China, America and the new world order

Last week I was invited to speak in a conference about entepreneurship at ESCI-UPF university, together with the US consul in Barcelona. It was very interesting and it made me think about America position in the world, especially in relation to China.

After getting used to a world with America as a single referee, the situation is quickly changing. We are moving towards a bipolar order again, with the US at one corner and China at the other. There are several keys to this quick change of balance towards Asia.

We begin with China. One of the keys for the amazing change we have seen in the last 15 years (especially from 2000 to 2005) is that China is a dictatorship. No elections, no boycotting from opposition, and a strong party culture. Politicians that are supposed to get to the top are carefully groomed and prepared to be able managers. They need to win huge fights inside the party but, once they are in power, they are prepared, they set up policies and everybody follows. And if some other politicians do not follow, they get them out of the way (like Bo Xilai and company). So economically speaking, soft dictatorships like China and Singapore, that prepare their leaders, are a dream. Set a 10 year target and everybody goes for it. Of course, what is good economically speaking is bad in many other ambits, beginning with personal freedoms. You are OK as far as you don’t cross your path with someone more powerful than you. If you do, you are pretty much defenseless and can end in jail or worse. As a concept, no matter how good it is, I don’t like any system that restrict press freedom. Our press is already too self-restricted and full of vested interest. Full restriction by the government means the government has a lot to hide and, as a concept, I like to think that the government’s mission is to serve people, not the other way around (I like to think it, but I don’t believe, I am not so naïve. But it’s a nice concept…)

In western countries the situation is different. We have democracies, for me still the less bad system that humanity has found. We are free, we can choose where do we get the news from, we can express our thoughts or feelings and we are better protected from abuse. On the bad side, politicians are short termist (elections every 4-5 years…) and many times take decisions based on popularity not on what’s best for the country, especially if the benefits begin to show in more than 4 years. Anyone can be a president or minister, no matter if they are prepared to administrate anything. And the worse the economy goes, the more populist parties appear, and this sometimes might cause less able people to govern a country (I am not saying that’s a rule, but check history books and we find a lot of examples).

So, if we compare, it can seem that soft dictatorships are better for economy than democracies, and these days there are a lot of articles around making this point, especially in Asia. You read everywhere that China will overtake the US and it’s because of their government system.

For me, it’s not so much merit of soft dictatorship as demerit from democracies. Especially the former world referee, America. Their government machine is one of the best in the world, but it will not work if power that moves this machine, the politicians, don’t do their jobs.

A couple of years ago I saw a graph at The Economist magazine. Since then, every time I read news about the US government not agreeing on something, getting on stupid arguments, being on the brink of default, not going ahead with international treaties that would benefit them… I think about this graph


What we see here is a representation of the voting relationships in the US senate in 1989. I red, republicans. In blue, democrats. Every time a senator votes the same as others, a line is traced between them. On the edges of the sphere we have the most radical senators, who only vote what others from their party vote, and never vote similar to the other party. As we can see, in 1989 we had a blue-violet-red ball, with a lot of voting activity.

Now let’s have a look at 1997:



As we can see, the senate is becoming more polarized. Less bills are being passed, and we see less purple and more defined red and blue balls.

And now, 2013:


There are a couple of republicans bridging the gap but, out of this, collaboration between the two parties does not exist. They can’t agree on immigration, healthcare, defense, government shurtown… There are senators who not only do not vote with senators from the other party, they also don’t vote with senators from their own party who have voted with senators from the other party.

In effect, the American is at civil war. A political civil war, where half of the country fights against the other half, taking decisions based on fanatism and not caring about the damage that they can do to their country. The political system was not designed to work like this, less and less bills are being passed and, for every bill that could improve America’s future that is not passed, Chinese govermnent passes 10 laws that will allow to make a better China in the future.

The most amazing though is that, despite their politicians, America goes ahead (much better than Europe, which will be a lost cause if we continue this way). A testimony to the strenght of its economic fabric and to its entepreneur culture, where anyone with a good idea has easy access to credit and the tools to make the idea grow. But, on the long term, it will not be enough, these graphs are kind of a roadmap showing how American politicians are paving the way for China to become the next superpower.