Two weeks ago Kristofer Eriksson was visiting us in Nieuwegein and during the Saturday worksession we gladly found some time for ‘kibbeling‘ and beers. Surprisingly the beers did not just lead to some simple, cliché talk, but rather inspired us to talk about geopolitics and how countries are runned. Eventually we ended up having a intense discussion whether a democratic or totalitarian government was better?
Democracy / Capitalism – the American way
Of course we know America is the most popular way of democracy. There it’s the survival of the fittest and it can generate ‘American Dreams’. Life in the States imho is all about more, bigger, better. This is probably one of the reasons I loved to spent my vacations there. Driving a mustang cabrio along highway 1 from San Francisco to LA comes quite close to the American lifestyle I reckon. And of course a long the road you need not to worry about starvation, fast food is everywhere and it’s there for the lowest prices for the biggest plates.
And as far as politic goes, no need to get complicated, just 2 choices 50-50. The political system is easy and always leads to 1 party having a majority, making it relatively easy to push through complete policies. But then again, why should Americans care for politics, as a big majority of Americans are mainly focused about their own wellbeing and do not know about the world around them.
All of the above of course is the core reason for a strong consumption economy, which of course makes the American economy one of the strongest in the world. But at the same time we can see how the ‘short-minded’ craving for fast shareholder value has lead to the biggest financial crises I have seen in my life. I mean, it’s because of the of this whole situation with the sub-prime market in the US that the whole world has seen > 1.000.000.000.000 USD evaporate in thin air. If one starts to think further about how badly the state of the American financial system is, then we can be sure that the American way can be devatating.
Democracy / Care state – the Dutch way
In the Netherlands, similar to the Scandinavian countries, democracy seems to be sacred. Everyone has a voice and indidualism has kicked out the power of the Church decades ago. Holland is a country where it’s not valued to be succesfull. The more money you start to make, the more taxes you pay – upto 58% of your income, so why bother to make more money? But then again, the system is quite good at taking care of all people in the society; the poor, the ill, the misfortuned – but also the ones that are just lazy. So living in Holland gives you a good feeling about how a country can take care for it’s people, but makes you wonder how much the people care for their country.
And with politics, it seems like individualism has started to kick in. The traditional social, christian and liberal party are losing ground and make way for many smaller parties. I mean, the party of the animals is even represented in the parliament. Of course, more voices make more point of views to be seen. But the extreme can lead to a coalition with too many parties to make clear policy. Personally I think Holland is in such a situation where no real changes, reforms and decisions are made. People are trying to get consensus, as the ‘Poldermodel‘ is proud trademark of the Dutch. Just take a look at the ‘Ontlsagdossier’, where everyone agrees that the Dutch labour regulations are too rigid and need to be reformed to make Dutch companies more competitive. You might think that 1 governmental period should be enough to make decisions, but for this dossier even 4 governments seem not to be enough.
But the Dutch care state has a decent model where investments / earnings are weighed on a longterm balance. Just look at the Dutch banks that were marginally effected by the sub-prime, especially ING is doing very well. A very clear symbol of the Dutch way of management are the ‘Deltawerken‘. It has taken 47 years to construct them, but the requirement was to protect the Netherlands for at least 100-150 years.
Totalitarian / Communistic Capitalism – the Chinese way
The Chinese have a different way of spreading propserity. They have the power to assign regions city to be just ‘upgraded’ within years, not decades. Their way of running the economy is probably more about efficiency. I mean what other country can determine that a city of millions is only producing textile, while the other produces consumer electronics? The other side of the medal shows that some millions of people have to wait for prosperity, but it’s quite probable that they will get their turn. The Chinese way has made many foreing politicians question it’s ethics, but I guess the financial results easily smuther many critical voices.
As for politics, it’s even easier with only 1 party. I think many of us, who have studied politics / economics, automatically think negative of such a system. But I think we’re naive to think that it’s easy to run a country that has to feed > 1.000.000.000 civilians. Any country has political dissidents who are suppressed in someway. Just look at Holland where 2 famous Dutch have been assassinated for their strong opinions. In China probably hundreds of thousands of even millions are suppressed, but then again many more millions are reaping the benefits of China’s policy. So whatever we think of the Chinese way, they definitely show that capitalism doesn’t require democracy.
No country in the world has such big federal reserves like the Chinese. And in the past few years tens of millions Chinese people have entered the level of prosperity that we are accustomed to in the West. I guess they’re doing a lot better than many 2nd world economies in South / Central America. Hmm, I think even many Western countries can be considered a 2nd world economy when compared with China in 20-30 years from now.
So let’s all focus more on the collective and long term results!
So many people find it easy to criticize and theoretically find it easy to discard economical / financial consequences. But I bet many of the human rights people don’t have an answer for many of the economical consequences that might appear if the West would start to impose sanctions on China. Worldwide we would lose billions of production / consumption value, who’s gonna accept that check?
No, it’s not for the normal people to make such decisions as they might not make any decision, which is usually the worst option. That’s why all countries have their secret agencies, that need to make decisions to do things that cannot easily be justified to the public. And just look back a few hundreds years in time, the West has had their share of genocide and suppression. I mean, who’s fault is it that most of the Indian cultures in the America’s are vanished?
So, why focus so much on the bad things of life and not more on the positive developments of China and Russia? Yeah, we’re humans, but we all know that being constructive often helps in creating understanding between peers. So in my opinion the West should be less condescending and need to see that the former 2nd world economies are becoming peers. And now is the time to change our attitudes towards these countries with more respect, rather than to just
It’s the same for companies
Considering all this, we can easily reflect politics of different countries with management of different companies. Even with Web 2.0 theories and technologies, the board of directors is there to make hard decisions to protect the company’s continuity. But then again, directors and managers should allow their people to be decisive and empowered. In so many Enterprises ‘control’ has become highest importance, causing many to be blind for the lack of decision making and action that has come with it.
Critics should be aware what ‘indecisiveness’ can do to a company and if that’s worth all the democracy of the Poldermodel. I know many of my customers are struggling with such issues internally.