I despair that National Review has run such a piece of economic ignorance as Oren Cass’s “Fight the Dragon”, in which he calls on the US to wage economic war on China. The basis of his claim that China’s internal actions harm the US is contained in the second paragraph that trade is a “prisoner’s dilemma”. Nonsense. Trade is win-win. Each side trades what it values less for what it values more. No nation can force another, against its will, to subsidize its economy. There is nothing that China (or Japan, our whipping boy of the 1980s, or any other nation) can do with its own currency or its own industries that can harm the US, except destroy its own economy and, thereby, provide fewer or less valuable goods to the worldwide market in the future.
Send Mr. Cass back to Econ 101. He has a lot to learn…and, frankly, so do the editors of National Review for printing such drivel.
Patrick Barron is a consultant to the banking industry. He teaches Austrian school economics at the University of Iowa and Bank Managemant Simulation for the Graduate School of Banking, University of Wisconsin. Visit his blog. Send him mail.