Monday, March 23, 2020

Re-Examining An Old Tenet Of The Free Economy

     “When the facts change, I change my mind. What do you do, sir?” – attributed to John Maynard Keynes, possibly apocryphal

     Changes in circumstances bring about changes in convictions, and why shouldn’t they? If our understanding follows from the evidence before us, and that evidence is later shown to be inaccurate or incomplete, to re-examine our previous beliefs is the only rational course.

     Some people refuse to do that. They retain their undermined – sometimes utterly refuted – prior stances with a quasi-religious tenacity. They become vitriolic when challenged on them. It can make things rather difficult for their relatives, friends, and occupational colleagues.

     Consider, however superficially, the requirements for fielding an army – a meaningful army, that can actually fight. What does such an effort require?

  • Men;
  • Mobility;
  • Munitions.

     Now, those are very broad categories. For example, the “men” category would include many specimens I wouldn’t want in a field army: men too old to fight; men too small or weak to fight; men disinclined (whether from allegiance or self-centeredness) to defend their country; men incapable of using a weapon; or seriously sick men.

     So a nation that maintains a standing army would perforce require that those enlisted in its ranks be young, at least moderately large and strong, patriotic, and healthy. Could such a nation afford to allow its source of important pharmaceuticals to lie outside its borders? I think not, especially considering that men at arms tend to be packed together more closely than civilians, and thus are more prone to communicating infectious conditions.

     A nation can afford to allow the manufacture of many things to lie outside its borders. Consumer electronics; video games; durians; T-shirts – all very well. But a nation that has enemies, or that has had them recently enough to imagine that it might have them again one day, cannot afford to allow the requirements of maintaining an adequate armed force to be withheld from it.

     Maximum economic efficiency does require that goods be made under those conditions where their price to the consumer will be minimized. This is a basic tenet of free-market economics. For example, if your T-shirts are being made by PhDs in physics, they’re likely to be prohibitively expensive, and thus will sell poorly. Alternately, if they’re being made by relatively unschooled, low-skilled workers, then all other things being equal they’ll be more affordable, and will sell much better. Of course, “all other things” are seldom equal, as companies that have tried to save money by exporting their software development and support activities to foreign lands have learned. Still, the core observation remains sound.

     But economic efficiency is merely one desideratum among many. It’s not nearly as important as life, freedom, or national sovereignty. In a world where two hundred quarrelsome States constantly vie to impose their wills on one another, in some contexts economic efficiency must defer to national preparedness. While this is maximally clear during wartime, even in times of widespread peace it never quite fades away. We’ve received a lesson in this from the Wuhan coronavirus, a.k.a. the Kung Flu or the Chi-Com Crud.

     Once the processes for manufacture and quality control have been sufficiently refined and automated, the production of most drugs can be relegated to less-educated, less-skilled workforces. That doesn’t make it a wise policy to allow the complete export of production to other lands. No, not even other lands that have been allies of long standing. Yet we have permitted exactly that to occur. With biological warfare concepts rising ever higher in sophistication, the notion approaches madness.

     The lives and well-being of Americans have depended for some time on drugs whose production lies outside our borders. Much of that production resides in Communist China, with which the U.S. is currently at loggerheads over trade, currency manipulation, and intellectual-property matters. This, to put it gently, is not good.

     Perhaps we are fortunate that as mild an affliction as the Chi-Com Crud appears to be has delivered the wake-up call. The openness of the world to international travel has made far worse biowar scenarios appallingly plausible. Yet some object to the reimportation of pharmaceutical production, among other things, to the United States. It will make the price of those drugs go up, they say – and they could be right. But it would be wise to remember the tale of the pork chops.

     The world market contains many thousands of internationally traded goods. We don’t often think the ones we routinely purchase and consume in a strategic context. But it’s becoming important that we learn to do so. The counterpoised thesis, the condemnation of autarky, still has merit; just not in all contexts and things.

     A large part of the reason so much physical production has left the U.S. is over-regulation in pursuit of some unattainable goal: typically, “perfectly clean” air or water. There’s nothing that’s currently made abroad that can’t be made by Americans in American workplaces. Fanatical “pro-environment” regulations are often the reason some operation has gone offshore.

     Thankfully, President Trump understands this and is doing what he can, as fast as he can, to correct the situation. With luck and the good sense not to be terrified away from this eminently sensible policy by terms like autarky and protectionism, we’ll get back to a tolerable level of pharmaceutical self-sufficiency soon enough. The consequences of not doing so could be grave, including the specter of having to conduct a war by un-warlike means.

     Verbum sat sapienti.


evilfranklin said...

A "Free Economy" never envisioned the destruction of a Free Nation.

Big Pharma ships production of medicines and medical supplies to China to reduce costs. Then they raise the price of those items to exorbitant heights.
A prime example of destroying America through outsourcing of strategic production.
The same has been said about outsourcing production of parts for war planes, war ships, and other weapons of war that the U.S. requires.

A "Free Economy" never envisioned the destruction of a Free Nation.

The costs of an economy dependent upon products supplied by allies is too high. Allies often turn into enemies on short notice.
The American standard of living has been steadily declining due to the outsourcing in the name of "Free Enterprise". It's past time to return ALL production to American shores.

Returning production to American shores will cause our standard of living to further decline in the short term. In the long term it will improve our standard of living, and our national security, through higher employment and higher wages.
It is in the strategic interests of America and Americans to become 100% totally independent as soon as possible.

evilfranklin said...

Okay, this would hurt many of us, but i have to say that the country going deeper in debt to fund those that have lost their jobs or have no income is a bad idea.

Instead I suggest that a one time flat wealth tax of 1% be levied against EVERY CITIZEN of the United States. NO EXCEPTIONS! That goes for government employees of every stripe as well (elected, appointed or hired).
The tax would be due July 1, 2020. On August 1, 2020 every CITIZEN of the United States would receive a check for one million dollars, tax free. No stipulations on how this money would be spent would be allowed.

The government would not be allowed to deduct any money to cover the costs of administering this tax or its' payments
Non citizens would receive nothing.

The balance, if any, would be held in trust until August 1, 2021. Interest on the balance, if any, would be set at 5%. At that time the balance, if any, including any interest accrued, would be distributed equally to every CITIZEN of the United States.

If a balance still remains the process would be repeated each year on August 1 until all funds have been distributed.