What zebras can teach us about international trade

Tim Harford

It’s not often that you can squeeze zebras into a column about trade tariffs, but against the backdrop of a trade war over electric vehicles, with the US election, the Chinese economy and the global climate at stake, let’s try. The Biden administration is imposing heavy tariffs on Chinese goods, especially electric vehicles.

Medium term, the effect will be to block cheap EVs entering the US market, which is bad for the planet, bad for American consumers and great for anyone else who wants to make EVs in, or sell EVs to, the US.

But long term? The long game is to try to shift the structure of the US economy towards the manufacturing of green technologies such as solar panels, batteries and electric cars. Might that work? That’s where the zebras come in.

Consider a simplified model of a savannah. Grass grows in the sun. Zebras eat the grass. Lions eat the zebras. And because it’s not much of a model without a technical term, let’s introduce one: the trophic level. The trophic level of the sun is zero. The grass has a trophic level of one, the zebras two and the lions have a trophic level of three.

Of course it all gets more complicated. Warthogs eat plants, but they might eat a dead zebra or even a dead lion. So a warthog might have a trophic level of, say, 2.1. All this is useful stuff to think about if you’re modelling the ecology of the savannah. Useful, too, if you’re thinking about the structure of an economy.

Two complexity scientists, James McNerney and Doyne Farmer, have suggested looking for analogies to trophic levels in economies. It’s not that an economy has a food chain or an apex predator, as such. But economies do have lots of interdependent industries, and the mathematics of trophic levels offers a promising way to analyse them.

In an economic setting, let’s define the trophic level of zero as being individuals. A widget industry that uses only human labour has a trophic level of one. A sprocket industry that uses a 50:50 mix of workers and widgets has a trophic level of 1.5, and so on. The more links there are in an industry’s supply chain, the higher its trophic level. Does that mean that industries with a high trophic level are more sophisticated? No more than

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