February 26, 2021

Competition, Not Bailouts, Promotes Prosperity

3 min read
If it’s true, as Intel’s Andy Grove said, that only the paranoid survive, then it...

If it’s true, as Intel’s Andy Grove said, that only the paranoid survive, then it is well past time we cast aside our low-wage, service- and transaction-oriented economy, instead leveraging our asymmetrical advantages over China to compete in global markets as a producer, not merely as consumers.

We must reintroduce competition as the basis for economic growth. The U.S. is already competitive in AI, consumer electronics, entertainment. We know how to innovate, we’ve just forgotten how to share the wealth.

The consequences of hopelessness and despair were on full display on January 6, 2021, at the U.S. Capitol. A decent living wage, the dignity of work, the satisfaction of accomplishing a task, keeping a roof over one’s head — these are the things sorely missing in a nation where an unchecked virus, political violence and insurrection are now a reality.

The healing begins by recognizing the causes and consequences of economic inequality.

“As a nation, we should admit that we have been engaged in a generous corporate welfare scheme of the classic crony capitalist kind,” Dan Breznitz and David Adler note in a recent journal article advocating the reshoring of production. “We need to change this, and use the taxpayers’ money not to bailout, but to reintroduce competition into our economy in a way that incentivizes domestic production as well.”

Competition begets economic growth, they continue, and with economic growth comes the thing we lack: Hope.

Geopolitical forces are relentlessly at work, shaping the technological competition in areas such as AI and space exploration. A bipartisan consensus has emerged that China is a “strategic competitor.” Some question the ultimate goals of the shift from decades of engagement with China to strategic competition.

One goal, certainly, is reducing western dependence on Chinese manufacturers, a dependency we have learned the hard way over the last year threatens global technology supply chains.

Kurt Campbell, expected to be named the Biden Administration’s “Indo-Pacific coordinator,” has argued that competition with China “should seek to achieve not a definitive end state akin to the Cold War’s ultimate conclusion but a steady state of clear-eyed coexistence on terms favorable to U.S. interests and values.”

Coexistence requires that we reboot the American economy to produce those goods we require should Chinese manufacturers choose for strategic reasons to deny us.

It’s true, as Campbell and others argue, that competing for the sake of competition won’t solve what ails us, or ensure stable coexistence with an ascendant China.

Still, U.S. economic growth and the inequality it would alleviate are the primary reasons to compete economically and politically with China.

Besides, competition is in our DNA. Why do American’s admire the early astronauts? Because they were some of the most competitive human beings on Earth.

We are strivers. As such, we must find ways to recreate the conditions necessary to compete in the global economy, innovating not just in the abstract, with zeroes and ones, but by producing what we need rather than relying on others.

And paying skilled workers a living wage to operate the machines that make those products.

As the American Civil War raged, President Abraham Lincoln delivered this memorable line in an address to Congress: “We must disenthrall ourselves, and then we shall save our country.”

Lincoln was referring to the emancipation of slaves as a means of ending the Civil War. As today, many were skeptical. “Is it doubted that [emancipation] would restore the national authority and national prosperity, and perpetuate both indefinitely?” Lincoln asked, knowing full well that many did.

It turns out it did. That is, it did until we lost our way, allowing our manufacturing sector to deteriorate in favor of services, private equity and financial transactions.

The way forward involves putting Americans back to work, promoting competition as an engine of economic growth, restoring prosperity for all and reinvigorating our democratic ideals in the process.

The post Competition, Not Bailouts, Promotes Prosperity appeared first on EETimes.

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