Nonetheless, there are ways that citizens, acting through the vehicle of their state, can enact policies that prevent them from collectively shortchanging themselves. The historical policy has been import substitution where the nation in question stops importing a given finished good and, instead, cultivates its own manufacturing industry to produce said good through its own raw resources. For example, Tudor England – as described by Daniel Defoe in A Plan of the English Commerce (1728) – stopped raw wool exports and shifted to wool-manufacturing. As a matter of fact, raw wool exports were disincentivized with increased duties and eventually banned altogether. This type of infant industry protectionism paved the way for the England that Adam Smith eventually occupied when he composed his Wealth of Nations to advocate for free trade – free trade eventually makes sense when one is at the frontier of technology and production in a given industry since, at that point, what matters most is finding new markets for what one can already produce.
Forgive the paste but I think this is the key insight you made here. You mentioned the cunning of the Tudors that set the stage for the arrival of capitalism through import substitution. It appears to me (I know no economics) the Chinese did this on steroids, what could the US have done to counteract this force?
Nonetheless, there are ways that citizens, acting through the vehicle of their state, can enact policies that prevent them from collectively shortchanging themselves. The historical policy has been import substitution where the nation in question stops importing a given finished good and, instead, cultivates its own manufacturing industry to produce said good through its own raw resources. For example, Tudor England – as described by Daniel Defoe in A Plan of the English Commerce (1728) – stopped raw wool exports and shifted to wool-manufacturing. As a matter of fact, raw wool exports were disincentivized with increased duties and eventually banned altogether. This type of infant industry protectionism paved the way for the England that Adam Smith eventually occupied when he composed his Wealth of Nations to advocate for free trade – free trade eventually makes sense when one is at the frontier of technology and production in a given industry since, at that point, what matters most is finding new markets for what one can already produce.
Forgive the paste but I think this is the key insight you made here. You mentioned the cunning of the Tudors that set the stage for the arrival of capitalism through import substitution. It appears to me (I know no economics) the Chinese did this on steroids, what could the US have done to counteract this force?