Sunday, July 10, 2011

China is not a model

The Economist has another typical article that degenerates into treating China with words like "ooh" and "aah". First the article lists economic and political similarities between the US and the EU and then starts drawing comparisons to China, implying that the Chinese government (or any authoritarian regime) could cope with financial crises more effectively than "dysfunctional" democracies. Maybe, but let's not start treating China as some kind of a model until comparisons between the West and China become valid. Despite the fact that the Chinese GDP soon catches up with that of the US, their current GDP per capita is less than one tenth of that of the US. The time to start drawing comparisons is when the Communist party has made it possible for the Chinese to enjoy Western levels of prosperity. With their current political and economic system there's no chance of that happening.

There's one good point there though: "Every year China continues to grow, the case that countries need to be democracies in order to become wealthy and developed becomes more tenuous."

Of course, this is nothing new. During the Cold War many 3rd world countries adopted the Soviet system as an economic model. What failed them was not any lack of democracy but the centrally-planned economic system that China has now somewhat abandoned. Even in the West many countries were economically liberal before they were politically liberal. It was the wealth brought on by Capitalism that made people in the West demand more political liberties. This is also what makes the Chinese leadership so nervous.

It is Capitalism that brings stability in the first place because materially well-off people have a lot to lose if they resort to petty factionalism. (No wonder then that Communist revolutions took place exactly where Marx least expected them.) This is why democratic countries that have been made prosperous by Capitalism are stable while attempts to introduce democracy prior to Capitalism tend to result in failures.

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