Comment by roughly
4 months ago
It gets a lot less contradictory when you realize the principles are window dressing for the interests.
Early America had no regard for intellectual property rights because all the good media came from abroad - then we built Hollywood and saw the light. The west pushes deregulation and free trade because we've got the money and the only thing that can keep us from sucking a market dry is government intervention. The Dutch just seized a company because a geopolitical opponent was using it to exercise leverage, which is also how TikTok became a sub-brand of Oracle.
Nation states will use whatever words are necessary to justify their actions, but the game is and always has been power, leverage, and interest. Given the rise of China, I'm guessing we're going to get a lot more opportunities to tut and shake our heads about how hypocritical western governments turn out to be with regards to national economic interests.
(And, to be clear, I'm not saying this is like it's a good thing. I'm not a government, I'm a person, so all I get is the pointy end of all this happy rhetoric.)
> It gets a lot less contradictory when you realize the principles are window dressing for the interests.
I don't think this is the epiphany you think it represents. The whole point of laws and regulations is to protect interests.
Do you think that any regime passes and enforces laws that are detrimental to their best interests?
In free market economies, laws and regulations are put in place to foster competition, and antitrust legislation is in place to prevent anticompetitive practices. However, laws and regulations are also in place to prevent strategic interests from being captured or even threatened. The motivation is rather obvious and to the point. Where is this window dressing you speak of?
> Nation states will use whatever words are necessary to justify their actions, but the game is and always has been power, leverage, and interest.
Your post shows some degree of confusion, specially by the way you imply inconsistencies. There are none, and the whole point is rather on the nose. Internal competition and level playing fields are promoted as they pressure companies to improve their competitiveness. "Competitiveness" is the operating principle. Having a rival third-party perform an action that threatens your competitiveness is obviously not acceptable.
You're not saying "governments have interests" (which we can agree is obvious), youre saying the public principles invoked are contingent on whether they advance those interests and get swapped out the moment they don't. That's not a banal "laws protect interests", it's a claim about which interests and when the rhetoric changes.
"Window dressing" from the cited comment isn't about the existence of law, it's about the story told to legitimate a choice already made on interest grounds. When a principle helps the home coalition's position, it's foregrounded, when it threatens it, it's narrowed, reinterpreted, suspended etc. The principle is the sales pitch and the selection and timing are about power.
Countries push openness most intensely in sectors where their firms can penetrate foreign markets (finance in the 1990s, software/IP heavy goods in the 2000s etc). Because openness abroad protects their capital, openness at home is celebrated until it starts eroding strategic capacity. Then come security reviews, export controls, local content rules, subsidies etc and everything is wrapped in principled language.
> Internal competition and level playing fields are promoted as they pressure companies to improve their competitiveness.
Until internal competition threatens a national champion in a strategic race. Then we let consolidation happen (or subsidize it) and call it "industrial policy". We laud the disciplining function of foreign competition until the foreign rival is big enough to discipline us, then it's "unfair trade", "security risk", "systemic rivalry" etc
For decades, openness to China was "win win globalization". As China's capability rose, the same flows (capital, tech, data etc) got relabeled as channels of leverage. Now we create controls, seizures/forced restructurings and targeted decoupling justified by a different principle than yesterday's.
So basically your "policy serves interests" is a truism that ignores the commenter's claim about how principles are instrumentalized. I mean free markets, antitrust, IP, security, sovereignty etc aren't a tight contradiction free doctrine. States pick the item that best advances leverage at that moment and explain it with whatever noble language fits. It's a realistic description of how advanced economies behave when the balance of advantage shifts.
There used to be a concept of enlightened self interest, in which countries agreed to play by universal rules that they benefit from in the long run, but which might not be in their favor in every particular case.
Now, we're in an era of petty self interest, in which no one trusts anyone else, international institutions and laws carry no weight, and everyone is poorer and less safe in the long run.
However, laws and regulations are also in place to prevent strategic interests from being captured or even threatened. The motivation is rather obvious and to the point. Where is this window dressing you speak of?
And yet the sale was allowed - 7 years ago - and only voided now under cloak and dagger, via a never-before used law. The window dressing is the entire "international rules based order" we hear so much about. If it's all just interests, then you can't complain about Russia invading Ukraine, Israel annexing land from various neighbors, China taking Taiwan and seizing TSMC, etc.
Having a rival third-party perform an action that threatens your competitiveness is obviously not acceptable.
And yet that being acceptable is the entire basis of the free market system. So yes I'm just whistling past the graveyard, but the hypocrisy is real and there should be no crying about principles later. The embrace of "the strong do as they will and the weak suffer as they must" - just as the west's relative strength is at its lowest ebb in perhaps hundreds of years - is at the the very least a bold strategy, Cotton. Let's see if it pays off.
I think the issue is more complex than that but certainly vested interests / national interest is definitely one aspect of things.
The west and the US specifically has operated on an open market policy partly as a result of two world wars we got dragged into in relatively short order. Economic integration was thought to reduce the likelihood of another great war.
However what we have currently is a relatively developed economy (China) using currency manipulation and protective policies to prop up their own economy long after it has passed out of the "developing" phase. Plus massive and ongoing state investment and debt deferral. China effectively subsidizes massive amounts of economic activity that makes any US or EU tax breaks / protective policies look like chump change.
When you have such a large market participant behaving that way it is little wonder that people lose their faith in free markets and want to intervene. Including doing explicitly punitive things against China. It is an attitude of China's own making. After all... China will not allow you to buy a freakin' popsicle stand as a foreigner let alone a shipbuilding company or anything else.
China wants all the access to the rest of the world and wants everyone to buy their products... but they do not want to reciprocate.
>China wants all the access to the rest of the world and wants everyone to buy their products... but they do not want to reciprocate.
There's a history with the West where they have been manipulated and taken advantage of in a way that the US never has.
It's possible their desire to force companies into partnerships is genuinely based on a fear of that happening again.
You say that China wants everyone to buy their products. There's also the implication that this is bad for the US economically. However China wouldn't benefit if their customers are poor.
> There's a history with the West where they have been manipulated and taken advantage of in a way that the US never has.
That's definitely possible but I think the cause is much simpler: initially they wanted to bootstrap their own industries and now nothing forces them to do anything different so they just continue with hyper-protectionist policies.
On the side of the west: Outsourcing to China is the new group-think. The new "No one ever got fired for buying IBM" for the MBAs. A box of Bandaids now says "made in china" on it. Bandaids are churned out entirely by machine. Packed entirely by machine. Boxed entirely by machine. By the millions per day. Human labor input is more or less irrelevant. Why outsource that to China? Because that's the only thing management knows how to do and the only thing so-called investors understand. It certainly isn't to save money or make the product better.
> However China wouldn't benefit if their customers are poor.
If I had a nickel for every time a government or leader adopts bad policies despite the obvious future negative consequences I'd be the world's richest person.
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The Dutch did not seize the company, but assumed control over certain aspects of its governance.