Excerpt from an interesting piece by David Brin who argues that a key differentiator of Pax Americana has been encouraging actual trade rather than mercantilism:
Look, lest there be any misunderstanding, I am not downplaying the importance of Japanese, Korean, Malaysian, Chinese and Indian efforts to uplift themselves through the hard work of hundreds of millions who labored in sweatshops making toys and clothes for U.S. consumers. Without any doubt, those workers... (like the generations who built America, before 1950, in the sooty factories of Detroit and Pittsburgh)... and their innovative managers, were far more heroic and directly responsible for the last six decades of world development than American consumers, pushing overflowing carts through WalMart.
Nevertheless, those consumers —plus the trade policies that made the WalMart Tsunami possible, plus a fantastically generous and nearly unrestricted flow of intellectual capital from west to east — all played crucial roles in this process that lifted billions of people out of grinding, hopeless poverty. Moreover, it now seems long past time to realize how unique all of this was, in the sad litany of human civilization.
This roughly aligns with my view, although it only worked out this way in parts of the world. Resource rich countries tend not to be so lucky.
I wonder if the counter-mercantile approach was more possible because of advances in the understanding of economics or because of shifts in the rewards for the elites of powerful countries. Remember that Adam Smith was a vehement critic of mercantilist policies. I do think the original choices in the Marshall plan and other points mentioned by Brin played a critical role in putting us down this road, but it would have been unlikely to have been sustained if it weren’t fairly beneficial to a range of groups with a lot of political clout.
A good portion of Americans aren’t particularly happy with this deal. Other developed countries, classically Germany, have done a better job of protecting and promoting their manufacturing base. I also wonder whether pursuit of intellectual property protections as a top priority has undermined our ability to get concessions elsewhere.The path we chose probably wasn’t the only workable option. I do hope that offering a solid safety net and ramping up Green job industries will help ease some of the issues around trade. The world still has got at least a billion people to lift out of absolute poverty.
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