Amidst the ongoing tension between the Trump Administration and Canada, some have floated the proposal that Canada should respond to American bullying by cutting off energy exports: use the nuclear option, turn off the pipelines, make them suffer.
asserted
them → float → pipelines
I will note that the proposal comes from the rest of Canada, while Alberta wants to stand pat.
asserted
Alberta → note → Canada
Canadians are hurt and angry at the behaviour of the current American administration, and the instinct to lash out is not unreasonable.
asserted
instinct → hurt → administration
Being insulted by a friend and neighbour is intolerable, and doing nothing has its own price.
asserted
doing → insult → price
But I would ask three questions before we push the nuclear embargo button.
asserted
we → ask → button
When has this been tried before?
asserted
this → try → ?
And what would it do to the average American?
asserted
it → do → American
Albertans vote on the nineteenth of October on whether to begin leaving Canada, so this argument runs straight into that one.
Somebody has tried this at full scale, holding a better hand than ours, and failed.
asserted
Somebody → vote → ours
Antebellum American cotton looked much like Alberta energy: one product, on one transportation network, to one customer, with excessive confidence in the economic power of that commodity.
asserted
cotton → look → commodity
I want to be explicit that the Southern states went to war to preserve slavery, which is a moral gulf I am not crossing.
asserted
I → want → slavery
I am analyzing economic leverage.
asserted
I → analyze → leverage
In 1860, the American South grew roughly two thirds of the world’s cotton and supplied about four fifths of the raw material for Britain’s largest manufacturing industry.
asserted
South → grow → industry
They called it King Cotton, and it made the South rich and arrogant.
asserted
South → call → it
The South concluded it could move British foreign policy by withholding cotton and forcing an intervention in the American Civil War.
uncertain
it → conclude → War
Roughly two and a half million bales were burned to manufacture a shortage, and exports fell from about three million bales to a trickle.
asserted
exports → burn → trickle
They called it King Cotton diplomacy.
asserted
They → call → it
Whether an embargo works is settled by the customer, not by the seller.
asserted
works → work → seller
Britain felt exactly the pain the South intended.
asserted
South → feel → pain
British textile mills went idle, causing mass unemployment.
asserted
mills → go → unemployment
Yet Britain did not enter the war on the South’s side.
asserted
Britain → enter → side
Britain had stockpiled about a million bales in advance, which gave it the time to go shopping.
asserted
which → stockpile → shopping
Through the 1860s, India raised cotton production by roughly seventy per cent, Egypt expanded, and efforts were made in Queensland and New Zealand.
asserted
efforts → raise → Queensland
A commodity is fungible and can be replaced.
asserted
commodity → replace → ?
You can hurt your customer badly and still lose.
asserted
You → hurt → customer
The embargo did not produce compliance, it produced resolve.
asserted
it → produce → resolve
Before the American Civil War cotton represented wealth.
asserted
cotton → represent → wealth
After the war, cotton represented poverty.
asserted
cotton → represent → poverty
King Cotton had been demoted.
asserted
Cotton → demote → ?
My family is from Thomasville, Alabama, so I can attest to that.
asserted
I → attest → that
Ours would run into the same wall.
asserted
Ours → run → wall
Embargoing energy can cause real pain for Americans at the pumps, but we cannot make the administration reasonable.
asserted
administration → embargo → pumps
We know how this works from our own side, because when President Trump says Canada needs to be the 51st state, our elbows go up.
asserted
elbows → know → side
An economic moat is a position that gets harder to copy the more money it makes.
asserted
it → get → ?
Every year of high prices is what funds the competition, whether that is planting more cotton or drilling more wells.
asserted
that → fund → wells
This is why commodity traders say the cure for high prices is high prices.
asserted
cure → say → prices
When you fill up your car, what matters more: the country the crude came from, or whether the unleaded is a few pennies cheaper than the station across the street?
asserted
unleaded → fill → street
The dependence is real, but it cuts both ways.
asserted
it → cut → ways
We are a large supplier earning a real rent, and we can be replaced.
asserted
we → earn → rent
That is true whether the barrel is sold from inside Confederation or outside it.
asserted
barrel → sell → it
Trevor Tombe at the University of Calgary set out the arithmetic for the Canadian Broadcasting Corporation.
asserted
Tombe → set → Corporation
…and 30 more, not listed.
The Aporia
