Wednesday, September 22, 2010

Thomas Friedman on Competition with China

Sometimes you have to wonder where Thomas Friedman's head is....
To visit China today as an American is to compare and to be compared. And from the very opening session of this year’s World Economic Forum here in Tianjin, our Chinese hosts did not hesitate to do some comparing. China’s CCTV aired a skit showing four children — one wearing the Chinese flag, another the American, another the Indian, and another the Brazilian — getting ready to run a race. Before they take off, the American child, “Anthony,” boasts that he will win “because I always win,” and he jumps out to a big lead. But soon Anthony doubles over with cramps. “Now is our chance to overtake him for the first time!” shouts the Chinese child. “What’s wrong with Anthony?” asks another. “He is overweight and flabby,” says another child. “He ate too many hamburgers.”

That is how they see us.
Here's the thing, Tom: When a state-run organizaton presents a state-approved, state-sponsored caricature of how its own citizens compare to those of other nations, even before you take notice that it's a communist, totalitarian state, the idea is not to convey "Here's what you already think." It's to convey, "Here's what you should think." In the context of the film at issue, if a chubby American whose idea of exercise appears to be putting on his Rolex in the morning or getting in and out of his Lexus SUV happens to be in the audience, nodding in vigorous agreement, all's the better.

You know what else? You don't have to go to China to hear that story. More than two thousand years ago Aesop wrote a version, the Tortoise and the Hare, which (believe it or not) was not intended as a wake-up call to us. (Granted, Ancient Greece did fall.) In terms of "Wow, look at those really big buildings," China's not the first totalitarian state to want to show off its prowess through massive building projects and it won't be the last.

That's not to discount China's role as a global economic competitor, or the problems we face at home. Friedman highlights problems faced by both nations,
The Chinese system is autocratic, rife with corruption and at odds with a knowledge economy, which requires liberty.
There is absolutely no reason our democracy should not be able to generate the kind of focus, legitimacy, unity and stick-to-it-iveness to do big things — democratically — that China does autocratically. We’ve done it before. But we’re not doing it now because too many of our poll-driven, toxically partisan, cable-TV-addicted, money-corrupted political class are more interested in what keeps them in power than what would again make America powerful, more interested in defeating each other than saving the country.
Friedman brings out his inner G.W. Bush ("If this were a dictatorship, it'd be a heck of a lot easier, just so long as I'm the dictator"), suggesting that China's system of government has resulted in the "average senior official [being] quite competent". His thesis, however, is internally inconsistent - in his own words there is a reason we can't "do it now" - our flawed and corrupted political system.

Friedman also quotes an Indian entrepreneur. Although it's not clear, I believe he's referring to an entrepreneur who is developing businesses in India, as opposed to the United States. And that entrepreneur sees democracy as part of the problem,
For democracy to be effective and deliver the policies and infrastructure our societies need requires the political center to be focused, united and energized. That means electing candidates who will do what is right for the country not just for their ideological wing or whoever comes with the biggest bag of money. For democracies to address big problems — and that’s all we have these days — requires a lot of people pulling in the same direction, and that is precisely what we’re lacking.
But that's not really, true, is it. India had a business boom based neither on those aspects of democracy nor upon a broad sharing of its new wealth with the public at large. As compared to the United States it has a serious problem with corruption and success in business can mean bribing a lot of people. Not so long ago, Friedman was lecturing us that we needed to prepare for our flat-Earth race against India, now it's apparently the U.S. and India against China. When you're in a race to the bottom for who can hand out the best business environment for sweatshops - no worries about labor laws, western-style environmental regulation, or paying taxes sufficient to help support a fully developed city or state - democracies will always lose to totalitarian states.

There are a couple of points worth making about what Friedman sees as our corrupt political culture. First, as bad as things are right now, they've been worse at various points in our nation's history. Second, if everybody pulled together and decided, "The government must have sufficient revenue to build quality infrastructure that will carry us through to the 22nd century, must reinvent higher education, must make large, bold investments in research and innovation," we would be left with a big question: How do we pay for all of that? It's easy if you're China - as long as the money keeps rolling in, the government can skim what it wants right off the top. Here it would require tax increases - and let's be blunt, the hyper-wealthy elites of our nation, people like Thomas Friedman, simply won't get on board with that.1

Sure, Tom's willing to pay an extra 50 cents per gallon to fuel up his hybrid SUV, but only if everybody in the nation also has to pay the new tax. He's not shown any inclination to offer up any of his extended family's wealth, or to scale back his own lavish lifestyle. Not that Friedman's hypocrisy makes him any less correct than, say, carbon-burning, mansion-dwelling Al Gore; but I would be more enthusiastic when he made this type of argument if it didn't smack of, "Now everybody pull together - pick me up and carry me across the finish line before the burgers get cold."

I would suggest that for his next column Friedman approach this issue from a different angle. Rather than telling us what we need to do - things that, frankly, would likely get massive voter approval if funded, he should do us the favor of telling us exactly where the money will come from.

Update: Harold Meyerson makes some observations about China, and the role of large U.S. companies in both its growth and its status as a competitor, that Friedman appears to consistently overlook:
Consider the debate in Congress about whether to impose tariffs on Chinese imports if China continues to depress the value of its currency. Roughly 150 House members, including 45 Republicans, have authored a bill to do just that, and the Ways and Means Committee will take up the bill on Friday. Unions and some domestic manufacturers support the bill. But a large number of American businesses, in a campaign coordinated by the U.S.-China Business Council, oppose it.

Now, there's nothing un-American in opposing the legislation as such -- far from it. Support for and opposition to tariffs are both as American as apple pie. The question here is whether the 220 corporations that belong to the council -- household names such as Coca-Cola, Bank of America, Ford, GM, Wal-Mart, Intel, Microsoft, Hewlett-Packard, J.P. Morgan Chase, Chevron, Exxon Mobil and Boeing -- are already so deeply invested in China as manufacturers, marketers or retailers that buy goods there to sell them here that their interests are more closely aligned with China's than with America's. Revaluing China's currency would be helpful to domestic U.S. manufacturers, their employees and the communities where those employees live and work, but America's largest companies have long since ceased to be domestic.

Given the explosive growth of the Chinese economy, it's a safe bet that every major U.S. corporation will devote greater resources to building, buying and selling there. But China, unlike the Obama administration, truly is guided by an ideology alien to most Americans -- Leninism -- and wields far greater control over what U.S. corporations can and can't do there than the U.S. government does over what corporations can and can't do here. Our leading companies' economic interests, and those of their Chinese hosts, whom they cross at their peril, are increasing likely to pit them against proposals that diminish China's edge, however obtained, in global competition.
1. As a member of the Pulitzer Committee, did Friedman vote in favor of Kathleen Parker's award? Because, it should be noted, she's presently endorsing propaganda of a different sort, applauding the notion that we can have "smaller, more caring government, one that remembers us". Why am I instead reminded of the television edit, "Forget you."

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