How the US can keep up with China
The late futurist Lawrence (Larry) Taub predicted that global economic and cultural center of gravity would move from the West to East Asia. He also predicted that East Asia’s place in the sun would not last very long. By 2050, the global center of gravity will gradually move to the region from India to Western Asia. Resistance is futile. Taub showed in his book The Spiritual Imperative that there are fundamental macro-historical forces at work that are beyond human control.
That is not to say that the United States is helpless in its struggle with China. At a minimum, it can take measures to make the changing of the guard with China less painful. Step 1 would be a rigorous exercise in self-reflection and asking some painful questions. Why did the US allow China into the World Trade Organization while Beijing insisted that foreign companies transfer their technology to China? Who were the people advising US president Bill Clinton when he made this decision? Were they union leaders or bankers? Why didn’t the agreement include a sunset clause? Why did it take President Donald Trump to make the Chinese reverse course?
A bit of self-reflection would no doubt shed light on the fact that a silent, gradual, pernicious coup d’état occurred in the United States in the latter part of the 20th century. Clinton’s so-called Third Way was a smokescreen to give capital free rein. It resulted in the North American Free Trade Agreement and the repeal of the Glass-Steagall Act. The latter move contributed to the financial crisis of 2008, which created the largest wealth transfer in human history. The mantra of “free trade” was unquestioned, never mind the millions of people who lost their jobs and descended into poverty.
Today, millions of American children grow up in poverty or have insufficient food. Millions of people have become victims of the opioid crisis, which claims some 9,000 deaths a year in the US. A handful of people own 50% of all US wealth. Is this unheard-of wealth disparity really the Will of the People? Could it be that there is something fundamentally wrong with American democracy?
The last few weeks we have witnessed near-hysterical media hype over immigrants at the US border with Mexico. It is not even close to the top 10 of the most pressing problems facing America. How to explain this massive media attention, the widespread protest and a McCarthyism-like obsession with Trump and his supporters, while a mere seven years ago the Barack Obama administration bombed Libya to smithereens, causing the deaths of thousands and creating hundreds of thousands of refugees? To this day, many people drown while trying to cross the Mediterranean, old news ignored by media too busy fueling hatred for Trump and his supporters.
Donald Trump is not the cause of the crisis in the US. He is its product. In 2016, a sufficient number of voters realized the US was on the wrong track to elect a non-politician. Perhaps they could not articulate their feelings in the most sophisticated way and they might not all have been familiar with the intricacies of global trade and finance, but when the other side told them they were “deplorables,” they knew enough. They took their chances with the Donald Trump wrecking crew in an election that should not have been close. Not even the media, 98% of which endorsed Hillary Clinton, could prevent a changing of the guard.
The real tragedy for the US – and the world – is that it has no easy way to address its fundamental problems. The old ideological divide between labor (the Democrats) and capital (the Republicans) has broken down and politics has become personal, a route to power and wealth. The fish rots from the head down. Both previous Democratic presidents championed the poor while on their watches the wealth disparity grew to historic levels and they left office to become multimillionaires. With friends like that, workers do not need enemies.
Bretton Woods II
The days that America could set the global agenda ended roughly with the financial crisis of 2008. Since that time, the US national debt has doubled and China has replaced the US as the world’s largest exporter of technology. The US does not have many good options to get out of its downward spiral, but it is not helpless. It would need to build a domestic consensus for a radical rethink of its national priorities and an international consensus to rethink the global financial system.
Domestically, take a leaf out of China’s playbook and formulate long-term plans based on strategic national goals. Get money out of politics, set term limits and change the education system to teach children they not only have rights but also obligations.
Internationally, close US military bases, retrain the army to rebuild the domestic infrastructure, and limit overseas military deployment to multinational peace operations. Consult with international partners to close all tax havens. Tell trade partners to get out their calculators and do the math: The US$20 trillion in national debt and a trade deficit set to hit a trillion dollars a year if not addressed is a problem for the world, not just the US.
Last but not least, teach students not only about Plato and Socrates, but also about Confucius and Lao Tzu.