You Don't Bring a Praseodymium Knife to a Gunfight

China thinks it can withhold its exports of obscure but important minerals to get its way with its neighbors. Why it picked the wrong weapon.

Last week, the New York Times published a stunning story: China, amid a nasty territorial spat with Japan, had quietly halted shipments of rare-earth minerals to its East Asian neighbor, threatening to escalate a skirmish into a full-blown trade war. China swiftly denied the story, while other journalists rushed to confirm it. The Times reported on Sept. 28 that China, while still not admitting the existence of the ban, may be tacitly lifting it -- but the damage to the country's image as a reliable supplier has been done.

In case you haven't been following this arcane dispute, here's a quick primer: Rare-earth minerals are the 15 elements in that funny box at the bottom of the periodic table -- known as lanthanides -- plus two others. About 95 percent of global production takes place in China, largely at one huge mining complex in Inner Mongolia. The lanthanides are essential to much of modern electronics and high-tech equipment of various kinds. The magnets in windmills and iPod headphones rely on neodymium. Lutetium crystals make MRI machines work; terbium goes into compact fluorescent bulbs; scandium is essential for halogen lights; lanthanum powers the batteries for the Toyota Prius. For some of these products, alternative materials are available (moving to a non-rare-earth technology would make those cute little white earbuds about the size of a Coke can, though). For others, there simply isn't a viable substitute.

For years, analysts have been issuing dire warnings about this situation, casting China's near-total monopoly and its steadily shrinking export quotas as a mortal threat to U.S. national security and global commerce. In 2005 testimony before the U.S. Congress, Frank Gaffney of the Center for Security Policy argued that China's interest in rare-earth elements "falls into a pattern of ... activity around the globe that is clearly deliberate, well thought out, and ominous in its implications." A more recent report written by a military researcher at Fort Leavenworth, Kansas, urges the United States to stockpile the most important rare-earth elements and make studying the minerals a national strategic priority.

But the truth is that though most of the rare earths, both metals and oxides, do come from China, this isn't the same at all as having a monopoly that is sustainable -- as Beijing is about to find out in a fairly painful manner. Now that the specter of a monopoly being exercised for political ends has been raised, there will be sufficient political will to break that monopoly.

Two important facts about rare earths help explain why: They're not earths, and they're not rare. China has reached its dominant supplier position through good old-fashioned industrial aggression, not innate geographical superiority. Cheap labor, little environmental scrutiny, and a willingness to sell at low cost have made other producers give up. For competitors, like the owners of Mountain Pass, a California mine that shut down in 2002 partly due to the China factor, that has been a daunting combination. For the rest of us, it has been fantastic: Affordable rare earths have helped power the information-technology revolution, driving down the cost of everything from hybrid cars to smart bombs.

But the non-rarity of the rare earths themselves means that China's position isn't sustainable. That California mine, for instance, could potentially supply 20 percent of world demand, currently around 130,000 tons a year. Another facility, Lynas Corp.'s Mount Weld in Australia, has the capacity to produce a similar amount. In fact, there are enough rare earths in the millions of tons of sands we already process for titanium dioxide (used to make white paint) to fill the gap, while we throw away 30,000 tons a year or so in the wastes of the aluminum industry. There's that much or more in what we don't bother to collect from the mining of phosphates for fertilizers, and no one has even bothered to measure how much there is in the waste from burning coal.

If rare earths are so precious, why isn't the United States working harder to collect them? The main reason is that, for these last 25 years, China has been supplying all we could eat at prices we were more than happy to pay. If Beijing wants to raise its prices and start using supplies as geopolitical bargaining chips, so what? The rest of the world will simply roll up its sleeves and ramp up production, and the monopoly will be broken.

But, of course, it's not that easy. Rare earths aren't found in nature as  separate elements; they need to be extracted from each other, a process that involves thousands (really, thousands) of iterations of boiling the ores in strong acids. There is also almost always thorium, a lightly radioactive metal, in the same ores, and it has to be disposed of. (Thorium leaking into the California desert was a more serious problem at Mountain Pass than low prices.) So ramping up production would mean that Western countries would need to tolerate a level of pollution they've been all too happy to outsource to China.

Another possibility is that we find a new and different way to separate rare earths, as we find new and different sources for the ores. The main difficulty is that chemistry is all about the electrons in the outer ring around an atom, and the lanthanides all have the same number of electrons in that outer ring. Thus we can't use chemistry to separate them. It's very like the uranium business: Separating the stuff that explodes from the stuff that doesn't is the difficult and expensive part of building an atomic bomb precisely because we cannot use chemistry to do it -- we have to use physics.

The very fact that China has been supplying us all these years means that while Western academics in their ivory towers have been continuing to research all sorts of lovely things, very few of these findings have been tested in the real world. One possible solution, lightly investigated in academia but not elsewhere, is adopting the technology used to separate titanium. It might work with the lanthanides, or it might not. But we should try it, along with other high-tech methods, to make the best of our own strengths rather than trying to compete with China -- the land of cheap labor and environmental unconcern -- on its own terms.

In the end, the question of whether China has been using its rare earths access to threaten Japan doesn't matter as much as the possibility that it might -- and the certainty we'd better do something about it.

Herry Lawford via Flickr


Liberté! Egalité! Low-Carbon Economy!

Europe's Social Democrats spent a century building and ruling over the welfare state; now they're out of power. Here's how solidarity can be restored for the 21st century.

Once Ed Miliband's celebrations for winning the leadership of Britain's Labour Party have subsided, he will have to reckon with his party's disastrous election earlier this year, in which Labour received its second-lowest share of the vote since World War II. Perhaps he'll take solace that Labour isn't alone in the doldrums of opposition: Everywhere in Europe, it seems, the moderate left is enduring hard times.

Social democracy, once the pride of Europe, a genuinely indigenous political movement that fought for the welfare state and bettered the lives of millions, is today in crisis. Sweden's Social Democrats just saw their conservative rivals gain re-election for the first time in 100 years. Only four governments on the continent are headed by Social Democrats -- in Greece, Portugal, Spain, and Norway -- and several of those would likely fall from power if elections were held today. Across 13 European countries, including those with the strongest traditional social democratic parties, their average share of the vote has dropped 7 points since the 1960s.

Social democracy is not a lost cause, though. There's much that can be done to stop the bleeding of Europe's center-left and help moderate European progressives make a comeback in the 21st century.

The first step would be acknowledging just how bad the crisis is. Social democracy simply wasn't built for times like these -- the movement got its start as a way for the working class to earn a political voice after years of being denied one. When social democrats started organizing, workers couldn't vote, couldn't unionize, and endured deplorable working conditions that were unregulated by the state. Social democrats made the working class more than an expendable cog in the capitalist machine, and in return, they received workers' enduring political loyalty.

After World War II, social democrats became the chief advocates and builders of the welfare state, greatly expanding the provision of health care, education, pensions, housing, and income supports for the working class. The 1970s, however, posed new challenges. Economic growth in the advanced countries slowed under the impact of the oil crisis and international competition. Social democrats were caught unprepared. They lacked a program to restore the high levels of economic growth necessary to sustain and expand the welfare state.

The first real attempt to give Europe's center-left a modern update was in the 1990s under the banner of the Third Way. The Third Way was a movement that sought to position social democrats as modern advocates of the market who embraced globalization while retaining a commitment to the basics of the welfare state. Initially there seemed to be some electoral payoff: At the end of the 1990s there were 14 European governments headed by social democrats. But it was only a temporary respite, and the social democratic decline continued apace in the 2000s to its current lows. The Third Way, it turned out, was not quite the modernization elixir its proponents made it out to be.

That's not to say that modernization is a bad idea. But it very much matters what kind of modernization one is talking about. The Third Way was ultimately a rather superficial modernization that replaced socialist dogma with a reliance on technocrats whose faith in market mechanisms failed to produce stable, broadly shared economic growth.

We propose instead that social democrats embrace a new and deeper modernization addressing three aspects of the movement: coalitional, definitional, and organizational.

Today's social democrats face far more competition on the center-left than they ever have before. In many countries, the landscape now includes parties from three parts of the political spectrum: greens, far leftists, and liberal centrists. The first challenge for social democrats will be to co-opt this competition into lasting coalitional partnerships. After all, these new parties now typically earn their highest support among emerging demographics (for example, young people, college graduates, singles, professionals) -- precisely the groups whose support traditional social democrats are struggling to earn.

These competitors' ability to attract new faces has allowed their parties to capture a larger share of the vote in the last several decades. Put together, they now draw more support than the social democrats: Greens, liberal centrists, and far leftists got 55 percent of the left-of-center vote in the last decade in the 13 European countries mentioned earlier.

Social democratic parties have no choice but to adopt a big-tent philosophy, one that unabashedly embraces other center-left political parties and progressive organizations. Europe's progressive forces can only forge a stable majority if they transcend their party boundaries. It may not be comfortable for social democrats to do this, and it certainly won't be easy. But it is necessary: Only social democrats have the organizational muscle, political maturity, and roots in the working class to forge such a coalition.

European social democrats must also do a better job of defining what they stand for and how they differ from conservatives. Third Way advocates did reconcile progressive thought with the market economy, individualism, and globalization, but they did so in a way that allowed conservatives to blur their differences with the left. A more successful approach would be to articulate new signature policies that are bold and distinctive -- and therefore much harder to co-opt.

Social democrats could, for example, lead Europe's shift to a low-carbon economy. The sort of large-scale social change required won't happen, however, without a radically enlarged domestic market for renewable energy -- and that is unlikely to happen without a post-modern industrial policy that creates positive incentives for businesses and invests in sustainable infrastructure. Where European conservatives' economic policies have, at the most, amounted to nothing more than ad hoc Keynesianism (which they have since jettisoned for full-throated austerity), the social democrats now have the opportunity to present a bold alternative.

A closer European Union could be another signature goal of a renewed social democracy movement. The European project has until now been dominated by the goal of market integration, but that era is over. The consensus in Europe now holds that leaders have failed to give enough consideration to economic and fiscal coordination among member states to promote mutual growth. Social democrats are in the best position to rally the public behind policies that would correct Europe's economic imbalances and permit shared prosperity.

Finally, social democrats have failed to modernize their parties, even as their own societies are experiencing waves of demographic and social change. Part of the appeal of many of the new left-of-center parties and the continent's many unaffiliated progressive civic organizations is that they are more open and less hierarchical than social democratic parties. Third Way social democracy in particular was organized around a very tight command-and-control structure. Attempting to manage the 24-hour news cycle, Third Way policy and message development was tightly controlled and their dissemination was centralized; intraparty debate was often frowned upon.

Today, the advent of new social media and the blogosphere makes it impossible to control the news cycle. Moreover, party members tend to be less deferential toward politicians and party officials; absent identification with the party through economic class, supporters want to play a more personal and active role in the political process. Social democratic parties need to become more transparent, disseminate their messages more widely, and organize and leverage supporters more effectively at a grassroots level. But European social democrats should not delude themselves that simply importing the technologies used in Barack Obama's presidential campaign and grafting them onto their own campaigns will be sufficient. The key is building new and more democratic infrastructure around these technologies and cultivating an open relationship between that infrastructure and progressive constituencies.

In this time of crisis for social democracy, there should be no debate about the need for modernization. To avoid becoming merely relics of the 20th century, social democrats will need to embrace change. Going back to the old ways and old constituencies will only assure continued decline. And it would be a tragedy if social democracy were no longer capable of inspiring passion, but rather, only nostalgia.

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