Has China ‘Overtaken’ the West?

Has China ‘Overtaken’ the West?

This past July, at a university student “camp” in Transylvania, Hungarian President Viktor Orban discussed the rise of China, not only calling China a full-fledged superpower but also suggesting that it may already have surpassed the West:

According to Viktor Orbán, “China has shifted the balance of the world”. He added that this was a long-standing fear of the Western world. Even Napoleon said “let China sleep, when it wakes up it will shake the world.” The prime minister pointed out that never before has there been such a rapid and tectonic global shift in the balance of power as we are living in today….

The prime minister pointed out, “China has become a powerhouse of production, in fact it has already overtaken the US, or is overtaking it at this very moment. Car manufacturing, computers, semiconductors, pharmaceuticals, infocommunications systems: they are the strongest in the world today in all of them.”

“China has completed some three hundred years of the Western industrial revolution and the global information revolution in thirty years….”

According to Orbán, “current developments are in favour of Asia and China – be it in terms of the economy, technological development or even military power (…) changes are also taking place in international institutions, and we all know that whoever creates international institutions has an advantage…. “It has a civilisational creed: it is the centre of the universe, and this unleashes inner energy, pride, self-respect and ambition. It has a far-reaching plan, expressed as: to end the century of humiliation, that is, to make China great again, to paraphrase the Americans.”

There is much to note about Orban’s observations here, some of it good, some of it not-so-good.

The first thing to note is that his views on China require some tempering.  Inarguably, China has the will to be a superpower.  It has the determination, the ambition, and the desire.  But a nation cannot simply will itself to superpower status.  If one could, then there would be an endless array of superpowers on the global scene.  It’s more complicated than that, obviously.  Moreover, as the Soviet Union demonstrated, achieving superpower status is a very different thing from maintaining it.  And maintaining it under the guidance of a planned economy with authoritarian control of a people is exceptionally difficult.  The immutable truths of economics and human nature don’t suddenly vanish in the face of overwhelming will and desire.  As Launcelot Gobbo told his father, “truth will out.”  In other words, Orban is almost certainly more sanguine about China’s future than the circumstances would dictate.

At the same time, however, we worry that he has a point about much of what makes China so formidable.  We were alerted to this speech by David P. Goldman – i.e. “Spengler” at the Asia Times – who is one of the smartest people in the world when it comes to geopolitics and global economics and finance.  In turn, Goldman calls Orban the smartest politician he has ever known and has written extensively on themes similar to those in the Hungarian president’s speech.  Among other things, Goldman has written that those who expect China’s current economic slowdown to lead to regime change or a diminution of China’s global ambitions are delusional.  China, he writes, is a powerhouse that must be defeated, as it will not simply give up the fight.

For our part, we are hesitant to contradict Goldman but nevertheless hope that he, like Orban, is overly confident in China’s ability to will itself to global dominance.  But whatever the case, whether one agrees or disagrees with Orban about China and its place in the world, he does make one chillingly salient point about what distinguishes it from the West at this moment in history: “”It has a civilisational creed: it is the centre of the universe, and this unleashes inner energy, pride, self-respect….”  The West – and the United States, in particular – lacks such a civilization creed.  It lacks any confidence or pride in itself and belief in its own righteousness.  Indeed, much of the West is aggressively self-loathing, convinced that it is and always has been a force for evil in the world.

The sentiment among American populists today is that this lack of civilization pride is the principal problem in our society today.  Moreover, they believe that this problem can be rectified and that it can be done in the space of a presidential term or two.  Donald Trump, obviously, believes that he can make America Great Again.  Unfortunately, he is not especially clear about what made America great in the first place, what made it lose its greatness, or how to make it great once more.  In fact, he appears to want to do so in much the same fashion as the Chinese, through the strength of his will alone.

Trump is hardly alone, however.  Vivek Ramaswamy has made the restoration of “national pride” and “national patriotism” the centerpiece of his presidential campaign.  He and his wife have also put their money where his mouth is, endowing American Identity Scholarships to encourage and promote the study of core American ideals.

The question is whether national pride or patriotism can, indeed, be restored.  Patriotism, you see, is both a virtue and the means by which we come to understand what is important and valuable and MORAL in our community.  In his famous 1984 Lindley Lecture (given on the campus of the University of Kansas, Rock Chalk Jayhawk) “Is Patriotism a Virtue?” the communitarian moral philosopher Alasdair MacIntyre put it this way:

I understand the story of my life in such a way that it is part of the history of my family or of this farm or of this university or of this countryside; and I understand the story of the lives of other individuals around me as embedded in the same larger stories, so that I and they share a common stake in the outcome of that story and in what sort of story it both is and is to be: tragic, heroic, comic. A central contention of the morality of patriotism is that I will obliterate and lose a central dimension of the moral life if I do not understand the enacted narrative of my own individual life as embedded in the history of my country. For if I do not understand it I will not understand what I owe to others or what others owe to me, for what crimes of my nation I am bound to make reparation, for what benefits to my nation I am bound to feel gratitude.

The problems here are manifold, but most importantly, Americans, more than any other people, even in the West, deny the idea that we have a common heritage or a common stake.  It is all well and good to say we have a common heritage, to declare that we have historical ideals that bind us together, but the likelihood of convincing a critical mass of the people of this is vanishingly small.  This is particularly so in an atmosphere in which the institutions of cultural transmission have been overtaken by those who fervently believe otherwise.  Our media, our education systems (lower and higher), even our religious leaders, in many cases, thrive on the notion that this nation is “diverse” and thus has neither any uniting characteristics nor the need for them.

For the record, this is the reason that we have staked our career on the idea that business is the last remaining institution that has not been fully captured by those who insist that America cannot be great again because it was never great in the first place.  Business must be saved from complete ideological capture and then must serve as the beachhead from which to wage the long march back through the institutions.  It is no coincidence, we think, that Ramaswamy made his move from corporate entrepreneur to cultural/political leader embracing this same idea.  He – along with a great many others, including many reading this right now – understand that we must preserve this beachhead. Even so, it is inarguable that the necessary march will not only be long but slow and multigenerational as well.

What we are left to wonder is what can be done in the meantime.  How do we stave off the rise of a new and overtly totalitarian global hegemon, one with a clear “civilizational creed,” until we can regain our own sense of national purpose?

Sadly, we don’t have the answer to that question.  If we did, we’d be sure to let you know first, on our way to fortune and fame.  We suspect that a significant part of the answer will come from the “country class,” which not only appreciates the nation’s purportedly common ideals better than its ruling class but also has considerably greater grit and determination.

Fingers crossed.

Stephen Soukup
Stephen Soukup
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Steve Soukup is the Vice President and Publisher of The Political Forum, an “independent research provider” that delivers research and consulting services to the institutional investment community, with an emphasis on economic, social, political, and geopolitical events that are likely to have an impact on the financial markets in the United States and abroad.