Pushan, your application of Cipolla’s framework to dissect the inefficiencies of tariffs is both clever and compelling—especially the prisoner’s dilemma lens that underscores the mutual harm of trade wars. Yet, I can’t help but wonder if political incentives complicate the picture: leaders often cater to short-term demands from vocal constituencies, even at the expense of long-term economic health, which might keep us trapped in the 'stupid' quadrant. Meanwhile, today’s tangled global supply chains add another layer—tariffs on intermediate goods can send unpredictable ripples, potentially blurring the lines between Cipolla’s categories. Could there be cases where tariffs, though inefficient, act as strategic leverage to renegotiate trade terms? I’d love to hear your take on how these factors might shift the analysis.
Hi Genna, this is a series. The next ones will add these complexities. I will need an entire post dedicated to the politics of trade wars. For instance, farmers are a powerful constituency in both Europe and North America (vocal minority; politically organized). That is why even WTO rules have exceptions carved out for agricultural products. Another one on global value chains. And a third one on strategic trade policy. Long way to go.
"Two things are infinite: the universe and human stupidity; and I'm not sure about the universe." (Einstein)
Brilliant!
Pushan, your application of Cipolla’s framework to dissect the inefficiencies of tariffs is both clever and compelling—especially the prisoner’s dilemma lens that underscores the mutual harm of trade wars. Yet, I can’t help but wonder if political incentives complicate the picture: leaders often cater to short-term demands from vocal constituencies, even at the expense of long-term economic health, which might keep us trapped in the 'stupid' quadrant. Meanwhile, today’s tangled global supply chains add another layer—tariffs on intermediate goods can send unpredictable ripples, potentially blurring the lines between Cipolla’s categories. Could there be cases where tariffs, though inefficient, act as strategic leverage to renegotiate trade terms? I’d love to hear your take on how these factors might shift the analysis.
Hi Genna, this is a series. The next ones will add these complexities. I will need an entire post dedicated to the politics of trade wars. For instance, farmers are a powerful constituency in both Europe and North America (vocal minority; politically organized). That is why even WTO rules have exceptions carved out for agricultural products. Another one on global value chains. And a third one on strategic trade policy. Long way to go.
Looking forward to the next post!