Trade wars aren't just about politics—they're a physical necessity because our digital world is growing way faster than our actual roads and ports.
We usually view trade wars as purely political or ideological. This paper argues that when intangible assets (like digital flows) grow exponentially while physical infrastructure (like ports and grids) grows linearly, protectionism becomes a structural mechanism to prevent the system from literal physical congestion.
Structural Divergence in the Open Economy: Time-Scale Mismatch, Intangible Accumulation, and the Physical Constraints of Trade
SSRN · 6465839
This paper addresses the US strategic retrenchment from global trade through a structural dynamics framework, conceptualizing the economy as a "Capacity-Constrained System" where exponential integration flows ($M$) outpace linear institutional stocks ($K$). We identify a systemic "Time-Scale Mismatch" driven by rational "Sectoral Substitution": capital prioritized high-return intangible assets ($K_{Private}$) while the physical substrate ($K_{Public}$) faced chronic stagnation. This differential