Globalist Analysis

When China Challenged America to Catch Mice

Has the United States ceded the art of pragmatism to the Chinese?

Has the United States ceded the art of pragmatism to the Chinese?

Takeaways


  • If China becomes the world's largest economy by 2019, it will be due to Americans believing that ideological rigidity, not reform, was more important in catching mice.
  • In order to create a majority coalition for reform, people need to be convinced that the future will be better than the past.
  • Large interest groups protecting their power by gaming the system are not a new phenomena in American history.
  • The late 1900s produced a counter-revolution against monopolization and oligarchies.
  • It is as if we have ceded pragmatism to the Chinese, who have run with it with astonishing success.

I do not care if the cat is black or white. What matters is it catches mice.” That is what Deng Xiaoping — arguably the individual whose actions had the biggest impact on the world during the past 50 years — said when responding to the question of how he could dare experiment with capitalism in Maoist, Communist China.

Deng’s famous statement, a true defense of pragmatism against ardent ideologues, represented a Chinese version of the old American can-do spirit. It is as though Eli Whitney or Bill Gates or Warren Buffett had written the words for Deng.

Ironically, America’s politicians today — as demonstrated by the success of the Tea Party wing of the Republican Party in the 2010 midterm elections — have forgotten how to practice the American art of pragmatism.

It is as if we have ceded pragmatism to the Chinese, who have run with it with astonishing success while we are busy drowning in a quagmire of dogma. For many Americans, and especially for the new Republican leadership, it is more important to toe the so-called party line — to balance the budget while neglecting investments and education, to defend antiquated ideas of states’ rights, and to protect the energy companies at all costs — than it is to pragmatically approach the problems facing us. In America today, it does matter what color the cat is.

America is becoming a manipulated democracy where faux orthodoxy rules — where large interest groups, acting in the fashion of what economists call “rent seekers” (organizations seeking to profit through manipulation of the political environment), successfully lobby to prevent any changes that will hurt their current income stream.

Interest groups protecting their power by gaming the system are not a new phenomena in American history. The late 1900s are full of examples of the Rockefellers, Fiskes and Morgans manipulating the legislative and court system to exploit their newfound wealth and power.

But the late 1900s also produced a counter-revolution against monopolization and oligarchies: the reform movement.

Theodore Roosevelt and then Woodrow Wilson, assisted by numerous muckrakers, used the presidency as a bully pulpit and created the reforms needed not only to rebalance the system but also to enable the United States to move forward into the 20th century.

America desperately needs a TR/Wilson reform movement again to re-establish government as a protector of the commonweal. Unfortunately, this time it is much more difficult.

Decision-making in a democracy is partly made up of appeasing different constituencies, including people who benefit from the existing system and people who are left behind and are frightened by the future.

In order to create a majority coalition for reform, some of these people need to be convinced that the future will be better than the past.

But to do that, one needs clear leadership. Richard Neustadt, the late Columbia University professor, in his thesis on presidential power, taught that one of the powers of the presidency is to go over the heads of Congress and directly to the public, to build a national consensus — essentially Theodore Roosevelt’s “bully pulpit.”

But Teddy Roosevelt never had to fight against 24-hour talking heads. Cable TV, the Internet and modern technology have made Neustadt’s dictum somewhat outdated. Technology has significantly diffused presidential power, making the president’s voice one among thousands.

The recent Supreme Court decision on campaign finance has magnified this problem dramatically. By equating corporate campaign spending with freedom of speech, the court has strengthened the power of the very interests that would be most hurt by reform.

At a time when America increasingly needs pragmatic national leadership to confront world economic and political challenges like energy, global warming and China, the Supreme Court’s decision essentially takes power away from the center, away from the presidency — and thus makes leadership more difficult.

Unlike many court cases in the past, the power taken away from the presidency in this case is different for two reasons. First, because it is what Joseph Nye of Harvard would call soft power, not constitutional power.

And second because the court, not even considering the effect its decision would have on America’s democratic tradition, did not give this power to another branch of government or to members of the citizenry — but, whether advertently or inadvertently, to the highest bidder.

Justice Holmes, defining the limits of free speech, in 1919 famously said that you cannot cry fire in a crowded theater. By equating free-for-all corporate campaign spending with free speech, the court chose to ignore Holme’s dictum when it comes to America’s democracy.

The list of where ideology and cash — “ideocash” — trumps pragmatism, where the cat has only one color, goes on and on in America today.

It applies to the attacks on Federal Reserve Chairman Ben Bernanke because he acted pragmatically, with a can-do attitude in adapting QE II, to the rejection of federal money for high-speed trains by several governors — and, of course, to an energy policy that has not moved beyond Drake’s discovery of oil in Pennsylvania in 1859.

If China becomes the world’s largest economy by 2019, as now forecast by The Economist magazine, it will be due to two factors: The hard work of the Chinese people and America’s belief that ideological rigidity, not reform, is more important in catching mice.

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About Edward Goldberg

Edward Goldberg is the president of Annisa Group, a firm that advises business on global issues.

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