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Jewish World Review
August 23, 2011
/ 23 Menachem-Av, 5771
Wanted: Global Role Models
Any poor country seeking to become richer and looking for a role model is bound to be bewildered. Europe certainly offers nothing. Germany's economy is recovering but is linked to a common currency, which, thanks to the euro zone's delinquent members, drains all its energy. Ireland and Portugal are virtually bankrupt. Spain's unemployment rate among those in the 15-to-25 age range is nearly 50%. Italy is a musical comedy. Greece is a kleptocracy, where the rich pay no tax. And France is a pseudo-democracy, where Dominique Strauss-Kahn is a typical member of the ruling elite.
As for the traditional homes of capitalism, Britain has a sensible Conservative leader and finance minister. But they are dependent on Liberal votes to survive in office, and that means a commitment to dotty experiments, such as a return to windmills. The U.S. has a President who's spent much of his term enacting a health care program so complicated that no one understands it and who will more than likely enact a form of old-style state socialism if reelected. At present there's no sign of the U.S. emerging from deep recession into its customary dynamism.
Russia--another pseudo-democracy--is run by a thriving elite and is largely dependent on its natural resources for such prosperity as it enjoys. And the Muslim world, though rich in raw materials in places, offers nothing but failed tyrannies that struggle to survive by murdering their citizens.
The most promising examples of economies to imitate are in Asia, and they all, in different ways, suggest that capitalism offers the best prospects.
China. Mao Zedong's appalling dictatorship, which killed more than 70 million people, held China back for over a generation. Its primitive form of communism gave the remainder only a subsistence standard of living. Since China embraced capitalism it has grown mightily in terms of production, exports, savings and overseas investments. However, it hasn't dared to introduce democracy. China's capitalist model is old-fashioned and based on traditional heavy industry, and its lack of intellectual freedom means there's no market in ideas to ensure a future in the vanguard of new technology.
India. Having clung to democratic institutions and the rule of law, India offers a better role model, albeit a corrupt and confusing one. After gaining independence in 1947, India also missed an entire generation of growth. Gandhi and his followers wanted a primitive handcraft society. Nehru and his family dynasty practiced a form of socialism invented by Harold Laski at the London School of Economics in the dismal 1930s. Not until these twin formulae for perpetual poverty were shaken off during the last quarter of the 20th century did India begin to unleash its people's natural energies and thrive accordingly. Since then much has been achieved.
But India is still an astonishing study in contrasts. It is an exporter of IT to the advanced West. If you live in London and your computer is infected by a virus, your best chance of getting rid of it is to call a firm in New Delhi, which will deal with the problem expeditiously, politely and cheaply. At the same time more than 100 million Indians still have no access to modern hygiene, and their dry latrines are still cleaned--often by hand--by a million or more poorly paid Dalits (those once known as "untouchables").
Because Indians enjoy freedom of expression and so many of them read and write English, India has a much better chance of remaining in the economic forefront. Nevertheless, it has an immense amount of catching up to do. There are puzzling aspects to Asia's other potential role models.
Japan. In many ways this is a hermit state, whose overwhelmingly male elite is too closed to new ideas from outside and too collectively opposed to individual initiatives to extract the economy from its stagnation. Japan would be much more dynamic if its women, who are far more open-minded and adventurous, ran the government and industry.
Singapore and South Korea. Both countries are more promising. Singapore started from nothing in 1945 to become one of the best run and most prosperous--albeit tiny--states in the world. South Korea, despite the handicap of having its northern neighbor run by a criminal gangster regime, has built up a flourishing capitalist economy, practicing democracy and observing the rule of law. Much can be learned from the hardworking South Koreans and Singaporeans.
Poor countries wishing to flourish must pick and choose their role models-- though it's sad to acknowledge that Washington is currently not a stellar example of how to do things. Regardless, both New York and London still hum with intellectual creativity, and their universities are open to all.
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