The Economist magazine has a recent cover entitled:

How the West Got China Wrong

One of the stories inside the issue suggests that during the 1990s and 2000s, many western pundits were increasingly optimistic that China would gradually move closer to Western values. The magazine now says that these pundits were wrong.

Part of what is so spectacular about the decline of Sino-optimism is how recently and how thoroughly it held the high ground. The idea that global engagement and rising prosperity would drive Chinese convergence with Western values was one of the last beliefs shared by all sides in the Washington elite.

I’d say they were right. If the pundits missed anything, it was the fact that the rest of the world would become more authoritarian and nationalistic, notably Russia, Turkey, India, the US and many European countries. Thus while it’s true that China has recently become more nationalistic and authoritarian, it’s not true that they’ve moved further away from Western values. We’ve moved in their direction.

Life in Chinese cities today is much more like life in the West than was the case 20 years ago, and 20 years from now Chinese life will be even more similar. History shows that in the long run, rising prosperity brings liberalism. But we also know that there can be major setbacks (observe 1914-45), and that progress is not a straight line.

If China were moving toward authoritarian nationalism while the rest of the world was moving toward liberalism, then I’d be worried about predictions that China will eventually converge with the West. But that’s not what we are seeing, and it’s not what I expect to see in the future.

It’s of course possible that I’ll be wrong, and that nationalism will be the wave of the future. But given that the younger generation is far less nationalistic than the older generation, I think it more likely that the world eventually swings back toward liberalism, one funeral at a time.

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PS. Mercatus has recently published a new primer on NGDP targeting as well as futures targeting, written by Ethan Roberts and myself. I recommend it to people who want a short introduction to the concept.