Friday, August 3, 2018

Britain the US and China: Dani Rodrik explains

I have been following Dani Rodrik for quite a while.  Much of what he writes is (rather) accessible to all and that is very important for IB Economics students.  I just read a very short and very interesting article he wrote titled The Double Standard of America’s China Trade Policy. There are zillions of articles on the US - China trade conflict and for us it is a conflict worth paying close attention to.  Rodrik's article is great because he puts it in context.
I quote:
China plays the globalization game by what we might call Bretton Woods rules, after the much more permissive regime that governed the world economy in the early postwar period. As a Chinese official once explained to me, the strategy is to open the window but place a screen on it. They get the fresh air (foreign investment and technology) while keeping out the harmful elements (volatile capital flows and disruptive imports).
In fact, China’s practices are not much different from what all advanced countries have done historically when they were catching up with others. One of the main US complaints against China is that the Chinese systematically violate intellectual property rights in order to steal technological secrets. But in the nineteenth century, the US was in the same position in relation to the technological leader of the time, Britain, as China is today vis-à-vis the US. And the US had as much regard for British industrialists’ trade secrets as China has today for American intellectual property rights. 
The fledgling textile mills of New England were desperate for technology and did their best to steal British designs and smuggle in skilled British craftsmen. The US did have patent laws, but they protected only US citizens. As one historian of US business has put it, the Americans “were pirates, too.”
Five minutes to check out!

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