| Peripheral in the United States, the Huawei issue is central in Britain. British telecoms bought most of their previous-generation of 4G networking equipment from the Chinese colossus. According to the US, all this gear should be ripped out and replaced by often inferior and incompatible products. What seems a simple matter of "national security" to American politicians thus appears to many Brits including Boris Johnson, as a matter of US bullying, protectionism, and imperial overreach. This is a profound philosophical divide. Socialism consists largely in the belief that the existing "means of production" are permanent and unchanging, and that countries compete on a known and possibly level playing field. Capitalism consists of a constant, dynamic and unpredictable competition by free enterprises to disrupt the playing field. Governments everywhere, even when they purport to uphold free enterprise, resent the unpredictability of capitalist freedom. They prefer to believe, with followers of Karl Marx, that some particular configuration of infrastructure, whether railroads, looms, and factories of the Industrial Age or AI and 5G today, are a final thing — an eschaton. The country that gains these promontories, so it is believed, will rule the future of the world. Governments must intervene to assure victory in this "full-societal" war. Socialism is a cogent temptation for incumbent capitalists, who want government guarantees, for conservative pols, who want to pander to their incumbent beneficiaries, and for military strategists who want to manage the existing panoply of powers. Make no mistake, mercantilism — the political control and regulation of international trade — is a form of socialism. No matter whether in the name of "national security" or "level playing fields" or enforcement of "intellectual property," dictation to companies of their trading partners is socialism. As advancing telecom and transport technologies propel economic growth and supply-chains into a global web of information tools, mercantilism becomes ever more insidious. In fact, it is more subversive of market freedoms even than national control of the diminishing domains of domestic companies. Today's Prophecy Today, for all its ritual communism, China leads the world in the number of capitalist companies with the freedom to do commerce creatively around the globe. It now educates most of the world's engineers. China's technology leaders, such as Huawei and Ping An, are actually freer to trade and invent than our own firms such as Google and Amazon. American tech leaders face increasingly intrusive regulations on spurious grounds of anti-trust, privacy, and diversity. Banishing China from our markets and trade will confine to an ever-shrinking horizon the ever-diminishing number of reasonably free US companies. Suppressed by a campaign of regulatory overreach led by green Luddites and lawyers — at last being boldly combatted by President Trump — the number of US public companies is down some 50 percent in 20 years. The challenge we face is not the "containment" of a Communist regime that mimics and steals US technology. The challenge is competing with a freer and more innovative capitalist power. Benefiting from a long "special relationship" with the US, China now uses US industry standards, operating systems, chip architectures, and networking protocols to outperform and out-innovate America. The most telling and far-reaching threat to Chinese communism is not the West but Chinese capitalism and its deep engagement with the US. To banish from China our industry standards, protocols, OSs, and architectures — on the grounds that they were somehow stolen — are deeply destructive to American technology. The Trump Administration drive, supported by many Democrats, to "decouple" our economy from China's in fact is a campaign to contain America and guarantee its decline. It plays into the hands of the continuing Communist Party threat to Chinese and world capitalism. US investors must defy this menacing threat to American markets brought on by American politicians. We must do this by defending and strengthening the still massive engagement of US companies in China and Chinese companies in the US and the world. That is what we are doing here. I regard it as a patriotic trust. Regards, 
George Gilder
Editor, Gilder's Daily Prophecy | 
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