September 25, 2011

The Post-American World 2 by Fareed Zakaria

The Post-American World 2 by Fareed Zakaria

[Author narrates the rise of new nations which are not part of the industrial nations (or G7 countries and their rising role in the global landscape]

There have been three tectonic power shifts over last five hundred years, fundamental shifts in the distribution of power that have reshaped international life - its politics, economics and culture. The first was the rise of western world - it produced modernity, science and technology, commerce and capitalism, the agricultural and industrial revolution.

The second shift was the rise of US - the most powerful nation after Rome. US dominated global economics, politics, science and culture. The third shift is the rise of the rest. Over the past few decades, countries all over the world have been experiencing rates of economic growth..The tallest building is in Dubai, World’s richest man is in Mexico, Biggest plane builders in Russia and Ukraine, largest publicly traded corp. is in China, largest refiners is in India..

In 1985, Japan was already a wealthy nation. Many experts believed it was on track to unseat US as the largest economy, but because Japan’s market’s industries, institutions, and politics were still not fully modernized the country could not make that final step. China by contrast is a still a poor country. It has a per capita GDP of $4,300. It will certainly face many problems as and when it becomes a first world country. Same is true for India whose per capita GDP is much lower than China. Even if the average person in these countries still seems poor by Western standards, their total wealth will be massive. Or to put it in mathematical terms: any number however small, becomes a large number when multiplied by 2.5bn (population of India and China). It is these two factors - a low starting point and a large population - that guarantee the magnitude and long-term nature of the global power shift.

How did all this come to be? The earth quake that shook everything else was the collapse of Soviet Union. Suddenly there was only one basic approach to organizing a country’s economy. Alan Greenspan has described the fall of the Soviet Union as the seminal economic event of our time. The financial force that has powered the era is the free movement of capital. Most Western countries removed capital controls restricting movement of currency in and out of the borders. The result: a vast and ever-growing supply of capital that could move freely from one place to the next. This spread, independent central banks and taming of inflation. Hyperinflation is the worst economic malady that can befall a nation. It was not the great Depress that brought the Nazis to power in Germany, but rather hyperinflation, which destroyed the middle class by making its saving worthless.

In many countries outside the Western world, there is pent-up frustration with-having had to accept an entirely Western or American narrative of world history. - One in which they either are misact or remain big players. Russians have long chafed at the standard narrative about World War II, in which Britain and the Unites States heroically defeat the forces of fascist Germany and Japan. Given mainstream US historical accounts, Americans could be forgiven for believing that Russia played minor part in the decisive battles against Hitler and Tajo. In fact, the eastern front was the central arena of World War II. It involved more land combat than all other theaters of the war put together and resulted in thirty million deaths. It was where three-quarters of all German forces fought and where Germany incurred 70% of its causalities. The European front was in many ways a sideshow, but in the West it is treated as the main event.

An Indian friend explained to me.” For Brittan and America, WWII is a heroic struggle in which freedom triumphs over evil. For us, it was a battle to which Brittan committed India and its armed forced without bothering to consult us. London told us to die for an idea of freedom that it was at that very moment brutally denying to us”.

UN system represents an outdated configuration of power. The permanent members of UN Security Council are the victors of WWII that ended 60 years ago. The body does not include Japan or Germany - the worlds’ 3rd and 4th largest economies or India the world’s largest democracy or any Latin American or African country. The G-8 does not include China or India and South Korea. By tradition, IMF headed by a European and World Bank by an American. This tradition like the customs of an old segregated country club may be charming and amusing to insiders, but to outsiders it is bigoted and outrageous.

The current state of IMF and World Bank also provides a useful lesson. These institutions, dominated by US ideas and money have long been as vehicles for American influence. And today, Setser writes, “emerging economics like China, Russia, India Saudi Arabia, Korea and even Brazil not only do not need the IMF; they increasingly are in a position to compete with it. For example, Chinese development financing provides an alternative to World Bank lending.

In the past crisis the West played the part of the stern school teacher rebuking a wayward classroom. The lessons the teachers imparted now seems discredited. Recall that during the Asian financial crisis the US and other Western countries demanded that the Asians take three steps - led bad banks fail, keep spending under control and keep interest rates high. In its own crisis, the West did exactly the opposite on all three fronts.

80 years earlier to Columbus trip to America, a Chinese admiral Zheng He began the first of seven equally ambitious expeditions. He took 317 vessels, 28,000 men compared to Columbus 4 boats and 150 sailors. The largest vessel was 400 feet - more than 4 times the length of Columbus flagship, Santa Maria and had nine masts. However when the new emperor came to power who abruptly ended such massive boat building and in the few hundred years, Chinese completely lost the knowledge in building big ships. It was a fateful decision. Just as China chose to turn away from the outside world, Europe was venturing abroad and it was Europe naval expeditions that allowed it to energize itself and spread its power and influence across globe.

It has become commonplace to say that actually China and India were as rich as the West right up until the 1800s. The dominance of the West, according to this perspective, has been a 200-year blip and we are now returning to a more normal balance. This statement also implies that the West’s advantage may be largely accidental - the result of coal and colonies, that is the discovery f a cheap energy source and the domination of the rich lands of Asia, Africa and the Americas.

Why did non-Western countries stand still while the West moved forward? There are no neat answers. Private property rights, goo institutions of governance and a s strong civil society (one that not dominated by state) were clearly crucial for growth in Europe and US. In contrast, the Russian czar theoretically owned entire country. In China, the Ming court was run by mandarins who disdained commerce. Almost everywhere in the non-Western world, civil society was weak and dependant on the government. The local businessmen in India were always captive to the whims of the court. In China, rich merchants who abandon their business to master Confucian classics so that they could become favorites of the court. The moguls and the Ottomans were warriors and aristocrats who thought of trade as unglamorous and unimportant. In India this bias reinforced by the low position of businessmen in Hindu caste hierarchy. Historians have taken particular note of Hindu beliefs and practices as barriers to development. Businessmen had to keep interest rates high in anticipation of frequent and arbitrary taxation by their rulers. No one had much of an incentive to build wealth, since it was likely to be confiscated.

Europe is broken up wider rivers, tall mountains and large valleys. This topology produced many natural borders and encourages political communities of varying sizes. - City-states, duchies, republics, nations and empires. People who were mistreated or shunned in one place could escape to another and thrive. States that succeeded were copied. Over time, this completion helped European become highly skilled at both making wealth and making war.

Europe’s waterways were also a blessing. Compare to Africa, , it has the shortest costliness, much of which is too shallow to build major ports. Most of its rivers are not navigable (fast-moving, dramatic, and vertiginous)

{The books goes on comparing different aspects of European’s history of leading industrial nations which I read in many books. The book end with list of priorities set by the author which lacks supportive points and did not elaborate in detail in the book)

September 11, 2011

The origins of political order by Francis Fukuyama.

The origins of political order by Francis Fukuyama.
(From pre-human times to the French revolution)

[Insightful and I like the comparison drawn by correlating facts across Chinese, Indians, Middle Eastern Muslim and European states]

[Some facts:]
During the forty year period from 1970- to 2010, there was an enormous upsurge in the number of democracies around the world. In 1973, only 45 of the world's 151 countries were counted as 'free' by Freedom House (a non-Gov. org). By late 1990, some 120 countries around the world - around 60%-had become electoral democracies.

Persistent poverty often breeds other kinds of social dysfunctions, like gangs, narco-trafficking, and general feeling of insecurity on the part of ordinary people. The failure to deal with these problems has undermined the legitimacy of democracy. India has been remarkably successful democracy even with its poverty, ethnic and religious diversity and enormous size. Nonetheless, Indian democracy like sausage making, looks less appealing the closer one gets to the process. Nearly one-third of Indian legislators are under some form of criminal indictment, some for serious crimes like murder and rape. Indian politicians often practice an overt form of patronage politics in which votes are traded for political favors. The fractiousness of Indian democracy makes it very hard for the Gov. to make major decisions on issues like investments in major infrastructure projects.

The frequent chaos and corruption of democratic politics in India has frequently been contrasted to the quick and efficient decision making of China. Chinese rulers are not constrained by either a rule of law of democratic accountability; they want to build a huge dam, bulldoze neighborhoods to make way for highways or airports or mount a rapid economic stimulus package, they can do so far more quickly than democratic India.

American system was built around a firm conviction that concentrated political power constituted in imminent danger to the lives and liberty of citizens. For this reason, the US constitution was designed with a broad range of checks and balances by which different parts of the government could prevent other parts from exercising tyrannical control. However, the American political system's ability to deal with its fiscal challenges is affected not just by the Left and Right polarization of Congress but also by the growth and power of entrenched interest groups. Over time, elites are able to protect their positions by gaming the political system, moving their money offshore to avoid taxation and transmitting these advantages to their children through favored access to elite institutions.

Democracy: In Amartya Sen's words, democracy remains default politician condition. " While democracy is not yet universally practiced, nor indeed universally accepted, in the general climate of world opinion, democratic governance has achieved that status of being taken to be generally right". Democracy's failure lies less in the concept than in execution: most people around the world would strongly prefer to live in a society in which the government was accountable and effective; where it delivered the sort of service demanded by citizens in a timely and cost-effective way. But few Gov. are actually able to do both, because institutions are weak, corrupt, lacking capacity or in some cases absent altogether. Left-wing revolutionaries from the 19th century anarchists on thought it sufficient to destroy old power structures without giving serious thoughts to what would take their place.

It is not only that we take democracy for granted: we also take for granted the fact we have a state at all that can carry out certain basic functions. Many parts of sub-Saharan Africa are libertarian's paradise. The region as a whole is a low-tax utopia with government often unable to collect more than about 10% of the GDP in taxes compared to more than 30 percent in US and 50 % in parts of Europe. Rather than unleashing entrepreneurship, this low rate of taxation means that basic public services like health, education and public services are starved of funding. The physical infrastructure on which a modern economy rests, like roads, court systems, and police are missing.

The US administration seemed to think that democracy and a market economy were default conditions to which the country would automatically revert once Saddam Hussein's dictatorship was removed and seemed genuinely surprised when Iraq state itself collapsed in an orgy of looting and civil conflict. A market economy and high levels of wealth don't magically appear when you 'get Gov. out of the way': they rest on a hidden institutional foundation of property rights, rule of low and basic political order. A free market, a vigorous civil society, the spontaneous 'wisdom of crowds; are all important components of a working democracy. but none can ultimately replace the functions of a strong, hierarchical government. There has been a broad recognition among economist in recent years that 'institutions matter': poor countries are poor not because they lack resources, but they lack effective political intuitions. We need therefore to better understand where those institutions come from.

Getting to Denmark:
For people in developed countries, Denmark is a mystical place that is known to have good political and economic institutions; it is stable, democratic, peaceful, prosperous, inclusive and has extremely low levels of political corruption.

The Danes themselves are descended from Vikings a ferocious tribal people who conquered and pillaged much of Europe. The Celtic peoples who first settled the British Isles as well as the Romans who conquered them and the Germanic barbarians who displaced the Romans, were all originally organized into tribes much like those that still exist in Afghanistan, Iraq, Papua New Guinea. So were the Chinese, Indians, Arabs Africans and virtually all of the peoples on earth. They owned primary obligation not to state but to kinfolk, they settled disputes not through courts, but through a system of retributive justice and they buried their dead on property held collectively by the group of kin.

Over the course of time, however these tribal societies developed political institutions. First and foremost was the centralized source of authority that held an effective monopoly of military power over a defined piece of territory - what we call a state. Property came to be owned not by groups of kinfolk but by individuals who increasingly won the right to buy and sell it at will. Their rights to that property were enforced not by kin but courts and legal systems that had the power to settle disputes and compensate wrongs. In the time, social rules were formalized as written laws rather than customer or informal traditions. Those legal systems were eventually accorded supreme authority over society, an authority that was seen to be superior to that of rulers who temporally happened to command the states armed forced and bureaucracy. This came to be known as the rule of law.

The purpose of the book is to fill in some of the gaps of this political amnesia, by giving an account of where basic political institutions came from in societies that now take them for granted. The three categories of institutions in question are the ones just described:

rule of law
accountable government.

A successful modern liberal democracy combines all three sets of institutions in a stable balance. The state concentrates and uses power. The rule of law and accountable government on the other hand, limit the state's power, first by forcing it to use its power according to certain public and transparent rules and then by ensuring that it is subordinate to the will of the people.

Afghanistan has held democratic elections, but extremely weak state and is unable to uphold laws in much of its territory. Russia has a strong state, but rulers do not feel bound by rule of low. Singapore has both strong state and rule of low, but only an attenuated form of democratic accountability. China had a strong state, but without law and accountability, Indian had law and now has accountability, but has traditionally lacked strong state; the Middle East had state and law; but in much of the Arab part it lost the latter tradition.

China succeeded in developing a centralized uniform system of bureaucratic administration that was capable of governing a huge population and territory when compared to Mediterranean Europe. China had already invented a system of impersonal; merit based bureaucratic recruitment that was far more systematic than Roman public administration. China was more important in the development of the state.

India graduated from a tribal to a state-level society at about the same time as China. But then, around twenty-five hundred years ago, it took a big detour due to the rise of a new Brahmanic religion which limited the power that any Indian polity could achieve and in some sense paved the way for modern Indian democracy.

The Middle East at the time of the Prophet Muhammad was also tribally organized: it took not just the advent of a new religion, but also curious institutions of slave-solders to enable certain polities in Egypt and Turkey to turn themselves into major political power. Europe was very different from these other societies insofar as its exit from tribalism was not imposed by rules from the top down, but came about a social level though rules mandated by the Catholic church. In Europe alone state-level institutions did not have to be built on top of tribally organized ones.

Region is also key to the origins of the rule of the law. Religiously based law existed in ancient Israel, India and Muslim Middle East and also the Christian West. It was Western Europe however, that saw the strongest development of independent legal institutions that managed to take on a secular form and survive into the present day.

The state of nature

(How the contemporary life science shed light on human nature and hence on the biological foundations of politics; politics among chimpanzees and other primates; what aspects of human nature under-grid politics; when different parts of the world were first settled)

Human nature provides three causes of quarrel: competition, diffidence (fear) and glory. " The first, maketh men invade for gain, the second for safety, and the third for glory' Every man against every man. To escape from this perilous situation, human beings agree to give up their natural liberty to do as they please in return for other people respecting their right to life.

The human and chimp genomes overlap by 99% (that diverging 1 % accounts for language, religion, abstract thought and the like, not to speak of certain significant anatomical differences, however so it's rather important).

If I believe that my tribe's chief is just another fellow like me following his own self-interests, I may or may not decide to obey his authority. But, if I believe that the chief can command the spirits of dead ancestors to reward or punish me, I will be much more likely to respect his word. My sense of shame is potentially much greater if I believe I am being observed by a dead ancestor who might see into my real motives better than live kinsman. It is extremely difficult to prove of falsify any given religions belief. Even if I am skeptical that the chief is really in touch with dead ancestors, I may not want to take the risk that he really is.

(me against my brother, me and my brother against my cousin; me, my brother and my cousin against any stranger)

One of the biggest issues separating Right and Left since the French revolution has been that of private property. And all the communist governments did was to nationalize the 'means of production' not least land. Here comes the issue of 'tragedy of commons'. Grazing fields in traditional villages were collectively owned by the village's in habitants. Since no one could be excluded from access to these fields whose resources were depletable, they were overused and made worthless. If it is a private property whose owners would then have a strong incentive to invest in its upkeep and exploit its resources on a long-term, sustainable basis.

When tribal-level societies were succeeded by state-level societies, tribalism did not simply disappear. In China, India and ME and pre-Columbian America, state institutions were merely layered on top of tribal institutions and existed in an uneasy balance with them for a long periods pf time. The only part of the world where institutions was fully superseded by more voluntary and individualistic forms of social relationship was Europe, where Christianity played a decisive role in undermining kingship as a basis for social cohesion.

The Indian detour

India never experienced a centuries-long periods of continuous violence comparable to China's spring and Autumn and Warrning states periods. The Indian states fought each other, but not to the bitter degree of mutual extinction that the Chinese stated did in China.

India has a unique pattern of social development unfolded that would have huge implications for Indian politics down to the present day. Right around the time that states were first being formed, a fourfold division of social classes emerged known as varnas: Brahmins who were priests, Kshatriyas, warriors,; Vaishyas, merchants and Sudras, everyone else not in the first three varnas. A second critical developments was the emergence of jatis, (castes) which subdivide all of the varnas into hundreds of segmentry endogamous occupational groups from priests of different types to traders and shoemakers and farmers.

India was a far less literate society. Much of what we know about social organizations in early Indian has to be inferred from the Vedic texts which were hymns or prayers with their interpretive glosses dating back to the second or third millennium B.C but transmitted orally until they were finally written down in the middle of the first millennium B.C

There are three broad areas of kinship organization in India, corresponding to the three large ethnalingustic regions of the subcontinent: northern zone populated by Sanskrit speakers descended from the India-Aryans, southern zone of Dravidian-language speakers and eastern zone that shares much in common with Burma and other parts of southeast Asia. The main difference in kinship rules between the Sanskrit north and Dravidian south related to cross-cousin marriage. In north, a son must marry outside father's linage and one cannot marry a first cousin. In south, also a son must marry outside the father's linage; however he is positively encouraged to marry father's sister's daughter) Men are also permitted to marry their eldest sister's daughter or their maternal uncle's daughter). North, families are forced to cast their nets over a wider circle to find appropriate marriage partners, but in south, it is more inward looking relationship that exists in all tribal societies

Chinese developed a professional priesthood to preside over the rites that legitimated kings and emperors. But state religion in China never developed beyond the level of ancestor worship. When emperors lost legitimacy at the end of the dynasty or when there was a no legitimate ruler in the interdynastic periods, it was not up to the priesthood t declare, as an institution. Legitimacy in that sense could be bestowed by anyone, from peasant to soldier to bureaucrat.

Religion took a very different turn in India. In the beginning it may have been based on ancestor worship as in China, but in the period beginning in the second millennium B.C when the Vedas were composed, it evolved into a much more sophisticated metaphysic system that explained all aspects of the phenomenal worked in terms of an invisible transcendent one. The new Brahminic religion shifted the emphasis from one's genetic ancestors and descendants to a cosmological system encompassing the whole nature. Access to this transcendent world was guarded by the class of Brahmins, whose authority was important to safeguard not only the lineage of the king but also the welfare of the lowliest peasant in a future life.

Under the influence of this Brahminc religion, the twofold divisions of varnas into aryas and dasas evolved into the fourfold divisions brahmins, kshatriyas, vaishya and shudras. The first three varnas- brahmins, kshatriyas and vaisyas - were all regarded as 'twice born' and were permitted as a result of their second birth to be initiated into ritual status. The sudras who included vast majority of the population, were 'once born' and could hope for ritual status only in the next life.

Brahmin hierarchy was not organized into an institution with a central formal source of authority like Catholic church. It resembled rather a vast social network, where individual Brahmins communicated and cooperated with one another without being able to exercise institutional authority as such.

All four varnas fought in was and Brahmins were known to hold high military rank hierarchy reproduced the social hierarchy in terms of the subordination of the lower orders. Given the ritual aversion to blood and dead bodies, one does not imagine that wounded solders received much succor from their highborn comrades. Such a conservative social system was also evidently slow to adapt new military technologies. Indian armies also never developed effective cavalry forces with mounted archers which led to defeats by the Greeks in the 4th BC as well as by Muslims in the 12th century AD.

A mechanism by which Brahminic social system limited political power was by controlling literacy, a legacy that extends up to the present moment and consigns huge numbers of Indians to poverty and lack of opportunity. The Brahmins controlled access to learning and knowledge through their role as guardians of ritual. Through the end of he first millennium B.C they had a strong aversion to the writing down to the most important Vedic texts. A great many Brahmins devoted large parts of their lives to memorization on a prodigious scale or to logical analyses and debates. Efficacy in the ritual and therefore the process of learning did not necessarily require that the meanings of what was memorized be understood. Brhmanic commitment to the oral transmission of the Vedas reinforced their own social supremacy by creating additional barriers to entry into their Varna. Brahmins strongly resisted the introduction of writings and technologies related to it.

Compared to the Chinese, the Brahmins monopoly on learning and their resistance to the adoption of writing had an incalculable impact on the development of a modern state. From the Shang Dynasty onward, Chinese rulers used the written word to communicate orders, record laws, keep accounts and write detailed political histories. While effective access of ordinary Chinese to high Gov office was limited in many practical ways, the Chinese were long aware that education was one important route to upward social mobility. Lineages and local communities in China therefore invested in educating sons to take advantage of the system. Nothing like this existed in India. Rulers were themselves illiterate and relied for administration on a similarly uneducated carder of patrimonial officials. Literacy was a privilege of the Brahmin class, which had a strong self-interest in maintaining their monopoly over access to learning and ritual. As in the case of the military, the hierarchal system of Varna and jatis severely restricted the access of the great majority of the population to education and literacy and therefore reduced the pool of competent administrators available to Indian states.

The sultanate held on for 320 years, longer than any indigenous Hindu empire. But while the Muslims were able to create a durable political order, their state too was limited in its ability to shape Indian society. Like the Gupta dynasty, they never extended their territorial reach very for into southern India. In the words of Sudipta Kaviraj, "Islamic political rulers implicitly accepted limitations on political authority in relation to the social constitution which parallel those of Hindu rulers... The Islamic state saw itself as limited and socially distant as the Hindu state". The same is not true of the British, whose lasting effort on India has been much more profound. In many respects, modern India is the result of foreign nation-building project. Kaviraj argues, "The British did not conquer an India which existed before their conquest; rather they conquered a series of independent kingdoms that became political India during and in part as a response to their domination",. The important institutions that bind India together as a polity - a civil service,,

an army, a common administrative language, a legal system aspiring to the application of uniform and impersonal laws and of course democracy itself - were the result of Indians interacting with the British colonial regime and assimilating Western ideas and values into their own historical experience.

India meets none of the 'structural' conditions for being a stable democracy; it has been and in many ways remains, an extremely poor country; it is highly fragmented religiously, ethnically, linguistically and in class terms; it was born in an orgy of communal violence that reappears periodically as its different subgroups rub up against each other. In this view, democracy is seen as something culturally foreign to India's highly inegalitrarian culture, brought by a colonial power and not deeply rooted in the country's traditions.

[The book continues analyzing Middle Eastern and followed by European political system. Here some of the very brief Info.]

"The ottoman institution of military slavery; how tribalism was the main obstacle to political development among Arabs; how military slavery first arose under the Abbasid dynasty; why tribesmen make good conquerors but poor administrators; Plato's solution to problem of partomonialim'

The institution of military that lay t the core of Ottoman power represented a dead end with respect to global political development. The problem wasn't slavery per se; this institution was considered legitimate in the West, as everyone knows, until well into the 19th century. What never occurred to any European or American was to turn their slaves into high government officials. While the military slave system served as the basis for the Ottomans rapid rise to power from the 14th to 16th century, it was subject to internal contradictions and could not survive the changing external conditions faced by the empire in the late 16th century.

"How the European exit from kinship was due to religion rather than politics; common misunderstandings about the nature of the European family; how the catholic church destroyed extended kingship groups; how English individualism was extreme even in European context.