Friday, February 24, 2012

Is Prosperity Strengthening Beijing's Iron Grip? -

This is the historic price and promise of industrialization: It is no fun, but it is better than subsistence living back on the farm. And, modernization theorists like Seymour Martin Lipset have argued, as people get richer thanks to dismal jobs like those at Foxconn, they are able to demand more rights.

That is a powerful argument, and it has been true not only in the Western developed world, which industrialized first, but also in 20th-century stars like Japan and South Korea. But Daron Acemoglu, an economist at the Massachusetts Institute of Technology, warns that we should not assume that the happy connection between prosperity and democracy will automatically hold true for China. That is because China is industrializing in the age of Apple — in an era of globalization and the technology revolution.

But globalization and the technology revolution mean that China’s authoritarian rulers have been able to deliver strong economic growth without surrendering political and social control: “Instead of having to develop an entire industry, an emerging market economy can house just some of the tasks such as assembly and operation. This not only enabled China to grow very rapidly by relying on world technology and leveraging its cheap and abundant labor force, but has also mollified demands for structural, social and institutional changes that previous societies undergoing catch-up growth had experienced,” he writes.

Mr. Acemoglu sees a powerful, and worrying, paradox at work. It is the triumph of the open society in the West, with its focus on individual rights, independence and iconoclasm that created the technology revolution. But the impact of those discoveries on the world’s mightiest dictatorship may be to prolong its reign.