Book Review: History 2.0

by Derryl Hermanutz

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Anybody who is not locked inside the myopically Western-centric perceptual bubble knows China is rising and the US is declining, not just relative to each other but in absolute terms. Life for the Chinese people and economic partners - Eurasia - is getting better. Life for the US people and economic partners - the West - is getting worse. Why is this happening?

In "History 2.0" Frank Li identifies good Chinese government vs bad US government as the immediate reason; and identifies deep-seated historical, cultural and ideological differences as the core reason. China's Confucian government "works". US "democracy" doesn't work. As a Chinese-American Li celebrates the success of his native country, and bemoans the failings of his adopted country, and advocates measures to reverse the decline of the US.

Li identifies the immediate cause of China's recent successes as its adoption of capitalism by Deng Xiaoping's administration after 1978. Capitalism - allowing people to personally benefit from their productive efforts - is the only system that works, according to Li. But whereas the US has private capitalism that serves the interests of the hyper-rich capitalist class at the expense of everybody else, China has state capitalism that serves the interests of China's people, economy, and nation as a whole. In the US capitalists rule the government. In China the government rules the capitalists.

A central feature of the power to rule is the money issuance and allocation system: banking. China's government owns the central bank and the big State commercial banks and uses the banks' money issuance function as the financial arm of China's economic-industrial policy to build up China's economic infrastructure and generate widely shared prosperity. In the US, the big commercial banks own the central bank (the Federal Reserve Banks), and the banks use their money issuing power to concentrate ownership of the economy into ever-fewer, ever-richer hands, while the people and their elected governments sink into ever-deeper pits of inescapable debt bondage. China enjoys a government-issued money system. The West suffers under a privately-issued debt-based money system.

Li sees China's strength in its Confucian government. Confucianism is a political philosophy based on the Tao - the Way. Confucianism begins by recognizing that all large scale mass societies (nations, civilizations) must be governed, then works toward developing the arts of government. The purpose of Taoist government is to serve the Mandate of Heaven: promote harmonious society. To serve this purpose requires finding and empowering people who possess the moral virtues, intellectual abilities, and motivational aptitudes that enable them to learn and practice the arts of good government.

"China enjoys a government-issued money system. The West suffers under a privately-issued debt-based money system."

Confucian government does not begin from the visibly false premise that all men are created equal or that all people have equal abilities. Within a Confucian meritocracy people rise to the level of their competence within their field of endeavor. Unsuitable candidates are excluded from participation in government, which is the "highest" endeavor.

Confucian government is meritocratic. Public service - a position within the government - is perceived as prestigious and desirable. The school system weeds out unsuitable candidates via a series of rigorous tests. Successful candidates begin at the bottom in positions with little governing power, and are promoted by their superiors according to their demonstrated ability to manage small affairs. The promotion process weeds out morally corrupt and technically incompetent people, and only promotes those whose past performance demonstrates that they can be depended upon to perform their public service roles to the benefit of the system and the nation as a whole.

The West, by contrast, assumes society is self-regulating: that the invisible hand of the free market optimally organizes society, and any government action will generate sub-optimal outcomes. This assumption is ideologically immunized against the visible evidence that society is not self-regulating and the West is not ruled by free market forces. The West is ruled by the rich people and corporations who own the banking system and the productive economy and who exercise domineering influence over the West's elected governments. People - not an "invisible hand" - govern human societies.

Li points out that China has a 5000 year old culture, a common language, and 2500 years of Confucian political philosophy. These ideas and values are deeply written in the minds and hearts of the Chinese people, including members of the government.

"People - not an "invisible hand" - govern human societies."

The West has a 2000 year history of Christian religion with its "Divine Right of Kings" support for feudal aristocracy, multiple languages, and only adopted its present capitalist culture and elected governments over the past two centuries. From China's long view, the results of the recent US "experiment" are now coming in, and the system is a failure.

China's leaders are informed and guided by China's Taoist culture and seek to foster harmonious society, however that might be accomplished. It is a results-based political philosophy, not a rules-based procedural bureaucracy. Xiaoping adopted capitalism because China needed economic development and capitalism generates that outcome. The Confucian government is not guided by the ideology of capitalism (the sanctity of private property, which practically means rule by money in service to the rich) or socialism (rule by the people in service to the collective). It is guided by the semi-mystical ideology of Taoism that seeks to optimally order the parts into a coherent and harmonious whole.

According to Li, America's downfall is "democracy" - which is actually rule by the rich: a plutocratic oligarchy masquerading as a free market democracy. The US ruling class makes spectacular gains in wealth, power and privilege while the US population suffers deepening unemployment, poverty, wage serfdom and debt bondage, and social and political chaos. Western political analysts bemoan "the failure of democracy". Frank Li says democracy itself is the problem; or rather, the delusion of democracy.

"[China] is a results-based political philosophy, not a rules-based procedural bureaucracy."

A 2014 study by Princeton University Prof Martin Gilens and Northwestern University Prof Benjamin I. Page concluded that economic power has become so concentrated in the hands of such a small number of U.S. corporate giants and mega-billionaires, and that this concentration of economic power has consolidated virtually unchallengeable political power in their hands and virtually none in anyone else's, that the U.S. more resembles oligarchy than anything else:

"The central point that emerges from our research is that economic elites and organized groups representing business interests have substantial independent impacts on U.S. government policy, while mass-based interest groups and average citizens have little or no independent influence. Our results provide substantial support for theories of Economic-Elite Domination and for theories of Biased Pluralism, but not for theories of Majoritarian Electoral Democracy or Majoritarian Pluralism. ...vast wealth disparities render political rights and legal equality illusory." - - {Gilens and Page, Testing Theories of American Politics: Elites, Interest Groups, and Average Citizens (2014)}

Gilens and Page found US government response to clearly expressed democratic interests "statistically insignificant", whereas the same government reliably implements policies that serve the interests of the rich minority owning class.

Li points out that the US Republic was not established as a "democracy". The Founding Fathers explicitly rejected democracy and instituted an aristocracy of land barons. Within the new nation only white men who possessed sufficient property were allowed to vote and participate in government. While Li recognizes that the ability to acquire and govern property is a kind of meritocracy wherein only those men with sufficient political-economic knowledge and skill form the government, this kind of government by rich white men is a far cry from the kind of "democracy" most Americans have been led to believe they have.

"the U.S. more resembles oligarchy than anything else"

It wasn't until after the establishment of legal and social-political institutions that honored the sanctity of property rights - an ideological culture and governing institutions that support, defend and preserve the financial and economic power of the capitalist ruling class - that poor white men, women, and blacks were allowed to participate in government and vote for political candidates.

The elected US government does not serve democratic interests. "Voting" does not produce democracy. Government acting in the interests of the democratic majority of its people and the nation as a whole constitutes democracy.

By this functional rather than procedural definition, China is a much more democratic nation than the US because China's communist-Confucian-meritocratic government serves the Chinese masses while the US elected government does not serve the US democratic majority.

"The elected US government does not serve democratic interests."

The very term "democracy" has been replaced in the West by "liberal democracy", which means only those economically and socially liberal beliefs and values that serve the status quo powers are legitimate to hold. Today liberal democracy means the liberty of transnational bankers and corporations to financially and economically plunder nations free of government "interference". Conservative values - such as the traditional rights of families, communities and nation-states to make laws and act in their own self-interest - are impediments to the New World Globalist Order with its technocratic rule by transnational bankers and corporations and the people's lowest common denominator "consumer values".

"Consumer values" are the moral imperative that consumers "should" only buy stuff from whoever sells it for the lowest price. If a transnational can import and sell something for 3 cents less, consumers should buy it, and domestic producers and their employees are put out of business by "free market competition". Then, instead of buying stuff with the incomes they earn by producing stuff, the now unemployed business owners and employees buy stuff with ever-increasing totals of unpayable personal, household and government debt.

"China is a much more democratic nation than the US because China's communist-Confucian-meritocratic government serves the Chinese masses while the US elected government does not serve the US democratic majority."

Economic production is offshored to maximize the profits of the corporations that own and operate "the economy" as their private corporate fiefdoms. No consideration is given to the effects on the people and governments of the now unemployed nations.

Western corporations shipped their consumer goods manufacturing industries to Asia to exploit lower production wages and tariff-free imports into their home nations. Within liberal democracies it is politically illegitimate for national governments to prevent transnational corporations from hollowing out national economies by offshoring production and replacing domestic production with imports.

China is now the world's factory, and the US is now the consumer market. China earns money by producing and selling stuff and is getting richer. The US borrows and spends money buying the imports and is getting poorer. But US capitalists who own the transnational corporations are getting richer, so "liberal" US "free trade" policy serves their interests. In liberal democracies, the majority of people who are getting poorer have no politically legitimate claim on their government to reverse these policies that are directly contrary to their economic and financial interests.

Today political democracy is disparaged by the Western academic, political and media authorities as "populism" - the politically illegitimate views of deplorables and malcontents - even though the deplorable malcontented majorities in those nations still believe they live in "democracies" whose governments reflect their values and serve their interests.

"US capitalists who own the transnational corporations are getting richer, so "liberal" US "free trade" policy serves their interests."

Citizens of Western nations are unaware that they now live in "liberal democracies", an ideological dictatorship of liberal beliefs and values that serve the interests of rich globalists contrary to the interests of the democratic majorities of "liberal democratic" nations. Any national government - like China, Russia, Venezuela, Cuba - who tries to govern in the interests of its own people, contrary to the interests of transnational corporations - is depicted by Western politicians and media as an "authoritarian regime" that is violating "liberal democratic" values.

Since the 1789 French Revolution with its rallying cry of Liberte! Egalite! Fraternite! the West's ruling oligarchies have maintained the illusion of democracy to deceive the masses into believing that they did it to themselves by "voting" for their plight. Li pulls off the veil and exposes democracy for the failed ideology and mass delusion that it is.

Frank Li is a brash, in-your-face writer whose bold assertions will shock and appall Western readers who are accustomed to the comforting and reassuring "exceptionalist" propaganda narratives that are preached by Western authorities and trumpeted by Western media as "reality". I often burst out laughing while reading Frank's outrageous statements. The laughter is not because the statements are obviously false. Quite the contrary, the statements are true. But they are not presented in the usual apologetic academic style so as not to offend the sensibilities of lullaby-coddled readers. It is the self-assured arrogance of Frank's presentation that I find so entertaining.

"Frank Li is a brash, in-your-face writer whose bold assertions will shock and appall Western readers"

If you are ready to step outside the Western ideological bubble and see what the world looks like from a more objective perspective, Frank's book provides a tour.

I don't personally share Frank's optimism that the US can reverse the course of its decline. I think the West's rulers and people are so committed to the perverse ideologies that are destroying them that they cannot even see that they are ruled by their ideologies. The ideological worldview is mistaken for objective reality, such that it is not possible to "change reality", and anybody who sees and speaks from a perspective outside this ideological bubble is "crazy".

I may be wrong and Frank may be right. We will see soon enough whether the US changes course or continues its downward trajectory. Meanwhile, China continues to follow its very different course on its upward trajectory.