The pitch
to US companies was to remove all government-imposed restrictions on trade, but
the “unintended” consequences included off-shoring US manufacturing and
decimating the US middle class. It was all according to UN Agenda 21. The only
way to bring us down was to make us poor.
If the U.S. Doesn’t Control Corporate Power, China
Will. Laissez-faire
economics has left firms bending the knee to Beijing, by Matt Stoller,
10/11/18.
Last
week, Bloomberg broke the news of a hack by the Chinese military of
critical hardware assembled by an American company in China, affecting Apple,
Amazon, and the U.S. Defense Department. While there is controversy over the story, no one doubts two
key facts. Chinese hacking of Western corporations and governments is systemic,
and China has a virtual monopoly over the manufacture of high-technology
products, which it uses to its own advantage.
The
same day as Bloomberg published
the expose, U.S. Vice President Mike Pence gave a speech discussing China. Espionage, he
said, was just one of a range of tricks China uses. Others include tariffs,
forced technology transfers, arm-twisting of corporate leaders to lobby the
U.S. government, and censorship of Hollywood through enticing
Western media companies with promises of reaching Chinese audiences.
Pence
was, in part, justifying President Donald Trump’s new tariffs on hundreds of
billions of dollars of Chinese goods. But he went beyond tariffs, outlining a
strategy that includes investment limits, military patrols, and requests to
companies. Pence called on Google to stop developing its search and tracking
technology for the Chinese market. He even argued that U.S. corporate focus on
the short term, “the next quarter,” gave an advantage to China. In other words,
a deeply conservative Pence sounded like liberal stalwart Sen. Elizabeth Warren
in arguing the Chinese are using America’s own short-term-oriented financial
system against it. Companies, he was saying, have moral obligation above
shareholder value.
That’s a
strange argument to come from a Republican vice president. But it points to how China is exploiting the
laissez-faire model of industrial organization
Washington has enabled for decades.
But it
points to how China is exploiting the laissez-faire model of industrial
organization Washington has enabled for decades.
As
the consensus in D.C. shifts toward taking on an increasingly aggressive China,
ideas about how corporations relate to the state will also have to change—or
else undermine their new stated national framework.
Straightforwardly
illegal hacking by China is common (although it’s hardly the only country to do
it). For instance, in 2016, security researchers found that data on about 700 million Android phones and
other devices programmed with Chinese firmware was being surreptitiously sent
to China.
Recently,
Chinese state-backed chipmakers stole designs from Micron and Samsung. The
Chinese have taken all kinds of intellectual property including information on
smartphone-testing robots, Monsanto corn seeds, and the formula for the white
pigment that goes into Oreo stuffing.
But
just as common as and perhaps even more important than hacking are legal or
quasi-legal methods. Chinese companies are, according to one Defense
Department report, “flooding Silicon Valley with cash” to simply acquire
secrets. Two years before hacking Micron, the Chinese tried to buy it. This
year, Chinese automaker Geely secretly bought 10 percent of German car-making giant Daimler, using
shell companies to avoid detection, with U.S.-based Morgan Stanley doing the
banking work for the deal.
Chinese
state-backed companies have access to a massive legal budget, which affords
them the ability to use U.S. courts to destroy American business leaders who
challenge unfair deals. As a counterterrorism official pointed out in April, “When you go to a board
of directors or a CEO and say, “Hey, I know you have two bids, you have Cisco
or Oracle, and then you have the Chinese company which is 40 percent cheaper,’
it’s hard to explain to them and hard for them to explain to their constituents
that they’re going to pay 40 percent more for a U.S.-based company because it
doesn’t threaten national security.”
This
exploitation of America’s corporate weaknesses is new. As Barry Lynn relates
in his book Cornered,
for much of the 20th century, the United States simply did not outsource
production to its enemies or geopolitical competitors such as China or the
Soviet Union, even if it was profitable to do so. Washington even made sure
that friends couldn’t gain too much power over its political economy, ensuring
that, say, Japanese allies did not gain a monopoly over flash memory.
But
starting in the 1980s, U.S. lawmakers weakened the essential controls the state
put on the financial system. This was not just led by anti-tax advocates like
Grover Norquist and anti-government politicians like President Ronald Reagan,
but also by a set of neoliberals in the Democratic Party led by President Bill
Clinton, who used the theories of (Marxist-Redistributionist) economist
Lester Thurow to declare the era of big government over.
Clinton
promoted a vision of a globalized world with no nation-states impeding the free
flow of capital and goods. This lack of assertive public power allowed private
power to take its place, as corporations merged and organized trading flows
without having to worry about the demands of public institutions.
This
trade revolution built on top of an earlier intellectual revolution, one put
forward by (small government) economists Milton Friedman and Michael Jensen
that shifted the basis of the American corporation to shareholder value as the
prime goal of industrial organization.
By
focusing solely on shareholder value, investment bankers, economists and a new
breed of CEOs changed (abandoned) the commitment of corporations to
environmental rights, workers, and local communities. They also made it so that
U.S. companies felt no obligation to their own country’s national security
goals.
General
Electric Co. Chairman Jack Welch reflected these new values in 1998 when he
said, “Ideally, you’d have every plant you own on a barge to move with
currencies and changes in the economy.” More recently, Google has backed away
from working with the U.S. military, but it is happy to work with the Chinese
government on censorship and tracking software for China’s citizens.
Comments
Trump is
reversing redistributionist policies and wants to restore the US “Meritocracy”.
He believes in national sovereignty and expects national loyalty from errant US
corporations. Trump needs to define “shareholder value” that doesn’t involve
treason.
Norb
Leahy, Dunwoody GA Tea Party Leader
No comments:
Post a Comment