Excited to have our paper "Beijing's Bismarckian Ghosts" generously referenced in @martinwolf_'s column!
We argued that the Anglo-German great power economic rivalry a century ago holds eerie parallels to today’s US-China contest.
Some takeaways:
ft.com/content/5887ec…
We argued that the Anglo-German great power economic rivalry a century ago holds eerie parallels to today’s US-China contest.
Some takeaways:
ft.com/content/5887ec…
1) ON PARALLELS: My coauthors, historian Harold James and economist Markus Brunnermeier, and I recognize that no historical analogy is perfect.
But we believed the Anglo-German rivalry is clearly a useful reference point for US-China economic rivalry.
But we believed the Anglo-German rivalry is clearly a useful reference point for US-China economic rivalry.
2) SIMILARITIES: Both rivalries take place amidst economic interdependence and explosive innovation.
Both feature an autocratic rising power seen as protectionist challenging an established democracy with a free-market economic system.
And both go way beyond tariffs.
Both feature an autocratic rising power seen as protectionist challenging an established democracy with a free-market economic system.
And both go way beyond tariffs.
3) REGIME TYPE: As in today's rivalry, regime type amplified economic competition and anxiety. Laissez-faire Great Britain felt cheated by Germany, which eventually led to British tariffs that only amplified Berlin's distrust.
4) COMPETITION: Our key point was that even a century ago, great power economic competition also included:
- standard setting
- technology theft
- financial power
- infrastructure investment
- tariffs
Here are a few examples:
- standard setting
- technology theft
- financial power
- infrastructure investment
- tariffs
Here are a few examples:
5) STANDARDS: The fight over Huawei has precedent in Britain's monopoly on that era's ICT (telegraphy). Germany feared British control over international messages, built a rival system, & used an intl. institution to undermine the standards supporting British ICT dominance.
6) TECH THEFT: China's technology theft has corollaries in Germany's efforts to copy many of Britain's best practices and technology, though no German effort comes close to China's efforts (e.g., what was once called Made in China 2025) in scope and ambition.
7) FIGHTING WITH FINANCE: The US and Britain held financial power over their rising power rivals. For their part, China and Germany intentionally worked to undermine that financial power to enhance their freedom of maneuver.
8) INFRASTRUCTURE: Germany and China were continental powers vulnerable to established maritime powers that controlled vital sea lanes. Germany sought a Berlin-Baghdad railway and China is pursuing a Belt and Road -- both reshape strategic geography and bypass rival navies.
9) TARIFF: Threatened by German exports, Britain adopted tariffs that drove some small European states into German arms.
Decoupling's effect on Asian states is evolving, but the stakes are high - and avoiding similar consequences will be critical.
Decoupling's effect on Asian states is evolving, but the stakes are high - and avoiding similar consequences will be critical.
10) IN SUM: Effective great power economic competition is subtle, patient, long-term, and rarely emotional and reactive.
The US should work with allies to:
- strengthen rules
- set standards
- punish theft
- fund research
- safeguard financial power
- and build infrastructure
The US should work with allies to:
- strengthen rules
- set standards
- punish theft
- fund research
- safeguard financial power
- and build infrastructure
