Who Does Capitalism Better, China or America? Ian Bremmer Will Make America’s Case at the March 13 Slate/Intelligence Squared…

Live debates about fascinating and contentious topics.
March 6 2012 6:30 AM

Full Speed Ahead, Without a Steering Wheel

Why Eurasia Group President Ian Bremmer will argue that America’s liberal capitalism is still better than China’s state capitalism at the Slate/Intelligence Squared live debate on March 13.

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Slate: What should it be about? Innovation?

Bremmer: Right, but it’s hard for China to innovate because the educational system and the centrally planned economic system don’t really support entrepreneurship. Innovation requires changing your model all the time, which is not what state capitalists want to do. Never mind the fact that a lot of China’s wealthiest people, when given the choice, want their kids to be educated and to live abroad, because the quality of life outside of China is so much better.

Slate: How do you think the Chinese feel about their brand of capitalism? Is there a lot of support for it?

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Bremmer: When I wrote my book The End of the Free Market, one of the things I started with was this conversation I had with He Yafei, the former foreign Vice Prime Minister of China, who was in New York. We were sitting around the table and he asked me (this was after the financial crisis): “So, Ian, now that the free market has failed, what role do you think the state should play in a country’s economy?” And he smiled, but of course what he was really saying was, “You Americans have been talking about democracy, about your free market system, and you’ve been exporting it all over the world. You’re very evangelical and very arrogant about it. Well, how dare you? Look at what you’ve done in the States.” And it’s true. Our failures within our own borders allow the Chinese to imagine that their system is better.

Slate: Have you spent time in China?

Bremmer: Yeah, I was there a few weeks ago.

Slate: What were your impressions?

Bremmer: You cannot avoid being impressed with what they’ve accomplished over the last 34 years. The people are very proud: In the midst of a challenging global environment, they’ve held the Beijing Olympics and the Shanghai Expo; they’ve brought hundreds of millions of people out of abject poverty. But I also have to say that you know they’re a poor country. You feel it with the environment, the air quality, the water. Japan’s a rich country. Their infrastructure is sturdier. You can tell the difference between a nation that’s resilient and meticulously created and one that is growing as fast as possible but still very poor.

I also came away thinking that the willingness of the Chinese to address long term structural problems is…not there. There’s just so much urgency now. Americans say that China plans and looks to the future; actually, that’s not true any more. They’re much more focused on domestic constituency.

Slate: They’re not planning ahead? Your debate opponents argue that China does capitalism better than America because its system allows for more long-term planning than ours.

Bremmer: In theory. China’s like a car with a really big engine, and it’s been going really fast down this road for the past 35 years. It’s been a straight road. And it’s fine, but coming up is a huge turn. And, unfortunately, we’ve never seen if China has a steering wheel.

Slate: Are there types of goods that you’d rather buy from China than from the United States? Or vice versa?

Bremmer: [laughs]. With most products, you don’t have a choice. If you’re in the United States, a majority of what you’re buying is coming from China. That said, I’m more comfortable, for instance, having a CT scan done on American-made machines than on Chinese ones. The technology is advanced and physical safety comes into play—and the quality control in China still isn’t there. Food safety and health safety are not up to speed in China the way you’d like them to be.

Slate: Do you see the liberal versus state capitalism question as primarily an economic one? Or could it be moral too?

Bremmer: There’s certainly a political dimension alongside the economic one. State capitalism in China is effective in large part because of the authoritarian system. That type of government has its significant trade-offs.

Any value dimension, I think, stems mostly from the difference between rich and poor. Singapore is an authoritarian state too—but it’s wealthy, so it shows more respect for the environment, citizens’ basic rights, transparency and all the rest. (I prefer the United States to Singapore, but that’s not the point). Likewise, the values in the U.S. are better than those in China, because we’re rich. It’s not that the Chinese are culturally retrograde from a human values perspective. They’re just willing to tolerate a lot more to ensure economic growth. Unfortunately, they’re also big—1.3 billion people—and the combination of those two things is putting the world in danger.

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