Revolutions are all about jobs
Thereâs nothing like a few revolutions to focus the mind. The lesson the worldâs smartest authoritarians are drawing from Tunisiaâs Jasmine Revolution and its neighborhood copycats is simple: Itâs all about jobs.
âThe leadership in China is always worried about how do you stay ahead of the growth to create enough jobs,â says Dominic Barton, the global managing director of consulting firm McKinsey, who has lived in Asia for much of the past decade. âThey have to create over 30 million jobs a year. … They know that if they donât and there are disruptions and the people donât have jobs, there will be revolution.â
To illustrate how focused Chinaâs Communist rulers are on jobs, Barton described work he had done helping the Chinese government structure its economic stimulus in the aftermath of the 2008 financial crisis. The Chinese authorities came to him with a very specific question: What sort of discount should you put on TVs in Tier 3 cities? âIt was a very focused question. And the reason was, they were trying to create consumer demand in a very sophisticated manner.â
The mandarins wanted McKinseyâs advice on how exactly to implement their TV stimulus program: Should the price of televisions be cut by 25 per cent, or should consumers be required to pay the full price, then apply to their mayor for their 25-per-cent rebate? Barton says that once he understood how precise the request was, he âdid the McKinsey thingâ of talking about how important it was to make sure the project worked and had an impact. One Chinese official wasnât impressed by his spiel, Barton recalls: âHe says, âI think we have a different definition of impact than you âŚ If this doesnât work, we are going to have probably 12 million people that wonât have jobs. And you should know that all of the revolutions in our 5,000-year history have occurred in the countryside.ââ
The Middle Eastâs remaining autocrats are swiftly learning the Chinese lesson, as illustrated vividly by Saudi Arabiaâs new $36-billion (U.S.) stimulus program, which includes a 15-per-cent pay increase for public sector workers. As Jack Welch, the former chief executive of GE, described it this week, âIn this recession, China did incredible things,â adding that âit is a little bit like what the Saudis are trying to do now to keep everyone happy.â
As Bartonâs Chinese interlocutor readily acknowledged, these regimesâ concern about keeping their people employed is hardly selfless. Both Chinaâs long history and current events in North Africa show the smart autocrat that if too many of his subjects are unemployed, their supreme leader is at risk of losing his job, too. Moreover, instant job creation is easier in economies where the state plays a dominant role — and that is particularly true for power exporters such as China and Saudi Arabia, who have plenty of cash on hand. Nor do government handouts — especially in oil-dependent Saudi Arabia — necessarily offer a path to long-term economic growth and job creation.
Even so, the authoritarian regimesâ preoccupation with jobs is in striking contrast with the United States, where despite nearly record levels of unemployment, the central issue in the political discourse at the moment is cutting government spending, a major gripe for the U.S. left, which correctly sees that less state spending will mean fewer jobs.
It isnât only the progressive activists who think jobs needs to be at the center of the U.S. national conversation. Welch, an outspoken Republican, says: âWhy did we spend a whole year fighting over health care and ignoring jobs?â
Google chief executive Eric Schmidt calls unemployment the No. 1 issue facing the country. Like those Chinese mandarins, he has a proposal. âThe best way to solve that problem is to have a construction boom,â he said in an interview. âThe best way to have a construction boom is for the government to create liquidity in markets that are debt-related to build whatever they care about. My favorite one is energy — rebuilding Americaâs energy infrastructure, insulating all the homes. This requires lots of construction. And these are nice, local American jobs.â
Both Welch and Schmidt are very worried about government debt. But governments need to be able to do more than one thing at the same time. The Arab uprisings have reminded the worldâs dictators that not worrying about jobs could undermine their own job security. Kicking out elected leaders who canât provide jobs is even easier.