Table of Contents
- Challenging Nine Nobel Laureates in Economics
- Predicting China’s Global Rise More Than a Century Ago
- The Chinese as a People Shaped by Their Society
- Chinese Meritocracy, Absence of Caste, and Malthusian Poverty
- Remarkable Upward Mobility But Relentless Downward Mobility
- When and Why China Fell Behind the West
- The Comparative Analysis of Ian Morris and His Ideological Blind Spots
- Resurrecting the Lost Wisdom of the Early Twentieth Century
The rise of China surely ranks among the most important world developments of the last 100 years. With America still trapped in its fifth year of economic hardship, and the Chinese economy poised to surpass our own before the end of this decade, China looms very large on the horizon. We are living in the early years of what journalists once dubbed “The Pacific Century,” yet there are worrisome signs it may instead become known as “The Chinese Century.”
But does the Chinese giant have feet of clay? In a recently published book, Why Nations Fail, economists Daron Acemoglu and James A. Robinson characterize China’s ruling elites as “extractive”—parasitic and corrupt—and predict that Chinese economic growth will soon falter and decline, while America’s “inclusive” governing institutions have taken us from strength to strength. They argue that a country governed as a one-party state, without the free media or checks and balances of our own democratic system, cannot long prosper in the modern world. The glowing tributes this book has received from a vast array of America’s most prominent public intellectuals, including six Nobel laureates in economics, testifies to the widespread popularity of this optimistic message.
I described the enormous economic success that China had enjoyed over the previous thirty years and sharply contrasted it with the difficulties that ordinary Americans had experienced in that same period.
During the three decades to 2010, China achieved perhaps the most rapid sustained rate of economic development in the history of the human species, with its real economy growing almost 40-fold between 1978 and 2010. In 1978, America’s economy was 15 times larger, but according to most international estimates, China is now set to surpass America’s total economic output within just another few years.
Furthermore, the vast majority of China’s newly created economic wealth has flowed to ordinary Chinese workers, who have moved from oxen and bicycles to the verge of automobiles in just a single generation. While median American incomes have been stagnant for almost forty years, those in China have nearly doubled every decade, with the real wages of workers outside the farm-sector rising about 150 percent over the last ten years alone. The Chinese of 1980 were desperately poor compared to Pakistanis, Nigerians, or Kenyans; but today, they are several times wealthier, representing more than a tenfold shift in relative income.
A World Bank report recently highlighted the huge drop in global poverty rates from 1980 to 2008, but critics noted that over 100 percent of that decline came from China alone: the number of Chinese living in dire poverty fell by a remarkable 662 million, while the impoverished population in the rest of the world actually rose by 13 million. And although India is often paired with China in the Western media, a large fraction of Indians have actually grown poorer over time. The bottom half of India’s still rapidly growing population has seen its daily caloric intake steadily decline for the last 30 years, with half of all children under five now being malnourished.
China’s economic progress is especially impressive when matched against historical parallels. Between 1870 and 1900, America enjoyed unprecedented industrial expansion, such that even Karl Marx and his followers began to doubt that a Communist revolution would be necessary or even possible in a country whose people were achieving such widely shared prosperity through capitalistic expansion. During those 30 years America’s real per capita income grew by 100 percent. But over the last 30 years, real per capita income in China has grown by more than 1,300 percent.
Ordinary Chinese workers have increased their real income by well over 1,000 percent in recent decades, while the corresponding figure for most American workers has been close to zero. If typical American wages were doubling every decade, there would be far less anger in our own society directed against the “One Percent.” Indeed, under the standard GINI index used to measure wealth inequality, China’s score is not particularly high, being roughly the same as that of the United States, though certainly indicating greater inequality than most of the social democracies of Western Europe.
These facts do not provide much evidence for the thesis in Why Nations Fail that China’s leaders constitute a self-serving and venal “extractive” elite. Unfortunately, such indications seem far more apparent when we direct our gaze inward, toward the recent economic and social trajectory of our own country
Against the backdrop of remarkable Chinese progress, America mostly presents a very gloomy picture. Certainly America’s top engineers and entrepreneurs have created many of the world’s most important technologies, sometimes becoming enormously wealthy in the process. But these economic successes are not typical nor have their benefits been widely distributed. Over the last 40 years, a large majority of American workers have seen their real incomes stagnate or decline.
Meanwhile, the rapid concentration of American wealth continues apace: the richest 1 percent of America’s population now holds as much net wealth as the bottom 90–95 percent, and these trends may even be accelerating. A recent study revealed that during our supposed recovery of the last couple of years, 93 percent of the total increase in national income went to the top 1 percent, with an astonishing 37 percent being captured by just the wealthiest 0.01 percent of the population, 15,000 households in a nation of well over 300 million people......
..... In that interview, Sachs noted with astonishment the rise of the Greater Bay Area, a Chinese region bordering Hong Kong. Its largest city is Shenzhen, which in the late 1970s had been a small, impoverished fishing town with a population of around 25,000. But in less than two generations, the population has expanded by nearly a thousand-fold, creating the wealthiest city in all of China and the third largest after Shanghai and Beijing, with the surrounding region now including 85 million people. He noted that region was not merely a global leader in one or two important areas, but in so many of them, including technological development, industrial production, financial services, shipping, and higher education, with no other area of the world having that combined distinction......
.....The 2009 Program for International Student Assessment(PISA) tests placed gigantic Shanghai—a megalopolis of 15 million—at the absolute top of world student achievement.[1] PISA results from the rest of the country have been nearly as impressive, with the average scores of hundreds of millions of provincial Chinese—mostly from rural families with annual incomes below $2,000—matching or exceeding those of Europe’s most advanced and successful countries, such as Germany, France, and Switzerland, and ranking well above America’s results.[2]
These successes follow closely on the heels of a previous generation of similar economic and technological gains for several much smaller Chinese-ancestry countries in that same part of the world, such as Taiwan, Hong Kong, and Singapore, and the great academic and socioeconomic success of small Chinese-descended minority populations in predominantly white nations, including America, Canada, and Australia. The children of the Yellow Emperor seem destined to play an enormous role in Mankind’s future.
A major difficulty faced by most of these competing developmental theories of Chinese success is that they fail to explain why that success had occurred across such a wide variety of different governmental systems and geographical locations.
The likely roots of such widespread Chinese success have received little detailed exploration in today’s major Western media, which tends to shy away from considering the particular characteristics of ethnic groups or nationalities, as opposed to their institutional systems and forms of government. Yet although the latter obviously play a crucial role—Maoist China was far less economically successful than Dengist China—it is useful to note that the examples of Chinese success cited above range across a wide diversity of socioeconomic and political systems.
For decades, Hong Kong enjoyed one of the most free-market, nearly anarcho-libertarian economic regimes; during that same period, Singapore was governed by the tight hand of Lee Kuan Yew and his socialistic People’s Action Party, which built a one-party state with a large degree of government guidance and control. Yet both these populations were overwhelmingly Chinese, and both experienced almost equally rapid economic development, moving in 50 years from total postwar destitution and teeming refugee slums to ranking among the wealthiest places on earth. And Taiwan, whose much larger Chinese-ancestry population pursued an intermediate development model, enjoyed similar economic success.
Despite a long legacy of racial discrimination and mistreatment, small Chinese communities in America also prospered and advanced, even as their numbers grew rapidly following passage of the 1965 Immigration Act. In recent years a remarkable fraction of America’s top students—whether judged by the objective winners’ circle of the Mathematics Olympiad and Intel Science competition or by the somewhat more subjective rates of admission to Ivy League colleges—have been of Chinese ancestry. The results are particularly striking when cast in quantitative terms: although just 1 percent of American high-school graduates each year have ethnic Chinese origins, surname analysis indicates that they currently include nearly 15 percent of the highest-achieving students, a performance ratio more than four times better than that of American Jews, the top-scoring white ancestry group.[3]
Chinese people seem to be doing extremely well all over the world, across a wide range of economic and cultural landscapes.
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