The Politics of Technological Development

There is a political concept Westerners regard with a kind of holy awe, especially in the United States. This is the concept of “separation of powers.” It originates in the writings of the 18^th century French philosopher Montesquieu who believed that only by granting a certain independence to the legislative and judicial power could the executive power—royal in his day—be controlled and abuses prevented. This concept is embodied in the U.S. constitution and recommended by Americans to everyone else in the world, for once not entirely without reason.

Although few constitutions actually institutionalize the separation of power, in many developed countries something similar has been gradually established. An additional separate power that could not have occurred to Montesquieu is a relatively independent civil service, working for the executive but responsible for implementing laws passed by many different governments over many years and loyal primarily to the constitution. As capitalist business prospered and gained an undue influence over government, the civil service became especially important in representing the common interest as defined by law. Another important “separate power” that has emerged in recent years is independent communication media. They provide a further check on the abuse of government and business power by making the truth known to the public.

All these “checks and balances” as American scholars call them are essential to modern regimes. Where they fail and executive and business power operate unrestrained by law and protected by secrecy, political crisis and disaster often occur sooner or later. When the nation is very powerful the crisis and disaster may involve many other nations in terrible wars. A weaker country may only pay a price internally.

The Soviet Union and the People’s Republic of China are unusual in that they rejected the wisdom of Montesquieu and yet managed to avoid the rapid political or military collapse that has so often ended capitalist dictatorships. This is no doubt due in large part to their ability to command the respect of millions of their citizens by introducing many important elements of modern life such as civil equality and technological development in societies still dominated before the revolution by very reactionary and backward regimes.

But it has proven difficult to move beyond the initial organization of society by the communist party toward an organization that is more open and economically efficient. In Russia the transition failed and the capitalism introduced under the successor regime destroyed the economy as the country itself broke apart. China has not had such catastrophic experiences with reform and in fact has made enormous progress in recent years. But some of the less desirable consequences of that progress now suggest the usefulness of a new look at Montesquieu’s inspired idea.

We give too little thought to the reason why capitalism is so successful at what it does. We are told it is because of the reliance on markets, but that is not the whole story. The key to the affair is surprisingly simple. Under capitalism, unlike every other economic system, owners or managers have the authority to pursue a single goal: profit. Assuming markets operate reasonably well, a smart and energetic individual or group of individuals has an excellent chance of succeeding at such a simple game. Capitalist enterprise measures its achievements by its own criterion, that is, profits, and this too is one of the secrets of its success.

Contrast this with economic activity in premodern societies or under communism. From time immemorial farming has been a family enterprise. Its goals were always complex and included not only producing food, but also raising children, caring for elders, maintaining religious rituals, participating in village life, and so on.

Communist enterprises inherited some of these functions. Often the factory was also a medical, child care, sports and leisure and social service agency all rolled up in one. Maintaining employment was also important. The enterprise was not free to pursue profit at the expense of these other goals but functioned as a social institution with a broad range of responsibilities. No doubt this rendered communist enterprise less “efficient” than capitalist enterprise, but it nevertheless managed to industrialize huge backward countries such as Russia and China and cannot be counted a failure. But as capitalism is introduced in communist societies a new problem arises from the very simplicity of its goals. The single-minded pursuit of profit by the most active elements in society results in neglect of other vital goals.

This happened in the West as well at an earlier date. But capitalist enterprise in the major Western countries had to contend with a political system shaped by the idea of the countervailing powers. Its adversaries, especially labor, used the levers of the divided state to advance their cause. If the executive was unsympathetic, they could appeal to the legislature or the courts. If no branch of government would help, the media might trumpet their complaints. Honest civil servants might reveal abuses that would otherwise have remained hidden. One way or another, the labor movement was able to exercise influence and soften the harsh rule of a single-minded capitalist class interested only in profit.

The result has not been bad for capitalism. In fact mature capitalism prospers under constraints so long as they are not impossibly burdensome and the government that enforces them is reasonably honest. Good entrepreneurs manage to make money even with legislation regulating the hours of labor, pollution controls, and strict accounting rules. This fact does not prevent businessmen from whining about what they consider “excessive” regulation, but the whining is part of the system of checks and balances and cannot be taken at face value. But of course capitalism did not start out like this. The constraints were gradually added on to a wild system that caused huge devastation to disadvantaged groups and nature while developing the economy.

There is much to learn from this history. To an outsider it looks as though China is recapitulating the Western experience but without the background of a divided state that made it possible for disadvantaged groups to advance their interests gradually and on the whole peacefully. The wild capitalism developing in China today is not subject to the limitations we have grown accustomed to in the West. It is a new capitalism that works wonders of development but at a cost that is not counted in the national growth statistics. This cost returns in political protest and public health problems when those who suffer the side-effects of development sicken or resist.

This situation can be conceptualized in terms of two types of accounting. On the one hand a market economy grows in which all exchanges are calculated and added up to measure the official wealth of the society. On the other hand there is an unaccounted economy of goods that diminish as the capitalist economy expands. Some of these diminishing goods, such as clean air, have costs that show up in the official economic statistics for health care as positive contributions to national wealth although in reality they represent suffering and misery rather than prosperity. Other activities of entrepreneurs interfere with the less profitable and less politically influential agricultural economy in ways that escape all calculation and generate political conflict. None of these effects of rapid capitalist development are unfamiliar to Westerners who know their own history.

However, there is significant difference due to the state of technological development. The technologies of early unregulated capitalism were far less dangerous than those currently employed by Chinese business. It is true that workers in certain sectors such as hat making were poisoned by the chemicals they used even in the 19^th century. Hence the old expression “Mad as a hatter.” And air pollution in London finally reached such fatal proportions in the 1950s that the burning of coal had to be curtailed. But after World War II Western economies employed far more dangerous substances and accordingly in recent years they have come under stringent regulation.

Just because the Chinese economy relies on these recent Western innovations, it manipulates an incredible array of extremely toxic chemicals and produces quantities of pollutants out of all proportion to what early capitalist economies were capable of inflicting on their populations. The latest technology has been imported without the accompanying regulatory framework. The result is unprecedented social and public health problems.

What can China do about this unfortunate situation? It cannot stop developing. That would certainly lead to disaster as so many expectations have been raised by the progress of recent years. But nor can it continue as before. The resistance is growing and threatens stability. And without stability no economy can develop. The government has made tremendous efforts to address the problems, especially in large cities, but nevertheless unexpected crises continually arise. The ultimate solution has not yet been found.

The Western example suggests an approach: begin separating the powers, allowing recourse to a variety of institutions that are sufficiently independent they can be used by disadvantaged groups to gradually impose respect for underrepresented social concerns. The introduction of appropriate checks and balances in the specific domain of technology and development can strengthen the authority of the central government and force capitalism to adjust to the many needs of society and the environment that are not served by unregulated markets. A freer flow of information about technology would be especially helpful in combating abuses that develop unchecked in secrecy.

The Chinese situation is incredibly complex. Perhaps this analogy to Western history is misleading. But China’s growing pains are not likely to go away any time soon. The fact is that modern technology is so dangerous and disruptive it requires a very high level of responsibility and control to yield benefits to society as a whole. Capitalism, with its all too simple goal, must be controlled to achieve this as several centuries of Western history demonstrate. One way or another China too will have to come to terms with the limits of capitalism as a principle of social organization. Of this there can be no doubt. How China will accomplish this will be of interest and concern to the entire world.