Silver Linings for a Golden Age

Sep 17, 2013 Kishore Mahbubani

To gain purchase on where the world is headed, we must consider three crucial issues: whether the US will reassert its moral leadership; whether China will recapture its economic-growth momentum; and whether Japan and Europe can recover their animal spirits. Despite the many challenges ahead, there is reason to be optimistic.

SINGAPORE – Are prospects for global stability and prosperity improving or deteriorating? With enlightenment and progress in some parts of the world accompanied by atavism and stagnation elsewhere, this is not an easy question. But we can gain greater purchase on it by considering three other questions.

The first is whether the United States will regain its standing as a source of moral leadership. Despite its flaws, America did provide such leadership, beginning at the end of World War II. But the terrorist attacks of September 11, 2001, changed everything.

Americans’ anger following the attacks drove them to support policies that they once would have considered inconceivable. In the name of the “global war on terror,” they have tolerated torture; accepted – and even endorsed – the illegal invasion of Iraq; and allowed innocent civilians to become collateral damage of mechanical drone strikes.

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Kir Komrik Sep 18, 2013

Thank you for taking on a timely topic,

Your first question is key and imo USG has done an insufficient job of assessing what is going on domestically, to the point of potential tragedy. Leadership begins with credibility, for if no one can trust that your facts and statements are accurate, and if that leadership is not predictable and consistent, the ability to lead is seriously undermined.

What USG can't seem to get through its head, as they say, is that secrecy and representative government are not compatible. The greater the frequency and magnitude of secrecy, the greater the social structure is undermined. This is because, imo, people tend to have an innate awareness regarding credibility. When pertinent facts are simply not shared or the facts are incomplete and internally inconsistent, people tend to notice this with considerable discernment and enter a state of cognitive dissonance because they do not _want_ to believe their "leader" is not being truthful. The result of this is a psychological disconnect; a tendency to "check out", disengage and become apathetic about matters of civics, particularly foreign policy.

Those outside the US do not have this problem of cognitive dissonance. They can be honest with themselves. When it walks like a duck and it quacks like a duck, they can call it a duck. But the voting public stateside reacts completely differently. Every one of the policies this article mentions are wrapped up so tightly in matters of national security it is essentially impossible for any US citizen to have an informed opinion about it. And _that_ is why what the article laments as a broken moral compass presents in our day, here in the States.

US citizens have no idea why USG is doing what it is doing, and it concerns them, but USG isn't talking. That is the problem. If we were to survey the bizarre, clinical and irrational policies issued by this government since 9/11 we cannot help but conclude USG knows far more than we do. And that doesn't necessarily mean that there is no criminal wrongdoing, only that certain people are hoarding information that would be very costly to them if made public. And that's being generous.

And this is _one_ of many reasons why I argue that the problems here are _structural_ and go straight to the core of the neo-liberal, western democracy. Europe is not free of this problem, either. They have the same basic normative systems we do. Resolving this incompatibility in representation and secrecy is key to durability. For those that really, really like to read, you can read all about moral hazard, democracy and why a totally new set of ideas are so desperately needed here:
http://kirkomrik.wordpress.com/rule-of-law/global-constitutionalism/
But the summary is this; much of the demand for secrecy is coming from the fact that we live in a New World Disorder; that is, abject anarchy. As a result, states must keep secrets from each other. When times get dangerous, the frequency and extent of secrecy spirals out of control.

Something dangerous for someone looms, but we know not what.

- kk
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Harmohan Singh Sep 18, 2013

Dear Excellency, Thank you for this very informative piece.
With your kind permission, may I offer my thoughts?

1. Agree the US and Chinese economies are not in the best shape. They are however, closely inter-related. They need each other more than some of their respective policy makers realize.

2. The US economy will rebound. Her single largest import is oil. For several decades, the US imported nearly half of her oil demand, or 10 million bbls/day. This is a big ticket item considering the steep price of oil. However, of late, the US has managed to reduce her reliance on imported oil by increasing domestic production, viz. fractionating, etc. It's possible the US may be a net exporter of energy in the near future, according to some experts.

3. China's economic model as you correctly stated is export-oriented, especially of manufactured goods. This will remain the model for some time, albeit with a few adjustments. China's policy makers are acutely aware that she has to move up the scale towards a consumer society, with its focus on driving domestic demand. To get to this level will, as you said, require structural changes to her economy, particularly the judicious management of her significant domestic debt. Fiscal and monetary policies have to be calibrated to ease the problem without stoking unemployment.

4. Given the level of mutual interest between the US and Chinese economies, policy makers in both countries will continue to collaborate to ensure a win-win - there is no win-lose in this relationship because of its interconnectedness. China will recover and continue to rise, because it is in America's and, the world's interest.

Thank you, Sir

Best wishes
Harmohan Singh
Singapore
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