Social Matter

Al-Jazeera English’s Head to Head program recently featured a debate with Dr. Zhang Weiwei, renowned expert on the Chinese model of development and professor of international relations. It’s not the strongest of debates; AJE host Mehdi Hasan leaps from point to point and doesn’t grant Weiwei much opportunity to address the worldview and grand strategy of the Chinese State. As a result, Weiwei comes off looking weak at points. I’d encourage watching it anyway in addition to Eric Li’s fuller exploration of these topics. Hasan also seems to assume that the results of Chinese democracy would be good and desirable ones, ignoring that anti-Japanese and pro-expansionist nationalism would likely increase.

The problem is that Hasan attempts to frame the debate in a way which looks at China as operating almost in a vacuum, ignoring the fact that China has an entirely different culture and is in the process of transitioning from a brutal Communist system. We don’t consider Maoism as particularly relevant to the modern day, but a system which killed 40-70 million people cannot be overcome in the single generation of reform since 1978. It’s unsurprising that the West, with its increasing political time-preference, has trouble seeing this. Martin Jacques, the British academic and journalist, pointed out during the debate that no Western country had liberal democracy in the sense that Hasan articulates (universal sufferage, total freedom of the press, electoral rights and rule of law) during our own period of industrialization. I think this comment strikes at the far more interesting question which Hasan ignores.

Given that both China and the West are encountering periods of dramatic economic, social, demographic, and political transformation, which system has the greater potential to a) create long-term solutions for existing problems, and b) reform itself as necessary? A lot of political debate focuses on the question of what system or ideology is “better”: more democratic, more stable, and so on. The problem with this is that the world is a flux. Policies and entire political systems become discarded as new information comes in. The West again has trouble understanding this because all our reforms over the past few centuries have been in the direction of greater liberal democracy. But across the Eurasian sphere from the former USSR to China itself, a huge segment of humanity has experienced what happens when ideologies have a static idea of a “perfect system“, rather than structuring themselves so that new information will continually improve them.

Totalitarian practices arise when states are terrified of new information, and don’t even require the state ideology to be inherently totalitarian. Communist states once suppressed economic information showing that market systems were more productive, even when this was self-evident to the population (such as in East Germany). Theocracies suppress information which could challenge religious orthodoxy. German physicist Philipp Lenard attempted to marginalize Relativity on ethnic rather than scientific grounds – ironically, the Nazis ended up rejecting this claim because of its sheer ridiculousness. Progressive ideologues are increasingly coming to terms with the idea they don’t fucking love all science. In essence, totalitarianism is a sign of increased fragility.

This is actually one of the arguments for liberal democracy. Ideally, a liberal democratic state exists only to protect the rights of all citizens, and leaves them otherwise free to vote how they will based on their values and beliefs. Because the rights of citizens are sacrosanct, the state cannot avoid uncomfortable information. Of course, we can see today that this isn’t at all how things work out. States which begin as liberal, democratic ones end up being captured by special interests as much as any other system. Its system of rights makes it exceptionally ripe for entryist strategies employed by private and ideological agents. Policy is not passed on the basis of true information, but on what the populace believes to be true information. Rent seeking increases as parts of the population can vote themselves some portion of wealth. The saving grace of liberal democracy is that rights to free speech still exist to a far enough extent that we may be able to overcome these structural weaknesses. For now, anyway.

China’s defenders portray the Chinese model as being based on a meritocratic approach to governance and a low-time preference “civilizational state” appropriate to Chinese culture and history. This applies to Chinese business as well as government. The Economist describes a focus on speed as being vital to the Chinese model of management. China is skilled at carefully selecting aspects of Western strategies and technologies which it believes to be appropriate. Companies begin selling quickly (skipping the Western norm of beta testing) and then rapidly incorporating market feedback in order to improve the product. The goal is not to out-innovate the West, because China realizes that this is not as yet possible. Its strength is its huge resource base, and so it focuses on “accelerated development” instead. Presumably, it will begin to shift toward innovation as it increases its human capital base. This may help us explain the phenomenon of ghost cities in China. The model is wasteful on the one hand as resources may be pumped into enterprises which yield losses. But it’s also geared towards increased antifragility, since China is willing to bear the brunt of losses in order to strengthen its long-term development. This is only possible with China’s system of government, in which politicians cannot attempt to overthrow the government for every short-term loss. Examining how China improves this technique to decrease its wastefulness will be something to look at in future.

Overall, China’s model of governance more closely approximates how large private corporations operate (don’t let the apparent waste throw you off – Silicon Valley gets similar criticism). In a competitive market, firms must minimize waste and optimize development if they want to maintain their customers. This applies to firms with high market power as well as ones without. Like corporations, China must deal with corruption, human error, short-term biases, and so on. But because China is currently competing against both developed countries like the US and developing ones like Brazil or India, it also faces similar competitive pressures in how it governs the country. The West has not faced such pressures from outside its own region for a long, long time – perhaps not since before the colonial era. As China and other countries shift economic and political power away from the West, our own governmental structures will no longer enjoy the luxuries of wasting resources because of ideological impotency. This goes beyond questions of economic policy. Foreign policy and our approach to demographic issues will also change. Conservatives who howl against President Obama’s sensible approach to Cuba will join progressives who think that evolution no longer matters on the dust-heap of history.

My argument here is not that the Chinese model is a perfect model. The moment a perfect model is discovered, a new crisis will return it to imperfection, and the Chinese model may soon face its first major test. The question is which model is better equipped to respond to our rapidly shifting economic, social, and technological conditions. Which will take a more long-term approach in planning? Which will maintain stability through crises without stifling dynamism and innovation? At this moment in time, China is adjusting their ideology to deal with the new reality. The West is largely trying to ignore the new reality in order to protect its ideological biases. It’s not hard to see which one is more fragile and less effective.

Of course, the West will continue to produce massive wealth and the Western powers will continue to be major contenders for a long time coming. But let’s not be deceived into thinking that we built that. The economic and political position of the West is largely the result of previous generations. The current management is taking some steps to maintain that, such as making us more energy independent. But our ideologies are dangerously undermining us. The conservative base still thinks that talking about how awesome the US is will make it true. The progressive base is stuck in the same old rut of wanting increased welfare benefits while undermining economic incentives and social cohesion. Europe is already challenging this establishment. The barbarians reach the peripheries first.

Meanwhile, China views the whole thing from the perspective of practical businessmen. They continue to learn from others while adapting it to their own context. They reach their hands out to those who want to work with them. They are increasing pressure against their political and economic competitors. In the words of Dr. Zhang Weiwei:

“If you think our model is good, you can learn from us. If you think our model is not good, we don’t care.”

america Antifragility China Zhang Weiwei