Driving this increasingly confrontational approach is a view of China as a monolithic, authoritarian state embarked on a long-term strategy to overthrow US hegemony. Compared to Western states — riven by factional strife, paralysed by democratic deadlock, flailing about in the Middle East and seemingly unable to plan beyond next Tuesday — China certainly seems a fearsome challenger. Its plans cover everything from domestic Artificial Intelligence development to global infrastructure, while the top-down China Communist Party (CCP) regime ensures strict implementation and compliance. Some analysts have even suggested the existence of a 100-year strategy to displace the United States, implying an incredible capacity for long-term strategic planning.

The trouble is: this isn’t true. The Chinese party-state does not work like this. As I explain in a new book, Fractured China, the party-state is much more fragmented than many Westerners believe. Indeed, central policymaking is often loose and vague, with many competing interests shaping what actually happens on the ground.

Under Mao, the Chinese party-state was highly centralised, with top-down “command and control” systems that allowed central agencies to micromanage China’s economy and society. However, in Deng Xiaoping’s post-1978 “reform and opening up” era, these institutions were dismantled to facilitate the turn to capitalism.

Power and control over resources was extensively decentralised to provincial and local governments, as well as the emergent private sector. Privatisation and corporatisation turned former government ministries into free-wheeling, profit-seeking enterprises whose overseas activities are often beyond the ability of Chinese regulators to control. And as party cadres moved into business, and business tycoons joined the party, competing cadre-capitalist networks emerged across the party-state.

Suggested reading

China and Russia's deal with the devil

By David Patrikarakos

Over the past decade, policymaking has been fragmented across a host of national and subnational agencies, often with competing interests and agendas. Some previously domestic agencies have acquired an international role, with even provincial governments having their own foreign and commercial offices.

Provincial governments have, for example, signed a number of trade and investment deals with governments in Asia and Africa. China’s Ministry of Foreign Affairs, then, is not in control of Chinese foreign policy, and often does not even know what other agencies are up to — until some crisis erupts, such as that in Ghana when the local government of Shangli county in Guangxi province deliberately “exported” tens of thousands of artisanal gold miners to offset local unemployment, sparking a populist anti-Chinese backlash and a government crackdown.

Of course, central leaders do still retain some powerful mechanisms for coordinating the fractured party-state. And these all have some effect on how the system works. But they do not add up to strategic, top-down control of every aspect of Chinese behaviour. Top leaders may convene “leading small groups”, committees bringing together different agencies in a given policy area, to try to cohere them around common purposes. But these purposes are often left vague to accommodate competing interests and agendas.

Equally vague are CCP elites’ speeches and slogans, which set an overall “tone” and direction for policy. Subordinates must orient themselves to these slogans to win policy support, funding and promotion. But they are so general that they usually require extensive interpretation to work out what they mean in practice.

Central agencies’ policies are likewise frequently loose “opinions” that local governments must adapt to local conditions. This all creates enormous scope for subordinates to interpret central “directives” in ways that actually advance their own sectional interests, rather than any geostrategic grand strategy. Indeed, the system actively encourages experimentation within loose guidelines — what former paramount leader Deng Xiaoping called “crossing the river by feeling for the stones”.

The most important cohering mechanisms are the CCP’s powers of appointment, appraisal and discipline, which leaders can use to encourage loyalty and punish wayward cadres. Xi Jinping is making particularly strong use of these powers — having, for example, prosecuted over two million cadres for corruption. That such purges seem necessary reflects the epochal transformations in China’s party-state, which, while spurring rapid economic growth, have also weakened central control, undermined the regime’s authority, and enabled massive local corruption.

Suggested reading

The West can learn from China

By Marshall Auerback

Such dynamics have, for instance, played out in the current strife over Xi’s drive for “common prosperity”. Everyone must orient themselves to this agenda, but no one — probably including Xi himself — really knows what it actually means, and everyone tries to wrap it around their own personal preferences. Hard-line leftists in China have interpreted “common prosperity” as unleashing a long overdue attack on the rich, terrorising many business tycoons, who have quickly donated billions to state-linked good causes. But others insist that “common prosperity is not egalitarianism,” and will not involve “robbing the rich to help the poor”, bashing the Left for “triggering ideological confusion and panic”.

Or take Xi’s call for a “toilet revolution” in 2015, in a speech lamenting the often-dreadful state of China’s public lavatories. Local governments seized on this vague utterance to justify splurging a staggering $3bn on toilet upgrades over the next 18 months, doubtless enriching many state-linked construction companies, before the horrified State Council reined them in.

Indeed, Chinese local governments are especially adept at exploiting their autonomy to further their own interests, leading to highly irrational outcomes, which are often misinterpreted as some kind of cunning strategy.

For example, Labour’s Stephen Kinnock, the shadow Asia minister, recently accused China of “deliberately overproducing steel” to dump on Western markets. In reality, overcapacity has been endemic across most basic Chinese industries since the 1990s — reaching 20 to 30% by the early 2010s — as local governments competed against one another to develop local industries and infrastructure through debt-fuelled over-investment. This is why China now has more airports per square kilometre than the US, and is awash with “ghost towns” and loss-making roads and railways, and why many local governments and state-owned enterprises (SOEs) are effectively bankrupt.

But it is China’s BRI that provides the best example of how these dynamics play out internationally. Western commentary tends to depict the BRI as Xi’s cunning grand strategy, designed to undermine US leadership and ensnare developing countries through “debt-trap diplomacy”. Detailed maps give the impression of a strategic blueprint being faithfully rolled out by officials and companies.

The reality is very different. “One belt, one road” emerged as a slogan in 2013 following two speeches by Xi, which largely just described what China was already doing: investing and building infrastructure in developing countries. But quickly, everyone piled in. Over the next two years, provincial governments and state-owned enterprises lobbied ferociously to get their pet projects incorporated into the BRI. Consequently, the project’s guidelines are remarkably vague and capacious, involving no clear objectives, no timeline, no dedicated resource commitments, and no real prioritisation. Practically every party-state activity has been squashed in.

Suggested reading

Science journals have been corrupted by China

By Ian Birrell

Even today, there is no official Chinese map of the BRI, and unofficial ones were banned in 2017. There is not even a clear definition of what constitutes a BRI country or project: different agencies use different metrics to suit themselves. BRI projects are not devised in Beijing, according to a strategic blueprint. They normally originate with foreign governments, seeking funds to accelerate infrastructure development, which may also be useful for securing electoral support or fuelling patronage networks through dodgy construction contracts. And they are often egged-on by Chinese SOEs — not because they want to advance China’s geostrategic interests, but because they want to win lucrative tied aid contracts. Consequently, projects are as likely to occur outside of the six broad “corridors” sketched in the BRI guidelines as inside them.

Indeed, oversight over the BRI is remarkably weak. Chinese policy banks and regulators have very little capacity to evaluate projects’ feasibility, and consequently approve many “white elephants”, such as the notorious Hambantota Port in Sri Lanka. Half of China’s overseas projects are loss-making. Regulators also have no real capacity to scrutinise projects’ implementation, relying instead on host countries to supervise them. The Ministry of Foreign Affairs is barely involved in decision-making, and is typically only brought in when these problems spark major diplomatic incidents. China is still crossing the river while feeling for the stones, but it is stubbing its toes as it goes along.

And so responding to the behaviour of every Chinese entity as though it were intentionally planned and sanctioned by the top Chinese leadership is clearly misguided. The Chinese party-state is not monolithic — it is fractured, even when it comes to Xi Jinping’s signature foreign policy initiative.

Rather than confronting an imaginary strategic monolith, then, Western analysts and policymakers should develop a much more nuanced understanding of China and the internal struggles animating the party-state. In some policy areas, the interests involved do make cooperation difficult or even impossible. But elsewhere, there are forces and agencies that want to work constructively with foreign partners, creating scope for collaboration and mutual learning.

The UK’s decision to join and shape China’s Asian Infrastructure Investment Bank (AIIB), for example — rather than boycotting it, as Washington demanded — is a good case in point. The AIIB has adopted similar standards to existing multilateral development banks, while also trying to drive up the standards of China’s overseas projects.

A new Cold War will only isolate and immobilise these groups, empowering nationalist and paranoid factions who are convinced the West cannot tolerate China’s rise. Unless we tread carefully, and develop a more realistic understanding of China, we risk provoking a confrontation that we might not be able to win.

The escalator in question had been installed in the South Bank’s futuristic Dome of Discovery, allowing visitors to travel quickly up to the special gallery on the solar system.

The story goes that when the saviour of the free world arrived at the Dome of Discovery that grey, drizzly day in May 1951, he rode up with the other dignitaries, looking around him in childlike delight, got off at the top, and then rode down to the bottom again. Then he went up again. Then he went down again. And again, and again.

The point of this story — apart from proving that the national-hero-on-the-Tube scene in Darkest Hour is a total invention — is that it reminds you how ridiculously old Churchill was. He was 70 when the voters rejected him in 1945, and by any sensible standard ought to have retired then and there. When he returned to office six years later, he was about to celebrate his 77th birthday.

He was a great man, of course, but as a dyed-in-the-wool Victorian, he was an absurd candidate to lead Britain into the new challenges of the atomic age. And not surprisingly, given his champagne-sodden lifestyle, he was not in the best of health. A severe stroke in May 1953 almost killed him, yet still he refused to step down. Only in April 1955 did he finally agree to go, ten years too late.

Which brings me to poor Joe Biden, whose health has been somewhat under the spotlight this summer. I say “health”, but what I really mean is his age. As it happens, I have a lot of time for Sleepy Joe, a politician with brains, decency and the common touch. But let’s be honest: he should have been President at least a decade ago.

The American media, especially on the Right, had a field day with Biden’s gaffes during his summer travels. He called Vladimir Putin “President Trump” – something of a Freudian slip — having previously called his own Vice President “President Harris”. At the G7 in Cornwall he got mixed up between Syria and Libya, confused Covid and Covax, the world vaccine programme, and got himself into a laughable mess when he jokingly reprimanded Boris Johnson for not introducing the President of South Africa. In fact, Boris had just done so seconds earlier. By the time Biden returned home, a group of Republican congressmen were even calling for him to undertake a “cognitive test”, having presumably booked him into a maximum-security retirement home beforehand.

All this might seem very unfair. Politicians make so-called gaffes all the time, and Biden’s slips weren’t especially glaring. The problem, though, is that Biden is very old, and looks it. He’s 78, fully eight years older than the next oldest US president, Donald Trump, and almost a decade older than the bronze medallist, Ronald Reagan. This might be a dreadful thing to say, but when I watched him give his inaugural address in the January cold, I was half-expecting to see him keel over half-way through.

More from this author

How the culture wars came for history

By Dominic Sandbrook

When reporters ask Biden about his great antiquity, he often quotes the former baseball pitcher Satchel Paige, who played his last professional game two weeks before his sixtieth birthday. “Age is a question of mind over matter,” Paige supposedly said, though he almost certainly didn’t. “If you don’t mind, it doesn’t matter.”

That’s a nice line, but it’s too glib. Age does matter. If a younger man had been in Downing Street in the early Fifties, a man who knew that escalators had been around in London for more than half a century, then he might also have known that Britain’s industrial economy badly needed radical modernisation.

And there are other obvious examples. When William Gladstone took office for the fourth time as Prime Minister in 1892, he was a staggering 82, simply too old to lead effectively. In the words of his admiring biographer Roy Jenkins, he was half-deaf, half-blind and “over the hill”, the conduct of political business patently “beyond his capacity”.

“I live in fog that never lifts,” Gladstone said. He too was a great man. But if he’d been able to see and hear, isn’t it possible that Britain would have entered the 1900s in a better condition?

More from this author

Prime Ministers don't need to be virtuous

By Dominic Sandbrook

In politics, as in life, looks matter. The fact that Fifties Britain was led by a man who marvelled at the sight of an escalator spoke volumes about its obsession with its own past and inability to embrace the post-war world. And even if Mr Biden really is a dynamo of energy and master of detail, as his supporters insist, his appearance hardly proclaims the virtues of youth and vigour. Indeed, if the United States’s enemies wanted to paint it as a decadent, decaying, senescent society, unable to move on from its Cold War heyday, then no casting agency could have supplied better rivals than Biden and Trump, two ageing prize-fighters who made their names when Bill Gates was still at college.

Why has the United States, so often the herald of modernity, become such a gerontocracy? There’s no easy answer, but an obvious place to start is a political system that rewards years of contacts, lobbying and fundraising, instead of promoting young blood and fresh ideas. To put it bluntly, its politicians are so elderly because its politics are so corrupt. In that respect, the obvious comparison is the Soviet Union when Biden and Trump were in their twenties — another self-consciously youthful society that had simply grown old.

Under Leonid Brezhnev, who stayed in the Kremlin until his death at the age of 75 in 1982, people often joked that the USSR was being led by a dead man. There was a lot of truth in that. By his final years, Brezhnev had suffered several strokes and at least one near-fatal heart attack and was also afflicted with emphysema, memory loss, bronchitis and gout. Contemporary news footage shows his aides manoeuvring him about like a department-store dummy, not unlike the heroes of the film Weekend at Bernie’s. No doubt Brezhnev, too, would have insisted that he had the wisdom of experience, that age was just a number, and that you’re as young as you feel. Then he ordered the invasion of Afghanistan.

There is, of course, an obvious rejoinder to all this. At the first US presidential debate in 1984, the 73-year-old Ronald Reagan put in a dreadful performance against the 56-year-old Walter Mondale, forgetting that he was in Kentucky rather than Washington and admitting that he sometimes felt “confused”. At the second debate a fortnight later, one of the interrogators asked him about it, and Reagan had the perfect comeback. “I will not make age an issue of this campaign,” he said, trying but not quite succeeding to hide a smile. “I am not going to exploit, for political purposes, my opponent’s youth and inexperience.” Even Mondale roared with laughter, and that was that.

Although it would be satisfying to end with some sweeping conclusion about youth always trumping experience — or vice versa — the truth is that there isn’t really an obvious pattern. Do younger politicians make rash mistakes? Yes, if they’re Tony Blair, reordering the world around him. No, if they’re Barack Obama, a case study in passivity.

More from this author

The American Dream that failed

By Dominic Sandbrook

Should you weep and wail if your paramount leader looks like an extra from One Foot in the Grave? Maybe not. When Deng Xiaoping won an internal power struggle to become master of China at the end of 1978, he was 74. A chain smoker, he was very far from being one of life’s gym bunnies. He was, in other words, one of the last people you would pick to catapult his country into a new age of economic reform and breakneck change. But we know what happened next.

And here’s an even better example. The most celebrated doge in Venice’s history, the enormously cynical Enrico Dandolo, was 85 when he took power in 1192, and ruled for another thirteen years. Dandolo might have lost his eyesight, but he had all the ruthless greed of a much younger man. He kicked out foreign residents, launched an attack on the Dalmatian coast and, most infamously, bankrolled and orchestrated the Fourth Crusade’s sack of Constantinople, one of the most appalling atrocities in medieval history. Among the looted treasures were the four Horses of St Mark, which stand in Venice to this day. So every tourist postcard is, in its way, a tribute to this malignant but undeniably vigorous old man.

In any case, when it comes to politics and age, perhaps the venerable antiquity of our leaders is the wrong question. Who cares how old Biden is? It’s the age of his voters that’s the real problem. Surely now, after all we’ve been through, it’s time to wake up to the realities of the modern world, and to reform the age at which young people can vote. I’ve said it before, and I’ll say it again: 18 is far, far too young. But I suppose that’s an argument for another day.

After the Communists came to power in China in 1949, all workers were made similarly unsackable: private enterprise was abolished and workers were guaranteed employment and subsistence by the state. Under Mao, society was organised into danwei, administrative work units — and sometimes physically gated compounds — tasked with supplying accommodation, food, education and rudimentary healthcare in exchange for close political surveillance.

This material security was known as the “iron rice bowl”, after Ji Yun’s story: a social contract in which each worker could be sure of a position. But when Deng Xiaoping began the process of transforming China from a planned economy to a “socialist market economy” in 1978, that iron rice bowl was melted down for scrap in the country’s newly roaring manufacturing economy.

Since then, 850 million Chinese people have been lifted out of poverty. In the last 20 years, its annual GDP growth has remained above 6% — compared to 1.4% in the EU — and in some years has been as high as 14%. Today, China is less “iron rice bowl” than, as President Xi Jinping famously phrased it, “capitalism with Chinese characteristics”.

More from this author

Is China trolling the West?

By Mary Harrington

But the price of becoming competitive has been, well, competition. Beijing implemented policy changes in the late 1980s to foster competition between schools and students; entrance exams have never been so difficult. Meanwhile, a good university place is key to “making it”, while top performers in the gaokao exam — their equivalent to A Levels —become local media celebrities.

Nor does the race end after young people reach adulthood. Much as in the West, young Chinese adults face rounds of unpaid internships and, in Beijing, rents even less affordable than those in London. Job opportunities have become scarcer and more dependent on personal connections, while the cost of living has outstripped earnings growth.

The winners in this (increasingly stratified and hereditary) race become multi-millionaire social media celebrities. The losers, well, lose. Indeed, some have embraced a self-conscious policy of averageness dubbed “Buddhist Youth” — someone who seeks to go with the flow, for example by eating the same food every day, or allowing their partner to make all the decisions. Some take this even further. “Sang culture” (“sang” means dejected or dispirited) is gaining popularity among Chinese millennials, with “Sang Tea” — a joke on the popular brand “Lucky Tea” — now selling beverages called “My Ex-Girlfriend Is Marrying Someone With Rich Parents Lemon Juice”.

It’s a bleak worldview that bears comparison with the rise of the Western “failson”. This is a style of millennial miserabilism that describes a young person who has opted out from society, not with countercultural optimism like the hippies of the Sixties, but bleak, internet-addicted apathy. Sardonically echoing President Xi’s exhortation to bring “positive energy” to all aspects of life, Sang Tea’s slogan “a cup of negative energy a day” resonates with those “failsons with Chinese characteristics” who have found that positive energy doesn’t always deliver positive results.

Suggested article

China's plan for medical domination

By Steve Boggan

China’s modernisation has also echoed the West’s “millennial burnout” in producing dropouts — albeit with Chinese characteristics. Some are fleeing to lower-pressure regional cities with hipster cultures, or checking out altogether in favour of life as a member of a mountainside commune. And along with the failsons and dropouts have come — as Qi Chen noted in these pages — “feminists with Chinese characteristics”.

So whether they inhabit Chinese state capitalism or the Western “free market” variety, it appears that millennials have some common traits. The escalating sense of competition, pervasive internet culture, consumer excess and dwindling opportunities that characterise millennial life in both worlds seem to produce relatively apolitical individuals trapped between shopping and pessimism, and ambivalent about relations between the sexes and commitments of family life.

Yet we’re used to thinking about ideology as the force that drives politics; people come up with ideas, they spread, they get implemented — that’s how the world changes. But watching China’s warp-speed economic development produce sociocultural changes that are, in many ways, similar to those which have transformed the West makes me wonder: is politics just how we rationalise things that are happening anyway?

Consider, for example, the seemingly grassroots Western social revolution of the Sixties, which sought to challenge traditional norms and obligations, as well as the duty to respect our elders. Since then, we’ve seen a steady shrinking in the size of households and rapid growth in single-person households. (In 2016, EU data showed that two-thirds of households were composed of only one or two people. Households of five or six people accounted for a mere 6.5% of Europeans.)

Suggested article

Don't mess with China's feminists

By Qi Chen

No such organic challenge to traditional structures and duties occurred in China. Instead, it was imposed from the top down by Beijing, in the name of economic development. Social scientists were already reporting in 1984 on the concerted effort by the Chinese government to disrupt traditional family bonds in the interests of mass urbanisation and modernisation. It worked: in the last 20 years, the proportion of its population living in urban areas has gone from 20% to 50%. Meanwhile, between 1982 and 2010, multigenerational households have plummeted and single-couple and single-person households have seen rapid growth.

Similarly, some in the West blame changes such as declining interest in marriage and falling birth rates on feminism. But in China, feminism looks more like the byproduct of state-imposed changes in social structure that have redirected resources towards girls and lowered incentives to embrace traditional roles.

So do ideologies such as feminism cause economic shifts, or vice versa? It’s difficult to say. But a look at UK GDP against divorce rates over time suggests that periods of economic growth tend to coincide with spikes in the divorce rate. This is more difficult to track in China, as divorce was relatively difficult to obtain until 2003; but divorce rates have increased steadily since then, and nearly doubled between 2009 and 2019.

In this, China reflects a global shift that has seen marriage rates fall worldwide, while the birth rate is crashing in nearly every country around the globe. Whether social changes emerge organically or through the state, and whether growth causes or is caused by social changes, economic development seems difficult to separate from the attenuation of social and cultural structures.

Suggested article

How China bought Britain's universities

By Mark Edmonds

None of this is to imply a Eurocentric idea of “development” which assumes China must necessarily follow the same trajectory as the West. But watching similar trends play out in two cultures as ideologically distinct as Britain and China suggests that societies in both East and West do share some social characteristics, in as much as they share material conditions and cultural pressures. (If this is true, it implies the popular pastime of dunking on millennials for their attitude rather misses the bigger picture, as does dunking on the liquefying impact of social liberalism.)

The CCP certainly seems more willing than governments in the West to impose top-down measures designed to mitigate millennial disaffection and the weakening of social norms, for example in its recent announcement of measures to combat the “feminisation” of male youths. But it remains to be seen whether these will have the desired impact.

Beijing, after all, devotes considerable effort to imbuing Chinese youth with patriotic fervour and the will to strive and succeed. But the fact that “sang” culture exists at all suggests some forces can act even more powerfully on China’s youth than the massed pressure of its propaganda regime.

Suggested article

The WHO's Covid shame

By Ian Birrell

In any case, it seems likely that as long as China embraces a market economy, it will face the question of how best to mitigate the impact that a market economy has on social structures. So far, the liquefying effect of the “capitalism” bit of Xi’s “capitalism with Chinese characteristics” seems to be mostly held in abeyance by the social policies that make up the “Chinese characteristics” part.

For though many of Xi’s measures seem monstrous from a Western standpoint, from a Chinese perspective they may appear reasonable trade-offs: certainly, while growth may be driving a new progressivism and hammering the country’s birth rate, support for the regime remains broadly high. So for now, the Faustian bargain of a growth-oriented economy still holds, and President Xi retains the Mandate of Heaven regardless of a few disaffected tea-drinkers and commune-dwellers.

But should mass material enrichment slow in earnest or even — as in the West — begin trickling back upwards, the regime may need to find other means of fostering solidarity among Chinese youth. The rest of the world should beware that moment: because in the absence of peaceful growth, the quickest route to national solidarity is warfare.

The problem was that Cable, who later became an interesting Cabinet minister then a poor Lib Dem leader, struggled to connect his economic insights to practical politics. The ever-smaller band of hacks attending used to leave that room each week wondering what his seminars had to do with the Blair government, the Lib Dems’ prospects, or anything else that was then on the agenda at Westminster.

Those Commons sessions — erudite, informative, almost devoid of politics — came to mind while I read Cable’s latest book. Money and Power is good and interesting, but fails utterly to deliver on one of its key promises. The book is 16 portraits of world leaders who made a real economic impact, and if you’re looking for a brisk, slightly old-fashioned “great man” primer on modern economic history, pre-order it today. But if you’re taken by the publisher’s promise of a book “examining the fascinating interplay of economics and politics”, prepare for disappointment.

Because this is economics largely estranged from — and sometimes wholly divorced from — politics. Time and again, the matter of whether and why economic policies and their authors are approved or rejected by their populations is an afterthought, treated like a weather event: something that just happens. And in his intelligent but bloodless way, Cable unwittingly says quite a lot about what can go wrong with economic policymaking. By omission, he points towards some things that the next generation of economically-interested politicians should be thinking hard about now.

More from this author

What's to become of the Lib Dem 'cockroaches'?

By James Kirkup

Maybe the first and biggest question is: how important should economic policy be to politicians? Cable quite rightly notes that for most of the post-war period, countries around the world have given national priority to rising living standards and economic wellbeing. He goes on to describe how a variety of leaders have sought to do that, with varying degrees of success. Cable’s measure of success for the politicians he profiles is largely based on economic outcomes: did they deliver more wealth and wellbeing for their populations?

The importance of that barely needs to be explained: sustained economic growth in recent decades has transformed human experience in ways that were barely conceivable even a generation ago. Infant mortality has plummeted, lifespans are soaring, and the years of life we have are happier and healthier than ever before.

But is that enough? And is the pursuit of growth above all always the right thing for politics to do? Cable’s economic policymakers often come across almost as Platonic guardians, distant and superior beings making decisions about the best interests of the masses who will eventually benefit, whether they know it or not and whether they welcome it or not. One of Cable’s most revealing observations is about Margaret Thatcher: “One of her traits — and an admirable one — was to introduce and persist with measures that she knew to be unpopular but judged to be necessary.”

In this book, elections, opinion and consent are peripheral; where Cable says “politics”, he often means a leader’s ascent through the hierarchy of a party, not anything directly involving the people who feel the results of economic policies. His depiction of Ludwig Erhard, father of social market economics, is crisp, informative and challenging (I speak as Director of the Social Market Foundation) but says almost nothing about post-war politics in West Germany. He writes about Franklin D Roosevelt’s success in establishing a generation-long post-war consensus around a “strong, active federal US government, labour rights and social protection”, but he does so in a single paragraph and offers no explanation of how FDR turned economic success into political wins.

And as Cable acknowledges — but cannot explain — there is no certainty that good economics is also good politics. He profiles Leszek Balcerowicz, Poland’s finance minister at the fall of communism: his “Big Bang” liberalisation of the Polish economy put the country on track for years of strong growth and, eventually, EU membership. But Balcerowicz lasted barely two years, as Poles rejected him and his allies. By contrast, Cable notes that Peronism in Argentina “has combined one of the most abject, sustained failures in economic policy with continued political popularity, evidenced by the 2019 election of a sixth Peronist president”.

What makes the difference? Cable doesn’t know and doesn’t really try to answer. His puzzlement over voters’ curious choices is evident in his last and probably unwise profile, of Donald Trump, which appears to have been hastily finished in the strange days following the November election.

Trump’s eclectic but not haphazard approach to economics perplexes Cable (and others), who cannot understand how Reaganomic tax-cuts could sit with a fixation on protectionist bilateral trade policy and nostalgia for inefficient manufacturing — and command the support of a large section of the American electorate.

All of which leads to one of the questions Cable doesn’t ask, but which emerges clearly on reading his book: what happens to economic policy when people decide there are more important things in life than economics?

Suggest reading

Trumpism is here to stay

By Eric Kaufmann

To be fair to Cable, he’s hardly alone in this. All sorts of people — politicians, journalists, academics — have been keen to try to explain the politics of recent years in solely economic terms. Trump won in 2016 because white non-college incomes fell and jobs disappeared; Britain voted Brexit because of austerity.

And economics may have been one factor for some voters. But that economics-first view overlooks other things, the cultural and the social, which some people consider more valuable than GDP growth. Philip Hammond used to say that none of the 17.4 million who backed Brexit voted to be poorer, but some of them did. Some were quite happy to forego some portion of future economic growth in exchange for what they saw as sovereignty, national pride, a sense of control.

That’s not a choice I’d have made, but I think people who make policy need to accept it as a valid choice. They also need to think more about why some people feel able and compelled to make such choices: free trade made America richer in aggregate, but didn’t benefit everyone, or make everyone feel happier about themselves or their country. Economic policy should acknowledge such perceptions and experiences and reflect them more, rather than — as Cable’s analysis sometimes seems to imply — regarding voters’ irrationality as an inconvenient obstacle to be overcome or just avoided.

Here, I should note that I have a lot of sympathy for Cable’s Platonic view of policymaking: both as a columnist and a think-tanker, I’ve often argued for politicians to do unpopular-but-sensible things. (And I still do: the sooner we start taxing housing assets to fund social care the better.) But my guess is that it’s going to become even less viable to make economic policy by doing complicated and contentious things for the greater good of the electorate in the hope of securing their weary consent later. I suspect electorates empowered and (sometimes) informed by social media and possessing a very(historically speaking) high level of wealth and comfort are only going to expect more from their leaders than sound economic management.

My bet is that sooner or later, that’s going to mean people in politics start talking a lot more about central banks. A conversation about their role in modern economics — and politics — is surely overdue. Our elected leaders have handed vast power to technocrats whose legal mission is to do what’s best for the masses, not what they want. There’s nothing wrong with this — it’s better than the alternatives — but where’s the political process to deliver consent? The economic guardians of monetary policy routinely make decisions with profound political consequences: ultra-low interest rates and quantitative easing are effectively transferring great wealth to older property-owners, at the expense of younger people struggling to buy a home and amass decent pension. Yet in the UK at least, politicians barely talk about any of this. In QE, economics trumps politics to such an extent that politics is barely present.

That cannot last. Cable several times cites Bill Clinton’s campaign slogan — It’s the economy stupid — as a truism that explains all politics. Not anymore.

Suggest reading

This is no time for austerity

By Peter Franklin

There’s another even deeper canyon on the politics-economics faultline that Cable highlights without apparently noticing. Can economics be used to suppress politics? Can you provide enough wealth to buy your way out of the political need to win arguments and elections? These questions arise in Cable’s analysis of east Asian leaders, in which he has disappointingly little to say about political freedom.

His portrait of Lee Kwan Yew, for instance, has more to say about the academic background of Lee’s economic advisers than about the people of Singapore and their view of a leader who delivered economic growth and an increasingly authoritarian state.

And then there’s China, which is posing one of the biggest questions of all about politics and economics. Is it possible to make a country and a people rich without making them free? Our entire idea of the West is premised on the assumption that economic growth and political freedoms proceed together: as people own more stuff, they demand and acquire legal rights over that stuff, and in due course a say in how those laws are made. Educated, property-owning masses cannot be denied political freedom forever, we trust.

China is doing a depressingly good job of proving us wrong on that. The CCP’s embrace of the market has made many of its people — by global and historical standards — rich. Hundreds of millions of Chinese people have smartphones and flatscreen TVs, but not one of them has a vote. Effective economic policy is trumping politics.

Suggest reading

How China could turn off Britain's lights

By Clive Hamilton

This is the stuff I’d like to read about in a book that offers to guide our understanding of the future relationship between politics and economics. Sadly Cable barely touches on this and his book sometimes goes beyond being simply apolitical and borders on the amoral. His chapter on Deng Xiaoping treats Deng’s role in Mao’s mass murder of their countrymen — and direct responsibility for the Tiananmen Square massacre — as mere factual context for the man’s views on markets, industrialisation and agricultural reform.

The results are jarring, especially when Cable writes blandly about the catastrophic Great Leap Forward, when private farming was banned and crops seized by the state. This horror took place when Deng was one of the three men running China, yet Cable presents it as little more than a bump in the road to economic success:

 “…countless millions died in the famine: 45 million according to some Western sources; 16-17 million on Chinese official estimates. It was an epic disaster which appears to have persuaded Deng (working with like-minded senior leaders) to press for ‘adjustments’: radical economic changes designed to raise living standards.”

After all, what other response could a good economic policymaker have to helping cause the worst famine in human history than to seek to raise living standards for those still living? Deng may have been, in Cable’s phrase, an effective economic architect, but he was a gravedigger too. Shrugging off a state’s murder of its own people because it made the ones it didn’t kill richer is the logical, dismal conclusion of a worldview that accords economics priority over politics.