Intelligent Governance for the 21st Century

A Middle Way between West and East

Nicolas Berggruen, Nathan Gardels

• Publisher: Polity
• Year: 2013
• ISBN:
  9780745663586
• Edition: 1
• Topic: Politics & International Relations
• Subtopic: Politics
• Index: Politics & International Relations

For decades, liberal democracy has been extolled as the best system of governance to have emerged out of the long experience of history. Today, such a confident assertion is far from self-evident. Democracy, in crisis across the West, must prove itself.

In the West today, the authors argue, we no longer live in "industrial democracies, " but "consumer democracies" in which the governing ethos has ended up drowning households and governments in debt and resulted in paralyzing partisanship. In contrast, the long-term focus of the decisive and unified leadership of China is boldly moving its nation into the future. But China also faces challenges arising from its meteoric rise. Its burgeoning middle class will increasingly demand more participation, accountability of government, curbing corruption and the rule of law.

As the 21st Century unfolds, both of these core systems of the global order must contend with the same reality: a genuinely multi-polar world where no single power dominates and in which societies themselves are becoming increasingly diverse. The authors argue that a new system of "intelligent governance" is required to meet these new challenges. To cope, the authors argue that both East and West can benefit by adapting each other's best practices. Examining this in relation to widely varying political and cultural contexts, the authors quip that while China must lighten up, the US must tighten up.

This highly timely volume is both a conceptual and practical guide of impressive scope to the challenges of good governance as the world continues to undergo profound transformation in the coming decades.

Part I

Globalization and Governance

1

Globalization 2.0 and the Challenges to Good Governance

Introduction

“East is East, West is West.” But, today, the twain are intertwined.

Everyone knows the contrasting traits that distinguish these broad civilizational spheres: authority versus freedom, the community versus the individual, the cycles of the ages versus the progress of history, and representative democracy versus, in China’s case, rule by a meritocratic mandarinate. Yet, we also know that China has become the factory of the world and the largest creditor of the United States.

In this book we revisit the twain that Rudyard Kipling famously said “never shall meet” in this new historical context where China and the West are as tightly tethered as they remain highly distinct.

As the West recedes from its centuries-long dominance and the Middle Kingdom regains its solid foothold in history, we are obliged to look out on this changing landscape with Eastern as well as Western lenses.

If the reader will permit the reduction of some essential truths, the modern Western mind tends to see contradiction between irreconcilable opposites that can only be resolved by the dominance of one over the other. Following the German idealist philosopher Georg Wilhelm Friedrich Hegel,¹ this was the approach Francis Fukuyama² took when he argued that “the end of history” had arrived after the Cold War in the triumph of liberal democracy over other forms of human governance. In the geopolitical mind of the West, territories and ideologies are either won or lost.

The Eastern mind instead sees complementary aspects of a whole – yin and yang in Taoist parlance – that must be continually balanced on a pragmatic basis depending on shifting conditions. History doesn’t end. The cycles go on as the relationships between freedom and authority or the individual and the community find a new equilibrium. In the “geo-civilizational” mind of the East, what is incommensurate can co-exist.

When he quips that “the Tao is much deeper than Hegel,” George Yeo, the former foreign minister of Singapore and one of Asia’s most important thinker/ practitioners, is alluding to this contrast between the Eastern and Western mind.

It is from within the perspective expressed by Yeo that this book addresses the common challenges of governance that both East and West are facing as a result of the complexity and diversity of the interdependence that ties us together.

Following the pragmatic, non-ideological Eastern approach, our concern is what we can learn from each other. The question is not whether rule by a meritocratic mandarinate rooted in China’s ancient “institutional civilization” will win out over Western-style democracy, or vice versa. The question we pose is what balanced combination of meritocracy and democracy, of authority and freedom, of community and the individual, can create the healthiest body politic and the most intelligent form of governance for the 21st century. Indeed, we ponder whether there might even be the emergent possibility of a new “middle way.”

Is Democracy Self-Correcting?

The conventional, though not incorrect, wisdom in the West is that, despite the awesome achievement of lifting hundreds of millions of people out of poverty in just three decades, the modern mandarinate of nominally Communist China is not self-correcting, and thus not sustainable. Unless it loosens its autocratic grip by allowing freer expression and more democratic mechanisms for popular feedback and accountability, the “red dynasty” will succumb to terminal political decay – rife corruption, arbitrary abuse by authorities, and stagnation – just as all previous dynasties have in China’s millennial history.

The unconventional observation of this book is that, just as we’ve seen with financial markets, Western democracy is no more self-correcting than China’s system. In a mirror image of China’s challenge, one-person-one-vote electoral democracy embedded in a consumer culture of immediate gratification is also headed for terminal political decay unless it reforms. Taking a cue from China’s experience with meritocratic rule, establishing capable institutions that embody both the perspective of the long term and common good in governance is key to the sustainability of the democratic West. The argument we will make in this book is that restoring equilibrium in each system will require a recalibration of political settings through mixed constitutions that combine knowledgeable democracy with accountable meritocracy.

Governance

Governance is about how the cultural habits, political institutions, and economic system of a society can be aligned to deliver the desired good life for its people. Good governance is when these structures combine in a balance that produces effective and sustainable results in the common interest. Bad governance results either when underlying conditions have so changed that once effective practices become dysfunctional or when political decay sets in as organized special interests gain dominance – or both. Then debts and deficits become unsustainable, protective cartels sap the vigor of the economy, corruption destroys trust, social mobility stagnates, and inequality grows. The ruling consensus loses legitimacy. Decline sets in.

Dysfunction and decay aptly describe governance across much of the democratic West today, which is in crisis from its ancient birthplace in Greece to its most advanced outpost in California. After centuries of forward momentum fueled by an inner civilizational confidence, debt, political gridlock, indecisiveness, and fraying legitimacy are paralyzing the capacity of liberal democracy and free market economies to manage change. On the face of it, that momentum and confidence has shifted to the East. Indeed, as we have already noted, Western liberal democracy is being challenged as the best form of governance by non-Western forms of modernity, most notably by China’s mandarinate and state-led capitalism. Yet signs of decay and dysfunction are already appearing there as well owing to enveloping corruption and the collateral social, environmental, and even spiritual damage of China’s remarkable success.

From Globalization 1.0 to 2.0

The challenges produced by the present global power shift, combined with rapid technological advance, are daunting for the rising powers no less than for the receding ones. All political systems are in some way experiencing disequilibrium as they seek to adjust to the repeated shocks caused by the transition underway from what we call Globalization 1.0 to Globalization 2.0.

In the decades since the end of the Cold War, American-led globalization – 1.0 – has so thoroughly transformed the world through the freer flow of trade, capital, information, and technology that it has given birth to a new phase – Globalization 2.0.

“In the past few centuries what was once the European and then the American periphery became the core of the world economy,” writes Financial Times analyst Martin Wolf. “Now, the economies of the periphery are re-emerging as the core. This is transforming the entire world … this is far and away the biggest single fact about our world.”³

Nobel economist Michael Spence reinforces this point. What we are seeing today, he writes, are “two parallel and interacting revolutions: the continuation of the industrial Revolution in the advanced countries, and the sudden and dramatic spreading pattern of growth in the developing world. One could call the second revolution the Inclusiveness Revolution. After two centuries of high-speed divergence, a pattern of convergence has taken over.”⁴

This great economic and technological convergence that is the consequence of Globalization 1.0 has at the same time given birth to a new cultural divergence as the wealthier emerging powers look to their civilizational foundations to define themselves anew against the waning hegemony of the West. Since economic strength engenders cultural and political self-assertion, Globalization 2.0, above all, means the interdependence of plural identities instead of one model for all. The once regnant Western liberal democracies must now contend on the world stage not only with neo-Confucian China but also with the likes of the Islamic-oriented democracy within Turkey’s secular framework, which has become an attractive template for the newly liberated Arab street. In short, the world is returning to the “normal pluralism” that has characterized most of human history.

Historically, a power shift of this magnitude often ends in collision and conflict. But, given the intensive integration that the post-Cold War round of globalization has wrought, it also poses entirely new possibilities of cooperation and cross-pollination across a plural civilizational landscape.

We are thus at an historical crossroads. How we govern ourselves in the coming decades within and among nations will determine which of these paths the 21st century follows.

Establishing a new equilibrium under the Globalization 2.0 operating system is a double challenge.

The complexity of the deeper global integration of trade, investment, production, and consumption, no less information flows, requires greater political and technical capacity at the megacity-region, national, and supranational level to manage the systemic links of interdependence. If it all falls apart, everyone will be damaged. At the same time, the growing diversity that has come with the global spread of wealth, amplified by the participatory power of social media, requires more devolution of power toward the grass roots, where the restive public is clamoring from the bottom up for a say in the rules that govern their lives. Political awakenings everywhere are demanding the dignity of meaningful participation.

Failure to find an institutional response to this double challenge will result in a crisis of legitimacy for any governing system – either because of the failure to perform through providing inclusive growth and employment or because a “democratic deficit” that shuts out diverse public voices will undermine effective consent.

Getting the balance right will thus make the difference between dynamic and stalled societies as well as determine whether clash or cooperation emerges as the global modus operandi.

That balance might be called “intelligent governance,” which devolves power and meaningfully involves citizens in matters of their competence while fostering legitimacy and consent for delegated authority at higher levels of complexity. Devolving, involving, and decision-division are the key elements of intelligent governance that will reconcile knowledgeable democracy with accountable meritocracy.

What the right balance is will differ because political systems are at different starting points. Every system must reboot based on the cultural settings of its present operating system. While China, as the conventional wisdom suggests, would need more participatory involvement and a more accountable meritocratic mandarinate to achieve balance, the United States would need a more depoliticized democracy in which governance for the long term and common good is insulated from the populist short-term, special interest political culture of one-person-one-vote elections. In short, China would need to lighten up while the US would need to tighten up.

In Europe, the institutional infrastructure necessary to complete integration – a strong but limited political union – must be invested with democratic legitimacy or it will fail to attract the allegiance of European citizens who are disenfranchised and thus disenchanted.

As the adjustment mechanism of the global power shift underway, the G-20, like the institutions of the European Union, must similarly be invested with legitimacy by nation-states and their publics. Otherwise it will lack the political capacity to provide the global public goods – a reserve currency, the stability of trade and financial flows, security, nuclear non-proliferation, and measures to combat climate change – that no individual hegemonic state or set of international states can provide under the multi-polar order of Globalization 2.0. Since proximity confers legitimacy, the chief challenge here is how to spin networks of “subnational” localities into a web of global governance as the 21st-century alternative to the outmoded notion of a distant and oppressive “world Leviathan.”

This book seeks to address this central issue of the first half of the 21st century: how good governance can establish equilibrium within nations as well as among them at the regional and global level.

To do so, we will examine the contending systems of what we call America’s “consumer democracy” and China’s “modern mandarinate” as a metaphor for identifying the tradeoffs that are required to achieve the proper balance of good governance. We will further propose an “ideal, mixed constitutional template” that is a hybrid of meritocracy and democracy. No armchair theorists, we will then report on our practical experience in implementing such a template in widely varying circumstances from California to Europe to the G-20 level.

The ultimate point of this book is that governance matters in whether societies move forward or backward. Never has that been more true than during this transition from Globalization 1.0 to 2.0. If cities, states, or nations can’t navigate the rushing white waters of change, they will crash against the rocky shoals or be left behind in stagnant waters.

A BRIEF INVENTORY OF DISEQUILIBRIUM

Everyone is feeling the shock waves of change. In the United States, Joseph Schumpeter’s⁵ famous “destruction” seems to be racing so far ahead of “creation” that the growing inequality between those moving ahead and those left behind is undermining faith both in democracy and in capitalism, pitting the “99 percent against the 1 percent” at the top of the income scale. Partisan gridlock has become the norm, dividing democracy against itself and paralyzing the ability of political leaders to act.

Across the spectrum in Europe, Japan, and the US, debts and deficits anchor the political imagination to the past. Everyone’s dreams are being deleveraged.

Disunity in the Eurozone over resolving the sovereign debt crisis has called the historic project of integration as well as the European social contract itself into question. To regain its balance, Europe has to go all the way back to the nation-state or all the way forward to political union. Ignoring demise instead of facing it, Japan is coasting into a retirement trap on the basis of its accumulated wealth. The country is drawing down on its domestic savings, with little thought of how to ...

Table of contents

• Cover
• Half Title
• Title Page
• Copyright
• Contents
• Acknowledgements
• Introduction
• Part I Globalization and Governance
• Part II Intelligent Governance
• Part III Conclusion
• Notes