Global Analysis from the European Perspective. Preparing for the world of tomorrow




America – soon a middle kingdom

President Trump has the ambition of bringing back industry to the United States. He wants to bring it back first of all from China. That’s where once famed outsourcing was directed to. Do you still remember those years? Americans and generally Western entrepreneurs and manufacturers were oh so proud that they had found cheap labour. Out of greed, in search of maximizing profit, they moved much of the industry from the United States (and Europe) to south-east Asian countries. It worked for some years during which the said entrepreneurs and manufacturers lined their pocket handsomely. That Americans had little employment? Who cared about them? The scheme was very ingenious and devellish. Yes, the unemployed needed to be somehow supported or else they were ready to spoil the business of the managers of this world, especially the black and Latino minorities. The plan that the entrepreneurs and manufacturers seem to have forged was the following: the government was to take care of the basic human needs – food, medicinal care and the like – of all those wretched who happened to live in the affluent United States. The government took care of the wretched, which means the middle class and the rest of American society took care of them by means of their taxes. Thus middle class people began to support the poor and the needy while the entrepreneurs and the manufacturers reaped the profit. A wonderful scheme! But back to President Trump.

It has transpired that the real riches of a country and the country’s real strength derives from the skills of its inhabitants and the products that is manufactures. The United States cannot remain a superpower for a long time if its economy is based on providing services, if its riches are calculated by the amount of the speculative capital at various stock exchanges. Imagine a war between the United States and China. The Middle Kingdom is capable of producing all the armament and anything it might need while America…

So, the idea of bringing back industry to the United States is basically good, it serves the national interest. Yet, it is easier said than done. A simple question arises: who is going to work in the factories? Americans have become lazy. Americans have unlearned the necessary skills. The generation of good workers is now mostly retired. The American administration can bring back or purchase the plants and the equipment almost overnight, but it cannot overnight train efficient workers. What then? Is Washington going to import people? That might be the case but then such a policy will run counter to the present trend of ridding the country of foreigners. It would be changing Tweedledum for Tweedledee.

But let us assume that America still has a sufficient number of skilled workers and engineers. Then another problem arises: they are accustomed to good pay and the protection of the trade unions, which means they are not going to toil long hours for a pittance. Contrarily, the Chinese, the Vietnamese, the inhabitants of India are. Whose products then are going to be more competitive: those made in and by the United States or those made in and by the so called Third World?

As we know, President Donald Trump is fond of imposing tariffs. He believes that this is a very efficient instrument of protecting national economy and exerting pressure on other nations. That might be so in theory if we do not scrutinize all the for and against. Yes, a national economy protected by tariffs might survive for long years, but at the same time it receives no incentive to develop, to be outperform the competition from abroad. If the Asiatic businesses continue to compete globally, they will naturally develop. If American businesses enjoy the protection in the form of tariffs, they will stagnate. What then? America – a backward country?

What a historical paradox! Imagine an America set off from the rest of the world by protective tariffs. It might soon become… the middle kingdom! Because that’s what China (and Japan) used to be in the 19th century: backward countries whose backwardness resulted precisely from their isolationism. And you know what? After some time the mighty Chinese fleet might knock on the American door and demand that it be opened… just as it was the case with China – and Japan – when the Europeans (and Americans) forcefully opened those countries to the outside world. 

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