The Committee of Public Safety

If Francis Fukuyama didn’t exist and hadn’t ever written The End of History and the Last Man, the Department of Defense would have had to create a RoboFukuyama deep in the bowels of Area 51 and set it free to liberate pontificators on the post-Cold War era. If you couldn’t reach into the bag of lazy journalistic flourishes and pull out your Fukuyama Bat to rhetorically beat dear Francis once more, you’d never get this:

In the summer of 1989, American political economist Francis Fukuyama foresaw the “End of History” in a landmark essay, meaning that no credible alternative had survived to political and economic liberty as practiced in the U.S. and Western Europe. All that remained, he argued, was for other countries to catch up.

Today, history is back, according to writers such as Israeli military historian Azar Gat. In his new book, “Victorious and Vulnerable,” he says that although democracy is the most benign system in history, it will have to demonstrate its advantages all over again in the face of its latest rival: authoritarian capitalism, as practiced by self-confident powers such as China and Russia.

We’ve noted Azar Gat’s central thesis before in a Committee report. Gat also wrote about it in the closing chapters of War In Human Civilization and The Return of the Authoritarian Great Powers. Gat’s argument is that:

Today’s global liberal democratic order faces two challenges. The first is radical Islam — and it is the lesser of the two challenges…The second, and more significant, challenge emanates from the rise of nondemocratic great powers: the West’s old Cold War rivals China and Russia, now operating under authoritarian capitalist, rather than communist, regimes. Authoritarian capitalist great powers played a leading role in the international system up until 1945. They have been absent since then. But today, they seem poised for a comeback.

Gat has argued that the victory of liberal democracy over the “authoritarian capitalist” powers in WWI and WWII was more contingent than most inhalers of free air would think:

Liberal democracy’s supposedly inherent economic advantage is also far less clear than is often assumed. All of the belligerents in the twentieth century’s great struggles proved highly effective in producing for war. During World War I, semiautocratic Germany committed its resources as effectively as its democratic rivals did. After early victories in World War II, Nazi Germany’s economic mobilization and military production proved lax during the critical years 1940-42. Well positioned at the time to fundamentally alter the global balance of power by destroying the Soviet Union and straddling all of continental Europe, Germany failed because its armed forces were meagerly supplied for the task [...] All the same, from 1942 onward (by which time is was too late), Germany greatly intensified its economic mobilization and caught up with and even surpassed the liberal democracies in terms of the share of GDP devoted to the war (although its production volume remained much lower than that of the massive U.S. economy). Likewise, levels of economic mobilization in imperial Japan and the Soviet Union exceeded those of the United States and the United Kingdom thanks to ruthless efforts.

Reading Adam Tooze’s The Wages of Destruction, you get a better case for Gat’s argument than Gat argues above. Tooze demonstrates, contrary to the widely shared belief that Gat refers to, that the German economy more mobilized, even in 1940-1942, than the Western powers. The advantage of the Western powers was overwhelmingly quantitative instead of qualitative. Indeed, according to Tooze, the democracies overwhelming economic advantage was not only the crucial ingredient in their victories in both world wars, it was the primary cause of both world wars. In both wars, Germany went to war because its leaders thought that whatever advantage it currently possessed was transient in the face of rapidly growth in the power of the West, projected through the East. Hitler in particular was fixated on the need to acquire a vast eastern hinterland in order to even begin to challenge the British Empire and the United States with their vast internal markets. In Hitler’s mind, Germany had to achieve similar economies of scale to compete with the (purportedly) Jewish run democracies and escape the trap that defeated Imperial Germany in World War I.

The looming power of America was always the shadow looming over Hitler’s future Aryan paradise. Fixated on the overwhelming power of America, threatening to swamp Germany and all of old Europe, the Nazi’s optimized Germany’s economy to make the Wehrmacht punch above its weight and, as a result, won more results than Germany’s paltry resources justified on their own. If it had merely been based on material resources, Germany would have lost. Those in the German government who could evaluate the material disparity were desperate for peace. But Hitler gambled and, in one of the most miraculous victories in history, defeated France in 1940 and drove the British off the Continent. However, even with the combined resources of a subjugated Western Europe at his command, Hitler was still outclassed by America. He believed that American power would only grow with time and that his only hope was seizing Russian resources. The German high command believed that Russia was a paper tiger and not the threat that America was. It could easily be disposed of before America strangled Germany. The road to Washington led through Moscow.

Germany, however, found Nemesis. The Americans cleverly fed the Soviets resources to keep the Germans tied down, trading money, weapons, and Russian lives by the million for the lives of American boys and killing thousands of Germans in the process. The Red Army digested the Wehrmacht deep in western Russia and Hitler’s longshot gamble came to its most probable and predictable end.

While the Nazis and Japanese had to exhort their soldiers and populations on to greater displays of spirit to close their material gap, the new “authoritarian capitalist” powers like Russia, China, and the other SCO members, Gat proposes, have the advantage of huge resource bases and vast spaces. If Germany and Japan, perhaps driven by a relative poverty of national resources, have been driven to heights of population mobilization rarely achieved elsewhere, Russia and China have a poor record of maximizing their populations in the most efficient way possible. Russia and China are both examples of how you can punch above your weight military through economics driven by pure coercion but are poor examples of extracting maximal productivity from their populations through economics based on the mix positive and negative incentives offered by capitalism. The authoritarian capitalist revolution was pioneered by Lee Kwan Yew in Singapore offered them a way out. Deng Xiaoping picked it up from there:

China’s ruling Communists, who had bloodily suppressed their own street protests around Tiananmen Square in June 1989, were transfixed by the revolutions sweeping Eastern Europe that summer and fall. Their first reaction was to freeze economic and political change. But “paramount leader” Deng Xiaoping took the view that the Soviet bloc had failed because of its economic stagnation.

In early 1992, weeks after the dissolution of the Soviet Union, Deng toured China’s south to promote a strategy of rapid economic change, coupled with tight political control.

“Deng’s approach was something new,” says Michael Yahuda, a leading historian of China. “In the previous reform period, from 1979 to 1989, there was much discussion of political reform too. Thereafter, there was no mention of political change,” he says.

The question of which arrangement of government and economy is best is still in flux. Gat explicitly and Tooze implicitly argue that it may not be the intrinsic superiority of the democracies that beat out the original authoritarian capitalists. It was their superior resources, much of which were won and developed at a period in the democracies’ past when they were less democratic, that was the critical determinant. The past 70 years have demonstrated that some form of capitalism is superior to a pure form of command economy. But it has yet to demonstrate what the best admixture of positive incentive and negative incentive is in an economy. It has yet to demonstrate which mixture of motivation through command and coercion and motivation through interest and voluntarism is bets. Most importantly, it has yet to demonstrate which mixture of politics and economics is optimal.

The crucial weakness of authoritarianism is leader selection and rotation. While diktat by one man may yield efficiencies in some circumstances, it definitely creates negative situations in others. Rotating an authoritarian in when their on fire and out when they’ve cooled off is a problem authoritarian government have solved only sporadically and over limited periods of time. Capitalism involves a certain degree of personal autonomy that authoritarian regimes have a hard time restraining themselves from violating. Capitalism involves rotations of classes and elites which practically beg incumbents to use coercion to stop. The modern authoritarian capitalist regimes that Gat fears have shown some progress in those areas but have yet to demonstrate that they have conclusively solved them. However it may turn out that economic liberty is essential to creating a powerful state, possibly leavened by a dose of personal liberty here and there, but that political liberty as generally understood in the Anglosphere is not.

The battle is joined.