♠ Posted by Emmanuel in China at 1/24/2011 12:27:00 PMWhile I try to be a conscientious scholar, a neat thing about academia is that you don't even have to be right to gain attention. Take Francis Fukuyama [please!] After the collapse of the Soviet Union, he gained notoriety for his now widely derided "End of History" thesis that all political-economic systems would converge on capitalist liberal democracy as the only game in town. While the succeeding years have put paid to that idea, Fukuyama has successfully parlayed a naff idea into a vehicle for self-promotion. Among other things, he famously broke with his erstwhile neoconservative ideological allies over the invasion of Iraq as an experiment in forcefully fomenting freedom 'n' growth so beloved by certain Americans.
Moving to the year 2011, we find ourselves with a more reticent Francis Fukuyama who, if anything else, veers too much in the other direction. The End of the Line for the End of History, Frank? Somebody would have suggested it's The Return of History and the End of Dreams if that even more faux-grandiose title weren't already taken. Actually, I have just attended a presentation by Nicholas Lardy of the IIE here at the LSE that takes some exception with Fukuyama's characterization of contemporary China. One of the more striking refutations Lardy makes is the commonplace assertion that the state has retaken the commanding heights of industry in China. Parsing the data carefully, Lardy notes that the share of economic activity attributable to state-owned enterprises was still going down in 2009 and 2010 as effects of the US-led financial crisis were being felt and China undertook a large stimulus programme aimed especially at infrastructure development.
Let's just say the authoritative Nicholas Lardy neither wishes schadenfruede on China nor sees any imminent banking crisis. While we wait for the event's podcast to be posted, let's turn to some choice quotes from the reinvented Francis Fukuyama on why US democracy has little to teach China:
The first decade of the 21-century has seen a dramatic reversal of fortune in the relative prestige of different political and economic models. Ten years ago, on the eve of the puncturing of the dotcom bubble, the US held the high ground. Its democracy was widely emulated, if not always loved; its technology was sweeping the world; and lightly regulated “Anglo-Saxon” capitalism was seen as the wave of the future. The US managed to fritter away that moral capital in remarkably short order: the Iraq war and the close association it created between military invasion and democracy promotion tarnished the latter, while the Wall Street financial crisis put paid to the idea that markets could be trusted to regulate themselves.As for democratic convergence, it seems to be put off (for now):
China, by contrast, is on a roll. President Hu Jintao’s rare state visit to Washington this week comes at a time when many Chinese see their weathering of the financial crisis as a vindication of their own system, and the beginning of an era in which US-style liberal ideas will no longer be dominant. State-owned enterprises are back in vogue, and were the chosen mechanism through which Beijing administered its massive stimulus. The automatic admiration for all things American that many Chinese once felt has given way to a much more nuanced and critical view of US weaknesses – verging, for some, on contempt. It is thus not surprising that polls suggest far more Chinese think their country is going in the right direction than their American counterparts...
The most important strength of the Chinese political system is its ability to make large, complex decisions quickly, and to make them relatively well, at least in economic policy. This is most evident in the area of infrastructure, where China has put into place airports, dams, high-speed rail, water and electricity systems to feed its growing industrial base. Contrast this with India, where every new investment is subject to blockage by trade unions, lobby groups, peasant associations and courts. India is a law-governed democracy, in which ordinary people can object to government plans; China’s rulers can move more than a million people out of the Three Gorges Dam flood plain with little recourse on their part.
Americans have long hoped China might undergo a democratic transition as it got wealthier, and before it became powerful enough to become a strategic and political threat. This seems unlikely, however. The government knows how to cater to the interests of Chinese elites and the emerging middle classes, and builds on their fear of populism. This is why there is little support for genuine multi-party democracy. The elites worry about the example of democracy in Thailand – where the election of a populist premier led to violent conflict between his supporters and the establishment – as a warning of what could happen to them...Despite its unwillingness to lose even the slightest grip on power, the Communist Party has actually done much to evolve since the events of Tiananmen lest China end up like other socialist states in Eastern Europe right about the time Fukuyama was ending history. Let's just say Fukuyama is now rectifying the error of his ways even if he may be going overboard with the state-led capitalism bit as per Nicholas Lardy. Better late than never, I guess, and perhaps Fukuyama will fix that misstatement a few years down the line.
[I]f the democratic, market-oriented model is to prevail, Americans need to own up to their own mistakes and misconceptions. Washington’s foreign policy during the past decade was too militarised and unilateral, succeeding only in generating a self-defeating anti-Americanism. In economic policy, Reaganism long outlived its initial successes, producing only budget deficits, thoughtless tax-cutting and inadequate financial regulation.
These problems are to some extent being acknowledged and addressed. But there is a deeper problem with the American model that is nowhere close to being solved. China adapts quickly, making difficult decisions and implementing them effectively. Americans pride themselves on constitutional checks and balances, based on a political culture that distrusts centralised government. This system has ensured individual liberty and a vibrant private sector, but it has now become polarised and ideologically rigid. At present it shows little appetite for dealing with the long-term fiscal challenges the US faces. Democracy in America may have an inherent legitimacy that the Chinese system lacks, but it will not be much of a model to anyone if the government is divided against itself and cannot govern. During the 1989 Tiananmen protests, student demonstrators erected a model of the Statue of Liberty to symbolise their aspirations. Whether anyone in China would do the same at some future date will depend on how Americans address their problems in the present.
And yes, it is the US, not China, that has become ideologically rigid. Adapt or die--and even Americans know who the endangered species is: debtlodocus Americanus. The galling thing about the US is that current "grown ups" believe their children will be worse off than they are--and they are doing a damned good job of making sure of that eventuality by racking up, well, $14 trillion in debt and counting.