The one point in the China trade negotiations where few Americans disagree with Trump is the necessity for China to respect our intellectual property rights. This issue also highlights the significant difference in our political cultures.
We recognize individual property rights including the ideas of the individual when they are secured by copyrights and patents. This has been jet fuel for our economic engine and is the reason we are such a prolific innovator. The lack of recognition and respect for individual property rights is the main reason communist countries were economic laggards.
China’s flirtation with capitalism has paid great dividends, but it is top down driven, more resembling mercantilism than capitalism. While they have recognized the need to respect ‘material’ property rights, they still lack the political rights and the culture of individualism that drives our political culture.
They likely do not recognize the legitimacy of individual ideas as property. For them it is not theft, it is a stark difference in political culture. Trump may think he is seeking simple economic fairness, but he is really asking for China to change its civic culture. This is a challenging reconciliation.
Our early experience with capitalism was Calvinist driven; work and production was considered God’s work, but conspicuous consumption was morally discouraged. This culture of production driven economic growth remained, but culturally our economy is now more consumer driven, perhaps to a fault. The Keynesian focus on centrally controlled demand overestimates the effect of demand and the ability of a large central government to control it like the dials on a radio.
Innovation comes from a culture and political system that respects ideas from everyone regardless of class and protects them as much as other material property. Such a system requires much greater roots in a society than the Chinese version of capitalism.