Brother Number One Says Markets Make Great Prosperity!

By skepticlawyer

Over at Catallaxy, Sinclair has a very thought-provoking and chewy post on states that are economically capitalist but politically illiberal (to greater or lesser degrees).

He asks whether those states will one day move beyond their illiberality, or whether they can remain illiberal while enshrining many of the things that make political liberalism possible: secure property rights, the rule of law, competitive markets.

His post was inspired by discussion over the role that General Pinochet played in Chile’s economic boom, but also concerns states like Singapore, China, Vietnam and Thailand, those purveyors of ‘democracy with Asian values’. I’d recommend reading it, because he’s cited some excellent empirical research that really does repay reading in depth. For my part, I made the following comment:

I do think it is worth considering the possibility that the reflex twinning of capitalism with liberal democracy is something of a furphy. Free markets and secure property rights are part of a ‘prosperity toolkit’ that any country can use. The assumption that they must always and everywhere be twinned with the gentleness of liberal democracy (ie, now that China is capitalist, it will inevitably become democratic) strikes me as false; indeed, it falls into the Marxist fallacy that the base (capitalism) must determine the superstructure (liberal democracy).

Militant Islam is often presented as the ineluctable enemy of liberal democracy, and on one level it is. On another level of enmity, however, is authoritarian capitalism, represented by China and to a lesser extent Vietnam, Thailand and Singapore. These states have taken the free market ‘toolkit’ and made themselves immensely rich (far richer than any of the Islamic states, which depend on resources, not free markets), but they have also—by and large—dispensed with the liberalism and the democracy.

I didn’t always think this, and a very large part of me hopes that it is wrong, and that states that are currently authoritarian capitalist will one day become liberal and democratic, but I don’t think it necessarily holds. On the empirical front, there is also a mountain of research indicating that economic prosperity matters to people in places like China or Vietnam or Singapore, while political freedom is subject to something like a Kuznets curve: it only becomes important once the majority of people in a given country have become very rich indeed.

As I say, I hope I’m wrong, but I do suspect being politically liberal is a whole other kettle of fish, and requires a particular way of thinking about the world. Basic economic principles, however, can often be demonstrated empirically: there really is a right way and a wrong way to go about making your country rich. That difference, I think, is crucial.


  1. Posted March 24, 2010 at 5:00 am | Permalink

    Leninism sold the idea that the state could be an instrument of liberation. Since most of those places were used to state-as-instrument-of-exploitation, Leninism seemed to be the high road to outdoing the West.

    Now, as you say, crap: but much of the point was being also against the traditions of their own culture since they had clearly “failed” to deal with the Western challenge.

    The liberal ideal of a limited state was, in fact, much more radical but lacked sufficiently articulate and organised defenders: in part because it was so radical for those societies.

    One of the most pointed historical questions I have ever seen put is: is contemporary China closer to the vision of Chiang Kai-Shek or Mao Zedong? If the former, why precisely did all those millions of people have to die?

  2. Jason Soon
    Posted March 24, 2010 at 5:53 am | Permalink

    China, Vietnam and Thailand are all starting off from a low base so people should not get too excited about their progress. Of course when you move from Communism to capitalism (in the case of China and Vietnam) you’re going to get huge gains. John Lee of the CIS has been predicting China will face problems soon.

    With Singapore there is a substantial disconnect between multinationals and their domestically grown enterprises. Basically they grow because they can attract multinationals and skilled workers willing to do a sabbatical there.

  3. Jarrah
    Posted March 24, 2010 at 8:31 am | Permalink

    Whether China (or any other authoritarian capitalist-ish country) transforms into a liberal democracy will depend on the pressures on that society, some of which will tend towards liberalism, pluralism and democracy, and others not, or neutral.

    I think it is obvious that freer markets and the attendant rise in prosperity will be one of the former factors. Whether they can become dominant is the real question.

  4. Posted March 24, 2010 at 4:00 pm | Permalink

    A friend of mine from Singapore prefers Australia because she has: choice. Her words. Well you can buy the same stuff there right? I say.

    You can buy stuff there you can’t buy here, but still there’s no choice, she says.

    Her ‘choice’ is intangible. But being the well-educated daughter of a export merchant she’s decided she wants more choice. Friends of mine from the PRC are the same altho’ intelligently cautious about democracy.

    I think industrial capitalism breeds the conditions wherein individuals start to desire liberal society. To oppose this the govt has to expend a lot of energy and resources keeping people pointed in the same direction.

    To what extent democracy and capitalism go together I’m not sure but that aspect of it makes sense.

  5. Patrick
    Posted March 25, 2010 at 4:12 am | Permalink

    Friends of mine from the PRC, as opposed to ‘of Chinese descent’, are generally amazingly devoted to China, surprisingly respectful of Western accomplishments and wholly contemptuous of ignorant Western do-gooders.

    One of them (a PHD student at Stanford) used to deal with pro-Tibeters by asking them to point it out on a map 😉

    His girlfriend, when I asked her about raising her children in China (which she wants to do, they presently live in the US), responded that since they were both single children, they would be allowed to have two so there was no problem.

    It’s a big gap.

  6. Posted March 25, 2010 at 5:25 am | Permalink

    Bingo, Patrick — although I take Jarrah and Jason’s points about what ‘value set’ will become ascendent in the long run — I do think we are dealing with our own ‘toolkit’ reconceptualised, and we may just have to learn to live with it.

    As will, I suspect, the Islamists. In 50 years’ time, as China becomes the global hegemon, I suspect the Islamists will come to long for the gentleness of the United States.

  7. Posted March 25, 2010 at 9:34 am | Permalink

    Friends of mine from the PRC, as opposed to ‘of Chinese descent’, are generally amazingly devoted to China, surprisingly respectful of Western accomplishments and wholly contemptuous of ignorant Western do-gooders.

    Patrick I was referring to people from the PRC as opposed to ethnic Chinese. These friends of mine, one in particular who is highly unusual and should not be held representative, are all devoted to their country yes. But they also chafe at the yoke as well.

    Wherever you go it’s the same monkey. Monkeys don’t like leashes.

  8. Patrick
    Posted March 25, 2010 at 5:15 pm | Permalink

    Well, Adrien, I think you have summarised the whole debate here. You think that we are all the same monkeys, and whilst I expect that deep deep down we are,* I have come across a number of chinese who really didn’t seem to be at all – who were not chafing at all.

    Maybe they aren’t monkeys?

    *By this, I mean that I suspect that after a few generations of similar inputs, including ignorance of one’s own ancestry, each race would turn out along a very similar standard distribution of human characteristics and race would be more or less irrelevant. But the different monkeys in the PRC are not about to get those similar inputs this generation or the next, so potential universal monkeyhood could be a while off yet.

  9. Posted March 26, 2010 at 10:26 am | Permalink

    I am reminded of Zhou Enlai’s alleged response to the question from Nixon about what he thought the effects of the French Revolution were: “it is too early to tell”.

    Sinc’s original paper is a touch jargon-heavy, but it does point to some congruence on the grounds that skepticlawyer alludes to: there being wrong and right ways to make your country rich.

    Authoritarian capitalism can surely persistent for quite some time: how long is hard to see except as speculation. I am, however, a bit of a sceptic about China as global hegemon. First, what about India? Second, it presumes current Chinese trends continue without any breakdowns, collapses or major turning points. There are a lot of potential major institutional problems in China.

  10. Posted March 27, 2010 at 6:50 pm | Permalink

    If I can just let people know that there is a lot of spam landing in the can at the moment, so if your comment hasn’t appeared, it’s likely because it got caught up in the spammer and has been chucked along with all the adverts for various drugs, pr0n, grand pianos (?) etc.

    It’s not that we hate you. Seriously 😉

  11. Posted March 29, 2010 at 4:23 am | Permalink

    On the “we know how to get rich” point, if you have not discovered Hans Rosling yet, do yourself a favour and spend 25 minutes listening to the best presentation of data you have seen.

  12. Posted March 29, 2010 at 5:16 am | Permalink

    Statistics. We has it. And since we’re sharing disciplines, have a look at Steve Davies doing some of the most thrilling history you will ever see here: why we are not living in Western Civilisation any more.

  13. Posted March 30, 2010 at 3:01 pm | Permalink

    Yes, he is great.

  14. Posted March 30, 2010 at 3:03 pm | Permalink

    Steve is also a fellow medievalist for you, Lorenzo. Among other things, he’s a specialist in the history of the devil in Christian and Islamic thought, and speaks about nine languages. Fascinating stuff indeed.

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