To Win the World, Innovation is Our Most Powerful Weapon
China and the Geopolitics of Automation
As the world watches the Russian invasion of Ukraine with appalled outrage, it’s worth thinking about the bigger picture — specifically China. As historian Yuval Noah Harari and others have persuasively argued, Russia has already lost this war. They have lost the public relations war as the clear aggressor. They have been humiliated by their inability to conquer Ukraine as swiftly as expected, and are still fighting eight days in — seven days after they were supposed to have mopped the floor with their smaller opponent. Russia’s already second-rate economy is being devastated by a barrage of international sanctions. The ruble is plunging to Soviet-breadline-level worthlessness. And whenever they do take Ukraine, if it goes that far, they will likely have a hell of a time holding it. This is cold comfort to those involved, of course. However things turn out — and there are many ways the situation could dramatically worsen — the peoples of both Ukraine and Russia will suffer.
China, like Russia, is a nuclear-armed, undemocratic, authoritarian, expansionist regime that makes a mockery of human rights, and has an equally adversarial relationship with the West. The difference is that Russia, though still dangerous, is an anachronism of exaggerated reach and fading relevance. China is a rising power with no ceiling in sight. China has the world’s largest population, the second largest economy, the second largest military, and sits at the cutting edge of innovation and global commerce. What has insulated both countries from international accountability is that they both have what others need. Russia has 11 percent of the world’s oil and 17 percent of its natural gas, and China has a colossal manufacturing sector, responsible for over 28 percent of global output, the most of any nation by far. The way to take their leverage away is to reduce the world’s dependence on their exports. For Russia, this means energy independence, whether by renewables or increased domestic production. For China, this means manufacturing independence.
China’s industry accounts for over 40 percent of their economy, with manufacturing in particular comprising 26 percent, or $3.8 trillion USD per year. Some 90 percent of China’s exports are goods rather than services. The key to Chinese manufacturing dominance lies in cheap labor. Sprawling industrial infrastructure, sweatshop wages, poor regulations, and the planet’s largest prison labor system allow China to price the competition out of the market. We wring our hands at China’s treatment of Tibet, Hong Kong, and Taiwan; its oppression of the Uyghurs; its authoritarian surveillance state; and its gulag-like laogai filled with millions of forced laborers, slaves by any other name. But our addiction to their cheaply manufactured goods has defanged any efforts to rein in these abuses. The drug dealer holds all the chips as long as we’re hooked on their supply. Independence is security.
American consumers and businesses will never voluntarily boycott Chinese-made products, not if it means paying more, and certainly not in enough numbers to make a difference. It’s too easy to take far-away problems affecting people we don’t know and will never meet, and put them quietly out of sight and out of mind. What other avenues exist? Sanctions are a powder keg — acts of hostile provocation toward the one nation the US should move heaven and earth to avoid getting into a slugfest with.
Similarly, trade wars are crude and inefficient instruments that segments of the public may demand at the moment, but from a consumer class that lacks the stomach for their implications at the checkout. Protectionism is the recalcitrant and futile attempt to swim against the currents of the world instead of with them. If we want to hold China accountable, we need to remove their leverage. That means deeply investing in automation.
The US and other developed countries should make a concerted push to increase their domestic manufacturing automation to achieve manufacturing independence. The reason why this hasn’t already happened is cost. Automation has transformed industries, but it’s still more expensive than sweatshop labor, of slavery or near-slavery. There are a number of tools to drive down prices. Funding research and development into manufacturing automation, subsidizing such technologies, and offering tax incentives for domestic manufacturing applications can start the process. The real snowball effect is when these systems are adopted at scale. Innovation and refinement play a role in lowering prices, but the biggest driver is volume. If we can get the cost down enough with top-down nudges, it will begin a chain reaction, and the rest will occur bottom-up. We should bring back the manufacturing jobs lost to globalization — and give them to machines. Let’s get our cheap crap from domestic robots instead of Chinese labor camps.
The beauty of innovations is that they’re not purely for domestic consumption; they can be sold to the rest of the world. And for all the widgets and gadgets floating to foreign markets, our biggest export is, and will remain, ideas. It’s not enough to merely make gross labor exploitation morally wrong — we must render it unprofitable. This is no simple task. It requires a realignment of our own labor market, just as John Deere does much of the farming that used to require millions of calloused hands.
Automation comes with its own dangers, of course. There is the ever-looming threat of unsustainable income inequality. There is the unresolved problem of fantastic technological wizardry, itself based on a supply chain that puts far-away children in far-away mines. There is the likely impossibility of implementing the controlled automation of a single sector without it bleeding into others, with the loss of jobs that entails. But automation is coming whether we like it or not. We can either control it, or be controlled by it. The cost of trying to stop the future will be high, both at home and abroad.
If we want to live up to our ideals, if we want the moral freedom to stand up to the bullies and bastards of the world, we must embrace the interconnectedness of a globalized economy — but we must be self-sufficient. We must have the autonomy that comes from not being beholden to anyone. The freedom to say no without serious repercussions is true power. Our big stick is no longer measured only in bombs and battleships, but also in gears, bolts, and computer chips.
A new Cold War has been ignited. The world is on high alert. All-out war is the outcome we must avoid at all costs. Now is the time to begin thinking a step ahead, to begin laying the groundwork and economic infrastructure to more effectively navigate the geopolitical arena without the need for violence. Learning the lessons of past blunders does not mean withdrawing from the global community. It means outplaying your opponent long before the point of battle is reached. No other country has an economy large enough to outcompete China. Those who make peaceful resolutions impossible will make violent resolutions inevitable.
See also: “A Better World Is Worth Fighting For”
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