Tabarrok in China: The World of DAAS Podcast

I am very excited to appear on Safegraph CEO Auren Hoffman’s World of DAAS podcast. We’ve covered a lot of things including this (slightly edited) from China.

Auren Hoffman (23:06.518):

Now, he has thought a lot about things like repurposing, building productive capacity. How do you think we can think about that differently?

Alex (23:24.058)

I understand there’s some concern about China, and there’s an argument and I think it’s a legitimate argument, that there are certain things like chips that we want to be sure about, it’s not good to have them made in Taiwan, right? We want to make sure that we put them on their shores. However, I have three concerns. One, basically, I don’t think China and the United States have such a conflict of interest. Of course, it is not a perfect harmony, but there is a lot of interesting harmony between China and the United States. We do a lot of trade with China, which benefits both China and the United States.

..China is getting richer. Okay, people are worried because there are more wars or whatever, but this also means that Chinese people are getting cancer. Now there are 1.4 billion people who want to cure cancer, and they are willing to put money into it, right? Then that will increase the amount of research and development of all kinds of high-tech goods, which is amazing for us. Like, I’d be happy if an American won the Nobel Prize for curing cancer. I would be 99.5% happy if a Chinese scientist won the Nobel Prize for curing cancer.

So we have a lot to gain from rich China. That’s the first point. The second point is, yes, I get the idea that we want to do chips on the beach, but I think we want to go to friendshore, right? So we don’t just want protection in every country. As far as I can tell, that’s right, a hundred percent tax on your Chinese EVs. Crazy, but okay. However, let’s lower the prices in Germany.

Let’s lower prices in Europe. In fact, let’s create free trade, even free entry between the Western democracies, you know, including Japan, Australia, New Zealand. So, let’s not turn away from the small problem of foreign policy, which is to make sure that we have the right military. Let’s not turn that into trying to build a fortress America That’s going to make us poorer and actually less safe, you know, let’s build a free world. Okay, let’s create immigration and free trade with Europe and Canada and Mexico and so on. Let’s build a free world. That’s the second point.

The third point is what it looks like. It is very easy to take the foreign policy debate and turn it into rent seeking to benefit special interests and protectionism to benefit special interests. OK? So at one time in the United States, maybe even today, you know, we prohibited the importation of mohair. That’s right. Why? Because we use mohair to make military uniforms. The whole thing is ridiculous. But it is very easy, almost inevitable, for this kind of argument to be turned into a place of special interest.

I think this is one of my best podcast appearances because we talked about new things about crime, universities, why Tyler and I are able to collaborate on many projects, conspiracy theories that I believe and so on. Listen to everything.


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