America First?

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Moments after taking over as the 45th President of the United States on January 20th, Donald Trump said: “From this day forward, a new vision will govern our land. From this day forward, it’s going to be only America first, America first.”

The irony is that this insular approach comes from the President of a country which was built primarily by outsiders. Countries and civilizations which do well, never do so in isolation is a basic point that Trump seems to have forgotten.

Take the case of the British and how they managed to cross the Atlantic Ocean in order to reach North America. As Thomas Sowell writes in Wealth, Poverty and Politics: “When the British first confronted the Iroquois [a group of tribes] on the east coast of North America, the mental and material resources at the disposal of these two races were by no means confined to what they had developed themselves.”

So, what did British have access to, which they hadn’t produced themselves? As Sowell writes: “The British had been able to navigate across the Atlantic, in the first place, by using the compass invented in China, doing mathematical calculations with a numbering system from India, steering with rudders invented in China, writing on paper invented in China, using letters created by the Romans, and ultimately prevailing in combat using gunpowder, also invented in China. The Iroquois had no comparably wide cultural universe.”

The point being that Britain would not have managed to capture large parts of the world, including North America from the native tribes, without having access to all the foreign technology and the ideas that it had. And this was possible because Great Britain had always been a very open economy.

This ensured that many things that originated in Asia over the centuries became a part of the British and the European cultures. As Sowell points out, among the many things that originated in Asia and became a part of the European culture included, papers, bells, printing, gunpowder, the compass, rudders, spaghetti, chess, playing cards and so called Arabic numerals, which actually originated in India.

Without many of these things, the British wouldn’t have been able to crossover to North America. And if they hadn’t been able to do that, there would have been no United States of America. Hence, technologies and ideas from outside contributed a lot in Great Britain ruling large parts of the world, including North America. The founding fathers of the United States and the leaders that followed did not forget this, and their openness to ideas and individuals from outside, continued.

Donald Trump now wants to undo much of this. The question is can the United States afford this? As far as it comes to making things, the United States can’t compete with much of the world. This is clearly visible in the fact that it imports significantly more than what it exports. And this has led to a severely disgruntled workforce.

Nevertheless, one area where the United States clearly rules, is in the world of ideas and technology. As Ruchir Sharma writes in Breakout Nations—In Pursuit of the Next Economic Miracles: “US strength in technology looks overwhelming in comparison with even the fastest-rising emerging markets, and in comparison with Japan and Taiwan, nations that also spend heavily on tech research and development but generate a lot less growth out of it.”

Also, unlike Japan’s insular technology culture, the United States has a very open culture. As Sharma writes: “Silicon Valley is so rich in immigrant Indian and Chinese talent that it’s little surprise Google has travelled so well. The broader ecosystem that nurtures tech-start-ups, including the venture capital industry, the top-notch university system and the strong legal protection for intellectual property , is also arguably stronger in the United States than anywhere else in the world.”

America’s lead in technology is its best chance to pull the country out of the rut that it currently is. And the tech industry cannot continue to thrive, if only America and Americans come first. The sooner Donald Trump understands this, the better it is going for US long term growth.

The column originally appeared in the Bangalore Mirror on March 1, 2017

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About vivekkaul
Vivek Kaul is a writer who has worked at senior positions with the Daily News and Analysis(DNA) and The Economic Times, in the past. He is the author of the Easy Money trilogy. Easy Money: The Greatest Ponzi Scheme Ever and How It Is Set to Destroy the Global Financial System , the latest book in the trilogy has just been published. The first two books in the trilogy were published in November 2013 and July 2014 respectively. Both the books were bestsellers on Amazon.com and Amazon.in. Currently he works as an economic commentator and writes regular columns for www.firstpost.com. He is also the India editor of The Daily Reckoning newsletter published by www.equitymaster.com. His writing has appeared across various other publications in India. These include The Times of India, Business Standard,Business Today, Business World, The Hindu, The Hindu Business Line, Indian Management, The Asian Age, Deccan Chronicle, Forbes India, Mutual Fund Insight, The Free Press Journal, Quartz.com, DailyO.in, Business World, Huffington Post and Wealth Insight. In the past he has also been a regular columnist for www.rediff.com. He has lectured at IIM Bangalore, IIM Indore, TA PAI Institute of Management and the Alliance University (Bangalore). He has also taught a course titled Indian Economy to the PGPMX batch of IIM Indore. His areas of interest are the intersection between politics and economics, the international financial crisis, personal finance, marketing and branding, and anything to do with cinema and music. He can be reached at vivek.kaul@gmail.com

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