Wealth inequality in China, US reveals a failure to learn lessons from fall of the Iron Curtain
- While China and America can hardly be said to have similar political systems, both have embraced the same form of unhinged capitalism
- As the Chinese middle class suffers the consequences, Beijing is seeking to provide ‘common prosperity’ as a corrective
Two of the most notable publications of the post-Cold-War era are Francis Fukuyama’s End of History and Samuel Huntington’s Clash of Civilisations. The former saw the dawn of a democratic age, the latter, a multipolar world rising from the ashes of the crumbled Berlin Wall.
Even though Huntington granted the Sinic civilisation, as he called China, a place in this new era, he and most others at the time failed to see what the People’s Republic would be able to bring to the table of the 21st-century world order.
However, at the core of his analysis, Wang is not correct (just as Fukuyama and Huntington are not). To him, social inequality, homelessness and a feeling of disenfranchisement among US citizens are products of Western liberalism and democracy.
What he perceived to be the loss of a sense of community and belonging vis-à-vis the constitutional enshrinement of individualism in America, was therefore to be prevented from taking root in China at all costs.
China had just navigated its own moment of liberal awakening, with the student protests in Beijing in 1989, the same year my teenage self saw the once-perilous border that was the Berlin Wall climbed by Germans who shouted “Gorbi, Gorbi” (they meant Gorbachev).
After his return to China, Wang left academia and became an adviser to the Chinese leadership: Jiang Zemin, Hu Jintao and Xi Jinping. All three leaders have embraced Wang’s assessment of liberalism and democracy.
The reason for this paradox is that, although China and America do not have the same political system, both have embraced the same form of unhinged capitalism which can best be described as a bonanza, in which everything is on the market and can be traded and dealt with through money.
The less regulation the better! This ideology resonates in Deng Xiaoping’s “let some people get rich first”, as well as the Republicans’ “trickle down” economics, a mantra they repeat to this day as if it were the sacred “Om”.
In western Europe, we do have a kind of “socialism”, at least in the eyes of American Republicans, who would decry a system with free education and affordable healthcare for all as communism. Actually, it is called a “social market economy”, and it has been a success for almost 80 years now.
But that’s not the whole story of Western European “socialism”: restricting business is something different from restricting people, their ambition, their thirst for innovation, and their ultimate sense of freedom.
This needs to be said because assessments of the reasons for the collapse of the Soviet Union often get it wrong. The USSR crumbled because Moscow would not give freedom to the people behind the Iron Curtain. East Germans, for instance, asked for basic freedoms, such as Reisefreiheit, the ability to travel abroad, which was not granted to them.
What happens to a system that doesn’t recognise the basic needs of people can be summed up by one of Gorbachev’s phrases that every German knows: “Life punishes those who come too late”.
Dr Alexander Görlach is a senior fellow at the Carnegie Council for Ethics in International Affairs in New York