Trade freely and carry a big stick
In at least one respect, I’m more hawkish on China than almost anyone else. For instance, I’d like to see the US add Japan, S. Korea, Australia and New Zealand to the Nato alliance. According to the FT, this move is currently outside the Overton Window:
Beijing has repeatedly warned against the creation in Asia of any Nato-like military bloc, a prospect that security experts said was very unlikely since countries in the region have highly varied interests and strong economic ties with China. . . .
“It would complicate calculations for China if they need to think about not only the alliance with the US, but also the 30 members belonging to Nato,” said Yoshikazu Hirose, an expert on the alliance at the National Defense Academy in Japan.
Unfortunately, Nato expansion into East Asia seems unlikely to happen:
Stephen Nagy, senior associate professor at the International Christian University in Tokyo, said there would be limits to co-operation between Nato and its new partners.
“I think they would welcome any kind of diplomatic, financial and resource investment into Nato to push back against Russia,” Nagy said. “But do the Nato members want South Korea, Japan, Australia and New Zealand in their relationship and as equals sitting at the table? I’m not so sure.”
Over at Econlog, I frequently argue that Nato is just about the best thing that ever happened. As far as I’m concerned, the more the merrier—as long as the more don’t include countries hell bent on invading their neighbors and annexing territory, or countries without secure borders. If Kuwait had been a member of Nato back in 1990, both the Gulf War and the Iraq War never would have happened. Ultimately, the entire world will become members of Nato. Unfortunately, I won’t live to see that day.
In contrast to my super-hawkish Nato views, I’m dovish on trade. Indeed I’m disgusted by the US attempt to destroy China’s high tech sector by bullying smaller countries:
The US is pushing the Netherlands to ban ASML Holding NV from selling to China mainstream technology essential in making a large chunk of the world’s chips, expanding its campaign to curb the country’s rise, according to people familiar with the matter.
Washington’s proposed restriction would expand an existing moratorium on the sale of the most advanced systems to China, in an attempt to thwart China’s plans to become a world leader in chip production. If the Netherlands agrees, it would broaden significantly the range and class of chipmaking gear now forbidden from heading to China, potentially dealing a serious blow to Chinese chipmakers from Semiconductor Manufacturing International Corp. to Hua Hong Semiconductor Ltd.
American officials are lobbying their Dutch counterparts to bar ASML from selling some of its older deep ultraviolet lithography, or DUV, systems, the people said. These machines are a generation behind cutting-edge but still the most common method in making certain less-advanced chips required by cars, phones, computers and even robots.
When countries behave peacefully, we should have as much economic integration as possible. When countries invade their neighbors, we should punish them as much as possible. We need many more free trade blocs, a bigger Nato to protect smaller nations, and much more effective sanctions on Russia.
This study caught my eye:
New work by Giacomo Magistretti of the imf and Marco Tabellini of Harvard University also exploits falling air-transport costs to tease out the causal effect of trade on both attitudes towards democracy and the overall political orientation of a country. They find that stronger economic ties indeed facilitate the transmission of political values—but only if said values are democratic.
The effects are big. People who grew up during periods when their home economy traded comparatively more with democracies appear to be much more drawn to open regimes than those who came of age under opposite circumstances.
And how about this:
In March the Commerce Department humoured a request by Auxin Solar, an American manufacturer, to check if Chinese companies were circumventing anti-dumping tariffs. Duties had originally been imposed by Barack Obama, then extended by Mr Trump; Auxin claims that firms are dodging tariffs by making parts in China but assembling modules in their South-East Asian factories.
The effect is that a small American firm is obstructing more than 300 projects, according to a tally by the Solar Energy Industries Association, a lobby group. Some developers cannot get their hands on kit. Others find that costlier gear has put their construction deals in the red. NextEra told investors in April that up to 2.8 gigawatts of solar and battery projects planned for this year, equivalent to around a tenth of its intended renewables investments in 2021-24, would be delayed. American assemblers of solar panels, it said, were sold out for the next three years. America’s largest solar project, spanning 13,000 acres of Indiana, has been postponed. NiSource, the utility behind it, will instead delay the retirement of two coal-fired power stations to 2025.
PS. To head off a common criticism, the so-called “free rider problem” with Nato is a myth. Even if all Nato members were to merely spend 2% of GDP in defense, no non-member would dare to invade Nato. Who wants to take on roughly 2/3rds of the world’s military power, all alone? It’s not a concern.
PPS. Glad to hear that Sweden and Finland are about to join. Nato will become better than ever. And this shows that Russia’s invasion of Ukraine was never about Nato (which Ukraine was not about to join), it was about Russian nationalism. Instead of complaining about Nato, Russia should become a civilized nation and join Nato.
Tags:
17. July 2022 at 08:24
I could envision a tipping point in the future where everyone would want to join NATO. The only “disadvantage” to joining would be that you’d have to agree in advance to respect the borders of every other member. There’d be little point to not joining once NATO got to a certain size.
17. July 2022 at 10:05
“Ultimately, the entire world will become members of Nato. Unfortunately, I won’t live to see that day”
NATO only works when you have only one major power in it that can umbrella the others and at least one external boogieman. Once China and Russia join NATO or the US withdraws from it, NATO becomes just another feckless UN Security Council or a paper tiger.
You are deluded if you think NATO would defend Iceland from an US invasion.
17. July 2022 at 14:33
NATO expansion may be outside the Overton Window. It’s not even clear how much Germany is committed to European security let alone Pacific security. However, IPTO (Indo-Pacific Treaty Organization) is not only within the Overton Window for debate, it seems to be an ongoing effort, not literally called IPTO of course. An Indo-Pacific security alliance led by the quadrilateral nations (US, Japan, Australia, India) seems realistic. At least before Abe’s death, Japan seemed more amenable to making military investments to support such an alliance than Germany has in Europe.
17. July 2022 at 15:17
“When countries behave peacefully, we should have as much economic integration as possible. When countries invade their neighbors, we should punish them as much as possible.”
This is correct – and it implies we should combine NATO and NAFTA (call it NAFTO). Admit all countries that are currently in either into both. One big free trade pact/defense treaty. Anyone joining the alliance gets rewarded with a free trade deal.
Furthermore, it is in the interest of the US, the EU and the whole world for the EU to become a sovereign country, with the current member states analogous to the states in the US. Then have the EU join NAFTO and assume France’s permanent seat on the UN Security Council.
Once this is done, NAFTO would have 11 members – the US, EU, UK, Canada, Mexico, Iceland, Norway, Turkey, Albania, Montenegro, and North Macedonia. The last four of them are candidates for EU membership, so it could be down to 8. This would make it much more manageable and reduce the free-rider problem, if it exists, or the perception of the problem.
Then we can start talking about which countries to add – maybe Australia, Japan, South Korea?
17. July 2022 at 15:21
Peter, I focus on the very real and very important advantages of Nato, not silly thought experiments about the US invading Iceland. It protects countries that are civilized but small, like the Baltic States.
BC, Right now, Germany spends considerably more as a share of GDP than Japan. Japan may be planning to increase its spending, but so is Germany.
17. July 2022 at 15:52
“When countries behave peacefully, we should have as much economic integration as possible. When countries invade their neighbors, we should punish them as much as possible.”
And here is what I mean, when I say that Sumner has a proclivity to gravitate towards totalitarianism. Think about what he’s saying. If you don’t believe what he believes, if you don’t do what he tells you to do, then he will “punish you”.
Hmmm….
Can anyone blame RU or CN for spending sleepless nights thinking about how to deal with this thug at their doorstep?
17. July 2022 at 16:07
So in your mind, the RU invasion has nothing to do with the 1.5B in military sales to Kiev in 2019. Nothing to do with shelling in Donbas. Nothing to do with invasions in Iraq, Afghanistan, Libya and Syria, and apparently nothing to do with bombings in Somalia, Bosnia, or Timor.
You believe the problem is not NATO, but everyone else. India, Brazil, Eastern Europe, Africa, Asia, and Latin America are all just backward places; those barbarians should all join NATO.
I wonder if Rome thought the same — oh wait, yes they did. And that, of course, was their undoing.
You need to take responsibility for your actions, and recognize that the problem is not EVERYONE ELSE. The problem is you!
17. July 2022 at 16:59
“The US is pushing the Netherlands to ban ASML Holding NV from selling to China mainstream technology essential in making a large chunk of the world’s chips, expanding its campaign to curb the country’s rise, according to people familiar with the matter.”
Don’t you know? Those ultraviolet scanners contain microchips wired for sound! Or something. Idk. Frankly a lot of the anti-China trade stuff I feel co-opts legitimate national security concerns in say, weapons, and then uses it to achieve at first misguided mercantilist policies and now outright racist ones.
17. July 2022 at 18:20
Ricardo:
Are you seriously arguing that we sold too many armaments to Kyiv pre-Putin’s invasion?
Take a look at what’s happened. Russia launched a full scale invasion of Ukraine and still neither Ukraine nor the US has counter-attacked on Russian soil. How does this not show you there never was a threat of US invasion or the US backing of a Ukrainian invasion of Russia.
17. July 2022 at 18:28
Ricardo, Rome was morally superior to the barbarians.
Carl, If Ricardo had been around in 1938, he would have been defending Hitler by pointing to some abusive British colonial policy.
17. July 2022 at 23:19
Why not let Vietnam, Thailand, and Taiwan into Nato.
“When countries invade their neighbors, we should punish them as much as possible.”
What about when they routinely threaten military action against virtually every one of their neighbors Or, what about when they use military force to try to settle competing territorial claims. Or when they provide military assistance to countries engaged in military invasions of their neighbors. Or ones which support genocidal regimes in places like Myanmar. Or ones which steal other countries intellectual property. Or flaunt trade agreements on a massive scale.
18. July 2022 at 05:17
NATO was explicitly created to create strong incentives to prevent the USSR from attempting to take control of Europe. A single power bloc to prevent USSR advancement and ultimately defeat the USSR——which it did.
A global NATO is what? I have no idea. I am for creating important alliances——but it is impossible and undesirable to create a global NATO as there are no single set of interests that all countries can possibly agree on.
I am not even sure what the current NATO is for. Germany strongly opposed Ukraine joining NATO —-because it did not want to fight a war with Russia (no more USSR) over something they believe is a 200 year old “internal” feud.
Russia has nukes——so does France, UK, US. Russia is self destructing. It’s not longer close to being equal in power to US—as USSR was.
I am not sure NATO even exists—-except in name only. I still would not unwind it—-despite it’s unclear purpose. But a global NATO? I don’t think so.
18. July 2022 at 05:42
PS. I don’t know about Russia joining NATO——don’t even know what that means—-HOWEVER——-I completely agree that Russia has blown it and could have easily become a growing nation by becoming allies with Western Europe——but you are right—-they cannot escape their perception of the west as “other” —-or what you call Nationalism. They are a country—-at least as Putin sees it——that is at one with the Russian Orthodox Church——as were the Tsars and many intellectuals (for example Dostoyevsky). The west has an incomplete understanding of Russia—-I do not have any idea what the typical Russian believes——but my guess is they are more like Putin than not. It’s a tragedy.
China and Russia——two of the oldest nations on earth——-are a double tragedy—-as they are self defeating—-and dangerous.
18. July 2022 at 08:43
dtoh, You said:
“What about when they routinely threaten military action against virtually every one of their neighbors Or, what about when they use military force to try to settle competing territorial claims. Or when they provide military assistance to countries engaged in military invasions of their neighbors. Or ones which support genocidal regimes in places like Myanmar. Or ones which steal other countries intellectual property. Or flaunt trade agreements on a massive scale.”
I don’t know of any country like this. But if there is one, then don’t let it into Nato.
Why not let Vietnam, Thailand, and Taiwan into Nato.”
If Thailand and Vietnam become stable democratic countries, then by all means let them into Nato. As for Taiwan, I answered that question in my post.
18. July 2022 at 13:35
“I don’t know of any country like this.” – Scott is once again in ostrich sand burying mode. Do you really believe that or are you just pretending? And what would be worse?
Which of Xi’s policies justifies the West being so mindless and selling out military key technology to China? Could we really be that foolish?
The war in Ukraine didn’t make it any better. It is a barbaric war of extermination by Putin against Ukraine. You either strongly oppose it — and side with civilization. Or you’re a barbaric asshole government that doesn’t deserve high-tech Western technology. It’s as simple as that. It’s called growing a back bone — and thinking beyond the day.
Why NATO alliance against CCP China in the first place anyway, Scott? What do you have against CCP China? Why do we need NATO all of a sudden? Isn’t that China-phobic? It’s a lovely peaceful non-aggressive country that would never threaten military action against their neighbors.
If you want to carry a big stick, Scott – in terms of establishing a big stick alliance against governments like Putin and Xi. Then don’t sell out the big stick manufacturing technology to CCP China. This is part of existential security and maintenance. It must be part of the Western defense strategy to secure its own existence.
19. July 2022 at 08:24
Christian, You said:
“Why NATO alliance against CCP China in the first place anyway, Scott?”
When did I advocate that?
19. July 2022 at 16:06
https://www.newswars.com/watch-starbucks-ceo-says-stores-closing-in-democrat-run-cities-because-theyre-no-longer-safe/
This is what happens when you let people like Sumner walk around with their “big sticks.” These thugs have now forced starbucks to close in many democrat run districts, because people are using their bathrooms as drug dens and robbing employees at gunpoint.
But remember, its those fiscally conservative red states that you have to worry about, not the disgusting inner city run by socialist thugs. Those radical Tennessee boys playing romantic country music, and addressing people as Sir and Ma’am, according to Sumner, are the real threat to American security. He calls them “terrorists.”
And don’t forget, we have to carry our big stick around and wave it at the Russians, Chinese, Africans and Middle Easterns, because low and behold, they have a different value system. The big stick Sumners are like dystopian borg, harassing humanity with their big sticks, crushing any form of dissimilarity.
Instead of carrying a big macho thug stick, like the thug Roosevelt, which you simply echo, I suggest a more measured approach to foreign policy, one that might actually win friends in the international arena; perhaps a foreign policy more akin to the framers, which actually focuses on America’s problems. You might even call that “America first”. Imagine that. Imagine a world where America travelers are welcomed, and not feared.
20. July 2022 at 13:25
“And don’t forget, we have to carry our big stick around and wave it at the Russians, Chinese, Africans and Middle Easterns, because low and behold, they have a different value system.”
How would you describe the value system in a country where the frontrunner for the 2024 presidential race once tried to encourage his supporters to overturn a democratic election? Or where right wing extremists are rapidly replacing moderates in one of the two major parties?
Authoritarian?
20. July 2022 at 16:38
Scott, do you know about the one time when the Soviet Union asked to join NATO during the height of the Cold War?
20. July 2022 at 16:44
Matthias, No. Thank God they didn’t let them in!
26. July 2022 at 07:20
Why else would Thailand and Vietnam join? As an alliance against Myanmar? Against Laos? Against the Easter Islands? Against the Vatican?
🙄🙄🙄