Google’s decision to pull out of China is the right one. Any company committed to free expression will find difficulty doing business in authoritarian nations
Confucius is often called up in support by the champions of authoritarian capitalism but his advice to Zilu when asked how to serve a prince is a summary of the exact opposite: “Tell him the truth even if it offends him.” The truth is that the model of authoritarian capitalism, in which markets are free but people are not, poses a serious question for Western companies.
Google has, rather late in the day, decided to tell China the truth, even at the cost of giving offence. After discovering attempts to gain access to the Gmail accounts of Chinese human rights activists, Google has decided to pull out of China. Until now, Google had been prepared to compromise its corporate manifesto of free expression by accepting the content filters mandated by the Chinese Government. There is no genuine freedom of expression when the filters eliminate the following offensive words: Tibetan independence; the Dalai Lama; the Tiananmen Square crackdown.
It is true that a few references did sneak through on Google, unlike on Baidu, its much bigger competitor. In March, YouTube, which is owned by Google, was blocked because it was carrying videos of Chinese soldiers beating Tibetan monks. But Google had made a not wholly reputable bargain with the authorities in which unfettered freedom of expression was traded for commercial possibility. There was a reputational risk for Google in being in China, just as there is an obvious business risk in not being in China.
Not that Google has walked away from an obvious pot of gold. No foreign company can yet claim to have cracked the Chinese market. Microsoft is struggling and Yahoo! has more or less pulled out. Although Google had been working on the launch of a music service in China, the dominance of Baidu and the intransigence of the political authorities mean there was no guarantee of commercial success. All the same, it must have been an agonisingly difficult decision to write off $350 million in revenues in a land of 300 million users, the biggest web market in the world.
The decision to withdraw was taken after Sergey Brin, one of the company’s two founders, and an evangelist for free expression, prevailed over the comparatively cautious chief executive, Eric Schmidt. Some measure of the gravity of the decision can be taken from the fact that it was immediately referred to Hillary Clinton, the US Secretary of State, who increased the stakes by suggesting that President Obama may now be ready to take a harder line against Beijing.
A tougher line on questions of liberty is to be welcomed. But this is no small matter. As large and as iconic a company as Google is, this dispute is about a lot more than who helps the Chinese organise the internet. Far from yielding to pressure, diplomatic or commercial, the Chinese Government believes itself to be the custodian of a model of capitalism that is a competitor to the form found in the Western liberal democracies. The belief that freedoms and rights are mere luxuries that hamper economic growth has, since it was first formulated by Lee Kuan Yew, the former Prime Minister of Singapore, cemented authoritarian capitalism as an alternative route to prosperity. A shift from a Western to an Eastern model is currently taking place in Russia.
The evidence that either model is intrinsically more productive is not yet conclusive but, in time, the creativity permissible in open societies will surely triumph. Besides, freedoms have a value in themselves, something that the Chinese people have shown they know too. This is a contest between two incompatible accounts of the future and never the twain shall meet. Google’s withdrawal from China is the model of liberty declining the model of authority. It might be commerically painful but it is the right decision.