The strange contradictions of Thomas Friedman

In his most recent op-ed, Thomas Friedman claims that if we don't pass firm economywide environmental standards, we will fall behind other nations in the development of new technology. Ending in a bizarre flourish, he even says that there is otherwise "no way" we will be "able to afford decent health care for every American."

Now, as readers of this blog know, I strongly support aggressive carbon policy, and maybe it's best to keep my mouth shut and placidly agree with whoever seems to be on the same side. But as Jason Furman might say, the collateral damage to rational thought from Friedman's columns is simply too great...

Take this passage, where he approvingly quotes from an advisory board report:

Here’s the key point on energy from the draft report of the president’s Economic Recovery Advisory Board: “If the U.S. fails to adopt an economywide carbon abatement program, we will continue to cede leadership in new energy technology. The U.S. is now home to only two of the ten largest solar photovoltaic producers in the world, two of the top ten wind turbine producers and one of the top ten advanced battery manufacturers. That is, only one-sixth of the world’s top renewable energy manufacturers are based in the United States. ... Sustainable technologies in solar, wind, electric vehicles, nuclear and other innovations will drive the future global economy. We can either invest in policies to build U.S. leadership in these new industries and jobs today, or we can continue with business as usual and buy windmills from Europe, batteries from Japan and solar panels from Asia.”

Let's break this down. If the United States enacts carbon restrictions, the domestic demand for green technologies will increase. How do US manufacturers gain "leadership" (a relative status) in the industry as a result? This is only possible insofar as there exist barriers to trade that cause businesses and consumers to be disproportionately likely to purchase goods from their own country, so that when new demand is created in the US, it benefits US manufacturers more than it benefits firms in other countries.

Such barriers can be substantial, although I suspect that they are relatively small when we're dealing with photovoltaic panels or batteries (the kinds of tradeable items where relative status might be relevant, if it ever is). But in any case, the irony is impossible to ignore: Friedman's arguments about how carbon policy in the US will affect American "leadership" only make sense to the extent that the world is not flat.