Democrats of all stripes seem to be converging around hostility to China. Senate minority leader Chuck Schumer has repeatedly warned that the Trump administration “must not back down and be weak on China.” A centrist like Schumer is matched by a progressive like Representative Ro Khanna, who argues that “America must ensure China does not win the 21st century and export its model of government globally.”
Playing up the China threat gives Democrats a way to display their national security bona fides while supporting greater public investment to compete with China. What Democrats have not considered is that anti-China politics could reshape the global system in ways that ultimately sabotage their aspirations. The danger is that intensifying competition with China may render impossible a new progressive approach to globalization that is essential to winning an inclusive and environmentally sustainable economy.
As Trump’s trade war shows, the outcome of a deepening rivalry with China is not likely to be friendly competition over who will develop the best green technologies. Instead, exacerbating insecurities in both countries will promote increasingly rancorous conflicts over global markets and increasingly dangerous geopolitical tensions over the control of trade routes and strategically important countries. The Cold War should remind us that acute international competition may drive public funding higher, but the money will primarily go to the military rather than human needs.
The fundamental obstacle to the Democrats’ agenda both at home and abroad is not a lack of enthusiasm for public spending but the ossified political economy of free market globalization. By dramatically increasing inequality, entrenching the power of financiers and corporations, and pitting the workers of different countries against one another, free market globalization has created a barren political terrain for progressive goals. Even well-meaning politicians, trapped within a structure that makes deference to business interests the prerequisite for drawing jobs and investment, have no choice but to ignore strong popular support for robust collective goods and environmental sustainability.
The key to a different economy is strengthening the power of labor. As demonstrated in the “golden age of capitalism” of the 1950s to the ’70s, workers who enjoy strong unions and effectively enforced rights win rising wages and stable jobs. This not only improves workers’ lives and reduces the appeal of resentment politics; it also sets in motion a form of economic expansion that benefits everyone by expanding consumer demand without undermining profits. This is possible because productivity growth rises when companies can no longer gain an advantage by degrading jobs and must instead compete by investing in their workers.
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Yet free market globalization has seriously compromised the strength of American workers. Facing such circumstances, Democrats can either attempt to wall off the United States from the rest of the global labor market while attacking China and other competitors to defend American dominance in high-paying careers, or they can act to increase the power of labor around the world. The first approach is that of Trump, and if fully implemented would not only significantly damage the US economy but also feed growing global resentment over US attempts to monopolize economic opportunity.
The second approach opens the possibility of shared prosperity for all. But how to achieve it? For three decades, policy-makers in both parties have been developing a global regulatory system to guarantee the interests of investors. Yet this same system could be extended to secure the interests of working people as well by writing labor rights into new trade agreements and ultimately the rules of the World Trade Organization. Nearly every country has already committed to protect essential labor rights under the conventions of the International Labour Organization. All that remains is to establish mechanisms that enforce these commitments.
This one change could spark a profound transformation of the global economy. By distributing the gains of globalization broadly, it would cultivate a new popular consensus behind open global trade. With stronger and more equitable growth, public revenues would rise around the world and make possible increased investments in education, infrastructure, and the transition to a green global economy.
Most significantly for relations with China, progressive globalization would resolve today’s escalating great power tensions not with the defeat of one side but by breaking out of the zero-sum framework. In place of the United States and China fighting over a restricted market for high-value production, a deeper and broader globalization would lead to the dramatic expansion of world consumer demand, allowing both countries to flourish.
Yet, precisely because it involves such a deep restructuring of global growth, achieving progressive globalization would require support from all the major powers. Can Chinese leaders who suppress labor and jealously guard their sovereignty be convinced to join a global regime of labor rights? In fact, for a decade China was moving in precisely this direction with a range of significant (though still inadequate) domestic labor reforms and active participation in international institutions—before the deteriorating global economy and intensifying geopolitical tensions convinced the leadership to recentralize power. Liberalization has ceased not because of something intrinsic to either Chinese culture or the Chinese Communist Party, but because of the leadership’s acute sense of insecurity both internally and internationally.
Stabilizing the security environment and linking it to pro-labor policies should be a central goal of the Democrats’ foreign policy agenda. The next Democratic president should open comprehensive negotiations with China on a new Asian security structure and on expanding the TPP trade agreement to include both the United States and China while refounding it on the enforcement of basic labor rights for all members. Such ambitious negotiations would be difficult and would face opposition from powerful interests in both countries, but success would rebuild badly eroded trust and lay the foundations for a newly inclusive global economy that works for the people of both countries.
The greatest threat to a new era of peace and mutual gain is a world fractured by US-China competition over the atrophying prospects for growth—one increasingly prey to suspicion and fear, increasingly driven by nationalist passions and a militaristic mindset. Such a world would not aid but thwart the Democrats’ priorities, subordinating the interests of working people to the imperatives of national security and fatally undermining efforts on climate change by strangling international cooperation.
The alternative to this grim future is one in which the United States and China work together to extend the benefits of globalization to those billions who have been excluded. The choice is stark, and short-term political considerations must not be allowed to decide it.
