It was Mahinda’s birthday and everyone got presents. Hambantota port got its first ship. Guests got 4,000 kilograms of kiribath. Even competitor Sarath Fonseka got exercise facilities in jail. What did Sri Lanka get? Mahinda.
In his display of power, Mahinda has spent state money, torn up roads, barracked military in schools and taken the entire economy offline with a national holiday. Indeed, he has done this before, to commemorate the end of war. This type of display is essentially what he keeps the media around for. To project power.
Last week the country celebrated the rebirth of a nation, essentially reborn in one man. What a few mourned, however, was the death of liberal democracy. There was once an idea that we thought could unite this land. But it didn’t. So we get a man.
As Mahinda stood at the Maagam Ruhunupura Mahinda Rajapaksa Port, it was impossible to deny the achievements of the man. Despite only symbolic traffic, it is still a very impressive port. The next day, as Mahinda stood before assembled troops opposite the Galle Face Green, it was impossible to deny his achievements as a military leader. Indeed, it is impossible to deny Mahinda at all.
Sri Lanka has experimented with socialism and capitalism and is now settling on what Ian Bremmer calls State Capitalism. In this “governments use the tools provided by state capitalism to accomplish political goals, not to serve the public welfare. This system allows them to minimise the political risks they face by maximising their control over activities that generate substantial amounts of wealth.” State capitalism was on proud symbolic display last week. As Minister of Ports and Aviation, Mahinda Rajapaksa visited the new Hambantota Port. As Minister of Finance, he allocated the funds for the multi-million dollar inauguration. As Minister of Highways he took over the Galle Face Road, and as Minister of Defence he marched troops down it. His Excellency is indeed using the tools of state capitalism to accomplish political goals.
As Mahinda said in Hambantota, “We did not own our national carrier SriLankan Airlines. Now we are the owners of SriLankan and Mihin Air. We gave Sri Lankans, the rightful owners, everything from the fertiliser bag to the Shell Gas company.”
Rather than entrenching the state through ideology, Mahinda is entrenching it through a feeling of ownership. These are the tools of individual driven capitalism, turned against itself. Since it his family that actually owns everything, it is necessary to project this feeling of ownership, specifically by inviting everyone to his birthday party.
The trouble, however, is that the people don’t actually own the government anymore. As Bremmer said, “Running a police state isn’t cheap, and direct control of much of a nation’s wealth can make all the difference.” Mahinda’s inauguration was also symbolic of this.
Mahinda is now, quite officially, the sun that the state orbits around. He took his oaths under a giant solar cutout, flanked by his family and backed by his military chiefs. Such is the state of the state. Backed by a powerful military, succeeded by dynasty, placating the masses with kiribath. Such is the state of Sri Lankan state capitalism.
The trouble with state capitalism is not during good times. Indeed, it can make hay quite mightily while the sun shines. The trouble comes when growth slows down, or hard times come. Given the choice between security and prosperity, a state capitalist society will always choose security. One has to remember that its primary goal is self-preservation. The prosperity of the people is only a means to this end.
In a free market, liberal democracy, however, the primacy of the people is the central goal. Not that Mahinda does not care about the people, but he cares about them as children. To be given certain things and kept happy. Liberal democracy views people more as adults. Capable, responsible and empowered.
Instead of the ruling class giving away things to ensure its survival, people are given opportunities to thrive. The free markets that generated most of the wealth and technology in the world emerged from the free flow of ideas, capital and human beings. Now countries like China are implementing those technologies well, but they don’t necessarily have the freedom to create new, dynamic drivers of growth.
In the same way, Mahinda can use his power to physically develop Sri Lanka up to international standards, but then what? In Hambantota he said, “This country does not need another port for many centuries ahead. We develop this country for the benefit of the future generations. It is their responsibility to reap the benefits of this port. It is wrong if the youth only expect jobs through this port.”
This is true. It is the youth of Sri Lanka that need to develop Sri Lanka. Sadly, however, this is not where Mahinda is investing. He is investing in the ports and technologies that will generate state wealth, that will keep his ministers happy and keep supporters in jobs, but he is not investing in the dynamic, free society that will generate ideas he couldn’t think of himself.
Ports, roads, military formations — these are all things we can simply copy from others. We can even build these things cheaper, faster and better than the West because we don’t have to go through the laborious, painful process of thinking of new ideas in the first place. But once we have copied everything out there, then what? What do we do as the environment changes? Without freedom, where do new ideas come from? Within state capitalism, what is the engine for revolutionary new ideas and growth?
State capitalism is fundamentally about playing the game the West started. It’s not a game changer. They simply take certain ideas and leave out the rest, benefiting from the years of thinking and hard work that emerged from free societies. Keep inflation low, keep interest rates a certain way, build roads, build infrastructure, basic prosperity will grow. Like agriculture, this command of the technology of prosperity can reduce people to fiefs and they will be happy, for a while. People will take jobs, they will take security, they will be happy as living standards improve. But then what?
At some point, every society needs new growth. It needs new ideas. At some point all nations are faced with problems they couldn’t expect and they need to draw on resources they didn’t know they had. This is where all that freedom — so wasteful and disruptive — comes in handy. And that is what state capitalism lacks. At some point all the infrastructure will be built, all the roads will be there, and growth will slow down. In China even, that government is only tolerated as long as it delivers growth. As the work of Joseph Tainter shows, however, all civilizations have increasing diminishing returns over time, just as their bureaucracies get bigger and more expensive. At that point, if they don’t have new, revolutionary ideas to kickstart growth, they collapse under their own weight.
That type of growth is precisely what Mahinda Rajapaksa cannot deliver. He can copy the West, actually, he can copy China copying the West, but he cannot deliver the freedom and institutions to enable Sri Lankan people to truly thrive and contribute to the world. But he can drive the economic engine that ensures we keep contributing taxes to him. But let’s not pretend his birthday inauguration was for us. Happy Birthday Mr. President. Happy Birthday. To you.
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