- By Ian Bremmer<p> Ian Bremmer is president of Eurasia Group and author of the newly released Every Nation for Itself: Winners and Losers in a G-Zero World. </p>
I hosted a dinner last night along with a couple of Harvard folks — economic historian Niall Ferguson and economist Ken Rogoff. It seems Ferguson and I have been facing off a lot recently — him doing the run-up to today’s changing geoeconomic environment (starting from about the 14th century) and me looking ahead. This time, Ken was there to keep us honest on facts and figures.
Niall’s pretty much a Davos fixture, with a studied but effortless presentation style and pretty extraordinary range when it comes to European/Eurasian/Asian historical trends. He also tends to get a haircut right before the summit, and so looked disarmingly boyish. (I guess that puts me in the middle, since Rogoff has a rather more adult do.)
The talk moved swiftly to whether Asia (and China in particular) has the ability to structurally eat the west’s lunch. Niall thinks so — and points to six "killer apps" that the west has dominated for a couple of centuries that now the east has picked up (things like innovation and competition). I’m skeptical on the innovation side, but generally they’re strong drivers.
My primary rejoinder was to what extent China has also imported some killer apps from the west that are going to prove, well, problematic, for their model. The first, and the less controversial, is growth. When they get to around $10,000 per capita (from just under half that at present), growth’s going to slow substantially. The economy has to be restructured, and largely into the hands of consumers … out of the hands of the state. An extremely difficult thing for a consensus-driven state capitalist system to do.
But there’s a second, more controversial "killer app": representative government. Not in the sense that Beijing is moving towards western-style democracy. But rather that over time, the Chinese government has indeed become much more responsive (and has had to become much more responsive) to the demands of the domestic constituency. That’s a trend that’s likely to prove extremely difficult to slow down. It’s also one that likely makes the Chinese government more short term…and less strategic. One of the biggest advantages China has had (in addition to extraordinary amounts of productive cheap labor) is the ability to direct resources strategically in a way that the west, with their continual electoral cycles and need to placate constituents, really can’t. When does that start seriously changing in China? Quite possibly at the worst possible time…when there’s a slowdown.
Anyway, at the end of the presentation, we did a snap poll of the roughly 75 attendees at the dinner: how many thought emerging market growth was, on balance, a good or a bad thing for the developed world? A plurality actually voted "bad." (I’d say 40/45 percent, 25 percent good, and the rest thoughtfully abstaining). Food for thought.
Daniel W. Drezner is professor of international politics at the Fletcher School of Law and Diplomacy at Tufts University and a senior editor at The National Interest. Prior to Fletcher, he taught at the University of Chicago and the University of Colorado at Boulder. Drezner has received fellowships from the German Marshall Fund of the United States, the Council on Foreign Relations, and Harvard University. He has previously held positions with Civic Education Project, the RAND Corporation, and the Treasury Department.| Daniel W. Drezner |