A New Economic Model for All?

Before reading this blog post, watch this video from Ted. Dambisa Moyo talks about China's economic and political systems in a very straightforward manner and relates them to the entire world. While I understand that the United States is not a comparative country, her talk brings up a very good point. If you recall, our first unit was about globalization and how it is affecting the world. For those of us who read Stiglitz, this video should sound familiar. For the last century, Western nations have controlled global economic institutions like the IMF and the World Bank, trying to force their model for economic growth on developing countries throughout the world. Stiglitz speaks out about the inequality in the global institutions, and Moyo brings the whole concept full circle.

Moyo breaks down China's economic system as State Capitalism and prioritized economic right along with a de-emphasis on democracy as opposed to the Western system of Private Capitalism, prioritized political rights, and an emphasis on democracy. She identifies the Chinese model as one that many developing countries see as a quicker way to reach prosperity. They see China as a place where more wealth is being created today, where the issue of healthcare is better handled, where there is increased economic equality, and where infrastructure is new and cunning. All of these are issues in the Western World, especially in the United States.

So what is the point? The point is that the West has always gone around championing their program and force feeding it to other nations because there was no viable alternative. The West was all powerful and controlled both the dominating political and economic ideologies of the time. However, with the rise of China this has changed. The West now has an opponent, and unlike the USSR, this idea is here to stay. The West has lost its credibility to China because the Chinese have gotten results. They are closing economic gaps, not widening them. Just a century ago, China was like those developing countries. Now they are a world superpower. Who wouldn't find this model appealing?

Well that is the thing. Where it is not appealing is the political end. Democracy is not as important in China, but it is the Holy Grail in the West. But again Moyo talks about this issue, asking which is more important, food or the right to vote? So as a result Moyo argues that economic success will lead to democracy, not the other way around.

I find her argument very compelling and I would like to elaborate on the idea from above. If she is right and economic success does lead to democracy, what does that mean for China? I would argue that she is right in her assumption and that China cannot keep a lid on democracy for ever. As the middle class continues to grow in China, pressure will be put on the government for more civil liberties. People will want their political freedom to match their economic freedom. As capitalism takes root and continues to grow, democracy may be inevitable. I imagine a rebellion led by the wealthiest Chinese citizens who are joined by those in middle class. Like Iran it will be urban led as the CCP will be unable to control dissent and will succumb to the pressure. But for now the CCP is safely in control and they are the new model for economic growth. The West will have to adapt.