Category Archives: International

U.S. Trade Representative Tai Should Rethink Keeping China Tariffs in Place

Over the weekend, The Wall Street Journal interviewed Katherine Tai, the new United States Trade Representative. She has a lot of work ahead of her to undo the damage from the Trump administration’s protectionist turn. But she made two disappointing remarks about the approach she plans to take on the tariffs Trump placed on Chinese goods worth $377 billion per year. These can be undone at any time by either Congress or the stroke of President Biden’s pen.

First, as she told the Journal:

“I have heard people say, ‘Please just take these tariffs off,’” Ms. Tai said. But “yanking off tariffs,” she warned, could harm the economy unless the change is “communicated in a way so that the actors in the economy can make adjustments.”

The top trade policy priority right now should be to prevent normalizing President Trump’s trade policies. He doubled U.S. tariffs in one term, in unpredictable fashion. That was the radical change that made planning difficult. Restoring tariffs to where they already were for a long time would be far better for giving businesses something to plan around.

Tai has this argument backwards, and with poor timing. Businesses are struggling to recover from the COVID slowdown. Lowering tariffs would provide an economic stimulus that requires no new spending. Economics aside, the politics of undoing Trump’s China tariff are also positive. It sends a message of moving on, and a responsiveness to consumers, businesses, and economic realities.

Her second disappointing remark is about leverage:

The negotiator also cited tactical reasons for her reluctance.

“No negotiator walks away from leverage, right?” she said.

Tariffs do not give the U.S. any leverage, so there is none to walk away from by repealing them. Their purpose was to get China to reform its unfair trade policies, which is the right goal, but tariffs never had a chance of achieving it. The first round sparked no reforms, only retaliation. Trump enacted a second round and got the same result. On it went, and now three quarters of China’s exports to America are tariffed, there are retaliatory tariffs on the same proportion of American exports to China, and Beijing has not made a single notable reform.

True, withdrawing tariffs would also fail to convince China to reform, but that does not justify keeping them or trying to use them as leverage. Tariffs simply do not work with Beijing as a negotiating tactic. They are like trying to use a hammer as scissors. They are the wrong tool for the job. When a strategy fails, the right thing to do is admit it and try something else.

There is a lot the U.S. can do to help along Chinese reform. We now know tariffs are not part of the list. There is also no silver bullet. Pundits and voters hate hearing this, but it’s true. Pretending that there is a silver bullet in order to appeal to them will do no good. Change in China must ultimately come from within, but there is still a lot the U.S. can do to help. It takes a multifaceted strategy that is more subtle than tariffs, and gets less media coverage than summits or negotiations.

Continued economic, intellectual, and cultural engagement with China will let ordinary Chinese people see how much richer and freer liberal policies are. Walls don’t work, but bridges, windows, and conversations do. This is a slow, bottom-up process that is difficult to measure with statistics.

But just as blue jeans, underground rock music, and American movies helped to win the Cold War, today’s equivalents can help ordinary Chinese people see the connection between liberalism, markets, and prosperity—and work toward moving their own country in that direction.

That is a long-term process, but there is important work right now that Tai, President Biden, and Congress can do to help get it started. First on the agenda should be getting rid of the Trump tariffs. Neither Tai’s “companies will have problems adjusting” argument nor her leverage argument hold water. The right thing to do is to rip off the Trump-era band-aid and move on to policies that at least have a chance of working. Congress or President Biden could do this tomorrow.

Repealing these bad policies is not enough, though. The larger system that makes tariff abuse possible needs reform. As we recommend in the new CEI Agenda for Congress, this would mean repealing Section 232 of the Trade Expansion Act of 1962 and Sections 201 and 301 of the Trade Act of 1974.

These provisions allow the president to enact tariffs without congressional approval. The China tariffs were enacted under Section 301. The steel and aluminum tariffs—against allies we’ll need as counterweights to China—were enacted under Section 232, allegedly for national security reasons. It’s time for them to go, and Tai can play a role in making that happen.

The Trans-Pacific Partnership is an important diplomatic counterweight to China; the U.S. should rejoin it. Tai and President Biden should work to rebuild the World Trade Organization’s dispute resolution process, where the U.S. wins more than 85 percent of the cases it brings. Renewing Trade Promotion Authority (TPA) would speed up negotiations for a trade agreement with China, if the president chooses that route. At the very least, TPA would help with upcoming agreements with the United Kingdom and the European Union, whose help we’ll need to counter Chinese influence. Tai can play an important role working with Congress to renew TPA before it expires in July.

This is a somewhat slow period in China-U.S. relations. The tariff back-and-forth is likely over with Trump out of office. The Phase One agreement, which was unrealistic to begin with, was made completely unworkable by COVID, and is essentially dead.

But over the medium to long term, working to liberalize China will be a top economic, diplomatic, and humanitarian priority for the United States. Tai stumbled out of the gates in her first interview, but it’s a long race. With the right policies, she can help make historic positive changes that will benefit both the American and Chinese people.

For more on those policies, see the trade chapter in CEI’s new Agenda for Congress, my paper on COVID-related trade reforms, and Iain Murray’s and my paper “Traders of the Lost Ark.”

Book Review: Open: The Story of Human Progress by Johan Norberg

On March 25, 2021 at noon ET, CEI is hosting a double book forum featuring Johan Norberg, the 2019 winner of CEI’s Julian L. Simon Memorial Award, and Patrick Moore, a Greenpeace cofounder and author of Fake Invisible Catastrophes and Threats of Doom. Register here, where video of the event will also be viewable afterwards.

Liberalism—in the correct sense of the word—needs fresh voices. The ideological conversation is different than it was a decade ago, and many market-liberal thinkers have not kept pace. Today’s debate is over whether society should be open or closed, not which side of the Iron Curtain was better.

This is where the Swedish economist Johan Norberg performs a valuable service. He is fighting the current battle, not the last one. His newest book, Open: The Story of Human Progress, is a superb defense of the pro-freedom side of the debate. And he defends it against the nationalists and populists who are attacking it right now.

People over a certain age on the political right tend to still use the word “socialism,” but often as a catch-all term for things they dislike. This is different from the word’s commonly understood meaning of state ownership of the means of production, belief in dialectical materialism, teleological stages of history, or any of the other things socialists actually believe in.

People under a certain age on the political left often say they favor socialism. But they, too, have given the word a new and different meaning. They typically define socialism as a more-or-less market economy with a large welfare state, as in the Nordic countries. They are also often careful to add the qualifier “democratic” as an implicit nod to what socialism’s original meaning entails.

When people give the same word different meanings, confusion reigns. When people today lob the s-bomb, they are often talking  at each other, not to each other. The real debate is elsewhere.

This tactic is great for getting people riled up, though. The heat-without-light approach has advanced the careers of people like Fox News host Tucker Carlson and former President Trump on the right, and Sen. Bernie Sanders and Rep. Alexandria Ocasio-Cortez on the left. But it makes substantive debate difficult.

Openness and liberal institutions have generated more wealth for more people than any other socioeconomic system in history. But they are also unpopular. Norberg has some ideas on why, drawing on a mix of history, economics, and psychology. He sums up his thesis on page 6:

As I will argue, the reason that the Enlightenment and the Industrial Revolution started in Western Europe was that this region of the world happened to be the most open, partly just out of luck. It has been repeated in every place that has gone through similar institutional changes. It is not the triumph of the West, it is the triumph of openness.

First, the history. The last two centuries have seen a mass enrichment unlike anything in human history. As economic historian Deirdre McCloskey has pointed out, people today are 30 times wealthier than our ancestors were in about 1800. Not 30 percent more, but 30-fold. As President Biden once said about a different issue, this is a big deal. Since the Great Enrichment began, life expectancies have doubled. Infant mortality is down by more than 90 percent. Famines today have political causes, not natural ones. Violence, both intentional and accidental, are sharply down across the board. A few years ago, the percentage of world population living in absolute poverty—$1.90 per day or less—fell below 10 percent for the first time ever. Almost every long-run trend is showing improvement.

This historical process is as important as the taming of fire or the invention of the wheel. This is what Norberg defends. And it needs defending, because the openness and liberal values that made it all possible are unpopular. Psychology helps to explain why.

People respond to threats more sharply than to good news. In lab experiments, people feel the sting of loss about twice as sharply as a gain of similar amount. Psychologists call this loss aversion. We evolved this trait because mother nature is a superb economist. People have only so much attention to give to things, so we have evolved ways to economize on it. When things are going well, we can leave them alone, and save our scarce attention for dealing with threats. We are hardwired to pay more attention to threats, because long ago there was a survival advantage in doing so.

This tendency is not unique to humans, and long predates us. In a way, the modern life we all enjoy runs counter to hundreds of millions of years of natural selection processes. No wonder liberals have an uphill battle!

In the last two centuries or so since the Great Enrichment began, threats have become progressively less menacing. People don’t have to worry nearly as much about famine, disease, or violence. But that same impulse still exists. Now it gets channeled differently. Socialists—actual ones—viewed capitalists as threats. Populists, from William Jennings Bryan to Josh Hawley, frame various elites as threats. Nationalists view immigrants and foreigners as threats.

Who and what people consider to be threats changes with the times. But that core psychological mechanism remains constant. Some kind of outside Other always poses a threat to the in-group, which must always be defended. This in-group can be a family, tribe, race, nation, political party, or just about anything else. People can also have multiple in-groups at the same time, and can shift seamlessly between them. A Republican and a Democrat who would be enemies in one setting might become fast friends at a baseball game if they like the same team, then go back to being enemies when the game is over.

The key point is that the in-group/out-group dynamic is in everybody’s DNA, and is where the urge to close society comes from. Norberg here draws on the political psychologist Karen Stenner’s 2005 book The Authoritarian Dynamic, which argues that about a third of people have an underlying authoritarian impulse in them—but it doesn’t express itself unless people feel threatened. During normal times, they are just as open and amiable as anyone else. But when they feel threatened, “they react explosively,” Norberg writes on p. 343. “They become intolerant of diversity and dissent and willing to restore unity by government control, even if it wrecks rule of law and free speech.”

Liberal institutions are powerful enough to double lifespans and increase prosperity 30-fold in a handful of generations. At the same time, they are vulnerable to attacks like this.

Prior liberal flowerings got started in societies as diverse as Ancient Greece and Song dynasty China. But none of them lasted. The general intellectual climate wasn’t open enough to openness. Plato was executed essentially for nonconformity. After Mongol invaders ended the Song dynasty, the succeeding Ming dynasty responded to the threat by destroying the world’s most advanced fleet of oceangoing ships and banning nearly all foreign contact.

That vulnerability is why the open society will always need defending, especially as its attackers change tactics every generation or two. Norberg’s defense is perfectly suited for this generation’s emerging threats. Populist and nationalist governments have come to power in recent years in countries such as Brazil, Mexico, Hungary, and elsewhere. President Trump’s trade war, immigration restrictions, race-baiting were slowing the longest economic expansion in U.S. history and causing cultural divisions even before COVID-19 hit.

Even after he cost his party the House, the Senate, and the presidency, the Republican party is continuing along a national populist trajectory. The progressive wing of the Democratic party is pushing similar policies in different packaging, on issues from international trade to technology policy. The United Kingdom’s Brexit debate, which should have been about escaping the European Union’s burdensome regulatory, agricultural, and tax policies, was instead hijacked by ugly nationalist impulses, and became divisive for all the wrong reasons. Strongman governments and nationalist political parties are springing up in places that should know better, such as Eastern Europe, which bore the brunt of both fascism and communism in the 20th century.

Norberg writes clearly and persuasively, with passion, and without anger. It is an impressive performance, and a joy to read. He has only one notable slip in 384 pages, and that is his support for a carbon tax on pages 330-331. Ironically, this comes in a section about the knowledge problem in economics. A centralized body such as Congress is unlikely to have the on-the-ground knowledge it needs to put an accurate price on carbon emissions.

Perhaps more significantly, the carbon tax suffers from public choice problems—which basically means that politicians tend to behave like politicians. A cardinal rule of politics is that policies are made and enforced by the government we have, not the government we want. Even if Congress did overcome the knowledge problem, it is unlikely that people like Nancy Pelosi and Mitch McConnell, or whoever succeeds them down the road, would craft a carbon tax on the merits. For Norberg, a carbon tax is “supposed to be an incentive, not a source of revenue.” This is surely not how a carbon tax would work under a real-world government.

That quibble aside, Open is one of the best books of its kind to come out in years. It is the right defense of the right values at the right time.

Norberg is not the only voice in favor of openness. Recent works by economists Virgil Storr and Ginni Choi, psychologist Joseph Henrich, and experimental economist Bart Wilson are other recent contributions. Matt RidleySteven Pinker, and Deirdre McCloskey have all been flying the flag for openness, tolerance, and dynamism for years. But just as Julian Simon was in his day, these voices of reason are too often drowned out by a chorus of doomsayers.

Markets are inherently dynamic and ever changing. No one is in charge of them, and no one directs the process. Markets work best when people are open, tolerant, and cooperative. People need to get along with people who look different, speak differently, and may live far away. It takes trusting strangers. That not natural to the human brain, which evolved to fit a hunter-gatherer world. But open markets have gotten us this far. If we let them, they can take us much farther. Whether we do or not will be this generation’s defining debate.

Proposed European Tech Regulations Will Backfire, Badly

The European Union recently proposed two major tech regulation bills aimed at America’s tech industry, the Digital Markets Act (DMA) and the Digital Services Act (DSA). While American antitrust law is flawed, European competition policy is arguably more so. On purpose or not, DMA/DSA would add trade barriers in a world that already has too many. They are costly. And they won’t increase competition. In fact, they would help to lock in the big U.S. companies’ dominance.

How would they do this? They would block self-preferencing, such as Amazon promoting self-branded products in its search results, or Google and Apple giving their own apps special treatment in their app stores. Retailers and grocery stores already have been doing this for the last century or so, and those markets are highly competitive. It is no different when a company does the same thing online.

Companies would face stricter content moderation policies. If the EU says to take down certain content, companies would have a short time frame to either remove it or be fined. European companies would not face these same compliance costs, presumably giving them a leg up, though without improving their products.

Tech platforms would be liable for user-posted content, rather than the users themselves. This essentially copies President Trump’s position in the Section 230 controversy. Besides chilling speech, this would give popular services a reason to avoid the European market. It would also lock in dominant players. Facebook can afford to hire armies of content moderators, but startup competitors cannot. Repeat offenders risk fines of up to 10 percent of global revenue.

Breaking up companies is another option, though the practical politics of the EU breaking up a U.S.-based company likely make this unrealistic.

Unlike most legislation, DMA/DSA would not apply to everyone. They would only apply to “gatekeepers,” a new term defined in just such a way that it applies only to a handful of major U.S. tech companies. In practice, DMA/DSA is simple extraction from successful companies, without proof of consumer harm.

Swiss competition commissioner Henrique Schneider argues in a recent Competitive Enterprise Institute paper that, even if that EU officials understand basic economics—no sure thing—they “choose to disregard it in order to advance two political aims—protectionism and consumer welfare (as they conceive the latter).” And, as he predicted, things are getting worse.

Beyond Spotify, it is hard to even name a major European tech company. This is not for a lack of talent and good ideas in Europe. It is because of a broken regulatory culture that prefers tearing down over building up. Taking foreigners down a notch is very different from allowing homegrown entrepreneurs to build and innovate.

DMA/DSA is trade protectionism under another name. U.S.-EU trade relations are already strained because of President Trump’s misguided trade war, Europe’s equally misguided retaliation, and a long-running dispute over subsidies to Boeing and Airbus. President Biden is likely to further raise trade barriers, as my colleague Iain Murray points out. Some kind of major U.S.-EU trade agreement is likely necessary in the next few years as a diplomatic and economic counterweight against China. DMA/DSA would aggravate tensions between allies at precisely a point when they can be somewhat smoothed.

Finally, DSA/DMA wouldn’t actually take down the big American companies, but lock in their dominance. They can afford massive fines and compliance costs; smaller startups can’t. And if a smaller competitor nears the threshold of becoming a “gatekeeper,” it may decide to stay small on purpose, leaving most of the market to big incumbents. This would harm consumers, who would pay more to have fewer choices and lower-quality services.

If the DMA/DSA bills are enacted—no sure thing—it will be a long process. According to CNBC, Margrethe Vestager, the EU’s top competition policy official wants them enacted “as fast as possible,” meaning about two years. More realistically, the process will be delayed by tech company lobbying efforts and squabbles between Brussels and the EU’s 27 national governments. By then, the tech market will likely look very different.

If the Digital Markets Act and the Digital Services Act are accurate statements of where EU regulators stand on tech policy and innovation, then Europe’s tech sector will remain second-class. Along the way EU regulators would make global trade less free, help to lock in today’s big tech companies’ dominance, and harm consumers around the world.

Book Review: Thucydides – The Peloponnesian War

Thucydides – The Peloponnesian War

Thucydides wrote the second volume in the unofficial trilogy of great Greek historians. He begins almost exactly where Herodotus’ Histories ends. Having defeated Persia, Athens now finds itself at war with Sparta. This time, Athens would lose. But Thucydides, who participated in the war, does not see it through to the end. No one is quite sure why. Fortunately, Xenophon would later pick up the baton and finish the war and the “trilogy” in his Hellenica.

Where Herodotus is filled with legends, exoticism, and fantastical creatures, Thucydides is more earthbound. The gods are absent, he never leaves the Pelopennese, his prose style is plain, he consciously sticks to the facts, and his organization is meticulously chronological. Each chapter covers exactly one year, and if important events and themes do not respect those boundaries, so be it. The contrast in historiography, or historical method, is as interesting as the actual history itself.

The Peloponnesian War also contains Pericles’ famous funeral oration, which is one of the heights of Greek literature. Many of the other speeches Thucydides recounts also have high literary value. He stands out in his attempt to humanize his opponents and to understand their points of view. Rather than smear Spartans with ad hominems the way many modern political writers do their opponents, Thucydides sought understanding and objectivity. He saw his task as leaving a reliable record, not making the case for his side events.

At the very least, Thucydides assumes good intentions and noble deeds among the enemy he fought and lost to. Thucydides understood that if one is going to lose, better that it be to a noble opponent than to a weak and immoral one. There are lessons here for today’s politicians as well as the crass Internet commenters who egg them on.

Book Review: Bruce Bueno de Mesquita and Alistair Smith – The Dictator’s Handbook: Why Bad Behavior is Almost Always Good Politics

Bruce Bueno de Mesquita and Alistair Smith – The Dictator’s Handbook: Why Bad Behavior is Almost Always Good Politics (New York: Public Affairs, 2011)

The rise in populism over the last decade has birthed a bumper crop in books on dictators, with contributions from Frank Dikötter, Daniel Kalder, and others. Bueno de Mesquita and Smith’s entry is a quality addition. The reigning classic in the genre, though, is Gordon Tullock’s early work on the public choice theory of autocracies, which is collected in The Social Dilemma, which is volume 8 of his Selected Works.

Bueno de Mesquita and Smith work from the discipline of foreign policy, rather than from economics, law, or political science. They belong to the realist school, which is in some ways the current incarnation of Machiavellianism and realpolitik. Foreign policy realists have quite a bit in common with public choice economics—politicians respond to incentives, and tend to behave in self-interested ways.

The Dictator’s Handbook is a popular-level distillation of a larger theory of autocratic behavior Bueno de Mesquita and Smith have explored in numerous academic works. Dictators often show strong ideologies in public. These are often various forms of socialism, nationalism, theocracy, or some mixture of the three. In private, dictators may sincerely believe in their ideology. And it will influence their policy choices. But, just as public choice theory argues, when self-preservation conflicts with the ideology, self-preservation nearly always wins.

This self-preservation instinct explains why so many dictatorships look so similar. Military support is essential to maintaining power, which is why dictatorships often have lavish and showy military budgets, even if they do not have any intention of going to war. Well-paid soldiers are less likely to rebel, especially in poor countries where other career opportunities are limited. A highly visible military projects power, which scares off rebels inside and outside of the palace. And a well-fed and well-feted general is less likely to pursue his own coup.

Gaudy personal styles and decorating styles are another common dictator trait; nearly every dictator’s residence, whether in Belarus or Libya, is almost indistinguishable from Donald Trump’s apartment in Trump Tower. It’s another way of projecting power, if not taste.

A dictator’s inner circle is often unstable. This is both caused and countered with a culture of excessive honorifics and ostentatious wealth—with obvious gradations to signify an official’s place in the hierarchy. Taking privileges away is a sign that someone is falling out of favor.

Dictators rarely have a formal succession plan. This is another reason why they usually have a garish, privileged court culture. Dictatorships are typically in very poor countries. Officials who enjoy a Western standard of living—courtesy of the dictator, they are constantly reminded—are less likely to overthrow the dictator. Moreover, when aspirants are competing against each other, they are not competing against the dictator himself. When generals have a comically large number of lapel pins on their epaulet-laden uniforms, there is a reason for it. They are status signals in their competitive game against each other. They are not just marks of favor from the leader.

Bueno de Mesquita and Smith run a risk of stereotyping by pointing out how alike so many dictators are. But they are well aware that each country, and each dictator, has their own situation and cultural factors in play. At the same time, their commonalities show a kind of convergent evolution: successful dictators stay in power because they have discovered “best practices” that apply widely. Dictators that did not adopt these practices did not stay in power, so the only remaining examples have strong militaries, garish styles, elaborate court cultures, no formal succession plan, and so on. While the world as a whole has been tending towards democratic liberalism since the end of World War II, there are still plenty of illiberal countries. It is important to understand them if their people are to become free.

It is also important to know warning signs when we see them, as the tragedy of President Trump’s late-term coup attempt shows.

Best Books of 2020: Joseph Henrich – The WEIRDest People in the World: How the West Became Psychologically Peculiar and Particularly Prosperous (New York: Farrar, Straus, and Giroux, 2020)

It’s early, but The WEIRDest People in the World: How the West Became Psychologically Peculiar and Particularly Prosperous by Joseph Henrich will likely be one of the new decade’s most influential books. Henrich complements work by Joshua GreeneRichard WranghamJonathan HaidtSteven PinkerMichael Shermer, and others on the psychological underpinnings of modern liberalism—liberalism in the more-or-less original sense of the word.

Henrich’s book has two main arguments. One is historical: The Catholic church, completely unintentionally, set off a social chain reaction that created modernity. The second is psychological: People in modern societies are psychologically distinct than people in traditional kin-based societies.

He uses the acronym WEIRD for Western, Educated, Industrialized, Rich, and Democratic, to describe the unusual people in modern market-liberal societies. If you are reading this book review, then you are probably WEIRD, and so is nearly everyone you know. But we WEIRD people are the outliers in human history. Outside of Europe, East Asia, and North America, there are very few of us.

Most human societies are built on kin-based structures. This was true during our hunter-gatherer past, which was about 190,000 years of our 200,000-year history—95 percent of our species’ time on Earth. Societies remained kin-based through the agricultural revolution, and through the birth of cities about 6,000 years ago. And it is still true today in most countries. Despite occasional flowerings, there were no enduring WEIRD societies in human history until about two centuries ago. This is maybe one tenth of one percent of human existence, and even then, most societies remain kin-based. Again, it is WEIRD people who are unusual.

What is a kin-based society? In these, business partnerships, social networks, and marriages are confined to networks that rarely stray outside the extended family or clan. People tend to be wary of non-kin, and have a strong in-group-vs.-out-group worldview. People tend to look out for their clan’s collective interest over their individual interest. In kin-based societies, nepotism isn’t frowned upon; it’s the norm. WEIRD Americans today look askance when a president appoints inexperienced family members to be senior advisers. But in most other societies, this would have been acceptable, even normal behavior.

By contrast, WEIRD people are more individualistic and more trusting of outsiders. Kin-based families often arrange marriages for their children. WEIRD people usually marry for love. Kin-based people are expected to enter the family business. This is why so many of us have occupation-based surnames, such as Smith, Baker, or Fisher. WEIRD people usually prefer to choose their own line of work, which is one reason why today’s Smiths, Bakers, and Fishers rarely practice those occupations.

Kin-based people are reluctant to do business with strangers and foreigners. WEIRD people are more open to trade and more trusting of potential business partners they have never met. Nobody is purely meritocratic, but WEIRD people are closer to that ideal than most people.

So now that we know the difference between most people and WEIRD people, what is Henrich’s historical argument about the Catholic church accidentally making today’s WEIRD-ness possible?

The Catholic church blew up traditional kin networks through what Henrich calls its unofficial “Marriage and Family Program (MFP).” In short, the Church prohibited cousin marriages. The incest taboo is a human universal. But its boundaries vary from place to place. The church decided to push them progressively further out over a period of centuries. In many places, it eventually prohibited marriages closer than second and third cousins. In a few places it briefly went as far as eighth cousins.

This was a bigger deal than it sounds. Back in, say, the 12th century, people lived isolated lives. Few people lived in cities. Many people lived their entire lives within a 30-mile radius. They met few, if any, people outside of their extended families. And the wanderers they did meet were often beggars, vagrants, or outlaws. The Church’s MFP forced these isolated people to look outside their villages and kin groups for marriage partners. This forced openness, in the long run, ended up wiring people’s brains differently.

Young people are impressionable. When they are of marriageable age and are forced to meet and interact with strangers, and travel among them, traditional closed-kin psychological barriers gradually break down. They are gradually replaced with growing degrees of WEIRDness. It is a long, gradual process with many degrees. But over centuries, the effects add up.

None of the changes Henrich describes are genetic. None of them are racial, and none of them are peculiar to Europe. The conditions that make individuals WEIRD are cultural, intellectual, and psychological.

Using cousin marriage rates as a stand-in for how strong the Church’s Marriage and Family Program operated in different regions, along with historical records, Henrich finds that the MFP was the single biggest cause of everything from per capita GDP to interest rates to murder rates. Interestingly, regional cousin marriage rates closely track religious divisions and regional church influences. Henrich himself was skeptical about the MFP’s cultural influence, so he checked his results every way he could.

So, while openness is the real engine of WEIRDness, in Europe’s case, Church doctrine was what drove the process of opening up.

The differences between kin-based and WEIRD people show up in psychological tests. The Church’s MFP turns out to have changed people’s personalities and psychological profiles. In my recent review of Virgil Storr and Ginny Choi’s excellent Do Markets Corrupt Our Morals?, I noted their finding that people from market societies play decision-making games differently than do people in non-market societies. Henrich argues that this is because they are psychologically different.

From birth, WEIRD people from market societies have been more exposed to outsiders and more likely to trust them. No wonder they tend to play lab games that way. They tend to be more trusting of other players and more willing to use long-term strategies. People from kin-based societies are more likely to do the equivalent of a dine-and-dash from a restaurant. If the other player is not from their in-group, they feel fewer compunctions about cheating that other player.

Kin-based and WEIRD people even assign blame differently. Most WEIRD people see classroom teachers’ disciplinary tactic of punishing an entire class for one student’s offense to be morally wrong. Kin-based people see this as normal, and are fine with it. They think more in terms of collective responsibility than individual responsibility. In fact, criminal justice systems in many kin-based societies punish whole families for one member’s crime.

There is a reason for this. In most human societies, life was precarious. One bad harvest could mean starvation. Very strong conformity norms were a survival advantage. Collective punishment helps to reinforce conformity norms. Maybe someone does have a new idea for planting a crop differently. But if it fails, the stakes are life and death. It’s probably not worth it. Better to make sure that everyone sticks with what he or she knows works.

When most people’s only experience with foreigners is with either castoffs or invading armies, they probably aren’t going to trust them. They’d probably return the favor when possible. Unlike trade, theft and war are zero-sum interactions. When these are someone’s sole experience with out-groups, they are less likely to trade with foreigners and realize the benefits of division of labor. Safer to do it all yourself.

Henrich has written a provocative book that builds on an already robust literature. Despite its deep historical and psychological content, The WEIRDest People in the World is also highly relevant to modern public policy. The regulations and legislation that groups like CEI deal with on a daily basis do not come from a vacuum. They come from longstanding political institutions. And these system-level institutions in turn come from culture. All three of those levels matter. A reformer who works on only one of them will fail. Henrich has come up with a plausible framework to explain how they interact over the long run, and how they can shift. Where people are relatively WEIRD, people will build relatively market-oriented political institutions—and eventually, policies. Where they are kin-based, they probably won’t.

Without the Church’s unofficial Marriage and Family Plan, European culture likely would have remained insular and kin-based. That tendency still exists, and is expressing itself in the European Union’s trending towards becoming a protectionist trading bloc. Reformers need to push back and remind people that WEIRD-style openness has massive benefits, especially for the poor.

What about the rest of the world? Fortunately, the Church’s MFP is not the one and only way for people to become psychologically WEIRD. Ideas can be imported and exported, same as goods and services. America was a relatively WEIRD society from the start, as was Australia. The Asian tigers such as Japan, Korea, Singapore, and Hong Kong, saw the economic success of WEIRD countries, and followed their example. China is at a weird midway point psychologically, and its institutions are still extractive and kin-based by WEIRD standards. This may limit China’s future growth as a global power.

The point is that setting a good example can do a lot more good than people think. This puts today’s nationalists and economic protectionists in an awkward position. They are not the future. They are throwbacks to an impoverished, unhappy past.

The post-1800 Great Enrichment that billions of people are enjoying today has deep and distant causes operating at multiple levels. Henrich’s thesis of WEIRD psychology, cultural openness, and economic prosperity will have a major impact on future work in geopolitics, economic development, political polling, immigration, and free trade for a long time to come.

Book Review: Eric Metaxas – Bonhoeffer: Pastor, Martyr, Prophet, Spy

Eric Metaxas – Bonhoeffer: Pastor, Martyr, Prophet, Spy  (Nashville: Thomas Nelson, 2010)

Who was Dietrich Bonhoeffer? He was a German pastor who became a prominent resistor to Hitler’s Third Reich. He helped people to escape Germany, was part of a group that plotted to assassinate Hitler, and died in a concentration camp.

This book would have been about two thirds shorter if it had stuck to its subject. Instead, much of the book is theological discourse. A hero’s courageous life story was regularly interrupted with digressions on obscure theological interpretations and debates—including an out-of-nowhere rant about abortion during a chapter on Bonoeffer’s time in Tegel prison.

Even while listening to the Audible narration at 2.25x speed, there was a great deal of tedium, and not enough about the remarkable man whose name is in the book’s title. There are occasional flashes of (possibly unintentional?) humor, as in Hitler’s description as an “irascible vegetarian.” These moments are few, though.

Bonhoeffer was born in 1906 into a prosperous, intellectual household with several siblings, including a twin sister. His childhood was happy, his parents raised him right, and Bonhoeffer showed high character from the start. He also had enough musical talent to seriously consider becoming a professional musician.

He instead decided to become a pastor. He received his doctorate at age 21, and was ordained at 25. Though protestant, he was tolerant of other denominations, including Catholics, making friends and attending their services. Bonhoeffer’s ecumenicism made him stand out as a little bit of a liberal hippie type by the standards of the day, though a straight-laced one.

The young Bonhoeffer also had an adventurous spirit. He traveled to Rome and Spain, though he spent much of those trips attending church services and in theological study. He was also able to spend a great deal of time studying his favorite sculpture, Laocoön and His Sons, located in the Vatican.

While on a trip to America, Bonhoeffer took a 4,000-mile road trip from New York to Mexico. Bonhoeffer did not know how to drive, and failed a driving test right before the trip. He drove anyway, though with a friend, and essentially taught himself on America’s highways.

During this period he read Erich Maria Remarque’s anti-war novel All Quiet on the Western Front and saw its movie adaptation. To that point, it was the 20th century’s best-selling novel. Bonhoeffer lost an older brother during World War I, and Remarque’s frank depictions of things his older brother experienced, and the way he humanized the soldiers, helped to turn Bonhoeffer into a pacifist.

Bonhoeffer and his similarly liberal-minded family were disturbed by Hitler’s rise from well before he took power, but didn’t take him very seriously until it was too late. But the problems were far larger than one man.

A German Christian movement arose in Germany, embracing the trendy new nationalism and supporting Hitler. Bonhoeffer denounced the movement—which did not come naturally to the inclusive Bonhoeffer—and began to earn a higher profile, and the attention of the authorities. In a theological distinction that actually mattered, Bonhoeffer argued that Hitler was converting the German Christians, not the other way around.

He also struggled with depression, starting around the mid-1930s. In 1939, before the war started in September, Bonhoeffer managed to escape Germany and return to America. But he was restless and unhappy, because he knew that he could help the resistance. So he ended up going back to Germany. He would not survive the war.

He joined the Abwehr, an underground resistance group that ultimately aimed to assassinate Hitler. They nearly succeeded several times, most famously in the failed Valkyrie plot. They also whisked away Jews and others to safety outside Germany, and tried to communicate clandestinely with Allied governments.

Bonhoeffer took seven trips over the Swiss border and back helping the Abwehr cause. He was imprisoned in 1943, just seven miles from his parents’ house. He also became engaged to an 18-year old, though he was 36 at this point. They wrote each other frequently, but saw each other in person a total of 17 times during his imprisonment. As the tide of the war turned against Germany, they both believed Bonhoeffer would spend a year in prison at most.

They were not far off. In February 1945, Bonhoeffer was transferred to the Buchenwald concentration camp, site of some of the Nazis’ worst medical experiment atrocities. He was hanged on April 9, 1945. Allied forces liberated the camp two days later. He was 39. Bonhoeffer’s Letters from Prison were published posthumously, and remain in print today.

Book Review: Tim Mackintosh-Smith – Arabs: A 3,000-Year History of Peoples, Tribes and Empires

Tim Mackintosh-Smith – Arabs: A 3,000-Year History of Peoples, Tribes and Empires

A very good survey history written by an Oxford-educated Brit who has lived in Yemen for much of his adult life. This book is especially interesting when read with Azar Gat’s thesis on nationalism in mind. Gat is worth summarizing to better understand Mackintosh-Smith. Gat views nationalism as both ancient and based on ethnicity. Ethnicity, for Gat, is broader than race or genetics, though it includes both of those things. Ethnicities share, in varying degrees, things like language, culture, religion, dress, dietary customs, and more. The list is long, and it can vary, though language is often the most important. The common thread is that taken together, these cultural markers are strong enough to band people together in an in-group that is easy to distinguish from out-groups.

Ethnicities are similar to the small tribal groups our species has lived in for nearly its entire 200,000-year span, just larger in scale. Nation-states, which are historically a very recent concept—just a few centuries old in most of the world—are an additional step up in scale. They are simply one more way for our evolutionarily-ingrained sense of ethnicity to express itself. A lot of today’s nationalism-related troubles are due to square political pegs not fitting into round cultural or in-group holes, which are always moving around and changing shape anyway.

With Gat’s framework in mind, Mackintosh-Smith’s affectionately argued thesis in this book suddenly makes a lot of sense. To Mackintosh-Smith, Arabs are simultaneously among the world’s most unified and its most fractious peoples. They have the Arabic language in common—Gat’s most important unifying ingredient. People in Morocco, Syria, Iraq, Tajikistan, and as far East as Pakistan can all speak to each other in Arabic and have little trouble understanding each other. But High Arabic is also a bit like Latin was in post-Roman Europe: a formal, stilted lingua franca. Many Arabs speak a different local language at home and in everyday life. So Arabs are at the same time united by language, and not.

Arabs also have Islam in common. But the Sunni-Shia split still has echoes today, and sets Shi’ite Iran apart from most other Arab Islamic countries. Just as Christianity has its million and one different flavors of Catholicism, Protestantism, Evangelicalism, and Orthodoxy, Islam has its different flavors of Sufism, Wahabbism, and on down the line, each with ancient, modern, moderate, and radical versions. So Arabs are at the same time united by Islam, and not.

One thing most Arabs have in common is a nomadic heritage. This has made imposing the new convention of national boundaries very difficult, if not impossible. Not only do some people still move across the new boundaries with some mixture of indifference and impunity, the very notion of national boundaries is a very new concept in Arabs’ 3,000-year history. So Arabs are at the same time united by their nomadic history, and divided by it.

Also in the mix is a cultural divide between the few remaining nomads and the now-majority city dwellers, and there is another ingredient in the unified-but-not mix.

Mackintosh-Smith, though likely unfamiliar with Gat’s work on nationalism, is aware of all those competing dynamics. At each stage of his chronological narrative, most of those facets of Arabic life are there, from the establishment of settled agriculture to pre-Islamic empires, to Muhammad himself and the Ummayad caliphate, its succeeding Abbasid caliphate, its eventual displacement by the Ottomans, and on to today’s independent states, unity and discord are always there in tension with each other. It is a fascinating story.

More Interconnected than Most People Think

From page 70 of Johan Norberg’s 2020 book, Open: The Story of Human Progress:

What we now think of as Western civilization is a combination of a philosophical heritage from the Greeks, religions from the Middle East, creatively interpreted by Romans in what is now Turkey, and scientific ideas borrowed from the Arabs and the Chinese. We got our alphabets from the Phoenicians, and our numbers are called ‘Arabic numerals’ because we learned them from mathematicians in Baghdad, who got them from the Indians.

New EU Tech Rules will Chill Innovation and Harm Consumers

This is a press statement originally posted at cei.org.

The European Union today announced new rules it claims will change the way technology companies operate. The EU says the Digital Services Act and the Digital Markets Act “will create a safer digital space for users” and “level the playing field so that digital businesses can grow.”

Vice President for Strategy Iain Murray said:

“The European Union’s proposed new powers allow it to treat American tech firms as cash cows, to be fined whenever it finds them guilty of providing too much discretion to consumers or allowing too much speech. Its proposed veto on acquisitions will also chill innovation in the European tech sector as it will make the prospect of significant rewards for an acquisition-based business strategy less likely. Europe will act as an anchor on tech innovation, slowing progress and reducing consumer welfare worldwide. The incoming Biden administration should avoid making the same mistakes.”

Senior Fellow Ryan Young said:

“The European Union’s two proposed tech regulation bills have two fatal flaws. One is that, on purpose or not, they are trade protectionism under another name. Many of their provisions are aimed at the large U.S. tech companies. Taking them down a notch would give an opening to EU-based tech companies, the thinking goes. As with President Trump’s trade wars, this will harm consumers without actually helping the industry. The two bills also leave in place the EU’s stifling regulatory culture that is the root cause of Europe’s lack of tech sector innovation.

“The second fatal flaw is that the EU’s proposals would actually lock in the existing American firms’ dominance. They are the only companies that can afford the massive content moderation costs the EU is demanding, or the large fines. Startups that might one day dethrone today’s giants cannot afford these costs, and may not even bother trying to compete.”

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