Monthly Archives: November 2020

The Asian Century 12.

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            China has a huge stake in continuing economic growth.  For decades, Communism delivered little to the Chinese people but poverty and suffering.  Only a brutal police state kept the Chinese Communist Party (CCP) in power.  After the death of Mao, the CCP re-founded Chinese Communism.  Prosperity gained through rapid industrialization and entry into the global market would legitimize CCP rule.  Having made this bargain, the Party would have to keep the economy growing faster than either population or the expectations of the Chinese people.  A crash or even a serious slowdown would strain the Party’s claim to both omniscience and power. 

            China has an unbalanced economy.[1]  China laid the foundations for its post-Mao economic ascent with investment in heavy industry and mass production of consumer goods for export.  The Chinese have a high savings rate that limits the domestic demand for consumer goods, while also limiting the impact of foreign lenders.[2]  The government pursued a policy of easy money with interest rates held down regardless of market conditions. 

China’s excess of enthusiasm led to over-investment in productive capacity.  Even before the 2008 financial crisis, political considerations forestalled a clean-out, so mills and mines proliferated beyond actual demand.  The same forces prevented raising interest rates. 

            China responded to the global recession triggered by the American financial crisis of 2008 with a gigantic stimulus program.  After 2008, government-owned heavy industry splurged on adding more productive capacity in basic industries.  All of this happened because the central government provided easy credit.  Local governments did the same with their own locally-controlled businesses.  Private industry—notably property developers and construction companies—built whole “ghost towns” on credit. 

            China ended up with a more distorted economy as a result of that stimulus program.  “Zombie” businesses walked the land like a Chinese opera version of “Twilight.”  This led many Western observers to predict a financial collapse that would shake Chinese politics and society.  Why didn’t that happen? 

            China has robust means to resolve its economic problems.  It’s not a Western capitalist country or a democracy.  Real power rests with the Chinese Communist Party.  Zi Jinping has been consolidating control of the Party and of the government in his hands for some time now. 

China operates a powerful set of controls on capital flows out of the country, so the savings of the Chinese are readily available to the government.  The same controls help shore up the international exchange value of the currency. 

Ownership of so much industry and control of the banks allowed Zi to begin shoring-up the financial system from early 2016 onward.  China did what Japan had balked at doing years before.  It forced mergers and write-downs on loans, sometimes expanding the state’s ownership stake in businesses through taking equity positions.  The government pulled back on lending, both by banks and outside the banking system.   

Will these reforms suffice to hold off disaster?  Probably not.  Political concerns limited the clean-out needed for real stability.  Meanwhile, real estate and consumer debt have ballooned.  There’s always someone who says “This time it’s different.”  It never is different. 

[1] Thomas Orlik, China: The Bubble That Never Pops (2020), reviewed by Edward Chancellor, WSJ, 27 July 2020. 

[2] Foreign lenders, operating with a more capitalistic mind-set, might well have tried to drag on the reins. 

The Asian Century 11.

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            After the collapse of Communism in the Soviet Union in 1989, other countries that believed in centrally-planned economies had a Road to Damascus experience.[1]  The scales fell from their eyes: adaptation to capitalism and the global market offered the only path to political survival for the elite.  China and India embarked on this path with energy and determination. 

            Along with forced-draft industrialization came an amazing amount of pollution.  For example, both steel and cement, two mainstays of China’s economic progress, burn huge amounts of carbon.[2]  Local governments have encouraged industrialization though their sponsorship of Town and Village Enterprises (TVEs).  The TVEs have long enjoyed a high level of freedom from any meaningful regulation.  The coal mines and smelters they operated spewed pollutants[3] into rivers, waste land, and the air.  The concentration of China’s population in the great river valleys and along the coastal plain concentrates pollution in those areas as well. 

            The auditor could add to the price of progress the price of the fruits of progress.  China had 5.5 million privately-owned automobiles in 1995; now it has 194.5 million.  Mountains—literally–of garbage pile up in unofficial garbage dumps around cities. 

For a long time, the Chinese government shrugged it off as the price of progress.  Then the public health effects aroused protest and criticism.  Myriad statistics suggest that the Chinese are being poisoned by their own success.  The infertility rate for couples has risen from 3 percent in 1995 to 15 percent in 2018.  Lung cancer deaths rose by 465 percent from 1973 to 2013.  Life expectancy in the more industrialized areas is 3.1 years less than in less industrialized areas. 

Eventually, the Chinese Communist Party and the government that fronts for it began to take the problem seriously.  By this point, however, immense damage had been done and much of China’s economic success was founded on polluting activities.  Both changing course for the future and cleaning up the legacy of the past will load heavy burdens on China. 

For one thing, there are the economic costs.  Shifting from burning coal and oil will require developing “fracking” for natural gas as a reasonable alternative until renewable energy becomes a reality.  Shifting from heavy industry to technological and service industries will require development of an appropriate labor force, while leaving large numbers of discontented coal miners and steel workers in its wake. 

For another, there are the political problems.  Local governments are going to have to manage the reality of angry workers and angry industrialists.  But local governments seek to evade the dictates of the central government.  Officials in one province responded to an order from Beijing to limit their steel production by continuing to produce at a high level, then trying to hide the extra 50 million tons of steel.[4] 

Then there is the possibility that China will seek internal unity through a nationalist foreign policy.[5]  With any luck, the latter is alarmism and pessimism.  With any luck. 

[1] Yanzhong Huang, Toxic Politics: China’s Environmental Health Crisis and Its Challenge to the Chinese State (2020), reviewed by Walter Russell Mead, WSJ, 11 November 2020.. 

[2] For example, half of China’s blast furnaces produce one-fourth of the world’s steel. 

[3] These include lead, cadmium, mercury.

[4] That’s more steel than all of Germany—a one-time world leader—makes in a year. 

[5] Volker R. Berghahn, Germany and the Approach of War in 1914 (1973). 

The Asian Century 10.

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            “China is the most significant international threat that America—and the global West generally—now faces.  And that will be true for the rest of the Century.”[1]  Certainly that seems to be the intention of Xi Jinping.  He has been deploying China’s enormous economic power to claim the leading role in Asia for China.  First in his sights is Hong Kong, regardless of the terms of the “hand-over agreement” with “Little England.”  Next is Taiwan, itself an economic powerhouse.  Xi’s Belt and Road initiative is also shouldering China into a role in many other corners of the globe. 

            For its part, what John Bolton calls “the global West” seems to be knocked back on its heels.  The phrase “crisis of democracy” is frequently used.[2]  The financial crisis and the drawn-out “Great Recession,” “globalization,” and mass immigration (much of it unregulated and unwelcome) all cast into doubt the effectiveness of the democratic state as a model for progress.   The same forces intensified nationalist forces, which sometimes take an authoritarian form.  Both Brexit and Donald Trump’s version of “America First” show how far beyond the fringe this mood has spread.  All these developments may have sharpened China’s appetite. 

            Much remains unknown.  Is the “global West” really suffering a crisis of democracy?  Or is it just having a fit of the sulks after victory in the long struggle with aggressive tyrannies? 

            How strong is China really?  Deng Xiaoping had set the country on the capitalist road with sweeping political and economic reforms intended to create a market economy.  Chinese industriousness and thrift would do the rest.  By and large, this vision has come true.  Undoubtedly, Japan and the United States provided a lot of help through investments and voluntary transfer of intellectual property, but China’s own efforts explain the lion’s share of its success.  Now China has the second largest economy in the world. 

Now some observers see strains on the foundations of China’s power.  Xi Jinping has reversed course on many reforms.  He is moving the Party and the State more and more tightly under his control.  He is moving China’s economy back toward Party and State control.  If a market economy and global integration raised China up, then the new course might lay it low. 

            In times of crisis, China does things that reveal the true nature of its government: brutal and secretive.  The suppression of the Tiananmen Square demonstrations in 1989, the repression of what Americans call “diversity” (Tibet, Uighurs), and its hiding of the truth about Covid-19 in 2019-2020 provide examples of a robust dictatorship responding to its own fears.  Is China’s foreign policy another example of a state acting from fear, rather than from strength?  Taiwan’s rival model of economic organization effects can’t be ignored by people on the mainland.  One might see the fixation on Taiwan as driven by concern for present problems as much as by historical memory of the Qing dynasty. 

            There are real dangers here.  Both Lenin and Hitler refused to wait on History.  They tried to hurry it forward to the destination they had appointed for it. 

[1] John Bolton (Yes, that John Bolton), “Beijing Never Got the Memo,” WSJ, 16 November 2020, review of Dan Blumenthal, The China Nightmare: The Grand Ambitions of a Decaying State (2020). 

[2] Not without reason.  See: https://waroftheworldblog.com/2020/11/04/crisis-of-democracy/  

Hidden History.

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            Robert Harris is the author of a series of historical-fiction thrillers. 

            Munich (2017).  The 1938 conference between German dictator Adolf Hitler, Italian dictator Benito Mussolini, French prime minister Edouard Daladier, and British prime minister Neville Chamberlain marked the high point of Appeasement.  While both Hitler and Chamberlain believed in what they were doing, other people on both sides had their doubts.  Some of these people, British anti-appeasers and German anti-Nazis, tried to undermine their own leaders.  Could knowledge of German plots to topple Hitler be communicated to the British?  Could British anti-appeasers use this knowledge to shift Chamberlain toward a harder line?  Would a harder line by the British provide an excuse to overthrow Hitler before he could set fire to the whole world? 

            Enigma (1995).  One secret of the Second World War was British victory in breaking the code system, called “Enigma,” used by the German military for all radio communications.  This allowed the British to read all enemy radio traffic, but with occasional, nerve-racking interruptions.  A second, less well-preserved, secret of the Second World War was the Russian massacre in 1940 of thousands of captured Polish army officers.  The mass graves were discovered by the German invaders in 1943.[1]  Harris supposes that an Anglo-Polish cryptographer discovers the truth.  Revealing it could wreck the Russo-British alliance. 

            V2 (2020).  As the Second World War turned decisively against Germany, Hitler unleashed “vengeance weapons” created by advanced science.  First, the V-1 “flying bombs,” then the V-2 ballistic missiles began to rain down on allied cities.  Is there any way—technological or human—to halt the attacks?  The question racks both an Allied intelligence officer and a German scientist tormented by his own deal with the Devil. 

            Fatherland (1992).  Long after Nazi victory in the “last European war,” a German homicide detective discovers the Holocaust.  Here Harris is thinking-through the implications of a German victory: a “united” Europe is dominated by Germany; the Soviet Union has been thrust back away from Europe; American “appeasers” (Joseph P. Kennedy, Charles Lindbergh) now head the government of the United States; and the Holocaust has been kept so completely secret that thought about the Jews never enter anyone’s noggin.  Now, on the eve of a Hitler-Kennedy summit meeting, the truth starts to leak.   

            Harris is fascinated by the hidden parts of historical events.  Knowledge of the German resistance to Hitler only came out after the war and then in dribbles; the Nazis meant for the Holocaust to remain hidden from history and all but one copy of the minutes from the Wannsee Conference were destroyed; at Nuremberg, the Katyn Wood massacre was blamed on the Germans; and the Enigma story remained secret until 1974.[2]  In dramatizing these events, Harris restates a basic lesson of history. It didn’t have to be this way.  People create History by the decisions they make and the actions they take. 

            He also leaves the reader wondering “What else is still hidden?” 

[1] For another fictional take on the Katyn Wood discovery, see Philip Kerr, A Man without Breath (2013). 

[2] See Peter Hoffmann, The German Resistance to Hitler, 1933-1945 (1977); F.W. Winterbotham, The Ultra Secret (1974); Allen Paul, Katyn: The Untold Story of Stalin’s Polish Massacre  (1991)..   

My Weekly Reader 15 November 2020.

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            The Covid-19 pandemic has sent people streaming to History in search of previous events to provide some guidance for the present.[1]  Applying to America the understanding of the impact of epidemic disease formulated by his Yale colleague Frank Snowden, law professor John Fabian Witt argues that “New germs help make new laws and institutions, yet old ways of doing things shape the course of epidemics and the ways in which we respond to them.” 

            Witt discerns two trends in the American government response to disease, beginning with the smallpox epidemic that coincided with the Revolutionary War.  One is the development of preventive measures.  These measures include things like draining marshes and bogs to rob mosquitoes carrying malaria, yellow fever, and dengue of their habitat; providing city populations with clean water to drink and to clean the filth off the streets in order to avoid cholera; and the screening of populations to prevent the transmission of disease.[2]  Government, what Witt calls the “Sanitationist State,” grew in power in response to the need to prevent disease.  At the same time, science and medicine advanced rapidly in their ability to provide government with the needed tools.  All of these efforts Witt sees as expressing liberal values of a free society. 

            In contrast, there are the coercive or authoritarian measures of a “Quarantinist State.”  Governments caught up in a desperate emergency may impose an “authoritarian and discriminatory control over people of color, the poor, and immigrant newcomers.”  Here it is hard not to think that Witt may be using epidemic disease chiefly as a metaphor to criticize other forms of expanded government power.  “America’s record on infectious diseases is filled with discrimination and authoritarianism….Each new infection presents a risk of entrenching existing inequities.”  The same might be said of any national security emergency.  Witt may be extending an earlier argument against John Yoo’s interpretation of the Constitution in the aftermath of the undoubted emergency created by 9/11.[3]  However, one could just as easily point to the USA Patriot Act and the revelations of Edward Snowden for further examples of what can happen under an “emergency” that never seems to end. 

            Witt raises vital issues.  A democracy is rule by laws, not by men.  A democracy’s laws define the operations of government during normal times.  An emergency is a departure from what is normal.[4]  What becomes of the rule of law during an emergency?  Can the courts grant broad discretion to government officials to deal with an emergency?  When should government officials surrender such discretionary power?[5]  Is it fair to judge the quality of a democracy by what it does in an emergency, rather than by what it does in normal times? 

            Happily, American presidents have always pulled back or were pulled back from the brink in previous emergencies.  Those were decisions taken by individual men.  We know less about the behavior of the career bureaucrats who operate the machinery of government.

[1] See, for example, John Fabian Witt, American Contagions: Epidemics and the Law from Smallpox to Covid-19 (2020), reviewed by Adam J. White, WSJ, 10 November 2020. 

[2] The case of “Typhoid Mary: in 19th Century New York City offers a revealing example. 

[3] See: https://harvardlawreview.org/wp-content/uploads/pdfs/witt.pdf 

[4] War, rebellion, natural disasters, and epidemic or pandemic outbreaks of disease are common examples of conditions which may justify declaring a “state of emergency.”

[5] Declaring a “state of emergency” or a “state of siege” is a common feature of anti-democratic coups. 

Imagining November 2022.

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Mask wearing remained a contested issue in spite of an earnest and avuncular blitz of television ads by President Biden.  As a result, full control of the virus had to wait on mass vaccination

            The Covid 19 pandemic is under control by November 2022.  The development and testing of vaccines had been completed by early 2021.  A gigantic production effort by pharmaceutical companies made possible mass vaccination beginning in Spring 2021.  Lingering suspicion of the vaccines slowed the achievement of a critical mass, but it was achieved during Summer 2021. 

            Vaccination allowed a full return to the pre-Covid economy. 

            Direct negotiations between President Biden and Senate Majority Leader McConnell produced unexpected results. 

            First came a “skinny” stimulus bill previously rejected by House Democrats in the tag-end of the Trump Administration.  It covered only one year’s worth of spending, left the cap on state and local taxes in place, and excluded any aid that might be used to shore up the state pension funds of New Jersey, Illinois, and California. 

            Second, they agreed on a deal to stabilize Social Security by raising the cap on the Social Security tax for those making more than $800,000 a year.  It did not raise benefits. 

            Third, Biden announced a first step in his “Green Good Deal.”  This came in the creation of a National Coal Reserve.  The US government will pre-emptively buy all coal that is mined.  This will complete the transition of the US away from one kind of fossil fuels.  The coal will be sequestered in disused coal mines surrounding Scranton, PA.  Many thousands of jobs will be created for those retro-fitting the mines and warehousing the coal. 

            Attorney General Elizabeth Warren crusaded against the American economy of the previous two decades.  The Anti-Trust Division of Department of Justice announced attacks on “Big Tech.”  The Criminal Division launched a campaign to claw-back the “illicit profits” of American business.  This involved investigations of a thousand corporations. 

            The sustained US tariff campaign against China yielded big gains.  China agreed to buy regularly scheduled dollar values of American products.  China agreed to effective safeguards against intellectual property theft. 

            US troops were much reduced in Afghanistan and Africa.  A small, anti-terrorism raiding force continued to operate from Bagram Air Base.  In the interests of restoring alliance solidarity within NATO, Americans continued to provide intelligence and logistical support to French forces fighting to defend French-owned uranium mines in Niger. 

            Ships of an expanded and improved US Navy made highly publicized port visits in Taiwan, the Philippines, and Vietnam. 

            It became ever apparent that Biden would not seek a second term.  The lackluster performance of Kamala Harris during the 2020 Democratic primaries combined with occasional odd things that she has said in public as Vice President fueled interest in the 2024 presidential race among Democrats.  The most-mentioned candidate is New York Governor Michael Cuomo. 

            Adam Schiff celebrated his victory in the race for the Senate seat of Diane Feinstein, who had abruptly been retired.

            Wreathed in the glow of seniority, Nancy Pelosi (aged 82), Steny Hoyer (aged 83), and Jim Cliburn (aged 82) all ended their careers in public life.  This set up the House Democrats for their first new leadership in twenty years.  The leading candidates are Alexandria Ocasio-Cortez and Abigail Spanberger. 

            Amy Walter, once of the Cook Political Report and NPR’s “The Takeaway,” succeeded Judy Woodruff at the helm of the moribund “NewsHour.”  Viewership (even among Republicans) immediately soared. 

Crisis of Democracy.

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One way of telling the history of the Twentieth Century is to describe the Triumph of Democracy.  In 1900, only11 countries that could be described as political democracies: they granted all adult male citizens the right to vote and they applied the same laws to all citizens.[1]  The “War to Make the World Safe for Democracy” only somewhat advanced their cause: by 1920, there were 20 democracies and many of them had granted women the vote.  The interwar crisis and the Second World War centered on the defeat of aggressive tyrannies.  Thereafter, however, democracy advanced by leaps and bounds.  Western colonial empires were dismantled.  Democracy expanded its meaning from the purely political to social democracy, and legal protections for civil rights were greatly extended.  The Cold War ended in the collapse of the Soviet Union and its empire.  By 2003, there were 86 democracies in a world of 190-odd countries.[2]   

            Rather than continuing its advance, however, democracy has been in retreat since the mid-2000s.[3]  Where democracy continues to exist, “democratic norms and institutions” are being hollowed-out.  What has caused democracy to fall into disrepute?  What has caused dictators and would-be dictators to gain a new credibility? 

            The crisis arises both from specific personalities and from larger and more long-term systemic changes.  On the level of personalities, one can point to the interaction of Xi Jinping, Vladimir Putin, and Donald Trump.  Many of the successes for democratization owed at least something to American government backing for democratic movements and institutions from the of Jimmy Carter’s administration through the Reagan-Bush era.  Donald Trump’s administration has largely abandoned the “bully pulpit” on behalf of democracy in the shit-holes of the world.  A host of minor-league wannabe-tyrants draw inspiration from Chinese and Russian aggression. 

On the level of systems, two different sorts of problems exist.  On the one hand. regularly-held elections in which citizens choose their own leaders are not enough to make a country democratic.  Real, living democracy requires also a widely accepted “liberal” mindset.  It requires independent institutions like courts, business, media, and non-governmental associations.  Finally, it requires institutions of government (from the civil bureaucracy to the military to the intelligence services) that serve the nation, rather than any individual leader.  These are the “democratic norms and institutions” that are being hollowed around the world. 

On the other hand, all of these ills arise from the interaction of sclerotic political systems with increasingly indifferent citizens.  Here it becomes difficult to solve the chicken-or-the-egg problem.  Do frozen-up political systems foster citizen alienation?  Does they shift citizens into wavering between solving their own problems through ad hoc means or hoping for a strong-man who can burst the dam?  Does citizen alienation and indifference allow political systems to congeal around dead issues, rather the forcing them to address live issues? 

Neither answer holds much promise for revived democracy. 

[1] This bald definition invites enough qualifications to make your head spin.  For example, women didn’t have the vote; many representative governments hedged-in responsive government to serve an anti-democratic distrust of “the mob”; and democracies ruled over-seas empires in an undemocratic fashion. 

[2] Larry Diamond, “The Global Crisis of Democracy,” WSJ, 18-19 May 2019. 

[3] That is, it began during the years of the Obama-Biden administration.