Liberalism is the only counter to the China threat.

Two posts about China this week that were too good to pass up, because both of them illustrate how American liberals need to refocus our ideology for the new century.

The first is by Reed Hunt at TPMCafe. Hunt, author of In China's Shadow, points out that China's rise is linked to the fate of the American middle class. He sees the main threat as being Chinese corporate competition:

If most American firms do not defeat their Chinese rivals in the American market, their American employees will be worse off...If American firms invest more in China than in the United States, and if American firms lose more than they win in competition in the American market, then American citizens will have suffered a double whammy, lowering national income...Income inequality in the United States is at record levels and is increasing...if the American reaction to these developments is to erect tariff barriers or to use war to try to assure export markets, then national income will decline even faster and internal conflict will worsen.

Hunt (wisely, in my opinion) doesn't favor a protectionist solution. He thinks the right response is to strengthen American entrepreneurship:

The right response is found in the lessons of the Golden 90's: open markets to entrepreneurship, to start-up's, to experiment, chaos, collaboration, confusion, and creative destruction. That's what America did in information industries in the 90's and the result was huge wealth creation as well as income improvement for virtually every American family...

Energy and health care are the two big sectors that should be opened by law to competition from new entrants and responsive entrepreneurship from incumbents...American workers ought to be supported by reliable public benefits as they create start-up's, move to new jobs in new firms, and intensify their personal commitment to entrepreneurship. They should have very cheap access to college educations, easy credit for starting firms, portable and individualized savings accounts, cheap and universal broadband communications.

There's nothing harder than passing and implementing laws that open closed, incumbent-dominated, change-resistant markets. But the architectures of law, technology, and leadership all have to be redesigned so as to be biased toward open entry, access, and competition.

Wonderful. I couldn't have said it better, so I won't.

What I will say is this. Progressives and liberals long focused on redistribution of wealth as the way to help the poor and working class. More recently, the focus has shifted to protectionism. But it's obvious (to me, at least) that if we go down that path, China is going to eat our lunch. Instead, we progressives need to focus on an idea that has been sorely neglected of late, a classical American idea that has the power to stave off Chinese competition and decrease income inequality at the same time: economic mobility.

Liberals should not associate economic mobility with a laissez-faire, winner-take-all form of cutthroat capitalism. Mobility for only a few is not true mobility. Logic dictates that if all Americans have the chance to improve their economic lot, most will. In fact, the growth of America's middle class during the mid-20th century was the most striking example of economic mobility in our country's history - and was hailed as a great liberal triumph. As Reed Hunt says, policies like college assistance, small business support, portable savings accounts are important first steps, and we have no time to waste.

The second China post concerns foreign policy and our national interest. Kenneth Baer summarizes an article in this quarter's issue of Democracy that claims - as I often have in the past - that China's true threat is not military or economic, but ideological. The article argues that "illiberal capitalism" - the idea that countries can achieve prosperity while abusing human rights indefinitely - is on the rise, thanks to the success of China:

The rise of China presents the West, for the first time since the fall of the Berlin Wall, with a formidable ideological challenge to that paradigm. The "China model" powerfully combines two components: illiberal capitalism, the practice and promotion of a governance strategy where markets are free but politics are not; and illiberal sovereignty, an approach to international relations that emphasizes the inviolability of national borders in the face of international intervention. China’s rise, in turn, presents a successful and, in many nations’ eyes, increasingly legitimate model for national development, one that poses a distinct alternative to Western-style democratic liberalism.

This ideology is a lot more attractive to dictators and strongmen than U.S.-style liberalism, because it tells them they can have their cake and eat it too. Already, nations like Venezuela, Iran, Pakistan, Thailand, Russia, and others have latched onto this notion, encouraged by China's meteoric economic rise - and other countries in Latin America, Africa, the Middle East, South and Southeast Asia can't be far behind.

The United States, as the flagship nation of liberal democracy, must oppose this trend. But "illiberal capitalism" (an unwieldy name for "fascism") will not self-destruct as easily as communism, Islamism, or Nazism. We're facing a smarter and more patient enemy this time around.

The way to defeat China's ideology is through liberalism. It was liberalism - the idea that the American Dream was more than just money - that won the majority of the world over to our side in the Cold War. Showing that the U.S. values human rights, economic opportunity, and social equality - the main pillars of American liberalism - will win the day against China.

But if we keep ignoring the rule of law, torturing suspects, tearing up international institutions, and being unfriendly to immigrants, we'll have nothing to offer the world that China can't. And then the future will belong to these guys.