Global Competition and Social Morality
GLOBAL COMPETITION AND SOCIAL MORALITY
In a speech in Doha on 8 December F W de Klerk discussed the role that governance and social responsibility play in the sustainability of political and economic systems.
De Klerk said that much of history has been a competition to determine which system of governance could best assure sustained geopolitical ascendency, economic prosperity, technological progress and the well-being of citizens.
Britain and the Netherlands emerged as dominant powers in the 17th because their middle classes enjoyed greater personal freedom and security from arbitrary state action than their counterparts elsewhere in the world. The climate of relative freedom led to a remarkable blossoming of intellectual, commercial and scientific endeavour that greatly contributed their emergence as global powers.
During the last century free and pragmatic democracies had triumphed over the totalitarian and ideologically-driven German and Japanese systems of governance. They had also been victorious in their subsequent struggle against international communism. They were successful because the closed Soviet system was incapable of competing with the creativity, innovation and dynamism of free societies.
According to De Klerk, all this led had to a degree of hubris in the West. “During the 1990s Francis Fukuyama announced that the search for the ideal system of governance had reached its conclusion with the free market universal democracy model that the United States had evolved. He called it the End of History.”
Since then the world had moved into a new era that was still reeling from the economic crisis of 2008 -2009 and that was now convulsed by doubts over the future viability of the Euro.
A number of western democracies were experiencing serious problems with their social-democratic model. “They are discovering that countries simply cannot keep on pumping out social benefits without producing the wealth to finance them. The result, as we see in Greece, is inevitably bankruptcy. The larger the role of government in catering to the social needs of the people, the less scope there is for the productive sectors of the economy.”
The key question during the coming decade might well be whether the US and European models would be able to hold their own against the increasing global economic challenge of China and India. De Klerk predicted that this would not be a competition between armies and air forces - but would be an equally deadly competition in world markets for customers and resources.
After three decades of Maoist communism, the Chinese leadership had finally noticed that Hong Kong and Taiwan were out-performing most of the rest of the world in achieving spectacular economic growth. “They must have seen that Hong Kong had one of the freest economies in the world with minimal state interference and maximum decision-making in the hands of producers and consumers. Personal income tax in Hong Kong is 15% and company tax is 16% - and yet the people of Hong Kong enjoy a very high level of social development. Despite the tiny size of its government sector Hong Kong holds 13th position on the UNDP’s Human Development Index.”
Beijing must also have noticed that, although Hong Kong was economically free, it was not politically free. It was still a British Colony. “So maybe it would be possible for the Chinese Communist Party to stay in control while liberalising the economy at the same time? The rest is history.”
De Klerk observed that the big loser in the international economic stakes had been the fifteen core countries of the European Union. “In 1975 they accounted for 36% of the global GDP; the United States’ share was 26.3% and that of Asia was 16.5%. By 2009 the EU core countries’ share had had declined to 27%; the US had risen slightly to 26.8% - and Asia had increased to 22%. According to projections, the EU core countries’ share in 2030 will be 18.6%; the US will have declined to 23%; and Asia will have soared to 36%. So what are the Europeans doing wrong?”
According to De Klerk, part of the answer could be found in the fact that the maintenance of democracy and freedom depended ultimately on the morality, the diligence and restraint of citizens as much as they did on free elections.
De Klerk said that in many Western societies democracy had become an auction in which competing parties tried to outbid one another in offering voters more and more for less and less. Economies inevitably became less competitive when they passed laws that gave citizens more and more leisure time and early retirement and that raised minimum wages above those of competitor nations.
According to De Klerk it was not only dictators and oligarchs who could and did misuse power to secure undeserved and unearned wealth. “The voters in democracies are just as susceptible to abusing their power. They do so by insisting on benefits that they know the country cannot afford.”
De Klerk observed that in Western democracies politicians and bureaucrats were often equally intent on promoting their personal and class interests at the cost of society. “They invent an avalanche of laws and regulations that only they can administer - all, of course - in the interest of the public! The result is unsustainable deficits caused by uncontrolled growth of government.” De Klerk pointed out that between 2000 and 2009 the wage gap between federal civil servants and private sector workers in the USA had grown from 32% to 60%. In South Africa public service salaries had increased by more than 60% in real terms between 2005 and 2010 – with little or no improvement in service delivery.
De Klerk said that free market democracies would have to develop a deep sense of social responsibility among their citizens if they wished to ensure the sustainability of their system. “Voters must reassert control over free-wheeling politicians and rampant bureaucracies. They should accept the need to make sacrifices to promote the overall good of society, the reasonable well-being of their fellow citizens, and the continuing competitiveness of their economies.”
In De Klerk’s opinion the competition between the systems of governance in Europe, North America and the emerging giants of Asia would become more intense in the decades that lie ahead. Success would probably go to the competitor whose citizens showed the highest level of social responsibility.
Published in: FW de Klerk Foundation