Modern protectionism
Two recent statements about protectionism/subsidization got me to thinking about some big trends. The first was an article from Doug Bandow on how other countries - especially Europeans - free ride on American development of new chemical entities and pharmaceuticals. For support, see here and here. The second was an article by Peter Drucker (by way of MR) discussing how the Bush steel tariffs have distorted the steel-using industries' use of materials. In both cases, we had an unanticipated consequence. My question is: what other similar forms of protectionism and subsidization may be leading to long-term and major changes in the world that other nations can free ride?
A1) Transportation. European countries have artificially induced oil scarcity in their countries through taxation, and Japan has an actual scarcity. This forces their consumers to seek more fuel efficient automobiles (turbo diesel in Europe, hybrids in Japan). Will America be able to free ride off of their policies? Or will they be off of oil before we are, while our Big 3 are relegated to a niche market (light trucks)?
A2) Transport again. Will we be able to free ride off of the development of light rail in other countries? I think this is a tougher problem because the population density in America outside the NE Corridor is so much lower than that of Europe and Japan that it simply isn't feasible outside that area. Berlin's population density is 11,400 inhabitants per sq. km in the inner city, Paris has a density of 20,000 inh./sq. km in the inner city, New York has an inner city density of 10,194.2/km² (26,402.9/mi²), Tokyo is 13,333 / sq. km, London has about 5100 /km², but a place like Los Angeles or San Francisco only have about 2400/km^2. As you can see, between Dallas and California, except for large urban centers like Denver, the density is too small to support any kind of mass transit.
A3) Energy. Will the US be able to free ride off of Japan's development of methane hydrates? Off of Portugal's and Holland's investment in wind generators?
A1) Transportation. European countries have artificially induced oil scarcity in their countries through taxation, and Japan has an actual scarcity. This forces their consumers to seek more fuel efficient automobiles (turbo diesel in Europe, hybrids in Japan). Will America be able to free ride off of their policies? Or will they be off of oil before we are, while our Big 3 are relegated to a niche market (light trucks)?
A2) Transport again. Will we be able to free ride off of the development of light rail in other countries? I think this is a tougher problem because the population density in America outside the NE Corridor is so much lower than that of Europe and Japan that it simply isn't feasible outside that area. Berlin's population density is 11,400 inhabitants per sq. km in the inner city, Paris has a density of 20,000 inh./sq. km in the inner city, New York has an inner city density of 10,194.2/km² (26,402.9/mi²), Tokyo is 13,333 / sq. km, London has about 5100 /km², but a place like Los Angeles or San Francisco only have about 2400/km^2. As you can see, between Dallas and California, except for large urban centers like Denver, the density is too small to support any kind of mass transit.
A3) Energy. Will the US be able to free ride off of Japan's development of methane hydrates? Off of Portugal's and Holland's investment in wind generators?
Labels: energy
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