By Land or by Sea: The US after WWII

[Bootstrap]

She’s asking a specific strategic question: when the U.S. acts in the world, does it try to get its way primarily through force and threats, or by working with others to set fair rules?

And then who enforces that set of "fair rules"?

The imaginary adult with nukes.

Actually, that is precisely the opposite of what she is saying.

She isn’t appealing to some “imaginary adult with nukes” to enforce rules. Her whole point is that durable U.S. influence has come from building economic alliances and institutions where countries prosper when they do what is right for everyone.

In other words, she is saying that soft power is real power.

[Bootstrap]

Okay tomorrow china puts sanctions on us restricting the export of chips and pharmaceutical products. How does framework fix this? How does the system benefit people and minimize the bottleneck that just occurred? I’m arguing that her entire system created the bottleneck.

I think this is the central issue you keep returning to. You are saying that the system Paine is defending creates fragile dependencies, and when those dependencies are weaponized, the costs are immediate and severe.

But here’s why I do not understand this criticism:

• A continental power dealing with fragile supply chains responds by manufacturing critical goods at home.
• A maritime power dealing with fragile supply chains also responds by manufacturing critical goods at home.

In other words, domestic production and redundancy seem like necessities no matter which strategic framework you’re operating in.

So I'm curious where you see the difference. Can you explain more?

Her system caused the dependency as businesses chase money. As industry dries up, gets shut down, the path to building those critical things gets worse and worse. The chips act for example was pointed to address this but its much too small and if China cut off those two resources tomorrow we would be facing the same existential crisis Japan faced pre world war 2.

I think this is where we disagree.

Fragile supply chains are orthogonal to Paine’s framework. Domestic production of critical goods is more expensive, and sustaining it at scale always requires non-market intervention.

You can do that under either system. The real question isn’t the framework, but whether you’re willing to pay the cost to maintain onshore capacity and redundancy.

[Soloist]

I think this is where we disagree.

Fragile supply chains are orthogonal to Paine’s framework. Domestic production of critical goods is more expensive, and sustaining it at scale always requires non-market intervention.

You can do that under either system. The real question isn’t the framework, but whether you’re willing to pay the cost to maintain onshore capacity and redundancy.

I agree that we disagree. The system that Paine advocates for causes the fragile supply chains. They are not orthogonal.

You refer

There are a lot of strong adjectives here, but I do think the United States became wealthy and powerful in the 1940s and 1950s largely by doing exactly what she’s describing. Many people see that period as an economic golden era and a time when U.S. leadership was at its strongest.

That doesn’t mean everything the United States has done in the past was good. I would certainly argue that Vietnam, Iraq, and Afghanistan were mistakes—and my sense is that she would probably agree with that, even if she might frame it differently.

That though is missing the point. We had degraded Germany and Japan severely. France, Spain and UK were likewise degraded. China was also badly hurt. We emerged from the conflicts with a production base that was equal to the entire world and we were the undisputed champions of the ocean.
China was too beat up to matter and as Paine herself points out, both China and Russia were poorly suited to address via Maritime power.

As we shifted to her policy she outlines, our production was shed chasing the $ and little by little the pockets of men grew and our production shrank. Now we are in a situation like Japan was in. We could fix it, but it would require a massive retooling of our economy. Just ask the question, at the end of WW2, how many planes did we produce per a year? now how many do we produce now?
Our ability to make firearms hasn't depreciated as we still have the industry base so if we wanted to roll out the same amount of rifles we did in WW2, we could in a year perhaps but to produce anything close to the plane base would take quite a few years and this isn't even addressing my two primary points which are vastly more technologically defendant on high skill and expensive time consuming factories.

[Bootstrap]

I think this is where we disagree.

Fragile supply chains are orthogonal to Paine’s framework. Domestic production of critical goods is more expensive, and sustaining it at scale always requires non-market intervention.

You can do that under either system. The real question isn’t the framework, but whether you’re willing to pay the cost to maintain onshore capacity and redundancy.

I agree that we disagree. The system that Paine advocates for causes the fragile supply chains. They are not orthogonal.

I'm having hard time following your logic here.

In any system, you face the same choice: either you pay more to produce critical goods domestically, or you buy cheaper goods from wherever they’re available. That tradeoff exists regardless of whether you’re operating in Paine’s framework or not.

You seem to be assuming that a rules-based global system requires always choosing the cheapest option. I don’t think that follows. Nothing in that framework prevents using non-market policies to sustain onshore capacity and redundancy.

[Bootstrap]

As we shifted to her policy she outlines, our production was shed chasing the $ and little by little the pockets of men grew and our production shrank. Now we are in a situation like Japan was in. We could fix it, but it would require a massive retooling of our economy. Just ask the question, at the end of WW2, how many planes did we produce per a year? now how many do we produce now?

I agree with you on the need for a massive retooling of our economy if we want significantly more domestic production.

I think it’s far better to do that retooling within a transparent, rules-based system than through ad hoc deals driven by “strong men,” insider access, or favors to the already rich and powerful—which is how you end up with large scale corruption and oligarchy.

A rules-based order doesn’t prevent industrial policy.

[JohnH]

There are a lot of strong adjectives here, but I do think the United States became wealthy and powerful in the 1940s and 1950s largely by doing exactly what she’s describing. Many people see that period as an economic golden era and a time when U.S. leadership was at its strongest.

... so you think that getting wealthy and powerful by winning World War II is a good thing?

I think it’s far better to do that retooling within a transparent, rules-based system than through ad hoc deals driven by “strong men,” insider access, or favors to the already rich and powerful—which is how you end up with large scale corruption and oligarchy.

A rules-based order doesn’t prevent industrial policy.

#1, who decides what the rules are? We have something called "Congress" in a democracy that normally decides such things.

#2, who enforces these rules? We have something called a "President" in a democracy that normally enforces such things.

#3, who adjudicates disputes? We have Article III courts in our democracy who normally decide such things.

What of the above do you think needs to change? How would you propose changing it?

[Soloist]

I'm having hard time following your logic here.

In any system, you face the same choice: either you pay more to produce critical goods domestically, or you buy cheaper goods from wherever they’re available. That tradeoff exists regardless of whether you’re operating in Paine’s framework or not.

You seem to be assuming that a rules-based global system requires always choosing the cheapest option. I don’t think that follows. Nothing in that framework prevents using non-market policies to sustain onshore capacity and redundancy.

The age old statement, follow the money explains everything here.

You can look through the history for numerous examples and surely you don't deny the rise of global trade enabled cheaper commerce resulting in a less regulated (capitalistic nation) snapping up those cheaper prices.


Answer why

but I do think the United States became wealthy and powerful in the 1940s and 1950s largely by doing exactly what she’s describing. Many people see that period as an economic golden era and a time when U.S. leadership was at its strongest.

What gave that? an industry base which we don't have now? or her policy which she basically admits is only being embraced in the last 40 years or so.
(still trying to find what specifically she stated, somewhere in the past 16 minutes of this talk...)

I think that you aren't seeing my point and I'm not seeing yours. Both of us believe the other is not interpreting her article correctly and both of us have different conclusions as to the implications. I don't see value in continuing to go around and around especially when you seem to be ignoring my points and you likely feel the same.

Edit: she was referring to the Global Maritime order being ushered in, in our day at the tail end of the industrial revolution (post ww2).

Going to take a bit to get through though, she is addressing China first.

[Bootstrap]

I think this is where we disagree.

Fragile supply chains are orthogonal to Paine’s framework. Domestic production of critical goods is more expensive, and sustaining it at scale always requires non-market intervention.

You can do that under either system. The real question isn’t the framework, but whether you’re willing to pay the cost to maintain onshore capacity and redundancy.

I agree that we disagree. The system that Paine advocates for causes the fragile supply chains. They are not orthogonal.

Can you help me imagine a different system - a better one - where businesses do not choose cheaper manufacturing abroad?

I assume we agree that the average Russian or Chinese person is worse off than the average American and we do not want to pick their system. I assume you are not arguing that we want the seas to be so dangerous that people do not dare ship goods.

If those options are off the table, I’m not sure what alternative system you have in mind that prevents firms from choosing cheaper production abroad.

[Soloist]

Can you help me imagine a different system - a better one - where businesses do not choose cheaper manufacturing abroad?

In a free society, the way to do this is through tariffs and economic incentives.
A business will choose their stockholders over national interests in a free society.
You could set up government ran businesses specifically to address these shortcomings but it would be unpalatable to the voters.

I assume we agree that the average Russian or Chinese person is worse off than the average American and we do not want to pick their system. I assume you are not arguing that we want the seas to be so dangerous that people do not dare ship goods.

I have no way of knowing if the average Russian or Chinese is worse off. I haven’t been to either country to compare with my own experience.

If those options are off the table, I’m not sure what alternative system you have in mind that prevents firms from choosing cheaper production abroad.

I think the onus would be on you at this point since you advocated that her system works and do not need to have their strategic weaknesses I described.

[Bootstrap]

Can you help me imagine a different system - a better one - where businesses do not choose cheaper manufacturing abroad?

In a free society, the way to do this is through tariffs and economic incentives.
A business will choose their stockholders over national interests in a free society.
You could set up government ran businesses specifically to address these shortcomings but it would be unpalatable to the voters.

First off, I notice that both you and Josh are working from the podcast, which is different from the article. I have been working from the article, which is why I asked people to read it. That may be one source of differences in our understanding of what she is saying. I did listen to the podcast, but not recently.

But I still don't see why you cannot do tariffs and economic incentives in her framework. She explicitly says economic incentives are important. As far as I can tell, she never says tariffs are always wrong. She did give a talk called “Tariffs Created Chaos 100 Years Ago” that discusses the historical effects of tariff escalations in the early 20th century, saying that tariff wars and protectionism in the 1930s disrupted global trade flows, contributed to economic contraction, and helped create conditions for rising geopolitical tensions by undermining the pre-war economic order. Here's an excerpt:



And I think most historians would agree that the Smoot–Hawley Tariff Act of 1930 sharply reduced trade, prompted retaliatory barriers, and made the Great Depression worse. I cannot think of a time in history where broad-based tariff wars worked out well for the countries involved - can you?

Targeted tariffs for things like pharmaceuticals and chips would be different, I think. But I think it's probably better to have the government invest directly in these industries and their research. The goal is to fund these things at home, and just taxing foreign production does not automatically do that. Government can also choose to buy from domestic suppliers in industries where it wants to promote production at home.

Funding training for skilled labor can also help.