What if Russia and China don’t become more liberal?

June 28, 2012

Liberal democracy faces a new and decisive challenge – figuring out how to deal with the “post-Communist oligarchies” of Russia and China. These regimes – authoritarian, capitalist and eagerly integrated into the global economy – are without precedent. Figuring out how to deal with them is the greatest strategic and moral question the West faces today. How we answer it will determine the shape of the 21st century, much as the struggle with communism and fascism shaped the 20th.

This is the assertion Michael Ignatieff, a Canadian intellectual and a former leader of the Liberal Party, made in a powerful lecture in the Latvian capital, Riga, at the beginning of this month. Ignatieff’s thesis came to mind during the annual St. Petersburg International Economic Forum, held last week as the gracious former imperial capital for which the forum is named glowed in the pure white light of the summer solstice.

Central to Ignatieff’s argument is his insistence that “history has no libretto.” It isn’t marching toward any particular destination, including liberal democracy, he said: “As late as Benedetto Croce, liberals still thought of their creed as being the wave of the future and thought of history as the story of liberty.”

When it comes to Russia and China today, we still hope we will all eventually sing along to this seductive libretto. “It is a cliché of optimistic Western discourse on Russia and China that they must evolve toward democratic liberty,” Ignatieff argued. Sadly, though, we’re wrong: “we should not assume there is any historical inevitability to liberal society.”

As Ignatieff explained to me in a telephone conversation this week: “The simple point is that we thought they were coming towards us. What if they are not?”

The optimistic Western cliché Ignatieff described was very much the conventional wisdom in St. Petersburg. It is what the visiting Western business titans wanted to believe, and it is what the presiding Russian government chiefs wanted them to believe.

Klaus Kleinfeld, the chief executive of Alcoa and chairman of the U.S.-Russia Business Council, said in an interview that President Vladimir V. Putin’s opening speech at the conference was “very, very good. He was basically clear that he stays on the course of reforms. He stays on the course of modernization.”

When I suggested that Putin might instead be taking Russia backward – freedom of assembly was sharply curtailed this month and several activists, including Putin’s goddaughter, were questioned by the police and had their homes searched – Kleinfeld demurred.

Referring to the reformist promises of Putin’s speech, Kleinfeld said: “We have to take that at face value.” Kleinfeld also said that Russia’s progress needed to be judged in historical context.

“How the country has emerged in the last 20 years, I think, is pretty amazing. I think most people that are easy with their criticism measure Russia against countries that had much, much more time to go into a market economy,” he said. “Some of these processes take a little time to struggle themselves through. They are on a good path.”

What is striking is what you might call the “libretto” assumption in these remarks: Russia is on the right path, just give it time.

At least when they speak English, this is a view that Putin’s people are eager to endorse. When I asked Igor I. Shuvalov, the suave and sharply dressed first deputy prime minister what he made of Putin’s speech, he, too, spun it as proof that Russia is on the path to becoming more like the West.

“I was very pleased that yesterday what he announced was completely in line with a new generation. It was everything which any citizen of the European Union, or other developed countries, wants. It’s exactly how Putin sees the future for Russia in just a few years,” Shuvalov explained.

“We are passing the way all developed countries pass,” he said.

This is a useful theory for Russian leaders – and for Chinese ones, too – and a comforting one for their Western business partners. It is useful because assurances that you are on the path toward Western-style liberal capitalism can serve as a catchall justification for whatever illiberal policy you happen to be pursuing at the moment. Think of it as the dictator’s version of St. Augustine’s prayer to be made good, but not yet.

Believing that the duo Ignatieff calls the “post-Communist oligarchies” are on the liberal capitalist path is comforting for the liberal capitalist companies that do business with them. After all, for all the kowtowing required to do business in Russia and China, the rewards are vast.

Consider the experience of BP, the oil giant based in London, which paid $7 billion in 2007 to establish a 50 percent stake in TNK-BP, its Russian joint venture. BP’s trials at the hands of both its Russian partners and the Russian state are the stuff of legend. But shareholders and the board care more about the $19 billion BP has received in dividends since making the deal. That’s quite apart from BP’s share of TNK-BP, which analysts think could be worth between $25 billion and $30 billion.

The optimistic cliché of inevitable liberal evolution is convenient and comforting. But that doesn’t make it right.

If Russia and China really are not marching inevitably toward liberal democracy, as Ignatieff argues, that is a problem not just for their repressed people but also for us.

Ignatieff says that our attitude toward Russia and China is a question of such great import because both countries “are attempting to demonstrate a novel proposition: that economic freedoms can be severed from political and civil freedom, and that freedom is divisible.”

He is right that this is the fundamental operating proposition of Russia and China, and he is right that it poses the most serious challenge that the very idea of liberal democracy faces anywhere today.

It is no surprise that this question was not on the agenda in St. Petersburg. But surely it should be much more squarely on the agenda in Western capitals – and even in Western boardrooms.


We welcome comments that advance the story through relevant opinion, anecdotes, links and data. If you see a comment that you believe is irrelevant or inappropriate, you can flag it to our editors by using the report abuse links. Views expressed in the comments do not represent those of Reuters. For more information on our comment policy, see http://blogs.reuters.com/fulldisclosure/2010/09/27/toward-a-more-thoughtful-conversation-on-stories/

Until they are willing to play on a level and equal playing field, we shouldn’t be dealing with them on a for profit basis at all. If you lay with a dog, don’t be surprised when you get fleas.

Posted by boon2247 | Report as abusive

“…’attempting to demonstrate a novel proposition: that economic freedoms can be severed from political and civil freedom, and that freedom is divisible.’…”

How is this a “novel proposition”? I recently read Randall Peerenboom’s book “China Modernizes: Threat to the West or Model for the Rest?” very informativ e and states that the West has a problem that Mr. Ignatieff displays in abundance here, it is projecting its own desires and hopes on a foreign country.

Granted there are exceptions to the following statement (Mr. Chen Guangcheng comes to mind), but in general most people will accept the following deal:

The State will guarantee an ever increasing standard of living, i.e. you will be allowed to make as much money as you like within preset legal standards in exchange the individuals will stay out of political discourses.

Western companies really don’t have an issue with non- or semi-democracies, after all the West sells weapons and signs economic deals with some of the most repressive regimes in the world. The Wests real issue is lack of influence with the elites of Russia and China, that they can’t get the countries elites to sign even more advantageous deals than the one signed by BP (outside of the problems BP has with AAR, its partner in Russia.

Posted by NobiNobita | Report as abusive

Perhaps it’s that, throughout the globe, we’re acknowledging a fact of life regarding the hierarchical nature we apparently inherited from our evolutionary predecessors, which is that wealth buys freedom, and power maintains wealth. This would be a sadder but, if we’re lucky, wiser re-acquaintance with reality as understood prior to the so-called Enlightenment. The odds are against getting lucky, so we’ll probably have to settle for sadder. I wish we could say it was a pleasant dream while it lasted, but the brutal conflicts that both preceded and followed the Enlightenment shows it was just a variation on the prevailing nightmare.

Posted by TobyONottoby | Report as abusive

Liberal and liberty are not related.

Russia and China are not changing for the better. Both are dangerous to the rest of the world; they are militaristic bullies.

The facts no one wants to read.

Posted by ALLSOLUTIONS | Report as abusive

I think a total redefinition of liberalism needs to be done for Russia and China. Of course one cannot forget the fact these societies are very narrow and to open them up to the wilderness of capitalism is disastrous we see that in Russia now. The failure of the socialists to reform and become totalitarians was predicted even with the birth of communism. Now what should be done? Understand not all part of socialism is evil when it comes to dealing with the masses of a country. It may not really work for a company or an individual house hold but some socialist ideology can help governments to spread the success of society across a vast nation. Understand both Russia and China are huge countries with diverse culture. This is where communism failed but when you look at the history of these countries during the communist era, you can see the success of some socialist ideas that helped innovation. So bring economic socialism and political freedom. It will help those societies solve their problems.. not all of the problems, some of the problems. There are no healing for the wounds created by the brutality of totalitarians in the society. The generation that carries those wounds will carry it to their graves.

Posted by bulldancer | Report as abusive

Liberal democracy may not be a foregone conclusion for all nations, but one thing all the world’s cultures have in common as a result of their shared genetic lineage is an appetite for consumption. And it is consumption, for better or worse, that turns the gears of the liberal democracy machine. A desire for unbridled consumption is what unseated the hardline Communist regimes in Russia and China and installed more market-friendly leaders in their place.

Consumption is the sibling of competition, and people are inherently competitive with one another, even when they’re smiling and shaking each other’s hands. People want more than their neighbors, they want to dominate each other by any means available: physical, intellectual, financial, emotional.

There is no end to competition, thus there is no end to consumption, because we’re competing to consume. Competition and consumption will go on forever, because they are the twin columns of life on earth (eating and competing). And as the “meme” of liberal democracy spreads throughout the world, it stokes an insatiable desire to consume and compete with your neighbors and with other nations. That is the mechanism by which a (moderately) free market democracy is arguably the endpoint of nationalistic evolution.

Posted by Nullcorp | Report as abusive

China and Russia demand that any Western business concerns wish to operate in their sphere of influence accept that civil and political freedom is separated from economic freedom based on their ideology.

You want to convince the Governments of the West to demand that any Western business concerns to operate only in countries where political, civil, and economic freedom are inseparable based on your ideology.

What is to decide whose ideology is “superior”? Two hundred years of Western military domination over your colonies and the third world gives you the right?

Western liberal democracy has less than two hundred years out of more than three thousand years of human history. The jury is still out in regard to how successful it is.

Posted by ayetee | Report as abusive

As an American professor at a Chinese university for the last five years, I’m still amazed how many, how mistaken, and how invisible to myself are my assumptions about China, so Ignatieff’s thesis strikes me as both obvious and unlikely to be widely accepted in the West.

Among the Chinese people I know, history has a totally different pattern and so the future appears as a totally different proposition. Five thousand years of ups and downs encourages a cyclical rather than a linear historical “plot-line”. In fact, in the current academic semester I introduced my junior-level students to a concept which, to my surprise, was totally new to 95% of them: modernity. What in the West we might see as historical progress, my students see as economic-technological change with no necessary relation to political or even social change, and certainly no relation to “historical progress”.

my students’ final assignment was to answer the question “In the 21st century, will China become the West?”

Posted by Hekuanghui | Report as abusive

It’s not entirely without precedent.

Peter I made the Boyars cut their hair, studied naval architecture in Deptford and built a faux-Venetian city, the Westerners came and bought furs, but things didn’t get much better for the serfs.

Then, in the 19th century, there was no shortage of peasant reforms, and the Westerners came and built steel mills and railways, but life, if anything, got worse for the serfs.

In a sense, it’s what Russia has always done when talking to Europeans. Just as it adopts a different tone when talking to its other neighbours.

Posted by IanKemmish | Report as abusive

On the fall of the Soviet Union, I used to say that our form of socialism turned out better than theirs.

The abstract notion of economic players making rational decisions to serve their own interests in an open market does not accord well with the collaborative decision-making decoupled from personal liability that is the concrete reality of nearly all business. From this alone we know there is more going on in economic life than is commonly understood by policy-makers and the public alike. The predictive failures (interest rates, inflation, expansionist austerity) by large numbers of highly-regarded economists demonstrate that even those who do it for a living do not have a solid understanding.

And how to explain the rising class of Chinese entrepreneurs in a land of successful state-owned enterprises?

We just don’t know enough to know that we aren’t fooling ourselves by touting this, that, or the other political-economic theory as fact.

Posted by TheCageNovel | Report as abusive

History is life seen through a rear-view mirror. The failed leader of the Federal Liberal party of the Socialist Republic of Canadistan is not in a position to speculate. If it turns out that capitalism and authoritarian leadership brings the greatest good to the greatest number of Chinese and Indian voters (in mock elections of course) then that is the course of history. Western morality will go the way of the Gnostic Gospels, forgotten in the sands of time.

Posted by Craigers | Report as abusive

There seems to be this illusion that a country’s economic, social, and political structure exists independent of its society. It does not. Russia and China aren’t attempting to demonstrate anything, novel or otherwise. They are simply trying to move their societies forward as they see fit. That where they are and where they appear to be going does not align with “Western” images of liberal democracy only tells you that their societies are different that those of Europe and the US. The idea that Russia and China pose a serious challenge to the very idea of liberal democracy is ludicrous on its face. The only challenge they pose is to the belief in “the West” that you have to be like us to succeed – a belief that’s been around since the time that colonization of the world began.

Posted by majkmushrm | Report as abusive

If you tell people what they want to hear, they tend to believe you, even if you’re telling a lie. The leaders of Russia and China know that.

They know that we want to believe they are moving toward liberal democracy. And it’s easier for us to believe they are essentially benevolent, than to worry that trouble is on the horizon.

Neville Chamberlain’s 1938 “Peace in Our Time” approach to Hitler is a good example.

Dealing with trouble requires more effort than ignoring it. But postponing action may allow the situation to grow worse.

Hence, we must deal with China in particular now. They are becoming increasingly powerful, by dominating world commerce. They are achieving this by unfairly manipulating their currency. The consequence has been devastation of the western industrialized economies, and a more highly militarized and aggressive China.

If we ignore this, we can keep on buying cheap stuff in Wal-mart. And trans-national corporations can continue to earn huge profits from cheap Chinese labor – made even cheaper by their undervalued currency. But we will pay a heavy price for many years to come, as the Chinese dictatorship will soon rule the world.

Americans must face reality, and make this a key issue in the presidential election campaign. American must ask Obama and Romney how exactly they will deal with China.

Posted by DifferentOne | Report as abusive

“Ignatieff says that our attitude toward Russia and China is a question of such great import because both countries “are attempting to demonstrate a novel proposition: that economic freedoms can be severed from political and civil freedom, and that freedom is divisible.”

But is it really so novel? Freedom was “divisible” at various times in Latin America (especially Chile but also in Brazil), apartheid-era South Africa, and in Asia (South Korea, Taiwan, Singapore) and Western boardrooms didn’t particularly care.

Posted by bluepanther | Report as abusive

today’s liberal democracie are neither particularly liberal nor
particularly democratic.
the flagship western democracy has spent the last 10 years fighting
unwinnable wars paid for by borrowing against the future in order
to make the world safe for standard oil while the rich have gotten
richer and the poor have lost their homes and jobs. the us supreme
court has affirmed the ‘one dollar, one vote’ principle making
it possible for the economic power structure to monopolize the
airwaves and buy votes and legislators. in the us, the ‘free market’
has made it impossible to institute a reasonable health care
system and laid siege to even the poor compromise that made it
past the obstructionists in congress. in both the us and europe,
bankers have made bad loans to people who can’t afford to pay
them back and then packaged the debt and sold it to each other
in glitzy wrappers with nothing inside; the resulting financial
chaos has been an excuse to break the remaining unions and roll
back safety nets put in place by people who remember 1929. the
bankers have been bailed out with taxpayers’ money while the
people who pay the taxes lose their invested savings. it’s not
just china and russia that are turning into state capitalist
oligarchies. ignatieff’s concerns are valid but perhaps
misplaced. government of the people by the wealthy for the
rich seems to be where most of the developed world is heading.
in the short term the oligarchs might get what they want. but
it might be harder to get an unemployed elementary school
teacher to die for a dollar than it is to get a madrassa trained
ophan to die for god…

Posted by siddemontreal | Report as abusive

Is this article a joke? She’s worried about Russia and China not becoming more liberal? She should worry about how the US is moving steadily to the right–even under he Democrats.

Posted by cautious123 | Report as abusive

We need to find innovative ways to engage and interact with the Russian Federation.

The Russian Federation today is much more open and tolerant than it was a generation ago.

It has a long way to go. But millions go abroad. Millions more have access to information from around the world via Internet.

There is much to gain for both sides. The Russian Federation will continue to present challenges as it continues to have pains growing into a tolerant and mature democracy.

The Russian Federation will not be as Euro-centric in the future because of the rise of India and China.

Bohdan A Oryshkevich, MD, MPH
New York City

Posted by BAOryshkevich | Report as abusive

We need to find innovative ways to engage and interact with the Russian Federation.

The Russian Federation today is much more open and tolerant than it was a generation ago.

It has a long way to go. But millions go abroad. Millions more have access to information from around the world via Internet.

There is much to gain for both sides. The Russian Federation will continue to present challenges as it continues to have pains growing into a tolerant and mature democracy.

The Russian Federation will not be as Euro-centric in the future because of the rise of India and China.

Bohdan A Oryshkevich, MD, MPH
New York City

Posted by BAOryshkevich | Report as abusive

Sound like smoke dreams to me. I think it is going to go back to where it was and stay there in Russia and China. I expect more purges and lots of people running for cover.

Posted by fred5407 | Report as abusive

Read your history folks. Russia and China are not becoming more liberal. Many western countries (the United States and Canada as examples) are becoming more authoritarian.
As far as Russia “becoming westernized,” the tsar of Russia at the end of the 17th Century and beginning of the 18th, Peter the Great looked to the west to bring Russia “up to speed” with the west. His Russia took on the appearance of westernization. Not so the reality. Read the history of Russia. Read the history of Peter the Great. If you think Russia is becoming “more” liberal, you are deluding yourself and looking through a prism which sees all things liberal.

Posted by neahkahnie | Report as abusive

WE deal with how their actions impact us. As for own well being an organization is most effective when decision are made close to where the information comes in. If it goes through many layers of management, it takes too long and original signal gets distorted. Therefore effectiveness required some flexibility.

Posted by SamuelReich | Report as abusive

These dictatorial countries will have to eventually succumb. Their peoples and technology will allow no other outcome. This is not a question of the weakness of the current leaders pulling these societies backward.
It is a question of the sad corrupt leaders of today holding back a torrent of human desire for self direction, fulfillment and freedom. The genie has been let out of the bottle and fortunately the ability to communicate on a vast scale will prevent any reversal.

Posted by keebo | Report as abusive

As they used to say in the former USSR: “First we create our own problems, then we bravely overcome them.” Now it’s our turn to repeat that.

Let’s stick to the basics… Russia and China have two huge resources that nobody else does: oil/gas and cheap labor, respectively. But it’s the Western countries who in the end let Russia and China leverage these resources and become what they are now.

I call it “back side of capitalism”, meaning that the very essence of capitalism – profit and competition – compel Western corporations to ship local technology and jobs to China and, as it happened in Europe, get addicted to Russian oil/gas. In some way, Western capitalism turns its back to itself, or, as they say in Russia, “cuts the branch on which it sits”.

It is also very much so, since neither Russia nor China strive to become a truly capitalistic state. They want to mimic capitalism as much (but not more!) as it suites their ruling elites, both in terms of self-enrichment and keeping the “masses” in check.

The way spurious mushrooms are different from the real ones, the same way Russian and Chinese “capitalism” is different from the Western one…
My two big questions are: are we going to continue blindly poisoning ourselves and do we still have time and resources to recover?

Posted by UauS | Report as abusive

Fast effective control requires decisions be made as close to the information input as possible without going layers of management to get distorted, debated and delayed.

That means decisions not requiring great technical expertise be made at the local level. Those requiring great technical expertise are obviously out of the political realm.

Therefore, decision making at top by party politicians will limit the growth of autocratic nations.

Posted by SamuelReich | Report as abusive

We all live in precarious and limited freedom times.
Russian and China liberalization or non-liberalization is the least of my worries.

Oligarchs are already controlling much of Western societies.

It was funny and sad at the same time to see everyone cheering and blowing fireworks on July 4th to celebrate their independence. Sadly, independence is gone.

The Oligarchs are here and we cannot shake them – They are embedded in our global banking, corporate structure and political system and have complete freedom to move around to what ever country suits their needs – for an opulent life style or for a cheap repressive labor force.

You realize this and dare not go there…..

Posted by Butch_from_PA | Report as abusive

Perhaps the best way to deal with authoritarian countries like China and Russia and also third world countries is from the bottom up.

By instituting a formal external system of qualification which I have called EXOREG

If a company or organization wishes to sell a product or a service in say the EEC then a small team of inspectors from the EEC would visit the companies factory or factories offices etc. and make sure that it complied with standards for pollution and energy consumption. The inspectors would ensure that there is a proper health and safety regime in place with workers receiving compensation if injured etc, and that working hours are not excessive no under aged children are employed, proper worker holidays are paid for,and maternity leave given etc. The factory would then be monitored with unannounced visits using local inspectors baked up by EEC monitors, corruption would be avoided by the threat of reduction points or stars similar to the star system used with Hotels throughout the world.

The companies operating the factories or offices etc. would be asked to pay the cost of this supervision and costs of such inspections and would be allowed to display their stars on their stationary buildings and advertising world wide and on the Web allowing consumers to make their judgements.

It would be difficult for the producing country to complain because the same legislation applies to home produced goods within the EEC in most cases and where it does not it should.

This process would be introduced gradually, this would then produce a more level playing field for workers in the EEC producing similar products. It would of course gradually raise prices of the imported goods, but it would also prevent the wholesale destruction of Western Industries and the transfer of machine tools, and production technology which once it has gone is difficult to replace. Whole factories full of specialist machinery have been transferred to Chine and other low cost countries when businesses have succumbed to low cost imports and receivers have disposed of assets leaving just empty shells (i.e. MG Rover cars etc.)with the former products now being imported. This system which could be called;

EXOREG (for External Regulation),

would encourage well run and considerate employers in the exporting countries to prosper at the expense of those companies which continued to exploit their lack of care for their population. If they wished to continue exploiting their workers and careless or corrupt regimes then they could not sell their products to the EEC.

A factory in England pays;

Local council Business Tax (Rates)
National Insurance contributions for the workforce
PAY AS YOU EARN TAX deducted from the workers pay packet before they receive it
Maternity leave for both male and female staff.
Public Liability Insurance (for third parties)
Employers Liability Insurance (for the staff)
Buildings Insurance
Vehicle Tax and Insurance
Fuel Tax
Value Added Tax
MOT inspections for its vehicles
Planning, Building Regulation and CDM Fees if it wants to extend its premises with very strict rules on what can be done
It must also be careful to not discriminate on grounds of disability and must employ without racial, age, sex, discrimination and if dismissing an employee must do so after giving several written warnings and must in most cases pay redundancy pay.

-I have probably not mentioned everything.

What rules apply to China?

There may be many companies throughout the World who do provide good working conditions but how can we know which?

They should be encouraged.

EXOREG would provide the beginnings of these sorts of benefits to workers throughout the World who wished to sell to the EEC.

Posted by BrianBlanchard | Report as abusive

The trouble is, of course, that the governments of China and Russia see the faults in our system that we acknowledge but dismiss as incidental in a very different light to what we do. They might wonder where the leaders of the world’s major democracies get the right to lecture anyone. The poverty of blacks and slum-dwellers in the US may not have escaped their attention, for all the bleating about equal opportunity, nor the fact that the US economy is well nigh broke and the constraints of transparent democracy make fixing it a near impossible task. The fact that numerous European democratic socialisms are on the edge of an economic cliff might not have escaped their attention. The fact that we Australians are parked on a lucky patch of ground, but our democratically elected Prime Minister is hamstrung with a minority government and personal popularity stuck around sewer level might not have escaped their attention. We are generally freer people, but we have made many mistakes and the leaders of Russia and China may well take the view that their most responsible path is to avoid falling into the pitfalls that western democracies have. They might also have noted John Stuart Mill’s comment that democracies aren’t so much rule by the majority as they are rule by the clever minorities who possess the skills to pull the strings by which majorities are manipulated and wonder if their system isn’t that much different to ours, anyway.

Posted by GarethInOz | Report as abusive

The liberal society will always enjoy a couple of strategic advantages over any form of authoritarian regime. These are the advantages of innovation and social progress. Innovation is not something that can happen out of thin air but it pre-requires freedom, democracy and a progressive consciousness.

Posted by Alex3085 | Report as abusive