GEORGE TEMPLETON: COMMENTARY
Rim Country Gazette Columnist
“No
people can live to itself alone. The unity of all who dwell in freedom
is their only sure defense…. No nation can longer be a fortress, lone
and strong and safe. And any people, seeking such shelter for
themselves, can now build only their own prison.” Dwight D. Eisenhower
The Price of Free Trade
A
dozen of us engaged in idle chat prior to a business meeting in the
mid-seventies. We were middle managers, responsible for everything but
with authority over nothing. How was it that we got our privileged
position? Some of us had taken steps that increased the probability
that we would evolve in particular directions. None of us had planned
or asked for it. It is remarkable how things turn out. We thought, if
we outsource manufacturing, won’t it eventually mean that middle class
America will have to decline in standard of living to compete with cheap
overseas labor? No job will be safe from international competition.
But it isn’t just cheap labor that matters. It’s also government,
infrastructure, and education.
The
salary difference is on the order of ten to one, less within free-trade
zones, more in rural communities. How about our leaders? Can they
really control what the world will become? There are not enough
resources on the planet for everyone to live like Americans. Nature has
a way of establishing equilibrium. The truth has a spreading velocity.
Wolves don’t care what Sheep Think
“Tariff
man” welcomes economic warfare. It’s national defense! Tariffs are
not paid by our manufacturers or the Chinese as Trump claimed. When
prices go up, importers eventually have to pass them on to you. Tariffs
hurt our friends. They create winners and losers. Trump wins when
foreigners lose, but what about American consumers? The Chinese are
gaining on us. Exactly how is it unfair? What should China do to
restore equity? We must have a plan. Have we forgotten what it takes
to be a world leader?
There
are three sides to this. The first argues that we must embrace China
as a partner. The third worries about America’s fate in the coming era
of Chinese influence. Between them we find the Senate Committee on
Chinese Espionage along with the FBI, Homeland Security, and the Justice
Department. They don’t see our challenge as spy versus spy. It is
country against country, a well-organized conspiracy, patient,
persistent, and intense, with thousands of participants, who may never
be held accountable in a court room. They are “weaponized to vacuum up
U.S. industrial capabilities and emerging technologies”. Retired
General Keith Alexander, a NSA man, credits Chinese espionage with “the
greatest transfer of wealth in history” ($600 billion). However,
Wikipedia lists only 28 spy cases dating back to the eighties. In the
past nine months there have been 16 individuals and four corporations
charged in eight separate cases. The increase may be a consequence of
slow legal processes and a more intense focus by the FBI.
The
Chinese identified the world’s needs, like the relays in smart
electrical meters, and motors below fifty horsepower. Hidden in
numerous places, they have greatly reduced our costs. Now there is the
2025 Chinese government strategy, called the “wheel of doom” by the
Senate Committee. To prevent our demise, they say that we should
prohibit Chinese investment in technical start-ups, scientific research,
and education. America may abandon the World Trade Organization
because it has only the force of persuasion, but the Russian meddling in
the 2016 election shows how powerful opinion can be. Influence is
malleable. It is subject to ignorance and propaganda. Fact Check
needed 3441 words to adequately respond to Sarah Sander’s recent 24 word
tweet concerning the National Climate Assessment. A good writer of
propaganda can imbed a dozen propaganda techniques in a single
paragraph. We have to develop a pallet for the details.
It Never Entered Their Mind
The
Confucian goal was perfect harmony, from the bottom to the top, not top
down. Rulers were to be accountable for their decisions. They were to
be moral, ensure the well-being of the people, and promote harmony
through management and coordination. Constructive criticism,
accountability and public-mindedness described the relationship. These
are lofty goals, but people found a way to let self-interest take over.
Chinese
Communism has an uneasy relationship with Confucianism, but they are
not anti-science like our religious right. It’s a false choice: faith,
instinct, and belief or secularism, rationality, and empiricism. Both
are human, but a choice of only one leads to missing the other. Will
China be a partner or an enemy? Trust and participation are not among
the mechanisms of war. Influence isn’t spying. Chinese business
practice is based on long term relationships instead of contracts and
lawyers. They value the wisdom that comes along with age and experience
over novelty.
Is
plagiarism is a word in the Chinese vocabulary? Cheap labor makes the
manufacture of simple things in high demand profitable. Learn the
details later! It is deep in the Asian subconscious. It makes it
easier to violate copyright laws. But we taught them the how and why of
technology and we did this although our company claimed that we have
only three years to capitalize on new innovations before others figure
it out.
The
Committee on Chinese Espionage wrung its hands over the Confucius
Institutes. Their charter promotes Chinese culture, language, and good
will, but staffing, academic freedom, curriculum, censorship, and spying
are concerns. Conservatives would rather not have college students
exposed to controversy. Communism is reluctant to privatize. It
maintains control over business, banking, and the judiciary, but it has
learned from Hong Kong and Taiwan. It bends the rules in free trade
zones where many have allegiance to their family and culture, but are
not enthusiastic about their government. These are small potatoes
compared with the future of our food, energy, artificial intelligence,
robotics, automobile and telecommunications industries. If we can’t
solve them, how can we deal with global warming, sustainability, mass
immigration, and war?
A Paranoid Style
The
most useful patents are for clever things that are obvious. They are
easy to copy. To patent is to publicize. Historically, America has
born development costs and market timing risks that are absent in
copying. Being first provides an opportunity to corner the market, but
manufacturing technology progresses and making millions of anything is a
challenge. The recent Micron Technology intellectual property lawsuit
involves DRAMs, an old commodity widely used since the seventies, in
computers, military equipment, and even children’s toys. The new
creation shrinks chip sizes and expands memory capacity. It takes
billions of dollars and equipment available only from the USA to make
the improved version. Micron is the only American manufacturer, but
they have collaborated with Taiwan. Their competitors are in Korea.
It’s the kind of thing the Chinese government conspires to get. Now we
have three countries and four companies suing each other.
My
company would not allow any unattended documents on your desk. If you
got up to go to the bathroom, you locked up all your desk drawers and
filing cabinets. A cluttered desk reveals a muddled mind! More than
one computer was required. You periodically updated the password for
each piece of software. It took a half-hour to unlock and type in
numerous passwords. The paperless society made the only valid document
the one stored on the computer. Anything in print was obsolete and
illegal. Security police enforced this. When companies outsource
sunset technologies, they are not giving away their secret sauce.
The
electro-mechanical designer’s job went away, replaced by a computer
system that instantly made every change simultaneously available to
those who needed to know everywhere in the world. It increased
efficiency. Communication and automation explains why the cost of
electronic components declined by a factor of one hundred since 1965, in
spite of inflation. But now prying eyes need only one thing, the
computer. Social media, the internet, and business that wants to know
you, proves that nothing on the internet is secure. Is any cryptography
immune to theft and hacking? A secret is hard to keep!
Your
computer does not contain a hidden Chinese spy chip and they don’t hear
your every word through the ac power line. It is not technically
feasible and even if it were, there are standards for electromagnetic
compatibility and an entire industry that implements them. It is not
about security. It’s about control. What should be classified?
Consider non-commercial university research on quantum entanglement.
What is real and does it exist at a time and place? Is the moon there
when I am not looking at it? Are we waves or particles? How is it
that things are true even though they are mutually exclusive?
Dragon or Very Hungry Caterpillar
There
was a time when America had to go it alone. The rest of the world had
been destroyed by wars. Nationalism argues for returning to the world
of the 1950’s, but the boundary conditions of that equation are not the
same. It was before refrigeration, television, woman drivers, and jet
planes. America was still on the gold standard. It was a world that
was much less affluent and not addicted to smart phones, consumerism,
and credit. It was a world before travel and the diffusion of
foreigners. The thrill is gone. Our culture has changed. There is no
high school electronics course. There is no kid next door with a new
Corvette and less than 2 years of education. Of course, there is a new
profitable frontier and it is all around us, but not advertised.
Can
we return to the fifties by introducing a 25 percent tariff on all
manufactured imports? Our government would have to take steps to
discourage consumption, increase investment, and emphasize education.
Knowledge changes reality. It’s a knowledge economy! Education makes
the future, but it needs to lead to a job first, and then continue in
any subject of interest. It must cooperate with industry and business,
but then knowledge will get around.
Travels with George
The
world I visited in the nineties did not have paved roads or electricity
at night, yet they were making transistors. In India, a manager
proudly showed me their new semiconductor device. I wondered if they
had the government registration I signed thirty years ago. That device
was nostalgia. So was their American factory automation. The Japanese
supplied automation in China and Taiwan outsourced jobs to them. The
world is not our adversary. A weak competitor is better than none at
all. A more prosperous world does not mean a poorer USA.
Dealing
with the decline of our middle class will require regulations and
strategy. There’s something wrong with a society that justifies a
salary of eighty million dollars a year and a severance package of one
hundred and twenty million dollars for a company CEO, but ignores the
plight of direct-labor workers who lose their source of livelihood. We
have to be concerned, not with just profit, but with the loss of our
dream and the devaluation of humanity. That can only lead to our
alienation from one another and a failure to address our common
challenges.
.
e,
the people of the United States, were forced to wait 230 years -- until
yesterday -- before we finally got a Muslim woman in Congress (and we
got two) who could finally say the plain truth that no one had dared yet
uttered:
ome presidents have really bad years.
