Two years ago at Freedom Democrats, I praised George Soros in post that nonetheless had a qualification at the end. I noted that for all the money he had pumped into progressive political infrastructure in the US, he still had not in any fundamental way changed Dem Policy. I suggested at the time that he needed to get out of the game lest he suffer a credibility implosion.
Now fast forward to the present. Yesterday, Soros, in an acceptance speech for a “Globalist of the Year” award from the Canadian International Council, intimated that the failure of Dem Political Re-alignment in the United States was essentially ceding the world stage to China. From Foreign Policy:
“There is a really remarkable, rapid shift of power and influence from the United States to China,” Mr. Soros said, likening the U.S.’s decline to that of the U.K. after the Second World War.
Because global economic power is shifting, Mr. Soros said China needs to change its focus. “China has risen very rapidly by looking out for its own interests,” he said. “They have now got to accept responsibility for world order and the interests of other people as well.”
Mr. Soros even went so far as to say that at times China wields more power than the U.S. because of the political gridlock in Washington. “Today China has not only a more vigorous economy, but actually a better functioning government than the United States,” he said, a hard statement for him to make because he spent much of his life donating to anti-communist groups in Eastern Europe.
What Soros is saying that the Financial crises is a serious challenge to the “Washington Consensus.” But given that Washington is in gridlock, the effect globally is that the Washington consensus is now finished. With nothing to replace it with, “the world order as we know it is turning into disorder.” Soros is now effectively endorsing China to step into the power vacuum, with all the qualifications, of course, that “they accept responsibility for this world order and the interests of other people as well.” Indeed, this is a reversal for Soros, who had spent previous decades funding democratic institutions in opposition to communism.
Soros, like all Social Democrats, has a dilemma. They thought the financial crises would spur a new consensus. But it has not. There is no new political realignment in the US(the midterms served to “de-align” the Dem realignment). Social Democrats in the US, if we go by Krugman, are in serious disharmony with their European counterparts(over such things as the Stimulus and QE). And these political creatures, when the chips are down, will always go authoritarian. So, for the likes of Soros, it’s not unexpected, but it is, nonetheless, disheartening.
Now Soros is correct about the Washington Consensus being dead. I’ve writing about this for two years. The problem, for the political class, is that there is no intellectual framework to replace it with. A Political Economy, stuck in a regime that has lost resiliency, will exhibit increasing intervention to enforce an artificially stable equilibrium. This is a viscous cycle. A problem for the political class is that the class conflict in such a regime becomes pretty naked and obvious. And contra Soros, “the “Bejing Consensus” is no replacement. It wouldn’t last 5 seconds. The Chinese economy is a bubble economy to begin with and the consensus of communist bureaucrats cannot run the new world 21st century capitalist order.
Unlike Soros, I have a different interpretation politically of the ramifications of “broken government.” In an older post at Freedom Democrats, Broken Government: A Return of Radical Politics, I argued, from a historical perspective, that “broken government” today would once again raise the specter of radical politics in America. Radicalism in American politics is a weed that sprouts up from time to time. It’s due to sprout up again. The one pesticide that could kill it or contain it is the culture war, which is the communitarian conflict that was born out of the last bout of radicalism in America, namely during the 60s(which also, of course, spawned the modern american libertarian movement). This is why I’ve been critical of the likes of Angelo Codevilla, who is trying to recast the burgeoning class conflict narrative into the old communitarian or culture war categories. Despite that, I think a return of radicalism in American politics is inevitable. However, I make no prediction of what the final product of this will be, although I would tend toward the pessimistic side. But it should be clear that the 21st century is the twilight of liberal political institutionalism. The only real political debate anymore is authoritarianism vs. libertarianism.