Diatribes of Jay

This is a blog of essays on public policy. It shuns ideology and applies facts, logic and math to economic, social and political problems. It has a subject-matter index, a list of recent posts, and permalinks at the ends of posts. Comments are moderated and may take time to appear. Note: Profile updated 4/7/12

16 May 2019

Competition and Cooperation with China


For an essay on Elizabeth Warren’s qualifications for the presidency, click here. For brief descriptions of and links to recent posts, click here. For an inverse-chronological list with links to all posts after January 23, 2017, click here. For a subject-matter index to posts before that date, click here.

To understand our species, just watch the opening scene of Stanley Kubrick’s cinematic masterpiece 2001: A Space Odessey.

The movie opens to the tune of Strauss’ Also Spracht Zarathustra. It follows a sturdy alpha ape as he probes new territory at the head of his clan. Topping a hill, he comes across a rival clan of apes. He jumps up and down, screeches, and bares his teeth in challenge. The rivals and their leader do the same. Neither tribe retreats.

Eventually, our hero’s eyes land on a field containing the bleached bones of big, dead herbivores. He picks up a femur and hefts it. He wields the big bone as a weapon to kill the rival leader.

As the dead rival’s clan retreats, our hero leaps and screeches his triumph. He throws the big bone in air. It rolls over lazily in the sky. In as much time (relative to our species’ biological evolution) as it took our species to begin to explore space, the bone becomes a space station, revolving (to create artificial gravity) to the tune of Strauss’ Blue Danube Waltz.

Even the sturdy apes who were our ancestors were no match for any big cat, let alone the huge dinosaurs that the Chicxulub Meteor cleared away 65 million years ago to enable our evolution. We humans have since come to dominate our small planet by virtue of two traits only: our ability to cooperate, and our ability to make and use tools, including weapons. It’s hard to know which has been more central to our species’ success so far.

But now our tools and weapons have become too powerful. We humans can extinguish ourselves, as well as most other life on Earth, by war or, with global warming and/or pollution, by negligence.

Kubrick and his audience were aware of the risks of war when the movie came out in 1968. Just six years earlier, our species had survived the Cuban Missile Crisis of October 1962. It had come within minutes of extinguishing itself, and perhaps all life on Earth, with a nuclear Holocaust.

We stepped back from the brink only by virtue of the extraordinary cool judgment of three men: (1) our then president, JFK, (2) the then General Secretary of the Soviet Union, Nikita Sergeyevitch Khrushchev, and (3) an obscure Soviet submarine flotilla commander named Vasiliy Aleksandrovich Arkhipov. (The latter refused, under horrendous conditions, to fire his submarines’ nuclear torpedoes.) The story of how these men saved us all from our species’ warlike instincts is one that every child should know.

One month before that crisis, JFK had made his famous speech at Rice University, committing us Americans to a “space race” with the Soviets. Pointing to the sky, he had promised to put an American on the Moon within a decade.

The motivation for JFK’s promise was obvious to all who listened in that tense time. Space travel requires much the same technology as intercontinental ballistic missiles. So JFK was telling the Soviets not to mess with us.

JFK’s promise was the modern equivalent of Kubrick’s apes jumping, screeching and baring their teeth. After fulfilling it, we Americans abandoned the Moon for over half a century. Only now are we thinking of re-visiting it, as competition with China heats up.

Unfortunately, JFK’s Moon-race threat didn’t work. Or perhaps it worked too well, scaring the Soviets into moving their intermediate-range nuclear missiles into Cuba, then their client state. That move precipitated the Cuban Missile Crisis and led to our close brush with species’ self-extinction.

But the two events together taught us all a valuable lesson. Now that our weapons are so terrible as to threaten species self-extinction, peaceful competition is the only kind in which our species can afford to indulge. Less destructive forms of competition must take the place of war.

Today we Americans are beginning just such a great competition with China. Unlike our Cold-War competition with the Soviets, that competition is general and wide-ranging. China challenges us in trade, commerce, technology and international influence.

When our new century ends, either China or the United States will bestride the globe as does Anglo-American culture today. So competition with China has the potential for species-wide social, political and economic consequences.

Nevertheless, the competition must be peaceful. Since the Cold War with the Soviets, two more things have come up that make peaceful cooperation mandatory. First, we humans are on a path to heating our planet irrevocably, thereby producing a climate vastly different from the one in which we evolved. Second, both by heating and by polluting, we are threatening to extinguish a million other species, destroying the biosphere in which we evolved, with unknown and perhaps catastrophic consequences. Only close cooperation between our species’ two biggest economies can hope to stave off those two existential threats.

China seems to understand this point. Unlike us Americans and the old Soviet Union (now Russia), China never wasted money or energy developing a world-destroying arsenal of nuclear arms. It has nukes, but only enough to defend itself and deter aggression by other major powers. As the largest single nation by population, China has always relied on its population and its disciplined culture for influence. Seldom has it relied primarily on arms, for seldom has it entertained an expansionist foreign policy.

But make no mistake about it. The competition between the United States and China is real. It will be consequential for our entire species. At the same time, the need for cooperation is just as real. Without it, we humans might fail to rise to the two greatest challenges in our history: global warming and other-species extinction.

In the competition, China has several advantages that we Americans do not have. It has relatively stable and authoritative leadership, with a much stronger grip on its society and its people. In contrast, we Americans have, in a mere decade, oscillated among leaders as different as George W. Bush, Barack Obama, and Donald J. Trump.

China also has a population four times as big. Most of its people have entered the middle class in the last ten or twenty years, if at all. They are full of justified expectation, willing to work hard, and imbued with patriotism and the strength that comes from recent deliverance from hunger and want. In contrast, our middle class—what remains of it—is largely dispirited. For a generation or two, it has been systematically sucked dry by our oligarchs and a rigged economic system.

So what, pray tell, do we Americans have that might enable us to win our inevitable peaceful competition with China?

Only three things are apparent. First, our system of higher education is still the world’s best, although declining relatively under the twin effects of neglect at home and rising quality abroad. Second, we have a history of democracy and more humane treatment of our people. Unfortunately, that system is decaying rapidly as our society divides against itself. We just can’t seem to muster truly equal treatment for our many minorities, let alone a fair shake for our lower middle class. Finally, we have our “innovation machine.” In the last century or so it has given the world (among other things) the electric light, recorded sound, movies, high-altitude flight, atomic energy, atomic weapons, the transistor, the integrated circuit, the personal computer, the Internet, and smart phones.

Among these three potential advantages, only one stands out as decisive and perhaps sustainable. It’s our innovation machine—our seamless web of research, science, technology, industry and production, which is focused on churning out inventions as a matter of course. No other nation has anything like it.

But China is self-consciously trying to copy it.

Then why, pray tell, do we allow our oligarchs, almost at will, to bargain and sell our innovative technology abroad, even in China, for the sake of lower labor costs and access to China’s market? Why are we letting our oligarchs give away our crown jewels for the sake of their own profit?

If the truth be told, Chinese spying and theft are responsible for only a small fraction of the loss of our technology to date. China has resorted to those extreme measures only recently, as it became apparent that the door to easy access to American technology and innovation is closing for trade and political reasons. The vast majority of our innovative technology now used inside China got there because our oligarchs sent it there in exchange for access to China’s huge market and its low-cost labor.

If we are serious about competing peacefully with China, we must stop this practice ASAP. Not only must we beware of Chinese technology like Huawei’s, which China might use to spy on us and steal our secrets. We must also prohibit and prevent our oligarchs from selling or giving our secrets away in ordinary business deals.

We must keep more of our technology secret, inside the United States, and not rely so much on patents. We must create, sustain and enforce an industrial policy inside the United States that keeps our technology secret and at home, at least until we have had the chance to give its benefit to our own workers, thereby restoring some semblance of a favored middle class. We must prosecute our own oligarchs if they send it to China.

Another reason to restrict technology export is that technology is a seamless web. The more innovation elevates the general level of a nation’s scientific and technological infrastructure, the more innovations that nation is likely to make.

For example, our American head start in transistors and integrated circuits led directly to leadership in digital computers, the personal-computer revolution, the Internet and smartphones. If we want to maintain that sort of leadership in whole new fields of technology, we’re going to have to keep much more of our technology from going abroad, especially to China. We’re going to have to make random technology transfer abroad illegal, at least in specified fields and for specified head-start periods.

If we do not, our competition with China will be very short, and we will lose. The last twenty years of hard experience have proven how fast technology and brains drain to a nation whose lower labor costs serve as magnet for technology transfer. That phenomenon, not theft, is what China used to leap into the twenty-first century in high technology, and now to threaten the United States with becoming second best.

I know, I know. Restricting technology transfer abroad in order to keep more jobs and innovation at home will be a difficult and thankless task. We will have to decide, on a case-by-base basis, which technology transfers abroad threaten our national security, the growth of our industrial base, the security of our workers, and the primacy of our innovation machine, and which do not. In order to broaden our sphere of competition, we will also have to transfer some parts of our technology to our allies, and we will have to decide which parts, to which allies, and when.

In some cases, we will have to restrict the transfer abroad of goods that can be easily reverse engineered to discover their mode of operation or manufacture, before we have had a chance to enjoy our period of head-start exclusivity. Deciding which transfers to restrict or prohibit will be a mixed question of law and technology, requiring attorneys trained in law, intelligence officers who know what China is doing, pols trained in making fine distinctions, and innovative workers trained in technology and able to see around corners.

From ancient times, China has been an inventive society. It was responsible for three of the most consequential inventions in human history: gunpowder, noodles, and printing (without moveable type, to which the Chinese writing system is poorly adapted).

At the same time, China has always been a copying society, resistant for cultural and philosophical reasons to protecting intellectual property. Above all, China’s is a practical culture, not a legalistic one like ours. China knows that copying others’ innovations, while also making its own, is the best way to sprint ahead of the pack of nations. That practical understanding makes any agreement by China to refrain from appropriating and copying valuable technology suspect. If nothing else, the recent spate of Chinese spying and stealing proves that point.

So success in our competition with China devolves to a simple syllogism. We Americans now have the world’s most creative innovation machine. Our system of higher education, our advanced technological base, and our cultural respect for innovation and creativity sustain it.

But if we let the output of our innovation machine flow into China without restraint, China will eventually overcome all three comparative advantages. Its technological base will rise, as we and others export our technology to China to exploit its labor-cost advantages. Its education will rise along with its technological base. And our cultural affinity for invention will be useless at home, as innovation drains to China and our own innovative youth follow brain-draining career paths in China.

Therefore, we have zero chance of winning the peaceful competition with China unless we find some ways to play our innovative cards closer to our chest. We can’t just rely on selling soybeans to win the game..

Insofar as concerns relations with China, finding and enforcing ways to keep our innovations at home will be the whole ball game. If China, with a population four times ours, has sustained access to all its own innovations and all of our own as well, its winning the peaceful competition will become a certainty. So will the complete destruction of our middle class.

Trump’s current “strategy” (if you can dignify it with that term), is to hit China with tariffs until it hollers “uncle!” But that ploy simply won’t work, because China is not the primary gatekeeper.

Even if China were to stop actively stealing our secrets and to stop demanding that applicants to do business in China transfer American technology they otherwise would not transfer, that would not let us win the competition.

The vast bulk of technology transfer to China so far has been made voluntarily by American capitalists for their own reasons—principally to keep goods made in American plants in China up to current standards, primarily for export from China, including to the US. No matter what the pressure on China, it’s highly unlikely to forbid American firms from transferring inward to China what they want to transfer for their own reasons. If the US is to curtail that sort of transfer, which constitutes most of America’s technology transfer problem, the restrictions will have to come from the United States, not China.

Footnote: In exchange for a period of legally exclusive use, patents require inventors to disclose all the details of how best to make and use the patented inventions. That disclosure is part of the patent itself, published by the national and/or regional patent office(s) that issue it and usually also on line.

Therefore patents create a great temptation, plus an easy means, for others to steal new technology and fight about the theft later in court. The delay and procedural hurdles to international litigation under the WTO make this ploy an highly attractive option for China.

For these reasons, owners of leading-edge and path-breaking innovations often decide to keep them as trade secrets, rather than to patent them. Then the secrets are susceptible only to theft, by cyberhacking or otherwise. To the extent they can practically be kept secret, they remain the innovator’s exclusive property until stolen or disclosed, and so potentially indefinitely.

Links to Popular Recent Posts

For reasons why Trump’s haphazard trade war will not win the competition with China, click here.
For a deeper discussion of how badly we Americans have failed to plan our future, click here.
For an essay on Elizabeth Warren’s qualifications for the presidency, click here.
For comment on how not doing our jobs has brought us Americans low, click here.
To see how modern politics has come to resemble the Game of Thrones, click here.
For a discussion of the waste of energy and fossil fuels caused by unneeded long-range batteries in electric cars, click here.
For a discussion why Democrats should embrace the long campaign season and make no premature moves, click here.
For a discussion how Trump and Brexit have put the tree world into free fall, click here.
For a review of how our own American acts help create our president’s claimed “invasion” of Central American migrants, click here.
For a review of basic facts that must inform any type of universal health insurance, click here.
For a discussion of how the West’s fall and China’s rise affect the chances of our species’ survival, click here.
For a discussion of what the Mueller Report is and how its release could affect American politics, click here.
For a note on the Mueller Report as the beginning of a process, click here.
For comment on the special candidacies of Beto O’Rourke and Pete Buttigieg, click here.
For reasons why the twin 737 Max 8 disasters should inspire skepticism and caution with regard to potentially lethal uses of software and AI, click here.
For my message to Southwest Airlines on grounding the 737 Maxes, click here.
For an example of even the New York Times spewing propaganda, click here.
For means by which high-school teachers could help save American democracy, click here.
For a modern team of rivals that might comprise a dream Cabinet in 2021, click here.
For an analysis of the global decline of rules-based civilization, click here. For a brief note on avoiding health lobbying Armageddon, click here.
For analysis of how to save real news and America’s ability to see straight, click here.
For an update on how Zuckerberg scams advertisers, click here.
For analysis of how Facebook scams voters and society, click here.
For the consequences of Trump’s manufactured border emergency, click here.
For a brief note on Colin Kaepernick’s good work and settlement with the NFL, click here.
For an outline of universal health insurance without coercion, disruption of satisfactory private insurance, or a trace of “socialism,” click here.
For analysis of the Virginia blackface debacle, click here. For an update on how Twitter subverts politics, click here.
For analysis of women’s chances to take the presidency in 2020, click here.
For brief comment on Trump’s State of the Union Speech and Stacey Abrams’ response for the Dems, click here.
For reasons why the Huawei affair requires diplomacy, not criminal prosecution, click here. For how Speaker Pelosi has become a new sheriff in town, click here.
For how Trump’s misrule could kill your kids, click here.
For comment on MLK Day 2019 and the structural legacies of slavery, click here.
For reasons why the partial government shutdown helps Dems the longer it lasts, click here.
For a discussion of how our national openness hurts us and what we really need from China, click here.
For a brief explanation of how badly both Trump and his opposition are failing at “the art of the deal,” click here.
For a deep dive into how Apple tries to thwart Google’s capture of the web-browser market, click here.
For a review of Speaker Pelosi’s superb qualifications to lead the Democratic Party, click here.
For reasons why natural-gas and electric cars are essential to national security, click here.
For additional reasons, click here.
For the source of Facebook’s discontents and how to save democracy from it, click here.
For Democrats’ core values, click here.
The Last Adult is Leaving the White House. Who will Shut Off the Lights?
For how our two parties lost their souls, click here.
For the dire portent of Putin’s high-fiving the Saudi Crown Prince, click here.
For updated advice on how to drive on the Sun’s power alone, or without fossil fuels, click here.
For a 2018 Thanksgiving Message, click here.

Links to Posts since January 23, 2017

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