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Don’t confuse science fiction with reality

Summary:
Niall Ferguson has a Bloomberg piece that suggests we should welcome the new Cold War with China. It’s full of questionable claims: The Chinese Communist Party caused this disaster — first by covering up how dangerous the new virus SARS-CoV-2 was, then by delaying the measures that might have prevented its worldwide spread. The Wuhan local government did initially hide the severity of the outbreak from the authorities in Beijing, and China paid a heavy price for that crime. But if you are going to advocate a new Cold War you need something bigger than malfeasance at the local level. I can’t emphasize enough that the Beijing government had no incentive to prevent effective measures to stop the crisis. None. Once Beijing become aware of the severity of the problem

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Niall Ferguson has a Bloomberg piece that suggests we should welcome the new Cold War with China. It’s full of questionable claims:

The Chinese Communist Party caused this disaster — first by covering up how dangerous the new virus SARS-CoV-2 was, then by delaying the measures that might have prevented its worldwide spread.

The Wuhan local government did initially hide the severity of the outbreak from the authorities in Beijing, and China paid a heavy price for that crime. But if you are going to advocate a new Cold War you need something bigger than malfeasance at the local level. I can’t emphasize enough that the Beijing government had no incentive to prevent effective measures to stop the crisis. None.

Once Beijing become aware of the severity of the problem they acted decisively (on January 23rd), and simultaneously told the world just how dangerous the virus was. That doesn’t absolve them of blame for the earlier screw-up. The local cover-up of the outbreak could occur precisely because the CCP has decided not to allow free speech in its scientific community. But this is very different from suggesting a grand conspiracy to harm the world (and China!) by covering up the epidemic.

The US and much of the rest of the world responded to China’s January 23rd announcement by twiddling our thumbs for 6 weeks, doing almost nothing. The idea that getting a warning a few weeks earlier would have made any difference to the US is not just wrong, it’s laughable.

BTW, this isn’t the first time that Ferguson spread misleading information about China’s role in the crisis.

Ferguson then argues that the famous sci-fi trilogy by Liu Cixin is the best way to understand the Chinese worldview:

Yet the book that has done the most to educate me about how China views America and the world today is, as I said, not a political text, but a work of science fiction. “The Dark Forest” was Liu Cixin’s 2008 sequel to the hugely successful “Three-Body Problem.” It would be hard to overstate Liu’s influence in contemporary China: He is revered by the Shenzhen and Hangzhou tech companies, and was officially endorsed as one of the faces of 21st-century Chinese creativity by none other than … Wang Huning.

“The Dark Forest,” which continues the story of the invasion of Earth by the ruthless and technologically superior Trisolarans, introduces Liu’s three axioms of “cosmic sociology.”

I enjoyed this trilogy as much as Ferguson. But however much fun it is to look for real world political insights in sci-fi novels, one needs to be cautious in drawing analogies. China knows that any attempt to destroy the West would be suicidal, and vice versa. This isn’t interstellar warfare.

In Liu’s book the two powers are engaged in a one period game. The side that shoots first is likely to win. In reality, we are engaged in a multi-period game, where the “winner” is likely to be the country most open to globalization.

I use scare quotes for “winner” because it’s not even clear what it means to win. Are Italy and Switzerland involved in a competition? Who won? The one with more military power and GDP, or the one with higher living standards and more financial resources?

I’m not so naive as to think there’ll be no military/technological rivalry between the US and China, but I worry that people forget about what the US/Soviet Cold War was actually all about. Contrary to the claims of leftist historians, both sides were not to blame. The Cold War was caused by Stalin’s expansionist policies—his decision to conquer many countries and forcibly turn them communist. We were hardly guilt free (consider the Allende coup, or Iran 1953) but without Stalin’s post-WWII expansionism there is no Cold War. In contrast, restraint on the part of the US would not have prevented a cold war. It wasn’t symmetrical. (And don’t waste your time; I’m not going to argue with tiresome Chomskyites in the comment section.)

Today, China is not expansionist in the sense the Soviet Union was expansionist. Most complaints about China’s military involve either domestic repression (Hong Kong, Xinjiang), uninhabited islands/mountain passes with no clear ownership, or a theoretical risk of attack that has not happened (Taiwan). Not to mention that the US officially considers Taiwan to be a province of China, as does Taiwan itself. That’s nothing like the Soviet empire. Heck, that’s not even anywhere near as bad as Putin’s expansionist Russia.

Nationalists often add Chinese economic warfare charges that are based on a lack of understanding of how international trade benefits both sides. Or they point to examples of (non-military) bullying that are truly objectionable, but are minor enough to call at most for a new cold skirmish, not a cold war.

In contrast, aggressive moves like Trump’s unprovoked trade war with China or attack on companies like Huawei are simply brushed aside. It’s all China’s fault.

I’m not trying to absolve China of the charges directed at it. But I don’t see how China bullying Australia over a call for a Covid-19 investigation is any different from the US bullying smaller countries over Iran, Huawei, or gas pipelines. Or even worse, bullying smaller countries because we don’t like their tax haven policies while we ignore foreign demands for records of the (far more numerous) tax evaders who hide their money in the US. We are both a bully and a hypocrite. There’s enough blame on both sides to refrain from a cold war over bullying charges.

The best argument against the Chinese government is that it’s highly repressive against its own people, far more repressive than the US government. With the support of President Trump, China has put large numbers of Muslims into concentration camps. I’m just as outraged by the Xi/Trump/Modi anti-Muslim policy preferences as other liberal-minded people, but how does launching a cold war help things? Are we also to launch a cold war against India over its brutal repression of Muslims?

In the end, this call for a cold war is a knee jerk reaction to a long series of resentments. I share the frustration with the CCP. But unless someone can clearly spell out the precise logic for why we should welcome a cold war with China, and the increased risk of nuclear holocaust that it implies, I’ll remain highly skeptical.

So do I favor doing nothing? No, I favor a policy that would be 100 times more effective are restoring American supremacy than anything the American nationalists propose:

Vox co-founder and editor Yglesias proposes that the only way to keep China at bay is to beat the Chinese at their own game, growing a population of 1 billion Americans. But how? One ingredient is a far more liberal immigration policy: “The solution to the illegal immigration crisis is to let more people come legally, not tie ourselves into knots trying to stop the flow.”

Polls show that huge numbers of Chinese people want to move here—disproportionately the most skilled. So lets bring in 100 million Chinese and 100 million Indians. China’s population is already set to fall sharply; let’s make it fall much faster, especially among the most skilled.

Instead, nationalists like Trump are stopping H1-b immigration. Our nationalists are the real enemies of America, which can only stay number one as a multiracial superpower.

PS. If you think that controlling islands in the South China Sea is “bullying”, then you may be interested in knowing that the largest such island is occupied by Taiwan. That’s right; Taiwan agrees that the Spratly Islands are Chinese territory. Is Taiwan a plucky underdog or a big bully?

PPS. Remember when most pundits (other than me) told you that China was losing the trade war? Funny how things turned out.


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Scott Sumner
Scott B. Sumner is Research Fellow at the Independent Institute, the Director of the Program on Monetary Policy at the Mercatus Center at George Mason University and an economist who teaches at Bentley University in Waltham, Massachusetts. His economics blog, The Money Illusion, popularized the idea of nominal GDP targeting, which says that the Fed should target nominal GDP—i.e., real GDP growth plus the rate of inflation—to better "induce the correct level of business investment".

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