Perhaps, but my personal experience is slightly different. Many, even most, economists pursue the subject because they are very interested in aspects of public policy. Among academics that means working on what are mostly mundane technical issues. A few acquire a reputation for being bright and articulate, so they receive invitations to write media articles, appear on TV, or even to advise governments. That is very seductive and gives the illusion of public influence on things they care about.
Unfortunately, however, the time required to be a public persona eats into the time and independence required to carry out serious empirical or policy analysis. At that point you have a choice - either focus on doing the things required to maintain your public presence, or retreat (at least partially) to devote the time and energy required to continue to carry out independent analysis. Few are willing to take the latter course, so what outsiders mostly see are highly opinionated and plausible people. They have long since stopped doing anything that might qualify as serious empirical analysis or deep thinking. They rely heavily on what they are told rather than on any detailed knowledge, as that was left behind years ago.
I do think an element of this whole debate is a “pushback” against the experts, this time in economics. Economic theory can sometimes be counterintuitive - but the idea of continued deindustrialisation in EU and US, UK unable to even make steel, and China dominating almost all global manufacturing, high tech and low tech - just seems like a bonkers proposition to the average person.
There is a real issue here. We might agree that many policies pursued by rich countries are perverse, seemingly based on a luxury beliefs not backed by much substance. However, at what point do we accept that even medium countries like the UK cannot do everything so that specialisation is inevitable? At no time in the last 50 years has the UK's steel industry been able to operate on a stable and profitable basis. Should we operate aluminium or copper smelters? The difficulty lies in a refusal to face such choices honestly as well the tendency to believe in fantasies - stories of future economic opportunities that have little substance. The current version of that is all of the alleged green jobs.
Excellent - thank you Gordon for bringing knowledge and rationality to the subject. Not being an economist or very bright, I have a rag-bag of comments.
I've gathered recently that for about its first 150 years, the USA did fine on tariffs and no income tax. I go back to a time when the BBC reported the monthly balance of trade figures as though the world was about to end. I confess that when purchasing, I don't concern myself with its effect on trade imbalance, merely with whether I can afford it.
Two illustrations of comparative advantage amused me, the first by Adam Smith on how the Scots might very well produce fine wine at perhaps thirty times the cost of imported French wine. The second was the idea of growing cars in Iowa: wheat grown there and shipped from the Pacific ports in return for ship-loads of Toyotas.
The enthusiasm for offshoring manufacturing to what were sneeringly referred to as Chinese "screwdriver plants" feels fresh in my mind. I knew it would only be a matter of time before the Chinese acquired all the necessary design skills, by fair means or foul, rendering some of us obsolete, and so it has proved.
I have to accept that some things have to be protected by governments regardless of economic sense, to retain industry for national defence. Is steel such an example.
I also understand that far eastern countries have used tariffs to nurture nascent industries, but have made them work only because of fierce domestic competition providing the impetus for winners to emerge fit to be unleashed internationally.
That aside, I see tariffs as part of a large arsenal of ways in which the dead hand of government makes life worse for the average Joe, serving successful lobbying at the expense of the rest of us. I cite as part of this arsenal, energy policy which has helped to reduce or destroy the sense of steel-making in the UK, subsidised wind and solar energy leading to subsidised steel.
Finally, I was interested in your comment on economists and I wonder whether the discipline has gone a similar way to theoretical physics. I now read daily headlines like "these particles could come from a mirror universe" or "time doesn't exist, says researcher", who wouldn't get far running an airline. I suspect that sophisticated mathematics is employed mainly to make its author look clever rather than solve any useful problem. ""If anybody ever tells you anything about an aeroplane which is so bloody complicated you can't understand it, take it from me: it's all balls" - R J Mitchell (chief designer of the Spitfire).
Two points. First, for many economists the core argument against tariffs is not free trade and the gains from trade but competition. Tariffs in small or medium countries protect firms that become lazy, fail to innovate or invest, and devote large resources to lobbying to maintain their protection. Among the general public competition often has a bad reputation but without it there is little progress and everything becomes inward-looking. That is central lesson from the 20th century with socialism which attempted to repeal competition. So countries which had tariffs but were able to sustain competitive pressure - either internally or in international markets - tended to thrive.
Second, I must admit to having published theoretical papers when much younger. Perhaps it is a rite of passage. Theorists are rarely as stupid as they appear. They are trying to focus on specific aspects of complex systems. Hence, Newtonian laws of motion without friction. The overwhelming problem for economics is that we cannot experiment on complex systems. Theory without experimentation (testing) is largely useless. That is why many economists - the ones you don't hear about - spend so much trying to devise clever ways of testing individual and system behaviour. However, the one thing most of us learned 50 years ago is that complex economic models are fantasies (in the literal sense) and do not generate real data. Climate scientists fail to understand that point even now.
Thank you for your thoughts - much appreciated. To be clear, I believe theoretical physicists to be exceedingly clever, but some appear to have lost the plot.
Years ago I went on a training course (more or less Accountancy Explained for Managers) and the lecturer, as an aside, said as far as I can remember:
The very best accountants are unknown and work for the Globally Rich private families. The next best accountants quietly work for major businesses. Average accountants work for local authorities, or their own business, and the poorest accountants work noisily in the media.
Now replicate that cascade of ability for Economists. It would explain the 'passionate intensity' displayed in the news and also the lack of understanding.
Arguments about tariffs have been hugely important ever since the War of Independence. Conflicts between manufacturing and other interest groups punctuated the 19th century in the US as much as the Corn Laws did in the UK. Debates between producer and consumer interests will never go away - all that happens is temporary shifts from one side to the other.
Tariffs on goods are the visible focus of such arguments. Still we shouldn't forget all of the restrictions on employment and services that act as barriers to inter-state as well as international exchange.
Perhaps, but my personal experience is slightly different. Many, even most, economists pursue the subject because they are very interested in aspects of public policy. Among academics that means working on what are mostly mundane technical issues. A few acquire a reputation for being bright and articulate, so they receive invitations to write media articles, appear on TV, or even to advise governments. That is very seductive and gives the illusion of public influence on things they care about.
Unfortunately, however, the time required to be a public persona eats into the time and independence required to carry out serious empirical or policy analysis. At that point you have a choice - either focus on doing the things required to maintain your public presence, or retreat (at least partially) to devote the time and energy required to continue to carry out independent analysis. Few are willing to take the latter course, so what outsiders mostly see are highly opinionated and plausible people. They have long since stopped doing anything that might qualify as serious empirical analysis or deep thinking. They rely heavily on what they are told rather than on any detailed knowledge, as that was left behind years ago.
Thanks for this view.
I do think an element of this whole debate is a “pushback” against the experts, this time in economics. Economic theory can sometimes be counterintuitive - but the idea of continued deindustrialisation in EU and US, UK unable to even make steel, and China dominating almost all global manufacturing, high tech and low tech - just seems like a bonkers proposition to the average person.
There is a real issue here. We might agree that many policies pursued by rich countries are perverse, seemingly based on a luxury beliefs not backed by much substance. However, at what point do we accept that even medium countries like the UK cannot do everything so that specialisation is inevitable? At no time in the last 50 years has the UK's steel industry been able to operate on a stable and profitable basis. Should we operate aluminium or copper smelters? The difficulty lies in a refusal to face such choices honestly as well the tendency to believe in fantasies - stories of future economic opportunities that have little substance. The current version of that is all of the alleged green jobs.
Excellent - thank you Gordon for bringing knowledge and rationality to the subject. Not being an economist or very bright, I have a rag-bag of comments.
I've gathered recently that for about its first 150 years, the USA did fine on tariffs and no income tax. I go back to a time when the BBC reported the monthly balance of trade figures as though the world was about to end. I confess that when purchasing, I don't concern myself with its effect on trade imbalance, merely with whether I can afford it.
Two illustrations of comparative advantage amused me, the first by Adam Smith on how the Scots might very well produce fine wine at perhaps thirty times the cost of imported French wine. The second was the idea of growing cars in Iowa: wheat grown there and shipped from the Pacific ports in return for ship-loads of Toyotas.
The enthusiasm for offshoring manufacturing to what were sneeringly referred to as Chinese "screwdriver plants" feels fresh in my mind. I knew it would only be a matter of time before the Chinese acquired all the necessary design skills, by fair means or foul, rendering some of us obsolete, and so it has proved.
I have to accept that some things have to be protected by governments regardless of economic sense, to retain industry for national defence. Is steel such an example.
I also understand that far eastern countries have used tariffs to nurture nascent industries, but have made them work only because of fierce domestic competition providing the impetus for winners to emerge fit to be unleashed internationally.
That aside, I see tariffs as part of a large arsenal of ways in which the dead hand of government makes life worse for the average Joe, serving successful lobbying at the expense of the rest of us. I cite as part of this arsenal, energy policy which has helped to reduce or destroy the sense of steel-making in the UK, subsidised wind and solar energy leading to subsidised steel.
Finally, I was interested in your comment on economists and I wonder whether the discipline has gone a similar way to theoretical physics. I now read daily headlines like "these particles could come from a mirror universe" or "time doesn't exist, says researcher", who wouldn't get far running an airline. I suspect that sophisticated mathematics is employed mainly to make its author look clever rather than solve any useful problem. ""If anybody ever tells you anything about an aeroplane which is so bloody complicated you can't understand it, take it from me: it's all balls" - R J Mitchell (chief designer of the Spitfire).
Two points. First, for many economists the core argument against tariffs is not free trade and the gains from trade but competition. Tariffs in small or medium countries protect firms that become lazy, fail to innovate or invest, and devote large resources to lobbying to maintain their protection. Among the general public competition often has a bad reputation but without it there is little progress and everything becomes inward-looking. That is central lesson from the 20th century with socialism which attempted to repeal competition. So countries which had tariffs but were able to sustain competitive pressure - either internally or in international markets - tended to thrive.
Second, I must admit to having published theoretical papers when much younger. Perhaps it is a rite of passage. Theorists are rarely as stupid as they appear. They are trying to focus on specific aspects of complex systems. Hence, Newtonian laws of motion without friction. The overwhelming problem for economics is that we cannot experiment on complex systems. Theory without experimentation (testing) is largely useless. That is why many economists - the ones you don't hear about - spend so much trying to devise clever ways of testing individual and system behaviour. However, the one thing most of us learned 50 years ago is that complex economic models are fantasies (in the literal sense) and do not generate real data. Climate scientists fail to understand that point even now.
Thank you for your thoughts - much appreciated. To be clear, I believe theoretical physicists to be exceedingly clever, but some appear to have lost the plot.
Years ago I went on a training course (more or less Accountancy Explained for Managers) and the lecturer, as an aside, said as far as I can remember:
The very best accountants are unknown and work for the Globally Rich private families. The next best accountants quietly work for major businesses. Average accountants work for local authorities, or their own business, and the poorest accountants work noisily in the media.
Now replicate that cascade of ability for Economists. It would explain the 'passionate intensity' displayed in the news and also the lack of understanding.
Thanks for keeping my trust in Trump. There was a clip of him from about 40 years ago dreaming of using tariffs. I wonder where he got his insight.
Arguments about tariffs have been hugely important ever since the War of Independence. Conflicts between manufacturing and other interest groups punctuated the 19th century in the US as much as the Corn Laws did in the UK. Debates between producer and consumer interests will never go away - all that happens is temporary shifts from one side to the other.
Tariffs on goods are the visible focus of such arguments. Still we shouldn't forget all of the restrictions on employment and services that act as barriers to inter-state as well as international exchange.
Wow! Thanks. The Corn Laws make an interesting story.