Venture capitalist challenges notions about democracy | Rich Elfers’ Politics in Focus

A Chinese venture capitalist and political scientist in the January/February edition of Foreign Affairs presents an intriguing perspective on the current state of U.S. democracy. The author, Eric X. Li, trumpets the advantages of the one-party rule by the Chinese Communist Party. Democracy is not the only form of successful government, according to Li.

A Chinese venture capitalist and political scientist in the January/February edition of Foreign Affairs presents an intriguing perspective on the current state of U.S. democracy. The author, Eric X. Li, trumpets the advantages of the one-party rule by the Chinese Communist Party. Democracy is not the only form of successful government, according to Li.

There is a follow up article to Li’s in the same edition of Foreign Affairs, also written by a Chinese, which demolishes most of Li’s arguments. Still, there is value in sharing Li’s comments about America. He holds up a mirror to our current political state of affairs. The reflection is instructive.

Here’s what he says about our government and economy from his Chinese perspective:

“While China’s might grows, the West’s ills multiply: since winning the Cold War, the United States has, in one generation, allowed its middle class to disintegrate. Its infrastructure languishes in disrepair, and its politics, both electoral and legislative, have fallen captive to money and special interests. Its future generations will be so heavily indebted that a sustained decline in average living standards is all but certain.”

Is there any truth to what Li is saying? Yes. Since the 1980s tax cuts to the upper 20 percent of the U.S. population have greatly increased the wealth of the wealthiest, while middle-income workers’ incomes have stagnated. That trend increased with the tax cuts that just ended with the settling of phase one of the “fiscal cliff” crisis.

Our infrastructure does languish in disrepair because, although both political parties agree we need to be fixing our roads, bridges, water lines and sewer systems, neither side can agree as to where the money is going to come from: tax increases or spending cuts. Some kind of compromise must be devised for the U.S. to deal with this issue.

In regard to special interests controlling our legislative process, all one has to do is to spend a little time studying what caused the 2008 economic meltdown to know that investment banks, to name one group, spent billions to successfully influence legislation in Congress to the detriment of average Americans and to our government.

I’m more optimistic than Li about our living standards. While they have declined since 2008, America will bounce back as it has historically done, again and again. One proof of this is the development of new technology that is tapping into new sources of natural gas and petroleum. Another is the “reshoring” of outsourced jobs. Because of improved technology, many lost jobs are returning to the U.S.

Li goes on to point out how flawed our democracy is compared to China’s Communist system:

“Elections are seen as ends in themselves, not merely means to good governance. Instead of producing capable leaders, electoral politics have made it very difficult for good leaders to gain power, and in the few cases when they do, they are paralyzed by their own political and legal systems.”

It’s difficult for me to disagree with much of what Li says in this statement, but looking at the history of America, we have been in this place before. The late 19th century saw the rise of corrupt industrial and financial monopolies that controlled our government and abused our workers and the weak.

Eventually, through the leadership of presidents like Teddy Roosevelt, William Howard Taft and Woodrow Wilson, these “malefactors of great wealth” were tamed. A free press also revealed the rot and corruption in our economy and government, purging and refining us.

Franklin D. Roosevelt helped the U.S. survive the Great Depression by adapting and changing our system so that a strong economy and a stable and growing middle class could be maintained. We still reap the benefits of those decisions.

Li acknowledges that while democracy will not disappear, China’s one-party system works well for China based upon its history and culture. “The significance of China’s success, then, is not that China provides the world with an alternative but that it demonstrates that successful alternatives exist.”

Li is wrong about this. China’s leadership is in a race for their survival to keep their economy growing. If they don’t keep growing, they won’t be able to maintain power and they know it. They know corruption in China is endemic and without a free press and a voting public to root out the rot, China will not continue to be a viable alternative to democracy.

Li’s comments do act as a mirror to our society and government, but that reflection only reveals the present situation, it does not reflect the regenerative ability of our political and economic systems to change. Those changes won’t be easy, but they will come with an engaged public and an active media to shine the light on the evil.

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