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ZorbaTHut  2yr ago (text post)   45550 thread views

Culture War Roundup for the week of September 5, 2022

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They are not good at sustained growth over controlled territories (in fact even sustained resource extraction).

The Russian and Chinese empires were doing pretty well, growing for centuries. The latter collapsed because of the British, the former collapsed because of the Prussians/Germans (who themselves did very well up until they started facing the British). And when the British and other Europeans arrived to pull the rug out from underneath everyone else, they ruled their colonies autocratically.

I don't understand what you're talking about commitment devices. There are internal factions in all parties and states, from the US democratic party to the CCP. The methods the CCP uses to coordinate are more centralized and straight forward than what the US Democrats do because they enjoy the advantages of deciding on a central strategy. A strong paramount leader can say "Hide our strength and bide our time" and they'll actually execute the strategy. If you don't obey the party, you get imprisoned or sent off to Inner Mongolia. There's no Chinese Manchin holding up Xi's legislative agenda. There are bottom-up elements too, they let local areas try out various economic ideas to see if they work before imposing them nationwide. It's a little like Auftragstaktik, 'get semiconductors produced, we'll give you some money, make it happen and we'll promote you'.

The Democrats or Republicans have all these people pushing on them because they're less centralized. You have cliques like the Project for a New American Century plotting to start random wars in the Middle East. You have the Tea Party plotting to wreck the government. You have various wings of both parties blatantly bribing voters by printing out money and giving it away. Of course there are factional interests in China too - some people allege that One Belt One Road is about pandering to China's construction-industrial complex. But it clearly serves their national strategy as well as factional interests. Factions in America are much stronger and the country is much more divided.

Expecting China to reach US GDP per capita in under 30 years is ridiculous. In 1989, Chinese GDP per capita was $407, the US was at $22814. That they've narrowed a 50x difference to <4x is extremely impressive, especially considering that America has a host of geographic and historical advantages. It is not easy to create hundreds of millions of jobs.

The methods the CCP uses to coordinate are more centralized and straight forward

In theory, I agree that hierarchical top-down control propagates signals better. As for practice, I can provide examples from the Soviet history, which illustrate the following problems:

  1. Signal from the top might be initially poor (unrealistic), and all subordinate levels would have to cope with it

  2. Interest groups and factions, which you acknowledged, erode control and create corruption. Democracy has those too, but I’d argue it has less overall corruption due to formal influence channels, like lobbying, donation campaigns, etc. Hidden corruption in autocracy might remain unaccountable for a long time.

  3. Struggle between US parties is more transparent, with a lot of stuff exposed by journalists. Publicity reduces space for maneuver (you can’t make things up randomly or keep denying everything). In autocracy outcomes of conflicts often depend on personal connections and ability to maneuver; there is no way for outsiders (even within same circle) to get the signal, as the eventual purge would be advertised as generic treason or whatever

Factions in America are much stronger and the country is much more divided

American failures are more exposed, but whether they are more numerous/deleterious is a purely empirical question. I’d be glad to know evidence on China.

extremely impressive

Agreed. My point is that China and US are facing different slopes of the same S-curve at the moment (economically, and historically, as you noted), so direct comparison of growth rates is not meaningful.

Well there are natural problems in measuring inherently obscured phenomena in corruption.

If we compare public infrastructure, China crushes the US. They actually finished their HSR program and it is creating an 8% return according to the World Bank. Meanwhile, California's HSR has yet to begin operation, while costs balloon.

If we compare military research, US officials worry that Chinese procurement is much more efficient: https://www.thedrive.com/the-war-zone/china-acquiring-new-weapons-five-times-faster-than-u-s-warns-top-official

“In purchasing power parity, they spend about one dollar to our 20 dollars to get to the same capability,” he told his audience. “We are going to lose if we can’t figure out how to drop the cost and increase the speed in our defense supply chains,” Holt added.

If we compare quantitative military procurement, China builds a mid-sized European navy every 18 months. The US Navy is actually shrinking as they decommission recently purchased warships like the Littoral Combat Ships along with relics from the 90s or earlier.

As far as I can see, all the US's strengths seem to be concentrated in the private sector. SpaceX rocketry and Starlink open up novel capabilities for the US. Microsoft, Facebook and so on are leading the world in AI. Intel and AMD are very good at designing chips. But these advantages are what you'd expect from a very large, advanced economy. They don't indicate that the government is excellent, only that it isn't Soviet-tier in worsening development. If the government was capable, they'd be building huge numbers of nuclear plants (like China is), developing infrastructure, creating an effective healthcare system (China's life expectancy just surpassed the US), fighting drugs and reducing violent crime. The US is well behind China in these fields despite being richer. Thus I conclude that China has a more capable government.

I also don't see why publicity and journalists mean you can't make things up. Certain elements of the US political-media-intelligence establishment made up a Trump-Russia collusion story that spread around the world: https://nypost.com/2022/05/23/fbi-told-agents-trump-russia-data-source-was-from-doj-not-clinton-tied-lawyer/

A different bunch of the same sort made up Weapons of Mass Destruction in Iraq and used it to start a pointless war. While China does disappear people from public attention or conceal various incidents like Tiananmen, that seems to be a much more natural thing to do than accusing the President of working for a foreign power or invading random countries. That doesn't enhance national strength.

Thanks for evidence, that's interesting. I know very little about China to comment. Soviet Union was 3rd fastest growing economy in 1928-1970 (however, as this article shows, choosing time window changes picture a lot), and its military complex was relatively efficient too. W/t Gorbachev I believe it could have grown further, albeit slowly. Drawing parallels in how US was taking stock of SU, it seems they usually overestimated the threat and were misled by gross numbers and lack of official data. Some of this obsession with net output seems to hold for China, judging by retracted papers (1) (2). I need better stats, but most Chinese patents were filed in Chinese patent office, which might imply the same issues with quality, despite clearly superior number of applications.

No. Russian Empire displayed noticeable growth only during the short period of industrialization after 1880. P. Gregory attributes much of it to extensive measures:

During Russia’s industrialization era, the growth of national income was above average [...] On a per capita and per worker basis, Russian output growth was average relative to the industrialized countries. [...] growth was of a largely “extensive” character, that is, was caused principally by the growth of inputs rather than the growth of output per unit of input. Again, the Russian experience is similar to that o European offshots, which also grew “extensively” during that period.

As for impact of autocracy, most Russian rulers were hardcore conservatives and fiercely opposed to any innovation. Witte, the main engineer of industrialization, was fortunate enough to be tolerated by Nicholas II; Stolypin, who had more ambitious plans, wasn’t so fortunate.

The size of Russian industry at the end of the 19th century was relatively small with significant barriers to entry and widespread monopolies. Russian tsars traditionally distrusted capitalist institutions seeing them as a threat to their absolute power (Pipes, 1997). Under the Russian corporate law, the registration of any joint stock company required a special concession from the tsar who personally signed corporate charters. This stands in contrast with corporate laws of Germany, France, [etc] in the late 19 century. The reformers understood very well that Russia’s industrialization required “importation of foreign capital and technology”; however, tsars did not want to give up the control over the economy to foreigners — and kept significant barriers in place.

src: The Industrialization and Economic Development of Russia through the Lens of a Neoclassical Growth Mode, pdf

WWI was a proximate cause of 1917 revolution, but the meaningful cause has been pending systematically since revolution of 1905 (similarly, prompted by defeat from Japan): backward institutions and incompetent uncompromising ruler. I’d be glad to share more details, if you wish. Open to counter evidence.

Edit: formatting

Territorially and demographically the Russian empire was growing for centuries, that was what I was primarily thinking of. However, it still displayed impressive (but sub British) industrial growth and labour productivity.

https://ideas.repec.org/p/hig/wpaper/199-hum-2020.html

The authors argue that Soviet historiography sought to create the impression that Russia was backward, exaggerating legitimate industrial weakness (which it had, not being as close to the traditional centres of wealth and Atlantic ports in Western Europe). However, Russian state-sponsored investments in metallurgy, alchohol and petrochemicals put those sectors on par with the British.

However, the Russian industries that were established or modernised with the help of the state in the late 19th and early 20th centuries were about as productive as their British counterparts. The Southern metallurgy, which produced about half of metal output, was 105.7 per cent as productive as British iron and steel factories. The productivity of railway carriage and wagon production was also close to Great Britain’s. Finally, the Russian alcohol, tobacco, rubber, and petrochemical industries showed higher labour productivity than the analogous industries in Great Britain.

Furthermore, I'd argue that the 1905 war was ultimately caused by logistical difficulties innate in having to supply an army all the way across Siberia over 1 railway. Russia has a natural disadvantage in naval power too (rarely having good ports and focusing mostly on land), so that would complicate fighting a naval war on the other side of the world! The Japanese were closer and fairly well-organized themselves, it's not unforeseeable that they could win a war in Manchuria, right next door.

Great paper, thank you! It provides much more detailed and up-to-date view of the imperial industry, than the book I cited (by Paul Gregory, who is a renowned scholar and doesn’t belong to an early-soviet tradition of downplaying tzarist achievements).

We find that Russia’s labour productivity, calculated based on net output data and net

output weights, was at 81.9 per cent of the U.K. level, […] on a par with France’s and significantly superior to Italy’s.

What helped Russia achieve this erformance was the highly productive and large alcohol industry. Without the alcohol sector, Russia’s productivity would have been 74.8 per cent of the British level. [...] the government had made large investments in it, leading to a strong comparative advantage.

That’s it. Vodka has always been a Russian superpower. It also accounted for a huge share of tax revenues (around 30% !) in both imperial and soviet govts.

High labour productivity is a surprise to me. That said, the article shows that productivity varied a lot across industries, and ~70% of population was still employed in a much more backward agriculture, which spoils per capita figures.

Despite these successes, Russian enterprises operated with substantial friction in the production process and the labour market. […] According to Cheremukhin et al. (2017), high barriers to entry and widespread monopolies were the most important factors that slowed down Russia’s industrialisation; although these factors were also widespread in other industrialised countries

They support the evidence for monopolies (which I attribute to state policy and more directly to the tzar and his cronies), but also note it wasn’t a distinct issue (if issue at all) of autocracy. This also downplays my argument.

All that data however doesn’t elucidate the connection between autocrat and his economic policy. The growth was absent before 1880, and I believe afterwards it was only impeded by autocrats. Railroad construction – a major industrialization booster – was initiated and done almost solely by Witte – a savvy technocrat, whom Nicholas despised and eventually pushed into resignation. Stolypin, who tried to modernize agriculture, faced fierce resistance from status-quo factions. Arms industry during WWI was also dominated by Romanovs' cronies, with other factories almost staying idle, when they could contribute.

As for 1905, defeat from Japan fueled public sentiment, but it wasn’t decisive at all. The general strike of 1905 was precipitated by many decades of struggle: Bloody Sunday, local worker strikes, peasant arsons, socialist revolutionary activities, etc. The public opinion had been formed long ago, and refined into various (unofficial) parties. Their proclamations and complaints were focused on the tzar’s incompetence and intransigence. It’s a long story, but this summary is close to my perception

If the last paragraph appears too handwaving, I can bring examples from the book (in a separate message)

Oh I'm not dissing your book, that was just their general argument which I was summarizing.

Various researchers calculated that, between 1887 and 1913, Russian manufacturing and mining sectors grew, on average, from a low estimate of 5.1 per cent (Goldsmith, 1961; Suhara, 2018) to a high estimate of 6.65 per cent per year (Gregory, 1999, pp. 487-488; Kafengauz, 1994, pp. 290-297). Accepting Gregory’s (1999) higher estimate would mean that Russian industry grew considerably faster than the industry in major industrialised countries, including the U.S., the U.K., and Germany (Gregory, 1999, p. 488). Accepting the more conservative estimate by Goldsmith (1961) would mean that over this 26-year period, Russian industry grew on a par with major industrialised countries (Gregory, 1999, p. 488).

I think Russia was a successful autocracy. They faced a much more challenging geography than the Western Europeans, the area they got to take over was not the fertile Americas with endless rivers but cold and infertile Siberia. They didn't get any of the good Atlantic ports. They mostly faced the strongest non-European powers like the Ottomans, Persians, Chinese and Japanese rather than rich and easy-to-conquer foes. That they then managed to industrialize at similar rates to the West is impressive given that they started off with a poorer, less literate country. I think this shows that autocracies can develop at similar speeds to democratic countries over relatively fixed territories even in worse circumstances.

Even if Witte did get kicked out by Nicholas, surely that's a personal failure of a specific leader rather than a systemic failure. Tsar Alexander appointed him in the first place! Stolypin was appointed Prime Minister and Interior Minister by Nicholas. It seems to me that much of the damage to Russia was caused by bad luck in that they faced a stronger autocracy in Germany and a coterie of anarchists and Bolsheviks who were dead set on killing anyone who wanted to improve the country. RIP Stolypin.

No, I mentioned the book as it seems decent, but apparently is not granular enough. Your paper is a good signal for me to update.

Gregory classified Ru pattern of growth as a typical "fast start" of emerging economies, mostly extensive. And this makes sense because, as you noted, Ru didn't have much fertile soil beyond Black Earth Region, access to maritime trade beyond Baltic; but a vast space in the East to colonize, reaping low hanging fruits. China wasn't powerful at the moment, being abused by Europeans and Japanese alike. But the article clearly shows intensive growth, that's important.

Russia is a good instance of autocracy treatment group, in a natural experiment of European powers. Causality is elusive, though, as ever. Was Russia (and Japan) successful due to autocrats yielding to liberal reforms, import of European institutions and technologies; or due to restraining them? Public opinion blamed failures on entrenchment of conservative elites, backed by the tzar. But opinion is usually biased against status-quo, and the state still was a major investor in industry and education.

Speaking of counter(factuals), if an autocrat could be pressured by the public into popular reforms (like Alexander II or Nicholas II), like parliamentary Britain or France were pressured by strikes into welfare programs, what is so special about autocracy? On the other hand, if the same nominal autocracy gives raise to Stalin's industrialization, Brezhnevian stagnation and Chinese rapid growth, doesn't it imply that economic policy might be more predictive of performance, than power vertical?

Good thread. RIP Stolypin.

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