s, when Europeans were starving and the spectre of Communist revolutions was stalking Italy, France and West Germany. The idea was to keep the allies strong and stop them going Communist. The second was to prevent a long-term drift back to the kind of autarkic, closed economic blocs (imperial or otherwise) which many Americans blamed for eventually leading to many of the international crises of the 1930s and ultimately to WW2. There are plenty of examples of U.S. officials saying in the 1940s things basically to the effect of "we'll take some economic hit from this open order, but we have to do it for foreign policy reasons". And they also expected the hit to be small because the U.S. was just insanely more productive and had much higher output than the rest of the world in the 1940s - something like 50-60% of all manufactured goods in the entire world were produced in the U.S. in the late 1940s, so they felt they had relatively little to fear from foreign competition.
I guess I'm a neoliberal. It is not that free markets do not work, they just do not work with our current set of geopolitical conditions and pressures. Of course (as a planet filled with all the same apex species) we should set aside nationalistic habits and concerns and form a new global tribe. Things would be so much more efficient and we would produce so much more if we could not worry about tariffs, pirates, wars, etc. But we aren't in that world yet. This fact is the main source of my economic consternation.
Somebody has to call BS on this premise: your topic is "Neoliberalism & its enemies," not "Hewlett's grant-making vis-a-vis neoliberalism as an analytical framework."
Strawman takedowns are sloppy. That's why neoliberalism critiques are generally unedifying & hollow precisely to the extent that they under specify the object of critique.
To specify and be fair, I this sentence is an uncharacteristically dodgy rhetorical move given your (appreciated) preoccupation with rigor: "If Hewlett’s grant-making does not reflect the best ideas of left-wing scholarship on the topic of neoliberalism, that’s a problem with their grant-making, not a problem with my article." The problem does indeed lie with the premise of the article.
Admittedly off-topic, but I actually really like Harris's laugh. I'd understand if it felt forced, but I think it's genuine. I'm meh on her generally, so I don't think it's simply because we're both Democrats. Am I missing something?
Great piece. One quick correction -- the "antidumping" duties on Chinese tires that you cite, were not antidumping duties, but safeguards. Safeguards -- which are at the discretion of the POTUS to impose --- are imposed on "fairly traded" goods that nevertheless injure domestic industry. Antidumping duties (which the Obama administration also used plenty) are imposed when the goods are not fairly traded AND imports injure the domestic industry. POTUS (allegedly) has no control of over the imposition of antidumping (or countervailing) duties.
I think your analysis would benefit from moving up a level and asking yourself, should public policy focus on what’s best for workers or what’s best for consumers? I would argue that US policy has focused entirely too much on what’s good for consumers at the expense of workers.
Voters have chosen what is best for consumers instead of workers too, which is why they've voted for union busters. I don't like it, but the working class as a whole has decided that their consumer identity matters more in practice.
Counterpoint: Everyone is at all times a consumer; many people are not workers at any given time; everyone is not a worker for a substantial part of their life; ergo, policy should prioritize consumer benefits. (Hat tip to Frederic Bastiat.)
I'm not sure the second point follows from the first. Almost all people who aren't workers are dependent on people who are, or on work they've already done, and so may also gain from worker benefits.
No argument there. The question is do you have zero worker protections, zero trade barriers and open boarders in order to keep prices as low as possible? Or, do you strike a balance between the needs of workers and consumers and are we currently leaning too much in favor of consumers?
'American chicken is considered unsafe in Europe, even though as far as I can tell, when Europeans visit the United States they eat the chicken.'
It's not considered 'unsafe' in the sense that any single one or two encounters with it are likely to lead to disaster, but that the standards are suboptimal. In a similar way, Europeans mostly think American gun laws are mad and bad, but Europeans still visit public places when they visit America. It's possible to tolerate a level of risk and perceived bad policy without thinking it should be adopted in one's homeland.
The discussion on TPP reminded me of something I've been meaning to bring up more about conservative opposition to TPP. I've seen in other spaces, people trying to rationalize why Trump and his followers hated the TPP deal so much. But as someone who came at least partially from a far-right background, I can testify that far-right people have a deep fear and loathing of all free trade.
Ultimately, if they believe in anything philosophical it is in the separation of the races, and that countries should be racially segregated and fight each other for dominance, and not trade with each other. This is why Trump, Bannon, MAGA, etc. hate the TPP and really any international agreement that is egalitarian in nature. And they often talk of tarriffs as being some kind of magical policy that will fix all economic ills because it is a policy that while economically harmful, it still facilitates the separation of nations/races.
So once again it always comes back to the same thing: bigotry as a life philosophy.
This is just venting on my part, but a very large part of why I consider the current critique of trade with China to be made in flat-out and knowing bad faith is because I am old (almost 50 even!) and can remember all the bloviating and weeping and pictures of morose middle-aged men standing around in front of closed factory gates and b****ing about evil slanty-eyed foreigners stealing American manufacturing jobs going back to when I was a kid! Billy Joel's "Allentown" was released in 1982 for God's sake! (Sample lyrics: "Well, we're living here in Allentown / And they're closing all the factories down * * * Every child had a pretty good shot / To get at least as far as their old man got / But something happened / On the way to that place). If American manufacturing has been getting "gutted" for literally the *entire adult lifetime* of anyone of working age living today, I can't take anyone's tears about the subject in 2024 seriously.
I'm sympathetic to your point--I grew up in Detroit, and my family owned a small manufacturing business--but isn't part of the bitching today that while this de-industrialization has been happening for decades, we still haven't solved the problem of what to replace those jobs with?
Everybody likes to roll their eyes and say, Get over it, find another career--but I think it's kind of remarkable how many (men in particular) have failed to do so. I don't think we have another industry/career path for the type of workers who were previously working on the floor.
A big part of the old order was a political Noblesse Oblige- most of the industrial capacity of the rest of the world was bombed out. America had to allow growth, just to do right by its allies, and it was big enough and ahead enough it could absorb the cost.
China is bigger than the US, so it can't absorb the cost.
The problem with neoliberalism is that there's no such thing as unilateral free trade. You will always simply import the trade policy of the people you trade with, so you can only have free trade by mutual agreement. The new consensus doesn't see free trade agreements as less-worse options in a world where unilateral free trade is the ideal. It instead sees these sorts of agreements as the foundation of viable trade relationships.
This is separate from the critique of free trade offered up by the 1990s anti-WTO types, et al, which is completely Ricardian: that all the jobs will go to Portugal on account of its lower labor costs.
Chinese political prisoners are gonna be sewing soccer balls with their teeth whether we sell 'em cheeseburgers or not, so let's sell 'em cheeseburgers.
“American chicken is considered unsafe in Europe, even though as far as I can tell, when Europeans visit the United States they eat the chicken.”
I don’t have any strong opinion on which side of the dispute is right, but I don’t think this fact is particularly indicative. It’s very common for Americans to visit foreign countries with laxer food safety standards and eat the food, and I don’t think most people would consider this evidence that American food safety rules not followed in e.g. Mexico should be repealed.
When a factory gets offshored, everyone in the country gets cheaper goods, but the workers lose their jobs. This is the exact opposite of protectionism: diffuse benefits but concentrated costs. We can accept that on a macro scale this trade off is worth it while still recognizing that the factory workers do have a legitimate grievance. What to do about it is a much harder question.
A related problem to the trade deals is that they’re not considered in terms of their timeline vs. individual saliency.
Suppose the washing machine trade deal happens, then within a few years, new competition comes in and American washing machine builders begin to lose their jobs. Meanwhile, the bulk of the American population benefits from cheaper washing machines. Since there are so many more consumers than builders, the net economic impact is strictly speaking positive for the country.
The problem is that saving $50 on the washing machine is nice but not particularly salient for almost everyone while losing your job is incredibly salient. There is no history that there is successful mass retraining of displaced workers. The whole reason you see new articles about the 60-year-old welder who becomes a web developer is because it is so unusual as to be newsworthy. The Luddites had their moment, but in the end, they mostly ended up worse off than they had been before the machines came in… and on and on.
There are many academic studies on this but it’s also just common sense: middle-aged people have many life anchors such as families and homes and responsibilities for aging parents so they’re not really in a position to tear up their lives and move even if they had the desire to radically retrain themselves.
I have sometimes considered the idea of viewing trade deals as timed controlled events. If a trade deal is good then it should be good over time. Suppose you agree on the trade deal but give it a 20 year phase in at 5% per year. It seems to me that this smooths out the saliency gap… older workers just retire, middle-aged workers mostly retire, while everyone sees that their kids should not follow them into the factories, and the kids have time to react and get new types of jobs. Nothing is perfect so there will be some sad stories, but it seems to me. This would work to minimize that.
Economists would not love this because the overall benefit is diminished in both directions, but they also measure success too strongly in terms of GDP and not in terms of whether it leads to the rise of fascist populism. Human lives have a timeline that cannot move as fast as capital can
Not every country could get away with this idea, but access to the US market or the European market is so enormously valuable that you can place conditions on it and if we miss out on some trade deals oh well.
In some instances, you might even find that American washing machine companies have the time to retool and become competitive, which is ultimately the best scenario for the US. We can’t be the best at everything or even many things, but there’s no real nationalistic competitive advantage to washing machine manufacturing. Tasks like that probably get their advantage mostly from bad labor and environmental regulation and currency manipulation. The Koreans are wonderful people, but they have no genetic disposition to build machines.
Yes and…39% of cumulative CO2 emissions are from our two nations. A 50% chance of reaching the 1.5° Paris goal leaves a remaining budget of 275GtCO2, 16 years of only US + China emissions at current levels. (Friedlingstein, 2023). Why does it matter?
1) China started down the cap and trade path of US SO2 in around 2007 If you remember US CAP or Kerry Graham Lieberman…it looked like US corporates were all-in and Republican support in the Senate seemed not impossible. China geared up for green. We took a pass.
2. China actually prepared for the Nordhaus climate club\/aligned co2 price framework - EVs, batteries, solar panels, wind turbines…these were new industries so China bet big on global leadership.
3) Meanwhile, the US quit the 193-nation Paris Agreement, became global #1 oil & gas producer, made a huge bet on LNG export capacity, and later legislated all kinds of carrots for domestic manufacturers of green products. US LNG competing in EU & EMDCs with Chinese cleantech! Then shut out China cleantech in IRA legislation. China built a bubble in EVs after their real estate bubble - and we stuck it to them (even though their cheaper goods would make up for our error in not acquiring industrial capacity in cleantech). All because a bunch of supposedly conservative politicians do not believe the earth has an energy imbalance of 3.4 watts per square meter (see NOAA AGGI). Hey wait…shut down NOAA except weather forecasting (see 2025 plan)! Imbecilic.
4) China is subsidizing green exports and Republicans are suspending belief in physics. Two spoiled children who will bake the planet if the US goes isolationist. Republicans…please have a lunch with on this with Hank Paulson and Billy Pizer... or even take a peak at the distribution shape of potential climate damages as the Military has - think about hedging the mother of all fat tails.
Bottom Line - engage on climate - and trade with - China. We will be richer. And cooler. With fewer immigrants and failed states.
I know I'm late to this, but I wanted to say (source: writing a book which is in part about this) that the important thing to realize about the immediate post-1945 U.S. commitment to an open, free trade-oriented, multilateral economic order is that it was not primarily driven by domestic economic considerations at all. It was primarily a foreign policy gambit with a few aims. The first was to help get Europe, Japan and other allies on their feet after the devastation of WW2, by giving them access to the U.S. market and some way to alleviate the dollar gap, which was a huge economic problem in the 1940s, when Europeans were starving and the spectre of Communist revolutions was stalking Italy, France and West Germany. The idea was to keep the allies strong and stop them going Communist. The second was to prevent a long-term drift back to the kind of autarkic, closed economic blocs (imperial or otherwise) which many Americans blamed for eventually leading to many of the international crises of the 1930s and ultimately to WW2. There are plenty of examples of U.S. officials saying in the 1940s things basically to the effect of "we'll take some economic hit from this open order, but we have to do it for foreign policy reasons". And they also expected the hit to be small because the U.S. was just insanely more productive and had much higher output than the rest of the world in the 1940s - something like 50-60% of all manufactured goods in the entire world were produced in the U.S. in the late 1940s, so they felt they had relatively little to fear from foreign competition.
I guess I'm a neoliberal. It is not that free markets do not work, they just do not work with our current set of geopolitical conditions and pressures. Of course (as a planet filled with all the same apex species) we should set aside nationalistic habits and concerns and form a new global tribe. Things would be so much more efficient and we would produce so much more if we could not worry about tariffs, pirates, wars, etc. But we aren't in that world yet. This fact is the main source of my economic consternation.
Somebody has to call BS on this premise: your topic is "Neoliberalism & its enemies," not "Hewlett's grant-making vis-a-vis neoliberalism as an analytical framework."
Strawman takedowns are sloppy. That's why neoliberalism critiques are generally unedifying & hollow precisely to the extent that they under specify the object of critique.
To specify and be fair, I this sentence is an uncharacteristically dodgy rhetorical move given your (appreciated) preoccupation with rigor: "If Hewlett’s grant-making does not reflect the best ideas of left-wing scholarship on the topic of neoliberalism, that’s a problem with their grant-making, not a problem with my article." The problem does indeed lie with the premise of the article.
Admittedly off-topic, but I actually really like Harris's laugh. I'd understand if it felt forced, but I think it's genuine. I'm meh on her generally, so I don't think it's simply because we're both Democrats. Am I missing something?
Great piece. One quick correction -- the "antidumping" duties on Chinese tires that you cite, were not antidumping duties, but safeguards. Safeguards -- which are at the discretion of the POTUS to impose --- are imposed on "fairly traded" goods that nevertheless injure domestic industry. Antidumping duties (which the Obama administration also used plenty) are imposed when the goods are not fairly traded AND imports injure the domestic industry. POTUS (allegedly) has no control of over the imposition of antidumping (or countervailing) duties.
I think your analysis would benefit from moving up a level and asking yourself, should public policy focus on what’s best for workers or what’s best for consumers? I would argue that US policy has focused entirely too much on what’s good for consumers at the expense of workers.
Voters have chosen what is best for consumers instead of workers too, which is why they've voted for union busters. I don't like it, but the working class as a whole has decided that their consumer identity matters more in practice.
I think that’s changing. Now when they get what they want good and hard are they going to be enraged by the price spikes? Probably.
Counterpoint: Everyone is at all times a consumer; many people are not workers at any given time; everyone is not a worker for a substantial part of their life; ergo, policy should prioritize consumer benefits. (Hat tip to Frederic Bastiat.)
I'm not sure the second point follows from the first. Almost all people who aren't workers are dependent on people who are, or on work they've already done, and so may also gain from worker benefits.
No argument there. The question is do you have zero worker protections, zero trade barriers and open boarders in order to keep prices as low as possible? Or, do you strike a balance between the needs of workers and consumers and are we currently leaning too much in favor of consumers?
'American chicken is considered unsafe in Europe, even though as far as I can tell, when Europeans visit the United States they eat the chicken.'
It's not considered 'unsafe' in the sense that any single one or two encounters with it are likely to lead to disaster, but that the standards are suboptimal. In a similar way, Europeans mostly think American gun laws are mad and bad, but Europeans still visit public places when they visit America. It's possible to tolerate a level of risk and perceived bad policy without thinking it should be adopted in one's homeland.
The discussion on TPP reminded me of something I've been meaning to bring up more about conservative opposition to TPP. I've seen in other spaces, people trying to rationalize why Trump and his followers hated the TPP deal so much. But as someone who came at least partially from a far-right background, I can testify that far-right people have a deep fear and loathing of all free trade.
Ultimately, if they believe in anything philosophical it is in the separation of the races, and that countries should be racially segregated and fight each other for dominance, and not trade with each other. This is why Trump, Bannon, MAGA, etc. hate the TPP and really any international agreement that is egalitarian in nature. And they often talk of tarriffs as being some kind of magical policy that will fix all economic ills because it is a policy that while economically harmful, it still facilitates the separation of nations/races.
So once again it always comes back to the same thing: bigotry as a life philosophy.
This is just venting on my part, but a very large part of why I consider the current critique of trade with China to be made in flat-out and knowing bad faith is because I am old (almost 50 even!) and can remember all the bloviating and weeping and pictures of morose middle-aged men standing around in front of closed factory gates and b****ing about evil slanty-eyed foreigners stealing American manufacturing jobs going back to when I was a kid! Billy Joel's "Allentown" was released in 1982 for God's sake! (Sample lyrics: "Well, we're living here in Allentown / And they're closing all the factories down * * * Every child had a pretty good shot / To get at least as far as their old man got / But something happened / On the way to that place). If American manufacturing has been getting "gutted" for literally the *entire adult lifetime* of anyone of working age living today, I can't take anyone's tears about the subject in 2024 seriously.
I'm sympathetic to your point--I grew up in Detroit, and my family owned a small manufacturing business--but isn't part of the bitching today that while this de-industrialization has been happening for decades, we still haven't solved the problem of what to replace those jobs with?
Everybody likes to roll their eyes and say, Get over it, find another career--but I think it's kind of remarkable how many (men in particular) have failed to do so. I don't think we have another industry/career path for the type of workers who were previously working on the floor.
A big part of the old order was a political Noblesse Oblige- most of the industrial capacity of the rest of the world was bombed out. America had to allow growth, just to do right by its allies, and it was big enough and ahead enough it could absorb the cost.
China is bigger than the US, so it can't absorb the cost.
The problem with neoliberalism is that there's no such thing as unilateral free trade. You will always simply import the trade policy of the people you trade with, so you can only have free trade by mutual agreement. The new consensus doesn't see free trade agreements as less-worse options in a world where unilateral free trade is the ideal. It instead sees these sorts of agreements as the foundation of viable trade relationships.
This is separate from the critique of free trade offered up by the 1990s anti-WTO types, et al, which is completely Ricardian: that all the jobs will go to Portugal on account of its lower labor costs.
Chinese political prisoners are gonna be sewing soccer balls with their teeth whether we sell 'em cheeseburgers or not, so let's sell 'em cheeseburgers.
“American chicken is considered unsafe in Europe, even though as far as I can tell, when Europeans visit the United States they eat the chicken.”
I don’t have any strong opinion on which side of the dispute is right, but I don’t think this fact is particularly indicative. It’s very common for Americans to visit foreign countries with laxer food safety standards and eat the food, and I don’t think most people would consider this evidence that American food safety rules not followed in e.g. Mexico should be repealed.
When a factory gets offshored, everyone in the country gets cheaper goods, but the workers lose their jobs. This is the exact opposite of protectionism: diffuse benefits but concentrated costs. We can accept that on a macro scale this trade off is worth it while still recognizing that the factory workers do have a legitimate grievance. What to do about it is a much harder question.
A related problem to the trade deals is that they’re not considered in terms of their timeline vs. individual saliency.
Suppose the washing machine trade deal happens, then within a few years, new competition comes in and American washing machine builders begin to lose their jobs. Meanwhile, the bulk of the American population benefits from cheaper washing machines. Since there are so many more consumers than builders, the net economic impact is strictly speaking positive for the country.
The problem is that saving $50 on the washing machine is nice but not particularly salient for almost everyone while losing your job is incredibly salient. There is no history that there is successful mass retraining of displaced workers. The whole reason you see new articles about the 60-year-old welder who becomes a web developer is because it is so unusual as to be newsworthy. The Luddites had their moment, but in the end, they mostly ended up worse off than they had been before the machines came in… and on and on.
There are many academic studies on this but it’s also just common sense: middle-aged people have many life anchors such as families and homes and responsibilities for aging parents so they’re not really in a position to tear up their lives and move even if they had the desire to radically retrain themselves.
I have sometimes considered the idea of viewing trade deals as timed controlled events. If a trade deal is good then it should be good over time. Suppose you agree on the trade deal but give it a 20 year phase in at 5% per year. It seems to me that this smooths out the saliency gap… older workers just retire, middle-aged workers mostly retire, while everyone sees that their kids should not follow them into the factories, and the kids have time to react and get new types of jobs. Nothing is perfect so there will be some sad stories, but it seems to me. This would work to minimize that.
Economists would not love this because the overall benefit is diminished in both directions, but they also measure success too strongly in terms of GDP and not in terms of whether it leads to the rise of fascist populism. Human lives have a timeline that cannot move as fast as capital can
Not every country could get away with this idea, but access to the US market or the European market is so enormously valuable that you can place conditions on it and if we miss out on some trade deals oh well.
In some instances, you might even find that American washing machine companies have the time to retool and become competitive, which is ultimately the best scenario for the US. We can’t be the best at everything or even many things, but there’s no real nationalistic competitive advantage to washing machine manufacturing. Tasks like that probably get their advantage mostly from bad labor and environmental regulation and currency manipulation. The Koreans are wonderful people, but they have no genetic disposition to build machines.