Tariffs and the End of Globalism?, Denmark’s Anti-Mass Migration Progressives, South Africa as Racketeer Party State, A Deep Dive in CAN-USA Relations, Violence in Pre-History

Every weekend (almost) I share five articles/essays/reports with you. I select these over the course of the week because they are either insightful, informative, interesting, important, or a combination of the above.

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It’s quite funny that the biggest topic of discussion right now is the tariff system that the USA introduced earlier this week. Tariffs. That is about as boring a subject as it gets. This is a far cry from war, or phony “Russia controls Trump” conspiracies theories. I think it makes a strong case that US politics has “re-normalized” after several years of media-driven hysteria. Tariffs, trade imbalances, deficits….this is incredibly vanilla stuff that would lead most people to turn off the TV news.

I can speak to the politics of trade, but I must confess that I am pretty much useless when it comes to the technical aspects of it, especially the fine details. It’s all very dry stuff, and I was never going to be an accountant or economist. This is why I am agnostic on these tariffs, and am just kicking back and enjoying the show. I don’t have any real insight to offer on the specifics.

What I can say is this: these tariffs are an official recognition that economic globalism no longer works for the USA. The Americans introduced this system in the 1990s, and at first it worked for them (but not for large swathes of Americans, of course). They bet that free trade would open up China and permit them an entry point in which to topple the CCP. That did not happen, and the Americans had to re-calibrate, something that should make perfect sense to everyone. This re-calibration has led to the introduction of these tariffs, heralding a possible new era in US imperial history, one in which they are now more extractive, no matter if a country is an ally, an enemy, or a neutral party. I am not the only one to have reached this conclusion:

America will do what it thinks is best for itself, and that is perfectly fine and reasonable. But because this is Trump doing this, everyone is losing their minds. “Tariffs are a tax” is one of the most common refrains in response to the jettisoning of decades of economic and political orthodoxy. Free Trade is supposed to be a permanent feature of the USA, or at least the conservative/right wing of US politics, many argue.

“Only Nixon could go to China”, so I guess only Trump could end the Neo-Liberal consensus on trade.

brought up an excellent point when he wondered out loud how the anti-globalism protesters in Seattle in the late 1990s would react to learning that it would be a sitting GOP President who would end it. Times change, and times are weird.

Will this tariff scheme result in a re-industrialization of the USA? I have no idea. Will it lead to more balanced trade? Beats me. I am going to rely on what others have to say, and we’ll start with this essay from Oren Cass that was published in February of this year:

Understanding America

The One Word that Explains Globalization’s Failure, and Trump’s Response

Donald Trump is at his best when he seizes on a common-sense position that happens also to be correct, confounding elite technocrats attempting to impose on the nation a view that both seems absurd and is in fact wrong. His insistence on framing his administration’s forthcoming actions on trade in terms of “reciprocity” is a perfect example. The United …

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a month ago · 81 likes · 35 comments · Oren Cass

Oren Cass is a proponent of tariffs and of America’s re-industrialization, so let’s see what he has to say:

“Isn’t that how it already works?” No, no it is not. Reciprocity is supposed to form the basis of the international trading system, but other countries have flouted that expectation and the U.S. has repeatedly turned a blind eye. To keep the party going, economists constructed a narrative in which reciprocity was unnecessary. Let other countries behave however they want, the story went, the U.S. would benefit from opening its market to all comers.

Okay, this makes sense.

The premise underlying this confidence was that manufacturing does not matter and indeed a nation benefits most from producing as little as possible domestically and importing as much as possible from abroad. As Milton Friedman had put it back in the 1970s, “The gain from foreign trade is what we import. What we export is the cost of getting those imports. The proper objective for a nation, as Adam Smith put it, is to arrange things so we get as large a volume of imports as possible for as small a volume of exports as possible.”

By this logic, anything that slows the flow of imports, or raises their cost, would indeed be a self-inflicted wound. If the Chinese Communist Party wants to block the sale of U.S. electric vehicles in China, let it. We should still want as many cheap Chinese EVs as possible flooding into our market. In a Wall Street Journal column denouncing Trump’s strategy two weeks ago, economic historian Douglas Irwin deployed the metaphor of blocking up a harbor. “The British economist Joan Robinson once said that a country shouldn’t throw rocks into its own harbors just because other countries have rocky coasts,” he wrote. “The same principle applies here: The U.S. shouldn’t have stupid tariff policies just because other countries have stupid tariff policies.”

But the American experience of recent years has proved this mindset to be extraordinarily naïve. That’s not my word, it’s Krugman’s, from our conversation last week on the “On with Kara Swisher” podcast:

OC: The initial argument was that trade deficits are self-correcting.

PK: I don’t think I ever said that. I think I said the trade deficits are not a problem.

OC: No. You wrote a piece for the American Economic Review in 1993, in fact titled, “What Do Undergrads Need to Know About Trade?” in which you said we need to teach them “that trade deficits are self-correcting.”

PK: Okay, if I did say that, that was naïve…

“Gotcha!”

A collapsing orthodoxy:

What’s remarkable about the collapsing orthodoxy is that we are not learning something new so much as rediscovering what wiser economists knew all along. Even Friedman’s claim that “the proper objective for a nation, as Adam Smith put it, is to arrange things so we get as large a volume of imports as possible for as small a volume of exports as possible,” runs directly counter to what Smith actually wrote, which was: “If a foreign country can supply us with a commodity cheaper than we ourselves can make it, better buy it of them with some part of the produce of our own industry.”

With some part of the produce of our own country. A vital assumption of the classical model was that trade would be balanced—something made here for something made there. David Ricardo, explaining the principle of comparative advantage with the example of Portuguese wine and British cloth, described what England was doing as “purchase[ing wine] by the exportation of cloth.” John Stuart Mill stated especially bluntly that “since all trade is in reality barter, money being a mere instrument for exchanging things against one another, we will, for simplicity, begin by supposing the international trade to be in form, what it always is in reality, an actual trucking of one commodity against another.” The purpose of trade was not to decimate your own industrial base (obviously), it was to trade.

The last line should be self-evident, but it is obvious that it has been ignored for some time now.

Which brings us back to the present debate. Trump has repeatedly made clear that his frustration is with the imbalance in trade—the U.S. has an annual $1 trillion trade deficit, reflecting $1 trillion worth of goods made abroad for our consumption, which we acquire not with “some part of the produce of our own industry” but rather by sending back assets—ownership of our real estate and corporations, treasury debt that represents simply an I.O.U. to pay some day, and so on. Thus we simultaneously erode our domestic industrial capacity in the near-term and send abroad the claims on our long-term prosperity. As Warren Buffett observed, “Our country has been behaving like an extraordinarily rich family that possesses an immense farm…We have, day by day, been both selling pieces of the farm and increasing the mortgage on what we still own.”

The very first paragraph of Trump’s memorandum for an “America First Trade Policy,” issued on Inauguration Day, emphasized “a path toward eliminating destructive trade deficits.” The first directive to his administration was titled “Addressing Unfair and Unbalanced Trade” and instructed it to “investigate the causes of our country’s large and persistent annual trade deficits in goods.” The White House fact sheet announcing the “Fair and Reciprocal Plan” on trade emphasized twice that “lack of reciprocity is unfair and contributes to our large and persistent annual trade deficit.”

Cass proposed a global tariff model, one that is macro and not tailored to a country-by-country basis:

The reciprocal model has real benefits of its own. In the global-tariff model, no individual country has much incentive to change its own policies toward the U.S. because no reduction in a particular bilateral deficit would significantly alter the overall trade balance. The global tariff operates only at the macro level, attempting to reshape the relative attractiveness of domestic versus foreign production and acquiring U.S. goods versus assets. Reciprocal tariffs would have the macro effect, but they would also pit countries against each other in attracting U.S. business. For instance, let’s say the U.S. continues to push supply chains out of China, where will they go? Most likely to countries facing lower reciprocal tariffs. How does a country get a lower reciprocal tariff? By reducing its trade deficit with the U.S., which will require opening access to U.S. producers and encouraging the purchase of U.S. products. That would be nice.

The following excerpt is the most interesting one to me, and I assume it will be to you too:

Finally, while both global and reciprocal tariffs could help to move toward a trading-bloc system in which the U.S. and its allies maintain high levels of free and balanced trade while collectively excluding non-market and heavily distorted economies, reciprocal tariffs might get there more smoothly. Countries that do adopt fair policies and achieve balanced trade with the U.S. would naturally transition into such a bloc as tariffs among them drop toward zero, while those that do not would find themselves outside it. Ambassador Robert Lighthizer outlined this scenario in a recent New York Times essay. The final step would be for the U.S. to insist that its partners likewise impose high tariffs outside the bloc. And lo and behold, over the weekend, “Trump Team Pushes Mexico Toward Tariffs on Chinese Imports.” (On a podcast last week, C.J. Mahoney, Deputy U.S. Trade Representative in the first Trump administration, described how an updated USMCA could provide for “common external tariffs that are consistent across North America.”)

“The final step would be for the U.S. to insist that its partners likewise impose high tariffs outside the bloc.”

China is the target and this is about the Pivot to East Asia.

Will it work? Mainstream economics are adamant that this is a horrible idea, but I turn to Bismarck who said of Americans:

“There is a Providence that protects idiots, drunkards, children, and the United States of America.”

The usual laws don’t apply to America, so they just might pull this off. It could happen. It might not.

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In 1992, Democrat Party strategist James Carville told election campaign workers working on behalf of Bill Clinton’s bid to become President of the United States to focus on the message “It’s the economy, stupid”. This one line has resonated ever since, illustrating the importance of simple messaging when on the campaign trail. It’s instructive in that it forced campaign workers to not get lost in the weeds i.e. arcane policy debates, and instead zone in on bread and butter issues (recall that a recession had hit the USA at the time).

Elitism will often generate an effect akin to having one’s head in the sand, and this can fairly describe much of Europe’s and North America’s politics of the past two decades or so (or even longer). Nowhere else is this more obvious than when it comes to immigration, the issue that most drives the populist backlash that has coloured our political world for over a decade and a half. Populism on both sides of the ocean has many fathers, but none are as fecund as the immigration issue. Yet many mainstream parties insist on not addressing valid concerns regarding it, choosing instead to wave them away as “racist” or “xenophobic”, or patronizingly moralize in its favour….and then they wonder why populism continues to gain support.

US Democrats are still in post-loss autopsy mode, and some are now beginning to bring up the issue of immigration and its harmful effects on their future electoral prospects. To them, immigration restriction has been verboten, the realm of racist rednecks. After all, only racists would oppose mass migration, right?

Wrong. Liberal Denmark proves a counter to this assumption, which is why the New York Times flew a trial balloon a few weeks ago in the form of a long story on how Danish liberals restricted migration and have managed to retain political power:

Generous support for Ukraine is only one way in which Denmark has become an outlier. Since President Trump won re-election in November, Frederiksen has become a global symbol of opposition to him, thanks to her rebuffing his call for Denmark to turn over control of Greenland. But the main significance of Frederiksen and her party, the Social Democrats, has little to do with aid to Ukraine or a territorial argument in the North Atlantic. Over the past six years, they have been winning elections and notching policy victories that would be the envy of liberals worldwide, and doing so at a moment when the rest of the West is lurching to the right.

The framing up above is as follows: “She is a good person. After all, she opposes Trump. This means that good people can be immigration restrictionists too.”

Over the past several years, there is arguably not a single high-income country where a center-left party has managed to enact progressive policies and win re-election — with the exception of Denmark.

Since the Social Democrats took power in 2019, they have compiled a record that resembles the wish list of a liberal American think tank. They changed pension rules to enable blue-collar workers to retire earlier than professionals. On housing, the party fought speculation by the private-equity industry by enacting the so-called Blackstone law, a reference to the giant New York-based firm that had bought beloved Copenhagen apartment buildings; the law restricts landlords from raising rents for five years after buying a property. To fight climate change, Frederiksen’s government created the world’s first carbon tax on livestock and passed a law that requires 15 percent of farmland to become natural habitat. On reproductive rights, Denmark last year expanded access to abortion through the first 18 weeks of pregnancy, up from 12 weeks, and allowed girls starting at age 15 to get an abortion without parental consent.

All the while, the country continues to provide its famous welfare state, which includes free education through college (including a monthly stipend of about $900 for living expenses), free medical care and substantial unemployment insurance, while nonetheless being home to globally competitive companies like Novo Nordisk, the maker of the anti-obesity drug Ozempic. In 2022, Frederiksen won a second term, defying the anti-incumbent mood that has ousted incumbent parties elsewhere since the Covid pandemic. As part of her success, she has marginalized the far right in her country.

Here’s a tip: if you want to marginalize the far right in your country, co-opt their immigration platform. It’s just that easy.

Denmark as progressive maverick:

But there is one issue on which Frederiksen and her party take a very different approach from most of the global left: immigration. Nearly a decade ago, after a surge in migration caused by wars in Libya and Syria, she and her allies changed the Social Democrats’ position to be much more restrictive. They called for lower levels of immigration, more aggressive efforts to integrate immigrants and the rapid deportation of people who enter illegally. While in power, the party has enacted these policies. Denmark continues to admit immigrants, and its population grows more diverse every year. But the changes are happening more slowly than elsewhere. Today 12.6 percent of the population is foreign-born, up from 10.5 percent when Frederiksen took office. In Germany, just to Denmark’s south, the share is almost 20 percent. In Sweden, it is even higher.

These policies made Denmark an object of scorn among many progressives elsewhere. Critics described the Social Democrats as monstrous, racist and reactionary, arguing that they had effectively become a right-wing party on this issue. To Frederiksen and her aides, however, a tough immigration policy is not a violation of progressivism; to the contrary, they see the two as intertwined. As I sat in her bright, modern office, which looks out on centuries-old Copenhagen buildings, she described the issue as the main reason that her party returned to power and has remained in office even as the left has flailed elsewhere.

The Danish progressive argument for immigration restriction:

Leftist politics depend on collective solutions in which voters feel part of a shared community or nation, she explained. Otherwise, they will not accept the high taxes that pay for a strong welfare state. “Being a traditional Social Democratic thinker means you cannot allow everyone who wants to join your society to come,” Frederiksen says. Otherwise, “it’s impossible to have a sustainable society, especially if you are a welfare society, as we are.” High levels of immigration can undermine this cohesion, she says, while imposing burdens on the working class that more affluent voters largely escape, such as strained benefit programs, crowded schools and increased competition for housing and blue-collar jobs. Working-class families know this from experience. Affluent leftists pretend otherwise and then lecture less privileged voters about their supposed intolerance.

“There is a price to pay when too many people enter your society,” Frederiksen told me. “Those who pay the highest price of this, it’s the working class or lower class in the society. It is not — let me be totally direct — it’s not the rich people. It is not those of us with good salaries, good jobs.” She kept coming back to the idea that the Social Democrats did not change their position for tactical reasons; they did so on principle. They believe that high immigration helps cause economic inequality and that progressives should care above all about improving life for the most vulnerable members of their own society. The party’s position on migration “is not an outlier,” she told me. “It is something we do because we actually believe in it.”

Can this be applied elsewhere? Not every country is Denmark, of course,

The Brahmin Left:

In earlier eras, some of the biggest concerns about high levels of immigration came from the political left. Progressives worried that it would hurt the most vulnerable members of the society where they were arriving. As A. Philip Randolph, the American labor and civil rights leader, argued a century ago, “The excessive immigration is against the interests of the masses of all races and nationalities in the country.” By the late 1960s, however, the political left was starting to change. Students and intellectuals on both sides of the Atlantic were becoming more influential, energized by the movements against nuclear arms, pollution and racial and gender discrimination.

The French economist Thomas Piketty has coined the term “Brahmin left” to describe this new version of progressivism. (Brahmins are the highest caste in India, and Protestant elites in Boston came to be known as Brahmins.) In Piketty’s telling, the term captures the shift of the political left away from its working-class roots toward a more affluent, academic version of progressivism that focuses on social issues and cultural identity rather than economic class. This shift helps explain why the Democratic Party and center-left parties in Europe once won voters without college degrees by wide margins and now lose this same group.

Immigration is a natural issue for the Brahmin left. The old left worried that a labor pool swollen by immigration would undermine unions and lower wages. The new progressives focused instead on the large benefits for the new arrivals. Immigration was a way to help the world’s poor, many of whom were not white. The advocates for the 1965 law in the United States considered it an extension of the civil rights movement. In Europe, the issue was a way to make amends for colonialism. In both places, it was also a response to the failure to protect Jews during the Holocaust.

The Brahmin left paired its arguments for racial justice with economic and cultural arguments. Immigrants start new businesses and provide labor that makes other businesses possible. In doing so, they expand a country’s gross domestic product. They invigorate the countries where they arrive, diversifying food, music, sports, art and other forms of culture.

What happens when the bill finally arrives?

By the 1990s and early 2000s, rising immigration became a signature feature of post-Cold War globalization, celebrated by nearly every politician and intellectual who seemed to matter, including Tony Blair, George W. Bush, Bill Gates, Milton Friedman and liberal academics who agreed with Friedman on little else. In 2015, Chancellor Angela Merkel of Germany famously exhorted her country’s citizens to welcome waves of refugees from the Middle East. “Wir schaffen das,” Merkel said: “We can do this.” Think tanks and journalists trumpeted the advantages of immigration. Academic economists shed their usual skepticism about free-lunch arguments and claimed that immigration benefited everyone.

But most voters in the receiving countries were never as enthusiastic. As liberals recognize in other circumstances, a policy that lifts G.D.P. doesn’t necessarily benefit everyone. Rapid immigration can strain schools, social services, welfare programs and the housing market, especially in the working-class communities where immigrants usually settle (as happened in Chicago, Denver, El Paso, New York and elsewhere over the past four years). Many studies find a modestly negative effect on wages for people who already live in a country, falling mostly on low-income workers. A 2017 report by the National Academies of Sciences, Engineering and Medicine, intended as a comprehensive analysis of the economic effects of immigration, contains a table listing rigorous academic studies that estimate immigration’s effects on native wages; 18 of the 22 results are negative. The Brahmin left sometimes waves away these effects as too small to matter. The workers who experience them feel differently. Corporate executives feel differently, too, which explains why they often push for higher immigration to restrain wage growth.

This is a very, very informative read and I encourage you to read it in its entirety.

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We’ve covered South Africa in previous SCRs, so I apologize to those of you who are a bit done with the subject. To me, it’s a fascinating drama; a highly-developed country slowly de-developing by design due to its political system and to human greed.

When the distant-from-Africa Normie thinks of South Africa, he/she will automatically think of Nelson Mandela and the campaign to free him from prison. A story with a happy ending for all except maybe the supporters of Apartheid. The truth is very different, of course, and Lawrence Thomas has chosen to explain to us why that is:

South Africa is what happens when a country becomes ungovernable. From endemic sexual crime to farm murders, rolling blackouts, and expropriation, the rest is just the details. What has come to be termed “South Africanization” is not the failed development of a Third-World nation such as Afghanistan or Somalia, but the structural de-development of a once fully modern state that had its own nuclear weapons program. President Trump’s support of Afrikaner farmers has brought global attention to the decaying state of the country and is perhaps the most high-level recognition yet that the 1990s “Rainbow Nation” dream is dead. What’s strange about it all is how much of it happened on purpose.

What may be worse is that the very system of law and government itself has become an instrument to be captured and used to further the mass looting of the country. South Africans of all races inherit a Western political culture and economy. The average South African experiences a strong civic identity, highly active political parties, popular national media networks, a market economy, and a parliamentary constitutional order. The last thirty years saw a coalition of political actors, patronage networks, and organized criminal gangs seize control of and use all the infrastructure of modern government for their own ends.

State-driven radicalization:

The combination of social progressivism with an economic model of managed decline has become orthodoxy in many establishment parties across the developed world. South Africa is a study of the political phenomenon in its advanced stage and a demonstration of what is at stake in defeating it in the rest of the Western world. Flip Buys, leader of the Afrikaner trade union Solidariteit, was likely prophetic when he foresaw that South Africa would become home to the “first large grouping of Westerners living in a post-Western country.”dens a widespread movement that sees land redistribution as the sole resolution to the country’s racial conflict and views the presence of any white population as fundamentally illegitimate. The radicalization of race politics is the means through which political fights are won, since it plays on the country’s major divides and wins over those who feel left out of the spoils.

On the ground, reports tell of ANC officials tacitly allowing invasions of private and public land by squatters. Occupations of this sort have sometimes preceded the farm murders which have gained media attention internationally, and squatters have now begun to invoke the Expropriation Act. Such groups become the shock troops of political pressure: they can harass and pressure the occupants of the lands they occupy, or worse, while becoming a media story about the “landless oppressed” used to justify broader government action. The broad facilitation of ground-level conflict and crime by those with political power is the defining feature of South Africanization.

Persistent decay:

In other words, decay is a burden without benefit. There is no “rock bottom.” Business, political organization, social fabric, and all other forms of Western cultural life just face increasing costs. Some are direct, while others are opportunity costs: how much doesn’t happen because almost no one can guarantee electricity? In a relatively developed country, there’s still much more to break down and expropriate.

The combination of social progressivism with an economic model of managed decline has become orthodoxy in many establishment parties across the developed world. South Africa is a study of the political phenomenon in its advanced stage and a demonstration of what is at stake in defeating it in the rest of the Western world. Flip Buys, leader of the Afrikaner trade union Solidariteit, was likely prophetic when he foresaw that South Africa would become home to the “first large grouping of Westerners living in a post-Western country.”

Click here to read the rest.

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It’s all very, very long selections this weekend, friends. Sorry about that!

Up in the Great White North, the Trudeau-led Liberals were headed towards an electoral wipe out of historical proportions, until President Trump decided to publicly bait Canadians via what-must-be-jokingly threats to turn their country into the 51st state. Since then, the post-Trudeau Liberals have seen their prospects ascend like a phoenix risen from the ashes solely due to a backlash against Trump.

The history of Canadian-American relations is more complex than one might think, and my friend

has published a killer deep-dive into its history:

Nemets

On the Historical Unity of Americans and Canadians

“Canadians have relatively few binding national myths, but one of the most pervasive and enduring is the conviction that the country is doomed” – Andrew Potter…

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11 days ago · 105 likes · 41 comments · Peter Nimitz

Here’s an excerpt:

The divide between Patriot and Loyalist causes in North America was primarily ideological and sectarian rather than national or sectional. Those sympathetic to republicanism rallied to the Patriots regardless of their region or background, while those who felt affinity to imperial institutions or whom believed in the “mixed constitution” rallied to the Loyalists. Two Patriot generals, Moses Hazen and James Livingston, came from Quebec’s English-speaking population, as did perhaps half of the four hundred and fifty men in their two units – the First and Second Canadian Regiments. The remainder, heavily drawn from French veterans who had settled in Quebec following the French and Indian War, were described as a dissolute lot, unattached to their native Catholic Church. American republicanism didn’t just appeal to those whom were parts of democratic assemblies, but also those unattached to any institution but whom still aspired to play an active role in shaping the fates of their at best partially-formed communities. At the end of the war, the survivors settled in New York’s Hudson Valley. Had the invasions succeeded, they would have likely been the rulers of the American state of Quebec.

The failed invasions of Quebec were followed in 1776 by a Patriot invasion of Nova Scotia. Local Patriot sympathizers invited a Massachusetts militia force to conquer the colony. It was defeated. Nova Scotia’s Patriot sympathizers fled to Maine and established a settlement there.

The settlement of the Patriot volunteers from Quebec and Nova Scotia in the United States during and following the American Revolution was only part of a larger population exchange – an exchange which added a sectional and eventually national angle into the existing ideological and sectarian divides. About fifty thousand Americans and ten thousand Europeans who fought for or sympathized with the Loyalist cause settled in Quebec and Nova Scotia following the conclusion of the war, septupling the English-speaking population of Canada. Previously only divided by loyalty, the English-speakers of North America were now divided by an international border.

Like I said, it’s a deep dive. If you’re interested in reading this history, click here.

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Recommend Fisted by Foucault to your readers

You’ll never think of Foucault the same way again