Richard Baldwin documents this reality: (HT Scott Lincicome)
So, the sclerosis story had it backwards. The sclerotic economy keep the factory jobs better than the dynamic economy. The dynamic economy shed factory share faster for the one reason that has nothing to do with sclerosis: its own consumers shifted spending away from manufactures. Europeans did not stop buying manufactures, and they did not stop making them. Their factories lost value added because they spent more of imported inputs.
Paul Samuelson’s popular textbook Economics (1948) was the first apparent depiction of a guns versus butter graph, making it a permanent staple of introductory courses. Samuelson was introduced to the first production possibilities frontier graph, depicting the tradeoff between two goods, by his Harvard professor Gottfried von Harberler, a student of Friedrich von Wieser and Ludwig von Mises, who had introduced it in his book Theory of International Trade (1936).
Yet the underlying insight, arguably, reaches back much further. In Book IV of Wealth of Nations, Adam Smith meticulously documented the economic costs of Britain’s imperialism. Subduing, protecting, and administering far-flung territories had enormous costs and few benefits. Contrary to the prevailing wisdom of his day, he argued that empire, once all the tradeoffs were considered, diminished the wealth of nations rather than increasing it.
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The tradeoff for the Soviet Union was even more devastating, [Adam] Tooze notes. “… the production [of military equipment] came at the expense of enormous sacrifice on the Soviet home front,” he writes, “where hundreds of thousands if not millions of people starved to death for the sake of the war effort.”
It is this bitter experience that led President Eisenhower to observe:
Every gun that is made, every warship launched, every rocket fired signifies, in the final sense, a theft from those who hunger and are not fed, those who are cold and are not clothed. This world in arms is not spending money alone. It is spending the sweat of its laborers, the genius of its scientists, the hopes of its children. The cost of one modern heavy bomber is this: a modern brick school in more than 30 cities. It is two electric power plants, each serving a town of 60,000 population. It is two fine, fully equipped hospitals. It is some 50 miles of concrete highway. We pay for a single fighter plane with a half million bushels of wheat. We pay for a single destroyer with new homes that could have housed more than 8,000 people.
Dan Hannan is correct about Trump. Two slices:
America at 250 has never been wealthier or more powerful. It has grown two thirds faster than Western Europe over the past 20 years. Rival ideologies – Chinese authoritarianism, Islamism – are hideously unappealing.
Yet, at the same time, the US is starting to behave like a tinpot autocracy. The best way I can describe it is as Third Worldery. The attempt to browbeat the Nobel Peace Prize Committee; the obsession with building big arches; the tariffs; the annexation threats against Canada, Denmark, and Panama; the renaming of public institutions after a living leader; the successful attempt to bully FIFA over a red card. Such things are the hallmark of insecure dictatorships, not of confident democracies.
Opting for strongman government seems to have opened the way to Third Worldery across the board. Once you build your head of state into a Father of the Nation type, once dissent from his latest whims is portrayed as a form of treachery, other things follow.
It is the same pattern everywhere. When Recep Tayyip Erdoğan insists that the rest of us refer to his country in English as “Türkiye”, he invites us to treat Turkey as a post-colonial failed state rather than as the Western democracy it was before his time. I mean, we use English exonyms for serious places. No one demands that we say Deutschland or Nippon or Magyarország. But touchy third worldists demand Côte d’Ivoire, Timor-Leste and Cabo Verde – and, now, Gulf of America, the classic needy country move.
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Then again, as Lady Macbeth says, “What’s done cannot be undone”. Those who have downplayed, excused or ignored Trump’s venality will struggle to find grounds on which to oppose equally sleazy stuff from a successor in either party. Standards have been permanently lowered. We will look back wistfully on what was lost.
Giancarlo Sopo reviews the new movie Young Washington. Here’s his conclusion
Young Washington returns a stone founder to flesh and blood, and it does so with skill and real feeling, made without a flicker of irony by people who believe in their subject. We are badly short of films that believe in anything at all, and a nation needs heroes. This is a good one, and word that a sequel is already under way is welcome news. I only wish the film had left a little more of the man inside the marble unexplained.
We are Rebecca, Max, and Aakrith. We are researchers at The Mercatus Center, a research organization dedicated to classical liberal ideas. Rebecca is a philosopher, Max is an economist, and Aakrith is a political scientist. Together, we are the Space Team, and this is our Substack.
We’re here to persuade you that space policy is increasingly important. And that getting space policy right offers humankind astonishing opportunities. In particular, we’re currently thinking hard about innovation, competition, federalism, property rights, and life in space.
