Jared Diamond, author of the Pulitzer Prize-winning Guns, Germs and Steel, has a new book entitled Collapse: How Societies Choose to Fail or Succeed.
I have not read it yet, but the title alone can be the start of an interesting exercise: thinking about what sustains healthy, prosperous societies.
Without having read the book, there are arguably two such prerequisites: a belief in, and practice of, private property, and a functioning market.
The notion of private property entails the larger notion of the rule of law, but the idea of private property seems to me more important: one can have a system of laws which does not emphasise private property, but private property is not possible without a system of laws that anchor and safeguard it.
Voltaire expressed a similar belief when he urged us, at the end of Candide, to cultivate our gardens.
Having a garden, and not merely "usage rights" for a limited period of time, even 50 and 70 years, as in China, and having that garden protected from intrusion from the state or, by the state, from fellow citizens, is the foundation of everything.
This is a truth that both Confucianism and Communism deny. Both doctrines feel that reducing everything to private profit is, well, reductionistic. "Man is so much more!" Adam Smith's description of selfishness as the main driver for commerce is quoted in the same vein.
"There is plenty of evidence that man is more altruistic!" Yes, there is -- but Adam Smith's point was that private benefit is an important, even crucial, factor that brings benefits to everybody, but he did not hold it is an end-all or be-all.
Contrast this belief with the following exchange that takes place at the very beginning of Mencius, one of the Confucian classics. The philosopher Mencius visits an ancient Chinese king, who asks him, "Why have you come to see me from afar?
Can you bring profit to my state?" Mencius scoffs: "What is the point of mentioning profit? All that matters is that there should be benevolence and rightness." Mencius seems to have been a man of independent means who undertook such travel for pleasure. The very mention of "profit" soils everybody.
The role of the state in establishing private property is a difficult one, for private property is an island that to a great extent stands outside each reach.
Why should a state that is all-powerful give up absolute power over a portion of its realm? This is the question Beijing faces. I suppose world history shows such power is not as much given as asked and fought for, which if history repeats itself would entail social convulsions in China.
But a far-sighted political entity would see the benefits of enshrining private property before it is required to so forcibly. There are also signs that China is moving in this direction, albeit too slowly.
By market, the second prerequisite, I mean feedback mechanisms at various levels in society. When Tung Chee-hwa, the chief executive of Hong Kong, resigns because he says he is in poor health, a linkage between perks and performance is not established.
I am not advocating a society in which everything is made crystal clear, where truth is always worn on the sleeve (Moliere warns against such honesty in The Misanthrope), but it is interesting to note the contrast between the swift and clearcut departures of Carly Fiorina at Hewlett-Packard and Harry Stonecipher at Boeing and the long, oblique exit of Mr Tung.
It is almost as if, in such situations, veils exist in order to protect a fragile sense of self: directness would hurt and humiliate.
The answer is to strengthen and empower the individual -- every individual -- so that he or she, confident and well-anchored, can withstand adversity, whether the ordinary challenges of everyday life or high-profile rejection in public life.
Notice how, within days of her departure from HP, Ms Fiorina was spoken of as a possible US appointment to the position of president of the World Bank.
The point here is not simply that she is a favourite of President Bush, though that may be true, but that life goes on, and to try to over-protect an individual from reality belittles our well-established capacity for survival.
It is not only unnecessary but detrimental -- to the individual and to the community. Think, now, about protecting the ego of an individual who has failed and a public enterprise, which has failed.
In both cases, reactions in China are to protect and avoid visible failure -- not to allow the logic of the market to take its toll. But that is the whole point of the market and no one can choose the outcomes she or she prefers. In the end, the market wins, only at a much higher price.
The former Soviet Union is an example of this. In China, genuine unions and social security would allow the logic of the market, no matter how painful, to unfold.
All this is a long-winded way that two fundamental preconditions for sustained economic success and prosperity are not yet present in China. But, for now, all is in order.
This may seem curious, but China's current "business model" is one of low value-added, labour-intensive industry, and this model can last for decades to come. Wages in coastal China have gone up lately, but economic activity is moving further inland in response.
The introduction of modern efficiencies in the state sector also has much further to go. The present dynamism can therefore continue for some more time.
But the concerns I have outlined need to be addressed if China wants to move to the next level of economic growth, propelled by innovation and focused on services.
When you make commodity products using foreign raw materials and capital equipment, when you undertake little fundamental research and long-term planning, when you don't build brands, prices inevitably fall and your margins get squeezed.
You respond by upgrading, but that response takes time. For an enterprise, the simple act of thinking farther ahead requires confidence in a sound and ongoing institutional framework.
Building a brand and intellectual property are examples of such "thinking ahead". For now, there are few signs of an innovation or a service mentality taking hold in China, as anyone who has been approached by sellers of fake goods in the streets of China's cities, or experienced the wrath of surly shop assistants in its brand-new luxury malls can attest; but that should change with time.
Industrialised East Asia, in general, can be said to be in the throes of this transition. To ask, as some do, whether China can have global brands or multinationals is to fast-forward furiously. It is too early to ask such questions.
China's current economic model, in other words, is satisfactory for its current stage of development. The time for a qualitative transformation is decades away.
Jared Diamond's book, if I am to guess, is concerned with the externalities of private-benefit behaviour -- issues such as environmental damage, which is widespread in China.
But such externalities occur in China not because there is too much of a market in place, but too little. Rampant short-termism is another result.
So why do societies fail? Because people don't create institutions -- institutions that enshrine private property and market principles.
