Economics

World Stats

August 5th, 2011 // 9:57 am @ Oliver DeMille

Sometimes a few statistics and quotes tell us a lot more than any commentary. Consider the following:

“…married couples, for the first time, now make up less than half (45%) of all households.”
(“For Richer, Smarter: The Decline of Marriage,” The Economist, June 25^th, 2011)

“Percentage by which a couple is likelier to divorce if one partner has a commute greater than 45 minutes: 40” (Harper’s, August 2011)

16,000 children starve every day. (Spirituality & Health, July/August 2011)

“Traditional marriage has evolved from a near universal rite to a luxury for the educated and affluent. There was barely a marriage gap in 1960: only four percentage points separated the wedded ways of college and high school graduates (76% versus 72%). The gap has since widened to 16 percentage points…” (“For Richer, Smarter: The Decline of Marriage,” The Economist, June 25^th, 2011)

“Estimated percentage of the U.S. college class of 2011 who are moving back home after graduation: 85” (Harper’s, August 2011)

The average 2011 college graduate has $22,000 in student loan debt, even though jobs are especially scarce for this group. (The Huffington Post, July 2011)

“On any given day, 1.6 million of us are blogging, 27 million are tweeting, and 1.5 billion are posting on Facebook. We’re emailing during meetings, texting during lectures, and talking on our cell phones as we tackle rush hour traffic.” (Spirituality & Health, July/August 2011)

“Last year China became the world’s biggest manufacturer, displacing America from a position it held for more than a century.” (“Rising Power, Anxious State,” The Economist, June 25^th, 2011)

Americans were asked in a poll who is the most trusted political journalist. The number one answer was, “Don’t Know,” and number two was, “None.” (Harper’s, August 2011)

“The fraction of the population now working (58.2%) is near a 25-year-low—lower than it was when the recession officially ended in June 2009.” (Robert Reich, The Wall Street Journal, July 15, 2011)

More than half of Americans do not know the recession is over. (Harper’s, August 2011) Part of this is rooted in the way economists define growth and recession. It takes 2.5% growth in the economy just to keep up with the natural growth of the working population, and we haven’t seen 2.5% economic growth for some time. So even though we haven’t technically been in “recession” for over a year, we are still falling further and further behind.

“By 2010, [federal entitlement] payments to individuals were 66% of the federal budget, up from 28% in 1965. We now spend $2.1 trillion a year on these redistribution programs, and the 75 million baby boomers are only starting to retire.” (Wall Street Journal editorial, July 29, 2001; cited on Meet the Press, July 31, 2011.)

The real unemployment rate in July 2011 is over 20%, including those unemployed and underemployed. (The Huffington Post, July 2011)

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Oliver DeMille is a co-founder of the Center for Social Leadership, and a co-creator of Thomas Jefferson Education.

He is the co-author of the New York Times, Wall Street Journal and USA Today bestseller LeaderShift, and author of A Thomas Jefferson Education: Teaching a Generation of Leaders for the 21st Century, and The Coming Aristocracy: Education & the Future of Freedom.

Oliver is dedicated to promoting freedom through leadership education. He and his wife Rachel are raising their eight children in Cedar City, Utah.

Category : Blog &Citizenship &Community &Culture &Economics &Family &Featured &Leadership

A New Definition of Success

August 3rd, 2011 // 10:46 am @ Oliver DeMille

The Religion of Prosperity

The lasting legacy of the twentieth century may be its materialistic definition of success.

Indeed, the “religion” of prosperity has grown to dominate politics, philosophy, religious debate, family and community culture and even education (people sent their children to school with patently career/financial goals).

Even the enemies of prosperity have learned to argue in blatantly materialistic language: Marx believed in a world dominated by conflict between poor and wealthy classes, Hitler argued for economic supremacy of one nation (based on his horrific view of racist supremacy), and Stalin, Mao and a host of dictators amassed power and wealth to themselves and those who served them.

Altruistic movements from various religions and important philosophies (such as feminism, tolerance, environmentalism, etc.) struggled to gain support until they learned to make their case in terms of profitability.

The typical approach to materialism by intellectuals has usually been either to denigrate mankind’s natural materialism and its excesses as “unfettered greed,” or, less frequently, to side with the “virtue of prosperity” perspective.

This debate between the so-called “virtuous poor” and the “virtuous wealthy” made its rounds through politics, academia, media, religion and art.

Science tried to arrive at conclusions based on various studies of socio-economic behavior.

Economists even got into the mix—for example, John Maynard Keynes said that as societies become more and more prosperous, they begin to seek success in things beyond financial increase.

A New Consensus

In the twenty-first century, it appears that a new consensus is emerging—and it’s not what you might think.

In fact, like the earlier materialistic debate (Success 1.0), there are two main perspectives on the new definition of success (Success 2.0).

The first is the “meaning” view, which has become well-known through our modern entertainment.

In this worldview, depression and poverty are bad, financial prosperity is good, and financial prosperity along with a life of real meaning is success.

Steve Jobs popularized this view when he told a graduating class that we should all spend our work lives doing things we really care about and enjoy.

Popular courses at Harvard, Stanford and other prestigious schools on Happiness in Life, or How to Be Happy, have received a great deal of media coverage—and more students than typical science, history or even finance classes.

And why not?

After all, happiness is a concrete feeling that brings its own rewards.

Positive Psychology

A whole new academic field, Positive Psychology, has risen in just the past two decades with a focus on happiness as the real measure of success.

The findings of Positive Psychology are interesting: people typically have more power over their immediate happiness than their immediate wealth or attractiveness, our thoughts have great impact on our happiness, and focusing effectively on happiness brings instant results that are often more pleasant than the noticeable rewards of food, alcohol, sex or even exercise, for example.

Moreover, the growing Success 2.0 movement has adopted some of the assumptions from both sides of the twentieth century debate on materialism: it argues that some material success is needed to maintain long-term happiness and also that at some point enough is enough and people will find more happiness by enjoying family, fun and giving to those in need than by seeking more money.

This view rejects the extremes of both the “unfettered greed” and “virtuous poor” arguments, while adopting the moderate views of both: meaningful work and a liberal flow of money helps one’s happiness, as does working to live (rather than living to work), spending time with family and friends, and giving needed service and monetary donations to help others.

In short, the new definition of success argues that financial prosperity is good and that those who attain it will find more happiness by seeking lives and work with real meaning including service to others.

As a review of Martin Seligman’s book Flourish put it:

“These days, we are hungry for a new definition of the ‘good life.’ Fractured relationships, crumbling economies, environmental crises, and a continuous state of war all have played their part in chipping away at what was once thought to be the basis for happiness…

“Dr. Seligman introduces the ‘New Prosperity,’ a concept based in optimism, and he shows how it affects everything from the health of a marriage, to recovery from illness, to the fluctuations of the stock market. Rather than focusing on gross domestic product, his new vision of prosperity, combines wealth with well-being…” (Spirituality & Health, July-August 2011).

But not everyone is buying the new definition of success.

For example, while men are three times more likely to find a happy woman more attractive than a proud woman, women are five times more likely to find a proud man more attractive than a happy one (Harper’s, August 2011).

And as the Tiger Mom debate shows, a lot of parents are still convinced that success for their children means prosperity through an Ivy League degree and a highly-compensated profession.

The fact that such a life is likely to be less about leadership or deep meaning than “high class drone work” is usually ignored by proponents of old-style success (Sandra Tsing Loh, “My Chinese American Problem—and Ours,” The Atlantic, April 2011).

Likewise, there is a second, darker, side of the Success 2.0 movement.

The Glory Years

Instead of a moderate combination of the following mantras 1) “work hard to build financial success,” and 2) “don’t lose your life in work, but use work as a support to a great life with family, friends and meaningful service,” some are taking the de-emphasis on career success as permission to avoid work and accomplishment altogether.

“Have fun, hang out with friends, party, live with your parents to avoid expenses, and forget about anything that takes hard work,” is gaining popularity.

This view is not lost on marketers who see college as the “glory years” of partying rather than the hard work of study to obtain an excellent education or prepare for one’s career.

For example, I recently purchased notebooks and pens at Wal-Mart’s “Back to School” sale.

A number of shelves were dedicated to supplies parents, kids and teachers will need for school—calculators, binders, pencils, backpacks, filler paper, markers, and more.

On an adjacent display, several large signs announced: “Back to College Sale!”

Interested, I walked over to see what the college sale had to offer different from the elementary/high school displays.

Imagine my surprise when the entire “Back to Colllege” sale, which took up a lot of floor and shelf space, consisted of toothpaste, deodorant, mouthwash and shampoo.

I suppose these are important for college students as much as anyone else, but why was there absolutely nothing related to academics?

I think this is rather poignant.

The tools of college “success,” at least for the Wal-Mart marketers (and I think they have a pretty good sense about the views of their target audience), centered around social acceptability and having fun.

CAKE!

Of course, any university campus probably includes students seeking a fun social life, a quality education, and preparation for a meaningful and rewarding career.

The point is that in the twenty-first century students are more likely to want all three, while last century these three groups were more frequently divided into distinct cliques.

Even where past students combined two of these goals (e.g. a fun social life and career preparation), they tended to clearly prioritize one over the other. Most of today’s students seem to want all three—at the same level of priority.

In short, the old formula of Success = Financial Prosperity is being replaced with a new view that Success = Real Happiness (Financial Prosperity + Meaningful Work + Flourishing Relationships + Significant Service).

With this new math, keeping score may be more complex and more accurate.

Daniel Pink pointed out that the theme of people giving up relationships for their work has been replaced in Hollywood and television productions with people putting relationships above career but finding ways to make them both work.

They want to have their cake and eat it too—or, on the “dark” side, to just enjoy cake.

There is probably little need to worry about those who have decided, for now, to loaf through life.

It almost certainly won’t last.

Success, both the 1.0 and 2.0 varieties, is a kind of widespread de-facto American religion.

As one author wrote of Americans:

“What a curious people. Their mania for self-improvement encompassed everything that touched them, and they resented the cost of every change. They were proudly self-reliant and quick to assign blame to others for their disappointments.

“They were certain theirs was the most enlightened and envied society on earth, that human history was mostly a chronicle of their achievements, and were convinced, too, that their country was constantly in need of repair. Everything they had was better than what any other people had, including their form of government, and nothing was good enough. They believed in themselves…

“For all its power and influence, its abundance and enterprise, [America] was still an immature society: impatient, demanding, not comfortable with introspection, frivolous and audacious” (O, anonymous).

But when it comes time to do the big things, America has repeatedly risen to the occasion.

It has sometimes taken crisis to bring Americans to the table, but once they come they sway everything in their path.

I am convinced that the current generation will do the same.

Churchill quipped that Americans can be counted on to do the right thing after they have exhausted the other possibilities.

Seligman suggests that there are ways to do important things that are not rooted in crisis.

For example, he “presents a rather startling idea, given the current state of affairs: that if history were to repeat itself, such a focus might result in a new Renaissance, appropriate for the twenty-first century but similar to the one that occurred when mid-fifteenth century Florence—rich, well-fed, and at peace—decided to invest its wealth in beauty rather than in conquest” (Spirituality & Health, July/August 2011).

We need to overcome a few challenges before we fully engage the idealism we are capable of.

An estimated 85% of 2011 college graduates are moving back home after graduation (Harper’s, August 2011), an alarming reality for their Boomer generation (born 1946-64) parents.

Likewise, the X generation (born 1965-1985) has reluctantly avoided taking on the responsibilities of past generations.

Up and At It

But when the times require, these generations will grow up and lead out.

Like Shakespeare’s Henry V, generations X and Y (born 1985-2005) grew up being told that world crisis was ahead and that they would have to sacrifice and lead to improve the world.

They subsequently attempted to prolong and enjoy their youth as long as they could.

But like young Henry, when they are called upon by world events, they will be up to the task.

Many members of Gen X and Gen Y worried that 9/11 was such a call, then relaxed as things seemed to normalize.

They worried that the Great Recession was their call, and they are still keeping one eye on this possibility, even while they cling to disappearing hopes for lives of perpetual youth.

Despite their fears, history makes it clear that their time will come, and current trends indicate that they will approach it with a new view of what success means.

In the 1980s and 1990s, a lot of people wanted to “get rich and get out.”

Today, many Americans are restructuring their careers or engaging entrepreneurial and other non-traditional enterprises specifically to combine their hard work with more money, more time with family and hobbies, and more service and charitable contributions.

Success 2.0 is a good change for America, and it broadens the opportunity for everyone in a free society to truly succeed.

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Oliver DeMille is a co-founder of the Center for Social Leadership, and a co-creator of Thomas Jefferson Education.

Oliver is dedicated to promoting freedom through leadership education. He and his wife Rachel are raising their eight children in Cedar City, Utah.

Category : Blog &Citizenship &Culture &Economics &Education &Entrepreneurship &Family &Featured &Generations &Leadership

Debts and Deficits: A Jane Austen Story

August 2nd, 2011 // 10:54 am @ Oliver DeMille

Chapter I: A Truth Universally Acknowledged

It is a truth universally acknowledged, that when a nation treats business badly, corporations with extra capital take it abroad and the home nation faces job losses and economic challenges.

Such nations experience widespread anxiety about their future, problems feel overwhelming, and the leaders seem unable—or unwilling—to find and implement effective solutions.

But the answers are actually quite clear, if only the people and their leaders have the courage to apply them.

When great nations struggling with debt, deficits, sluggish growth and high unemployment cultivate the most friendly global environment for business investment and economic growth, their economy booms and flourishes.

The current debate in Washington about debts, deficits, taxes, spending cuts and political parties is a lot like a Jane Austen novel.

There are attractive, well-spoken charmers who turn out to be villains, shockingly inappropriate self-promoters, and well-meaning individuals of influence whose personal flaws and arrogance cause problems around them—even as they are entertaining to the audience.

There are also regular, good people who stand to gain or lose a lot.

And, above all, there is the romance of important things happening, things which touch us on a level deeper than the intellect.

The most striking similarity, however, may be that the first paragraph of the story—and even the title—contain the whole answer.

Readers who carefully ponder the thoughts of the first paragraph of certain Austen novels get a preview and veritable overview of the whole plot to come.

In Pride and Prejudice, for example, the reader discovers in the first several sentences that the daughters of a modestly-situated family are in need of marrying well and that their prospects have just improved due to the proximity of a promising young man.

The plot is pretty much determined at this point.

The girl will get the boy, after some courtship, disappointments, major crisis, and so on.

And since we are told right off the bat that more than one girl needs to get a boy, we can be sure that at least some of them will succeed.

The title helps too: we can be fairly certain that the disappointments and crises will have something to do with pride, prejudice and misunderstandings, and that when these flaws are overcome the crises will be over and the story will find resolution.

The same is true of our current national narrative, which could be entitled Debts and Deficits.

Chapter II: A Rocket Science Conclusion

It really isn’t rocket science to conclude, even without going into detail, that deficits will be solved by spending less than we bring in, and that debt will be overcome either by not borrowing too much in the first place or by growing the economy to bring in surpluses that pay off the obligated amount.

Of course, it is in the details, dialogues, relationships and minutiae that the real fun is found.

Who will succeed?

Who will show their true colors?

Which characters will face reality and change?

How will the audience respond?

Still, whatever the particulars, the plot is generally known from the beginning.

Yes, it is within the realm of possibility that the whole thing could turn strangely off course.

The story could progress, develop and build toward crescendo only to suddenly go in some strange and totally unexpected direction, but only by refusing to overcome the debts and deficits.

These are what the story is about, after all, so dealing with them is vital—and eventually this is what will happen.

Americans want two things which seem to be in conflict with each other.

Chapter III: Greedy Americans

First, they want freedom, opportunity, prosperity, low taxes and non-intrusive government, and, second, they want a lot of government programs that provide significant benefits which they have become accustomed to enjoying—from roads and schools to trash collection, national defense, personal protection, prescription drug benefits, retirement checks, and much more.

At first glance, it seems impossible to simultaneously increase both.

Either government spending must go down or taxes must go up.

This is the crisis.

Darcy wants massive new programs that will require huge government spending increases, while Lizzie wants tax cuts and decreases in government red tape.

You can imagine the letters they would exchange on the subject.

As the disagreements escalate, both sides eventually resort to name calling: “inferior connections,” “lack of gentlemanly behavior,” “tax cuts for the rich,” “socialists,” “party of no,” “the President has no plan,” etc.

Still, the plot is basically set: overcome your pride or you won’t get what you want, realize that your prejudice has caused you to misread people and their real character, spend less than the nation takes in or see fiscal problems exponentially increase, become attractive to business investment and hiring or watch the economy and unemployment continue to sputter.

Mrs. Bennett’s behavior is shocking; no wonder Darcy feels pride in comparison.

The corporate tax rates in the United States are double those of our top competitors; no wonder jobs are scarce in the United States.

Sometimes the context tells the whole story.

David Cote said on Meet the Press:

“Right now the problem we’ve got is uncertainty of demand. Businesses don’t add until they’re sure that somebody is going to want to actually buy something. To that we’ve added uncertainty of regulation, and when you combine those two it just causes businesses to say, ‘I’m going to wait a little bit.’ And I always find it interesting when I hear government say, ‘We need to create jobs…’ Actually, government doesn’t create jobs. Government can create an environment where jobs can be created, and I think it’s important to start to distinguish between the two.”

Ohio Governor John Kasich added, in the same conversation:

“In my state, where we faced an $8 billion deficit, we wiped it out and eliminated it, and here’s the interesting thing: we have just been taken off of negative watch [credit rating]. In the middle of this we also have jumped—according to CNBC—11 places in terms of business friendly [states]. We’ve been able to cut taxes, improve and reform government, and you know why? We looked it square in the eye because Ohio was dying, and we are beginning to really become business friendly. That is what they’re not doing here in D.C. right now.”

Ohio faced a massive deficit, and overcame it by becoming business friendly, by attracting business growth.

As a result, they were able to cut taxes and drastically improve their economy.

But Washington has yet to make such changes.

As Senator Marco Rubio said on Face the Nation,

“If you talk to job creators, not politicians, not presidents, they will tell you…they’re looking for some regulatory reform….because they think these regulations that are being imposed make America a more unfriendly place to do business. When people tell you, ‘communist China is a better place to do business than America,’ you know you’re in trouble.”

As Jack Lew, Director of the White House Office of Budget and Management said on This Week With Christiane Amanpour,

“It’s not enough for us just to do what we have to do. We have to do as much as we possibly can to deal with the fiscal challenges.”

Chapter IV: A Strategy for Washington

The strategy for Washington is clear.

Become business friendly.

Cut spending to get our fiscal house in order.

Cut the corporate tax rate to make America’s business environment competitive with other nations.

That’s the only jobs program Washington needs.

I recently heard a radio talk-show discussion that suggested the United States can’t make the needed changes without a huge crisis.

Unless we engage a massive military conflict, one commentator argued, the American people will never be willing to fund the level of government spending needed to get our economy turned around.

This kind of thinking is entirely wrong.

Yes, Darcy must have become even more attached to Lizzie by facing the Wickham crisis and bringing it to resolution, but every indication is that he would have fully pursued her anyway—and everyone would have been better off without the crisis.

We may need crisis to get us to do the right thing with our economy, but we really should just do it without waiting for calamity.

The Great Recession, continued unemployment and our sluggish economy are crisis enough.

And, again, the solutions are clear.

They were inherent in the plot before the economy ever started struggling.

When you spend more than you have, stop.

When you need more than you have, become attractive to business opportunity.

Pay your bills.

Don’t default.

Don’t keep increasing the debt without reducing spending and following a valid plan for fiscal prosperity.

Make hard choices because they are the right thing to do, regardless of what the Lady Catherines or Mr. Collinses of the world will think.

There is only one way this can end: We have to get our fiscal house in order.

Chapter V: Happily Ever After or…Not So Much

Image Source: Pride and Prejudice, A&E. 1995.

We can do this right now, with celebrations and smiles, or we can refuse to make the right choices and let world markets force our government spending, regulation and excesses to change.

But change they will.

We can marry Darcy or Wickham, but marry we shall.

That ending was foreshadowed when the first page was written.

The story of the United States right now is Debt and Deficits, and there can only be one ultimate conclusion.

Debts and deficits are real, we have them, and we must overcome them—by choice or natural consequences.

How much we suffer between now and the last page depends on us.

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Oliver DeMille is a co-founder of the Center for Social Leadership, and a co-creator of Thomas Jefferson Education.

Oliver is dedicated to promoting freedom through leadership education. He and his wife Rachel are raising their eight children in Cedar City, Utah.

Category : Blog &Citizenship &Constitution &Economics &Featured &Government &Leadership &Politics

An Old Joke

July 13th, 2011 // 9:01 am @ Oliver DeMille

Just One Wish

A society without adequate entrepreneurship will see little, if any, progress.

Disney’s Aladdin & the Genie

The old Cold War-era joke is told of an American, a Frenchman, and a Russian, lost in the wilderness, who find a lamp and rub it.

Out comes a Genie.

He offers them each one wish, for a total of three.

The American pictures the large ranch owned by the richest people in the valley where he grew up, and wishes for a ranch ten times its size, with flowing streams and meadows full of horses and cattle.

His wish is granted and he is transported home to his new life.

The Frenchman pictures the farm and cattle of the largest estate from his home province, and pictures one just like it.

Again, his wish is granted.

Finally, the Russian pictures the land and herds of the rich family in the steppes where he grew up, and wishes that a drought kill the cattle, dry up the grass, and bankrupt the aristocratic family.

This play on old stereotypes isn’t really very funny, though it brings big laughs with audiences of producers.

They get it.

The Frenchman, thinking like an entrepreneur, wants the good things that life provides, and is willing to go to work to produce them.

The American, who thinks like an entrepreneur and an investor, is willing to go to work also, but wants to see his assets create more value.

The Frenchman wants value, the American plans for value, increased market share and perpetual growth.

In contrast, the stereotypical-punchline “Russian” in this parable can only think of one thing—getting even with those who seem to have more than him.

This is the same as Steve Farber’s lament about the sad state of our modern employee mentality—where “burn your boss” is a slogan of millions of workers who see their employer as the enemy.

Even Washington sometimes likes to join the blame game by pointing fingers at Wall Street, Main Street and everyone in business.

Initiative, vision, effective planning, the wise use of risk, quality execution—all are the contributions of entrepreneurs and investors.

Without them, any society will decline and fall.

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Oliver DeMille is a co-founder of the Center for Social Leadership, and a co-creator of Thomas Jefferson Education.

Oliver is dedicated to promoting freedom through leadership education. He and his wife Rachel are raising their eight children in Cedar City, Utah.

Category : Blog &Business &Culture &Economics &Entrepreneurship &Mini-Factories &Producers &Prosperity

Thirteen Thoughts on China

July 11th, 2011 // 11:40 am @ Oliver DeMille

A Review of Henry Kissinger’s On China

America is interested in China. Intellectuals have long criticized the citizenry of the United States for being self-absorbed and comparatively uninterested in world affairs. Many Americans have only given close attention to international events that directly impact them. In the case of China, it seems that Americans are deeply concerned not about what has occurred, but rather about what may come.

Henry Kissinger’s book On China is an excellent primer for any person who wants to know more about China.

There is much here for the beginner, and also a number of items of personal interest for the scholar of modern Sino-American relations.

Here are thirteen ideas from the book which sparked my thinking:

1- Exeptionalism and Singularity

Americans often talk about exceptionalism, the things that make the United States different from other nations. For the Chinese, the foundational concept is singularity. This may sound similar to exceptionalism, but it is almost the opposite.

Where America sees its founding coming after long millennia of human history, benefiting from the experiences of historical civilizations and rising above all of them, the Chinese notion of singularity stems from the view that China has no founding—that it has existed longer than written history, that it maintained a long set of traditions from before recorded annals to the present, and that it is the only modern civilization to have done so.

While many Americans claim universal principles of freedom that all nations should adopt, China claims universal principles of society that it has always used.

2-Language

The Chinese language is as old as written history.

According to Kissinger, its characters were developed at about the time of ancient Egypt.

While the Western nations have used and then moved beyond ancient Egyptian, Greek, Latin, and the numerous European languages, China kept and deepened its language.

Only Hebrew, of all the Western languages (if Hebrew can even be considered Western), is as old, and its spoken form had to be resurrected in the twentieth century.

While the culture of Western Civilization has used many languages, the Chinese Civilization has used basically one written language. Our Western classics, myths, and major political documents are mostly translations from a host of languages.

Chinese classics are nearly all studied in the original.

The result in China is a profound sense of continuity with the past and a closer connection to its traditions than experienced in any Western nation. It is hard for Westerners to even grasp the lasting significance of this reality.

3-Dynastic History

The Western political experience includes a long cycle of declining current powers eventually replaced by rising new powers—Egypt, Israel, Greece, Rome, Spain, France, Britain, and the United States, to mention a few.

Each rises, leads the world for a time, then declines. A new power seems to arise every couple of centuries.

In China, where history goes back past the time of the Egyptian dynasties, the cycle is different, and the differences drastically impact the way Chinese leaders view the world.

The Chinese cycle includes a period of internal division and inner conflict, then an era of unity and dynastic rule, then another time of division and conflict.

This cycle in China usually takes three to nine hundred years to run its course, and today’s Chinese see themselves just sixty years into a new dynastic rule that will once again put China at the center of world power—for the next five hundred years or more.

4-The Center of the World

Until the nineteenth century, China never had to deal with a civilization or nation of “comparable size or sophistication….As late as 1820, it produced over 30 percent of world GDP—an amount exceeding of Western Europe, Eastern Europe, and the United States combined.”

It has historically always considered itself the center of the world and felt deeply humiliated by its loss of dominance to Western powers in modern times.

5-Secular Empire

According to Kissinger, China has always been a secular empire.

Unlike the West, religion, religious wars, and conflicts between major religious views have played little part in China’s political history. Spirituality has historically centered on restoring the principles and ideals of a Confucian-style past “Chinese Golden Age.”

Learning was seen as the key to this objective, and also to personal advancement. The goal of Confucian-Chinese spirituality, learning, and politics has usually been “rectification, not progress.”

The main principle in this order was to “know thy place.”

The pinnacle of society was the Emperor, who was both a political leader and a spiritual-religious symbol. He was considered “the Emperor of Humanity” on earth and “Son of Heaven” as man’s “intermediary between Heaven, Earth and humanity.”

This tradition of the great Emperor above all mankind, his bureaucracy to maintain order in all things, and each person fulfilling his proper place in society created a certain kind of culture that has lasted for a very, very long time through various outward governmental structures and forms.

Most Americans disagree with the basics of this model, but we must not discount the power of its history and tradition.

Kissinger wrote:

“If the Emperor strayed from the path of virtue, All Under Heaven would fall into chaos. Even natural catastrophes might signify that disharmony had beset the universe. The existing dynasty would be seen to have lost the ‘Mandate of Heaven’ by which it possessed the right to govern: rebellions would break out, and a new dynasty would [eventually arise to] restore the Great Harmony of the universe.”

Government was supreme.

6-Monarchy and Aristocracy

Where the West was dominated by aristocrats in nearly all countries, with a host of peasants and occasionally powerful kings, China was run by an Emperor and his army of bureaucrats (mandarins).

The provinces (cantons) were likewise ruled by the mandarins, and the outlying (non-Chinese) nations were considered tributaries to the central Emperor.

Kissinger doesn’t mention that these are the two great types of historical governments:

Monarchy ruling through bureaucratic management
Aristocracy ruling through class dominance.The American founding created a third system:
The Federal Democratic Republic ruled by constitutionally separated branches and levels of government all limited by checks, balances and periodic elections.

7-Sino-centric World History

Many modern Chinese see the history of the world as three distinct eras:

China’s world prominence until the nineteenth century
A “century of humiliation” from the early 1800s until the communist revolution in the 1940s
A rebirth of China’s proper world role beginning in the 1940s and still developing today

8-China’s Grand Strategy

China’s grand strategy has traditionally revolved around playing foreign powers against each other.

During the modern era, Britain, Russia, France, the United States, Japan, the Soviet Union, Korea, Vietnam and India have all been impacted by the Chinese strategy of “using barbarians against barbarians.”

Through it all, China has held mainly to its traditions rather than joining the West (or attempting to join it) like most nations have done.

For example, while most Westerners might agree that with three superpowers during the Cold War an alliance of two would be the strongest position, China followed its traditional non-Western approach by keeping the U.S. and USSR strongly pitted against—and focused on—each other rather than China.

9-The Communist Era

The pain of the communist era in China is felt by nearly every family and person in China. All suffered. Communism united China under central control, leading to increased power. But the pain of totalitarian communist rule created a modern generation hungry for freedom and economic opportunity.

This era also changed the Chinese psyche from “fit your place in the system” to one of regaining China’s place in world prosperity, power and leadership.

10-Leadership through Symbolism

Chinese leadership often operates with an emphasis on making impressions rather than literality.

This tactic includes attempting to make things seem a certain way as a means of influence—regardless of whether or not the reality actually resembles the perception.

In short, symbol is often more highly prized and utilized than the literal reality in Chinese culture and diplomacy.

Western leaders and citizens who don’t understand that most Chinese leaders assume the symbolic over the literal frequently misunderstand Chinese motivations, actions and words.

11-Contemporary Chinese Literature

Two current Chinese-written bestsellers (in China) include China is Unhappy: The Great Era, the Grand Goal, and Our Internal Anxieties and External Challenges by Song Xiaojun (2009) and China Dream: Great Power Thinking and Strategic Posture in the Post-American Era by Liu Mingfu (2010).

Kissinger comments:

“Both books are deeply nationalistic. Both start from the assumption that the West is much weaker than previously thought, but that ‘some foreigners have not yet woken up; they have truly not understood that a power shift is taking place in Sino-Western relations.’ In this view it is thus up to China to shake off its self doubt and passivity, abandon gradualism, and recover its historic sense of mission by means of a ‘grand goal.’”

Liu advocates a Chinese return to a ‘martial spirit’ and a military rise along with its economic rise.

Liu wrote:

“If China in the 21^st century cannot become world number one, cannot become the top power, then inevitably it will become a straggler that is cast aside.”

Kissinger writes that these books:

“…could not have been published or become a national cause célèbre had the elites prohibited publication. Was this one ministry’s way of influencing policy?”

He notes that official government views differ from the tone of these books, but doubts that this debate is over in China.

12-War on the Economic Front

Still, Kissinger says:

“A country facing such large domestic tasks is not going to throw itself easily, much less automatically, into strategic confrontation or a quest for world domination….The crucial competition between the United States and China is more likely to be economic than military.”

After the Great Recession, this may be exactly what has so many Americans deeply concerned.

As for the rise of China, Kissinger wisely suggests that America has the ability to substantially determine its own future regardless of what China does.

We should worry less about China than about how to overcome our own nation’s challenges.

Peace and cooperation between these two cultures and nations is, as Kissinger puts it, “inherently complex.” It is important to the future of both nations that our citizens and leaders approach relations wisely and in principled fashion.

13-A War of Ideals

Kissinger suggests:

“The United States bears the responsibility to retain its competitiveness and its world role. It should do this for its own traditional convictions, rather than as a contest with China. Building competitiveness is largely an American project, which we should not ask China to solve for us.”

I agree. Our biggest problem is Washington, not Beijing, and if we as the American citizenry handle Washington correctly, China will never be the threat it could become if Washington is insolvent or weak.

As I said above, Kissinger goes into depth on a number of additional topics, all of which are valuable to the American citizenry.

These thoughts are just a few of the many covered in On China.

As a group, we don’t know enough about China. Kissinger’s analysis is astute and timely, based on both research and long personal experience. This is an important book, and it is a valuable addition to the prudent citizen’s reading list on China.

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Oliver DeMille is a co-founder of the Center for Social Leadership, and a co-creator of Thomas Jefferson Education.

Oliver is dedicated to promoting freedom through leadership education. He and his wife Rachel are raising their eight children in Cedar City, Utah.

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