What Keeps Trump Up at Night (Part I)
I wish President Trump were more popular, because he is tackling two huge existential threats to western civilization: Chinese economic hegemony and Iranian cultural hegemony. Americans should know an “existential threat” is what European colonization and westward migration were to Native Americans: a new agrarian economy that replaced an indigenous hunting-and-gathering economy, and a new culture that brought foreign germs, alcoholism and forced Christian conversions. What seemed liked justice and progress to European Christians was, in fact, an attack on a native population.
It is short-sighted for so-called liberals to put red-state Americans and neoconservative Europeans in a basket of deplorables – when economic protectionism and cultural nativism are mere reactions to the failure to successfully integrate 1.4 billion Chinese and 1.8 billion Muslims into the world's advanced societies (such as the USA). In short, native-born citizens want their governments to support their household incomes and protect their cultural traditions. In Part I, let's examine how China threatens the world’s economic order.
When the WTO admitted China, smart globalists believed trade amongst nations was better than war between nations, exports would eliminate Third World poverty, and emerging economies would buy lots of iPhones and Coca-Cola. This mostly proved true – except China’s too many people, too few western values (e.g. property rights) and communist rule has wrought unintended and harmful societal disruption.
The Chinese economic miracle was created by western out-sourcing, which is a nice term for cheap-skating: American companies closed factories to cut fixed costs and fired factory workers to cut labor costs. While that did benefit single companies, it devastated many households and communities. Furthermore, the consequences have divided America. While New Yorkers can buy more China-made stuff for less, households in western Virginia and eastern Ohio are under financial duress, because free-traders under-estimated the impact of China’s infinite low-cost labor supply.
Since 1990, China has added 35 million manufacturing jobs and the USA alone has lost 7 million; and China’s share of global manufacturing output has grown from 3% in 1990 to more than 25% in 2014, when China’s 120 million factory jobs dwarfed America’s 12 million (source: The Economist). Remember, the allies defeated the Nazis because America was the arsenal of democracy. Today, when other Asian countries accuse China of adopting neocolonialism (forced and unfavorable lending and trade deals), advanced economies should fear Chinese economic hegemony – and wonder what comes next?
From Tokyo to Washington to Berlin, leaders want China to embrace fair-and-reciprocal trade, stop forcing western companies to transfer proprietary knowledge in exchange for access to China’s consumers, and stop stealing western intellectual property. Good luck – because communist leaders believe global economic hegemony will prevent another Tiananmen Square. Thankfully, candidate Trump called out do-nothing leaders who allowed China to grow at the expense of American workers and small businesses.
In The Wisdom of Crowds, James Surowiecki provides convincing evidence that millions of ordinary folks are truly smarter than the so-called experts, meaning western leaders must start listening to the basket of deplorables in Detroit, Ghent, Leipzig and Coventry – because these ordinary folks have firsthand experience with unfair trade. This firsthand experience drove American union households to vote against Hillary Clinton, Dutch and Germans to cast more votes for nationalist candidates, and the English to vote for Brexit.
To be sure, there are xenophobic elements, but China’s economy did grow at the painful expense of western manufacturing facilities and blue-collar compensation, precipitating a less liberal West. In the USA, most households now care more about self-survival problems (e.g. paying for a new car) and less about self-awareness issues (e.g. putting nutrition scores on restaurant menus). Look at the arc of current events: do you see it getting better if China goes un-checked?
History is filled with examples of “deplorable” behavior when groups face existential threats. The father kills the neighbor’s Doberman when it threatens his child. Gangs form to defend the hood. Affluent communities organize neighborhood watch teams. Here is an illustrative Hollywood visual: westward-ho wagon trains in a defensive circle shooting at an Indian war party.
Barack Obama mistakenly apologized for US economic and military hegemony. The USA has rightly and consistently promoted the economic constructs of consumer-driven markets (plentiful goods cost less) and investor-driven capitalism (profit opportunity attracts capital). These bedrock principles – not central planning – have transformed national economies all over the world. So...why should America bet its economic future on the central economic planners in Beijing?
Emerging economies (such as Taiwan) typically begin with some central planning (protection) on their way to embracing free consumer-and-investor-driven markets, as well as engaging in fair and reciprocal trade with the USA and Germany. American-style economics promotes a single bedrock principle: competition makes companies and countries stronger. National economies that are fair and open (mostly) trust American economic hegemony because it is so Darwinian: the best-run coffee shop will grow into the global brand Starbucks, and global investors will rush out of old-school RCA into new-school Samsung.
President Trump is now locked into a clash of the titans with President Xi. Democrats and multinational corporations are rightly worried by punitive tariffs and threatening tweets. However, American leaders in business and government should take the longer view to protect working-class Americans and essential industries (such as steel and aluminum). These leaders must ask themselves if they trust China's communist leaders and central economic planners to do right by the rest of the world.
If US business and political leaders look at the 2016 electoral map, they will see the many red counties that voted for Trump - - where it was not racism or fascism at work. Rather, it was the palpable fear of losing the American Dream that turned so much of America red. San Franciscans and New Yorkers might hate Trump, but folks in 80% of the nation’s counties are rooting for him to fix the China problem. I am convinced these red-state Americans know what the coastal-elite Americans have yet to consider: how can you trust China not to cheat its way into dominating America's financial, technology, medical and entertainment sectors?