Tag: Milton Friedman

A Twitter Digression on Trade and China

This week I saw an absolutely horrendous take on Twitter by Chris Arnade and felt compelled to discuss it. This is partially because the positions are incorrect, but also because his discussion itself was in bad faith and actively worsens our dialogue. Are there bad takes on Twitter every minute? Yes, but hey, I saw this one.

Here is the thread:

https://twitter.com/Chris_arnade/status/1181524435163058176

First, let’s start with the object-level fact that hundreds of millions of people were lifted out of poverty in China. The intentions of the advocates of free trade isn’t relevant to this fact, what’s relevant is whether a particular policy improved the well being and life expectancy of millions of people. This is equivalent to claiming Jonas Salk was only in it for the name recognition, and therefore, we shouldn’t have used the polio vaccine.

Next, Arnade is simply wrong about the intentions of his political opponents, claiming they only support free trade because of greed. He then obfuscates the target of his accusations by using the ever popular term “elites”. Free traders have been talking about the moral benefits of trade forever. Friedman wrote Capitalism and Freedom in 1962, 10 years before Nixon’s visit to China, and The Economist was founded to repeal the Corn Laws in 1843. Saying Milton Friedman was defending free trade just to make money off of China’s market liberalizations decades later is just lazy argumentation.

So Arnade is wrong about their intentions, but are these even the “elites”? As far as I can tell Chris doesn’t have a good definition of elites. I noted in the past:

He claimed on his interview on EconTalk, that while elites are abandoning faith, it remains an important aspect of life to more everyday people. This divide is not borne out by the data. Income doesn’t predict church attendance, and according to Gallup, the difference in church attendance between college educated and non-college educated is within the margin of error. If you want things that predict church membership, you should use age (young people are less religious) or political ideology (those identifying as “conservative” are far more likely to go to church than those calling themselves “liberal”).

If Arnade doesn’t have a good definition of elites, then it seems pretty duplicitous to then claim “elites” have any particular position since we can’t identify who he is talking about. Even if such a group existed, surely there would be many different positions and ideas within this group. Not for Chris though, everyone in this group is one in the same. And it seems especially malicious to then claim that not only does this group with no definition exist, but they have specific stated incorrect claims! In fact, Arnade has identified these claims from an imaginary group as fake and then reveals the “true” beliefs which are, of course, simply greed. This is not just a strawman, ladies and gentleman, but indeed strawwomen and strawchildren too.

It’s plausible that someone could have disagreements with free traders, but just ignoring their arguments and claiming they’re only after money is a terrible way to learn and improve our understandings of the world. We should be engaging with each other’s ideas sincerely, not attributing hidden values to people we disagree with. I guess I find this especially upsetting because EconTalk, Russ Roberts’ podcast, does such a good job of emphasizing those values of charity and understanding, and Arnade was recently a guest on that podcast. To see someone who was treated very charitably turn around and be so underhanded on Twitter is quite disappointing.

Let’s return to China. Arnade discusses a “deal” where the U.S. allowed human rights abuses hoping that democracy would follow. I know of no one who has ever said that. In fact, the opposite occurred: the Cultural Revolution killed 500,000 people, ending in 1976 and following the Great Leap Forward which killed some 18 million people in the lowest estimates. Since trade liberalizations began, nothing on that scale has occurred again.

The interest in China from Nixon was as a tool in the Cold War against the Soviet Union. Democracy was really not the goal. Moreover, the U.S. didn’t dictate to China to liberalize its economy, the market liberalizations were largely from within Deng Xiaoping’s government. In fact, I’m not really sure the U.S. would even be able to extract human rights improvements through protectionist policies. What is the model we would base it on? Cuba? Iran? North Korea? Venezuela? All have become wonderful bastions of human rights following American sanctions.

Also, I should bring up the simple libertarian critique that even if you have the perfect policy, the perfect knowledge of exactly how a foreign government will react to sanctions and trade agreement details, government is not an impartial executor of policy. Democratic forces and interest groups will always mutate policy as it passes through government, and it will not be implemented in the idealized fashion you might like. For example, what does the phrase “U.S. foreign policy human rights record” conjure up?

It’s true that China has not become a democracy, while many foreign policy types certainly believed it could happen, particularly in the 90s. Chris seems to think he predicted this outcome (not cited). Suppose you knew this, would you change policy? In a choice between a poorer China without democracy and a richer China without democracy, it seems we should choose the richer one because, you know, we want good things for all humans, not just people who live in the same country as us. 

Finally, let’s get to the economics here. There is no “us” who “exported our factories”. Individual firms make decisions in a complex economy. And those decisions have been that as a percentage of the total, manufacturing jobs peaked in the 40s prior to the establishment of the People’s Republic of China:

Arnade seems to understand that as he cites the recent scandal in the NBA where the Houston Rockets GM tweeted in support of the Hong Kong protesters, and quickly deleted it under a firestorm. Yet, Arnade switches between U.S. trade policy, governed by Congress (allegedly), and private firms making profit maximizing decisions without bothering to differentiate them.

It’s unclear exactly how Arnade wanted U.S. policy to intervene to stop private firms from making their own decisions. He cites an upcoming book, but provides no details. He also cites anti-labor policy, and I have heard similar discussions from economist Noah Smith, and many others associated with the new neoliberal movement. My problem is that given all the weird deceitfulness and strawmanning, I have no reason to trust Chris when we finally get to the policy discussion. I agree with him that the NBA or Blizzard caving to the Chinese government is a bad thing, but saying more robust industrial policy would have changed that is a non-sequitur.

Moreover, there are still tons of benefits from trade with China. The smartphone revolution changed the way we interacted with the world, and mostly in good ways I believe. This happened in part because of Chinese manufacturing allowing anyone to buy a highly complex piece of technology for cheap. On the other hand, technologies we have a dimmer view on today, like social media, are entirely U.S. grown.

There are problems in the world today, but we need to improve our level of dialogue if we want to solve them. Refusing to engage with well known arguments that critique your position and instead going on uncharitable Twitter threads is something we should avoid.

Book Review: The Libertarian Mind

The full title of this book is The Libertarian Mind: A Manifesto for Freedom, written by David Boaz, Executive Vice President at the Cato Institute. This is actually the second edition of Libertarianism: A Primer, published in the late 90s by Boaz.

So why did I read an introductory book on libertarianism? Well, it had been a while since I’d really looked at a libertarian book, especially critically. As discussed in What is Postlibertarianism? v2.0, I’ve strayed a bit from a libertarian absolutist, and that post in an attempt to carve out a space independent from both the Right and Left, but also perhaps libertarianism itself. It seemed this might be a good time to revisit some of the basics to see if I had forgotten what had made libertarianism so appealing in the first place. David Boaz’s introduction to the political philosophy seems to be a good way to do that.

Intro and Libertarian History

The book is a solid introduction to libertarianism. Boaz discusses important libertarian talking points like the fact that the two-party political system in the US doesn’t necessarily hold all the answers. He also does a fair job tracing the history of liberalism in political philosophy, culminating in modern libertarian thinkers. That’s one of the better chapters of the book, and similarly, perhaps the most useful segment is Boaz’s recommended reading list on various libertarian topics, located in the final pages. There are literally hundreds of libertarian readings and authors mentioned, and I plan on adding a few to my future reading list.

I have never been as familiar with the pedigree of American conservatives and American progressives, and I would be curious to see what their similar reading lists or genealogy would look like.  Libertarianism included routes through Locke, Mill, Mises, Friedman, Nozick and many more. It was clearest here that while I may not agree entirely with the label of “libertarian” today, there is a broader liberal tradition, wide and powerful in scope, and it is squarely within that tradition that I find myself. 

Obviously then, I had broad strokes of agreement with this book in many areas, but I wanted to point out a few areas that I thought did a good job of applying libertarian critiques or approaches.

Positives

Boaz talks a lot about rights and rights-based approaches, which I’m not quite as excited about as I used to be (see Rules and Heuristics). Nonetheless, he makes a strong case for the consequentialist benefits of property rights: they reduce the amount of issues that must be political. Application of property rights settles disputes, allowing individuals to make choices about who they interact with and how. Alternatively, if the state is dictating policy, e.g. education policy, all education is determined by politics. Political losses then have greater effect on individual lives, since it’s often harder to opt-out of state policies you dislike.

Relatedly, the chapter on pluralism and tolerance was excellent. Also well stated was the chapter on the rule of law. This is a nebulous concept, and I think Boaz does a good job discussing the many aspects, including constitutional law, the importance of judicial activism (would have been surprising to me 8 years ago) to protect individuals from government, general warrants, regulatory loopholes for specific companies, and overcriminalization. Each of these are fairly disparate parts of law, but they are all important breaches of a uniform rule of law, and contribute to delegitimatize the state and democracy. 

The chapter on public choice theory resonated, and I especially liked the terminology of a “package deal” to refer to political candidates, and how that could be so limiting. And as you would expect from a libertarian, the discussion of free markets, price theory, opportunity costs, and free trade were pretty straightforward. One highlight included the importance of entrepreneurial profits and the value of entrepreneurs seeing value missing in the economy, taking risks, and profiting by fulfilling needs. Another was the argument that the “balance of trade” wasn’t a useful measure since it doesn’t acknowledge that by definition, goods are traded by individuals. Individuals benefit from trade because they wouldn’t take part in it otherwise. Trade balances don’t take into account international supply chains routed all over the world, simplifying imports to two countries, when value added can come from dozens.

Negatives

Now for things that didn’t quite work. The book acknowledges the fact that several of the founding fathers were slave owners. Nonetheless, since the book doesn’t spend much time on anything, it only lends a couple pages to the issue of slavery. That isn’t going to convince anyone from the social justice movement.  This is a recurring issue. Many times I did object to a point the book brought up, but there’s no time for any in-depth discussion, so most of the time I remained unconvinced.

For example, in the rule of law chapter, Boaz attacks the concept of unaccountable bureaucracy, demonstrating how bureaucratic rules can be authoritarian with no accountability. Nonetheless, elitist independent agencies could make more sense than democratic Congressional loudmouths; the alternative to bureaucracy isn’t necessarily that the government doesn’t perform that job, but that it is left to unrestrained democratic pressures. 

The book also spends some time arguing not just that welfare is expensive, but that it’s actively harmful. I’m not sure how much I agree, but welfare for the poor never seems like it should be the first priority of spending cuts; the top federal budget items are Medicare, Social Security, and Defense spending. I actually thought the discussion of mutual aid societies was intriguing although I’m not sure how well they’d work now. It was one of the better answers I’d heard of for the critique that bad things will happen if we get rid of the welfare state. Another related point: the book doesn’t state what a “good” tax level would be, just that we have high taxes now. It’s not wrong, but I found it a bit of a cop-out.

Finally, the book isn’t too concerned about inequality, like you’d expect. However, the claim was that innovative markets would constantly challenge and undermine those at the top, with new products and markets catapulting new successful entrepreneurs at the expense of the old. Again, this could be true, but there wasn’t enough time to really dig into it; certainly the Forbes top 400 richest people in the world would constantly change as markets shift over time, but would the richest 1% really be in much danger? Is it ok if they are not? Libertarians would probably also argue that market innovation and technological progress are more important than inequality (a poor person in 2018 has much more material wealth than a rich person in 1968), but are there political risks to allowing for large inequality? The book doesn’t have time to answer these critiques.

For my takeaways: the book did a bit better than I expected on pointing out that I still generally agree with the bulk of classical liberalism/libertarianism, and my critiques are more like policy tweaks than philosophical deal-breakers. However, it’s only an introductory book, and due to my knowledge in these areas, specific issues I have with libertarian orthodoxy weren’t well addressed, nor was they really meant to be.  I will definitely be looking at the extensive “For Further Reading” list for some libertarian writings on specific topics I’m concerned about. I would also state that this is a pretty good introductory book if you want 350+ pages from a representative libertarian. If you have already studied a lot of libertarian thought, I doubt you’ll find too much new here.

 

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