The Answer Is Democracy; The Question Is Why

Guest author: Frank Li.   Bio at end of Article.

Democracy, as we know it today, does not work!    For the U.S., there must be a 1-term limit for the top political offices, so as to give democracy another chance to work.  For China,  it must introduce democracy, slowly!Let’s start with some simplified definitions:

• Capitalism: The system in the U.S. Unfortunately, the “Land of Opportunities” is now filled with entitlements, largely because of democracy, as we know it today. In other words, this system is becoming more and more socialistic.
• Socialism: The system in Europe, featuring high taxes and generous entitlements. This system taxes the rich so much that it leaves little incentive of work. As a result, it has been nothing but only in a steep decline over the past few decades.
• Communism: The system in the entire “socialistic block” led by the Soviet Unions from 1945 to 1989, including China from 1949 to 1976. In this system, the proletarians came to power via violent revolutions. They did not tax the rich – They shot them, after (or before) confiscating their properties! What happened next? A totally ruined economy! Today, there exist only two communist countries on earth: Cuba and North Korea. All others have failed and changed.
• State capitalism: The system in China from 1979 to present. This system (= autocracy + capitalism), with many endemic problems of its own (e.g. lack of democracy), has been faring far better than the other systems over the past two decades, to the extent that we all now must ask ourselves this question: what is democracy and who needs it?

I focus on China and the U.S. in most, if not all, of my writings.  The U.S. has been the #1 for the past few decades, but China is rapidly catching up, well on its way to surpassing  the U.S. in GDP by 2030.  I love both the U.S. and China.  I was so disgusted with China that I left in 1982. But today, I am only concerned about the U.S., because China is on the right track but the U.S. is not.

From 1985 to 1999, I did not set my foot on China. I became a U.S. citizen in 1997. Since 2005, I have been visiting China twice a year.  Now, let me repeat:  we, the U.S., are in deep trouble for two main reasons: (1) the rise of China as a competitor, and (2) the incompetence of our political system – Democracy, as we know it today, is a luxury we can no longer afford.

There are three ways to win in a competition: (1) our competitor self-destructs, (2) we become better ourselves, or (3) we somehow manage to destroy our competitor.

Way # 1: Will China self-destruct (again)?

Many Americans expect China to implode (again) on several bases, such as history, some technical analysis (Charlie Rose interview of James Chanos), or their (subconscious) wish. My answer is no (or unlikely – hint: focus on the big picture!).

The century we are now in is the 21st century. While the U.S. has dominated over the past 70 some years, China “ruled” mostly through the 1st 18 centuries! Then the Europeans took over the leadership and Napoleon knew it well: He called China a sleeping lion and advised the West to let China sleep. Fortunately (or unfortunately), the sleeping lion is now awake.

The Chinese know how to succeed when given the opportunities: how to make things and how to sell. In other words, business (or capitalism in general) is in their blood, which erupted in the 1990s, after being suppressed for a few hundred years. They also know, better than any other people, that punishing success (via death as in communism or tax as in socialism), you end up without any success.

The current leadership generation in China (aged ~50) considers itself the luckiest generation of the Chinese ever, as this generation went from being extremely poor to being very rich in a short span of two decades! Their work ethic and drive to success are unmatched and unmatchable!

While an autocratic system like China’s can bring in success quickly, it can also go wrong quickly. What makes it go wrong quickly? – a strongman on the top!   Fortunately, the strongmen in China are all dead now and it’s impossible to have new ones unless something extraordinary happens, such as WWIII.

China calls itself, officially, a “socialist country with its own characteristics,” but it largely followed the U.S. as the example throughout its economic reform. Politically, however, there is no example to follow, nor much incentive left in China for democracy for two reasons: (i) the Iraq war and (ii) two bad examples of democracy in India and in Russia.

Now, is lack of democracy a big problem in China? No! What are the big problems for the Chinese? Environment pollution and government corruption! But these problems are nothing as compared with what they have gone through over the past 60 (or 200) years. As a Chinese, I knew well how low China’s international standing was, especially after I arrived in Japan in 1982. Today, as a Chinese-American, I am glad that China has earned respect back from the rest of the world! In short, being rich is much better than being poor!

Way # 2: Can we become better ourselves?

Yes, we can. But it will not be easy.  Here is my short list of problems to be overcome:

1. I believe I have accurately diagnosed the root cause of our core problems and offered the best and the easiest possible solution.   But nothing is easy in the U.S. any more.
2. Because most of our career politicians work for no purpose but re-election, the more they work, the more they seem to damage our country, with the wars in Iraq and in Afghanistan being the worst examples.
3. The ruling party in China is called “the Communist Party of China.” But today there are actually more communists in the U.S. than in China (as a percentage of the population). To me, most Democrats are socialists and the left most Democrats are communists. Why? Because they sound so similar to the way I was educated (and fooled) in China back in the 1970s:
   —–Down with the rich; long live the proletarians! 
   —–They play God! Want a big help (e.g. housing or healthcare)? Count on me – I will give it to you by robbing the business or the public treasury, or both!
4. What about the Republicans? They are better than the Democrats for business; just as bad in spending; and worse in foreign policies (e.g. the two on-going wars).
5. The only way to increase our competitiveness is through innovation and hard work, not the repeated use of steroids (i.e. stimulus packages)! The government does not have any money of its own. It’s our money, all from business, ultimately!

Way # 3: Can we somehow destroy China?

No, we can’t!  But will we try? If you had asked me this question 10 years ago, my answer would have been a resounding “no”.  But today I am not sure, given the Iraq war, as in “a soon-to-be 2nd-class economy with a 1st-class military”.

More broadly, we, the U.S., have actually been the source of instability in the world after the Cold War. Here are three facts (or observations):

1. Our military is by far the most powerful in the world. Today our defense spending is bigger than the next 16 biggest spending countries combined!  Why?  There are many war hawks in the military, plus the jobs & votes for the career politicians!
2. We destroyed the world order by starting the Iraq war! Modestly, it is the biggest mistake in the history of American foreign policy.  More seriously, “I believe March 20, 2003 will eventually be marked as the beginning of the end of democracy as we know it”.
3. We are the biggest arms dealer, selling arms to “everybody,” including Taiwan.

Final Words….

Now, let me say a few words about Taiwan.   There will not be a war between Taiwan and China!   Following the current trend, Taiwan will be somehow integrated into China economically, if not politically, within 20 years.   No Americans, no problem!

China fell hard a few hundred years ago and has finally turned itself around.  Let’s (1) accept China’s success and (2) meet China’s competition by becoming better ourselves.  Here are two lessons from China:  (1) punishing success (via death as in communism or tax as in socialism), you end up without any success, and (2) adapt and change, or it’s a long trip to hell!

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About the Author

Frank Li is the Founder & President of W.E.I. (West-East International), a Chicago-based import & export company. Frank received his B.E. from Zhejiang University (China) in 1982, M.E. from the University of Tokyo in 1985, and Ph.D. from Vanderbilt University in 1988, all in Electrical Engineering. He worked for several companies until 2004, when he founded his own company W.E.I. Today, W.E.I. is a leader in the weighing industry not only in products & services, but also in thought and action. Dr. Li writes extensively and uniquely on politics, for which he has been called “a modern-day Thomas Jefferson” (see page 31).