At least since the rise of Marxism in the 19th century, enthusiasm for “managed” economies has been a peculiar enthusiasm of intellectuals worldwide. From the 1920s to the 1960s, if not later, Fabian socialists were telling us that the Soviet Union, China, and other Communist countries had found a superior model to foster industrialization. 

Then in the 1980s, by which time it was obvious that the future was not to be found in Moscow, we started hearing about a more capitalist version of the “managed” economy — the kind practiced by Japan and its imitators in East Asia. Their “tiger” economies, we were told, would soon not only defeat the United States in economic competition but literally own us, lock, stock, and barrel.

That prediction hasn’t looked so hot ever since the Japanese economy went into a long swan dive starting in the early 1990s after the bursting of a real estate bubble. Yet enthusiasm for Asian alternatives to the “liberal” model practiced in the United States has not waned. It has merely transferred the object of its affections from Tokyo to Beijing.

For the last decade, China has been heralded as the economy and indeed the superpower of the future. Yet the events of recent days — with the Chinese stock market doing a pratfall that is dragging down the rest of the world’s markets with it — suggest that the path to the “Chinese century” is no more assured than was the path to Soviet or Japanese dominance in decades past.

Indeed, as Greg Ip and Bob Davis of the Wall Street Journal point out, the very opacity of the Chinese system is turning out to be a crucial defect. “For sheer clout, China’s economy outweighs every country in the world save the U.S.,” they write. “But on transparency, it remains distinctly an emerging market, with murky politics, unreliable data and opaque decision making.” As an example, they cite outside estimates that China’s real GDP growth in the last quarter — officially reported at 7 percent — may really be as low as 3.7 percent.

The Journal quotes a former Treasury official: “With my G-7 and many G-20 counterparts there were frank, honest conversations, you were on the phone pretty frequently, often weekly. With China, you don’t know who to call. It’s hard to know where decision making occurs or who’s calling the shots.”

It is not just lack of transparency that plagues China. The corruption of the Chinese system is legion. President Xi Jinping has mounted a purge of other Communist Party officials on grounds of corruption but many suspect that this is little more than a ruse to remove rivals while leaving his family and supporters — who are as corrupt as any other party princelings — in firm control of the economy’s commanding heights.

Thus, it is hard not only to know who is calling the shots but why they are doing so. Are they trying to benefit the Chinese people as a whole, or are they self-dealing in a way designed to benefit themselves and their family at the expense of the country as a whole?

Although the Journal does not draw the connection, these defects are endemic to most authoritarian regimes. A partial exception may be found in Singapore, which is hardly a model of democracy but has done a first-rate job of fighting corruption and instilling high standards of professionalism among its bureaucrats. But Singapore is a tiny city-state that had the benefit of Lee Kuan Yew’s genius. China is the most populous country in the word, and it is entirely at the mercy of its kleptocratic class of Communist mandarins.

It turns out that China has not found a magical formula for managing its economy in ways that will allow it to effortlessly overtake more open and liberal economies such as that of the United States. For all of America’s defects, I’d say our model is still the one to bet on for the future. Until China liberalizes, it’s hard to imagine its economic growth continuing at the breakneck pace of recent decades.

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