The Levelling

by Michael O'sullivan

  For each pole to be truly distinctive, it must have its own way of doing things in the legal and political senses. The United States and Europe are the obvious examples here. One interesting legal trend in China is the way Chinese laws and legal rulings are (opaquely) springing up to challenge the commercial prowess of the West. China also shows an ability to independently innovate in the arenas of military technology, telecoms, and information technology, all determinants of being a pole.20 China is now a world leader in solar, smartphone, and telecom technologies. It has introduced a suite of cyberlaws that effectively cordon off a distinct internet space for China—a space in which it has the power to request decryption support from internet companies and in which social media products are liable to a security review—and that require that data on Chinese customers be stored in China. This trend helps make the point that as multipolarity takes over from fully fledged globalization, national-champion companies will form part of the essential capabilities of poles, and in a sense these galleons of multipolarity will replace more globally oriented companies like Apple.

  Orwell Was Right

  By thinking through the characteristics or determinants of a geo-economic pole, we can begin to flesh out the base of the main axes of power. We can also bring in some literary color through a very appealing framework found in one of the most important books of the twentieth century, George Orwell’s 1984. Orwell divided the world into three regions—Oceania, Eastasia, and Eurasia—on the basis of economic power and forms of government. For a world where reality has trumped fiction, this may not be a bad schema at all, as it fits nicely around the major poles that are now beginning to form.

  Although it requires some shoehorning, we could well fit the major countries of the world into the following categories: Oceania (the United States and possibly the United Kingdom), Eurasia (the European Union plus Turkey, eastern Europe, and Israel), and Eastasia (Chinacentric Asia). Though today’s world does not map cleanly onto Orwell’s classification, the three broad regions he sets out give a good guide to how a multipolar world might evolve. Some countries, such as the United Kingdom, Japan, and Australia, could just as easily fit in two categories. Taking our inspiration from Orwell, we can sketch Oceania, Eurasia, and Eastasia in more detail.

  Oceania

  In the multipolar world, Oceania, or the Anglo-Saxon countries (principally the United States, the United Kingdom, Canada, and Australia) will continue to do what they do best: fighting and finance, backed by a mixture of classical republican institutions and democracy.21

  From the point of view of the levelling, the United States and the United Kingdom have an important heritage to live up to: both have been the origin of periods of globalization and each has helped foster the rise of democracy in the past three hundred years. In particular, by the nineteenth century America was regarded by Europeans, much as Alexis de Tocqueville did, as the model Europe should follow.

  Globalization was born out of two Anglo-Saxon empires: the British trade- and land-based empire of the nineteenth century and the American hegemony of the twentieth and early twenty-first centuries. Though the British Empire was undemocratic in its impact on other countries and though it sought to transfer value from the rest of the world to its core, it did at least set up transport routes, the cultural, legal, and linguistic structures that globalization still travels by today. As a result, most of the facets of globalization have a strong Anglo-Saxon flavor, especially if we think of globalization as a legal, political, economic, and perhaps cultural network.

  The original free-market philosophy that spawned globalization was propagated by thinkers like David Ricardo and Adam Smith and was spread by US and British policy makers. The notion that free markets are the most efficient mode of economic activity is one of the intellectual pillars of the proglobalization camp. This spirit lives on in academia, in that many of the world’s leading economists have trained or worked in the large universities of the US East Coast, which supply many of the staff members of organizations like the World Bank and IMF. (Joe Stiglitz is scathing of the mind-set of the IMF senior management.)22

  Also, many international financial institutions—such as the Bundesbank (Germany’s central bank), a significant chunk of the Japanese financial system, and economic restructuring programs in Latin America, to name just a few—can claim Americans as their architects. The dollar remains the world’s reserve currency, the US Federal Reserve is considered the most powerful central bank in the world, and, importantly, the investment banks that drive activity in the global financial system are American. The financial crisis has done little to dent this position, and most international equity markets follow the pulse of Wall Street rather than follow the beat of Frankfurt or Shanghai.

  Eastasia

  An alternative to the Anglo-Saxon approach is taking root in Asia, where since the 1990s the Asian Tiger economies—Singapore, Hong Kong, Taiwan, and South Korea—have outperformed the rest of the world economy and are now all highly globalized. China is their economic epicenter. Singapore and Hong Kong, whose economic growth in the past thirty years has easily outstripped that of competing small states like Ireland and New Zealand, have become entrepôt economies, importing and then exporting huge quantities of goods and services. They have been followed in this regard by other Asian countries, whose approach to development is distinctive enough to be labeled the “Sinatra” doctrine (i.e., “Do it my way”).

  Broadly speaking, what China and many other Asian nations have in common is the active “Colbertian” direction to economic policy. Jean-Baptiste Colbert was minister of finance in France for much of the late seventeenth century and was known for using the state as a promotor of economic activity. In this light, Colbertism denotes an active state involvement in economic policy. To stretch the comparison with France a little more, one might say that a better comparison with China today is the Second French Empire under Napoleon III (1852 to 1870). It was a period of limited democracy, curbed parliamentary and press freedoms, and active surveillance of France’s more vocal citizens, but also a time of infrastructure building, innovation, and gentrification. Yet toward the end of the Second French Empire, the emperor’s legitimacy was withering, and he fell into a trap that snares many rulers: using war to bolster their standing. His mistake was to cast an eye toward Prussia, which was being shaped into a formidable military power by the combined talents of Otto von Bismarck and Helmuthe von Moltke. A victory for Napoleon III would have installed him as the de facto ruler of Europe. His wife, Empress Eugénie, is even said to have underlined the importance of the conquest of Prussia, saying, “If there is no war, my son will never be emperor.”23 Napoleon III’s reign ended badly, in hubris, war, defeat, and rebellion. After the Battle of Sedan in the Franco-Prussian War in 1870, he capitulated, and in a few years, he found himself, with Eugénie, in declining health in Chislehurst, England, where he later passed away.

  The point of recounting all of this is that politics and markets share a common trait: the propensity toward overconfidence, underestimation of risk, and swift turn in fortunes. Though the globalizing Asian countries do not follow the economic and political prescriptions of the received Anglo-Saxon model, what they do have in common are well developed systems or architectures of government, in addition to intricate social and cultural norms. For instance, China’s deep-seated culture and the political structures built up during communism have allowed its authorities to promote progrowth economic strategies while at the same time maintaining a high degree of control over both economy and society.

  These superstructures, as Marx referred to them, have given Asian countries the ability to engage globalization in a controlled manner. In this respect, understanding China in particular is a question not simply of absorbing the values and priorities of its culture but also of interrogating the aims of its government. For many Westerners, Beijing, to redeploy Churchill’s famous characterization of Russia, is a political “riddle wrapped in a mystery, inside an enig
ma.”24

  Yet in trying to understand China, many commentators are guilty of looking at China through Western eyes, which implies on the one hand that China has not quite yet arrived and on the other that a globalized rather than proper multipolar worldview still colors the judgment of many in the West, who continue to underestimate China. On the scale of the very long sweep of socioeconomic history, the transformation of China, and in particular its economy, in a relatively short period of time is a great accomplishment.

  To a large degree, China has achieved what American and European governments took much longer to do. For instance, in 2000 Chinese households had the same amount of wealth that Americans had in 1905 (about USD 6 trillion), but by 2023, according to IMF forecasts, China’s households will have the same amount of wealth that America had in 2000 (USD 60 trillion).25

  In more recent years, there has been a sense that China has what one might call a “learning” administration—that is, one that has observed how the United States and Europe have mired themselves in financial crises, how they have dealt with it, and what lessons can be drawn from financial crises in the other poles. Quick adjustments to stock market regulation and currency management in China have highlighted how quickly Beijing has been to learn market communication. Policy makers in China have doubtless been absorbing lessons from what developed world central banks have done over the past ten years in respect of the extraordinary measures taken to combat debt crises. In particular, if China has learned from Europe’s crisis, it will know, first, that it must not end a debt and banking crisis with large amounts of debt on the government balance sheet, and, second, that it must not allow the burden of economic pain to fall on the ordinary man and woman lest that provoke social unrest.

  Looking ahead, there are two components to the political impetus in China. The first, overriding one is the goal of advancing China and increasing its prestige, or its dream, to be consistent. This may sound obvious, but it is a common, driving factor across China’s political class and is internalized across the country. China had this dream well before Trump’s promise to “Make America Great Again” and even as far back as Reagan’s proclamation of “Morning in America,” but it is only now that the West is becoming more aware of it.

  The focus of debate among Western commentators is the extent to which China wishes to reinforce its prestige. European countries, and then the United States by virtue of its economic and military power, have in recent centuries spread their influence, and in many cases empires, far and wide, even to the shores of China (in the Opium Wars, for example). Westerners may worry that it is now China’s turn, and its every step will be scrutinized in this light. Will it, for example, take a more active role in international politics with respect to Africa with its emphasis on “Chinese solutions”? In its rhetoric, and increasingly in policy, there is a growing tendency on the part of Chinese foreign-policy leaders to assert that the US-based international system and way of doing things are no longer working.26 China’s deepening commercial involvement in African countries, such as the Congo, calls to mind the book The Scramble for Africa by Thomas Pakenham (an Anglo-Irish historian, formally known as Lord Longford) in which he details the partition and despoiling of Africa in the nineteenth century by European powers such as England, Italy, France, and Belgium.27 A subtle variant on Chinese promotion of its prestige internationally is apparent in Chinese cinema, which is already forging ahead here with films like Operation Red Sea (2018) and Wolf Warrior 2 (2017) depicting the bravery of Chinese overseas interventions. An important diplomatic litmus test will be whether these fictional interventions are played out in real life, as Chinese troops may in future perform national security operations outside China (in broader Asia, Africa, and possibly Latin America). China may sensibly stay out of areas like the Middle East.

  China may well refrain from territorial expansion, but it may continue to use its economic size to exert itself over other countries in Asia and to impose its own standards on other countries in areas such as internet freedom, security, and food security. The One Belt, One Road plan ingeniously extends China’s influence across Asia, through the Middle East, and up through eastern Europe (China has established a trade and investment project, “16 + 1,” with sixteen eastern European states, including the Baltic states, the Czech Republic, Hungary, Romania, Serbia, and others) without explicitly compromising the sovereignty of the many countries this project will traverse.28

  Ducking the Dreadnought

  Like many large countries before it, China has also shown a tendency to dial pressure up on regional trade partners and then dialing it back down once agreement is in sight. One looming test for China is how it reacts to the hostile treatment of Chinese communities in populous Muslim countries like Indonesia. It is this kind of problem—rather than South China Sea naval battles conjuring up the likes of Dreadnought or USS New Jersey—that will be one of the key tests of Chinese foreign policy.

  The second part of the Chinese puzzle relates to the inner machinations of the Communist Party. Since Xi Jinping became president of China and general secretary of the Communist Party, party members have been more disciplined with regard to divulging the party’s inner workings and internal intrigues (such as concerning the sudden political demise of Bo Xilai, a charismatic Chinese politician who was considered a strong candidate for the top Politburo Standing Committee until, intriguingly, he and his wife were jailed for the murder of a British businessman). In some respects, the party may be riven by many of the same policy issues that dog political groups in Europe, but we just can’t see or hear the debates within the Communist Party.

  Still, from the outside it is just possible to discern several factions within the party, younger members versus old, career politicians versus military brass, Premier Xi’s supporters versus those of previous regimes, and to a certain extent, emerging policy divides appear to cluster around urban versus rural constituencies, anticorruption groups versus those with a more laissez-faire attitude, those who favor the cultivation of religion in China versus those who prefer to shut it out to the greater gain of the party, and more environmentally conscious cadres versus those less concerned about climate change.29

  Technology may also become a live issue, as China is now a leader in robotics and artificial intelligence. Though China’s proficiency in computing power is catching up with that of the United States, especially in quantum computing, its real advantage in the area of artificial intelligence is the vast pools of data it can gather on its citizens and economy and its ability to use this in a practical sense. In order to make the kind of productivity gains that would sustain its economic growth, it will probably have to use more technology in industry and services, to the detriment of human capital. Don’t be surprised to see the rise of a Luddite wing in the Communist Party. In general, technology will become a problematic political issue for emerging economies that have hitherto been focused on labor-intensive industries and that now feel an impetus to improve productivity through technology.

  On other related issues, such as trade, the Communist Party might take the innovative and unusual step of encouraging (or creating) party mavericks to speak up on topics of international importance. Someone who sounds off on trade and against the West in a loud and eccentric way (to the staged and public disapproval of the party leadership) might be a useful megaphone to deploy in trade relations. Such a character would give the party leaders a degree of plausible deniability—for example, in official relations with the West while the maverick was being deployed to stoke up boycotts of Western goods.

  At a higher level, China’s national good and that of the party are currently synonymous, but it is likely that tension will grow between them in the event of a debt crises. This is because the national good will be used as the guiding principle in apportioning the losses of such a crisis, but many supporters of the party may not be happy with that principle, given that many of them have business interests and would stand to lose out to the national go
od as financial pain is apportioned.

  There is also the intriguing possibility that the Chinese Communist Party today resembles the sociopolitical setting that the Levellers faced, and it is not at all unlikely that a Leveller-type group will emerge (to be quashed by the Grandees). Suppose, say, that in 2021 China is mired in a debt crisis, its unemployment has soared to 10 percent, the rise of robotics in its factories has raised the natural rate of unemployment, a dip in property prices has imparted a significant shock to savings, there is little social welfare, and environmental issues continue to plague the many large Chinese cities. Ordinary Chinese citizens are beset by the same issues the Levellers confronted: harsh treatment for indebtedness, arbitrary application of the law, abuse of the environment, and domination by a concentrated political elite.

  The rise of such a movement in China, or at least in some of its poorer regions, would, first, mark the sociopolitical evolution of China, and, second, represent such a threat to the established order that the Chinese authorities would invest a great deal in subverting it. Indeed, the Chinese authorities are investing an unmatched amount of capital in surveillance technology and artificial-intelligence-based behavioral analysis. According to some estimates, China spends nearly 20 percent more on domestic than external security, with a focus on Tibet, the Xinjiang Uygur Autonomous Region, and Beijing.30 It is possible that, as happened with the Putney Debates, Chinese authorities would stage a listening before taking responsive economic and social policy actions, as well as political action to shut down a Leveller-type movement (unlike in the seventeenth century, social media might make a shutdown like this more difficult).