Thursday , September 19 2019
Home / S. Sumner: Money Illusion / I guarantee that everyone won’t be wrong about China

I guarantee that everyone won’t be wrong about China

Summary:
Tyler Cowen has an excellent Bloomberg piece on China, entitled “What if Everyone’s Wrong About China.” Here’s one observation: It was also conventional wisdom, circa 2010, that China was due for an economic crack-up. That didn’t happen, either.” Well, not everyone was wrong about that! In fairness, I didn’t expect China to turn in a more authoritarian direction during the 21st century, so I was wrong about that. But then I didn’t expect that to happen in Russia either. Or in India. Or Turkey. Or Hungary. Or Brazil. Or the Philippines. And of course I didn’t expect Trump. So I missed the entire global turn toward authoritarian nationalism. Tyler asks us to consider whether the now fashionable pessimism about prospects for Chinese democracy will also prove to be wrong. I

Topics:
Scott Sumner considers the following as important:

This could be interesting, too:

Tyler Cowen writes Wednesday assorted links

Tyler Cowen writes Lebanese/Gaza marriage markets in everything

Tyler Cowen writes Tuesday assorted links

Tyler Cowen writes My favorite things Pakistan

Tyler Cowen has an excellent Bloomberg piece on China, entitled “What if Everyone’s Wrong About China.” Here’s one observation:

It was also conventional wisdom, circa 2010, that China was due for an economic crack-up. That didn’t happen, either.”

Well, not everyone was wrong about that! In fairness, I didn’t expect China to turn in a more authoritarian direction during the 21st century, so I was wrong about that. But then I didn’t expect that to happen in Russia either. Or in India. Or Turkey. Or Hungary. Or Brazil. Or the Philippines. And of course I didn’t expect Trump. So I missed the entire global turn toward authoritarian nationalism.

Tyler asks us to consider whether the now fashionable pessimism about prospects for Chinese democracy will also prove to be wrong. I certainly expect so.  Pundits are always excessively swayed by current trends.  In 2015 and 2016, I recall reading all sorts of left leaning pundits telling us about Obama’s enduring legacy.

Here’s Tyler:

Or consider Hong Kong. Not long ago it was practically a cliché that Hong Kong was a territory of apathetic, spoiled wealthy people, not very committed to self-rule or democracy. That too has been shown to be false, as 1.7 million people took the risk of participating last weekend in a peaceful anti-government march.

I don’t know if I ever posted on that point, but I certainly did argue against the more general claim that East Asians were not interested in democracy, citing hotly contested elections in places like Taiwan and South Korea—areas that pundits used to tell us would never be democratic.  Of course Taiwan is 98% Han Chinese.  So Hong Kong doesn’t surprise me at all.  Actually, Mainland China has thousands of demonstrations each year, mostly focused on local grievances.  This is nothing new.

I also recall being told that certain Latin American dictators were “popular”, only to find out that they weren’t so popular when they finally did have elections.

I still think Fukuyama’s “End of History”, or utilitarianism, or liberalism, or democratic capitalism, or whatever you want to call it, is the megatrend, and all these forays into socialism, nationalism, etc. are mere epicycles.  Democracy seemed to be dying in the 1930s, and in the 1980s not many predicted the collapse of the Soviet Union.

Here’s something I’m really confident in predicting:

In one hundred years, either China and Russia will be democratic or the US and UK and Japan will be nondemocratic.  Two completely different political regimes in these big countries is not a long run equilibrium. In one hundred years, democracy will be seen as clearly the way to go, or clearly not the way to go. Here’s another prediction.  The US/China trade war will eventually be seen as being just as misguided as the Japan-bashing of the 1980s now seems. 


Tags:

 
 
 
Scott Sumner
Scott B. Sumner is Research Fellow at the Independent Institute, the Director of the Program on Monetary Policy at the Mercatus Center at George Mason University and an economist who teaches at Bentley University in Waltham, Massachusetts. His economics blog, The Money Illusion, popularized the idea of nominal GDP targeting, which says that the Fed should target nominal GDP—i.e., real GDP growth plus the rate of inflation—to better "induce the correct level of business investment".

Leave a Reply

Your email address will not be published. Required fields are marked *