Wednesday, April 23, 2014

America Rests On Its Laurels

Civilizations compete. Sometimes they even clash. They succeed or fail in ways that can be measured.

Successful civilizations often, but not always, inspire imitators.

Civilizations that are falling behind sometimes try to emulate their betters. But, sometimes they try to destroy those who are doing better. They do not aspire to greater success; they want to share the misery.

When the Cold War ended America stood forth as the world’s most successful civilization. Some would envy it. Some would refuse to accept it. Some would try to surpass it.

The question was: why had America succeeded when so many other civilizations had failed? Why did America succeed when Marxist civilizations had produced nothing but misery?

Did America win the Cold War because of liberal democracy? Did we win because we had the most lawyers? Or was it all about free enterprise and capitalism?

Bret Stephens addressed these questions in his column yesterday:

Maybe the West mistook the collapse of communism—just one variant of dictatorship—as a vindication of liberal democracy. Maybe the West forgot that it needed to justify its legitimacy not only in the language of higher democratic morality. It needed to show that the morality yields benefits: higher growth, lower unemployment, better living.

Today, America is retreating from world leadership. It seems to believe that occupying the moral high ground, being too proud to fight, and ensuring that transgender people not suffer discrimination will make it a beacon that the rest of the world will want to emulate.

America’s leaders are pursuing lofty ideals like social justice and inequality… but apparently, that has not translated into greater wealth and prosperity.

The world has taken notice. As its economy sputters along in the weakest recovery in memory, the American model looks less and less attractive to developing nations. Of course, Europe is not inspiring too many imitators either.

Stephens wrote:

A West that prefers debt-subsidized welfarism over economic growth will not offer much in the way of an attractive model for countries in a hurry to modernize. A West that consistently sacrifices efficiency on the altars of regulation, litigation and political consensus will lose the dynamism that makes the risks inherent in free societies seem worthwhile. A West that shrinks from maintaining global order because doing so is difficult or discomfiting will invite challenges from nimble adversaries willing to take geopolitical gambles.

Stephens does not mention the rise of China. While America has been, at best, resting on its laurels, China has been rising. 

Surely, that nation’s ability, through a strange admixture of free market capitalism and political dictatorship, has been producing an enormous amount of wealth. Developing nations have noticed and they seem to prefer the Chinese to the American model.

One consequence is the return of the dictators. Stephens writes:

A quarter-century later, the dictators are back in places where we thought they had been banished. And they're back by popular demand. Egyptian strongman Abdel Fatah al-Sisi will not have to stuff any ballots to get himself elected president next month; he's going to win in a walk. Hungarian Prime Minister Viktor Orbán presides over the most illiberal government in modern Europe, but he had no trouble winning a third term in elections two weeks ago.

It’s not about our ideals or our principles. It’s about performance:

Has the West been performing well lately? If the average Turk looks to Greece as the nearest example of a Western democracy, does he see much to admire? Did Egyptians have a happy experience of the democratically elected Muslim Brotherhood? Should a government in Budapest take economic advice from the finance ministry of France? Did ethnic Russians prosper under a succession of Kiev kleptocrats?

Samuel Huntington saw it coming:

Sustained inability to provide welfare, prosperity, equity, justice, domestic order, or external security could over time undermine the legitimacy of even democratic governments. As the memories of authoritarian failures fade, irritation with democratic failures is likely to increase.

We seem to have reached a point that Huntington foresaw:

What would happen if the American model no longer embodied strength and success, no longer seemed to be the winning model?


David Foster said...

Ibn Khaldun, 1377 AD:

"When the dynasty follows the ways of group feeling and (political) superiority, it necessary has at first a desert attitude, as has been mentioned before. The desert attitude requires kindness, reverence, humility, respect for the property of other people, and disinclination to appropriate it, except in rare instances. Therefore, the individual, the individual imposts and assessments, which together constitute the tax revenue, are low. When tax assessment and imposts upon the subjects are low, the latter have the energy and desire to do things. Cultural enterprises grow and increase, because the low taxes bring satisfaction. When cultural enterprises grow, the number of individual imposts and assessments mounts. In consequence, the tax revenue, which is in sum total of (the individual assessment), increase.

When the dynasty continues in power and their rulers follow each other in succession, they become sophisticated. The Bedouin attitude and simplicity lose their significance, and the Bedouin qualities of moderation and restraint disappear. Royal authority with its tyranny and sedentary culture that stimulates sophistication, make their appearance. The people of the dynasty then acquire qualities of character related to cleverness. Their customs and needs become more varied because of the prosperity and luxury in which they are immersed. As a result, the individual imposts and assessments upon the subjects, agricultural labourers, farmers and all the other tax payers, increase. Every individual impost and assessment is greatly increased, in order to obtain a higher tax revenue. Customs duties are placed upon articles of commerce and (levied) at the city gates. Then, gradual increases in the amount of the assessments succeed each other regularly, in correspondence with the gradual increase in the luxury customs and many needs of the dynasty and the spending required in connection with them. Eventually, the taxes will weigh heavily upon the subjects and overburden them. Heavy taxes become an obligation and tradition, because the increase took place gradually, and no one knows specifically who increase them or levied them. They lie upon the subjects like an obligation and tradition.

The assessments increase beyond the limits of equity. The result is that the interest of the subjects in cultural enterprise disappears, since they compare expenditure and taxes with their income and gain and see little profit they make, they loose all hope."

Longer excerpt here:

Jocker said...

Of course success of civilisation can be measured. The question is: how. Maybe this way:
Or this way:
After all, cold war was a very short period of time. In civilisation scale is much too short.

Anonymous said...

I think Vulture Capitalist Mitt Romney said it best: “First of all, I will eliminate all programs based on this test, if they don’t pass it – Is the program so critical it’s worth borrowing money from China to pay for it. And if not, I’ll get rid of it.”

But all is well, our collective household net assets is $81 trillion dollars, so we ought to be able slowly sell off our assets to China at a rate of 1 trillion per year for 81 years, after which we'll let commodities crash, and buy it all back on cheap newly printed dollars!

Take that China!