Totalmente equivocado, mas parece que os americanos perderam a cabeça.
The China Question
In matters of trade and manufacturing, the United Stateshas not been the naive victim of cunning Chinesemasterminds. We asked for this.
By Michael Lind
May 19, 2020
On May 25, 2000, President Bill Clinton hailed thepassage of legislation by the House of Representativesestablishing permanent normal trade relations with China: “Our administration has negotiated an agreement whichwill open China’s markets to American products made onAmerican soil, everything from corn to chemicals tocomputers. Today the House has affirmed that agreement. … We will be exporting, however, more than ourproducts. By this agreement, we will also export more ofone of our most cherished values, economic freedom.”
Two decades later, the chickens—or rather, in the case ofthe novel coronavirus that spread to the world from China, the bats—have come home to roost. In a recent pressconference about the pandemic, Gov. Andrew Cuomo ofNew York complained: “We need masks, they’re made in China; we need gowns, they’re made in China; we needface shields, they’re made in China; we need ventilators, they’re made in China. … And these are all like nationalsecurity issues when you’re in this situation.”
We should not be shocked to discover that many essentialitems, including critical drugs and personal protectiveequipment (PPE), that used to be made in the United States and other countries are now virtually monopolizedby Chinese producers. That was the plan all along.
Politicians pushing globalization like Clinton may havetold the public that the purpose of NAFTA and of China’sadmission to the World Trade Organization (WTO) was toopen the closed markets of Mexico and China to“American products made on American soil, everythingfrom corn to chemicals to computers.” But U.S. multinationals and their lobbyists 20 years ago knew thatwas not true. Their goal from the beginning was to transferthe production of many products from American soil toMexican soil or Chinese soil, to take advantage of foreignlow-wage, nonunion labor, and in some cases foreigngovernment subsidies and other favors. Ross Perot wasright about the motives of his fellow American corporateexecutives in supporting globalization.
The strategy of enacting trade treaties to make it easier for U.S. corporations to offshore industrial production toforeign cheap-labor pools was sold by Clinton and othersto the American public on the basis of two implicitpromises. First, it was assumed that the Western factoryworkers who would be replaced by poorly paid, unfreeChinese workers would find better-paying and more prestigious jobs in a new, postindustrial “knowledgeeconomy.” Second, it was assumed that the Chineseregime would agree to the role assigned to it of low-value-added producer in a neocolonial global economichierarchy led by the United States, European Union, andJapan. To put it another way, China had to consent to be a much bigger Mexico, rather than a much bigger Taiwan.
Neither of the promises made by those like Clinton whopromoted deep economic integration between the United States and China two decades ago have been fulfilled.
The small number of well-paying tech jobs in the U.S. economy has not compensated for the number ofmanufacturing jobs that have been destroyed. A substantialpercentage of those well-paying tech jobs have gone not todisplaced former manufacturing workers who have beenretrained to work in “the knowledge economy” but toforeign nationals and immigrants, a disproportionatenumber of whom have been nonimmigrant indenturedservants from India working in the U.S. on H-1B visas.
The devastation of industrial regions by imports fromChina, often made by exploited Chinese workers for Western corporations, is correlated in the United Statesand Europe with electoral support for nationalist andpopulist politicians and parties. The Midwestern Rust Beltgave Donald Trump an electoral college advantage in 2016, and the British Labour Party’s Red Wall in the northof England cracked during the Brexit vote in 2016 andcrumbled amid the resounding victory of Boris Johnson’sConservatives in 2019.
The second implicit promise made by the cheerfuladvocates of deep Sino-American economic integrationlike Bill Clinton was that China would accept a neocolonial division of labor in which the United Statesand Europe and the advanced capitalist states of East Asiawould specialize in high-end, high-wage “knowledgework,” while offshoring low-value-added manufacturingto unfree and poorly paid Chinese workers. China, it washoped, would be to the West what Mexico with its maquiladoras in recent decades has been to the United States—a pool of poorly paid, docile labor for multinational corporations, assembling importedcomponents in goods in export-processing zones for reexport to Western consumer markets.
But the leaders of China, not unreasonably, are not contentfor their country to be the low-wage sweatshop of theworld, the unstated role assigned to it by Western policymakers in the 1990s. China’s rulers want China tocompete in high-value-added industries and technologicalinnovation as well. These are not inherently sinisterambitions. China is governed by an authoritarian state, butso were Taiwan and South Korea until late in the 20th century, while Japan was a de facto one-party state run for nearly half a century by the Liberal Democratic Party(LDP), which was neither liberal nor democratic.
Even a democratic, multiparty Chinese government thatsponsored liberalizing social reforms would probablycontinue a version of the successful state sponsorship ofindustrial modernization in order to catch up with, if notsurpass, the U.S. and other nations that developed earlier. That is what China’s neighbors, Japan, South Korea, Taiwan and Singapore, all did following WWII. Indeed, when the United States and Imperial Germany werestriving to catch up with industrial Britain in the 19th century, they employed many of the same techniques ofnational developmentalism, including protective tariffsand, in America’s case, toleration of theft of foreignintellectual property. (British authors visiting the U.S. often discovered that pirated editions of their works wereas easy to purchase then as pirated Hollywood movies andknockoffs of Western brands are to obtain in Asia today.)
The question, then, is not why China pursued its ownvariant of classic state-sponsored industrial developmentpolicies in its own interest. The question is why the U.S. establishment did not retaliate against China’s policies for so long, given the damage they have done to American manufacturing and its workforce.
The answer is simple. American politics and policy are disproportionately shaped by the rich, and many, perhapsmost, rich Americans can do quite well for themselves andtheir families without the existence of any U.S. manufacturing base at all.
We are taught to speak about “capitalism” as though it is a single system But industrial capitalism is merely one kindof capitalism among others, including finance capitalism, commercial capitalism, real estate capitalism, andcommodity capitalism. In different countries, differentkinds of capitalism are favored by different regimes.
Recognizing that there are, in fact, different kinds ofcapitalism, not only among nations but within them, allows us to understand that the different variants ofprofit-seeking can interact in kaleidoscopic ways. Nationaleconomies can compete with other national economies orthey can complement them.
The United States could decline into a deindustrialized, English-speaking version of a Latin American republic, specializing in commodities, real estate, tourism, andperhaps transnational tax evasion.
America’s economic elite is made up mostly of individualsand institutions whose sectors complement state-sponsored Chinese industries instead of competing withthem. It is pointless to try to persuade these influentialAmericans that they have a personal, financial stake in manufacturing on American soil. They know that they do not.
The business model of Silicon Valley is to inventsomething and let the dirty physical work of building it bedone by serfs in other countries, while royalties flow to a small number of rentiers in the United States. Nor haspartial U.S. deindustrialization been a problem for American financiers enjoying the low interest rates madepossible in part by Chinese financial policies in the serviceof Chinese manufacturing exports. American pharmacompanies are content to allow China to dominatechemical and drug supply chains, American real estatedevelopers lure Chinese investors with EB-5 visas to take part in downtown construction projects, American agribusinesses benefit from selling soybeans and pork toChinese consumers, and American movie studios andsports leagues hope to pad their profits by breaking intothe lucrative China market.
For their part, many once-great American manufacturingcompanies have become multinationals, setting up supplychains in China and other places with low-wage, unfreelabor, while sheltering their profits from taxation by theUnited States in overseas tax havens like Ireland and theCayman Islands and Panama. Many of these so-called“original equipment manufacturers” (OEMs)—companiesthat outsource and offshore most of their manufacturing—are engaged as much in trade, marketing, and consumerfinance as they are in actually making things.
We should not be surprised that multinational firms, giventhe choice, typically prefer to maximize profits by a strategy of driving down labor costs, replacing well-paidworkers with poorly paid workers in other countries, rather than by becoming more productive throughreplacing or augmenting expensive labor with innovativemachinery and software in their home countries. Labor-saving technological innovation to keep production athome is hard. Finding cheaper labor in another country iseasy.
In short, the United States has not been the naive victim ofcunning Chinese masterminds. On the contrary, in the lastgeneration many members of America’s elite have soughtto get rich personally by selling or renting out America’scrown jewels—intellectual property, manufacturingcapacity, high-end real estate, even university resources—to the elite of another country.
A century ago, many British investors did well fromoverseas investments in factories in the American Midwest and the German Ruhr, even as products fromprotectionist America and protectionist Germanydisplaced free-trading Britain’s own unprotectedmanufacturing industry in Britain’s own markets. Bybuilding up China’s economy at the expense of ours, America’s 21st-century overclass is merely following theexample of the British elite, which, like a bankruptaristocrat marrying a foreign plutocrat’s daughter, sells its steel plants to Indian tycoons and state-backed Chinesefirms, sells London mansions to Russian gangsters andArab aristocrats, and sells university diplomas to foreignstudents including Americans and Chinese.
When asked whether the rapid dismantling, in a fewdecades, of much of an industrial base built uppainstakingly over two centuries has been bad for theUnited States, the typical reply by members of the U.S. establishment is an incoherent word salad of messianicliberal ideology and neoclassical economics. We are fighting global poverty by employing Chinese factoryworkers for a pittance! Don’t you understand Ricardo’stheory of comparative advantage?
Some of the profits made by rich Americans in the modernChina trade are recycled as money flowing to universities, think tanks, and the news media. The denizens of theseinstitutions tend to be smart and smart people know whobutters their bread. Predictably, intellectuals andjournalists who benefit from the largesse of American capitalists with interests in China are inclined to pleasetheir rich donors by characterizing critics of U.S. China policy as xenophobes who hate Asian people or elseignorant fools who do not understand that, according tothis or that letter in The Wall Street Journal or The New York Times signed by 1,000 or 10,000 or 100,000 economics professors, free trade always magically benefitsall sides everywhere all at once.
All of this idealistic verbiage about the wonders of freetrade and the moral imperative of ending global povertyby replacing American workers with foreign workerscannot muffle the click of cash registers.
The dangerous dependence of the United States and otheradvanced industrial democracies on China for basicmedical supplies has been exposed by the currentpandemic. The U.S. and other industrial democracies nowconfront a stark choice. Western countries can continue tocede what remains of their manufacturing base and evencontrol of their telecommunications and drone infrastructure to Beijing and specialize as suppliers oftechnological innovation, higher education, agriculture, minerals, real estate, and entertainment to industrial China. Or they can view Western economies as competitors of theChinese economy, not complements to it, and actaccordingly.
Rejection of the view that our economy should compete with, rather than complement, that of China in key sectorsdoes not require us to endorse demagogic claims that theChinese regime is a crusading ideological enemy hell-benton world domination like Nazi Germany or the SovietUnion. On the contrary, a strategy of U.S. industrial independence informed by sober realism would entailrecognition of the legitimate interest of China, under anyregime, in building up its own advanced industries—onthe condition that China in return recognize America’slegitimate interests in preserving its own domestic supplychains in the same key industrial sectors.
Econ 101 to the contrary, the purpose of internationaltrade should not be to maximize the well-being of global consumers by means of a global division of labor amongcountries that specialize in different industries, but toallow sovereign states to pursue industrial policies in theirown long-term interest, as they define it. Trade, investment, and immigration policies should besubservient to national industrial strategy. The purpose oftrade negotiations should be the modest one of reconcilingdifferent, clashing, and equally legitimate nationalindustrial policies in a mutually acceptable way.
National industrial policies are like national militaries—essential local public goods provided by a sovereigngovernment to a particular people. The model for trade negotiations should be bilateral and multilateral armscontrol, which are based on the premise that all partieshave a perpetual right to their own militaries, rather thanglobal disarmament, which seeks the utopian goal ofeliminating all militaries everywhere.
All modern economies are mixed economies, with publicsectors and private sectors, and all modern trade should bemixed trade, with wholly protected sectors, partlyprotected sectors with managed trade, and sectors in whichfree trade is not dangerous and is therefore allowed. In a post-neoliberal world, it would be understood that thelegitimate self-interest of sovereign nations and blocsinevitably imposes strict limits on the acceptable flow ofgoods, money, and labor across borders. Institutions whichlimit the right of sovereign states to promote their ownnational industries as they see fit, like the World Trade Organization (WTO), should be reformed or abolished.
All major countries like the United States, China, andIndia and all major trading blocs like the EU should insiston having their own permanent domestic supply chains in medicine, medical gear, machine tools, aircraft and drones, automobiles, consumer electronics, telecommunicationsequipment, and other key sectors. They should have theright to create or protect these essential industries by anymeans they choose, at the expense of free trade and freeinvestment if necessary.
If China and India want to have their own nationalaerospace industries in addition to the United States andEuropean Union, more power to them—as long as theUnited States and European Union can intervene topreserve their own national aerospace supply chains ontheir own soil employing their own workers. If thisapproach means accepting that Western-based aerospacefirms like Boeing and Airbus cannot hope to enjoy a permanent shared monopoly in global markets for largejets, well, too bad. Boeing and Airbus cannot claim in good times to be post-national global corporations tojustify offshoring policies and then claim in bad times tobe national champions when they need bailouts.
The alternative—deepening the complementarity amongChina’s industrial and America’s postindustrial economies—would be much worse for the United States. The sameAmerican overclass whose members have profited themost from transferring national assets to China in the lastgeneration has also been far more insulated from theeffects of imports from China, both manufactured goodsand viruses. The United States, which has always hadfeatures of a Third World country as well as a First World country, could decline into a deindustrialized, English-speaking version of a Latin American republic, specializing in commodities, real estate, tourism, andperhaps transnational tax evasion, with decayed factoriesscattered across the continent and a nepotistic rentieroligarchy clustered in a few big coastal cities.
It would be ironic as well as tragic if the strategy of Sino-American economic integration which American elites in the 1990s hoped would turn China into another Mexico for the United States ends up turning the United States intoanother Mexico for China.
