Michal Fabinger

Congratulations, Surya!

This is super cool both regarding the research directions and the people involved!

10. Conclusion 🌐

History consistently shows that tariff wars usually backfire, harming global prosperity. Carefully crafted cooperation and trade agreements have repeatedly proven more beneficial.

(Image credits: Wikipedia and Our World in Data)

9. Africa's Growing Integration 🌍📈

Historically, tariffs and limited infrastructure restricted trade within Africa. Recently, regional agreements like ECOWAS and the African Continental Free Trade Area (AfCFTA) have sought to lower tariffs and boost intra-African trade.

8. Asia’s Tariff Revolution 🚢🌏📊

Asia's growth miracle—particularly Japan, South Korea, and China—was driven by reduced tariffs and export-focused strategies. Lower barriers helped transform these economies and lift millions from poverty.

7. Latin America’s Mixed Experiences 🌴⚖️

Latin American nations have tried both high tariffs and open trade. Countries like Chile and Brazil benefited from openness, while others faced struggles adapting to global competition.

6. North America's Free Trade Experiment 🇺🇸🇨🇦🇲🇽🚛

Inspired by Europe, the U.S., Canada, and Mexico signed NAFTA in 1992, removing nearly all mutual tariffs. In 2020, NAFTA was replaced by the updated USMCA agreement, reflecting evolving trade priorities.

5. Europe's Tariff-Free Success Story 🇪🇺✨

Europe embraced tariff reduction early. The European Economic Community (1957) removed tariffs among six nations, greatly boosting trade within a decade. Today's EU shows how openness enhances economic growth and political unity.

4. Lessons Learned: GATT and the WTO 🤝

Later nations realized protectionism’s dangers. In 1947 they formed the General Agreement on Tariffs and Trade (GATT) to lower tariffs.

In 1995 it evolved into the World Trade Organization (WTO), with 164 members today (green and blue).

3. Trade Wars 🥊🌍

When one nation raises tariffs, making itself seemingly better off, other countries retaliate to protect their own economies.

This "tit-for-tat" spiral leads to widespread economic harm, often making everyone worse off.

Other countries retaliated, causing global trade to plunge nearly two-thirds in three years. This increased the severity of the Great Depression.

2. The Great Depression’s Tariff Disaster 🌩️💸 🤦

At the beginning of the Great Depression, the U.S. passed the infamous Smoot-Hawley Tariff Act (1930), sharply raising import tariffs to above 50%.

And here is how trade openness of countries increased over the last decades.

This figure shows the trade openness index of countries in 2023, defined as the sum of exports and imports (of goods and services) divided by gross domestic product, expressed as a percentage.

1. Early 1900s vs. Today 🏭

It is true that in the early 1900s high tariffs of 30-50% were common.

But international trade (e.g. exports) now accounts for 25-30% of global GDP.

In 1900s it was substantially lower, so the tariffs applied to a smaller portion of the economy.

Tariffs, Trade Wars, and Globalization: A Quick Tour from 1900 to Today 📦🌎💸

I've seen someone say that in year 1900, tariffs on international trade were high, so it would be ok to return to that level.

Does this make sense? Let's take a quick look at the history of tariffs.

Not by foreign powers. More likely by groups or individuals, some of whom may even be American citizens.

It was a crazy proposal, but not related to NATO.

The NATO treaty doesn't cover territories in Asia. It doesn't even cover Hawaii.

Side remark: This is a production-possibly frontier. The term Pareto frontier is used for multiplayer games where players have different preferences.

We could see many more visits of the comet if we change the path of human aging or the path of the comet.

5. Key Insight ⚖️ ✅

Efficiency sparks cost savings and innovation, but it doesn’t guarantee lower resource use.

Whether demand for a resource ultimately rises or falls depends on our habits, policies, and whether new uses emerge.

The impact of an efficiency breakthrough is often hard to predict!

But lower operating costs spur expanded usage, leading to more servers and more tasks. As capacity grows, total electricity consumption often ends up rising, overshadowing the initial efficiency gains.

(Of course, not just energy efficiency but also hardware cost play a role here.)

4. Another Example: Datacenters and Electricity 💻⚡🏬

Modern datacenters have become much more efficient, using less electricity per calculation. One might expect overall electricity usage to fall.

By the time we notice, total resource consumption may already exceed where it started. It’s possible that even today, society is misjudging similar situations.

3. Why the Frequent Misjudgment? 🤔⌛💡

Situations like Jevons' original example are often misunderstood. It’s easy to focus on direct savings—like using less coal in existing processes—but people often fail to predict new or expanded uses that arise when costs drop.

2. How Did It Happen? 🏭 🚂📈

- Lower "Effective" Cost: When coal-powered engines became cheaper to run, people found more ways to use them.

- Expanding Applications: Efficiency opened up new industries and services powered by steam, boosting overall coal demand far beyond the initial fuel savings.

1. Defining the Paradox 🏭 🚂❓

In 1865, economist William Stanley Jevons made a surprising discovery: after steam engines became more fuel-efficient, total coal use went up, not down!

But sometimes, the economy behaves counterintuitively: improving efficiency in the use of a resource can *increase* total consumption of that resource rather than reduce it.

Let's take a very quick look at this phenomenon, known as the Jevons Paradox.

Jevons Paradox: Can More Efficient Use of a Resource Lead to Greater Demand for It? ⚙️📈

If you buy a car that uses less fuel per kilometer, you’ll spend less on fuel, right? That seems intuitive.

But...

Brazil nuts are healthy if you eat just one per day.

But eating significantly more could exceed the maximum safe selenium limit and pose health risks.