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Has China rescued the West? The death of the state was announced too early

It took China's rise for our leaders to fall back in love with the state (photo by China Photos/Getty Images)

It took China's rise for our leaders to fall back in love with the state (photo by China Photos/Getty Images)


April 27, 2021   7 mins

It is instinctively difficult, when we consider the human suffering caused by Covid and the threat to global peace represented by the looming Cold War between the United States and China, to view either development in positive terms. Yet I would argue we should view both as developments which, in the grand sweep of history, usher in the final break with the failing social and economic model of the past four decades: an era which has seen the prosperity of ordinary people across the Western world plummet even as it has birthed all manner of morbid political symptoms in response. Indeed, we should view the world of 2021 as one filled with with hopeful political possibilities for both Right and Left, as long as we are willing to make use of them.

For critics of recent economic orthodoxy, long corralled at the fringes of political debate, the argument had always been that soon, the politically hegemonic fantasies of the neoliberals would be forced to meet reality, a historic collision which would bring their whole ideological edifice crashing down. That moment has arrived: and to understand the process through which great power competition will, perhaps counterintuitively, advance our happiness and prosperity, we should consider the work of the late historical sociologist Charles Tilly.

A theorist of the state and state formation, Tilly’s fundamental insight was that the modern system of national states, a curious European quirk which eventually conquered the entire world, derived from military competition. As he summarised the process, “war makes the state and the state makes war.”

In his 1990 work Coercion, Capital and European States, Tilly traced the origin of the European state system to the patchwork of feudal demesnes which succeeded the Roman Empire in Western Europe. Hemmed in from the rest of the world by the sprawling Islamic empires to the south and east, and the vast, coercive tributary states of Europe’s eastern steppes, Western European rulers created the modern state system through a process of constant competition, war, consolidation, and capitalist economic development. 

“Struggle over the means of war produced state structures that no one had planned to create, or even particularly desired,” Tilly observes. “From the late seventeenth century onward budgets, debts, and taxes arose to the rhythm of war. All of Europe’s warmaking states had the same experience,” which drove them to create “courts, treasuries, systems of taxation, regional administrations, public assemblies, and much more.” 

Different models of statehood — the capital-intensive trading networks of city states like Venice and Genoa, the sprawling continental empires of Spain and the Holy Roman Empire, studded with more or less independent towns and cities — each had their moment in the sun. Yet the precise combination of capitalism and military competition which birthed the modern national state was forged through this process of convergent evolutionary adaptation. As Tilly underlines, “the eventual organisational convergence of European states resulted from competition among them, both within Europe and in the rest of the world.”

As waging war became more expensive — the costs of warfare rocketed with the technological advances of the Early Modern period — battlefield success was granted to the states that expanded enough to create a vast tax base, which necessitated the creation of state bureaucracies to oversee tax collection and the creation of dynamic capitalist economies to fund the entire process. Driving all these developments were the demands placed on rulers by war — or by what would now be considered “great power competition”, like that currently accelerating between the United States and China.

As Tilly notes, “only the great sixteenth-century expansion in the scale and expense of international wars
 gave national states a definitive advantage over the empires, city-states, and federations that prevailed in Europe up to that time.” England, for example, is a nation forged by a thousand-year long competition with France, which helped centralise London’s rule, accelerated the absorption of the Celtic nations and led English elites to adopt new Dutch capitalist models of wealth creation which forged British pre-eminence. The unintended byproduct of this competition between the kings of England and France is the modern British state, which began as nothing more or less than the most efficient possible administrative machine for waging war.

When the Covid crisis struck last year, it functioned as a dry run for war. It is not by accident that the logic of great power competition with China only won wide acceptance over the past year. States realised, with mounting horror, that they had outsourced almost all the vital functions of statehood either to a hostile rival, or to external contractors incapable of matching the resources and sheer productive will of a coherent state actor. Like Tilly’s freewheeling mercantile states of the 16th century, we found ourselves outcompeted by a stronger, larger, state actor with a vast tax and industrial base. While the United States and European countries scrabbled around for PPE on the global marketplace or agonised over lockdowns and border closures, China defeated Covid in a matter of weeks, marshalling the almost unimaginable resources of its vast industrial base at the directed will of its central state apparatus. Western nations pulled the levers of the state, and realised they were not attached to anything. 

How could they possibly be confident of success in a great struggle against China? The only clear successes of Western economies, as this excellent recent Jacobin essay makes clear, were Trump’s Operation Warp Speed vaccine program and Britain’s parallel vaccine effort, both instances of central state planning and direction of market processes in pursuit of an overriding strategic goal.

No wonder, then, that the Biden administration has placed infrastructure at the centre of its political program. The “Bidenomics” at the centre of his Build Back Better platform is, as Chatham House recently observed, “a fundamental paradigm shift” which “sounds the death knell for the neoliberal era first ushered in by Ronald Reagan, where markets were deemed to be efficient and best left alone to function”. And it is expressly framed as a product of the looming competition with China.

Yet in his recent profile of the economist Paul Krugman’s conversion from enforcer of the Reagan orthodoxy to advocate of hyper-Keynesian state spending and direction, the economic historian Adam Tooze reminds us that we’ve been here before. Even FDR’s New Deal, Tooze notes, “had delivered far less than promised, until the floodgates were finally opened by the Second World War. The Great Depression, Krugman wrote, ‘ended largely thanks to a guy named Adolf Hitler. He created a human catastrophe, which also led to a lot of government spending.’” Just as the great competition against Germany and Japan created the government-directed spending and infrastructure boom which still stands as the greatest and widest period of prosperity in the history of capitalism, so too does the competition with China offer the prospect of reshaping capitalism in a statist form, bringing prosperity back to the ordinary working and middle classes for the first time in two generations.

In this gamble, we must be thankful that, like the first Cold War, the possession of nuclear weapons by both sides means the return to a world-shaking conflict like that of World War Two, with all its attendant human suffering, is improbable. Instead, like the Cold War where competition was sublimated into the Space Race, technological advance and improving the lives of their rival workers, there is much to be gained from a second period of great power competition. Capitalism may or may not be the best form of economic organisation available to us, but the statist version now opening up is at least a marked improvement on what came before.

Tooze quotes Krugman’s 2012 observation that, “‘if it were announced that we faced a threat from space aliens and needed to build up to defend ourselves, we’d have full employment in a year and a half’,” adding: “If 21st-century America needed an enemy, China was one candidate.” Indeed, Tooze notes, “the infrastructure programme Biden announced on 31 March is designed, like the ‘great projects of the past’, to ‘unify and mobilise the country to meet the great challenges of our time: the climate crisis and the ambitions of an autocratic China’. Perhaps Krugman’s Martians have arrived after all.”

Every day, headlines underline that the new-old statist form of capitalism has been resuscitated by great power competition: the British government’s refusal to sell the chip manufacturer ARM to American investors on national security grounds; the drive to reshore manufacturing of strategic goods like microchips and rare earth metals, the government’s citing of their vaccine success as the basis of a new politico-economic orthodoxy. When the IEA think tank tried last week to re-centre neoliberal ideology with the help of two backbench MPs (and was roundly mocked in the process) it only underlined that their worldview, once hegemonic, is now marginal, proven unfit for survival in a world of resurgent and competitive states — and for this we can thank Covid and China, for ushering in this new economic era.

When no less a figure than Francis Fukuyama, widely (if unfairly) characterised as the cheerleader of liberal triumphalism, recasts himself as an advocate of state-directed industrial policy, we can be certain that we have entered a new phase of capitalism— and as Fukuyama explicitly observes, the Biden administration’s new lust for reshoring and for building up stockpiles of strategic goods was “triggered by the global shortages in semiconductors and medical equipment induced by the Covid pandemic”. It took the pandemic to make the threat of the Chinese model real to Western leaders, and it took their acceptance that Chinese state capitalism is superior, in creating vital infrastructure and spreading prosperity, to the nostrums of recent economic orthodoxy for them to finally jettison neoliberalism.

As long as the two great powers can avoid a major war, and instead compete for dominance through their capacity to spread prosperity to their publics and their allies, then we are heading towards a near future vastly superior to the past few decades. During the Cold War, the rival model of Soviet Communism forced Western capitalist states to provide their workers with a welfare state and with a share in economic growth that capitalism has not, until now, been able to reproduce. Only when the threat from Communism faded with the collapse of the Soviet Union did the orthodoxies of neoliberalism and globalisation conquer the world, the direct result of American hegemony.

Now that hegemony is under threat, Western capitalism will be forced to remake itself in a statist mould to survive. The neomedievalising tendencies of the 1990s onwards already seem to be fading into history, at least for the advanced Western economies whose states are still just strong enough to rebuild themselves for one last great effort. It is not a moment too soon: the looming climate crisis, advancing across the horizon, surely heralds an era of full state mobilisation in the service of human survival.

Yet it took China’s rise, filtered through the great shock of the pandemic, for our leaders to fall back in love with the state, and for that all critics of neoliberalism should be thankful. War makes states, as Charles Tilly observed, and we can now argue that great power competition also remakes them. The death of the state was announced too early; the dawning age of Western state capitalism has only just begun.

 


Aris Roussinos is an UnHerd columnist and a former war reporter.

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David George
David George
3 years ago

Perhaps the bigger question is can liberty survive when economic liberty dies. The Chinese example says no, once the state is preeminent economically it becomes preeminent socially and politically, there’s no counter to all powerful state dominance, state serfdom. Shorn of a binding religion, culturally divided and riven with cultivated fear (climate change, pandemics, far right bogey men and so on) the people are sitting ducks, fish in a barrel. Be careful what you wish for Aris.

Last edited 3 years ago by David George
mwebb851
mwebb851
3 years ago
Reply to  David George

Ah, at least one person sees through the myth that China is a success story. There is nothing good about the CCP and no good will come from it and its appalling oppression.

Pedro Mendez
Pedro Mendez
3 years ago
Reply to  David George

I think it depends what you mean by liberty. The liberty enjoyed by a millionaire in a purely capitalist society is very different from the liberty available to a beggar.

Andrew Fisher
Andrew Fisher
3 years ago
Reply to  Pedro Mendez

But in a very real sense if they are not hassled and controlled by state agents in everything they do, they do have the same freedom. Communist societies have a remarkably poor record in either increasing living standards OR freedom

Andrew Fisher
Andrew Fisher
3 years ago
Reply to  David George

The argument that you can’t have meaningful political liberty if the state controls everything is a strong one. However it is worth considering that (Maoist) China started with a political tyranny first, so it may be not a good model for Western nations.

Seb Dakin
Seb Dakin
3 years ago

I second that. A really good article and I hope that he’s right.
Your mention of Bernie Sanders not quite sparking a wide enough movement to effect change, and BLM coming along straight behind made me ponder whether, an appeal to class having failed, race was the only vehicle proponents of substantial social change had in the US.
A really annoying aspect of the whole BLM/Woke agenda being adopted lock, stock and two stinking barrels into the UK is that it’s not race, but class where society’s fault lines truly lie, and whence solutions might come.
I suspect the same may be more true of the US than cheerleaders for the American Dream are prepared to admit and therein lies the true tragedy of CRT. They got it exactly wrong. The disadvantaged of the US have more in common with each other by the fact of being poor, than all the race, gender, linguistic or regional differences that right now are being used to divide them.

Fraser Bailey
Fraser Bailey
3 years ago

A good overview and one hopes that Aris is right. I liked this:
‘Western nations pulled the levers of the state, and realised they were not attached to anything‘. Someone said something very similar on, I think, Triggernometry recently. And this relates to Gavin Haynes’ article today in which he points out that ‘efficacy has become detached from employment’. Thus the state will have to start hiring some competent people again, assuming they can be found among the products of our debased education systems.
But there are caveats. Western nations are now home to millions upon millions of people who do not subscribe to the West’s most fundamental tenets. This includes the Woke brigade as well as those of a certain ‘faith’.
Further, all of this is contingent upon vast and never ending money printing. As some point, surely, inflation in goods and services, and not just assets, must arrive. Just a couple of days ago two friends with small business said their input costs i.e. materials, were increasing rapidly in price. The indications are that we will be faced with either rampant inflation or a sharp increase in interest rates, and the latter will certainly make life interesting.

Tim Bartlett
Tim Bartlett
3 years ago
Reply to  Fraser Bailey

I can confirm that, in the food industry at least, raw materials and packaging are almost all suffering over inflationary price rises. In past years the occasional ingredient would spike after a bad harvest or similar, but now its across the board.

Hardee Hodges
Hardee Hodges
3 years ago
Reply to  Fraser Bailey

We are told that inflation is not an issue or if it is, it’s just short term. What do we who pay bills know about? The productivity of China looms large but they are transitioning to a fairer economic system for workers. World dependance on Chinese production shows a real flaw that needs correction but at higher cost. That inefficiency also contributes to inflation. The world may be in a strange unstable place.

Saul D
Saul D
3 years ago

I’d dispute most of the history described. Kings have had tax collectors since time immemorial. Stealing taxes was the entire purpose of being king or lord. Europe was running wars after wars for kings seeking more and more tribute, but that wasn’t the essence of European success.
Outside Europe, princes, sultans, kings and chiefs were also trying for the same thing – power, tribute and plunder – something exploited to the full by British traders playing off factions, and taking the spoils.
But this wasn’t the driver. The truly remarkable thing that happened in Europe was the rise of independent states in competition to the empire builders. Mercantile centres – Venice, Genoa, Hansiatic League, banks in Italian city states, guilds in Germanic principalities. The most feared military force was not some imperial army, but the Swiss – self-trained independent-minded farmers – renting themselves out to any wealthy king.
Empires didn’t make Europe. The rebellion against empires did. Spain, the richest empire in Europe, sunk as the Low Countries revolted – bankrupted by the cost of fighting a determined local resistance. The merchant classes and guilds curtailed the power of the empire-building kings. The East India companies turned trade into conquest. This is the base of capitalism – not the stealing-taxes classes. As the merchants won, the nation state emerged, replacing monarchial power. A battle for sales, not taxes. China’s great turnaround came from chasing commerce, cutting the legs from under American industry. It understood the need to build a winning economy before it can go to war.

Gorgia Verolini-Wright
Gorgia Verolini-Wright
3 years ago
Reply to  Saul D

This is also an extraordinary statement, on which most of the article relies & yet is not at all supported by the evidence – “usher in the final break with the failing social and economic model of the past four decades: an era which has seen the prosperity of ordinary people across the Western world plummet even as it has birthed all manner of morbid political symptoms in response.”
There are always groups of people who suffer from political miscalculations and from technological change etc etc but it is not the result of a failing economic model – it is just an inevitable result of constant change & no government can solve it. Socialism least of all – totalitarianism can cover it up but that is all one can do. Capitalism can at least provide the quickest solution but is entirely dependant on change.

Jonathan Ellman
Jonathan Ellman
3 years ago

It’s also absurd to claim that the prosperity of ordinary people has plummeted. It depends on how you measure wealth but it takes an extraordinary definition not to recognise that ordinary people have far more wealth than ever before. True, ordinary people’s wealth relative to the elite class has shrunk but overall wealth has increased massively. That is unlikely to be reversed by increased statism; just look at China’s billionaire class and its people’s average salary.

David George
David George
3 years ago

Agree. It’s difficult to take the author or his essay seriously when he attempts to make his argument with such a blatant falsehood. Aris comes across as a deluded ideologue as a consequence.
No mention either of the extraordinary success, from a similar base, of the Asian countries that followed a liberal market course over the past sixty years of course. Japan, South Korea and Taiwan with living standards multiples of the benighted Chinese.
There is no centrally planned economy that could be properly described as successful. None.

David George
David George
3 years ago

I just checked the stats.
Real (inflation adjusted) personal median income in the US “plummeted” from $23K forty years ago to $36K at present.
In the UK it almost doubled, Median (household this time) real disposable income went from 16K to 29K pounds.
That’d all be the dreaded neo-liberalism’s fault I suppose Aris?

kathleen carr
kathleen carr
3 years ago

Also has prosperity plummeted? Young people can’t buy homes in the South-but thats because they are too expensive. More young people stay in education than ever before and people have the chance to travel & buy luxury items because of the availability of money to more people in the last four decades.

CHARLES STANHOPE
CHARLES STANHOPE
3 years ago
Reply to  Saul D

According to both the marine archaeology of shipwrecks, the evidence of massive iron pollution trapped with the Greenland glaciers, and sites such Monte Testacio in Rome, Trade in the Ancient World wasn’t equalled before the 17th century.

So I would put it to you that Rome and Greece made Europe, that laid the foundations of all that followed, often very poorly it must sadly, be said.

Incidentally the myth of Swiss invincibility was shattered forever at Marignano by the French in 1515. As their King modestly put it :“I have vanquished those whom only Caesar vanquished”

The Spanish had a splendid run from say the conquest of Mexico in 1521, to the fall of Madrid in 1706.

The armies of Revolutionary France made short work of Genoa, Venice, the Swiss, and all those tinpot little German states with their guilds.

The East India Company was bankrupted by becoming a territorial power, the Dutch one was destroyed by the Royal Navy 1780-1783.

Saul D
Saul D
3 years ago

The Swiss had lost, but it was already too late – the transformation to independence thinking had already started. The decade 1510-1520 had many key intellectual shoots of transformation. The Spanish were in decline by the 1560s – bankrupted (1567) and facing a Dutch revolt (1566) from mercantile classes. By 1650 commoners were beheading a king, an act repeated by the French. A lesson from the East India Company, is that no good comes of corporations acting in lieu of states.

CHARLES STANHOPE
CHARLES STANHOPE
3 years ago
Reply to  Saul D

I agree will all you say.
However as regards the EIC, it was the ‘interference’ of the State, by insisting that Christian Missionaries be allowed to operate in the subcontinent, that was one the major causes of the infamous Mutiny.
Later the ICS facilitated the arrival of large numbers of bossy white women, (Memsahibs) which again the good old EIC had effectively banned (for good reason).

Alex Lekas
Alex Lekas
3 years ago

My only concern is that the current woke race-baiting in America will so fracture the nation that it’s unable to come together
The wokerati see this as a goal. That young people lack the ability to crack a history book and learn about what socialism is rather than glom onto it without question is a damning indictment of an education system masquerading as indoctrination camp.
BLM is fueled by disenfranchised, white, middle class young people for whom neoliberalism has spectacularly failed.
As with socialism, this cause is also led by historically illiterate people who are perpetually angry, yet have less reason to be angry than any cohort in American history.

Starry Gordon
Starry Gordon
3 years ago
Reply to  Alex Lekas

I see very little actual socialism in books actually read by people who might practice it. (By socialism I mean ‘the ownership and control of the means of production by the workers or the community in general’, a meaning which I suppose has been propagandized out of existence for most.) There is a sort of underground of socialist discourse (my meaning) but it avoids the bourgeois institutions which nurture the other kind (your meaning, I suppose). It did crop up in Occupy Wall Street, but only briefly and transitionally. I don’t know what the goals of the wokerati are, but I doubt if any of them are remotely socialistic, and if they crack a history book they will find that most of them have been written by the same people who have been lecturing and haranguing them all their lives already. They’re not going to get down with the hippies.

Andrew Fisher
Andrew Fisher
3 years ago
Reply to  Starry Gordon

‘Bourgeois institutions’ – by which you mean institutions?.

What this Marxist-Leninist sloganeering has in common with ‘the wokerati’ is a lack of clear meaning combined with emotively heated commentary and attacks on a vaguely defined enemy class (which it would be a good idea not to find yourself a member of by something you’ve said or written).

Both ‘radical’ analyses (if they remotely deserve that term) are most unlikely to offer any real solutions to our inevitable real world predicaments. In fact likely to make things very much worse, as socialism always has when it’s been tried.

In the real world all solutions will in turn produce their own problems. That is inevitable, we should eschew extreme and millennial rhetoric, and I would say, the fallacious idea thst er can design a perfect society. Otherwise we are effectively advocating utopias.

Alex Lekas
Alex Lekas
3 years ago

No wonder, then, that the Biden administration has placed infrastructure at the centre of its political program.
Indeed, no wonder, not when the public has lost all skepticism and can’t be bothered to ask what govt – which is responsible for “infrastructure” in the first place – has done with the millions upon billions of dollars collected in gasoline taxes and other related fees. The same bureaucratic system that has made a laughingstock of schools, that cannot manage potholes, and that hires all these allegedly horrible police officers is now supposed to lead the way? Lead it to what?
A Chinese system works to the extent that it does because there is no room for dissent or criticism or anything else we take for granted. This is the same China of the one-child rule, the current issue with the Uighurs (sp?), Hong Kong, and so forth. Sorry, but “state capitalism” is as big a misnomer as ‘anti-racist.’

Euan Ballantyne
Euan Ballantyne
3 years ago
Reply to  Alex Lekas

That’s because “State capitalism” is really just a palatable rephrasing of classical fascism

Friedrich Tellberg
Friedrich Tellberg
3 years ago

Dangers, real or supposed, always serve as a pretext for authoritarianism. This seems efficient in the short run, but I don’t see any sustained progress to be possible without freedom of science, speech, and enterprise.
Maybe the author tapped into Chinese propaganda, because with somewhat more pleasure taken at Western failures, you find similar remarks in the Global Times and other outlets set up by the CP of China.
Catching up with the West is one thing. Showing the way to a better future is something completely different.
China applied mass coercion to tackle the crisis, the US, the UK and Germany brought the real technological innovation that can save us from a pandemic. In a world where covid is never going away completely, and where pandemics will reappear sooner or later, lockdowns and sustained isolation are a very poor solution.

Matthew Powell
Matthew Powell
3 years ago

Whilst I don’t morn the passing of the neo-liberal economic consensus, and am broadly supportive of the reassertion of policies based on National interests, over a growth only mindset; I do worry that the pendulum will swing too far in the other direction.

Anyone who thinks that mass state intervention will solve all our problems, need to reopen their history and economic text books, and see that any benefits of short term growth, are cancelled out the misallocation of capital and structural imbalances left behind from government programs, which always prioritise short term political gain, ahead of economic logic.

We need to make sure we use competition with China to build a better model, not to fall into another set of economic dogmas.

Janko M
Janko M
3 years ago

Great article, as usual. However, I would like to add that I am not so sure that nuclear deterrence is as clear as it was during the Cold War. With hybrid warfare, in many ways escalation is almost imperceptible and online full psychological warfare is ongoing. Additionally, in a global world, the challengers to world order only have to undermine the rules based system, by showing the rules to be useless. If they get America to abandon its commitments, that’s all they need. Sinking an aircraft carrier or two might be enough. Thus nukes are really just to deter mainland aggression.

Last edited 3 years ago by Janko M
Peter LR
Peter LR
3 years ago

That was well argued.
I thought there was another aspect to this point: “ like the Cold War where competition was sublimated into the Space Race, technological advance and improving the lives of their rival workers”.
Westad in his book ‘The Cold War’ describes how the Soviet/US conflicts played out through supporting regimes in other countries such as during the Middle East conflicts. I’m sure this is happening with the Chinese ‘Belt & Road’ initiative in which China is investing in Africa, for instance, as a way to create leverage in world affairs.

Jonathan Ellman
Jonathan Ellman
3 years ago

A good description of current trends and of what is most likely going to happen, also an optimistic one. But it needn’t be so. There is no reason to think statist capitalism any more efficient at achieving the goals of competing with China than a more regulated and more principled enforcement of what the USA has done for the last few decades. It is only partly true that “Chinese state capitalism is superior, in creating vital infrastructure and spreading prosperity”. It is true for a developing economy in desperate need of infrastructure with a workforce salaried at approximately a quarter of Western workforces and with a living memory of starvation. Moreover, the major Western corporations with such pandemic swollen profits are not detached from the state and never have been. They are connected by corruption as much as their Chinese counterparts.
But it is not clear that it is necessary for competing with China. Economic decoupling, favouring other developing states like India and Mexico, and others that meet the basic humane requirements the West pretends to value would impede Chinese progress. Furthermore, Chinese demographics are predicted to impact economically.
Nonetheless, it is likely that what Roussinos predicts will, at least in part, come to pass, because the shift will not be as enormous as it may seem to some. It’s already underway. However, it will probably be accompanied with further concentrations in wealth and reductions in popular power. This may be the spanner in the works. It’s easier to control and deny a population that never had democratic influence and has only recently emerged from extreme poverty than to take it away from ones that have had it for nearly a century. Although covid has shown those populations to be supine towards states when in danger, the battle lines between Western states and their populations are drawn.

Last edited 3 years ago by Jonathan Ellman
Simon Newman
Simon Newman
3 years ago

The Cold War threat was primarily *ideological* not military. Western States (or the US led Free World) didn’t want their workers voting Communist; so they needed those workers reasonably happy. But China is not an ideological threat; no Chinese leader is going to say “We will bury you.”
As for Climate Change, this is used to justify austerity and misery for the belt-tightened masses, not prosperity.
So I can’t see any great reason to be sanguine. If there is a rebalancing in favour of the workers it will be much more in response to the populist wave of the 2010s; a desire to avoid seeing another Trump take the throne.

James Jenkin
James Jenkin
3 years ago

Free trade and the market mechanism work fine until we let malignant states join in

Prashant Kotak
Prashant Kotak
3 years ago

Fantastic article. Well done Aris and UnHerd.

Douglas McNeish
Douglas McNeish
3 years ago

Roussinos’s writings never fail to provoke deeper thought about the direction of the economic and political order. Whether or not enough social and spiritual cohesion remains in western nations to enable a political and economic revival, and world leadership, is in doubt. As others point out here, it will not come through imitation of the CCP model, which is wholly unsuited to the individualistic cultural tradition of the west.

Brian Dorsley
Brian Dorsley
3 years ago

Which is why individualism is under attack in the West. Our governments look with envious eyes at China and seek to emulate it.

Andre Lower
Andre Lower
3 years ago

Interestingly, the author is labeling the vastly corrupt and self-serving policies of the last 40 years as “neoliberalism”. And arguing that the urgent dedication of capital to the rebuilding of derelict infrastructure is suddenly acknowledged thanks to the Chinese economic ascension + the Covid crisis.
I think it is simpler than that – corruption itself has been slowly sinking Western societies over the past 40 years or so, siphoning away the money required to maintain a healthy society and its necessary physical infrastructure. So China+Covid are not the trigger for a statist “awakening” at all – the looming social collapse driven by outlandish political corruption is. But sure, go ahead using China+Covid as excuses for the state to go back to actually doing its regulatory job, instead of serving its own interests…

S H
S H
3 years ago

It is certainly the case that, in a laisser faire world, production of items requiring unskilled labour would migrate to places where the cost of such labour is lowest. Indeed, the same is true of labour costs generally. This indeed explains the fact that labour costs in the developed world may have stagnated, except for those whose skills are in high demand. It is foolish to suggest that economists who support the market economy do not understand this point. (I hesitate to use the word neoliberal, since, once Hillary Clinton was accused of being neoliberal, the word largely lost its meaning.) The usual answer to this is upskilling the workforce, but if the workforce cannot be upskilled or the necessary programmes are not in place, this policy is unlikely to work. So we might be inclined to resort to mechanisms such as tariffs instead. These, effectively, mean of transfer of resource from the skilled to the unskilled and are likely to incur unintented consequences, as the effects of the tariffs disperse through the economy. It is also the case that issues of security of supply may indicate the need to keep production close to home. Furthermore, there is little doubt that a government with a clearly defined purpose, harnessing the dynamism of the private sector, can achieve a clearly defined result. This is, in effect, what happened with the US and UK vaccine programmes and it has shown up the weakness of the more bureaucratic approach of the EU. But Roussinos underargues for the more generalised approach of a corporatist economy, where government sets to targets and industry provides the results. This approach takes no account of consumer preferences, which drives the market economy, and is in great danger of severe misallocation of resources, since it is extremely unlikely that government will correctly forecast future consumer demand, except in very specific circumstances. History has taught us many times how unsatisfactory the results of such an approach can be.

Chauncey Gardiner
Chauncey Gardiner
3 years ago

Egad. If centralization were the key to everything, we’d all have been Soviets for some time now.

David J
David J
3 years ago

“…like the Cold War where competition was sublimated into the Space Race, technological advance and improving the lives of their rival workers”.
A Return to the Moon competition is now underway, so Space Race II may well repeat the trick.
The widening ownership of nuclear weapons remains a ghastly risk though, and I speak as someone whose father was in charge of civil defence at the height of the Cold War.

Peter Branagan
Peter Branagan
3 years ago

Thanks. Another super article by Aris. Much to ponder.
And, of course, I do hope he’s right.

A Woodward
A Woodward
3 years ago

Excellent piece. Thanks.

jeff kertis
jeff kertis
3 years ago

While the government can create full employment and spend a lot of money, in doing so, really never raises the middle class standard of living. That only occurs with more efficient production of things that they use and make their lives better. This current spending spree is only going to allow the poor to compete with the middle class for a still fixed number of goods, leading to inflation, and reducing the standard of living of those producing things, while increasing it for those who are not.

Craig Brown
Craig Brown
3 years ago

Yorum Hazony’s The Virtue of Nationalism can add some depth to the discussion.

Jon Walmsley
Jon Walmsley
3 years ago

What a surprise it is to read an optimistic take on the future Cold War! Whilst not exactly misguided – as Great Power competition does tend to encourage self-focused development, whether for good or ill, it does strike me as perhaps a little geopolitically naive. You say yourself multiple times such a vision of the future is predicated on the cold war remaining cold, (so thank you for noting that important proviso) but that’s just the trick isn’t it? There were more than a few times during the Soviet-US stalemate that the world teetered on the brink, most of which the world wasn’t even aware of, at least to the full extent.

Just look at the Cuban Missile Crisis – there were way too many near-misses there that could have started WWIII – just thank Vasili Arkhipov, as we might not even be here right now if not for his sound-minded caution. I suppose Khrushchev and Kennedy ultimately pulling back also helped of course, but one’s man’s decision could have made the different between ignition and staying on the starting line. One individual really did make a difference in that instant, but it could just as easily have gone the other way.

Today, those risks are greater than ever with increasing lines of complexity across different fronts – cyber warfare, proxy wars, satellite warfare, AI technologies, biological weapons – never mind the constant risk of nuclear escalation due to miscalculation, miscommunication or misunderstanding. The world is on a razor’s edge and it hardly even knows it.

In other words, I do not share your optimistic viewpoint that renewed Great Power competition is going to be all rainbows and unicorns for revitalising an ailing Western world and putting China to the test – it may well do these things, but the potential costs of that war heating up don’t bare thinking about. Still, what this competition will certainly do, guaranteed, is excerbate the many tension lines and increase that risk of violent confrontation, potentially on a scale the likes of which we have not seen since WWII. One can only hope any confrontation ends up limited and contained in nature, not unlike how the Korean War remained (more or less) confined to Korea, a specific area of interest; but when great powers start butting heads that’s easier said than done. If General Douglas MacArthur, the commander of the UN special forces during that war had had his way, he would have nuked Communist China and likely started WWIII! Again, cooler heads prevailed, but how many times is that truly going to last?

It’s not hard to imagine China then, with its increasing anti-naval power in its own backyard (the South China Sea), looking to displace American air and sea power in the region, even willfully enough to start a fight, or at the very least provoke one, or likewise America using its ‘rule-based international system’ line to justify whatever accident or misunderstanding or downright aggression leads to more than just harsh words crossing these contested seas. Sorry to say, but my faith in human nature has its limits, and that thread between tense peace and outright destruction has never been more fragile, and a Cold War doesn’t make it any sturdier.

Last edited 3 years ago by Jon Walmsley
Zorro Tomorrow
Zorro Tomorrow
3 years ago

Thought provoking at least. If peering through the veil of history holds the answers. The barons have replaced the kings and dangle incentives to those without the strength or wit to organise and dismount them. Citizens are the new slaves who strive to maintain differentials, “I am a more comfortable slave than you are.”
This drives the refugee exodus from the poorer parts. The guilt of liberals cannot refuse them entry and they have the religion and breeding capacity to organise and dismount the old moribund barons.
I liked the unattached levers of power. Similar to a toy steering wheel with a suction cup in Dad’s car we will don VR goggles to play at controlling our driverless cars and fight virtual wars on a 3D hologram.
We can control a Predator / Reaper drone from an iPad in a Skegness caravan and take out Toyota pickups in Syria now. With slaves to rearm and refuel in Kuwait of course.
It’s not climate, it’s our swollen population enforcing shortages which will do for us rather than climate. Or nukes from remote controlled submarines.

Andrew Fisher
Andrew Fisher
3 years ago

Isn’t BLM simply a set of ideas and even a quasi religion? Are the people who advocate it ‘disenfranchised’ or do we just assume they must be. Not all ideas about society need to emanate from an economic substrate, although Marx thought they did!

Last edited 3 years ago by Andrew Fisher
Karen Jemmett
Karen Jemmett
3 years ago

I find it astonishing that anyone thought neo-liberalism (or the neomedievalising tendencies of the 1990s, as Aris so eloquently describes it) was ever intended to be anything other than a temporary, um.. fix (in the dysphemistic sense, of course). Perhaps if some of these new-moneyed types had taken the trouble to read a bit of history along the way, it wouldn’t be such a major chore unpicking their second generation delusions? I like Aris’s optimism, btw…

Edward De Beukelaer
Edward De Beukelaer
3 years ago

Maybe it is not as complicated as explained in this interesting article: See Bourgeois Dignity by Deidre McCloskey…. For people to prosper you need freedom to enterprise but also, and as important, the equality in the possibilities for this . The equality comes from a state that has a justice system all can rely upon and trust, and that all are provided with the tools (infrastructure in the large sense of the term) with equal access to these tools.
Wild free capitalism also creates inequality which will eventually stifle prosperity for many… we need a state that guarantees equality for its people…. we need taxes for this, we also need to be able to trust the state… and then too many taxes and state control can stifle freedom … complicated. Will there ever be a true balance between freedom and state control…

Andrew Fisher
Andrew Fisher
3 years ago

An interesting article, but unfortunately the word ‘neoliberalism’ appears largely as a ‘boo’ word rather than with any understanding or analysis. The Institute of Economic Affairs (IEA) advocates classical liberal economic analysis and policies. Being fashionable and right are not the same things.

I am none the wiser as to why the state deciding a regional industrial policy and directing investment is likely to have any better results than it has before, at least in the UK. We see an arbitrary ragbag of projects championed by one vested interest or another at enormous cost, not least the egregious HS2. (Ironically a Labour government elected in 2010 would have killed this off, but David Cameron decided to continue with it)
This is going apparently to magically ‘level up’ the country, despite it connecting our most successful cities, by-passing poorer and more neglected areas, the rise of video conferencing and even the ‘green’ agenda (it isn’t..). Etc etc.

Matt B
Matt B
3 years ago

Perhaps future Tilly’s may say “the disintegration of the EU and perhaps its European states resulted from competition among them, or a lack of it, both within Europe and in the rest of the world”

Last edited 3 years ago by Matt B