So you might remember that Trump made a new branch of the military called Space Force.
There’s some critics in the Senate saying we need to keep Space explorations on the air-force division, no need for a new branch. In any case, it’s happening. Personally I think it make mores sense to have a different division if we’re going to do deep space exploration.
In any case, it’s official and Trump signed on December 11 orders to start moon bases, get to Mars, and explore some close by asteroids b y landing real human beings.
I have a theory as to why he wants to use the military, which might be one part of the bigger picture.
- We have known that the military is decades ahead of the public in terms of technological development. A stealth bomber that is completely black and invisible to radar had been operational for over 20 years before it was made public in late 80’s early 90’s for example.
- He’s fighting really hard to make new trade deals that protect American intellectual property. The new trade deal we made with Canada and Mexico focus heavily on protecting our intellectual property and Trump has made the case again and again that it’s American technological advantage that will drive our economy.
- He’s been going to a trade war with China and made it very clear that Intellectual Property theft isn’t going to be tolerated anymore. The Chinese economy is going down the drain right now. They financial markers (their version of Wall Street) is down due to the tariffs, they were also manipulating their currency to be artificially lowered (instead of having market forces naturally set a price) so they could compete globally as an exporter while at the same time protecting their markets from foreigners coming in. This has been a HUGE issue I remember financial books talking about it for years. Issues of IP protection, forced technology transfer, state support to state-owned enterprises, and cyber intrusion and theft were one of the ways China was going to rise in the value added. The reason is that China’s economy has grown, this means that the salaries paid to employees have also grown. It used to be that a Chinese made 1/10 of a Mexican salary (If I remember numbers correctly from the top of my head) now the Chinese makes on average three times more than the average Mexican. They have a rising middle class. In order to maintain themselves competitive they need to supply their supply chains with new products that are higher in the value chain and can thus justify the higher cost for producing it.
- Based on my talks with college professors and readings on the conditions of the Chinese tech development, they do seem to have a problem with innovation. The Chinese schools for are trying to become more like American schools and step away from standardize testing and into creative activities while Americans education keep saying it’s failing and wants to move into more standardize testing like China. In any case, one of the criticisms coming from China is that their education system focuses a lot on memorization (a Confusions style education that goes back thousands of years with the Imperial dynasties). This is zapping their creativity which in turns is zapping their innovation. There’s also a rise from the youth which was desiring to be entrepreneurs and innovators, so the government sees it as a win-win to foster a different type of education that will help China rise in the value chain of their already brilliantly established supply chain networks (deliberately designed in their city planning and part of their long-term strategy to become a world power). BUT the problem is that they still can’t compete with the West in terms of technological development (which actually relies heavily on sucking up talented individuals from around the world also, but some of these individuals do return to their home countries and their talents are used there after US education). So, since China can’t compete in innovation at the moment, they have depended on IP theft and forced transfer of technology to maintain their economy.
- Trump is looking to make them stop this through economic pressure they can’t figure out how to fight. They had originally tried to attack industries in US regions that voted for Trump like the farmers in the hopes Trump would lose the following election and China could be back to business as usual, but Trumps pressures have made them back down to this and actually purchase more from the farmers than ever before in the hopes Trump wouldn’t increase the tariffs. And if you look at the tariffs Trump has placed them into industries that aren’t very price elastic. This is to say, if Chinese industries were to increase the price, people would stop buying and find another brand. So, while Trump is putting in a 25% tariffs, about 4.5% increase to the US consumer is seen while a 20.5% cost is absorbed by the Chinese firm, which puts the money on the US treasury.
- In any case, if you look at the big picture, Trump is winning and he’s setting the foundations for US competitive advantage being set by our technological superiority which is set to maintain itself for decades to come if we can maintain our innovation pace and prevent IP theft. Making a trade deal with China that protects our IP would be crucial first step. After IP is secured, we can start rolling technologies that most likely exist in secret with the US military. Trump already said he would be looking to aid private firms like Elon Musk. We’re probably going to see these technologies being placed on the private sector eventually, and making sure that the US benefits from it. Say for example that China wants to use our tech, that’s all well, they just need to purchase it from American manufacturers or pay a fee since we hold the patent. Instead of just having them steal it.
- So my theory is that once the Chinese are brought to respect IP, and this can be done with a new trade deal that will force China to make this law, and enforce it, or see serious economic consequences like tariffs (which can only be maintained if we keep having the upper hand, which needs to be maintained by having trade deals that don’t screw us over) which we can use at any time if they violate their agreements.
