"Either you have a system in which there's just one giant jurisdiction, and you just hope that liberty is preserved there, or you have a system with a bunch of competing jurisdictions, in which people can leave if one becomes too oppressive. I think the second one, in the long run, in which different states are competing to see which one can have the most liveable, most desirable society, I think liberty is much more likely to be preserved there."
While this vision has been largely compromised in the United States (I like those who insist, "United State" would be more appropriate), has likewise been compromised to a large extent in Europe via the EU, and even to some extent via NATO hegemony across the Atlantic, the States comprising the Far East and to some extent in the Middle East seem to have preserved something of true sovereignty and represent a closer approximation to this founding vision for America than exists anywhere else in the world.
In my first post on this topic, I focused on the point that economic liberty (or at least a business-friendly climate) is stronger in the East than in the West, to say nothing of the fiscal management of the sovereign states. But perhaps this point of competition between the states underlies that to a large extent.
While Japan rose to economic dominance largely due to the support and control of the United States -- an uneconomic or even a "fake" boom -- I would attribute the turnaround in Asia most directly to Singapore. While Hong Kong was long a prominent economic hub in the region, it was a British colony and offered no real model for other sovereign states to follow. When Singapore seceded from Malaysia in 1965 it was primarily a pure port town without much of an economy beyond that, and hardly any natural resources. Under the direction of Lee Kuan Yew, Singapore rapidly transformed itself into a modern economy and initiated a new trajectory for Asia as the first of the Four Asian Tigers -- Singapore, Hong Kong, South Korea, and Taiwan.
Just look at these countries for starters, and the point begins to come into focus -- Singapore is a true city-state, Hong Kong is practically a city-state (it's technically a "Special Administrative Region" of China, but it's expected that it will largely be self-governing until 2050...let's see any Western States make a plan that long range), Taiwan is an island, and South Korea, while slightly larger, is only the 108th largest state in the world by geographical area.
So how did these tiny countries become economic powerhouses? The key to the economic turnaround has largely been foreign direct investment in these countries. Don't have capital? Attract it from the outside and watch your country flourish. How do you attract capital? Follow the Singapore model -- low taxes, limited regulation, stable political environment and it helps to have an educated workforce as well.
Now, while it isn't exactly simple for the average citizen of these countries to "vote with their feet" and emigrate to more attractive countries at will, but rising living standards do wonders to limit social unrest, and that alone encourages these countries to remain competitive in the region and on the world stage.
The effect on the rest of the region has been incredibly rapid, and it continues to spread. It should be abundantly clear by now that China has largely transformed strictly as a result of opening up their economy, and I would argue (from my brief experience there) that the average Chinese businessman faces substantially less red tape than does his American counterpart. Barring regression in China, they should continue to grow into an economic powerhouse. While I tend to think a regression may be likely, the one thing that should keep China on the right track is the regional competition -- if it becomes less favorable to do business in China, companies will simply move to Vietnam or other places.
Speaking of Vietnam, the economic development of that country has been truly remarkable. When I visited Saigon for the first time a few months ago, I visited the War Remnants museum there and witnessed first hand the utter destruction that country faced at the end of the American War (as they call it...). Decimated in terms of both adult male population, infrastructure and environment -- not to mention finances and economic activity -- the poor people of Vietnam were even more disastrously saddled with a strict Communist government. From the close of the war in 1975 until 1986, the economy continued to deteriorate at a rapid rate. At that time, looking around at the examples of the Asian Tigers and the early returns of reforms in China, Vietnam set about a policy of reform to open up their markets and create a more business-friendly environment. By the early 1990's, things had turned around and Vietnam has been one of the highest-growth economies in the entire world since that time.
It goes well beyond these examples too, and seems to be catching like wildfire -- there's the so-called "Tiger Cubs" in Southeast Asia: Indonesia, Malaysia, Philippines and Thailand. Even communist Laos just opened a stock market a few weeks back. India still seems to be at a halfway point between the new model and the influence of the Western model, but I find it very likely that they'll catch on before too long.
The model is spreading to the Middle East too: Qatar, United Arab Emirates (Abu Dhabi and Dubai), and Bahrain in particular seem to have caught on and are doing very well. I even saw a feature on CNBC today about Kurdistan -- that's right, the region in Iraq of all places -- that made it seem like the guy in charge there has got on the bandwagon. I wouldn't be surprised, based on what I saw, if there isn't a serious Kurdistan independence movement in the near future.
So does this all fit with the hypothesis, that States in competition are better than states "Unified," homogenized, hegemon-ized, etc? I'm not positive that the Asian case holds up under the scrutiny of the "individual liberty" criteria, but when you consider the plight of the individual in the pre-transformation state, it's clear that they're certainly better off. Furthermore, these tiny countries in competition with one another seem singularly-focused on growing their economy by increasing their stability and liberalizing their economic policies as opposed to slaughtering their own citizens, making war, or making power-plays on the global political stage.
It's a profound reality, and one that I both believe and hope will continue to proliferate and expand throughout the rest of the world. Of course, I hope it ultimately goes much further than this, but all things considered I'd rather see this competitive and business-oriented model win out as opposed to the warfare/welfare model, and as I said in the title: The East is succeeding while The West is failing.
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