What if Russia and China don’t become more liberal?

By Chrystia Freeland

June 28, 2012

Liberal democracy faces a new and decisive challenge – figuring out how to deal with the “post-Communist oligarchies” of Russia and China. These regimes – authoritarian, capitalist and eagerly integrated into the global economy – are without precedent. Figuring out how to deal with them is the greatest strategic and moral question the West faces today. How we answer it will determine the shape of the 21st century, much as the struggle with communism and fascism shaped the 20th.

This is the assertion Michael Ignatieff, a Canadian intellectual and a former leader of the Liberal Party, made in a powerful lecture in the Latvian capital, Riga, at the beginning of this month. Ignatieff’s thesis came to mind during the annual St. Petersburg International Economic Forum, held last week as the gracious former imperial capital for which the forum is named glowed in the pure white light of the summer solstice.

Central to Ignatieff’s argument is his insistence that “history has no libretto.” It isn’t marching toward any particular destination, including liberal democracy, he said: “As late as Benedetto Croce, liberals still thought of their creed as being the wave of the future and thought of history as the story of liberty.”

When it comes to Russia and China today, we still hope we will all eventually sing along to this seductive libretto. “It is a cliché of optimistic Western discourse on Russia and China that they must evolve toward democratic liberty,” Ignatieff argued. Sadly, though, we’re wrong: “we should not assume there is any historical inevitability to liberal society.”

As Ignatieff explained to me in a telephone conversation this week: “The simple point is that we thought they were coming towards us. What if they are not?”

The optimistic Western cliché Ignatieff described was very much the conventional wisdom in St. Petersburg. It is what the visiting Western business titans wanted to believe, and it is what the presiding Russian government chiefs wanted them to believe.

Klaus Kleinfeld, the chief executive of Alcoa and chairman of the U.S.-Russia Business Council, said in an interview that President Vladimir V. Putin’s opening speech at the conference was “very, very good. He was basically clear that he stays on the course of reforms. He stays on the course of modernization.”

When I suggested that Putin might instead be taking Russia backward – freedom of assembly was sharply curtailed this month and several activists, including Putin’s goddaughter, were questioned by the police and had their homes searched – Kleinfeld demurred. Referring to the reformist promises of Putin’s speech, Kleinfeld said: “We have to take that at face value.” Kleinfeld also said that Russia’s progress needed to be judged in historical context.

“How the country has emerged in the last 20 years, I think, is pretty amazing. I think most people that are easy with their criticism measure Russia against countries that had much, much more time to go into a market economy,” he said. “Some of these processes take a little time to struggle themselves through. They are on a good path.”

What is striking is what you might call the “libretto” assumption in these remarks: Russia is on the right path, just give it time.

At least when they speak English, this is a view that Putin’s people are eager to endorse. When I asked Igor I. Shuvalov, the suave and sharply dressed first deputy prime minister what he made of Putin’s speech, he, too, spun it as proof that Russia is on the path to becoming more like the West.

“I was very pleased that yesterday what he announced was completely in line with a new generation. It was everything which any citizen of the European Union, or other developed countries, wants. It’s exactly how Putin sees the future for Russia in just a few years,” Shuvalov explained.

“We are passing the way all developed countries pass,” he said.

This is a useful theory for Russian leaders – and for Chinese ones, too – and a comforting one for their Western business partners. It is useful because assurances that you are on the path toward Western-style liberal capitalism can serve as a catchall justification for whatever illiberal policy you happen to be pursuing at the moment. Think of it as the dictator’s version of St. Augustine’s prayer to be made good, but not yet.

Believing that the duo Ignatieff calls the “post-Communist oligarchies” are on the liberal capitalist path is comforting for the liberal capitalist companies that do business with them. After all, for all the kowtowing required to do business in Russia and China, the rewards are vast.

Consider the experience of BP, the oil giant based in London, which paid $7 billion in 2007 to establish a 50 percent stake in TNK-BP, its Russian joint venture. BP’s trials at the hands of both its Russian partners and the Russian state are the stuff of legend. But shareholders and the board care more about the $19 billion BP has received in dividends since making the deal. That’s quite apart from BP’s share of TNK-BP, which analysts think could be worth between $25 billion and $30 billion.

The optimistic cliché of inevitable liberal evolution is convenient and comforting. But that doesn’t make it right.

If Russia and China really are not marching inevitably toward liberal democracy, as Ignatieff argues, that is a problem not just for their repressed people but also for us.

Ignatieff says that our attitude toward Russia and China is a question of such great import because both countries “are attempting to demonstrate a novel proposition: that economic freedoms can be severed from political and civil freedom, and that freedom is divisible.”

He is right that this is the fundamental operating proposition of Russia and China, and he is right that it poses the most serious challenge that the very idea of liberal democracy faces anywhere today.

It is no surprise that this question was not on the agenda in St. Petersburg. But surely it should be much more squarely on the agenda in Western capitals – and even in Western boardrooms.

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Chrystia Freeland is the editor of Thomson Reuters Digital. Prior, she was U.S. managing editor of the Financial Times. Before that, Freeland was deputy editor, Financial Times, in London, editor of the FT’s Weekend edition, editor of FT.com, U.K. News editor, Moscow bureau chief and Eastern Europe correspondent. From 1999 to 2001, Freeland served for two years as deputy editor of The Globe and Mail, Canada’s national newspaper. Freeland began her career working as a stringer in Ukraine, writing for the FT, The Washington Post and The Economist.