Second, the way “infant” economies become “mature” economies is not via free trade. It never has been and never will be. Whether it be the mature economies of Britain (which began to seriously grow in the early 1600s), America (late 1700s), Japan (1800s), or Brazil (1900s), in every single case, worldwide, without exception, the economic strength and maturity of a nation came about as a result not of governments “standing aside” or “getting out of the way” but instead of direct government participation in and protection of the “infant” industries and economy.
The modern history of protectionist trade policies goes back to ancient Rome, stretches through the reigns of a series of King Henry’s in the UK, through Alexander Hamilton’s tenure as Secretary of the Treasury under George Washington, through the trade policies of Dwight D. Eisenhower and JFK, and continues today with China, Korea, the Middle East, and the rapidly-growing Brazilian economy.
[ ]…Once “strategic” and “important” industries are identified, government both encourages and protects their domestic growth in a variety of ways. These include subsidies, legal protections (like patent laws), import tariffs to protect against foreign competition, strong industry regulation to ensure quality, and development of infrastructure to ease manufacture, distribution, sales, and use of the product.
As Ha-Joon Chang points out in his brilliant book Bad Samaritans: The Myth of Free Trade and the Secret History of Capitalism,” in 1933 a clothing manufacturing company decided to branch out into the manufacture of automobiles. They had everything going against them – their nation had no really serious domestic auto industry, the company had no experience with the product, and other nations (particularly the US and Great Britain) were already making world-class vehicles that had captured most of the world’s markets.
But the company caught the imagination of its country’s leadership, and a ministry of trade decided to help it along. Government subsidies helped the company develop their first car. Decades of high import tariffs protected it from foreign competition as it grew into a serious contender. Domestic content laws both made sure the company used parts made within the country, and also guaranteed that domestic competitors would have to, thus building a strong base of domestic companies supportive of an auto industry, from tires to plastic components to precision machine tools and electronics.
In 1939 the country even kicked out both GM and Ford from sales within the country, and the nation’s single wholly-owned bank bailed out the struggling textile manufacturer as it moved relentlessly forward in the development of an automobile.
That company, originally known as The Toyoda Automatic Loom Company, is today known as Toyota, and manufactures the infamous Lexus that Tom Friedman mistakenly thought was successful because the world is “flat” and trade is “free.” In fact, the success of the Lexus (and the Prius and every other Toyota) is entirely traceable to massive government intervention in the markets by Japan over a fifty-year period that continues to this very day.
Like so many other words heard in everyday political speech, free trade has been a code word for some time. My neighbors think of it as this nice little system that means they can buy ham slightly cheaper at store X than at store Y. In reality it becomes the nice sounding grand old American tradition morphed into the right to ship jobs to Asia and hobble organized labor – though who object are Marxist radicals who do not want everyone to live up to their potential to be the next billionaire. Free markets is code for not allowing labor to have too much power because it takes away the freedom of rent-seekers to squeeze as much money as they can out of labor without paying them a living wage or simply taking the lion’s share of the profits created by someone else work, ideas, research or invention.
Using advanced statistical techniques, researchers at the University of Pittsburgh and Bates College have developed an approach to systematically describing smells.
This work may help guide future studies pertaining to how smells are represented in the brain. The research suggests that there are 10 basic categories of odor including fruity, minty, lemony—and sickening.
Senses such as hearing and vision can be discussed in terms that most people understand and that are tied to measurable physical phenomena. But the sense of smell, or olfaction, has thus far not lent itself to such a systematic understanding of what smells we perceive and how those perceptions relate to physical phenomena.
I’m amazed at how the brain, to an extraordinary degree, links smells with memory. Suede, which is probably partly a smell from the chemical tanning process, brings back very distinct sharp memories of someone I knew as a teenager. While some perfumes/colognes bring back other memories.