Dear Mr. Harford,
Just read your piece on zero sum. With respect, I’d like to suggest that you read a book by former IBM Chief Scientist Ralph Gomory and former American Economics Association President William Baumol tited Global Trade and Conflicting National Interests. They are not right wing crackpots, but neither are they blind apostles of entrenched trade orthodoxy. They find that zero sum outcomes are quite common and that while trade can sometimes be win-win, it can also often be zero sum depending on the circumstances of the trade. They prove this rigorously using mathematical models.
Simply put, when industries that are characterized by economies of scale are involved, the outcome is by no means always win-win. Indeed, it is more often than not zero sum.
Specifically with regard to China, you and other FT pundits warn America frequently against starting a trade war. I accept that these warnings are useful because this administration is not thinking very intelligently about trade. At the same time, I wonder why you seem never to warn China. Could it not be said that China has already launched a trade war. Its announced policy of “Made in China 2025 “ is certainly not a call for free trade. Do you seriously believe that China does not make it a condition of entering its market that companies must produce in China and transfer technology to China? The U.S. and EU Chambers of Commerce in China have produced much evidence of these practices and policies by the Chinese. China’s policies have led to enormous excess capacity in several industries and that capacity is being dumped on EU and U.S. markets. Perhaps you think this is a blessing to consumers, but it is considered illegal by the rules of the WTO.
Look at what China does to companies like Google, Amazon, and Facebook. Is that treatment not hostile and does it not constitute a kind of trade war?
In the face of this kind of evidence which I believe you must be aware of, why is your fear of trade war so frequently directed at the U.S. and so infrequently, if ever, directed at China?
Respectfully and sincerely yours,