Free trade and tariffs

Peter Theil was interviewed recently by Florian Schwab. Theil talks at one point about free trade and U.S. tariffs. I’m highlighting that exchange here because I’ve been trying to understand the relationship between an interest in free trade on the one hand, and the usefulness of tariffs to advance national policy on the other:

People are shocked by his imposition of tariffs.

At the center of this is the question with China. The US exports something like 100 bn a year to China, we import 475 bn. What’s extraordinary, is that if we had a globalizing world, we would actually expect the reverse to hold: you would expect the US to have trade surpluses with China and current account surpluses because we would expect that there is a higher return in China because it is a faster growing country than the US. This is what it looked, let’s say, in 1900, when Great Britain had a trade surplus of 2 percent and a current account surplus of 4 percent of GDP. And the extra capital was invested in Argentinean railroads or Russian bonds.

Clearly, today things are different.

The fact that the US does not have a surplus, that actually it has a massive deficit, tells you that something is completely wrong with the standard globalization picture that we have. It is sort of like: Chinese peasants are saving money and it is flowing uphill into low-return investments in the US and bonds in Europe with negative interest rates. There is something completely crazy about that dynamic.

What’s the problem with China?

It is certainly massive tariffs in China, trade barriers, informal controls, intellectual property theft, incredible restrictions on capital investments – it’s extremely hard to invest in China in any way whatsoever.

Still, free trade is a good thing.

In theory you always want to have free trade. I think it was Adam Smith who said that any country endowed with harbors would never throw rocks to them to make them not functioning. That is certainly the common sense dynamic. However, we are incredibly far from that world. And even if you are a doctrinaire, pro free-trade person, there is also an argument: How do you get from an unfair, partial free-trade to more free-trade? Maybe, there is a game theory and if you want to reduce barriers everywhere, you first need to impose tariffs, you have to escalate to de-escalate.

A paradox of free trade is that it isn’t free. It requires international organizations, it requires trust and enforcement mechanisms, it requires highly stable trade routes regulated by military powers, etc. Free trade and tariffs both seem useful to me insofar as they advance national policy or shared allied policies.

Decency, indecency, and sanction

Catherine Addington on being decent in an indecent age:

When a Christian is caught between a political economy hostile to human flourishing and a Church all too often comfortable with the status quo, it is demoralizing to have recourse to an ugly, embattled public square. Who wants to have life-or-death debates in a cold professional setting? In what universe is pitting hostile voices against one another conducive to Christian fellowship?

But by the time Bartolomé de las Casas and Juan Ginés de Sepúlveda met at Valladolid, Spain in 1550 to debate the morality of the conquest of America, the question had already been settled along with the continent. The debate was convened by Carlos V, king of Spain, Holy Roman Emperor, who had not yet been born when Columbus arrived on Hispaniola nearly sixty years ago. The existence of America, and Spanish dominion over it, were facts of life for him. The Spanish were not seriously considering withdrawal from the Americas. There was no going back.

The debate was not about conquest, then, but colonization; it was not about the nature of indigenous people, but their treatment. Carlos V was not asking if he could conquer indigenous people, but if he could give them to his soldiers as slaves, along with their land, as a reward for their service to the crown. Sepúlveda argued that the conquest was a just war, so Carlos could keep the profits (land and people) and distribute them as he pleased. Las Casas argued that the conquest was unjust, so Carlos had to make restitution for it.

Neither man won the debate, and the issue was never resolved. The debate has mainly become famous in retrospect, metonymically standing in for the entire colonial project. At the time, though, it was politics. As such, the men’s writings have a curious dual nature as both catty interpersonal sniping from opposite sides of the political spectrum and incredibly high-stakes ethical discussions. …

Bartolomé de las Casas became a planter and owner of indigenous slaves at the age of 18, when he immigrated with his father to the island of Hispaniola in 1502. After becoming a priest, he experienced a profound conversion while meditating upon the book of Sirach: “If one sacrifices ill-gotten goods, the offering is blemished; the gifts of the lawless are not acceptable.”

Abandoning his ill-gotten wealth, Las Casas returned to Spain as an anti-slavery activist. In the following years, he was granted a position as court adviser, given the title of Protector of the Indians, and testified before the legislature on the conquistadores’ abuses. (This testimony resulted in the abolition of indigenous enslavement, which was ignored by rioting colonists and repealed.) When Las Casas became Bishop of Chiapas, México, he attempted to enforce abolition by refusing the sacraments to slave owners. This proved so unpopular that he was forced to return permanently to Spain, where he continued his activism.

Juan Ginés de Sepúlveda was Carlos V’s royal chronicler and chaplain. His writings in this capacity were nominally historical, but functionally defensive, providing an official version of the Spanish empire’s expansion in the Americas and a justification for its policies there. Before he took on that office, his career was a long string of academic treatises (anti: Desiderius Erasmus, Henry VIII; pro: Aristotle, Machiavelli). His first major work was a panegyric in honor of the emperor. Theologians saw him as compromised—to say the least—but he had the vigorous support of the emperor’s advisers, who had invested a great deal in the colonies.

Las Casas’ activism was the political question of the day, and everyone had an opinion. Sepúlveda just happened to be the one who got the guy’s attention.

In 1550, Sepúlveda released Democrates alter, a fictitious dialogue arguing that the Spanish conquest of America was a just war. It invoked Aristotle’s concept of “natural slavery” at length: “…the Spanish have a perfect right to rule these barbarians of the New World and the adjacent islands, who in prudence, skill, virtues, and humanity are as inferior to the Spanish as children to adults, or women to men, for there exists between the two as great a difference as … between apes and men.”

Before Las Casas even read the book, he had already written a response to it—or at least to the Spanish summary of it that came across his desk. “What blood will they not shed?” Las Casas began his Apologia, describing the soldiers allegedly emboldened by Sepúlveda’s words. “What cruelty will they not commit, these brutal men who are hardened to seeing fields bathed in human blood, who make no distinction of sex or age, who do not spare infants at their mothers’ breasts, pregnant women, the great, the lowly, or even men of feeble and gray old age for whom the weight of years usually awakens reverence or mercy?”

Las Casas blatantly broke the rules of procedure here. … Rejecting the time-honored temptation to make an idol of decorum, he put things plainly.

This exchange makes evident the clash of personality (let alone ideas) between the two men. Sepúlveda wrote a Socratic dialogue of Aristotelian ideas, branding himself the rational debater. He philosophizes. Las Casas wrote with strong language and evocative imagery, coming off as an impassioned firebrand. He preaches. Even though they both cited the Greek philosophers and the books of the Bible throughout their works, and even cited each other, they were fundamentally not having the same discussion. It’s a familiar disconnect today.

I know, functionally, nothing of the history of Spanish colonialism and debates surrounding it, so I enjoyed this piece for introducing me to it.

Pro-Life San Francisco

I met Terrisa Bukovinac last month at Notre Dame’s Vita Institute, and when I saw that her organization, Pro-Life San Francisco, would be hosting “Stand with David Daleiden and Sandra Merritt” outside of San Francisco’s federal courthouse while I was still in the Bay Area, I decided to be there.

Judge William Orrick is presiding over a case that will determine whether David Daleiden’s Center for Medical Progress will be permitted to release its remaining investigative footage of Planned Parenthood’s incriminating interest in profiting from the sale of human body parts. David is also facing a suit from the National Abortion Federation. Together, these groups are interested in punishing anyone who dissents from their worldview, which holds that human life is only valuable insofar as another says that life is valuable, and that ultimately one can obtain justice at the expense of a weaker human person. These are some of the oldest, most disordered philosophies in human history. History is “on their side” on to the extent that human beings naturally seem to tolerate a great deal of injustice until it touches them personally; but after it does, the story changes.

I have great respect for Terrisa specifically as an advocate for life. She’s not coming at this from a religious perspective, but simply from a philosophical and scientific perspective. Here’s how Pro-Life San Francisco describes itself:

Pro-Life San Francisco is a millennial focused non-profit human rights organization for pro-life people from across the political spectrum. We stand for the basic principles of equality, nonviolence, and nondiscrimination. We recognize that regardless of your religion, sexual orientation or your political affiliation, a consistent application of human rights means protecting the pre-born members of our human family.  We are dedicated to creating a culture of peace where the pre-born members of our human family are protected from the violent and lethal discrimination of abortion. We aim to achieve this through the following actions:

Increase community awareness through online and in-person engagement, lectures, debates, public appearances, demonstrations, protests, and other creative educational efforts that uphold our commitment to the values of equality, non-violence, and nondiscrimination.

Assist those facing pregnancy decisions by connecting them with the resources they need to to thrive, such as: prenatal care, financial assistance, job placement, childcare, information regarding their title IX rights, and accessing nonviolent reproductive healthcare options.

I met a few of the Pro-Life San Francisco folks outside the courthouse after the hearing had concluded, and they’re joyful, unassuming, remarkable people.

Contain, deter, and undermine

Graham Allison writes on how American and China can avoid the “Thucydides Trap” wherein, as one great power rises to displace another, war tends to result:

…as China challenges America’s predominance, misunderstandings about each other’s actions and intentions could lead them into a deadly trap first identified by the ancient Greek historian Thucydides. As he explained, “It was the rise of Athens and the fear that this instilled in Sparta that made war inevitable.” The past 500 years have seen 16 cases in which a rising power threatened to displace a ruling one. Twelve of these ended in war.

Of the cases in which war was averted — Spain outstripping Portugal in the late 15th century, the United States overtaking the United Kingdom at the turn of the 20th century, and Germany’s rise in Europe since 1990 — the ascent of the Soviet Union is uniquely instructive today. Despite moments when a violent clash seemed certain, a surge of strategic imagination helped both sides develop ways to compete without a catastrophic conflict. In the end, the Soviet Union imploded and the Cold War ended with a whimper rather than a bang.

Although China’s rise presents particular challenges, Washington policymakers should heed five Cold War lessons. …

Lesson 5: Hope is not a strategy.

Over a four-year period from George Kennan’s famous “Long Telegram,” which identified the Soviet threat, to Paul Nitze’s NSC-68, which provided the road map for countering this threat, U.S. officials developed a winning Cold War strategy: contain Soviet expansion, deter the Soviets from acting against vital American interests, and undermine both the idea and the practice of communism. In contrast, America’s China policy today consists of grand, politically appealing aspirations that serious strategists know are unachievable. In attempting to maintain the post-World War II Pax Americana during a fundamental shift in the economic balance of power toward China, the United States’ real strategy, truth be told, is hope.

In today’s Washington, strategic thinking is often marginalized…

As loud and frenzied as so much of America’s public discourse is at the moment, almost none of it seems to concern matters of long-term importance. Developing a grand strategy for countering China’s authoritarian communist regime should be the fundamental foreign policy task of American and European leaders.

Big, long-term bets

Morgan Housel on betting on things that never change:

Amazon’s focus from day one was as old as it gets. Selection and price. Businesses have pursued the idea for millennia.

Jeff Bezos once explained why this was critical:

“I very frequently get the question: ‘What’s going to change in the next 10 years?’ That’s a very interesting question. I almost never get the question: ‘What’s not going to change in the next 10 years?’ And I submit to you that that second question is actually the more important of the two. You can build a business strategy around the things that are stable in time. In our retail business, we know that customers want low prices, and I know that’s going to be true 10 years from now. They want fast delivery; they want vast selection. It’s impossible to imagine a future 10 years from now where a customer comes up and says, ‘Jeff I love Amazon, I just wish the prices were a little higher.’ Or, ‘I love Amazon, I just wish you’d deliver a little slower.’ Impossible. So we know the energy we put into these things today will still be paying off dividends for our customers 10 years from now. When you have something that you know is true, even over the long term, you can afford to put a lot of energy into it.”

This is one of those important things that’s too basic for most smart people to pay attention to. …

In the last 100 years we’ve gone from horses to jets and mailing letters to Skype. But every sustainable business is accompanied by one of a handful of timeless strategies:

Lower prices. Faster solutions to problems. Greater control over your time. More choices. Added comfort. Entertainment/curiosity. Deeper human interactions. Greater transparency. Less collateral damage. Higher social status. Increased confidence/trust.

You can make big, long-term bets on these things, because there’s no chance people will stop caring about them in the future.

Filing this away.

Develop your passion, don’t ‘find’ it

Cal Newport writing more on the problem of the “find your passion” line of thinking, and sharing Melissa De Witte’s piece suggesting “developing your passion” rather than “finding it.” Why? Because:

The belief that interests arrive fully formed and must simply be “found” can lead people to limit their pursuit of new fields and give up when they encounter challenges, according to a new Stanford study. …

…the adage so commonly advised by graduation speakers might undermine how interests actually develop, according to Stanford researchers in an upcoming paper for Psychological Science.

In a series of laboratory studies, former postdoctoral fellow Paul O’Keefe, along with Stanford psychologists Carol Dweck and Gregory Walton, examined beliefs that may lead people to succeed or fail at developing their interests.

Mantras like “find your passion” carry hidden implications, the researchers say. They imply that once an interest resonates, pursuing it will be easy. But, the research found that when people encounter inevitable challenges, that mindset makes it more likely people will surrender their newfound interest.

And the idea that passions are found fully formed implies that the number of interests a person has is limited. That can cause people to narrow their focus and neglect other areas. …

“Difficulty may have signaled that it was not their interest after all,” the researchers wrote. “Taken together, those endorsing a growth theory may have more realistic beliefs about the pursuit of interests, which may help them sustain engagement as material becomes more complex and challenging.” …

“If you look at something and think, ‘that seems interesting, that could be an area I could make a contribution in,’ you then invest yourself in it,” said Walton. “You take some time to do it, you encounter challenges, over time you build that commitment.”

Dweck, the Lewis and Virginia Eaton Professor of Psychology, noted: “My undergraduates, at first, get all starry-eyed about the idea of finding their passion, but over time they get far more excited about developing their passion and seeing it through. They come to understand that that’s how they and their futures will be shaped and how they will ultimately make their contributions.”

Syncs with Malcolm Gladwell’s “10,000 hours” thesis on how to obtain mastery of a skill or subject, and more than that, this syncs with common sense.

A tyrant in fear of eternity

A scene from Notre Dame’s campus, coupled with a thought from Søren Kierkegaard on why we avoid eternity and fear its implications:

“Eternity is a very radical thought, and thus a matter of inwardness. Whenever the reality of the eternal is affirmed, the present becomes something entirely different from what it was apart from it. This is precisely why human beings fear it (under the guise of fearing death). You often hear about particular governments that fear the restless elements of society. I prefer to say that the entire age is a tyrant that lives in fear of the one restless element: the thought of eternity. It does not dare to think it. Why? Because it crumbles under – and avoids like anything – the weight of inwardness.”

To Vita Institute

I’m in Charlotte right now on a layover, headed to Notre Dame for the next week or so. Notre Dame’s Center for Ethics & Culture is hosting its Vita Institute, which I’ll be a participant in this year. I attended Vita Institute’s New York one day seminar earlier this year, and that made participation in the full program attractive:

The Notre Dame Vita Institute is an intensive interdisciplinary training program for leaders in the national and international pro-life movement. Through engagement with our premier faculty, interaction with other pro-life leaders, and exposure to award-winning community outreach programs, the Vita Institute aims to further enhance participants’ expertise and prepare them to be even more effective advocates on behalf of the unborn.

Held for a week every summer on Notre Dame’s beautiful campus, this program is wholly unique: it provides participants with the opportunity to study the fundamentals of life issues with world-renowned scholars across a wide range of disciplines, including social science, biology, philosophy, theology, law, communication, and counseling. Lecture topics include:

  • The Personhood Debate in Contemporary Philosophy
  • Abortion Jurisprudence
  • Basic Human Embryology
  • Dos and Don’ts of Public Policy on Human Life
  • Helping the Abortion-Minded Woman Choose Life
  • Legislative Strategies for the Current Decade and Beyond

It’s often pointed out that the “right to life” is the right that makes every subsequent right possible. As a culture, we should be doing everything we can to support mothers and fathers facing unexpected pregnancies as much as we provide meaningful care for the aging, elderly, and disabled, and everyone in between through better community life and better social and political responses to crisis.

The promotion of suicide as a good and legitimate response to old age’s feelings of loneliness or doubt about the meaning of life as one’s abilities fade is particularly tragic to me. We celebrated Dr. David Goodall’s recent suicide and mourned and lamented Anthony Bourdain’s within the span of four weeks, all the while ignoring the essential questions of meaning, purpose, and appropriate responses to psychological distress that certainly impacted both decisions.

As long as we perpetuate violence against human life in the name of “autonomy” or “self-actualization” or “health and wellbeing,” we’re falling short of our ideals as a people—and worse, we’re lying to ourselves about the nature of what we tolerate in the pursuit of those ideals.

These are some of the reasons I’m eager to spend the next week participating in this year’s Vita Institute. I might share some of that experience, and will at least share some scenes from Notre Dame and South Bend along the way.

Flag Day history

It’s Flag Day, the official commemoration of the Second Continental Congress’s 1777 resolution to adopt a U.S. flag: “Resolved, That the flag of the thirteen United States be thirteen stripes, alternate red and white; that the union be thirteen stars, white in a blue field, representing a new constellation.” That resulted in the replacement of the “Grand Union Flag” with the “Hopkinson Flag.” Some of Flag Day’s history:

In 1916, President Woodrow Wilson issued a proclamation that officially established June 14 as Flag Day; in August 1946, National Flag Day was established by an Act of Congress. Flag Day is not an official federal holiday. … On June 14, 1937, Pennsylvania became the first U.S. state to celebrate Flag Day as a state holiday, beginning in the town of Rennerdale.

To Victor Morris of Hartford, Conn., is popularly given the credit of suggesting “Flag Day,” the occasion being in honor of the adoption of the American flag on June 14, 1777. The city of Hartford observed the day in 1861, carrying out a program of a patriotic order, praying for the success of the Federal arms and the preservation of the Union.

There were so many great flags and emblems during the Revolutionary Era. A few of my favorite: the Moultrie “Liberty” flag, the “Pine Tree” flag, the “Betsy Ross” flag, the “Join or Die” emblem sometimes used as a flag, the “Gadsden” flag, the “Bennington” flag, and for its simplicity Washington’s headquarters flag—whose distinctive stars adorn the Museum of the American Revolution in Old City, Philadelphia.

I think this 1885 high school textbook illustration is remarkable for showing how states memorialized and passed along national history in the light of their own history in developing national identity and unity:

1885_History_of_US_flags_med.jpg

Illustration from an old High School textbook, titled “History of the US”. Shows the “Appeal to Heaven” pine tree flag and Gadsden flag at the top, the “Grand Union” flag and a 45-star version of the United States flag (used 1896-1908) in the center, and two versions of the New England flag … at the bottom.

And here’s a photo for Flag Day from a few weeks ago during a layover in Chicago:

IMG_9798

Scruton and Solzhenitsyn

Gerald J. Russello reviews Roger Scruton’s “Conservatism: An Invitation to the Great Tradition”:

Conservatism is not the unbounded “I” of the progressives (and some libertarians), but neither is it the undifferentiated mass of the socialist state. Rather, Scruton posits that the essence of conservatism is the I–thou, the “second person” perspective “in which the ‘we’ of social membership is balanced at every point against the ‘I’ of individual ambition.” This tension therefore allows for communication between people of differing views to whom we owe an obligation, which allows for society and political organizations. In contrast, to posit an endless array of fully autonomous individuals — as, for example, Rousseau did — is to render civil society impossible. …

Conservatism is older than the 1789 revolution, and built into the human condition. “Modern conservatism is a product of the Enlightenment. But it calls upon aspects of the human condition that can be witnessed in every civilization and at every period of history.” The most important is what can be called the physicality of conservative belief in the person. The person is not self-created and limitlessly changeable, subject only to the individual will. A conservative believes in contingency; individuals do have choice, but our identities are shaped by loyalties and communities not of our own choosing. Society must balance “the need for custom and community” with “the freedom of the individual.” Scruton sees that “extreme individualism” is a myth; it ignores “the indispensable part played by social membership in the exercise of free choice.”

This social membership is in part what we call tradition, which, echoing Oakeshott, Scruton defines as a kind of knowledge. Tradition helps us to know how to act in accord with our human needs and relational obligations. Political bonds among liberal individuals are weak, because there are no other bonds. For Scruton, this is a category mistake in understanding how political societies come into being and how they remain stable, even under great pressure. For the basic bond is pre-political. That is, legitimacy precedes consent, not the other way around. We recognize a political authority as ours, made by a particular people at a particular place for goals we share. This is why people continue to live peaceably in a society even when the vote might go against their wishes. …

So when conservatives say they defend “freedom,” it is not some abstraction: “What they mean is this kind of freedom, the freedom enshrined in our legal and political inheritance, and in the free associations through which our societies renew their legacy of trust. So understood, freedom is the outcome of multiple agreements over time, under an overarching rule of law.” How this happens, how a society maintains the balance between freedom and order, is conditioned by history, religion, custom, and tradition.

This “thicker” conception of culture requires thinking about society as more than just an Enlightenment-style consent-based system. Instead, maybe it’s useful to think of culture in evolutionary terms, in the same way we do with psychology. That is, the strongest and “thickest” and most resilient cultures avoid radical mutations as much as possible, and when revolutions must occur, they generally should be conservative revolutions that seek to preserve or enshrine existing practices and norms (as did the American Revolution), rather than assert experimental values or rights.

In Aleksandr Solzhenitsyn’s memoirs, he reflected on his famous 1978 Harvard commencement address where he used his platform not to attack the Soviet Communists who had exiled him, but to warn Western societies of threats he saw to their own health and wellbeing. He later reflected:

Western society in principle is based on a legal level that is far lower than the true moral yardstick, and besides, this legal way of thinking has a tendency to ossify. In principle, moral imperatives are not adhered to in politics, and often not in public life either. The notion of freedom has been diverted to unbridled passion, in other words, in the direction of the forces of evil (so that nobody’s “freedom” would be limited!). A sense of responsibility before God and society has fallen away. “Human rights” have been so exalted that the rights of society are being oppressed and destroyed. And above all, the press, not elected by anyone, acts high-handedly and has amassed more power than the legislative, executive, or judicial power. And in this free press itself, it is not true freedom of opinion that dominates, but the dictates of the political fashion of the moment, which lead to a surprising uniformity of opinion. (It was on this point that I had irritated them most.) The whole social system does not contribute to advancing outstanding individuals to the highest echelons. The reigning ideology, that prosperity and the accumulation of material riches are to be valued above all else, is leading to a weakening of character in the West, and also to a massive decline in courage and the will to defend itself, as was clearly seen in the Vietnam War, not to mention a perplexity in the face of terror. But the roots of this social condition spring from the Enlightenment, from rationalist humanism, from the notion that man is the center of all that exists, and that there is no Higher Power above him. And these roots of irreligious humanism are common to the current Western world and to Communism, and that is what has led the Western intelligentsia to such strong and dogged sympathy for Communism.

At the end of my speech I had pointed to the fact that the moral poverty of the 20th century comes from too much having been invested in sociopolitical changes, with the loss of the Whole and the High. We, all of us, have no other salvation but to look once more at the scale of moral values and rise to a new height of vision. “No one on earth has any other way left but — upward,” were the concluding words of my speech.

If the only way we can imagine a worthwhile future is “upward”, rather than imagining that peace and harmony and tranquility and the context for individual flourishing doesn’t require transcending every physical and cultural reality, then we’ll naturally sacrifice all sorts of norms, values, and eventually people along the way.