Education

This was the plan: America would stop making things and instead make recipes, the "IP" that could be sent to other countries to turn into actual stuff, in distant lands without the pesky environmental and labor rules that forced businesses accept reduced profits because they weren't allowed to maim their workers and poison the land, air and water.

This was quite a switch! At the founding of the American republic, the US refused to extend patent protection to foreign inventors. The inventions of foreigners would be fair game for Americans, who could follow their recipes without paying a cent, and so improve the productivity of the new nation without paying rent to old empires over the sea.

It was only once America found itself exporting as much as it imported that it saw fit to recognize the prerogatives of foreign inventors, as part of reciprocal agreements that required foreigners to seek permission and pay royalties to American patent-holders.

But by the end of the 20th Century, America's ruling class was no longer interested in exporting things; they wanted to export ideas, and receive things in return. You can see why: America has a limited supply of things, but there's an infinite supply of ideas (in theory, anyway).

There was one problem: why wouldn't the poor-but-striving nations abroad copy the American Method for successful industrialization? If ignoring Europeans' patents allowed America to become the richest and most powerful nation in the world, why wouldn't, say, China just copy all that American "IP"? If seizing foreigners' inventions without permission was good enough for Thomas Jefferson, why not Jiang Zemin?

America solved this problem with the promise of "free trade." The World Trade Organization divided the world into two blocs: countries that could trade with one another without paying tariffs, and the rabble without who had to navigate a complex O(n^2) problem of different tariff schedules between every pair of nations.

To join the WTO club, countries had to sign up to a side-treaty called the Trade-Related Aspects of Intellectual Property Rights (TRIPS). Under the TRIPS, the Jeffersonian plan for industrialization (taking foreigners' ideas without permission) was declared a one-off, a scheme only the US got to try and no other country could benefit from. For China to join the WTO and gain tariff-free access to the world's markets, it would have to agree to respect foreign patents, copyrights, trademarks and other "IP."

We know the story of what followed over the next quarter-century: China became the world's factory, and became so structurally important that even if it violated its obligations under the TRIPS, "stealing the IP" of rich nations, no one could afford to close their borders to Chinese imports, because every country except China had forgotten how to make things.

But this isn't the whole story – it's not even the most important part of it. In his new book Breakneck, Dan Wang (a Chinese-born Canadian who has lived extensively in Silicon Valley and in China) devotes a key chapter to "process knowledge":

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