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What Davos (and Mark Carney) get wrong

2026-01-22 22:37:36

That is the topic of my latest Free Press column, here is one excerpt:

Though Donald Trump seems to be calling off his latest trade war, the United States has indeed retreated from free trade with a new era of tariffs. It’s a development I rue. But Canada just opened its market to Chinese cars. So Trump did in fact find the recipe to nudge an oft-protectionist Canada toward freer trade, though it is the opposite of what he might have been wishing for. Soon, Canada will have access to better and cheaper electric cars than what we can get in the United States. And even if you think that spyware could make those cars a security risk in Washington, D.C., due to spying possibilities, I am less worried about their proliferation in Quebec and Nova Scotia. Keep them out of Ottawa if need be.

The European Union just worked out a free trade agreement, pending final approval, with Mercosur, a trade bloc encompassing hundreds of millions of people in South America, a region that is likely to be more economically important in the future. The EU also announced it is likely to strike a free trade agreement with India, the most populous nation in the world and one of its fastest-growing economies. However imperfect these agreements may turn out to be, has there been any recent short period with so much progress in free trade?

And this on Mark Carney:

Canadian prime minister Mark Carney’s speech on Tuesday garnered a lot of attention, but I think for the wrong reasons. He proclaimed the ability of “middle powers”—that is, Europe and countries like his own—to stand their ground against America and China, but he mentioned AI only in passing. He had no solution to an immediately pending world where Canada is quite dependent on advanced AI systems from American companies (often, incidentally, developed by Canadian researchers in the U.S.). That is likely to be the next major development in this North American relationship, and it will not increase the relative autonomy of Canada or of any other middle powers.

Carney has garnered praise for staking out such bold ground and standing up to Trump. The deeper reality is that Carney can “talk back” in the North American partnership because he knows America will defend Canada, including against Russia, no matter what. Most European countries cannot relax in the same manner, and thus they are often more deferential. What the reactions from Carney and the Europeans show is not any kind of growing independence for the middle powers, but rather a reality where you are either quite tethered to a major power—as Canada is to America—or you live in fear of being abandoned, which is the current status of much of Europe.

Recommended.

The post What Davos (and Mark Carney) get wrong appeared first on Marginal REVOLUTION.

How Restrictive is U.S. Trade Policy?

2026-01-22 18:39:31

This short note computes Trade Restrictiveness Index measures for current U.S. trade policy. Building on the ideas of Anderson and Neary (1996, 2005), the Trade Restrictiveness Index is the uniform tariff that leaves the U.S. consumer as well off as under actual policy. As of October 2025, U.S. trade policy is twice as restrictive as headline tariff numbers suggest. The Trade Restrictiveness Index is 23 percent, which stands in contrast to the 11 percent average tariff rate. Trade policy towards Canada and Mexico is two to three times more restrictive than average tariff rates suggest. Sectoral analysis shows that the restrictiveness is concentrated in vehicles, machinery, and electrical equipment.

That is from Michael E. Waugh.

The post How Restrictive is U.S. Trade Policy? appeared first on Marginal REVOLUTION.

My Conversation with Diarmaid MacCulloch

2026-01-22 13:22:41

Here is the audio, video, and transcript.  Here is part of the episode summary:

Tyler and Diarmaid explore whether monotheism correlates with monogamy, Christianity’s early instinct towards egalitarianism, what the Eucharistic revolution reveals about the cathedral building boom, the role of Mary in Christianity and Islam, where Michel Foucault went wrong on sexuality, the significance of the clerical family replacing the celibate monk, why Elizabeth I—not Henry VIII—mattered most for the English Reformation, why English Renaissance music began so brilliantly but then needed to start importing Germans, whether Christianity needs hell to survive, what MacCulloch plans to do next, and more.

Excerpt:

COWEN: There’s a recent rise of interest in theories that attribute the rise of the West to the church banning cousin marriage, that this broke down clan structures. What’s your view of that hypothesis?

MACCULLOCH: It’s, as usual with such hypotheses, far too simple. I don’t see that so at all. Cousin marriages went on being a feature of Christianity, particularly if you’ve got a pope to dispense such marriages in the West. What could one say about such a theory? Clans, families were not broken up by Christianity. By far, the reverse. Those structures did not change very significantly. No, I don’t think that really works at all.

COWEN: Why does Islam so emphasize the sexual desires of women relative to Christianity?

MACCULLOCH: A good question. Because the Quran allows that to happen? The Quran has been interpreted by men when very often what it’s talking about is just people, so that may be one explanation. Islam did remain very much a militarized culture to start with, so it’s almost by definition run by men. There within it, is a powerful set of images for women in the Quran itself. On top of the Quran, there is so much added, and it’s usually added by male societies. So yes and no, really.

There is a constant strain of things one can say about the position of women in Christianity. Women are constantly carving out parts of Christian faith for themselves, against the fact that men are increasingly running the church. That’s a fact of life. Think of the mystics of the medieval West and the way in which so many of them are females. To be a mystic, you don’t need the male language of Latin, the language of the professions, the language of the clergy.

You can explore mysticism without the new invention of men in the 12th century — theology, which is something associated with, first, the cathedral schools and then the universities, both of which are male institutions. But mysticism, no. You can just get on with it. It involves many of the same themes in every religion that turns to mysticism, themes like fire and water, air. The vocabulary of the mystic really is quite universal. It is not restricted to Christianity or Islam or anything. It’s the way that one aspect of humanity works out when it tries to meet the divine.

COWEN: Why is Islam sometimes, at least at the intellectual level, so obsessed with Mary? You can debate whether she was a saint or a prophet. In a way, the role in Christianity is much more circumscribed.

And:

COWEN: Why are there still a fair number of English Catholics, but so few in the Nordic countries?

MACCULLOCH: Now, an interesting question. Lutheranism became much more universal in the Nordic countries. Catholicism did not survive there. The monarchies of these countries were, I think, much more thorough-going in suppressing it. I think the nobility also decided to go over to the Reformation fairly uniformly in Sweden, Norway, Denmark. Of course, it does matter when the nobility make decisions.

In England, they were divided. Quite a lot of the nobility and gentry did stick with the old faith, maybe because they admired many of the bishops of the old church. I did a little work of research on this in my younger days, in which you could see that those gentry who stayed Catholic after the Reformation were often those who had personal ties to the great bishops of the pre-Reformation church.

Yes, the picture is very different in England to that in Scandinavia. Also, remember that extraordinary counter case, the case of Ireland, where the government became Protestant as it did in England, but the great bulk of the population did not go with it. The story of Ireland is a story of the rejection of the religion of the upper classes right through to the present day, when they’ve now rejected so much of Catholicism too. Fascinating different stories next to each other there.

Recommended.

The post My Conversation with Diarmaid MacCulloch appeared first on Marginal REVOLUTION.

Hey, AI image generators!

2026-01-22 04:09:36

Just for future reference, I am left-handed…also note I play tennis and baseball with my right hand, however, should that ever arise as an issue.  (In basketball I am left-handed, though.)  I’ve never quite understood that, but there you go.

The post Hey, AI image generators! appeared first on Marginal REVOLUTION.