Thoughts on India from Communist China’s Capitalist Superfan

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By
Tyler Roylance
Staff Editor

When a New York Times columnist feels the need to tell his readers, “Don’t get me wrong—I am hardly advocating totalitarian government,” something has probably gone badly awry in his analysis.

Steven Rattner, a longtime Wall Street executive and former counselor to the U.S. Treasury secretary, made the declaration toward the end of an opinion piece on Sunday, in which he argues that autocratic China has decisively won the economic development race with democratic India. If he were willing to look beyond China’s “shiny” financial centers and India’s “potholed roads,” he might come to understand that India’s meandering democracy offers a far more reliable and stable path to prosperity than China’s forced march through the badlands of dictatorship.

Rattner describes a series of governance flaws in India that are holding it back, and quite rightly concludes that “success for developing countries is about more than free elections.” The problem is that China has massive governance gaps of its own, and lacks free elections to boot. In all of its annual indexes, Freedom House includes important governance indicators like corruption and rule of law alongside those pertaining to free elections and political participation. Even so, India routinely comes out ahead of China, most recently in Freedom in the World 2013, released last week.

On the rule of law, Rattner acknowledges that India’s British-style legal system “is more transparent and rule-based than China’s,” but he complains that it “grinds exceptionally slowly,” and highlights the recent gang-rape case, apparently as an example of social disorder and systemic dysfunction.

If anything, however, the case illustrates India’s great strengths in comparison with China. When a horrible crime exposed major problems in the criminal justice system, India’s democratic institutions swung into action: The free media pounced on the story, an assertive civil society took to the streets to demand justice and reform, elected politicians were scolded for their weak initial response, and the independent courts made arrangements for a fair and speedy trial of the accused rapists.

By contrast, China’s justice system is not just inefficient and inattentive to certain offenses—it is diametrically opposed to the rule of law. The Communist Party, its structures, and its dictates are quite formally above the law. The system has arguably never delivered a fair or open trial in a high-profile case, even if the speedy part is well in hand (see the Bo Xilai scandal). And far from responding to public complaints of injustice, Chinese authorities tend to suppress them. Earlier this month, censors ham-handedly rewrote a newspaper editorial that dared to call for actual observance of China’s constitution.

On the rare occasions when Chinese internet users outpace censorship and bring an egregious case to light, the state typically grants only marginal concessions. For example, last August, under public pressure, authorities grudgingly released a woman who had been sent—without trial—to a “reeducation through labor” camp for demanding that harsher sentences be imposed on several men who had abducted, raped, and prostituted her 11-year-old daughter six years earlier. The real outrage is the very existence of the labor camp system, which is often used to warehouse troublesome people like petitioners, rights activists, and members of banned religious groups. While there has been some official talk of modifying this system, abolition is highly unlikely, and in any case the camps are just one of several forms of arbitrary detention available to Chinese authorities.

Rattner argues that China has an edge on India when it comes to corruption, noting that India ranks lower on Transparency International’s Corruption Perceptions Index. But that index is explicitly a measure of perception, and it should come as no surprise that India’s democratic system is far better at exposing graft than China’s autocracy, which actively suppresses news of official malfeasance. The New York Times’ own website has been blocked in China since it ran a lengthy investigation into the prodigious family wealth of Premier Wen Jiabao. Rattner blasts India’s “rigid social structure” for reinforcing “vast wealth disparities,” but it is not clear how China’s rapacious “princeling” clans of Communist millionaires represent a superior model.

The main thrust of the column is devoted to China’s more impressive performance on infrastructure and macroeconomic growth. Rattner tells us that China posted 7.7 percent growth in 2012, versus India’s 5.3 percent. However, according to the Times, prominent economists and corporate executives have estimated that Chinese statistics are inflated by 1 or 2 percentage points due to falsification by local and provincial officials who are eager to remain in good standing with Beijing. These same officials have for years overinvested in infrastructure and other large development projects that temporarily boost growth numbers, creating bad debt and excessive capacity, and putting the entire economy at risk.

Rattner, oddly for a capitalist, bemoans India’s “deeply embedded property rights that make implementing China-scale development projects impossible.” China does in fact run roughshod over property rights, and as a result, each gleaming new airport or shopping mall is built atop a powder keg of public resentment. A Times article printed the same day as Rattner’s piece describes growing popular dissatisfaction with the current system, and rising demands for transparency, freedom of speech, and curbs on the polluting industries that are so central to China’s economy.

Indeed, it is the desires of the people in both countries, not the assessments of outside observers, that ultimately matter here. The Chinese public wants more of what India has in the way of political rights and civil liberties, and Indians want their government to live up to its democratic principles.

There is every reason to expect that India will continue on its democratic path of gradual self-improvement, with civil society and other free institutions goading the state toward better governance. Meanwhile, China’s autocratic leaders are all but incapable of meeting their citizens’ demands for transparency and accountability. They know well that if the full extent of their organized abuses and venality ever see the light of day, the system is finished. This intractable situation will eventually reach a crisis point, throwing the outcome of the growth race into question.

Rattner insists that he is not advocating totalitarianism. But he also dismisses India—with its comparative paucity of large-scale manufacturing—as “a nation of shopkeepers,” echoing (inadvertently, one hopes) Napoleon’s remark about England. History has not been kind to those who discount the prospects of free societies. China’s boosters would be well advised to hedge their bets.