Americans persist in thinking that Adam Smith’s rules for free trade are the only legitimate ones. But today’s fastest-growing economies are using a very different set of rules. Once, we knew them—knew them so well that we played by them, and won. Now we seem to have forgotten
In the long run, [Friedrich List] argued, a society’s well-being and its overall wealth are determined not by what the society can buy but by what it can make. … In strategic terms nations ended up being dependent or independent according to their ability to make things for themselves. … That is, if you buy the ton of steel or cask of wine at bargain rates this year, you are better off, as a consumer, right away. But over ten years, or fifty, you and your children may be stronger as both consumers and producers if you learn how to make the steel and wine yourself.