A Glitch in the Matrix - By Barry C. Lynn

Economic interdependence among nations, Americans have long believed, is the surest and safest path both to a wide prosperity and a perpetual peace. If all nations jointly depend together on one vast "global" factory for many basic goods, so our thinking holds, no one state will ever dare disrupt the functioning of this "communalized" system.

In recent years, the United States pursued this strategy nowhere more dramatically than with China. The basic idea -- as Bill Clinton put it in 1997 -- was that further "isolation would encourage the Chinese to become hostile." Conversely, greater interdependence would have a "liberalizing effect."

But nearly two decades after Washington lifted almost all controls on commerce with China, this is not happening. Despite a vast increase in trade between China and the rest of the world, and a vast increase in the wealth and well-being of the average Chinese citizen, the regime has become more autocratic at home and more adventurist abroad. If anything, Beijing is proving highly adept at leveraging interdependent systems for national political advantage, as it did two years ago when it cut off export of rare earth metals to force Japan to back down in a territorial dispute.

So what should a fading hegemon do when its grandest of strategies proves to be flawed?

One extreme option would be to double down on that strategy, hoping that yet greater degrees of industrial interdependence might finally convince our rival to act as a more responsible partner in the world system. Another extreme option, diametrically opposed to the first, would be to abandon interdependence in favor of more traditional approaches such as a military balance of power.

The Obama administration, over the last year, has chosen to pursue both of these extreme -- and opposed -- options. On the one hand, it has begun to devote real energy to a new generation of trade agreements, like the Trans-Pacific Partnership, which aim to tie the U.S. and Chinese economies together even more closely. On the other, it has begun to meet force with force. As Beijing blusters in the South China Sea and builds up military power, Washington has dispatched Marines to Australia, promised a new missile shield to Japan, and proposed to station a second carrier group in the region.

This is absurd. To tighten the gears of the international production system and, simultaneously, to position more heavy weapons right on the factory floor is a recipe only for catastrophe. Any conflict of any size would almost instantly break many of our most vital systems of supply. Instead, the United States should use its power to force corporations to distribute production capacity more widely. Such a move would reduce China's growing leverage over America -- and it would help stabilize the international system, economically and politically.