This is implying that China is providing a "Free Market". For example it is impossible for American companies to even open a chip plant in China without first going through a Chinese company.
China has a specific "negative list" of sectors in which foreign investors are either barred or must enter into a joint venture. This list has been shrinking year by year. For example, Tesla 100% owns its operations in China, which wouldn't have been possible 5 years ago.
Is chip fabrication on the negative list? I can't find any references to it being on the negative list. On the contrary, I've found references to foreign investment in semiconductors being explicitly encouraged by a few provincial governements.[0]
The original international theory of the free market is that they don't need to be recursive for it to work.
It's OK if country X decides to subsidize sector A or B -- it's just free money for the world. The logic of this is the same as within countries. It's OK if Google uses search to subsidize it's smart phone operations. On the highest layer, it's still capitalism and should still work. We don't kick Google out of US markets just because it's internal departments don't use free markets to allocate goods.
The international free market is still supposed to work even if a country doesn't have internal free markets. That the US is going back on the first shows that in the end, it was always about geopolitics. When free markets aligned with US geopolitics, it was nice to be able to say "oh we're being principled".
> The international free market is still supposed to work even if a country doesn't have internal free markets.
That is self-proving as false and does not follow automatically what-so-ever. You're talking about mediocre economic theories that don't even make sense in theory.
> That the US is going back on the first
The US has never been the free market in practice or ideology that you're proposing. Not at any point in its history.
The US has very heavily utilized things like tariffs and restrictive trade agreements throughout its history, as have all large economies and without exception. The US has even utilized sanctions and blockades when it sees fit, going back 60+ years. If it was ever close to being a free market, that is well over a century in the past.
I find it astounding that anybody could be confused about the US being a particularly free market economy today. It's not even close to that. All you need is to have a primitive grasp of the scope of its vast economic regulations, its huge welfare state, and taxation to understand that. The US is a bureaucracy-heavy mixed economy at best.
This is the thing that always gets me. Anyone who ever complains about restrictions on the "free market" hasn't been paying attention. There is no free market. There never has been a free market. Sure, someone might be against a particular restriction or regulation for specific reasons, but "hurr durr free market" can never be a serious argument, as we do not have a free market, and never have.
I think we should err on the side of "freer" markets, but market restrictions have their place, and are often an essential tool to achieve good outcomes.
> That is self-proving as false and does not follow automatically what-so-ever.
To the extent that anyone believes free markets are good, the usual argument of their goodness does not at all rely on sub-levels to be free markets. Now you might be saying even "free markets are good" is suspect. Attacking that axiom is fine in my book.
> The US has very heavily utilized things like tariffs and restrictive trade agreements throughout its history,
I support this view. However, the early 90s "Washington Consensus" was that in international spheres to talk up how good free markets are. The US should drop that pretense entirely then.
It's actually a theory that I've first read in Jean-Baptiste Say's works.
He was mentioning it in connection with the French government of the time (I think he wrote all that down during Napoleon's reign, even though it could have been during the Restoration, too lazy to check) subsidising the export of their "luxury" products, the Sèvres porcelain if I remember correctly. He was explaining that, in effect, the French government was putting money in the pockets of foreign clients/entities.
As such, the same thing will happen (happens) when it comes to US steel industry, even though in this case one also has to take into consideration the opportunity costs of losing the knowhow of that industry for good if it is allowed to die in the face of foreign competition. One could say that today's US taxpayers, by in effect subsidising the US steel industry, are paying for future generations to have the opportunity to build tanks and munitions and other war-related stuff without having to worry about having enough steel stocks at hand.
Google does have a confound in that it's a monopoly. But if you take the example of a small startup, who uses profits in one department to subsidize R&D in another department, it's clear the startup doesn't have internal free markets.
Or take a family, if the mother gives the nephew a lot of spending money, that's also not free markets.
Yet families and startups in the US work well on the country level.
