of private enteqjrise and economic interdependence,rnas proponents of the UnitedrnStates’ present “engagement” policyrnargue will be the course in China. Indeed,rnPatten sees the Chinese businessrninterest as a principal obstacle to nationalrnreform. The governor’s campaign inrnHong Kong to create institutions ofrndemocracy and civil liberties to combatrnChinese despotism earned him a reputationrnfor being “bad for business,” whilernboth Western and local businessmenrnfelt that trade with China dependedrnon keeping in the government’s goodrngraces: “Political harmony was essentialrnto business profits.” The head of a largernBritish international bank warned Pattenrnthat he would mobilize other businessmenrnto boycott the Conservative Partyrnunless the governor retreated from hisrnreform program, while media mogul RupertrnMurdoch canceled HarperCollins’rnpublishing contract with Patten uponrnlearning that his book was critical ofrna Chinese regime with which Murdochrnhas strong —and growing—businessrnties.rnLocal entrepreneurs, whose rise tornprominence is supposed to transfonnrnChina, have proved no more independent.rnPatten calls Hong Kong businessmenrn(many of whom joined thernCeneral Chamber of Commerce in thernlegislature “to do their patriotic duty” onrnbehalf of Peking) “shoe shiners” of thernPeking regime. Thus, it was not difficultrnfor Peking to recruit a billionaire shippingrnmagnate as its Hong Kong satrap.rnThe subservience of Hong Kong businessmenrncalls into question the argumentrnof American businessmen that therncontinued appeasement of China is inrnHong Kong’s best interest.rnAs transnational business interestsrnhave gained political influence in Westemrncapitals, it is not surprising that Chinarnhas become adept at manipulatingrnthe international situation. “Sophisticationrnis not required,” Patten says.rnEurope is played off against America;rnone European country isrnplayed off against another. Chinesernviews of the venality of thernWestern world, and of the controllingrninfluence there of businessrnlobbyists, must be one of the fewrnaspects of modern life that continuesrnto give any relevance or vitalityrnto Marxist and Maoist thought.rnThe notion that foreign policy shouldrnfocus on boosting the overseas prospectsrnof nominally domestic business firmsrnis far too narrow and short-sighted evenrnif one construes national interest—orrnworld order—purely in material terms.rnPatten cites two common instancesrnin which the desires of business runrncounter to national security. One is thernsale of nuclear technology to China,rnwhere it will not only be used to improvernPeking’s nuclear arsenal but also bernpassed on to other regimes hostile tornWestern interests. Tlie other one is fliernrunning up of huge trade surpluses, “partrnof which are spent [by Peking] on modernizingrnits military hardware,” whilernthe West pretends it has no idea what isrnhappening.rnYet, having blasted internahonal businessrnfirms for their myopic greed andrntheir baneful influence on governmentrnpolicies. Patten endorses the classical liberalrntheory of “free trade” as the stancernappropriate to Western democratic governmentsrnin the future. By definingrn”free trade” as the conduct of businessrn”free” from concerns for higher issues,rnwhether moral or strategic. Patten typifiesrnthe confusion among mainstreamrnconservatives who embrace capitalism inrnprinciple while professing to be appalledrnby the lack of principle among capitalists.rnThe solution, of course, to this sup)-rnposed impasse is to acknowledge that,rnsince business acts like business, governmentrnmust act like government in protectingrnthe national interest from all dangers,rnforeign and domestic —includingrnthose posed by business.rnFrom the perspective of Hong Kong,rn”free trade” is a vital concept: As a citystate.rnHong Kong had no alternative to arntrade-dependent strategy. This has alwaysrnbeen the plight of small states lackingrnthe resources or population base torndo more than play their part in the internationalrndivision of labor. In times ofrngeneral prosperity, and under the protectionrnof larger powers, city-states can prosper.rnBut because they lack the power torncontrol the wider environment, they arernextremely vulnerable to economic turmoilrnand political pressure: Hong Kongrncould not insulate itself from the Asianrnfinancial meltdown any more than itrncould maintain its independence fromrnChina. Creat powers, by contrast, dornhave alternatives, which is what makesrnthem great. The continental spread ofrnthe United States, with 265 million welleducatedrnand affluent citizens developingrnand using state-of-the-art technology,rnmakes it much less dependent on thern”global” economy. With one-third ofrnthat economy in recession —the thirdrnmost directly involved in “free trade”—rnthe advantages held by a large coimtryrnwith a diverse industrial and commercialrnbase have again become apparent.rnAmericans should be gratefirl that fliernUnited States is not Hong Kong. Yet thernClinton administration has attempted tornemulate Hong Kong and the other Asianrn”tigers” by plunging into economic globalism.rnAs the U.S. trade representativernsaw it in 1996, America was “a maturerneconomy with few domestic opportunitiesrnfor growth.” The fatal flaw in thisrnpessimistic view is that it was alwaysrnAmerican consumer demand whichrnfrieled the export boom in Asia, not thernother way around. The over-investmentrnin export-oriented production all alongrnthe Pacific Rim drove down prices andrnprofits, leading to loan defaults and currencyrndevaluations on a massive scale.rnPatten, who has yet to learn from thernhistory of his own country, believes thatrn”protectionism tries to stop the clock”rnand leads to “the delayed introduction ofrnnew technology.” But this is what happenedrnin England at the dawn of therncentury, when British policy embracedrn”free trade” with a passion bordering onrnreligious zeal. In his new work, ThernWealth and Poverty of Nations, economicrnhistorian David Landes attributes England’srndecline to the loss of export marketsrnby an economy based on exports.rnWithout an assured market, investmentrnin new products and industrial methodsrnwaned. New occupations did arise, particularlyrnin services, but, as Landes notes,rn”these new lines may not have the samernsocial and economic values as older employments”rn(i.e., selling potato chips isrnnot the economic equivalent of makingrncomputer chips).rnThe irony is that China, another continental-rnsized state that does not practicernanything akin to “free trade,” will acceleraternits rise to power as the Pacific Rimrnslides into depression. This shift in thernregional balance of power will be aidedrnby an American policy that continues tornfavor China at the expense of our naturalrnallies on the Rim, refusing to intervenernagainst the transnational corporations inrnorder to fashion a strategy that bringsrnmoral values, national security, and economicrnpolicy into harmony.rn30/CHRONICLESrnrnrn