The other day, I had lunch with an economist I respect and admire. I asked him, what would it take for China to become a modern democracy and build a strong middle class?

OK. I didn't ask him that. I told him that China would need strong institutions of civil society and a deeper sense of a social contract to become a stable modern democracy with a dynamic middle class.

In America's early history, we had strong institutions of civil society, such as free press, good education and a strong national identity. We wrote individual freedoms into our Constitution. We had respect for the rule of law, not much bribery, respect for science and technical progress. We had social and economic mobility, opportunity and fairness. You see where I'm going with this. A robust civil society gives voice to workers, families and communities. It serves as a counter-balance to wealthy and powerful economic interests.

China has a rich culture and strong national identity, but income inequality is growing in China. There is no free press, no unions, no environmental groups and no real political system to make tough trade-offs between wealthy powerful economic interests and the public good. Workers have no economic bargaining power. China's leaders have limited respect for the rule of law and little willingness to enforce the rule of law. 

China has done an exceptional job of acquiring the means of production. Not so much for human rights, labor rights, public health or environmental protections.

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