BY ELISE LABOTT
Greater investment in the United States’ economic foundation is long overdue and would likely strengthen the middle class—one of Biden’s top campaign pledges. But it’s not clear that it will produce the winning ticket in a strategic competition with China, which drives top-down industrial policy across a broad array of sectors through state-managed firms. Washington’s battle with Beijing is not one of investment or even innovation—it is one of conviction and values. What are the United States’ animating principles?
Last week, in his first foreign address as president—to the virtual Munich Security Conference—Biden sought to enlist U.S. allies in Europe and Asia to the competition, pledging to renew the United States’ “enduring advantages” over China. Chief among them: revitalizing the United States’ alliances and recommitting to its democratic values at home while defending them abroad.
Those values had, for decades, helped make the United States a uniquely powerful nation. The country emerged from World War II with military and economic dominance but turned that overwhelming might into a largely benevolent international order. Instead of occupying its enemies, as the Soviet Union did, the United States rebuilt its wartime foes in its own image. The country helped create a community of democracies that shared U.S. values and defended ideals like the commitment to freedom, democracy, and the rule of law. Those were widely accepted to be the best ingredients for global stability and economic prosperity—and stood in stark contrast to the vision put forth by its ideological foes. Or, as former U.S. President Ronald Reagan said of how the Cold War would end: “We win. They lose.”
Today, the U.S. Constitution, rule of law, and the very idea of free elections are under assault by its fellow citizens.
But public satisfaction in those democratic values and confidence in the United States’ ability to embody them, let alone defend them, are wavering globally. Free societies are being challenged by populist forces on both sides of the Atlantic Ocean; the U.S. Capitol itself was violently assaulted last month by a mob incited by former President Donald Trump in a bid to overturn Biden’s election victory. Many Republicans still refuse to believe in their own democracy, just one of Trump’s legacies, which included internment camps for immigrants, disparaging the free press, insulting democratically elected leaders at home and abroad, and unquestioningly embracing authoritarian rulers, all adding up to a systematic rejection of long-standing U.S. values that underpinned the country’s greatness.
Today, the U.S. Constitution, rule of law, and the very idea of free elections are under assault by its fellow citizens. The commitment to racial equality has faltered, and capitalism is losing its appeal. The package that proved so alluring to the world for decades is slowly being destroyed from the inside.
And that helps explain some of the whiplash—and ineffectiveness—of recent U.S. foreign policy. Trump’s first secretary of state, Rex Tillerson, warned that conditioning foreign policy on values—like the defense of human rights—created obstacles to advancing U.S. interests. (To which the late Sen. John McCain countered, “We are a country with a conscience. … We are the chief architect and defender of an international order governed by rules derived from our political and economic values.”) Trump’s second secretary of state, Mike Pompeo, swung in the opposite direction, seeking to frame U.S. competition with China as an ideological struggle between Marxist-Leninism and U.S. democratic values, even as his actions weakened the United States’ ability to project those values.
But unlike the Cold War, today’s great-power competition isn’t a contest of competing ideologies. Revisionist leaders like Chinese President Xi Jinping and Russian President Vladimir Putin are not exporting communism or values of any kind; they peddle a calculating, nationalist vision, greased by corruption and coercion, to fuel their hegemonic ambitions. China is not eating the United States’ lunch—it is stealing it. Systematic theft of intellectual property, and the massive use of state subsidies to undercut competition, is not proof of Chinese innovation but what Biden called in his Munich speech the “Chinese government’s economic abuses and coercion that undercut the foundations of the international economic system.”
And to compete with China, what the United States needs to do is shore up those foundations. Take China’s explosive growth in low-cost manufacturing, which ultimately did so much to undermine U.S. industrial competitiveness and fueled an anti-globalization backlash that helped drive Trump-based populism. When countries like China took advantage of lax labor standards and negligible environmental oversight, the United States essentially exported jobs and imported workers’ misery. If the United States mandated that products made abroad used a more sustainable supply chain—as to a certain extent was done with the recent U.S.-Mexico-Canada trade agreement—then U.S.-made products would become more competitive.
The United States can and should rediscover the openness that defined its entrepreneurial past.
Similarly, when it comes to innovation, the United States can and should rediscover the openness that defined its entrepreneurial past. Warts and all, the United States still offers a far more attractive climate for innovation in its post-industrial, knowledge-based economy than oppressive countries like China. Or, as Biden put it in his Munich speech, the United States needs to “protect for space, for innovation, for intellectual property, and the creative genius that thrives with the free exchange of ideas in open, democratic societies.” Instead of shunning foreign students, as Trump did—and GOP luminaries like Sen. Tom Cotton still want to do by banning all Chinese students from studying science and math in the United States—the country could welcome them, and then let them stay after they complete their studies.
Or take China’s Belt and Road initiative, Beijing’s ambitious effort to export its excess manufacturing capacity to boost its economic and political influence through checkbook diplomacy in Asia, Africa, and Europe. U.S. officials are rightly concerned about Chinese “debt-trap diplomacy,” where Beijing uses big debts to extract bigger political concessions. But instead of offering a more attractive development model that marries the United States’ commitment to sustainability with the innovative energy of its business sector—a formula recently proposed by former Sen. Jim Webb—the United States continues to promote roughly the same development model it has used since the 1940s.
Much the same could be said for 5G mobile telephones—less berating from Washington and more creating—artificial intelligence, cyber technologies, or biotech. Secretary of State Antony Blinken sees the world as a battle between “techno-democracies” and “techno-autocracies.” He and Biden want to convene what they call a “league of democracies” to shape the norms of behavior in cyberspace, artificial intelligence, and biotechnology and share research and technology to give countries a democratic alternative to Chinese firms, so that, in Biden’s words, technology is “used to lift people up, not used to pin them down.”
Biden, in his inaugural address, urged the United States to “lead not merely by the example of our power but by the power of our example.” That starts by strengthening withered institutions and restoring the rule of law, the pillars of U.S. democracy, and the soft power that did once—and can again—give the United States a competitive edge.
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