Tyler Cowen: belief

Transcript context

…That’s a good question. It’s on my list of places to go, so I haven’t measured that myself. But I would think that they’re getting quite wealthy as a result of this. Whether they’ve gone too far, I don’t know, and whether it’s taxing of their infrastructure. Let’s take a somewhat different approach to trade. It’s found, I think, especially in China. Some people would argue it’s even practiced by Germany as well. And that is to have a focus simply on everyone being able to keep a job, not efficiency as economists would describe it, not output, not productivity, but the notion that exports possibly can take away some of your jobs as they’ve done in parts of the American Rust Belt, that that’s very bad for your political economy. You might, believe it or not, start electing rather strange candidates, or perhaps start opposing the Chinese government in nonproductive ways. Therefore trade policy really should be governed by making sure everyone has a good enough job. China has done this through a rather extreme mercantilism. Some people would say Germany has done it by its role in the Euro system, which gives it a currency which has arguably a permanently low value relative to German productivity. Do you think there’s much to this argument? No, in the sense that I don’t think you want a trade intervention per se as a job creation mechanism. If you want to guarantee jobs for people, that would be one approach. But you don’t have to link it to the trade sector per se. In fact, there’s sort of a theme through all of your little exceptions that you’re throwing at me — which I enjoy very much — in that the case for free trade has never been the case for laissez-faire. There may be cases for intervention, either overuse of certain tourist sites or you need a certain industry or sector for national security. These don’t necessitate an intervention in trade. You don’t need tariffs, quotas, export subsidies, things of that sort. There are other domestic policies that can more efficiently and more directly address the situation you’re trying to deal with.…

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