10 September 2016

Reconciliation

Can the nation state, a proven successful model, be reconciled with globalized borderless free trade?

It's a sticky wicket.

People are not ready to be world citizens, especially since so much of the world is a shitty place to live.  The people who live in the less shitty places certainly don't want theirs to become more shitty.

Let's face it, making everyone dirt poor in shitty conditions is much easier than all other alternatives.

For starters, I happen to like living in the USA (even with its known flaws).  I don't want to live under the government system the EU has going.  I don't want to live under they Chinese system.  I don't want to live under Sharia.

The good news is, under the nation state model, I don't have to since I'm lucky enough to already live in the USA.

A problem with global, borderless, free trade is the price of labor can drop to literal slavery if a given nation decides to do it.  Their energy can be cheaper if they just ignore any and all pollution considerations.  Their processing of raw materials can be cheaper if they just ignore any and all pollution considerations.

All of this makes everything they manufacture cheaper than in a place that pays well and worries about making a mess of their nest.

If you start out with a surplus of wealth you can eliminate such work and industries from your home nation and make it someone else's problem AND save money doing it by buying cheaper foreign goods.

If you've got a favorable comparative advantage in something this can even free up labor to maintain that wealth and standard of living.

The problem comes down the road when you cannot make anything yourself outside the things you are best at making.  This matters to a nation state because that includes military things.

"But we can still make planes and tanks and ships and guns!"

Granted, but can we still make steel and aluminum and brass and plastics and electronics and... and... and...?

Off-shoring the making of ore into metals is a mistake that a free nation gets to make very few times, mostly just once.  If they're lucky, they have a powerful ally with huge manufacturing potential to come to the rescue.  If not... they die.

1 comment:

  1. One problem with free trade is that if Country A has it and Countries B through Z do not, Countries B through Z have an unfair advantage. They can restrict imports from Country A, while simultaneously exporting to Country A.

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