Trade Wars

The United States’ greatest danger is not China. It’s much closer to home | Robert reich

VSHina’s increasingly aggressive geopolitical and economic position in the world sparks a violent bipartisan backlash in America. It doesn’t matter if it leads to more public investment in basic research, education and infrastructure – as the Sputnik shock of the late 1950s did. But it also presents dangers.

Over 60 years ago, the sudden, palpable fear that the Soviet Union was ahead of us shook America from post-war appeasement and spurred the nation to do what it should have done since. many years. Even though we did it under the guise of national defense – we called it the National Defense Education Act and the National Defense Highway Act and we relied on the Defense Advanced Research Projects Administration for basic research leading to semiconductors. , satellite technology and the Internet – the result was to increase American productivity and American wages for a generation.

When the Soviet Union began to implode, America found its next foil in Japan. Japanese-made cars were taking market share from the Big Three automakers. Meanwhile, Mitsubishi bought a substantial stake in Rockefeller Center, Sony bought Columbia Pictures, and Nintendo considered buying the Seattle Mariners. In the late 1980s and early 1990s, countless Congressional hearings were held on the Japanese “challenge” to American competitiveness and the Japanese “threat” to American jobs.

A tide of books demonized Japan – Pat Choate’s agents of influence alleged that Tokyo’s alleged gains to influential Americans were designed to achieve “effective political domination over the United States.” Clyde Prestowitz’s Trading Places argued that due to our inability to respond adequately to the Japanese challenge “the power of the United States and the quality of American life are rapidly declining in all respects.” In William S Dietrich’s In the Shadow of the Rising Sun, Japan “threatens our way of life and ultimately our freedoms, as much as the past dangers of Nazi Germany and the Soviet Union.”

Robert Zielinski and Nigel Holloway’s Unequal Equities argued that Japan rigged its financial markets to undermine U.S. companies. Daniel Burstein’s yen! Japan’s new financial empire and its threat to America claimed that Japan’s growing power put the United States in danger of falling prey to a “hostile Japanese world order.”

And let’s go: The Japanese Power Game, The Coming War with Japan, Zaibatsu America: How Japanese Companies Colonize Vital American Industries, The Silent War, Trade Wars.

But there was no vicious plot. We didn’t notice that Japan had invested a lot in its own education and infrastructure, which allowed it to make high-quality products that American consumers wanted to buy. We did not see that our own financial system looked like a casino and demanded immediate profits. We have forgotten that our education system leaves almost 80% of our young people unable to understand a news magazine and many others unprepared for work. And our infrastructure of dangerous bridges and rutted roads was draining our productivity.

In the present case of China, the geopolitical rivalry is palpable. Yet at the same time, US companies and investors are quietly making packages, running low-wage factories there and selling technology to their Chinese “partners”. And US banks and venture capitalists are busy making deals in China.

I don’t want to downplay the challenge China poses for the United States. But throughout postwar American history, it has been easier to blame others than it has been to blame ourselves.

The greatest danger we face today does not come from China. It is our drift towards proto-fascism. We must be careful not to demonize China to the point of encouraging a new paranoia that further distorts our priorities, encourages nativism and xenophobia and leads to higher military spending rather than public investment in education, the infrastructure and basic research upon which America’s future prosperity and security critically depend.

The central question for America – an increasingly diverse America, whose economy and culture are rapidly merging with the economies and cultures of the rest of the world – is whether it is possible to rediscover our identity and our mutual accountability without creating another enemy.