“But in May 2015, Beijing went public with a 10-year plan to dominate high-value, high-technology sectors – with the unspoken goal of destroying America’s economic supremacy.” Those are the words of protectionist Florida Senator Marco Rubio from an opinion piece published in the Washington Post. On their own they require a pause.
As history and basic logic indicate over and over again, central plans by governments fail over and over again. Populated by people lacking the skill to prosper in the private sector, governments are similarly populated by individuals constrained by the known, as in individuals who can’t see beyond the present of commerce. Which means that even if governments could execute economic plans (they can’t) as Rubio rather naively imagines, they would be centrally planning for the economy of yesterday, not of the future.
The very central planning that strikes deep fear in Rubio’s highly emotional heart about looming Chinese economic dominance is what would calm the more emotionally balanced among us. In other words, if governments were skilled investors as Rubio plainly believes, the former Soviet Union would still exist. And it would be thriving.
More realistically, wealth is always and everywhere created in limitless fashion by opposite thinkers who see a future that most (including just about every politician) do not. Better yet, what individuals in China and other countries create doesn’t subtract from American wealth as much as it enhances the capacity for Americans to powerfully create a great deal more wealth as work is divided in ever more specialized fashion among more and more people. Which is just a comment that if “Beijing” really wanted to harm the U.S. economically, it would retreat to the state economic planning that formerly defined its economy, and that Rubio oddly wants to import to the United States.
It all speaks to why Rubio’s expressed fear about Beijing’s “unspoken goal of destroying America’s economic supremacy” was and is the surest sign that it can’t and won’t. As actual Republicans like Ronald Reagan used to quip, “the nine most terrifying words in the English language are: I'm from the Government, and I'm here to help.” Reagan knew well that the previous truth gained the most lift from instances in which knowledge-bereft governments tried to manage the infinite knowledge and decisions that inform the marketplace every millisecond of every day. Put another way, China’s prosperity occurs despite attempts by Beijing to centrally plan economic activity, not because of it.
Furthermore, any attempts by China to destroy America’s economic supremacy could only occur at the expense of China’s own prosperity. Which is a statement of the obvious, or should be. Without a massive U.S. market to sell to, the Chinese people would be many multiples poorer; as in assuming Beijing could destroy “America’s economic supremacy,” doing so would be most felt in China, and in painful fashion.
The good news is that what’s true for China is true for the United States. China’s prosperity very much redounds to American prosperity as evidenced by rapid expansion in China of U.S. commercial giants like Apple, McDonald’s, Nike, Starbucks, Tesla, and many, many others. Which means that if Beijing ever actually does pursue the muscular industrial policy that so warms Rubio’s rather hysterical heart, America’s greatest businesses will suffer mightily. Which is a signal in and of itself: the fact that the best and brightest of U.S. companies continue to expand in China is a sign that the state’s power over China’s economy is much more a figment of Rubio’s alarmist imagination than is it evidence of actual, on-the-ground reality.
Rubio concludes with “a call to return to America’s roots of supporting critical industries.” Which is Rubio’s way of saying government should extract precious wealth created in the private sector so that knowledge-limited individuals with last names like Rubio can invest in the economy of the past. No thanks. If Beijing is doing what Rubio claims, the protectionist Florida senator can learn from China’s errors rather than wasting American wealth only to discover how dangerous the combination of emotion, political power, and the money of others is to the United States.
