April 11, 2018

The Good Lord (and Adam Smith!) Provides

Free trade advocates, like anyone who favors smaller government, face a Pollyanna problem. Without strict government oversight, who will build "muh roads" or keep the air clean?

If government takes over, it may not be ideal, but jk, you just want to do *ahem*nothing? Well, I'm a devotee of FA Hayek. With trade and property rights, spontaneous order will emerge and solve things better than Government. It takes some trust to let go.

My blog brother advocates tariffs and general head-knockin' to keep China from exploiting its vast reserves of rare Earth metals. Why, they did that predatory pricing that Walmart* is always accused of, and now our great nation is hosed! Or, perhaps, not.

TOKYO--Japan has hundreds of years' worth of rare-earth metal deposits in its waters, according to new research that reflects Tokyo's concern about China's hegemony over minerals used in batteries and electric vehicles.

Between our Japanese allies, and potential resurgence of domestic production, we are not subject to Chinese domination.

Trade on!

Economics and Markets Posted by John Kranz at April 11, 2018 12:41 PM

In defense of my heretical endorsement of wielding state power in the marketplace I must correct your characterization. My proposal is intended to keep China from exploiting OUR vast reserves of rare Earth metals. As the linked article said, the Chinese hegemony is made possible by that communist state's ability to flat-out ignore the chemical waste problems involved in processing of the metals. They don't have a monopoly on raw materials, they just underprice our for-profit businesses trying to compete on a vastly tilted playing field.

But what if our anti-pollution rules are overly strict? One form of government "subsidy" to the rare earth metals industry might be to get Leviathan off their backs.

Posted by: johngalt at April 11, 2018 3:29 PM

I think I got it -- apologies if I presented it poorly. I'm suggesting that the introduction of Japan as a supplier potentially changes everything. They might split the difference between our NIMBY and China's YOLO.

Posted by: jk at April 11, 2018 5:03 PM | What do you think? [2]