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October 25, 2005
"Market Autocracies"
A TCS article asks, Does Growth Lead to Liberalization? points to an article in the most recent Foreign Affairs [subscription only - or at the library like me] titled "Develoment and Democracy." Excerpt:
Threading this needle is difficult, but not, as it turns out, impossible. Gradually, through trial and error, oppressive regimes have discovered that they can suppress opposition activity without totally undermining economic growth by carefully rationing a particular subset of public goods -- goods that are critical to political coordination but less important for economic cooperation. By restricting these goods, autocrats have insulated themselves from the political liberalization that economic growth promotes.The authors note the difference between "coordination goods" and "general public goods":
Eachof these cases has involved the restriction what might be called "coordination goods" -- that is, those public goods that critically affext the ability of th political opponents to coordinate but that have relatively little impact on eceonomic growth. Coordination goods are distinct from more general public goods -- public transportation, health care, primary education, and national defense -- which, when restricted, can have a substantial impact on both public opinion and economic growth.The four types of coordination goods are:
1. Political rights, including free speech and the right to demonstrate peacefully.
2. General human rights, including legal protections and due process.
3. A diverse and unregulated press.
4. Broad access to higher eduction and graduate training.
The authors go on the mention several countries which have strengthened their autocratic regimes via economic growth. They even mention that in some cases, as incomces increase, political reform seems even less likely. The author of the TCS article calls them "market autocracies."
This all makes sense if one views it through the lens of how developed the economy is. Initially, the general public goods described above are absolutely essential to growth. In fact, they never cease being essential. This is true if one's economy consists of agriculture, mining, timber, all the way up through to manufacturing. But there, the importance of "coordination goods" increases dramatically if an economy is to make the leap from industrial workers to service workers.
In his 1991 book, The Work of Nations
I have trouble seeing a country developing its economy to the extent that it has a vast number of symbolic analysts without the "coordination goods" mentioned above. The creativity, questioning of assumptions, and robust communcation necessary to, for example, negotiate a complex transaction, write a sitcom, or design a computer game seem to go hand in hand with the kinds of coordination goods that market autocracies would restrict.
Perhaps there's just not enough data yet . . . it'll be a long, long time before China, for example, has more symbolic analysts and service workers than routine producers.
Another take would be this: American culture, shaped by its democratic political values, has resulted in a symbolic analyst culture that reflects those values and would not exist without them. But is it possible for symbolic analysts to thrive in cultures that place higher values on other merits? It is hard to imagine for us cantankerous Americans, but perhaps it is possible.
Time will tell.
Posted by Chester at October 25, 2005 12:10 AM
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Comments
Maybe you have misread Reich. He does NOT believe that the direction we are going in is good for the economy or the country. He debates that there are three types of people: the manufacturers, the in-service people (including doctors and lawyers), and "symbolic analysts" which is just a euphemism for entertainers, consultants, finance officers, stock brokers, and take-over addicted CEO's who make money by pushing money around and not by doing or making anything useful. They get rich off of everyone else's loss. He argues that the manufacturers have already lost (their boat is sunk), the service people are soon to go (is sinking), and the only one left standing in the rink (or floating) will be the "symbolic analysts". Reich is against mergers, lawsuits, and takeovers because they actually hurt labor in general.
I don't know how much anyone out there follows the US economy, but it is going to shambles. I know many parts of the US have perked up a bit, but living in the rust belt you will see a different picture. Here in my neighborhood, we're losing GM, Delphi, NWA, Visteon... and what is left isn't hanging on very well. People around here get laid off by the tens of thousands, while Asian immigrants have almost all but monopolized the service sector.
For the record, Reich became Clinton's Sec of Labor not just because he is a well-known economist but because he was a Rhodes scholar and went to Oxford the same time as Clinton (and a few other policymakers).
Posted by: Shellie at October 25, 2005 6:23 PM
I didn't misread Reich; I just disagree with most of his work. The only good part was what I summarized above. His solution to the employment problem is massive government education spending. Strike one.
Oh -- and yes -- he did go to Oxford with Bill Clinton. Knew that. I have to ask as I always do: has the Rhodes scholarship program ever produced a conservative? Strike two.
Finally, Reich, made all these predictions about how things were going down the tubes immediately before the largest expansion of the US economy in history. Strike three.
Your take on symbolic analysts is rather short-sided. Even if all CEOs just move money around regardless of the consequences, whylump them together with the rest of those who use get paid to think (as opposed to making something or servicing someone)? Besides, I disagree with you anyway. There may be many CEOs that are overpaid, but there are just as many that work their heinies off and the market compensates them accordingly.
As far as the regional Michigan economy, I think you have welfare-state/welfare-like corporate practices to blame, and nothing else. GM is a relic of the 1960s. It never adjusted to, well, to actual competition. Now it faces the consequences.
You can always move down here to Texas. Things are booming.
Posted by: Chester at October 25, 2005 7:47 PM
I'd like to argue that it is not the competition, but the new tax structure thanks to Bush & Co.. Companies will always try to get the most bang for their buck (who wouldn't?), and have always looked for cheap labor. There was a little outsourcing in the 80's and 90's, but now, liteerally, the jobs have moved to China and Mexico. It's not corporate competition, it's a cost of living competition - and the dollar continues to lose its value. In the near future it will get worse if the tax breaks and tax laws continue the way they are. But what are we supposed to do to replace the manufacturing sector? Asia already has the high-tech fields and consulting services.
I'm not a xenophobe, but there really is no other way to put this: Indians have infiltrated the HR offices and nepotism abounds here. In the automotive sector, the medical sector, and the educational sector. At least 40% of the people you deal with on a daily basis has an Indian accent. (Ever try to call customer service? Not only do you get someone with an Indian accent, you someone who is really sitting in India!) It's unbelievable when you realize that while Americans are getting knocked off for cheap foreign labor, they're getting knocked off for cheap domestic labor by foreigners, and they can't even step down the ladder because everything below them is saturated with foreigners too. Immigration policy has gone way beyond "attract the brains but make room for refugees and low-wage workers" and is accelerating the erosion of the MIDDLE CLASS. Know what? No middle class = no democracy. If it was just corporate competition, I would be content to say just leave it to survival of the fittest. It's not though- it's globalization, with the "symbolic analysts" doing all the manipulating and getting rich off the "misfortune" of the middle class and the poor. Large sums of money don't just spontaneously materialize, they only become available when someone else loses it. The bigger their win, the bigger your loss.
Posted by: Shellie at October 26, 2005 6:25 AM
For anyone out there who thinks I am exaggerating:
From the Macomb Daily Newspaper, 10-23-2005, Classifieds page 4B:
LPN/RN Foreign
Medical Grad
with excellent English needed for
nursing duties in allergy office.
Tues. 2-7, Wed. 2-5:30, Thurs.
2-7
Fax 248-620-1904
Posted by: Shellie at October 26, 2005 6:14 PM