A contest between two capitalisms

Robert Reich

TEXT OF COMMENTARY

Scott Jagow: President Bush arrives in China tomorrow. The next day, he'll attend the Olympic opening ceremonies. And the unveiling of a new American embassy in Beijing. The relationship between China and the U.S. is constantly evolving.


Robert Reich: The real competition lurking behind the upcoming Olympic games is between democratic capitalism and authoritarian capitalism. For years, American policy toward China assumed that trade and economic growth would generate a large Chinese middle class, and this middle class would demand democratic reforms.

We were right on the first part. The games will showcase a Chinese middle class so big that almost as many Chinese now use cell phones and the Internet as do Americans, and soon as many will own cars. But we were wrong about the democracy part. We thought capitalism and democracy went hand in glove. They don't.

Economic reforms are well underway. Chinese can own property and invest, trade what they wish and buy what they want. Private enterprise is in, collectives are out. But when it comes to civil and political rights, China today is where it was almost two decades ago at the time of Tiananmen Square.

Authoritarian capitalism works wonders if all you care about is getting ahead economically and being able to afford more stuff. Never before in history have so many people gained economic ground so fast as in China over the last two decades. But if you're someone with a grievance, or you want to criticize those in power, or you're a Tibetan or ethnic minority, or you happen to like clean air, you're out of luck.

Democratic capitalism should win in the end because it responds far better to what people want -- not only as consumers but also as citizens. Yet right now it's not so clear. The Chinese economy is booming while we're in deep trouble. Eighty percent of Chinese are optimistic about the future but only 20 percent of Americans say this nation is on the right track.

In terms of this big contest, you might think of our upcoming presidential election as our own Olympic games. It will showcase to the world how well democratic capitalism still works.

Jagow: Robert Reich teaches public policy at the University of California, Berkeley.

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