President Trump Talks Tariffs, Mainstream Media Goes Bananas
The liberal media is up to its usual histrionic tricks. What are they crying about this time?
President Donald Trump ran a campaign on protectionist policies (dubbed Trumponomics by our ever-creative oligarchs), and now they’re acting surprised, even shocked, that he intends to do what he said.
Can you imagine? A politician fulfilling his campaign promises. Horrible right?
Anyways, President Trump’s signaled that he wants to impose tariffs on imported products, particularly steel.
But let’s put that aside for a moment.
I want to look at the logic behind tariffs in a new light—this is brand new stuff people, no one’s ever written about this before. So if it seems crazy, it might be. But I don’t think it is.
Here’s my argument: President Trump should impose tariffs because of the Lindy Effect.
What is the Lindy Effect?
Like so many smart ideas, the Lindy Effect has a dumb beginning.
Lindy’s Deli is by all accounts an (at best) average diner in New York City. But it was at said diner that some gossip-loving actors an important observation about Broadway musicals:
the longer a musical lasted on Broadway, the longer it was likely to last.
For example, a new play that’s only been on Broadway for a week probably won’t be around next season—there are thousands of them. However, a play that’s been around for decades will probably last decades more.
That’s why you’ve heard of the Phantom of the Opera (12,000 performances over 30+ years) but not Lestat (39 performances in 2006). And it’s also why in 30 years time everyone will still know and love Phantom, while Lestat will be lost to history. Sorry, Lestat—I’m sure you weren’t as bad as the reviews said.
Anyways, this may seem silly and off topic, but it’s not. This observation (things that stand the test of time continue to stand the test of time) is one of the most important observations of the twentieth century, and it effects almost everything.
Consider this: if your life depended upon guessing what single piece of technology will still be around in 1,000 years (assuming humanity still exists), what would you say? Computers? Internal combustion engines? Maybe. After all, they’re useful, advanced technology. They’re good guesses.
But I can do better.
Bowls. Knives. Chairs.
The fact is that these three inventions have been around for thousands of years: they’ve proven their utility over centuries, and in hundreds of different societies. They’re robust relative to change and volatility—no matter how advanced our technology gets, bowls remain indispensable.
Here’s another one for you: which building will still be around in 1,000 years, the Pyramids at Giza, or the marvel of modern engineering the Burj Khalifa. We both know the answer.
No matter how many centuries pass, Mozart’s music, or Michelangelo’s sculptures, or Shakespeare’s plays are still adored. They’re not going anywhere. They’ve proven their worth. They’re robust.
This is the Lindy Effect in action.
The Lindy Effect Justifies Tariffs & Economic Protectionism
I know what you’re thinking: the Lindy Effect is so basic it almost doesn’t need to be said. It’s almost intuitive. And yet it was completely ignored by scholars until Benoit Mandelbrot imported it into the realm of academia in his book The Fractal Geometry of Nature, and Nassim Taleb popularized it in his book The Black Swan.
Now, people are starting to acknowledge it, but it’s not widely applied. It should be.
Why? Because the Lindy Effect doesn’t just apply to things like Broadway musicals or buildings, it also applies to ideas and organisms—anything that is subject to volatility (time), in fact.
For example, the Lindy Effect underpins the logic of Darwinian evolution (time sorts the unfit from the fit), but also adds to it—in the event of a calamity that wipes out 99% of all life on earth, what will survive? Humans? Doubtfully, we’re relatively new.
Rats? Probably, they’ve been here (in some form) since the dinosaurs. Cockroaches? Very likely (for the same reason). Bacteria? Definitely.
Bacteria were some of the first creatures on earth, and they’ve been around ever since—if anything’s going to survive, it’s them.
The Lindy Effect likewise applies to ideas: good ideas survive, bad ones are eventually weeded out.
This brings me to President Trump and his tariffs. Economists are up in arms. They say that tariffs can only hurt America. That they’re unnatural government intervention. That they interfere with the free market. Blah. Blah. Blah.
I’ve heard it all before, and I’m not convinced.
The fact is that tariffs, and other non-monetary barriers to domestic markets, are actually older than free trade and liberal economics (by thousands of years). In fact, they’re older than capitalism too.
Tariffs are robust. They’ve stood the test of time (they’re one of the few economic policies that have stuck around continuously for at least 800 consecutive years). They’re robust.
And even if economists don’t understand why tariffs work, it’s clear that they do—if they didn’t, we wouldn’t have them. So let’s not write them off simply because “economists” don’t understand them.
We need to start taking tariffs seriously—they’ve earned it.
Now’s a good time for some historical examples to prove my point.
The History of Tariffs is Lindy-Compatible
In this section I’m not going to explain why tariffs worked in each case—all I’m going to do is show you that they existed. That’s enough to prove that the Lindy Effect is in operation, and we should defer to its wisdom.
Most of you will know Venice as a rustic, waterlogged Italian city. It’s romantic. They have some nice buildings, artwork. Good food. All that’s true.
But what you probably don’t know is that Venice was once Europe’s richest city (c. 1300-1700), and the seat of a powerful Mediterranean empire that stretched from the Po River basin in Italy, down the Dalmatian coast, to numerous Greek islands in the Aegean, Cyprus, and north to the Crimean peninsula (in modern day Ukraine, or Russia depending upon who you ask).
And how did they get rich? Unabashed economic nationalism—they put Venice first. The interests of Venice always prevailed over both the interests of foreign powers, and over individuals. Why? Because it worked: when Venice did well, Venetians did well.
To that end, Venice’s modus operandi was not simply to impose a tariff on imported products, but to make imports outright illegal, unless Venice couldn’t acquire said product any other way (spices and the like were fine). Basically, if Venice could make it, she made it rather than buying it.
Economists may scoff, but who cares? Venice prevailed over its freer-trading rivals. Clearly their economic strategy worked (or at the very least, tariffs did no harm). You can read more about Venice’s economy in this article, or in Roger Crowley’s book City of Fortune.
Let’s jump to the other side of the world: China.
Most people think China was cut off from the world until recently, but that’s not really true. In actual fact, China was at the center of global trade for most of the last millennium. The reason you never hear about Chinese traders and explorers is not because China was isolated, it’s because people came to them.
Bottom line: China was the world’s largest trading nation, but not once did they practice free trade. Instead, they were very firmly mercantilist: they imported things they couldn’t make or extract for themselves (predominantly silver), and exported refined products.
My point is that China’s trade policy was actually very similar to Venice’s, despite the fact that their policies evolved independently on the other side of the planet. Call it convergent evolution.
You can read more about China and the Canton System here.
And of course, tariffs were the norm in the English world, from the British Empire to the USA itself.
For example, even during the Industrial Revolution (which economists like to pretend was caused by free trade) tariff rates on manufactured goods in Great Britain were roughly 50%—the highest in Europe. Ironic.
The USA itself was staunchly protectionist, and had some of the highest tariffs in the world from its inception until the 1970s. In fact, the second piece of legislation signed by President George Washington was the Tariff Act of 1789.
Tariffs were the norm in America until the 1920s (just before the Great Depression), and again until the 1970s.
Anyways, I think you get the point.
Tariffs are the historical norm.
Learning From Lindy: Trump’s Right on Tariffs
So what’s the takeaway here? Let’s put the pieces of the puzzle together and see what we can come up with.
On the one hand we have the Lindy Effect that says:
The longer something lasts, the longer it’s likely to last. Why? Because it’s proven its utility and robustness.
On the other, we have the fact that tariffs have operated in Europe’s richest states (from Venice to Britain) since the 1200s—that’s 800 years. On top of that, they evolved independently in China, and lasted for centuries (in fact, China still has massive tariffs to this day).
And of course, the US itself had a strong tariff policy for 200 years (vestiges of which still remain, particularly in agriculture).
Given all that information, it doesn’t really take a genius to put two-and-two together and realize that tariffs are robust, and probably serve an important economic purpose—even if economists aren’t sure what it is.
The default presumption here is not free trade is good, it’s that tariffs are good. The burden of proof doesn’t rest with Trump to justify his decision to impose tariffs, it rests with liberal economists to explain why tariffs are a bad thing.
Beyond that, the Lindy Effect shows us that tariffs likely produce a much more robust economy than does international free trade. This is why they’ve survived as long as they did, and it’s also why all the rich states had them.
And to be honest, even if you don’t buy this argument, I don’t care. Why? Because economic protectionism’s been around a lot longer than liberal economics, and it’ll be around after liberal economics dies out.
Lindy always wins.