> we also want China to be able to assume its rightful place as it develops and becomes a superpower in its own right,
Singapore economy is depending on trade and prolonged trade war will ruin Singapore with its unsustainable debt.
But how does China 'assuming its rightful place' should look in practical terms? Withdrawing US fleets from Pacific? Allowing East Asia to become China's vasal teritory? Tolerating growing economic and military threat?
> But how does China 'assuming its rightful place' should look in practical terms?
> Allowing East Asia to become China's vassal territory?
Sure, in much the same way that it was in the past, and in much the same way that all of North and South America are vassals to the United States.
It is not realistic for East and even Southeast Asian countries to care more about what the US thinks than what China thinks; I don't understand how people can advocate for this goal with a straight face.
I think countries like Singapore, Korea, etc do not want the US, Korea, to leave. They are between a rock and a hard place and want to balance the US and China in order not to become too dependent on one and to benefit from both.
Singapore, which is quite "China-friendly" is saying exactly that.
What I find interesting is that the West in general, and obviously the US in particular, indeed cannot seem to imagine or accept that their complete dominance of the world is coming to an end. This is a rude awakening.
Singapore, which has an history of promoting "Asian values" and is a former British colony with 70%+ ethnic Chinese is very well place to tell us things as they are.
Even if it were true I am not sure if people of Singapore, Korea, Japan, Thailand or Taiwan would like to swap places with people of Xinjang or Tibet..
> Singapore, which is quite "China-friendly" is saying exactly that.
No, that is a fundamental misjudge. Singapore can be safely regarded as one of major anti China forces in the region. If you just look back several years, Singapore actually managed to got itself in the anti China side on almost every single recent major events.
South America is not a US vassals. Some of the tiny countries that were invaded have strong dependency on the US. But Brazil, Argentina, Chile, Peru, Mexico, Venezuela
I struggle to believe they are. Where ever did you get that idea from
Look at places holding US debt to identify vasal States.
The debt is what defends the state. A coup or military takeover and that debt won't get repaid, so there is financial incentives for the US to intervene.
Civilization games taught me that vassals, when powerful enough can break their vassalage and become free again.
Perhaps that's what is happening with China. It's no longer dependent on the US in the way it was and in time, will eclipse the US as the largest superpower.
That is so not why treasury bonds are bought and the opposite of how they work. They are bought to be stable and value stores and some exchange rate hedging. It acknowledges supremacy sure in that they think it would be extraordinarily less likely to collapse.
They pay the money upfront for them and if the regieme change was illegitimate enough to freeze the bond it would be "free money" until a legitimate claimant comes forward. Like a neighboring city's bank refusing to turn over money from the account of Gotham after joker took over the city. That is the only securing function of it - meaning others lose it if they steal it.
It's easy to understand if you agree that US hypocrisy is crucially protected by manufactured consent and propaganda. Most people fall in two categories, either a) not heard of Chomsky, or b) think he's wrong.
Any nation of the Singapore's size would be ruined without trade. That's independent of debt levels, Singapore has to specialize and just cannot run a self-sustaining economy.
FYI, the Singapore public debt is objectively not unsustainable. On the surface, Singapore's public debt-to-GDP ratio is at around 110%, which is slightly higher than the US. Over the course of Singapore's history, each term of the government operated on a balanced budget (i.e., revenue >= expenditure). The government bonds are issue to "develop the domestic debt market". In fact, the government is legally not allowed to spend the proceed of the public debt.
Running short and long term debt balances to create financial market liquidity isn't uncommon. When Australia reached zero long-term debt in the early 2000s, the government continued raising and retiring hundreds of billions of dollars of debt on a regular cadence to provide AUD liquidity in the debt markets.
China is highly unlikely to undermine the U.S.-led global system given it has been one of its biggest beneficiaries, Balakrishnan said.
They undermine it every day they refuse to allow free trade. The US and others spent a lot of resources building the free trade system of the world... and China wants the benefits of selling into that global market, while reserving their own market for themselves.
Every day they are not confronted on this, they send out the message to every other country that free trade with other countries does not require you to open your own markets. They encourage the breakdown of trade and the closure of global markets.
Confronting China on this today is the US asking China not to undermine the global system that has helped enrich China. Not to burn the bridge after they're finished with it (that many countries have used to pull themselves out of poverty: vietnam, korea, taiwan, japan, and even singapore).
As Milton Friedman has pointed out, the loser of protectionist policies are the countries that practice them. If China wants to subsidize its industries and sell Americans cheap goods then that is primarily an issue for the Chinese people, not for American consumers.
Absorbing global manufacturing has made Americans the richest people with the highest purchasing power on the planet, has subjected American companies to competition that no other country has experienced, and has made them more productive as a result. Why would any American want their government to give in to the same mercantilism that China practises, at the expense of their own people? To maintain jobs that pollute the local environment and are largely going to be automated away anyway?
The central issue which makes this call for retaliation so intuitive (but mistaken) is that the plight of people who lose their jobs to trade is tangible. The steel worker is a person we can picture. But the collective welfare we all gain by the cheap imports from a country like China is invisible. Industries have lobbies, consumers don't.
>As Milton Friedman has pointed out, the loser of protectionist policies are the countries that practice them.
Milton Friedman says that because he's a policy advisor of countries that benefit from others dropping their protectionist policies.
At a certain state of development (and when you are not yet top dog to dictate what "free" trade means to other countries), you need some well balanced protectionist policies. The US itself rose thanks to its protectionist policies. Britain too -- as did all others major powers when it served them well.
"Britain was the first country to successfully use a large-scale infant industry promotion strategy. However, its most ardent user was the U.S.; the economic historian Paul Bairoch once called it "the homeland and bastion of modern protectionism"
The infant industry argument is controversial, but assuming for a second it is correct, how is that related to the discussion about what course the US should take towards China right now? The US does not need industry protection. The US is the most advanced country on the planet.
When the US administration gets into a tradewar that makes Chinese commodities more expensive and stops American farmers from selling soybeans, how exactly is this to the benefit of anyone?
The answer is clearly that the narrative is purely political and not economical. Playing up China as an economic enemy rather than a partner resonates with a relatively small, but vocal minority of the voterbase, who for ideological reasons seeks conflict with China.
> The US does not need industry protection. The US is the most advanced country on the planet.
--> The US is the most advanced country on the planet, therefore it logically follows that they do not need industry protection.
This doesn't seem quite right to me. Are you seeing a perspective that I'm overlooking? Have I perhaps mischaracterized you?
> The answer is clearly that the narrative is purely political and not economical.
Even if we assume for the sake of argument that "Playing up China as an economic enemy..." is completely true, do you consider that a complete proof of the above assertion?
>The infant industry argument is controversial, but assuming for a second it is correct, how is that related to the discussion about what course the US should take towards China right now? The US does not need industry protection. The US is the most advanced country on the planet.
The US "is the most advanced country on the planet" because it constantly uses "industry protection". Besides tariffs and subsidies, the whole power of the US state and military is constantly used to further US trade and resource interests, enforce favorable trade rules, ignore this or that treaty that doesn't benefit the US industry (e.g. environment or child labor laws), and so on.
>When the US administration gets into a tradewar that makes Chinese commodities more expensive and stops American farmers from selling soybeans, how exactly is this to the benefit of anyone?
For one, it's of benefit of those making (and/or) selling commodities of their own.
Heck, even American workers, who might have to pay more for Chinese-made commodities, but they also get jobs again to make similar commodities in the US. A paycheck + more expensive goods trumps being unemployed + the availability of cheapo Chinese goods.
> The US is the most advanced country on the planet.
This has only been true since about the mid 20th century and is by no means guaranteed to continue. Other countries are also populated by clever humans who would love to overtake us.
As an American I'm inclined to be supportive of measures taken by my government to keep the US in the top spot.
> Milton Friedman says that because he's a policy advisor of countries that benefit from others dropping their protectionist policies.
Friedman has been called many things but inconsistent or unprincipled were not among them. He advocated for free trade for the same reasons free trade is the overwhelming consensus of economists; it works and they can explain why whether you want the verbal or mathematical explanation.
Well balanced protectionist polices may be worth it theoretically but all a nation is really doing that way is increasing the variance of their economic growth. It’s a gamble. It could be a costly failure that retards growth for decades before being dismantled as in Ireland, India and Argentina or it could work, as in South Korea or Japan. Note that protectionist policies are not necessary for export lead growth. Hong Kong did just fine with unilateral free trade.
> Friedman has been called many things but inconsistent or unprincipled we’re not among them.
Yes they were, for example Friedman said that free market policies enable 'freedom' and socialist ones do lend themselves to authoritarianism, while conveniently ignoring the fact that in almost all places where his vision was put as fully into motion as possible, (70/80s Latin America), it had to be accompanied by severe state oppression. His policies could not be enacted via truly democratic means and in that sense they were no different than the 'socialist' ones he was so critical of.
He even admitted this later, essentially saying that you need a huge crisis of some sort, so that an economic 'shock therapy' could be enacted in order to bring about his vision of free markets.
You’re saying you dislike or hate his principles. I get it. I hate Dick Cheney and Hilary Clinton’s principles but I don’t claim they don’t have them. If someone says “war” they don’t need to hear more, they support it. Noam
Chomsky is deeply principled. If someone opposes the US he’ll support them, whether they’re the Khmer Rouge or the Serbs in the Yugoslav Civil War. Lenin was principled. He believed in Communism and he wasn’t going to let any opposition, real or imagined, get in its way. He was a true believer, just like Milo is a true believer that he should be rich and famous.
Consider another great economist, Joan Robinson. She supported Mao and the Cultural Revolution to her dying day[1]. That’s principle. When you look on morality and abandon it because your politics are more important you’re showing your principles. That’s consistency.
Regarding the “shock doctrine”, a phrase that appears nowhere in Friedman’s voluminous writings others have covered this ground at length.
> The Klein Doctrine
The Rise of Disaster Polemics
> Naomi Klein’s The Shock Doctrine purports to be an exposé of the ruthless nature of free-market capitalism and its chief recent exponent, Milton Friedman. Klein argues that capitalism goes hand in hand with dictatorship and brutality and that dictators and other unscrupulous political fig- ures take advantage of “shocks”—catastrophes real or manufactured—to consolidate their power and implement unpopular market reforms. Klein cites Chile under General Augusto Pinochet, Britain under Margaret Thatcher, China during the Tiananmen Square crisis, and the ongoing war in Iraq as examples of this process.
Klein’s analysis is hopelessly flawed at virtually every level. Friedman’s own words reveal him to be an advocate of peace, democracy, and individual rights. He argued that gradual economic reforms were often preferable to swift ones and that the public should be fully informed about
them, the better to prepare themselves in advance. Further, Friedman condemned the Pinochet regime and opposed the war in Iraq. Klein’s historical examples also fall apart under scrutiny. For example, Klein alleges that the Tiananmen Square crackdown was intended to crush opposition to pro-market reforms, when in fact it caused liberalization to stall for years. She also argues that Thatcher used the Falklands War as cover for her unpopular economic policies, when actually those economic policies and their results enjoyed strong public support. Klein’s broader empirical claims fare no better. Surveys of political and economic freedom reveal that the less politically free regimes tend to resist market liberalization, while those states with greater political freedom tend to pursue economic freedom as well.
> You’re saying you dislike or hate his principles. I get it.
Actually, I was only commenting on the claim that he didn't receive criticism for his 'principles', when he clearly did. I did not pass any other judgment.
> Noam Chomsky is deeply principled. If someone opposes the US he’ll support them, whether they’re the Khmer Rouge or the Serbs in the Yugoslav Civil War.
Think of Chomsky what you want, but this is a tragically misguided interpretation of his stance. He doesn't want the U.S. meddling in other countries, as the U.S. does not really do it for humanitarian reasons, but for geopolitical and resource exploitative reasons, (I mean just the existence of the term 'colliteral damage', or 'double tap' and the fact that drone strikes kill over 90% civilians should tell you enough). The notion that the U.S. cares about human rights, while being allied with Egypt, KSA etc. shows this clearly.
The U.S. has melted down over stupid Russian Facebook memes, calling it 'meddling', while actively supporting an illegal coup in Venezuela in the same breath.
His point is also that he criticizes the U.S because he's a CITIZEN, while he's not a citizen of all of the other places. So he puts an emphasis on where he lives, because there he has the biggest chance of innacting some change, as opposed to somewhere where he has no say whatsoever. I mean that'll be easy to do, because you don't really threaten anyone in power, but it also means you're doing little more than posturing.
As for my personal belief, I am actually not against markets or whatever. They serve a useful purpose for games, books, smartphones etc. But I do believe that they also serve a catastrophically unethical purpose when applied to healthcare for example, so that put's me squarely in a social democratic camp, but that doesn't really change the fact that MF has seen one extreme, so he went the exact opposite extreme.
And extremes, including free market ones, cannot be innacted peacefully, as has been demonstrated every time his vision was innacted, most notably by the Chicago Boys.
>> You’re saying you dislike or hate his principles. I get it.
> Actually, I was only commenting on the claim that he didn't receive criticism for his 'principles', when he clearly did. I did not pass any other judgment.
If your interpretation of someone’s writing makes no sense try rereading it to see if there’s a sensible interpretation. No one who supports Milton Friedman is going to be unaware he’s widely hated. I said he was principled and consistent and acknowledged to be so. That was wrong. He was principled and consistent and plenty of people disagreed with that truth.
I never said or implied he didn’t receive criticism, anywhere.
>Friedman has been called many things but inconsistent or unprincipled [are] not among them.
Actually in good-old Europe, "unprincipled" is upon Friedman's more common monickers.
Not that America is that behind:
"It must be said that there were some serious questions about his [Friedman's] intellectual honesty when he was speaking to the mass public." (Paul Krugman)
> The US itself rose thanks to its protectionist policies. Britain too -- as did all others major powers when it served them well.
Same with copying from others. Germany was famous for cheap, bad knock-offs of British products in the 19th century. That's the origin of "Made in Germany". And it seems China follows the exact same path. First the knock-offs were bad and people laughed. Then they got comparable in quality for a cheaper price, people started using them and companies grumbled. And then China started to lead in some areas and now the "established" players are in full panic mode and try to block Chinese companies (e.g. Huawei).
Before "Made in Japan" became a sign of pride, Japanese products (including cars) were ridiculed as cheap imitations and rip-offs of western inventions. This changed in the 70s.
>They undermine it every day they refuse to allow free trade. The US and others spent a lot of resources building the free trade system of the world...
I.e. the kind of trade that they dictate and call "free", creating banana republics that cut them special deals, toppling governments when they don't like their decisions, using humanitarian and development funding (even from supposedly independent sources, like the IMF) as bribes and pressure to secure special treatment , insisting on the dollar being used in major trade as opposed to the euro or the yuan (and punishing those states that make the opposite "free" decision), getting their hands on oil producing countries, and so on.
I think you raise a lot of valid points, the US is hardly innocent on a historic global basis.
That being said, what's your take on China's behavior specifically, do you believe they are acting in a "fair" manner? Do you believe the advantages they enjoy are all justified? (Note: for the sake of this argument only, karmic payback for US historic behavior is not considered a valid justification.)
EDIT: I'm curious why explicitly acknowledging valid points but then asking a clear and specific question (that excludes these points as they are not directly relevant to current trade with China) is being downvoted? Downvotes for disagreement are appropriate according to HN guidelines (or they used to be), but I'm not asserting anything, I am literally asking a serious question.
I was referring to the motivation of the downvoters. I would be happy to consider any valid motivations you could raise for downvoting a question (for clarity: a question is generally not an assertion, this one certainly wasn't.)
>That being said, what's your take on China's behavior specifically, do you believe they are acting in a "fair" manner?
Regarding trade: I think China (and any country) should have absolute say in how they do business, and who they want to do business with, who to allow in their internal market, etc.
And of course other countries should be free to reciprocate. That would be actually free trade in my book: with any nation being free to do business as it pleases (trade this, impose tariffs on that, etc).
The current "free trade" is mere lip service in the sense: "we promote free trade to force others to open their markets to us, but we ourselves use tariffs, wars, and whenever we like to further our interests". So, I don't like it, and I also don't like the "totally free" trade (which I find a pipe dream, as big players wil always work their way around it).
>Do you believe the advantages they enjoy are all justified? (Note: for the sake of this argument only, karmic payback for US historic behavior is not considered a valid justification.)
I think "fair" can only be considered in context. Something is fair or not according to how the actual players play the game, not according to some abstract rules. If everybody cheats, China is fair to cheat too. In that case, I don't think the "karmic payback" is irrelevant to answer the question, nor I believe it's mere US "historic behavior" (if the latter implies something that happened only in the distant past and is not active behavior it's benefiting from at the moment).
Regarding human rights: China is authoritarian (and on the fore-front of authoritarian abuse of technology). That said, the situation is accepted well by the vast majority of its population, who doesn't have much tradition of free elections in the first place, and who probably worries of the impact of a breakdown of the regime.
Naive pundits might call for the immediate dissolution of the CCP for example, but in 1.6 billion people state a power vacuum could lead to chaos, schism, and civil war than makes India/Pakistan, or modern day Iraq/Libya etc look like Disney movies. In any case, it's up to them, not to outsiders to call their shots (or to take sides in their internal power struggles). All kinds of countries had their popular revolutions, reforms, etc, if China (as a nation) doesn't like its regime, they're welcome to change it.
Free trade is like free markets. I can buy shares of nearly any public company in the world (notably, not including China). I can move my stuff for free (besides shipping cost) to many countries. That is free trade and free markets.
China has neither. Free is free as in no restriction, not free to do whatever you want.
Free to do whatever will make global trade more difficult for everyone as all countries will have tariffs, as it was historically.
>Free is free as in no restriction, not free to do whatever you want.
Well, the term (and its proponents) should not hijack the concept of freedom them. One could call it "open" (or sometimes "forcefully open" market, e.g. like when the British waged war on China so that they are free to sell opium there).
Free as in freedom should include the freedom not to trade.
>China has neither
Well, despite that is one of the biggest importers and exporters of the world, and they've been rising from an agrarian economy to the worlds top manufacturer, and being in the top-2 global players. So looks to be working for them.
>Free to do whatever will make global trade more difficult for everyone as all countries will have tariffs, as it was historically.
That's a good thing in my book. We need less global trade, if not for anything else, for environmental reasons (the "reduce" part of the reduce, reuse, recycle).
If the people in some country feel as if they benefit from trading something, they can always choose to trade it. But if they have negative consequences from trading, i.e. importing or exporting X, then why should they continue to do so and suffer them?
I'm on the fence about "free trade". It helps globalization and probably the human race to technologically advance as a whole, but harms a ton of local industry.
This answer seems to pretend the prisoner's dilemma doesn't exist.
The world grows more when it works together. If China doesn't want to play by the rules of the global trading system, it should stop reaping the benefits while undermining it for everyone else.
> Regarding trade: I think China (and any country) should have absolute say in how they do business, and who they want to do business with, who to allow in their internal market, etc.
I don't necessarily disagree, except:
- does this take into consideration explicit agreements they've signed with the WTO?
- if this behavior is perfectly fine, why the extreme reluctance (on both sides, at least until recently) to acknowledge specifics of how the game is actually being played?
> I think "fair" can only be considered in context. Something is fair or not according to how the actual players play the game, not according to some abstract rules. If everybody cheats, China is fair to cheat too.
That seems perfectly reasonable, but my question was: is the US "cheating" China? Are de-facto terms and actual actions (actual actions, so excluding "karma"-based justification) of trade between the US and China "fair", or are they not fair? As far as I can tell, that question remains unanswered.
> Naive pundits...
I absolutely agree on a philosophical basis, but unless I'm mistaken, this seems orthogonal to my specific question. For the sake of clarity and conversational efficiency, I'd rather we not add new topics of discussion to this particular sub-thread.
The US does this, but I'm glad it's a country where we value being able to openly criticize our government for it.
We have an independent judiciary, democratic institutions--what are structural Separations of Powers which is the most important structure of a civilization consistent with liberty.
China doesn't have that. Saying the US also cheats the rules, too, is important, but shouldn't be confused with the reality that China does it much more abhorrently.
The US has many problems, but there's a big difference between people being unhappy with you and being send into "reeducation camps" if the government doesn't like what you say.
There's also a major difference between being sent to reeducation camps and being killed by a drone strike. The US may tolerate dissent inside their borders better, but far worse overall.
Yeah, sure and how is that Huawei ended up being banned without due process? Europeans are not sparred either using the Justice Department or a straight out tariff(i.e steel, cars etc)
I wonder, how they will sing if Xi will get angry for real this time and call for something like blanket ban on exports to US.
If you think of China as a rational player who can be "mindgamed around" take in mind that Xi has goood record of shooting himself in the foot politically, which he has been doing consistently through his reign.
Americans have really have nothing to mentally reference when dealing with this type of person — USA never had real hereditary nobility. You are dealing somebody much more of a medieval lord than a nation leader.
Think if a person who own a giant company as a proprietorship vs. a CEO of public corporation with a lot of vigilant investors.
US being the world's superpower has experience with communists, dictators, royals and all kind of leaders. The only issue here is that China is the 2nd world economic power so it's a bit harder to use the stick.
Nobody said it was a perfect system. It can be abused, especially when legal precedents haven't been set, but there are also means to challenge the legitimacy of such decisions.
Rhetoric- and you believe it! Don’t you know where those slogans come from? Well-paid researchers - how do you say it? - "think tanks," funded by big businesses. What is that? A "think tank"?
China is the last sovereign country in the world. Authoritarian but willing - unlike U.N.-governed countries - to give its people the freedom to do what they want. The West, so afraid of strong government, now has no government. Only financial power.
What does that have to do with free trade and the actions around it?
I mean a Chinese person can say that they are glad to live in a country that does not invade other countries, killing hundreds of thousands of innocent people.
While separation of powers is a great thing for protection of human rights, it doesn't change anything for international treaties. No matter whether country is democratic or not, they will try to push terms that are beneficial to them rather than to other countries.
Really? We are currently disengaging in Syria. We left Iraq. If people had cared that much about leaving earlier, we would have left earlier because they would have made it an important issue of a campaign. A couple people criticizing it do not change policy. This is the flaw of the tyranny of the majority, which is why we are set up to allow more power to state and local governments.
Of course, Iran is now threatening free trade through the straits of hormuz. Would you call intervention to protect free passage "toppling foreign governments" because they "make decisions we don't like"?
>> If people had cared that much about leaving earlier...
It really does not matter. US of A could never prove the existence of WMD in Iraq. In fact, all of their claims have been proven to be wrong. Millions dead. People who started the war are enjoying retirement sipping on the costliest wines.
Both US and EU have import quotas on all kinds of products from 3rd countries, there's nothing free about it, it's all highly regulated by WTO and trade agreements...
US seems to promote free trade for the industries it controls. When it looses to competition it invokes national security, military intervention etc...Trump made clear what was already known.
I am a free trade believer but you must be stupid not to see that US doesn't want free trade. It wants free trade where it works for them, their "free trade", in US dollars of course. If you compete with the US you become a foe, an enemy.
"We must protect our country and our workers. Our steel industry is in bad shape. IF YOU DON’T HAVE STEEL, YOU DON’T HAVE A COUNTRY!"
"I think the European Union is a foe, what they do to us in trade. Now you wouldn't think of the European Union but they're a foe"
"There's a lot of anger at the fact that Germany is paying Russia billions of dollars."
It's more like, if you don't have steel/oil/planes/guns/CPUs you don't have an army (or more specifically, producers of the above can deny you resources when you need them most, in war).
As an example, this is why Russia has rushed to finish GLONASS, (GPS was disrupted for them in 2008) & why China and the EU are working towards the same goal.
You could argue the same with anything: food, energy, cars, electronics etc... In time of war everything counts but I thought we are not at war...are we? Is it free trade, fair justice, human rights etc or "national security" and "our interests"?
The "free trade" the US propagates is horrible for anyone not in the top 20% of society. Your manufacturing business has been decimated, many people outside coastal areas have been seeing declining standards of living.
Even the EU has many import tariffs to protect its own industries from unfair competition from China and others.
Why should someone who makes bikes in the EU compete with someone who does it for $0,50 an hour in Vietnam or who knows where?
Protecting your own markets is the sensible thing to do. Any country with a decent industrial policy does it.
I agree. In fact, I don't think ending international trade is going far enough. Why should Californian businesses who make bikes have to compete with Texas businesses who have to pay employees lower salaries, less tax and different rules.
The why is because of relative advantage. Complaining about the 50 cent wage in a far lower cost of living country is like complaining that you cannot compete with a farmer's fields for corn with your urban rooftop gardens in plant pots. Well of course! That is where their advantages are - if you can trade without issues that is your cue to do something else more productive with your time.
> Why should someone who makes bikes in the EU compete with someone who does it for $0,50 an hour in Vietnam or who knows where?
Because this will lead to increased competition on the low cost countries labor market, increasing their wages. Long term that should equalizes wages and thus standard of living globally and everyone is happy. At least that's the overly simplified and wishful thinking. Reality is obviously a bit more complicated, but I still wouldn't want to entirely discard that concept.
If we had the same rules everywhere and effectively one global government then we could have free trade. But we have sovereign nations with their own national interests.
Therefore trade always has to be a deal. Either the deal is a good one or it is not. We have had problems before with Japan, for instance they like to grow their own rice rather than just ship in 'Uncle Ben's' rice from Uncle Sam. Rice grown in Japan by real Japanese people on real rice terraces is much more expensive than rice churned out by U.S. agri-business. But do the U.S. agri-businesses have a right to demand free trade, pushing the Japanese small farmers out of business?
What sense does it actually make to do that? The product - rice - can be locally sourced with a lot of human effort gone into the production of it. This keeps people in Japan gainfully employed in agriculture. Japanese consumers also prefer the local product, it is more to their tastes.
Should this protectionism go on forever? Well, yes, it is not as if the local rice farmers in Japan are going to be competing for global exports.
So we have something similar with China and every other nation. I think that China are doing very well in tech thanks to the Great Firewall of China, they have versions of Wikipedia, Facebook, Google and Amazon - the world is richer for this diversity.
What is wrong with the U.S. approach to protectionism? They could be honest about Huawei and state that they wish to have domestic companies do 5G just because they have national interest to do so. They could be honest about their own 'Great Firewall' which is what the NSA is and be up front that the government feels it needs to spy on the citizens lest any of them get revolutionary thoughts.
The rest of the world is fine about U.S. protection of the pickup truck market. We get it - the U.S. needs Detroit and Detroit needs pickup trucks as they can't make competitive cars.
If the U.S. was claiming that Toyota and VW trucks were unsafe that would be wrong, that is what is going on with the Huawei situation, there are these allegations that are not substantiated by facts.
It is ridiculous that the U.S. is struggling with trade given how rich the country is from a land/resources point of view, how the U.S. owns the world's reserve currency and how almost all oil/energy has to be traded in USD. No other countries have these perks.
China has no territorial ambitions beyond Taiwan. This is benign, a bit like Ireland wanting Ulster back rather than Britain wanting to enslave India. They may peg their currency and have this Great Firewall, however, who is to say that they are wrong in not wanting their great nation to be ravaged by global capitalism? We just need to strike actual trade deals with China in the West, affording the Chinese people and their leaders some respect.
What sense does it actually make to do that? The product - rice - can be locally sourced with a lot of human effort gone into the production of it. This keeps people in Japan gainfully employed in agriculture. Japanese consumers also prefer the local product, it is more to their tastes.
Then the Japanese rice producers have nothing to fear from free trade. If Japanese consumers don't want it, there will be little shipments of American rice anyways. This of course ignores any subsidies that may artificially effect the market prices of rice in either Japan or America, but free trade is as much about consumer choice as it is about big business selling it's products.
I live in Canada. We have a supply managed dairy system that's managed by quotas that farmers own. Part of the management of that system is brutally high tarrifs on foreign milk products, including cheese. The farmers have high income support, but Canada also has among the highest milk prices in the world. This effects poor people as well as limits choice. I'm a cheese snob, and while Canada (in particular around Quebec) can make some very delicious cheeses, I'm left paying exorbitant prices for some of the unique cheeses from Wisconsin, France, Switzerland, etc. The result of this protectionism is that, under WTO rules, Canada exports absolutely zero dairy products. Our cheeses don't compete on a fair market leading to stagnant products that compete on tariffs as high as 800%.
Now you may say "great! farmers deserve a good living!" but they're benefiting from protectionism while the rest of the economy is relatively free. If the entire Canadian economy was run on this model, Canadians would have to pay a lot more everything, which would make our standard of living much lower.
Farmers just happen to be politically well connected, which at the end of the day are the people who tend to benefit from "trade deals" that restrict certain elements of trade.
I think that's a valid take. But OTOH, broad, principled terms like "free trade" mask some of the nuance and realities of that history.
Free markets have always come thick with caveats to suit whatever goals the authors/negotiators had at the time. The US, for example, generally prioritized investment access and largely got it. They also prioritized economic infrastructure, like the dollar standard and globalising the US patent system.
Meanwhile, agricultural markets were kept outside of the mix, which is a huge deal to many politically/economically weak countries. The line between a bad faith exploitation of the system (as you characterized china) and an acceptable exception was determined by political interests and power dynamics, not by principles.
What I'm saying is not that china "plays fair" or that the US does. What I'm saying is that it's a game where rules get made on the fly and power matters. There's a tendency to see your own priorities (patents stand out to me, in the US-China context) as obvious non-issues and rivals' priorities as huge compromises. I think it's wise to limit the moral reasoning which leads to finger pointing and conflict.
Meanwhile, there's always a lot of dirty dealing on all sides. Putting up trade barriers on national security pretexts or whatnot.
I think the Singaporean minister has the broad point right. The US had an incredibly central role in creating the current global trade setup. This reflected their power (and prestige, especially in Europe) at the time. The system wasn't a bad one and China has been a great beneficiary of it. A lot of the non-economic reasoning did come to fruition too. China is a far more open-to-the-world society today.
But... The size of China's current economy changes the political balance. They will demand a US-like role and unless that's accepted by the US, politically & emotionally, we're headed for a recessive period.
> As he ended this speech it is said that Cato shook out the folds of his toga and contrived to drop some Libyan figs on the floor of the Senate-house, and when the senators admired their size and beauty he remarked that the country which produced them was only three days’ sail from Rome.
Afterwards he adopted a still more forceful method of driving home his point: whenever his opinion was called for on any subject, he invariably concluded with the words, ‘And furthermore it is my opinion that Carthage must be destroyed!’ (Lives, ‘Cato the Elder’ 27)
The Carthage during 20 years after Second Punic War became export powerhouse and it was even able to repay war idemnities 10 years ahead of schedule.
Carthage became that (short lived, because Cato won that argument) export powerhouse in part thanks to the Mediterranean "pax romano" that would soon destroy them.
To be honest, last time China accepted major trade deals from the West to fully open their market, they got their cities flooded by opium and got land ruled by foreign law, and then got their government toppled. The lessons learned from that was that if you are not careful, western countries will come and dominate you. Look around, the same happened in India and many other countries with often exctintion of natives
Fast forward to 2018, China and USA already agreed to WTO rules with China considered as a developing countries and thus granted special rights such as protection of its industries. Then USA unilaterally breaks WTO rules with tariffs with an arbitrary interpretation of "national security" and wants a signature of a one way deal where USA gets all the rights and controls but doesn't give anything. I'm sorry but history teaches you that kind of deals will get your citizens subjugated by foreign powers or foreign corporations.
Isn't the ball in China's court here? I am not sure what is the expectation of US in this. China has a completely closed market while at the same time they are reaping the benefits of selling in markets of other countries with no penalties. How is that fair? Also, they force companies to share their technologies/IP if they are interested in coming into Chinese markets - and then they just steal it to undercut the foreign companies. This honestly needs to change. When China was smaller, these tactics were ok - but to expect the world will close their eyes on their practices at the current scale is fooling oneself.
They aren't stopping other countries from doing the same yet. And the reason for that is that they are still the underdog so it makes sense to turn a blind eye to their domestic industries violating American IP laws.
Just like it makes sense for the US to enact and attempt to enforce restrictive IP laws on a global scale.
Make no mistake once China ascends they will enforce their will on the world just like the US has done and it will be ugly.
Say goodbye to democracy.
Say goodbye to due process.
Say hello to coercive IP law.
Say hello to unimaginably restrictive DRM and surveillance.
This is the type of comment that really indicates an immensely ignorant oversimplified misunderstanding of the complexity of the Chinese political situation.
China has overthrown harsh rulers many more times than the US has, even taking into account the latter's short and young history. The last time was in 1912, and very plausibly arguably 1949 too. (The Nationalists were pretty bad, objectively speaking.)
I wanted to reply, it said comment deleted, I reload the page, there it is again, 0 minutes ago. Nice one deleting your comment because it garnered downvotes, just to post the exact same comment again.
"the complexity of the Chinese political situation" = "China has overthrown harsh rulers many more times than the US has" is itself a simplification.
So is this video, it's also a simplification, but more importantly, it's one of several lines in the sand: China aside, I don't want that where I live. Period. Western companies have already started to censor themselves to not offend China, and this must stop.
Yup, I'm not about to be censored by people downvoting my comments without explanation. I think the downvoting mechanic on HN is stupid.
Of course what I said is an oversimplification. It's meant to directly make you question your deep underlying assumptions, and your own oversimplifications. The government has a lot of power on paper both now and historically. Yet despite this, rebellions have still occurred regularly, and this core central power did not historically cause China to go and colonise other countries committing atrocities there. Perhaps something is missing from your own US-centric legalist analysis?
Fair enough, FWIW I didn't even downvote you, I also prefer discussion.
> It's meant to directly make you question your deep underlying assumptions
"Deep underlying" being code for being made up by you on the spot?
> The government has a lot of power on paper both now and historically. Yet despite this, rebellions have still occurred regularly
The last time 1949? So, not since modern, industrialized totalitarianism took hold. That's like talking about cancer by describing the life of a person before contracting cancer.
> this core central power did not historically cause China to go and colonise other countries committing atrocities there
They already are causing Western media to censor themselves even on sites blocked in China. Mercedes Benz apologized three times for even quoting the Dalai Lama, just an inspirational quote. For me, that's three times too many. And just like I'm not over the Iraq war being a war of aggression, I will not forget or forgive this, either. You do you.
> your own US-centric legalist analysis?
Again you assumptions about my assumptions. If anything, being German, my "analysis" (of which you quote nothing, don't engage with at all) is Nazi-based.
> They already are causing Western media to censor themselves even on sites blocked in China.
This isn't on the same scale as "enforce their will on the world", and nowhere near US-levels of "enforce their will". (Not justifying this sort of action however.)
My point is you and the earlier poster are happy to extrapolate small events into big ones in a way that doesn't match the historical record. The officials of the Chinese government are not stupid and can't go too far from public opinion, which is generally more principled that you (and other US-centric "analysers") give them credit for, being too focused on the laws and ignoring many "facts on the ground". (Not implying rule-of-law is a bad thing.)
> being German,
Germany has been under US influence since 1945, so my saying your analysis is US-centric is not too far off the mark. There are differences and also similarities.
> The officials of the Chinese government are not stupid and can't go too far from public opinion
Mercedes Benz apologized profusely. If the CCP will have their way, their murders will never have happened. The same is not true for the US, not even remotely. If that was the case, Noam Chomsky and others would have been murdered in the 70s or something. But here he is, one of the most prolific intellectuals. He gets smeared a lot, but there is still a giant difference.
That vimeo video you don't seem to be able to comment on directly is evidence of a very principled public opinion indeed, principled by fear, as a result of torture and murder.
> Germany has been under US influence since 1945, so my saying your analysis is US-centric is not too far off the mark.
More importantly, "saying your analysis is US-centric" means nothing. It's not a concrete criticism of anything I said. Your whole argument seems to be the US is worse, so how am I the US-centric one? All I'm hearing is, you're using one set of tyrants and murderers, US aggression and world influence, to justify another sets of tyrants and murderers, while saying "not justifying it however".
America is the first mover on DRM, and there is no American company that will let me pay for a movie and download an MP4 -- I have to be logged in and stream it (some services let you download it but then disable playing after 48 hours)
Is there a similar situation in China? My sense was that the culture was much less restrictive -- all is fair, it's not worth the time and money to sue someone else into oblivion.
You may be mistaken about the source of a lot of "deep innovation". I know I was, when I was younger. Here is a nice example that helped shatter some of the myths I myself believed, in this case it was that Silicon Valley was the product of free enterprise:
In reality capitalism only took over after massive (debt based!) spending by (US) government during WWII. The risky stuff doesn't happen in companies. Even things like e-cars and rockets, see Elon Musk and his companies as the most prominent examples, didn't invent any of the basics. They just take well-established concepts.
It's not either or, it's specialization: The low-probability-of-success stuff for larger society (government mostly, at this point), and when there is something to build on the more focused business people and entrepreneurs who want to see an ROI are better at executing from there on.
But, back to the comment you replied to, basic research, the risky stuff, is better off being open and available.
Define "deep innovation". Are you saying that private enterprise is only capable of "shallow innovation"?
If so, do you think that the world will do just fine if we removed large financial rewards for "shallow innovation" like the smartphone, new drugs, medical devices, software, etc?
everyone building out a new technology borrowed ideas freely without compensating the real innovators (of course, implementation can be the more difficult piece)
As long as governments subsidize public universities and research departments, there will exist a font of innovation
> everyone building out a new technology borrowed ideas freely without compensating the real innovators (of course, implementation can be the more difficult piece)
Implementation is innovation too
> As long as governments subsidize public universities and research departments, there will exist a font of innovation
A necessary strategy for any developing nation. If you allow imports with no local manufacturing requirement, other nations have incentives to dump products onto your markets to increase production. Open trade only really works if both sides can see eye to eye. Otherwise the developing nation will be stuck producing cheap products with little to no added value.
Hong Kong had unilateral free trade throughout decades of almost uninterrupted economic growth. If you produce cheap products you develop expertise that you can leverage to eventually produce more expensive ones. This process of learning by doing does not depend on tariff barriers and tariff barriers will not make it work either. Argentina produced cars domestically for decades that were more expensive and higher price than the world market and as soon as tariff protection was withdrawn the industry disappeared, after having wasted millions of dollars over decades.
>Also, they force companies to share their technologies/IP if they are interested in coming into Chinese markets - and then they just steal it to undercut the foreign companies.
That's a great way to copyright reform right there!
China has done what every developing country should do (Edit: and what the likes of Japan and Korea did before them)
If you open your economy when you are relatively undeveloped and weak then foreign companies will immediately occupy your economy and you can forget about creating national 'champions'.
China is not a closed market but they are careful not to fall into that trap.
Yup, they've set it up so money can flow within their own system and their own economy can prosper, rather than money feeding out to Google or Facebook. Quality of life in China has exploded massively, and things like restaurant prices are reaching American prices, which is insane going back ten years.
And they remix the ideas of western tech and often improve upon it. WeChat is orders of magnitude more convenient than what the US has to offer. Everything is centralized and integrated, what Google tries to do, but adopted everywhere. Book anything, pay for anything, tap phone to pay for anything. I don't expect many places to take phone payments. In China, most everywhere can take phone payments.
Their social networks also seem to do great at getting things naturally viral. I posted a random video without any boosting and it got like 1.5K views in a day.
I would just like to say that contactless chip cards are ubiquitous, do not require a battery, are more secure (no reliance on QR codes) and have been around for years in the West.
It isn't the same thing by any means, and doesn't really offer much over cards other than a slight improvement in convenience. Mobile payments in China are essentially peer-to-peer and universal. The closest equivalent is probably something like MobilePay or Swish, but that isn't as good or as widespread.
The "feature" of WeChat is that it can be used for almost anything. It is a cash successor more so that a card alternative. Anyone can print, display or scan a QR code. Doesn't matter if it is a store, a friend or a random person. Doesn't matter if it is in the physical world, on a website or in a chat. And it is easy to do. And almost everyone uses it.
Contactless cards only matches WeChat in the same way something like Apple Pay does.
I am not seeing the value in being able to print QR codes unless your business is selling fruit on the street (to be fair, a lot of businesses in China are just this).
The more secure analogy comparable in price would be solutions like Square and PayPal Here. Smartphones are ubiquitous.
My contactless card works nowhere outside my small home country. Meanwhile Chinese tourists are there seamlessly buying food from 7/11 with alipay whole I go through the full pin and card thing.
As the other reply says too, any shop can set this up easily. I challenge you to take contactless payments in your home country, it's nothing like simply getting a qr payment and involves merchant banking.
I've seen tiny remote rural village stores that would never even imagine having a visa PoS terminal with big wechat payment signs out front.
I've used contactless Visa to buy things in Japan, Singapore and several other places. It's a UK card though so maybe there's something different going on there
WeChat is orders of magnitude more convenient than what the US has to offer. Everything is centralized and integrated, what Google tries to do, but adopted everywhere
Fascism has it's good points!
Seriously though, WePay isn't innovation - we could have that right now in the West. Citibank could make an app that would allow peer-to-peer money transfers with QR codes the way WePay works. It would be smooth and easy. You'd just have to have a Citibank account. After a while, everyone could get an account with Citibank and it would be great! The other banks wouldn't like it, but whatevs.
Then Citibank would realize they were the gatekeepers of the digital peer-to-peer economy and they would seek rent. Transaction fees would increase. Monthly account fees would sky-rocket. Eventually, the govt would realize this was a drain on commerce and would seek to regulate and maybe even break up Citibank, but in a rule-OF-law nation, the govt would actually have to go to court and Citibank would get to argue their case against govt intervention. It could take YEARS! Look at how long it took the govt to prosecute IBM back in the day!
Meanwhile, if Tencent gets too greedy with WePay, the govt just makes their CEO disappear. In fact, in a fascist state, having monopolies is an ADVANTAGE! It's one throat to throttle - if there's a problem, there's just one CEO you need to kill.
WePay isn't innovative - it's just something that works particularly well in a fascist state. Getting the whole banking industry to agree to communicate and cooperate on a common mobile payment system is a bit more difficult...
The US is is a rule-OF-law country, China is rule-BY-law. The difference is that in rule-OF-law, the government is subject to the law. In rule-BY-law, the law is the tool the government uses to rule (dominate), that is, rule by means of law. It may sound nitpicky, but it’s a rather big difference.
Read a macroeconomics textbook written more recently than the 1970’s and it will call the infant industry argument theoretically plausible and reference Krugman’s paper on industry clusters. It will spend far more time on the globally optimal and not strategically effected strategy, free trade. We know protectionism can theoretically work. It can also be a massive failure, like in all of post-colonial South Asia and Africa. The only countries that made protectionism work were South Korea, Japan and Taiwan.
The point is that a fully open economy is not necessarily the optimal strategy for a developing country.
Of course this is just one aspect of development and there is no silver bullet.
Those who succeeded used protectionism and controlled opening of their economy as part of a broader strategy, governance, and culture.
There has been a big push to normalize the idea that "macroeconomists have figured out x and y". However, macroeconomists aren't scientists, and their messes like the Reinhardt-Rogoff affair should make everyone skeptical that they can claim they "know" anything with any degree of certainty.
I first encountered this when economists kept attacking rent control saying it destroyed cities, while Montreal remained the best place to live in all of North America.
Then I found this interesting essay about economists finally getting to try out an experiment about sweatshops in Africa, and concluding "Everything We Knew About Sweatshops Was Wrong":
> https://www.nytimes.com/2017/04/27/opinion/do-sweatshops-lif...
>
> In the 1990s, Americans learned more about the appalling conditions at the factories where our sneakers and T-shirts were made, and opposition to sweatshops surged. But some economists pushed back. For them, the wages and conditions in sweatshops might be appalling, but they are an improvement on people’s less visible rural poverty.
>
>As the economist Joan Robinson said, “The misery of being exploited by capitalists is nothing compared to the misery of not being exploited at all.”
>
>Textbook economics offers two reasons factory jobs can be “an escalator out of poverty.” First, a booming industrial sector should raise wages over time. Second, boom or not, factory jobs might be better than the alternatives: Unlike agriculture or informal market selling, these factories pay a steady wage, and if workers gained skills valued by the market, they might earn higher wages. Factories may also have incentives to pay more than agricultural or informal market work to persuade workers to stay and be productive.
>
>Expecting to prove the experts right, we went to Ethiopia and — working with the Innovations for Poverty Action and the Ethiopian Development Research Institute — performed the first randomized trial of industrial employment on workers. Little did we anticipate that everything we believed would turn out to be wrong.
Never blindly trust an "economics textbook" lol. When you disagree with them, economists say "read a textbook", and when you point out the models are bad, they pivot to "it's just a textbook, real models are much more complex than that" (they tend not to be).
There are huge amounts macroeconomists don’t know but if they’re not scientists neither are epidemiologists or nutritionists. Experiments are impossible or necessarily tiny and of low quality in all those fields.
Macroeconomics is not a healthy field making rapid progress. David D. Friedman’s verdict on it is that we know very little is true but we know plenty that isn’t. If you want to see someone really ripping into macro read Paul Romer’s The Trouble With Macroeconomics[1]. All that said I know what happens when you contract the money supply; you get a recession. Print lots of money; you’ll get inflation. Decrease inflation; your currency will appreciate. There’s plenty more like that. Purchasing power parity works as a theory of exchange rate formation over the long run and nothing does over the short run. Macroeconomists know plenty.
Regarding theory and replication, on rent control I see Montreal and raise you Mumbai[2]. If the rent controlled price is near the market price the damage will be pretty mild. If you haven’t allowed rents to rise since the 1960’s things will be worse. On replication, more than three quarters of cancer biology papers don’t replicate so the fact that some economics papers get retracted doesn’t disturb me too greatly[3]. If you’re doing science sometimes you find out you were wrong or that you made a mistake.
> In 2011, Bayer Healthcare said that its in-house scientists could only validate 25 percent of basic studies in cancer and other conditions. (Drug companies routinely do such checks so they can use the information in those studies as a starting point for developing new drugs.) A year later, Glenn Begley and Lee Ellis from Amgen said that the firm could only confirm the findings in 6 out of 53 landmark cancer papers—just 11 percent. Perhaps, they wrote, that might explain why “our ability to translate cancer research to clinical success has been remarkably low.”
This isn't really how this works though. You don't get to elevate economics by tearing into other fields, all you do is drag them down (fine by me).
You invoked "economics textbooks" like some kind of conversation-ender, and I showcased several things economists treat as hard natural law that end up being, at best, oddly amiss in key cases:
- Rent control (Montreal has it, best city in North America)
- Free trade (China doesn't do it, most reduction of poverty world-wide)
- Sweatshops are desired (Except in a controlled experiment where they are not imposed, they are rejected)
- Debt is bad (Incredibly damaging pro-austerity garbage study boosted in spite its flaws)
Feel free to make each subsequent case on its own merits and evidence as you understand it, but please don't point at economists and act like they possess an authority that they do not.
And preponderance of studies doesn't eclipse a key result. Montreal routinely ranks as the best city on the continent, so even if something "works in most places", it doesn't mean it's something you should pursue when you're trying to be the best, or when you're trying to do well by yourself and not trying to be the best. You surely know about the economics "Theory of the Second Best"?
I think despite their best efforts, most people are still more or less influenced by nationalism. Not just Americans, but anyone in the world can be afflicted with nationalism that impacts true neutrality of viewpoints.
Since y combinator new is most frequented by people from the US and other western nations that are having this conflict with China right now, my belief is that their emotions guide their logic. So everything that China does is bad and western countries are the victims. Which is the narrative that is also being strongly pushed in the American media and to a smaller extent other western media.
But as a Singaporean living in Asia, I don't see anything wrong with China's development path. It is developing the same way as almost every other industrialised nation in the world did. First by blatant disregard for IP and then slowly as it progresses up the economic ladder, it provides more and more protection for IP. China today and China ten years ago is vastly different in terms of the amount of the strength of its IP protection enforcement. And with its current trajectory, it will be vastly stronger in ten years still. With regards to barriers to imports, China has less barriers than most of the other developing nations and reducing sharply each year.
Instead of recognising this fact and working to hasten IP protections, America seems to me to be going on a mutually destructive path that is bad for everyone in the region if not the world. That makes me suspect this is not really about IP and prosperity but power which unlike the former, is zero-sum.
Its one thing for the average person on the street, but I don't understand why intelligent people in the West find it so difficult to separate facts from fiction and emotions from logic.
Lastly, I would like to add. There is nothing inherently moral or immoral about IP. It's just a way for the incumbents to protect their position. Making this a moral problem (Chinese bad because they steal IP) is not the right approach.
I agree on the market access point, to an extent. There an assymetry that can't stand forever, given the size of China's economy today. But, free trade has never really been free. There are tons and tons of caveats, exceptions, special rules and bad faith. So, I think it's misleading to represent china as "closed" and other countries as "open."
On the second point, I disagree.
IP is not some basic, natural law. It's a relatively recent invention, ostensibly invented to promote certain economic incentives. Why is china morally obligated to respect it?
At any given point in time, the biggest effect of an IP system is how it affects the current portfolio of patents & copyrights. That's what tends to dictate the rules. When copyright law is updated, it's the impact on Disney's IP asset portfolio that's considered... not future works that will be created. It's a similar dynamic for patents.
Why should china (or any country) have to subscribe to an IP system under which they don't own as many patents.
Meanwhile, the benefits of a patent system are contraversial, even dubious (imho). Lots of intelligent peoe think they do more harm than good. The billions spent by tech companies on patent lawyers are a case-in-poiny.
I do not think we (globally) are best served by a global IP monolith. This is one area where we can benefit from a diversity of rules.
> IP is not some basic, natural law. It's a relatively recent invention, ostensibly invented to promote certain economic incentives. Why is china morally obligated to respect it?
> At any given point in time, the biggest effect of an IP system is how it affects the current portfolio of patents & copyrights. That's what tends to dictate the rules. When copyright law is updated, it's the impact on Disney's IP asset portfolio that's considered... not future works that will be created. It's a similar dynamic for patents.
> Why should china (or any country) have to subscribe to an IP system under which they don't own as many patents.
To an extent I agree with you. There are a great many problems with the current state of "Intellectual Property" law and I there's some merit to the argument that it would benefit humanity as a whole if it were scaled back drastically or even eliminated entirely.
However, China not only does not enforce US patents and copyrights but also engages in extensive industrial espionage to steal trade secrets. Even if we did not have copyright and patent law, such actions would and should still be illegal. Qualitatively, I think there's a big difference between reverse-engineering and making your own version of some company's product, and hacking into their servers and stealing the data to make it or paying an employee of theirs to exfiltrate the source artifacts for you.
Chinese companies do both. The former is sometimes permissible, at other times may violate patent or copyright law, which may or may not be seen as a bad thing depending on your views of the matter. But the latter should be rightfully condemned.
There's also the argument that even if patents are granted too freely and abused, and copyright extended far too long, that if China wants to engage in the world economy then they need to play by the same rules as everyone else, and that if they do not play by those rules then other countries are entirely justified in retaliating.
Wasn't it the case that Facebook, one of the biggest American companies, bought Onavo precisely to spy on other tech companies and steal their business?
There is a HUGE difference between doing analytics/business intelligence (albeit a bit of a sketchy app, though users consented) and directly hacking into competitors with the express intent on stealing IP, which is more of the issue at hand.
That last one is a dangerous argument, imho. There're versions of that argument applied to labour laws, environmental laws, corporate law... It's often made by the radical EU-left. Yanis Varoufakis, most notably.
Unless you play by the same rules, free trade is unfair.
That argument is extremist, imo. It creates a dichotomy between trade or sovereignty. Want your own environmental laws, liability laws, pension schemes, oh&s rules? No trade for you.
It leads to both conflict, and the extension of the massive and very problematic trade agreements into every every facet of legislation.
IP laws can stay local. I agree on the middle point. Whatever the case for china making its own IP laws, they need to follow their own rule of law. Hacking/stealing is not justifiable. Deciding that pharma patents are not valid in China is.
>>Why should china (or any country) have to subscribe to an IP system under which they don't own as many patents.
Is is fine if I steal from you because I don't have as much money as you do?
Or, would you prefer that I don't "subscribe to" your notion of money in your pocket as wealth because I don't have as much and therefore it is perfectly moral to take yours?
>Also, they force companies to share their technologies/IP if they are interested in coming into Chinese markets - and then they just steal it to undercut the foreign companies.
If the companies are willingly going to the Chinese markets on their own accord under an IP sharing agreement, you can no longer use the term "force". They have a choice to not share it by not entering the market. You can critique this as an inherent weakness of capitalism, but China is not forcing anybody in this situation.
And why would they have to steal it if its already shared? This doesn't even make any sense.
It's very concise, written in fairly casual tone and in my opinion, spot on for the most part. One point he kept making throughout the book is Singapore will not stop working with a superpower because another superpower don't like it.
As others has observed the economies of USA and China are tied at the hip.
China sells goods cheaply to USA and takes the dollars it makes and invest in US treasuries. This keeps inflation low and keeps interest rates low. And allows the US to maintain an unnatural high living standard with low savings and asset price inflation.
The central bank may be able to compensate from the lack of Chinese buying but it is an unsustainable situation as the inflationary pressure from the lack of imports would be in full force.
Also notice that Singapore seems to be saying: Please don't ask us to pick sides ...
The US may have fewer friends in Asia than it assumes.
> The central bank may be able to compensate from the lack of Chinese buying but it is an unsustainable situation as the inflationary pressure from the lack of imports would be in full force.
I doubt if low inflation enviroment is high on current administration list. On the contrary. Some inflation could stimulate economy.
Yes. China is far closer with more military and no nominal compunctions about human rights that the US sort of has. They'll pick their poison to be China as the greater threat to appease.
Singapore is smart. Nobody can rely on a government on the other side of the planet with a history of war-mongering. For Singapore, their geographic proximity is more important than a fiat hegemony.
> Also notice that Singapore seems to be saying: Please don't ask us to pick sides ...
> The US may have fewer friends in Asia than it assumes.
Isn't Singapore political system famously authoritarian capitalist and its people ethnically Chinese? It might be a mistake as viewing it too much of a representative of the rest of Asia. It sounds very similar to contemporary China, in many respects, so it may have an unusually strong affinity to it.
> Singapore’s political environment is stifling. Citizens face severe restrictions on their basic rights to freedom of expression, association, and peaceful assembly through overly broad criminal laws and regulations. In 2017, the country tightened the already strict limits on public assemblies contained in the Public Order Act, which requires police permits for any “cause-related” assembly outside the closely monitored “Speakers’ Corner.”
> Isn't Singapore political system famously authoritarian capitalist
Most of Southeast Asia is increasingly authoritarian.
> its people ethnically Chinese?
Mostly (this is a trivial Google), but importantly not entirely.
Singapore was the last country to recognise the PRC instead of Taiwan. This was for good reason. First, Singapore maintains internal harmony by pretending to be multiracial. (It isn’t, obviously—the best candidate for the PM by far was ignored because “the people aren’t ready for a non-Chinese PM”, even though he was the most popular.) This involves insisting on English translators when visiting China, asserting independence, doing military drills in Taiwan, etc. Second, Singapore historically had to do the same thing to convince its neighbours that it was not a Chinese puppet.
But the crucial difference is that Singapore optimises for minimal oppression given a certain developmental outcome, whereas China doesn’t. Repression in Xinjiang, the Tienanmen Square massacre, current crackdowns on liberal thinktanks, etc. are not necessary to secure the régime. No Singaporean government would bother. (That is why New Naratif is still around.) Singapore is in fact qualitatively distinct from almost all other authoritarian states in that it requires extremely little oppression in view of the outcomes achieved compared to any other state, where the tradeoff is much worse.
Speaking personally as a citizen of a neighbouring nation - I would rather have a democratic and open nation like the United States as the sole-superpower of the world. China as an established super-power would be a tyrannical nightmare.
As someone who watches the very unusual moderation of China-critical comments on HN (+3 one moment, -3 a few hours later) I'm wary of a political piece praising China hitting #1 on HN.
I also don't see the value of Singapore - which is openly anti democratic (https://www.huffpost.com/entry/singapore-challenges-democrac...) providing advice here - as the same concerns about authoritarian corruption that apply to China also apply to Singapore.
Saying the people of China have 'chosen not to choose' is bizarre and disingenuous - you are twisting the notion of freedom to imply Chinese people have chosen not to be free. The Chinese people have never in recent memory chosen the Chinese communist party to represent them exclusively.
Yes, there's a world of difference between being able to choose from one option or 2.
As to the choice being an illusion because two parties often rule: tell that to the Whigs (one of the two parties that no longer exists in the UK), or to anyone that's held a balance of power in a coalition government.
compare the resume of xi jinping with that of donald trump and tell me who is qualified for their job: https://qz.com/1103045/chinas-19th-communist-party-congress-...
doing well in a popularity contest a.k.a election is not necessarily an indicator of competence
I noticed a pattern few month ago: you have a lot of bashing during East coast morning hours, followed by much more conciliatory toned wave of comments few hours after, when East coast wakes up.
> As someone who watches the very unusual moderation of China-critical comments on HN (+3 one moment, -3 a few hours later) I'm wary of a political piece praising China hitting #1 on HN.
So im not crazy for noticing this...im also highly concerned that HN may not have appropriate vote manipulation filter, and that much of what we read on the front page are increasingly engineered.....
meh, it's probably because white dudes in HN doesn't like to have an Asian, especially Chinese to steal their job opportunities, and so they like to see bashes around China because it doesn't guarantee benefits to them.
I worked in Singapore in 2016 and in my exploration of various neighborhoods I did not see abject squalor, as seen in East LA, West Chicago, etc. people seemed employed and happy.
US should make policies that are good for its citizens, its factories and its companies, not Singapore.
Singapore can survive as a country with mostly trade, IP, high tech, low taxes, services. Singapore doesn’t even have power plants, all from Malaysia.
But despite the dreams of some people, a big country like US cannot just be a service economy like Singapore.... so while I disagree with Trump on many other issues, I cam’t really fault him here, and I hope next American democratic president will not soften its stance.
Many people are talking about Vietnam now, but without realising that they are dealing with the same Chinese factory companies who just expanded their business there.
As long as the US is able to maintain both fiduciary and military hegemony, it has nothing to worry.
The fact is to aurpass the US, you need to possess better if not technologically superior assets to project.
It boggles my mind why this military factor is often ignores by proponents of china maximalists.
The us can call upon a dozen carrier strike groups on a moments notice, port call literally anywhere that isnt russia or china, bases distributed globally and unknown next gen technology that isnt even being revealed but kept secret, if the us had sr71 in the 60s they have something in the works that guarantee they will be ahead.
Only now china has started producing f16 class jet engines domestically, but still decades behind in many power projection components.until china has projection that aurrounding countries will take seriously, its just another pipe dream, until china can prove itself on a world stage like the US has in its constant state of warring, only then will your financial institutions criticized by Chomsky crowd, be actually legitimized.
Much like your local mob or cartel, those who are perceived to have monopoly on violence, often backed up by real violent acts, have weight behind their words. Those who are in competition, risk elimination through in action, so they must constantly maintain high tension with skirmishes here ans there to remind the other side. If you think this way, it makes sense that the governments purpose is to maintain this monopoly on violence, or otherwise risk being overrun by other competing groups, much like narco economoies where the official government body is increasing being weakened through corruption, and losing the valuable monopoly on violence. The US has monopoly on world violence and china wouldnt be the first to challenge it and lose, much as did USSR. Only rarely in Afghanistan and Vietnam, the US simply could not out terrorize the population as did the taliban and viet cong,and thus lost the war.
It would be so much easier to accept China's rise if they weren’t pulling a North Korea and imprisoning a million minorities with dystopian technology solutions.
I don’t think China realized how that policy is going to backfire in terms of their relationship with the West.
We want to see countries with individual rights rise, not authoritarians.
So, I'm not making a value judgement of what's going on but I always cringe when I see complicated geopolitical actions being reduced to one line talking points on HN. Of course it is actually much more nuanced in reality.
These observations about imprisoning minorities always fail to include information about past terrorist attacks and militant activity in the region. Most of the people in the reeducation centers were sent there for things such as spreading Islamic propaganda glorifying suicide bombings.The reality of the situation is more nuanced than the depiction by western media.
https://en.wikipedia.org/wiki/Terrorism_in_China
In December 2016 in Xinjiang, Islamic militants drove a vehicle into a yard at the county Communist party offices and set off a bomb but were all shot dead. Three people were wounded and one other died.
In July 2011, At least 18 people died in a series of alleged terrorist attacks in the city of Kashgar. According to state-run media accounts, the violence began when two Uyghur men hijacked a truck, ran it into a crowded street, and started stabbing people, killing six. The attack ended when the assailants were overpowered by the crowd, which killed one attacker. On the second day, state media reported that a "group of armed terrorists" stormed a restaurant, killed the owner and a waiter, and set it ablaze. They then proceeded to indiscriminately kill four more civilians. Armed clashes then reportedly ensured, ending with police capturing or killing the attackers. The Turkistan Islamic Party later claimed responsibility for the attack. One of the suspects appeared in a TIP video training in Pakistan.
In March 2015 in Guangzhou, three ethnic Uyghur assailants with long knives attacked civilians at Guangzhou train station, 13 injured.
In November 2014 in Xinjian, militants with knives and explosives attacked civilians, 15 dead and 14 injured. 14 of the 15 deaths were attackers
In May 2014 in Ürümqi, Xinjiang, Two sport utility vehicles (SUVs) carrying five assailants were driven into a busy street market in Ürümqi. Up to a dozen explosives were thrown at shoppers from the windows of the SUVs. The SUVs crashed into shoppers then collided with each other and exploded. 43 people were killed, including 4 of the assailants, and more than 90 wounded.
There are many more. Again, I'm not making of value judgement here but I think everyone should think critically and really understand what's going on from multiple points of view.
It’s not clear that the situation is “geopolitical”, but, more importantly, simply pointing to terrorism is not helpful either.
(1) The area is not inherently Chinese. China does not need to occupy Xinjiang. It has belonged to other people at other points. (See texts on the Islamic conquest.)
(2) China has encouraged mass Han immigration to Xinjiang. The Han who moved were not moving because of hunger or thirst. They moved because the state provided incentives to do so.
(3) Radicalisation is largely driven by ideologies that the CCP helped to support in the first place, when sowing chaos in Afghanistan without deciding what to do next. Of course it did not do so alone—the Americans and Pakistanis were also involved. But it at least props up Pakistan who continue to empower the Taliban.
(4) The Chinese state is very violent—and more violent than most other states.
Ergo it is misleading to suggest that the Uighurs are being particularly violent, and to imply that they are simply being violent for the sake of it. China could try a number of things, including getting out, reducing violence against Uighurs, and ceasing to incentivise Han migration.
There are 11 million Uighurs, and about a million in the camps. There are over 30 million blacks in the US, and under a million blacks in jail. (2.2 million is the total number of prisoners.)
The situation in Xinjiang is therefore much worse.
Most of the people concerned should not be locked up anyway—think of people who can’t afford to pay fines in the US, or people who pray in Xinjiang. It is extremely rare that a population is so poorly socialised that it is necessary to imprison over a tenth of the population. Perhaps they are in some strict sense “criminals”, but China can choose who to criminalise (as can the US), and it is clearly making unhelpful decisions.
I wonder why Singapore didn't say such things decades ago when the confrontation between US and the Soviet Union hit up? Because today confrontation still looks very much similar: between the free democratic bloc and a communist aggressive country (or bloc, maybe). Admittedly, the current conflict involves a lot of money and trade but most of all it's about geopolitical power, not soybeans or chips.
Because they didn't have nearly the developed economy that they do now? They probably also didn't have as much influence and maybe weren't really seen as a regional player?
208 comments
[ 3.3 ms ] story [ 225 ms ] threadSingapore economy is depending on trade and prolonged trade war will ruin Singapore with its unsustainable debt.
But how does China 'assuming its rightful place' should look in practical terms? Withdrawing US fleets from Pacific? Allowing East Asia to become China's vasal teritory? Tolerating growing economic and military threat?
> Allowing East Asia to become China's vassal territory?
Sure, in much the same way that it was in the past, and in much the same way that all of North and South America are vassals to the United States.
It is not realistic for East and even Southeast Asian countries to care more about what the US thinks than what China thinks; I don't understand how people can advocate for this goal with a straight face.
I think countries like Singapore, Korea, etc do not want the US, Korea, to leave. They are between a rock and a hard place and want to balance the US and China in order not to become too dependent on one and to benefit from both.
Singapore, which is quite "China-friendly" is saying exactly that.
What I find interesting is that the West in general, and obviously the US in particular, indeed cannot seem to imagine or accept that their complete dominance of the world is coming to an end. This is a rude awakening.
Singapore, which has an history of promoting "Asian values" and is a former British colony with 70%+ ethnic Chinese is very well place to tell us things as they are.
Even if it were true I am not sure if people of Singapore, Korea, Japan, Thailand or Taiwan would like to swap places with people of Xinjang or Tibet..
No, that is a fundamental misjudge. Singapore can be safely regarded as one of major anti China forces in the region. If you just look back several years, Singapore actually managed to got itself in the anti China side on almost every single recent major events.
I struggle to believe they are. Where ever did you get that idea from
The debt is what defends the state. A coup or military takeover and that debt won't get repaid, so there is financial incentives for the US to intervene.
Perhaps that's what is happening with China. It's no longer dependent on the US in the way it was and in time, will eclipse the US as the largest superpower.
They pay the money upfront for them and if the regieme change was illegitimate enough to freeze the bond it would be "free money" until a legitimate claimant comes forward. Like a neighboring city's bank refusing to turn over money from the account of Gotham after joker took over the city. That is the only securing function of it - meaning others lose it if they steal it.
On HN of all places I suspect that most people fall in a third category:
c) related to designing & parsing grammars
For more information, see https://www.gov.sg/factually/content/is-it-fiscally-sustaina....
They undermine it every day they refuse to allow free trade. The US and others spent a lot of resources building the free trade system of the world... and China wants the benefits of selling into that global market, while reserving their own market for themselves.
Every day they are not confronted on this, they send out the message to every other country that free trade with other countries does not require you to open your own markets. They encourage the breakdown of trade and the closure of global markets.
Confronting China on this today is the US asking China not to undermine the global system that has helped enrich China. Not to burn the bridge after they're finished with it (that many countries have used to pull themselves out of poverty: vietnam, korea, taiwan, japan, and even singapore).
Absorbing global manufacturing has made Americans the richest people with the highest purchasing power on the planet, has subjected American companies to competition that no other country has experienced, and has made them more productive as a result. Why would any American want their government to give in to the same mercantilism that China practises, at the expense of their own people? To maintain jobs that pollute the local environment and are largely going to be automated away anyway?
The central issue which makes this call for retaliation so intuitive (but mistaken) is that the plight of people who lose their jobs to trade is tangible. The steel worker is a person we can picture. But the collective welfare we all gain by the cheap imports from a country like China is invisible. Industries have lobbies, consumers don't.
Milton Friedman says that because he's a policy advisor of countries that benefit from others dropping their protectionist policies.
At a certain state of development (and when you are not yet top dog to dictate what "free" trade means to other countries), you need some well balanced protectionist policies. The US itself rose thanks to its protectionist policies. Britain too -- as did all others major powers when it served them well.
"Britain was the first country to successfully use a large-scale infant industry promotion strategy. However, its most ardent user was the U.S.; the economic historian Paul Bairoch once called it "the homeland and bastion of modern protectionism"
When the US administration gets into a tradewar that makes Chinese commodities more expensive and stops American farmers from selling soybeans, how exactly is this to the benefit of anyone?
The answer is clearly that the narrative is purely political and not economical. Playing up China as an economic enemy rather than a partner resonates with a relatively small, but vocal minority of the voterbase, who for ideological reasons seeks conflict with China.
--> The US is the most advanced country on the planet, therefore it logically follows that they do not need industry protection.
This doesn't seem quite right to me. Are you seeing a perspective that I'm overlooking? Have I perhaps mischaracterized you?
> The answer is clearly that the narrative is purely political and not economical.
Even if we assume for the sake of argument that "Playing up China as an economic enemy..." is completely true, do you consider that a complete proof of the above assertion?
The US "is the most advanced country on the planet" because it constantly uses "industry protection". Besides tariffs and subsidies, the whole power of the US state and military is constantly used to further US trade and resource interests, enforce favorable trade rules, ignore this or that treaty that doesn't benefit the US industry (e.g. environment or child labor laws), and so on.
>When the US administration gets into a tradewar that makes Chinese commodities more expensive and stops American farmers from selling soybeans, how exactly is this to the benefit of anyone?
For one, it's of benefit of those making (and/or) selling commodities of their own.
Heck, even American workers, who might have to pay more for Chinese-made commodities, but they also get jobs again to make similar commodities in the US. A paycheck + more expensive goods trumps being unemployed + the availability of cheapo Chinese goods.
This has only been true since about the mid 20th century and is by no means guaranteed to continue. Other countries are also populated by clever humans who would love to overtake us.
As an American I'm inclined to be supportive of measures taken by my government to keep the US in the top spot.
Friedman has been called many things but inconsistent or unprincipled were not among them. He advocated for free trade for the same reasons free trade is the overwhelming consensus of economists; it works and they can explain why whether you want the verbal or mathematical explanation.
Well balanced protectionist polices may be worth it theoretically but all a nation is really doing that way is increasing the variance of their economic growth. It’s a gamble. It could be a costly failure that retards growth for decades before being dismantled as in Ireland, India and Argentina or it could work, as in South Korea or Japan. Note that protectionist policies are not necessary for export lead growth. Hong Kong did just fine with unilateral free trade.
Yes they were, for example Friedman said that free market policies enable 'freedom' and socialist ones do lend themselves to authoritarianism, while conveniently ignoring the fact that in almost all places where his vision was put as fully into motion as possible, (70/80s Latin America), it had to be accompanied by severe state oppression. His policies could not be enacted via truly democratic means and in that sense they were no different than the 'socialist' ones he was so critical of.
He even admitted this later, essentially saying that you need a huge crisis of some sort, so that an economic 'shock therapy' could be enacted in order to bring about his vision of free markets.
Consider another great economist, Joan Robinson. She supported Mao and the Cultural Revolution to her dying day[1]. That’s principle. When you look on morality and abandon it because your politics are more important you’re showing your principles. That’s consistency.
Regarding the “shock doctrine”, a phrase that appears nowhere in Friedman’s voluminous writings others have covered this ground at length.
> The Klein Doctrine The Rise of Disaster Polemics
> Naomi Klein’s The Shock Doctrine purports to be an exposé of the ruthless nature of free-market capitalism and its chief recent exponent, Milton Friedman. Klein argues that capitalism goes hand in hand with dictatorship and brutality and that dictators and other unscrupulous political fig- ures take advantage of “shocks”—catastrophes real or manufactured—to consolidate their power and implement unpopular market reforms. Klein cites Chile under General Augusto Pinochet, Britain under Margaret Thatcher, China during the Tiananmen Square crisis, and the ongoing war in Iraq as examples of this process. Klein’s analysis is hopelessly flawed at virtually every level. Friedman’s own words reveal him to be an advocate of peace, democracy, and individual rights. He argued that gradual economic reforms were often preferable to swift ones and that the public should be fully informed about them, the better to prepare themselves in advance. Further, Friedman condemned the Pinochet regime and opposed the war in Iraq. Klein’s historical examples also fall apart under scrutiny. For example, Klein alleges that the Tiananmen Square crackdown was intended to crush opposition to pro-market reforms, when in fact it caused liberalization to stall for years. She also argues that Thatcher used the Falklands War as cover for her unpopular economic policies, when actually those economic policies and their results enjoyed strong public support. Klein’s broader empirical claims fare no better. Surveys of political and economic freedom reveal that the less politically free regimes tend to resist market liberalization, while those states with greater political freedom tend to pursue economic freedom as well.
https://object.cato.org/sites/cato.org/files/pubs/pdf/bp102....
[1]https://chinachannel.org/2017/12/13/fellow-travellers-tale/
Actually, I was only commenting on the claim that he didn't receive criticism for his 'principles', when he clearly did. I did not pass any other judgment.
> Noam Chomsky is deeply principled. If someone opposes the US he’ll support them, whether they’re the Khmer Rouge or the Serbs in the Yugoslav Civil War.
Think of Chomsky what you want, but this is a tragically misguided interpretation of his stance. He doesn't want the U.S. meddling in other countries, as the U.S. does not really do it for humanitarian reasons, but for geopolitical and resource exploitative reasons, (I mean just the existence of the term 'colliteral damage', or 'double tap' and the fact that drone strikes kill over 90% civilians should tell you enough). The notion that the U.S. cares about human rights, while being allied with Egypt, KSA etc. shows this clearly.
The U.S. has melted down over stupid Russian Facebook memes, calling it 'meddling', while actively supporting an illegal coup in Venezuela in the same breath.
His point is also that he criticizes the U.S because he's a CITIZEN, while he's not a citizen of all of the other places. So he puts an emphasis on where he lives, because there he has the biggest chance of innacting some change, as opposed to somewhere where he has no say whatsoever. I mean that'll be easy to do, because you don't really threaten anyone in power, but it also means you're doing little more than posturing.
As for my personal belief, I am actually not against markets or whatever. They serve a useful purpose for games, books, smartphones etc. But I do believe that they also serve a catastrophically unethical purpose when applied to healthcare for example, so that put's me squarely in a social democratic camp, but that doesn't really change the fact that MF has seen one extreme, so he went the exact opposite extreme.
And extremes, including free market ones, cannot be innacted peacefully, as has been demonstrated every time his vision was innacted, most notably by the Chicago Boys.
> Actually, I was only commenting on the claim that he didn't receive criticism for his 'principles', when he clearly did. I did not pass any other judgment.
If your interpretation of someone’s writing makes no sense try rereading it to see if there’s a sensible interpretation. No one who supports Milton Friedman is going to be unaware he’s widely hated. I said he was principled and consistent and acknowledged to be so. That was wrong. He was principled and consistent and plenty of people disagreed with that truth.
I never said or implied he didn’t receive criticism, anywhere.
This is what you said. People have thoroughly proven you wrong.
Actually in good-old Europe, "unprincipled" is upon Friedman's more common monickers.
Not that America is that behind:
"It must be said that there were some serious questions about his [Friedman's] intellectual honesty when he was speaking to the mass public." (Paul Krugman)
Or how about:
http://professorfekete.com/articles/AEFWhereFriedmanWentWron...
Paul Krugman's Hypocrisy: Now The Deficit Matters
https://www.dailywire.com/news/12299/paul-krugman-how-ive-co...
Hypocrite Krugman: ‘Awful’ 2017 McCain Now ‘Genuine Hero’, Again Claims GOP ‘Authoritarian'
https://www.newsbusters.org/blogs/nb/clay-waters/2018/11/13/...
Same with copying from others. Germany was famous for cheap, bad knock-offs of British products in the 19th century. That's the origin of "Made in Germany". And it seems China follows the exact same path. First the knock-offs were bad and people laughed. Then they got comparable in quality for a cheaper price, people started using them and companies grumbled. And then China started to lead in some areas and now the "established" players are in full panic mode and try to block Chinese companies (e.g. Huawei).
Before "Made in Japan" became a sign of pride, Japanese products (including cars) were ridiculed as cheap imitations and rip-offs of western inventions. This changed in the 70s.
I.e. the kind of trade that they dictate and call "free", creating banana republics that cut them special deals, toppling governments when they don't like their decisions, using humanitarian and development funding (even from supposedly independent sources, like the IMF) as bribes and pressure to secure special treatment , insisting on the dollar being used in major trade as opposed to the euro or the yuan (and punishing those states that make the opposite "free" decision), getting their hands on oil producing countries, and so on.
And of course using protectionism whenever they like for themselves ( https://en.wikipedia.org/wiki/Protectionism_in_the_United_St... ).
Some free trade...
That being said, what's your take on China's behavior specifically, do you believe they are acting in a "fair" manner? Do you believe the advantages they enjoy are all justified? (Note: for the sake of this argument only, karmic payback for US historic behavior is not considered a valid justification.)
EDIT: I'm curious why explicitly acknowledging valid points but then asking a clear and specific question (that excludes these points as they are not directly relevant to current trade with China) is being downvoted? Downvotes for disagreement are appropriate according to HN guidelines (or they used to be), but I'm not asserting anything, I am literally asking a serious question.
Regarding trade: I think China (and any country) should have absolute say in how they do business, and who they want to do business with, who to allow in their internal market, etc.
And of course other countries should be free to reciprocate. That would be actually free trade in my book: with any nation being free to do business as it pleases (trade this, impose tariffs on that, etc).
The current "free trade" is mere lip service in the sense: "we promote free trade to force others to open their markets to us, but we ourselves use tariffs, wars, and whenever we like to further our interests". So, I don't like it, and I also don't like the "totally free" trade (which I find a pipe dream, as big players wil always work their way around it).
>Do you believe the advantages they enjoy are all justified? (Note: for the sake of this argument only, karmic payback for US historic behavior is not considered a valid justification.)
I think "fair" can only be considered in context. Something is fair or not according to how the actual players play the game, not according to some abstract rules. If everybody cheats, China is fair to cheat too. In that case, I don't think the "karmic payback" is irrelevant to answer the question, nor I believe it's mere US "historic behavior" (if the latter implies something that happened only in the distant past and is not active behavior it's benefiting from at the moment).
Regarding human rights: China is authoritarian (and on the fore-front of authoritarian abuse of technology). That said, the situation is accepted well by the vast majority of its population, who doesn't have much tradition of free elections in the first place, and who probably worries of the impact of a breakdown of the regime.
Naive pundits might call for the immediate dissolution of the CCP for example, but in 1.6 billion people state a power vacuum could lead to chaos, schism, and civil war than makes India/Pakistan, or modern day Iraq/Libya etc look like Disney movies. In any case, it's up to them, not to outsiders to call their shots (or to take sides in their internal power struggles). All kinds of countries had their popular revolutions, reforms, etc, if China (as a nation) doesn't like its regime, they're welcome to change it.
China has neither. Free is free as in no restriction, not free to do whatever you want.
Free to do whatever will make global trade more difficult for everyone as all countries will have tariffs, as it was historically.
Well, the term (and its proponents) should not hijack the concept of freedom them. One could call it "open" (or sometimes "forcefully open" market, e.g. like when the British waged war on China so that they are free to sell opium there).
Free as in freedom should include the freedom not to trade.
>China has neither
Well, despite that is one of the biggest importers and exporters of the world, and they've been rising from an agrarian economy to the worlds top manufacturer, and being in the top-2 global players. So looks to be working for them.
>Free to do whatever will make global trade more difficult for everyone as all countries will have tariffs, as it was historically.
That's a good thing in my book. We need less global trade, if not for anything else, for environmental reasons (the "reduce" part of the reduce, reuse, recycle).
If the people in some country feel as if they benefit from trading something, they can always choose to trade it. But if they have negative consequences from trading, i.e. importing or exporting X, then why should they continue to do so and suffer them?
I also agree that open trade is a better name
This answer seems to pretend the prisoner's dilemma doesn't exist.
The world grows more when it works together. If China doesn't want to play by the rules of the global trading system, it should stop reaping the benefits while undermining it for everyone else.
I don't necessarily disagree, except:
- does this take into consideration explicit agreements they've signed with the WTO?
- if this behavior is perfectly fine, why the extreme reluctance (on both sides, at least until recently) to acknowledge specifics of how the game is actually being played?
> I think "fair" can only be considered in context. Something is fair or not according to how the actual players play the game, not according to some abstract rules. If everybody cheats, China is fair to cheat too.
That seems perfectly reasonable, but my question was: is the US "cheating" China? Are de-facto terms and actual actions (actual actions, so excluding "karma"-based justification) of trade between the US and China "fair", or are they not fair? As far as I can tell, that question remains unanswered.
> Naive pundits...
I absolutely agree on a philosophical basis, but unless I'm mistaken, this seems orthogonal to my specific question. For the sake of clarity and conversational efficiency, I'd rather we not add new topics of discussion to this particular sub-thread.
We have an independent judiciary, democratic institutions--what are structural Separations of Powers which is the most important structure of a civilization consistent with liberty.
China doesn't have that. Saying the US also cheats the rules, too, is important, but shouldn't be confused with the reality that China does it much more abhorrently.
Around half of your population don't seem to want that at all as long as 'their guy' is in power.
https://www.reddit.com/r/europe/comments/ax5hwm/economic_war...
If you think of China as a rational player who can be "mindgamed around" take in mind that Xi has goood record of shooting himself in the foot politically, which he has been doing consistently through his reign.
Americans have really have nothing to mentally reference when dealing with this type of person — USA never had real hereditary nobility. You are dealing somebody much more of a medieval lord than a nation leader.
Think if a person who own a giant company as a proprietorship vs. a CEO of public corporation with a lot of vigilant investors.
And how did that work? (i.e for the Iraq invasion/Afganistan).
"international law matters only when it is aligned with US national interests"
https://www.theguardian.com/us-news/2019/mar/15/mike-pompeo-...
China is the last sovereign country in the world. Authoritarian but willing - unlike U.N.-governed countries - to give its people the freedom to do what they want. The West, so afraid of strong government, now has no government. Only financial power.
I mean a Chinese person can say that they are glad to live in a country that does not invade other countries, killing hundreds of thousands of innocent people.
The government continues war\policy 1. People continue criticizing.
The government starts war\implements policy 2. People criticize.
The government continues war\policy 1 and war\policy 2. People continue criticizing.
...
Of course, Iran is now threatening free trade through the straits of hormuz. Would you call intervention to protect free passage "toppling foreign governments" because they "make decisions we don't like"?
It really does not matter. US of A could never prove the existence of WMD in Iraq. In fact, all of their claims have been proven to be wrong. Millions dead. People who started the war are enjoying retirement sipping on the costliest wines.
"My policy on cake is pro having it and pro eating it."
I am a free trade believer but you must be stupid not to see that US doesn't want free trade. It wants free trade where it works for them, their "free trade", in US dollars of course. If you compete with the US you become a foe, an enemy.
"We must protect our country and our workers. Our steel industry is in bad shape. IF YOU DON’T HAVE STEEL, YOU DON’T HAVE A COUNTRY!"
"I think the European Union is a foe, what they do to us in trade. Now you wouldn't think of the European Union but they're a foe"
"There's a lot of anger at the fact that Germany is paying Russia billions of dollars."
Even the EU has many import tariffs to protect its own industries from unfair competition from China and others.
Why should someone who makes bikes in the EU compete with someone who does it for $0,50 an hour in Vietnam or who knows where?
Protecting your own markets is the sensible thing to do. Any country with a decent industrial policy does it.
Because this will lead to increased competition on the low cost countries labor market, increasing their wages. Long term that should equalizes wages and thus standard of living globally and everyone is happy. At least that's the overly simplified and wishful thinking. Reality is obviously a bit more complicated, but I still wouldn't want to entirely discard that concept.
Have you noticed who is in government over there right now?
TPP-agreement would have tied pacific countries and US tighter together while leaving China out until it improves. CPTPP and it's TPP without the US.
Monopolies?
Capitalists?
If we had the same rules everywhere and effectively one global government then we could have free trade. But we have sovereign nations with their own national interests.
Therefore trade always has to be a deal. Either the deal is a good one or it is not. We have had problems before with Japan, for instance they like to grow their own rice rather than just ship in 'Uncle Ben's' rice from Uncle Sam. Rice grown in Japan by real Japanese people on real rice terraces is much more expensive than rice churned out by U.S. agri-business. But do the U.S. agri-businesses have a right to demand free trade, pushing the Japanese small farmers out of business?
What sense does it actually make to do that? The product - rice - can be locally sourced with a lot of human effort gone into the production of it. This keeps people in Japan gainfully employed in agriculture. Japanese consumers also prefer the local product, it is more to their tastes.
Should this protectionism go on forever? Well, yes, it is not as if the local rice farmers in Japan are going to be competing for global exports.
So we have something similar with China and every other nation. I think that China are doing very well in tech thanks to the Great Firewall of China, they have versions of Wikipedia, Facebook, Google and Amazon - the world is richer for this diversity.
What is wrong with the U.S. approach to protectionism? They could be honest about Huawei and state that they wish to have domestic companies do 5G just because they have national interest to do so. They could be honest about their own 'Great Firewall' which is what the NSA is and be up front that the government feels it needs to spy on the citizens lest any of them get revolutionary thoughts.
The rest of the world is fine about U.S. protection of the pickup truck market. We get it - the U.S. needs Detroit and Detroit needs pickup trucks as they can't make competitive cars.
If the U.S. was claiming that Toyota and VW trucks were unsafe that would be wrong, that is what is going on with the Huawei situation, there are these allegations that are not substantiated by facts.
It is ridiculous that the U.S. is struggling with trade given how rich the country is from a land/resources point of view, how the U.S. owns the world's reserve currency and how almost all oil/energy has to be traded in USD. No other countries have these perks.
China has no territorial ambitions beyond Taiwan. This is benign, a bit like Ireland wanting Ulster back rather than Britain wanting to enslave India. They may peg their currency and have this Great Firewall, however, who is to say that they are wrong in not wanting their great nation to be ravaged by global capitalism? We just need to strike actual trade deals with China in the West, affording the Chinese people and their leaders some respect.
Then the Japanese rice producers have nothing to fear from free trade. If Japanese consumers don't want it, there will be little shipments of American rice anyways. This of course ignores any subsidies that may artificially effect the market prices of rice in either Japan or America, but free trade is as much about consumer choice as it is about big business selling it's products.
I live in Canada. We have a supply managed dairy system that's managed by quotas that farmers own. Part of the management of that system is brutally high tarrifs on foreign milk products, including cheese. The farmers have high income support, but Canada also has among the highest milk prices in the world. This effects poor people as well as limits choice. I'm a cheese snob, and while Canada (in particular around Quebec) can make some very delicious cheeses, I'm left paying exorbitant prices for some of the unique cheeses from Wisconsin, France, Switzerland, etc. The result of this protectionism is that, under WTO rules, Canada exports absolutely zero dairy products. Our cheeses don't compete on a fair market leading to stagnant products that compete on tariffs as high as 800%.
Now you may say "great! farmers deserve a good living!" but they're benefiting from protectionism while the rest of the economy is relatively free. If the entire Canadian economy was run on this model, Canadians would have to pay a lot more everything, which would make our standard of living much lower.
Farmers just happen to be politically well connected, which at the end of the day are the people who tend to benefit from "trade deals" that restrict certain elements of trade.
Free markets have always come thick with caveats to suit whatever goals the authors/negotiators had at the time. The US, for example, generally prioritized investment access and largely got it. They also prioritized economic infrastructure, like the dollar standard and globalising the US patent system.
Meanwhile, agricultural markets were kept outside of the mix, which is a huge deal to many politically/economically weak countries. The line between a bad faith exploitation of the system (as you characterized china) and an acceptable exception was determined by political interests and power dynamics, not by principles.
What I'm saying is not that china "plays fair" or that the US does. What I'm saying is that it's a game where rules get made on the fly and power matters. There's a tendency to see your own priorities (patents stand out to me, in the US-China context) as obvious non-issues and rivals' priorities as huge compromises. I think it's wise to limit the moral reasoning which leads to finger pointing and conflict.
Meanwhile, there's always a lot of dirty dealing on all sides. Putting up trade barriers on national security pretexts or whatnot.
I think the Singaporean minister has the broad point right. The US had an incredibly central role in creating the current global trade setup. This reflected their power (and prestige, especially in Europe) at the time. The system wasn't a bad one and China has been a great beneficiary of it. A lot of the non-economic reasoning did come to fruition too. China is a far more open-to-the-world society today.
But... The size of China's current economy changes the political balance. They will demand a US-like role and unless that's accepted by the US, politically & emotionally, we're headed for a recessive period.
Afterwards he adopted a still more forceful method of driving home his point: whenever his opinion was called for on any subject, he invariably concluded with the words, ‘And furthermore it is my opinion that Carthage must be destroyed!’ (Lives, ‘Cato the Elder’ 27)
The Carthage during 20 years after Second Punic War became export powerhouse and it was even able to repay war idemnities 10 years ahead of schedule.
Carthage became that (short lived, because Cato won that argument) export powerhouse in part thanks to the Mediterranean "pax romano" that would soon destroy them.
Unfortunately, to the current US administration, confronting China is not a means to change China's behavior for better, but an end itself.
Are the sanctions against countries like Cuba, Iran or North Korea also a part of "fair" and "free" trade?
Of course, US is free to choose with whom they want or don't want to deal; just don't call it "free" trade please.
Fast forward to 2018, China and USA already agreed to WTO rules with China considered as a developing countries and thus granted special rights such as protection of its industries. Then USA unilaterally breaks WTO rules with tariffs with an arbitrary interpretation of "national security" and wants a signature of a one way deal where USA gets all the rights and controls but doesn't give anything. I'm sorry but history teaches you that kind of deals will get your citizens subjugated by foreign powers or foreign corporations.
China is no longer a developing country. The can say they are developing but that is no longer true.
Any justification? China's GDP per capita is lower than Mexico's.
China surely has some very shiny metropoli, but there is a few decades worth of modernization to be done still as you go inland.
The world might be a better place if everyone stole and remixed IP
Just like it makes sense for the US to enact and attempt to enforce restrictive IP laws on a global scale.
Make no mistake once China ascends they will enforce their will on the world just like the US has done and it will be ugly.
Say goodbye to democracy. Say goodbye to due process. Say hello to coercive IP law. Say hello to unimaginably restrictive DRM and surveillance.
China has overthrown harsh rulers many more times than the US has, even taking into account the latter's short and young history. The last time was in 1912, and very plausibly arguably 1949 too. (The Nationalists were pretty bad, objectively speaking.)
"the complexity of the Chinese political situation" = "China has overthrown harsh rulers many more times than the US has" is itself a simplification.
https://vimeo.com/44078865
So is this video, it's also a simplification, but more importantly, it's one of several lines in the sand: China aside, I don't want that where I live. Period. Western companies have already started to censor themselves to not offend China, and this must stop.
Of course what I said is an oversimplification. It's meant to directly make you question your deep underlying assumptions, and your own oversimplifications. The government has a lot of power on paper both now and historically. Yet despite this, rebellions have still occurred regularly, and this core central power did not historically cause China to go and colonise other countries committing atrocities there. Perhaps something is missing from your own US-centric legalist analysis?
> It's meant to directly make you question your deep underlying assumptions
"Deep underlying" being code for being made up by you on the spot?
> The government has a lot of power on paper both now and historically. Yet despite this, rebellions have still occurred regularly
The last time 1949? So, not since modern, industrialized totalitarianism took hold. That's like talking about cancer by describing the life of a person before contracting cancer.
> this core central power did not historically cause China to go and colonise other countries committing atrocities there
They already are causing Western media to censor themselves even on sites blocked in China. Mercedes Benz apologized three times for even quoting the Dalai Lama, just an inspirational quote. For me, that's three times too many. And just like I'm not over the Iraq war being a war of aggression, I will not forget or forgive this, either. You do you.
> your own US-centric legalist analysis?
Again you assumptions about my assumptions. If anything, being German, my "analysis" (of which you quote nothing, don't engage with at all) is Nazi-based.
This isn't on the same scale as "enforce their will on the world", and nowhere near US-levels of "enforce their will". (Not justifying this sort of action however.)
My point is you and the earlier poster are happy to extrapolate small events into big ones in a way that doesn't match the historical record. The officials of the Chinese government are not stupid and can't go too far from public opinion, which is generally more principled that you (and other US-centric "analysers") give them credit for, being too focused on the laws and ignoring many "facts on the ground". (Not implying rule-of-law is a bad thing.)
> being German,
Germany has been under US influence since 1945, so my saying your analysis is US-centric is not too far off the mark. There are differences and also similarities.
Mercedes Benz apologized profusely. If the CCP will have their way, their murders will never have happened. The same is not true for the US, not even remotely. If that was the case, Noam Chomsky and others would have been murdered in the 70s or something. But here he is, one of the most prolific intellectuals. He gets smeared a lot, but there is still a giant difference.
That vimeo video you don't seem to be able to comment on directly is evidence of a very principled public opinion indeed, principled by fear, as a result of torture and murder.
> Germany has been under US influence since 1945, so my saying your analysis is US-centric is not too far off the mark.
More importantly, "saying your analysis is US-centric" means nothing. It's not a concrete criticism of anything I said. Your whole argument seems to be the US is worse, so how am I the US-centric one? All I'm hearing is, you're using one set of tyrants and murderers, US aggression and world influence, to justify another sets of tyrants and murderers, while saying "not justifying it however".
Is there a similar situation in China? My sense was that the culture was much less restrictive -- all is fair, it's not worth the time and money to sue someone else into oblivion.
Until it becomes unprofitable to invest in innovation
https://youtu.be/ZTC_RxWN_xo (Secret History of Silicon Valley - Computer History Museum, Mountain View)
In reality capitalism only took over after massive (debt based!) spending by (US) government during WWII. The risky stuff doesn't happen in companies. Even things like e-cars and rockets, see Elon Musk and his companies as the most prominent examples, didn't invent any of the basics. They just take well-established concepts.
It's not either or, it's specialization: The low-probability-of-success stuff for larger society (government mostly, at this point), and when there is something to build on the more focused business people and entrepreneurs who want to see an ROI are better at executing from there on.
But, back to the comment you replied to, basic research, the risky stuff, is better off being open and available.
If so, do you think that the world will do just fine if we removed large financial rewards for "shallow innovation" like the smartphone, new drugs, medical devices, software, etc?
everyone building out a new technology borrowed ideas freely without compensating the real innovators (of course, implementation can be the more difficult piece)
As long as governments subsidize public universities and research departments, there will exist a font of innovation
This is such a sweeping statement it's just false
> everyone building out a new technology borrowed ideas freely without compensating the real innovators (of course, implementation can be the more difficult piece)
Implementation is innovation too
> As long as governments subsidize public universities and research departments, there will exist a font of innovation
We need both
That's a great way to copyright reform right there!
If you open your economy when you are relatively undeveloped and weak then foreign companies will immediately occupy your economy and you can forget about creating national 'champions'.
China is not a closed market but they are careful not to fall into that trap.
And they remix the ideas of western tech and often improve upon it. WeChat is orders of magnitude more convenient than what the US has to offer. Everything is centralized and integrated, what Google tries to do, but adopted everywhere. Book anything, pay for anything, tap phone to pay for anything. I don't expect many places to take phone payments. In China, most everywhere can take phone payments.
Their social networks also seem to do great at getting things naturally viral. I posted a random video without any boosting and it got like 1.5K views in a day.
The "feature" of WeChat is that it can be used for almost anything. It is a cash successor more so that a card alternative. Anyone can print, display or scan a QR code. Doesn't matter if it is a store, a friend or a random person. Doesn't matter if it is in the physical world, on a website or in a chat. And it is easy to do. And almost everyone uses it.
Contactless cards only matches WeChat in the same way something like Apple Pay does.
The more secure analogy comparable in price would be solutions like Square and PayPal Here. Smartphones are ubiquitous.
As the other reply says too, any shop can set this up easily. I challenge you to take contactless payments in your home country, it's nothing like simply getting a qr payment and involves merchant banking.
I've seen tiny remote rural village stores that would never even imagine having a visa PoS terminal with big wechat payment signs out front.
Fascism has it's good points!
Seriously though, WePay isn't innovation - we could have that right now in the West. Citibank could make an app that would allow peer-to-peer money transfers with QR codes the way WePay works. It would be smooth and easy. You'd just have to have a Citibank account. After a while, everyone could get an account with Citibank and it would be great! The other banks wouldn't like it, but whatevs.
Then Citibank would realize they were the gatekeepers of the digital peer-to-peer economy and they would seek rent. Transaction fees would increase. Monthly account fees would sky-rocket. Eventually, the govt would realize this was a drain on commerce and would seek to regulate and maybe even break up Citibank, but in a rule-OF-law nation, the govt would actually have to go to court and Citibank would get to argue their case against govt intervention. It could take YEARS! Look at how long it took the govt to prosecute IBM back in the day!
Meanwhile, if Tencent gets too greedy with WePay, the govt just makes their CEO disappear. In fact, in a fascist state, having monopolies is an ADVANTAGE! It's one throat to throttle - if there's a problem, there's just one CEO you need to kill.
WePay isn't innovative - it's just something that works particularly well in a fascist state. Getting the whole banking industry to agree to communicate and cooperate on a common mobile payment system is a bit more difficult...
Update - s/rule-by-law/rule-OF-law/
Of course this is just one aspect of development and there is no silver bullet. Those who succeeded used protectionism and controlled opening of their economy as part of a broader strategy, governance, and culture.
I first encountered this when economists kept attacking rent control saying it destroyed cities, while Montreal remained the best place to live in all of North America.
Then I found this interesting essay about economists finally getting to try out an experiment about sweatshops in Africa, and concluding "Everything We Knew About Sweatshops Was Wrong":
> https://www.nytimes.com/2017/04/27/opinion/do-sweatshops-lif... > > In the 1990s, Americans learned more about the appalling conditions at the factories where our sneakers and T-shirts were made, and opposition to sweatshops surged. But some economists pushed back. For them, the wages and conditions in sweatshops might be appalling, but they are an improvement on people’s less visible rural poverty. > >As the economist Joan Robinson said, “The misery of being exploited by capitalists is nothing compared to the misery of not being exploited at all.” > >Textbook economics offers two reasons factory jobs can be “an escalator out of poverty.” First, a booming industrial sector should raise wages over time. Second, boom or not, factory jobs might be better than the alternatives: Unlike agriculture or informal market selling, these factories pay a steady wage, and if workers gained skills valued by the market, they might earn higher wages. Factories may also have incentives to pay more than agricultural or informal market work to persuade workers to stay and be productive. > >Expecting to prove the experts right, we went to Ethiopia and — working with the Innovations for Poverty Action and the Ethiopian Development Research Institute — performed the first randomized trial of industrial employment on workers. Little did we anticipate that everything we believed would turn out to be wrong.
Never blindly trust an "economics textbook" lol. When you disagree with them, economists say "read a textbook", and when you point out the models are bad, they pivot to "it's just a textbook, real models are much more complex than that" (they tend not to be).
Macroeconomics is not a healthy field making rapid progress. David D. Friedman’s verdict on it is that we know very little is true but we know plenty that isn’t. If you want to see someone really ripping into macro read Paul Romer’s The Trouble With Macroeconomics[1]. All that said I know what happens when you contract the money supply; you get a recession. Print lots of money; you’ll get inflation. Decrease inflation; your currency will appreciate. There’s plenty more like that. Purchasing power parity works as a theory of exchange rate formation over the long run and nothing does over the short run. Macroeconomists know plenty.
Regarding theory and replication, on rent control I see Montreal and raise you Mumbai[2]. If the rent controlled price is near the market price the damage will be pretty mild. If you haven’t allowed rents to rise since the 1960’s things will be worse. On replication, more than three quarters of cancer biology papers don’t replicate so the fact that some economics papers get retracted doesn’t disturb me too greatly[3]. If you’re doing science sometimes you find out you were wrong or that you made a mistake.
[1]https://paulromer.net/the-trouble-with-macro/
[2]https://www.youtube.com/watch?v=2fh4tPWYeks
https://www.livemint.com/Opinion/2sEX5MD7aW1whVkxFllNCL/Rent...
https://marginalrevolution.com/marginalrevolution/2017/04/tw...
[3]https://www.theatlantic.com/science/archive/2017/01/what-pro...
> In 2011, Bayer Healthcare said that its in-house scientists could only validate 25 percent of basic studies in cancer and other conditions. (Drug companies routinely do such checks so they can use the information in those studies as a starting point for developing new drugs.) A year later, Glenn Begley and Lee Ellis from Amgen said that the firm could only confirm the findings in 6 out of 53 landmark cancer papers—just 11 percent. Perhaps, they wrote, that might explain why “our ability to translate cancer research to clinical success has been remarkably low.”
You invoked "economics textbooks" like some kind of conversation-ender, and I showcased several things economists treat as hard natural law that end up being, at best, oddly amiss in key cases:
- Rent control (Montreal has it, best city in North America)
- Free trade (China doesn't do it, most reduction of poverty world-wide)
- Sweatshops are desired (Except in a controlled experiment where they are not imposed, they are rejected)
- Debt is bad (Incredibly damaging pro-austerity garbage study boosted in spite its flaws)
Feel free to make each subsequent case on its own merits and evidence as you understand it, but please don't point at economists and act like they possess an authority that they do not.
And preponderance of studies doesn't eclipse a key result. Montreal routinely ranks as the best city on the continent, so even if something "works in most places", it doesn't mean it's something you should pursue when you're trying to be the best, or when you're trying to do well by yourself and not trying to be the best. You surely know about the economics "Theory of the Second Best"?
https://en.wikipedia.org/wiki/Theory_of_the_second_best
Since y combinator new is most frequented by people from the US and other western nations that are having this conflict with China right now, my belief is that their emotions guide their logic. So everything that China does is bad and western countries are the victims. Which is the narrative that is also being strongly pushed in the American media and to a smaller extent other western media.
But as a Singaporean living in Asia, I don't see anything wrong with China's development path. It is developing the same way as almost every other industrialised nation in the world did. First by blatant disregard for IP and then slowly as it progresses up the economic ladder, it provides more and more protection for IP. China today and China ten years ago is vastly different in terms of the amount of the strength of its IP protection enforcement. And with its current trajectory, it will be vastly stronger in ten years still. With regards to barriers to imports, China has less barriers than most of the other developing nations and reducing sharply each year.
Instead of recognising this fact and working to hasten IP protections, America seems to me to be going on a mutually destructive path that is bad for everyone in the region if not the world. That makes me suspect this is not really about IP and prosperity but power which unlike the former, is zero-sum.
Its one thing for the average person on the street, but I don't understand why intelligent people in the West find it so difficult to separate facts from fiction and emotions from logic.
Lastly, I would like to add. There is nothing inherently moral or immoral about IP. It's just a way for the incumbents to protect their position. Making this a moral problem (Chinese bad because they steal IP) is not the right approach.
For example, India doesn't have Alibaba or Tencent or whatever because they allowed in foreign companies with stronger currencies too soon.
USA set the rules after WW2. China played the game according to those rules. Countries that didn't were either smashed economically or by warfare.
That's a big big stretch. It's more open than a big part of Western countries.
That's not much different from US and other countries around. Most Western countries with socialist streak restrict way more than that.On the second point, I disagree.
IP is not some basic, natural law. It's a relatively recent invention, ostensibly invented to promote certain economic incentives. Why is china morally obligated to respect it?
At any given point in time, the biggest effect of an IP system is how it affects the current portfolio of patents & copyrights. That's what tends to dictate the rules. When copyright law is updated, it's the impact on Disney's IP asset portfolio that's considered... not future works that will be created. It's a similar dynamic for patents.
Why should china (or any country) have to subscribe to an IP system under which they don't own as many patents.
Meanwhile, the benefits of a patent system are contraversial, even dubious (imho). Lots of intelligent peoe think they do more harm than good. The billions spent by tech companies on patent lawyers are a case-in-poiny.
I do not think we (globally) are best served by a global IP monolith. This is one area where we can benefit from a diversity of rules.
> At any given point in time, the biggest effect of an IP system is how it affects the current portfolio of patents & copyrights. That's what tends to dictate the rules. When copyright law is updated, it's the impact on Disney's IP asset portfolio that's considered... not future works that will be created. It's a similar dynamic for patents.
> Why should china (or any country) have to subscribe to an IP system under which they don't own as many patents.
To an extent I agree with you. There are a great many problems with the current state of "Intellectual Property" law and I there's some merit to the argument that it would benefit humanity as a whole if it were scaled back drastically or even eliminated entirely.
However, China not only does not enforce US patents and copyrights but also engages in extensive industrial espionage to steal trade secrets. Even if we did not have copyright and patent law, such actions would and should still be illegal. Qualitatively, I think there's a big difference between reverse-engineering and making your own version of some company's product, and hacking into their servers and stealing the data to make it or paying an employee of theirs to exfiltrate the source artifacts for you.
Chinese companies do both. The former is sometimes permissible, at other times may violate patent or copyright law, which may or may not be seen as a bad thing depending on your views of the matter. But the latter should be rightfully condemned.
There's also the argument that even if patents are granted too freely and abused, and copyright extended far too long, that if China wants to engage in the world economy then they need to play by the same rules as everyone else, and that if they do not play by those rules then other countries are entirely justified in retaliating.
I find them different ways of accomplishing the same thing: securing a business edge
Onavo, a VPN that secretly did device-wide spying, doesn't count as a "hack" because...?
Unless you play by the same rules, free trade is unfair.
That argument is extremist, imo. It creates a dichotomy between trade or sovereignty. Want your own environmental laws, liability laws, pension schemes, oh&s rules? No trade for you.
It leads to both conflict, and the extension of the massive and very problematic trade agreements into every every facet of legislation.
IP laws can stay local. I agree on the middle point. Whatever the case for china making its own IP laws, they need to follow their own rule of law. Hacking/stealing is not justifiable. Deciding that pharma patents are not valid in China is.
>>Why should china (or any country) have to subscribe to an IP system under which they don't own as many patents.
Is is fine if I steal from you because I don't have as much money as you do?
Or, would you prefer that I don't "subscribe to" your notion of money in your pocket as wealth because I don't have as much and therefore it is perfectly moral to take yours?
Come on - let's have a rational discussion here.
If the companies are willingly going to the Chinese markets on their own accord under an IP sharing agreement, you can no longer use the term "force". They have a choice to not share it by not entering the market. You can critique this as an inherent weakness of capitalism, but China is not forcing anybody in this situation.
And why would they have to steal it if its already shared? This doesn't even make any sense.
https://www.goodreads.com/book/show/18297494-one-man-s-view-...
It's very concise, written in fairly casual tone and in my opinion, spot on for the most part. One point he kept making throughout the book is Singapore will not stop working with a superpower because another superpower don't like it.
China sells goods cheaply to USA and takes the dollars it makes and invest in US treasuries. This keeps inflation low and keeps interest rates low. And allows the US to maintain an unnatural high living standard with low savings and asset price inflation.
The central bank may be able to compensate from the lack of Chinese buying but it is an unsustainable situation as the inflationary pressure from the lack of imports would be in full force.
Also notice that Singapore seems to be saying: Please don't ask us to pick sides ...
The US may have fewer friends in Asia than it assumes.
I doubt if low inflation enviroment is high on current administration list. On the contrary. Some inflation could stimulate economy.
> The US may have fewer friends in Asia than it assumes.
Isn't Singapore political system famously authoritarian capitalist and its people ethnically Chinese? It might be a mistake as viewing it too much of a representative of the rest of Asia. It sounds very similar to contemporary China, in many respects, so it may have an unusually strong affinity to it.
https://www.hrw.org/asia/singapore:
> Singapore’s political environment is stifling. Citizens face severe restrictions on their basic rights to freedom of expression, association, and peaceful assembly through overly broad criminal laws and regulations. In 2017, the country tightened the already strict limits on public assemblies contained in the Public Order Act, which requires police permits for any “cause-related” assembly outside the closely monitored “Speakers’ Corner.”
Most of Southeast Asia is increasingly authoritarian.
> its people ethnically Chinese?
Mostly (this is a trivial Google), but importantly not entirely.
Singapore was the last country to recognise the PRC instead of Taiwan. This was for good reason. First, Singapore maintains internal harmony by pretending to be multiracial. (It isn’t, obviously—the best candidate for the PM by far was ignored because “the people aren’t ready for a non-Chinese PM”, even though he was the most popular.) This involves insisting on English translators when visiting China, asserting independence, doing military drills in Taiwan, etc. Second, Singapore historically had to do the same thing to convince its neighbours that it was not a Chinese puppet.
But the crucial difference is that Singapore optimises for minimal oppression given a certain developmental outcome, whereas China doesn’t. Repression in Xinjiang, the Tienanmen Square massacre, current crackdowns on liberal thinktanks, etc. are not necessary to secure the régime. No Singaporean government would bother. (That is why New Naratif is still around.) Singapore is in fact qualitatively distinct from almost all other authoritarian states in that it requires extremely little oppression in view of the outcomes achieved compared to any other state, where the tradeoff is much worse.
https://www.nytimes.com/2018/06/25/world/asia/china-sri-lank...
Speaking personally as a citizen of a neighbouring nation - I would rather have a democratic and open nation like the United States as the sole-superpower of the world. China as an established super-power would be a tyrannical nightmare.
I also don't see the value of Singapore - which is openly anti democratic (https://www.huffpost.com/entry/singapore-challenges-democrac...) providing advice here - as the same concerns about authoritarian corruption that apply to China also apply to Singapore.
As to the choice being an illusion because two parties often rule: tell that to the Whigs (one of the two parties that no longer exists in the UK), or to anyone that's held a balance of power in a coalition government.
I noticed a pattern few month ago: you have a lot of bashing during East coast morning hours, followed by much more conciliatory toned wave of comments few hours after, when East coast wakes up.
Pfff my, a typo: last is West coast
So im not crazy for noticing this...im also highly concerned that HN may not have appropriate vote manipulation filter, and that much of what we read on the front page are increasingly engineered.....
BTW, your comment on moderation is interesting.
https://borgenproject.org/top-10-facts-about-poverty-in-sing...
Singapore can survive as a country with mostly trade, IP, high tech, low taxes, services. Singapore doesn’t even have power plants, all from Malaysia.
But despite the dreams of some people, a big country like US cannot just be a service economy like Singapore.... so while I disagree with Trump on many other issues, I cam’t really fault him here, and I hope next American democratic president will not soften its stance.
The fact is to aurpass the US, you need to possess better if not technologically superior assets to project.
It boggles my mind why this military factor is often ignores by proponents of china maximalists.
The us can call upon a dozen carrier strike groups on a moments notice, port call literally anywhere that isnt russia or china, bases distributed globally and unknown next gen technology that isnt even being revealed but kept secret, if the us had sr71 in the 60s they have something in the works that guarantee they will be ahead.
Only now china has started producing f16 class jet engines domestically, but still decades behind in many power projection components.until china has projection that aurrounding countries will take seriously, its just another pipe dream, until china can prove itself on a world stage like the US has in its constant state of warring, only then will your financial institutions criticized by Chomsky crowd, be actually legitimized.
Much like your local mob or cartel, those who are perceived to have monopoly on violence, often backed up by real violent acts, have weight behind their words. Those who are in competition, risk elimination through in action, so they must constantly maintain high tension with skirmishes here ans there to remind the other side. If you think this way, it makes sense that the governments purpose is to maintain this monopoly on violence, or otherwise risk being overrun by other competing groups, much like narco economoies where the official government body is increasing being weakened through corruption, and losing the valuable monopoly on violence. The US has monopoly on world violence and china wouldnt be the first to challenge it and lose, much as did USSR. Only rarely in Afghanistan and Vietnam, the US simply could not out terrorize the population as did the taliban and viet cong,and thus lost the war.
I don’t think China realized how that policy is going to backfire in terms of their relationship with the West.
We want to see countries with individual rights rise, not authoritarians.
These observations about imprisoning minorities always fail to include information about past terrorist attacks and militant activity in the region. Most of the people in the reeducation centers were sent there for things such as spreading Islamic propaganda glorifying suicide bombings.The reality of the situation is more nuanced than the depiction by western media. https://en.wikipedia.org/wiki/Terrorism_in_China
In December 2016 in Xinjiang, Islamic militants drove a vehicle into a yard at the county Communist party offices and set off a bomb but were all shot dead. Three people were wounded and one other died.
In July 2011, At least 18 people died in a series of alleged terrorist attacks in the city of Kashgar. According to state-run media accounts, the violence began when two Uyghur men hijacked a truck, ran it into a crowded street, and started stabbing people, killing six. The attack ended when the assailants were overpowered by the crowd, which killed one attacker. On the second day, state media reported that a "group of armed terrorists" stormed a restaurant, killed the owner and a waiter, and set it ablaze. They then proceeded to indiscriminately kill four more civilians. Armed clashes then reportedly ensured, ending with police capturing or killing the attackers. The Turkistan Islamic Party later claimed responsibility for the attack. One of the suspects appeared in a TIP video training in Pakistan.
In March 2015 in Guangzhou, three ethnic Uyghur assailants with long knives attacked civilians at Guangzhou train station, 13 injured.
In November 2014 in Xinjian, militants with knives and explosives attacked civilians, 15 dead and 14 injured. 14 of the 15 deaths were attackers
In May 2014 in Ürümqi, Xinjiang, Two sport utility vehicles (SUVs) carrying five assailants were driven into a busy street market in Ürümqi. Up to a dozen explosives were thrown at shoppers from the windows of the SUVs. The SUVs crashed into shoppers then collided with each other and exploded. 43 people were killed, including 4 of the assailants, and more than 90 wounded.
There are many more. Again, I'm not making of value judgement here but I think everyone should think critically and really understand what's going on from multiple points of view.
(1) The area is not inherently Chinese. China does not need to occupy Xinjiang. It has belonged to other people at other points. (See texts on the Islamic conquest.)
(2) China has encouraged mass Han immigration to Xinjiang. The Han who moved were not moving because of hunger or thirst. They moved because the state provided incentives to do so.
(3) Radicalisation is largely driven by ideologies that the CCP helped to support in the first place, when sowing chaos in Afghanistan without deciding what to do next. Of course it did not do so alone—the Americans and Pakistanis were also involved. But it at least props up Pakistan who continue to empower the Taliban.
(4) The Chinese state is very violent—and more violent than most other states.
Ergo it is misleading to suggest that the Uighurs are being particularly violent, and to imply that they are simply being violent for the sake of it. China could try a number of things, including getting out, reducing violence against Uighurs, and ceasing to incentivise Han migration.
The situation in Xinjiang is therefore much worse.
Most of the people concerned should not be locked up anyway—think of people who can’t afford to pay fines in the US, or people who pray in Xinjiang. It is extremely rare that a population is so poorly socialised that it is necessary to imprison over a tenth of the population. Perhaps they are in some strict sense “criminals”, but China can choose who to criminalise (as can the US), and it is clearly making unhelpful decisions.