China Has Taken Space Inside the Right's Head, and That's Too Bad

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Aaron Rodgers broke his collarbone early in the 2017 NFL season.  Brett Hundley replaced him.  To say that Hundley didn’t come close to filling in for the immensely talented Rodgers brings new meaning to understatement. 

Last season was Hundley’s second in the NFL.  This means he’d had over a year to watch Rodgers up close, and learn.  Hundley was seemingly living every quarterback’s dream when it’s remembered how much Rodgers is revered by his NFL peers, coaches, and sports-talk pundits.  While Tom Brady may have more championship rings, it’s generally believed that Rodgers is the greater talent.   

So despite Hundley’s access to Rodgers' “intellectual property” (IP), the backup flamed out. That the Packers’ season ended in December is a reminder that there’s a vast divide between accession of IP, and actual execution on it. 

Which brings us to the right’s growing obsession with China and “intellectual property theft.” Who cares that some of the U.S.’s greatest entrepreneurs (including the late Steve Jobs) freely admit to having stolen from competitors for decades? Who cares that it’s incredibly hard for even the greatest business minds to know what is valuable or worthless? Who cares that, per Hundley, it’s very hard to mimic what’s established as brilliant even if you have access to the same instruction and resources as the person or product you’d like to emulate or reproduce?

The right seemingly don’t care about this.  Having discovered China seemingly overnight after “stealing” the mindless anti-trade droolings of Peter Navarro and his boss, they have a new narrative.  China is the “enemy” to some, it’s an “economic threat” to others, so it’s supposedly necessary that the federal government act. 

Karl Rove believes that IP theft protection is “critical.” Ok, but what would the feds protect? Figure that Jobs failed nearly as often as he succeeded.  Does anyone remember the Lisa? Bill Gates has never hidden from his tendency to lift ideas, yet despite that Microsoft was late when it came to the internet, internet search, and social networking, to name three.  And what of Gates’s failures? Do readers remember the Microsoft Zune?  Jeff Bezos is presently the richest man in the world.  Are any of you reading this column on your Amazon Fire smartphone?

Crucial here is that the previous paragraph mostly talks about the failures of our greatest business minds.  What of the successes? Assuming the ability of the Chinese to steal IP only to recreate proven goods and services, should we Americans be worried? Not really.  To understand why, consider the thinking of billionaire investor Peter Thiel.  As he put it in his masterful book Zero to One, “[E]very moment in business happens only once.  The next Bill Gates will not build an operating system. The next Larry Page or Sergey Brin won’t make a search engine.”

Think about what Thiel wrote.  While it’s the height of folly to presume that Chinese government officials or alleged IP thieves within Chinese businesses have a consistent clue as to what is good or bad company property, even the theft of the good is the path to average.  No doubt the Chinese can mimic certain processes on the way to profits, but the real advances in China will spring from creating new moments in business. 

All of this is important mainly because so many on the right view China’s rise as a “threat.” Actually it’s an opportunity.  China was only a threat when its people were on their backs economically.  The Chinese people represent more of an opportunity to the U.S. the more that they innovate.  A read of Thiel would help readers understand this truth much better.  His point about “every moment in business” only happening once was that U.S. companies should stop trying to mimic others’ successes (Microsoft creating Bing to challenge Google, for example…), and instead create new ones. 

Applied to the Chinese, so-called IP theft is, even when successful, often the imitation of what's already established such that it will never launch the Chinese editions of Gates, Page or Jobs.  That’s a problem.  Just as Jobs’s innovations have made life better in China (20% of iPhone sales are completed there), so will previously-unheard-of business innovations in China boost the U.S. In short, the IP theft only makes “China” a threat for holding down its economic evolution. 

Sadly, Rove’s reasoning gets worse.  And while it’s perhaps unfair to single him out, his latest column warns readers that “China aims to command the industries of the future,” and that China is seeking “crushing advantages in technology that will matter much more in the coming decades.” Thomas Friedman is smiling somewhere, along with the wise mind who convinced Congress and the Obama administration to direct loans to Solyndra.  Indeed, while it can’t be stressed enough that Americans won’t be made better off by a slower Chinese economy, what Rove views as bullish for China is actually quite bearish.  Simply put, governments cannot pick the technologies of the future. 

That they can’t explains why policymakers should ignore Rove’s call for a federal embrace of technology.  In Rove’s case he recommends that the Trump administration “safeguard the U.S. competitive edge in the digital economy, data analytics, biotechnology, nanotechnology and other likely drivers of 21st century growth.” Oh dear.  No.  Triple no.  What will set the U.S. up for prosperity surely isn’t Trump’s protectionism, but it’s also not Rove’s industrial policy.  The future is always and everywhere opaque.  Let markets define the future, not political types. 

And stop worrying about China.  Just as Virginians won’t be hurt if West Virginia booms, neither will Americans be hurt if the Chinese grow filthy rich.  In fact, Americans will gain from the latter much as the Chinese have benefited from billionaire-driven innovation in the U.S.

What’s important is that the Chinese will only start to achieve their potential once they stop mimicking us, and start creating their own moments.  In short, federal efforts to stop IP theft are wholly unnecessary.  The Chinese have every incentive to do this on their own: they want to grow filthy rich.  Let’s hope they do. 

John Tamny is a speechwriter and writer of opinion pieces for clients, he's editor of RealClearMarkets, Director of the Center for Economic Freedom at FreedomWorks, and a senior economic adviser to Toreador Research and Trading (www.trtadvisors.com). His new book is The End of Work, about the exciting explosion of remunerative jobs that don't feel at all like work.  He's also the author of Who Needs the Fed? and Popular Economics. He can be reached at jtamny@realclearmarkets.com.  

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