JOHN CHUCKMAN COMMENT: NOBEL-WINNING ECONOMIST PAUL KRUGMAN’S DANGEROUS THOUGHTS ABOUT CHINA – AND WHY AMERICA HAS NEVER BEEN A GENUINE FREE-TRADER   Leave a comment

JOHN CHUCKMAN
 
POSTED RESPONSE TO A COLUMN BY JEREMY WARNER IN THE TELEGRAPH

Jeremy Warner, you have it exactly right.

Americans have never been free traders at heart.

And I believe that is because the impulse to dominate, very much part of American culture and tradition, is not comfortable with it. Americans raised for generations with Manifest Destiny and “Empire of Liberty” have an instinctive repulsion around compromise with others.

And, following from the same roots, Americans are largely repulsed by the rule of international organizations so necessary to a better-ordered world. Thus everything from the United Nations to various International treaties are viewed with suspicion or even contempt.

Indeed, America often uses free trade, in the form of free trade agreements, as a weapon for political domination.

After all, classical economics tells us that it is the smaller partner who has the most to gain from free trade.

So when the U. S. signs a free trade agreement with some relatively small countries in South America or the Caribbean (as it has recently), it obtains effectively a sledge hammer over the affairs of those countries: don’t get out of line or we’ll abrogate the treaty benefiting you.

Further still, when the U.S. enters into a large and complex free trade agreement – as, for example, the North American Free Trade Agreement – it flexes its muscle whenever it is uncomfortable with a situation rising out of the terms of the agreement.

Students of that historic agreement will know the U.S., on a dozen issues, has simply declared it will not comply, and that is after going through the entire dispute-settling process established by the treaty and losing every decision. For Canada this high-handed behavior has included everything from trade in pork to soft-wood lumber, and for Mexico, it has included many agricultural products plus important services.

Americans, many of them, simply believe they have the best of all possible worlds under the best of all possible governments, and anything which appears to say otherwise is rejected out of hand.

Paul Krugman, despite the Noble Prize, is contaminated with strains of the same thinking we see in Thomas Friedman or Pat Buchanan or a large fraction of the United States Senate.

That is why, in my book about the decline of the American Empire and the rise of China, one of my most important themes was whether the United States would peacefully allow China to compete. I do believe if China is allowed to peacefully compete, it will unquestionably become the world’s most powerful economy in not many decades.

United States’ history puts the odds against it. The rise of Japan was met with immense hostility which eventually caused the Japanese to go to war against the United States, something they had had no intention of doing.

But the American expectation to keep the Pacific Ocean as an American lake made it take policies extremely hostile to Japan. The same motive was still at work only a few decades ago with the American holocaust in Vietnam.

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