The U.S. Will Be the Biggest Loser of the Thoughtless War Against TikTok
As seen in RealClearMarkets.
With threats of a U.S. ban growing, China-based TikTok is going out of its way to placate U.S. lawmakers. That TikTok has been reduced to this is sad commentary about politics in the United States. Protectionism quite simply never elevates those who practice it, and the political efforts to cut TikTok off at the knees are protectionism, plain and simple.
Indeed, it’s no reach to say that absent TikTok successfully offering Americans what they want, its existence in the U.S. would not remotely be in question. TikTok’s “error” was in discovering a wildly unmet need in the marketplace, only to meet it. At present Americans spend far more time on TikTok than they do on Facebook, Instagram, Snapchat, and others. This speaks to progress, including progress for the U.S.
Lest readers forget, arguably the biggest driver of our immense prosperity is the happy fact that the U.S. is a largely open market to the world’s genius. When we’re free to utilize the specialized creations of others, we have the greatest odds of doing what we do best. In other words, the most open country to global production is always the biggest winner economically. Absent the rest of the world’s production and its creativity, the U.S. would be quite a bit poorer.
The above truth is being dismissed by increasingly paranoid U.S. politicians. Of the backward view that achievement outside these fifty states somehow harms those within them, the U.S. political class is intent on putting TikTok out of business. It’s the equivalent of Seattle shutting off the inflow of goods from Cupertino, CA lest Apple become too strong. More realistically, what Apple did with the iPhone proved very beneficial for Seattle residents much as what Amazon’s done has proven hugely beneficial for those who live in Cupertino.
The simple truth is that work divided among a growing number of individuals is the path to specialization, and by extension major leaps in terms of productivity and wealth. What’s true for trade between workers in Seattle and Cupertino is just as true for workers in Seattle and Shanghai. Again, the U.S. would be much poorer absent work divided with the rest of the world.
To which those eager to bring TikTok harm claim that underlying its entertaining videos is a data-gathering business for the Chinese Communist Party (CCP). On its face, such a view brings new meaning to absurd. Really, what innovative mind would work against towering odds to create a multi-billion dollar business for government? Better yet, what government in any country would have ever teamed up with TikTok?
The fact that TikTok is worth so much is testament to how much freer the Chinese people presently are to work and produce creatively. Put another way, if TikTok had been created to meet the needs of the CCP, it wouldn’t be TikTok. And no American would have ever heard of it, let alone people around the world. Governments don’t create or operate innovative businesses, period.
The other excuse for the harassment of TikTok is that it’s manipulating the American people in service of the CCP. Once again, ridiculous. For one, if TikTok were really propagandizing for the CCP, its future would be imperiled for reasons that have nothing to do with U.S. politics. Think about it.
For two, if TikTok were actually capable of manipulating human thought then it would be worth exponentially more than it already is. That is so because no business has yet proven capable of such a skill. See New Coke, see the Ford Edsel, see Amazon’s foray into mobile phones. Do you remember the Fire? Or perhaps the Lisa rolled out by the late Steve Jobs. The idea that TikTok has discovered how to control our actions just isn’t serious.
For three, commercial history in the U.S. and in any economy defined by dynamism is all about dominance that is ephemeral. What this means is that while TikTok is much-loved now as its valuation attests, the fact that it is signals that it won’t always be the toast of social media users. Translated, TikTok’s valuation is a magnet (as was that of Facebook, Twitter, etc.) for the very investment that will eventually result in businesses that will knock it off of its proverbial perch. If TikTok’s success is bothersome, get out of the way so that it can thrive.
The problem now is that grandstanding politicians aren’t allowing the markets to work. They’re instead hiding behind governmental force to do to TikTok what its competition could not. No one will win, but Americans will certainly lose given the historical truth that protectionism is always and everywhere most harmful to those protected.