January 10, 2008
Column: Illiberal capitalism: Russia and China chart their own course
During the cold war it was natural to lump Russia and China together. They were the two great communist powers - the leading ideological adversaries of the west.
Then came 1989 - the year of the crushing of the students’ revolt in China and the collapse of the Soviet empire. Communism had failed. Free markets and democracy seemed poised to sweep all before them. The spirit of the time was captured in Francis Fukuyama’s famous article on "The End of History", published in Washington’s National Interest magazine that summer. Mr Fukuyama did not argue that history had ended in the sense that there would be no more great events. Rather he claimed ideological victory for the west, suggesting that "liberal democracy may constitute the end point of man’s ideological evolution".
Even though it swiftly became fashionable to dismiss Mr Fukuyama, a variant of his thesis has powerfully influenced US foreign policy ever since. The chain of thinking works something like this. Communism failed as an economic system. Russia and China have had to embrace free markets. Economic freedom will, in time, produce political freedom. A liberalised economy will generate new forces and tensions that will make it impossible to maintain an authoritarian political system.
The remainder of this column can be read here. Please post comments below.
Capitalism creates private ownership not just of the means of production but jut as importantly of the produced items. People expect accountability when their nokia doesn’t work, when their car breaks down, when their land is taken by corrupt officials, when family members die of pollution related cancer. The communist party has started to reflect that need for accountability and is very sensitive to popular perception; they expect hundreds of millions of Chinese to move to the cities and see their main purpose currently to successfully guide that migration; if they manage that then China’s transition from agricultural backwater to the central power on the planet will be complete.
For that the party needs to be much more flexible and many seem to work to make it so. More wealth, better education, a highly developed intellectual culture are creating a vast critical middle class that expects accountability and dialogue. Perhaps it’ll be short of democratic but much more representative nevertheless. It seems rather inevitable.
Posted by: felix drost | January 10th, 2008 at 1:25 pm | Report this comment“Writing in a recent edition of Foreign Affairs, Azar Gat, an Israeli academic, suggests that if western democracies run into economic problems, a “successful non-democratic Second World could then be regarded by many as an attractive alternative to liberal democracy.” ”
We’ve seen this film before: namely during the inter-war period, when liberal democracy was perceived by many as having failed, and the stability and order brought in by fascism and communism greatly admired. Hogwash then and now.
Why would China’s development trajectory be similar to the path previously trodded by South Korea and Taiwan, whilst its political evolution differ? Does size guarantee uniqueness in this respect? As for resurgent Russia — the present system is a house built on sand.
Posted by: RCS | January 10th, 2008 at 2:28 pm | Report this commentIt is not so strange, at least so far as China is concerned.
Consider the first success stories of Asia: South Korea, Taiwan & Singapore. None of these three began as democracies: on the contrary their “human rights” programme left much liberal busybodies, well, busy pointing their fingers and boding ill. Both Singapore and So. Korea were run as benign (or not so) capitalistic dictatorships. And Chiang Kai-shek could hardly be called an exemplar of democratic rule.
Consider also Japan: OK it duly voted in elections but the same party remained in power for over twenty (thirty?) years.
These are the templates the authorities in China are using. That today Japan, at least, is fully democratic but in a Japanese not western fashion, and Taiwan, Singapore & So. Korea have also dispensed with dictators is IMO a good portent. The Chinese outlook is OK.
(I don’t know enough about Russia to say anything.)
Posted by: MaryCunningham | January 10th, 2008 at 2:39 pm | Report this commentThe western model of democracy evolved over hundreds of years. The timescale you are referencing is less than 20. Trying to cram everything from the magna carta, Simon de Montfort’s parliament, through to Cromwell, the great reform act and female emancipation - the events of some 700 years if I am right - into such a tight period would of course stress any structure. If you look at the evolution of a democracy, it is not until there is a well-established middle class, confident enough to exert its power, that true political freedom can take root. And it is only through economic development that a middle class can emerge. However, that is not to say that we in the West, who take liberal domcracy for granted - perhaps a little too much for granted - should not push for others to accept a democratic model. And not just for their benefit - Sharansky puts this argument best - but for ours. Fukyama might well be right - but I hope his timescale was a long one.
MaryCunningham: try almost *40* years.
Posted by: AYC | January 10th, 2008 at 3:59 pm | Report this commentI agree with Gideon - China is slowly moving in the right direction (very slowly indeed, but steadily). Russia on the other hand is moving in the opposite one - towards nationalisation, cancelling freedom of speech, etc… Might change with Medvedev but I don’t think it to be very likely.
“A house built on sand” is right. And that is why the argument of Azar Gat is not a very valid one - oil prices is what makes Russia, Venezuela, and a bunch of others so ressurgent. But they depend on demand from developed nations as well as China and India. China’s and India’s demand for oil is in turn very much driven by demand for their goods from the western world. Once western economies slow, it will spell much bigger trouble for China, and even worse trouble for Russia.
Posted by: MYV | January 10th, 2008 at 7:10 pm | Report this commentWelcome to the integrated world.
.
The free trading environment of the U.S. is a peculiar abnormality ,
the more common type has strong state control , dirigism and various administrative constraint as seen in the europeen or indeed japanese model ,
The russian and chinese economic models are those countries political vision of their historical experience ,
on occassion the U.S. itself bend its free trade principles to protect vital sectors such as farming , defence , energy ressources or even harbors .
similarly the existence of a powerful elitist minority ,controling both the state tools and large economic group is common both in the west and asian model
In Russia and China those groups are issued from the party machine , this is to be expected ,
the ex KGB stamp is a guaranty of not being a drunk , of having both brain and to be a team player .
some concern over one country is hardly unknown in the states either , world champion of flag waving nationalism
The state of governance in russia and China shouldn’t be seem as nothing more that the raw local variation of a pretty universal pattern
.
Posted by: jeannick | January 11th, 2008 at 12:29 am | Report this commentBoth the current power structures of China and Russia are resposnses to problems that each of them faced. Lets call them problems of chaos.
In the case of China, Mao’s cultural revolution led to one kind of total disorganisation whereas
the sack of Russia by the Oligarchs and the Yeltsin coup of October 3 1993 led to the societal
breakdown of Russia under the benevolent eyes of the IMF who oversaw the transfer of 80% of the wealth to 30 or so groups of mafiosi.
These individuals tranferred about a trillion
dollars out of Russia in the space of about eight years.
The amount of control the chinese guv has over their society is much greater than the russian situation.
The chinese communist party never lost control whereas the russian one did.
The chinese party changed both its structure and the decision making mechanisms.
The economies of both of them are mixed economies
with state and private components.
The percentages of state vs private vary depending on what the state considers “strategic” or necessary.
Politics of dissent in Russia to-day is much more
developed than in China.
China reported thousands of “revolts” by peasents
and others who were unfairly treated by local authorities (corrupt or otherwise). The ecological
situation in some parts of the country (especially the NE) is dramatic. If measures are not taken soon the Indusrial development of the country will begin to suffer.
Russia has began ot diversify its economic activities (it has allocated a trillion $) to infrastructure alone and it intends to leverage its comparative advantges ( space, atomic power,science) in other spheres.
If one judges all these activities from the point
Posted by: Max Papadopoulos | January 11th, 2008 at 1:53 am | Report this commentof view Aristotle’s “Politics” and compares them
with the on going difficulties of western systems and their outcomes one might come to some very interesting conclusions.
Modern communications technology — cell phone, Fax — is often cited as undermining authoritarian rule. However, with the increasing pervasiveness of the Internet, Google-like tools (not the search engine but the tools used to analyse the data generated) will vastly increase the power of the state to monitor its citizens. The same technology that is used to predict consumer behavior can be applied more broadly to the analysis of political trends, identification of networks, and suggest possible intervention strategies. It may at some point be possible “to fool all the people, all of the time”
Posted by: Christian VanSchayk | January 11th, 2008 at 2:56 am | Report this comment@VanSchayk:
Consider what happened in the US during the year leading to the war in Iraq.
All electronic media pandered to the theory of WMD. THE NYT (via Judith Miller) “disclosed” the Niger uranium fable. In the US you had wall to wall onesidedness.
In France, Sarkozy and his friends have absolute
Posted by: Max Papadopoulos | January 11th, 2008 at 3:22 am | Report this commentcontrol.
It would help to define more accurately what “liberal democracy” and the “west” is. Is it Japan with its virtually one-party system and a strict beauraucratic control over economy for much of the post-WW2 time (the Nobel prize-winner Amartya Sen once called it “the only communist nation which achieved impressive economic results”)? Is it the USA with its medieval electoral system and two parties representing all the nuances of the 200 mn voters’ diversity of opinions on politics and economy? Or is it multi-party Italy where until recently governement coalitions could not survive a year and the officials’ abuse and corruption is sickening the whole nation? Or Belgium with its stifling taxes and rules for small businesses, and no government since 8 months despite its MANDATORY (very democratic!) voting system? Or Switzerland living from one referendum, on a local tram line construction, to another, on EU membership? Or the EU itself with 50% of its population unsure about the advantages of being EU citizens? Which exactly liberal democratic model could be recommended to the historically poor and morally bankrupt Russians and Chinese? If we only knew whose example to follow we probably would. As it is, however, the average 50-60% election rate in liberal democracies is not very convincing of their success.
Russia and China do not seem to be much different from the rest of the world. The main goal of their citizens is to increase their wealth. It happened so that while in the “West” a liberal democracy, whatever you call it, served this purpose better, in Russia and China, with their tumultous past, a less liberal approach seems a shorter and better cut towards the same goal. Freedom of expression is certainly significantly more advanced in the “west”, but I’s sure that the majority of, say, UK voters mean by it their right to know all about Princes Diana’s love life than about budget allocations for MI5. What was the second question at Sarkozy’s recent press conference? When does he get married. Chapeau to the free press! No need for web filters here.
The real problem is the absence of responsible and forward-looking elites in Russia (don’t know much about China). When outside observers talk about the current Russian government bringing in order to the country after the chaos of the 90-s, it is as far away from the truth as the notion a “western liberal democracy”. The current Russian elite is just robbing the country much more professionaly than the oligarch of the 90-s.
Posted by: A Russian | January 11th, 2008 at 6:47 am | Report this commentHi Russian, there are huge differences.
A liberal democracy has powers relatively strongly separated into legislative, executive and judicial, also the law and/or a constitution guarantees individual liberties and private property. The quality of democracy is much more directly related to the efficiency of the institutions related to that separation and to securing the rule of law than merely to the quality of or participation in elections. In Russia, China and most of the oil states there is hardly any effective separation of powers and so power becomes unaccountable, corruption institutionalized and any rights that might be encoded trivialized.
That is a huge difference, liberal democracies are accountable. The momentum in China is towards a similar accountability because of the growing power of the middle classes; in Russia the middle classes strongly depend on clientism to the centralized control of the resources based economy, which is why time and again be it under the guise of Tzarism, Communism, Liberalism or Nationalism, the same sort of people exploit the country.
Posted by: felix drost | January 11th, 2008 at 12:37 pm | Report this commentThe policital system in Russia and China are clearly different:
China is still a one-party (the Communist Party) system Dictatorship, even if actually its economy looks closer to America than to Cuba.
Meanwhile, Russia resembles more Mexico´s Democracy for decades with the overwhelming majority of the PRI (Institutional Revolutionary Party) or, as was appointed before, Japan under decades of domination by the Liberal Party…with the difference Russia is a sovereign nation where russian citizens wrote their own Constitution while Japan is an occupied nation which not even wrote its own Constitution (the US did it, as in any colony)
Russia is formally a Democracy, like Mexico and Japan, and apparently there is a separation of powers…something China is not pretending to have and is not pretending to be a Democracy.
As was pointed out before South Korea and Taiwan in Asia were a precedent of authoritarian regimes which at a given time, recently, opened their societies. The same happened in South America with Chile.
With the concept “liberal democracy” what some people really mean are nations behaving under US Authority, nations without Sovereignty following US orders, nations under American control.
If a nations starts doing something which contradicts Anglo-American interests…it becomes an “authoritarian”, “illiberal”, “undemocratic”, “rogue”, “antisemitic”…the only point important is following Anglo-American ORDERS and losing Sovereignty.
Posted by: Enrique | January 11th, 2008 at 1:34 pm | Report this commentFelix,
You say that democracy is more about separation of powers than about elections (which is news to me, but I trust an experienced user). Then you go on to say that liberal democracies are accountable. This actually means that “liberal democracies” are indeed accountable, but not to the voters (because they are not related to elections quality, according to you). In “liberal democracies” power branches are accountable to each other, there is a fierce competition between elites (what you call power branches) which ensures an equitable treatment for the rest of the population. Personally I would not call it a “liberal democracy” but a “competitive elite democracy”. And as I said in my previous post, that’s exactly the problem: there is no responsible elite in Russia. The current Russian power branches, although very competitive (if prison terms are any measure), are still more interested in their short-term enrichment than in long-term development of their constituencies.
Russia has had key power branches since a couple of centuries: state prosecutors – since Peter the Great; independent courts – since the 1860-s; Parliament – since 1905. But why don’t they function properly as they do in the “west”? Why are they corrupt and inefficient? You, as many others, blame the “oil state”. But this explanation seems overly simplistic. Oil revenues became significant for the USSR only in the late 60-s and 70-s. They did bring Communism down in the 1980-s but they had not brought it up in 1917. Unseparated, unaccountable and corrupt power has been in place in Russia for much of the past millennium. Can you explain this with your “clientism to the centralized control of the resources based economy” theory?
And from what I hear, it will be a long time before the middle class in a 1.3 bn China will make their government accountable. However, China is an exception is that their totalitarian elite is already much more responsible and concerned about the welfare of the country.
Posted by: A Russian | January 11th, 2008 at 1:43 pm | Report this commentFrance in 1789 had no hope of achieving democracy, and in fact it did not harbor such ambition for another century and half, but the Great Revolution still went ahead, and despite all its folly, heralded and began to establish among Men such ideas that until this day we are still benefiting from.
Too much negative energy among the repressed would inevitably erupt. Only one Voltaire and one Rousseau are needed to spark it off. I do not intend to play down the influence of their contemporaries and all past sages to them, but these two men were chiefly responsible for the event’s happening then, unless you prefer to believe that our collective HUMAN history was created by the invisible hand of one kind or another, I myself have too much a child in me to entertain that Marxist crap. And in any event, the conditions in present day Russia and China are not dissimilar from the Ancient Regime in France. But for goodness sake, let’s not wish for more revolutions in Russia or China.
But surely, if someone still reads John S Mill, he had put it then that those two nations’ seemingly never-abating refusal to changes brought from without is but the product of their respective shibboleths that harbored, and are still promoting, such ideas of despotism being good and individuals are cogs and the state the machine, the end as oppose to the means to enable every man, woman and child to try to have a better life, and of more direct relevance to the West, that of their perspective uniqueness as a people vs. the West - which surely would be hard to propagate/sell in Russia than in China.
Education of the people, rather than money or PPP as you put it, along could ever affect real changes. Before that happens, prepare yourself for international chaos, as there is today, isn’t there? And the West must be/remain active in bringing changes to both nations. Western companies must restrain or be restrained, par force if necessary, their greed for immediate profit of the present, and look ahead for only a few years into the future. Rather than trying to , in cahoot with the Masters of Russia and China, take advantage of the former’s oil and the latter’s peasant-laborers, internationalist compassion need to prevail before the persisting dangers of Russia and China continue to pose to Civilisation can be alleviated. Anything short of full and true democracy for these two major nations could at best provide an interruption to universal agony, worse giving them more time to build up.
Let’s it be accepted that changes should come form within, the international community still need to help to serve as the Catalyst of change. Hope is still there, and we can achieve it, BR believed in it, why shouldn’t we? Once these two nations are permanently pacified, they will throw their lot to the west’s aid. The problems of Africa and relating to religious fanatics can only then be resolved.
Copyright 2008 @ Pamanush
Posted by: Derek Xu | January 16th, 2008 at 7:44 pm | Report this commentHi Russian, thanks for your response, it is always stimulating and interesting to have a dialogue with you. I would have responded sooner but got a message that the debate was closed from further comments.
I didn’t mean to say elections don’t count, but that the separation of powers is an essential ingredient in the quality of democracy. Citizens can appeal to the courts and see executive decisions and laws overturned. Citizens vote for those who man the legislative and (in some cases) the executive brances and the interplay between the three branche creates a dynamic balance in which they have to mind each other. In my own country the Netherlands the middle classes are divided into three roughly equivalent groups; conservative, liberal and socialist, they must form coalitions in government and in the economy both and none has the upper hand. Also in the US and the UK the two dominant parties have internal coalitions of interest groups that sway the centre of gravity towards consensus policy. That social dynamic shapes the executive and legislative branches. Perhaps even without elections the social dynamic would seek to manifest itself in a compromise.
As for Russia I don’t pretend to understand it; there always seems to have been a reason for power to gravitiate towards the centre, the wealth generated by the exploitation of vast energy and mineral deposits is but the latest in a history of strong centripetal forces. The growth of alternative powers seems to be inhibited by circumstances and always it seems to be the better option to side with the centre aganst the Mongols, against the emancipation of the feudal system, against the Nazi war machine, against the Americans, against rampant self-enrichment.
China is traditionally an authoritarian country also but the growing middle classes are very rapidly familiarizing themselves with the concept of a warranty. When they buy a phone, a car, an insurance, an item of clothing, food, an apartment or anything, they are assuming that the seller is obliged to honour that the article sold or service rendered is as factually stated or legally implied. Even though the Chinese middle class is relatively small its socioeconomic clout is considerable (and many are party members!) and this contract attitude is insinuating itself throughout Chinese society and as you notice as well seems to start to create accountability within society and between citizens and government. The recent protests over the maglev train in Shanghai are a case in point. It’s going to be terribly interesting to follow these events over the following years.
Gideon, I’m thinking that limiting the debate to ideological terms doesn’t do justice to the effects that the vast wealth that is being created in China and Russia have. The effect in China seems to be centrifugal and towards a liberalizing accountability, in Russia it seems to work the other way around. What say you?
Posted by: felix drost, amsterdam | January 20th, 2008 at 2:40 am | Report this comment“That social dynamic shapes the executive and legislative branches. Perhaps even without elections the social dynamic would seek to manifest itself in a compromise.” I think, Felix, this sentence of yours is key to understanding modern liberal democracies. They may be not so liberal and not so democratic after all, but they are dynamic, and their dynamics is governed by the long-established rules of the game which are, you are right: balance of power. Which proves my point: the gradual progress of democracy in the past couple of centuries has been more about breeding new elites rather than new voters.
Russia had been “protected” from political change for too long by its single ruling elite, the absolute and corrupt monarchy, and then had suddenly to cope with too abrupt changes. Before 1917 we had a nascent governing class, a burgeoning bureaucracy and business, which started to resemble European elites. They went about reforming the country, often despite fierce opposition from the monarchy and its conservative supporters. This evolutionary process was savagely killed in 1917-1953, along with millions of the country’s business, cultural and administration elite. However, one could not blame the 1917 revolution more than the monarchy which brought it about. Russia was rarely fortunate with its tzars, but it was singularly unfortunate with the last one who missed all possible chances for its revival and who brought uncountable disasters onto it (for which he was recently proclaimed a saint by the church…)
However, it’s ironical that despite being dethroned in 1917, the monarchy has been reincarnated and survived until now - not only as the centralized power (first as Communist Party and now as secret services-backed Presidential power) but more importantly, in the people’s minds. Russia is a country of slaves and slaves’ children. Serfdom for the absolute majority was abolished here less than 150 years ago, but the vast rural population did not have passports and could not leave their village for a century longer, until Stalin’s death in 1953. With this genetic heritage, oil state or no oil state, Russians are psychologically more comfortable when they do not have to make choices. And there are no elites to make these choices for them – where would they come from after a century of weeding out all of what is best and gifted in this country, a century of non-existent politics and non-competing public interests? What incubator can give us in 15 years our own conservatives, liberals and socialists after a thousand years of political non-existence? I do not know how many generations must go before evolution of this country turns it into a “liberal democracy”, but one seems an unlikely number.
Posted by: A Russian | January 20th, 2008 at 6:26 pm | Report this comment