Tag Archives: China tariffs

The Survival Paradox

The expanding trade war between China and the US has dominated the news and the markets for several days now. I’ve said, however, for quite a while now, to be honest, much of what I have to offer on the topic. I can summarize as follows:

  1. Trump’s trade war with China will hurt American companies and farmers far more than it will hurt China. The time for a trade war with China was at least three decades ago. That horse is long out of the barn.
  2.  If American companies can’t compete without further intellectual property (IP) protection, as they claim, they have a much more serious problem than their need for the “rule of law” (ROL). The ROL promotes oligopoly and hampers market efficiency, as we are now witnessing in our own Silicon Valley.
  3. China has no desire to be the world’s steel or aluminum maker. Its focus is on clean energy and services.
  4. Yes, China has an industrial policy that identifies key industries for investment, as many Western companies complain. So do Germany and Japan. The US is the only developed country without one. (At least one that is transparent to everyone and not authored by corporate lobbyists.)
  5. While government owned enterprises in China enjoy certain benefits, as their American competitors complain, they also carry a lot of social burdens that those same US companies don’t.
  6. For Xi Jinping, saving face in this trade war with the US does not mean preventing any negative impact on the Chinese economy. He will have to clearly defeat the US to claim victory among his own people and Trump is clumsily forcing his hand.
  7. In Understanding China I strongly recommended that Americans try not to negotiate with the Chinese unless they have to. The rules of the game are different. However good a negotiator Trump may be in New York, he will not win in Beijing. It’s a certainty.

What I’d rather write about today, however, is the survival paradox.

There have been numerous books published recently that argue that the discontent the Western world witnesses on its newsfeeds each day is ill founded. Often written by statistical psychologists of one stripe or another, these authors typically provide page upon page of illuminating statistics relating to all the things we should be thankful for. (e.g., better health care, plenty of food, the absence of global war, etc.)

The message is consistent and clear: We need to “get over it.” Life is good in the West and if you don’t think so the failure is in your assessment, not the reality. While it is a message of hope at one level, it is an admonishment against juvenile self-preoccupation at another.

Fair enough.

But beyond the inevitable risk of using statistical averages to prove much of anything, the statistics offered as evidence of the things we should be thankful for are all measures of our survival; perhaps our happiness; but not our personal fulfillment. That I am healthy, have enough to eat, and own an iPhone is all well and good. Survival, however, is not the purpose of life any more than breathing is.

Personal fulfillment, of course, is much more difficult to define, much less measure, than mere survival. Artists have been trying since the beginning of time with little obvious progress. Judging by what is going on in the world around us, much less the fact that publishers and authors alike believe there is a substantial market for books admonishing us to get over our discontent, there is pretty strong evidence that all is not well on the Western front and there is, in fact, a crisis of confidence, if not genuine despair.

And, I increasingly believe, it is that very success in survival that the get-over-it authors refer to that is at the heart of the problem. Not because survival, by itself, is a bad thing, but because it does not exist in isolation. It is just one half of the many dualities that define human life and the universe.

Said differently, survival and fulfillment, the latter of which can be thought of as a sense of personal purpose, are the yin and yang of human life. They are complementary forces that cannot exist in isolation. When they are out of balance with each other, it is the imbalance itself that causes our despair.

In fact, I’ve recently concluded, there is a natural ‘echo chamber’ between survival and fulfillment not unlike the echo chamber created by social media that is the basic ‘scientific’ phenomenon behind fake news and the alt-whatever. The echo arises from the reverberation of the bias inherent in all information and what we misleadingly refer to as “truth.” It is caused by the gap between the reality of our survival on the one side and our personal fulfillment, or lack thereof, on the other.

I think of it as the survival paradox. In surviving more comfortably and successfully we actually disturb the natural balance that has defined, if not human happiness or contentment, human acceptance, since the beginning of time. Such is the disruptive force of modern consumerism and Buddhist monks, of course, have understood it for millennia.

Not everyone, however, wants to live like a Buddhist monk. So what are we to do? And how is that relevant to a blog about China?

It’s relevant for two reasons. The first is that for the West in general, and the US in particular, we have found no way to successfully bridge the survival paradox. To date our only solution has been to double down on consumerism. And that’s why President Trump is now in a trade war with China that he cannot win.

The second reason is that as China has developed over the last thirty years the social divisions that the survival paradox naturally gives rise to have started to show. When outlining his plan to open China to free market forces and Western investment, Deng Xiaoping famously cautioned, “Some must get rich first.”

But, as we in the West know all too well, free market capitalism has a fundamental flaw: The rich don’t just get rich first. They just keep getting richer and richer. And some in China, as Trump’s rally attendees are here in the US, are demanding to know when their time will come.

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There is, however, a fundamental difference in circumstances. China has a collectivist culture and its leadership has shown beyond the shadow of any doubt its commitment to maintaining that orientation. (Ironically, the US has helped. The true individualists among the Chinese have largely emigrated over the last two decades—many to the US.)

American exceptionalism, on the other hand, has been built on a culture of uber-individualism. And our government, and the corporate forces it has merged with in the industrial and post-industrial eras, is in the process of doubling down on individualism in its response to the same survival paradigm.

The problem is that the information age in which we live is no longer compatible with fundamental individualism. Corporate consolidation, digital technology, and advances in personal mobility have made the world so small that it is virtually impossible to live as we did as recently as the Mid-20th Century. Life and the change inherent to it are unfolding at the speed of electrons and we can’t keep up if we insist on each piloting our own boat for our own benefit. (As would be the only reason to fight a trade war.)

This is, in part, why Western institutions of liberal democracy are crumbling. Donald Trump isn’t destroying them. Brexit isn’t destroying them. It is our refusal to acknowledge the survival paradox that is destroying them.

In all of history there have essentially been two types of government control—institutional and individual. And for much of the 20th Century the US was the paragon of the former and China, under Mao Zedong, was a visible example of the latter.

The roles have now reversed. China, while it has a strong personal leader, is governed by a collective institution ideally suited to address the survival paradox and the smaller, integrated world we have become. The US, on the other hand, has an individual leader who talks about collectivist ideals (e.g., Make America Great Again), but who operates outside of any institutional restraints.

One fights trade wars it has already lost. The other plans for a future in which trade wars will be unnecessary and counter-productive.

photo credit above: iStock.com/andriano_cz


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