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2024 CNDI Negative
Neg – Adv – Innovation › AT Heg › AT Tech K2 Heg

No heg internal link—tons of other ways the US supports R&D

Hughes 21 (Kent Hughes - Public Policy Fellow and Chief Economic and International Trade Advisor in the Office of the Director, CEO and President of the Woodrow Wilson International Center for Scholars. “The New Economy and U.S. Global Competitiveness.” KAD. March 2021. https://www.kas.de/documents/283221/283270/The+New+Economy+and+US+Global+Competitiveness.pdf/89a84838-1ab7-1310-6977-095ccce95521?version=1.0&t=1615905263752)

Investing in R&D is not new, and it will be an important element in new economy competitiveness. But supporting federal and university laboratories is not enough. The United States needs to look at the path from the laboratory to production for domestic and global markets. In addition to funding research at universities, national laboratories, and research centers, the United States must also support the education of scientists, engineers, and skilled workers. During the early 1980s, the U.S. often led the world in scientific break throughs, but often lagged in terms of turning ideas into competitive products. Students of innovation point to two hurdles that face every innovator. The challenge of moving from idea to product is often referred to as the Valley of Death. Taking the next step and taking production to a competitive scale is referred to as surmounting the Darwinian Sea. A combination of federal, state, and private support will help labs and single inventors to overcome both hurdles. The U.S. has taken some creative steps to foster innovation. Started by the Obama administration, the Manufacturing USA program now has some 16 public private partnerships focused on aspects of advanced manufacturing that range from 3-D printing to regenerative medicine. The Departments of Defense and Energy provide much of the public funding and choose topics that fit their mission. The Department of Commerce also supports manufacturing institutes but chooses candidates from an open competition. In a recent competition focused on pharmaceuticals, the Department of Commerce identified five qualified candidates but could only fund one (ISA, 2020). By way of contrast, when China saw the U.S. developing the manufacturing institutes, it quickly created its own version. China now has 40 or more similar institutes. The Chinese example suggests the U.S. should pay close attention to the innovation initiatives around the world. In the Department of Commerce, the Foreign Commercial Services promotes exports and economic opportunity for American companies and workers overseas. U.S. could match that effort with a Foreign Technology Service that identifies innovations in products, processes, and institutions around the world. After rejoining the Paris Accord, President Biden is expected to set goals for reducing harmful emissions. Meeting any ambitious goals will require research and development coupled with the ability to put green innovations to work. Facing an ever more competitive world, many students of innovation suggest that the U.S. must pick priority areas for research. Basic research can lead to unexpected but promising directions. At the same time, targeted research focusing on what next steps are needed in artificial intelligence or new materials for electronics will yield near-term dividends that help the U.S. maintain a competitive edge. In an era of global companies and competing nations, the United States is likely to create incentives to translate innovations into domestic production and jobs. Like foreign policy, competitiveness policy starts at home. The Biden team can be expected to build on the reality and the sense that gains in productivity are widely shared.

2024 CNDI Negative
Neg – Adv – Innovation › AT Heg › AT Pursuit Inevitable

Restraint is possible. There’s a unique window for it to take root

David Broder 22, PhD, Interim Director of the Brady-Johnson Program in Grand Strategy and Lecturer in History at Yale, 12/20/2022, "American Hegemony Is Morally Bankrupt. We Need a Just Alternative," https://jacobin.com/2022/12/leftist-foreign-policy-restraint-strategy-ukraine-war

As one would imagine, Packer’s essay caused a stir, if not a visceral loathing, among restrainers (the term du jour for anti-interventionists). But as historian Samuel Moyn tweeted, Packer’s essay — while gilding liberal internationalism for a rehabilitation of American primacy — reflected the reality that the old order cannot return after the war on terror, “that a militarism-first option of liberal warmongers can’t simply be revived.” Moreover, military options that characterized the war on terror are currently off the table: preemptive invasion — and occupation — of sovereign nations, nation-building in the Middle East, unipolar dominance by the United States, etc. Due in part to the work of journalists like Azmat Khan, drone strikes have decreased dramatically during the presidency of Joe Biden. Elements of restraint are also evident in the Biden administration’s policy toward Ukraine. Ostensibly motivated by fear of nuclear escalation, Biden has rejected “New Cold War” hawks’ calls for a no-fly zone, sending certain high-tech weapons to Ukraine, and the prospect of a direct US intervention in Ukraine. In dealing with great or failed states, Biden is operating in the shadow of the US inability to remake the world, even as many national security figures wish this wasn’t so. Alone or in their aggregate, these new realities do not comprise a foreign policy of restraint. Restraint must be instrumentalized for a new US foreign policy — it is not the end in and of itself. As the war in Ukraine continues with no foreseeable end in sight, it provides restrainers with the means to envision and implement a postwar vision for the world. Restrainers must be critical of efforts to expand US power in the short term (for instance, a blank check to the Pentagon to fight the war), but must also look to build an affirmative vision that relies upon international collaboration to reprioritize national security threats (around issues such as climate change, migration and refugee policy, poverty, and global health); deter imperial adventures by great powers; and demilitarize the landscape of foreign policy options once the war ends. But first, what is restraint? Restrainers are often forced to defend their positions against liberal internationalists. The supposed clarity of liberal internationalism — support for global liberty and freedom achieved through military force and economic might, and buttressed by the inherent exceptionalism of the United States as a democratic superpower — is juxtaposed with the supposed murkiness of “restraint” as a category or term. Restraint can be defined in many ways, but as a heuristic, it is often reduced to the idea of pulling back from the world stage — and is pilloried as a synonym for “isolationism,” an even more loaded term. In addition to the capaciousness of restraint, other factors hobble its proponents. Restraint has yet to be tested as a basis for US national security. Restraint is not codified in institutions of foreign-policy making in the United States — quite the contrary. Restrainers also disagree on the ends of restraint. Some restrainers are nationalists and fiscal hawks who believe that monies spent abroad fighting monsters, to paraphrase John Quincy Adams, impair US business interests and free trade, and raise debts and tax rates. These restrainers are less concerned with matters of international justice. Other restrainers are self-described realists focused on “offshore balancing,” who seek spheres of influence akin to the Congress of Vienna following the Napoleonic Wars. Progressive or left-wing restrainers, like myself, believe in a demilitarized world determined by international cooperation on issues outside of military competition (poverty, health, climate, for example), that can limit conflagrations between great and small powers. Some progressive restrainers have faith in cooperation among member states of the United Nations through proposed forums like a “Summit of the Future,” which they believe can spearhead international comity. These divides within the restraint camp are real, but have too often been hyperbolized, deployed to create caricatures or straw men in service of jingoism. Liberal internationalism struggles with its own contradictions — for example, relying on undemocratic means (military force) to create ostensibly more democratic ends (liberal democratic societies) — but these fissures have not hamstrung the salience of its policies. This is because liberal internationalism became normative, even naturalized among foreign policy elites during World War II and into the Cold War. As historian Stephen Wertheim has written, US foreign-policy makers made a conscious choice to pursue primacy during World War II — and the Allied victory allowed them to sell their vision to the public. Except for brief moments, such as in the immediate postwar period and the late 1960s and early 1970s, restrainers in US foreign policy have occupied the minority position. The totalizing fear of Soviet dominance or Islamic terrorism conjured unfulfilled panics about the demise of freedom and democracy. Amid an unstable world and an era of permanent national emergency, the use of military force to prevent illiberalism and ensure American interests became an all too convenient, and easily available, option. But restraint will not thrive simply as the critique or opposition to liberal hegemony. Restraint cannot be reactive and defensive, seeking out assorted hawks to lampoon online or in print. That is too easy. Restraint must also not be the corollary to military withdrawal following imperial misadventure — its resonance cannot lie waiting for America to make mistakes abroad, for empire’s excesses to be revealed. Such was the case with the withdrawal of United States from Vietnam in the 1970s, or Afghanistan in 2021. As Emma Ashford has argued, restrainers must be forward-looking. They must build an alternative strategy to liberal internationalism that is codified around principles of universal equity; freedom from foreign interference, coercion, and invasion; global collaboration across wealthy and poor nations; and international institutions that provide checks and balances on military spending. In a time of multiple serious dangers — imperial war in Ukraine, autocrats flourishing in the Global North and Global South, the catastrophe of climate change, the unattended failures of the global response to COVID-19 — the temptation will be to adopt familiar paradigms that harken back to the Cold War. This appears to be what is happening now, with the rush to subsume all global issues under the framework of “great-power competition.” Restrainers must acknowledge this reality while mitigating its outcomes. They can highlight the multiple paths to achieve global cooperation, to prevent future Ukraine-like invasions, and to avoid turning Ukraine into a “Munich” — an analogy and justification for preemptive invasions of nefarious regimes under a new US administration. If these suggestions seem utopian, I offer history as perspective. “One-world” cooperative, internationalist visions were commonplace in the early aftermath of World War II. Ideas for sharing atomic secrets with the Soviet Union under the 1946 Acheson-Lilienthal report, or for a world federalist movement that reformed the United Nations to make the great powers more accountable to colonized nations, were discussed but never realized. Total war and atomic weapons broke open the realm of the possible in conducting world affairs. Given the transformative effects of the war in Ukraine on global issues (on trade, oil, transatlantic relations), the conflict could create a similar moment in which new paths become possible. It is true that the political climate in the United States has stifled a discussion about the future, of what is acceptable discourse on war. The shock of the invasion, and the durability of Ukrainian resistance to the Russian military, propelled public support for the war. An honest conversation about a long-term commitment to Ukraine got lost in the process. The hand-wringing and fallout from the Congressional Progressive Caucus letter to President Biden, which called for a relatively anodyne series of policies that largely echoed the administration’s line on Ukraine, further testified to the caliber of debate about the war’s future. These factors have no doubt stymied restrainers’ agenda. But restrainers are a more visible, organized bloc than at any time in recent memory. Restrainers have homes in academia and at various think tanks, not just the Quincy Institute for Responsible Statecraft, but also the Carnegie Endowment for International Peace and the Stimson Center. The fallout from the war on terror is still fresh in Americans’ minds, and when polled, Americans overall favor foreign policy retrenchment. Combined with the steps not taken by Biden to escalate the war, this atmosphere proves to be favorable to restraint.

2024 CNDI Negative
Neg – Adv – Innovation › AT Heg › Unsustainable

American hegemony is crumbling – Biden’s disastrous foreign policy decisions and fragile alliances prove

Dr. Alfredo Toro Hardy 22, former Venezuelan ambassador to Canada, PhD in international relations from the Geneva School of Diplomacy and International Relations, America’s Two Cold Wars: From Hegemony to Decline?, pg. 85-88, Blitz

But, even if Biden were in a stronger position in relation to his reelection possibilities, his so-called “Foreign Policy for the Middle Class” and his “Build Back Better” program, contain streaks of nativism and protectionism that worry many abroad. Managing international affairs as an extension to domestic politics and domestic economic policy, as these policies propose, echoes some of Trump’s misunderstandings on how modern economy works. Biden’s administration, as a result, has retained many of his predecessor trade initiatives, including the aluminium and steel tariffs on American allies. Meanwhile, the current White House has shown little interest in strengthening the World Trade Organization or in joining the TPP successor, the CPTPP. To win Rust Belt voters for his party, Biden seems unwilling to depart from Trump’s legacy in this area. On top of that, Biden’s decisions to withdraw American troops from Afghanistan without consulting its allies, or of imposing against their wishes a tight deadline for leaving Kabul, was seen as reminiscent of the unilateralism of Bush and Trump. Not surprisingly, this brought fresh doubts in relation to the trustworthiness of the United States and renewed calls for a European strategic autonomy. The European Union foreign policy chief, Josep Borell, talked about a wake-up call for Europe, and about their need to think and act in their own strategic terms. On a similar note, the Biden administration’s nuclear submarine deal with Australia, secretly bypassing a diesel submarine deal between France and Australia, was resented by the former and by other of its European partners as a new manifestation of America’s unilateralism. It would seem that although Biden has formally called for a liberal internationalist crusade against authoritarianism, and asserted his commitment to a “rules based international order”, many of his actions have created doubts about his true convictions in this matter. This has led Richard Hass to assert that the United States wants the benefit of international order without the hard work needed for building and maintaining it. In sum, the possibility of the United States getting a “third chance” looks, indeed, ever more distant and uphill (Dorsey, 2021; Hass, 2021; Karni, 2021; McGee, 2021; Menon, 2021; Schake, 2021). The United States faces now an extremely difficult assignment in gathering an alliance base, even more difficult when directed against the golden goose that China represents. In 2020 the European Union’s trade with China reached US$709 billion versus US$671 with the United States, a gap in China’s favor that will increase with every passing year. Not surprisingly, the European Union members, with Germany at their head, have been reluctant to confront the Asian country, claiming a strategic autonomy in its relationship with it. Although timidly supporting Biden’s proposition in the June 2021 G7 Summit—to keep a firmer stand in relation to China- European countries were squeamish about getting dragged by the United States in this contest. Germany, Italy, and France made it clear that the G7 should not be hostile to China (Brands, 2021; Collison, 2021; Deutsche Welle, 2021; Mahbubani, 2020a). Even in Obama’s time, it was difficult enough to gather the support of allies against the economic opportunities that China embodied, as evinced for instance in the foundation of the Asian Infrastructure Investment Bank, AIIB. Proposed by China in 2013, Washington opposed the initiative and tried to boycott the participation of its main European and Asian allies. The fact that China could attain financial might in the world’s fastest growing region was considered a threat to the United States. However, the boycott’s fortune fell when one of America’s closest allies did not buckle under its pressure: The United Kingdom. As soon as London decided to participate as a founding member of AIIB, the rest followed suit before its initial subscription period was foreclosed. Germany, France, Italy, Netherlands, Switzerland, Spain, Australia, New Zealand, and South Korea, among others, were all in. The United States’ opposition to this initiative proved insufficient against the opportunities that it represented. In this context, China has moved in the opposite direction to the United States. Not only has it forged a strong strategic partnership with Russia, Iran, and Pakistan, but it has engaged in a multilateral institutional building process reminiscent of that undertaken by the United States between 1944 and the beginning of the 1960s, with the intention of creating a favorable international architecture. From the trio, Russia, Iran, and Pakistan, the first of them plays a fundamental role.

2024 CNDI Negative
Neg – Adv – Innovation › AT Heg › Unsustainable

US hegemony is inherently unstable and waning now– Ukraine, China, internal contradictions prove

Danny Haiphong 23, journalist and activist for the No Cold War international campaign, “In 2022 the U.S.-led unipolar order was more unstable than ever”, CGTN News, https://news.cgtn.com/news/2023-01-01/In-2022-the-U-S-led-unipolar-order-is-more-unstable-than-ever-1geS18Tu3C0/index.html, Blitz

Chinese President Xi Jinping meets with Russian President Vladimir Putin via video link on December 30, which drew alarm from certain Western media outlets. The New York Times, for example, concluded that the call came amid a "weak moment" for both leaders. Readers were led to believe that both China and Russia find themselves "isolated and desperate." However, the assertion conceals a more difficult truth. That is, the U.S.-led unipolar order has experienced a number of challenges to its stability over the course of 2022 that show no sign of letting up in the new year. The signs of decay are both external and internal. Geopolitically, the United States finds itself playing a profitable yet unsustainable role in the Ukraine crisis. The United States has provided tens of billions worth of arms and assistance to Ukraine in contravention of the UN Charter since the conflict began in February 2022. U.S. leadership in the Joe Biden administration continues to reject diplomacy or peace talks in large part because weapons contractors have massively profited from the conflict. The U.S.'s pursuit of strengthening NATO's role in Ukraine has played an essential part in leading Russian leadership to conclude that it is in open conflict with the West. The U.S. has also leveraged the Ukraine crisis at the expense of Europe. Russia was once Europe's largest source of natural gas. U.S. pressure has led both the European Union and Washington to place enormous sanction on Russia. Sanctions have driven the EU into an economic crisis that, on top of inflation, threatens to cause large scale deindustrialization. While the U.S. dollar has benefited from Europe's economic crisis, some U.S. economists predict that spillover from Europe's crisis will lead to a recession in the United States at some point in 2023. The Ukraine crisis has been one critical flashpoint that reveals the instability of the U.S.'s unipolar imperial order around the world. While U.S. political leadership hypes China's so-called "isolation," the truth is that the U.S. and its allies are more divided and isolated than ever. U.S. investments on the African continent, for example, remain smaller than China's. The majority of African countries rejected U.S. and EU sanctions on Russia as a clear statement against using economic warfare to resolve conflict. U.S. attempts to create "alliances" in Asia have run into similar difficulties as nations such as South Korea and Japan have been unwilling to economically "decouple" from China. U.S. hegemony is also waning in the Middle East and Latin America. In 2022, Saudi Arabia expressed interest in joining BRICS and hosted the China-Arab Summit. These moves indicate that even the closest partners of the U.S. in the Arab world are looking to pursue stronger and more diverse relations with China. The election of President Luiz Inacio Lula da Silva in Brazil and President Gustavo Petro in Colombia indicate that political headwinds are occurring in Latin America. Across the Global South, nations are recognizing that U.S.-led unilateralism and unipolarity has little to offer but instability and underdevelopment. It cannot be forgotten that 2022 also exposed the many internal contradictions of the U.S.'s social order. Unending inflation has decimated wages for the majority of workers. Natural disasters and winter weather have caused many casualties and left thousands homeless and hungry. Life expectancy in the U.S. has fallen to just over 76, nearly two full years below China. A majority of people in the U.S. already distrusted their political leaders and the Biden administration's handling of both the COVID-19 pandemic and the economy has given them no reason to reconsider. So-called media pundits and U.S. political leaders have relentlessly attacked China and Russia to deflect from the shortcomings of their own system and satisfy geopolitical aims. Yet the blame for much of the instability that exists in the world rests at the feet of the U.S.-led unipolar order. The pursuit of maximum global dominance, corporate profit, and military control has taken a massive toll on the U.S.'s legitimacy worldwide. Accumulated damages to the people and the planet worldwide have piled up and left the United States with a proven track record. Many nations are instead seeking a multipolar world capable of creating a global environment where people-centered development can occur peacefully. A growing number of the world's countries already recognize China as a leader in this effort, as the growth in the Belt and Road Initiative investments over the last year attest. U.S.-led unipolarity, on the other hand, enters 2023 in a state of instability and decay. The contradiction between multipolarity and unipolarity will no doubt remain significant in 2023. While it is not possible to predict the future, the existing condition of the U.S.-led unipolar order presents challenges to global peace and stability that will require stronger solidarity and integration among peace-loving forces to overcome.

2024 CNDI Negative
Neg – Adv – Innovation › AT Heg › Unsustainable

Hegemony is unsustainable---military dominance is declining and China has overtaken an economic lead---current transition will be smooth and stable.

Layne 18—Christopher Layne, University Distinguished Professor of International Affairs, Robert M. Gates Chair in National Security at the Bush School of Government and Public Service at Texas A&M University, Ph.D. in Political Science from the University of California, Berkeley, 2018 (“The US–Chinese power shift and the end of the Pax Americana,” International Affairs—Oxford University, January, https://www.chathamhouse.org/sites/default/files/images/ia/INTA94_1_6_249_Layne.pdf, Volume 94, AIvackovic)

American decline redux Today the military, economic, institutional and ideational pillars that have supported the Pax Americana are being challenged by China. This raises two fundamental and intimately connected questions: if China surpasses, equals or even approximates the United States in these dimensions of power, can the Pax Americana endure? And, if it cannot, what will replace it? Posing these questions raises the contentious issue—contentious at least in the US—of whether American power is, in fact, declining. During his abortive 2012 run for the Republican presidential nomination, Jon Huntsman—President Obama's Ambassador to China, and now President Trump's Ambassador to Russia—succinctly expressed the prevailing view of the US foreign policy establishment when he said: ‘Decline is un-American.’ Leading US security studies experts agree. These primacists argue that the extent of China's rise—and hence of America's decline—are, like premature reports of Mark Twain's death, greatly exaggerated. Primacists believe the international system is still unipolar, and that US power will keep it that way for a long time to come. This claim is increasingly dubious. Indeed, the case made by the ‘declinists’ of the 1980s—notably Paul Kennedy, Robert Gilpin, David Calleo and Samuel P. Huntington—looks stronger every day.23 Contrary to the portrayal of their argument by many of their critics, the 1980s declinists did not claim either that America's post-Second World War power advantages had already dissipated, or that the United States was on the brink of a rapid, catastrophic decline. Rather, they pointed to domestic and international economic drivers that, over time, would cause American economic power to diminish relatively, thereby shifting the balance of power. In essence, the declinists believed that the United States was experiencing a slow—‘termite-like’—decline caused by fundamental structural weaknesses in the American economy that were gradually nibbling at its foundations.24 Kennedy himself was explicitly looking ahead to the effects this termite decline would have on the US world role in the early twenty-first century. As he wrote: The task facing American statesmen over the next decades … is to recognize that broad trends are under way, and that there is a need to ‘manage’ affairs so that the relative erosion of the United States' position takes place slowly and smoothly, and is not accelerated by policies which bring merely short-term advantage but longer-term disadvantage.25 The unwinding of the Pax Americana Decline may be ‘un-American’, but that does not mean it isn't happening. America's ‘unipolar moment’ has turned out to be rather—well, momentary.26 The Great Recession that began in 2007–2008 did not end America's unipolar ascendancy. It did, however, focus attention on, and accelerate, the ebbing of American power—the evidence of which has cumulated rapidly over the ensuing ten years. This slippage of US dominance is chipping away at each of the four pillars on which the Pax Americana was erected: military power; economic power; institutions; and soft power. As these pillars erode, it becomes increasingly doubtful that the Pax Americana can endure. China's challenge to American military power Until now the dominant view within the US foreign policy establishment has been that military strength is the one area in which America's advantage is insurmountable (at least within any meaningful time-frame). American military power is considered by US policy-makers and many security studies scholars to be the geopolitical trump card—no pun intended—that will ensure continuing American dominance even if China closes the economic and technological gaps separating it from the United States.27 However, some within the foreign policy establishment are beginning to question this viewpoint. Important recent studies of the Sino-American military balance suggest that some analysts are taking a fresh look at the question of how long it will take China to catch up with the US militarily. China and the United States face different grand strategic challenges. As self-styled global hegemon, America must be able project decisive military power to the three regions it considers vital to both its security and its prosperity: Europe, the Middle East and east Asia. In contrast, China's strategic goals, at least for now, are more limited. China aims at dominating its own geographic backyard: that is, it seeks regional hegemony in east and south-east Asia, which have become the focal points of Sino-American geopolitical competition. Even if China is not at present able to mount a global challenge to the US, there is evidence that it is beginning to draw level with the United States in regional military power in east Asia. In a recent report on the Sino-American military balance, the RAND Corporation refers to the ‘receding frontier of US military dominance’ in east Asia.28 According to RAND, the trend lines in the Sino-American military rivalry in east Asia are not favourable for the United States: ‘Although China has not closed the gap with the United States, it has narrowed it—and it has done so quite rapidly. Even for many of the contributors to this report, who track military developments in Asia on an ongoing basis, the speed of change … was striking.’29 In a recent book, Roger Cliff, an east Asian security expert at RAND, says that by 2020 China's military establishment will be almost on an equal footing with America's with respect to doctrine, equipment, personnel and training (though still lagging behind in organizational structure, logistics and organizational culture). Consequently, he predicts that by 2020 American military dominance in east Asia will be significantly eroded.30 He predicts that the 2020s will witness a power transition in east Asia and that at this point China will be able to challenge the regional status quo.31 American economic decline and the impairment of US economic hegemony During the past decade, signs of waning US economic power—and China's growing economic muscle—have become too numerous to ignore. Since the onset of the Great Recession, China has successively taken top position in the world in exports (passing Germany); in trade (passing the United States); and in manufacturing (claiming a title the United States had held for a century). In 2014 the World Bank made the stunning announcement that China had vaulted past the United States to become the world's largest economy (measured by purchasing power parity (PPP);32 and in the early to mid-2020s China is predicted to overtake the United States in GDP measured by market exchange rate.33 These shifts in the relative economic power of China and the United States have enormous economic and geopolitical implications. Indeed, in July 2017 Christine Lagarde, managing director of the IMF, stated that in ten years' time the organization's headquarters—which are required by its by-laws to be located in its member country with the largest economy—could be in Beijing.34 Taken together, these indicators paint a clear picture of relative economic decline. American primacists have advanced a number of clever but unconvincing arguments in an attempt to downplay the significance of the ongoing economic power shift from America to China. For example, some primacists assert that per capita GDP is a better yardstick of national power than aggregate GDP; that newly developed metrics of national power have diminished the importance of GDP as a measure of a state's economic power; that China is far behind the United States in advanced technology; and that China is incapable of doing innovation.35 This last claim is ubiquitous among primacists.36 It is, however, undermined by recent developments. For example, in September 2016 China began operating the world's largest radio telescope, which is intended to project China's ambitions deep into the universe, and bring back the kind of dramatic discoveries that win honours such as Nobel Prizes.37 In August 2016 China launched the world's first quantum satellite, which could lead ‘to new, completely different methods for transmitting information’.38 In another example of how China is catching up with the United States in innovation and technology, in June 2016 a Chinese computer (using made-in-China microprocessors) topped the ranking of the world's fastest supercomputers.39 In July 2017 China's State Council announced an ambitious plan to sprint to the front of the pack in artificial intelligence (AI), including both military and civilian applications.40 Indeed, The Economist recently observed that already ‘China could be a close second to America—and perhaps even ahead of it—in some areas of AI’.41 And China is moving to the forefront in green technologies (solar panels and wind-generated power) and in electric cars.42 The waning of US economic dominance may not be obvious to primacists, but it is perfectly apparent to many observers in the real world.43 The weakening of US relative economic power, which became unmistakably clear during the Great Recession, has undercut the Pax Americana both by compromising the United States' ability to manage the international economy and by shifting the Sino-American geopolitical balance in east Asia.

2024 CNDI Negative
Neg – Adv – Innovation › AT Heg › Turn – Heg Bad- China War

It’s the US pursuit of hegemony vis a vis China that causes US-China war

Chas W. Freeman 20 – a retired career diplomat who was Assistant Secretary of Defense for International Security Affairs, earning the highest public service awards of the Department of Defense for reestablishing defense and military relations with China, 2020, “China’s Challenge to American Hegemony: Remarks to the Global Strategy Forum”, https://mepc.org/speeches/chinas-challenge-american-hegemony//AN

The People's Republic of China has used force when measures short of war have proven inadequate to secure its borders or strategic interests (as in Korea, India, and Vietnam), but, by marked contrast with India in Goa or Indonesia in Timor-Leste, it gave diplomacy the decades needed to resolve the Hong Kong and Macau issues without bloodshed. Beijing has shown a similar preference for negotiations rather than the use of force to settle the Taiwan issue. Cross-strait tensions are lessening. It should be encouraging that China has insisted on United Nations authorization for its military activities abroad, which are directed at peacekeeping and against piracy. Still, China is modernizing its military at a peculiar moment of history. The United States inherited worldwide military superiority from the collapse of its Soviet rival. Without much discussion, it has embraced the neo-conservative agenda of sustaining this superiority at all costs. But rising Chinese defense capabilities erode American supremacy. China's new anti-carrier weapons endanger U.S. force projection capabilities in the Western Pacific; its anti-satellite programs imperil U.S. global surveillance and communication capabilities; its growing operations in cyberspace menace U.S. government operations and the economy of the American homeland alike. These are serious challenges not just to American hegemony but to core U.S. interests. They have begun to draw a response. The result is a deeply troubled Sino-American military relationship despite the diminishing prospects for war in the Taiwan Strait. China will persevere in its efforts to build a credible counter to American coercion. The United States will not soon abandon its obsession with the retention of absolute military superiority everywhere. A less hegemonic objective would allow the U.S. to accommodate a more powerful China while retaining the ability to prevail in any conflict with it. As things are, increasingly overt military confrontation between China and the United States is likely. These inherent tensions — along with those arising from the huge bilateral trade imbalance in favor of China — are why the idea of a US-China duopoly like the so-called G-2 is infeasible even if it were desirable, which it is not. Still, the world economy is about to see the displacement of the United States from its 20th Century preeminence. China will join the U.S., the EU, and Japan at the top. India, Brazil, Russia, and others in the G-20 will follow. What is in prospect is not the hegemony of one or two countries but its opposite — a multipolar balance of economic power. China, like Japan, is, of course, a country with a population vastly larger than it can prosperously support on its own resource base, large as that is. And China is late in the search for access to raw materials for its burgeoning industries. (So is India.) China has a vital interest in the perpetuation of a global economic order open to trade and investment. China is now enmeshed in multilateral organizations in which it must daily demonstrate its dedication to the sovereign equality of nations, great and small. All this enforces the respect for comity that is the essence of a "responsible stakeholder." It informed People's Bank of China Governor Zhou Xiaochuan's cautious suggestion last spring that it would be better to manage the dollar down to a sustainable international role than to have it collapse. But America is out of practice at dealing with independent power centers. For the past two decades the United States has been the undisputed global hegemon. For 40 years before that, it was the indispensable arbiter of the bloc of nations known as the "free world." American politicians are unaccustomed to formulating policy through multilateral consultations with other nations. Beijing isn't very good at this either, but seems more open to it than Washington. The United States will, as always, do what must be done, after it has exhausted all of the alternatives. But this will take time and cost the United States further prestige and influence. Meanwhile, China's global role will grow, especially if Beijing sustains the modesty and competence for which its diplomats have become known, rather than the arrogance that some of its domestic officials increasingly exemplify. The Chinese Communist Party has delivered prosperity to ordinary Chinese, which is why it enjoys their support. Eighty-six percent of Chinese think their country is on the right track. Chinese see proof of the superiority of their political-economy in the apparent effectiveness of its response to the financial crash and its aftermath. Their government's policies have so far succeeded in sustaining high rates of economic growth through programs that enhance long-term economic and intellectual competitiveness. The contrast with the muddled self-indulgence of Washington's response to the crisis, in particular, is striking. Americans have so far shrunk from the hard decisions necessary to restore fiscal integrity to their government or to reverse serious decay in their nation's human and physical infrastructure. The recession has joined foreign wars and continuing deterioration in relations with the Islamic world as a factor accelerating American decline. China seems certain to emerge from the crisis with a much larger and more competitive economy. The generation born under the single-child policy is coming of age. It is far more inclined to consumption than its frugal predecessors. A faster transition to growth driven by domestic consumption than many have thought possible seems in prospect. China's imports are now rising much more rapidly than its exports. Its balance of payments surplus, huge as it still is, fell by half in 2009. Continuing economic growth, deepened ties with Asian neighbors, the progressive internationalization of a yuan that is rising in value, all promise domestic stability and greater international stature for China in coming years. The current self-congratulatory mood in China is therefore entirely understandable. Yet it masks the underlying weakness of the Chinese political system. Government in contemporary China derives its legitimacy almost entirely from its ability to deliver continued rapid economic growth. It stands for no credible values, neither trusts nor is trusted by those it rules, suffers from a high level of corruption, and has no clear vision for self-improvement. If America's politics are widely viewed as so venal as to be dysfunctional, the Chinese system is seen as cynically manipulative and of questionable legitimacy. Without political reform, China will remain vulnerable to unrest should the economy falter. If there is no rule of law in China, Beijing's word will be doubted abroad. Despite its economic successes and growing defense capabilities, China's international influence will remain limited as long as it fails to evolve an attractive political system. It is not impossible that it may do so but there is no evidence at present to suggest that it will. A Chinese perception that the United States is attempting to leverage its military superiority to keep China down could goad Beijing into efforts to dislodge America from its position of global dominance. Given the continuing disparities in national power, the ensuing struggle would be a long one. The trigger would probably be some incident derived from U.S. military operations offshore China or from the Taiwan issue, to which Sino-American relations remain hostage. This is unlikely, but, unfortunately, it is not impossible to imagine. As I speak, for example, China is actively considering how to put effective pressure on the United States to halt arms sales to Taiwan. China wants Washington to live up to Ronald Reagan's commitment to restrain and reduce such sales in return for credible pursuit by Beijing of a peaceful settlement of its differences with Taipei. Sanctions on selected American companies — modeled on those the U.S. Congress has imposed on Chinese companies selling objectionable items to others — are apparently among the options before China's leaders. In the current economic climate, any such move by China could trigger a nasty confrontation and unleash an orgy of American protectionist retaliation that would likely set off a trade war. I do not consider such a development likely. If nothing else, however, the possible consequences of miscalculation by Beijing or Washington illustrate the global stake in continuing prudent management of the Sino-American relationship by both sides.

2024 CNDI Negative
Neg – Adv – Innovation › AT Heg › Turn – Heg Bad- War

US hegemony causes war- Ukraine proves

Xin Ping 22 - commentator on international affairs, writing regularly for Global Times, China Daily, and other publications, 3/20/23, Global Times, “US hegemony: the culprit of Ukraine crisis”, //nb

"Let the gull'd fool the toils of war pursue, where bleed the many to enrich the few," wrote the 18th-century English poet William Shenstone. That is what is exactly happening during the Russia-Ukraine conflict. Whether it's the people of war-torn Ukraine, sanction-ridden Russia, or insecurity-ingrained Europe, all have suffered greatly. The US, the culprit of the Ukraine crisis, has been constantly taking advantage of others' misfortune to maintain its hegemony. Every why has a wherefore. Edward Carr, a leading British scholar of international relations, reminded people more than 80 years ago that the US was a master in using kindness to disguise selfishness. Boasting abundant resources, strong industry and geographical advantage, Ukraine could have achieved development. While the country pursued a relatively balanced policy in the early years of its independence, the US supported and incited the Orange Revolution in 2004 and the Square Revolution in 2014 to push for a pro-Western agenda, splitting Ukraine politically from within and geopolitically between Russia and Europe. It is really thought-provoking that the "Gateway to Europe" has become one of the poorest countries in Europe, the frontline of NATO's eastward expansion, and the fault line of "color revolutions" and conflicts. In 2014 when the crisis broke out in eastern Ukraine, while Germany, France, Russia and Ukraine held several rounds of consultations and signed two Minsk Agreements to cool down the situation, the US took an opposite direction to fan the flame by inciting the anti-Russian and pro-Western forces in Ukraine to escalate the conflicts on the ground. In the current Russia-Ukraine conflict, the US is reaping the benefits without getting itself involved militarily. It never intended to come to Ukraine's rescue, the idea used as a political tool by the US to trap Russia in a seemingly endless conflict. We might need to go a bit further back into history to conclude how the US hegemony had created all the security trouble for Europe, Russia and Ukraine. It is well known that the US became a global superpower after the two world wars which plunged Europe into chaos and destruction and led to its dependence on the US military hegemony and NATO. Looking for a pathway to common security, Europe and the US signed the Helsinki Accords with the Soviet Union in 1975, which saw the establishment of the Organization for Security and Cooperation as well as the indivisible, cooperative and comprehensive approach to security. However, after the Cold War, the US overturned the European security agenda and rejected Russia's bid to join NATO four times. The aim was to make Russia the imaginary foe to justify US hegemony. Since 1999, the US launched five major NATO expansions, pushing its borders eastward by more than 1,000 kilometers to include a large number of Eastern European countries, splitting Europe further. It also promised Ukraine, Georgia and other members of the Commonwealth of Independent States (CIS) NATO membership, posing a realistic threat at the doorstep of Russia. Due to the hegemonic mentality and actions by the US, the vision of indivisible common security broke into pieces, and Russia, Ukraine and Europe were left in a security dilemma and constant conflicts. Former US congressman Tulsi Gabbard stated in a recent interview that President Joe Biden could have ended the crisis by promising not to admit Ukraine to NATO. But he didn't, because the US is seeking an excuse to impose sanctions on Russia, and it could profit from war for the American military-industrial complex. Ukraine has become another victim in a series of global security crises instigated by the US, just like Iraq, Afghanistan, and Syria. Now the hegemonic power is pushing for an Asian version of NATO expansion via its Indo-Pacific Strategy, aiming to contain China. Hegemony is the source of evil and chaos, while the common security is the only correct option to avoid and end crises. Whether it is Europe or Asia, the rationales of security are the same: Security cannot be enjoyed exclusively, but only shared; It is not a zero-sum game, but win-win cooperation. History may prove again that, the one who makes a fool of others will eventually make a fool of himself.

2024 CNDI Negative
Neg – Adv – Innovation › AT Heg › Turn – Heg Bad- War

Heg is the opposite of peace—their studies rely on a bloodless retelling of history that enshrines the U.S. as a beacon of progress, eliding its own coercive and imperial legacy—turns every conceivable scenario.

Porter 18 (Patrick Porter - Chair of Strategic Studies at the University of Exeter, Academic Director of Strategy and Security Institute and Senior Associate Fellow at RUSI. 6/5/18, “A World Imagined: Nostalgia and Liberal Order” POLICY ANALYSIS (NO. 843) https://www.cato.org/publications/policy-analysis/world-imagined-nostalgia-liberal-order, DOA: 10/21/18, kbb)

After its chief competitor, the Soviet Union, collapsed in 1989-1991, it extended this strategy globally. Proponents of liberal order draw on the logic of hegemonic stability theory.7According to that theory, one dominant state exercises such a preponderance of power that it lessens the insecurities that lead to arms races and spirals of alarm, enabling other states to ease their security competitions with neighbors and rivals, relax their arms programs, and focus on economic growth. More ambitiously, it not only reshapes institutions and markets but remakes the preferences of other states. To its admirers, this order, for all its imperfections, achieved unprecedented general peace and prosperity. It was based on a harmony of interests between the United States and the rest of the world. It made the world a single system or “whole,” as Council on Foreign Relations president Richard Haass claims.8 Revision of the order, and retreats by the hegemon, will lead to increased disorder. On the campaign trail Donald Trump explicitly threatened the status quo. He denounced allies as delinquent and threatened to shred alliances, tolerate nuclear proliferation, re-erect tariff walls, and abandon international agreements. To security traditionalists who oppose Trump, his revisionist challenge accelerates the collapse of a “liberal order” under a transnational assault by authoritarian forces. In a state of shock, they seek orientation in an ahistorical myth about the world before this dark age. As Princeton’s Aaron Friedberg tweeted, “After WWII US built a system of democratic states, tied together by trade, institutions and common values — a liberal order. Now it needs to defend that order against the illiberal powers it tried to incorporate after the Cold War.”9 Historian Jeremy Suri charges that Trump is plunging the world into a great regression by “launching a direct attack on the liberal international order that really made America great.” The elements of this order include “a system of multilateral trade and alliances that we built to serve our interests and attract others to our way of life.” Suri explains: Through the European Recovery Program (the Marshall Plan), the General Agreement on Tariffs and Trade (now the World Trade Organization), the International Monetary Fund (IMF), and the World Bank, among other institutions, the United States led a postwar capitalist system that raised global standards of living, defeated Soviet communism, and converted China to a market economy. Through the North Atlantic Treaty Organization (NATO) in Europe and a web of alliances in Asia and the Middle East, the United States contained aggressive states, nurtured stable allies, and promoted democratic reforms when possible.10 This sunny “highlights package” offers a strangely bloodless retelling of history. It is a euphemistic rendering of the Cold War and the actual practice of anti-Soviet containment by the superpower and its proxies. The Bay of Pigs, napalm, East Timor, the shah of Iran, and the Contras fade into the background. That this pristine retelling should come from distinguished historians of American diplomacy like Friedberg and Suri suggests how seductive the vision of an earlier and better order has become. Trump, too, is complicit in this mythmaking. Like his opponents, he frames his own election in stark terms. Trump speaks of a dark prehistory of “globalism,” of open borders, predatory capitalism, futile wars, and general American victimhood, and a return to wholesome nationalism, industrial regeneration, civilizational rebirth, and, of course, making America “great.”11 What was the liberal order, as its defenders define it? If an “order” is a coming together of power with social purpose, a “world order” is an international design of institutions, norms, and patterned relationships that defines the global balance of power.12 Some commentators argue that for a viable world order to emerge in a time of turbulence, the United States may have to compromise. Amitav Acharya, Michael Mazarr, and Henry Kissinger seek to revive the concept of world order, but unlike those of other “world order” visionaries, their proposed designs are pluralistic and require the United States to temper its universalism for the sake of stability and negotiated coexistence in a polycentric world.13 By contrast, the liberal order is a missionary project that looks to extirpate rival orders and demands the perpetuation of American dominance. As an ideal type, the “liberal order” entails a copious number of norms and institutions, suggesting that good things go together. In accounts of the postwar liberal order, many or all of the following features appear, though with varying emphasis: the rule of law and the supremacy of “rules,” humanist globalism and humanitarian development, free trade, multilateral cooperation, the security provision of the United States (principally through its permanent alliances), and a commitment to liberal progress through the advocacy of democratic and market reforms. Its institutions span the United Nations, NATO, the North American Free Trade Agreement (NAFTA), the Trans-Pacific Partnership (TPP), the General Agreement on Trade and Tariffs (followed by the World Trade Organization), the IMF, and the World Bank. A commitment to protocols and the bridging of divides figure centrally. Hence phrases like “open, rule-based international economy” abound.14 The “order,” proponents argue, embodied also a pattern of behavior, or, as Jake Sullivan at the Carnegie Endowment for International Peace explains, a “system of norms, institutions, and partnerships” whereby, under the hegemon’s stewardship, collective cooperation trumped competition for relative advantage, significant shares of sovereignty were ceded for the benefits of collective action, and a global consensus spread.15 An “illiberal order” would presumably be the opposite of these things: politically and economically divided and closed, authoritarian, uncooperative, coercive, and disrespectful of rules and norms. The liberal order is necessarily hierarchical. To speak of liberal order is to speak also of American primacy, with the former depending on the exercise of the latter. Nostalgists do not deny that the American superpower upheld it partly through overwhelming military strength. However, they emphasize the nonbloody uses of force, for example, deterring and dissuading adversaries, reassuring and uniting allies, and preventing conflict. And they stress the consensual, attractive quality of American hegemony. Postwar continental Europe therefore stands out as a favorite area of emphasis, as an “empire by invitation.”16 Most anxious observers agree that a significant “fall” is occurring.17 To explain it, they weigh heavily an alleged loss of political will within the West. Leading theorists of liberal order, such as Princeton’s G. John Ikenberry, have long warned that “the hallmarks of liberal internationalism — openness and rule-based relations enshrined in institutions such as the United Nations and norms such as multilateralism — could give way to a more contested and fragmented system of blocs, spheres of influence, mercantilist networks, and regional rivalries.”18 Once optimistic that the order would withstand geopolitical challenges and prove resilient, Ikenberry now fears a different kind of insurgent threat, flowing not from hostile subversive states but from within. Working- and middle-class populations, he suggests, may lose faith in the order as democracy degenerates.19 Similar complaints have arisen across the Atlantic. Warnings against U.S. disengagement are a staple of rhetoric from security thinkers in allied countries.20 For Robin Niblett, director of the internationalist Chatham House, Trump replicates and feeds on the destructive forces that powered “Brexit,” forcing liberalism into retreat.21 For the University of Exeter’s Doug Stokes, as for Ikenberry and Niblett, domestic discontent may unravel the worldwide arrangements that best served America’s “globalized” interests. For the old order to reproduce itself, it must make a new settlement with the American working class.22 Most of these diagnoses have a common premise. All offer an upbeat, potted history of the world created in and after 1945. Many then blame the crumbling of that world on agents or forces that are separate from it.23 If the order is perishing, they argue, it is being assassinated rather than dying from its internal failures. They have little to say about the significant reverses that occurred while the order reigned. These included some of America’s most disastrous wars, geopolitical chaos in the Persian Gulf from the Iran-Iraq War to the present sectarian breakdown, resurgent jihadi Islamism, the greatest act of urban terrorism committed by a nonstate actor in history, the eurozone crisis, the economic regression of Russia under “shock therapy,” mounting and unsustainable debt, the global financial crisis, the entrenchment and immobility of wealth, and the growing underclass of working poor. Rather than attributing to the old order the failures that occurred on its watch, nostalgists blame mismanagement, or popular fatigue, or “populism” and demagogues that whipped up mass discontent. They give credit to the order and U.S. primacy for benign developments, discounting other possible contributors such as the deterrent effects of nuclear weapons or the memory of World War II. That the order may have been complicit in its own undoing is hardly considered. Nostalgia for a lost order is not just the complaint of self-styled liberal internationalists of any particular faction. It has a wider provenance among those who believe today’s choice lies between continuing American primacy and chaos. The strength of the consensus is reflected in a Brookings Institution paper, coauthored by former high-ranking officials in the administrations of George W. Bush and Barack Obama, urging the White House to revert to a traditional posture, upholding an order favoring openness, human rights, and peace, and claiming that this is the only viable grand strategy for the United States.24 The hawkish intellectual Robert Kagan argues that the order established after World War II was a “liberal enlightenment project” that is now “challenged by forces from within and without,” not only because of popular fatigue with the burdens of international leadership but because Americans have forgotten the reasons their country adopted the role as the world’s guarantor and stabilizer.25 Primacists such as Robert Lieber, Thomas Wright, and Eliot Cohen issue similar warnings.26 The prominence of neoconservatives among this chorus is ironic. Critics once accused neoconservatives of violating the principles of liberal order with their bellicose unilateralism, by agitating for preventive war in Iraq in March 2003 without an explicit UN mandate, and by justifying torture. But this reflects the paradoxical problem at the heart of liberal “world ordering.” On the one hand, under most popular visions of liberal order, the hegemon creates a world based on deference to institutions and rules. But actual international life includes hostile, noncooperative forces that refuse to defer. Thus the liberal order includes conflicting rather than complementary rules and principles. It contains “veto players” like Russia or China with different conceptions of order. The protection and enforcement of such an order, and the enforcer’s own preponderance, rests upon selection and the exercise of a hegemon’s privilege. Liberal world orders typically involve several impulses, namely, internationalism, integration, and imperialism.27 That last, imperialism, is the most contentious. Historically, world orders, with their trading protocols and monetary regimes, and control of sea lanes, commercial routes, and access to raw materials, are designed and imposed by the strong. The opening of Asian markets, a celebrated feature of liberal order, was also a pre-1945 byproduct of violent and imperial coercion, imposed on China by Great Britain through the Opium Wars and on Japan by American Commodore Matthew Perry with the threat of naval bombardment in 1853-1854. Proponents of liberal order occasionally admit that what is sometimes framed straightforwardly as a rule-bound order is in fact a system of imperial power (and vigilante privilege) exercised by a hegemon. Robert Cooper, the former diplomat and adviser to Prime Minister Tony Blair, argued that if the world had a civilized core that deserved lawful conduct, there was also a barbarous periphery that warranted “rougher methods of an earlier era.”28 “Among themselves,” he wrote, “the postmodern states operate on the basis of laws and open co-operative security” but “in the jungle, one must use the laws of the jungle.”29 One-time advocate of American empire Michael Ignatieff admitted that being an imperial power “means enforcing such order as there is in the world and doing so in the American interest. It means laying down the rules America wants (on everything from markets to weapons of mass destruction) while exempting itself from other rules (the Kyoto Protocol on climate change and the International Criminal Court) that go against its interest.”30 At the height of the war on terror, jurists advising the George W. Bush administration used a similar logic to justify the suspension of the rule of law and Geneva conventions.31 One can defend these inconsistencies as necessary, or not. That they continually recur suggests that liberal “world ordering” is an inescapably compromised process. The United States is an imperial power, even if it is distinct from former empires. It may lack the land hunger of empires past and look different from European or Asian imperialisms. It was averse to formal annexation, refused to claim the mantle of empire, and made a succession of retreats, from Vietnam, Lebanon, and Iraq. But it still throws its weight around in imperial ways: through coercion, subversion, or patronage, it penetrates the sovereign autonomy of other states to constrain their choices. The political economy underlying American interventions was at times coercive, as in the structural-adjustment programs visited on developing countries from Eastern Europe to Latin America. Leading primacists who speak up for liberal world ordering have earlier acknowledged that the American project overseas must be necessarily imperial, albeit in this case of a distinctively informal “American” kind, involving the forceful suppression of revolt, hard-nosed enforcement of parameters around other states’ policies, and the exercise of unequal bargaining influence.32 But for the most part, today’s lamentations for a dying liberal order do not acknowledge the necessarily imperial component. This is the imperialism that does not know itself. Invocations of the liberal world order have become the ritualized language of the foreign policy establishment. In the academy, there is a well-established scholarly study of “world orders.”33 But too often, especially among think-tank specialists and the foreign policy commentariat, the liberal order’s admirers assert what they ought to prove. In that respect, President Trump’s former deputy assistant for strategic communications at the National Security Council, Michael Anton, was right to argue that the foreign policy establishment has become a “priesthood,” fonder of recapitulation than argumentation.34 It repeats its axioms but neglects to ground its vision in a careful reading of history or the present. A good example is an article by Edward Luce in June 2017, mourning the internal defeat of Western liberalism and a new world “disorder.” To demonstrate the imminence of disorder under Trump, Luce did not examine what Trump was actually doing beyond the decision to withdraw from the Paris climate change agreement, which is not an unprecedented pullback. The many Trump administration moves that have affronted Moscow go unmentioned: for example, the reinforcement of NATO through increased funding of the European Reassurance Initiative; and the bombing of the Assad regime, Putin’s ally, in April 2017. Instead, Luce cited the statements of two allies who were wondering where Trump’s behavior would lead, gossip about personality clashes in Trump’s court, and corroborating statements from other figures in the foreign policy establishment who take the “liberal order” as an article of faith, betraying a confirmation bias. Without evidence, he then accused President Obama of “global retrenchment.”35 Typical of the genre, Luce contrasted these recent failures with the postwar internationalism and institution building of President Harry Truman. To be reprimanded for violating established norms of American “global leadership,” against the exalted standards of Truman, is an occupational burden that comes with the presidency. Before Trump, critics had accused presidents Clinton, George W. Bush, and Obama of retreating from a long-standing commitment to a liberal world order. The charge that Washington is abandoning a noble Trumanite diplomatic past is less an observation than a political predisposition, substantively shallow yet part of the framework within which debate is conducted. International history after 1945 is more fraught. Accusations that U.S. presidents are flouting a long-standing postwar liberal order rely upon a mythologized account of history. When presidents wage war unilaterally, topple governments, coerce allies, threaten abandonment, disregard the demands of international institutions, practice economic protectionism, or cultivate illiberal allies and clients, they may or may not be practicing prudent statecraft. Either way, their behavior is unexceptional. They are not departing from tradition. Let us revisit history first in the area of trade and political economy. President Trump disturbs defenders of the liberal order partly through his economic nationalism, his promise to rebuild American manufacturing industries by erecting protective tariff walls, and his withdrawal from the Trans-Pacific Partnership (TPP). The extent to which U.S. membership in the TPP represented a long-standing commitment to liberal order is doubtful, given that the United States signed the agreement in February 2016 and withdrew in January 2017, and given that the agreement’s intent was to exclude and contain China as much as to integrate other Asian economies. Nonetheless, nostalgists assert that Washington’s commitment to free trade was a central pillar of liberal order. Identifying the marketing precepts of the Washington consensus with liberal order, they present Washington’s various “Open Door” policies as both a cause and symptom of the world’s liberalization. Without question, the United States in the postwar period dismantled the economic architecture of the British Empire. It strove to reshape the international economic environment on its terms, to establish and exploit the dollar as the reserve currency, to promote open markets, and to make a world safe for the penetration of American capital. How far did that process, that long-standing commitment to the “Open Door,” represent a liberal drive for free trade? In reality, there was not one but several postwar economic orders. As Michael Lind cautions: Globalization on a large scale, characterized by the emergence of transnational corporations and supply chains, got underway only in the 1990s and 2000s. Mass immigration to the United States and Europe is also largely a post-Cold War phenomenon. The euro and the Eurozone date back only to 1999. Labor mobility within Europe is also a relatively recent policy. Controversial “megaregional” trade pacts like NAFTA, the TPP, and TTIP [Trans-Atlantic Trade and Investment Partnership], which go beyond old-fashioned tariff reductions to rewrite much domestic legislation, go back only to the 1990s.36 Niall Ferguson, too, observes that “truly free trade, truly free capital flows and large-scale migration across borders did not begin until the 1990s.”37 Earlier decades saw capital controls, fixed exchange rates, and periodic returns to tariff barriers. One major pillar of the postwar order was U.S. ally, democratic Japan. Under U.S. military protection, that same country instituted, in the words of Claremont McKenna College’s Leon Hollerman, “the most restrictive foreign trade and foreign-exchange control system ever devised by a major free nation.”38 The long-running competition with the Soviet Union moved the United States to deliberately encourage the economic growth of its Asian allies, but under the shield of a neomercantilist state. In other words, in identifying the U.S.-led order with market and trade liberalization, nostalgists historicize what are in fact a quite recent set of post-1989 international arrangements. From this perspective, a liberal order did arrive, only it came later, in the age of post-1989 unipolarity. There is a more basic defect in recollections of the liberal order. During the postwar era, the United States persistently flouted liberal economic principles and imposed restrictive measures when it suited. Indeed, major powers have not historically risen through free trade and passive governments. Ascending powers have typically risen partly through the deliberate, visible, and intervening hand of an activist state.39 So too with America. All U.S. presidents have had to manage the tension between the commitment to the “Open Door” and the demand for industrial protection at home. The subsidy, the tariff, the quota, and the bilateral voluntary-restriction agreement have remained part of America’s repertoire. As a recent study of global data by Gowling WLG reveals, the United States is a “long-term and prolific proponent of protectionist policies,” and the world order it presides over is notably protectionist.40 Since the 2008 financial crisis, the United States has imposed tariffs worth $39 billion, while the world’s top 60 economies have adopted more than 7,000 protectionist trade measures worth more than $400 billion. The United States and the European Union both accounted for the highest number of protectionist measures, each exercising more than 1,000, with India a distant third at 400.41 America’s trade protectionism has the highest impact on other countries. Foreign farmers would be baffled by the claim that the old order embodied free trade, when the United States persistently granted agricultural subsidies and other mechanisms limiting foreign governments’ access to U.S. consumers.42 The reversion to protectionism has precedents from before the global financial crisis. Some of the most strident advocates of open markets and the dismantling of trade barriers have in practice done the opposite. One was President Ronald Reagan. Reagan had championed the cause of free trade as a foundation of progress and peace. Yet as president, he increased the proportion of imports subject to restrictions by 100 percent from 1980, as well as tightened quotas, introduced “voluntary restraint agreements” and new duties, raised tariffs, and strengthened the Export-Import Bank in order to protect the recovery of U.S. industries, especially automotive, computer-chip, and steel.43 Reagan justified these steps on the grounds that he was forcing economic competitors to trade freely. Regardless, his policies were a long way from Adam Smith. President Clinton also championed free trade, in words and deeds. He drove through NAFTA, a free trade zone uniting North America’s three largest economies, and pushed for China’s admission to the WTO under “most favored nation” status. Yet under Clinton, rice subsidies that continued during his administration enabled U.S. growers to dump their product onto the markets of vulnerable rural countries such as Haiti, Ghana, and Indonesia at depressed prices. Clinton has since apologized to Haiti for the devastation that these arrangements inflicted on the country.44 President George W. Bush emulated Reagan rhetorically, invoking the principles of free trade and unfettered markets. Yet in 2002, he increased steel tariffs by 30 percent, only to back down 20 months later under threat of punitive countertariffs by the European Union, a protectionist bloc in its relations with many countries beyond its borders. Confronted with the prospect of economic meltdown in the crisis of 2008, Bush intervened in the market with strongly protectionist measures, including bailouts of major firms, claiming, “I have abandoned free-market principles to save the free-market system.”45 The reintroduction of protectionist measures today, then, is not such a sudden or radical departure as is sometimes claimed, though Trump’s open enthusiasm for a “trade war” does mark a difference. There is a defensible logic to the position that in order to practice free trade a country needs a viable economy to practice it with. Reagan and Bush’s contortions on the issue reflect the inherent difficulty of liberal projects, whose architects often feel impelled to compromise with illiberal pressures. A world where even the most avowed exponents of free trade continually resorted to protectionism, though arguably more free and liberal than what had gone before or than what might have prevailed otherwise, was still not the “flat” free-market capitalist world we are being invited to be nostalgic for. Nostalgists claim that one dividend of American hegemony has been the economic liberalization of the globe, or large parts of it. They could point, for example, to the transformation of China into a wealthy capitalist economy that has lifted its population out of “a dollar a day” poverty. But this liberalizing process is more conflicted than potted histories suggest. Beijing achieved rapid industrial revolution and the movement of its workforce from the field into the factory through authoritarian and illiberal measures: involuntary-resettlement urbanization schemes, population control through forced abortion and compulsory sterilization, severe working conditions, repression of civil society, including trade unions, labor, and human-rights activists, and internet surveillance, among other measures. The People’s Republic has consistently ranked low on the Freedom Index.46 A more direct application of U.S.-backed liberalism happened in Russia. After communist rule collapsed in 1991, at the urging and advice of the United States’ government and economists, Moscow embarked on a program of “shock therapy” to restructure Russia around the principle of market exchange, adopting accelerated privatization of state industries, deregulation, fiscal discipline, and the shedding of price controls. This experiment was a major effort in the project to enlarge the global liberal order at a rapid clip. It had the support of the leading institutions of global capitalism, the IMF, World Bank, and U.S. Treasury Department. Harvard academic Jeffrey Sachs, one of Russian liberalization’s architects from 1991 to 1993, set out the program’s logic in The Economist, a journal that champions the cause of the liberal world order. “To clean up the shambles left by communist mismanagement, Eastern Europe must take a swift, dramatic leap to private ownership and a market system. West Europeans must help it do so.”47 “Swift, dramatic leap,” a vast program grounded in classical liberal economics, took on the tempo and zeal of the revolutionary communism it aimed to replace. These rapid reforms replaced an oppressive and failed communist system. They did so at Washington’s continual insistence that Russia reform itself on “our conditions.” But the results on many measures were disastrous: capital flight and deep recession; slumping industrial production; malnutrition; the rise of criminality — a criminalized economy, in fact — intertwined with a corrupt oligarchy enjoying a concentration of wealth; and the decline of health care and an increased rate of premature deaths.48 As Nobel laureate and former World Bank chief economist Joseph Stiglitz observed, by eschewing the more gradualist path of Poland or China, the consequences of the program were profoundly illiberal.49 “Liberal order” visionaries are quick to give their ideas credit for the prosperity of nations from Western Europe to the Pacific Rim, finding causation in correlation. They deny such a direct link between their ideas and the problems of post-Soviet Russia.50 Yet it is hard to accept that measures like sudden privatization and the rise of monopolies in a corrupt country were not related to asset stripping and capital flight or that “eliminating the housing and utilities subsidies that sustained tens of millions of impoverished families” did not play a major part in the social ruin that followed.51 Western technocrats, diplomats, and politicians were deeply implicated in the new order’s design. Lamentations for the end of the liberal order are also heard in the realm of “hard” security. The U.S. hegemon, nostalgists warn, is losing (or has lost) the political will to underwrite the international system through a commitment to permanent alliances and to intervene to bring order out of chaos. Part of the current intellectual confusion flows from the conflation of liberalism, which is supposedly peaceable, consensual, and benign, with the process of “world ordering.” It is here that defenders of the old order present their most misleadingly anodyne account of history. A review of the actual experience of the past 70 years suggests that the process of “world ordering” must at times be coercive. For all the attractions of American hegemony abroad, there has also been resistance and imposition. To understand how the superpower met that resistance and imposed itself, we must go beyond the romanticized postwar moment of Trumanite internationalism in the late 1940s. Consider both ends of the chronology as it is usually presented, from 1945 until the recent past. Admirers trace the restructuring of international life in that first year to the visionary institution building that President Truman oversaw amid World War II, such as the United Nations Conference on International Organization in San Francisco and its main creation, the UN Charter. In this rendering, the founders conceived the liberal order through a collaborative process of institution building. The narrative is strikingly nonviolent. In fact, to create the conditions for that visionary world making, the liberal order was conceived in blood. Only months later, the same U.S. president launched two atomic strikes on Imperial Japan, immolating and irradiating two of its cities after blockade, firebombing, and starvation had not broken its will. He did so to put down an adversary that had been brutally pursuing a rival vision for an Asian order of its own. In order to create an order, Washington swept aside a competitor by introducing a genocidal weapon into the world. There are powerful arguments that this was the “least bad” choice available.52 Tellingly, though, in panegyrics for a dying liberalism, the words “Hiroshima” and “Nagasaki” hardly appear. If there were liberal principles that underpinned the UN as it was founded in 1945, they were at first self-determination and sovereignty rather than democracy and human rights. The world order was hardly born “liberal” in the sense implied today: recall that two of the permanent five members of the UN Security Council were totalitarian communist states, and two of the democracies were managing colonial empires that they would not relinquish for decades. Then and now, modern liberalism is antithetical to the grave exertion of state power still practiced in 58 countries, the death penalty. To be sure, the birth of the post-1945 world order did advance some liberal ideas broadly. The general norm against imperial aggression was one. This, however, was not strong enough to prevent or dislodge China’s seizure of Tibet, the bids of Turkey and Greece to grab Cyprus, Israel’s occupation of Gaza and the West Bank, India’s occupation of Kashmir and annexation of Goa, Indonesia’s occupation of East Timor, or indeed the Soviet Union’s occupation of Eastern Europe. At the other end of the chronology, the present moment, consider that the U.S. hegemon has been waging a “war on terror” against Islamist jihadi groups since the 9/11 attacks of 2001. In pursuing the liberal cause of democratization as an antidote to terror, Washington entered the age of “enhanced interrogation” and preventive war. Now, with new weapons (drones) at hand, Washington conducts a sustained campaign of extrajudicial assassinations, often without the consent of host countries and without seeking formal permission or mandates. It has conducted renditions of suspected terrorists without trial. Reluctant to deal with live captives in indefinite detention, a more liberal president from 2009 increasingly avoided the dilemma by killing them. Meanwhile, whatever benefits it has wrought, American unipolarity was not peaceful or liberalizing for the unipolar power. The first two decades of the unipolar Pax Americana after 1989, which made up less than 10 percent of America’s history, generated 25 percent of the nation’s total time at war. That period is more bellicose by an order of magnitude than the preceding eras of bipolarity and multipolarity, in terms of frequency if not intensity.53 Whether in Iraq and Libya, or now with U.S. assistance to Saudi Arabia’s indiscriminate bombardment of Yemen, this proclivity to continuous war making has not created a “liberal” condition of peaceful order. At home, there is a continuous state of alarm and vigilance, whereby “normality” is permanently suspended by an unending state of exception. This, combined with an encouraged state of paternalism where citizens are encouraged to be passive consumers of events, has helped weaken the checks and balances of the republican Constitution.54Detention without trial, secret, warrantless surveillance, unauthorized wars, torture, covert “black sites” — these are not the obvious features of a robust liberal constitutional order. If large parts of the world have not accepted liberalism in major areas of civic life, neither has the United States. Instead of a full reckoning with diplomatic history, nostalgists frame history around the positive creation of new architectures and schemes. Thus the Marshall Plan (1948-1961) figures centrally in America’s postwar historic mission, based on, as Benn Steil puts it, “the moral primacy of democratic government and free economic exchange.”55 This absolute, almost platonic account of the past has little room for other, less-celebrated events from the same era, such as the British- and U.S.-backed overthrow of Iranian prime ministerMohammad Mossadegh in 1953, deposed despite his commitment to national independence and secular democracy. In this picture, the violence and compromises of hegemony, moral and strategic, almost vanish. Nostalgia for the liberal order also overlooks the reality that it was enforced through coercion. In the same era, a defining episode in the postwar assertion of American hegemony was the Suez crisis of 1956. In that hinge event of the Anglo-American relationship, the U.S. Sixth Fleet stalked and harassed British ships in the Mediterranean, fouling their radar and sonar, menacing them with aircraft and lighting them up at night with searchlights.56 With the British pound and oil supplies under pressure, President Dwight Eisenhower threatened Britain with the simple formula of “no ceasefire: no loans.” Patronage could be rapidly withdrawn, regardless of recent history, blood ties, or shared visions of Western-enforced order. The United States enforced its interpretation of that order by targeting its ally’s vitals.57 Between those two moments in time, the United States practiced geopolitics ruthlessly. It partly did so in the course of its long security competition with the Soviet Union. Strikingly, the Cold War as it was actually conducted and lived — where two superpowers did not allow rules, sovereignty, multilateralism, and institutions to constrain them when the stakes were high — does not occupy a prominent place in the mytho-history. Hardly anywhere in nostalgic reminiscences do there appear the numerous coups that were sponsored or supported by Washington. These interventions linked to the United States since 1945 may or may not have been defensible. They certainly violated one of the claimed core principles of “liberal,” “rules-based” order, that of self-determination. The United States not only overthrew governments (sometimes democratically elected ones) — or attempted to — in Albania, Ghana, Guatemala, Greece, Cuba, Chile, Iran, El Salvador, Nicaragua, South Vietnam, Argentina, and Grenada. It also supported violently illiberal forces, from Islamist mujahideen in Afghanistan-Pakistan and President Hosni Mubarak’s oppressive state in Egypt to the Indonesian Suharto regime and its death squads. A mainstay of U.S. hegemony in the Persian Gulf is its partnership with Saudi Arabia, an absolutist state that beheads apostates and survives by making concessions to Wahhabi theocrats. It is currently waging a brutal campaign against rebels in Yemen that, according to Amnesty International, includes attacks that are “indiscriminate, disproportionate or directed against civilians and civilian objects, including funeral gatherings, schools, markets, residential areas and civilian boats.”58 NATO allies on the European continent for decades included authoritarian Portugal and Greece. West Germany, the poster child of the liberal order, did not have elections during its first four years, and its proud social democracy retained officials who had been security elites in the Third Reich.59 Former Nazi mandarins stuffed the highest levels of government, including the Foreign Office and the Interior and Justice Ministries. Several former Nazi generals would later become senior commanders in the Bundeswehr. And in the 1948 Italian elections, the CIA helped ensure the electoral defeat of communists by funding anti-communist parties, forging documents to discredit the Communist Party, and warning Italians that if they publicly supported the party they would be barred from entering the United States. For the sake of liberalism in the long term, the United States exercised its privileges. If the deliberate subversion of a democratic election abroad with “fake news,” bribes, and coercion represents the antithesis of liberal world order, as Trump’s critics now suggest, then Washington attacked that order in the period of its creation. Coups, partisan electoral interventions, the cooptation of illiberal actors, and the flouting of international law made American hegemony unexceptional. In dismantling the power of old European colonial empires, the United States erected a form of domination that had an imperial quality of its own. Consider one of its more ambitious ventures in liberal ordering: the invasion and remaking of Iraq. The occupiers of Iraq regarded themselves as liberators. After invasion, though, the United States also projected power over Iraq’s interior governance in imperial fashion and with a liberal program, with all the tensions this implies. Director of the Coalition Provisional Authority Paul Bremer applied a program of rapid liberalization not only through the well-known de-Ba’athification and disbanding of the Iraqi Army, but through the order for “the full privatization of public enterprises, full ownership rights by foreign firms of Iraqi businesses, full repatriation of foreign profits … the opening of Iraq’s banks to foreign control, national treatment for foreign companies and … the elimination of nearly all trade barriers.”60 The United States continued to impose itself on Iraqi politics when it wanted, demanding and receiving the resignation of elected prime minister Ibrahim al-Jaafari in May 2007. Intended to implant market democracy, these measures infringed the country’s sovereign democratic will. In other words, the liberators were freeing the Iraqis to conform with the occupier’s preferences. It remains hard to have an empire without imperialism. Yet many visions of liberal order erase the historical process of imperialism, decentering, as Jeanne Morefield argues, “imperial violence while simultaneously positing the necessity of imperial action.”61 If liberalism at a basic level is an enlightenment project committed to liberty, equality, and limitations on state power, and if “world ordering” requires imperialist power projection, it is hard to fuse them without friction. Some may conclude from this historical record that, in the history of American hegemonic “world ordering,” liberalism was missing in action. On each occasion, critics have accused the United States of betraying its own liberal traditions in the pursuit of power. But it is hard to believe that a republic whose leaders so often and so intensely enunciate liberal principles is really driven by secret, amoral cynicism. A more troubling possibility should be considered. Liberalism is a powerful engine of American statecraft, but that statecraft often violates liberal principles. As a dogma of foreign policy, liberalism is jealous, intolerant, and messianic. Applied unchecked, it leads to its own illiberal opposite.62 The practitioners of rough geopolitics were not necessarily hypocrites. They often believed they were serving the ultimate cause of forging a liberal peace under American oversight but that to do so they had to accommodate illiberal allies and pitilessly destroy liberalism’s enemies. In this way, a superpower attempting to create a liberal order permits itself to employ unsentimental methods. Thus in February 2017, David Petraeus could recall sincerely that “to protect freedom here at home, we adopted a foreign policy that sought to protect and, where possible, promote freedom abroad, along with human rights and rule of law,” invoking American values such as “political pluralism” and “a free and open society.”63 Yet as commander in Iraq, Petraeus sought to reverse that country’s implosion and salvage victory by compromising these standards. To that fight, he brought pragmatic, byzantine divide-and-exploit methods, paying for the defection of former Iraqi insurgents and working with Shia paramilitary units not known for their commitment to the Hague conventions. As director of the CIA, Petraeus advocated and implemented a campaign of “signature” drone strikes, whereby the assailant knowingly targets a group gathering — at a funeral for an al Qaeda member, for instance — because of their suspicious behavior and association, rather than through verified identification of the presence of individual persons. Such strikes, therefore, can also threaten noncombatants and the innocent.64 To bolster the struggling rebellion in Syria, Petraeus later in 2015 advocated luring away and recruiting “opportunistic” members of the jihadist Jabhat al-Nusra, then formally affiliated with al Qaeda.65 This is not the place to arbitrate the wisdom and legitimacy of such measures. Dealing with conflicts in such places is a choice of agonies, and no doubt Petraeus and his peers regard themselves as guarding Americans while they sleep and trafficking with lesser evils to keep greater ones at bay. But note that a senior advocate of liberal order can also advocate measures that risk “crowd killing” and that involve enlistment of members of jihadi terrorist organizations and collaboration with sectarian governments. Champions of liberalism must somehow navigate their ideals through the illiberal demands of warfare. Nostalgists for the liberal order also betray a shallow conception of their central idea, liberalism. They conflate liberalism with other desirable phenomena, like capitalism and democracy. They neglect the possibility of illiberal democracy, and illiberal capitalism. Majority democratic rule does not equate with, or necessarily produce, a liberal protection of individual rights such as the presumption of innocence or trial by jury, a liberal tolerance for opposition and dissent, or a constitutional order that separates powers and constrains government through an independent judiciary or a free press. Capitalism can also be illiberal, as the Chinese Communist Party demonstrates. One of America’s long-term allies, Singapore, evolved as a supervised market democracy that curtailed the right to dissent. South Korea, an ally and protectorate within America’s Asian system, evolved first as a dictatorship under authoritarian founding fathers who were also modernizers, Syngman Rhee and Park Chung Hee. These authoritarians nurtured the chaebol business groups, Hyundai, Daewoo, and Samsung. Free markets took root first as highly protected markets under unfree political conditions. Such contradictions are absent from liberal-order panegyrics. As it is recalled, the “liberal order” embodies the permanent commitment of the United States to alliances and institutions without coercion. A broader historical perspective suggests, however, that Trump’s coercive treatment of allies is less of a break with the past than is often thought. In reality, the United States has often coerced allies with threats of abandonment and punishment.66 In 1954, Secretary of State John Foster Dulles threatened Europe with an “agonizing reappraisal” of alliances. In 1973 and 1974, President Richard Nixon and his national security adviser Henry Kissinger suspended intelligence and nuclear cooperation with Britain to punish noncooperation over a U.S.-initiated declaration of principles and the privacy of bilateral and UK-European Economic Community discussions. The United States has used the threat of abandonment to persuade allies and clients to cancel their nuclear programs, including West Germany, Japan, and Taiwan, while threatening adversaries with sanctions or preventive war. The demand that European allies shoulder more of the burden of military expenditure has been a staple of U.S. diplomacy, from President Eisenhower to former secretary of defense Robert Gates. Despite Britain spending blood and treasure in Afghanistan and Iraq to support the war on terror and cement its standing in Washington, President Obama made a blunt threat that departing from the European Union would place the UK at the “back of the queue” when seeking a bilateral free trade agreement. Assured commitment to institutions and allies through only positive solidarity is a false memory. This underlines the pattern whereby Washington underwrites a liberal world order not by adhering to its principles but by stepping outside them, practicing punishment, threats, and bribes that it would not accept if directed at itself. In “liberal order” litanies, another persistent claim is that the order was “rules-based.” It was not. Rules exist, and flouting them can have costs. But at critical moments for strong states such as the permanent five members of the UN Security Council, rules proved to be slippery; they were invoked, stretched, arbitrarily altered, or ignored, as interest permitted. The unreality of nostalgic legalism was illustrated in the summer of 2016 by two adversaries who both at different times have appealed to “rules” as the arbiter of international order. China defied the unanimous ruling of the Permanent Court of Arbitration, which found against its territorial claims, and continued to expand into the South China Sea and seize disputed waters, islands, and shoals. At the same time, the United States appealed to China to respect the “legally binding” verdict yet had not even ratified the UN Convention on the Law of the Sea that it urged China to observe. From ignoring the International Court of Justice over the mining of Nicaraguan harbors in 1986 to bombing Serbia in 1999 without a UN mandate, the United States has infringed on the letter of international law when it has found that other interests or values were compelling. It exercised a vigilante’s privilege. So too did other major powers. For less powerful and emerging states, the writ of liberal order was often remote, as they “routed around” rules to pursue their interests. In this century, Africa, from the Great Lakes region to the Sudan, has seen millions butchered, displaced, and unavenged. The era may have involved greater degrees of “rule following” than earlier eras. But it was not “based” on the observation of rules, at least not for the major powers. To rebrand this fraught history of power politics as an era of rule-bound civility is perverse. There is nothing intrinsically wrong in calling for the conservation, or restoration, of an order on the basis that it represents something better. In this case, though, the nostalgia rests on delusion — about what the world was and what it can be.

2024 CNDI Negative
Neg – Adv – Innovation › AT China › AT Taiwan Invasion

China won’t invade Taiwan – Xi wants to be perceived as a peacemaker and the Ukraine conflict has deterred them from taking military action.

Ian Bremmer 23 – a foreign affairs columnist and editor. He is the president of Eurasia Group, a political-risk consultancy, and GZERO Media, a company dedicated to providing intelligent and engaging coverage of international affairs. He teaches applied geopolitics at Columbia University’s School of International and Public Affairs. 4-12-2023, “Why China Won’t Invade Taiwan Anytime Soon”, https://time.com/6270599/china-invade-taiwan///AN

Though China will not show Taiwan, the U.S., or anyone else exactly how it would launch a full blockade or invasion of Taiwan, China’s armed forces find it very valuable to practice. After all, Chinese troops haven’t faced a shooting war since a brief conflict with Vietnam in 1979. Finally, Taiwan will hold national elections next year. Though China’s latest intimidation may not lead to military conflict anytime soon, it may have an effect on how Taiwan’s voters imagine the future. All that said, the actual risk of imminent Chinese military action against Taiwan remains low. Beijing always flexes military muscle when highest-level U.S. and Taiwanese officials meet face to face. Yet, though Speaker McCarthy’s visit with Taiwan’s president marks the highest-level U.S.-Taiwan meeting on US soil since 1979, China’s latest response was less militarily threatening than its reaction to last summer’s visit to Taiwan by then-Speaker Nancy Pelosi – and Beijing is well aware that Washington will notice that. More importantly, Xi is spending considerable energy these days on playing a larger role on the global stage, particularly as a peacemaker. He has offered a 12-point peace plan for Ukraine he hopes will encourage others to see China as a global mediator, even if this particular plan has no chance of success. This past weekend, Xi welcomed French President Emmanuel Macron and European Commission Chairman Ursula Von der Leyen to Beijing for discussion of the Ukraine war and the future of China’s relations with Europe more broadly. Though Xi didn’t promise his European guests to lean harder on Russia, the Chinese and French governments issued a joint statement pledging they would work together to bring Russian and Ukrainian negotiators to the bargaining table. This follows the remarkable visit to China of the foreign ministers of Middle East rivals Iran and Saudi Arabia, where they agreed under China’s mediation to improve their historically contentious relationship. Most importantly, just days ago, Taiwan’s former president Ma Ying-jeou became the first current or former Taiwanese leader to visit the mainland since Taiwan broke away in 1949, and during his visit he spoke of the “common inheritance of blood, language, history and culture” between the two sides, raising hopes in Beijing that reunification can still be achieved without risking a potentially catastrophic conflict. In short, Xi Jinping wants to be (at least perceived as) a peacemaker, and though Taiwan’s future remains of far more importance to him that any of these issues, China’s president is unlikely to reverse all these diplomatic victories by stumbling into a costly war. There are more basic reasons why China is unlikely to move against Taiwan soon. Xi has watched carefully as Russia’s President Vladimir Putin has provided a vivid demonstration of just how unpredictable, costly, and humiliating an ill-conceived war can be. Taiwan, backed with generations of sophisticated and powerful American weapons, has been preparing for a possible Chinese invasion even longer than Ukraine has prepped for a full-frontal assault from Russia, and given the complete lack of Chinese combat experience over the past 44 years, Xi understands that the risks of Pyrrhic victory – or even of defeat – are real. At a time when China is emerging from the world’s most draconian lockdown and its worst economic slowdown in decades, Xi is likely to be extra careful about the fights he picks. At least for now.

2024 CNDI Negative
Neg – Adv – Innovation › AT China › AT China War

No US-China war – interdependence and deterrence check

Landis 17 [Teddy, Harvard, in addition to being a member of the JFK Jr. Forum Committee, Teddy works with the Harvard Public Opinion Project at the Institute of Politics, “The Inevitability Of A U.S.-China War And How To Avoid It,” Huffington Post, 4/11/2017. http://www.huffingtonpost.com/entry/watch-former-un-ambassador-samantha-power-and-harvard_us_58ed0a8be4b081da6ad00827] CPO

While Ferguson agreed with Allison’s argument that China and the U.S. are headed in the trajectory of war, he did say we have to be careful of the “Paul Kennedy Syndrome.” Kennedy, a professor at Yale, implied in his famous The Rise and Fall of Great Powers that West Germany and Japan were on the verge of overtaking the United States. Obviously that did not happen. If we apply similar skepticism to the U.S.-China scenario, we can see that the U.S. still maintains the world’s most powerful military by a huge margin, and that global interdependence is higher than ever. China and the U.S. need each other and China would not necessarily win a war. Furthermore, Chinese leaders do not want war and will take steps to prevent war from being necessary. It is possible that with Trump’s potential retreat from world, their takeover might become easier. Ferguson reported that in this respect, Chinese leaders feel as if history is going their way. (Although Trump’s latest action in Syria could signal that the “retreat” may not be happening). Ferguson concluded on a more positive note by saying that China’s leaders are perhaps the most history-minded in the world. They study history and they apply it. This makes them far less likely to be trigger happy and instead points them towards a strategy where war is far less likely. Conclusion: As China overtakes the United States’ geopolitical and economic supremacy, it is poised to become the world’s number one power. Thucydides warned us that this dynamic is a trap that often leads to war. However, with careful study from Professors like Graham Allison and Niall Ferguson, and leadership from politicians like Ambassador Samantha Power, we may be to apply history and find a peaceful way forward. You can watch the full conversation at Harvard’s John F. Kennedy Jr. Forum here.

2024 CNDI Negative
Neg – Adv – Innovation › AT China › AT China War

Diplomacy, internationalism, globalization, and deterrence mean no chance of war.

Thorton '22 - Senior Fellow at the Paul Tsai China Center at Yale Law School [Susan, March/April, "A Rival of America’s Making? The Debate Over Washington’s China Strategy," https://www.foreignaffairs.com/articles/china/2022-02-11/china-strategy-rival-americas-making]

John Mearsheimer’s article engenders a sense of foreboding and doom. “Engagement may have been the worst strategic blunder any country has made in recent history,” he writes. As a result, “China and the United States are locked in what can only be called a new cold war. . . . And this cold war is more likely to turn hot.” I cannot agree that the U.S. policy of engaging China was a major strategic blunder. During the Cold War, that policy succeeded at convincing China to stop sponsoring communist revolutions in East Asia and helped counter the Soviet Union. After the Cold War ended, engagement enabled massive economic growth in China that lifted hundreds of millions of Chinese out of poverty—a significant reason that the share of people worldwide living in extreme poverty, by the World Bank’s definition, fell from 36 percent in 1990 to 12 percent in 2015. Surely, this counts as a major human achievement. What would be a strategic blunder, however, is whatever series of missteps might lead to a military conflict between China and the United States. Mearsheimer argues that structural factors are inexorably leading to such a conflict. But his realist view of the situation disregards modern international realities. There are a number of formidable restraints in place to keep the peace. The United States has worked hard over the decades to build these barriers—often as part of the very engagement strategy that Mearsheimer criticizes. These bulwarks have helped preserve peace and promote prosperity for the last 70 years, and they are still strong enough to prevent a U.S.-Chinese conflict. Although accidents or incidents connected to military brinkmanship may occur, they would almost certainly not lead to a wider war. That would require something exceedingly unlikely: the simultaneous failure of every restraint. First, bilateral diplomacy would have to break down. Engagement is the opposite of estrangement, which describes the absence of U.S.-Chinese relations from 1949 to 1972. The purpose of engagement is to forestall misperceptions, provide reassurance, and prevent conflict. It is true that diplomacy and communication between China and the United States have been anemic for the past five years. And it is difficult to discern authoritative policy amid the current cacophony of diplomatic posturing on Twitter and elsewhere, creating an environment ripe for confusion and overreaction. But these deficiencies are not structural; they can be remedied. If top-level leaders in both countries consistently communicate and work to reduce public posturing, as they should, then the diplomatic barriers to war can be reinforced. For a war to break out, the international system would also have to fail. China and the United States are connected to a global network of countries and institutions that have a stake—in some cases, an existential stake—in preventing conflict between these two countries. Almost every government and institution on the globe would be grievously damaged by a U.S.-Chinese war, and so they all would try to prevent an imminent conflict through diplomatic pressure, mediation, or acts of resistance, such as denying overflight and basing rights. Critics may be quick to deny the influence of others in heading off a major-power clash. But in the current international system, there is no way for either side to emerge victorious, and those outside China and the United States would see this most clearly. Then there is the restraint created by globalization. Mearsheimer argues that it was a catastrophic mistake for the United States to help China grow wealthy, as its resulting strength will inevitably lead it to challenge the United States. But it is also plausible that the inextricably integrated nature of the global economy, and specifically of the Chinese and U.S. economies, makes any war unwinnable and thus acts as a deterrent to conflict. It is true, as critics will point out, that economic dependencies failed to prevent World War I. But the economic relations of the early twentieth century were nothing like the complex entanglements of today’s international economic system. In the case of China and the United States, they create a situation of mutual assured economic destruction. Another restraint is public opinion, at least on the U.S. side. Politicians in the United States respond to various incentives, but they cannot ignore the sentiments of their voters. And after a 20-year fight against terrorism, the American public is decidedly wary of protracted and costly overseas conflicts. If U.S. policymakers appeared poised for a conflict with China, one would also expect that the press, having learned its lesson from the war in Iraq, would perform its watchdog function, question the official narratives, and activate public concern. All these barriers should work to prevent a conflict. But if they somehow didn’t, there is a final fail-safe that is even harder to imagine not working: military deterrence. Taiwan is the most likely issue over which a U.S.-Chinese war could break out. But the quantity and quality of the weaponry on both sides translates to certain catastrophic losses for all, which should provide a sufficient deterrent to war. And because the devastation of a conflict over Taiwan would spiral out of control quickly, one cannot rule out the use of nuclear weapons. Strange as it may sound, that is good news: just as the nuclear age prevented direct military conflict between the Soviet Union and the United States for more than 40 years, so it should between China and the United States, both of which are nuclear-armed powers with survivable second-strike capabilities. Although China has many fewer missiles and warheads than the United States—something China is working on remedying—the doctrine of mutually assured destruction still operates. The balance of terror holds. Looking through this list of potential failures, one might find cause for pessimism, given that each restraint has seen its share of erosion in recent years. But China and the United States are not prisoners of history. The two countries will find that they cannot escape one another, and eventually, they will have to seek accommodation. This may now seem a distant vision, but it is a far more likely outcome, given the countervailing currents, than an apocalyptic war.

2024 CNDI Negative
Neg – Adv – Innovation › AT China › AT China Rise

China rise is peaceful

Michael Mousseau 19. Professor in the School of Politics, Security, and International Affairs at the University of Central Florida. “The End of War: How a Robust Marketplace and Liberal Hegemony Are Leading to Perpetual World Peace.” International Security 44(1): 160-196.

The rise of China has sparked fear in some American thinkers and policymakers who believe that power equals threat and changes in relative power result in conflict and war.69 I argue, however, that such fear is unwarranted unless China has a status economy; status powers have an interest in sowing chaos wherever they lack control, which is diametrically opposed to the contractualist preference for order and self-determination. China, however, has neither a status nor a contractualist economy, but an axial economy (see table 1). As the world's largest exporter with considerable public and private trading sectors, China possesses an economy not unlike those of ancient Athens, the Italian city-states of the Renaissance, and the European kingdoms of the Enlightenment. The elites of those societies, like China's today, embraced long-distance commerce. Axial states can wage wars over global markets. Historical examples include the Venetian-Genoese wars of the early Italian Renaissance, the Anglo-Dutch wars of the second half of the seventeenth century, and the Anglo-French wars of the eighteenth century. These wars were fought for control of markets and maritime trade routes, not global leadership. As discussed above, elites in axial economies perceive little interest in the welfare of strangers and thus non-discriminatory trade. The last time a leading contractualist power dealt with an axial-capitalist peer competitor was in the nineteenth century. In the decades before World War I, axial Britain was in the process of transitioning toward a contractualist economy (see table 1). In the first decade of this century, axial China was moving rapidly toward becoming a contractualist economy.70 The parallels are uncanny: both countries wildly embraced trade, but with a mix of normal and mercantilist arrangements. Although both China today and Britain then had normal trade relations with many countries, both had, or continue to have, discriminatory relations in other spheres: just as British merchants had privileged access to the markets of many of Britain's colonies and Dominions and used military force to collect debts, China today seeks privileges for its state-owned enterprises in its internal market and abroad and imposes harsh terms on states that fail to pay their debts.71 Similarly, just like Britain a century ago, China today appears to be increasingly acting as if it has an interest in the global market order. Late-nineteenth-century Britain provided the world a trading currency by backing the pound sterling with gold, and British bankers financed projects all over the globe. Recently, China ceased undervaluing the yuan, indicating that it has an interest in the health of economies beyond its borders, and is now providing as much financing to developing countries as the World Bank.72 Just as the United States and Britain managed to avoid serious militarized conflict, so too can the United States and China. Negotiated solutions are possible because, like Britain, China has an interest in the global market order. Despite its rise, China has become far friendlier to its neighbors and others than it was as a status power, when it fomented revolution abroad under the leadership of Mao Zedong. China has resolved most of its territorial disputes.73 Largely, only its maritime disputes are ongoing, and these are not new, having originated in the pre-communist period.74 In recent years, China has established diplomatic relations with many countries it once treated as enemies, including Indonesia, Singapore, and South Korea.75

2024 CNDI Negative
Neg – Adv – Innovation › AT China › AT China Rise

No spillover---China will not attempt a direct predatory challenge to the US.

Shifrinson, PhD, Assistant Professor of International Relations, Fredrick S. Pardee School of Global Studies, BU, ‘20

(Joshua, “The rise of China, balance of power theory and US national security: Reasons for optimism?” Journal of Strategic Studies, Vol. 43)

This framework carries large implications for scholars and policymakers seeking to understand China’s strategy as its power grows and US relative power declines. As noted, many analysts fear that a rising China will embark on a predatory course designed to push the United States down or from the great power ranks. Although it is difficult in the abstract to describe what the particular elements of Chinese predation may entail, the general concern seems to be that China will adopt steps that will rapidly shift the distribution of power its favour by enacting policies that are increasingly costly for a relatively declining United States to overcome, pushing the United States to exhaust itself competing or to surrender the issues at stake, and thus imperil the United States’ position as a great power. Elements of this approach might involve Chinese efforts to engage in economic warfare by hindering US economic competitiveness and limiting American economic opportunities; adumbrate US military advantages; undercut US credibility and prestige; and weaken US alliances in East Asia or beyond.55 Furthermore, recent Chinese actions in and around East Asia seemingly give credence to such concerns. After all, the last decade has witnessed China take an increasingly assertive stance in its maritime disputes in the South and East China Seas56 ; enact an Air Defense Identification Zone (ADIZ) over the East China Sea57 ; make political and economic inroads into Central Asia and Africa58 ; influence the domestic politics of Asia-Pacific states to favour pro-China policies; and expand its defence budget.59 Concurrently, trade tensions with the United States are rising, and the Chinese government has tried to buttress its authority by cracking down on domestic opponents.60 China’s current strategy: Mixed It is too early, however, to declare Chinese predation a fact, just as there are reasons to question whether Chinese predation is likely in the future. On one level, and consistent with research by scholars such as Avery Goldstein, Alastair Iain Johnston and others, there are less-competitive elements embedded in current Chinese strategy.61 Chinese land reclamation and military deployments in the East and South China Seas, for instance, have mostly involved territories previously claimed by the Chinese government – China has not expanded its maritime claims so much as taken a unilateral approach towards resolving existing disputes.62 Similarly, China’s ADIZ move came after Japan expanded its own ADIZ and began consolidating control over the disputed Senkaku Islands.63 It is also important to recognise that there are steps China could plausibly have undertaken in recent years yet chose not to. Despite concerns over a Chinese military build-up, for instance, China did not increase the share of state wealth allocated to military spending; military expenditures have remained at 1.9 per cent of Chinese gross domestic product (GDP) since 2009.64 Likewise, China has sustained a minimalist nuclear deterrent even though this force is vulnerable to disruption.65 Above all, China has not tried to form an anti-US alliance in East Asia – in fact, there is some evidence that China has sought to keep the United States engaged in East Asia rather than exclude it.66 For example, not only did Chinese President Xi Jinping tell US President Barack Obama in 2014 that the ‘Pacific Ocean has ample space to accommodate our two great nations,’ but China’s Xinhua news agency greeted Donald Trump’s election – after a campaign marked by calls for a reduced US role in the world – with a warning against US isolationism.67 These moves are not consistent with a predatory campaign: China is pursuing a mixed strategy that blends both cooperative and competitive elements. Of course, it is possible that Chinese strategy may give way to predation in the future. Still, the approach developed above highlights that China’s future course will ultimately depend upon China’s threat environment and the constraints and opportunities this imposes. And on this basis, a series of quantitative and qualitative indicators provides room for cautious optimism that China will at worst continue its mixed strategy vis-à-vis the United States. As importantly, there are reasons that China may – under certain conditions – adopt a supportive strategy. The logic here is simple: not only is China’s threat environment such that it is far from clear whether the PRC would be able to systematically challenge the United States without significantly harming its security, but China faces competitors besides the United States. Combined, these factors should give China pause before pursuing a predatory course, and may even offer ground for supporting the United States.

2024 CNDI Negative
Neg – Adv – Innovation › AT China › AT China Rise

China’s rise is peaceful and they won’t displace the US.

Nathan '22 - Class of 1919 Professor of Political Science at Columbia University [Andrew, March/April, "A Rival of America’s Making? The Debate Over Washington’s China Strategy," https://www.foreignaffairs.com/articles/china/2022-02-11/china-strategy-rival-americas-making]

The country’s geographic position is also unfavorable. Along its land and sea borders, China confronts distrustful neighbors. Among them are seven of the 15 most populous countries in the world (India, Indonesia, Japan, Pakistan, the Philippines, Russia, and Vietnam) and five countries with which China has fought wars within the past 80 years (India, Japan, Russia, South Korea, and Vietnam). None of China’s neighbors is culturally Chinese or ideologically aligned with the Chinese Communist Party. All may cooperate with China at various times and to varying degrees for strategic or economic reasons, but all seek to hedge against Chinese domination, often by cultivating relations with the United States. As Chinese behavior has become more assertive, this counterbalancing behavior is growing more evident. India has compromised its traditional strategic autonomy in order to participate in joint military exercises with Australia, Japan, and the United States as part of the Quadrilateral Security Dialogue, known as the Quad. Japan has taken the unprecedented step of officially declaring stability in the Taiwan Strait to be a national interest. And Australia has reaffirmed its U.S. alliance by accepting help in acquiring nuclear-powered submarines under the 2021 AUKUS agreement. China is unlikely to achieve anything like hegemony over any but the smallest of its neighbors. Geography helps explain another Chinese weakness: its lack of allies other than North Korea. There are countries that are nearby enough to receive substantial help from China in the case of a military conflict, but they all fear China more than they fear any other state. The lack of allies is more a liability than an asset, for it deprives China of ways to multiply the pressure it can put on uncooperative neighbors and of the ability to position sizable military forces around the world. To be sure, none of the United States’ 60-some allies and partners has interests identical to Washington’s. None can be counted on to follow every component of U.S. strategy toward China. But U.S. alliances and partnerships still complicate China’s military calculations, increase the pressure on Beijing to comply with the international norms preferred by other states, and expand the alternatives available to countries considering whether to accept Chinese investments. Nor is the structural distribution of international power favorable to Chinese global dominance. Barring catastrophic mismanagement by other states, China will continue to face five powerful rivals—India, Japan, Russia, the United States, and the European Union—in a multipolar system that is not going to disappear. A unipolar moment, if one ever really existed, cannot be re-created, not by the United States and certainly not by China. THREAT PERCEPTION The challenge the United States faces from China is bad enough without exaggerating it. As realism would predict, Beijing is dissatisfied with the status quo: it is closely hemmed in by Washington’s allies, partners, and military forces; its supply lines are vulnerable to U.S. interdiction; and its society is influenced by American culture. China wants to push the United States away from its shores and weaken its alliances, and this means a real chance of conflict, especially over Taiwan. I agree with Mearsheimer that if such a war occurred, it would probably be a limited war, albeit highly destructive and tragic. I also agree that it would have the potential—not a great one, but more than zero—to escalate to a nuclear exchange. But Mearsheimer is wrong to describe China’s determination to gain control over Taiwan as either “emotional” or “expansionist,” because these descriptors make China sound irrationally aggressive. Mearsheimer’s own theory of realism better explains why Beijing will not lose its appetite for Taiwan, given the long-standing legal basis of its sovereignty claim and the island’s strategic, economic, and technological importance to Chinese security. Also consistent with realism is China’s preference for avoiding a premature strike on Taiwan and instead deterring Taiwanese independence as long as it takes to achieve what Beijing calls “peaceful reunification.” But deterring Taiwanese independence has meant that China has had to build up military assets capable of threatening the aircraft carriers and forward air and naval bases that the United States has long relied on to stave off any attempt to take Taiwan by force. The result: a U.S.-Chinese arms race that raises the risk of war through miscalculation. And Mearsheimer is wrong to describe Beijing’s goal as global dominance. In a multipolar world, China will seek to shape global institutions to its advantage, just as major powers have always done. But it has no proposal for an alternative, Beijing-dominated set of institutions. It remains strongly committed to the global free-trade regime, as well as to the UN and that organization’s alphabet soup of agencies. It participates actively in the UN human rights system in order to help its allies and frustrate its rivals. Its Belt and Road Initiative operates alongside, rather than in place of, long-standing Western-funded development programs. China seeks influence, but it has little prospect of dominance as long as other powers also stay active in these institutions. Overestimating the China threat is just as dangerous as underestimating it. Hyping the hazard makes it harder to manage, by creating panic among both the American public and Chinese policymakers. Whether or not engagement was the mistake that Mearsheimer claims, whether or not there was ever an option to constrain China’s growth as he believes, we are where we are. I agree with Mearsheimer that what the United States must do now is manage the situation—which should mean not exacerbating what is already, on cold realist grounds, a serious challenge.

2024 CNDI Negative
Neg – Adv – Innovation › AT China › Turn – Competition Bad

Pursuing primacy vis-à-vis China causes counterbalancing and miscalc.

Joshua Shifrinson 21, Assistant Professor of International Relations at Boston University, “Neo-Primacy and the Pitfalls of US Strategy toward China,” The Washington Quarterly, 43(4), pp. 89-90

It Is Difficult to Stop China’s Continued Rise Second, neo-primacy’s logic rests on shaky foundations, as the United States’ opportunity to reclaim preeminence is extremely small, and the effort will likely prove both counterproductive and dangerous. Baldly, if the United States was unable to keep China from becoming a near-peer competitor in the first place via classic primacy, it is even less likely that the United States has the wherewithal to put the Chinese genie back in the bottle and now push China from the great power ranks via neo-primacy. States generally balance when confronted with a direct external threat. This tendency is significant in the US-China context because, under neo-primacy, the United States would effectively declare itself a direct threat to China at a time when US analysts acknowledge China has a growing capacity to oppose American plans and ambitions.53 Though China is not poised to dominate East Asia, it can thus be expected to devote its own considerable resources toward keeping pace with US efforts to arrest China’s rise and/or shift the relative distribution of power in the US favor. The odds of major crises would then increase as Washington and Beijing maneuver for position, in turn raising the odds of escalatory spirals, miscalculation, and war.54 Trends in military spending and recent economic developments suggest China’s capacity to oppose neo-primacy and a US drive to reclaim untrammeled preeminence. On one level, China currently devotes a smaller share of its economic wealth to military purposes than the United States, yet it has still managed to reduce American military advantages. This implies that Beijing could do quite a bit to frustrate American policy simply by allocating more to international purposes; if the United States feels pressured by a China that spends 2 percent of its GDP on defense, a China that spends 3 or 4 percent of GDP on defense—roughly what the United States has spent since the Cold War—would present a still larger problem and place the United States in an even worse position.55 Nor is it just military spending that underlines neo-primacy’s limitations. After all, ongoing efforts to decouple the US and Chinese economies—designed partly to limit Chinese growth—has pushed Beijing toward fostering a self-sustaining domestic economy able to withstand “sustained acrimony with the United States.” Given this, it is reasonable to infer that additional economic efforts to outpace Beijing will generate countervailing Chinese responses.56 Considering, too, that China’s economy has grown at a faster rate than the United States’ (even during COVID-19) and that the country has worked to narrow the USChina technological gap,57 the PRC’s ability to keep pace with the United States cannot be discounted.58 Shifts in the distribution of power since the Cold War make neo-primacy self-defeating by enabling China to match US efforts while risking US national security along the way. In this sense, neoprimacy risks exacerbating the very problem it seeks to address.

2024 CNDI Negative
Neg – Adv – Innovation › AT Patent ILs › R&D

No R&D internal link—no link between patenting and R&D

Mezzanotti and Simcoe 19

Filippo, Northwestern University Kellogg School of Management; Timothy, Boston University Questrom School of Business and NBER. “Patent policy and American innovation after eBay: An empirical examination.” Volume 48, Issue 5, June 2019, Pages 1271-1281. LJS

Fig. 3 plots the NSF estimates of total R&D spending from 1990 through 2013 along with the cumulative R&D reported by U.S. public companies in the Compustat database from 1999 through 2013.24 There are three main take-aways. First, Compustat captures the majority of U.S. business R&D spending– 87 percent, on average, for years in this figure. Second, both time-series exhibit a sharp drop in R&D spending in 2009, coinciding with the Great Recession. This drop is larger in the Compustat data, but the recovery begins sooner and is more dramatic for that series. Finally, there is no sudden change in the R&D investment growth trend around 2006. Overall spending accelerated during the boom years between 2006 and 2009 and fell during the recession. Even after the end of the recession, we see R&D spending going back to the same trend it was experiencing before the eBay decision. Overall, the R&D time-series data provide no evidence that changes in patent-law led to any dramatic changes in R&D spending. With the Compustat data, we can also examine industry-level trends in R&D investment before and after eBay. Fig. 4 uses S&P industry sector codes to group companies into three broad sectors, as above, corresponding to Computers, Life Sciences and Other industries.25 Interestingly, for the public companies in these data, between 1999 and 2013 total R&D spending grew faster outside of the Computer and Life Science sectors. Computer-related R&D fell in the years following the Internet bubble, and then grew steadily. For this industry, the progress was more-or-less parallel to growth in Life Sciences R&D, although the latter sector experienced the recession more sharply. To us, the broad industry-level R&D trends suggest that large changes in aggregate R&D spending are driven by changes in “demand” (specifically, the macro economic environment) and shocks to financial conditions, rather than changes in patent policy that occurred in 2006. As a last effort to find a connection between changes in patent law and R&D spending, we estimate a series of firm-level difference-in difference regressions using the Compustat data. Our basic specification will be ln(RDit) = αi + λt + β1 PostEbayICTit + β2 ln(Assetsit) + εit where the outcome (RDit) is annual R&D expenditures; αi are a set of firm fixed effects that capture time-invariant unobserved factors that drive R&D spending; λt are a set of year effects that capture changes in the overall economic environment, including (importantly) the great recession; and the main explanatory variable is Post Ebay ICTit, an indicator that equals one for firms in the ICT sector after 2006. By taking the natural log of the outcome, we can interpret β1 as the percentage change in computer-related R&D relative to the “control” industries following the eBay decision. Our sample includes all firms that report R&D expenditures for every year they appear in the Compustat data, and we include the log of total assets as a time-varying control for firm size.26 The basic idea behind this regression is that if changes in patent-law (including but not limited to the eBay decision) disproportionately impact the ICT sector, and if there is a strong link between patent strength and R&D investment, then we should observe a decline in R&D spending for ICT firms relative to firms in other sectors. That is, a strong link between patents and R&D would lead to estimates of β1 less than zero. The assumption that the eBay decision had a disproportionate impact on ICT firms is consistent with Seaman’s (2016) findings on post eBay patent injunctions in software and pharmaceuticals, as described above. Prior research also shows that patent assertion by Non Practicing Entities (NPEs) is concentrated in the ICT sector, and that NPEs are unlikely to obtain injunctive relief (Allison et al., 2018). Finally, because ICT patents often cover a particular component within a larger system, whereas patents in other industries (e.g. pharmaceuticals) may be more “fundamental” to the final product, we expect the balance of hardships factor to favor injunctive relief outside the ICT sector. While we believe that the assumption of disproportionate impact on ICT is a reasonable one, and consistent with most of the discussion on the law change, different experts may disagree on the definition of a control group. For instance, one could argue that some areas of Life Science were also strongly affected by the law change. Because our Compustat data end in 2013, the impact of the Mayo and Myriad decisions on the analysis should be minimal. Nevertheless, to guard against this problem, we will conduct our analysis using Life Sciences and “Other” industries as separate control groups. Our analyses will therefore use three different control samples, where in each case the treatment is defined as the ICT-sector and the control group changes column-by-column. In the first column we compare ICT to all non-ICT firms. In the second column the control group contains only life-science companies, and in the third column the control group contains only companies that are in neither ICT nor life-science industries. Comparing the coefficients across the different specifications should assuage concerns that the choice of control group is driving the results. It is important to note that we do not interpret these estimates as the causal effect of eBay on R&D investment. In particular, our analysis may also partially capture unobserved changes in the business environment that interact with the effect of the new rules. However, if eBay led to a significant decline in the expected returns to U.S. R&D investment, we should be able to detect some changes across the different groups in our model. We estimate these models in two different specifications: ordinary least squares regression with a logged outcome, and an exponential (or Poisson) model of R&D in levels. The results of our regression analysis are presented in Table 1. Across all of the regression models, we can never reject the null hypothesis that there was no change in ICT-sector R&D spending re lative to other industries after 2006. Compared to all other firms, post 2006 R&D investment in the computer sector declined by 2%, with a standard error of 3%. Comparing estimates in the second and third columns, it appears that the small relative decline in computer-related R&D is driven by firms outside the life sciences sector, as suggested by Fig. 4. Estimates based on the Poisson specification are very similar, but exhibit less precision. In the Appendix, we show that the results in Table 1 are robust to small changes in the sample and specification.27 Overall, the results in Table 1 imply that if one wishes to maintain that eBay had a large negative impact on U.S. R&D investment incentives, it is important to think about what else happened around the same time period to increase R&D incentives by a similar amount. Before moving on, it is interesting to compare the coefficient on the Post Ebay ICT “policy” variable in Table 1 to the coefficient on log(As sets). Because these regressions include firm fixed-effects, the latter coefficient measures the association between firm-growth and R&D. It is well known that growing firms increase their R&D spending, and our estimates suggest that after controlling for time-invariant factors, a 10 percent increase in assets is associated with a 5 percent increase in R&D spending. What is notable about these estimates is that they are large and precise. Comparing the magnitude and precision of the two coefficients in Table 1 suggest that even hotly debated changes in patent policy can have a minor impact on individual firms’ R&D investment decisions compared to other firm-level factors that drive growth.

2024 CNDI Negative
Neg – Adv – Innovation › AT Patent ILs › Productivity

No productivity internal link—too soon to collect data and productivity maintained post eBay

Mezzanotti and Simcoe 19

Filippo, Northwestern University Kellogg School of Management; Timothy, Boston University Questrom School of Business and NBER. “Patent policy and American innovation after eBay: An empirical examination.” Volume 48, Issue 5, June 2019, Pages 1271-1281. LJS

U.S. productivity growth has been sluggish in recent years compared to late 1990s, and there is a robust ongoing debate among economists about the causes of this slowdown (Syverson, 2017). It is possible that critics of eBay attribute the broad U.S. productivity growth slowdown to changes in patent policy. In our view, that inference would be misplaced for several reasons. First, it is too soon: the historical evidence suggests that it takes decades for significant inventions to have an impact on aggregate productivity (e.g. David, 1990; Solow, 1987). Because patent policy impacts the early stages of the innovation process, any impacts of post-eBay patent policy are not likely to have influenced the productivity statistics.29 Second, if patent policy were the mechanism driving the productivity slowdown, we should see it in the R&D and patent data. But we do not. Nevertheless, as a final step in our analysis, we examine industry level links between patenting and productivity. Our approach compares industries that do and do not use patents, before and after 2006. If patents are a significant driver of innovation in patenting industries, and if the eBay decision harmed incentives to innovate in those industries, then we expect to find slower productivity growth in those industries after 2006. As with our previous analysis, we might fail to measure the impact of the patent-policy changes because of unmeasured changes in industries over time that lead to faster relative productivity growth in patenting industries. However, this statement is just another way of saying that unmeasured factors were equally important to changes in patent policy. Our productivity data come from the NBER-CES manufacturing industry productivity database. Although the NBER data contain productivity information for 473 NAICS 6-digit industries, after merging them to the USPTO industry-level patent statistics, we are left with a balanced panel of seventeen NAICS 3 and 4-digit manufacturing industries from 2000 through 2011.30 We use a four-factor productivity index that accounts for capital, production and non-production workers, and materials. Fig. 7 plots the TFP index for Computers (NAICS 334), Pharmaceuticals (NAICS 3254) and other manufacturing industries. Each index is normalized to equal one in 2006, the year of the eBay decision. The figure shows that computer-related manufacturing industries experienced faster TFP growth both before and after the eBay decision than Pharmaceuticals or the other manufacturing sectors in our data. This is a common feature of many productivity time-series and is partly due to rapid quality improvements associated with Moore’s law (as well as the difficulties of accounting for them). To check for a systematic relationship between patenting and post eBay productivity trends, we use a difference-in-difference regression based on the following specification: TFPit = αi + λt + β1 * ln(Patentsi) * PostEbayt + εit where TFPit is the log of four-factor TFP for industry I in year t; αi are a set of industry fixed effects; λt are a set of year effects that capture common economy-wide productivity trends; ln(Patentsi) measures the patent-intensity of industry i; and PostEbayt is an indicator variable that equals one for 2006 and all subsequent years. The main effects of patent-intensity and the eBay decision are absorbed by the industry and year fixed effects respectively.31 The coefficient β1 measures changes in the TFP growth rate for patent-intensive industries relative to less patent-intensive industries following the 2006 eBay decision. To address the differential pre-eBay trends observed in Fig. 7, we consider two robustness checks. First, we estimate a model where each industry has its own liner productivity trend. Specifically, we interact each industry fixed effect with a time trend (αi*t). In that specification, β1 captures any deviation from trend following the eBay decision for more patent-intensive sectors. Our second robustness test drops all observations from the “Computer and electronic product manufacturing” sector (NAICS 334), where hedonic adjustments play a particularly important role in productivity measurement. The results are presented in Table 2. Results in the first column show that total factor productivity growth accelerated after 2006 for more patent-intensive industries. This is inconsistent with the idea that changes in patent-policy during that period acted as a drag on innovation. In column 2, we add industry specific trends to the model. Although this reduces the size of β1, the coefficient remains positive and statistically significant. Columns 3 and 4 are based on the same specification as columns 1 and 2, respectively, while dropping observations from the computer-manufacturing sector from the estimation sample. In both cases, we continue to find that TFP growth increased for more patent-intensive industries following the 2006 eBay decision. We do not wish to make too much of these models. Productivity is notoriously difficult to measure, and changes slowly in response to a wide variety of factors. However, this is precisely the reason to avoid thinking that broader changes in productivity over the last decade are necessarily linked to changes in patent policy. Our analysis simply shows that if there is any statistically discernable link between the eBay decision and subsequent short-run productivity growth, the data suggest a positive correlation between innovation and recent changes in U.S. patent policy.

2024 CNDI Negative
Neg – Adv – Innovation › AT Patent ILs › Innovation

No innovation internal link—patents aren’t key to investment

Mezzanotti and Simcoe 19

Filippo, Northwestern University Kellogg School of Management; Timothy, Boston University Questrom School of Business and NBER. “Patent policy and American innovation after eBay: An empirical examination.” Volume 48, Issue 5, June 2019, Pages 1271-1281. LJS

Although R&D investment remains highly concentrated among large firms, there is other evidence that innovation is becoming more distributed (Foster, Grim and Zolas 2016; Ozcan and Greenstein 2013). Perhaps our previous analyses have missed the impact of patent-policy changes on smaller innovators. To rule out this hypothesis, we gathered data on venture capital spending from the Price Waterhouse MoneyTree survey. These data allow us to look at aggregate VC spending by sector and deal-type, but not individual investments.28 Fig. 5 shows that Venture Capital Investment followed an upward trend from 2002 through 2012, at which point there was a dramatic increase in total VC funding, coming mainly in later rounds. There is no apparent change in either early or later stage VC funding in the years immediately after the eBay decision, although there is a drop in later round funding in 2009 and 2010, coinciding with the recession. To provide additional insight into possible links from patent policy to VC investment, we can examine investments for the computing and life science sectors. Fig. 6 plots Total VC investments and Seed stage investments for both sectors. The graph clearly illustrates that the large surge in investment around 2012 is associated with later rounds in the computing industries. Late stage life science investments also increase around this period, but not by the same amount. There is also an increase in early-stage computer-related VC investing (relative to early stage life science investing) starting around 2009. While computer-related investment is higher than life sciences investment throughout this time period, it is notable that there is no sharp decline in Life Sciences VC investing following the AMP and Myriad decisions. Overall, we take the main message of Figs. 5 and 6 to be a shift in VC investment towards industries most influenced by the post-eBay changes in patent policy. It is important to highlight that we cannot say whether VC investments might not have been higher absent the changes. However, to the extent that the observed changes reflect other factors that were more significant than patent-policy, this result is consistent with the idea that intellectual property is less important for driving investments in innovation than those other factors. Moreover, as we emphasized above, economic theory also provides reasons to suspect that a more flexible patent remedies regime could lead to more innovation – particularly in settings like the IT sector where rights are fragmented and innovation is highly cumulative.

2024 CNDI Negative
Neg – Adv – Innovation › AT Patent ILs › Competitiveness

The US out-competes everyone—no chance of relative decline due to structural factors

Daniel 24

Will, senior reporter at Fortune, covering markets and the economy. "This is the ‘special sauce’ behind American exceptionalism—and why the U.S. stock market could continue dominating", Fortune, 6-23-2024, https://fortune.com/2024/06/23/american-exceptionalism-us-economic-outlook-stock-market-forecast-dollar-dominance-europe-china/ LJS

For economists, analysts, investors, and the like, American exceptionalism refers to the relative outperformance of the U.S. economy and stock market compared to its developed peers in recent decades, particularly in the wake of the pandemic. It’s the idea that there’s a confluence of factors—a special sauce, if you will—that has made the American economy and markets structurally more robust and resilient in the 21st century. There’s certainly some evidence to back up this thesis. U.S. GDP per capita has surged compared to its developed peers’ over the past decade. In fact, while the U.S. and eurozone had roughly the same overall GDP in 2008, the U.S. economy is now about double the eurozone’s. And a decade ago, the Chinese economy’s rise to overtake America’s as the world’s largest was seen as inevitable. But amid a real estate crisis that’s battered China’s middle class, soaring youth unemployment, a crackdown on businesses, an expanding trade war with the U.S., and the end of debt-driven growth, that trajectory is now in question. Warnings of a “lost decade” have gotten louder, especially as President Xi Jinping adopts more ideological policies that weigh on growth. In financial markets, U.S. outperformance is apparent too. Since the beginning of 2009, U.S. stocks have trounced the competition, with the S&P 500 soaring more than 500%, while Japan’s Nikkei 225 jumped 336%, and Europe’s STOXX EURO 600 rose just 130%. The list of reasons behind this run of American outperformance is long and varied. Experts point to several long-term strengths, like the U.S.’ labor market flexibility and robust capital markets, as well as more recent or short-lived dynamics, including growing energy independence and an aggressive monetary and fiscal response to COVID-19. “I'm very much a believer that American exceptionalism isn't a temporary phenomenon, but will continue for the rest of the decade and maybe beyond,” Ed Yardeni, the veteran Wall Street strategist and economist who runs Yardeni research, told Fortune. In fact, since the beginning of the decade, he's been predicting a “Roaring 2020s scenario” that features a productivity and AI-induced U.S. economic boom. While some deride claims of American exceptionalism, Yardeni—and a number of other veteran investors like him—are willing to put money on it. “I've been recommending overweighting the U.S. for a long time in a global portfolio, since 2010,” Yardeni said. “I think that that's worked really well and should continue to work.” Of course, there’s always a counterpoint worth mentioning. MUFG’s head of U.S. macro strategy George Goncalves questioned whether the U.S. economy and markets are truly exceptional, or whether they’re only the “cleanest shirt” in a dirty closet of struggling developed economies. He also noted that the U.S. economy continues to be full of haves and have-nots amid sky-high income and wealth inequality. “American exceptionalism creates this perception that everyone’s benefited,” he said. “And I don't think that’s true.” Finally, Goncalves wondered if the U.S.’ recent run of outperformance compared to its developed peers can continue, given that so much of it has been driven by record fiscal spending, and the national debt is now over $34.7 trillion. “Is that sustainable? Interest costs matter and consumers have run out of excess savings,” he told Fortune. “It’s almost like a sugar high has created this perception of American exceptionalism when the reality is it was mostly just a big spending spree.” Still, others point to several key advantages, both long- and short-term. U.S. ‘special sauce’: Long-term keys to American exceptionalism Chris Konstantinos, chief investment strategist of RiverFront Investment Group, a Richmond-based investment management firm, is an American exceptionalism believer who has been dissecting the factors behind the phenomena for quite a while. In an interview with Fortune, he explained that several years ago his team was looking at profit margins in the industrial sector around the world when they noticed that U.S. businesses tended to be “structurally” more profitable. “It begged the question of ‘why?,’” Konstantinos said. After parsing through lots of data and speaking with experts, the veteran strategist discovered numerous reasons for the American economy’s unique strength, including flexible labor markets, robust capital markets, a culture for nurturing tech and innovation, vast natural resources, younger demographics than developed peers, the dollar’s status as the dominant reserve currency, and many more. But there were a few key long-term advantages that he singled out as being the most important because of their ability to drive productivity growth. “Many countries have these various advantages, but none have the combination—or the entire package—quite like the U.S. does,” Konstantinos said. “I think of it as America’s ‘special sauce.’” Labor market flexibility First, the U.S. labor market is “less encumbered by regulation” than developed peers, enabling companies to more readily increase or lower the size of the workforce to meet changing industry conditions. That might not always be great for workers, but it is good for the economy, according to Konstantinos. Flexible labor markets help U.S. corporations protect profits, increase productivity, and more readily respond to unexpected events like a pandemic or economic crash. Demographics Second, although headlines about America’s aging population are now common, the reality is that compared to other developed peers, the U.S. is doing well demographically. The median age of U.S. citizens is 38.5 years old, compared to 46.7 in Germany, 48.1 in Italy, and 40.7 in the U.K., and 49.5 in Japan. The U.S. also has higher immigration rates from countries with lower median ages on average. “It’s true that regions like India, Brazil and Africa have much younger demographics, but compared to most of our current economic peers, we are doing pretty well,” Konstantinos said, noting that “a young, relatively upwardly mobile society tends to produce strong consumption, which helps fuel our economy.” A culture of innovation and robust capital markets Third, as JPMorgan Chase CEO Jamie Dimon said in 2016, Americans have “innovation from the core of our bones,” and are willing to take on risks to start new businesses, enter new industries, and invest in themselves. While many have questioned whether the American Dream is still alive, immigrants worldwide also continue to flock to the U.S. for a better life and can have immense success when they get here. Look no further than the Taiwanese-American Nvidia co-founder Jensen Huang, or the South African-American Tesla CEO Elon Musk for evidence of this reality. Ignoring the slightly nationalistic rhetoric of Dimon, there are some structural factors that facilitate U.S. innovation, including the ease of starting new businesses in the U.S. compared to other developed nations; the quality of U.S. intellectual property protection; as well as significant government spending on research and development that benefits private enterprises. The U.S. is often considered a better place to do business when taking into account the more onerous regulations in Europe. In fact, it’s the sixth most business-friendly nation worldwide, according to the World Bank, while the U.K. is eighth on that list, Germany is 22nd, Canada is 23rd, Japan is 30th, and France is 33rd. A lack of patent protection in China has also led many companies to fear entering the country. China steals between $225 billion and $500 billion worth of IP annually, according to estimates from the cyber intelligence company CyFirma. With big tech companies’ profits soaring, the U.S. is only increasing its research and development spending overall as well. “And that's paying off in more innovations and so on,” according to Yardeni. “I think another point you might want to make is that the U.S. has the most developed and sophisticated capital markets in the world,” Yardeni added. “So the U.S. has the ability to provide a great deal of financing for all sorts of innovation and startups.” The veteran investor noted that the U.S.’s giant investment banks, venture capital firms, and private credit lenders all boost innovation by providing equity and debt financing for new businesses, business expansions, and more. The productivity edge The factors listed above are critical to American exceptionalism in various ways, but Konstantinos said their main benefit could be their contribution to the U.S.’ productivity advantage and higher rate of corporate earnings growth. To his point, U.S. productivity, as measured by real GDP per hour worked, has surged compared to its developed peers for decades now, and that’s only accelerated since the pandemic.

2024 CNDI Negative
Neg – Case Turn – Patent Trolls › Turn – Patent Trolls › AT Aff S Trolls

Patent trolls are inevitable—companies don’t even check patent databases which gives trolls an in

De Wit 10

Severin, managing partner. "The Case eBay Inc. vs. MercExchange LLC, It's Impact on NPEs and Patent Enforcement", Ipeg Institute, 3-31-2010, https://papers.ssrn.com/sol3/papers.cfm?abstract_id=1613585 LJS

More than anything else the aftermath of eBay concentrated on whether patent trolls are indeed stifling innovation and how these "patent aggregators" could be stopped. eBay was just a precursor to a much larger debate on patent trolls and their effect on patent enforcement, that is still going on till date. Debates about Patent Reform have a tendency to evolve also around the issue of patent trolls and whether they constitute a threat to the patent system or to innovation (or both). As patent trolls produce no goods, nor do they "practice" the patented invention themselves, trolls have been labeled a "threat" to operating companies and therefore stifle innovative work by those companies, who "independently invent 29" . These stories, routinely invoked by the press, advocates, and academics, shape, according to Colleen V. Chien30 , public understanding of the patent system. In her 2009 publication, Chien describes and matches these stories 31 to empirical data on patent litigations to determine which types of suits are most prevalent. Chien's publication is among the first systematic attempts to place the various types of patent litigation within context. The author focuses exclusively on the litigation of high-tech patents, covering hardware, software, and financial inventions, using data from the Stanford Intellectual Property for cases initiated in U.S. District Courts from January 2000 through March 2008. Chien's data show that the reality is more complicated than the rhetoric regarding patent litigation. For instance, NPEs 33 bring only a minority of patent suits: 17% of high-tech patent suits in the last eight years (28% of all high-tech patent suits if one includes suits with multiple defendants and those that seek declaratory judgment ("DJ"). This average reflects an increase in NPE suits as a proportion of all suits over an eight-year period, from 22% in 2000-2001 to 36% from 2006 to March 2008, counting defendants, or from 10% to 20%, counting cases 34. Although an overall increase is seen in the number of patent litigations, data do not support the view that this increase is solely due to NPEs. In terms of numbers NPE's do not qualify as the prevalent patent litigators, although, admittedly, NPE's main object and goal is to enforce patents they acquired. Enforcement by litigation is part of their business. According to several studies, individuals and small companies are more likely than large companies to sue on their patents 35. Although there might be a difference between small companies, individual patent owners and NPEs, all have one thing in common, they seek remuneration for their inventions. Some have argued that NPE's do not "invent" anything themselves. Even is this true, what difference does when looking into enforcement of rights acquired? Whether it is a right acquired as result of an own invention or a right that has been identified as a valuable one, analyzed, checked by engineers as well as patent lawyers, prior art searched and thoroughly prepared for EOU 36. PricewaterhouseCoopers (PwC) has compiled a thorough database of patent damages awards (from 1980 through 2008), collecting information about patent holder success rates, appellate reversals and modifications, time-to-trial statistics (from 1995 through 2008), and practicing versus NPE statistics (from 1995 through 2008). Based on this study, they made several observations that are illustrative for assessing the impact of NPEs 37. Their findings, in a nutshell: • Annual median damages award has ranged from $2.2 to $10.6 million, with no discernible trend since 1995 • Damages awards for NPEs have averaged more than double those for practicing entities since 1995 • NPEs have been successful 29 percent of the time overall versus 41 percent for practicing entities, due to the relative lack of success for NPEs at summary judgment; however, both have roughly a 2/3 win rate at trial • The disparity between jury and bench awards has widened and is likely the contributing factor in the significant increase in use of juries since 1995 • Reasonable royalties continue to be the predominant measure of damages awards • Alleged infringers increase their trial success rates slightly as plaintiffs seeking declaratory judgment • While the median time-to-trial has remained fairly constant since 1995, significant variations exist between jurisdictions • Certain federal district courts (particularly Virginia Eastern and Texas Eastern) continue to be more favorable to patent holders, with shorter time-to-trial, higher success rates, and higher median damages awards • Five federal district courts accounted for 33 percent of all identified decisions involving an NPE as the patent holder. So is the NPE business model contemptible? We full heartedly disagree. One can have ethical oppositions against a company whose only task it is to make money out of patents. If this is because one despises capitalistic behavior in order to maximize profits, one can say it's just a logical result of this political view to also denounce NPE's acquisition of IP to gain profits. However many embrace IP as means to protect value in (some) inventions but then subsequently denounce NPE's strive for gain by enforcing that same IP. This is nothing less than hypocritical. Compare this with other parties that "play" the market. If hedge funds gain from debt-laden countries like Greece by arranging currency-swaps to masquerade losses or financial distress, the financial world is heralding the players as "financial innovators". If the use of market mechanisms is used to profit from Intellectual Property the players are called "extortionists 38". Investors who buy and develop real (immovable) property are often denounced as "property speculators" only by those who have no idea what risks are involved in assessing, valuating and subsequently developing such property. Is this in fact the location for the property? Will eventually buyers take the offering or even like what the developer presents as an "unique opportunity"? Are investors willing to take the risk that the property, once renovated and assessed, will turn out to find no buyers? Those business risks are commonly accepted and rewarded by paying upgraded and sometimes inflated property prices. So why would an investor in intangible assets be judged any different 39? In this regard, one aspect of NPE's has remained underexposed in literature, namely that NPEs have gone through considerable effort to locate and acquire patents that remain undervalued, unused or overlooked by industry, or "operating" companies. One way of looking to this is that NPE's acquire patents that "operating companies" have either missed, ignored, dismissed or simply overlooked, despite sophisticated databases offering all the opportunity to explore what is being patented in a certain technical area. In fact, can anyone maintain that "he was not aware of a certain patent"? That seems possible only if he did not look for the patent nor searched the databases publicly and freely available from all major Patent Offices around the world. Many patent professionals and information companies offer extensive search tools. For a relatively low amounts anyone can find out "patented prior art" or which (an how many) patents are granted prior to their own "independent" invention. But that is only the easy part. When a new consumer electronics product is being developed, may patented technologies are being licensed in from third parties. Apple's iPod for example has hundreds of patented technologies, ranging from wireless LAN facilities, to touch screen, motion controls (for shuffling), battery power, etc. Existing technologies, not developed by others, in many cases patented, are then either bought from the owners (by taking a license) or are being circumvented by "designing around". A major task of any patent department e.g. of a consumer electronics company, is to find out whether a product design that comes from their in-house R&D group, is not touched upon by third party patents 40. Surely it is, caused by the sheer number of patents, frequently impossible to weigh whether some patents are indeed infringed by one's own product, or even to read all the patents that seem relevant for the searched technology. When NPEs subsequently reach a better result or a different opinion and buy that patent that was initially discarded as irrelevant (e.g. because it was wrongfully held to be invalid) or overlooked by the operating company, the company occasionally has to face litigation. If not settled the operating company has then to accept the consequences by paying damages as a result of its wrong infringement or incomplete database analysis. However, the reality is that many "operating" companies simply ignore patented inventions by third parties, either willingly or unwillingly (meaning they do not check any database prior to developing or researching their new product or process). From a 2003 study by Motivaction, commissioned by the European Patent Office 41 information services are not as 50% to 70% of the companies surveyed are not aware of the EPO’s patent information services. Even more troublesome is that a vast majority of European companies simply do not recognize the relevance of patent information for their own R&D efforts. A striking 31% of "EPC10" , it appeared that while the EPO (as an institution) is well known, the EPO’s patent 42 disagreed with: "I have used patent information in the past to find out if someone else has independently arrived at the same idea as mine", against 22% in the US. - companies disagreed with the statement "Information contained in patents is of commercial advantage to my company", for only 14% of their US companies. 55% of EPC10 companies disagreed with: "I have used patent information in the past to solve technical or engineering problems", against 36% in the US. 52% of EPC10 companies So who is there to blame? Certainly not NPEs. They only expose widespread patent ignoramus. In doing so most NPEs focus on high-tech patents for obvious reasons. First they acquire patents from distressed or bankrupt companies 43, from companies that have gone out of a certain business or from smaller SMEs that have neither the expertise nor the money to enforce their patent rights. NPE's have to operate in an imperfect market, contributing to their high risk strategies. Many even doubt that there is such a thing as a "patent market" where demand and supply provide for a fair price, rather than a very expensive lottery 44. As McDonough rightly points out, patents are "illiquid commodities 45" because they are not "readily convertible into cash 46". Without the presence of parties that have full faith and credit in the "patent market", NPEs fulfill the role of "market makers", as they discover and extract the value of a patent, be it in licensing negotiations or in enforcement strategies. Some have taken the view that "patent value" maybe a illusive concept, because of the impossibility of obtaining sufficient empirical data on each, patent "worthlessness"47 is prevalent, which only adds to the impossible task for NPE's to identify those "value" patents that are valid, used and infringed by parties without being reasonably compensated. In that sense there is nothing wrong with most NPE's. The opposite is true if one sees this phenomenon as a result of insufficient "patent mining" 48 as the process of seeking relevant patents is often called. If the patents are the result of in house innovative R&D output, asserting them against alleged infringers who use these intangible assets in their own products in order to recoup investments in their R&D is commonly regarded a smart business to maintain competitiveness or market share. However, if these patents have been bought from a third party - either defunct or bankrupt or from sellers of unused IP for a profit - with the purpose of enforcing it against companies using the patented technology is then seen as "extortion" of ethically behavior. Seldom is this seen as a smart policy and a sign of shrewd entrepreneurship. What difference is there with other examples of buying assets with an intention to "work" the asset for onward sales with a profit? Obviously these patents have been bought by a party that decided to make value of patents where the seller did not an opportunity to extract the full value, e..g because they did not see the opportunities, or simply do not have the resources in manpower or money to do it themselves. These companies have valid and sound reasons to sell their patents. The price the buyer normally is willing to pay (having made the analysis that they would be in a better position to make even more money of those patents, backed by investors, than the original owner) reflects the potential and true value of the patents. This is what NPEs regularly do and what we will increasingly see happening. Many companies have an inventory of unused patents 49 that is not subject to active value creating strategies, but rather used as defensive (and passive) “freedom-to-operate” operations. One can hardly blame parties for looking to find “Rembrandts in the attic” and come up with a viable value extracting enforcement strategy for pursuing financial rewards from intangible assets, where the original owners did not.