Notes from a Canadian Expedition (Yes, they let me in! And back out!)

And more from this week...

Entirely by coincidence, I had committed long ago to spend the past couple of days in Canada, meeting with policy folks and business leaders in both Ottawa and Toronto. Suffice to say, interest was running high. A couple of takeaways from the visit:

1. My goodness it’s chilly in Canada in February. The temperatures were freezing, the attitudes toward the United States even colder. Seriously, though, while most Americans ignore the threats from President Trump, find them amusing, or perhaps perceive them as vaguely concerning in their peripheral vision, they are story A, B, and C in Canada and perceived by Canadians as existential.

Nationalist sentiment has surged and polls suggest most Canadians would rather go down fighting than make concessions. It’s a useful reminder that rational negotiation theories are one thing and tactics in a standard commercial dispute are another, but the dynamics of geopolitical conflict take on an emotional life of their own.

2. Conversely, I was struck by how frequently people, notwithstanding their outrage at Canada’s treatment, also acknowledged unprompted that Trump in fact had a point—that Canada does excessively protect its domestic industry, does need to spend more on defense, and so on. Likewise, conservatives seem largely onboard with the idea that time is up for grand visions of a globalized liberal world order, and they are willing or even eager to move clear-eyed toward a multipolar one in which market democracies come together in a U.S.-centered bloc.

But, they have no idea what the United States wants, and I think it’s probably safe to assume the same goes for other prospective members of such a bloc around the world. There’s much to be said for tactical unpredictability in a negotiation—for instance, the European Union has just announced that it will preemptively reduce tariffs on American cars from 10% to 2.5%. That’s amazing. But we would be well-served to do a much better job of conveying where we are going and why.

To that end, your one thing to read this week is this remarkable Megyn Kelly interview with Secretary of State Marco Rubio. This part in particular:

That’s the way the world has always worked. The way the world has always worked is that the Chinese will do what’s in the best interests of China, the Russians will do what’s in the best interest of Russia, the Chileans are going to do what’s in the best interest of Chile, and the United States needs to do what’s in the best interest of the United States. Where our interests align, that’s where you have partnerships and alliances; where our differences are not aligned, that is where the job of diplomacy is to prevent conflict while still furthering our national interests and understanding they’re going to further theirs. And that’s been lost.

And I think that was lost at the end of the Cold War, because we were the only power in the world, and so we assumed this responsibility of sort of becoming the global government in many cases, trying to solve every problem. And there are terrible things happening in the world. There are. And then there are things that are terrible that impact our national interest directly, and we need to prioritize those again. So it’s not normal for the world to simply have a unipolar power. That was not – that was an anomaly. It was a product of the end of the Cold War, but eventually you were going to reach back to a point where you had a multipolar world, multi-great powers in different parts of the planet. We face that now with China and to some extent Russia, and then you have rogue states like Iran and North Korea you have to deal with.

It’s not normal for the world to simply have a unipolar power. That was an anomaly. It was a product of the end of the Cold War, but eventually you were going to reach back to a point where you had a multipolar world.

This is such an important point and it parallels for foreign policy the point that I have been emphasizing in economic policy, that analyses operating from a discredited set of assumptions necessarily produce useless results.

In the context of trade policy, economists continue to use models that say free trade always delivers the best outcome, and that welcoming China into the WTO was the right choice, to warn against tariffs and other policies that might interfere with their preferences. And yes, if those models were good ones, had made good predictions and recommendations, had produced good outcomes, then we should take very seriously their warnings that some other policy might be a mistake. But if their models fundamentally misunderstand the real world and have led us into disaster, why would we possibly care that those models recommend staying the course?

As the hit man Anton Chigurh asks his next victim, Carson Wells, in Cormac McCarthy’s “No Country for Old Men,” “If the rule you followed brought you to this, of what use was the rule?”

So much U.S. foreign policy over the past few decades has been built on the assumptions that the United States is and will be the dominant world power and can shape global events, that upholding “norms” and promoting liberalism will influence the behavior of other nations regardless of their own interests, and that the United States itself will benefit more from the resulting international environment than it would benefit from merely leveraging its power to advance its interests. To be clear, this was an entirely bipartisan conceit:

Here's Samantha Power, in her final remarks as UN Ambassador in 2017:

President Putin is taking steps that are weakening the rules-based order that we have benefitted from for seven decades. Our values, our security, our prosperity, and our very way of life are tied to this order. And we – and by we, I mean the United States and our closest partners – must come together to prevent Russia from succeeding.

This means better understanding and educating our public about how Russia is challenging this order. This means reaffirming our commitment to the rules and institutions that have long undergirded this order, as well as developing new tools to counter the tactics Russia is using to undermine it. And this means addressing the vulnerabilities within our democracy that Russia’s attacks have exposed and exacerbated. To do this, we cannot let Russia divide us. If we confront this threat together, we will adapt and strengthen the order on which our interests depend.

Here's the Brookings Institution’s Robert Kagan the following week:

In recent years, however, the liberal order has begun to weaken and fracture at the core. As a result of many related factors—difficult economic conditions, the recrudescence of nationalism and tribalism, weak and uncertain political leadership and unresponsive mainstream political parties, a new era of communications that seems to strengthen rather than weaken tribalism—there has emerged a crisis of confidence in what might be called the liberal enlightenment project. … This crisis of the enlightenment project may have been inevitable. It may indeed have been cyclical, due to inherent flaws in both capitalism and democracy, which periodically have been exposed and have raised doubts about both—as happened, for instance, throughout the West in the 1930s. Now, as then, moreover, this crisis of confidence in liberalism coincides with a breakdown of the strategic order. In this case, however, the key variable has not been the United States as the outside power and its willingness, or not, to step in and save or remake an order lost by other powers. Rather it is the United States’ own willingness to continue upholding the order that it created and which depends entirely on American power.

Here's Senator John McCain at the Munich Security Conference a month later:

Even now, when the temptation to despair is greatest, I refuse to accept the end of the West. I refuse to accept the demise of our world order. I refuse to accept that our values are morally equivalent to those of our adversaries. I am a proud, unapologetic believer in the West, and I believe we must always, always stand up for it — for if we do not, who will?

What these claims all have in common is a mystical belief that we get to decide whether the liberal order persists and how it works. If only we come together in its defense, commit to upholding it, refuse to accept anything else… apparently that will be enough, in the spirit of an after-school special. And yes, if you believe that, then the foreign policy toward which the United States now appears to be turning is outlandish and irresponsible. But if all that is wrong and outdated, if the reality of the modern world is that wishing good things does not make them so, then it is the folks demanding greater reliance on pixie dust who deserve the criticism.

Of course, one can move toward a new set of assumptions and still make bad policy choices therein. But the critic must know which case he is making. If the claim is that we can still rescue the liberal world order, have at it. But analyses will be far more useful if they begin from contemporary reality.

BONUS LINK: Carnegie’s Stephen Wertheim does an excellent job assessing the Trump administration’s direction on its own terms, rather than criticizing it for failing to adhere to a failed paradigm, in this commentary for The Guardian.

WHAT ELSE SHOULD YOU BE READING?

Big Stick Economics | Mark DiPlacido & Oren Cass, Commonplace

American Compass policy advisor Mark DiPlacido and I have a new essay that makes what I think is a particularly pivotal but typically overlooked point about efforts at reindustrialization: there’s no such thing as a “defense-industrial base” independent from a plain ol’ industrial base.

Most economists and market fundamentalists will make exceptions to their free-trade absolutism when it comes to, say, nuclear submarines and aircraft carriers, but that’s supposed to be a grudging and limited concession. The problem, as the United States has discovered in recent years, is that there’s no plausible pathway to building those things effectively without a robust commercial industrial base to support the effort. As Mark and I write:

Policymakers have traditionally spoken of a “defense-industrial base” (DIB) in isolation from a broader industrial base, implying concern only for those parts engaged directly in defense production, which could be nurtured directly through defense spending, even as market forces were allowed to weaken the rest. But a strong DIB cannot possibly persist in the face of widespread industrial stagnation. An effective DIB rests atop an enormous capacity for processed minerals and steel, semiconductors and batteries, trucks and planes, which must be oriented first and foremost toward commercial applications and filling civilian, peacetime demand. Suppliers for all the components of missiles must also make other things too, so that they have viable commercial businesses in times when large numbers of missiles are not being built.

An isolated DIB also suffers from all the worst maladies of a state-dominated sector. If the government is the only customer, if bureaucrats are defining the product specs, if profits depend on decisions in Congress more often than decisions in the market, sclerosis is inevitable. The ironic result is that the market fundamentalists who most aggressively resist efforts at channeling investment toward the industrial sector then find themselves having to place their faith in a far more centrally planned economic model for the sake of national defense.

Divergent Realignments? | David Skelton, The Realignment

An interesting theme of conversations in Canada was the sense that the Conservative Party there is far behind the Republican Party in its realignment. Take Pierre Poilevre. (Pronounced Polly-Ev, apparently. Kind of a faux pas to say it like it rhymes with Oliver.) He is an extraordinarily talented politician and has tapped into many of the same cultural current that drove the popularity of not only Donald Trump but also Ron DeSantis. But on the basics of political economy, he hasn’t moved far from Old Right orthodoxy. Whether that combination works, we may soon find out.

The British, Skelton notes, tried that in spades and have indeed found out. In many respects they were out in front of even the Untied States, with Brexit and so on. But the Conservative Party there refused to adapt even a bit, leading to a premiership so disastrous it was outlived by a head of lettuce. And to Rishi Sunak too. The severity of the disconnect between rhetoric, constituency, and policy has probably left the Tories worse off than had they never contemplated reform at all.

Places Versus People: The Ins and Outs of Labor Market Adjustment to Globalization | David Autor et al.

An incredibly important new China Shock working paper just dropped, focusing specifically on how globalization and deindustrialization affect not the absolute level of employment but rather job quality, and underscoring especially the superior quality of manufacturing jobs to the service-sector alternatives that substitute for them:

• “Most trade-induced job reductions in manufacturing reflect a loss of mid- and high-earnings jobs.”

• “Jobs that comprise the eventual employment rebound in trade-exposed [areas] are disproportionately found at low earnings terciles.”

• “To the degree that trade-exposed [areas] see net gains in high-premium employment, it occurs among college-educated workers only. Non-college employment falls in high-premium industries and rises in low-premium industries.”

AND IN COMMONPLACE THIS WEEK

Lots of fantastic commentary on subjects ranging from health care to immigration to the fashion legacy of Ralph Lauren. I can’t cover it all here, which is all the more reason to be visiting commonplace.org regularly, following us on X @commonplc, and subscribing for email updates.

I already mentioned my essay with Mark DiPlacido on Big Stick Economics. We also had a terrific feature from The American Conservative’s Jude Russo, It’s Not Too Late to Ban Online Sportsbook.

And, may I recommend sampling:

The Deep State Loves Free Trade | Nicholas Phillips. Powerful global interests built the system we see today.

Rewiring the American Dream | Skyler Adleta. Training the tradesmen we need starts with understanding why these careers are so worthwhile.

Immigration Restriction is the Catholic Position | Emile Doak. Permissive policies only abet the tragedy of mass migration.

Conservatives Need a Health Care Agenda | Matthew Loftus. Quality over quantity ought to be the bedrock of it.

Joining me this week on the American Compass Podcast, Jude Russo discusses his great feature on the ills of online sports betting, especially apropos of this weekend's Super Bowl. (Take the Eagles.) We cover the substantive ills of legalized gambling and also the pragmatic political considerations that should shape a conservative response.

Enjoy the weekend!