Reuben Abraham, CEO and senior fellow of the Mumbai-based IDFC Institute cites the iPhone as culprit-in-chief. "Most of the technology inside an iPhone in some point in time or another has been funded by the US government… Lithium-ion batteries came out of research funded by the [Department of Energy]." The same goes for click wheels, liquid crystal displays, microprocessors and micro hard drives.
No economist has made this point better than Mariana Mazzucato, whose The Entrepreneurial State dashes notions of a heaving, inefficient bureaucratic state left aside by the innovative genius of a private sector free of state encumbrances. States, far from being enemies of innovation, can push it. Industries can be incubated and nurtured. Those not doing so risk mouldering.
Whether they be subsidies, overproduction, dumping, or tariffs, the world market is a set of scrappy untidy practices that put paid to the notion of trade free unbound. Governments may well promote it, but the pragmatists are otherwise engaged in a different set of realities rooted in technology and considerations of protecting industry.
It took Trump, a bully-boy populist hell bent on opportunism and nostalgia, to make any discussion of tariffs heretical, when they have, in all truth, been a functional reality in the modern global political economy for decades. Protectionism, it can well be said, never left.
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