The world is a risky place. There is a group of metals called rare earth metals. They are fairly widely distributed across the earth’s crust, but their extraction and processing into isolated types is a dirty and labor-intensive process. Nonetheless, members of this class have found themselves useful in both consumer and military production.
The Chinese regime (the same regime that killed between 35-50 million of its own citizens in “The Great Leap Forward”) has commanded that its labor under its control vigorously pursue the extraction and processing of these metals. At this point in time, due to the poverty of its people and so the lower wage it can get away with and its ability to eat any loss with other areas of productivity under its control (the Chinese economy is at the peak of a rapid rise over the past couple of decades) the Chinese have largely out-competed other rare-earth producers around the globe. Current estimates suggest that China controls anywhere from 80-90% of production and trade in rare earth elements. There are interesting questions about “peak” rare earth extraction in China and so the inevitable price rise that is coming as the extraction of what is left becomes more difficult, but at this point it is obvious that if China shuts down or restricts access to rare earth elements the rest of the world (consumers and military (government)) will notice…and “suffer”.
So, a crisis is proclaimed. In order to defend against the possibility of this crisis those who have the power of “defense” are ready to act. Who has the power of defense? The government! Has it found growing justification for its blunt and often problematic activity? Absolutely! And the reason is maybe that which justifies government action more often historically than anything else–self-defense! “Oh, please!” the people cry. “Protect us”.
So, the government then will be invited to take some of what it has forcefully taken from the people and distribute it to “national defense”. This will invite/incentivize men of ambition to respond to what is distributed. And so, on mining investment chat-boards you have calls to “nationalize” mining…in America…I kid you not. “The government should buy this mine because someone found rare-earth elements in the ground” or “The government should provide stimulus to this industry because we need it and cannot take care of it ourselves.
My hear hurts. The rhetoric of “strategic” or “critical” resources is being used to initiate government consolidation of power in the name of “self-defense”. The question is not whether it is being used correctly or not in this or that case. The questions is, historically, how often has government ever shrunk? Once the power is offered and accepted the government rarely gives it back. And so, maybe there are good reasons now for effective and efficient policy. But now is so so brief. Soon it will be a new now. And the same power will exist. But its use may not be the same.
Let’s solve problems without asking government to solve them for us. The “national interest” is always a “we” or “us” and it implies a “them”. The policies enacted will always be to the benefit of “us” and detriment of “them”. And even if you like the “us” you are increasing the power of, the power will likely remain increased, but the “us” who has it may change. No?