Pitchfork Economics with Nick Hanauer You Can't Tariff Knowledge (with César Hidalgo)
Sep 30, 2025
César Hidalgo, director of the Center for Collective Learning and author of "Why Information Grows," discusses how knowledge, not tariffs, drives economic growth. He explains the distinction between knowledge and practical know-how, and why the future favors nations investing in research and human talent. Hidalgo argues that digital exports are often overlooked in trade stats and that tariffs are ineffective, prompting alternative strategies like export promotion. His insights highlight the need for a more dynamic understanding of trade and industrial policy.
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Distributed Knowledge Powers Economies
- Knowledge is distributed across many people and institutions rather than concentrated in a few geniuses.
- Markets and institutions assemble dispersed know-how into productive outcomes.
Know-How Vs. Factual Knowledge
- Distinguish factual knowledge from know-how: the latter is the capacity to make and requires practice to transmit.
- Know-how is non-fungible and harder to transfer than written facts or manuals.
Comparative Advantage Is Dynamic
- Comparative advantage assumes static capacities, but capacities evolve over time through knowledge accumulation.
- Measuring what a country could plausibly produce enables a dynamic view of development.
