For Capitalism's Sake: Defending Taiwan and Our Way of Life

Abandoning Taiwan in its time of need would not only betray a fellow democratic nation, but embolden authoritarian regimes across the globe.

Taiwan Old Streets, Alexander Synaptic

Taiwan is a crucial node of the global supply chain, particularly in the semiconductor industry. Its crown jewel, Taiwan Semiconductor Manufacturing Company (TSMC), stands as the world's largest contract chipmaker, powering tech giants such as Apple, Qualcomm, and Nvidia. TSMC's state-of-the-art semiconductor manufacturing capabilities enable the production of the most advanced chips, which are utilized in an array of applications, including iPhones, computers, electric vehicles, and defense systems.

A Chinese invasion of Taiwan would dramatically disrupt the global supply chain and grant China a significant advantage in groundbreaking technology for years to come. Therefore, protecting Taiwan from a possible assault by the Chinese People's Liberation Army (PLA) is crucial. Failure to act could result in severe economic and democratic consequences on a global scale. Given the far-reaching implications for worldwide democracy and economic stability, the defense of Taiwan is of the highest importance, necessitating a resolute and unwavering response.

Should China seize control of Taiwan's semiconductor industry through an invasion, the consequences for investors, democracies, and the global economy would be profound. Such a takeover would likely lead to significant disruptions in the supply chain, potentially restricting or delaying access to essential components and affecting a multitude of industries dependent on these chips. Investors with holdings in sectors like automotive, aerospace, consumer electronics, telecommunications, and healthcare may encounter difficulties as their portfolio companies contend with rising costs, production delays, and potential erosion of market share.

If China succeeds in monopolizing Taiwan's advanced semiconductor production capabilities, it will gain considerable leverage over the global technology market. By controlling the supply of state-of-the-art chips, China could dictate market terms, increase prices, and restrict access to essential technology. This development would create a ripple effect throughout the global economy, extending beyond the technology sector and adversely affecting free trade in every market. TSMC consistently pushes the boundaries of innovation. If China were to take control of TSMC, it might realign research and development efforts with its strategic goals, potentially hampering the industry's rapid pace of innovation. Additionally, China could limit chip access to countries that align with its new Global World Order alongside Russia. This restriction could impede the development of new technologies and constrain growth opportunities for nations and businesses alike, impacting investors in various sectors.

Additionally, semiconductors are crucial to defense systems, with their production being intimately connected to national security. Should China take over Taiwan's semiconductor industry, the Chinese Communist Party (CCP) could potentially gain access to sensitive information and advanced technologies, posing a risk to the United States and its allies. This situation could prompt increased defense spending and divert resources from other sectors. Safeguarding Taiwan's semiconductor industry is vital for upholding global technological leadership and ensuring the stability and growth potential of investments across various sectors.

As Americans, we must not remain passive in the face of this looming threat. Our way of life fundamentally depends on free trade, open markets, and the innovation that stems from them. Inaction could trigger a domino effect of economic turmoil worldwide– jeopardizing jobs, hindering progress, and stifling growth. Given China's expanding influence on the global economy, permitting it to seize Taiwan's vital industries would dangerously alter the balance of power, putting both our capitalist values and our fundamental freedoms at risk.

Capitalist values are inherently linked with democracy. Taiwan, as a beacon of democracy in Asia, has successfully transitioned from authoritarian rule to a flourishing, multi-party government. The nation serves as an inspiration for others in the region, and its fall would profoundly impact global democratic pursuits. The United States has previously struggled to safeguard democracy in Iraq and Afghanistan, with varying degrees of success. If the U.S. and its allies fail to defend Taiwan, it could signal that democratic progress is neither valued nor safeguarded, consequently deterring similar transitions elsewhere. A third failure in three decades in defending democracy would be catastrophic, potentially leading to the spread of authoritarian regimes, contributing to further instability in the international political arena, and creating a more challenging environment for investors. 

Taipei Skyline 2020

As the leader of the free world, the United States bears the responsibility to protect freedom and democratic values at all costs. Abandoning Taiwan in its time of need would not only betray a fellow democratic nation, but embolden authoritarian regimes across the globe. Inaction could weaken the determination of democratic nations to confront totalitarian aggression, potentially threatening our cherished way of life and deeply held values. Failure to stop China's invasion of Taiwan would also shift the balance of power in Asia, potentially emboldening China to consider similar invasions of countries like Vietnam or the Philippines—both nations that the US fought wars to defend. Taiwan's democratic values and institutions closely align with those of the United States and its allies, rendering its defense both a moral obligation and a strategic necessity. If the United States were to forsake Taiwan, it would signal to authoritarian regimes worldwide that we and our allies lack the commitment to uphold democratic values. Defending Taiwan goes beyond safeguarding a single nation's sovereignty; it is about preserving the global democratic order and maintaining regional stability in Asia. 

A failure to defend Taiwan could lead to a rollback of human rights and civil liberties in the country, as the Chinese government stands ready to impose its authoritarian policies on the Taiwanese people. This could lead to increased repression, surveillance, and censorship, diminishing the quality of life for millions of Taiwanese citizens. Moreover, the erosion of human rights could also have broader implications, as it might encourage other authoritarian regimes to adopt similar measures, further destabilizing the international community.

Taiwan is a vital strategic ally for the United States and its partners, including Japan, in the Asia-Pacific region. Its unique combination of geographic location, democratic values, and economic strength positions it as an invaluable partner for promoting regional stability and prosperity. In recent years, Japan has taken a remarkable shift in its position on defending Taiwan, as evidenced by its 2021 annual defense white paper, which highlights the importance of peace and stability in the Taiwan Strait for both Japan and the international community. This shift demonstrates Japan's growing concern about the potential consequences of a Chinese invasion of Taiwan.

Failing to safeguard Taiwan would undermine the United State’s network of allies in the region, including Japan, and signal a lack of commitment to the broader principles of democracy, freedom, and human rights. A failure to act could strain relations with other democratic nations, hinder collaborative efforts to address global challenges, and weaken our economic prosperity. As Japan has increasingly recognized Taiwan's importance in maintaining regional stability, the need for the United States and its allies to stand together in defense of Taiwan is now more crucial than ever. Furthermore, the economic rationale for defending Taiwan is more significant than that of any other nation the United States has defended since World War II. Taiwan's central role in the global semiconductor industry, which is the backbone of modern technology and innovation, makes its defense critical to maintaining the current economic order. The disruption of the semiconductor supply chain would not only affect the technology sector but also have cascading effects on other industries, such as automotive, aerospace, consumer electronics, telecommunications, and healthcare.

The potential economic consequences of a Chinese takeover of Taiwan's semiconductor industry are far-reaching and could lead to a severe and prolonged global recession. Given the intertwined nature of modern economies, defending Taiwan is not just a matter of national security and democratic values but also of global economic stability. Therefore, the stakes in this situation are higher than in any other post-World War II conflict, making the defense of Taiwan an imperative for the United States and its allies.

The democratic peril associated with failing to defend Taiwan is immense and far-reaching. The implications extend beyond Taiwan's borders, threatening democratic progress, strengthening authoritarian regimes, undermining the global democratic order, eroding human rights, and jeopardizing strategic alliances. As capitalists, it is essential to recognize that a secure and prosperous global economy is closely linked to the preservation of democratic values and institutions. Defending Taiwan is not only a moral obligation but also a strategic imperative. We, as Americans, must fervently defend our way of life and the values we hold dear. We cannot – and must not – let Taiwan fall. The time to act is now. Stand up, stand firm, and stand with Taiwan to preserve the global democratic order, protect human rights, and maintain a secure and prosperous global economy.