The New Babel

During a recent conversation on a topic that now escapes me, my Chinese wife began to tell the story of the Tower of Babel, a biblical story from the book of Genesis. It tells of a united humanity, all speaking the same language, which, in the years following the Great Flood, built a tower designed to reach the heavens. God, however, was unhappy and instilled in humanity a diversity of languages and scattered them about the world.

My wife is not religious. Nor has she ever studied the Bible. She is, however, familiar with the Bible, without associating her knowledge with that sacred text, to a degree that relatively few Americans are today. Without getting into a debate about origin, many biblical stories exist outside of their biblical context. Even in China. Perhaps particularly in China, which has long been a story-telling region of the world.

The common Christian interpretation of the story is that God, in introducing so many languages to humanity, was punishing the people for believing that they were capable of building a tower that could reach God’s domain. This, the interpretation implies, is a level of unfounded arrogance that could be attained only through the collective confidence and knowledge of an informed humanity.

I have come to wonder, however, if, in fact, the opposite isn’t true. Perhaps God was, in truth, if not rewarding humanity, helping it to achieve a higher level of understanding and, in turn, enlightened satisfaction.

There is little question that enlightenment cannot be attained in total isolation. We need teachers, be they people, or books, or even the Internet. We aren’t born with sufficient information to lead exciting, productive lives. It may be true that a baby isolated at birth may enjoy some form of happiness, but its very survival would be far from assured.

That, in turn, introduces the need for communication. And, as is often the case, this need provides a concurrent opportunity. How far we take the benefit of knowledge is up to us.

Before Gutenberg invented his press, most knowledge was distributed orally, through legends and oral histories passed down through the generations. Even today much, perhaps most, of our knowledge is acquired through the spoken word. A declining but still significant amount is exchanged face to face, but throw in online videos, movies, music, and podcasts, and the percent, whatever it might be, has to be significant.

Language, however, is of human construction. Even if you accept Genesis in some literal sense, it is, at least, created in the image of humanity. God, however you may define him or her, surely does not speak English or German or Chinese.

All language, moreover, is symbolic. The Asian languages are the most obviously so, built, as they are, on pictograms or characters that originally had some literal relevance to reality. Alphabets, moreover, are consensually accepted conventions, having no direct counterpart in the natural world.

All language, as a result, requires a speaker and a listener, just as for every left there is a right, for every front there is a back, for every pro there is a con, and for every yin there is yang. Effective communication only occurs when the two parts of the communication are in balance, when the intended expression and comprehension are in harmony.

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Which is why the diversity of language that exists may have been an incentive, not a punishment. My wife and I speak different languages. Yet our level of mutual comprehension is greater than any that I have ever known with another individual. And the reason is that language has forced both of us to develop our skills as listeners.

In today’s world, however, there is a great imbalance. And the effectiveness of our communication has been greatly compromised as a result. If you doubt that, turn on your tv or check the news feed on your smart phone.

That escalating failure, without any doubt, is due not to the fact that we are speaking less, but that we are listening less effectively. We are drowning in speech. We have more than 100 television channels of people speaking. We have billions of websites of people sharing words. We have people in the streets chanting their message. Silence, in fact, is on the verge of literal extinction.

But why aren’t we listening?

The most obvious reason is that the people with a message, and that is all of us, are telling us not to listen. They only care about what we do. Buy this. Vote this way. Think like this. Chant this message. Like me. Follow me. Give me that.

Technology isn’t helping. Technology has opened vast and powerful mediums for speaking. We can broadcast our speech to the world in fractions of a second. Little technology, however, has been devoted to helping us listen. Facebook and Google, the face of technology, are automated delivery systems for the commercial speech of advertising. To the extent they pretend to listen, they are merely gathering data for more targeted speaking. They have no interest in listening per se.

One of the indirect and unforeseen consequences of technology, moreover, has been the death of subtlety. Even though video seems to imitate a multi-dimensional reality, technology, as we know it today, is binary. It ultimately exists in only two dimensions. We can imitate reality but we cannot, and despite assurances from the commercial crowd that hopes to sell us virtual reality, will never be able to, duplicate reality.

That is already obvious in the world of written communication. It is a reality, however, that hasn’t been fully acknowledged.

Classical literature, for example, is of declining interest among a new generation of readers. Tolstoy cannot compete with Rowlings. Proust cannot compete with Tolkien. Why?

To comprehend, much less enjoy, Tolstoy or Proust, you must embrace subtlety. Proust communicates through delirium and Tolstoy speaks through gestures and imagery. In the 1,200 pages of War and Peace there is relatively little actual dialogue. And yet Tolstoy’s communication with the reader is unparalleled in literary history. Contemporary authors don’t even come close. Nor would we buy their books if they tried.

Rowling and Tolkien, of course, communicate through imagery. It is, however, a different kind of symbolism. It is graphic symbolism, not subtlety. Tolstoy gives you a gesture with the hand, the turning of a lip, a suggestive tilt of the head. Rowling gives us wizards, Muggles, flying broomsticks, and centaurs. I’ve read Harry Potter. It’s brilliant. As a reader, however, you don’t have to work much. Rowling delivers the entertainment on a platter. (Surely one of the best pure writers of our generation.)

Literary subtlety, in the end, is all about listening. And that takes time and patience. And those are the two commodities in shortest supply in our tech-mad world.

Technology has also killed our ability to think abstractly. Who can understand the theoretical physicists or mathematicians? Who wants to?

Who wants to major in philosophy or art history? Who will be our historians when the current crop dies away? Google? Instagram?

Oh how the worm turns. We are quite literally at the gates of Shinar. Silicon Valley is the new Mesopotamia.

What will happen this time? God or not, something will have to give. The current model of humanity is not sustainable. It will survive me, but not those that I love.

In the world of Genesis, language was enough to force us to listen. For a while. But it won’t be enough this time. An apocalypse would work, of course. Climate change will ultimately force us to change our resource-consuming habits.

Whatever happens, however, we will be forced to start speaking less and listening more. This is the balance that the universe, from the beginning of time, has sought, even demanded. Why not start now?

Note from the Author: It was exactly one month ago that I made a blog post entitled, Will They?, in which I predicted that President Trump would ultimately cancel the June meeting with the supreme leader of North Korea, Kim Jong-un. I also, on many occasions, confidently explained why the mis-named US/China “trade talks” were doomed to fail. Washington is clueless about Asia today. If you really want to know what’s happening in Asia today, read my book, Understanding China. The perspective and knowledge are timeless.

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My newest book, We, Ourselves, and Us: Creating a More Just and Prosperous America, is now available on Amazon in paperback (click here) and Kindle (click here) versions.

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Einstein Meets Confucius

Author Gary Moreau, aka Avam Hale in fiction

I read a marvelous book recently, entitled, The Order of Time. It’s written by Carlo Rovelli, an Italian theoretical physicist that specializes in quantum gravity and is a proponent of loop theory.

To paraphrase, Rovelli explains that while scientists have long considered time to be an essential element of the mathematics of the universe, it doesn’t really exist. It’s only real in an experiential sense and that is largely a construct of our individual perspective.

Consider this example: People never used to worry about clocks. They worried about the cycle of sunshine and darkness. But that cycle is different in every single village, town, and city on the planet. The cycle varies both by latitude and by longitude. But back when we used to spend our lives in our little village we didn’t care.

Then the scientists and engineers invented trains to take us from one village to the next. And people needed to know when the train left their village. But how can you develop a timetable when every village has its own time? You can’t. But, at the same time, it’s not quite practical to say that the whole world has just one time. Farmers in Sichuan don’t care what the sun is doing in London. They care what it’s doing on their farm.

The solution was the time zone, and it’s a compromise. Time zones are a construct, evidenced by the fact that the very large country of China has only one. Officially, every Chinese city is on Beijing time, although the people living in the western provinces have made some local adjustments in how that gets implemented, since their “day” unfolds at a very different “time” than Beijing’s.

In other words, time zones, and the clocks that adhere to them, are perfectly accurate for local purposes but not very accurate when we’re covering large distances. Even the distance from New York to Beijing is too big to share one time. Consider the difference in “time” between New York and the edge of our own galaxy, much less a distant universe. (Scientists have already demonstrated, using very precise atomic clocks, that time at sea level and at the top of a mountain moves at different speeds.)

In the language of theoretical physics, in other words, time doesn’t really exist. It is an illusion.

Which, of course, is what the Buddhists have been saying for thousands of years. The Taoists conceptually agree: reality is just too complex for the human mind to comprehend.

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The more that western scientists reveal about the true reality of the universe, in fact, the more they sound exactly like the ancient Chinese philosophers. Confucius (551 BCE – 479 BCE) said, “Wherever you go, there you are.” That sounds exactly like something a modern theoretical physicist working out of Stockholm or Chicago might say.

The implications are many, the first being that modern science and Eastern philosophy share far more in common than anyone to date has acknowledged. And the primary reason is obvious. There are very few, if any, graduate students in theoretical physics that also study ancient Eastern philosophy. And vice versa. The academic world has long considered these two disciplines to be distinct and, essentially, mutually exclusive. Philosophy, scientists are taught, has nothing to offer science because it is not empirical (i.e., it doesn’t adhere to the scientific method).

And we’ve all bought into the mutually exclusive assumption. Few western scientists have any interest in devoting precious hours to the study of Eastern philosophy or religion. Many young Chinese believe, in the same way, that to further the development of the Chinese quality of life the Chinese people must abandon tradition and become more modern (i.e., scientific) in their outlook.

The impact on education began decades ago. The Chinese education system has emphasized mathematics and engineering for the last fifty years. And the American education system, which once emphasized the liberal arts (e.g., comparative literature, art history, philosophy), is now shifting its focus to emphasize those same subjects—commonly known as the STEM subjects (i.e., science, technology, engineering, mathematics) in anticipation of a future designed exclusively by technology and science.

But what do ancient Chinese philosophy and modern theoretical physics share in common? In what way were Confucius and Laozi (the founder of philosophical Taoism) like Albert Einstein and Stephen Hawking?

That’s easy. They were all abstract thinkers. They were all capable of escaping the boundaries of formal logic otherwise known as deductive logic, the foundational logic at the heart of the STEM subjects and what has, until now, been understood to be modern science.

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If the West wants to continue to develop the boundaries of science we should be teaching our youngest children how to think abstractly. We should be teaching them classic literature, art history, and philosophy. American school children should be studying Confucius and Laozi. Abstract thinking, like language, is best taught to the young. The formal reason of the STEM subjects, which is also important, but not sufficient, to scientific advancement, can come later.

China, at the same time, should not be so quick to abandon its philosophical tradition in its mad dash to advance economically and technologically. The country and the culture that will develop the fastest and go the furthest is not the one that devotes itself most completely to modern empiricism and science, or the one that clings blindly to tradition. It will be the country that takes the best from Eastern tradition and Western modernity.

And what does that look like? Why is the latest science starting to look a lot like China’s ancient philosophy?

Western science has assumed, since the Enlightenment, that the universe is both mechanical and linear. No aspect of science has been more central to modern science than the belief in linear causation. For every effect there is a cause or causes. And every cause results in the same effect, everything else held equal, every time.

The ancient Chinese philosophers, however, understood that reality is not so linear. They defined reality not so much through cause and effect as in the balance between opposing forces, most often referred to as yin and yang.

The Western worldview is linear and discrete, while the Chinese worldview is continuous and circular. As I discussed at length in my book, Understanding China, this is why Western and Chinese culture are so fundamentally different.

What Rovelli and other theoretical physicists are now discovering, I believe, is that both perspectives are right. And quantum physics is only reinforcing that truth. The universe is not linear or circular. It is both. Both deductive and inductive logic are necessary to explain reality and understand how it functions.

And, importantly, both deductive and inductive logic exist in a context not of constancy, as Western science has assumed (i.e. the assumption that nature is inherently built on mechanical systems), but in a context of constant and continuous change. If concepts like time are not an illusion, they are at least irrelevant in any linear sense.

The realization that the universe is not mechanical and linear, but is, in fact, circular and amorphous, is perhaps the most important scientific revelation since the beginning of the Enlightenment itself more than 300 hundred years ago.

It is both another example of why we shouldn’t just walk away from tradition and why we should not isolate ourselves into artificial nation states. We should, instead, learn from each other and honor both discovery and tradition.

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My newest book, We, Ourselves, and Us: Creating a More Just and Prosperous America, is now available on Amazon in paperback (click here) and Kindle (click here) versions.

If you read any of my books and like them  I would greatly appreciate it if you will take the time to post a review on Amazon, Goodreads, or whatever book site you enjoy. Thank you in advance.

Liu Comes to Washington

Author Gary Moreau, aka Avam Hale in fiction

Chinese Vice Premier, Liu He, arrived in Washington on Tuesday for several days of economic and trade negotiations with Treasury Secretary and Goldman Sachs alum, Steve Mnuchin, and others. Liu is China’s top trade negotiator and a member of the Political Bureau of the Communist Party of China’s General Committee, China’s top governance body.

There is little doubt that Liu’s arrival explains President Trump’s 180-degree flip on the seven-year trade embargo which the US Commerce Department recently imposed on US companies providing goods and services to Chinese telecom maker ZTE Corp. In typical hyperbole, Trump characterized ZTE as a “massive Chinese phone company,” and announced that he had instructed the Commerce Department to fix the problem and get ZTE back in business as soon as possible.

In fact, ZTE only has about 80,000 employees worldwide and, while important to China’s efforts to expand its 5G network, is not a behemoth by Chinese standards. Foxconn, the Chinese maker of all things Apple, employees 1.2 million people, and the Chinese Apple supply chain in total is estimated to employ as many as 4.8 million. Huawei, the largest Chinese mobile handset maker employs 180,000, almost all in China, while China Mobile employs 500,000.

Make no mistake, in other words, that Trump’s decision to reverse the seven-year ban on US exports to ZTE over its business relationships with Iran had very little to do with Chinese employment and everything to do with the sudden realization that Trump’s declaration of trade war on China is potentially disastrous to the US. (With perhaps a nudge from US ally, Japan, whose mobile carrier, NTT Docomo, was the reason ZTE launched its latest phone, the Axon M, to begin with.)

Trump apparently has no trade ideology. His foreign policy—all his policy, for that matter—is transactional, the business currency of real estate development and reality television. And it will ultimately fail, and cause far more harm to the American economy than anything China has done over the last three decades.

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It won’t work for a couple of reasons. The first is that the strategy will merely push China up the value chain of technology. As China Daily reported after the DOC announcement, “The incident highlights that China needs to step up the development of homegrown semiconductor industry, to reduce reliance on foreign technology.” (At the expense, of course, of US semiconductor companies like Qualcomm.)

The second reason is that transactional negotiation is what the Chinese excel at—culturally, politically, and economically. Trump doesn’t stand a chance negotiating individual transactions with a trading partner that has developed to the point where it can stand on its own and a government that can expect continuity of power for at least the next two decades.

In what will surely be tweeted as another transactional victory for Trump and his merry band of one percenters, it was also announced earlier this week that Tesla has been granted a business license for Tesla (Shanghai) Co Ltd. While it’s unclear where Tesla will get the money to actually build a plant in China, and while I think Tesla will find China to be a financial black hole, what’s significant about this announcement is that it is the first time that a foreign auto manufacturer has been granted a business license without first securing a Chinese joint venture partner.

While the US government routinely prohibits foreign investment in favored American industries, American companies have long complained that China protects key strategic industries, of which automotive is considered one, by requiring them to obtain a Chinese joint venture partner for any Chinese investment. And there is a common Wall Street narrative that it is the joint venture apparatus where American companies stand to lose valuable intellectual property, essentially creating their future competitors.

In reality, however, that’s not where most technology transfers occur. The biggest threat to intellectual property protection for American companies operating in China is the common vendor network that virtually all companies share with their competitors. (That same threat exists in every country in the world.)

And, of course, their own employees. Because, as I note in Understanding China, personal obligation in China is typically personal, not institutional, it is relatively easy to hire talent away from your competitors. Rather than attempting to hack your engineering network, your Chinese competitor is far more likely to post someone outside the gate to your factory and simply ask your departing employees who knows the most about what goes on inside. Dinner follows and your technology just walked out the door. (American tech companies steal talent from each other all the time, of course, but they do it through recruiters.)

There is little doubt that before Vice Premier Liu packs up for home Trump will be declaring success in the current trade talks. Trump being who he is there is no conceivable scenario in which he would admit failure in much of anything.

And whether that’s an “alternative” narrative or a false narrative won’t really matter. The pork and soybean farmers may find some temporary relief, but Trump’s transactional foreign trade policy will be a tragic failure for American economic interests in the long run.


My newest book, We, Ourselves, and Us: Creating a More Just and Prosperous America, is now available on Amazon in paperback (click here) and Kindle (click here) versions.

If you read any of my books and like them  I would greatly appreciate it if you will take the time to post a review on Amazon, Goodreads, or whatever book site you enjoy. Thank you in advance.

Tiger Mothers?

I wrote the post below several years ago while still living in Beijing. I offer it again, on the eve of Mother’s Day, because it is timeless in its message.There are no Chinese mothers, American mothers, French mothers, or African mothers. They are all mothers and share far more in common than not. Here is to them all.


Over the May 1 holiday I was feeling a little bored so I decided to go furniture shopping. Browsing, actually. I needed something but wasn’t really in the market or mood to buy. I just wanted to have a look.

When I entered the store a young salesperson approached me and, as is typical in China, wanted to follow me around the store with order pad in hand. I brushed him off making it clear that I had no intention of buying anything. And to my surprise and relief he left me alone.

After browsing for a while, however, I did have a question but all of the salespeople, of course, were tied up following other shoppers around. As luck would have it, however, a young sales lady came speed-walking by on her way to who-knows-where and I jumped in her path and asked if she could help.

She immediately looked around to find my requisite sales attendant but not finding anyone hovering nearby asked, in broken but comprehensible English, if my salesperson had gone somewhere. After I explained that I had none, and a moment of her visible astonishment that I had gotten away with that, she smiled and said that she would be happy to help but noted that her English was very poor. I noted, in equally broken, but apparently comprehensible Chinese, that we’d find a way to work out the communication.

And we did. As is always the case. Between her English, which was better than she believed, my elementary Chinese, which is not, and a lot of sign and body language, we got through it. And, of course, we both had smart phones with online translators, which we both resorted to in a pinch. (In response to a question regarding a cabinet she held up the word ‘conjoined’, but I’m actually pretty fluent at translating translators after all these years.)

And as it turns out the store was having a sale – a pretty big sale, in fact – which is not all that common at this particular store. So, knowing that I would ultimately be in the market for a particular piece of furniture I worked at getting myself in the mood and ultimately decided I would come back the next day – with a wallet this time – and give it some serious consideration.

With sales people the world over I’ve learned not to appear too enthusiastic so I told her I might come back the next day but did ask her for her card, knowing that once you have established a simple communication process with someone with whom you do not share a common language you don’t want to start over with someone new. (Turns out her family name is Wang, a name she shares with approximately 100 million other Chinese according to a 2007 government census.)

So I showed up the next day and showed the card to the young man who literally ran up to me as I walked in the door. (Foreigners are often given this kind of attention by commissioned sales people, unfortunately. The Chinese are outstanding statisticians and know the odds are in their favor if you have round eyes and a big nose and happen to have found your way to China.)

He found Ms. Wang and she began to escort me through the store, stopping along the way to give me a small bottle of water as it was a rather warm and humid day in Beijing. And as we arrived back at the section of the store where I had initially made my queries she began to repeat the answers she had provided the day before. Only this time her English, if not impeccable, was at a notably higher level than it had been just 24 hours before.

Quite literally taken aback by such an abrupt advance in fluency I complimented her on her English and asked how she could have possibly advanced so far in only one day. Had her skills advanced for some inexplicable reason or did she, as I presumed, simply feel more confident – or more motivated (I actually had a wallet this time.) – on this particular day?

At which she went on to explain, smile brilliant across her face, that she had stayed up very late into the evening brushing up on her English knowing that there was some chance that I might return. She felt it important, she said, to show respect for her customers.

Good answer; sale made; commission earned.

I had a bit of a chuckle a few days later, therefore, when I read an article in The Economist entitled, Revenge of the tiger mother. It was about a study by Amy Hsin and Yu Xie, two sociologists from the City University of New York and the University of Michigan, respectively. The study was an attempt to understand the well-documented fact that Asian-Americans achieve at a much higher rate than other ethnic sub-groups in the United States.

Amy Chua, a Yale law professor, famously attributed the achievement gap to harsh (read good) Asian parenting, coining the phrase ‘tiger mother’ and igniting a firestorm of controversy among American mothers offended by the implied racial stereotype of the lax and coddling Western parent.

I do remember, actually, a parent-teacher conference several years ago here in Beijing in which my wife and I shared with my daughter’s teacher her disappointment that her report card scores were not as high as a Chinese boy in her class with whom she was friends. The teacher, an Australian as I recall, immediately noted, “You can’t compare your daughters with the Asian kids. The Asian kids leave school and immediately go into private tutoring whether they need it or not. As an educator it drives me crazy. The kids need much broader development at this age and a little playtime with other kids is a good thing. Your daughter is doing just fine. Tell her not to worry.”

Fair enough.

And I also know that one of the biggest social problems facing China today – and this comes from my Chinese friends and colleagues – is the rise of the ‘little emperor.’ These are the only children of China who are quite literally coddled by two parents who were themselves single children, and four grand-parents, all of whom are intent on giving the child ‘a good life’ – often meaning anything he or she wants.

This past weekend, in fact, I ran into a Chinese mother I hadn’t seen in some time and inquired about her young son. She immediately replied, “It’s terrible. He’s almost six and has memorized the phone numbers of his four grandparents, all of whom live within 5 kilometers. He is impossible to discipline. If we tell him no he calls his grandmother without our knowledge. If she says no he calls his other grandmother. And then he starts with the grandfathers. It’s awful.”

At any rate, what Ms. Hsin and Ms. Xie found was that the achievement gap could not be explained by socio-demographic factors or differences in cognitive ability. (It is actually hard to believe that in this day and age anyone would think to test cognitive differences as an explanation for differences in racial or ethnic achievement.)

The most likely explanation, they found, is the simple fact that Asian-Americans work harder at achievement than everyone else, a trait they attribute, in part, to the optimism of first or second-generation immigrants. (Barring special events like the Irish potato famine, isn’t that why people emigrate? The promise of a better life?)

This is no big scientific breakthrough in my mind, unlike the discovery of a new atomic particle or a hidden galaxy. It is, to quote my own dad yet again, common sense.

People work hard for lots of reasons and optimism is certainly one of them. But so is need, lack of alternative, and the example of role models.

I had my first job at 11. When our neighbor offered the use of his power mower after seeing my brother and I mowing the lawn with mechanical hand mowers my father declined, noting, “I have two power mowers already.” And my closest friend, a New Englander who likes to burn wood and could easily afford a dozen wood splitters, still spends many a fall weekend splitting it by hand.

Take any group of successful people and you will find too many differences to find any kind of statistically significant commonalities to their success. With one exception. They all worked hard at whatever it was they achieved.

Thank you, Ms. Wang, for reminding me of that eternal truth.


My newest book, We, Ourselves, and Us: Creating a More Just and Prosperous America, is now available on Amazon in paperback (click here) and Kindle (click here) versions.

If you read any of my books and like them  I would greatly appreciate it if you will take the time to post a review on Amazon, Goodreads, or whatever book site you enjoy. Thank you in advance.

The No-Talk Talks

Author Gary Moreau, aka Avam Hale in fiction

As most China hands predicted, President Trump’s trade negotiating team, led by Treasury Secretary and Goldman Sachs alum, Steve Munchin, and one-percenter/investor, Wilbur Ross, the Secretary of Commerce, left the Beijing trade talks yesterday with little to show for their jet lag.

In the end that’s not surprising for the simple reason that they were never intended to be “talks” to begin with. The US team was clearly there simply to deliver what Cornell professor, Eswar Prasad, called, the “terms of surrender.”

According to the New York Times (Keith Bradsher, May 4, 2018), the U.S. list of demands stipulated that China must:

■ Cut its trade surplus by $100 billion in the 12 months starting in June, and by another $100 billion in the following 12 months.

■ Halt all subsidies to advanced manufacturing industries in its so-called Made In China 2025 program. The program covers 10 sectors, including aircraft manufacturing, electric cars, robotics, computer microchips and artificial intelligence.

■ Accept that the United States may restrict imports from the industries under Made in China 2025.

■ Take “immediate, verifiable steps” to halt cyberespionage into commercial networks in the United States.

■ Strengthen intellectual property protections.

■ Accept United States restrictions on Chinese investments in sensitive technologies without retaliating.

■ Cut its tariffs, which currently average 10 percent, to the same level as in the United States, where they average 3.5 percent for all “noncritical sectors.”

■ Open up its services and agricultural sectors to full American competition.

The United States also stipulated that the two sides should meet every quarter to review progress.

I will not address each demand individually except to note that each, of and by itself, is completely unrealistic, and, in aggreagate, absurd. These are the kinds of demands a schoolyard bully delivers to his prey prior to sticking his head in the toilet.

The Chinese side is succinctly summed up by Peng Guangqian, an influential military strategist that another article by Keith Bradsher quoted as saying, “President Trump wants to curb our development.”

There can, in fact, be no other explanation. In the end, these talks clearly had little to do with trade and even less to do with creating jobs at home or advancing stagnant wages.

The demand that China abandon Made in China 2015 is akin to asking Germany to drop “Industrie 4.0”, a government regulatory and investment initiative launched as part of Germany’s High Tech 2020 Strategy, itself launched in 2011. An equivalent demand on the US would require the US to eliminate the US Tax Code, eliminate all government research and support for higher education, and nationalize the entire defense industry to prevent any distortion of the theoretically free markets for airplanes, weapons systems, and munitions.

I actually take back what I said earlier. It goes beyond absurd.

So what is the US objective?

On the surface, it would appear that the global hawks in the administration are intent on maintaining the singular and unchallenged global hegemony that the US has enjoyed since the collapse of the Soviet Union. In short, they don’t want to share power.

But why? What does political hegemony do for them other than inflate their egos, and while there’s no underestimating the power of an inflated sense of self-importance, that hardly seems sufficient to risk the health of the world’s two largest economies, and potentially, in the extreme, putting the world at risk of a devastating armed conflict.

There is only one motivation in the world that is worth that risk—money and power. And I say one because in the US, at least, they are two sides of the same coin.

There is virtually nothing on the US list of demands that would do anything to further the interests of American labor in terms of either job growth or wage advancement. Nada. Nothing. The word “employment” is never even mentioned. If job and wage growth are the objectives of Make America Great Again, why not suggest them as a neutral yardstick by which to measure progress and determine next steps by both parties?

There is only one group of Americans which benefits from these demands: the capital class, and the bankers and investors that make it up. In other words, people just like Steve Munchin and Wilbur Ross and the other one-precenters that they represent.

If China were to capitulate, in fact, the world would be thrown into chaos and anarchy. The capital markets would soar and the rich in America would get much richer. Wages would still stagnate, however. And most of the country would continue to feel as if the world has passed it by and the government has abandoned them.

While the one-percent seems set on ignoring the reality, the ninety-nine percenters, as history has shown time and time again, will eventually show up at the door with pitchforks in hand. Every balloon has its limits.

You might think that simply can’t happen in a liberal democracy in which our political leaders serve at the pleasure of the citizenry. And that might be true if there were such a thing as an independent, informed, and free press. That might be true if we demanded that our politicians work transparently instead of huddled behind closed doors with lobbyists and special interest groups. That might be true if politicians did not need the money of the one-percent to gain power in the first place.

None of those things, however, are true. The First Amendment means little if the people in power are willing to lie to the press and its citizens. Political empathy means nothing if it isn’t backed up by behavior. An active presence on social media means nothing if its just used to bully and spread misinformation.

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I am reading the captivating book by Doris Kearns Goodwin, No Ordinary Time: Franklin and Eleanor Roosevelt: The Home Front in World War II. It’s a fascinating story, superbly told, full of parallels with our own current events.

President Roosevelt clearly understood that in a democracy change occurs slowly but that once the people get behind a change, no matter how significant, it sticks. As a result, he was extremely cautious, much to the chagrin of many aides, about pushing the US into the war before there was a broad consensus among the citizenry, which he ultimately got when the Japanese bombed Pearl Harbor.

Trump has no such tolerance for the democratic way. He is a government of one and apparently believes that he knows what the American people want even if they don’t. And, of course, the end—his will—justifies any and all means.

With the historical record now in place, however, it is clear that Roosevelt had an agenda long before he admitted to one publicly. While he was careful to wait for popular support, there is little question that he did, both transparently and opaquely, everything in his power to influence popular sentiment in the direction he wanted to see it go.

It’s just another example of the universal duality of all existence. Or, more colloquially, for every egg there is a chicken and for every chicken there is an egg. Which comes first?

While the beauty of the democratic system is the expression of the will of the people, the dark side is that the state enjoys immense power to shape that will as it desires. And that, of course, is where the separation of powers comes in. That separation inhibits treachery by the fact that many members of the political class have to be in cahoots for the will of the people to be ignored or overturned.

But Trump is a demagogue who has figured out how to separate the people’s will from their self-interests. And, just as importantly, he has trampled on the separation of powers, either through executive order, bullying, or outright dishonesty. (He has admittedly exposed the imbalance of power that now exists between the three branches of government, but he didn’t create that imbalance.)

In the end, the trade mission to China exposed not so much the gap in expectations between the two sides as it did Trump’s real economic agenda. He is a one-percenter. And his agenda is to protect and expand the power and wealth of the one percent. Mnuchin and Ross were perfect emissaries. They clearly get it, as their list of demands so clearly reveals.

China is not the boogeyman. If we truly believe in multi-lateralism and multi-culturalism, we should be applauding China’s rise to the global stage. Instead, we continue to vilify one-fifth of the world’s population in an unashamed attempt to reward the one percent of Americans who are the true force behind Trump’s agenda, at the risk of the safety and welfare of the rest of the seven billion people on the planet who just want peace and to give their children a better life.


My newest book, We, Ourselves, and Us: Creating a More Just and Prosperous America, is now available on Amazon in paperback (click here) and Kindle (click here) versions.

If you read any of my books and like them  I would greatly appreciate it if you will take the time to post a review on Amazon, Goodreads, or whatever book site you enjoy. Thank you in advance.

Cultural Appropriation?

Author Gary Moreau, aka Avam Hale in fiction

An inevitable rite of spring, millions of high school students attending their proms have posted pictures documenting their sartorial splendor on social media in the past few weeks. Among them was Keziah Daum, an 18-year-old from Utah, who wore a red Chinese cheongsam, or qipao.

And she took some heat for the decision from those who complained of cultural appropriation. One Chinese man Tweeted: “My culture is not your…prom dress.” It was retweeted 40,000 times and received 180,000 likes. Not quite viral, perhaps, but far more endorsement than it deserves.

While I am seldom moved to superlatives by much of anything, the cultural appropriation criticism is absurd. If the point were valid, then American cowboys and miners, for whom Jacob Davis and Levi Strauss invented blue jean pants, have a legitimate right to global outrage. (To say nothing of Mickey Mouse.)

Daum has no Chinese roots and picked out the dress merely, but justifiably, because she thought it was gorgeous. “I am grateful I was able to wear such a beautiful dress.”

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Our clothes are, in the end, truly personal. Even if they are “traditional,” we individually make the decision to wear them for purposes of shared identity. Who can be the legitimate gatekeeper of such a club?

According to the South China Morning Post, which seemed to unequivocally support Keziah, “The qipao is believed to have been adapted from the style of Manchu women in the Qing dynasty of 1644 to 1912. The tightly fitting modern version was created in Shanghai in the 1920s and made fashionable by socialites and the upper class.”

In the period following the revolution of 1949 that gave rise to the People’s Republic of China, and during the Cultural Revolution that followed, the dress fell out of favor due to its traditional and bourgeois association. It has since, however, become very popular in China and Peng Liyuan, China’s first lady and fashion icon, has worn a qipao on many occasions when she has joined her husband, Xi Jinping, at diplomatic events.

Both of my daughters own one. When living in China they both attended the International School of Beijing, which considers a commitment to upholding Chinese culture a core component of its mission. And it strongly encouraged its students to dress in traditional garb during special events honoring Chinese tradition.

My wife, who is Chinese, does not own a qipao, although I assure you that she would look lovely in one. She grew up very poor and would never, even today, spend that much money on a single piece of clothing. Nonetheless, when I shared the debate surrounding Keziah Daum with her she scoffed and said, simply, “People are bored.” She went on to note, quite insightfully, that if people took this idea to its logical conclusion Milan would be out of business.

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Living while tweeting is a sure sign of just how out of whack our priorities have become. And it is indeed ironic that the United States, that bastion of individualism, is leading the charge in appropriating cultural appropriation. Really? What would Horatio Alger or the Marlboro Man, much less Wonder Woman, think about that?

If anything, we should be applauding Keziah Daum for her progressive feminist values. According to Louise Moon, the journalist who wrote the South China Morning Post article, “The dress symbolised a silent protest to promote gender equality after the fall of the dynasties and the beginning of the republican period in the early 1900s, and was worn during the 1919 reformist May Fourth Movement.”

In the end I think the whole idea of cultural appropriation is misguided. It is the height of conformist arrogance. Culture cannot be policed into submission any more than people can. We will never have individual identity if we don’t celebrate our common humanity first.

So why, then, am I honoring the misguided tweeters with a blog post? That’s simple. I don’t believe they speak for the vast majority of Chinese people. In their attempts to stir the bile of cultural appropriation they are, in fact, appropriating something that doesn’t belong to them.


My newest book, We, Ourselves, and Us: Creating a More Just and Prosperous America, is now available on Amazon in paperback (click here) and Kindle (click here) versions.

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Mnuchin Goes to Beijing

Author Gary Moreau, aka Avam Hale in fiction

Donald Trump made trade with China a very visible element of his 2016 presidential election platform. And while I believe he was elected for cultural, not economic, reasons, he continues to keep the issue in the news. This week, in fact, his trade negotiators, under the leadership of Treasury Secretary, Steve Mnuchin, will meet with their Chinese counterparts in Beijing. Trump himself will not be present, but, as he reminded us after the historic meeting between the leaders of the two Koreas, his influence and negotiating skills are omnipresent.

One of the objectives of the American side is to seek an immediate reduction in the trade surplus that China enjoys with the United States. This can only happen, however, if the US abandons its ideological commitment to free markets. China, you see, has a personal savings rate approaching 40%. Americans, on average, save nothing.

It is no surprise, therefore, from an economic perspective, that China runs a trade surplus with the US in consumer goods. The American appetite for cheap consumer goods is limited only by its earning power and its credit card debt. If they can, Americans will buy. That’s personal freedom, of course, and I take no quarrel with it here. A corollary of that reality, however, is that any attempt to artificially reduce the trade surplus will result, not in more jobs in America, but in higher prices for consumers. Job growth will, in fact, likely decline.

The more telling of Trump’s two primary objectives for this week’s talk, however, is his insistence that China abandon its national industrial policy known as Made in China 2025. In it, China lays out its plans to move away from the production of steel and toys into robotics, AI, semiconductors, airplanes, and green energy.

These, with the possible exception of green energy, it would seem, are the same industries that America’s tech giants and their financial allies on Wall Street wish to dominate, so they are naturally looking to Trump for help in foiling a potential competitor. Are they doing so, however, in the interests of free market capitalism, as they submit, or in the interest of artificially maintaining the global corporate oligopoly which, according to Oxfam, allowed 82% of the global wealth generated in 2017 to be captured by the richest 1%?

Trump and his court of corporate nobles, of course, cry foul at the very idea that China has a national industrial policy, although both Germany and Canada have them as well. In fact, virtually every developed country on the planet has one, including the United States. They differ only in the amount of transparency with which they are developed and executed.

The government has many tools with which to pursue its industrial policy. Direct cash infusions are the most rarely used since no government is typically flush with cash. The US governments does, however, invest a lot of money in basic research, largely through the university system, the NIH, and the Department of Defense, and can direct that investment with a great deal of specificity. Silicon Valley today, in fact, would not exist without direct government investment. The products of both Apple and Google, as well as the internet itself, rely on patents and technology that were originally developed at taxpayer expense.

The US government, moreover, already restricts trade under the guise of national security, when, in fact, there is little national security involved. The plant I ran in China, for example, was prohibited from adequately maintaining a machine that had been purchased from a US manufacturer on such grounds. It was a simple, inexpensive machine, but relied on a small PC, probably no more powerful than an Apple watch, for its operation. And when the control system broke down, the manufacturer could not provide us with a replacement due to export restrictions imposed by the US, on a technology that was readily available anywhere in the world.

In April of this year, as another example, the Trump administration prohibited US companies from selling their wares to Chinese telecom manufacturer ZTE. The government’s complaint was that ZTE had violated Washington’s directive about not doing business with Iran or North Korea. (The US government was apparently unconflicted about any infringement on Chinese sovereignty.) It’s much more likely, however, that this was a classic business negotiator’s attempt to flex some muscle prior to the upcoming trade talks. (It’s unclear, moreover, how this contributes to a reduction in the trade surplus.)

In January, the US government scuttled a deal for Chinese entrepreneur, Jack Ma, of Alibaba fame, to buy MoneyGram, on national security and American privacy concerns. The latter concern, of course, seems a bit audacious seeing that regulators have taken no steps to punish or further regulate Facebook and other giant US companies that have exposed, even knowingly, the personal data of millions of America.

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And it’s a stretch to suggest that personal banking apps could threaten national security, particularly given that most Americans have no savings to appropriate. What is clear, however, is that the deal was scuttled by a government regulatory entity controlled by the US Treasury Department, currently under the direction of Steve Mnuchin, an alumnus of the financial king of kings, Goldman Sachs. He may, of course, have been legitimately concerned about US security interests, but he may, perhaps concurrently, been concerned about the US financial industry’s current oligopoly, which does almost nothing to protect either the financial or security interests of average Americans.

This is the same US government entity, I remind us, which injected $700 billion of taxpayer money, virtually twice the multi-year investment the Chinese government is expected to make in support of its 2025 industrial policy, to bail out the US banking oligopoly when the monster child of its own creation and obscene profits, the subprime mortgage crisis, threatened to expose the destructive power of oligopolic capitalism. (Ask Russian consumers how that’s working.)

In no way, however, does the government exert more industrial policy power than in the area of taxes. And if the US truly despises industrial policy as a violation of free market principles, why does the US Congress, year after year, approve $2 billion of freebies for the American sugar industry, all of which benefits a mere handful of wealthy political patrons?

President Trump and his corporate allies made a lot of noise about the reduction in corporate tax rates in 2017 and what that would do for jobs. The reality is, however, that few, if any, US corporations actually pay the theoretical corporate tax levy of 35%. Alphabet, the parent of Google, pays less than 20%. Microsoft, in 2016, paid just 17%. Apple, the most profitable company on the planet, pays just 25%. And GE, despite earning $10 billion in 2016, actually recorded a tax credit of $400 million. It not only didn’t pay any taxes, it earned income.

The point here is two-fold. For starters, the idea that the US has no industrial policy and leaves its corporations to compete in the free markets of capitalism is pure folly. The US has a very robust national industrial policy. We’re just not allowed to weigh in on it. It’s crafted by corporate lobbyists and politicians behind closed doors.

And for those who would argue that we still have the power of the ballot box, which the Chinese do not enjoy, I would only point out that forcing China to abandon its own national industry policy will do nothing to help the Rust Belt voters that expected Trump to Make America Great Again. America has lost no jobs to Chinese robotics, AI, or airplane companies. None.

If, in fact, Trump really wishes to help the American heartland, he would be encouraging China to transition into these industries where the US stands more than a fighting chance of succeeding anyway. Instead, President Trump and his nobles from Wall Street and Silicon Valley seem, once again, intent on preserving and expanding the coastal corpocracy that is truly behind America’s social and economic decline.

It’s not helping anyone, least of all the average American.

top photo credit: (steel mill)


My newest book, We, Ourselves, and Us: Creating a More Just and Prosperous America, is now available on Amazon in paperback (click here) and Kindle (click here) versions.

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Will They?

Author Gary Moreau, aka Avam Hale in fiction

If I could predict whether or not President Trump will actually meet with the Supreme Leader of North Korea, Kim Jong-un, in the next 30-60 days, they would have good reason to confine me to a padded cell. This represents a level of political theater that even P.T. Barnum would have been at a loss to orchestrate.

But if there is anything each of these leaders has demonstrated beyond anything else it is their penchant to do it anyway. Who needs a plan?

Having said that, I will nonetheless hazard a guess, and, no, they will not be meeting face to face anytime soon.

Trump will be the one to announce the postponement because he’s Trump and he has to announce everything. His is a cast of one. And he could provide any number of reasons for the delay. The most probable are:

1. He doesn’t want to steal the spotlight from South Korea, a people who adore him for his courage and caring.

2. He wants to give his “friend,” Xi Jinping, a chance to get more involved. He may defer, in other words, until after President Xi’s already promised visit to Pyongyang.

3. It’s unnecessary because Kim Jong-un has already bowed to Trump’s unrivaled negotiating skills and given Trump more concessions than any other world leader could have extracted.

Whatever the reason, however, he will surely insist that he, President Donald Trump, deserves the Nobel Peace Prize as the only US President since 1953 to actually make something happen on the Korean Peninsula.

But nothing is still nothing. North Korea is not about to give up its nuclear arsenal and anyone who believes that Kim Jong-un ever suggested that does not understand the cultural distinction between the inductive East’s and the deductive West’s use of language.

China, moreover, is not about to allow a unified Korean peninsula that could put US troops on its border. Whatever else he may be, Kim is a buffer and there will be no standing down without China’s support.

And, as a practical matter, South Korea has neither the political will nor the military wherewithal to force North Korea’s hand.

China, in the end, is in charge, whatever the Western journalists have to say about it. South Korea knows it. North Korea knows it. Japan knows it. And so does China. The US is the odd fella out on this one despite the “center of the universe” posturing for control of the narrative.

Ours is a transactional president attempting to force his will in a part of the world where relationships and obligation reign supreme. It hasn’t worked in the Middle East and it won’t work in East Asia.

Why would it? What would the Chinese gain by allowing Trump to secure diplomatic victory in its own backyard? Another dinner at Mar-a-Largo?

And why would South Korea put its fate in the hands of the US at this point in history? We are a country racked by political division and economic atrophy. The US accounted for 50% of the world’s total economic activity at the end of WW II but currently accounts for less than 15%. Our transactional approach to global diplomacy, moreover, has undermined the confidence of our allies that we’re really going to have their back when they need it most.

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We also tend to overlook the facts when they don’t align with our narrative. The fact is that South Korea’s top trading partner, by a multiple, is China, accounting for more than one quarter of all South Korean exports. And that doesn’t include trade with Hong Kong, an established Chinese territory, and Taiwan, a presumed territory, which are South Korea’s 4th and 8th largest trading partners, respectively. It’s a virtual certainly, in fact, that not a single one of Korea’s largest corporations does not have a significant investment on the Chinese mainland.

It is estimated, moreover, that there are more than 2 million Koreans living in China, making it the largest ethnic Korean population outside of Korea. When my Chinese wife and I went to the special government office responsible for marriages between Chinese nationals and foreigners, mine was the only Caucasian face among the many foreigners in the room. Most were Koreans.

And, of course, there are several hundred thousand ethnic Chinese living in South Korea, as there are throughout Southeast Asia, many with significant financial investments there.

The Korean people, I believe, genuinely want to see the peninsula unified. And while most South Koreans, in my experience, appreciate the role the US has played in protecting their sovereignty and allowing them to flourish economically, the biggest risk for Trump, as I see it, is overplaying his hands with one of his most important allies in the region. South Korea will go for unity and peace in the region before they will go for US hegemony at any price.

In the end I don’t believe it would be the worst outcome for the Trump-Kim summit to be canceled or delayed. The problem of the peninsula, as it were, is not a bilateral problem and there will not be a bilateral solution. There can only be bilateral aggression and that isn’t going to serve anyone’s interest.

It’s not like President Trump doesn’t already have enough problems on his plate.

top photo credit: (North Korean soldier)


My newest book, We, Ourselves, and Us: Creating a More Just and Prosperous America, is now available on Amazon in paperback (click here) and Kindle (click here) versions.

If you read any of my books and like them  I would greatly appreciate it if you will take the time to post a review on Amazon, Goodreads, or whatever book site you enjoy. Thank you in advance.

Noblesse Obligee

Author Gary Moreau, aka Avam Hale in fiction

I am an avid reader of books. Perhaps it was all of that time I spent on an airplane over the years (well over one million miles). Perhaps it was my preference for solitude and the stimulation of my own thoughts. It doesn’t matter. I read a lot and have begun to share my thoughts on the many books I read via Amazon and Goodreads. (I am currently an Amazon Top 500 reviewer.)

There have been a rash of books, of late, regarding the economic, political, and social malaise engulfing the western world. The best among them, in my opinion, is Can Democracy Survive Global Capitalism? by Robert Kuttner, cofounder and coeditor of The American Prospect magazine, and a professor at Brandeis University. I can’t recommend the book highly enough. I’ve posted reviews on Amazon and Goodreads if you are interested.

Many contemporary books have resurrected the term “Fascism,” and drawn fearful parallels between the state of the world today and Europe in the period leading up to World War II. The most direct linkage is provided by former Secretary of State Madeleine Albright, in her book, Fascism: A Warning.

Kuttner has little to say about China directly but Albright and the others, too numerous to mention, do. And the core of their assessment appears to be that because the Chinese people do not go to the polls to elect their president in the way that Americans do, and because the government will figuratively silence political dissidents that it deems will disrupt social security and harmony, China must be “evil” in the same sense that Mussolini and Hitler were.

It is, I believe, a tragic and unfortunate misinterpretation of world events that is empowered by the western media’s own fascist pre-occupation with being able to say whatever it wants to say, true or not, and without regard for overall social harmony, which is the only time that productive change can actually take root.

I have long believed that one of the most important hallmarks of being an American is respect for authenticity. My father referred to it as “a man that is comfortable in his own skin.” To me it means a man or woman who speaks and behaves in a way that accurately reflects the person they are and the things that they believe in. And, of course, that he or she believes in the dignity of all people, regardless of wealth, class, race, gender, ethnicity, or ability.

The Chinese, I believe, are very authentic—once you understand their culture. If you evaluate Chinese behavior through American eyes you will, as many Americans do, conclude that the Chinese are a bit rude, don’t always tell the truth, and can be more than a bit pushy. These, however, are false impressions created by the American tendency to evaluate the world against our own standards. That is American culture and it is built on the Aristotelian belief in the linear logic of cause and effect.

What I like about Mr. Kuttner’s book, and believe me that he has not read or authorized this reference, is that he seems to appreciate that cause is less important than effect. Politically speaking, that means that a benevolent dictator that genuinely believes in the dignity of the common man is far superior than a man who is democratically elected (both Mussolini and Hitler were) but who, in his heart, believes himself superior to all others.

I grew up living only miles from a US nuclear air base that was the point of the spear of America’s “mutually assured destruction” (MAD) strategy in the Cold War with the USSR. As an elementary school student in the early 1960s I vividly remember practicing hiding under our desks at school, hands behind our heads, to prepare for possible nuclear annihilation by the Russians. (The kindergarten students, as I recall, were not disciplined enough to follow the protocol, so they all huddled beneath a large blanket.)

John F. Kennedy was the president of the US at the time and my parents trusted him. He was a lot of things that misaligned with their personal values, but they believed that he was a good man, so when he told them to sit tight during the Cuban Missile Crisis, they did just that. They talked about it; they asked questions; but they ultimately believed that Mr. Kennedy would do the right thing.

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First introduced in Homer’s Iliad, and later given prominence by the great French writer, Honoré de Balzac, the phrase noblesse obligee comes to mind. Essentially, whatever your personal pedigree, we all should have an innate commitment to our common humanity. And it is that commitment that ultimately matters in our assessment of our leaders. They may have gained power by the ballot box or the sword (and there is little difference, in the end), but it is what they do with that power that ultimately matters most.

In evaluating both China and the US, at the moment, I care not how wealthy President Trump is. I care not about his negotiating skills. I care not about what he says to the cheering crowds he assembles among the disenfranchised. I care only what he does or does not do.

In the case of Chairman Xi Jinping, I feel the same. I care not that he is a member of the Communist Party of China, the word communist itself bringing back terrible memories of the Soviet leaders who my teachers convinced me were anxious to take my life. I care not that his government does not allow full freedom of the press to say whatever it wishes. I care not that he employs whatever means necessary to maintain social harmony. I care, in the end, only about what he does and the degree to which he is authentic and committed to the common men and women of China.

And while we are in the early innings of a very long game on both sides of the Pacific, here is my tally to date:

USA: President Trump is authentic, but authentic in all of the wrong ways for a leader of the strongest nation on the planet. He is a corporatist in populist clothing. In the end he has only a romantic appreciation of the working men and women who made America what it is today. He is a New York elitist with an insatiable appetite for gold and limousines.

China: President Xi Jinping is not a Maoist but he is true to Mao’s original guiding light. Mr. Xi is not his father, but he is true to his authenticity. Mr. Xi, himself, is authentic. He truly believes in the Chinese Dream he talks so much about and has the personal and managerial skills to bring it to life.

If we evaluate a country and a culture not by the press’ ability to print anything it likes in the interest of selling its wares, but by the alignment of the government and the interests of the common person, China gets my nod.

I will share one specific example but there are many more:

While living in China my wife and I ventured down into one of the most popular walking streets in the heart of Beijing one Sunday afternoon to observe the throngs and to enjoy a taste of barbecue. In the middle of this very crowded street was an elderly couple from some far flung rural province that had ventured to Beijing to air some personal grievance with the local government where they lived. Both wore large sandwich boards and paper hats detailing these grievances.

Before long, the police, naturally, showed up. None of them, so far as I could tell, however, were armed. They wore no helmets and carried no shields or batons. The most senior among them, judging by his age, approached the couple and spoke to them in terms I did not understand, but his hands were clasped lightly behind his back the entire time. Nothing about the authorities was menacing in any way.

Eventually the police officer, a federal security officer to be precise, stood back and the couple was allowed to walk in a circle for several minutes. Everyone in China has a smart phone, of course, so the audience was large and many were filming the events. And after several minutes the couple walked toward the nearby police van and climbed in, with the policemen and policewomen’s deference and assistance.

My point here is not to fawn over President Xi Jinping, or to suggest that China does not have its challenges. It is, quite simply, to suggest that the ultimate democratic ideal is a commitment to truth and authenticity. And in that regard, the United States, in 2018, should stand in judgment of few others, and China is not among them.

He may ultimately prove me wrong. At the moment, however, Xi Jinping would have my vote, should China be so foolish, which it won’t, to give me one.


My newest book, We, Ourselves, and Us: Creating a More Just and Prosperous America, is now available on Amazon in paperback (click here) and Kindle (click here) versions.

If you read any of my books and like them  I would greatly appreciate it if you will take the time to post a review on Amazon, Goodreads, or whatever book site you enjoy. Thank you in advance.

Corpocracy & the Trade War

Author Gary Moreau, aka Avam Hale in fiction

Lost in all of the furor over the trade war with China is a critical social and business distinction between the two countries. The US operates on a system that presumes the supremacy of the individual. China, on the other hand, operates on a system that presumes the supremacy of geography and ethnicity.

The best example of the difference is the way in which the two countries dole out citizenship to newborns. In the US, if you have a baby on US soil, whether or not the parents are US citizens, or even here legally, the baby has the rights to US citizenship. While that may seem to suggest geography trumps lineage, it reflects the supremacy of the individual’s rights; in this case the baby’s.

In China, on the other hand, it is the ethnicity of the mother that drives the baby’s rights. A baby born in Beijing to a foreign mother has no rights to Chinese citizenship. A baby born to a Chinese mother in Houston, on the other hand, does have rights to Chinese citizenship.

To understand the business implications you must appreciate that under US law, a corporation is a person. They hold all of the rights, save voting, of every US citizen. As a result, they have the right to free speech and they can own property, like intellectual property, in the same way an individual can.

There are many implications of this. The first is the fact that the US taxes the corporation, not its location. It’s far more complicated than I want to get into here, but suffice it to say that the US is one of only a handful of countries that has historically taxed the worldwide income of its corporations. Those corporations could defer that tax, however, which is why so many companies were holding large amounts of cash overseas. The 2017 Tax Reform Act provided for a one-time exclusion in order to encourage companies to bring that cash to the US, and it introduced a hybrid territorial tax system, but the basic idea of treating the corporation as a person remains intact. (They are distinguished from individuals in terms of the tax rates they pay, however.)

China, on the other hand, does not treat its corporations as individuals and regulates them, instead, based on their geography. To the extent that a corporation is doing business in China, be it a foreign company or a domestic one, it will fall under Chinese regulations.

The best example is the way China treats the Internet. Foreign technology companies, including the Silicon Valley tech giants, are not allowed to just reach into the market of Chinese Internet users without being subject to Chinese Internet regulations. And there are regulations in place to require that foreign companies operating in China keep their local data on local servers (in the interest of national security) rather than on servers at the company headquarters in Chicago or Palo Alto.

The basic perspective is that China belongs to the Chinese people. If you, as a foreign company, want to make money off of the Chinese people, that comes with certain obligations. And one of those obligations is to pay taxes that benefit the people you are making money from.

American multi-nationals often charge their foreign subsidiaries enormous fees for what is characterized as corporate support from the home office. This can take many forms—from accounting to engineering—but is generally based on the perspective of the US corporate parent that “I own you” and I can, therefore, do what I want with the money you make in China. “Not so fast,” say the Chinese, however. Before we will allow the Chinese company to pay those fees we want to make sure that those services are really provided and were, in fact, truly necessary. The reality is that many of those fees are for the provision of services that could easily be provided within China at much, much lower rates. (Which would mean more Chinese taxes to benefit the Chinese people.)

The bigger impact of this distinction has to do with all of the fuss you are hearing from President Trump and others about intellectual property. If an American company develops new technology at a research center in China, it believes that it owns that technology. And that’s a perfectly logical position for a corporation to take if you believe that corporations are people and that the US parent company “owns” the Chinese subsidiary.

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That’s not so logical, however, if you have a more collectivist perspective. If new ideas are created by Chinese nationals working in China, in the collectivist view, those ideas should benefit the Chinese people. After all, those inventors benefit from their rights as members of the Chinese community. They go to Chinese-funded schools, drive on Chinese roads, enjoy the fruits of Chinese farmers, and the benefits of community funded police and fire protection.

Which is why there is so much fuss over the sharing of technology between US multi-nationals and their Chinese joint venture partners. (In certain strategic industries that the Chinese consider critical to the interests of the Chinese people, foreign companies must have a minority Chinese partner for their Chinese business.) The word “forced”, however, which Trump is tweeting regularly, is, in my experience, a gross exaggeration. It is nonetheless true that China does not want foreign companies manufacturing there to install antiquated production technology for purposes of skimming profits off of the Chinese economy. And it is true that this technology will eventually leak out, much as it did here in the US back when we were a manufacturing country.

For GM, for example, China is now its single biggest market, and it makes a lot of money there. And it has a minority Chinese joint venture partner. And while I know nothing privileged about the inner workings of GM, I’m sure that they deploy their latest production technology there. Otherwise, they could not compete, the Chinese government would not have allowed China to become GM’s largest market, and after all, it is their largest market. And I’m equally sure GM is concerned about the rising Chinese automakers having access to their technology.

But that is the same concern they have here in Detroit. All of the Big Three automakers use essentially the same supplier base, frequently trade employees, and back engineer each other’s products extensively. Can you tell the difference between a Ford and a Chevrolet at first glance? Why should it be any different for a Chinese automaker? If anyone has a legitimate beef about design and technology leakage it’s probably the Germans—and the culprit is the US, not China.

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“A deeply thoughtful book about business management today and the nature of thought itself.”

As a related aside, the Chinese brand of collectivist thinking tends to infuriate US companies who are accustomed to assuming all of the rights of citizenship. They don’t like being told what to do or how to think. And that arrogance, in turn, has not ingratiated the US corporate community to Beijing. And it is that conceptual friction that is, in the end, contributing greatly to a lot of the US corporate angst toward China that Trump is currently tweeting on behalf of.

Make no mistake, however; the current perspective of US multi-national corporations is NOT “the American way.” This is a very recent development in the US, coinciding with the ongoing incorporation of America. At the time of the Founding Fathers, there were no multi-national corporations and corporations did not enjoy the rights of corporate personhood. Corporations were licensed for very specific purposes, such as building a canal, for a very specific and limited period of time.

As recently as 1900 the average factory in the US employed fewer than ten people, the economy was very localized, and the role of corporations in American life was largely limited to providing employment and supporting the local community. It is only in the latter half of the 20th Century that US corporations were able to achieve the scale and the power they have today. (And from a corporate insider let me assure you that US corporate power today is far greater than you fear.)

The US government, to be fair, resisted the incorporation of America until the rise of the conservative movement in the 1980s. They did it largely through antitrust regulation that promoted healthy competition and protected American consumers and citizens from the dangers of corporate monopolies and oligopolies.

The corporations, aided greatly by the banks and Wall Street, however,  ultimately won, and it wasn’t a fair fight. The politicians, after all, have no power if they can’t get elected, and in order to do that they need money. And since the courts ultimately eliminated any restriction on corporate involvement in politics, it’s no surprise that the deepest pockets ultimately took control of the American political process.

As a result, the US is no longer a democracy; it is a “corpocracy.” Conceptually, the American corporation now plays the same role that the church did in Medieval Europe. The kings may wear the crowns, but it is the corporate “popes” that are really calling the shots.

The incorporation accelerated greatly during the dot-com 90s when young entrepreneurs were preaching disruption and libertarianism. It is ironic, indeed, that this “common man” perspective has now produced among the biggest and most powerful corporations the world has ever known. And they pulled it off, quite impressively, while the anti-trust regulators stood by and watched. (Why would they complain, the politicians were benefiting as much as the entrepreneurs.)

Although Trump is a willing water carrier for American corporate interests, the American corpocracy is ultimately unsustainable. It will implode and the Trump revolution, ironically, is ample evidence that the implosion is already underway. (One of the many contradictions of the Trump era and the man himself.)

Perhaps the ultimate twist of history, however, is that Trump would never have been elected, and the trade war with China would never have been necessary, if the US had, just a few decades ago, adopted the collectivist perspective the Chinese are now applying. We sold our souls; we shouldn’t expect others to do the same.

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My newest book, We, Ourselves, and Us: Creating a More Just and Prosperous America, is now available on Amazon in paperback (click here) and Kindle (click here) versions.

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