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SPRING NOTE
The global financial crisis and ensuing recession have generated a widespread view that the essence of the so-called Washington Consensus, and with it the model of democratic capitalism, stands discredited before the court of world opinion. At the same time, interest has risen sharply in what may be called the Beijing Consensus: an increasingly robust market economy coupled with authoritarian government.
As is usually the case with sweeping statements about the rise and fall of global forces, this one is a bit too neat. The decline of faith in democratic capitalism is more pronounced among chattering classes in the West than among economic elites in much of the non- West, who are generally pleased with how the macroeconomic orthodoxy of the Washington Consensus has performed for their countries over the past few decades. And the Beijing Consensus is itself not new. A successful government- directed market economy characterized the Turkish Republic for decades before it became an electoral democracy. Some years later, similar systems not only worked in fledgling Asian tigers like South Korea and Taiwan, but were touted explicitly as models in Singapore and in several Latin American countries.
That said, the current intellectual trend is different from what has gone before. In earlier times, authoritarian capitalism was widely seen as a transitional arrangement leading to democratic capitalism, not as an ideal end in itself. Now, many do see authoritarian capitalism as an ideal end. They do so because of an unexpected juxtaposition: While the United States and other Western countries are noisily debating issues of fairness and social equality in the wake of economic distress, the Chinese model seems able not only to deliver the goods in purely material terms, but to do so in a relatively inclusive way. While an elite has benefited most from China's rapid economic growth (as elites always do), very large numbers of people have ascended from misery to a decent level of material life, and, while myriad problems remain, optimism sounds the dominant chord. This juxtaposition enables Beijing Consensus boosters to ask: Who needs Western-style democratic capitalism, which fosters deepening inequality and enables plutocracy to mock genuine democratic values, when authoritarian capitalism can ensure both reliable growth and expanding equality?
Such arguments implicitly...