State Capitalists Can't Have It Both Ways
The challenge for democracies is to become just as farsighted as the state capitalist systems that have drawn the world's envy. But while we try to bring about this small revolution in our thinking, the state capitalists may be dealing with a much bigger revolution of their own.
With the European Union mired in crisis and the United States struggling to recover, it's easy to conclude that capitalist democracies' engines of economic growth have run out of steam. While their elected politicians make myopic decisions to score political points, state capitalist leaders like China's build infrastructure and plan for the long term. Is it time to admit the superiority of a new kind of economic system?
That's the question many economic and political thinkers have been asking in the years since the global financial crisis began, most notably Ian Bremmer in his book, The End of the Free Market. And they're asking with good reason - with voters going to the polls as often as every two years, politicians in democracies can't seem to focus on anything except winning reelection. As a result, they neglect the long-term investments that could help their economies to grow; making those investments would incur costs today for benefits that might appear long after the politicians left office. Meanwhile, leaders of state capitalist countries from Singapore to Saudi Arabia stay in power for a decade or more, carefully guiding their economies through years of stable growth.
These distinctions are fairly obvious, but there's one that's a bit more subtle. A state capitalist government has zero accountability; unseating it requires a full-on revolution. By contrast, the frequent elections in democracies offer plenty of accountability. The problem in democracies is one of preferences. The voters themselves are shortsighted, so it's no surprise that their leaders are as well.
If voters rewarded politicians who planned for the long term, then the economic policies of democracies would look very different. The genius of democracy is that this shift could occur without a costly change in the political system. Democracies can have it both ways - accountability and farsighted planning - as long as their voters are focused on the long term.
That's not true of state capitalist systems, which will never be accountable to their citizens except in moments of national upheaval. Such upheavals can be devastating in the short term; they plague economies with uncertainty, reduce investment, and waste resources on unproductive activities like killing people. In other words, all that long-term planning could go for naught if your system lacks accountability. There are exceptions, of course: South Korea, Taiwan, and others have managed to shift from state capitalism to democracy in relatively peaceful ways. Yet for countries like China - where unrest is already manifest - the risk of upheaval remains.
In the meantime, the challenge for democracies is to become just as farsighted as the state capitalist systems that have drawn the world's envy. It will be tough - factors ranging from our own narcissism to the increasing complexity of the global economy are making it harder to plan for the future. But while we try to bring about this small revolution in our thinking, the state capitalists may be dealing with a much bigger revolution of their own.
Swipe right to make the connections that could change your career.
Swipe right. Match. Meet over coffee or set up a call.
No, we aren't talking about Tinder. Introducing Shapr, a free app that helps people with synergistic professional goals and skill sets easily meet and collaborate.
Jeff Bezos, the founder of Amazon.com, explains his plan for success.
- Jeff Bezos had a clear vision for Amazon.com from the start.
- He saw the innovative potential of the online marketplace.
- Bezos explains why books, in particular, make for a perfect item to sell on the internet.
Even when they suffer costs in doing so.
- It's commonly thought that the suppression of female sexuality is perpetuated by either men or women.
- In a new study, researchers used economics games to observe how both genders treat sexually-available women.
- The results suggests that both sexes punish female promiscuity, though for different reasons and different levels of intensity.
It has found several bizarre planets outside of our solar system.
- The Kepler program closed down in August, 2018, after nine and a half years of observing the universe.
- Picking up where it left off, the Transiting Exoplanet Survey Satellite (TESS) has already found eight planets, three of which scientists are very excited about, and six supernovae.
- In many ways, TESS is already outperforming Kepler, and researchers expect it to find more than 20,000 exoplanets over its lifespan.
SMARTER FASTER trademarks owned by The Big Think, Inc. All rights reserved.