America the Indispensable
Photo by Luke Michael on Unsplash

America the Indispensable

Joel Kotkin
Joel Kotkin

God has a special providence for fools, drunkards, and the United States of America.
~Otto von Bismarck

Post-millennium America does not look good at a glance. The country has struggled with the pandemic and with deepening divisions over race, class, inequality, and culture. It is in the humiliating process of losing another war, this time in Afghanistan. Since 2016, the world’s largest economy has been presided over first by the buffoonish and occasionally deranged Donald Trump, and then by an aging Joe Biden who bears scant resemblance to Franklin Roosevelt.

Yet, despite its manifest failings—the assault on the Capitol by Trump’s supporters was not a good image builder—the US remains the indispensable country, the last major counterforce to the rising authoritarian challenge of China, and its growing list of allies, including perhaps the new Islamist regime in Kabul. It remains, without question, the only nation with the natural resources, population, military, and technical skill to rally the West and salvage its threatened legacy.

The US routinely rises to the challenge late, a pattern evident in both World Wars, the initial period of the Cold War, the response to China’s late 20th century industrial juggernaut, and the terrorist threat. But in the end, it remains a huge and blessed land with enormous sokojikara, or “reserve power,” as Japanese political scientist Fuji Kamiya described it decades ago, that allows it to overcome competitors.

The case for America

Pessimism about America’s direction has resurged, following a brief improvement when Biden became president. According to an ABC/Ipsos poll, Americans’ optimism about the country’s direction has dropped 20 points since May. Concern is growing that the country is in a  precipitous decline, something that won’t improve with the bleak images from the Afghani debacle. Most Europeans believe that China will soon replace America as the world’s economic powerhouse. The Chinese, unsurprisingly, seem to feel the same. In a since-deleted tweet, Ministry official Zhao Lijian described Western efforts to slow China’s dominion as being “as stupid as Don Quixote versus the windmills … China’s win is unstoppable.”

So will our children—now living in unhappy and increasingly divided societies—grow up kowtowing to the Mandarins? Without America, that’s the future for the West and everyone else. Europe, politically divided, demographically stagnant, and anti-American, lacks the capacity and willingness to resist. Germany appears unwilling to stand up to either its largest trading partner, China, or to its now-favored supplier of energy, Russia. Weaker European states, such as Italy, the Czech Republic, Greece, Macedonia, Montenegro, Poland, Portugal, Serbia, and even rightwing favorite Hungary have signed up to be cogs in China’s “Belt and Road initiative.” Asia’s democracies can’t hack it without America. Japan is a rich but aging country that lacks much forward momentum, something that can also be said of South Korea. India is still too poor and chaotic to match China’s regimented power.

Nevertheless, as Bismarck suggested, it’s not usually a good idea to bet against the United States. Trump’s disruptive interlude, notes Walter Russell Mead, may have concentrated the minds of others, creating “new leverage” for the US now that its support, particularly on the military side, can never again be taken for granted, particularly if they don’t seem willing to fight for themselves. Some countries, like the Philippines, have already reconsidered their China links and moved closer to Washington. Even some Europeans, notably France’s Emmanuel Macron, are ready to consider China as a strategic “rival.”

An incipient alliance is forming, led by the US, that includes Australia, Japan, and perhaps most importantly, India. Chinese attempts to intimidate these major trade partners have failed, due to rising concerns about the country’s aggressive expansionist policies. The Sinophile former Australian Premier Kevin Rudd has argued that the so-called Quad is “uniquely problematic for China’s strategy because its aim of unifying a multilateral coalition of resistance has the potential to stiffen spines across the whole of the Indo-Pacific and possibly beyond,” and reports that China is preparing for a “struggle over the future of the international order.”

Missiles and aircraft may not be America’s most important weapons in this struggle. Despite its divisions, the United States still possesses a competing ideology that is universalist in nature, and as it welcomes migrants from across the world, it is everyday more representative of the globe. The liberal ideal that allows for sometimes unruly division and dissent is also our greatest asset.

The economic challenge

In the recent past, the American establishment saw China as an opportunity more than a danger. They encouraged and abetted China’s focus on production and the conquest of technologies needed to make goods. The societal losses of this shift, which has cost 3.7 million US jobs since 2000, can be seen in laid-off workers, and in communities that lost economic opportunities that were shipped across the Pacific. As historian Ross Terrill suggests, “the American market was catalyst and the Chinese economy was beneficiary.”1

The erosion of production and related technologies increasingly extends to high-tech products, including even critical components for military goods. But the critical turning point may be the pandemic which sharply revealed America and the world’s dependence on China for basic medical supplies. “COVID-19 has exposed a critical flaw in the global trading system: a manufacturing base that has left the world vulnerable to shortages of life-saving supplies,” explains Beth Baltzan, Democratic counsel to the House Ways and Means Trade Subcommittee from 2012 to 2016. Economic nationalism, notes the left-leaning American Prospect, has now gone “mainstream,” well beyond Trump’s hyperbolic “America First” rhetoric.

So, a number of Democrats are now pursuing some of Trump’s themes, including legislation aimed at boosting US industrial production and a new emphasis on “buy American” government procurement programs. Democrats like Ohio’s Sherrod Brown and Michigan’s Gary Peters have joined Republicans like Senators Rob Portman and Josh Hawley in seeking ways to curtail the ruinous dependence on Chinese medical supplies and high-tech gear. There is also growing bipartisan support for a new industrial policy to meet China’s mounting challenge in science and technology, such as the recently passed US Innovation and Competitiveness Act. This is more than just good policy; it’s good politics. A recent survey by the left-leaning Center for American Progress found that far more Americans prioritize US job protection than progressive mainstays such as climate change and improving relations with allies.

Seeing China for what it is

China’s “civilization state” represents a profound philosophical challenge to liberal values. This year is the 100th anniversary of the Chinese Communist Party, and it confirmed the end of China’s flirtation with free-market capitalism. As it has reached for predominance, China has become more authoritarian, militarized, and nationalistic, and now offers the world an alternative system.

China’s ascendency is not to be dismissed; it could surpass the US in terms of aggregate economic output as soon as 2028. The regime can claim to have lifted more people out of poverty more quickly than any in history. The long period of humility and apparent acquiescence to neoliberal values is being replaced by increasingly naked authoritarian bravado, as evidenced by the mistreatment of Hong Kong and the incursions into the South China Sea. China may also believe the Afghan disaster indicates that the US won’t protect allies like Taiwan (the global epicenter of the critical semiconductor industry).

Marxism may be China’s official ideology, but the unifying principle has been the restoration of the nation’s historic legacy. This has meant building a roster of vassal states and, in the words of the liberal Center for American Progress, giving “authoritarian principles more sway in the global governance system.” Rejecting concepts like individual political and property rights, China is drumming up support for the “Beijing consensus,” in a bid for what Johns Hopkins’s Deborah Bräutigam describes as “globalization with Chinese characteristics.”

At the heart of this effort is an attempt to use cyberspace to control society, limit debate, and shape behavior. With help from the big tech firms, like Facebook, Apple, Google, and IBM, China is creating an all-seeing surveillance regime that the Gestapo and KGB could only dream about. Recently, a group of scientists resigned from a genetics journal which, they alleged, promoted technologies that would facilitate government plans to track people’s DNA. The regime already employs a digitally enabled “social credit” system to track citizens’ activities. There’s even an app that rewards people for reporting signs of dissent, such as illegal publications, to the authorities. As MIT researcher Christina Larson asks, “Who needs democracy when you have data?”

Time for America, and the liberal West, to stand up

When Mao Tse-tung seized control, he announced that China had finally “stood up” after years of subservience to foreign powers. Now it’s the turn of liberal governments to do the same, even if that requires what an analyst at the American Interest described as a “hard decoupling” from the Beijing regime.

This may already be beginning. As China’s long “capitalist spring” has hardened into a harsh statist winter, it has undermined faith in the country’s private companies, particularly in the once-burgeoning tech sector. Recent actions limiting new funding for companies have caused investors to suffer over $1.2 trillion in losses. China will sacrifice even its strongest tech players to secure power. In this respect, investors, particularly foreigners, were “played” by Chinese authorities who wanted money for risky start-ups but never surrendered central control.

The assault on property rights and the rule of law is also making foreign companies reconsider their investments, with many shifting to other Asian countries. Japanese firms including Sharp, Sony, and Nintendo have already shifted out of China, part of an exodus of over 1,700 companies pulling up stakes last year alone. Softbank, the giant Japanese-based venture firm, has seen its revenues crater as Chinese investments fell due to government clampdowns, and the company has suspended future investments there.

Overall, in 2020 (and likely in 2021), the US surpassed China as a primary recipient of foreign investment, in part due to large outflows from China itself, Hong Kong, and Japan. Last year, Taiwan Semiconductor Manufacturing, the world’s leading chip foundry, decided to build a $12 billion new plant in Arizona. Samsung, a huge Korean chipmaker, is also shopping for sites in the United States for a $17 billion plant. And Intel, long the industry leader, plans to invest $20 billion in two Arizona plants.

President Trump’s tariffs may not have made much of an immediate impact, but more American firms are rethinking their Chinese investments. The Reshoring Initiative suggests that the annual number of jobs arriving from offshore, mostly China, increased from 6,000 in 2010 to 180,000 in 2017. A recent Kearny study notes that in 2019, the percentage of US manufacturing goods that were imported dropped for the first time in a decade. Of course, many companies will resist leaving China, but the evidence indicates that a shift out of the country may be just beginning.

Pandemic problems

The COVID-19 pandemic initially enhanced China’s prestige and its system of top-down control. Some American commentators praised Xi’s response to the crisis. But China’s COVID-19 response has since become an indictment of the country’s autocratic structures: filthy market conditions, incompetent governance, and bureaucratic languor. None of this can be admitted by the regime itself, and the instinct to protect the Emperor—Xi Jinping—has led Chinese media to celebrate the country’s mishandling of the epidemic, with the leader portrayed as a great and effective hero fighting a menace.

In reality, the pandemic has been a disaster for China’s global image. The country’s pandemic campaign has been marred by exports of poor quality medical equipment, and its vaccines have proven far less effective than those developed by private companies in the United States, Britain, or Germany. Indeed, there has been a surge of serious outbreaks in countries using the Chinese vaccine, including Mongolia, Seychelles, and Bahrain. Latin American countries are now reconsidering their initial embrace of the Chinese vaccines.

China continues to report low rates of infection, but less than one-in-five Chinese have received the jab. The Delta variant, suggests longtime China-watcher Gordon Chang, is resisting government efforts to control it. Its spread has begun to slow growth and effectively “killed the triumphalism of the Communist Party.” Once seen as a boost to China’s ambition to replace America as the world’s leader, the pandemic has provided the US and the West with an opportunity to mount the kind of vaccination drive that might restore faith across the developing world in the effectiveness of democracies.

Diversity as asset, not divider

As the US was convulsed by the Floyd protests and violence in 2020, the Chinese foreign minister had the gall to denounce the “systemic and persistent existence” of repression of “people of color.” China, meanwhile, forces the assimilation of the non-Han Chinese who make up roughly six percent of the population, most famously in Xinjiang and Tibet. Only 0.01 percent of China’s population are immigrants, and those who do come—particularly from Africa—are not generally well-treated. Racist comments and memes are common throughout Chinese media.

The West, particularly the US, may be far from perfect in this respect, but it is certainly a far more welcoming country. New census numbers suggest that a majority of young Americans are from ethnic minorities, while the once dominant white population has, by some accounts, actually shrunk. But, contrary to Chinese claims and many media accounts, the ideal of a post-racial America is far from an abstraction. The acceptance of inter-racial dating in the US is up 40 percent since 2003 according to the census, and marriage between races has risen from three percent in 1967 to roughly one-in-six now. Today, one-in-10 babies born in the US have one white and one non-white parent. Similar trends can also be found in Canada, Australia, and the UK.

Last year, over 840,000 green card holders became citizens, the most in a decade, while more than 10 percent of the American electorate was born elsewhere, the highest share in a half century. Immigrants may come seeking economic opportunity but they also want basic protections of both personal privacy and property. President Xi speaks of a “Chinese dream,” but such a thing is only possible if citizens are prepared to sacrifice basic human rights to pursue it. Americans from China more than doubled between 2000 and 2018, reaching nearly 2.5 million. Thousands more can be expected to arrive in the UK from Hong Kong’s increasingly repressive regime in the coming years. A possible invasion or covert takeover of Taiwan would drive many more to the Anglophone countries.

Immigration shouldn’t be seen as a form of global affirmative action—managed intelligently, it can be a critical asset to liberal states. Immigrants are new consumers and workers in a period of looming demographic decline and a global major labor shortage. Without immigrants, China’s slowing birthrate, the lowest since the great famine in the early 1960s, means it will have to adjust to a shrinking workforce. By 2050, China is expected to have 60 million fewer people under the age of 15, a loss approximately the size of Italy’s total population.

The youthful energy that drove China’s emergence is fading, and there’s no way to reverse it short of a massive cloning campaign. The ratio of retirees to working people is expected to have more than tripled by then, which would be one of the most rapid demographic shifts in history. In 1970, China’s median age was 10 years lower than the US, while today it is higher. By 2050, China’s old age dependency ratio—defined as the number of individuals aged 65 and over per 100 people of working age compared to those aged between 20 and 64—will be roughly 20 percent higher than that in the US.

Why ideals matter

In 1970, Mao described the US as “a paper tiger, already in the throes of a death-bed struggle.”2 This vast miscalculation may be shared by much of our intelligentsia, but it is as wrong now as it was then. Instead of Western decline, it was the USSR that collapsed, while America led the world into the digital economy, grew faster than its competitors and, if anything, extended its cultural hegemony. Strong empires, like that of Rome, always go through periods of decline; but Rome survived nutcases like Nero and Caligula, hitting its heights centuries later.

Mao and his successors would no doubt be comforted by the fact that many key Western institutions—the academy, the media, the corporate hierarchy, and even some churches—increasingly reject Western culture, an assessment most common among the young. This raises the question whether the US still has the desire and willingness to invest in itself under duress.

The choice is either a US-led world or one dominated by a China that the vast majority of people in Europe, the US, and elsewhere recognize as repressive. Liberal democracies may struggle to manage divergent views, but as the brave Hong Kong protestors have reminded us, the rule of law and safeguards protecting liberty, privacy, and property remain critical to preserve human rights and self-determination. These ideals are what makes America and the West far stronger than many think. Despite its faults and failures, America will likely remain, as Lincoln suggested, “the last great hope of humanity”—this time against the rising tide of a technologically enabled, unrestrained autocracy.

 

Joel Kotkin is the presidential fellow in Urban Futures at Chapman University and executive director of the Urban Reform Institute. His new book, The Coming of Neo-Feudalism, is now out from Encounter. You can follow him on Twitter @joelkotkin.

Feature image by Luke Michael on Unsplash 

References

1 Ross Terrill, Australian Bush to Tiananmen Square, (Lanham: Hamilton Books, 2021) p.xv
2 Terrill, p. 143

World Affairs