When manholes started disappearing around the world in 2004, the world discovered China. Re-discovered, we should say, as, in the Chinese eyes, China was merely reasserting its historical manufacturing primacy after centuries of slumber. But, even in 2004, what it did was still just gruntwork at the bottom end of the world's value chain, jostling for space with Vietnam, Bangladesh and assorted sweatshop countries.
Thereafter, came the phase of great copy-and-catch-up, to borrow Tyler Cowan's phrase, and cheap Chinese knock-offs flooded the global markets. The tabloids and governments razed about the poor quality of Chinese-made and pilferage of intellectual property. Yet, this outrage was reassuring, as China seemed far off from gaining any technological edge and forever consigned to fighting it out over the lower cost.
That should indeed be the common-sense strategy. After all, the Western countries have an enormous advantage at this point in time. China is, despite its enormous efforts, still a newbe: It still lacks the centuries of technical expertise that the Western countries have built. Besides, Western nations are still far ahead in business know-how and experience of commercialisation, skills that the Chinese graduates at Western business schools can't learn fast enough. Instead of bringing up walls and self-excluding oneself from China, the opposite strategy - full engagement and greater globalisation - may have served the West better.
But that needs focusing on issues that the policy-makers don't want to deal with. Public health and education are obvious areas to start. The innovation game is a broad one - a country can't condemn two-thirds of its population to drudgery and dead-end work and expect to build a venture-some economy. A narrow elite built around lucky birth collapses inwardly; innovation, unfortunately, is disruptive by nature, as it turns over the status quo. It's a hard game to play when private enterprise is tasked to run a country's education and health because it conflates economic worth with human possibilities and works to perpetuate privilege. Yet, this is exactly what politics of consumer democracies are made of: An unbroken chain of privilege! A good school and a good school in every district would obliterate this convenient world of 'dream-hoarding' in the name of meritocracy, and therefore, can not be done.
Outinventing China would mean settling the wars at home that the rich and the powerful in these countries are waging on its poor. But that would reduce the gross domestic happiness, because today, the rich also want to feel they are smart; strengthening public education and public health would puncture this balloon of illusion. That's way too painful; one would rather let the distant Chinese take over the world than admit that the boy from the slum across the street is at least as smart as one's own son. Eradicating their poverty would just make us feel poorer - and unhappy, as our happiness is defined by the things we have which many other people can't. Let it be the Chinese - let them take over the world!