Chas Freeman via James Fallows:
To deal effectively with China, Americans need to understand it in terms of its own complexities and authentic aspirations. This is unlikely to be achieved by officials engaged in writing narrowly focused and highly tendentious reports mandated by Congress to justify the single-issue agendas of our military-industrial complex or, for that matter, our humanitarian-industrial complex. Nor can it be accomplished by analysts stir-frying intelligence to suit the political appetites of those they work for….
Predictions about China based on a priori reasoning, ideologically induced delusions, hearsay, conjecture, or mirror-imaging have been frequent and numerous. They have racked up a remarkable record of unreliability. To cite a few relevant examples: contrary to repeated forecasts, the many imperfections of China’s legal system have neither prevented it from developing a vigorous market economy nor inhibited foreign investment — of which China continues to attract more than any other country, including our own. China’s failure to democratize and its continuing censorship of its media, including the Internet, have not stifled its economic progress or capacity to innovate, which are increasingly impressive. China’s perverse practices with respect to human rights have not cost China’s Communist Party or its government their legitimacy. On the contrary, polling data suggests that Chinese have a very much higher regard for their political leaders and government than Americans currently do for ours.
“If Liu Binyan could get it wrong, who had any chance of getting it right?” I think some of that is due to the halo effect. We consider X to be good, and Y as well, so a lack of X will also hurt Y. I think we should try harder to keep our arguments for X and Y distinct. I think some of that applies to the “blowback” argument as well (though in the main I think it is accurate). We shouldn’t find it too surprising that “social liberalism” is not a main determinant of economic growth, and that’s part of the idea behind my favorite Catallarchy post. The tougher point would be the legal system, as rule of law is considered to be such a huge component of the “invisible capital” of nations. Greg Clark might argue that in the absence of a truly horrendous government like Mao’s, such institutions aren’t that big a determinant of the strength of markets.
A country that may be an even better poster-boy for economic success without liberalism is Singapore. Scott “I swear I’m not a monetarist” Sumner (who is like Will Wilkinson but with domain competence) compares it to his favorite national model (Denmark) here. William Easterly (very glad he’s blogging) points to it as the exception to the rule of countries with individualist values outperforming those with collectivist values. I like the map the Inductivist presents here with survival values weighed against self-expression values.
On the subject of polities with little respect for individual liberty, I’ve recently been engaged in an exchange of emails with Kevin Gutzman, sparked by his post on the roots of Anglo-American democracy in Germanic tribes vs the ancient Greeks. I took the side of Benjamin Constant on their conception of freedom having a reasonable deal to do with democracy but (especially for Sparta) little to do with individual liberty. A site dedicated to range-voting has an interesting section explaining the Spartan system of government.
Finally, returning back to Freeman, a little while back (long enough for the comments to be closed) I defended his take on Tiananmen against the “politically correct — i.e. non Burkean conservative — view” at the Volokh Conspiracy. This evolved into a general defense for “formalism”. I have to admit that part of it was just playing Devil’s Advocate, as I tend to do situationally. By the time I got too bored to comment at Unqualified Reservations anymore I was mostly critiquing Mencius’ apologia for untrammeled power of the security forces.
Entitled to an Opinion 
March 11, 2009 at 11:44 am
One aspect of political or personal liberty that appears to have some connection with economic prosperity is that of expression and communication.
The spread of printing during the 15th through 17th centuries invited various levels of resistance from rulers who (rightly) feared that it could be used to foster dissidence and subversion. The most successful restraint of printing and publishing in Europe began in Spain under Philip II, and continued into the mid-18th century. At the beginning of this period, Spain was perhaps the richest country in Europe, and by its end, it was among the poorest; the development of its commerce and industry was hindered because information could not freely be disseminated. Printing was not introduced into the Ottoman Empire until 1729. The first press there was closed in 1742 and not re-opened until 1784. Its backwardness compared to Europe was a by-word.
The poverty of the old Eastern Bloc nations was similarly associated with its rulers’ suppression of the free exchange of information. In the former Soviet Union, access to photocopiers was strictly limited. In Ceausescu’s Roumania, typewriters were registered to the persons who possessed them. Samples of their imprint were taken by the police, so that any subversive document made on a typewriter could be traced back to the machine, and by implication, the person, that produced it (the parallel here to gun registration and ‘ballistic profiling’ is exact). Needless to say, not many Roumanians had typewriters – and the wretched privation of their country became sadly evident after the fall of its dictatorship.
Singapore can prosper despite the restraint of personal freedoms in good part because it is too small to exert the total repression the rulers of communist Russia and Roumania did, as well as because the Singaporean rulers do not follow an ideology that requires such repression. They aren’t totalitarian, like communists or nazis; they are just authoritarian, and exert only as much repression as is necessary to keep them in power. What we used to call “Red” China has succeeded economically to the degree it has only because it abandoned the full Marxist-Leninist model. Its rulers are now content to be mere authoritarians.
March 11, 2009 at 11:57 am
I have the impression that, as harsh as China’s rulers are, they’re actually fairly consistent and predictable at a high level of analysis.
Speech or activity that makes them look bad is reliably silence and punished. Opposition is crushed. Working with the system and in alignment with authority means you’ll be spared or even rewarded, and the authorities will generally leave you alone.
It’s tough to play a game when you don’t know the rules. China’s government makes the rules clear and its behavior predictable. As long as it doesn’t get in the way of entrepreneurial actions, as many totalitarian regimes have done in the past, I see no reason to presume that business would suffer — and it hasn’t. China has gone out of its way to encourage the freedom of business, as long as that freedom doesn’t transgress certain well-defined boundaries.
March 11, 2009 at 2:25 pm
It seems classical liberals say a couple things about unsavory foreign regimes vis-a-vis market liberalism. Externally, “if goods don’t cross borders armies will.” That seems to be true enough with China. The regime is increasingly reliant on international trade and unlikely to provoke a war with the US or any other major power – and probably even Taiwan.
OTOH the classical liberal assertion of internal democratization and anti-authoritarian behavior via markets has definitely taken a hit, though I wonder if things aren’t marginally better on the domestic front. But compared to when, the height of the Great Leap Forward, or, say 1975?
I remember Bruce Mesquita on Econtalk saying that from what he can gather the condition of the median Chinese person has not improved. Not just politically, but economically. The city dwellers drag up the average.
March 11, 2009 at 2:45 pm
Man, did UR get boring or what? I think you should write a post-mortem on it.
melendwyr: Not being a China expert, I always thought the low-level officials were hopelessly corrupt, and that this was a massive drain on independent businesses and entrepreneurs. TI ranks China at 72, which is tied with Mexico and Romania. So crooked as fuck.
March 11, 2009 at 6:16 pm
Thanks for the link. I think it is time for me to become a monetarist again. I hate joining groups (preferring to define myself), but looking around it seems like the monetarists are almost extinct–so maybe I should call myself a “new monetarist,” and I could make up my own definition. Regarding China, people make too much of their growth rates. If you have a mind-bogglingly inefficient government and are at 10% of Western living standards, then move to a somewhat inefficient government and rise to 30% of Western living standards, you get very fast growth in the transition. In absolute terms China is still a mess. I am actually fairly optimistic about China, but only because I expect them to continue to liberalize (they are far more socially liberal today that 20 years ago.) In another 20 years it will be changed beyond recognition. Yasheng Huang’s book on China is recommended to anyone interested in its economy.
March 11, 2009 at 6:17 pm
Scott: The analogy I’ve heard (and given myself) is that Maoist China was like a person with someone boot on their neck, gasping for air. Remove the boot and rapid improvement is to be expected.
“New Keynesian” seems to have worked, and there is the “new originalism” in constitutional law, so I say go for it with “new monetarism”.
I hadn’t heard that China had gotten more socially liberal. Could you elaborate on that point?
Michael: Singapore can prosper despite the restraint of personal freedoms in good part because it is too small to exert the total repression the rulers of communist Russia and Roumania did
Singapore is just a city-state, which reduces the total quantity of freedom-crushing it can engage in, but I don’t see how that would make the average level of repression per resident lower. I think the fact that it is a coastal city-state whose economy is heavily dependent on firms that could easily Exit (even if they have no Voice) is significant though. I like your Jeane Kirkpatrick-esque distinguishing of authoritarianism and totalitarianism.
Good point melendwyr. This is what Robert Higgs calls “regime uncertainty” but as Arnold Kling has pointed out, would better be termed “rules uncertainty”. That was part of the reason I defend rule of law.
Dain, how about the public choice point that trade creates a constituency that benefits from it and may resist anything (such as war) that would disrupt it?
the condition of the median Chinese person has not improved. Not just politically, but economically. The city dwellers drag up the average.
Even if only city dwellers were improved and all city dwellers were already above average, the median should still rise due to the huge shift in population from the country to cities.
James: I wouldn’t be too surprised if there was a lot of corruption in China, but they don’t seem to be quite a flailing state. The fact that they execute corrupt officials indicates they take the issue seriously. Let us also remember the benefits of corruption.
UPDATE (after I had written a response to Scott in the thread he originally commented in): Some support for Scott’s point about increasing social liberalism in China.
March 12, 2009 at 12:07 pm
Ease of exit is one reason why the city-state of Singapore can’t crush freedom as thoroughly as (for example) the old Soviet Union, with its massive land empire, did. Another reason is the difficulty of controlling the flow of information in a small state that is dependent for its sustenance on international trade. Even if the Singaporean leadership registered typewriters and restricted access to photocopiers in Ceaucescu-communist fashion, it could not seal its borders effectively to unwanted information without also impeding its commerce intolerably.
The Singapore government has tried to stifle a few critics, typically by using libel laws or trumped up charges of crimes that are nominally unrelated to the critics’ political activity. However, I suspect its authorities are aware of the limits to which they can push such suppression, and in the end just aren’t interested in exerting any more control over their society than is needed to secure their continued power.
March 12, 2009 at 3:57 pm
Dain, how about the public choice point that trade creates a constituency that benefits from it and may resist anything (such as war) that would disrupt it?
Did I not agree with this point?
March 12, 2009 at 6:07 pm
Bryan Caplan has a post on the Big Brother side of Singapore here.
I guess I didn’t read your comment closely enough, Dain. My U.S-centric view resulted in me making too large a distinction between interest groups outside the state and a ruling regime.
March 12, 2009 at 6:42 pm
You said a constituency, which seemed to described the ruling regime.
I think the Chinese version of Ugly Betty is a kind of testimony to its increasing social liberalism.
At one point under Mao there was punishment of imprisonment for infidelity, highlighting the moral austerity of humorless leftism.
March 14, 2009 at 2:20 pm
[…] Wrong Classical Liberal Predictions by TGGP […]
March 16, 2009 at 12:22 pm
An honest politician is one who stays bought.
When we say the Chinese system is corrupt: is it honestly corrupt, or corruptly corrupt? Because if you really can buy officials off in a predictable fashion, that may be almost as good as an honest system, assuming the bribes aren’t prohibitive.
March 17, 2009 at 10:16 pm
A single official may not demand a prohibitive bribe, but if things are dysfunctional enough that a constant stream of officials can stick their hand in your piggybank, that could be more of a problem. Having fewer officials and less bureaucracy could help with that.
March 18, 2009 at 12:44 pm
Much corruption works in a predictable fashion as Melendwyr suggests.
As an illustration of this, a friend of mine who has a long familiarity with the ways of doing business in Latin America once observed to me that it was an invariable principle that when it became obvious that a bribe was necessary to accomplish what one wanted, one should offer the bribe as early as possible, to the lowest-level official possible. This, he assured me, was how the locals expected the system to work, and if one went along with it, all would go smoothly.
North Americans, with their notions of civic duty, would often protest, and insist on seeing someone at a higher level than the official who initially solicited the bribe – on the naive assumption that his superiors would be indignant about it, and set him straight. Instead, such foolish gringos only raised the ante for themselves – and the longer they fought, the higher the price became.
Most cultures in which mordida, baksheesh, or whatever it may be called, is customary, require its immediate recipient to pass on a ‘cut’ to superiors, and those who upset this order by demanding what they think of as ‘justice’ from a crooked official’s boss only waste his time and show themselves to be contemptibly ignorant. Those who honor the local customs get by economically. There is a failure on the part of most Americans and north Europeans to understand that in most of the world, government officials are compensated in good part by bribes, just as waiters are by tips, and the practice is scarcely considered corrupt at all. It’s just how business is done.
March 18, 2009 at 9:20 pm
Interesting analogy to tipping.