Saturday, June 8, 2013

Let's not waste our time on the impossible...

Fareed Zakaria closes last Wednesday's column titled China is not the World's Other Superpower with the following:
The United States should seek good and deep relations with China. They would mean a more stable, prosperous and peaceful world. Further integrating China into an open global system would help maintain that system and the open world economy that rests on it. But this can happen only if China recognizes and respects that system and operates from the perspective of a global power and not that of a “narrow-minded” state seeking only to maximize its interests.

Yeah, okay, but to suggest that China should not act solely in its self interest is not only unrealistic, it's impossible. Every governing body, as does every individual, acts in its own self interest. It's all about what "it" believes its self interest to be. As our "leaders", for example, impose their values onto other nations---while they profess they're acting in the interest of humanity---they are indeed acting in what they believe to be our their self interest: There are many pockets remaining in the world that are utterly rife with all manner of human rights violations, but, as you've noticed, our "leaders" are very selective in terms of at whom they direct their influence.

Rather than encourage the impossible, we would be far better served by leading by example. And the very best way---counterintuitive as it may seem---would be to adopt an entirely unilateral free trade policy. That is, tell the world that we welcome into our market absolutely anything and everything it can produce --- no restrictions whatsoever. And if nations such as China wish to maintain barriers between our products and their citizens---if they want to limit their people's access to the world market---that's entirely their business.

Sound crazy? Now think about it; a country cannot engage with such a healthy-thinking trading partner without, to a great degree, emulating it. You see, we buy with U.S. dollars, which are, in the end, claims against U.S. goods, services and assets. When, for example, the Chinese exchange stuff they make for U.S. dollars, they must ultimately buy from, or invest in, the U.S --- or they'll buy from, or invest in, another country whose citizens desire to buy from, or invest in, the U.S. All the while the American economy benefits greatly: As we buy the stuff we desire at world prices, we are left with greater resources with which to expand (and invent) areas where we enjoy a comparative advantage. The fact that the rest of the world yet so thirsts for U.S. dollars tells us that such areas presently exist. To keep it so, we must adamantly resist any policies that would limit our access to world markets. Same goes for policies that would hinder our producers capacity for production: I.e., when we legislate greater costs onto U.S. industry, make no mistake, we jeopardize the economic future (less production, less global demand for the U.S. dollar, higher prices of goods and services, fewer job opportunities) of the very people voters the crafters of those policies pretend to help.

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