The end of unrest, industrial policy, and national power (Subscribers only!)
Three more posts to unlock.
Hey, friends! Hope you’re all doing well. Noahpinion has now reached 2500 paying subscribers, which is not superstar level but is showing steady growth. And here I’ve got three more paywalled posts here to tempt you into joining the ranks of the paid subscribers! But just to sweeten the deal, here’s a special sale where you can get a subscription for 30% off! Very nice.
Anyway, here are the previews:
In a well-read post earlier this week, I put forward the hypothesis that China is trying to shape its economy so as to maximize its national power. But I glossed over the all-important question of what kind of economy actually does maximize national power. So here I want to think a little about that.
National power has always been important to economic policy. Leaders tend not to like it when their countries get conquered by the neighbors (and their people really tend not to like it). In addition, ruling over a more powerful country is more prestigious than ruling over a weaker one. Meiji Japan’s slogan of “富国強兵” — “enrich the country, strengthen the military” — was actually taken from a very old Chinese maxim…
Essentially, anything that increases GDP has some connection to national power. But the question is exactly how strong the connection is for each industry.
Subscribers can read the whole thing here!
If you’re at all like me, you’re wondering when America’s age of unrest is going to end. The more I think about this question, the more I find myself drifting toward an unexpected answer: Perhaps it has already peaked.
At first blush, that might sound like a strange and almost quixotically optimistic thing to say (or pessimistic, if you think unrest is desirable). Didn’t we just have an attempted coup? Didn’t we just have the biggest protests in the country’s history, with widespread looting and riots in Portland that lasted months? Aren’t we in the middle of the biggest violent crime wave since the early 90s?…
Indeed, all this is true. But remember that “peak” means that the level of something is still very high, even as the first derivative has turned negative. In other words, I believe we’re still in a time of great unrest, but that it’s beginning to ebb.
Check out the whole post here.
We can try to predict what moves the Chinese leadership will make in pursuit of this strategy. But another interesting and perhaps even more important question is: How could this industrial policy fail at its presumed goal of making China a more industrially and technologically powerful nation?…
In the real world, people who study this sort of thing do find cases where governments were very good at picking winners, and where their choices altered the landscape of competitive advantage in their favor. An example is South Korea’s Heavy and Chemical Industry policy in the 70s…
Skeptics might argue that China is no South Korea, and that it simply won’t be able to pull off a similar trick…As for whether the Chinese government has the requisite competence, I can’t tell you.
But more interesting is the question of how industrial policy of the type China appears to be using might be ill-suited to the task set out for it. I can think of a few things that could go wrong.