why is it inevitable? What do trade wars get us?
As I understand it, trade wars decrease the GDP of the world, decrease the total output and productivity of markets on both sides. I mean, certainly, it's better than a war war, but it's something that has great costs for both sides, and few (no?) Benefits for either.
Also, just like trade wars, wars come at great costs to both sides, but they still happen.
but if both sides are worse off at the end than at the beginning... why do it? Are people really willing to immiserate themselves if they know the other guy is even worse off?
I always thought of wars as conflicts over resources where one side, at least, though they could gain more by fighting than what the fight would cost them. But some wars, I have a hard time putting some wars into that framework without going way out into conspiracy land, and even then, what possible profit, say, could the US have gotten out of Vietnam, or the USSR out of Afghanistan that would justify the cost of those wars? was it just an error in judgement about how much such a war would cost?
And also, yes, some consider relative wealth more important than absolute wealth; "I'd rather have $100 and my neighbor $10, than I have $150 and my neighbor $140."
I actually think that's a bad example, 'cause if I have 10x what my neighbor has, I can easily convert some of that wealth differential into real wealth for me in ways I couldn't if we were more equal. "Hey neighbor, would you like to mow my lawn for some money?" so in a real way, the neighbor example is more about how much you want local labor vs mass manufactured goods.
> So fine, let's just drop all the discussion, we save a lot of trees, we can throw out the newspapers and most of the scholarly literature, and just come out, state it straight, and tell the truth: we'll do whatever we want because we think we're gonna gain by it. And incidently, it's not American citizens who'll gain. They don't gain by this. It's narrow sectors of domestic power that the administration is serving with quite unusual dedication.
-- Noam Chomsky, Talk titled "Why Iraq?" at Harvard University, November 4, 2002
Oversimplified has a great couple of Youtube videos that explain it all (this was where Vietnam finally made some kind of sense to me) in an accessible and entertaining way: https://www.youtube.com/watch?v=I79TpDe3t2g
Some fun philosophical questions...
Do you actually know that both sides are worse off at the end?
How do you personally believe this should be measured? How confident are you that that measurement approach is correct? What is the definition of "correct" in this context?
Do you conduct your measurements at two discrete snapshots in time: before and after? Are consequences 5, 10, 50 years down the road irrelevant, both in theory and in fact?
If you are measuring GDP, do you think looking at the aggregate national level is satisfactory? Might there be some unintended consequences lurking in the shadows waiting to bite you in the ass if you ignore regional GDP?
Do the very real (democratic) consequences of people's opinions matter in your measurement, or are you content with measurements limited to the the theoretical world, where people behave as they "should"?
It's interesting how easily technical people can see the complexity in their software models, but seemingly remain blind to the complexities of planet earth and human nature.
Could have asked what do wars get us in the 1930s - and the answer would be: with the United Kingdom? Not much ... With Nazi Germany? Quite a bit ...
Not saying china is Nazi Germany but if you ask the question in the abstract without context then it will never really have a consistent answer.
My personal view is that the Chinese regime must fall. I would be in favour of dropping most immigration restrictions for any chinese citizens. If you cannot topple the regime you can remove it's people.
I mean, I can see why the allied countries decided they needed to throw all they had into the fight... I just don't see how Germany could have actually done the math sober and thought they could win a war against... almost the rest of the world.
Based on the impact of the trade war on American businesses, you are able to deduce the quality of understanding of economics of those behind the policies?
The WTO was designed to encourage free trade. The problem with free trade is that countries with developed industries will crash those that don't have developed industries. Basically, there is little incentive to join if you are still developing since it will kill your local industry.
What the WTO did is a compromise. Countries that are developing get special exceptions that expire once the country reaches certain milestones. The US was one of the founding members that helped to write these rules and the rules were designed to largely help US companies.
The exceptions allow developing countries to put rules in place to help local industry. From what I can tell China looks like it will move from a "developing" country into a "developed" country sometime in the next 5 to 10 years (based on rules that the US made when it helped setup the WTO) but now it thinks that it should happen sooner.
If they started the trade war by following rules that the US helped to write then ... I don't know what I think about that ...