Politics

Трамп неге Қытайды қорқыта алмайды?

Feb 9, 2017 Kenneth Rogoff

КЕМБРИДЖ – АҚШ президенті Дональд Трамп соғыстан кейінгі әлемдік экономикалық тәртіпті тұрақсыздандыруды жалғастырып, әлемнің көп бөлігі еркін әрі терең дем алмай тұр.

Комментаторлар оның қазіргі заманғы либералды демократияда көшбасшылық пен толеранттықтың дәстүрлі нормаларына жасалған шабуылын сипаттау үшін лайықты сөздерді іздеуде. Жетекші БАҚ жеткілікті ақпаратсыз өз айтып тұрғанына кәміл сенген президентке тап болып, оның шын мәнінде жалған мәлімдемелерін өтірік сөз деп айта алмай тұр.

Бірақ кейбіреулер хаос және бос сөздің астында жаһанданудан Трамп әкімшілігінің бас тартуының экономикалық негіздемесі бар деп айтар. Бұл пікір бойынша, АҚШ Қытайға үстемдік бере отырып үлкен қателік жасады және күндердің күнінде американдықтар қатты өкінетін болады. Біз, экономистер, АҚШ-тың әлемдік көшбасшылықтан бас тартуын тарихи қате деп санаймыз.

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Kenneth Rogoff

Writing for PS since 2002
243 Commentaries

Kenneth Rogoff, Professor of Economics and Public Policy at Harvard University and recipient of the 2011 Deutsche Bank Prize in Financial Economics, was the chief economist of the International Monetary Fund from 2001 to 2003. He is co-author of This Time is Different: Eight Centuries of Financial Folly (Princeton University Press, 2011) and author of The Curse of Cash (Princeton University Press, 2016).

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0 Comments on this paragraph, 84 Comments on this article

Sam Ward Feb 23, 2017

In the spirit of economics it is important to identify the few facts that are available. There was no mention of the duties for imported products in either country. While we know how much US debt China owns, there was no mention of the percentage of China's GDP generated through sales to the US. This would certainly reflect how much China depends upon US consumerism. Additionally, China is not significantly manufacturing any complex or high-tech products. If a duty were levied against imports from China, it wouldn't take long for corporations to move operations to other countries if they needed to. I think people are missing the story here. If the US and other countries tax Chinese imports, it might force China's hand to open it's highly controlled economy in order to maintain income generated from exports.
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Peter Schaeffer Feb 18, 2017

"Commentators search for words to describe his assault on conventional norms of leadership and tolerance in a modern liberal democracy. "

A President who cares about the American people is definitely a new thing. We haven't had one in a long time.

"The mainstream media, faced with a president who might sometimes be badly uninformed and yet really believes what he is saying, hesitate to label conspicuously false statements as lies. "

Wow. What BS. Consider the following.

"It fact, the TPP would have opened Japan far more than it would have affected the US. Rejecting it only opens the door to Chinese economic dominance across the Pacific."

Every trade deal since 1990 has been sold with lies lack the one above. All have failed the American people. But Trump is a bad guy who doesn't tell the Trump. Mainstream economists have been lying for decades and now they are getting caught.

"US populists, perhaps inspired by the writings of Thomas Piketty, seem unimpressed by the fact that globalization has lifted hundreds of millions of desperately poor people in China and India into the global middle class. The liberal view of Asia’s rise is that it makes the world a fairer and more just place, where a person’s economic fate does not depend quite so much on where they happen to have been born. "

So US populists care about the American people... Shocking really. How about a few economists who care about the American people? Not going to happen any time soon.

"Unfortunately, with this attitude, it is hard to see how America can maintain the world order that has benefited it so much for so many decades. And make no mistake: America has been the big winner."

Any country (such as the USA) with massive trade deficits is a huge loser... Just the facts.

The U.S. runs a 4:1 trade deficit with China. We have as much leverage as we want to get a better deal with China. If China threatens other nations in Asia, they can deal with it. The idea that we should sacrifice American economic interests to help China (or other nations in Asia) is absurd.

The bottom line here is easy. America has spent too many years listening to pampered Ivory Tower economists who are all too wiling to sell their fellow Americans down the drain. Time to listen to the people instead.
- shanmugham anand Feb 21, 2017
  
  well said,peter!
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Peter Schaeffer Feb 18, 2017

A Mr Lighthizer (now in the Trump administration) wrote the following back in 2008.

"Modern free traders, on the other hand, embrace their ideal with a passion that makes Robespierre seem prudent. They allow no room for practicality, nuance or flexibility. They embrace unbridled free trade, even as it helps China become a superpower."

A fine critique of the "conventional wisdom" on trade that has wrecked the US and is wrecking Europe now.
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Mauricio Duran-Loriga Feb 17, 2017

Since 1945 US aircraft carriers have reigned supreme in their task of policing international trade against undesirable disruptions. Not any longer. China Dong Feng 41 ICBM is capable of sinking aircraft carriers without detection, rendering the US fleet good for Hollywood movies.

This is THE reason behind dethroning US world leadership, as no insane US President will dare threat an enemy that can leave the empire in cahoots by the next ten minutes.

The Trump story and the Rogoff et al leftist lobby are just agit-prop fanfare to avoid coming clean to the general public with the pants at the ankles' level. Better to terrorize the dumb lambs with fictional enemies and nuclear winters.

The postwar global economic order has been shaken as Russia and China have overtaken the US critical military capacities.

Trump is adjusting the country to its new place in the chessboard.

"Anti-globalization movement" looks like a terrific populist motto supplied by Hollywood screenwriters. Wag the dog.
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Manu Oquendo Feb 15, 2017

The argument that goes as "this wave of globalization has lifted hundreds of millions out of poverty" is true. But USA and European Citizens do not elect their governemnts to Work for China, Vietnam, or India while our pouplations get lied to and with degraded economic horizons for them, their children and their grand children who will have to pay current debts and live miserable lives.
The situation is untenable and the Academy should face it and try to find solutions. Long overdue.
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Manu Oquendo Feb 15, 2017

Free trade can be good and can be bad. It is not always good. There are winneres And losers. Not everybody is a winner. In fact, winners are few and far between. So mostly are losers.

See Raymond Barre's text books of the sixties proving it mathematically. Now, since the 70's Barre is politically incorrect.

Who pays the externalities od the losers? The losers? Why should they?

The Bretton Woods Order, with all its shortcomings, was a much better system for the world.
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Stephen Pain Feb 14, 2017

I recognize that China has a huge population and its need for resources are great, but it has adopted a similar approach to Japan in the 1930s. The entire communication infrastructure of Latin America and Africa has a Chinese component, especially government IT systems. On top of this China as Japan did in Manchuria has concentrated on the taking of raw materials and selling in return the manufactured goods. In other words the colonialist model of the British Empire. Several countries are now complaining of the purchase of private land and the militarization of ports. That is the US model. The grabbing of territory and keeping it. That is the Russian model. One cannot blame China, but it must stop doing this because it will lead to depletion of resources and to conflict. I would prefer China kept to the green model of the Paris agreement and started to rethink its imperialism.
- Hsnio Shu Feb 24, 2017
  
  Mr. Pain, there is huge difference about your point on Japan vs China. There is no Chinese military in Latin American and Africa. Obviously, there is no killing.
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- Hsnio Shu Feb 24, 2017
  
  Mr. Moriyama, it is very touching when you started your comment with “…I do not intend to deny that Japan had an aggressive, colonial policy…”. From the same paragraph, I have to point out your Japanese right-wing revisionism at making another alternative facts. The reason Mao entered NE China in the late 1940’s was to receive the weapon and ammunition left by Japanese army from one of the WWII victors, Russia. The building of industrial base, mainly mining and railway, started in the late 1920’s that helped fund Japanese further invasion into China and East Asia. These industries obviously could support the Korean War later in many ways, not contribute to the rapid paced Chinese civil war. In a grand scheme of things, your intentional misinterpretation here is small. But, I know why.
  
  Then, you said “Japan spent more money on Korea and Manchuria that it made from them”. What are you trying to justify, the invasions? Even if this is true, to you, the Korean and Chinese people were killed and slaved didn’t cost Japan anything. I can see that you don’t care.
  
  By the way, the name of Manchuria was created by Japan. 100 years later, you are still pushing the same. It is clear where your colonist mindset came from and is at it, just like Abe I have to add.
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- Yoshimichi Moriyama Feb 15, 2017
  
  Mr. Pain,
  I do not intend to deny that Japan had an aggressive, colonial policy in its modern history but it seems to be generally little known that it was the best colonial master of all time. Manchuria was the most industrialized part of China in 1945 and Mao took it. It was a big reason why Mao defeated Chiang Kaishek. Japan spent more money on Korea and Manchuria that it made from them.
  There are three Confucianist countries in the world, China, Korea and Vietnam. Japan is not a Confucianist country. I understand Vietnam fought China more than eighty times in the past two thousand years. Korea is a more Chinese-like society than China is.
  
  I will appreciate very much if you are interested and read my rather lengthy comment on EastAsiaForum/Kazuhiko Togo/The "Comfort women" issue after the fall of Park Guen-hye/February 9, and my two comments on cfr.org (the Council on Foreign Relations)/Sheila Smith/Looking Ahead in Asia, With Our Allies/November 30, 2016.
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Jose araujo Feb 14, 2017

"US populists, perhaps inspired by the writings of Thomas Piketty, seem unimpressed by the fact that globalization has lifted hundreds of millions of desperately poor people in China and India into the global middle class."

Cheap shot, shame one Mr. 90% debt and prophet of the expansionay austherity...
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G. A. Pakela Feb 13, 2017

The Chinese have been practicing a very effective trade war with the U.S. from the start. U.S. markets are open to a plethora of Chinese good. The same is not true of China where even the U.S. film industry is limited to the number of films that can be distributed in China for a profit. The Chinese are also guilty of dumping steel form their excess capacity that would not exist but for heavy state subsidies. Technology must be transferred to China. What would China do if the U.S. starts to ratchet up the pressure? Their economy is dependent upon exports. What about the threat to sell of Treasuries? So what, the Fed is sitting on a multiple of the Treasuries that the Chinese own through it QE policy. Any massive and disruptive sale could be offset by another round of QE.
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Peter Burgess Feb 13, 2017

The value of international trade has been recognized for centuries. In the aggregate the global economy is more efficient with trade. The devil, however, is in the detail. Who is it that gets to benefit and is the allocation of this benefit fair? In the case of the trade between the US and China, business investors have done very well with profits soaring even while prices remained quite stable ... but this profit came from less employment for American workers at high wages and more employment for Chinese workers at low wages. As long as we use GDP growth as the measure of progress, China has been booming for the last 30 years, and the US economy has been doing only moderately well ... and workers in the US have done rather poorly since the early 1980s. US workers have every reason to be angry at the way the system has worked for them ... and it should not have come as a surprise that they have voted for change ... even Trump's change!
Peter Burgess http://truevaluemetrics.org
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Soren Jensen Feb 13, 2017

Somehow Mr Bernie Sanders name snug into the article with the statement that Denmark is a relative homogenous country and Bernie Sanders might have mentioned that the country has a very low tolerance for immigration. It is correct that Denmark is a nice place to live and they are doing many things right. I am born in Denmark. lived there 40 years and now almost 37 years i USA. What Senator Sanders did say was that Denmark has universal healthcare and the education after high school is free. This is what's missing in USA. Taxes are high in Denmark, but in the end it is what you get out of it. Health care is a right fro all people poor or rich and should have nothing to do with benefits from a company. And by the way Denmark has about 250,000 immigrants or about 4% of the population. Compare this to USA.
S Jensen
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William Cash Feb 13, 2017

It's an interesting because from what I've read, Trump is heavily indebted to the Bank of China. So we'll have to wait and see how it plays out. Trump already lost the first round.
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Janos Nagy Feb 13, 2017

Maybe first Mr Rogoof can explain how this so called globalization works.
Interestingly profits were globalized but they forget to globalize taxes and regulations like minimum wages.
I bet that this so called globalist economic system will cost an other 20 trillions in new debt in the next 10 years to the USA.
There is nothing explained in this article in economic terms but as lately PS became a leftist political platform and not an independent discussion forum.
And just talk about the 100 millions of people in India and China were moved up to the middle class. It would have cost less just send them the money instead of deficit finance the trade deficits.
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Andrew (Andy) Crow Feb 13, 2017

Economists really do the world a disservice when they perpetuate myths based on false models. One of the most dangerous myths is that spending on the military generates a profit to the economy as a whole. I'm not suggesting that defence spending is necessarily wasted in an uncertain world, but it belongs very definitely on the debit side of the balance sheet. Defence spending is an overhead cost it cannot reasonably be placed in the asset column.
Economists were quick to point this out in terms of the Soviet regime which was criticised for building weapons systems while its people lived in poverty. One finger points and three point back.
- Michael Public Feb 13, 2017
  
  Thanks Andrew. A good exercise in seeing whether expenditure is worthwhile is to imagine you spent the money on only that (and say food). What would the quality of life be like?
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Jon Quirk Feb 13, 2017

Excellent article but, being fact and logic-driven it will not be read, and certainly not understood, by Mr Trump who most needs to read it.

Mr Rogoff can you perhaps do a cartoon strip, starring Mr Trump in a skin-tight Superman body-hugging suit, and run it along the lines of a super-hero (and super-ego) saving the World?

The message must be the same but at least this way it has a chance of being both "read" and understood.
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Maria Lin Feb 13, 2017

This article is raising China as the Middle Kingdom. Is it?
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Cary Fraser Feb 12, 2017

Trump's behaviour reflects the limited historical literacy that infects many of his supporters - both rich and poor. the rise of China and the wider Asian region has brought an end to the brief era of American primacy. Trump is a product of resentment and it will require a more intelligent leadership generation to move America beyond its current political morass.
- Andrew (Andy) Crow Feb 13, 2017
  
  Cary Fraser, you hit the nail on the head. If Donald Trump's presidency does nothing else it will serve the world well if it brings some intelligent people out of hiding and into the realms of government and influence.
  Professor Rogoff's article is symptomatic of much that is wrong with the present crop. I'm sure he means well, but that is not enough. He is a spokesperson for those who would argue the toss about the disposition of deckchairs on a sinking ship whilst complaining that the iceberg shouldn't have got in the way.
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Andrew Cole Feb 12, 2017

Or put another way why China can bully, Philippines, Vietnam, Thailand, Korea, Japan, Indonesia, and Taiwan. Why are you setting such different standards based on white western v any other combination? Rather proving Trump's point I think. Applying the clash of civilisations interpretation of the dangers to the survival of the west, President Clinton probably was the worst traitor we have had - by laying down the groundwork for a challenge from China, 2 versions of Islam, and a resurgent Russia. Generally rolling over does not work in any "negotiation" even an international one, and that is a problem that cultural relativists will never understand.
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William Ryan Feb 12, 2017

If I remember correctly it was Deutsche bank that was widely defrauding its customers. The story can be found at WallStreetonparade.com ...I think Trump is right to be putting America First for a change rather that the predatory oligarchs who put China first for the past 20 years. I know that they can make the case blame it on technology and innovation but there is conflicting data on that from the World Bank. Yes we do not want a trade war, just a fair chance to compete with more open and fair trade policies and restructure globalisms concentrated political power...
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Delia Ruhe Feb 12, 2017

“We economists tend to view abdication of US world leadership as a historic mistake.”

This view is really unfortunate, given that the American political class is right out of leadership material. The Republican Party can offer the electorate only a parade of clowns as presidential hopefuls, while the Democrats, who’ve been polishing up their neoliberal, Republican-Lite act since the early 1990s, cannot read the writing on the wall and torpedoed the popular agenda of Bernie Sanders in favour of the unpopular neoconservativism of Hillary “Regime Change” Clinton. Perhaps more important, members of both parties agree when asked by journalists about private sector money corrupting politics, yet no one in either party will even consider drafting legislation to fix the problem. In addition, every 4 years the issue of the antiquated Electoral College is raised, but the political establishment continues to cling to it as protection from out-of-control populism (i.e., protection from actual democracy). Well, that excuse has now badly backfired — which is of course no guarantee that Americans have seen the end of that dangerous institution.

If economists are so convinced that the “abdication” of American leadership is such a mistake, economists should get together and hammer out a new model. After all, it was a gang of economists (identified with the University of Chicago) that succeeded in convincing the Reaganites and the Thatcherites that viewing civilization exclusively through the prism of economics is the only way to go because TINA. Thus we ended up with a fancy retread of turn-of-the-century economic “reciprocity” — a system that didn’t work back then either. It didn’t work then and it doesn’t work now because it denies a fundamental truth: the role of capitalism is to create wealth; the role of government is to distribute it — or, more accurately, some of it. When Reagan said that “government is not the answer, government is the problem,” he was being his usual early-stage Alzheimers self: for it was government by the people, for the people, of the people that ultimately perished from the Earth. Who needs government when Americans have the Koch brothers.

“Rejecting it [the TPP] only opens the door to Chinese economic dominance across the Pacific.”

Maybe it’s China’s turn. They couldn’t do much worse than what über-financialized America did prior to 2008 — and what it promises to do again as soon as Trump deep-sixes what’s left of regulations intended for the protection of labour, consumers, and the environment, the three constituents absent from the “free trade” negotiating table because they are on the menu, served up in a sauce of their own blood.
- Andrew (Andy) Crow Feb 13, 2017
  
  Delia Ruhe, it's not just the American political class that is deficient in talent and vision. There is a global deficit.
  I suspect part of the underlying problem is that we have a 'political class' at all - it is inimical to democracy that we have professional politicians. We do need professional administrators - if it worked well (which it doesn't currently) and was held properly to account (which it isn't) the British civil service is a good model. The theory is that representatives of the people set policy vision and direction and the civil service specialists, skilled in implementation of process make those policies come to fruition. I expect a similar variation of this is the theoretical model in the US.
  You have government and executive. Once those roles become confused or worse still reversed the vehicle goes off the road. The tail wags the dog. We all go to hell in a handcart.....pick your favourite simile or metaphor for the world you see about you.
  It is said that if a manufacturer (engineer, craftsperson) runs a business it will never make money, but if it is run by an accountant it will never make anything. As in all the best jokes there is an element of truth in this.
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- William Pu Feb 12, 2017
  
  "Abdication" sounds lot better than "losing out".
  
  If you spend money you don't have on something you don't need in the first and find yourself having to borrow money w/o a repayment plan then God can't help you much less economists or Donald Trump.
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Mikhail Drabkin Feb 12, 2017

Truth is fact multiplied by beliefs.
Dr.Rogoff if vested in the belief in globalization.
This article is merely an opinion. No proof possible without applying the past to the future. Past is is a comfort food for those who predict the future.
All knowledge is a model.
Go away Dr. Rogoff with a model that benefits hundreds of millions of Chinese and Indians. How does it help to tthe non-technologistas? Low prices at Walmart and Target - thank you very much, but Anerica CAN do without!

To those comments that lure into the robotized future by fantazies about "invent a system of a more just distribution of profits.." I say - will never happen.
Redist Facebook and Google, or you risk the future of your children!
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Hergen Heinemann Feb 12, 2017

Maybe somebody could take the risk to inform Trump, that the trillions of USD-nominated papers China is holding have their origin in the fact that the US has printed a lot of paper, printing US$ on it and that China has taken these papers as "compensation" for their deliveries to the USA; and that the USA by this funny behaviour of the Chinese was able to consume more than it produced; thus creating a lot of wealth for the US consumers; so much that these amounts for some years were as high as the US defence budget. If you wish you can say that for these years the Chinese have financed the US defence budget. Isn`t it?
- William Pu Feb 12, 2017
  
  Don't encourage him. Donald Trump might just print a few trillion dollar bills and hand it over to Xi JinPing and say we're even. What is Xi JinPing gonna do? Walk over to Walmart and buy back everything in sight that were made in China in the first place?
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Keith Johnson Feb 12, 2017

Statements like "We economists tend to view abdication of US world leadership as a historic mistake' confirm that Rogoff is a second class mind. His arguments are muddled and nationalistic. For example, slagging Piketty as anti-growth in all circumstances is ridiculous. And why for heavens's sake should any Mexican politicians be 'sympathetic to US interests'? And in whose name is America 'maintaining world order that has benefited is so much'? What a load of old cobblers!
- Andrew (Andy) Crow Feb 13, 2017
  
  Zeger, "to lead the world into an abyss of ignorance and stupidity" ? Look around you Zeger. You describe where we are and what we need to get away from. If you are comfortable bobbing around in this septic tank it's probably an indication that you are floating near the top. It's not very nice further down.
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Mirek Fatyga Feb 12, 2017

perhaps a better way of phrasing this article would be:
US with ~5% of of world population, is still consuming ~20% of world oil production. About 50% of this consumption has to be imported, unconventional oil notwithstanding. In the last 35 years the world population increased by about 3 billion, most of it outside of the developed world. By straight extrapolation, the production of oil would have to about quadruple to bring everyone in the world to the US standard of living. With efficiencies, perhaps it only needs to double, except that the population is still growing, though not quite as fast as it was in the mid XXth century.
In summary, some loss of living standards in the developed world was inevitable and remains inevitable until technology progresses to develop substitutions. Electrification of transportation is a good step forward, though I do not pretend to know what other solutions may be even better. Western governments could have managed this transition better, particularly by spreading the pain more evenly, but the pain was and remains unavoidable.
If the US retreats into some mix of autarky and/or international aggression to capture resources it would need to maintain the standards of living without technological change, the US will (a) decline precipitously (see Argentina), and (b) likely cause a sequence of wars as many declining world powers have historically done, and one of these wars may just culminate in a nuclear strike on the US territory.
There.
- William Pu Feb 12, 2017
  
  Birth lottery winners are seeing their winnings depleting. Scary!
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shanmugham anand Feb 12, 2017

The author advocates appeasement of China!
- Z. De Vries Feb 12, 2017
  
  No, he warns for the consequences of underestimating China, or overestimating the power of the US, as 'so-called' president Trump does.
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William Pu Feb 12, 2017

If you've been in a high school, most adults have, you'd know that bullies never pick on victims their own size.
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Martin Yuille Feb 12, 2017

Thomas Piketty must get under Rogoff's skin.

Rogoff claims Piketty opposes globalisation. And he claims that the most learned and widely-read political tendency of "US populists" are inspired by Piketty.

Never let facts get in the way of good old fashioned prejudice, Kenneth, but you really should know that Piketty seeks reform of globalisation - not an end to it.

He wrote that "globalization must be fundamentally re-oriented .. to promote a model for fair and sustainable development". See https://www.theguardian.com/commentisfree/2016/nov/16/globalization-trump-inequality-thomas-piketty.

It is the long-term failure of politicians - not the failure of the process of globalisation - to adopt such a model for globalisation that has created the ideological space for the likes of Trump.
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David Neunuebel Feb 12, 2017

Interesting but the crack about Bernie Sanders was unnecessary to make the point and sophomoric. B- on this paper.
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John Ellis Feb 12, 2017

All basically true hence the telephone call in which basically Trump ate humble pie.
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Stefan S Feb 11, 2017

Globalization is losing favor because looting by the leadership class is resulting in a misallocation of resources. Despite being a heterogenous nation of immigrants, America is wealthy enough to afford better access to jobs, education, and healthcare, but for the likes of thinkers like Rogoff.
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P. Kamath Feb 11, 2017

'.... In fact the reverse is true. China is vulnerable to Indian aggression...' How so! It is true, India has amassed considerable military force at the borders facing China, but will it ever have the will to fire back and take the offensive against China any time even provoked directly or through its proxies? Never, China prefers that way too!
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Dark Chocolate Feb 11, 2017

"Moreover, huge swaths of Asia, from Taiwan to India, are vulnerable to Chinese aggression."

I don't know about other countries, but India is not vulnerable to Chinese aggression. In fact the reverse is true. China is vulnerable to Indian aggression.
- John Reid Feb 11, 2017
  
  More to the point, just what evidence can Mr Rogoff produce to support his implicit claim that China is even thinking about military adventures? Has it not occurred to him that first, China has been able to watch the US driving its national debt ever higher through defence spending, and second that it could cause the US far more trouble by simply refusing to buy its bonds at the sort of yields that are currently on offer? The US has long been the recipient of the world's larges aid programme. Cutting off the supplies of cash would cause a great deal of trouble.
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David Garland Feb 10, 2017

As I stood in line at the supermarket yesterday, both the woman in front of me and the woman behind were using WIC. And these are the 'good times' before the next recession/depression. Tell me again how much better off the US middle class is (and how happy we all should be that we get to shop at Walmart).
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Yoshimichi Moriyama Feb 10, 2017

This is a too simplistic analysis, apart from still unclarified uncertainties of the Trump administration's policy. Economists are amazingly neglectful of the important roles that are played by other kinds of social institutions, traditions and customs for economic activities other than economic institutions.
China has benefited a great deal from economic and political liberalism of the Western world including Japan, but it is least mindful by dint of its culture of protecting the liberal order. It cannot think otherwise; it cannot act otherwise. Economic policy is always subjugated to political policy. To have good understanding of Chinese economy requires to have good understanding of Chinese history and political culture.
- Yoshimichi Moriyama Feb 14, 2017
  
  Dik, thank you for your reply.
  We live in an age of big organizations, and big organaizations have much influence on the market and the market is warped.
  Galbraith also said our capitalism produces a lot of junks and what we truly need is little produced. We do not know it because our information world is warped.
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Jan Czaja Feb 9, 2017

Mr. Rogoff, I'm going to go out on a whim over here and speculate that part of the reason that Trump is acting this way is due to the "unfair" nature of trade with China. I think that we all agree here, even Trump, although he wouldn't say it in public, that manufacturing jobs are note coming back. That's not the point. What I don't understand is the economists' limited coverage of China's mercantalist / protectionist policies and how they effect US trade. For example, China essentially forces our companies into joint ventures with their state owned companies in order to "steal" our technology so they can sell back the same product to us in 5 years for 10% of the price. This plus many other examples are somehow given limited coverage, yet are "yuge" part of the reason for Trump's behavior. Trump's a capitalist and as all capitalists wants to make money. If China can sell to us, we should be able to them as well, but we have to play by the same rules. Otherwise, let the trade war begin.
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Bernard Fudim Feb 9, 2017

China will still conduct internal and foreign policy, that serves its own best interest rather than the best interest of the world. If tariffs increase the Chinese will lower export prices and further manipulate their currency to attempt compensating for lost sales. Lower prices and a deflated Chinese currency will encourage Japan and other Pacific customers to think about raising their own tariff barriers. China wants to own the South China Sea and no amount of American imports will change their determination. Chinese militarization will not be deterred by elimination of tariffs.
Despite our being a major trading customer, China has not shown any willingness to suffer the consequences of completely isolating North Korea. If North Korea were to attack South Korea, China could sit back as an observer because South Korea only has meaning for them, as a competitor for Chinese products on the international market.
- Andrew (Andy) Crow Feb 13, 2017
  
  If the US and China go head to head in a Trade War, Currency War, Cyber War or more Conventional War both sides lose and the collateral damage will be immense.
  In a zero sum game the best possible outcome is zero, but there is always risk of the worst possible outcome of mutual damage which is a negative product.
  If the current trade balance is wrong it must be adjusted not destroyed and that is the work of traders and diplomats.
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Michael Public Feb 9, 2017

Far more convincing than any of your reasons as to why China can't be bullied is a user comment from another article. User is Godfrey Roberts. I paste his comment below.

""Given China’s dependence on exports, even the best-case scenario is likely to lead to some decline in China’s potential growth... the existing global trading regime will unravel, with China as one of the biggest casualties".

Hardly. China is less export-dependent than Canada, and far less dependent than, say, Germany.

Exports contribute 18% to China's GDP, and exports to the USA constitute 18% of that. But those percentages are based on nominal, WTO figures. China's exports to the USA contribute less than 20% of the WTO figure because most, like iPhones, contain a high proportion of American I.P.

So China's exports to the US contribute less than 1% to its GDP.

US exports to China, on the other hand, contain 100% American I.P., from genetically modified seeds to computer chips and sequencers. So the US, with its much smaller, much slower-growing economy, would probably suffer more"
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Curtis Carpenter Feb 9, 2017

Professor Rogoff ignores Steve Bannon's publicly-stated belief that war -- not trade war, but actual armed conflict -- is inevitable within the next decade. He also discounts the fact that precedent has been set that essentially dismantles all of the checks and balances that at one time would have prevented Trump and Bannon from starting such a war.
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P. Kamath Feb 9, 2017

Excellent little informative column and very thoughtful readers' feedback. Trump and his surrogates it seems ,are very poor readers of good books!
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Andrew (Andy) Crow Feb 9, 2017

By way of a postscript I should say that were I an American citizen my preference in theory would be to vote Democrat, but since the Democrats have demonstrated that they have little respect for democracy I would be in a quandary about which party deserved my vote. It was a relief in November not to have to make that choice between two candidates in whom I had no confidence. On balance I would probably have supported the candidate more likely to deal with the motes in American eyes rather than the beam's in the eyes of the rest of the nations of the world. And I have mis-rendered that saying as I mean it, not through scriptural ignorance.
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Andrew (Andy) Crow Feb 9, 2017

"The mainstream media, faced with a president who might sometimes be badly uninformed and yet really believes what he is saying, hesitate to label conspicuously false statements as lies."
The mainstream media then, is quite correct. (Now that is news!) A lie is a deliberate falsehood, usually intended to deceive - why else? If Donald Trump believes what he says he may be wrong, but he is not lying. Bill Clinton was a liar. Had he simply told the truth about the Monica Lewinsky affair he would have earned considerably more respect as person and possibly as a president. Had he lied to protect Ms Lewinsky's reputation that might have been considered 'gallant' and worthy of a small credit mark. ( And I bet the presidential cigar came from Havana which would have been a legitimate political issue. A sexual peccadillo is not.)

"We economists tend to view abdication of US world leadership as a historic mistake."
Much of the world population on the other hand breathes a sigh of relief. International political meddling has not been seen on such a scale since the British Empire ruled the world. In both cases the end was/is national self interest. Neither was/is 100% bad nor entirely without merit, but both did/do more harm than good and without any legitimacy beyond 'force main'. Karl Marx's economic theories are contestable, but that 'power corrupts and absolute power corrupts absolutely' is demonstrable.

"Chinese economic dominance across the Pacific."
There is a tacit implication here that China should not be economically dominant in it's own backyard. Er....Why not? The US must surely accept in this age of 'modern liberal democracy' that the nation of the 'yellow peril' of propaganda myth is actually composed of human beings and proper respect is due between nations of civilised human beings. When the prison population mix in the US is proportionate to the different racial/ethnic groups in the States it may possibly be appropriate for the US to consider it has a claim to the high moral ground in respect of civil liberties in other lands. In the meantime win-win trade deals make for good international relations and an increasing understanding, and even merging of, cultural differences. Mr Trump is reputed to be a deal maker. Mr Obama (nice fellow though he seems to be) would apparently struggle to deal a pack of cards.

If the rest of Mr Rogoff's piece continues in this vein of skewed misprision I shall be spared it by reading no more. If there is a sensible conclusion I'm afraid you lost me on the way, Mr Rogoff. Have you considered taking-up a hobby?
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Petey Bee Feb 9, 2017

Warmer, but a ways yet to go.

"Unfortunately, with this attitude, it is hard to see how America can maintain the world order that has benefited it so much for so many decades. And make no mistake: America has been the big winner. No other large country is nearly as rich, and the US middle class is still very well off by global standards."

That one is screaming out at you, isn't it? The country is rich. The middle class are ok. The bottom two quintiles by wealth/income have sunk in the mud, however, and the third quintile is worried that their turn is coming, in the face of tech change and - yes - globalization. Geography concentrates those 2nd and 3rd quintiles in the states that count more in US national politics, and they were Trump's support.

That's the political reality in the US. Continuing to make half-hearted arguments that globalization is good in a vague general sense will do nothing to "help".

China, of course, will not be swayed by any of this, that makes enough sense. But that wasn't what most of this article was about.
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stephan Edwards Feb 9, 2017

So the average worker has to accept that his interests have been completely and utterly sacrificed to make corporations get rich and help the poor of China and the 3rd world. Your words boil down to the trade war is over the working class lost in the name of helping corporations and foreign countries. Congratulations you have left the working class 2 choices: One they will elect someone who makes Adolph Hitler look like a schoolboy or two If the working class decides the elections are no longer anything but jokes internal warfare has the losers take up arms under the theory what do they have do lose. War either way. Congratulations by abandoning the interests of its own people for the interests of big donors, corporations and 3rd world. Our leadership, political, academic and corporate has made a war internal or external inevitable. Bluntly no one believes "our" government has represents any interests but the big donors and this article pretty much admits the governments sold out its own people.
- Jan Czaja Feb 9, 2017
  
  "US populists, perhaps inspired by the writings of Thomas Piketty, seem unimpressed by the fact that globalization has lifted hundreds of millions of desperately poor people in China and India into the global middle class."...I think that says it all stephan. The writer is essentially saying tough luck US blue collar worker. The welfare of corporations and few beneficiaries in third world is more important than you. More of the same from Neoliberals, yet they still wonder about Brexit, Trump's election, and highly likely Wilder's and Le Pen's wins.
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Odyssios Redux Feb 9, 2017

It's completely disingenuous of Trump - or anyone - to suggest that there are ways of 'bringing (industrial) jobs back' from anywhere. Because, due to various aspects of automation, they're nowhere! If you tried to re-create Detroit in its heyday, as an auto producing town, you could - but with only the fraction of the former workforce. If you insisted on employing the original numbers, you'd soon bankrupt yourself, as you couldn't compete with automated lines, in the US or anywhere else. Worse product, more expensive? Hah!

Yes, the globalization train has left the station. But it had done that well before 1914, at which point it was stopped in its tracks by World War 1. Took til after the second round to get seriously restarted. There may be other hiatuses - like now and its likely followup. But (absent massive war short of nuclear) the amount of trade won't go down significantly. For one thing, the population is rising. Things will, absent continuing globalization, simply no longer decrease so fast in price.

AS to Mexico and South America - don't make me laugh. The US' record of interfering in numerous countries there, including the overthrow of governments in seriously large ones - Chile, 1973, anyone? - is grotesque. A fact not lost on local populations, even if it is on the US. Which has not an innocent, but a wretchedly ignorant, view of its own actions there (and elsewhere, but this is not the place ... ).

Piketty's message seems to have been somewhat warped. AS I understand it, he was concerned with the development of gross inequity in the distribution of wealth, particularly over the past (say) 30 years.

For reasons having to do with long term social and political stability, this is an important thing to watch and control. There are ways of doing this other than Balkanizing trade arrangements. Taxation policies come to mind as a first thought.

As to China, Trump is blundering along sustained both by profound ignorance, and ill-founded self-regard. Not good news for the US or anywhere else.

But looming over all this and more, is the fact that within 20 -30 years, there will be very few goods that require more than a smallish percent of the present workforce. Anywhere. What then?

Incipient problems related to climate change we know we don't have to worry about, since El dDonaldo assures us it can't possibly be happening. Such a relief.
- Robert Thomas Feb 11, 2017
  
  Great comments
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- Paul Friesen Feb 9, 2017
  
  You are right. The world of 50 years ago is not coming back. We need to figure out how to deal with automation.
  
  This absolutely does not have to be a tragedy. What we need to do is create a system in which everybody benefits from automation. As automation displaces more and more labour, we need to distribute more and more of the benefits to those displaced. And this does include people who live in poor countries, which never got the chance to industrialize.
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Jerry F. Hough Feb 9, 2017

There is a madness to this kind of piece, which is all we see. There is no understanding whatsoever that we are in a political situation as explosive as the second half of the 1920s, and that Trump is extremely mild in comparison with what is possible.

Rogoff et al say that what a good time it is. The
market was at 750 in 1982 and now is at 20,000, up some 25 times. Wages in India and China have soared as their countries build the base of power we built in the 1880s and 1890s for the American century.. Why should the average Americans complain just because their wages have been stagnant for 35 years?

Utter, utter madness. Rogoff should be exploring to find measures that will ensure that some of the fruits of globalization go to labor and not just the owners of the means of production (the owners of mutual funds). Let us work to ensure that this turns out to be the pro-democracy revolution of 1848, not the anti-democratic one of 1933.
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