Joshua Kurlantzick recently argued that the global economic downturn might spell doom for a number of autocratic governments around the world. Most, he argues, have staked their legitimacy on economic performance. Dramaticaly reduced world demand for consumer goods and energy threatens states like China, Russia, and Venezuela (and perhaps also Iran and other OPEC states):
Modern autocracies are very different from those of the past. Rather than ruling by strict ideology, ruthless internal police, and tight control of information, authoritarian regimes like Beijing and Moscow have remained in power primarily by making an implicit bargain with their most critical middle-class citizens — you might not have freedom, but you will have money. As long as the broad middle class, which is where the most dangerous dissent would take hold, is gaining ground economically, the regime is safe.
So while in the West, leaders worry that the global economy faces a second Great Depression, such an economic crisis poses a major threat to some of the world’s most resilient autocracies. A strong economy was their only backstop. Now, starved of the growth that keeps them in power and unable to repress their people as old-fashioned dictators did, these autocracies may have nothing left to fall back on.
He concluded with even stronger language:
The Great Depression fed dangerous new autocratic ideologies like fascism and communism; a second Great Depression could destroy them. While the economic crisis will cause untold human suffering in these and other countries, it is quite possible that, on the other side of it, we will see the end of that distinctive phenomenon of the late 1990s and early 21st century: the growth autocracy. And that, at least, would bring some light to a financial dark age.
That sounds almost hopeful, doesn’t it?
However, at least for China, James Fallows rejects this analysis in the April Atlantic:
Why do I think the Chinese have good reasons for hope?
One answer lies in the realm of straight economics. Some of the lost demand is sure to be picked up within China itself, thanks to a stimulus plan that, at some 4 trillion RMB (about $600 billion), is proportionately much larger than the one proposed by the Obama administration, because the Chinese economy is so much smaller than America’s.
Fallows then proceeds to explain the superior position of Chinese banks — they can (and will) lend money to prime the economy. Other sectors of the economy also have lots of tools and resources, he argues.
Fallows continues by rejecting the sociology and politics undergirding Kurlantzick’s thesis:
Beyond straight economics, the “China is over” hypothesis seems to miss important cultural and political realities. Its unspoken premise is that average Chinese people just barely tolerate the social bargain the government now offers—limited freedom, potentially unlimited wealth. So if the regime ever falls short on its material promises, the deal will be off and people will rebel.
This does not square with what I have seen. I have often wondered why so many people in different roles and regions in China seem vivid. The answer has to be more than contrast with my own blandness. I think it is because being in China today is like being in Western Europe in the 1950s. No one’s family story is dull or uneventful. People doing routine jobs have been through great hardships and dramatic swings of fate.
He then regales readers with stories of ordinary peoples’ prior reactions to the Cultural revolution, natural disasters, and other serious hardships in China. The people will tolerate the economic downturn and the government will survive. Indeed, the final section of his article explains how the recent downturn actually creates new opportunities for future Chinese successes.
He concludes with an interesting thought: is the U.S. similarly taking advantage of opportunities presented by the current downturn?
FYI: Over at my personal blog, I’ve posted (and critiqued) a couple of other pieces on the potential “upside of the downturn.” And like Fallows, I worry that some opportunities will be lost. For instance, though reduced energy consumption means less greenhouse gas emissions globally, it might also mean less government spending on alternative energy and attention directed away from environmental problems.