America’s Mandarin Problem

A physicist, a chemist, and an economist are stranded on
an island, with nothing to eat. A can of soup washes ashore. The physicist
says, “Let’s smash the can open with a rock.” The chemist says, “Let’s build a
fire and heat the can until it bursts open.” Recognizing the messiness of those
solutions, the economist says, “Let’s assume a can-opener . . .” 

—Glenn Hubbard and Tim Kane, Balance: The Economics of
Great Powers from Ancient Rome to Modern America

The Industrial Revolution, as we know it, could have
occurred five centuries earlier. While Europeans were living short,
subsistence-level lives, the rest of the world was witnessing an explosion in
technology and trade coming out of Ming China. Why the revolution didn’t
materialize then and there are among the subjects authors Glenn Hubbard and Tim
Kane take on in their book
Balance:
The Economics of Great Powers from Ancient Rome to Modern America.

Here’s how the story goes: When the last vestiges of Rome
were crumbling in Byzantium, China had already experienced over almost two
millennia of innovations that included the casting of iron (200
bc), the
discovery of paper (
ad 105), and movable type (ad 1041-1048). But according to
Hubbard and Kane, China’s most important development was its mastery of
maritime engineering, anticipating innovations that wouldn’t appear in the
Europe for another six centuries. The emergence of the first imperial navy in
1132 under the Song Dynasty coincided with imperial incentives in the form of
cash rewards to spur innovation in maritime engineering. As a result, this era
saw an explosion of oceangoing vessels. This expanded trade, which in turn
promoted unprecedented levels of interaction with surrounding cultures.
Institutions and policies created conditions promoting a virtuous cycle of
trade and innovation.

Enter the Mandarins.

The Mandarins were the dominant political class of China.
They had enormous influence in the Forbidden City, regardless of which emperor
or dynasty reigned at any given time. The Mandarins found the order they were
charged with protecting slipping away: Under the reign of emperor Zhu Di of the
Ming Dynasty, an upstart slave by the name of Zheng He revolutionized trade,
making seven voyages to the West and opening of trade relations with Japan and
India.

In early eighteenth century England (when the Industrial
Revolution
did happen) there were laws
protecting property rights and entrepreneurial innovation. No such institutions
existed in Ming China. China was governed not so much by rule of law as by the
dictate of imperial rule and the dominant political class. The Mandarins saw
protecting the virtue of their nation as their primary responsibility. Being
Confucians, they favored agrarianism over industry and had a jaundiced view of
profit seeking and entrepreneurial ambition. They were suspicious of changes
that challenged the rigid order of caste and hierarchy. In the words of
Confucius, “Good government consists in the ruler being a ruler, the minister
being a minister, the father being a father, and the son being a son.”

The Mandarins successfully used their influence after Zhu Di
died and the next emperor took the throne: By the time the following emperor
would come to power, the ships that once visited the other side of the
continent were destroyed. Coinciding with this reassertion of Mandarin
influence and policy came a precipitous economic decline. The world would have
to wait until the eighteenth century for a small island nation in Europe to
usher in the Industrial Revolution.

Hubbard and Kane suggest a common pattern underlies most of
the historic examples of decline: A national power emerges, often due to some
institutional feature that provides a competitive edge over its rivals. The
nation experiences a dramatic ascent, but at some pivotal point, the same
institutions that helped facilitate national prosperity refuse to adapt to new
circumstances, preferring to protect their narrow interests at the long term
expense of the society they were supposed to serve. Rome was not brought down
by military overextension, but rather by the institution Augustus Caesar formed
to protect the emperor, the Praetorian Guard: A century after Augustus, the
Guard would be killing emperors and selling the throne. Similarly, the Ottoman Empire would
become the so-called “sick man of Europe” because its military class, the
Janissary Corps, refused to recognize the staggering advances in European
Warfare and resisted any reforms to their outdated modes of war.

The authors are certainly on to something and they give
compelling support for their theory (albeit a theory that has been in currency
at least since Mancur Olsen’s work in the 70s). But when Hubbard and Kane turn
their attention to our present state of affairs—our stagnant economy, our
exploding entitlements dilemma, and so on—we are given a list of usual suspects
as our present day Praetorians: partisan factions, public sector unions, a self-serving political class.

Hubbard and Kane explain that our present dysfunction is the
product of perverse incentives produced by poorly conceived laws and
institutions, but their solution is to institute new laws and amendments. But
how are laws and amendments supposed to right a ship operated by a political
culture already invested in the present day state of affairs? In Hubbard and
Kane’s recommendations, we have the equivalent of an economist who solves the
problem of opening the can by assuming a can opener.

The story of Mandarin China ought to give us pause. As our
institutions, laws, and governing principles such as the separation of powers,
continue to fray, a political class with ever greater powers of discretion over
the country is emerging in their place. This reflects a broad cultural problem,
against which new institutions and laws will prove useless.

If our present political state is ruled by a particular
class, then any solution ought to begin by investigating our political class
and the conditions that brought it about. By focusing on institutions, Hubbard
and Kane miss that institutions are also a reflection of the character of the
people. Instead of economists, we need a Tacitus: someone willing to offer us
an account of the facts that quotes quotes and names names. Then, perhaps, we
can begin to understand the nature and magnitude of the challenge.

Forfare Davis lives in Southern California with his wife
and two children. He blogs for
First Things. You can follow Mr. Davis on twitter @Pseudoplotinus.

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