The rebuilding of ground zero offers a lesson in how to marry monumental vision with pragmatic know-how.
Ground zero in Lower Manhattan is a mass grave. So when it came time to rebuild the World Trade Center, the whole enterprise was enshrouded with passion and symbolism. The developers wanted a project that would proudly assert the American spirit. They wanted to send a message that the terrorist damage would not last. They wanted it to commemorate the tragedy and celebrate the revival. Everything, therefore, had to be big: the country’s tallest building, the most expensive commuter rail station, the costliest memorial.
Born in grief and passion, the whole enterprise was soon plagued by furious discord. Personalities clashed. Practicalities were ignored. Building budgets didn’t mesh with the deadlines. There were arguments about the memorial and the proper definition of the word “patriot.” There was a lot of planning but not much execution. Symbolism eclipsed reality.
During his brief tenure, Gov. David Paterson hired Chris Ward, formerly Mayor Michael Bloomberg’s environmental protection commissioner, to take over the Port Authority and rescue the shambolic ground zero project. Ward quickly understood his mission: to take a sacred cause and turn it into a building project. That is to say, to demystify it, to see it as it really is and not through the gauze of everybody’s emotions surrounding 9/11.
Ward set prosaic priorities — what would be built first, which parts of the project could wait. He cut costs by doing things like putting columns in the design of the transportation hall. He changed the name of Freedom Tower to One World Trade Center. He divided the construction deals into manageable chunks.
Ward gave me a tour of the site this week, and what I liked best was that it wasn’t all that moving. It was mostly about infrastructure, not pathos. Ward spoke as much about the internal guts of the project as the outer meaning. He praised the memorial fountains, which occupy the land of the original towers, for their dignity and restraint. They don’t tell future generations what to think.
It’s still an enormous project, but Ward distinguishes between “myopic monumentalism” and monumental projects done right. Myopic projects are designed in a rush. They are simple and brutal and single-purposed. They lack the cross tensions and quiet paradoxes that accrete on a project when it evolves patiently and over time. Robert Moses’s dream of building an expressway through the heart of Manhattan was myopic monumentalism. Frederick Law Olmsted’s Central Park, with its complex blend of neighborhoods, was not.
Ward (who is inexplicably being replaced by Gov. Andrew Cuomo) rescued the ground zero project by disenchanting it, by seeing it as it is, not through shrouds of symbols — by attending closely to all the practical complexity. American politics in general could use that sort of disenchantment.
Many issues that were once concrete and practical are distorted because they have become symbolic and spiritual. Tax policy isn’t just about how to raise revenue anymore. Liberals see it as a way to punish the greedy and redress the iniquities of capitalism. Conservatives see tax increases as an assault on the enterprising class perpetrated by arrogant central planners. A tax rate could be seen as just a number signifying an expense, but now it’s a marker in a culture war.
Gun policy isn’t about what specific weaponry should be in private hands. It’s seen as an assault on or defense of the whole rural lifestyle, so to compromise on any front is to court dishonor.
President Obama’s Green Tech initiative has become a policy disaster — not only at Solyndra but at one program after another — because its champions ignored basic practical considerations. They were befogged by their own visions of purity and virtue.
Maybe it’s part of living in a postmaterialist economy, but nearly every practical question becomes a values question. You get politicians and commentators whose views are entirely predictable because they don’t care about the specifics of any particular issue. They just care about the status war against their social enemies and the way each issue functions as a symbol in that great fight.
It would be nice if there were more leaders like Ward inclined to disenchant problems and stare directly at specific contexts. Sometimes circumstances compel you to raise taxes, sometimes circumstances allow you to cut them. Sometimes government can promote innovation; in most cases it can’t.
Walker Percy once wrote, “God writes straight with crooked lines.” Translated into policy terms, that means it takes a lot of little zigs and zags over the terrain to get where you want to go. Mayors, governors and local officials do this all the time as they respond practically to circumstances. At the national level anybody who tries to zig and zag gets regarded as weak and traitorous by the economic values groups. There are rewards for those who fight over symbols, few for those who see the thing itself.
November 5, 2011
Wanted: Worldly Philosophers
By ROGER E. BACKHOUSE and BRADLEY W. BATEMAN
When economists tackle small problems, they lose any vision about what the economic system should look like.
IT’S become commonplace to criticize the “Occupy” movement for failing to offer an alternative vision. But the thousands of activists in the streets of New York and London aren’t the only ones lacking perspective: economists, to whom we might expect to turn for such vision, have long since given up thinking in terms of economic systems — and we are all the worse for it.
This wasn’t always the case. Course lists from economics departments used to be filled with offerings in “comparative economic systems,” contrasting capitalism and socialism or comparing the French, Scandinavian and Anglo-Saxon models of capitalism.
Such courses arose in the context of the cold war, when the battle with the Soviet Union was about showing that our system was better than theirs. But with the demise of the Soviet Union, that motivation disappeared. Globalization, so it is claimed, has created a single system of capitalism driven by international competition (ignoring the very real differences between, say, China and the United States). We now have an economics profession that hardly ever discusses its fundamental subject, “capitalism.”
Many economists say that what matters are questions like whether markets are competitive or monopolistic, or how monetary policy works. Using broad, ill-defined notions like capitalism invites ideological grandstanding and distracts from the hard technical problems.
There is a lot in that argument. Economists do much better when they tackle small, well-defined problems. As John Maynard Keynes put it, economists should become more like dentists: modest people who look at a small part of the body but remove a lot of pain.
However, there are also downsides to approaching economics as a dentist would: above all, the loss of any vision about what the economic system should look like. Even Keynes himself was driven by a powerful vision of capitalism. He believed it was the only system that could create prosperity, but it was also inherently unstable and so in need of constant reform. This vision caught the imagination of a generation that had experienced the Great Depression and World War II and helped drive policy for nearly half a century. He was, as the economist Robert Heilbroner claimed, a “worldly philosopher,” alongside such economic visionaries as Adam Smith, John Stuart Mill and Karl Marx.
In the 20th century, the main challenge to Keynes’s vision came from economists like Friedrich Hayek and Milton Friedman, who envisioned an ideal economy involving isolated individuals bargaining with one another in free markets. Government, they contended, usually messes things up. Overtaking a Keynesianism that many found inadequate to the task of tackling the stagflation of the 1970s, this vision fueled neoliberal and free-market conservative agendas of governments around the world.
THAT vision has in turn been undermined by the current crisis. It took extensive government action to prevent another Great Depression, while the enormous rewards received by bankers at the heart of the meltdown have led many to ask whether unfettered capitalism produced an equitable distribution of wealth. We clearly need a new, alternative vision of capitalism. But thanks to decades of academic training in the “dentistry” approach to economics, today’s Keynes or Friedman is nowhere to be found.
Another downside to the “dentistry” approach to economics is that important pieces of human experience can easily fall from sight. The government does not cut an abstract entity called “government spending” but numerous spending programs, from veterans’ benefits and homeland security to Medicare and Medicaid. To refuse to discuss ideas such as types of capitalism deprives us of language with which to think about these problems. It makes it easier to stop thinking about what the economic system is for and in whose interests it is working.
Perhaps the protesters occupying Wall Street are not so misguided after all. The questions they raise — how do we deal with the local costs of global downturns? Is it fair that those who suffer the most from such downturns have their safety net cut, while those who generate the volatility are bailed out by the government? — are the same ones that a big-picture economic vision should address. If economists want to help create a better world, they first have to ask, and try to answer, the hard questions that can shape a new vision of capitalism’s potential.
Roger E. Backhouse, a professor of economic history at the University of Birmingham, and Bradley W. Bateman, a professor of economics at Denison University, are the authors of “Capitalist Revolutionary: John Maynard Keynes.”
November 5, 2011
Our Reckless Meritocracy
By ROSS DOUTHAT
HERE is a story about the promise of America. A boy grows up in rural Illinois, the grandson of a farmer who lost everything in the Great Depression. He goes to his small-town high school and then attends his state university, where he walks onto the basketball team and graduates Phi Beta Kappa. He does a stint in the Marine Corps Reserves, gets his M.B.A. and then goes to work for one of the Midwest’s regional banks.
In a different era, he might have stayed there for the rest of his career. But he’s lucky enough to be coming up in the 1960s and ’70s, just as the WASP elite is fading and the big East Coast institutions are opening their doors to strivers from all over. So our Illinois farm boy climbs and keeps on climbing.
He moves to New Jersey and goes to work for Goldman Sachs. He rises to become the company’s C.E.O., and a millionaire many times over. He goes into politics, winning a term in the United States Senate and then getting elected governor of New Jersey. When Barack Obama wins the White House, he’s discussed as a candidate for Treasury secretary. And when he loses his re-election bid, he returns to Wall Street as the head of a financial services company.
By now you may have guessed that I’m talking about Jon Corzine. If so, you probably know that his inspiring story has an unhappy ending — for New Jersey, which faced an enormous budgetary mess when Corzine left office; for his latest Wall Street firm, MF Global, which filed for bankruptcy last week after somehow mislaying some $600 million in customer money; and for the former farm boy himself, who resigned on Friday in disgrace.
But this sudden fall from grace doesn’t make Corzine’s life story any less emblematic of our meritocratic era. Indeed, his rise, recklessness and ruin are all of a piece. For decades, the United States has been opening paths to privilege for its brightest and most determined young people, culling the best and the brightest from Illinois and Mississippi and Montana and placing them in positions of power in Manhattan and Washington. By elevating the children of farmers and janitors as well as lawyers and stockbrokers, we’ve created what seems like the most capable, hardworking, high-I.Q. elite in all of human history.
And for the last 10 years, we’ve watched this same elite lead us off a cliff — mostly by being too smart for its own good.
In hereditary aristocracies, debacles tend to flow from stupidity and pigheadedness: think of the Charge of the Light Brigade or the Battle of the Somme. In one-party states, they tend to flow from ideological mania: think of China’s Great Leap Forward, or Stalin’s experiment with “Lysenkoist” agriculture.
In meritocracies, though, it’s the very intelligence of our leaders that creates the worst disasters. Convinced that their own skills are equal to any task or challenge, meritocrats take risks than lower-wattage elites would never even contemplate, embark on more hubristic projects, and become infatuated with statistical models that hold out the promise of a perfectly rational and frictionless world. (Or as Calvin Trillin put it in these pages, quoting a tweedy WASP waxing nostalgic for the days when Wall Street was dominated by his fellow bluebloods: “Do you think our guys could have invented, say, credit default swaps? Give me a break! They couldn’t have done the math.”)
Inevitably, pride goeth before a fall. Robert McNamara and the Vietnam-era whiz kids thought they had reduced war to an exact science. Alan Greenspan and Robert Rubin thought that they had done the same to global economics. The architects of the Iraq war thought that the American military could liberate the Middle East from the toils of history; the architects of the European Union thought that a common currency could do the same for Europe. And Jon Corzine thought that his investment acumen equipped him to turn a second-tier brokerage firm into the next Goldman Sachs, by leveraging big, betting big and waiting for the payoff.
What you see in today’s Republican primary campaign is a reaction to exactly these kinds of follies — a revolt against the ruling class that our meritocracy has forged, and a search for outsiders with thinner résumés but better instincts.
But from Michele Bachmann to Herman Cain, the outsiders haven’t risen to the challenge. It will do America no good to replace the arrogant with the ignorant, the overconfident with the incompetent.
In place of reckless meritocrats, we don’t need feckless know-nothings. We need intelligent leaders with a sense of their own limits, experienced people whose lives have taught them caution. We still need the best and brightest, but we need them to have somehow learned humility along the way.
November 15, 2011
Who’s the Decider?
By THOMAS L. FRIEDMAN
Driving to the covered bazaar in the exotic western Indian town of Jodhpur last week, our Indian guide stopped to point out a modern landmark. “Do you see that stoplight?” he asked, pointing to a standard green-yellow-red stoplight in the busy intersection. “It’s the only stoplight in Jodhpur. There are 1.2 million people living here.”
The more you travel around India, the more you notice just how lightly the hand of government rests on this country. Somehow, it all sort of works. The traffic does move, but, for the first time in all my years visiting India, I’ve started to wonder whether India’s “good enough” approach to government will really be good enough much longer. Huge corruption scandals have stripped the government of billions of dollars of needed resources, and, as much as I’m impressed by the innovative prowess of India’s young technologists, without a government to enable them with the roads, ports, bandwidth, electricity, airports and smart regulations they need to thrive, they will never realize their full potential.
This isn’t just a theoretical matter. The air in India’s biggest cities is unhealthy. You rarely see a body of water here — a river, lake or pond — that is not polluted. The sheer crush of people — India will soon have more than China — on an unprotected environment really seems to be taking its toll. Without better governance, how will India avoid becoming an ecological disaster area in 10 years? Eventually the law of large numbers — 1.2 billion people — just starts to devour every minimalist step forward that India makes. India doesn’t need to become China, and isn’t going to. But it still needs to prove that its democracy can make and implement big decisions with the same focus, authority and stick-to-itiveness as China’s autocracy.
Azim Premji, the chairman of Wipro, one of India’s premier technology companies, did not mince words about the future when he announced his company’s earnings two weeks ago: “There is a complete absence of decision-making among leaders in the government. If prompt action is not taken, the country will face a setback. You must appreciate how serious it is.”
Sound familiar? Premji could have been speaking about the European Union or the United States. No leaders want to take hard decisions anymore, except when forced to. Everyone — even China’s leaders — seems more afraid of their own people than ever. One wonders whether the Internet, blogging, Twitter, texting and micro-blogging, as in China’s case, has made participatory democracy and autocracy so participatory, and leaders so finely attuned to every nuance of public opinion, that they find it hard to make any big decision that requires sacrifice. They have too many voices in their heads other than their own.
Here we are in America again on the eve of a major budgetary decision by yet another bipartisan “supercommittee,” and does anyone know what President Obama’s preferred outcome is? Exactly which taxes does he want raised, and which spending does he want cut? The president’s politics on this issue seems to be a bowl of poll-tested mush.
At a time when, from India to America, democracies have never had more big decisions to make, if they want to deliver better living standards for their people, this epidemic of not deciding is a troubling trend. It means that we are abdicating more and more leadership to technocrats or supercommittees — or just letting the market and Mother Nature impose on us decisions that we cannot make ourselves. The latter rarely yields optimal outcomes.
The European Union has a particularly acute version of leaders-who-will-not-lead, which is why both Greece and Italy have now turned to unelected technocrats to run their governments. Writing in The Financial Times on Saturday, Tony Barber noted, “In effect, eurozone policy makers have decided to suspend politics as normal in two countries because they judge it to be a mortal threat to Europe’s monetary union. They have ruled that European unity, a project more than 50 years in the making, is of such overriding importance that politicians accountable to the people must give way to unelected experts who can keep the show on the road. If so far there is little public outrage in Athens and Rome, it is surely because millions of Greeks and Italians hold their political classes in such contempt.”
Yes, it’s true that in the hyperconnected world, in the age of Facebook and Twitter, the people are more empowered and a lot more innovation and ideas will come from the bottom up, not just the top down. That’s a good thing — in theory. But at the end of the day — whether you are a president, senator, mayor or on the steering committee of your local Occupy Wall Street — someone needs to meld those ideas into a vision of how to move forward, sculpt them into policies that can make a difference in peoples’ lives and then build a majority to deliver on them. Those are called leaders. Leaders shape polls. They don’t just read polls. And, today, across the globe and across all political systems, leaders are in dangerously short supply.
The Technocratic Nightmare
By DAVID BROOKS
The European Union is an attempt to build an economic and legal superstructure without a linguistic, cultural, historic and civic base. No wonder it's in crisis.
November 17, 2011
The Technocratic Nightmare
By DAVID BROOKS
During the first half of the 1990s, I lived in Brussels and wrote about the European Union, among other subjects, for The Wall Street Journal. This was the heyday of European integration. Helmut Kohl, François Mitterrand and Jacques Delors were in power, negotiating the Maastricht Treaty and organizing the common currency.
There was a lot of excitement among the civil servants who saw themselves as the architects of a new Europe. But there were some oddities.
The European leaders would come together for a summit and issue a joint communiqué. But then if you sampled the coverage in each of the national medias, you felt as though you were reading about 12 entirely different events.
Europe was unifying legalistically and economically, but there was no common language or common conversation. At one meeting, leaders embraced “federalism,” but that word meant one thing in Britain and another thing in Germany.
Then there was the elitism. Off the record, Europe’s technocrats would say the most blatantly condescending things: History had taught them that Europe’s peoples were not to be trusted and government should be run from the top by people like themselves.
As a consequence, European integration was opaque, and consisted of a long series of complicated fudges. When the European Union leaders were compelled to seek popular approval to get the Maastricht Treaty ratified, they sponsored a forlorn rally in a Brussels park. There were E.U. flags and booths and speakers. But the crowd was bored and sparse. At one point, everyone was asked to sing the new European national anthem to the tune of “Ode to Joy.” Dead silence. No one knew the new words that had been written to go with that masterpiece.
The European Union is an attempt to build an economic and legal superstructure without a linguistic, cultural, historic and civic base. It was the final of the post-World War II efforts — the United Nations was among the first — to build governments that were transnational, passionless and safe.
Over the 17 years since I left Brussels, I’ve been impressed and surprised that they could keep the E.U. together. The desire for a unified Europe is strong, at least among the leadership class and those over 60.
But now the inherent flaws are undermining the project. The nations of Europe have been running different kinds of economies and different kinds of democracies, reflecting their diverse histories, values and cultures. If you jam diverse economic cultures into a single currency, you’re bound to get an explosion.
At this moment of crisis, it is obvious how little moral solidarity undergirds the European pseudostate. Americans in Oregon are barely aware when their tax dollars go to Americans in Arizona. We are one people with one shared destiny. West Germans were willing to pay enormous subsidies to build the former East Germany. They, too, are one people.
But that shared identity doesn’t exist between Germans and Greeks, or even between French and Germans. It was easy to be European when it didn’t cost anything. When sacrifices are necessary, the European identity dissolves away.
The mess threatens to bring down the European project and European economies. It threatens to send the world into another global recession. (At this point, Chancellor Angela Merkel has more influence over President Obama’s re-election chances than Obama himself does.)
On a superficial level, the fault lies with the current European leadership, their addiction to inadequate patches and fudges. But the real problems emerge from the technocratic mind-set, from the arrogant gray men who believe they can engineer society, oblivious to history, language, culture, values and place.
And the final curse is that while building Europe in this way was a mistake, Europeans cannot now simply reverse course. If the euro was immediately dissolved, the Deutschmark would surge, nearly every other currency would plummet and the imbalances would create a global catastrophe.
In the short term, the European Central Bank, the stable European nations and even the U.S. will have to take extremely big and painful action to stabilize the situation. But, after that, it’ll be a time for chastening. It’ll be time to discard the technocratic mind-set that created this inherently flawed architecture and build a Europe that reflects the organic realities of those diverse societies.
Thinking back on all the complacent conversations I used to have in Brussels, I was struck by a quotation I read this week in The Economist. A European central banker said he had always wondered how Europe’s leaders could have stumbled into World War I. “From the middle of a crisis,” he said recently, “you can see how easy it is to make mistakes.”
December 1, 2011
The Spirit of Enterprise
By DAVID BROOKS
Why are nations like Germany and the U.S. rich? It’s not primarily because they possess natural resources — many nations have those. It’s primarily because of habits, values and social capital.
It’s because many people in these countries, as Arthur Brooks of the American Enterprise Institute has noted, believe in a simple moral formula: effort should lead to reward as often as possible.
People who work hard and play by the rules should have a fair shot at prosperity. Money should go to people on the basis of merit and enterprise. Self-control should be rewarded while laziness and self-indulgence should not. Community institutions should nurture responsibility and fairness.
This ethos is not an immutable genetic property, which can blithely be taken for granted. It’s a precious social construct, which can be undermined and degraded.
Right now, this ethos is being undermined from all directions. People see lobbyists diverting money on the basis of connections; they see traders making millions off of short-term manipulations; they see governments stealing money from future generations to reward current voters.
The result is a crisis of legitimacy. The game is rigged. Social trust shrivels. Effort is no longer worth it. The prosperity machine winds down.
Yet the assault on these values continues, especially in Europe.
Over the past few decades, several European nations, like Germany and the Netherlands, have played by the rules and practiced good governance. They have lived within their means, undertaken painful reforms, enhanced their competitiveness and reinforced good values. Now they are being brutally browbeaten for not wanting to bail out nations like Greece, Italy and Spain, which did not do these things, which instead borrowed huge amounts of money that they are choosing not to repay.
The estimated costs of these bailouts vary enormously and may end up being greater than the cost of German reparations after World War I. Germans are being browbeaten for not wanting to bail out Greece, where even today many people are still not willing to pay their taxes. They are being browbeaten for not wanting to bail out Italy, where future growth prospects are uncertain.
They are being asked to bail out nations with vast public sectors and horrible demographics. They are being asked to paper over fundamental economic problems with a mountain of currency.
It’s true that Germans benefited enormously from the euro zone and the southern European bubble, and that German and French banks are far from blameless. It’s true that the consequences for the world would be calamitous if the euro zone cracked up. It’s true that, in a crisis, you do things you wouldn’t otherwise do; you do things that violate your everyday values.
But our sympathy should be with the German people. They are not behaving selfishly by insisting on structural reforms in exchange for bailouts. They are not imprisoned by some rigid ideology. They are not besotted with some semi-senile Weimar superstition about rampant inflation. They are defending the values, habits and social contract upon which the entire prosperity of the West is based.
The scariest thing is that many of the people browbeating the Germans seem to have very little commitment to the effort-reward formula that undergirds capitalism. On the one hand, there are the technicians who are oblivious to values. For them anything that can’t be counted and modeled is a primitive irrelevancy. On the other hand, there are people who see the European crisis through the prism of some cosmic class war. What matters is not how people conduct themselves, but whether they are a have or a have-not. The burden of proof is against the haves. The benefit of the doubt is with the have-nots. Any resistance to redistribution is greeted with outrage.
The real lesson from financial crises is that, at the pit of the crisis, you do what you have to do. You bail out the banks. You bail out the weak European governments. But, at the same time, you lock in policies that reinforce the fundamental link between effort and reward. And, as soon as the crisis passes, you move to repair the legitimacy of the system.
That didn’t happen after the American financial crisis of 2008. The people who caused the crisis were never held responsible. There never was an exit strategy to unwind the gigantic debt buildup. The structural problems plaguing the economy remain unaddressed. As a result, the United States suffers from a horrible crisis of trust that is slowing growth, restricting government action and sending our politics off in strange directions.
Europe’s challenge is not only to avert a financial meltdown but to do it in a way that doesn’t poison the seedbed of prosperity. Which values will be rewarded and reinforced? Will it be effort, productivity and self-discipline? Or will it be bad governance, now and forever?
Worker-Owners of America, Unite!
By GAR ALPEROVITZ
Published: December 14, 2011
College Park, Md.
THE Occupy Wall Street protests have come and mostly gone, and whether they continue to have an impact or not, they have brought an astounding fact to the public’s attention: a mere 1 percent of Americans own just under half of the country’s financial assets and other investments. America, it would seem, is less equitable than ever, thanks to our no-holds-barred capitalist system.
But at another level, something different has been quietly brewing in recent decades: more and more Americans are involved in co-ops, worker-owned companies and other alternatives to the traditional capitalist model. We may, in fact, be moving toward a hybrid system, something different from both traditional capitalism and socialism, without anyone even noticing.
Speech by His Highness the Aga Khan at the Ceremony Conferring the Honorary Doctorate at the University of Ottawa
13 January 2012
Please also see: Press Release, Photographs
There are many topics of mutual interest that I could talk about today. But I have picked just one. In my eyes it is important - and I understand that it is also high among your priorities. I refer to the field of governance and public policy, and, specifically, to the difficulty of establishing workable constitutional systems - especially in countries with less experience in democratic governance.
As you know, my own interests in the last 50 years as Imam of the Ismaili community, have been primarily focused on Africa, South Asia, Central Asia and the Middle-East - and on improving the quality of life for the people who live there. The more I think about this matter, the more I am persuaded that one of the critical barriers to progress is the way in which governing processes occur.
The University of Ottawa has a long tradition of sharing internationally in the hard work of intellectual inquiry. Canada’s Governor General recently referred to this process as “the Diplomacy of Knowledge.” And it seems to me that questions of constitutional governance in the developing world deserve a particularly high place on that agenda.
The so-called Arab Spring has brought special attention to this challenge - illustrating that it is easier to rally people in opposition to a particular government than to forge agreement about new governing processes. But, while this pattern has recently been more dramatically evident, it has been a reality for a very, very long time.
In my life, the two moments which contributed most dramatically to this condition were the fall of the British and French colonial empires after World War II - and then the disintegration of the Soviet Union and its Eastern European empire two decades ago. The process continues today, as developing nations re-examine - sometimes peacefully, sometimes violently - the structures under which they are governed.
In some cases and I think here of Kenya’s very new constitution - power has been diffused - in response no doubt to pressures from ethnic, economic, religious and other centrifugal forces. One risk of decentralization is that it can place more decision-making power into the hands of communities that have had less access to education and governing experience, and less exposure to national and global issues.
Perhaps this is why, in some cases, the trend has been to consolidate governing authority - such as in Afghanistan, with the aim of overcoming inertia and inefficiency - as well as - fragmented and provincial outlooks.
The history of constitutions can be seen, as an oscillation between the two poles of centralization and diffusion - with new concentrations of power often amplifying the temptation to abuse, while new dispersions of power are often associated with stagnation, paralysis and even more opportunities for corruption. Arrangements that effectively balance power - through a federalist approach, for example, are elusive. What is critical is that constitutional arrangements should respect inherited traditions, ensure fairness to minority communities, respond to rural as well as urban concerns and underwrite equitable opportunity for a better life. Reconciling the global and the local, the urban and the rural, the regional and the national, is a formidable challenge - one that calls for the best of our intellectual energies and consistent fine-tuning over time.
There is a second question related to the experience of fledgling - and often failing – democracies. In much of the developed world, we have seen the emergence, over time, of two-pronged political structures - where one party forms a government and the other constitutes the opposition. This arrangement can foster greater accountability and even a certain stability. But I have to say, I am increasingly sceptical about the emergence of such constructs in many developing countries. To the contrary, I suspect that a continuing multiplicity of widely differentiated parties will mean that some form of coalition government will become the norm. This will especially be the case, of course, in societies that are - multi-cultural, multi-religious, or struggling to accommodate secular and religious political forces.
The difficulty is, however, that multi-party coalitions can be intrinsically undisciplined, with their differing agendas, and often unstable. In such situations, the threat of defection can be highly destabilizing, while accountability is often blurred and transparency is discouraged. Yet, coalition governance is now becoming a familiar form of government in many countries of Asia, Africa and the Middle East.
The broader the array of parties, the greater the risk that they will be based on personalities or narrow parochial identities, rather than a broadly-recognized, predictable point of view.
There is certainly no straightforward, universal formula to apply in such situations. We must not naively assume that what has worked in some parts of the western world, for example, will also work the same way in less developed contexts. Different places, different histories require quite different approaches.
The questions raised by coalition governance are not easy ones – either in the developing world or the developed world. What should be the rules under which parties and other governing entities are put together? How can we best find the glue that will hold them together - such as joint commitments to issues of clear national interest – and to a spirit of pluralism which values conciliation among diversified viewpoints?
Let me emphasize that I am not opposed to the concept of coalition government. Indeed it may be an inevitable response to the intrinsic pluralism of many of the countries in which I work. But the high level of political instability and failure around the world illustrates the need for creative new thinking about this particularly demanding form of democracy.
What constitutional options and best practices will give coalition government the greatest chance of stability and consistent, high quality performance?
The alternative is a world widely characterized by significant numbers of unstable states. It is a scenario to be avoided.
Again, the discussion of comparative political systems is just one of many conversations in which the great universities of the world should be vital participants. Our own Aga Khan University is now planning a new Graduate School of Government, Public Policy and Civil Society to help address these issues. And surely this is a discussion in which the University of Ottawa can make a special contribution - given the commitment you have articulated to research, the topic of “Canada and the World” - your focus on international intellectual engagement - including 140 bilateral university agreements - your emphasis on fostering democracy, and, indeed, the creation of a new premier Centre for Governance and Public Policy Research.
I know, too, that this University’s global effectiveness is reinforced by the high regard in which Canada is held as a valued international partner. In my experience, a country’s standing in our contemporary world is no longer recognised by what it can achieve for itself, but by what it can do for others. In this context, Canada has truly become a great, world power.
January 23, 2012
By DAVID BROOKS
I hope President Obama read about Maddie Parlier as he was working on his State of the Union address. Parlier is the subject of Adam Davidson’s illuminating article in the current issue of The Atlantic.
Parlier’s father abandoned her when she was young and crashed his car while driving drunk, killing himself and a family of four. Maddie is smart and hard-working. She did reasonably well in high school but got pregnant her senior year.
She and the father of her child split up, which put the kibosh on her college dreams because she couldn’t afford day care. She temped for a while. Her work ethic got her noticed, and she got a job as an unskilled laborer at Standard Motor Products, which makes fuel injectors.
Parlier earns about $13 an hour. She’d like to become one of the better-paid workers in the plant, but, in today’s factories, that requires an enormous leap in skills. It feels cruel, Davidson writes, to mention all the things Parlier would have to learn to move up. She doesn’t know the computer language that runs the machines. “She doesn’t know trigonometry or calculus, and she’s never studied the properties of cutting tools or metals. She doesn’t know how to maintain a tolerance of 0.25 microns, or what tolerance means in this context, or what a micron is.”
A good attitude and hustle have taken Parlier as far as they can. It’s hard, given her situation, to acquire the skills she needs to realize the American dream.
Davidson’s article is important because it shows the interplay between economic forces (globalization and technology) and social forces (single parenthood and the breakdown of community support). Globalization and technological change increase the demands on workers; social decay makes it harder for them to meet those demands.
Across America, millions of mothers can’t rise because they don’t have adequate support systems as they try to improve their skills. Tens of millions of children have poor life chances because they grow up in disorganized environments that make it hard to acquire the social, organizational and educational skills they will need to become productive workers.
Tens of millions of men have marred life chances because schools are bad at educating boys, because they are not enmeshed in the long-term relationships that instill good habits and because insecure men do stupid and self-destructive things.
Over the past 40 years, women’s wages have risen sharply but, as Michael Greenstone and Adam Looney of the Hamilton Project point out, median incomes of men have dropped 28 percent and male labor force participation rates are down 16 percent. Next time somebody talks to you about wage stagnation, have them break it down by sex. It’s not only globalization and technological change causing this stagnation. It’s the deterioration of the moral and social landscape, especially for men.
The idiocy of our current political debate is that neither side seems capable of talking about the interplay of economic and social forces. Most of the Republican candidates talk as if all that is needed is more capitalism. But lighter regulation and lower taxes won’t, on their own, help the Maddie Parliers of the world get the skills they need to compete.
Democrats, meanwhile, have shifted their emphasis from lifting up the poor to pounding down the rich. Democratic candidates no longer emphasize early childhood education and community-building. Instead they embrace the pseudo-populist Occupy Wall Street hokum — the opiate of the educated classes.
This materialistic ethos emphasizes reducing inequality instead of expanding opportunity. Its policy prescriptions begin (and sometimes end) with raising taxes on the rich. This makes you feel better if you detest all the greed-heads who went into finance. It does nothing to address those social factors, like family breakdown, that help explain why American skills have not kept up with technological change.
If President Obama is really serious about restoring American economic dynamism, he needs an aggressive two-pronged approach: More economic freedom combined with more social structure; more competition combined with more support.
As a survey of nearly 10,000 Harvard Business School grads by Michael Porter and Jan Rivkin makes clear, to get companies to locate their plants in the U.S., Obama is going to have to simplify the tax code, cut corporate rates, streamline regulations, make immigration policy more flexible and balance the budget over the long term.
To ensure there’s skilled labor for those plants, Obama would have to champion different policies: successful training programs like Job Corps, better coordination between colleges and employers, better treatment for superstar teachers, more child care options and better early childhood education.
This agenda is libertarian in the capitalist sector and activist in the human capital sector. Don’t triangulate meekly toward the center; select bold policies from both ends. That’s what would help Maddie Parlier and millions like her.
January 26, 2012
At Davos, Debating Capitalism’s Future
By ED MILIBAND
IS 20th-century capitalism failing 21st-century society? Members of the global elite debated that unusual question on Wednesday at the annual World Economic Forum.
There was a time, not long ago, when such a debate would have been held only among the protesters who annually shelter in igloos farther down the Alpine slopes. So it is encouraging that more than three years since the global financial crisis, a belated process of soul-searching has begun in search of the right lessons to learn from it.
In Britain, members of the Conservative-led government — not least the prime minister, David Cameron — have echoed the Labour Party’s call for a more responsible capitalism.
There is a great difference, however, between being willing to talk about an issue and being ready to act.
It is a difference between those who still believe that all governments can do is get out of the way and those who believe there is a real role for governments in first reviving our economies, and then setting the right rules for future success. The challenge therefore is not just to capitalism but also to politics.
At the Group of 20 summit in London three years ago, Prime Minister Gordon Brown and President Obama led concerted action to guide the world economy from the brink. Three years later, some governments are engaging in a short-sighted fiscal protectionism that can only lead to stunted growth.
If we learned anything from the 1930s, it was that governments cannot shrug their shoulders and watch as their own people are consigned to unemployment. I find it tragic and astonishing that some governments need to learn this lesson again.
Nor should we forget the causes of the current growth and debt crisis as we seek to put our economies on a more sustainable footing.
Both the United States and Britain suffered because their economies were overly reliant on the financial sector’s artificial profits; living standards for the many worsened while the economic rewards skewed to the top 1 percent; a capitalist model encouraged short-term decision-making oriented toward quarterly profits rather than long-term health; and vested interests — from giant banks to media moguls —were deemed too big to fail or too powerful to challenge.
We need to recognize that the trickle-down promise of conservative theorists has turned into a gravity-defying reality in which wealth has flowed upward disproportionately and, too often, undeservedly. To address properly the squeeze in middle-class incomes on both sides of the Atlantic requires fresh thinking from governments about how people train for their working lives and what a living wage should be.
Governments can set better — not necessarily more — rules to encourage productive businesses that invest, invent, train, make and sell real products and services. We need rules that discourage the predatory behavior of those seeking the fast buck through hostile takeovers and asset-stripping that do not have the interests of the shareholders, the employees or the economy at heart. In Britain, the Labour Party is considering how we can raise the bar for corporate takeovers so that companies’ futures are not determined by just a handful of speculators.
And governments must remember they are elected to serve the people, not the powerful lobbies who can pay for access or influence. Too often the real enemies of market capitalism are some of the leading beneficiaries of the current model, which favors price-gouging cartels and consumer exploitation. In Britain, airlines need to be more upfront about the true cost of their fares, and pension firms cannot continue to sign up customers for products that can chip away at their retirement income through exorbitant management fees.
As President Obama noted in his State of the Union address on Tuesday, it is neither socially nor economically sustainable for the wealthiest and most powerful to avoid paying their fair share. I support proposals for a financial transactions tax levied equally on the major trading centers from Hong Kong and Singapore to Wall Street and the City of London. The British government needs to show more leadership on this issue in Europe — and all members of G-20 need to help make it happen.
Britain loses billions of pounds in revenues because of outdated rules that allow our richest citizens to keep their money in off-shore tax havens. Tax authorities need to know about income and wealth hidden behind front companies, trusts and other complex financial products. If these rules cannot be changed by international agreement, progressive governments should go ahead and do it themselves.
As President Obama said in his State of the Union address this week, it is “common sense” to ask a billionaire to pay, proportionally, at least as much as his secretary in taxes. Indeed, in Davos this week, I will look around the room and ask myself who pays taxes at a higher rate — those eating the soup or those serving it?
In my country, I believe that changing the rules of capitalism will mean a change of government. But more generally, it will require a change in what citizens expect and ask of politics. The question is not so much whether 20th-century capitalism is failing 21st-century society but whether politics can rise to the challenge of changing a flawed economic model.
Ed Miliband is a member of the British Parliament and the leader of the Labour Party.
February 16, 2012
Why China’s Political Model Is Superior
By ERIC X. LI
THIS week the Obama administration is playing host to Xi Jinping, China’s vice president and heir apparent. The world’s most powerful electoral democracy and its largest one-party state are meeting at a time of political transition for both.
Many have characterized the competition between these two giants as a clash between democracy and authoritarianism. But this is false. America and China view their political systems in fundamentally different ways: whereas America sees democratic government as an end in itself, China sees its current form of government, or any political system for that matter, merely as a means to achieving larger national ends.
In the history of human governance, spanning thousands of years, there have been two major experiments in democracy. The first was Athens, which lasted a century and a half; the second is the modern West. If one defines democracy as one citizen one vote, American democracy is only 92 years old. In practice it is only 47 years old, if one begins counting after the Voting Rights Act of 1965 — far more ephemeral than all but a handful of China’s dynasties.
Why, then, do so many boldly claim they have discovered the ideal political system for all mankind and that its success is forever assured?
The answer lies in the source of the current democratic experiment. It began with the European Enlightenment. Two fundamental ideas were at its core: the individual is rational, and the individual is endowed with inalienable rights. These two beliefs formed the basis of a secular faith in modernity, of which the ultimate political manifestation is democracy.
In its early days, democratic ideas in political governance facilitated the industrial revolution and ushered in a period of unprecedented economic prosperity and military power in the Western world. Yet at the very beginning, some of those who led this drive were aware of the fatal flaw embedded in this experiment and sought to contain it.
The American Federalists made it clear they were establishing a republic, not a democracy, and designed myriad means to constrain the popular will. But as in any religion, faith would prove stronger than rules.
The political franchise expanded, resulting in a greater number of people participating in more and more decisions. As they say in America, “California is the future.” And the future means endless referendums, paralysis and insolvency.
In Athens, ever-increasing popular participation in politics led to rule by demagogy. And in today’s America, money is now the great enabler of demagogy. As the Nobel-winning economist A. Michael Spence has put it, America has gone from “one propertied man, one vote; to one man, one vote; to one person, one vote; trending to one dollar, one vote.” By any measure, the United States is a constitutional republic in name only. Elected representatives have no minds of their own and respond only to the whims of public opinion as they seek re-election; special interests manipulate the people into voting for ever-lower taxes and higher government spending, sometimes even supporting self-destructive wars.
The West’s current competition with China is therefore not a face-off between democracy and authoritarianism, but rather the clash of two fundamentally different political outlooks. The modern West sees democracy and human rights as the pinnacle of human development. It is a belief premised on an absolute faith.
China is on a different path. Its leaders are prepared to allow greater popular participation in political decisions if and when it is conducive to economic development and favorable to the country’s national interests, as they have done in the past 10 years.
However, China’s leaders would not hesitate to curtail those freedoms if the conditions and the needs of the nation changed. The 1980s were a time of expanding popular participation in the country’s politics that helped loosen the ideological shackles of the destructive Cultural Revolution. But it went too far and led to a vast rebellion at Tiananmen Square.
That uprising was decisively put down on June 4, 1989. The Chinese nation paid a heavy price for that violent event, but the alternatives would have been far worse.
The resulting stability ushered in a generation of growth and prosperity that propelled China’s economy to its position as the second largest in the world.
The fundamental difference between Washington’s view and Beijing’s is whether political rights are considered God-given and therefore absolute or whether they should be seen as privileges to be negotiated based on the needs and conditions of the nation.
The West seems incapable of becoming less democratic even when its survival may depend on such a shift. In this sense, America today is similar to the old Soviet Union, which also viewed its political system as the ultimate end.
History does not bode well for the American way. Indeed, faith-based ideological hubris may soon drive democracy over the cliff.
I’M reading a fascinating new book called “Why Nations Fail.” The more you read it, the more you appreciate what a fool’s errand we’re on in Afghanistan and how much we need to totally revamp our whole foreign aid strategy. But most intriguing are the warning flares the authors put up about both America and China.
Co-authored by the M.I.T. economist Daron Acemoglu and the Harvard political scientist James A. Robinson, “Why Nations Fail” argues that the key differentiator between countries is “institutions.” Nations thrive when they develop “inclusive” political and economic institutions, and they fail when those institutions become “extractive” and concentrate power and opportunity in the hands of only a few.
“Inclusive economic institutions that enforce property rights, create a level playing field, and encourage investments in new technologies and skills are more conducive to economic growth than extractive economic institutions that are structured to extract resources from the many by the few,” they write.
“Inclusive economic institutions, are in turn supported by, and support, inclusive political institutions,” which “distribute political power widely in a pluralistic manner and are able to achieve some amount of political centralization so as to establish law and order, the foundations of secure property rights, and an inclusive market economy.” Conversely, extractive political institutions that concentrate power in the hands of a few reinforce extractive economic institutions to hold power.
Acemoglu explained in an interview that their core point is that countries thrive when they build political and economic institutions that “unleash,” empower and protect the full potential of each citizen to innovate, invest and develop. Compare how well Eastern Europe has done since the fall of communism with post-Soviet states like Georgia or Uzbekistan, or Israel versus the Arab states, or Kurdistan versus the rest of Iraq. It’s all in the institutions.
The lesson of history, the authors argue, is that you can’t get your economics right if you don’t get your politics right, which is why they don’t buy the notion that China has found the magic formula for combining political control and economic growth.
“Our analysis,” says Acemoglu, “is that China is experiencing growth under extractive institutions — under the authoritarian grip of the Communist Party, which has been able to monopolize power and mobilize resources at a scale that has allowed for a burst of economic growth starting from a very low base,” but it’s not sustainable because it doesn’t foster the degree of “creative destruction” that is so vital for innovation and higher incomes.
“Sustained economic growth requires innovation,” the authors write, “and innovation cannot be decoupled from creative destruction, which replaces the old with the new in the economic realm and also destabilizes established power relations in politics.”
“Unless China makes the transition to an economy based on creative destruction, its growth will not last,” argues Acemoglu. But can you imagine a 20-year-old college dropout in China being allowed to start a company that challenges a whole sector of state-owned Chinese companies funded by state-owned banks? he asks.
The post-9/11 view that what ailed the Arab world and Afghanistan was a lack of democracy was not wrong, said Acemoglu. What was wrong was thinking that we could easily export it. Democratic change, to be sustainable, has to emerge from grassroots movements, “but that does not mean there is nothing we can do,” he adds.
For instance, we should be transitioning away from military aid to regimes like Egypt and focusing instead on enabling more sectors of that society to have a say in politics. Right now, I’d argue, our foreign aid to Egypt, Pakistan and Afghanistan is really a ransom we pay their elites not to engage in bad behavior. We need to turn it into bait.
Acemoglu suggests that instead of giving Cairo another $1.3 billion in military aid that only reinforces part of the elite, we should insist that Egypt establish a committee representing all sectors of its society that would tell us which institutions — schools, hospitals — they want foreign aid to go to, and have to develop appropriate proposals.
If we’re going to give money, “let’s use it to force them to open up the table and to strengthen the grass-roots,” says Acemoglu.
We can only be a force multiplier. Where you have grass-roots movements that want to build inclusive institutions, we can enhance them. But we can’t create or substitute for them. Worse, in Afghanistan and many Arab states, our policies have often discouraged grass-roots from emerging by our siding with convenient strongmen. So there’s nothing to multiply. If you multiply zero by 100, you still get zero.
And America? Acemoglu worries that our huge growth in economic inequality is undermining the inclusiveness of America’s institutions, too. “The real problem is that economic inequality, when it becomes this large, translates into political inequality.” When one person can write a check to finance your whole campaign, how inclusive will you be as an elected official to listen to competing voices?
DOES America need an Arab Spring? That was the question on my mind when I called Frank Fukuyama, the Stanford professor and author of “The End of History and the Last Man.” Fukuyama has been working on a two-volume opus called “The Origins of Political Order,” and I could detect from his recent writings that his research was leading him to ask a very radical question about America’s political order today, namely: has American gone from a democracy to a “vetocracy” — from a system designed to prevent anyone in government from amassing too much power to a system in which no one can aggregate enough power to make any important decisions at all?
“There is a crisis of authority, and we’re not prepared to think about it in these terms,” said Fukuyama. “When Americans think about the problem of government, it is always about constraining the government and limiting its scope.” That dates back to our founding political culture. The rule of law, regular democratic rotations in power and human rights protections were all put in place to create obstacles to overbearing, overly centralized government. “But we forget,” Fukuyama added, “that government was also created to act and make decisions.”
That is being lost at the federal level. A system with as many checks and balances built into it as ours assumes — indeed requires — a certain minimum level of cooperation on major issues between the two parties, despite ideological differences. Unfortunately, since the end of the cold war, which was a hugely powerful force compelling compromise between the parties, several factors are combining to paralyze our whole system.
For starters, we’ve added more checks and balances to make decision-making even more difficult — such as senatorial holds now being used to block any appointments by the executive branch or the Senate filibuster rule, effectively requiring a 60-vote majority to pass any major piece of legislation, rather than 51 votes. Also, our political divisions have become more venomous than ever. As Russ Feingold, the former Democratic senator, once remarked to me: At the rate that polarization is proceeding, partisans will soon be demanding that consumer products reflect their politics: “We’re going to have Republican and Democrat toothpaste.”
In addition, the Internet, the blogosphere and C-Span’s coverage of the workings of the House and Senate have made every lawmaker more transparent — making back-room deals by lawmakers less possible and public posturing the 24/7 norm. And, finally, the huge expansion of the federal government, and the increasing importance of money in politics, have hugely expanded the number of special-interest lobbies and their ability to influence and clog decision-making.
Indeed, America today increasingly looks like the society that the political scientist Mancur Olson wrote about in his 1982 classic “The Rise and Decline of Nations.” He warned that when a country amasses too many highly focused special-interest lobbies — which have an inherent advantage over the broad majority, which is fixated on the well-being of the country as a whole — they can, like a multilimbed octopus, choke the life out of a political system, unless the majority truly mobilizes against them.
To put it another way, says Fukuyama, America’s collection of minority special-interest groups is now bigger, more mobilized and richer than ever, while all the mechanisms to enforce the will of the majority are weaker than ever. The effect of this is either legislative paralysis or suboptimal, Rube Goldberg-esque, patched-together-compromises, often made in response to crises with no due diligence. That is our vetocracy.
The Financial Times columnist Ed Luce, the author of the new book “Time to Start Thinking: America in the Age of Descent,” notes that if you believe the fantasy that America’s economic success derives from having had a government that stayed out of the way, then gridlock and vetocracy are just fine with you. But if you have a proper understanding of American history — so you know that government played a vital role in generating growth by maintaining the rule of law, promulgating regulations that incentivize risk-taking and prevent recklessness, educating the work force, building infrastructure and funding scientific research — then a vetocracy becomes a very dangerous thing.
It undermines the secret of our success: a balanced public-private partnership.
“If we are to get out of our present paralysis, we need not only strong leadership, but changes in institutional rules,” argues Fukuyama. These would include eliminating senatorial holds and the filibuster for routine legislation and having budgets drawn up by a much smaller supercommittee of legislators — like those that handle military base closings — with “heavy technocratic input from a nonpartisan agency like the Congressional Budget Office,” insulated from interest-group pressures and put before Congress in a single, unamendable, up-or-down vote.
I know what you’re thinking: “That will never happen.” And do you know what I’m thinking? “Then we will never be a great country again, no matter who is elected.” We can’t be great as long as we remain a vetocracy rather than a democracy. Our deformed political system — with a Congress that’s become a forum for legalized bribery — is now truly holding us back.
Last edited by kmaherali on Wed Apr 25, 2012 6:53 am, edited 1 time in total
A competitive mind-set is productive only to a point. It's important not to lose sight of value defined by other metrics. Peter Thiel's argument for monopoly may provide an alternative framework.
By DAVID BROOKS
As a young man, Peter Thiel competed to get into Stanford. Then he competed to get into Stanford Law School. Then he competed to become a clerk for a federal judge. Thiel won all those competitions. But then he competed to get a Supreme Court clerkship.
Thiel lost that one. So instead of being a clerk, he went out and founded PayPal. Then he became an early investor in Facebook and many other celebrated technology firms. Somebody later asked him. “So, aren’t you glad you didn’t get that Supreme Court clerkship?”
The question got Thiel thinking. His thoughts are now incorporated into a course he is teaching in the Stanford Computer Science Department. (A student named Blake Masters posted outstanding notes online, and Thiel has confirmed their accuracy.)
One of his core points is that we tend to confuse capitalism with competition. We tend to think that whoever competes best comes out ahead. In the race to be more competitive, we sometimes confuse what is hard with what is valuable. The intensity of competition becomes a proxy for value.
In fact, Thiel argues, we often shouldn’t seek to be really good competitors. We should seek to be really good monopolists. Instead of being slightly better than everybody else in a crowded and established field, it’s often more valuable to create a new market and totally dominate it. The profit margins are much bigger, and the value to society is often bigger, too.
Now to be clear: When Thiel is talking about a “monopoly,” he isn’t talking about the illegal eliminate-your-rivals kind. He’s talking about doing something so creative that you establish a distinct market, niche and identity. You’ve established a creative monopoly and everybody has to come to you if they want that service, at least for a time.
His lecture points to a provocative possibility: that the competitive spirit capitalism engenders can sometimes inhibit the creativity it requires.
Think about the traits that creative people possess. Creative people don’t follow the crowds; they seek out the blank spots on the map. Creative people wander through faraway and forgotten traditions and then integrate marginal perspectives back to the mainstream. Instead of being fastest around the tracks everybody knows, creative people move adaptively through wildernesses nobody knows.
Now think about the competitive environment that confronts the most fortunate people today and how it undermines those mind-sets.
First, students have to jump through ever-more demanding, preassigned academic hoops. Instead of developing a passion for one subject, they’re rewarded for becoming professional students, getting great grades across all subjects, regardless of their intrinsic interests. Instead of wandering across strange domains, they have to prudentially apportion their time, making productive use of each hour.
Then they move into a ranking system in which the most competitive college, program and employment opportunity is deemed to be the best. There is a status funnel pointing to the most competitive colleges and banks and companies, regardless of their appropriateness.
Then they move into businesses in which the main point is to beat the competition, in which the competitive juices take control and gradually obliterate other goals. I see this in politics all the time. Candidates enter politics wanting to be authentic and change things. But once the candidates enter the campaign, they stop focusing on how to be change-agents. They and their staff spend all their time focusing on beating the other guy. They hone the skills of one-upsmanship. They get engulfed in a tit-for-tat competition to win the news cycle. Instead of being new and authentic, they become artificial mirror opposites of their opponents. Instead of providing the value voters want — change — they become canned tacticians, hoping to eke out a slight win over the other side.
Competition has trumped value-creation. In this and other ways, the competitive arena undermines innovation.
You know somebody has been sucked into the competitive myopia when they start using sports or war metaphors. Sports and war are competitive enterprises. If somebody hits three home runs against you in the top of the inning, your job is to go hit four home runs in the bottom of the inning.
But business, politics, intellectual life and most other realms are not like that. In most realms, if somebody hits three home runs against you in one inning, you have the option of picking up your equipment and inventing a different game. You don’t have to compete; you can invent.
We live in a culture that nurtures competitive skills. And they are necessary: discipline, rigor and reliability. But it’s probably a good idea to try to supplement them with the skills of the creative monopolist: alertness, independence and the ability to reclaim forgotten traditions.
Everybody worries about American competitiveness. That may be the wrong problem. The future of the country will probably be determined by how well Americans can succeed at being monopolists.
The people who pioneered democracy in Europe and the United States had a low but pretty accurate view of human nature. They knew that if we get the chance, most of us will try to get something for nothing. They knew that people generally prize short-term goodies over long-term prosperity. So, in centuries past, the democratic pioneers built a series of checks to make sure their nations wouldn’t be ruined by their own frailties.
The American founders did this by decentralizing power. They built checks and balances to frustrate and detain the popular will. They also dispersed power to encourage active citizenship, hoping that as people became more involved in local government, they would develop a sense of restraint and responsibility.
In Europe, by contrast, authority was centralized. Power was held by small coteries of administrators and statesmen, many of whom had attended the same elite academies where they were supposed to learn the art and responsibilities of stewardship. Under the parliamentary system, voters didn’t even get to elect their leaders directly. They voted for parties, and party elders selected the ones who would actually form the government, often through secret means.
Though the forms were different, the democracies in Europe and the United States were based on a similar carefully balanced view of human nature: People are naturally selfish and need watching. But democratic self-government is possible because we’re smart enough to design structures to police that selfishness.
James Madison put it well: “As there is a degree of depravity in mankind, which requires a certain degree of circumspection and distrust: So there are other qualities in human nature, which justify a certain portion of esteem and confidence.”
But, over the years, this balanced wisdom was lost. Leaders today do not believe their job is to restrain popular will. Their job is to flatter and satisfy it. A gigantic polling apparatus has developed to help leaders anticipate and respond to popular whims. Democratic politicians adopt the mind-set of marketing executives. Give the customer what he wants. The customer is always right.
Having lost a sense of their own frailty, many voters have come to regard their desires as entitlements. They become incensed when their leaders are not responsive to their needs. Like any normal set of human beings, they command their politicians to give them benefits without asking them to pay.
The consequences of this shift are now obvious. In Europe and America, governments have made promises they can’t afford to fulfill. At the same time, the decision-making machinery is breaking down. American and European capitals still have the structures inherited from the past, but without the self-restraining ethos that made them function.
The American decentralized system of checks and balances has transmogrified into a fragmented system that scatters responsibility. Congress is capable of passing laws that give people benefits with borrowed money, but it gridlocks when it tries to impose self-restraint.
The Obama campaign issues its famous “Julia” ad, which perfectly embodies the vision of government as a national Sugar Daddy, delivering free money and goodies up and down the life cycle. The Citizens United case gives well-financed interests tremendous power to preserve or acquire tax breaks and regulatory deals. American senior citizens receive health benefits that cost many times more than the contributions they put into the system.
In Europe, workers across the Continent want great lifestyles without long work hours. They want dynamic capitalism but also personal security. European welfare states go broke trying to deliver these impossibilities.
The European ruling classes once had their power checked through daily contact with the tumble of national politics. But now those ruling classes have built a technocratic apparatus, the European Union, operating far above popular scrutiny. Decisions that reshape the destinies of families and nations are being made at some mysterious, transnational level. Few Europeans can tell who is making decisions or who is to blame if they go wrong, so, of course, they feel powerless and distrustful.
Western democratic systems were based on a balance between self-doubt and self-confidence. They worked because there were structures that protected the voters from themselves and the rulers from themselves. Once people lost a sense of their own weakness, the self-doubt went away and the chastening structures were overwhelmed. It became madness to restrain your own desires because surely your rivals over yonder would not be restraining theirs.
This is one of the reasons why Europe and the United States are facing debt crises and political dysfunction at the same time. People used to believe that human depravity was self-evident and democratic self-government was fragile. Now they think depravity is nonexistent and they take self-government for granted.
Neither the United States nor the European model will work again until we rediscover and acknowledge our own natural weaknesses and learn to police rather than lionize our impulses.
ON Monday, Secretary of State Hillary Rodham Clinton gave a speech in Mongolia denouncing Asian governments that seek “to restrict people’s access to ideas and information, to imprison them for expressing their views, to usurp the rights of citizens to choose their leaders.” It was a swipe at China’s authoritarian political system. The view that China should become more democratic is widely held in the West. But framing the debate in terms of democracy versus authoritarianism overlooks better possibilities.
The political future of China is far likelier to be determined by the longstanding Confucian tradition of “humane authority” than by Western-style multiparty elections. After all, democracy is flawed as an ideal. Political legitimacy is based solely on the sovereignty of the people — more specifically, a government that grants power to democratically elected representatives. But there is no compelling reason for a government to have only one source of legitimacy.
Democracy is also flawed in practice. Political choices come down to the desires and interests of the electorate. This leads to two problems. First, the will of the majority may not be moral: it may favor racism, imperialism or fascism. Second, when there is a clash between the short-term interests of the populace and the long-term interests of mankind, as is the case with global warming, the people’s short-term interests become the political priority. As a result, democratically elected governments in America and elsewhere are finding it nearly impossible to implement policies that curb energy usage in the interests of humanity and of future generations.
In China, political Confucians defend an alternative approach: the Way of the Humane Authority. The question of political legitimacy is central to their constitutional thought. Legitimacy is not simply what people think of their rulers; it is the deciding factor in determining whether a ruler has the right to rule. And unlike Western-style democracy, there is more than one source of legitimacy.
According to the Gongyang Zhuan, a commentary on a Confucian classic, political power can be justified through three sources: the legitimacy of heaven (a sacred, transcendent sense of natural morality), the legitimacy of earth (wisdom from history and culture), and the legitimacy of the human (political obedience through popular will).
In ancient times, Humane Authority was implemented by early Chinese monarchs. But changes in historical circumstances now necessitate changes in the form of rule. Today, the will of the people must be given an institutional form that was lacking in the past, though it should be constrained and balanced by institutional arrangements reflecting the other two forms of legitimacy.
In modern China, Humane Authority should be exercised by a tricameral legislature: a House of Exemplary Persons that represents sacred legitimacy; a House of the Nation that represents historical and cultural legitimacy; and a House of the People that represents popular legitimacy.
The leader of the House of Exemplary Persons should be a great scholar. Candidates for membership should be nominated by scholars and examined on their knowledge of the Confucian classics and then assessed through trial periods of progressively greater administrative responsibilities — similar to the examination and recommendation systems used to select scholar-officials in the imperial past. The leader of the House of the Nation should be a direct descendant of Confucius; other members would be selected from descendants of great sages and rulers, along with representatives of China’s major religions. Finally, members of the House of the People should be elected either by popular vote or as heads of occupational groups.
This system would have checks and balances. Each house would deliberate in its own way and not interfere in the affairs of the others. To avoid political gridlock arising from conflicts among the three houses, a bill would be required to pass at least two houses to become law. To protect the primacy of sacred legitimacy in Confucian tradition the House of Exemplary Persons would have a final, exclusive veto, but its power would be constrained by that of the other two houses: for example, if they propose a bill restricting religious freedom, the People and the Nation could oppose it, stopping it from becoming law.
Instead of judging political progress simply by asking whether China is becoming more democratic, Humane Authority provides a more comprehensive and culturally sensitive way of judging its political progress.
Jiang Qing is the founder of the Yangming Confucian Academy in Guiyang, China. He is the author, and Daniel A. Bell is an editor, of the forthcoming book “A Confucian Constitutional Order: How China’s Ancient Past Can Shape Its Political Future.”
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