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China Is No Model
For the solutions to our problems, don’t look far from home.


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The West has reached a fork in the road. Our current models of governance and economics aren’t working. The consensus is gathering strength — both in Europe and in the United States — that we must choose a different path. The Tea Party, Occupy Wall Street, the protests in Greece, and the increasingly frenetic debate over the future of Europe — all these are signs that people no longer believe in the system we’ve got and want a different one.

In a recent Wall Street Journal op-ed (“China’s Superior Economic Model”), former union leader Andy Stern tries to show us the way. He urges us not to “double down on an empirically failing free-market extremism.” Instead, he says, America should “study the ingredients of its competitors’ success.” China, he argues, is “on a clear trajectory to knock America off its perch by 2025,” because of its government’s success in setting strategic priorities and “arraying the forces of organization.”

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This view is increasingly fashionable nowadays. Every bit of it is nonsense.

American society today is further away from “free-market extremism” (a fancy liberal way to describe economic freedom) than at almost any other point in its whole history. The federal government is spending a greater proportion of our GDP (nearly a quarter) than at any previous time, with the exception of World War II. Combine that with state and local government, and our public sector is now nearly large enough (40 percent–plus) to qualify the U.S. as a socialist country. The highest corporate-tax burden in the developed world and a mind-boggling array of pointlessly expensive regulations are driving U.S. companies offshore to the comparative freedom of socialist economies elsewhere.

It bears recalling how we got here. The Reagan Revolution coincided with a widespread consensus — in both the developed world and among east-Asian countries — that limited government, low taxes, and low regulations were necessary to unleash the economic potential of our societies. These principles were captured in the G-7’s Bonn Declaration of 1985.

In the 1990s, with the welfare state largely discredited, the New Left of Tony Blair and Bill Clinton pursued a kind a triangulation, by seeking liberal goals through conservative means. The ’80s and ’90s were a period of unprecedented sustained economic growth in the West, among the Asian Tigers, and in China, precisely because our societies took the road of free-market capitalism.

In the first decade of the 21st century, the Bush administration often defaulted to seeking conservative goals through liberal methods. Witness its big federal programs in health care, education, and the environment. This pattern was also generally followed in Europe. And now, in the Obama administration, we see an unabashed return to the Old Left philosophy of labor-union militancy, high taxes, high spending, and crushing regulation. That — not “free-market extremism” — is the model we have in the West today. That is the model that is failing us, and that is the model the Obama administration is asking us to double down on.

If we were to study the ingredients to China’s success, what would we discover? That Marxist-Leninism and Mao Zedong Thought were right after all? That the “capitalist road” should be vilified? That we should reprise the Great Leap Forward? (Hint: Between 20 and 40 million Chinese starved to death during that “government-led reform.”)



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