What do we do about China? That's the question behind the North Korea problem, and David P. Goldman, "Spengler," has commended Steve Bannon for his strategic understanding of the issue. The Norks aren't the problem; China is the problem and the economic war it is waging.
I would say it is not. I'd say that semiconductor manufacturing is already a low-margin industry where you have to swim like mad just to stay afloat. Why would China want to put money like that into semiconductors just to play catch-up?
I will tell you why. It is because that is the only way that politicians and their crony-capitalist toadies know how to act. Oh wow! we gotta be big in semiconductors, else we'll be second-class citizens in the world.
Against this attitude is the story of commerce since the industrial revolution. Again and again an innovation has completely altered the terms of trade, and the surviving early adopters made gigantic fortunes, because they embraced the innovations and did the right thing at the right time. But sooner or later the new industry became just another big industry, not making enormous profits, and not changing the world. But, of course, it is precisely at this point, possibly in the wake of an economic downturn, that government steps in, "to save our (already mature) industry!"
The point is that politicians and activists and crony-capitalists are idiots. It is not just generals that are always fighting the last war. It is everybody in the ruling class. Because that is all that they know.
Now I have been reading a biography by Andrew Roberts of Lord Salisbury, British Prime Minister at the end of the 19th century. The Brits were facing the rise of Germany: what to do?
Well, Lord Salisbury was pretty good at it, jousting and fencing with the brash German state, as it came to world-historical relevance. Then there were the French, mad as hell after losing the Franco-Prussian war in 1870. Then there was Russia that was always making a nuisance of itself knocking at the door of the rotten Ottoman Empire in Istanbul.
But Lord Salisbury's successors obviously were not up to the mark, because 1914.
Of course there was plenty of blame to go around, from the growing protectionism, to the shallow folly of Kaiser Wilhelm II, to the general failure to learn the lessons of the American Civil War and the Franco-Prussian War, that warfare with rifled artillery and machine guns was going to be really horrific.
My point is that in the 21st century, national power and greatness is not served by national fisticuffs, nor is it served by backing last year's horse in this year's Kentucky Derby.
America's greatness has been fed by its open society and the fact that many of the commercial, industrial, knowledge, and technical innovations got seeded and grown right here, making enormous fortunes (which are the flip side of enormous benefits to consumers).
If China is to take its place at the forefront of nations it will not do it with political intervention in the markets or backing yesterday's technology. It will come because Chinese inventors and entrepreneurs will invent things that nobody had thought of before. And that will create unimaginable wealth that will spread across the globe, starting in China.
I'd say that in the strategic future, the key issue will be the relation between a billion Chinese, innovating and producing and consuming, and a billion Indians doing the same thing. The US, I'd say, is likely to be a bystander as the two great ancient civilizations of the world truly burst through into the modern era.
In such a strategic environment it seems to me that the sensible policy is a gradual retreat, trying to manage the expansion of China and India to world dominance in a way that leaves us in a good position.
But what we really want to avoid is a repeat of 1914 when a adolescent Germany wanted to flex its muscles and the brilliant minds in Europe couldn't think of a way of containing a rambunctious Germany without sacrificing a generation of young men on Flanders fields.
I mean really. A century ago Germany was bidding to be the leading nation in Europe, and after two world wars and a Cold War, guess what: Germany is the leading nation in Europe. Just what was all that warring and sound and fury about, chaps?
So here we are a century later. China is bidding to be the leading nation in the world. And even the "white supremacist" Jared Taylor says that Asians are superior to Americans.
Let's do this sensibly, and let's not do the Rise of China to the drumbeat of a couple of world wars.
I tell you what I wonder. I wonder if the rise of China will take place mostly with overseas Chinese that have moved away from China because they feared what might happen to their wealth, what with a Communist Party dictatorship and all in China.
And then there are the Indians. The interesting thing about India is that it has been invaded and mucked around with time and again over the past few thousand years, most lately by the Mughals and the Brits. But it doesn't seem to matter to Hindu culture. It still goes on rocking.
Look at the Indian National Movement. It got rid of the Brits and also confined most of the Muslims into East and West Pakistan. It could do that because the Brits had kindly located all the Muslims with its various Censuses. Is that strategic brilliance or what?
Here's a question. What is the real secret of Hindu culture? Hey, maybe we "white supremacists" could learn something from the Hindus!
And let's use the rise of China as a challenge to Americans to up our game, so that we and China and India can all fight like mad to give the best products and services and culture and politics and prosperity to the world without having the whole thing degenerate into a street fight between rival gangs.
China is establishing a dominant position in high-tech manufacturing, including a new US$50 billion plan to build a domestic semiconductor industry.Etc. Well. Is that a problem or not?
I would say it is not. I'd say that semiconductor manufacturing is already a low-margin industry where you have to swim like mad just to stay afloat. Why would China want to put money like that into semiconductors just to play catch-up?
I will tell you why. It is because that is the only way that politicians and their crony-capitalist toadies know how to act. Oh wow! we gotta be big in semiconductors, else we'll be second-class citizens in the world.
Against this attitude is the story of commerce since the industrial revolution. Again and again an innovation has completely altered the terms of trade, and the surviving early adopters made gigantic fortunes, because they embraced the innovations and did the right thing at the right time. But sooner or later the new industry became just another big industry, not making enormous profits, and not changing the world. But, of course, it is precisely at this point, possibly in the wake of an economic downturn, that government steps in, "to save our (already mature) industry!"
The point is that politicians and activists and crony-capitalists are idiots. It is not just generals that are always fighting the last war. It is everybody in the ruling class. Because that is all that they know.
Now I have been reading a biography by Andrew Roberts of Lord Salisbury, British Prime Minister at the end of the 19th century. The Brits were facing the rise of Germany: what to do?
Well, Lord Salisbury was pretty good at it, jousting and fencing with the brash German state, as it came to world-historical relevance. Then there were the French, mad as hell after losing the Franco-Prussian war in 1870. Then there was Russia that was always making a nuisance of itself knocking at the door of the rotten Ottoman Empire in Istanbul.
But Lord Salisbury's successors obviously were not up to the mark, because 1914.
Of course there was plenty of blame to go around, from the growing protectionism, to the shallow folly of Kaiser Wilhelm II, to the general failure to learn the lessons of the American Civil War and the Franco-Prussian War, that warfare with rifled artillery and machine guns was going to be really horrific.
My point is that in the 21st century, national power and greatness is not served by national fisticuffs, nor is it served by backing last year's horse in this year's Kentucky Derby.
America's greatness has been fed by its open society and the fact that many of the commercial, industrial, knowledge, and technical innovations got seeded and grown right here, making enormous fortunes (which are the flip side of enormous benefits to consumers).
If China is to take its place at the forefront of nations it will not do it with political intervention in the markets or backing yesterday's technology. It will come because Chinese inventors and entrepreneurs will invent things that nobody had thought of before. And that will create unimaginable wealth that will spread across the globe, starting in China.
I'd say that in the strategic future, the key issue will be the relation between a billion Chinese, innovating and producing and consuming, and a billion Indians doing the same thing. The US, I'd say, is likely to be a bystander as the two great ancient civilizations of the world truly burst through into the modern era.
In such a strategic environment it seems to me that the sensible policy is a gradual retreat, trying to manage the expansion of China and India to world dominance in a way that leaves us in a good position.
But what we really want to avoid is a repeat of 1914 when a adolescent Germany wanted to flex its muscles and the brilliant minds in Europe couldn't think of a way of containing a rambunctious Germany without sacrificing a generation of young men on Flanders fields.
I mean really. A century ago Germany was bidding to be the leading nation in Europe, and after two world wars and a Cold War, guess what: Germany is the leading nation in Europe. Just what was all that warring and sound and fury about, chaps?
So here we are a century later. China is bidding to be the leading nation in the world. And even the "white supremacist" Jared Taylor says that Asians are superior to Americans.
Let's do this sensibly, and let's not do the Rise of China to the drumbeat of a couple of world wars.
I tell you what I wonder. I wonder if the rise of China will take place mostly with overseas Chinese that have moved away from China because they feared what might happen to their wealth, what with a Communist Party dictatorship and all in China.
And then there are the Indians. The interesting thing about India is that it has been invaded and mucked around with time and again over the past few thousand years, most lately by the Mughals and the Brits. But it doesn't seem to matter to Hindu culture. It still goes on rocking.
Look at the Indian National Movement. It got rid of the Brits and also confined most of the Muslims into East and West Pakistan. It could do that because the Brits had kindly located all the Muslims with its various Censuses. Is that strategic brilliance or what?
Here's a question. What is the real secret of Hindu culture? Hey, maybe we "white supremacists" could learn something from the Hindus!
And let's use the rise of China as a challenge to Americans to up our game, so that we and China and India can all fight like mad to give the best products and services and culture and politics and prosperity to the world without having the whole thing degenerate into a street fight between rival gangs.
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