“The Wall” Will Make America Great Again

I’ve been reading articles recently about how Trump is not getting much of what he wants for border wall funding in the latest spending bill. Its sparking a lot of anger on right and in response Trump has threatened to veto the bill.  Its a great sign that by introducing the idea of the wall Trump has given a truly enormous gift to the American right.

Everyone knows that most people who get here illegally overstay visas or go through some other legal maneuver rather than just crossing the desert. Everyone knows that even though a lot of drugs are smuggled in from Mexico, there would be plenty of ways for drugs to get here or be made here with a Wall. The Wall is mostly symbolic. To the right it is a symbol that America is a great place and that coming and sharing in that greatness is a privilege that has to be earned by contributing. To the altruist left, the wall is a symbol that America is a fundamentally heartless and “racist” place that denies its bounty to poor suffering people just because they weren’t born here.

Because of the symbolism, the left has a hatred of the wall that vastly exceeds its practical importance or cost. If they just let it be built then for most part the problems it seeks to address would still be around and it would be easy to just forget about it. But as long as it is not built, it is a convenient stand in for the larger philosophical issue and Republicans win that issue. Most Americans are not altruists and can understand at a visceral level that helping poor foreigners doesn’t help them.

It reminds me a lot about universal healthcare. Universal healthcare was a democratic goal for decades. Republicans had the abstract, philosophical objection that it constituted “socialized medicine” and that socialism is bad. The abstract threat of socialism didn’t resonate as much with people as the observable fact that US healthcare is very expensive and being uninsured or in danger of being uninsured is scary. Finally it got to a point after the 2008 election where democrats had complete control of the federal government and a strong mandate to do something about healthcare.  They managed to pass Obamacare which was a pretty small and mild reform designed to ameliorate some of the worst aspects of the old healthcare system from a consumer point of view. It didn’t address any of the thornier provider side issues. But even though it was a smallish thing, Democrats still put up the “mission accomplished” banner and haven’t stopped getting their ass kicked since. Without that issue to drive the lower middle class to polls for dems, the wind really went out of their sails. People won’t vote for the people who had a good idea and implemented it. They’ll vote for the people who have a good idea and want to implement it.

The wall is not a particularly good idea, but it represents a good idea. It represents an American government that looks out for American interests. It represents a government that is of, by and for the American people and not some other group of people. By wrapping the good idea in a bad idea that guarantees that it never gets done, Republicans have a gift that keeps on giving.  It can help drive Republicans to wins for decades, and then once elected they can spend their time lowering taxes and repealing regulations and doing actual immigration reform. They can do all the stuff that helps America in the long run but has limited appeal for ordinary people.

Let Them Have Vasectomies

One of the main social issues facing American society is the seemingly never ending cycle of fatherless families, poverty and criminality.

This Vox article shows the strong relationship between the household income of a child and their chance of going to prison.  children from lowest decile income households are as much as 20X more likely to end up going to prison as those from the highest, and of course way more males go to prison than females. One of the biggest causes of low household income for a family is an absent father:

Approximately 60 percent of U.S. children living in mother-only families are impoverished, compared with only 11 percent of two-parent families. 

This  new paper has some striking statistics about the relationship between fathers living in the home with children and life outcomes. The paper documents the disparity between black and white income, controlling for parental income. It finds that:

The intergenerational gap in individual income is 10 percentiles for black men across the parental income distribution – similar to the overall gap in family income. In contrast, black women earn about 1 percentile more than white women conditional on parent income.

The authors find that the circumstance that lowers this gap the most is for the children to grow up in low poverty neighborhoods where the majority of fathers are present. However:

Less than 5% of black children currently grow up in areas with a poverty rate below 10% and more than half of black fathers present. In contrast, 63% of white children live in areas with poverty rates below 10% and more than half of white fathers present.

The fathers and sons in this situation remind me of Robin Hanson’s farmer vs. forager distinction. For millions of years foraging (aka hunting/gathering) was our way of life. Agriculture arose only about 10,000 years ago, so we are not as adapted to the lifestyle it requires. Farming requires a much more disciplined existence than foraging. A lazy, undisciplined farmer that does not plant at the right time or harvest at right time, manage the crops, ration the food during the winter etc. will likely starve. Farmers have to be much more conscientious than foragers who basically can go searching for food when they are hungry. Foragers are at the mercy of their environment,  but as long as food is available, the actual lifestyle is much easier and requires little self-discipline. Anthropologists have famously called hunter gatherers “the original affluent society.”

Hanson’s view is that as wealth increases in a society, the lure of the more natural forager lifestyle will become enticing.  When the choice is a disciplined lifestyle or death, then discipline is worth it. But once all the necessities are cheap and plentiful people can feel free to seek out less responsibility and more leisure. The present day male “farmer” archetype is the suburban family man. He gets up early and suffers through a miserable commute to go to work for the sake of his family. There is a lot of sacrifice and a lot of delayed gratification in that lifestyle. Many men simply don’t want that lifestyle.  Forgoing marriage and family allows men to have an enormous amount of freedom. In a wealthy society they don’t even need a steady job. They can get along working intermittently, maybe sometimes living with a partner, perhaps sometimes living with parents. They can play a lot of video games, smoke a lot of pot and have very little responsibility.  Of course, many of these men also end up committing crimes and going to prison.  In neighborhoods where the fathers have adopted the farmer mentality, boys seem to do the same. But in areas where the fathers are absent the male children also seem to end up in the less responsible, less regimented forager lifestyle.

Many of these forager men do not particularly want to be fathers. They don’t want to be tied to women or children. They won’t be good fathers. But because they have low conscientiousness, a lot of them end up fathers at a young age. They are not very responsible in general, so why would they be responsible about birth control? These men have a preference for more freedom, more leisure and less responsibility. As far as I am concerned that’s fine. As long as they are not hurting anyone else they can have that preference and live that life.  But once they start leaving a trail of broken homes behind them and boys who will follow in their footsteps, they are harming others.

What if we can create a circumstance where men who don’t want children default to not having children? Say, by paying them to have vasectomies? What if we paid every man who wanted a vasectomy something like $5,000. It would need to be enough to overcome the inertia of doing nothing,  but not enough so that responsible but poor young men who eventually wanted children would feel tempted by it.

Assuming that the men who did it truly did not want children, they would be more free and more happy. Perhaps their lives would be empty, but vasectomies are reversible, and there are sperm donors and adoptions.  If they change their minds then there are options available. But the easy default would be to have no children rather than to have and abandon children.

There would be a decrease in the number of children living in fatherless homes. Those children wouldn’t grow up to be poor and/or criminals. That would ease the burden on society caused by the forager lifestyle.

At the margin it would raise the status of fatherhood. Having a child would mean making a positive choice and forgoing some quick money. The people who made that choice would feel more attached to that choice than the people who became fathers simply because they didn’t like condoms.

The birth rate would probably not be much affected. Women are the bottleneck in the reproductive process. Its doesn’t take much time or effort for men to do their biological part. The reason that men exist is to accelerate the process of natural selection by competing for mates. The survival of the species requires that a fairly high percentage of females need to reproduce but many males can have zero offspring if the most successful males with the best adapted genes have many.  If women simply shift at the margin from reproducing with men who want to “hit it and quit it” to men who want to be active fathers, then the traits of those men would be passed on and the poverty cycle could be broken.

The biggest downside I can foresee is that these irresponsible men might become even more irresponsible. They might end up feeling like they don’t have a stake in society and that might make them behave antisocially. The film “Children of Men” deals with the scenario where everyone has become infertile and the subsequent societal breakdown. Absent the feeling of contributing to the future, life can feel empty and meaningless. That is clearly a risk if the program is very successful. However, I think even that would have an upside. If sterile men realized that their lack of attachment to society and the future was making them miserable, then maybe the “forager lifestyle” would start to lose its appeal in general.  Since that lifestyle seems to lead to sloth and criminality, and away from human progress, I think that could potentially be a big win.

Marijuana Legalization Increased Potency

There is an economic argument, called the “Iron Law of Prohibition” that making a drug illegal should increase the potency of that drug. The primary empirical example is that during prohibition, smugglers mostly smuggled hard liquor because it was easier to smuggle.

Its true that prohibition increases transportation costs. But there are many other factors at work that make this far from an “Iron Law.” Aside from higher transportation costs, illegal markets should have higher capital and human resource costs. Mature capital markets and high human capital employees should not be as readily available to criminal enterprises.  Funding crime is risky, so is engaging in it. 3rd party reviews of illegal goods should be more difficult to come by. If someone printed a guide to which dealers have the best cocaine in a city, law enforcement could use that to make a lot of arrests. So, information on what products are good or not is going to be less open and abundant. Finally, governments will not hold the sellers of illegal products to their claims. If your drug dealer of choice sells you some baking soda and tells you its cocaine, no judge or regulatory body will get you compensation.

The sum result of all these increased costs and decreased consumer protections should be that illegal markets are less efficient than legal markets. They should do a worse job of delivering consumers what they want. People want hard liquor and there are thousands of varieties available. But they also want beer and wine because the other things in the drink besides the alcohol are also desirable. In the case of wine, they are even considered healthy.

In the less efficient prohibition era market, all the nice forms of alcohol that people enjoy were harder to come by. This article explains that “Stolen and redistilled [industrial] alcohol became the primary source of liquor in the country.” So if you were drinking during prohibition you were probably drinking paint thinner, from which most of the toxins had hopefully been removed. And a lot of the time the toxins weren’t all removed (especially since the government demanded that more toxins should be added). So, the average concentration of alcohol increased during prohibition, but so did the amount of undesirable adulterants.  The main effect was that variety and quality was reduced.

 

glenfiddich-bourbon-barrel-reserve-14-year-old-single-malt-scotch-whisky-1

                                    which would you choose? 

 

Compare that to the case of marijuana. The other stuff in a marijuana flower is not good for anything. People like the THC (actually TCHA) and CBD to some extent. Everything else will just harm your lungs without any benefit. Since pot prohibition has been curtailed (though not completely ended yet) there has been more investment in developing hybrid strains with higher concentrations of THCA. There are independent labs that will verify the concentration of each strain and consumers can rely on those numbers. There are even more potent forms of consumer marijuana now, like dabbing. Does anyone think that if marijuana were totally legalized that THC concentrations would go down? As long as people prefer more potency, the drug will get more potent in a legal market.

labeled pot

You’re not getting a label like that from a drug dealer

People will also bring up the case of opiates and Fentanyl to make the case that prohibition increases potency. Fentanyl is very potent, in some ways, butThe biological effects of the fentanyl analogues are similar to those of heroin, with the exception that many users report a noticeably less euphoric high associated with the drug.” Since Fentanyl is less desirable than other opiates, it is often erroneously sold as heroin or mixed in with poor quality heroin. If recreational opiates were legalized, I don’t think we’d see a dramatic drop in potency. Addicts develop high tolerances, and they don’t want to have to do massive injections to get their fix. Instead, we’d probably see better purities, with less undesirable adulterants. Better labeling and more precise dosing.  Theoretically, we could also see synthetic opiates developed that create more euphoria with less depression of respiratory drive, and maybe even less addictiveness. The best and brightest are not working on this problem because making the safest, most fun drugs possible is a very serious crime.

That last thought suggests a regulatory change that might make a big difference to the world. What if the FDA made a category for recreational drugs, and approved (without a prescription obviously) whatever available was most enjoyable with the fewest undesirable side effects. Is there any particular reason why people should not be able to take drugs for enjoyment if doing so harms neither themselves or others? Such a regulatory category would create incentives for real research to see what is possible. The existence of safe, non-addictive drugs that are more fun that alcohol or heroin (or even THC) could not only alleviate the current opiate epidemic, but all possible future drug epidemics.

The Nuclear Option

I am seeing lot of articles likes this uncritically reporting a private company’s press release as news.  The gist of the article is that a start-up called “Commonwealth Fusion Systems” has gotten a $50M investment to build a prototype fusion reactor. They use this illustration:

3600

which looks like a prety cool lego playset.

Their plan is to use the same basic design as ITER but I guess with a newer type of magnet and a budget that is 0.1% of ITER’s.

I find it frustrating because articles like this pop up every once in awhile and people share them as if they represent progress. This is another one from 4 years ago. It talks up the unimportant milestone of net energy production at the National Ignition Facility, where they use lasers to compress tiny fuel pellets to create fusion and study the dynamics of the reaction to understand nuclear bombs better. No one who knows anything about it thinks its a remotely reasonable way to create fusion power.

If you don’t know much about nuclear fusion watch this quick video. Commercial fusion is the best chance we have to completely replace the carbon based energy system on Earth. Fusion power and propulsion is THE technology that we need to do anything other than pure research in space outside of Earth orbit. We know how to make fusion. We have had commercial fusion generators for decades. They make energetic neutrons which are used for imaging the ground for resource extraction. Injecting enough energy into a plasma to generate fusion is just not that hard. You can do it at home.  Lightning does it. What has been hard is to make fusion generate more power than is put into the system. But we know that the necessary power input into a plasma to get it to fusion temperatures scales more slowly than the power output. So we know how to make fusion work. We just need bigger reactors.  That’s the whole thing. There are engineering unknowns and tons of potential optimizations, but we know at the most fundamental level how to make it work. Its not a scientific problem as much as a funding problem.

Its very strange to me that we know exactly what technology we need to develop to make enormous progress on multiple fronts. And that we are in a long term period of slow economic growth and excess capital. And yet people are happy to promote trivial markers of progress in fusion rather than demanding real sizable investment. Its like Black Lives Matter celebrating any traffic stop of a black person that doesn’t end in violence. Sorry, but it’s not good enough!

Now, the libertarian in me says that the private market will make the investments and figure it out, when it makes sense to do so. But, I am not a naive libertarian. I’m a realist. We need tinkering at scale to make this technology work. ITER is going to provide that but it was started during the Reagan administration and it is still far from done! The funding for it is a trickle. ITER should achieve positive net energy but it will never be a commercial plant. The current timeline doesn’t have a commercial plant being built until 2050 or later. It may just be the case that fusion has such large positive externalities and such large up front capital requirements that no corporations can really handle it. ITER is expected to cost something like $50 Billion, and produce no revenue. Uber has spent something like $12 Billion building its business and that’s a record for private corporations. Could a corporation or consortium of corporations really swallow a bill for $100 Billion or $200 Billion before it starts generating any revenue? It doesn’t seem like it. But the US federal government blows $200 Billion like its nothing.

Every year NASA spends nearly $20 Billion. The Department of Energy spends close to $30 Billion. The Department of Defense spends over $600 Billion! If we took $10 Billion from NASA (since fusion is absolutely essential for space travel), $5 Billion from the DOE (since its the future of energy) and $10 Billion from the DOD (since fusion must be important for national security and they waste so much money anyway) then you’d have $25 Billion every year to spend on developing fusion. That means we could build 5 ITERs in the US in a decade! No one, other than some bureaucrats, would even notice whatever pointless projects would have to be cut. That is the kind of investment we need. We need different designs at scale to optimize and bring down costs.

Mr. President, if you are reading this: Do you really want the fucking french to lead in this technology with the US providing only token contributions? The International Space Station was garbage. CERN is pointless. Fusion would be worth many $Trillions. Pleasea, put some real money for fusion in your infrastructure plan to build reactors in America with American workers and American steel!

Be a Fierce Competitor

Previously we established that most forms of learning are the same thing with different names. The exception is passive “book learning” which has relatively limited value. I would also argue that the progress that a system makes and the learning it does are basically the same thing. The more things you know about the world the more things you can do in it, and the more things you do in the world the more you can learn about it. Doing new things requires learning new things and learning new things requires doing new things.

Now I assert that this singular process of learning/progressing is best way to be a valuable person and have a valuable life. One of the best way to progress is to be a fierce competitor. That means squeezing out as much performance as possible from every domain. It means trying to improve the behavior of every system of which you are a part. You as an individual, as part of a family, a community, an economy,  various polities, humanity and as part of Earth’s biology.

Why is that valuable? Clearly zero sum competitions are ubiquitous. Winning simply so others can lose doesn’t seem like it has much value.  But progress needs a measure. You can’t know how well you are doing if you don’t compare yourself to others. You can try, as Jordan Peterson argues, to compare yourself only to your past self but your memory is terrible and you are easy to fool.  That doesn’t mean that comparing the present to the past is pointless but it is incomplete. Furthermore, nearly every competition has a positive sum element. Raising the average level in practically any domain creates gains that leak out and benefit others.

The clearest domain in which to see this is the economy. Centuries ago Adam Smith explained how capitalistic competition drives firms to provide larger benefits at smaller prices and we can see everywhere how that has manifested in a vastly richer world.

To be clear, I am not saying “win” or “be a winner.” I am saying compete. The point is not the result of any given competition. Its the process of raising the bar, and thereby forcing others to do the same in a virtuous cycle.

What does it mean to be competitive at every level?

As an individual it means finding the metrics and competitions that matter to you and trying to optimize them. Whether that means the pounds you can bench press, your income or your blog traffic. There are only limited opportunities for adults to get into direct head-to-head competitions but by measuring your abilities and successes you can effectively compete against your previous self and everyone else.  It is important to look beyond the individual level to decide what domains are worth competing in.  Maximizing health, wealth and wisdom will allow you do much more for the larger systems of which you are a part. Maximizing the number of cigarettes you can smoke at once or the number of hours you sleep per day will have the opposite effect.

Make whatever organization you work for better. If you see waste or stupidity or any problem for which the solution is clear, then speak up. If the organization refuses to improve, then take your talents and efforts elsewhere. Propping up weak or failing organizations harms progress. We want the weak to die so that the strong can gather the resources and flourish.

Be an educated voter. Force politicians do better. Force governments to provide more and better services while consuming less resources. Frankly, this is the area where there seems to be so much low hanging fruit. Most people already work pretty hard. The economy is constantly innovating to increase efficiency and output. The government is relatively stagnant. Most political fights are zero sum clashes over the distribution of resources between equally matched interest groups that predictably go nowhere. Too many people seem to want to punish politicians for even trying to make compromises. This is short sighted fear. People worry, somewhat understandably, that change will make them worse off. For any given change that is somewhat likely. But the more changes there are that have more winners than losers, the higher probability that any individual will be an overall winner. In the limit as the number of good changes go to infinity the probability that everyone benefits goes to 1 (unless the distributional impact of the good changes are really highly correlated). Politicians need the incentive to find whatever compromises they can that will create more winners than losers. Voting for people who want to find compromises and improve things is the only way to create those positive incentives.

Be a discerning consumer. Force businesses to work ever harder for your money. Lazy and thoughtless consumption rewards and encourages stagnant, anti-innovative businesses and gives you a worse experience. That doesn’t mean being an “early adopter” and rewarding mere newness rather than genuine improvements. That is just a way to get ripped off and encourage wasteful fads. If we raise the bar for what we consume then businesses will rise to meet it.

At the highest level, as humanity consumes more and more of the world’s resources and creates bigger and bigger impacts on the planet, many are worried about the mass extinction that we are causing.  There is no doubt that our species is out competing the rest of life on Earth and forcing it to adapt. Many people think that by some complex causal chain the changes that our success bring about will cause our ultimate failure. But we are the most adaptable part of the most adaptable system in the known universe. Its true that we can be short sighted and exploit resources in an unsustainable way and cause harm. We’ve done that before. But as long as we suffer for our mistakes and consequently learn from them we can continue to improve. We can become more efficient at getting the maximum out of the resources that are available to us without degrading or destroying them. And then the rest of biological life can continue to adapt to the radical shock that we create.

It has become somewhat gauche to declare ourselves “the pinnacle of evolution,” but there is a sense in which it is true. We are the only species that has a chance to take life on Earth to an even higher level of success in the Universe. We can take life off the planet and spread it to the rest of the solar system and beyond. No other species that has ever lived has had that capability. Evolution is almost exclusively brutal competition for resources. And yet it is through that competition that life has conquered Earth and is now poised to extend its empire. By competing fiercely in every domain you honor and contribute to that ancient and awesome process.

I don’t know about you, but that gets me fucking pumped!

Why Am I Such a Failure

This is a a partial follow up to In Search of Lost Time.

I  notice that most of the people I “know” are extremely successful, rich and famous. When I say I know them I simply mean that if I see their face I recognize them. I’ve never met Tom Hanks or Barack Obama but I know more about them than any of my neighbors. I can barely remember a handful of my high school classmates and all my teachers are gone but I can sure remember a lot of the people who were on TV and in movies while I was in high school.

Maybe I’m a bit of an outlier.  I perhaps consume more than an average amount of media and definitely engage in less than an average amount of real social interaction. But I don’t think I am too far from the norm. Consider the phenomenon of the “box office draw.” It makes no sense to prefer to see the same people over and over in different movies. As soon as I see The Rock in a movie I know it’s The Rock, not whoever he is playing. It shatters the suspension of disbelief. Not only does having a movie star in a film make it less immersive for the audience, but it costs a fortune for the producers. Rationally, talented actors who are not widely recognizable should be the most valuable commodity in Hollywood.  If an actual friend of mine was in a movie I would definitely see it. I would want to support them and also would be very curious to see their performance. My logical mind knows that I am not friends with The Rock, so the desire to see his next film is not as strong, but I am still somewhat drawn to see it. Its worth it for movie producers to pay him 8 figures to appear in their films because they know that effect is going to operate.

Before the invention of mass media no one experienced this phenomenon. Evolution could not have prepared us for knowing so many people that we do not know. The brain has highly developed circuits for recognizing faces because being able to tell friend from foe and navigate the details of complex social interactions was vital for humans throughout our history.  Seeing a celebrity in person feels like an optical illusion.  Part of the brain is sure that they know that person well , and it fights with the rational  part that knows they are a stranger.

Throughout history (and prehistory) the majority of people that most people knew were fairly close to them in status.  That does not mean that there was not a hierarchy.  Its just that the hierarchy was compact. In a hunter-gatherer tribe there could have been people that were considered particularly wise or charming or skilled in some way or another. And conversely people that were less skilled or socially adept than average. A popular piece of “wisdom” is that you should not compare yourself to others,  since its likely to make you miserable, but it often makes sense to do so. If you can understand why some people are able to do what you cannot, you learn from them. If you can see why other people fail, you learn what not to do. There is no way that evolution intended for us to ignore the vital information contained within the social hierarchies we can see.

Humans are not intuitively good at statistical reasoning. My brain sees that the majority of the people I know are far, far more successful than me. I try to find the incremental steps that bridge that gap but I can’t intuitively sense the massive survivorship bias inherent in the situation. I can try to be more like them but I won’t get the results they have gotten. Every coin toss has gone their way or else I wouldn’t know them.  My  only choices are either to naively try to be like them and fail in frustration and envy forever, or to give up. If I give up trying to be like the lucky geniuses, then the part of my brain that thinks that I really know those people will never leave me alone.   I have no aspirations to be a movie star, but the statistically ignorant part of my brain will never let me forget that I could have been a bitcoin millionaire. I don’t compare myself to Stephen King but with enough writing practice maybe I could be achieve the level of Scott Alexander.  Or maybe I could be the next Nassim Taleb. We both have a finance background, after all, and he seems like such a weirdo.  And while I’m at it is it really too late to start being Warren Buffett? I know that there are millions of strivers for every one who achieves their levels of success but I just don’t see those failures and can’t make my brain truly understand their magnitude.

Obviously I, and everyone else, has figured out how to live with this unnatural situation. We can recognize that these comparisons are delusional. We can suppress these feelings and not experience them most of the time. And yet, I think there is a cost. This  passage in “Infinite Jest” made me feel better about it when I read it 15 years ago, and it has stuck with me ever since. Particularly this quote:

“You have been snared by the delusion that envy has a reciprocal. You assume that there is a flip-side to your painful envy of Michael Chang: namely Michael Chang’s enjoyable feeling of being-envied-by-LaMont-Chu. No such animal.”

If there is no reward to being on the other side of the fame divide, then that should relieve the pain. I can try to convince myself that I’m not missing out. However,  if true it implies that there is a massive deadweight loss. If the lucky few were able to somehow experience the envy of the rest of humanity as a form of pleasure then at least that psychic joy would be conserved. If the people that society turn into gods really became gods then that would be something. But if there is nothing but loss in this system then that is truly sad.

Trade Wars are a Tariffic Idea

There has been a lot of bitching and moaning about Trump’s plan to impose tariffs on imported Steel and Aluminum.

People say that consumers will feel pain because prices will go up. But, they shouldn’t go up by the full amount of the tariffs. Domestic supply can increase and foreign supply will decrease/shift to the lowest cost producers. End user prices will rise somewhat, but by less than the full amount of the tariffs. Furthermore, the prices of these products are already volatile and subject to the forces of global supply and demand. After the tariffs were announced the price of steel in the US climbed to around $800/ton but it was over $1100/ton in 2008. If you didn’t notice the high price of steel 10 years ago then you probably won’t notice it now either.

According to this: “Production of a ton of steel generates almost two tons of CO2 emissions, according to steel industry figures, accounting for as much as 5 percent of the world’s total greenhouse-gas emissions.”   At the margin, a tariff on steel decreases global demand and is a form of carbon tax. Carbon taxes are often considered the most efficient form of anti-global warming policy. People who claim to be worried about global warming should welcome policies that will decrease global emissions, but as soon as any policy threatens even the slightest harm to the economy the environmentalists are nowhere to be seen. It seems that virtually everyone who claims to care about the environment is actually using it as an excuse to push for policies that they like for other reasons.

Tariffs have a long history in the United States:

File:Federal taxes by type.pdf

100% of Federal revenue came from tariffs until the 20th Century.  Some countries still generate a large amount of income from Tariffs. For instance, The Bahamas has no income tax and generates almost all government revenues from tariffs and also by taxing tourists. Both of those revenue sources have a great feature which is that they are partially paid for by foreigners. It is economics 101 that the incidence of a tariff will be shared between the domestic consumer and foreign producer. Consumer prices will rise somewhat and producers will sell somewhat less of the produce and sell it at a lower price. The difference between what the producers sells at and the consumer pays is the revenue produced by the tariff.

If the long term goal is a world of low tariffs and fair and free trade between nations, then raising tariffs has to be part of our strategy to make that happen. If we commit to never raising a tariff then foreign nations can impose tariffs on our goods with impunity. By doing so their governments can generate revenue from US citizens. In many countries US intellectual property rights are not well enforced. That is a massive tax on US IP holders that directly benefits foreign consumers. The goal of US trade policy should be to make sure that US producers and consumers are getting the best deals they can. If US producers are being taxed by other nations but their producers are not being taxes by the US then that is a net transfer from the US to the rest of the world. The US government should do what is in its power to minimize that.

The US is in a great position to exert its market power to make trade cheaper and freer across the globe. The US is the #2 exporter in the world (behind China) but according to this as a percentage of GDP we are around 150th on a list of 183 nations. Every other major economy (and most other minor ones) are much more dependent on exports than the US. The US economy is enormous and very diverse. We mostly just trade with each other, but because our economy is so large, selling things to us is critical for most of the rest of the world economy. In a trade war we can hurt the world more than the world can hurt us. Why shouldn’t we maximize that enormous leverage to get the best trade deals we can?

We spend $700 billion annually on a military to enforce our political and economic priorities around the world. At worst a trade war would cost a fraction of that (Total US exports are only $2 Trillion/year so they would need to be cut 35% to equal the annual cost of the military). Often the actual wars that we engage have unpredictable and negative long term consequences. Almost everything we do in the middle east seems to make it worse.  If a trade war succeeds in creating lower overall barriers to trade across the world then that is positive that is unlikely to have unintended side effects. In the worst case scenario, it is a simpler matter to return to the status quo.