The Asian Alternative

Political imagination in the US remains stunted by the assumptions of the Cold War. We imagine that the world of political outcomes can be confined to a spectrum with “freedom” on one end and totalitarian central control on the other. All along there were alternatives beyond this false dichotomy, struggling to survive beneath the giants.

Anglo-American political systems, the ones we commonly refer to  as “the Free World,” are premised on private property, with rights mediated and protected by the legal system. The most powerful institutions in the English-speaking world are courts and businesses. Mass political power is blunted through the use of muddled, permanently indecisive electoral processes, run by political parties heavily coopted by major property owners. In our political system, democracy is means to fragment and nullify public will, leaving the private sector as the primary source of social cohesion.

Throughout the 20th century, the most notable alternative was the heavy-handed and brutal centralized Communist model adopted by the Russians. All power was vested in the state. Rights were eliminated. Rationality and human rights were subsumed beneath cult allegiance. It didn’t go well.

Without fail, every developing country who embraced either of these rival models devolved into a trainwreck. America’s Asian colonial clone, the Philippines, is a kleptocratic catastrophe. A sprawling, tropical Alabama, Filipinos have even elected their own murderous mini-Trump. Cambodia, Nicaragua, Angola, followed the Russian model into poverty, slaughter and oblivion.

There is a little-noticed model for economic growth, human rights and environmental sanity beyond the Washington-Moscow axis. Northeast Asia produced a collection of stable and prosperous nations who ignored Cold War dogma to embrace policies that worked for their people. Superficially, these nations were Communist, capitalist, democratic, authoritarian, or even military dictatorships at different points in their progress. Their posture toward democracy, private property, human rights and even rule of law bore little relationship to their peoples’ prosperity or lifestyle. As we consider what comes next after the implosion of our own democratic experiment, the Asian Alternative should at least leave us questioning our unconsidered assumptions about the limits of political organization.

For post-World War II developing countries, the most successful model for progress followed three steps, land redistribution, export-oriented manufacturing, and subservience of the financial system to national objectives. Enabling this system meant placing the bulk of public decision-making in the hands of a competent, independent bureaucracy, fed by an aggressively meritocratic, results-oriented incentives. Where the Anglo model privileged property rights, rule of law, and elections, the Asian model placed its confidence in technocratic expertise. Property rights and individual liberties enjoyed a degree of respect, but were never elevated above outcomes.

The degree to which these countries invested in private property, political freedom, or democratic institutions varied, but in every case these were low priorities. Instead of elections, discipline was imposed by competition. The relative smallness of these countries meant that in many cases they could feel the feedback loop of failure strongly enough to push back against any overly entrenched bureaucratic interests before bad decisions hardened into dogma.

Countries like Japan, South Korea, and Taiwan imposed draconian land seizures to address severe inequality with barely a whiff of dissent. Corporate competition was encouraged, but incentives toward national interest were imposed through a nationalized banking system and tight financial and exchange controls. No successful developing countries allowed broad deregulation of their financial industries (Hong Kong and Singapore were a special case, but one largely proving the rule). Under this model, banking and stock exchanges were treated the way we would treat nuclear power plants, as necessary but lethal.

A powerful, meritocratic central bureaucracy built markets using a toolbox that included broad control over borrowing conditions and the coercive power of a few state-controlled industries. Within those markets, the government could sit back and let outcomes reward initiative and efficiency. Popular opinion played little role in decisions. Taiwan and South Korea were dictatorships for much of the post-war period, and are only now just beginning to develop democratic institutions. Japan has operated under a unique, consensus-driven single-party state democracy, in which the conduct of elections has shallow impact on the bureaucracy.

Infrastructure development is the greatest strength of this bureaucratic model. With property rights relegated to secondary status and your batty Tea Party aunt powerless to influence public policy, it is possible for the state to do something as simple as build an airport or a train station at a reasonable cost. New infrastructure development in the US is virtually impossible because no authority possesses the power to cut through established property interests, and a persistently corrupt political class elevates the cost of both budgeting and finance beyond reasonable tolerances. In the time it takes to pay off Mayor Emanuel’s sponsors, prove in court that the new rail network won’t kill any birds, and litigate detailed compensation for every private rose garden displaced by a new train station, the Chinese have built another 1000 miles of high speed rail and six new automated cargo ports.

Meanwhile, in the developing states that failed to redistribute land after World War II and failed to construct an efficient, independent bureaucracy, stability and broad prosperity remain elusive. Vietnam’s American experiment devolved quickly into a localized apocalypse from which they are still battling to reemerge. Indonesia, Malaysia and Brazil sit poised at the edge of true first-world prosperity, yet struggle with the legacy of a dysfunctional electoral system and crippling income inequality.

A post-Cold War world is now divided between nation-states run by private finance and nation-states run by professional bureaucracies. Neither is demonstrating any secure advantage in terms of personal freedom or individual liberty. What Americans call freedom seldom amounts to more than benign neglect from the state. As a prosperous generation rises in Asia, their demands for human rights are being met with skepticism and hostility by entrenched interests in a much more tightly controlled public sector. These models each enjoyed their success and challenges in their time. Now both are straining under changing conditions.

Economically, the Asian Alternative was a powerhouse development tool, but countries like South Korea and Taiwan are demonstrating the limits of this model. Export-led development works until you’re rich. An educated, prosperous population needs new economic outlets stymied by an entrenched bureaucratic state. A culture of interdependency between big corporations and bureaucrats stifles unplanned innovation, feeding a brain drain. Tools and practices that built Hyundai won’t build Tesla.

Together with our successful European and Pacific partners, we must now contemplate the next, uncharted step. Having mastered the worlds of agriculture, commodities, and then industry, what political and economic models will bring human success in world driven by data?

Whatever succeeds, history tells us it will not be merely a continuation of what came before. What we gain in the US by reference to the Asian Alternative is a broader sense of possibilities, a larger palate of colors and options. Corporations are not merely rapacious engines of exploitative extraction. Business can be steered toward common interest. Healthy societies have smart, independent, expert bureaucracies. Electoral politics is not necessarily the best way to arrive at policy decisions. Property rights, like all rights, are encumbered by civic duties. Ideology is for children.

The next American Revolution has already started. We need to catch up and decide where we want it to go.

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This post is part of a series exploring what’s next after liberal democracy and what we should do to prepare. Much of this material was covered in The Politics of Crazy, though from the perspective of a more optimistic era. The work fits better as a whole, but reading through a 6000+ word piece on a computer seems impractical. When these are complete I’ll gather them into a series of links on a single page.

12 Comments

  1. Vietnam is a tragic example of tunnel vision in our history. I have thought that Truman never wanted to sit in the big chair. After having to make the most momentous decision in history, I think he was spent. He got played by the French and the Russians and that did not end well. Korea also paid for the lack of foresight after WW2.

    One would think we should have learned from those mistakes, yet we have boots on the ground in Afghanistan and may yet get into a shitstorm with Iran. The first cases caused by a man tired of the most horrible was of all time. The current version by a man who may believe that a war may be he only thing that can save his dumpster fire of an administration. Sad.

  2. Hi Chris
    I don’t believe that the mining companies have 5% of the political power that you think they have!

    And if they did use their power in anything other than a very tightly controlled fashion then you would find that the Australians would “nationalise” them in a heartbeat

    As far as the Russians and Chinese interfering with Ozzy elections – they are still using paper ballots and their system is a LOT more robust than the US kludge!
    The sort of things that make US voters doubt the integrity of their systems are simply not present in Australia

  3. Compare the Asian Alternative to the Scandinavian Alternative. Both seem to work. In fact, they have some clear similarities in promoting group welfare over individual rights, with the Asians going slightly further in that regard. How similar or dissimilar are they? We North American think of those systems as very different, but is it just their different histories and population sizes, or is there a fundamental underlying difference?

    1. They are similar in their origin philosophies. All of them stem from the 19th century German experience, and from thinkers like List and Weber (the Japanese imported this model to Asia under the Meiji Restoration). They all represent a rejection of economics almost entirely in favor of science and history. They both place a great deal of faith in a professional, expert bureaucracy to make decisions that we would think of as inherently political and belonging to the legislative branch. The difference, I think, is in the role of human rights and rule of law, which are relegated to the margins in the Asian systems, but dominate the Nordic model.

      When Park Chung-hee took power in S. Korea in 1961, his first action (in the first couple of days) was to round up all of the country’s major business and banking figures and throw them in prison. He gradually let them out, sometimes after only a couple of days, but only after they’d been fully impressed with the fact that they could be assassinated at any moment. He enjoyed considerable cooperation from business interests during his time in office. That’s the Asian Alternative in a nutshell, and that wouldn’t happen in Norway. There’s more than a tinge of Fascism in the Asian model.

      Human rights, private property, and the rule of law are a very big deal in Germany and Scandinavia. They are seldom more than a slogan in Taiwan or even Japan. There are laws in China. Those laws are often followed by the government. It is sometimes even possible to win a fight with the government over a law they broke. However, when a major state interest is at play, no one really bats an eye at the central government displacing a whole village full of people and replacing their homes with a reservoir. Rights, laws, and individual interests carry very little social weight.

      That comes with costs. Survival in a system like that demands that people clump together and mitigate risks of social exposure. Costs of failure in the Asian model are unreasonably high, dampening unplanned or unsupported innovation. And the Chinese are finding that they just can’t break some of the bad habits they developed under Communism.

      But yes, they do at least all share a common origin story in the German experience.

      1. And then you have the third model

        NZ, Australia and most of Europe – not the Scandinavian or Asian models

        Secure decent parliamentarian democracies – that are doing OK (ish)

        Or even the US model from 1930’s – 1960’s – when taxes were high enough to drive sensible behaviour and the unions were powerful enough

        There is no need to abandon democracy – you just need limits on wealth

      2. I might add that the Scandinavian nations typically have Social Democratic governments and also tend to be parliamentarian. Unfortunately a social democratic model would not be acceptable in the US. While New England, the Left Coast and New York would probably accept that, the other regional groups in the US would not. That would include Appalachia, the South, Midlands and the Far West.

        To follow up on Duncan’s comment, strengthening the Federal government with higher taxation, to enable construction of infrastructure, provision of reasonable social services, and as a check on excessive wealth accumulation would help a great deal. That combined with providing for labor to have a voice in corporate government, similar to the German model and as provided for in Elizabeth Warner’s proposed corporate restructuring plan, would most likely be an acceptable approach in the US, and would not require a radical restructuring of the US Government.

      3. Again, I don’t know much about NZ. They might enjoy the benefits of existing on the fringes, but Australia fits squarely in the Anglo political model. You can get away with almost anything in AZ politics, even serious gun restrictions, as long as the power of the mining companies remains intact. They are the rentiers that own the joint. And AZ’s odds of holding out against the sustained Chinese subversion campaign against their political system (the model for what the Russians are trying to execute here) don’t look great. They’re in no better shape than us, with less to work with in resources.

        And Europe, Jesus… Hungary is run by Fascists. Poland is arguably the same if not worse. France dodged a bullet at the last minute with Macron, but their luck won’t last. Germany is fighting to keep a new generation of Nazis out of a ruling coalition. Italy is a comedy. And we don’t even need to mention the UK.

        European countries are still organized around an assumption of a singular, unifying culture. In a global economy run on talent, that just doesn’t work. The French and Germans and Portuguese and so on don’t know how to have a country that isn’t distinctly, uniformly French or German or whatever. Everyone with any sense recognizes the need the change, but a talent-centered world creates cultural demands that their voting publics won’t endure.

        No. Good government is more complicated than a tax rate. And that stuff about the US in the 30’s-60’s sounds an awful lot like MAGA.

        It’s a great big world out there, big enough that there’s probably a democracy somewhere doing just fine, but you gotta look hard right now to find them.

      4. South Korea was a third world country when I was there 44 years ago. A toilet was a hole in the ground, imports were not allowed, and you could dent Korean a made car by farting in it’s general direction. Our umbrella allowed them to boom into a player on the global stage, but a model of governance, I think not.

      5. Our umbrella was spread just as carefully over the Philippines. Didn’t do them any good. Certainly didn’t help the Vietnamese, who enjoyed the most smothering American umbrella money could buy.

        The Asian countries that rose from poverty to wealth in the post-war period all shared one interesting bit of history – they were all under Japanese rule prior to the US entering WW2.

      6. EJ

        Australia’s just had five prime ministers within five years. My Australian friends are suggesting that the country has become ungovernable, because the pragmatism that governing requires is not acceptable to the nation’s mood of ideological purity. I would not suggest it as a model of stability or success.

        On Europe:
        It has been pointed out quite frequently over here that the current wave of Nazis / Russian money / fake news has affected countries with weak senses of community far more than those with strong ones. Denmark, famous for its people’s williness to see cooperation as a higher virtue than competition, has been relatively unaffected. The UK, where people will step over homeless people to get into Starbucks, less so. Alienation and selfishness seem to correlate highly with the crisis of liberalism.

        While Germany may be recovering, if this correlation continues then I’m worried for France. Macron’s demolition of the welfare state and creation of a more laissez-faire economic system may be the equivalent of taking off one’s jacket in a snowstorm.

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