Kevin Hassett’s conclusion in the current issue of TheAmerican suggests that democracy and economic prosperity do not go hand-in-hand, but instead, that dictatorships are better at fostering economic growth. (h/t: Brussels Journal) Now, I’m no defender of democracy. I see it as the flip-side of the dictatorship coin, but the historical record is enough to convince me that it is leaps and bounds better at fostering growth and prosperity than dictatorships of any sort – one need only look at the 1,000 year period of abject economic stagnation, between the fall of Rome and the Renaissance, and compare any of those monarchies to any of the lesser forms of filth that would follow in the 16th through 20th centuries. That said, Hasset’s assertion is strikingly idiotic:
So the future may look something like the 20th century in reverse. The unfree nations will grow so quickly that they will overwhelm free nations with their economic might. The unfree will see no reason to transition to democracy.
Meanwhile, democracies may copy many of the market-friendly policies of the dictatorships, but it seems unlikely that free citizens will choose to reduce their own political freedoms.
That sounds vaguely reminiscent of Kruschev’s “WE WILL CRUSH YOU!” outburst. I do not deny that these countries are growing. But I categorically reject the proposition that they can continue to grow at such a pace, and that they will “overwhelm” the already developed world with their might – economic or otherwise – if not for any other reasons than trade begets interdependency and creates wealth.
These economies that have an aggregate 250% over 15 years simply cannot continue to grow at such a pace indefinitely (the United States experienced similar growth – 235% during the post-WWII era, via EH.net). It is also important to note that the economies in question, particularly China, have seen vast trade liberalization in the last two decades. Some amount of real economc growth is to be expected – unlike the figures put out by the Soviets in the 1950s, which were mostly lies – although it is likely to be in the form of State- or crony-capitalism. Eventually these nations, too, will reach diminishing returns. What growth they are experiencing now is like slamming that RedBull in the morning, when you wake up sweating tequila. About five minutes of relief.
It is important to note that China’s economy is 21 times larger than either Singapore’s or Malaysia’s, 8 times larger than Saudi Arabia’s and 3 times larger than Russia’s. Korea (D.P.R.) is not even ranked. Look it up yourself. My best five-second guesstimate for the weighting scheme used would something like this:
(source: data from World Bank, Excel wizardry: myself)
If China had leveled out at say, 3%, even if the other countries continued at 10% or so, the weighted average growth rate for these countries would be about 3.5% – still robust, but hardly spectacular. Clearly, as goes China, so goes the aggregate. Now, a good deal of China’s growth is real, if nonetheless fascist. And to some extent, her appetite for crude oil weighs significantly on Saudi Arabia’s growth. A further consideration is where these countries might be, and how fast they’d be growing if it were not for previously industrialized nations investing heavily within their borders. China’s growth is not endogeneous.
More importantly, China is not in the midst of a golden age that will never end.
