Will the East's New Capitalists Put America in Second Place?
Byline: William H. Peterson, SPECIAL TO THE WASHINGTON TIMES
Slant of this work can be seen in its Chapter One heading, "Icebergs Ahead." Yes, the giant U.S. economy is cast here as the Titanic, speeding through the night while ignoring warnings of looming icebergs. Clyde Prestowitz, head of Washington-based Economic Strategy Institute, supportee (one of many) of billionaire textile protectionist Roger Milliken of South Carolina, author of this well-written first person singular book, ticks off some iceberg warnings, some in the form of headlines from January 2005 newspapers:
* New York Times, January 25: DOLLAR'S STEEP SLIDE ADDING TO TENSIONS U.S. FACES ABROAD
* Financial Times, January 24: DOLLAR AT THE MERCY OF SMALL GROUP OF CENTRAL BANKS
* Wall Street Journal, January 24: CHINA ON PATH TO OVERTAKE U.S. ECONOMY
* Wall Street Journal, January 24: BIG SILICON VALLEY FIRMS THRIVE BUT JOBS ARE FEW
Granted these headlines portend a gloomy U.S. outlook. Granted too our economy - to invoke a winked comment by J. P. Morgan asked to forecast the economy during Congressional testimony back in the 1930s: "It will fluctuate." But the Prestowitz "icebergs" are still selective, backing up his subtitle, "The Great Shift of Wealth and Power to the East."
Which raises the question: Is that shift, if that's what it is, with its "globalization" bad for America? Mr. Prestowitz weighs the case of communist China, boasting a population of 1.3 billion. China almost collapsed from Mao's disastrous postwar "Great Leap Forward" of all out socialism. Deng Xaioping rescued it in 1978 (Mao died in 1976). Deng got the Chinese Communist Party to adopt "4 Modernizations:" increasing rural incentives and incomes; boosting new private enterprises; slashing central direction; and sparking foreign direct investment, soon luring in GM, GE, Motorola, Starbucks, etc. Deng brazenly said heretical things like "to get rich is glorious" and my gem: "It makes no difference whether a cat is white or black as long as it catches mice." Anyway, the Chinese economy has taken off like a rocket. Is that bad for America?
Ditto India with its population of 1.1 billion. After World War II it tried socialism under Prime Minister Jawaharlal Nehru. The result was what my New York University mentor Ludwig von Mises called "planned chaos." A statistic that tells it all. In 1938 India's share of world trade was almost three percent; in 1980 it was 0.5 percent. Much credit for India's turnaround today goes to its present Oxford-educated prime minster, Manmohan Singh, an admirer of Margaret Thatcher and an authority on free trade. Recently he put before India's parliament a plan to free up free enterprise by - to quote Mr. Prestowitz - "slashing tariffs and other trade barriers, deregulating and privatizing, attracting foreign investment, and fostering export-led growth. …