Why Obama Will Never Beat China

The mainstream media is apparently attempting to label Republican Mitt Romney a flip-flopper on China, on the basis of some remarks he made five years ago that are just as tough in substance, if gentler in tone, than his policies today. Whatever the media try, they cannot hide Obama's record of failure on China.

There is a simple reason President Barack Obama cannot and will not lead the U.S. to out-compete the Chinese economy: he, like much of the Beltway elite, admires China’s model too much to see it defeated. 

From 2008, when he hailed China’s “vastly superior” infrastructure, to 2012, when a Cabinet member praised China for having “only three people make the decision,” Obama’s love for Chinese authoritarianism has persisted.

It is a love widely shared by the policymakers and public intellectuals who surround the White House and feed it information and ideas--people like New York Times columnist Tom Friedman, whose regular homilies to China are something of a running joke. The left, and Obama with it, are unable to face the fact that their ideas are neither popular nor effective--so they conclude that the constitutional system itself must be to blame.

The Chinese model, such as it is, has succeeded by grafting elements of a market economy onto a totalitarian political system and society. Socialists and free-market liberals alike mistake the Chinese system for an integrated whole: the left sees China as a “developmental state,” in which a central authority directs investment; liberals see China as a test of whether economic choice can thrive without political choice.

In reality, what China presents is something like a self-directed form of extraterritoriality, the system through which late nineteenth century European colonial powers carved out separate areas of legal and economic jurisdiction for themselves in China. Except this time it is the Communist Party of China that is colonizing Chinese society, carving out areas in which it permits market-oriented growth--and considerable self-enrichment.

Image credit: TheWashingtonNote.com

But that is not what Obama sees. He sees a rapidly growing economy that owes its success to the foresight and will of enlightened planning authorities. 

Likewise with Friedman, who knows that China rejects any attempt at curtailing its economic growth for such utopian aims as stopping climate change, yet he covets the power that the Party theoretically has to make such a sweeping decision, to exert such total control.

There is a way to out-compete China--not to hold its economy back, for that would harm America’s own, but to make sure that our economy is not supplanted, eclipse, or locked into decline. 

The first step is to stop spending and borrowing so much public money. The second is to achieve rapid economic growth--which, in turn, means allowing the private sector, and the individuals within it, to succeed without undue interference.

It is the haphazard, improvised, and--yes--unequal nature of economic growth that the left cannot tolerate--the agency of others, taking society to heights never imagined and in directions never foreseen. 

That is the opposite of what the Chinese model represents: a carefully managed growth, making the most of vast human and natural resources while maintaining control, at bottom, of the choices individual human beings make.

China will succeed--in spite of the Chinese model, not because of it. Eventually, the contradictions must be faced: witness the absurdity of the Communist Party turning to Hayek for ideas in the midst of its failing stimulus, when Hayek’s ultimate target was not spending but central planning itself. 

Obama doesn’t get it: we can either compete the American way, and win--or imitate the Chinese way, and go down together in the end.


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