A common theme was the greed and bloat of governments, especially compared to the frugality of working people. In Schiff’s mind, the Chinese system comes closer to capitalist freedom than the American one: It allows entrepreneurs to keep more of their profits and removes the red tape tamping down local business opportunities. Pei countered that the Communist Party vacuums up 35 percent of China’s wealth and offers no social services in return. At least when the American people surrender 30 percent of their income to government, they get welfare programs as compensation.
Schell replied that Chinese citizens do reap benefits from state spending. “Look at the highway system, look at the rails system!” he protested.
It was a moment of rare passion for Schell, who revealed backstage that he felt deeply ambivalent about his own position. “Honestly, I could have argued either side,” he said afterward.
But to Bremmer and Pei, China’s investments in infrastructure are unsustainable and misguided. Rather than pour state wealth into projects its people don’t need, they say, the country should look for ways to boost domestic consumption.
Bremmer blamed the Western “environment of fear”—a byproduct of the 2008 financial crisis—for fostering self-doubt in Americans. We see miracles in China where we should be noting weaknesses and liabilities, he said. For instance, the Chinese owe much of their extraordinary growth to cheap labor, a quickly vanishing resource.
The overall atmosphere of the evening was one of uncertainty and risk. At one point or another, every debater on stage alluded to the unknowability of the future, even as they doubled down on their best guesses. Bremmer, Schiff, and Schell in particular seemed to see both China and America as time bombs: Their task was to predict which economy would explode first. Schiff, who foretold of the collapse of the housing bubble in 2008, warned that the United States economy would crash as soon as the Chinese stopped funding our extravagant spending habits.
Yet many of the arguments also had a nostalgic slant. Schiff spoke of “[turning] back the clock to try to incorporate the system and the values that were enshrined in the Constitution by the framers.” Pei admonished Americans for their short memories. Schell even invoked Adam Smith, the “patron saint of capitalism,” to propose a more active regulatory role for the U.S. government: “When the security of the whole society is at stake, the natural liberty of a few individuals who might endanger that security ought to be restrained.”
And ultimately it was this fealty to traditional ideals that won the day for the pro-U.S. team. Whether or not authoritarian capitalism could do things democratic capitalism couldn’t, the audience was reluctant to link an economic system so enmeshed with the principles of liberty to China’s one-party regime.
Still, as Schell remarked in his closing statement, “Who would have thought, five or 10 years ago, that we would be sitting here tonight even having this debate? What China has accomplished, as counterintuitive as it was, is pretty extraordinary.”