Shooting the Center

Readers of this column know that I have often observed that many trade issues these days involve the left and the right ganging up and shooting the center. This was most recently illustrated in the Biden and Trump administrations’ approach to trade policy and tariffs. Trump has taken the argument to an extreme, but both presidents favored a more protectionist policy, albeit for different reasons. According to the left, past open trade policies benefited large corporations and their executives at the expense of workers, who suffered job losses and lagging wage increases. According to the right, the United States has been a victim of exploitation by evil foreigners stealing our jobs, undermining our economy, and compromising our national security. If you dissect these two philosophies, the main difference is the bad guy—big companies for the left, foreigners for the right. The remedy, more protection, is the same. The center, which saw trade as an engine of economic growth, found itself an object of derision—people living in the past while the world has changed around them. It may well be that Trump’s excesses in imposing tariffs will discredit his argument of the United States as a victim and prompt a return to economic reality, but that day has not arrived and will not be here for some time, if ever. Meanwhile, the rhetorical war continues.

At the same time, a similar war has broken out over “Big Tech,” the large digital companies that trade and antitrust activists love to hate. Once again, the left and the right are united in their disdain for these companies, but once again for very different reasons. According to the left, these companies are hurting consumers and reducing their choices by stifling competition and engaging in anticompetitive practices. According to the right, these companies are havens for liberal thinking that discriminate against conservative content, weaken our society, and expose our children to dangerous content. In this case, the villain is the same, but the crime is different. To the left, big is apparently, by definition, bad. The companies’ very existence and the methods they used to achieve their size are unacceptable. For the right, the crime is content—the presence of content they object to and the absence of content they like.

People a lot smarter than I have written extensively on all sides of this argument, except for one, which I get to below. I am not going to weigh in on the big debates, except to express three opinions. First, big is not necessarily bad. How a company got to be big and how it uses its market power are fair game for regulators if laws were broken along the way, but the mere fact of size should not open it to attack. Second, when examining the state of competition in an industry, it is important to include foreign competition as well as domestic competition. Digital technology, by its very nature, transcends borders. A company might be much larger than its domestic competitors, but it also may face vigorous foreign competition that needs to be considered. Third, I confess to being a First Amendment purist who hates to see attempts to limit the right of people to express themselves. That is an easy thing to say but a hard thing to practice, but the First Amendment only matters in hard situations—when people say nasty, hateful things. Some countries have outlawed hate speech. The United States has not, but we struggle to defend our constitutional principles while the internet multiplies opportunities for people to test its limits.

Largely missing from the debate over Big Tech has been its relevance to national security, and that is a connection that needs to be made more explicit. The twenty-first-century economy is primarily digital. For financial institutions and other service providers, it’s obvious, but even companies that manufacture rely on digital services for sales, customer and supplier contacts, keeping track of inventory and maintenance, and so on. In doing so, they rely on digital service providers, including cloud service providers—in other words, Big Tech. That means keeping tech companies healthy is important not just for themselves but because they have become the foundation of the modern economy. Currently, we are world leaders in this sector, but we are hard-pressed by China. Weakening U.S. companies will effectively cede leadership to China, not only with respect to commercial services like TikTok, but also on more fundamental research. Former National Security Advisor Robert O’Brien, whom I don’t usually agree with, made an important point about the consequences of attacking Big Tech: “Research and development at scale on AI that powers defense systems, quantum tech that secures communications, and 5G networks that underpin military and economic resilience, will slow dramatically.”

I have never been persuaded that the biggest security threat the United States faces is TikTok, but losing our leadership in the technologies of tomorrow is a serious threat to our economy and our military. With our technology companies under attack from both left and right, there is real danger that the center will not hold. “Don’t mess with success” is a useful aphorism in this case, but the erosion of our political center is a deeper problem than this single case, and it will take more than platitudes to preserve it.

William A. Reinsch is senior adviser and Scholl Chair emeritus with the Economics Program and Scholl Chair in International Business at the Center for Strategic and International Studies in Washington, D.C.