It is more or less a requisite part of studying any amount of international relations that one should come across the idea of “wishful thinking”. In short, I’d say that this is the idea that our surroundings conform to a false reality that would be conducive to a particular strategy being carried out towards a desired end. Similarly, it can lead us to refute incoming information when it forces us to confront a reality that we don’t want to be true, or that is so entirely inconsistent with our preconceptions that we are unable to consider its veracity.
This goes hand in hand with the idea of incomplete information, which is a typical problem in political systems with few informational feedbacks, often due to an overly assertive leader. The possible result is that false conclusions are reached due to false assumptions that are reflected back when the inquisitor looks out to the world. This may be the result of assuming that reality behaves in some particular way, that it will work the way we desire it to, and that these assumptions seem perfectly reasonable to us, regardless of how they may fail to stand up to what is really going on in the world that exists outside of our head.
To some extent, this is an inescapable problem in every field of inquiry. What I am wondering is if such wishful thinking may have led a particularly famous physicist to a wrong conclusion? The reason that I think it is interesting to take this issue up is that another particularly famous physicist has much more recently used this possibly false conclusion to propose a theory of “cyclical big banging”, if I may be permitted to invent such a term, as an explanation for where the big bang came from. I have been altogether too vague so far, so let me get directly to the topic matter at hand.
As far as I recall, Einstein believed that the space-time continuum was circular. By that I mean that I am lead to believe that he believed that there was some curvature in the universe that essentially meant that if an object of some mass were to continue uninterrupted in one direction for an infinite amount of time, that the this object would return to its starting point. It should be explicit that I do not understand this to mean that he questioned the infinitude of the potential size of the universe. (Perhaps it could have ever further rings of continuum, or some such thing, but in any case, the details are not important for my argument).
Allow me to change tack for a moment and offer some context with a brief outline of some issues with the big bang, what it allows us to explain and a major problem that this theory poses for the universe if it is true.
Upon noticing some particular patterns in waves beaming to the earth, some physicists observed a few decades ago that all the other galaxies in the universe appear to be getting further away from ours. This is the centerpiece of evidence that leads us to believe that the universe started as an incredibly dense ball of matter that exploded into every direction.
Thing is, the further other galaxies are away from us, the greater the difference in this “wave signature”, à la doppler effect, which amounts to evidence that the universe continues its outward spread. This led to the “great cool down” theory, which basically states that the universe is in continual expansion. (The opposing theory being that gravity would eventually be enough to stop this and bring us flying back together, with equally catastrophic consequences… unfortunately, or fortunately, I’m not sure which, it appears that things are already way to far apart and are moving way too fast).
The great cool down is no great secret, but in case it has escaped your attention, this means that as everything spreads further and further apart, the heat becomes more spread out, and we trend towards the theoretical limit of absolute zero, where the inner bits of particles stop moving, at about -273.15C. One final point before continuing is that time is the fourth dimension. This is a very deep statement. It has ginormous implications in terms of the way that the universe can be conceived, but I have absolutely no intentions of getting into any in depth discussion of the philosophical or mathematical implications of relativity (the second of which is beyond me at this point in time anyways).
OK, back to the main point. Einstein proposed that the space-time continuum could be curved such that we may be able to return to the point of origin by apparently continuing in one direction.
Stephen Hawking takes up on this in his ‘Brief History of Time’ to suppose that this would allow for recurring big bangs. The idea would be that everything would continue expanding to the point that space-time curved back in on itself, leading straight from the great cool down back into the next agglomeration of matter/energy, leading to yet another big bang.
Two interesting things that come from this idea: first, that the big bang is the beginning of time for all intents and purposes, since it would obviously destroy all forensic record of what came before it (including, say, another intelligent species which had discovered the secrets of the universe). Second, and similarly, there would be no way to know how many big bangs there had been.
What I particularly take issue with here is that, to my knowledge, there is no reason whatsoever to believe it’s true. The theory appeals to me for a lot of reasons though. Paramount being that, even if all the evidence we see points to a great cool down, I have a far easier time, in a spiritual sort of sense, dealing with the implications of recurring big bangs than a great cool down. It leaves so much more to the imagination. Nature itself, for all its contradictions (perhaps you should read “dynamic equilibria” within ever-changing surroundings, or “constructive tensions” in place of that word), cannot be anything other than what it is.
A recurring big bang leaves plenty of theoretical space for one to suppose that nature has meaning. That nature has a future. That, whatever happens, even if life ends, it can begin again. That there is a cycle. That there is equilibrium. Balance. Direction. Meaning. At the outside edge, even if all religion and theism is nothing more than a confused attempt by human individuals and societies to construct a sense of psychological order within an apparently chaotic reality, that even in the case of the end of the universe, there is always a new beginning.
The opposite of such a hypothesis, of course, would be that nature can have no meaning. That nature has no future. That, whatever happens, when the continuum of life reaches an end, it will never begin again. That there is no cycle of the universe. That the trend to equilibrium means a progression to what is, at the outside limit, essentially pure nothingness.
What I am saying is that, in the lack of evidence, I have to wonder if Hawking’s recurring big bang is nothing but a case of wishful thinking, in the face of the sheer weight of the alternative.
_____________________________
But, think of a drop of oil in water. Now … just imagine that there was some force that would make it suddenly shoot to all directions in a pot of moving water. Both experience and simple scientific explanations tell us that the oil will eventually rejoin into one drop when surrounded by water. We know that energy (aka matter) is attracted to itself in some sort of way, almost certainly some sort of force almost identical to what we understand as gravity.
Which brings me to the even greater question, which has led many physicists to postulate the existence of dark matter … Is it not possible that there is not some analogy for Van der Waals forces at the macro level? I have no reason to believe this is the case, except that following Lyell’s principle of uniformatarianism, if we have reached such a conclusion at the level of particles, then I would think that some such phenomenon may be at least as reasonable as the postulation of dark matter that is all the rage in theoretical physics these days. The present argument can easily be rejected by simply saying that different laws apply to small bodies (particles) and large bodies (say, stars and galaxies), but I just don’t find that to be an entirely satisfying rejection. If you don’t know what Van der Waals discovered, then don’t worry about it. Otherwise, that’s more than just a bit of food for thought.
________________________________________
On another note, I have reached a troubling conundrum.
I have spent the last few days in a somewhat of a state of heightened awareness of the fact that everything is made of stuff (i.e., is made of parts). This has brought an enormous sense of liberation, in almost the opposite of the Foucault-ian concept of “docile bodies” which are used by producers in ever-more-specialized ways to better ever-better producers or ever-more-efficient soldiers, etc. Rather, with more of an artisan sort of outlook (perhaps more ‘natural’ for humans, but certainly not more competitive in the evolutionary sense when connecting productive capacity to military capacity at the societal level), it is a sort of liberation, knowing that the ‘things’ around me are all within the realm of possibility were I to wish to cultivate the skill of making any of those constituent things.
The conundrum, however, comes with the shocking realization that nothing really exists. At least, not in the conventional way. I mean, I’ve known the nature of Van der Waals forces since high school chemistry, but a recent discussion led me to some contemplation of the way that (at the atomic or molecular level) material, or mass, that makes up an object doesn’t so much occupy a space, as it demarcates a space that excludes almost the entire probability mass of another object or bit of mass from simultaneously sharing any bit of that space.
Everything is made of stuff, but that stuff really isn’t anything in particular in the first place.
In closing, let me say that allowing common sense and experience to guide choices is about the only sensible thing to do for practical purposes, but it is only one of many ways that we questioning beings have at our disposal to inquire about the reality of nature.
Tuesday, February 17, 2009
Tuesday, February 10, 2009
Consider this:
1) I propose that there is a 1% chance of a giant fire burning down your house, killing some family members and forcing the rest to live on the streets. Do you a) spend a small portion of your income, perhaps 1%, protecting against this possibility, or b) do nothing and hope there's no fire.
2) I propose that there is a 99% chance that there will be a small fire in your house, causing some damages, possibly killing one family member and certainly forcing your uncle onto the streets for an extended period of time. Do you a) spend a small portion of your income trying to minimize damage, or b) do nothing and hope there's no fire?
The next question is: is global warming a type 1 scenario or a type 2 scenario.
(hint, a pair of pears would just be too much in about two seconds).
1) I propose that there is a 1% chance of a giant fire burning down your house, killing some family members and forcing the rest to live on the streets. Do you a) spend a small portion of your income, perhaps 1%, protecting against this possibility, or b) do nothing and hope there's no fire.
2) I propose that there is a 99% chance that there will be a small fire in your house, causing some damages, possibly killing one family member and certainly forcing your uncle onto the streets for an extended period of time. Do you a) spend a small portion of your income trying to minimize damage, or b) do nothing and hope there's no fire?
The next question is: is global warming a type 1 scenario or a type 2 scenario.
(hint, a pair of pears would just be too much in about two seconds).
Saturday, February 7, 2009
language and experience
If language can only imperfectly communicate experience or reality, then what's the significance of the experience of communication?
Apple. Picture it. Imagine tasting it. Pick one. Do it, in your mind. Is it really an apple? Of course not.
Now think about another person doing each of the same things. Do you think they are thinking about the same apple, or even the same kind of apple? Enjoying the imaginary apple in the same kind of way?
Here I am talking about a very simple thing. An apple. Yet, rest assured, we already find great divergence in what we are talking about. If we can't even agree on a precise meaning of simple things, then how are earth are we to communicate clearly when it comes to deeper communication?
In my mind, I consider every act of communication to be an act of miscommunication, although sometimes we are not far off the mark. This can be a source of great consternation, as we try to share our experience of life with the people around us, but it can also be a great source of pleasure, as we explore our social surrounding.
At the end of the day though, I cannot get inside your head and you cannot get inside mine. Words may be out in the open, but the listener may presume to understand something, according to their experience, whereas the speaker may presume that the listener understood the communication according to the way the the speaker themself had intended it.
So, in a sense, we can escape all this quite easily by forgetting about words and getting to actions. I may eat an apple. I may share an apple. I might eat an apple that looks and tastes the same as another one, eaten by another person. But, did I eat it alone? With someone? Was our experience of eating the apple similar?
OK, so a largely identical experience may carry differing significance for two people. No problem then. Experience must be the loci of meaning then. No original statement there, after all, that's where the phenomenologists ended up. But, I am not thinking of the pathway through exploration of the meaning of experience that follows from cognition through to psychoanalysis. This was a path that seemed to carry a significant portion of philosophy and psychology over the last century much farther from reality and truth than closer to it.
What is the significance of experience? of AN experience that is. The apple. Looking at it. Eating it. Picking it, etc. When does it become more than than just the act in itself?
When is eating an apple more than eating an apple? I suggest, perhaps, when it takes on a social nature. Eating an apple is a thing that any apple-eating animal can do. Doing so as a human, well that's a different story.
It is something that can be done together. The very fact that it is done alone may also have a particular signifiance, or none. Whatever the case is, we can go beyond the action itself. It goes beyond the shared or solitary experience of doing so. More than simple objective reality, transformed into a symbol, a word, it becomes the paranormal, something more than reality. An experience we share, or may talk about. And in the act of communication, it may be something that may take on all sorts of additional meanings, and bring us to much deeper levels of self- and social-consciousness.
Still, I am really referring to that very simple apple, all the while aware that much more can be pulled from the word, all of which goes well beyond the object as it is in material reality, and belongs in the scope of social REALITY that we construct, within and between and among ourselves.
The word is not the thing, but the word is a thing unto itself.
An experience is not a word, but can be transformed into a word in its own right.
The experience of a word, or many of them, in communication, is not just a word, not just an experience of something that is in nature, when abstracted from humans, but is something more.
What then of a note, the stroke of a brush, a step of a dance, a flicker of a smile. All, much more than they seem to be. More than nature, because their nature is social.
Apple. Picture it. Imagine tasting it. Pick one. Do it, in your mind. Is it really an apple? Of course not.
Now think about another person doing each of the same things. Do you think they are thinking about the same apple, or even the same kind of apple? Enjoying the imaginary apple in the same kind of way?
Here I am talking about a very simple thing. An apple. Yet, rest assured, we already find great divergence in what we are talking about. If we can't even agree on a precise meaning of simple things, then how are earth are we to communicate clearly when it comes to deeper communication?
In my mind, I consider every act of communication to be an act of miscommunication, although sometimes we are not far off the mark. This can be a source of great consternation, as we try to share our experience of life with the people around us, but it can also be a great source of pleasure, as we explore our social surrounding.
At the end of the day though, I cannot get inside your head and you cannot get inside mine. Words may be out in the open, but the listener may presume to understand something, according to their experience, whereas the speaker may presume that the listener understood the communication according to the way the the speaker themself had intended it.
So, in a sense, we can escape all this quite easily by forgetting about words and getting to actions. I may eat an apple. I may share an apple. I might eat an apple that looks and tastes the same as another one, eaten by another person. But, did I eat it alone? With someone? Was our experience of eating the apple similar?
OK, so a largely identical experience may carry differing significance for two people. No problem then. Experience must be the loci of meaning then. No original statement there, after all, that's where the phenomenologists ended up. But, I am not thinking of the pathway through exploration of the meaning of experience that follows from cognition through to psychoanalysis. This was a path that seemed to carry a significant portion of philosophy and psychology over the last century much farther from reality and truth than closer to it.
What is the significance of experience? of AN experience that is. The apple. Looking at it. Eating it. Picking it, etc. When does it become more than than just the act in itself?
When is eating an apple more than eating an apple? I suggest, perhaps, when it takes on a social nature. Eating an apple is a thing that any apple-eating animal can do. Doing so as a human, well that's a different story.
It is something that can be done together. The very fact that it is done alone may also have a particular signifiance, or none. Whatever the case is, we can go beyond the action itself. It goes beyond the shared or solitary experience of doing so. More than simple objective reality, transformed into a symbol, a word, it becomes the paranormal, something more than reality. An experience we share, or may talk about. And in the act of communication, it may be something that may take on all sorts of additional meanings, and bring us to much deeper levels of self- and social-consciousness.
Still, I am really referring to that very simple apple, all the while aware that much more can be pulled from the word, all of which goes well beyond the object as it is in material reality, and belongs in the scope of social REALITY that we construct, within and between and among ourselves.
The word is not the thing, but the word is a thing unto itself.
An experience is not a word, but can be transformed into a word in its own right.
The experience of a word, or many of them, in communication, is not just a word, not just an experience of something that is in nature, when abstracted from humans, but is something more.
What then of a note, the stroke of a brush, a step of a dance, a flicker of a smile. All, much more than they seem to be. More than nature, because their nature is social.
Net potential
The potential pitfalls of excessive focus on public debt in times of trouble...
The logic here is simple: the number that really matters is the debt to GDP ratio. Let me say it again for emphasis - it is the debt to GDP ratio, not the absolute amount of debt, that is significant when considering the ability of future generations to pay off our debt.
A typical fiscal conservative is concerned, among other things, that governments are in danger of building up too much debt when fighting recessions, which would then have negative long term effects due to the deteriorating position of public finances. In particular, right wingers in Canada seem to share a particular proclivity to citing Rae's difficulties in the recession in the early 90s as proof that government spending is not an effective way to reduce the extremes of recession. (Actually, they say that "you can't spend your way out of recession", whereas I am rephrasing this, to make it clear that, in fact, government spending clearly reduces the extremes of recessions, at least in the short term).
The important question then, is this: does additional public spending during recessionary periods a) improve, or b) damage, long term prospects for both the health of public books and economic growth.
My argument is simple, although I do not take it as a foregone conclusion that it is correct in each case. This argument should be correctly applicable in some cases, but not in others.
Here it is: long term productivity growth, which, in the knowledge economy, is largely driven by human capital accumulation, is particularly threatened by the extremes of recessions because workers shift to sectors where their acquired skills are underused or useless.
The intuition that comes from this, in more poignant terms? Fiscal stimulus must be big enough to prevent an enormous decline in long term potential growth that would result from a misallocation of skills that would take place during an extended period of recession.
I don't typically think it's worth writing something unless it points to the fallacy of a certain school of orthodox thinking, and in this case I think it's important to be explicit about which argument I'm taking on. Let me move from the orthodox to the unorthodox in discrete steps: 1) Government spending in recessions increases public debt and prevents the markets from doing their magic of downsizing or eliminating ineffcient economic activity; 2) Economic growth continues on a trend, so a period below the trend may not be too much to stress about because there is always a rebound; 3) but recessions also eliminate jobs in otherwise healthy industries; 4) These otherwise healthy industries rely on a certain body of skills and experience to maintain ongoing economic growth, 5) The misallocation of labour skills or loss of skills over time, that occurs as people find other occupations, reduces potential GDP, and 6) MOST IMPORTANTLY, a lower potential GDP growth rate means that the debt to GDP ratio is higher, EVEN IF TOTAL DEBT IS LOWER!
So, to sum this up in a few nice words ... When private demand collapses, public stimulus can have the net effect of improving our capacity to repay future debt by ensuring that human capital, i.e., acquired skills and talents, are not destroyed for all practical purposes when shifting to other sectors.
This argument doesn't even count for (a more common argument that) the fact that public spending may improve the debt to GDP ratio, even in the short term. This is simply due to the fact that spending 2% of GDP may sufficiently prop up demand that the decline in corporate and income tax receipts will have less of an impact on the total fiscal balance cmopared to doing nothing.
Between my present argument and the more standard one, let me conclude that it is no foregone matter that public efforts to spend our way out of recession have long term negative impacts on either public finances or long term growth. This is not to deny that the orthodox arguments must be carefully considered before a government decides to prop up aggregate demand as an anti-cyclical tool. It is, as I often say, a matter of debate for any givn case. Do not let anti-Keynesian dogmatism undermine our net potential.
The logic here is simple: the number that really matters is the debt to GDP ratio. Let me say it again for emphasis - it is the debt to GDP ratio, not the absolute amount of debt, that is significant when considering the ability of future generations to pay off our debt.
A typical fiscal conservative is concerned, among other things, that governments are in danger of building up too much debt when fighting recessions, which would then have negative long term effects due to the deteriorating position of public finances. In particular, right wingers in Canada seem to share a particular proclivity to citing Rae's difficulties in the recession in the early 90s as proof that government spending is not an effective way to reduce the extremes of recession. (Actually, they say that "you can't spend your way out of recession", whereas I am rephrasing this, to make it clear that, in fact, government spending clearly reduces the extremes of recessions, at least in the short term).
The important question then, is this: does additional public spending during recessionary periods a) improve, or b) damage, long term prospects for both the health of public books and economic growth.
My argument is simple, although I do not take it as a foregone conclusion that it is correct in each case. This argument should be correctly applicable in some cases, but not in others.
Here it is: long term productivity growth, which, in the knowledge economy, is largely driven by human capital accumulation, is particularly threatened by the extremes of recessions because workers shift to sectors where their acquired skills are underused or useless.
The intuition that comes from this, in more poignant terms? Fiscal stimulus must be big enough to prevent an enormous decline in long term potential growth that would result from a misallocation of skills that would take place during an extended period of recession.
I don't typically think it's worth writing something unless it points to the fallacy of a certain school of orthodox thinking, and in this case I think it's important to be explicit about which argument I'm taking on. Let me move from the orthodox to the unorthodox in discrete steps: 1) Government spending in recessions increases public debt and prevents the markets from doing their magic of downsizing or eliminating ineffcient economic activity; 2) Economic growth continues on a trend, so a period below the trend may not be too much to stress about because there is always a rebound; 3) but recessions also eliminate jobs in otherwise healthy industries; 4) These otherwise healthy industries rely on a certain body of skills and experience to maintain ongoing economic growth, 5) The misallocation of labour skills or loss of skills over time, that occurs as people find other occupations, reduces potential GDP, and 6) MOST IMPORTANTLY, a lower potential GDP growth rate means that the debt to GDP ratio is higher, EVEN IF TOTAL DEBT IS LOWER!
So, to sum this up in a few nice words ... When private demand collapses, public stimulus can have the net effect of improving our capacity to repay future debt by ensuring that human capital, i.e., acquired skills and talents, are not destroyed for all practical purposes when shifting to other sectors.
This argument doesn't even count for (a more common argument that) the fact that public spending may improve the debt to GDP ratio, even in the short term. This is simply due to the fact that spending 2% of GDP may sufficiently prop up demand that the decline in corporate and income tax receipts will have less of an impact on the total fiscal balance cmopared to doing nothing.
Between my present argument and the more standard one, let me conclude that it is no foregone matter that public efforts to spend our way out of recession have long term negative impacts on either public finances or long term growth. This is not to deny that the orthodox arguments must be carefully considered before a government decides to prop up aggregate demand as an anti-cyclical tool. It is, as I often say, a matter of debate for any givn case. Do not let anti-Keynesian dogmatism undermine our net potential.
Monday, February 2, 2009
economic protectionism south of the border
re: concerns that a proposed bill in the US is protectionsist
I recently read about a proposd bill in the US that would dictate that any money spent on stimulus measures should be supplied by American producers.
Apparently there are concerns that this is amounts to a protectionist measure. For those who don't know their economic history, this harkens to the days of the Smoot-Hawkley tariff act in 1930, a piece of legislation that is sure to get more airtime in coming months. Many economists see this as the trigger that turned the asset crisis following the 1929 bust into the Great Depression.
My main point? Don't worry about! There's no reason to think that this is specifically protectionist at this point in time. (However, if we can paint it as somewhat so, then those who demand protectionist measures can possibly be appeased by these measures and we can avoid the potential worst that could come from escalating tariffs).
One may wonder how this could be seen as not protectionist. Then again, one might also wonder how it could be seen as protectionist. The second one first ... This could be seen as protectionist becasue it favours American industry at the expense of foreign producers, which effectively goes against the principles of free trade.
Let me offer an analogy before I make my argument that, considering the times, this can justly be considered as falling within the scope of free trade.
Imagine that some parents wants to support their child's university education. Should they send the cheque to the child, or to a fund at the university that will distribute money among the student body? Obviously, their cheque will have the desired effect of supporting their child's education if they send the check directly to the child.
I don't know if the connection is obvious here, since the US (the parent, which is not meant to imply paternalism) is much bigger, and there are many people. But, if we consider the American economy as the student, and other economies as the other students, then I could ask the question again. What's the best way to get the money to the kid?
It's not as though anyone is proposing that the US make things directly more difficult for the competition in the school of life, in the world economy, by charging higher taxes against foreign goods.
Just think - if the US wants to stimulate their economy to prevent a collapse, then why on earth should anyone expect materials for public projects to come from anywhere but the US?
Also, and this is the resounding punch - at the aggregate level, this is simply a handout the the American private sector: the government will buy up all the most expensive construction materials, while all the cheapest imports will go to the private sector. This probably does frontload the stimulus to American producers, but at the back end of the plan we see hidden incentives that may help some construction firms get back on their feet because the best deals will be left for them.
Whether the WTO, the international orgnization that is charged with maintaining and promoting trade agreements, would agree with me is a different questino altogether. Either way, I think that threatening, or even pursuing WTO actions should be seriously considered by those who are concerned about the consequences of even wider preferential measures for America's industries. Not, mind you, with the goal of winning, but with the goal giving American policy makers and politicians the ability to tell their populace that they have even gone into the face of international opposition to protect American industries, but in the interests of improving national security by maintaining good relations in these trying times, that anything more is simply not on the table.
The risks? That foreign politicians, in need of scapegoats for problems at home, will be all too effective at convincing their electorate they have fought hard for national interests, and trade relations will degenerate as we all get used to zero sum, or less, games as we all get too focused on national interest. Also, there's the risk that the WTO suit would piss off enough Americans that political pressures would rise for more protectionism.
But, I don't think that these risks, combined, outwiegh the risk of the protectionist crowd in the US, once getting the bit in their mouth, deciding to run off with a repeat of the 1930 tariff act. That, my friends, would be a surefire way to erase a generation of economic growth and increase the risk of global conflict.
Bring the suit on, fight bravely, tell the public we're fighting hard for the national interest, and then before the nationalist fervour festers into mob mentality, every political ledaer can declare that they have fought hard on our behalf in the international trade arena, and most importantly, American protectionist sentiments can be satiated with some costly American steel and lumber for new infrastrucutre, and the world can breathe a sigh of relief that this is as far as protectionism will go.
The rest of us consumers and businesses will still have the right to choose our goods based on price, ethics, sustainability, or whatever, without paying a greater premium for the geographic origin of the product.
I recently read about a proposd bill in the US that would dictate that any money spent on stimulus measures should be supplied by American producers.
Apparently there are concerns that this is amounts to a protectionist measure. For those who don't know their economic history, this harkens to the days of the Smoot-Hawkley tariff act in 1930, a piece of legislation that is sure to get more airtime in coming months. Many economists see this as the trigger that turned the asset crisis following the 1929 bust into the Great Depression.
My main point? Don't worry about! There's no reason to think that this is specifically protectionist at this point in time. (However, if we can paint it as somewhat so, then those who demand protectionist measures can possibly be appeased by these measures and we can avoid the potential worst that could come from escalating tariffs).
One may wonder how this could be seen as not protectionist. Then again, one might also wonder how it could be seen as protectionist. The second one first ... This could be seen as protectionist becasue it favours American industry at the expense of foreign producers, which effectively goes against the principles of free trade.
Let me offer an analogy before I make my argument that, considering the times, this can justly be considered as falling within the scope of free trade.
Imagine that some parents wants to support their child's university education. Should they send the cheque to the child, or to a fund at the university that will distribute money among the student body? Obviously, their cheque will have the desired effect of supporting their child's education if they send the check directly to the child.
I don't know if the connection is obvious here, since the US (the parent, which is not meant to imply paternalism) is much bigger, and there are many people. But, if we consider the American economy as the student, and other economies as the other students, then I could ask the question again. What's the best way to get the money to the kid?
It's not as though anyone is proposing that the US make things directly more difficult for the competition in the school of life, in the world economy, by charging higher taxes against foreign goods.
Just think - if the US wants to stimulate their economy to prevent a collapse, then why on earth should anyone expect materials for public projects to come from anywhere but the US?
Also, and this is the resounding punch - at the aggregate level, this is simply a handout the the American private sector: the government will buy up all the most expensive construction materials, while all the cheapest imports will go to the private sector. This probably does frontload the stimulus to American producers, but at the back end of the plan we see hidden incentives that may help some construction firms get back on their feet because the best deals will be left for them.
Whether the WTO, the international orgnization that is charged with maintaining and promoting trade agreements, would agree with me is a different questino altogether. Either way, I think that threatening, or even pursuing WTO actions should be seriously considered by those who are concerned about the consequences of even wider preferential measures for America's industries. Not, mind you, with the goal of winning, but with the goal giving American policy makers and politicians the ability to tell their populace that they have even gone into the face of international opposition to protect American industries, but in the interests of improving national security by maintaining good relations in these trying times, that anything more is simply not on the table.
The risks? That foreign politicians, in need of scapegoats for problems at home, will be all too effective at convincing their electorate they have fought hard for national interests, and trade relations will degenerate as we all get used to zero sum, or less, games as we all get too focused on national interest. Also, there's the risk that the WTO suit would piss off enough Americans that political pressures would rise for more protectionism.
But, I don't think that these risks, combined, outwiegh the risk of the protectionist crowd in the US, once getting the bit in their mouth, deciding to run off with a repeat of the 1930 tariff act. That, my friends, would be a surefire way to erase a generation of economic growth and increase the risk of global conflict.
Bring the suit on, fight bravely, tell the public we're fighting hard for the national interest, and then before the nationalist fervour festers into mob mentality, every political ledaer can declare that they have fought hard on our behalf in the international trade arena, and most importantly, American protectionist sentiments can be satiated with some costly American steel and lumber for new infrastrucutre, and the world can breathe a sigh of relief that this is as far as protectionism will go.
The rest of us consumers and businesses will still have the right to choose our goods based on price, ethics, sustainability, or whatever, without paying a greater premium for the geographic origin of the product.
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