Americans have always looked abroad for inspiration. Alexander Hamilton drew on the experience of Britain and France to shape the economic institutions of the early republic. In the early 19th century, Henry Clay championed tariffs, a national bank, and internal improvements in an effort to match Britain’s economic might. As the 19th century gave way to the 20th, Germany emerged as an industrial colossus, and American intellectuals had a new model. During the 1950s, at least some Americans, mainly but not exclusively on the political left, saw the breakneck modernization of the Soviet Union as a clear indication that the old-fashioned market economy was on its last legs.
There have been a variety of fads and fashions in the years since. Once it became clear that the Soviet model was not quite as impressive as it had once seemed, liberals and progressives started looking to northern Europe, and in particular to Sweden, for lessons on how to run an economy. Conservatives have swooned at various times over Switzerland and Chile and Singapore, among other capitalist success stories. And then, of course, there was the 1980s-era obsession with Japan, which in the view of some observers was destined to surpass a declining America.
Some of these enthusiasms proved less harmful than others, and some were even constructive. Hamilton was right: The United States really did have much to learn from Britain. Germany’s scientific breakthroughs were indeed enviable. Sweden, Switzerland, Chile, and Singapore all have their virtues, and not just of the culinary variety. Even Japan, for all its economic pathologies, taught U.S. manufacturers a great deal about how to thrive in a more competitive world.
But the belief that we had much to learn from the Soviets was both dangerous and stupid. And much the same can be said for the current enthusiasm over China’s economic model.
You’ve no doubt heard President Obama cite China’s investments in wind and solar energy, and its gleaming infrastructure and high-speed trains, as a slam-dunk case for devoting taxpayer dollars to similar efforts here. Perhaps you’ve read books such as China, Inc., What the U.S. Can Learn from China, or the colorfully titled Becoming China’s Bitch. You may have encountered the work of New York Times columnist Thomas Friedman, who has suggested that America’s political class could learn a thing or two from the Chinese Communist Party.
What you most likely haven’t heard is that across a wide range of economic, technological, and military indicators, the United States is actually, in the words of political scientist Michael Beckley, “wealthier, more innovative, and more militarily powerful compared to China than it was in 1991.” As Beckley explains in a recent article in International Security, China’s growth in per capita income, value added in high technology, and military spending is impressive primarily because China is starting from such a low base. That the United States has continued to grow across all of these dimensions is making it exceedingly difficult for China to catch up. Beckley thus concludes that China is “rising in place.” That is, while China is improving its economic and military position in absolute terms, it is stagnating relative to America, even in an era of sluggish U.S. growth.
This doesn’t change the fact that China’s economic rise since the late 1970s has been impressive. Hundreds of millions of Chinese have been lifted from poverty over the last three decades, and the country’s teeming coastal cities have emerged as the workshop of the world. But to some extent this rapid growth is an artifact of the suppression of growth in earlier years. Whereas Japan snapped back to growth after the Depression and the devastation that accompanied the Second World War, China experienced a bloody civil war and collective traumas such as the Great Leap Forward and the Cultural Revolution, which led to tens of millions of deaths by disease and starvation in the years that followed. Even after those dark days, autarkic policies limited China’s growth prospects until Deng Xiaoping decided to loosen the Party’s economic grip. Those envy-inducing double-digit growth rates are at least partly the product of the catastrophes that came before, rather than of policies the U.S. could emulate.
China might be worth emulating if its growth trajectory were sustainable. Indeed, if China could keep growing at its current rates indefinitely, Beckley’s thesis regarding its relative stagnation would soon seem ridiculous. But there is no reason to believe that this will happen. While we can expect China at some point to have an economy somewhat larger than that of the United States — after all, China has four times our population — the country is plagued by pervasive corruption and bad debts that are already undermining its growth prospects.