“The greatest improvements in the productive powers of labor, and the greater part of the skill, dexterity, and judgment, with which it is anywhere directed or applied, seem to have been the effects of the division of labor.”
The definition of labor division made by Adam Smith, renowned as the father of modern economics, in the opening chapter of his book Wealth of Nations, has been serving as a cornerstone for world economics since the industrial revolution.
Just as an American scholar remarked, Wealth of Nations is one of the sources that powered the miracle of the US development.
The pursuit of a free market enabled the US to have done a great job in establishing a global major market, and in the process of international labor division. The adherence to fair competition is also what the US had always taken pride in.
However, some US politicians today have long forgotten where their country came from, or are justly trying to stop the development of other countries for their own interests even if they are clear about how the world economy runs.
The “invisible hand” of the market is currently being held back by the “hegemonic hand” of Washington.
Adam Smith illustrated the significance of labor division by the case of making nails, but the US politicians take everything as a nail and want to batter it with a hammer in their hands.
Some US intelligence officials have frequently fabricated the risks of doing business in China, and the US government has also contained Chinese enterprises in the name of “national security”. Uncle Sam even pressured its allies to join it in restricting Chinese companies.
Abandoning openness, freedom and fair competition, the US politicians have completely destroyed their self-praised image of a “defender of fair competition”.
Even the American media couldn’t stand such practices. In response to the ridiculous remarks made by US Secretary of State Mike Pompeo that the company is deeply tied not only to China but to the Chinese Communist Party, and that connectivity, the existence of those connections puts American information that crosses those networks at risk, an American investigative journalist noted that the US government does not have any evidence against Huawei’s alleged “theft of US corporate technology”.
On the contrary, the Prism Gate scandal has already smashed the “real hammer” of the US government’s eavesdropping on citizens to the end, the journalist added.
The extreme pressure placed by Washington on China’s high-tech firms is a mirror that reflects the hypocrisy of the US politicians. Their so-called trade liberalism is to only liberalize themselves and confine the others, and their so-called fair competition is nothing but resorting to hegemony.
Going after unilateralism and holding high the “big stick” of tariffs, the US is trampling on freedom and openness.
At the top of the global industrial chain, the US is the largest beneficiary of international labor division, a major rule maker of global trade, and home to a great number of transnational corporations. It has already gained substantial benefits in economic globalization.
However, the fair competition principles of free market is just a pragmatism approach in the eyes of the US politicians who use whatever that suits their interests and abandon whatever that does not.
Similar cases happened a lot, such as the Plaza Accord signed in the 1980s in which Japan must swallow the bitter pill, and the “American Trap” in which the French energy company Alstom was contained by the US by legal weapons.
As a Chinese saying goes, incidents that have happened will only grow fiercer as time passes. The US politicians who are used to zero-sum games have probably not expected that the US will lose the opportunity of healthy development once it goes against fair competition.
The forefathers of the US would definitely be disappointed if they knew how the country is developing today. When the policies of a country are driven by zero-sum game and confrontation mentality, the basis for its participation in international labor division is gone. The country will not be a protector of global orders any longer, but a troublemaker and risk igniter.
The US is simply “pretending” to be ignorant about basic economic and trade knowledge by accusing China of being engaging in unfair trade practices and requesting the so-called fair and reciprocal trade. Claiming the US is “losing” and shouting “Buy American and Hire American”, the US is doing nothing but distorting the global industrial chain.
In a world where development of different countries is closely linked together, to cut off the tie is an arbitrary political act that goes against the economic law, from which the US farmers will not benefit but be trapped, the US economy will not be great again but fall, and the US capital market will not prosper but become a place full of risks.
Trade should be a win-win cooperation that brings mutual benefits. We are not hoping that the US politicians abide by the sense of justice, remorse, and consciousness as it has been said in Adam Smith’s The Theory of Moral Sentiments, but it is not difficult for them to act as Homo Economicus portrayed in Wealth of Nations.
Market rules that value fair competition and win-win results are of specific significance in today’s world, and to realize such significance is the maximum rationality.
US economist Jeffrey Sachs recently published an article, admitting that China is not the source of the US’ economic problems. Will such voice wake up the obdurate US officials?
(Zhong Sheng is a pen name used by People’s Daily to express views on foreign policy.)