I have no social science by which I can back this up, nothing that would qualify as “evidence”, no “receipts”. But I think that goodwill is an important force in human affairs, at individual, group, and national levels. I think it is a virtue in an ethical sense and wise as a practical matter to offer and seek to elicit goodwill.

Machiavelli famously wrote in The Prince:

…it is much safer to be feared than loved, when, of the two, either must be dispensed with. Because this is to be asserted in general of men, that they are ungrateful, fickle, false, cowardly, covetous, and as long as you succeed they are yours entirely; they will offer you their blood, property, life, and children, as is said above, when the need is far distant; but when it approaches they turn against you. And that prince who, relying entirely on their promises, has neglected other precautions, is ruined; because friendships that are obtained by payments, and not by greatness or nobility of mind, may indeed be earned, but they are not secured, and in time of need cannot be relied upon; and men have less scruple in offending one who is beloved than one who is feared, for love is preserved by the link of obligation which, owing to the baseness of men, is broken at every opportunity for their advantage; but fear preserves you by a dread of punishment which never fails.

As usually quoted, the excerpt omits the words that come immediately before:

[W]hether it be better to be loved than feared or feared than loved? It may be answered that one should wish to be both, but, because it is difficult to unite them in one person…

It is not as difficult in a nation, as in one person, to unite both fear and love. That the military of a country is strong and therefore fearsome does not preclude friendly relations with other countries, whether peer or weaker powers. Indeed, in many contexts, what is in a certain sense fear becomes sublimated into a less caustic attribute, respect, which can be mutual. The logic of ordinary deterrence — perhaps others are stronger than we are, but our will and capacity to defend ourselves is sufficient to deter would-be adventurers from imagining some transgression would be painless — is supportive of mutual respect and goodwill. Riffing on Niccolo, love itself cannot endure when opportunity and advantage tempt our counterparts to break the links that bind us. Love and respect, and therefore to a certain degree fear, are complements not substitutes.

I am terrified by the collapse of goodwill between great powers at the current moment. All I can say about the war in Ukraine is that our priority should be to achieve the most minimal terms all parties can live with so that politics can revert to less terrible means. People who perceive opportunity in war are shortsighted.

Beyond this war — we must pray there is a beyond this war — the collapse of goodwill between the United States and China since 2016 has been a catastrophe. As Scott Sumner very effectively points out, while there’s lots to dislike about China’s government, it is the United States that started the current cold war. We lashed out in hostility, blaming China for what in fact were our own poor choices. We should not have allowed, even encouraged, so much of our industrial base to migrate to China, and we certainly ought to work to restore what we have lost. But we had plenty of policy tools that could have prevented the destructive aspects of the “China shock”. We chose not to use them, because we got high on our own supply of a cartoonishly simplistic neoliberal globalization. Free markets and comparative advantage would lead to interdependence, peace, and prosperity. Any attempt by states to manage the process was “protectionism”. However terrible the effects upon domestic publics, they were to be endured. The market knew best, utopia was close at hand, just around the corner after some “trade adjustment”. We failed to look after our own interests, while other governments did look after theirs and so profited from some of our lapses. Durable goodwill depends upon parties setting and enforcing their own boundaries.

We should not revert to 2015 policy in hopes of recovering a relationship of goodwill with China. 2015 policy wasn’t working for us. But we should absolutely, as soon as possible, eliminate all bilateral tariffs against China. Country-specific tariffs are a terrible tool, because they provoke ill-will. They single out a particular country as a bad actor, and discriminate against its goods. There is no reason to do that! When we are concerned about our trade balance — which we absolutely should be, the insouciance towards international balance of the neoliberal period was sheer idiocy — we should intervene in the capital account, taxing purchases of our debt by foreign entities of any nation, on nondiscriminatory terms, and/or interest payments on our debt to foreign entities. By doing so, we can make unbalanced trade as bad a deal as necessary to achieve whatever balance of payments we deem desirable. I have made this case before (I call it “capital account protectionism”). In their magisterial Trade Wars are Class Wars, Matt Klein and Michael Pettis suggest capital controls as one approach the US might use to manage its imbalance (though they suggest accommodating imbalance by expanding public investment rather than private debt might have been an even better approach, a case I’ve made as well).

For the purposes of this essay, the crucial point is that we have more than sufficient tools that are nondiscriminatory across nations to manage our economic and trade concerns. In order to ensure minimal labor standards and prevent forced labor in our supply chains, we can create regulations and a certification bureaucracy (ideally multilateral) to enforce them uniformly, rather than call out some countries but not others for human rights abuses. When there are domains, such as communications infrastructure, that for national security reasons we insist should be produced domestically, we can regulate to require that, without calling other countries’ manufacturers spies or puppets of their state (whether they are or not). Rather than “friendshoring”, as Janet Yellen recently suggested, we should just make geographic diversification of our supply chains a matter of national interest. There’s no need to divide the world into more and less unfriendlies. The fact that some semiconductors are sole-sourced from earthquake and typhoon-prone Pacific rim nations would be a problem even if there weren’t geopolitical terrors laid on top of natural vulnerabilities.

Matt Stoller has a piece today which emphasizes the dangers more than the opportunities of China’s economic ambitions:

In May of 2020, the Chinese Communist Party (CCP) declared its economic strategy, using the phrase “dual circulation.” Dual circulation meant fostering a domestic productive apparatus that is independent of foreign technology and finance, while making sure the rest of the world is dependent on Chinese control of key supply chains, whether it’s shipping, railroad construction, electric batteries, or solar panels. Chinese ‘grand economic strategy,’ in other words, is to operate as a giant monopoly on which the rest of the world must rely.

I’m sure this is right. But don’t we, and shouldn’t we, do the same? That is to say, for the same reasons all countries should maintain some degree of military deterrence of invasion, all countries should seek an “autarky option” that may be expensive to exercise, but that in extremis can be exercised in order to limit foreign powers’ ability to coerce them via trade dependencies. Given the international interdependence required to support modern life, most countries will find it impossible to make reversion to autarky cheap. Which is good, because the traditional liberal case for commerce as a foundation of peaceful coprosperity remains strong, as long as the trade occurs mostly on equitable rather than coercive terms. But occasionally, national sovereignty requires defying trade partners, and enduring what costs they impose, as food self-sufficient Iceland demonstrated during the financial crisis or (much less positively) Russia is demonstrating now.

So the first of China’s dual circulations seems like a good aspiration for all countries (albeit more achievable for large countries, or blocs like the EU, than for small states). The second circulation, the ambition to foster dependence of trade partners, ideally to become a monopolist in critical sectors, is not so nice. But it is hardly a Chinese invention. The country that has most frequently and successfully “weaponized interdependence”, as Henry Farrell and Abraham Newman put it, is the United States with its extraterritorial monopoly over the US dollar financial system. In global affairs as in business, I don’t think it’s plausible to demand that ambitious players unilaterally desist from seeking monopoly. Monopoly, with the coercive power it affords over others, is agreeable. Just as states have to be responsible for military deterrence and managing their trade balance, they must ensure domestic or diverse sourcing of important goods. The US should strive to reduce its dependence on Chinese manufactures, just as China should seek to reduce its dependence on US aviation, not because trade in these things is bad, but because for trade in these things to be good, it must occur on noncoercive terms. Sustainable trade relationships are continually voluntary and mutually beneficial.

The United States has no need to impose discriminatory bilateral tariffs, or to adopt a hostile rhetorical posture against China, or any other country for that matter. We have to tools necessary to see to our own interests, and should seek a warm peace and friendship with the people of every country. China does some terrible things. What it is doing with the Uyghurs is horrid, indefensible. But rhetorical hostility does the Uyghurs no good, and we have no effective means of coercing China to change its policy. The best we can do is try to persuade its leaders that there are better ways of addressing whatever problems they think they are addressing. We are more capable of persuasion and assistance as friends than as adversaries. At the moment, and not unusually, we’re using the issue just to snow ourselves. Our current posture of hostility towards China derives from trade disputes and military rivalry in the Asia Pacific, but we imbue it with moral weight by attributing it to human rights and autocracy, even though we overlooked those concerns, from Tiananmen to Tibet, for decades when our elites perceived the trade relationship as more profitable than threatening.

The current hostility between the US and China is mutual. There is no guarantee that any change of posture on our part would lead to a warm reception on theirs. But goodwill, properly understood, is free. It should be offered unilaterally, whether reciprocated eventually or not. Expressing goodwill does not mean sacrificing ones interests. Indeed, it was failing to look after our own interests that led to the recent collapse of the goodwill. Goodwill does mean, rhetorically, expressing warmth, a desire for peace and fruitful intercourse. It means working diplomatically, assiduously and proactively, to find ways of reconciling our interests where they diverge, rather than relying solely on mutual deterrence. It means encouraging interaction at a cultural and personal level, rather than treating foreign nationals presumptively as spies. It means love unconditional, to all the humans of all the nations, at the same time as we do the hard and necessary work of attending to our own interests. It means persuading, but not coercing, others that there might be something decent in our perspectives and values, while remaining open to what’s good in the perspectives and values that they offer to us. Goodwill is not weakness or naiveté. Our foreign policy should offer and seek to cultivate goodwill, sincerely, ostentatiously, and without apology.

This entry was posted on Wednesday, April 27th, 2022 at 4:24 pm PDT.
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