To visit China as an American is to very much feel at home. In some ways, Americans feel more at home in China than the Chinese do. And that’s not just because street signs mostly include English spelling.
Americans feel comfortable there because almost literally everywhere they look in its increasingly sparking cities is an American business. McDonald’s are ubiquitous, so are Kentucky Fried Chicken outlets, Nike stores, Apple Stores, and Starbucks. By last count, there were 4,100 of the coffee chain’s locations in China, but that’s likely a dated number. It’s well known that Starbucks has designs on 7,000. As a start.
In his 2014 book The Age of Ambition, the New Yorker’s Evan Osnos recalled that upon returning to China as a reporter in 2005 (he’d studied there in college in the 1990s) that “the most urgent priority for practically everyone I met” was “a pent-up desire to consume.” The Chinese are increasingly voracious consumers because they’re increasingly skilled producers, and as a visit to the country will make plain, the brilliant consequence of their production is a feverish love affair with all things American.
This rates mention in consideration of China’s own “Belt and Road” initiative in countries not China. In a recent Wall Street Journal op-ed, former Navy secretary (Reagan), U.S. senator (D-VA, 2007-2013), and novelist extraordinaire James Webb described “Belt and Road” as “China’s pursuit of massive infrastructure projects in developing countries, where it seeks to cement long-term relations.” Webb views this as China “gaining influence” around the world, leadership in Beijing presumably feels the same way, and Webb thinks the U.S. should do the same. Let’s hope we don’t.
Implicit in infrastructure building is the same knowledge problem that underlies all other governmental allocations of precious resources always and everywhere produced in the private sector first. We all know from when China’s economy was wholly controlled from the proverbial Commanding Heights that the result was economic desperation. Central planning fails. See the 20th century. Webb knows this well.
Which is why it’s odd that he would embrace more of the same, albeit from the U.S. What fails in total doesn’t stop failing when practiced in limited fashion. With a U.S. “Belt and Road” initiative, Nancy Pelosi, Mitch McConnell, Chuck Schumer, Joe Biden, and Donald Trump (will he run again in 2024?) would be the central allocators of resources better left in the private sector. Government spending is a tax on growth precisely because governments can only spend insofar as they arrogate to themselves a portion of private production. In this case, they would extract resources from U.S. producers only to foist their planning on other countries. If such policies were consistent with economic growth, then it’s certainly true that West Virginia (where Robert Byrd’s name is seemingly on everything) would be one of the U.S.’s richest states.
After which, implicit in infrastructure spending is that politicians have a good sense of where future growth will take place. Lots of luck there. Goodness, early in the 21st century the internet was in a sense dead, along with the technology sector more broadly. Seattle-based Amazon’s shares were down to the single digits, and politicians were out for Wall Street blood after so many formerly high-flying IPO’d tech companies had gone belly up. Assuming a stateside federal infrastructure project in the early 2000s, Seattle and northern California would have likely been passed over in pursuit of other U.S. locales that looked much more attractive. Most did. At least for a time. Fast forward to 2021, and the world’s most valuable companies are almost uniquely situated where there was so much carnage twenty years ago. In short, infrastructure spending of the Belt and Road kind brings new meaning to “fatal conceit.” We tried this before. See 20th century once again. As much as possible let the market savvy allocate what’s precious, not politicians. If so, U.S. influence around the world will soar.
To see why, consider China once again. Why are its people so in love with American plenty? Products produced stateside are high quality for sure. Apple’s iPhone is the aspirational smartphone standard for many, Nike shoes and apparel have a similar reputation among athletes, and then McDonald’s is a global symbol of routine – and fast – American-style consumption on the go.
Which speaks to the meaning of the United States globally. The U.S. is a symbol of freedom. It’s a symbol of living life to the fullest, without limits. American products are surely great, but the American brand is arguably even greater. As a global symbol of unfettered freedom, people around the globe want what emerges from this Land of the Free. After which, free people in the U.S. have the freedom (in concert with enormous amounts of global capital seeking U.S. exposure) to relentlessly create new products and services. In short, freedom begets more of the Americana so desired by the rest of the world.
The above truth speaks to why an American “Belt and Road” initiative would be a colossal waste of precious resources that would, if anything, shrink U.S. influence. What enhances U.S. stature is its people living as they wish, keeping what’s theirs, and rushing the future into the present through the matching of the free and talented with capital not consumed by politicians.
Government spending is a tax on what makes the U.S. spectacular in the eyes of the world, and by extension it limits the intrepid ways of the American people in their production of aspirational goods and services. Add the lockdowns to the list of what shrinks the U.S. in the eyes of the world. When we act foolishly, we give the rest of the world cover to do the same.
The main thing is that the U.S. needn’t mis-allocate what its people produce in return for influence. The greatest source of U.S. influence is freedom itself. Keep it. Leave discredited Keynesian folly to others.