China: The Phantom Menace

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When Episode I of the Star Wars saga came out, there was much criticism of the title: The Phantom Menace. Those who are not genuine movie buffs perhaps found it corny. (To those who do not understand the concept of a “buff,” it is akin to a student. A movie buff values certain elements of film and drama, in a way that those adolescents who enjoy seeing explosions and yelling do not value elements of film and drama).

The point of the title, however, appeared to be this: there was a very real menace, namely, a Trade Federation army. And yet it was not the real menace facing the Republic. That would be the Sith.

So what does this have to do with China? I am, of course, getting to that.

China was recently admitted to the World Trade Organization. Jude Daniel Blanchette observes on Mises.org that the notion of a Marxist “class struggle” is less important to young Chinese than the ability to succeed in the marketplace. This is not your father’s communist China. Blanchette concludes that “As the barriers to economic freedom are destroyed, the energy and potential of China will be unleashed. Both the Chinese people and the world’s population will be better off for it.”

Realize what this means: American industry will be facing yet more foreign competition.

On the one hand, Americans claim to want freedom for every country in the world. For some, however, freedom apparently does not include the ability to trade freely, as many Americans complain and seek government intervention when they lose out in free competition with foreign firms.

Does American industry need such protection? In a word, no. China is a phantom menace. What the United States desperately needs is to abolish public education.

Look at it this way: it would be foolish in the extreme if, in an attempt to make terrible teams more competitive, the National Football League were to mandate that all teams finished the season at 8-8, i.e., to require that all teams compete “equally.”

The real solution to bad football is better playing and better coaching. The NFL should not articfically make unequal teams equal. Instead, the owners, coaches and players whose wallets depend upon their success should work harder to design better plays, to execute the plays on the field, and to achieve peak physical condition. This is, of course, easier said than done. Nonetheless, it is true.

The same is true for the workplace (note, of course, that the football field is a workplace as well). If it is true that American factory workers and managers simply cannot do a job as well as their Chinese counterparts, what is the reason for this? Setting aside for a moment the burdens imposed on industry by government regulations, education is a severe hindrance.

One solution, then, is to repair the educational system. How does one repair the educational system? For starters, by introducing the proper incentives.

A public school is merely a post office with books, kids, teachers, and different uniforms, i.e., it is merely another government bureaucracy. If the teachers fail, and the children do not learn, such that American manufacturers cannot find smart and inquisitive workers, will the teachers be fired? Will the School District go out of business? Of course not. They will raise taxes and demand more money as the solution to their troubles.

Which is, of course, not a solution. In Washington, DC, the public schools spend twice the national average. And the students are near the bottom in test performance. Private schools which spend much less, in contrast, are at the top. Part of the explanation is personal: more inner-city students may come from broken homes, where they receive no encouragement toward learning, and where their prospects for life are bleak. Part of the explanation, however, is that the public school bureaucracies do not push the children to realize their potential.

Schools are simply too important to be trusted to government bureaucracies that cannot go out of business. Schools are so important, they must be left to the marketplace – the only institution which rewards performance with pay.

There are those who contend that education is a right. Fine. Allow individual and corporate tax credits for those who fund scholarships for the poor. Abolish the capital gains tax so that more wealth may be generated, more of which may be used to create better schools.

To put it another way, does anyone support the creation of “free” (meaning tax-funded) grocery stores and restaurants? After all, food is very, very important to life, so should it not be free as well? Why trust something so vital as food to be provided by the profit motive? The reason, of course, is exactly the reason that the profit motive does provide grocery stores, namely, that is the best way for everyone to get the food they need and the food they want.

There are those who will contend that, because some are unable to provide food for themselves, that the profit motive fails at providing food. This is not true. Those who are unable to provide are failing at providing food; they are failing at producing sufficient wealth to provide food for themselves. This is not, of course, to make a moral judgment. There will always be those who, for whatever reason, are unable to provide for themselves. Hence the duty to aid those in need, the duty to act charitably. It remains true that the profit motive, i.e., privately-owned grocery stores (and farms, etc.) is the best way to provide food.

As the coming days see the newspapers and airwaves fluttering with tales of the menace of Chinese economic competition, Americans should not fall for such race-baiting. Americans are perfectly able to compete with the workers of any nation on earth. We must, however, throw away those things which are holding us back. The public schools are a good place to start. The rest of the regulatory state should be next.

Mr. Dieteman [send him mail] is an attorney in Erie, Pennsylvania, and a PhD candidate in philosophy at The Catholic University of America.

© 2001 David Dieteman

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