When the Soviet Union was the U.S.’s main geopolitical rival, capitalism and upholding liberal values went hand in hand for American companies.
Now that the U.S.’s main rival is China, we’re seeing that the relationship between capitalism and liberal values isn’t so straightforward, as the fallout confronting the National Basketball Association makes clear. This realization accounts for some of the rising American opposition to globalization; it may also lead to a larger re-evaluation about the role of business in American society.
It was easier for businesses to wrap themselves in the flag during the Cold War, when companies didn’t have to worry about alienating non-existent Soviet customers — trade between the U.S. and Soviet Union accounted for less than 0.25% of U.S. gross domestic product. A cynic would say that companies are always going to side with their customers over their national values, but the difference today is that China is a much larger customer of many more American enterprises than the Soviet Union ever was. It stands to reason, then, that China is in a stronger position to use that market share as leverage to enforce its political and cultural priorities.
Much of the original argument for the thaw in the 1970s between the two nations was that opening the Chinese economy to U.S. businesses would lead to a softening of the harsh totalitarian regime that ruled the nation. Of course, that illusion should have been dispelled by the brutal crackdown on protesters in Tiananmen Square in 1989. But that awful episode made little difference — U.S. corporations and consumers found too much to like from doing business with China. Cheap consumer goods and access to a vast new market were huge selling points.
But even as China’s one-party government held a tight grip on power, U.S. political and business leaders rarely questioned the premise that getting hundreds of millions of Chinese consumers hooked on Coca-Cola, Nike shoes, Dwayne Johnson movies and Houston Rockets basketball games would lead them to embrace American values.
It hasn’t worked out that way. Access to the China market has been tightly controlled by the Chinese government, and the access that has been granted came with strings attached — some obvious, others more insidious. Let’s consider just one example: the growth of Hollywood in China. As American movie studios tried to game out what would fly in China, it seems reasonable to assume that some films didn’t get made because they wouldn’t conform to China’s censorship laws. And without the enormous Chinese market, surely some films were no longer financial viable. Something else to consider: How much does China account for the trend of U.S. big-budget films filled with explosions and fight scenes and devoid of dialogue or potentially controversial content?
The punishment of the NBA’s Houston Rockets over a tweet by its general manager marks a more aggressive Chinese effort to assert its economic leverage. If China is willing to blacklist an NBA team — banning Rockets game broadcasts and barring websites from selling team merchandise — over a tweet by one employee, it raises the question of what it might do as its market power increases. The upshot is that if Americans thought that increased global trade was a way of exporting their cultural values, they should be very disappointed. The reality is, that the U.S. has been importing Chinese censorship standards. In other words, although President Donald Trump has mostly been focused on cheap Chinese imports being a bad deal for American workers and the trade deficit, the larger long-term concern might be that China undermines America by extorting profit-motivated businesses.
So maybe it’s time for us to take our ball and go home. If bottom-line-focused corporations won’t stand up for American values, then increased trade with China may ultimately become a national security risk, weakening U.S. soft power and giving the Chinese government more and more influence over how American society operates.
Asking the question — What kinds of business activities serve the interests of Americans — would be a revolutionary change, and it would have implications beyond just those companies that sell to the Chinese market. Should China prove to be a unifying force in American politics, bringing members of both parties together, the end result may be a new wave of bipartisan regulatory reform dictating how large companies are allowed to operate, particularly those with global reach.
China may end up being a catalyzing force as the U.S. grapples with new challenges created by globalization, technology and the intrusion of values that are at odds with the American credo. Whatever the U.S. political system’s response.
