The Pak Banker

China more like America

- Brandon J Weichert

The United States transition­ed from an agrarian backwater into an industrial­ized superstate in a rapid timeframe. One of the most decisive men in America's industrial­ization was Samuel Slater. As a young man, Slater worked in Britain's advanced textile mills. He chafed under Britain's rigid class system, believing he was being held back. So he moved to Rhode Island.

Once in America, Slater built the country's first factory based entirely on that which he had learned from working in England's textile mills - violating a British law that forbade its citizens from proliferat­ing advanced British textile production to other countries.

Samuel Slater is still revered in the United States as the "Father of the American Factory System." In Britain, if he is remembered at all, he is known by the epithet of "Slater the Traitor." After all, Samuel Slater engaged in what might today be referred to as "industrial espionage." Without Slater, the United States would likely not have risen to become the industrial challenger to British imperial might that it did in the 19th century. Even if America had evolved to challenge British power without Slater's help, it is likely the process would have taken longer than it actually did.

Many British leaders at the time likely dismissed Slater's actions as little more than a nuisance. The Americans had not achieved anything unique. They were merely imitating their far more innovative cousins in Britain. As the works of Oded Shenkar have proved, however, if given enough time, annoying imitators can become dynamic innovators. The British learned this lesson the hard way. America today appears intent on learning a similar hard truth … this time from China.

By the mid-20th century, the latent industrial power of the United States had been unleashed as the European empires, and eventually the British-led world order, collapsed under their own weight. America had built out its own industrial base and was waiting in the geopolitic­al wings to replace British power - which, of course, it did.

Few today think of Britain as anything more than a middle power in the US-dominated world order. This came about only because of the careful industrial and manipulati­ve trade practices of American statesmen throughout the 19th and first half of the 20th century employed against British power.

The People's Republic of China, like the United States of yesteryear with the British Empire, enjoys a strong trading relationsh­ip with the dominant power of the day. China has also free-ridden on the security guarantees of the dominant power, the United States.

The Americans are exhausting themselves while China grows stronger. Like the US in the previous century, inevitably, China will displace the dominant power through simple attrition in the non-military realm. Many Americans reading this might be shocked to learn that China is not just the land of sweatshops and cheap knockoffs - any more than the United States of previous centuries was only the home of chattel slavery and King Cotton. China, like America, is a dynamic nation of economic activity and technologi­cal progress.

While the Chinese do imitate their innovative American competitor­s, China does this not because the country is incapable of innovating on its own. It's just easier to imitate effective ideas produced by America, lowering China's research and developmen­t costs. Plus, China's industrial capacity allows the country to produce more goods than America - just as America had done to Britain. Once China quickly acquires advanced technology, capabiliti­es, and capital from the West, Chinese firms then spin off those imitations and begin innovating. This is why China is challengin­g the West in quantum computing technology, biotech, space technologi­es, nanotechno­logy, 5G, artificial intelligen­ce, and an assortment of other advanced technologi­es that constitute the Fourth Industrial Revolution.

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