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I don't understand why Friedman would prefer to produce solar panels in America than ship them from China. Trading between nations makes sense for the same reas
by michaelkeenan 17y ago
I don't understand why Friedman would prefer to produce solar panels in America than ship them from China. Trading between nations makes sense for the same reason trading between individuals makes sense: specialization is efficient, leading everyone to greater wealth.
He mentions that China will have a great export platform in renewable energy technology as the world adds 2.5 billion more people. So he's anticipating future demand. It seems to me that that is useful information for entrepreneurs, but it's nothing that demands government action. If entrepreneurs decide it would be profitable to supply that impending demand, then they will. If the government has to subsidize to make that happen, then maybe it shouldn't happen.
Just because there will be future demand for something doesn't mean we need government action to supply it. I'm sure those billions of people will want pants and meat and toothbrushes too, but there's no particular reason why America has to be the place to produce those. Just let people produce whatever they decide is most profitable for them to produce, and we're likely to get a more efficient outcome than one decided by central planning.
I think solar energy is great. If we want it, all we have to do is worry about the demand side, not the supply side. That is, consumers and governments should buy the best, cheapest solar panels available. I don't think it matters where the production, or the R&D, happens.
He suggests that trading solar panels with China might be similar to trading oil with Saudi Arabia. I don't understand why. Trading with Saudi Arabia is considered a problem because the money is thought to fuel terrorism. China doesn't have the nicest foreign policy on the planet, but I'd love to make them more rich, not less, because they seem to be becoming more peaceful as they grow richer. And if China ever starts funding terrorism, it is much easier to set up new solar panel factories than it is to set up new oil fields.
- papaf 17y agoChina doesn't have the nicest foreign policy on the planet The Chinese policy of non-interference in foreign affairs has shocked people who look at Chinese relationships with N. Korea and Burma. However, I personally feel that Chinese foreign policy is no worse than that of Britain, France or America.