You’d be hard pressed to find me talking tariffs, but here goes…
What I know about Economy 101 is simply the guns vs butter parable – a country who spends more on guns, spends less on feeding its people. I get that, the more we spend on prisons, the less we spend on schools. But today, tariffs are going to start again for Iran according to the Twitter fingers of Mr T, and maybe I should be worried but I’m kind of stuck on an overdrive of worry.
Why are those cave boys from Thailand becoming monks?
Why is Norway separating children from their parents?
What exactly won’t I be buying from Tehran?
And just when my feminist heart was melting because Saudi Arabia finally “allowed” its women to drive cars, I just read that Canada has decided to sanction Saudi Arabia on Human Rights violations.
Saudi authorities in 2018 continued to arbitrarily arrest, try, and convict peaceful dissidents. Dozens of human rights defenders and activists are serving long prison sentences for criticizing authorities or advocating political and rights reforms. Authorities systematically discriminate against women and religious minorities. In 2017, Saudi Arabia carried out 146 executions, 59 for non-violent drug crimes. A Saudi-led coalition continued an airstrike campaign against Houthi forces in Yemen that included the use of banned cluster munitions and apparently unlawful strikes that killed civilians. https://www.hrw.org/middle-east/n-africa/saudi-arabia
CANADA mind you! Not us, no we just love strong rulers.
Remember how much Ivanka and her dad fawned over that new young Saudi Prince Mohammed bin Salman? The one who held up his relatives and 200 of the richest Saudis in an airport until they paid their taxes to the crown. Well, not to be outdone, the Prince has retaliated by: evicting the Canadian ambassador; stopped all commercial airline flights to Canada; ordered 16,000 Saudi students to come home; AND placed an immediate freeze on all investments and bilateral trade agreements between Saudi Arabia and Canada!
I guess Riyadh will have to buy maple syrup from Vermont?
This has me wondering if sanctions and tariffs actually work? Or are they just symbolic slaps on the wrist of an increasingly entitled corporate global structure that can shift easily between ruling oligarchs and demagogues, and princes. According to The Washington Post, some goods and services are better than others to sanction. Usually there’s a point at which the demand for something goes up, the price will come down, except for iPhones. But consider Veblen goods, they perform in a contradictory way like diamonds – the more demand we have the higher the price.
“Veblen goods are positional goods, in which demand increases along with price because the good is seen as a display of prestige. Veblen goods can explain why some countries choose to invest in aircraft carriers or space programs when they should be allocating scarce resources elsewhere.” https://www.washingtonpost.com/news/posteverything/wp/2018/08/07/why-in-the-world-is-saudi-arabia-sanctioning-canada/?noredirect=on&utm_term=.26a5b146bfb2
Since most countries don’t have the resources to even impose sanctions on one another, the author posits that Prince bin Salman is showing the West his peacock plumage. He is arresting women activists while also letting them drive cars, so they know who is in charge. And he can throw out the Canadian Ambassador because he CAN, ratcheting up his prestige on the world stage…making tariffs and sanctions into a kind of Veblen good. Criticize Saudi Arabia at your peril!
Thorstein Veblen was an economist who coined the term “conspicuous consumption” in 1899. I wonder if he ever thought a Narcissistic real estate con-man who lived in a gilded tower in Manhattan could ever become President of these United States.
Patriotism, Veblen once said, was the only obstacle to peace among nations. Let that sink in.
MountainMornings 