An American Loss to China in Global Economics Could Deprive Billions of the Opportunity to Live Under Democracy

For over 250 years America has been the proof that a free people can successfully govern themselves. A critical contributor to this success has been our choice of democratic capitalism as our economic system. Democratic capitalism works well with the freedoms that have characterized America.

Our constitution gives us the power to choose the representatives that are to set and guard the economic rules. Although there have been missteps the government generally guided capitalization toward activities that benefited the nation. The system steadfastly outperformed all other competing systems in the ability to deliver economic benefits to its citizens. We were without serious challenge as the leading economic force in the world.

This ended during the later years of the 20th century. We allowed our government to make terrible mistakes that have completely changed the game. We now face the results-financial, trade and investment deficits. excessive special interests influence, loss of manufacturing jobs, too much control by the financial sector-and the list goes on.

These self-inflicted wounds have allowed another form of capitalism to emerge. One that gives little freedom to its citizens but shows great skill in supporting the state. It is best described as state capitalism. China is currently its most successful user.

State capitalism uses the aggressive tools of capitalism but does not grant its citizens the participation and freedom they would enjoy under a democracy The goal is not the general welfare of the citizens but to increase the power of the state. It is a tenacious competitor in the global economy and is currently outperforming our damaged system. It definitely threatens the dominant position of democratic capitalism.

If it prevails and our system continue its current degradation the American vision will eventually collapse and the dream of free people governing themselves will fade. We must not let this happen.

The seriousness of the situation requires strong and immediate action. We must admit mistakes on past policies that have had bad results for the country and make the fixes. We must stop giving away economic opportunities that we need to other countries.

An encouraging example of what must become our standard practice is covered in a recent article in the Washington Post. It reports on an event where the US Export-Import Bank discarded past policy and helped the US vendor fight back. The result was the sale of 150 locomotives by GE. This was against aggressive bidding tactics of China that would normally get them the business.

As the article reports

“The political resistance to brash tactics which would imperil the delicate management of the China relationship has collapsed," said Rosen.

Way to go-US EX-IN Bank and GE!!. We need more of these “brash tactics.” Now let’s fix those other problems. The billions of people may still get the chance to live under a US style democracy.