It never did make any sense to suppose American corporations to be capable of changing a foreign culture in ways we would want, except accidentally. A corporation is not a public service institution nor an engine of diplomacy. It exists for one purpose and one purpose only: to generate profits. It will do whatever it must do in order to generate those profits and protect them, whether that is good for human progress or bad. And, because of the logic of competition, it is more often bad than good, to the extent that law and regulation allow.

Why? Because the logic of competition argues against having scruples unless those scruples are simultaneously imposed by law on all one's competitors as well. If your company refrains from taking a potentially profitable, but morally dubious, action, and your competitors do not, you lose.

We may generalize this as an axiom: business sinks to the level of depravity that the law allows. Not because businesspeople are inherently moral lepers, but because those who are will enjoy a competitive advantage over those who are not and ultimately drive them out of business.

If the law allowed corporations to hire private armies and attempt to assassinate their competitors' officers and slaughter their employees, it would be common practice, because those willing to do this would have an advantage over those who were not. It is not common practice, only because the law does not allow it, and so we are able to have people succeed in business who are not murderous scumbags.

Free trade with China is a bad idea. Partly this is because of the rejection of democracy, liberty, and other liberal values by the Chinese government. Even more importantly, it is because of the Chinese government's treatment of the Chinese working class, which results in a drain of capital from liberal democracies into China, drawing down real wages over most of the world and damaging the global economy. All of this, as far as I can tell, being part of an economic strategy on the part of China to accelerate its own development on its own terms. It may, perhaps, also be part of a geopolitical strategy, but I am less convinced of this.

The truth is that China needs trade with us more than we need trade with China. At present, the U.S. represents a larger market for the world's good than China does. As China develops, that may not always be so. But for now, it is possible to use China's desire for trade privileges to leverage concessions from China in several ways -- or, if China is stubborn about that, simply to do without Chinese trade.

The most important concession we should demand is the adoption of modern standards of workers' rights in China. (Ridiculous that a supposedly capitalist country should have to lecture a supposedly socialist one about that, but it's the case.) But there are others perhaps just as important. Among the concessions we should demand is an opening of the Chinese internet. Without that, it would be prohibitively difficult to monitor whether China was complying with purely economic demands, since something like on-site inspections would be humiliating for China and (with reason) unlikely to be agreed to -- but Internet contact with Chinese workers would serve probably better than that.

In any case, we should abandon our misplaced worship of markets and our belief that trade by itself will generate reform. Contrary to the misconceptions of free-market purists, capitalism and democracy not only do not require one another, they are actually incompatible. It is because America is a democracy that our economy is no longer purely capitalist. And China has shown that capitalism in all its oppressive ugliness is perfectly compatible with a police-state government.