Capitalists of the World, Unite!

It should surprise more people that idealists are attracted to socialism rather than capitalism. Part of the problem is the economists don't know history, the historians don't know law, and the lawyers don't know economics. Put simply, capitalism seeks to synchronize ever-changing supply and demand for labor and resources, whereas socialism focuses on the inevitability of owners exploiting dispersed workers. When condensed in such a way, one immediately sees the need for regulation; and yet, since people have never agreed on the perfect type and amounts of regulation, it may be useful to analyze the topic differently. 

Globalization needs regulation, but everyone is reluctant to demand it for fear that it may discriminate against them. --  Misha Glenny, McMafia (2008) 

1. Economic Systems Should Not Be Discussed without Historical Context

Countries with strong militaries tend to use their navies to steal not just resources, but human labor from weaker countries. The United States, a slave-owning, capitalist country from inception, used slaves to maximize output from cotton, sugar, and tobacco fields in the 1700s and 1800s. 

America was founded on the double standard. That's our history. We were founded on a very basic double standard: slaveowners who wanted to be free. -- George Carlin

Even aside from anecdotal evidence, we know slavery in the West was handled differently than slavery and indentured servitude elsewhere in the world because few African or Muslim-majority countries have anyone who resembles Shaquille O'Neal or wrestler Mijaín López--indicating some slaveowners selected or bred people for certain traits while others didn't. Given that the Arabs had armies in the Middle East and Africa, were savvy traders, and the Prophet Muhammad's first wife was an affluent businesswoman, was capitalism or religion the difference in the way workers were treated? 

The natural state of human beings according to the Quran is freedom, and all believers are equal in the eyes of God. The Quran repeatedly urges believers to treat their slaves [indentured servants] humanely; to feed, clothe, and educate them; and to free them... Children of a free man are born free, and... the mother of a free man's child becomes an um walid, who cannot be sold. -- Martin Klein, Historical Dictionary of Slavery and Abolition (2014), pp. 307

If we say the former, the Europeans--who invented the first international debt trading markets in Venice and Belgium and the first publicly traded corporation (The Dutch East India Company) in the Netherlands--were as capitalistic as the Americans. So why has Europe become more "socialist" than the United States? Any reasonable answer must include the French Revolution (led by military commander Napoleon) and/or post-WWII agreements, whereby the United States drove global economic growth through military alliances and investment, allowing other countries to spend higher percentages of their budgets on social programs. Was Europe's acceptance of higher social spending the outcome of a non-European country's military victory or a specific economic structure? Whatever your answer, you must admit history, both distant and near, deserves a role in the discussion. 

2. History Shows Military Strength Trumped All Other Considerations, including Economics

At the same time, since many voyages capturing slaves and other resources were funded by companies issuing shares in joint stock companies in exchange for profits (minus royalty's cut), one could argue widespread inequality--both racial and economic--caused by European and American slavery would not have been possible without capitalism. After all, the more people who profit from immorality, the easier it becomes to mistreat labor. Indeed, at one point, the British East India Company had a larger military than the Queen of England's, which is consistent with the Exchequer's funding through imports of (stolen) gold and silver, plus fees on other items, rendering homeland defense subservient to military adventurism. (Defense is a cost most countries try to minimize unless they are empires, in which case they maximize it in hopes of being the first empire in history to avoid certain collapse.) 

If we continue pursuing the "capitalism equals inequality" argument or "more government equals more equality," we may agree America's pernicious treatment of slaves stemmed from a desire to maximize the profit motive; however, we must also admit the country's lack of morality would have allowed its military to go to Africa and coerce or mislead local leaders into selling their human capital under any economic system. Such conversations, with or without government approval, must have involved false promises of work and wealth or threats of genocide, followed by shiny gifts to helpless leaders to give the appearance of congeniality, then a transfer of resources. Remember: there were no videocameras or journalists to document human rights abuses, and almost all English-speaking philosophers and academics of the day believed in the inherent inferiority of non-whites. 

Why should they ask me to put on a uniform and go 10,000 miles from home and drop bombs and bullets on brown people in Vietnam while so-called Negro people in Louisville [Kentucky] are treated like dogs and denied simple human rights? No, I am not going 10,000 miles from home to help murder and burn another poor nation simply to continue the domination of white slavemasters of the darker people the world over. -- USA boxer and conscientious objector Muhammad Ali 

So was it capitalism, racism, Christianity, immorality, and/or military power that most contributed to the lack of fair wages for Africans in the United States? A clue to the best answer involves answering another question: had an arms-length transaction and voluntary departures occurred between white naval officers, African tribal leaders, and individual Africans, would we consider such transactions acceptable even if workers were exploited? Persons convinced they would answer a certain way may want to examine the skin color or guess the immigration status of the next worker they see in the back of a restaurant or agricultural field. 

3. Why Trade at All When You Can Steal? 

By now, Machiavellian types must be wondering why anyone bothers signing trade agreements. If you have the stronger military, why not steal what you need? In fact, this is exactly what has happened for most of human history, which explains our current cultural malaise--and misplaced economic priorities. 

The reason Canada is called Canada is because the Quebecois beat back American invaders. Cuba is socialist and not capitalist because a Spaniard from noble lineage succeeded in repelling American-sponsored troops. The reason the Ottoman Empire is now called Turkey is because it fought on the wrong side of WWI. You think socialist Sweden was really neutral in WWII? The so-called "neutral" Swedes allowed the Nazis to use their rail systems to transport troops and materiel. Too often, economic experts fail to realize a country's success hinges on which side of the most recent war they chose and geographic accident rather than particular economic preferences. It's as if experts think WWI ended one thousand years ago instead of approximately one hundred years ago. 

In fact, by 1932, borrowing by military allies had left the United States with over 40% of the world's gold reserves plus billions of dollars in outstanding European loans. Please read the last sentence again. The allies--the side that won, which also happened to be called the Allies--ended up owing billions of dollars, giving them incentives to maximize the losers' reparations/debt. 

Look closely, and everywhere you look, military and political leaders have erred on the side of expansion or compromise at any cost. Under such historical precedent, economic systems, whether socialist-leaning or capitalist-leaning, have logically prioritized military spending and R&D. 

The Malaysians are observing the agreements they have signed without trying to retaliate in other directions, such as water... which will lead to war. -- Singaporean founder LEE Kuan Yew (July 26, 2013) 

4. Diplomacy Has Failed, but We're Talking about Capitalism

Quick, name three genocides or civilian massacres the United Nations averted. You can probably cite a conflict the U.N. shortened. You might even be able to name peace agreements the U.N. negotiated post-war or post-bombings. Overall, however, diplomatic efforts have been oddly ineffective in reducing weapons sales and military spending.

We find it repulsive that the Western countries that more loudly make rhetorical speeches about human rights are the ones that manufacture most weapons that have killed more than 20 million people in the developing world since WWII. -- Nobel Peace Prize laureate José Ramos-Horta (1996) 

Today, no one talks seriously about nuclear disarmament because the only weapon preventing a larger power from invading a smaller power is a nuclear one. Such is the result of a world where economic futures are subordinate to threats of foreign invasion, coups d'état, sanctions, and/or onerous tariffs. And still, when people argue capitalism is the problem, they don't seem to realize diplomacy has failed. 

In some of these situations, the UN is almost absent, for instance in the South China Sea dispute, because China doesn’t want to internationalize the tension by allowing the UN special envoys to be present there... The UN can be present and can act only if the parties involved seek help, otherwise it cannot force itself into those situations. Another issue, Kashmir, is on the UN agenda since Day One but the UN has mostly a residual and symbolic presence, hence it is tolerated by India. There is not much more that the UN can do, at least at this stage. India is far too powerful, and they reject UN involvement to avoid internationalizing the issue and India is not keen to allow the UN to take part in any discussion regarding the status of Kashmir. -- José Ramos-Horta, Nobel Peace Prize Laureate, 2019 interview 

Conclusion

As Western voters divide themselves politically over increasingly meaningless economic terms, the really interesting developments are technological. In some countries, governments have maintained relevance by providing education, healthcare, social services, and public transportation, only to be challenged by less costly private actors, including religious entities responsible for large voter turnout. These governments are in disarray because they have privatized technological development or delegated to allies exempt from domestic regulation to such an extent, private corporations now host military and other confidential data, a similar situation as Britain's outsourcing of important affairs to the British East India Company--which it had to eventually dissolve and bail out. Meanwhile, governments elsewhere have maintained power by controlling or approving technological advances, especially in security, but have not invested adequately in creative enterprises or social services, thereby neglecting social cohesion.

Allow me a prediction: the future will not be about capitalism or socialism, but who controls the technology and under what terms. That's the discussion we ought to be having, and sadly, it's a discussion most voters are totally unqualified to have--which explains why people prefer to discuss the "isms" du jour. 


© Matthew Rafat (April 2020)


Bonus I: I didn't properly explain the link between slavery, immigration, and capitalism, so let me try again. If USA was not trying to maximize profit and output from its cotton and tobacco fields in the 1800s, it would not have needed to import labor. The importation of slaves is immigration in a sense, and in this case, immoral not because of capitalism--i.e., the desire to maximize profits--but because of the way the labor was treated and paid. 

Note that capitalist USA in the 1900s was able to attract immigrants voluntarily, even though labor conditions were similarly exploitative, because immigrants believed their first and second generations would be better off. Such progression was a function of automatic citizenship rather than a specific kind of economic system, but the demand for immigrants would not have been as high had companies not been able to maximize output under a globalized system of trade. In short, suboptimal diversity is often a function of the lack of investment and need for excess labor (immigration), which is the result of the absence of conditions favorable to the maximization and expectation of profit. 

Bonus II: After I wrote this article, I began to wonder: why didn't USA manufacturing and plantation owners in the 1700s and 1800s hire more laborers from Mexico rather than enslaving Africans? I suspect the French, who had set up shop in Mexico, would have stopped them; and conditions in Mexico must have been pleasant enough not to drive residents to uproot themselves. If my guesses are correct, I would be interested in knowing the relative value of Mexican currency (Spanish dollar and Mexican centavo/peso) to the US dollar in the 1700s and 1800s, though such an analysis might be impossible because the US dollar only came into existence as an agreed-upon monetary unit between 1785-1792.

Bonus III: Why bother with cross-continent trade? Well,  Indonesian cinnamon tastes better than cinnamon grown elsewhere; Iranian dates are juicier than Tunisian dates; and apparently cocaine from the Colombian jungle is the most potent. Why? Growing conditions in some places are more favorable to certain crops than others. Without investors and globalized trade, either fewer people would be exposed to the same variety of items and experiences, or such exposure would be limited based on the whims of not-always competent governments. 

Similarly, talent, like growing conditions, is not equally distributed. For example, MIT is considered to have the world's best technical minds (Harvey Mudd College and Caltech may disagree, but I digress). According to MIT in 2011, "over 40% of our graduate students, over 70% of our postdocs, and about 40% of our faculty were born outside the U.S." How can the United States steal so many talented people? Why aren't these great minds working at universities back home? Part of the answer is the inequality of the US dollar, which has been stronger than other currencies, making it easier to buy products and immigrants from overseas. Economists use the term "attract" rather than "buy" when discussing immigrant labor, but if you want to be hard-nosed, there's really no difference. In other words, the same currency that allows a country to exploit others in trade negotiations also allows it to steal their talent voluntarily--increasing opportunities, innovation, and quality of life for immigrants as well as everyone else. Equality may be a laudable goal, but most people go where they are treated or exposed to better--i.e., unequal--circumstances. Thus, if you are pro-diversity and pro-immigration, you want more inequality, not less--in your favor. 

Finally, trade begets trade. A container ship returning only gold and silver will not be able to utilize space--or afford shipping fees--as well as another ship also transporting spices, clothing, handmade jewelry, and other products. If there is a complaint, the complaint once again involves inequitable treatment of workers, not globalized trade.

Bonus IV: I originally wanted to end this article with the following exchange from a Hollywood movie, but I ran out of patience. Perhaps the dialogue below will stand on its own. From Sabrina (1954): 

Linus Larrabee: What’s money got to do with it? If making money were all there were to business, it'd hardly be worthwhile going to the office. Money is a by-product. 

David: What’s the main objective? Power? [Capitalism?] 

Linus: Agh! That’s become a dirty word. 

Davis: Well then, what’s the urge? You’re going into plastics now. What will that prove?

Linus: Prove? Nothing much. A new product has been found, something of use to the world. So, a new industry moves into an undeveloped area. Factories go up, machines are brought in, a harbor is dug and you’re in business. It’s purely coincidental of course that people who've never seen a dime before suddenly have a dollar. And barefooted kids wear shoes and have their teeth fixed and their faces washed. What’s wrong with a kind of an urge that gives people libraries, hospitals, baseball diamonds and movies on a Saturday night?

Book Review: Ponti by Sharlene Teo

I'm in Singapore, and I just finished Ponti (2018) by Singaporean-born Sharlene Teo. The title refers to a fictional movie Ponti! and the myth of the Pontianak. A Pontianak is a plain or deformed woman who makes a deal with the devil to become beautiful and irresistible to men, but with a Dracula-like catch: she must drink male blood to survive. (Yennefer of Vengerberg in 2019's The Witcher series is the European version.) Though Teo's book does not revolve around the popular Malaysian fable, viewers unfamiliar with Asian culture's ample room for ghosts will benefit from watching the 2018 movie Kuntilanak (MVP Pictures). 

In the book, I sensed Teo trying to fashion a story around the idea that real horror can be found in broken dreams, broken families, and broken friendships; unfortunately, too much effort is required by the reader to make such leaps. For example, in the beginning and the end, we are introduced to three elderly characters, all of whom are so unbelievable, they function as a tableau for the author's descriptive skills rather than logical plot devices. I am still determining if I was supposed to view the aforementioned characters as war victims or indications the protagonists had no idea how lucky they really were. Due to such gaps, the book underperforms its potential, and we are left with a melacholy novel interrupted by flashes of literary brilliance. 

Despite its shortcomings, Teo's Ponti (2018) is the only fiction book I would recommend to anyone planning to visit Singapore. Using beautifully-written prose, the author accurately captures much of Singaporean life, including hawker centres and even Bata department stores. 

Below are my favorite quotes from the book. 

© Matthew Mehdi Rafat (2020) 

On Singapore's heat: "Singapore lies just one degree north of the equator and it feels like the bullseye where the sun is aiming a shot at the earth with the intention of killing it." 

On gradually losing memories: "His voice is vague. What I have is a paternal approximation, borrowed from daytime soaps. No recordings exist of him. Voices are the first things to go. Next, speech patterns. The turn of a phrase. What was meant as a joke and what was wisdom? You don't get to choose what sticks and what fades."

On dating: "I can picture it. Date night: he'll bring her over some lontong and soya bean milk from the hawker centre near her place and she will beam at him, accept thankfully. And later on they will dim the lights and f*ck full of earnestness to [British operatic pop singer] Adele or something." 

On teenage jealousy: "I cannot imagine them growing old, or any better-looking. There is no limit to this soft sort of envy; it makes a wistful, gawping owl of me. I crane my neck to watch them leave." 

On how relationships decline: "Every evening we talked over each other in circles and absolutes, casting desperate blame spells and generalizations like a blanket over a dying animal. By that point it was you ALWAYS do this and why do you ALWAYS do that. Everything we did together was fraught and boring... I had been trying all my life, and at just 31, I was sick of it." 

On beauty: "Eunice is familiar yet exotic: white enough to fit in, desirably foreign enough to stand out."

On cards: "It sounds like a motivational card. Emptily hopeful."

On teenage activity: "Lying on her tiny bed in half a daydream and dirty clothes was her favourite thing to do."

On grief: "Grief makes ghosts of people. I don't just mean the ones lost, but the leftover people."

On the difficulties of being with a grieving friend: "Yet by the end of that year, being friends with Szu was like carrying around a heavy, sloshing bucket of water. Her grief weighed me down and I couldn't escape its drip."

On lessons to impart to our children: "It's a hot, horrible earth we are stuck on and it's only getting worse. But still. I want to care for you always. May you be safe, may you feel ease. May you have a long, messy life full of love." 

Interesting words: exeunt; leonine; cynosure; epicanthal; pomfret; gormless; auteur; myxomatosis. 

A Building Divided against Itself Cannot Stand

Sabine Weyand, EU director-general for trade:

[Economic] Self-sufficiency is not an option for any country. It's not an option even for any continent.

Bloomberg, "Supply Lines," April 13, 2020: 

Regarding "ventilators, the breathing-assistance machines in short supply across the world [because of COVID-19]... Depending on the model, they can contain as many as 900 pieces sourced from all over the world." 

We can argue manufacturing interdependence is unconscionably risky, but we can also acknowledge it's sensible for lower wage countries to take a higher share of more routine work. Yet, regardless of your beliefs on international trade, you probably don't know the historical basis for globalization, or even that a globalized economy does not have to be similar to the status quo. 

To better understand our current post-globalization era, think of the worldwide economy as two landlords in charge of two growing buildings. Until 1945, there were many landlords but most of them were inefficient or corrupt because they lacked a central office and/or the knowhow to attract and develop talent. Most landlords also had difficulty borrowing money and attracting investors on their own, hurting their chances of not only expansion but also basic maintenance. After 1945, only two landlords--the ones with the most sturdy manufacturing designs and access to oil--were able and willing to lease space to interested parties. All other landlords preferred local tenants, were bankrupted, or were indebted to one of the two remaining landlords.

As a duopoly, the two landlords initially agreed not to compete with each other. One landlord--ASU Corp--indirectly created non-competes within its own building by assigning its partners to lead production. As the most knowledgeable entity within the building, ASU used office leases as a launchpad for mutually beneficial long-term relationships. To minimize conflicts, ASU tenants would specialize in certain services and not compete with each other directly--at least not until tenants were able to master the basics of production and consumption. Under ASU's watchful eye, all tenants, as much as possible, would do business only with the landlord and with each other--and only under the landlord's protection, funding, legal principles, and guidance. 

The other landlord-- RSSU Cooperative--showed its strength by designing the most useful structures and facilities possible. It required its tenants to focus on farming/agriculture and infrastructure. In addition, each tenant had to sign a lease allowing the landlord an easement for technological/scientific testing. Like the other landlord, everyone would trade only with each other, but all the transactions in this building would be handled by the landlord, who would station one employee in each tenant's office to monitor trade and also to help facilitate transport and security. 

Over time, ASU's willingness to provide debt allowed its tenants to take more risks and to expand their own businesses--as long as they stayed current on interest and rent payments to ASU each month. ASU's status as creditor to its tenants meant it could dictate not just business strategy, but financial terms. Under ASU's leadership and advertising, transactions substantially increased between all tenants and also with the landlord. ASU's generous debt terms meant each transaction in its building benefitted from a multiplier effect, where the more tenants traded with each other, the better the chances that debts would be paid and values and prices would increase--for everyone. ASU aimed to master production and consumption, not just production.

RSSU, on the other hand, envisioned each tenant providing each other--as well as itself--with tangible and necessary items. It did not trust each tenant to set prices fairly or sustainably. As a result, while its consumers could satisfy all of their basic needs--except for food when harvests failed--each tenant lacked incentives to cater to consumers or to innovate in ways different from the landlord's expressly stated needs. 

I could continue, but you get the point. The multiplier effect of debt allowed one country to expand its influence at the expense of the other while also stealing much of the other's talent. Such economic expansion required continual fine-tuning of products, advertising, and supply chains so allies would not compete excessively with each other and would maximize the velocity of money. This system gave a single country the power to issue trillions of dollars of debt and to use its financial system--backed by tangible oil and intangible digital technology--as the backbone of the world's economy. Over time, as the United States ran deficits to sustain control over an economic system where it could make the rules, it began to lose influence because some savvy tenants were not in its building or refused to play by its rules. (Note: wherever there is a rule, someone subject to it is determining how to circumvent it in order to gain an advantage.)

Using the prior example, if a new landlord appears--we'll call this third landlord "ANIC"--and sells similar products cheaper than ASU's tenants, at some point conflicts are inevitable if ASU's deficits and its allies' debts assume ever-increasing values and prices. Moreover, the idea of agreed-upon specialization--whether in software, semiconductors, oil, or gas--looks naive if supply chains can be disrupted by a single tenant. (The USA's Middle Eastern military adventurism after 1973's OPEC embargo attempted to resolve this gap.) To summarize, if 900 pieces are needed to make a ventilator, a wise and trusted negotiator can create 900 friends and allies; however, if the primary negotiator's financial or security skills are deemed unreliable or capricious, opportunities to inspire 900 direct competitors becomes more likely. 

Once we realize trustworthiness is the true underlying foundation of a world economy spread out over multiple and distant countries, we know why the United States succeeded spectacularly from 1945 to 2001. In 1945, General George Marshall and General Dwight Eisenhower represented the best of the United States and used their strength to promote compassion, resolve, honor, and fairness. We need not cite any of their personal statements to prove the latter because the two countries they helped rebuild--Germany and Japan--are two of the most successful countries in the world today, with Tokyo the world's most advanced city in terms of infrastructure. In other words, while the Soviet Union--with its flag's hammer--desired the title of infrastructure expert, it was the United States under Eisenhower and Marshall that actually deserved it. Under these men, the world benefited from America converting its wartime manufacturing capacity to facilitate trade and movement within nations and between them. None of this trade, a version of sharing resources with debt tethering everyone together, would have been possible without trust. 

Fast-forward to 2020. Today's America, after the debacle of the Vietnam war, represents the visions of George Bush Sr., former CIA director, and Donald Trump, real estate developer. These two men view illegal tactics as necessary costs to weaken competitors while creating preferences for their own multi-national ambitions: malls, media, and majestic buildings plus a military designed to maintain currency stability by controlling the world's oil supply. We don't need a crystal ball to see that America in 2020 and in the near future is less likely to attract tenants/allies than America in 1945. 

In the meantime, more "tenants" will move to China's "building," though most will try to lease space with both China and the United States. Others, such as the EU, will try to become Landlord #3. Best case, this straddling will generate bridges between the "ANIC" and "ASU" buildings using a new industry of go-betweens; worst case, currency and legal complications (e.g., money laundering) will force tenants to choose a single lease. 

A "single lease" scenario would lead to a new 1945, where China and the U.S. carve out economic zones similar to the post-WWII East-West divide. (Think Checkpoint Charlie, but with tariffs, laws, and sanctions limiting movement rather than physical walls.)

The straightforwardness of the "single lease" scenario is appealing but would render the future dependent on the integrity and reasonableness of Chinese and American leadership. (Though I wonder: if we get a do-over, why does it feel like the U.S. is the old Soviet Union, and Iraq/Yemen its Afghanistan?) 

I predict most countries will improve domestic supply chains to ensure supplies of essential items, with adequate capacity judged based on emergency needs. Wise politicians will see food and water security as equally important as nuclear and digital technology. How such internal reliance will mesh with existing trade agreements is anyone's guess, but one thing is certain: the post-WWII framework of economic and financial interdependence as the foundations of peace is finished--at least until we see another Eisenhower and Marshall. 

© Matthew Mehdi Rafat (2020) 

Tourism as an Extension of Old Habits: the Great Unwinding

Some time ago, I was in an Asian country where the official language is not English. Airports, cafés, and museums displayed a model of the president's childhood bicycle and allowed spectators to sit down and take photos against an artificial backdrop. 

I ignored the hubbub until one day curiosity got the best of me. After examining the bike, I noticed the brand name was in English. As this was was the second time I'd seen an antique bike in Asia with a small metal crest displaying an English name, I decided to give the matter further thought. How could it be profitable for the British Empire to manufacture then transport bikes across Asia? 

Flying Pigeon

Was Hong Kong involved? Did a company in what is now English-speaking Singapore have a license of some kind? It turns out the bicycles--expensive yet popular--were originally made in Tianjin, China after the Communist Party defeated British and Japanese colonialists. So why, after expelling the British, would the Chinese use their colonizer's language on their best-selling bicycle, a symbol of Communist manufacturing prowess?

I have no idea. My failure to speak or read Mandarin Chinese probably means I will never know the answer to my Flying Pigeon questions. I'm sure, however, a tourism marketing firm will invent a pleasing response, sending us farther away from historical understanding and thus any reasonable chance of connecting our human hands across the borders of time. This generic response--and others like it--will be copied by others in the tourism business until one day children will repeat the Flying Pigeon's English origin story as if it had been handed down by the Chinese Premier himself.

Mass tourism is intolerable to the extent it allows such falsehoods to multiply, truth defenseless in the face of poor translators (both financially and unrenowned) and historians more worried about "Publish or perish" than their own country's political miasma. How has the translation business not taken off at the same time as increasing globalization? What are all the foreign language professors and graduate students doing in their research time, if not translating the great works of their native tongues? And why in Allah's or Yahweh's name must readers choose between one, or at most two, translations of popular books? 

The truth is, I know the answer to why I don't have my answer. Entire economies have been built on the assumption the best of all realistic worlds is a world where weapons purchases and security/technology cooperation form the hard underbelly of the civilian economy. Rising from this foundation are the industries of advertising, soft censorship, and political chicanery, all of which must be adept enough to convince American citizens to view Vietnam and Iraq as two discrete moral instances, and to persuade British voters to spurn their neighbors in favor of a distant former colony.

So what happens when truth isn't necessary to sustain economies and globalization? I suspect it will involve more of the kinds of videos I've seen online, including one where a British tourist--who has presumably studied the Ottoman Empire at some point in his life--proudly proclaims he is drinking "Bosnian coffee" while drinking Turkish coffee in Sarajevo. The more such unintentional comedy multiplies, the more globalization seems destined to a great unwinding. And so it goes? 

© Matthew Mehdi Rafat (2020) 

Padang, Indonesia: City of Waterfalls and Dragonflies

Most people will never visit Padang, Indonesia, and that's fine by me. The city includes a diverse mix of accommodations, from the relatively upscale Grand Inna Padang Hotel and The Axana hotel to the mid-range French-owned ibis, plus several RedDoorz and homestays. Beaches with red sunsets and pink skies are common within the city and outside of it. 

There aren't many museums or awe-inspiring mosques, but the two-level Museum Adityawaran will delight any anthropology student or ethnographer, and Masjid Taqwa Muhammadiyah Sumatera Barat boasts a unique modern design. 

As for food, the region has some of the world's best cinnamon as well as two restaurant chains (Lamun Ombak and Malabar) serving traditional fare, including jumbo size shrimp/udang if it's your lucky day. 

Lamun Ombak Pasar Usang

Unfortunately, it's impossible to see the best of Padang without a car, and most unique attractions are 45 minutes to 3 hours away from the city center. GoJEK and Grab apps are great for shorter trips, but in smaller cities and for longer trips, SE Asia tourism currently lacks solutions other than pre-planned tour buses, which I consider the exclusive province of senior citizens and their flag-football-waving leaders. 

I visited four different waterfalls--called "Air Terjun" in Bahasa--all of which were the highlights of my trip, and all of which require a local guide to find. 

Let's start with Baburai Waterfall, the farthest one from Padang's city center. It took 2 hours of driving to reach the jungle reserve housing the waterfall, then an easy 40 minutes walking to the waterfall--as long as you know the way. Sturdy but uneven concrete steps lead down to the waterfall, which will make any tourist wonder why more people aren't visiting. (My guesses are ignorance and a lack of reputable local tour guides and drivers; after all, no one really wants to drive in any foreign country, especially if they've heard stories of corrupt police officers shaking down tourists for bribes.) In any case, this waterfall had a very strong current, so much so that I couldn't get closer than 15 feet. 

After months of complaining about other visitors leaving behind plastic bags, plastic bottles, and solitary sandals, I ended up losing one of my favorite sandals trying to swim closer to the waterfall, thus gaining insight into the reasons single sandals pollute nature reserves. 

Nearby Baburai Waterfall is Dua Bidadari Waterfall, which requires only a 30 minutes walk on a completely paved path to reach. I call this waterfall a "Mini-Madakaripura" because both waterfalls are similar, though of course the one nearby Padang is much smaller. 

Air Terjun Sarasah (aka Air Terjun Sarosah, Air Terjun Sarasah Gadut--but *not* Air Terjun Sarasah Kuau Rajo) was my favorite. Located one hour away from the city center, a 45 minutes walk on a mostly unpaved path delivered a beautiful waterfall allowing visitors to go directly underneath the source. 

It was here I lost my 20 USD Decathlon plastic glasses when I mistakenly went the wrong way down and ended up hugging a tree branch while trying to free my foot from the damp dirt resembling jungle quicksand. (If you see a monkey wearing blue-tinted sunglasses, tell him I want my sunglasses back.) 

The easiest waterfall to see is Lembah Anai Waterfall (aka Lembah Anai Air Mancur), located by the side of the road. When I visited, the water was freezing cold, so I could only go halfway to the waterfall, but if you dislike hiking and want to see a nice waterfall, this one might be your best bet. 

So there you have it. You won't find much exciting in Padang's city center, but one to two hours' away await some of the world's prettiest waterfalls. I'm no geologist, but I assume the reason Japan, Indonesia, and California suffer horrendous earthquakes and tsunamis is because continents were created when tectonic plates collided around Costa Rica and Indonesia, which is why they and their neighbors have incredibly unique scenery. For me, if there's heaven on earth, it has to be in an Indonesian waterfall surrounded by dragonflies and fast-moving butterflies. 

Come visit before everyone else discovers these "hidden" gems. 

© Matthew Mehdi Rafat (February 2020) 

Bonus: Some tourists don't visit Indonesia because they'd rather go to Australia or the flight (using Garuda Indonesia) is expensive. My suggestion is to fly into Singapore, stay one or two nights, eat the chicken rice, then take Air Asia from Singapore to Kuala Lumpur, Malaysia (KUL is a great airport), and then anywhere in Indonesia. You can also try Scoot Airlines, though I suggest using Air Asia if you are flying into Kuala Lumpur, even for a connecting flight. 

Note that I travel lightly and avoid checking luggage. For my Padang trip, I've worn one pair of pants, one cap, two pairs of underwear, one pair of socks, and two shirts for an entire week. I handwash everything each night in the sink with shower gel and soap.

_________________________________

Padang, Indonesia: Kota Air Terjun dan Capung-capung yang Anggun

 

Mungkin  akan ada banyak orang yang tidak memiliki kesempatan untuk bertandang dan mengunjungi kota Padang, ibu kota Sumatera Barat, salah satu kota yang cantik di Indonesia. Hal itu tidak menjadi masalah bagi Saya secara pribadi. 

 

Namun kunjungan Saya ke kota ini beberapa waktu yang lalu menggugah Saya untuk bercerita tentang beberapa hal yang mengesankan dan mempesona. Mari kita mulai perjalanannya. Padang sebagai sebuah ibu kota memiliki beragam akomodasi, mulai dari Hotel Grand Inna Padang dan  The Axana yang relatif mewah hingga hotel kelas menengah seperti Ibis – milik Perancis, ditambah beberapa RedDoorz dan homestay yang terjangkau. Pemandangan pantai dengan matahari terbenam berwarna merah dan semburat langit merah muda adalah hal yang sering dan biasa Anda akan temui di daerah ini. 

 

Sebagai seorang penggemar Museum, Saya menyayangkan bahwa tidak banyak Museum atau Arsitektural Masjid yang dapat Saya eksplorasi atau sampai membuat saya berdecak kagum. Tetapi Anda  jangan sampai melewatkan dua tempat berikut ini, Pertama adalah Museum Adityawarman; sebuah Museum dengan dua tingkat atau dua susun berjenjang, yang akan memuaskan banyak rasa penasaran para peneliti entnofrafi atau para pembelajar bidang antropologi, dan yang Kedua adalah Masjid Taqwa Muhammadiyah Sumatera Barat yang memanjakan mata dan menawarkan desain modern yang unik dibandingkan Masjid lain di area tersebut. 

 

Di sisi lain, Anda harus meluangkan waktu untuk menikmati lezatnya kuliner khas Padang yang amat memanjakan lidah. Tentu Anda pernah dengar atau membaca tentang Rendang, makanan yang dinobatkan sebagai makanan terlezat nomor satu di dunia, dari Padang-lah asal masakan lezat tersebut. Tidak dapat dipungkiri, masakan Padang memang terkenal dengan dominasi rempah-rempahnya yang beragam, dan berkualitas tinggi, sebab padang merupakan salah satu wilayah penghasil kayu manis terbaik di dunia. Di daerah ini juga terdapat dua jaringan Restoran yang ternama yaitu Lamun Ombak dan Malabar yang menyajikan masakan-masakan khas dan tradisional, dan jika Anda beruntung, pada Anda dating, Anda akan disuguhkan masakan dengan menu Udang yang berukuran jumbo. 

 

Sangat disayangkan bahwa Padang mustahil dinikmati keindahan dan keistimewaannya tanpa menggunakan mobil, di mana atraksi-atraksi dan lokasi pariwisata yang menarik berjarak sekitar 45 menit sampai tiga jam dari pusat kota. Aplikasi online seperti GoJek dan Grab merupakan pilihan terbaik untuk perjalanan dalam kota dengan jarak yang dekat.  Secara umum pariwisata di negara-negara Asia Tenggara terutama untuk perjalanan jarak jauh belum memiliki banyak alternatif pilihan atau solusi selain menggunakan bus pariwisata dengan perjalanan yang terencana, hal ini terkait juga dengan keberadaan dan kesempatan bagi para lansia yang ingin turut serta berwisata bersama-sama. Saya berkesempatan untuk mengunjungi empat Air Terjun yang berbeda di sana, keempatnya menjadi sorotan perjalanan Saya dan jika Anda juga ingin mengunjungi tempat yang sama, jangan lupa Anda membutuhkan pemandu lokal untuk menemukan lokasi Air Terjun tersebut. Saya akan mulai dengan Air Terjun “Baburai,” yang merupakan lokasi Air Terjun terjauh dari pusat kota Padang. Butuh waktu dua jam berkendara untuk mencapai hutan cagar alam hutan di mana air terjun Baburai terlindungi di dalamnya. Dengan kecepatan yang standard dan dengan catatan jika Anda tahu jalannya, Anda akan sampai ke sana dalam waktun tempuh sekitar 40 menit berjalan kaki. Tangga beton yang kokoh – meskipun tidak rata – dan pemandangan indah sepanjang perjalanan yang mengarah ke air terjun, membuat wisatawan bertanya-tanya mengapa tidak banyak orang yang berkunjung. Dugaan saya hal itu terjadi karena kenihilan informasi, kurangnya pemandu wisata, dan pengemudi lokal yang bereputasi baik; sementara para wisatawan terutama wisatawan mancanegara seperti Saya enggan mengemudi di negara asing. Kembali ke cerita tentang Baburai, air terjun ini memiliki arus yang sangat kuat, sehingga saya dan wisatawan lainnya dilarang untuk terlalu dekat dengan air terjun ini, berilah jarak diri Anda dengan air terjun sekitar 4.5meter.

 

Setelah berbulan-bulan mengeluh tentang pengunjung lain yang meninggalkan kantong plastik, botol plastik, dan sandal yang hanya sebelah, saya “beruntung” karena mengalami sendiri dan mendapatkan jawaban mengapa banyak sandal hanya sebelah yang tertinggal di sini, karena saya akhirnya juga kehilangan satu dari sandal favorit saya saat mencoba berenang lebih dekat ke air terjun, hal itu membuat saya mendapatkan  wawasan tentang alasan sandal tunggal mencemari cagar alam. Air Terjun lain yang jaraknya dekat dari Baburai adalah Air Terjun Dua Bidadari, membutuhkan waktu 30 menit berjalan kaki di jalan yang beraspal untuk mencapainya. Saya menyebut air terjun ini sebagai "Mini-Madakaripura" karena kedua air terjun ini mirip, meskipun tentu saja yang lebih dekat dengan pusat kota Padang jauh lebih kecil. 

 

Air Terjun “Sarasah” (atau Air Terjun Sarosah - Air Terjun Sarasah Gadut—tetapi bukan Air Terjun Sarasah Kuau Rajo) adalah favorit saya. Letaknya sekitar satu jam perjalanan dari pusat kota, dan dibutuhkan 45 menit lagi berjalan kaki di jalan yang sebagian besar tidak beraspal. Jalan itu berujung pada air terjun yang indah dan memukau yang memungkinkan wisatawan untuk langsung berdiri di bawahnya dan menikmati siraman alami dari air terjun itu sendiri. 

 

Nah, selain tragedi hilangnya sandal saya yang sebelah, di sini juga saya kehilangan kacamata Decathlon (jika tidak salah ingat, harganya 20 USD atau setara dengan 283.000 IDR, bukan barang mewah, tetapi sangat bernilai bagi saya) ketika saya salah strategi untuk turun dari sebuah pohon dan akhirnya memeluk cabang pohon yg cukup jauh ketika mencoba membebaskan kaki saya dari kotoran basah yang menyerupai pasir hisap hutan. Jadi jika nanti Anda seekor monyet mengenakan kacamata hitam dengan frame berwarna biru, tolong sampaikan padanya bahwa saya ingin kacamata saya kembali. 

 

Air terjun selanjutnya adalah Air Terjun Lembah Anai (Air Mancur Lembah Anai), paling mudah dilihat sebab terletak di pinggir jalan. Ketika saya berkunjung, airnya sangat dingin, jadi saya hanya bisa pergi setengah jalan ke air terjun. Jika Anda tidak suka melakukan pendakian (hiking) tetapi tetap ingin melihat air terjun yang bagus, Air terjun Lembah Anai dapat menjadi pilihan terbaik bagi Anda. Di sinilah saya akhiri cerita perjalanan saya tentang kota Padang dan Air Terjun yang dimilikinya. Terus terang, Anda tidak akan menemukan banyak hal menarik di pusat kota Padang, tetapi satu sampai dua jam perjalanan dari sana, beberapa air terjun tercantik di dunia telah menunggu dengan tenang kunjungan Anda, dan saya bisa pastikan Anda akan terpesona serta mengagumi keindahannya. Saya bukanlah ahli geologi, tapi saya berasumsi bahwa negara-negara seperti Jepang, Indonesia, dan juga negara bagian California berulang kali mengalami gempa bumi dan tsunami yang mengerikan karena benuanya terbentuk ketika lempeng tektonik bertabrakan di sekitar Kosta Rika dan Indonesia, itulah sebabnya negara ini dan beberapa negara tetangga mereka memiliki pemandangan yang sangat unik dan fenomenal. Bagi saya, lokasi yang dapat disebut sebagai pecahan surga yang ada di dunia harus diberikan pada lokasi-lokasi air terjun di Indonesia yang amat memukau mata, mendamaikan hati, dan terkenang di jiwa, dengan suara air dan cantiknya kupu-kupu, serta para capung yang bergerak dengan anggunnya. 

 

Datang dan kunjungilah sebelum banyak orang lain ikut menemukan permata yang tersembunyi ini. 

 

© Matthew Mehdi Rafat (February 2020) 

 

Bonus: Beberapa turis tidak mengunjungi Indonesia karena mereka lebih memilih pergi ke Australia atau penerbangan dengan maskapai Garuda Indonesia harganya cukup mahal. Saran saya, terbanglah ke Singapura, menginaplah satu atau dua malam (jamgan lupa makan nasi ayam khas Singapura tentu saja), lalu naik Air Asia dari Singapura ke Kuala Lumpur, Malaysia (KUL adalah bandara yang bagus, lho!), dan kemudian Anda dapat memilih untuk terbang ke kota manapun di Indonesia dari Kuala Lumpur. Alternatif lain adalah Anda juga dapat mencoba Scoot Airlines, meskipun saya tetap sarankan untuk lebih baik menggunakan Air Asia jika Anda terbang ke Kuala Lumpur, bahkan untuk penerbangan lanjutan. 

 

Catatan bagi Anda, ketika saya bepergian ke Padang, saya adalah tidak membawa banyak barang untuk menghindari pemeriksaan barang bawaan. Saya hanya menggunakan sat utas ransel ukuran medium (jadi saya tidak menggunakan bagasi, hanya kabin saja), dan yang saya bawa hanya satu buah celana, satu topi, dua pasang pakaian dalam, satu pasang kaus kaki, dan dua kemeja untuk perjalanan selama seminggu penuh. Setiap malam saya mencuci semuanya menggunakan tangan dengan shower gel dan sabun di wastafel kamar mandi hotel.

Politics and Intelligence

Empires usually fail because of two reasons: 1) distrust between entities acting as checks and balances on the executive branch, which inspires secrecy and eventually an inability to identify problems; and 2) overextension at any cost, both numerical and qualitative, in order to prevent competitors from achieving progress. The second reason is why mainstream media degenerates or remains staid during a superpower's decline. 

Most of us understand media is intertwined with public opinion and therefore elections. In turn, media influence is connected with established political and private entities, usually law enforcement and multinational corporations (e.g., Dutch East India Company or ExxonMobil), because such entities, unlike individual government employees, have no theoretical shelf life and can use their longevity to incur debt, roll over debt, and use funding to gain long-term, reliable sources and conduits of information. In this way, entities are better able to sustain themselves because they can buy loyalty, whereas non-billionaire individuals cannot buy equal influence even if armed with facts and logic. 

James Boswell's The Life of Samuel Johnson, Volume 1

As media and advertising have become inescapable, an escalating amount of content is necessary to fill in the time occupied by new technologies. (Facebook's and Google's revenues indicate how much direct and indirect advertising targets our eyeballs and consumer preferences.) If established players do not occupy the content channels accessible to their residents and supporters, they leave open spaces for competitors--some benign, some domestic, some foreign, some hostile. (Military strategists are familiar with these tactics in the physical realm, though none seem able to push back credibly when overextension appears on the horizon.) 

By now, we all know the gist of Edward Snowden's allegations, but Snowden--as intelligent as he obviously is--was a low-level NSA worker. His aim to avoid the surveillance state is no longer possible for an ordinary person without extreme measures. Experienced intelligence assets and agents determined decades ago that influence must be assisted and co-opted to prevent a devolution of content--i.e., fake news, or what Aleksandr Solzhenitsyn in 1978 presciently called the "abyss of human decadence." 

Destructive and irresponsible freedom has been granted boundless space. Society appears to have little defense against the abyss of human decadence, such as, for example, misuse of liberty for moral violence against young people... It is considered to be part of freedom and theoretically counter-balanced by the young people's right not to look or not to accept. -- Aleksandr Solzhenitsyn (1978)

While intellectuals have been keen to recognize the symptoms of a society in decline, they have not understood the causes equally well. Put simply, as entities seek to control an increasing number of content channels, they are forced to hide truths unfavorable to their paymasters. Censorship being disfavored due to its ability to backfire, most leaders choose to ruin their opponent's credibility, their opponent's finances (the LKY method), or, as a last resort, assassinations (e.g., MLK's murder on the one-year anniversary of his Vietnam speech and 1973's Lillehammer affair). To mitigate blowback from the use of such underhanded tactics, the same entities boost persons favorable to their country's image, especially athletes and minorities, so as to avoid situations like USA's 1968 Olympics Black Power salute. Boosting, co-opting, and "soft censorship" require vast amounts of money, thus entrenching entities and billionaires while disfavoring individuals, even if the former lack facts, truth, or logic. 

This financial requirement, if not managed carefully, eventually renders countries and their residents debt facilitators or obligators foremost, bankers and politicians competing for the title of "Most Creative Cash Flow Consultant." (Witness current negative interest rates.) Such propaganda tactics obfuscate decline because the more such entities succeed, the harder it becomes to identify legitimate complaints and issues. Furthermore, most governments able to access debt/funding overshoot in their attempts to maintain social cohesion, whether co-opting too late (e.g., U.K.'s experience against the IRA and Sinn Fein, Russia's relationship with Chechnya) or boosting individuals and outliers in ways inimical to structural solutions (e.g., affirmative action and racial quotas over tearing down institutional factors supporting segregation). 

As financial burdens--as well as concomitant superficiality, budgetary mismanagement, and economic inequality--increase, the first reason mentioned in the opening sentence gathers strength. Regardless of where blame is directed for declining social cohesion, law enforcement tacitly or overtly gains more discretion to maintain law and order, weakening mechanisms designed to stop extremism. As lawyers and academics realize their participation (and therefore influence) has waned, their attempts to counter executive force are noble; however, at this juncture, the executive branch has already created separate modes of operation in a good faith effort to resolve problems in an efficient manner. To the extent such illegal maneuvers can be traced, it is not difficult to destroy evidence and silence witnesses through the same methods discussed earlier. Yet, the moment disrespect for legal norms protecting individual rights becomes fashionable, a country's power structure has already shifted from the long-term to the short-term, from the credible and sustainable to the out-of-touch and unbelievable. In such a realm, criticism is a threat to operations, weakening a country's desired image and investor confidence. After all, the more all parties believe outstanding debts will be repaid, the more existing parties gain power and are welcomed by all--except those who have studied history properly. 

© Matthew Rafat (February 2020) 

Update: I wanted to follow up on the difference between a Snowden acolyte and higher-level intelligence analyst. Let's say you have evidence a particular app or website is involved in human trafficking. You can try to go to court and ask for a take-down order, but the company would justifiably argue its website has legitimate users, and as a mere facilitator, it is not responsible for illegal activity between its end users. If you follow Snowden, you would also argue such tactics amount to government censorship and government picking and choosing winners.

But Snowden would have no answer to what might happen next: the government, a mega-church, or a billionaire's employees could, even without a backdoor, create fake profiles on the website and tilt the ratio between real users and sock-puppets however it liked. The company, at first, would be delighted because it could show advertising companies its growth. Over time, however, as real users left the website, it would become difficult for anyone involved to maintain credibility.

A more complicated situation would involve a leak of classified information. In such a case, though censorship could occur, the government could also direct all public (aka mainstream) website searches to websites it had created itself or through its subsidiaries' uploads. Many subsidiaries, such as nonprofits, would not have the technological expertise to determine whether they were reviewing altered or real material, or even whether they were being funded by the very government under investigation.

I often say the 21st century's hallmark is the "bad guys" have become the "good guys," and vice-versa. One reason is that unaltered, legitimate data--the underlying basis for truth--is sometimes only available in the dark web or through secret channels. 

USA's Strategy in Trade War is More Complex than Reported

No one has written a decent article explaining USA's perspective on trade vis a vis China, so I'll throw my hat in the ring. As with any negotiation, whether China "wins" depends on its ability to ascertain USA's ulterior motives. (Lawyers know no matter how specific the final language of an agreement, there is always room for interpretation.) 

Robert Lighthizer, the U.S. Trade Representative, wants to obviate China's usual currency devaluation in order to stimulate its domestic economy. Stated another way, the U.S. is trying to increase domestic Chinese consumer consumption by reducing the two countries' trade deficit. Why is this American objective potentially destabilizing for China? 

With so much else at stake, American "experts" erroneously emphasize the financial value of China's promises of agricultural purchases, believed to total 32 billion USD over the next two years. In reality, America's main goals are to 1) stop China's ability to fluctuate its currency unilaterally, thus limiting its power to assist export-oriented businesses (whether SOE or otherwise); 2) stop China's "free" technological gains through IP transfers, including software code, thereby increasing the cost of competing with USA corporations; and 3) stop China's alleged procrastination in reforming its judicial system, which, due to an alleged lack of independence, appears to tolerate a laissez-faire attitude towards IP violations. Thus, China's agreement to purchase American agricultural products are the Republican Party's opening salvo aimed at advancing a Trojan Horse reshaping China's entire economy. 

To understand the challenges in achieving viable compromises, remember that USA's economy is consumer-driven. According to some sources, consumer spending comprises a whopping 68% of America's entire economy. A consumer-driven economy allows for higher individual debt, more private enterprise, and less government interference. Though much of China's recent GDP growth is from consumer spending, its path from "developing" to "developed" status has been through non-consumer infrastructure spending and exports. 

China's success thus far should not be overlooked. From Singaporean professor Danny Quah: 

In absolute terms, the average person in the bottom half of the US income distribution today is worse off than the average person in 1980 in the US... [but] the people at the bottom half of China's income distribution today are four times better off than they were 30 years ago.

America desires less restricted markets within China and a less export-oriented economy because domestic Chinese consumption would tilt towards USA/EU products. In other words, it wants to rewrite the rules of the game to favor its own economic model (domestic consumer spending, privatization) over China's (government-driven growth that has taken 750 to 850 million Chinese out of poverty). I don't fault the U.S. Trade Representative's approach. As of today, American Nike is far better than Chinese LiNing, American Ford far better than Chinese Geely, EU-Unilever and EU-Nestlé far better than any Chinese company, and so on. Why the gap in quality and reputation? 

From World Bank

I'll say it again: because China has focused on infrastructure and other government-driven projects rather than domestic consumerism, it is just now trying to move up the consumer supply chain. (It has already moved to the top in ports, roads, trains, solar energy, etc.) In fact, China is well-positioned to compete in the global consumer market because its per capita GDP recently reached the "magic" 10,000 USD number, at which point most people, especially younger people, feel comfortable trying new items and upgrading personal preferences (e.g., pork to beef, the latest smartphone, etc.). 

For its part, USA is trying to impede China's shift into USA's economic specialty of consumerism through tariffs (hurting China's exports), technological blocks (hurting Huawei), legal mechanisms (using Western countries' court systems to threaten criminal charges against Chinese executives), and manipulating oil prices ("In 2018, China had record oil and gas imports and remains the number one crude oil importer in the world after surpassing the United States in 2017 and is the number two natural gas importer, behind Japan"). 

I see little chance of success for the United States in the short-term because China still has numerous options (Manila and Jakarta ports instead of HK and Shanghai) and alternate suppliers (oil and otherwise), allowing it to soften the blow of any US trade restriction. More importantly, China's government regularly publishes five to ten year economic plans, and if an American objective runs contrary to stated governmental aims, it seems unlikely China is willing to lose face by acceding to American demands. 

Over 1,000 pages on governance.

To its credit, China knows it currently lacks expertise building globally recognized, consistent brands and has failed to replicate other countries' branding successes, whether Japan or South Korea. (I dislike K-pop, but South Korea's outsized influence in Asia's entertainment scene shows remarkable prowess in generating consumer demand.) In Chinese-majority Singapore, I have seen zero Chinese Luckin Coffee stores but plenty of Taiwanese bubble tea shops and American Starbucks, indicating China has yet to operate comfortably within other countries' regulatory systems. 

Incredibly, replicating and improving global supply chains has proven easier than building products everyone wants and can access within those supply chains. If China has to divert spending that could otherwise be used to attract competitive ad agencies, international legal experts, and other fundamental blocks of consumerism, then it risks being left behind at the exact moment it opens markets to foreign competition and its own consumers can afford to differentiate between domestic and international brands regardless of tariffs. 

The West beat the Soviet Union not because America's approach towards human rights or privacy was fundamentally different--post-Snowden and Church Committee investigations, we know both West and East are and were surveillance and military-driven. Yet, despite more similarities than differences, the West succeeded because it was able to create better stories by leveraging innovation through the private sector and parlaying substantial development risk onto private banks. (See, for example, USA's Community Reinvestment Act of 1977, through which the federal government can allow or disallow bank branch expansion based on geographic and income-based diversity of loans.) 

Once upon a time, Ronald Reagan and the West could advance a credible anti-Communist narrative because America's diversity, refugee policies, private sector loans, oil access, and bankruptcy rules trumped its inconsistencies. Rather than worry about the U.S. Trade Representative's non-numerical demands, China should be asking itself the following questions: What will China's narrative be? And will it be able to create a stable and credible one if, moving forward, it is forced to increase the value of its currency to support greater domestic consumer demand? 

© Matthew Mehdi Rafat

Bonus: A few caveats: 

First, a weak or weaker currency does not guarantee a country will export more than it imports. Indonesia--a country with oil, gold, natural gas, and timber--has a relatively weak currency. Bloomberg News reported on December 16, 2019 that Indonesia's "imports of consumer goods surged and exports contracted for a 13th straight month." 

Second, the broad language disclosed so far reminds me of USA's most recent attempt to mediate between North and South Korea. (Regarding China and USA, what exactly are the components of "high-standard commitments to refrain from competitive devaluations" & enforcement "mechanisms"?) A year later, nothing truly substantive has changed between North and South Korea despite the hype surrounding diplomatic efforts; furthermore, as of last month, according to Reuters' Joyce Lee and Ju-min Park, "The United States is 'very actively' trying to persuade North Korea to come back to negotiations... as a year-end North Korean deadline for U.S. flexibility approaches."

Similarly, I predict these American-Chinese talks will be much ado about nothing and another chapter in America's habit of overreaching post-Vietnam-War. Also, I'd be lying if I said I wasn't curious to see if China tries to use its purchasing commitments to influence America's 2020 elections. Interesting times, eh? 

President Xi Jinping (December 31, 2019):

"Human history, like a river, runs forever, witnessing both peaceful moments and great disturbances."