Yoshikazu Kato, Adjunct Associate Professor of Asia Global Institute, discusses with Fukuyama the latter’s work - Political Order and Political Decay: From the Industrial Revolution to the Globalization of Democracy.
Kato: In your critical work Political Order and Political Decay: From the Industrial Revolution to the Globalization of Democracy, you pointed out that the study of development “necessarily centers around the process by which political institutions emerge, evolve, and eventually decay.” [①] In a speech you delivered at Johns Hopkins SAIS in October 2014, you said, “I do not think American civilization or private sectors are in decline—the big problem is a function of the government in the United States.”
With these in mind, my question is: how can the American political system institutionally avoid decay, and actually work toward restoration and even evolution? What efforts should the government make?
Fukuyama: The United States has faced periods of crisis and decay before, such as after the Civil War, when the country saw the rise of an industrial economy, and the Great Depression. In both of those cases, there was eventually an appropriate response: in the first, a grassroots movement for civil service reform that led to the passage of the Pendleton Act in 1883, and in the latter, the New Deal. Renewal, however, is not automatic: it requires grassroots mobilization, good leadership from the top, and the right ideas to catalyze political action. At the moment I don't see any of these factors in American politics, only an inchoate anger on the part of voters on the left and right. The most powerful grassroots group right now is the Tea Party, whose policy ideas would make our current situation worse.
Kato: Inequality has been on the rise in recent years. I am curious about how you see the issue in terms of the challenges it poses to liberal democracy. Can liberal democratic institutions solve the problem of inequality? And, how much responsibility does liberal democracy bear in this problem? Are institutional reforms necessary?
Fukuyama: I think that the rise in inequality and the decline of the middle class constitute one of the biggest problems facing democracy today. It is very important to have a broad middle class, for the sake of democratic stability. If you have a lot of poor people and a small oligarchy, then you have Latin America, whose politics have veered between conservative rule and irresponsible populism. The problem today is that inequality is primarily driven by the advance of technology, with smart machines replacing first low-skilled, then increasingly skilled labor. In the U.S., future jobs are bifurcated between low-wage, low-skilled ones like those in home healthcare, and high-skilled ones like those in programming and banking. This is not a problem unique to democracies, but democratic stability rests on a broad middle-class social base and is therefore particularly threatened. At the moment I do not see anyone offering a credible solution to this problem.
Kato: It seems to me that every nation and region in the world is considering the role of government right now. We’ve seen an immigration crisis in Europe, political turmoil in Latin America, geopolitical problems in the Asia-Pacific, and economic recession across regions. Under these uncertain circumstances, what should states do? And what should they not do? What, in your opinion, is the essence of government’s role? I’m sure it varies depending on political systems and contexts, but I’d just like your general perspective.
Fukuyama: Many governments around the world are seen as out of touch with voters, and as a result, populist parties have become increasingly prevalent in Europe and the U.S. The problem is not, as many Americans think, with the size of government, but rather with its quality: governments should be responsive to changing demands from citizens, and flexible enough to find new ways of meeting them. Politicians in many countries are excessively indebted to powerful and well-organized interest groups, that collectively do not represent the wishes of the whole population.
Kato: With regard to the quality of government and the capacity to be responsive to changing citizen demands, how do you evaluate the Chinese Communist Party (CCP)? Could American politics get some implications from the Chinese experiences?
Fukuyama: If you look to results, the CCP seems to be quite capable in many respects. It has exercised a great deal of discipline in, for example, creating township and village enterprises that are beyond the capacity of most developing countries, and stripping the People’s Liberation Army of its money-making businesses. However, there is also a great deal of corruption in the Chinese government and party. We do not empirically know the exact extent and how this compares with other countries; this is a topic for research that I have been trying to undertake.
Kato: It seems to me that the Chinese have historically placed great importance on the idea of “strong states, strong government, and strong leaders.” We see this reflected in the high reputation of Xi Jinping, who has emerged as the most authoritative Chinese leader in recent times. What’s your take on this, taking into account the three things you’ve described as the basic components of a modern political order: the state, rule of law, and democratic accountability? Do you see Chinese politics continuing to develop only in the sense of China becoming a strong state, but neglecting the rule of law and democratic accountability? And is this sustainable?
Fukuyama: The classic problem of Chinese politics that has never been solved is the problem of the "bad emperor." In a system with a strong state but no rule of law or democracy, a good emperor can move quickly to implement policies, more quickly than in a liberal democracy. But what guarantees the continuing supply of good emperors? A bad emperor can do much more damage in such a system than in one with checks and balances. At the moment, Xi is accumulating a great deal of personal power, and seems to be breaking out of the consensus for collective leadership that was formed after 1978. But we do not know what his intentions are in the long run—he could become a great reformer, or he could become something considerably worse.
Kato: I agree completely with your observation. My further question is: could the checks-and-balances mechanism resolve the classic problem in Chinese politics while working within the confines of Chinese-style meritocracy within the CCP or “democracy within the party”? What I mean is, would these be institutionally sufficient in preventing the rise of a “bad emperor”?
Fukuyama: I'm not sure that these mechanisms would be sufficient to check a bad emperor, since the question of who would check the party itself would remain. China needs multiple checks, beginning with law and rules to regularize the party's behavior. Democracy within the party would be a down payment on real democracy, but not sufficient in itself to lead to accountable government.
Kato: How do you evaluate the survival of the authoritarian political system in China since the collapse of the Soviet Union with regard to your “end of history” theory? [②] From your point of view, how much will China factor into the future development of political discourse around the world?
Fukuyama: China poses the most important challenge to the idea of the end of history, insofar as it is an authoritarian semi-capitalist system that has mastered economic modernization and may become the world's wealthiest and most powerful country. The issue is whether that system is sustainable over the long run. There are a number of reasons for thinking that it is not, beginning with the challenge of dealing with the enormous social stresses that have appeared as a result of modernization. But if China manages these stresses and remains strong and stable for another generation, then I think there is in fact a real alternative to liberal democracy.
Kato: Since President Xi started conducting expansive economic and financial diplomacy, the so-called “China Model” seems to have spread, particularly to developing countries and regions. It’s easy for some countries to see the model as an attractive one in terms of economic development, and even state-building. The CCP is aware of this and is actively “advertising” the model to such countries in order to extend the Chinese sphere of influence. In my view, the outcome of the CCP’s efforts to expand China’s influence depends significantly on the resilience of Western liberal democracy. What do you think?
Fukuyama: Many people would like to replicate China's authoritarianism, but they are not able to replicate other critical aspects of the China model, such as meritocracy, a disciplined party hierarchy, respect for education, and above all, a sense among the rulers that they have a certain responsibility to act in the public interest. All Asian authoritarian regimes have shared this characteristic of rulers who cared about the development of the broader society, something that is missing in other parts of the world like the Middle East or Africa.
Kato: In your book Political Order and Political Decay, you paid great attention to the future development of the rule of law in China, writing that the “creation of a rule of law that would limit political authority in China is thus still very much a work in progress.” [③] Following the publishing of your book, the CCP held its Fourth Plenum in October 2014 and focused nominally on the rule of law, though official plenum documents still emphasized the importance of “leadership under the party.” The CCP has consistently insisted that this is the rule of law with Chinese characteristics.
Fukuyama: The Chinese have been promoting "rule-based decision-making" for some years now, meaning that lower levels of the government are increasingly governed by rules. The Fourth Plenum simply continued in this tradition. But true rule of law requires that the law be binding on the most powerful actors in the political system, which in China's case means the Communist Party. China needs true rule of law in this sense, an acknowledgement by the party that it is subordinate to law. This has not been forthcoming.
Kato: I appreciate your continuous efforts in exploring the relationship between the Chinese middle class and political change. I also agree with your idea that “the future of rule of law and democracy in China will depend on whether [the middle class] can shift the classic balance of power between state and society that persisted in China’s past.” [④] Personally, I am not optimistic that the Chinese middle class could become a driving force in future political developments in China, since it is generally not very interested in democracy, freedom of speech, and the rule of law. A significant portion can even be said to have already given up on achieving more political freedom.
The topics that the middle class is concerned with seem confined to the social sphere. Things that are important to those in the middle class, such as improvements in education, housing, and healthcare, could be provided under the current political system. Additionally, the middle class does not seem to think that democratic accountability could work better than the CCP’s “sophisticated bureaucracy.” Most Chinese people feel that CCP dictatorship is not a bad system. They also tend to think that no alternative could be better. Of course, their belief in the authoritarian political system is tied to nationalism.
Fukuyama: I think the middle class is happy with the CCP's rule as long as the country continues to grow economically. However, this is not going to happen forever. It is very hard to move from middle- to high-income status, and the question you have to ask is: how will the middle class feel in the face of economic stagnation, or even a setback that lowers incomes and employment?
Kato: Under Xi Jinping’s leadership, China has assertively pushed new organizations of international cooperation such as the New Development Bank and the Asian Infrastructure Investment Bank. This, to me, indicates that China has never been satisfied with the world order established by the United States following World War II. Nowadays, China seems to be challenging the world order, perhaps even creating a new one. Could China become a primary architect of a new world order?
Some of the praises China has sung about state capitalism over the years, particularly since the 2008 financial crisis, appear to focus not on how state capitalism is good, but rather how liberal democracy is in decline. Thus, the future of democracy might depend on how liberal democracy can revitalize itself. If it cannot do so, it could forfeit legitimacy to state capitalism. Does this make sense to you?
Fukuyama: Yes, I think that the perceived success or failure of different systems has a big impact on ideas and the sorts of systems that other countries choose. The danger right now is that several authoritarian systems seem to be doing well, while democracies like the U.S., the E.U., and Japan are mired in low growth and/or joblessness. So it is very important for the elites in these countries to pay attention to questions of political reform. This will have an effect far beyond their borders.
Kato: If you had a chance to meet and speak with President Xi, what would you advise him at this moment?
Fukuyama: I would suggest that in domestic politics he focus on creating a real rule of law and greater individual freedom for Chinese citizens, and that on an international level he should work with other regional powers to turn down the rhetoric on the various issues that are dividing them.
[①] Francis Fukuyama, Political Order and Political Decay (New York, Farrar, Straus And Giroux, 2014) P7
[②] Francis Fukuyama, At the 'End of History' Still Stands Democracy, The Wall Street Journal, June 6, 2014, https://www.wsj.com/articles/at-the-end-of-history-still-stands-democracy-1402080661
[③] Francis Fukuyama, Political Order and Political Decay (New York, Farrar, Straus And Giroux, 2014) P369
[④] Francis Fukuyama, Political Order and Political Decay (New York, Farrar, Straus And Giroux, 2014) P385