April 6, 2010
The Asian financial crisis from 1997-98, followed by the subprime crisis of 2007-08 and the 2010 sovereign debt crisis have all but torpedoed what most analysts like to call “the Washington Consensus“. Entire nations and political groups that had opted in the nineties for free markets, political democracy and neoliberal economics are now turning in droves against this model. To be replaced by what ? Its competition is “the Beijing Consensus” – a model in which the state is at the center of economic activity instead of being relegated to its fringes, as in the neoliberal model.
China has impressed many of its former critics with its rapid and all-encompassing economic development, which this year has propelled it to the rank of the world’s second-largest economy. As Serge Halimi puts it in Le Monde diplomatique, its development model “seduces because it reconciles economic growth, free trade and stability in power of a half-industrial, half-political oligarchy” (at this point, it’s worth noting that the Chinese seem to have been good students of the much-criticised, over the past two decades, French statist model…). To be sure, the model lacks in novelty. For over fifty years, the Asian tigers have achieved rapid economic development under command-and-control, military dictatorship political systems. Their efficiency in promoting economic development, after their implosion due to the 1997-98 financial crisis, is currently being reassessed in Asia and elsewhere.
Francis Fukuyama was careful to warn readers in his End of History and the Last Man that following the success of the 1989 revolutions in Central and Eastern Europe, nations of the world would embrace democracy, but would not necessarily like the outcome. Constituencies around the world, from Asia to Africa, have indeed opted for free elections and political democracy, only to realise that ideology is no substitute for sustained economic development and that it could even lead to chaos. Hence the current admiration of large countries such as Indonesia, formerly enemies of the Chinese, for the Beijing Consensus. According to Juwono Sudarsono, former defence minister and professor of international relations in Jakarta (University of Indonesia),
“lingering suspicion of China is still present, but is offset by admiration for China’s successes” (source: The Guardian)
In continental Europe, few people if any are going to mourn the passing of neoliberal economics, which over the past few years has needlessly inflicted so much economic pain. Speculators and their press apart, constituencies are increasingly turning against austerity measures which are aimed at patching up nations’ budgets, milked on behalf of irresponsible financial operators and the banks they work for.
The Beijing Consensus, however, does not automatically mean that European countries will turn socialist – if France, Italy and Germany are any guide. When pushed against the economic wall, most European electorates have a tendency to turn crypto-fascist, and favour hard-line policies and politicians, to replace the extreme laissez-faire advocated so aggressively by neoliberals. As the same Serge Halimi warns us, “there is an increasing number of supporters of the Beijing Consensus within the ranks of the Western industrial elite“.