Allow me to return to your post in the broader context of your recent papers on the convergence of political and economic trends toward fragmentation.
If one accepts the realist, ‘security dilemma’ view of international relations, then would not global fragmentation have equally occurred, even if China’s politico-economic trajectory had followed the ‘globalist’ orthodoxy of the early 2000s and the US had done more to address its domestic economic fragmentation?
A more market-oriented Chinese economy could have made China even stronger and why a more democratic China should have been less (and not more) nationalistic?
In turn, would not these developments have been perceived as an unacceptable threat by the US to its position as No 1?
You’re right. Where we are, “China Shock” is the predominant fragmenting narrative. What might have happened on Lipset-style convergence (had China gone that way) could have moderated - so that we would then be in the historically unusual state of coalescing geopolitics and centrifugal economics. But now we’ve got everything in sight pulling centrifugal.
Thanks for your reply. Allox me to stress a point, which I am not sure is consistent with your analysis (or may it is): suppose that China had followed a Lipset-style political convergence trajectory AND the United States has successfully cushioned the economic China shock (ie, by providing compensation for the concentrated losses from the relative price changes). If I understand your analysis, the latter would have avoided the centrifugal economic pull, would not have it? (Another way of putting my understanding of your analysis would be that the centrifugal economic pull is driven by the divergence between Hicks/Kaldor efficiency and Pareto efficiency).
Even in this benign scenario, however, from a realist, security dilemma perspective, China could well be perceived as an unacceptable threat to the US as number one, couldn’t it? (In fact, from a realist perspective I guess it should). If you agree with this conclusion, how would you characterise this situation? Another way of putting my question is that what you call coalescing geopolitics is not primarily a matter of domestic political trajectories.
This is an insightful post. Friends involved in contact with the US administration confirm that their unwillingness to give any clear indication of what they want is is the most frustrating aspect of dealing with them. I would say that the US political systems’ inability to use the gains from trade to support an inclusive society has been probably the main domestic driver of international fragmentation. However, at least when it comes to the US-China confrontation there is also the problem that international strategic competition tends to be zero-sum: if China is able to convert its gain from trade into strategic parity with the US, the US are bound not to like the outcome, irrespective of their own gains from trading with China. Economists have a tendency to forget that relativities matter, both within and across nations.
It does seem that America's problems are made-in-America problems. Luke 4:23 comes to mind: "Physician, heal thyself."
I think I've said before sane-washing this administration is pointless; trying to find rationality is futile. Better to see it as Uncertainty Level 4 and accept literally anything may happen at any time. The bond market seems to be reaching that conclusion.....
Not sure about 'boundedly'. It seems the sky is the limit. As soon as you think, they wouldn't do that surely, it happens. Just today: Harvard no international students; Trump's crypto dinner for large buyers; Non-US companies to be punished with higher taxes in US.
Allow me to return to your post in the broader context of your recent papers on the convergence of political and economic trends toward fragmentation.
If one accepts the realist, ‘security dilemma’ view of international relations, then would not global fragmentation have equally occurred, even if China’s politico-economic trajectory had followed the ‘globalist’ orthodoxy of the early 2000s and the US had done more to address its domestic economic fragmentation?
A more market-oriented Chinese economy could have made China even stronger and why a more democratic China should have been less (and not more) nationalistic?
In turn, would not these developments have been perceived as an unacceptable threat by the US to its position as No 1?
You’re right. Where we are, “China Shock” is the predominant fragmenting narrative. What might have happened on Lipset-style convergence (had China gone that way) could have moderated - so that we would then be in the historically unusual state of coalescing geopolitics and centrifugal economics. But now we’ve got everything in sight pulling centrifugal.
Thanks for your reply. Allox me to stress a point, which I am not sure is consistent with your analysis (or may it is): suppose that China had followed a Lipset-style political convergence trajectory AND the United States has successfully cushioned the economic China shock (ie, by providing compensation for the concentrated losses from the relative price changes). If I understand your analysis, the latter would have avoided the centrifugal economic pull, would not have it? (Another way of putting my understanding of your analysis would be that the centrifugal economic pull is driven by the divergence between Hicks/Kaldor efficiency and Pareto efficiency).
Even in this benign scenario, however, from a realist, security dilemma perspective, China could well be perceived as an unacceptable threat to the US as number one, couldn’t it? (In fact, from a realist perspective I guess it should). If you agree with this conclusion, how would you characterise this situation? Another way of putting my question is that what you call coalescing geopolitics is not primarily a matter of domestic political trajectories.
This is an insightful post. Friends involved in contact with the US administration confirm that their unwillingness to give any clear indication of what they want is is the most frustrating aspect of dealing with them. I would say that the US political systems’ inability to use the gains from trade to support an inclusive society has been probably the main domestic driver of international fragmentation. However, at least when it comes to the US-China confrontation there is also the problem that international strategic competition tends to be zero-sum: if China is able to convert its gain from trade into strategic parity with the US, the US are bound not to like the outcome, irrespective of their own gains from trading with China. Economists have a tendency to forget that relativities matter, both within and across nations.
It does seem that America's problems are made-in-America problems. Luke 4:23 comes to mind: "Physician, heal thyself."
I think I've said before sane-washing this administration is pointless; trying to find rationality is futile. Better to see it as Uncertainty Level 4 and accept literally anything may happen at any time. The bond market seems to be reaching that conclusion.....
I think of it these days not as being rational, but as being "boundedly self-seeking".
Not sure about 'boundedly'. It seems the sky is the limit. As soon as you think, they wouldn't do that surely, it happens. Just today: Harvard no international students; Trump's crypto dinner for large buyers; Non-US companies to be punished with higher taxes in US.