Lawless State Capitalism Is No Answer to China’s Rise
Lawless State Capitalism Is No Answer to China’s Rise
Invoking national security and the economic rivalry with China, the Trump administration is pursuing legally dubious interventions and control of private industry, with potentially high costs for US dynamism. Like the panic over Japan's rise in the 1980s, the administration's response is unwarranted and counterproductive.
This opinion piece was first published by Project Syndicate >
STANFORD/LOS ANGELES – It is tempting to frame the Sino-American economic rivalry as a clash between engineering doers and lawyerly naysayers, as the Chinese-Canadian analyst Dan Wang does in his new book Breakneck: China’s Quest to Engineer the Future. But this is a false dichotomy, because law is a crucial feature of US capitalism.
We have heard the lawyers-versus-engineers argument before. Forty years ago, Japan’s economic rise induced similar anxieties, most famously articulated in the American sociologist Ezra Vogel’s book Japan as Number One: Lessons for America. Commentators fretted that America was mired in lawsuits while Japan’s best minds were solving problems and driving their country’s meteoric growth. Yet over the ensuing decades, the United States, with its mammoth legal industry, outperformed Japan by a wide margin.
Today’s panic about an Asian economic challenger is equally unwarranted and counterproductive. Invoking national security and the competition with China, Donald Trump’s administration is pursuing increasingly anti-capitalist and legally dubious interventions into private industry, with potentially high costs for American dynamism.
