Monday, September 26, 2005

Cruisin' for a bruisin'?

[Note: This piece was intended for publication at Free Market News Network. However, they're doing a big-time -- and very nice -- remodel, including email address changes, and I haven't been able to reach my editor via email or the site contact form ... and the longer an article of mine sits around unpublished, the less I like it and the more I want to tinker with it. So, y'all get it first ... and Earth to Mark, drop me a line! - TLK]

My first piece for FMNN was an entry in the "Is China growing freer than the West?" contest. I held then -- as I hold now -- that the answer is "no" -- that the Chinese Communist Party retains an iron authoritarian grip on the country and that it has no intention of loosening that grip.

One issue I ignored in the piece (as not relevant to its main thrust) was the bearing China's increasingly powerful "private sector" economy has on world affairs and on the prospects of future conflict. However, this is a factor which the US ignores at its peril.

One of the most important facts on the table is that the "free market" economy in China is no such thing. It's not even as mixed a bag as in the US, where "public-private partnerships" and other market-state entanglements increasingly prevail. The "private sector" in China is a fairy tale based on force and fraud. It consists of leveraging Western innovation and venture capital into slave labor enterprises, then using the Chinese share of the resulting profits to modernize the Chinese military and prop up a command economy with the equivalent of a perpetual blood transfusion.

When American consumers buy cheap Chinese goods from American retailers, they insert a vital link into the long chain of transactions by which Western capital is converted into Chinese military might and Chinese Communist Party political dominance.

With the profits generated by its laogai forced labor camp system, the Chinese government is modernizing the People's Liberation Army, building a blue water navy, and even reaching for the stars.

If the connection seems tenuous, it isn't: Until the mid-1990s, the People's Liberation Army directly owned most industrial enterprises in the People's Republic. Since then, a faux "transition to the private sector" has taken place as direct PLA ownership has been replaced with "ownership" and management by "retired" PLA senior officers. The revenue stream has had a link added to it, as the PLA now receives increased "direct" state funding instead of taking profits directly, but it's not too difficult to figure out from whence that state funding is derived. The "privatization" of enterprise in China is mostly smoke and mirrors.

Why is China working so hard to bulk up its military capabilities? "National defense" is an explanation, but not a very good one. The country's vastness and huge population make it virtually invasion-proof; a large basic infantry force could hold any would-be conqueror at bay indefinitely.

Of China's three conceivable competitors for regional "Big Man on the Block" status, one (North Korea) is its client state and subsists almost solely on Chinese aid; another (Russia) is in no shape, nor likely to get in shape any time soon, to contest the Siberian border; and the third (India) seems more concerned with Pakistan and the Bay of Bengal than about conducting war back and forth across the world's most formidable mountain barriers.

"Defense" does not explain China's intense focus on military modernization, especially when one looks into the details, such as the acquisition of nuclear ballistic missile submarines and a surface warfare fleet. It is the Pacific Rim, not Asia's interior, which interests Beijing. To be more specific, in the short term China is interested in settling territorial disputes with Japan in its favor, and in bringing Taiwan under its rule. In the long term, the Communists intend to exercise the primary influence, and preferably political hegemony, over the Rim.

Across the Pacific, of course, lies the primary obstacle to such ambitions -- and it's no accident that China is working hard to field weapons which can threaten that obstacle: The United States. In 1941, the Japanese acted preemptively to remove the US threat to their flank as they conquered the Pacific. China is acting no less directly, although certainly more slowly and less violently -- for now -- toward the same end.

Barring some (literal) sea change, China has the US over a barrel: It's using our economic power to modernize its military, and developing our dependence on Chinese trade as an extreme disincentive to contesting any use it may make of its military power. Every day, the US becomes more vulnerable to Chinese nuclear attack and to economic collapse should trade ties be broken; every day the cost of changing that trend climbs higher.

At some point in the next twenty to fifty years, the US faces the choice of a long -- and ruinous, even to the victor -- war with China, or of abandoning its allies on the Pacific Rim.

As a non-interventionist, of course, I prefer that the US begin disengaging from its expensive alliances with Japan, South Korea, the Philippines and Taiwan anyway ... and the sooner the better, as the disengagement will have fewer ill effects if undertaken freely and on our own timetable rather than under duress and on China's schedule.

Alternatively or additionally, the US should stop funding Chinese military modernization and propping up the Beijing regime with fake "free trade." Chinese products are not the products of free enterprise. They are the products of slave labor, and American consumers who buy them -- myself included, as it's damn near impossible not to right now -- are receiving stolen property, to the slaves' detriment and our own.

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