Davos Man is dying. No longer is the globalized economy based on the fierce but mostly fair competition between firms from all over the world. Instead, many governments openly do their firms’ bidding at the expense of Western competitors. Western governments, though, cling to their belief in the old ways and are hurting their own companies as a result. As they look for ways to begin digging out of the pandemic’s economic collapse, Western governments and their allies should collectively protect their top-performing businesses against Chinese rivals who don’t play fair. Otherwise, it is precisely their top performers they risk losing.
Adam Smith’s invisible hand is a remarkable thing. Thanks to it, a lowly Finnish paper mill named Nokia, founded in 1865, grew into a large paper and pulp company, and then turned to rubber boots, tires, and televisions before becoming a globally leading manufacturer of cell phones and mobile telephony infrastructure. Nearby, in Sweden in the 1880s, two young engineers started a repair shop for telegraphic equipment. Their firm, named Ericsson after one of its founders, subsequently began making telephones before turning, in recent decades, to cell phones and then mobile telephony infrastructure.
