This blog post is copied from the Radix blog...
The news yesterday that the doom-laden trade dispute, between the giant American planemaker Boeing and its small Canadian rival Bombardier, may have been resolved only seemed to compound the basic underlying problem.
If the dispute really has been patched up, then it has been by doing a deal with Boeing's European rival giant Airbus to construct the Bombardier planes ordered in the US in a factory in the USA.
Of course, we should welcome anything that resolves this kind of trade spat, but – really – there is something craven about the solution, just as there is about the original problem. Apparently, both modern protectionism and modern free trade are understood in practice as about protecting the giants against their challengers.
I have written elsewhere (in the book I wrote with Joe Zammit-Lucia and published by Radix) about how the free trade idea became so corrupted. It appears to have something to do with a long-running dispute inside the Chicago School of Economics in the 1950s. Milton Friedman emerged as the victor and he said that monopoly was rarely if ever an issue.
This nonsense has led to the current impasse, where free trade has come to mean the very opposite of the original idea - it isn't about supporting challenge from below, it is an apologia for monopoly, a featherbedding of the giants.
While I understand how this reversal came about, I'm not sure why the forces of Liberalism worldwide should have abandoned their most important economic doctrine.
But I do know that concern about monopoly power is rising, not here perhaps, but in the USA - where two pieces of economic research have been published which lift the lid on the economic consequences of monopoly power. After all, the US Department of Justice didn't open any cases against monopolies at all in 2014, and opened just three in 2015. That compares to 22 cases in 1994.
You can read more about the latest research in the Bloomberg report here. Particularly, economists Jan de Loecker and Jan Eeckhout have found that prices re now 67 per cent above costs when they used to be just 18 per cent, and other evidence that consolidation is driving up prices. German Gutierrez and Thomas Philippon have also found that business investment as a share of GDP has been falling - probably because of the increasing market power of companies. Why would anyone lend you money to compete with Amazon, after all?
The situation was summed up in a recent headline in Christian Science Monitor explaining that Catalonia can opt out of Spain (perhaps), but never out of Google. American thinktankers like Barry Lynn and Stacy Mitchell are beginning to make hay with the monopolies issue, but in the UK - well, silence.
In fact, if you were wondering why the political centre ground has become so lost on this side of the Atlantic, their ability to be the dog that didn't bark about monopoly power might be all you need to know.
So, thanks to the silly season, the great debate is finally grinding into life. What is bizarre is what it says about politics now. Why should the left take the side of parents? Why should the right claim, oddly, that children should be in front of screens as much as possible, to help the nation recruit the right knowledge base - though why GCHQ can't find the right staff, given that children are spending six hours a day online, I simply can't imagine?
My own experience suggests that too long online leads to depression, no matter how happy the messages people read there. Too long playing online games also makes children bored of real life.
These things matter very much indeed. And oddly enough, some of the original tech gurus knew that - as I explain in the book, Steve Jobs rigorously controlled the time his children spent on ipads. But that didn't stop UK schools gorging on them in the vain hope that it might help disadvantaged children learn - we all know that what helps people learn is good teaching and good relationships with teachers.
But there is a more fundamental disagreement below the radar here. It is the fundamental difference, which the official mind seems unable to grasp, between real and virtual.
Former GCHQ director Robert Hannigan said this in his Telegraph article:
"Parental guilt is also driven by a failure to appreciate that life online and 'real' life are not separate: they are all part of the same experience. Millennials understand this..."
Quite the reverse, in fact. The extent that millennials fail to understand the distinction between online and real life is precisely the extent to which they are disadvantaged. Or are your Facebook friends your real friends? If you really can't distinguish the two, you are in trouble, it seems to me.
This is a confusion, not so much among children - who tell the difference often and easily - but among officials. Their bureaucracies create the same kind of virtual simulacra of the world, and they need to believe there is a continuity between the two worlds, the real one and the bureaucratic copy.
Yet actually the real world is almost infinitely more complex, unexpected, magical and humane.
This is an absolutely vital debate and I would like to do more to make sure battle is joined.