Donald Trump Is Lying to You About China
Chinese President Xi Jinping. (Kham / AP)
Trump uses the fake news of intellectual property theft to justify his
tariff war on China. He boasts that he is going to stop the Chinese stealing
that victimizes Americans. In yet another way, he will be the savior of
Americans economic future, a savior who needs/deserves their votes and
donations. He takes his cues from the televangelists.
The claim that the Chinese are stealing our intellectual property chiefly
production technologies is largely bogus. Yet many are duped. All economic
development across the millennia has included the dissemination of new
technologies from those who have them to those who want them. The
dissemination works via buying and selling products, copying production
processes and products, sharing production facilities, exchanging access to
resources and markets for access to technology, and yes, no doubt, some
downright stealing too. Disseminators include workers and bosses, merchants
and manufacturers, students and professors, journalists and politicians, and
just plain travelers.
Often, when those who want anothers technology get it, they develop it
further, whereupon the developed technology in turn gets disseminated
elsewhere (likely including back to where it originally came from). Greece
disseminated technology to Rome, Rome to middle Europe, Europe to America,
and yes America to Asia among countless other disseminations, past and
present. Recently, the Rolls-Royce luxury car companys CEO attacked
Aston-Martin and other companies for stealing their concepts. A few decades
ago, the cry went up in the US about Japanese stealing our technology. More
decades back, the US stole technology from Great Britain according to the
British.
Demagogues, especially the nationalist variety, try to make political
capital out of recycling stories of awful foreigners stealing our
technologies. It allows them profitably to pretend that they can protect
the nation and its economy. Dissemination happens, one way or the other,
and never more easily than now with the global internet, world trade, and
jet travel. The fakery of proclaiming against it has never been more
glaring.
It has always been a presumption of most economics that dissemination of
intellectual property (more or less open flows of new products and
technologies) is good for economic development everywhere. The copyrights,
patents, and trademarks that block dissemination all have limits: they
expire after a time, they only block copies not variations, and so on. Those
limits are a recognition that the spreading of knowledge intellectual
property should be enabled and encouraged.
Capitalist enterprises routinely buy, study, and copy parts of other
companies products, especially those of their successful competitors.
Economic theories stress that often such replication of successful
competitors products and technologies is how enterprises survive. It is a
regular part of capitalist competition and serves a social purpose of
lowering average costs of production and thus prices to consumers.
Within todays world economy, capitalist enterprises in less developed
economies confront a choice. They can use an inferior technology to produce
commodities to sell in their own markets as infant industries protected
from global competition. Their commodities will be inferior to and/or more
expensive than their excluded competitors. That is one possible development
path. An alternative path offers to share the local market and local
resources (especially cheap labor) with foreign competitors in exchange for
sharing (gaining access to) the latters superior technology. If that offer
to share is mutually profitable, a deal may be struck. For demagogues later
to refer to such arrangements as stealing is, to be extremely polite, a
misrepresentation.
US universities have for years faced a crisis of dwindling numbers of US
students applying for graduate work. The cause was and is shrinking job
opportunities for new PhDs (as US colleges and universities shifted to
hiring cheap adjuncts instead). Many universities sought and welcomed paying
Chinese students whose arrival kept graduate programs afloat. During the
years that such students spent in US universities, their teachers, fellow
students, studies, and travels provided all sorts of access to intellectual
property in the US. Neither Mr Trump nor anyone else can know what bits of
knowledge were in any meaningful sense stolen as opposed to learned,
shared, read in professional journals, acquired through lab experiments,
etc.
The narrow, legal usage of Intellectual property theft such as violating
copyright, patent, or similar protections of idea, concepts, products, etc.
is a problem at least as old as capitalism itself. Such violations exist
everywhere, inside and outside the US, and are prosecuted in courts around
the world all the time. We do not know whether China experiences such
violations, on a per capita basis, more than other countries or more
vis-à-vis US intellectual property than that of other countries. Thus the
application of even the narrow legal meaning of intellectual property theft
term to Chinas behavior is not warranted.
Suppose finally that Trumps tariff war succeeds in somehow blocking China
from acquiring US intellectual property. That will provide incentives for
China to (1) make more deals with non-US companies, (2) further and more
quickly develop its own intellectual property and block the US from it, and
(3) deny US firms access to the Chinese market and to Chinese laborers
because Chinas access to US firms technology is blocked. Such steps all
carry costs and risks for US companies and the US economy now and in the
future. Moreover, it is highly likely that the USs blocking efforts will
fail to reach their objective. Too many avenues for transmission of
intellectual property will still be active, officially and unofficially,
formally and informally, legally and illegally.
We are left with the question: why then pursue a strategy of trade wars to
block intellectual property theft if it is mostly fake news? The answer has
two parts. First, the accusation of intellectual property theft (often
paired with forced technology transfer) amounts to a demand for better
terms of access for US firms who want to produce and/or sell in China. If
they must share their technology, for example, they want bigger shares of
profitable joint ventures, etc. The Trump tariff war aims to coerce better
terms from China for US companies active there. Trump expects and gets
approval from US companies so long as they believe they may gain more from
concessions forced on China than they lose from tariff-caused disruptions of
their currently profitable global supply chains
The second reason for Trumps tariff war on China is that it serves a useful
political purpose for Trump/GOP posturing. The simple logical story runs as
follows: Americas greatness was undone by bad deals made by establishment
politicians in the past. These allowed the Chinese (and others) to take
advantage of the US by means of intellectual property theft. Trump is
putting an end to that theft by his headline-dominating tariff wars. Thereby
America will become great again. And perhaps China, after 20 years of
spectacular economic growth, will be contained, in the arrogant jargon
right-wing pundits like to indulge.
This logic is neatly packaged and promoted politically. Integrated with big
budget outlays for the military, big tax cuts for corporations and the rich,
and big proclamations of patriotic chauvinism, the integrated package may
suffice to win elections in 2018 and 2020. But the fakery of intellectual
property theft accusations will be exposed, as it has in the past, and
likely soon. The accumulating chickens of multiple false accusations will
then come home to roost. A personally enriched Trump can then retire to Mar
a Lago.
Richard Wolff / Common Dreams