Democracy, Authoritarian Capitalism, and China: Crash Course World History 230

Hi, I’m John Green, this is Crash Course World
History and today in our final episode of this World History series we’re going to return
to some of our favorite themes, like the rise of the state; maybe the idea of “The West”; and also
we’re going to speculate a little bit about the future. Mr. Green! Mr. Green! No, no, no…I-I thought
you were from the future. Nope! I’m from your future, Me From the Past,
so I know that NSYNC doesn’t stay together, but I’m from my present. Although, now I’m
from my past. No, present again. That’s the problem with the future, me from the past. It keeps
briefly becoming present and then becoming past. And then of course people watching the videos
will be watching them in their present, which will be my ever more distant past. And they
could be watching them in ten years, the things that I have predicted will have come true
or not come true, and I will look like a genius or an idiot. Ahhh I’m freakin’ out Stan! Just
roll the intro. Man, I’m glad that intro pulled me out of
that logic loop. I could have been stuck in there forever, which reminds me that forever
itself is a very weird concept. I think the only thing we can say about forever is that
the future is forever. So Americans are pretty proud of their democratic
government and its history, but in world historical terms, democracy has not been the norm. Like
the 20th century was the high tide for democracy worldwide with the number of democratic governments
increasing dramatically, but the 2000’s so far have seen something of a anti-democratic
renaissance with the number of democracies that shouldn’t actually be called democracies,
doubling between 2006 and 2009. Like the People’s Democratic Republic of Korea, despite having
democratic in the name, not particularly democratic… I’m sorry for saying that Kim Jong-un, but
it’s true… He’s behind me, isn’t he Stan? You’ll be gone in 20 years, that’s my first
prediction. Also, while democracy can sound great, no
countries have ever actually practiced pure democracy. Unless you count Ancient Athens
which a) was not a country, it was a city state and b) it excluded women and slaves
from the political process so it wasn’t really a pure democracy. Because you know, like, most
people didn’t get to participate in the government. What we call democracies today are actually
the result of a number of revolutions in political thought that happened mostly in the west between
the 17th and 20th centuries. Like, we’ve talked a lot about the first of these revolutions
in political thought which happened in the 17th century with the creation of the centralized
nation state in Europe. And then there was the political breakthrough put forth by John
Stuart Mill, who envisioned a night watchmen state that was like too small to infringe
on individuals’ freedoms but efficient enough to be functional and useful as a government. Then in the late 19th and early 20th century,
the west developed the idea of the modern welfare state, enshrining the belief that
the state should provide things like education, health and unemployment insurance to enable
citizens to lead fulfilling lives. The welfare state relies on government planning and bureaucrats
who get their jobs not based on high birth but on merits and also data-driven answers
to problems. And so we saw the rise of technocrats and intellectuals influencing government policy.
To quote the book called “The Fourth Revolution,” there were two things new about this welfare
state. “The taxation of the entire population to provide benefits for the unfortunate and
the removal of the ‘poor law’ stigma from social welfare. The poor were now victims,
not layabouts.” So, in contemporary Europe and the United
States, everyone pays taxes, right. Whether it’s consumption taxes or property taxes or
income taxes or whatever. And we don’t view poverty merely as personal failing but as
a problem that needs to be addressed. And although imperialism certainly made it problematic
for these ideas to spread completely throughout the world, the ideas did prove very powerful,
like India adopted a heavily top down welfare state based on British principles once it
became independent. And even when the liberal democratic state came under ideological attack
from fascists and communists, it was able to triumph by mustering the resources to win
World War II and meet the Soviet Challenge during the Cold War. And for most of the 20th
century, western democracies have been on the whole, pretty successful in providing peace
and stability and prosperity to their own citizens. And yet, many parts of the world are turning
away from these ideas now. Why? Well, one of the reasons democracy may be falling out
of favor is that many of the most successful countries in the world, at least in terms
of economic growth are not democratic. There are democracies experiencing tremendous economic
growth like Brazil and India. But then of course there’s China. And China along with
countries like Singapore have looked to the west for guidance on how to create capitalism
but they’ve been much less interested in adopting Western models of governance. Let’s go to the Thought Bubble. So Singapore might only have 5.2 million inhabitants
but it has very effective government. The architect of its success, Lee Kuan Yew, has
argued that cultural values are the explanation and that Asians are quote, “More focused on
the family, more devoted to education and saving; and more willing to put faith in a
Mandarin elite than the West.” But it’s probably more due to Singapore’s being more authoritarian,
more interventionist, and more bossy in following Lee’s Hobbesian view that, “Human beings,
regrettable though it may be, are inherently vicious and have to be restrained from their
viciousness.” Although Singapore isn’t technically a one
party state it’s also very far from a traditional democracy. Like in 2011 Lee’s People’s Action
Party won 60% of the vote and 93% of the seats in Congress. That may sound terrible but it
has an upside. Knowing that their party will win elections allows Singapore’s politicians
to focus on something else. Namely long-term planning. If any of the particularly “Asian”
traditions cited by Lee have fueled Singapore’s success it’s that Mandarin ideal of choosing
and promoting skilled bureaucrats based on merit. The most interesting thing about Singapore’s
government is that, at least by Western standards, it’s remarkably small, with like, for instance
a world class education system that consumes only 3.3% of Gross Domestic Product. They
also have a required retirement fund in which Singaporeans contribute 20% of their paycheck
and their employers kick in another 15.5%. AND as you’ll already know if you watch our
show Healthcare Triage, Singapore has one of the most efficient and fascinating health care
systems in the world. Thanks Thought Bubble. And then there’s China with its gleaming skyscrapers,
enormous number of billionaires, and what is now the second largest economy in the world.
Now, of course, there’s also the air pollution, the growing income disparity, the terrible
working conditions, but hundreds of millions of people in China have emerged from poverty
in the last 50 years. And this was all accomplished by a very repressive state, so repressive,
in fact, that they can’t see this video. The Chinese model of governance has often been
called authoritarian capitalism and its architect was Deng Xiaoping. He was very impressed by
Singapore and sought to copy them, and in many ways, the Chinese Communist party has
been very successful at that. Despite some official corruption, the Chinese state is
very efficient and has presided over an incredible economic and social transformation in the
past 30 years. So we expect, like, rigid central planning from Communist parties, right? But
in China, rather than setting goals for every facet of the economy, the party makes sure
that it’s represented in most big companies, private and state-owned. And the biggest companies owned by the government
dominate strategic industries like energy and transportation and telecommunications.
The Communist Party’s Organization Department appoints all senior corporate figures in China.
And in general they‘ve done a good job of promoting good managers that help the companies
to grow. And China certainly wants this model to go
global, since its state owwned companies have funded 80% of China’s direct foreign investment
in the last 30 years, which allows commerce to advance Chinese diplomacy, extending the
nation’s so-called “soft power.” So who knows if this will actually work, but
when Chinese state companies are able to build the new African Union headquarters in Ethiopia,
for instance, it sends a powerful signal to African nations that this is a system where
people can get things done. Meanwhile, in the United States and much of
Europe… a little bit of a struggle to get things done. So Chinese state capitalism may
sound like the wave of the future, or at least the wave of the present. But maybe not. It
has some serious drawbacks. First, the close ties between business and politics opens the
system up to massive corruption. Fortunately, here in the United States, we
don’t have any ties between business and politics, so you won’t see any corruption
here! But there are also other drawbacks to authoritarian
capitalism, like state-run industries tend not to be responsive to investors, which limits
private investment. And in the long-term, that may limit the money available to them
to keep growing. Also, with a lot of these state-owned industries,
it’s not actually clear that they’re productive or profitable because they rely so heavily
on government subsidies. And finally state-owned industries don’t
to a great job of encouraging the freedom of expression that fuels a lot of, like, cultural
and intellectual industries like, for instance Hollywood. Which is more cultural than intellectual. The Fourth Revolution quotes one Chinese commenter
as saying: “We have [kung-fu] and we have pandas, but we could not make a film like
Kung-fu Panda.” Also, this kind of state-run industrial policy
is very effective sometimes, but it’s not clear that it’s going to be effective all
the time. Like it may work better for building roads and cell towers than for creating software,
for instance. So it seems to work for less developed nations
that need to build infrastructure and industry; it’s much less clear that it will be effective when
they need to move over to being service economies. And what I find fascinating is that China
has created this new path to economic growth in part by looking to its ancient past to
revitalize its government. Because they’ve created a new education-based meritocracy, which
is a modern version of the Han examination system. It’s sort of like a state run version of
Plato’s Republic, and polls indicate that most Chinese people are pretty comfortable with it.
I mean, things ARE getting better in China. Like philanthropist Nicolas Berggruen argues
that “Chinese-style meritocracy is good at focusing on long-term problems and bringing
in independent experts.” That said, China’s government isn’t always
as meritocratic and effective as some might want to believe. I mean, the Chinese version
of twitter is a litany of complaints about poor schools and dirty hospitals and inept
local officials. And in the wake of the Sichuan earthquake,
when many children died because of poorly built schools, there was widespread outrage over the
government’s inability to like, get things built well. All that noted, it’s important to be aware
that China embodies a challenge to the idea that the West has all the answers in terms
of economics and government. Particularly after the 2008 financial crisis,
the Chinese were the ones lecturing about government and fiscal policy and claiming
that the American political system was rewarding mediocrity over talent. And lots of Americans
would agree with these Chinese critics. I mean, we can’t even get a long-term highway
bill passed, let alone like, long-term planning for the overall economy. In a representative democracy, the best way
to get elected is to make promises, usually for lower taxes or for more or bigger benefits.
Or my favorite — for both. Also, democratic governments are very susceptible to interest
groups extracting benefits for themselves. Just as autocratic governments are very susceptible to,
you know, autocrats extracting benefits for themselves. And the problems of democracy can be a bit
of a vicious cycle. Like in the United States at least, we’re incredibly dissatisfied with
our government, especially Congress, and this is partly because we’ve come to expect so much
from government that they constantly let us down. Also, for the last 35 years or so, because
people are so dissatisfied with government, one of the main strategies for winning political
office is to talk bad about the government and to say that government is the problem. But of course, if we have too much government,
that’s a problem that can only be fixed… by the government.
So where does this leave us? Well, maybe we have reached the end of “the rise of the
west?” that began with the nation state. But it’s really hard to predict the future!
Like when I was in high school I wouldn’t have predicted that so many people would be
learning about history and science from YouTube videos, much less that China would become
the world’s second largest economy. If you’d asked me if 500 million people
would emerge from absolute poverty between the time I graduated from high school and
the time I started hosting Crash Course World History, I would have been like, no way! But I wouldn’t have said that. I would have cursed
in class because I was a surly, terrible student. But here are my predictions — I think that
China will continue to be a one party state, and a very successful one, as long as that
combination of state and industry continues to provide a rising standard of living. But I don’t think it’s going to happen
in the U.S. or Europe, even if it would lead to more efficiency. The major differences between these two models
of governance is that unlike communism and western style capitalism, they aren’t in
direct conflict. Like, they can coexist. And I think authoritarian capitalism and western
style capitalism WILL coexist, but I also think that probably in that process Western
style democracies will find that over time, they have money to do less. And I think we may have a lot to learn from
countries like Singapore, especially as new technologies enable greater efficiencies in
providing services, thereby making a lot of jobs obsolete. Possibly including mine. I mean, these days robots are writing some
reasonably good short stories, and Stan now has enough tape of my voice that he could
make an excellent artificial me. One of the reasons we focused so much in this
world history series on the factors that go into making a nation state is that while lots
of people think that nation states are about to go away, I don’t. Yes, corporations are becoming more powerful
and multi-national, but in many ways China’s rise to power was the result of a nationalistic
desire to amass wealth and power that has its roots going back at least to the 19th
century, if not earlier. But I want to make two observations here at
the end — first, whatever you think will happen in the future, whatever you think is
happening now, even what you think happened in the past, really depends on what information
you choose to focus on. So this year we’ve tried to look at really
big-picture history and approaches to the study of history and how we learn about it,
because there are choices involved. For instance, we focused a lot on the rise
of the nation state and trade, but we could have focused on the changing role of the family
or the impact of technology on lifespan or changes and continuities in religious practice
or any number of other things. The other thing I want to say about history and
the future is that neither is actually determined. 30 years from now, of course we’ll know
a lot about what happens in the next 30 years, but we’ll also be looking at the past differently
from how we look at it now. And YOU are a part of that. The choices that
you make over the course of your life will shape history both in the future AND in the
past. In short, we ask you to think about history and how to study it because we are
counting on you. But history encompasses a lot and there is
more than one history of the world. I hope you’ve enjoyed some of the versions that we’ve
presented. Thank you so much for watching. Crash Course is filmed here in the Chad and
Stacey Emigholz Studio and it’s made possible by our Patreon supporters, including Charlie
Shread and Scott Delea who are our cosponsors of today’s video. Charlie, Scott — thank
you so much. Patreon is a great website that allows you
to support Crash Course directly on a monthly basis. We used to have Subbable, but it got
acquired by Patreon. It’s a great company, please check it out, there are amazing perks,
but the biggest perk is that we get to keep Crash Course free for everyone forever. Only about 3% of Crash Course viewers need
to pay to support the other 97%. So to the 3%, we say thank you, to the 97%, we want
to say thank you too. If it becomes 4%, who knows, you might see more World History videos
in the future. Thanks again so much for watching and as we say in my hometown, don’t forget
to be awesome.

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