Pro-Growth War?

 

Anti-China hawks in the US are eager for a New Cold War that would disentangle the two mega-economies, especially their technology sectors. They see the inevitable economic disruption as a necessary evil to bolster US national security. And there might be even a partially beneficial economic offset if a slice of Asian manufacturing returns to American shores.

But some nationalists are more optimistic about the potential economic gains from escalating the current trade conflict into something broader. According to this view, the New Cold War would pit the two economies in a high-stakes competition for technological supremacy — and thus geopolitical dominance — in the 21st century. The sense of urgency would force each side to marshal all of their resources and talent in pursuit of victory. Space Race, meet the AI race. The resulting scientific advances and tech innovation would boost both economies. And with prosperity rising, neither side would risk the cold war turning into a hot one.

The seeds of this hot-take argument might be found in the 2014 book War! What Is It Good For?: Conflict and the Progress of Civilization from Primates to Robots. In it, archaeologist Ian Morris argues that war, over the long run, “has made humanity safer and richer,” in part because of the military-driven investment in scientific and technological research. Or maybe the inspiration was the 1998 film Armageddon which has a scene where the American president tells a global audience that “all of our combined modern technologies and imaginations, even the wars that we’ve fought, have provided us the tools … to prevent our own extinction’’ from an approaching planet-killer asteroid.

The stirring music of composer Trevor Rabin beneath that speech almost wins the argument. But I have a few notes. First, I might be more open to the idea that closed-off tech ecosystems are good for growth if I wasn’t in the middle of rereading A Culture of Growth: The Origins of the Modern Economy, where economic historian Joel Mokyr argues that scientific openness and collaboration across a fractured Europe between 1500 and 1700 — a transglobal marketplace of ideas — was pivotal in laying the ground for the Industrial Revolution. A reminder: there might be costs in trying to keep apart American and Chinese AI researchers or making America otherwise less hospitable to high-skill immigration.

Second, is war really necessary to drive and diffuse technological progress? Or is it the opposite? In A Great Leap Forward: 1930s Depression and US Economic Growth, economist Alexander Field documents US productivity gains during the Great Depression, finding World War Two “disruptive of the forward pace of technological progress made in the private sector.” And it was the “expansion of potential output during the Depression … that laid the foundation” for the postwar economic boom. While the Cold War-driven Space Race between American and the Soviet Union certainly generated economically valuable spinoffs, it is interesting to note that both of the leading books on the history of American economic and productivity growth — A Great Leap Forward and The Rise and Fall of American Growth by Robert Gordon — ignore the Space Race.

Third, there are other ways to drive technological progress other than the threat of losing a war — hot or cold — especially if that threat prompts self-defeating policies. How about the positive pursuit of audacious tech goals, such as seriously advancing clean energy, genetic editing, transportation, and space commerce? Americans seem ready for it. Or maybe the reality of America’s long economic stagnation will provide a catalyst for action. It’s been a decade after the end of the Financial Crisis and even big tax cuts don’t seem to have shaken the economy out of its 2 percent growth torpor. Higher living standards seems like a goal most politicians should be able to get behind.

Published in Economics
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There are 11 comments.

  1. CarolJoy, Above Top Secret Coolidge

    There is this statement I find most troubling:

    According to this view, the New Cold War would pit the two economies in a high-stakes competition for technological supremacy — and thus geopolitical dominance — in the 21st century. The sense of urgency would force each side to marshal all of their resources and talent in pursuit of victory. Space Race, meet the AI race. The resulting scientific advances and tech innovation would boost both economies. And with prosperity rising, neither side would risk the cold war turning into a hot one.

    Unfortunately for the inhabitants of China, the USA and other nations, our nuclear systems are no longer set up in a way to allow for much human input.

    Several times during the Carter/Reagan era, the radar alert systems would have prompted an all out thermo nuclear war if not for the allowance of humans into the decision making process.

    The radar alert systems were triggering a Russian attack, due to a preponderance of geese migrating across the path of their radar scopes. Another time, something about the angle of the moon set off the alerts.

    This system is now almost entirely digitized. I read recently, can’t remember where, that there are efforts afoot to make it even further beyond the reach of mere humans to stop the thermonuclear war.

    Yes, if our thinking and decision making powers were part of the set up, I possibly could agree with the argument laid out in the above statement. But as it is, I believe we are looking at a rather foolhardy ambition laid out by the war hawks among us. To say their ambition will not in the end serve us well is a vast understatement.

    So I felt very good indeed in reading the final paragraphs of “Pro Growth War.”

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    • #1
    • September 21, 2019, at 12:50 PM PDT
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  2. Unsk Member

    In many ways, Trump’s trade tariffs are a non-military way of decreasing the chance of war.

    What the pro-China trade Globalists fail to understand is at the present rate we are headed for war with China because that is what China wants; Global Domination through any means possible. China is building a massive war machine built from the profits of the world wide China trade we built for them. Thank you very much Billy Jeff, Dubya and Buraq Hussein.

    Whether the trade tariffs benefit the economy or not ( I think they will), the real issue is that we have to cripple China or at least severely damage it’s capacity to make war or otherwise we will be dragged into a very deadly war sooner or later we likely will lose if the Globalists have anything to say about it. 

    • #2
    • September 21, 2019, at 1:24 PM PDT
    • 4 likes
  3. Western Chauvinist Member

    Globalists. Turn ’em upside down, they’re all the same.

    China is sustaining its police state using our retirement cash (investments in sovereign bonds and Chinese traded stocks) and stealing our technology and modifying it for their “social credit” scoring system. There are literal concentration camps used to re-educate Uighur and Tibetan men. They are taken there from their homes (where Chinese soldiers bivouac with their wives and children), forbidden to speak their language or practice their religion. They’re allowed one hour a week to cry, and if they cry out-of-turn, they’re severely punished. You can’t make this shtuff up. 

    The only people who prosper in China belong to its 94 million member Communist Party.

    But, “free markets!” Wheeeee!!!

    https://www.hillsdale.edu/live/2019-2020-cca-understanding-china/

     

    • #3
    • September 21, 2019, at 1:34 PM PDT
    • 5 likes
  4. Western Chauvinist Member

    Oh, and China’s per capita GDP ranks below Uruguay. But, I’m sure we could learn something useful from China… /sarc off

    • #4
    • September 21, 2019, at 1:43 PM PDT
    • 2 likes
  5. DrewInWisconsin, Influencer Member

    How many straw men were sacrificed for this article?

    • #5
    • September 21, 2019, at 2:16 PM PDT
    • 4 likes
  6. Western Chauvinist Member

    DrewInWisconsin, Thought Leader (View Comment):

    How many straw men were sacrificed for this article?

    Oh, the carnage!

    • #6
    • September 21, 2019, at 2:17 PM PDT
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  7. Fake John/Jane Galt Coolidge

    We should not be so reliant on any outside country / economy so that they can force our action or hold us hostage. This is especially true for being reliant on a country / economy that is not based on democracy. We do not need foreign dictators from foreign places forcing their points of view upon us. Nor do we need to financially support such political actors that do not express individual freedom upon their subjects.

    • #7
    • September 21, 2019, at 6:50 PM PDT
    • 2 likes
  8. I Walton Member

    He’s always on the same page. The top, the political and economic elite just need to get the right formula and it’ll be good. There is no right formula for the top different from the original one. The formula evolves and changes always from the ground up, no ones in charge. Those in charge just have to allow it to happen and provide the framework that lets it. We had it right until the 20th century when we decided we could figure out a top down way to make it better. Fortunately our economy was so big, diverse and dynamic that it’s still doing well, but technology and falling costs have changed basics and we have to figure out how to get back to the original design or the drift to centralization that has brought every civilization down to stagnation and corruption will hit us as well. Regarding China, they’re more centralized and will decline faster if we can keep our wits about us. 

    • #8
    • September 22, 2019, at 4:12 AM PDT
    • 1 like
  9. KyleBauer Coolidge

    I think it is important to look beyond today and then work backwards to formulate a plan. China has a serious demographic problem looming on the horizon due to essentially erasing an entire generation with their one child only policy that heavily favored keeping boys.

    When their population becomes upside down (way more grandparents than grandkids) what will they do?

    I am worried that they will be like Japan before WWII – Japan’s big worry was protecting access to natural resources to fuel their economy.

     Will China move to acquire, by force if necessary, areas that keep their manufacturing capability untrammeled? If so, what should we be doing now to prepare?

    I don’t have an answer, but I think it is worth consideration.

    • #9
    • September 22, 2019, at 8:11 AM PDT
    • Like
  10. CarolJoy, Above Top Secret Coolidge

    Unsk (View Comment):

    In many ways, Trump’s trade tariffs are a non-military way of decreasing the chance of war.

    What the pro-China trade Globalists fail to understand is at the present rate we are headed for war with China because that is what China wants; Global Domination through any means possible. China is building a massive war machine built from the profits of the world wide China trade we built for them. Thank you very much Billy Jeff, Dubya and Buraq Hussein.

    Whether the trade tariffs benefit the economy or not ( I think they will), the real issue is that we have to cripple China or at least severely damage it’s capacity to make war or otherwise we will be dragged into a very deadly war sooner or later we likely will lose if the Globalists have anything to say about it.

    Very well stated. It is also true that during the height of our Cold War against Russia, our nation’s laws prevented any Big Deal Makers from having our electrical, computer and other military necessities from being manufactured in Russia. These laws were in place for obvious reasons.

    Yet today so much of our military stuff is built over in China!

    Not only that but many of our medications and vaccines are manufactured there as well. The Chinese would not even need to push the red button to achieve domination over us. Instead, they could easily take us out one tainted pill of Celebrex, Synthroid, Nexium et al at a time.

    • #10
    • September 22, 2019, at 1:15 PM PDT
    • Like
  11. Western Chauvinist Member

    Unsk (View Comment):
    the real issue is that we have to cripple China

    Yes. And beyond a military and an economic issue, it’s a moral one.

    • #11
    • September 22, 2019, at 1:22 PM PDT
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