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Dynamic national spirit drives China's growth

By David Blair | China Daily Europe | Updated: 2017-03-24 07:36

New book argues that complacency underlies US economic, social problems

Tyler Cowen's latest book has struck a nerve in the United States. He sees a failure of spirit underlying the many worrying trends his country has seen over the last 40 years - the lack of wage growth, declining life expectancy in some groups, increased inequality, growing monopolization of the economy, increasing racial and income segregation in schools and housing.

Fewer Americans now become richer than their parents. They move between cities much less often and start many fewer businesses. As the last election demonstrated, many Americans seldom meet, much less understand, fellow citizens with different backgrounds or worldviews.

Cowen, a frequent visitor to China, is a well-known free-market-oriented professor of economics at George Mason University in Fairfax, Virginia, near Washington, D.C. His book - The Complacent Class: The Self-Defeating Quest for the American Dream - has provoked widespread discussion and has been reviewed and analyzed in all the leading newspapers and policy journals.

 Dynamic national spirit drives China's growth

Economist Tyler Cowen believes China has a culture of ambition and dynamism and a pace of change that harkens back to a much earlier America. Provided to China Daily

In an interview, Cowen explained that he defines complacency as "not feeling a sense of urgency about the problems of your society or your nation. This manifests itself in seeking more safety and security and moving away from dynamism."

In contrast to his worries about the US, he writes: "Even with its recent economic troubles, China has a culture of ambition and dynamism and a pace of change that harkens back to a much earlier America. China, even though in the midst of some rather serious economic troubles, makes today's America seem staid and static. For all its flaws, China is a country where every time you return, you find a different and mostly better version of what you had left the time before."

Asked why he believes that China is dynamic compared with developed countries and almost all developing countries, he says:

"There are plenty of practical reasons. Standing above all is that the Chinese people have an idea that they can believe in, that China should be great again. They believe this deeply, and, actually, in a fairly unified way, though they may disagree on how to get there. I think this is a strong feature of China. They have a sense of the continuity of their past and want to recapture this leading role.

"A lot of the more practical factors are able to operate because, at this intellectual and ideological level, people believe in something very dynamic. Make China great again, so to speak."

But, dynamism and striving can be hard. Life in the United States might be too easy and too oriented toward safety rather than effort or adventure. He says: "If you are an American and you just don't want to work that hard, and have a lower-middle-class existence, your life is pretty good, provided you don't abuse opioids or do something stupid. It's harder to do that in China and many other places."

His description of Americans as complacent and settled may shock many. After all, didn't the US create the internet and other technological marvels? Don't its tech companies dominate world markets?

Cowen says that the US, of course, has some incredible companies that employ the world's smartest workers. But Silicon Valley is not representative of the country.

US business has also become less competitive inside the country. Cowen says: "Startups as a percentage of overall business have declined gradually in each decade since the 1980s. In general, there are higher levels of monopoly and concentration in the US economy. Chain stores are much more important. The companies we have last longer and it is harder to start new companies. It is harder to turn new companies into successes.

"People see highly visible companies like Facebook or Uber and think there is lots of competition, but the economy as a whole is a different story."

Dynamic national spirit drives China's growth

In recent decades, China has seen more competition and lots of new business starts. Cowen says that the growth of nationwide companies has squeezed out the old provincial or regional monopolies.

Real wage growth in China has averaged more than 10 percent per year, while US wages have been basically flat for 40 years. Cowen says that US wealth is going to monopolists and other "rent-seekers" - people who take advantage of their special positions.

One symptom of US complacency is the inability to build great public works anymore. For example, the Washington metro system in 2000 started seriously planning an additional line intended to reach Dulles International Airport. So far, less than 50 kilometers have been built, not yet reaching the airport. Meanwhile, the Beijing subway system has added 17 lines and more than 500 km of track.

"There are more veto points in the US system," Cowen says. "There is less agreement on who should pay for things.

"Keep in mind that most of the subway lines in Washington are actually getting worse. It's not that we built the new line and maintained the rest. Overall, it is much worse. There is a lack of a sense of urgency. On any given day, you don't feel you need to fix it now, so it never gets done."

He says that his experience at George Mason University leads him to believe that much of China's dynamism comes from the opportunities it offers to non-elite young people.

"It is striking to me how many of the good Chinese students in the US come from rural areas and do not have very wealthy parents. They are not typically from the poorest families, but they are not just from the elite families in Shanghai.

"Part of it is the exam system. I think that for all the talk of corruption, China is fairly meritocratic in the sense that a smart person from a middle-class or poor family really can rise a great deal."

Looking around the world, Cowen sees few dynamic countries.

He believes Japan paved the way in complacency. There is even a special word in Japanese - otaku - for the numerous young men who have withdrawn from society, not even pursuing sex or marriage. They have a pretty comfortable life, but one without ambition.

"India is a more complex story, but certainly worth a look," he says. "The story for China is true throughout most of the country, but for India you have to tell a more diverse, heterogeneous story. It would not be as simple as the China story."

Cowen also sees promise in Nigeria and Ethiopia: "I wouldn't say they have passed the success threshold yet, but they are future candidates.

"Nigeria impressed me with its human capital, dynamism and ambition, even though the country is currently in recession. And, like the overseas Chinese, Nigerians have done quite well abroad.

"Ethiopia's recorded rates of economic growth were the highest in the world from 2014 to 2017 and have been high for a decade."

Despite its current dynamism, China should be wary of factors that could lead to complacency the way it has in other countries. There may be an inherent cycle that moves all societies toward stagnation.

An aging society will naturally become more complacent, but he believes there is currently so much dynamism in China that it has some time to deal with that.

More generally, he says, barriers will accumulate in any system. "Privilege will dig in. Elite schools will become more of a transmission belt of privilege. The US is much further down this path, but China will develop its own version."

China cannot be complacent about its current dynamism.


Tyler Cowen

Born: January 21, 1962

Education: Ph.D. in Economics, Harvard University, 1987

Career Highlights:

Professor of Economics, George Mason University, Fairfax, Virginia

Director of the Mercatus Center at George Mason University

Co-creator of Marginal Revolution University

Blogger at

Columnist for Bloomberg

Author of many books, including Average is Over, The Great Stagnation, Discover Your Inner Economist, and An Economist Gets Lunch

Book: The core plays of Shakespeare

Film: High Noon

Music: The Beatles and Beethoven

Food: Chengdu and Yunnan cuisine

Hobby: Travel, with most recent trip to Northern Ireland. Planning a big summer trip to China, starting in Dalian.

(China Daily European Weekly 03/24/2017 page32)

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