Who Lost Egypt?

America did not lose Egypt. Rather, China — and what China represents — gained Egypt.

China and Egypt, arguably the two oldest countries if not nation-states in the world, have a broadly similar history: Both were major empires in ancient times, and both were able to stay geographically and somewhat culturally intact over the centuries.

Equally important is the fact that, although both countries were severely manipulated by colonial powers, neither country during the last 200 years fell completely under colonial rule for any long period of time.

And finally, both had uprisings led by politically frustrated young people, China in Beijing’s Tiananmen Square in 1989 and Egypt in Cairo’s Tahrir Square today.

But the key difference between Tiananmen Square and Tahrir Square is how America has changed in the eyes of the world. At Tiananmen, America was the ideal, the Statue of Liberty the unofficial symbol of the demonstration. In Cairo, America is not the hope for tomorrow — but the overly pragmatic broker, playing an overly cautious “Old World”-type game.

Of course, since Tiananmen Square, China has developed into the second-largest economy in the world, while Egypt, with its almost Brezhnevian-style leadership, continues to wallow in the past.

And that difference — the fact that a non-western country, a country more economically despondent than Egypt was 40 years ago, can now successfully challenge the West economically — is the siren song that Egyptians are now listening to on the Internet.

In business school, students are taught about the value proposition: Value = Benefits/Price (with “price” taking into account such things as money, time and effort). As Warren Keegan, author of the leading textbook on global marketing, states, “For any organization operating anywhere in the world, the essence of marketing is to surpass the competition at creating perceived value for the customer.” Technology, particularly the Internet, has expanded this concept by creating a Greek chorus around the customer.

Technology and globalization have also made the understanding of the value proposition, along with the concept of a surrounding chorus, a key component of a nation’s foreign policy.

Successful foreign policy is no longer just about building coalitions of like-minded states or playing one nation against another for the benefit of one’s home country. The Internet, in its ability to radically democratize everything, to take decision-making away from leadership, has forced governments to more closely define the benefits and values they offer to the citizenry of other countries.

China’s value proposition — its “Internet message” — is clear-cut: You might not have the liberties as described by the Enlightenment philosophers, but that is a small sacrifice (according to the Chinese value proposition) when weighed against the economic dynamism of China’s autocapitalism.

In essence, China has taken Emma Lazarus’ poem from the base of the Statue of Liberty and reinterpreted it to say, “Give me your tired, your poor, your huddled masses yearning to be rich. I lift my lamp above the non-western door.”

Ironically, faux communist China, with its successful mix of capitalism and autocracy that stresses economic development and societal stability while severely limiting civil liberties, has been able to do what Stalin and Khrushchev only dreamed of: becoming a successful model for other countries.

The value proposition the world sees on the web today from America is more diffuse. By definition, the United States has a more difficult message than China’s. For America’s message is not only prosperity, but also prosperity with democracy, prosperity that includes individual rights and liberties. To market this message successfully, both parts of the equation must be in sync.

In the 22 years since Tiananmen Square, America’s value proposition, like its politics, has failed to keep up both as a realistic symbol of a better world and as an economic engine that represents that ideal. Our foreign policy has swung between the realpolitik of George H.W. Bush to the overly simplistic “let’s invade to create democracy” policy of George W. Bush.

We have purposely looked the other way as our one truly democratic ally in the Middle East, Israel, ignores our values and acts like the post-war Soviet Union in keeping and settling on lands won in war. This feeds the impression in the rest of the Middle East that the United States does not represent democracy, but an indirect form of imperialism.

At the same time, our economic model that we so proudly boasted about has been diminished by the recession. Simultaneously, our political inability to see as a people the need to invest in our own future — whether in education, infrastructure or any public endeavor save for defense — calls into question whether our system has been so encumbered by tradition and special interests that it can no longer represent the commonweal.

Sadly, totalitarianism won over Lady Liberty 22 years ago in China. And although there is an amorphous call for freedom as part of the Cairo demonstration, it is not necessarily a call to be identified with American values of freedom.

America must be perceptive enough to make the necessary changes both at home and abroad so that it can re-assert its true value proposition, so that once again the symbol of the demonstrators is the Statue of Liberty.

Without these changes, America will grow more and more isolated within a world of newly empowered global techno citizens.