Best Practices

In the next few weeks, I intend to revisit the subject of my essays on “What Went Right?” It has been easy to forget about things going right for the past five years because so many things have been going very wrong, for Americans at least, under our current president. But a lot of things are still going right.

Take the massive growth of the middle class in Asia, as the fruit of decades of pro-free-market reforms and rising prosperity.

The explosion of Asia’s middle class, which was named this week by the World Economic Forum’s Global Agenda Councils as one of the ten most significant trends for 2014, is stunning. The size of this group currently stands at 500 million and will mushroom to 1.75 billion by 2020—more than a threefold increase in just seven years. The world has never seen anything like this before; it’s probably one of the biggest seismic shifts in history. It’s little wonder that people all across Asia expect a bright future for their children—according to Pew data, a massive 82 percent of Chinese respondents expect today’s children to grow up to be better off financially than their parents.

I might point out that this last result is a problem for China’s leaders, because if they can’t deliver on those expectations, they’re going to be in big trouble.

But the mere fact of a growing Asian middle class, as good as it is in itself, is not the real news from this report. The real news is the conclusion drawn by its author, Kishore Mahbubani, who is “Dean of the Lee Kuan Yew School of Public Policy at the National University of Singapore and a member of the World Economic Forum’s Global Agenda Council on China,” so we can assume that his outlook and advice will be taken seriously in the region.

The reason these Asian societies are now succeeding in this way is because they have finally begun to understand, absorb, and implement important reforms: free-market economics; mastery of science and technology; a culture of pragmatism; meritocracy; a culture of peace; the rule of law; plus, of course, education.

We can quibble with some of this—that part about “pragmatism,” for example—and Mahbubani goes on to give some credence to environmentalist hysteria. But that’s still a pretty good list, and the fact that the formula for progress and success is now so widely understood constitutes enormous progress. I’m old enough to remember a time when there was still serious global competition between capitalism and communism—outright totalitarian communism, not the sad and broken leftovers that remain today—over which one was the ideology of the future.

Michael Ledeen has a good analogy for the kind of Copernican Revolution that has happened on this issue.

In the centuries leading up to Galileo, the Aristotelians thrashed around desperately trying to save the astronomical doctrine—named after Ptolemy—that had the Earth at the center of the universe…. [A]nnoying facts had subverted a beautiful theory, and the beautiful theory had to go, even though many of those who called attention to the annoying facts would be burned at the stake, thrown in jail, censored and ruined along the way….

Sometimes these “paradigm shifts” happen very quickly. Other times are maddeningly slow. And we’re invariably surprised when the beautiful theory bites the historical dust, even though we had long known the theory was claptrap. Gorbachev probably knows that subject better than most…his whole world collapsed along with the myth of communism.

However, the myth lingered, and has had a brief reincarnation in the person of President Obama. Now its hollowness is being exposed once again, as the failures of the state overwhelm us from many sides. The Obamacare fiasco attracts the most current attention, because it causes so much direct pain to so many people, and promises even more for more in short order. The various “fixes” are replays of the [Ptolemaic] epicycles, and will have the same effect (footnotes in the history texts of the future)….

We’re now in a post-Galileo world, politically speaking.

You can also see this in the way a portion of the international establishment has turned against foreign aid. I recently discussed one example, and here is another. But the most telling example is the fellow I insist on calling by his real name, Paul David Hewson, rather than his stage name, Bono. The rock star turned anti-poverty activist seems to have made something of a conversion to capitalism: “Aid is just a stop-gap. Commerce, entrepreneurial capitalism takes more people out of poverty than aid, of course, we know that.” When I showed this to my wife, Sherri, she said “of course we know that?!” It’s quite a change, isn’t it? As Hewson himself puts it: “Rock star preaches capitalism…. Sometime I hear myself, and I just can’t believe it.” He goes on to declare: “Entrepreneurship is the most sure way of development.” And: “In dealing with poverty here and around the world, welfare and foreign aid are a Band-Aid. Free enterprise is a cure.”

Preach it, brother.

All of this is being grasped, not just through positive examples, such as Asia’s rising middle class, but through negative examples, such as Venezuela’s collapse into insanity under one of the last remaining regimes of outright socialism. A CNN blog post, apparently by Jason Miks, describes a list of “worst practices” for running a nation’s economy.

We often talk about best practices for economies. Perhaps there should also be a list of things to avoid—a checklist titled “How to ruin your economy.” Well, it so happens this isn’t just a theoretical list, because Venezuela is actually ticking each of those boxes in practice.

The list is:

1. Attack big business.
2. Create hyperinflation.
3. Induce a currency crisis.
4. Subsidize, subsidize, subsidize.
5. Become a dictatorship.

Someone send this list to the Obama administration. On second thought, don’t. I’m afraid they will follow it even more exactly than they are already doing.

This idea of capitalism as global “best practices” is an analogy I like almost as much as Ledeen’s reference to Galileo.

And that leads us back to what’s going right. Michael Schuman reminds us that the big global trends didn’t stop when Barack Obama took office, and that “Globalization is not just still with us; it’s just getting started.”

[G]lobalization is very much alive and well. The White House, for instance is engaged in a renewed push for free trade with proposed pacts with the European Union and a collection of Asian and Latin American nations under the Trans-Pacific Partnership. More importantly, though, globalization is changing in key ways. It is knitting together a society that, more than ever, is truly global….

More than half of humanity now lives in South and East Asia, and Chinese and Indian consumers have become the most sought after in the world. Global commerce is changing as a result. General Motors, for instance, sells more cars in China than in America; Yum! Brands cooks up more Kentucky Fried Chicken for Chinese diners than Americans. Hotels and travel agencies from Paris to Bali are striving to accommodate Chinese and Indian tourists. The storied design houses of Europe have opened lavish flagship stores in Asia, which is set to account for more than half of the world’s luxury-goods market within the next 10 years.

Emerging-market companies are becoming equally important global players. Apple’s chief rival is not a European or even Japanese company, but South Korea’s Samsung; China’s Huawei is the new force in telecom. Firms from emerging nations are becoming more important global investors and job creators too. Chinese pork processor Shuanghu is buying America’s Smithfield; Ford offloaded Volvo to China’s Geely and Jaguar to India’s Tata. Companies like China’s Lenovo and India’s Wipro are true multinationals that employ people throughout the globe….

Globalization is deepening, becoming more inclusive and more balanced between different parts of the planet. And it is introducing us all to new ideas, products and arts.

All of this is made possible by the spread of the knowledge that capitalism is the world’s “best practices.”

 

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