U.S. economic power: what is it good for?
Over the weekend, Paul Krugman trotted out his "let’s pressure China" argument but expanded it to Germany. This prompted some quality IPE snark from Kindred Winecoff, followed up by the same points written in less snarky fashion. Ordinarily, I would be eager to enter this debate full of vim and vigor. Unfortunately, I spent the ...
Over the weekend, Paul Krugman trotted out his "let's pressure China" argument but expanded it to Germany. This prompted some quality IPE snark from Kindred Winecoff, followed up by the same points written in less snarky fashion.
Over the weekend, Paul Krugman trotted out his "let’s pressure China" argument but expanded it to Germany. This prompted some quality IPE snark from Kindred Winecoff, followed up by the same points written in less snarky fashion.
Ordinarily, I would be eager to enter this debate full of vim and vigor. Unfortunately, I spent the weekend at my college reunion at an important networking conference in which I drank a lot and caught up with old friends a lot of retrospective analysis and discussion took place over cocktails and I’m still exhausted from pretending to be a 21 year old for a few days still processing the exciting intellectual synergies that took place during the free-flowing dance party breakout sessions.
Fortunately, I really don’t have to add too much. I’ll just link to my old post about this debate and note that the questions I raised in that post have yet to be answered.
Well, I’ll say one more thing. Between then and now, I’ve had the opportunity to enjoy a conversation with Krugman over dinner on these questions, and I think I can say where, exactly, we disagree. He believes that, as the deficit country, the U.S. has vast reservoirs of economic power that can be exercised over China. I would argue that the U.S. position is such that America can deter China but can’t unilaterally compel the country to alter its own policies.
More importantly, Krugman — and most economists engaged in this debate — are seriously underestimating the extent to which nationalism will affect China’s response to any unilateral move by the United States. Even if China’s response to an increase in U.S. trade barriers would be counterproductive to their own economic interests, it might serve the regime’s political interests. In an ordinary world economy, China wouldn’t want to do anything to upset its expoert engine. In a world where the leading open economy basically says "f**k it," well, they’re going to reassess. Riding the nationalist tiger will look politically appealing in a slow-growth world.
Daniel W. Drezner is a professor of international politics at the Fletcher School of Law and Diplomacy at Tufts University and co-host of the Space the Nation podcast. Twitter: @dandrezner
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