Sunday, March 13


"Pundita, I just read Juggernaut2. You're overlooking the Darwinian angle. Somebody has to lose in the global competition for big-ticket contracts. If you give good training to people in the poorest countries, as America has been doing in the developing countries like China and India, the people from the poorest countries won't be poor anymore but it's because they'll take away jobs from Americans.
[Signed] Tom in Sioux City"

Dear Tom:

Your argument might have held water a century ago. But industry is no longer materials-based in advanced societies, it's knowledge based. The latter creates more jobs than Americans can ever hope to handle. However, there is a way to tilt the playing field against America and against all democracies that engage in global trade. The unfair advantage comes when democratic peoples compete with despotic governments. This is because the despot can order his subjects to learn whatever profession and work in whatever industry gives an edge in exports. Thus, China graduated something like 300,000 engineers last year.

Do you get executed in China if you don't take up the career the communist party bosses deem necessary for the greater good of the Chinese people? It's a question intelligent Chinese don't ask. There are unpleasant penalties, if you don't do well in friendly communist party classes designed to help you mend unsociable thinking.

The treatment of peoples as a cog in the machine of state is an old story in communist countries; it's an old story even in the Old Testament. It's the story of Pharaoh, who could encourage his subjects to work on a building project and enslave those who said they'd rather be doing something else.

That's how the playing field is tilted against the American worker. A democratic government can't walk into your house and tell you what career your children will undertake. Red China's leaders can map out an industry in which they want to compete, and sequester as many Chinese as they need to learn and fill the job slots needed for that industry.

That's what the West created by putting regimes such as the one in China on equal footing with democratic nations. That's what you uphold, every time you buy a product made in China. That's what American business upholds, every time they set up a branch in China. That's what the World Bank and other development banks uphold, every time they write a loan to China. They uphold the rule of Pharaoh.

That is the problem India and other developing democracies face. India, for all it's flaws in government, is a free country. The Indian government doesn't force its citizens to work in a particular industry or learn a particular school subject. That puts India and other developing democracies at a big trade disadvantage with Pharaoh governments.

That, too, you and I and everyone else in the developed world uphold, when we don't demand that Pharaoh deliver his people from bondage before we'll trade with him, admit him to the United Nations, and write development loans to him.

Pundita hastens to add that the World Bank and other development banks shouldn't be blamed for the situation. The development banks are government-sponsored lending institutions. As long as the member countries supporting the development banks put Pharaoh on an equal footing with democracies, the development banks will continue to write him loans.

Oddly enough, American corporations and patent attorneys get huffy because India cuts corners on patent laws in the struggle to be competitive in global markets. So India must play by the rules, but it's okay for American corporations to increase Pharaoh's wealth and global power.

A Pundita Prize to the first reader who can tell me the downside to the Pharaoh method of staying competitive in global trade. And I'll give you three guesses as to which countries and financial institutions have to bail out Pharaoh, every time his industry map doesn't keep up with leapfrogging advances in technology.


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