June 22, 2005

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China's new left

The other day Richard had a post titled China's New Left seeks to rein in market reforms. It links to an article called China's inequities energize New Left, which is a more balanced view of this group. I've posted a comment on his thread (reproduced below the fold) which has some additional ideas not mentioned in this main post. Let's look at this in greater depth and please feel free to join in.

When looking at an issue, it's important to look at what the terms mean. So what does New Left mean?

...a loose coalition of academics who challenge China's market reforms with a simple message: China's failed 20th century experiment with communism cannot be undone in the 21st century by embracing 19th century-style laissez-faire capitalism....the New Left's adherents don't offer a coherent set of alternate policies.
The group is defined by what they oppose rather than what they stand for, the death knell of any political group.

The 'New Left' are worried about China's growing income gap but without any solutions. Is the income gap worth worrying about? No, with a but. If you think of an economy as a pie, it doesn't matter if the allocation of the pie is uneven, so long as the pie itself is growing. Is that true in China's case? Clearly the answer is yes. Witness the massive rise in living standards for literally hundreds of millions of Chinese citizens. It is the most rapid poverty allieviation in history. Yes, there is still plenty of crushing poverty in China. But it is decreasing at a rapid rate, not thanks to trendy pop concerts or dollops of foreign aid, but thanks to a quasi-capitalist economic system.

China's system is far from perfect. Cronyism and nepotism are rife. Government interference and direction in enterprise is rampant. Rule of law (in both enforcement and courts) is patchy at best. Unsurprisingly this has been China's economic way for much of its history (by the way, has there been any definitive economic history of China - if so can someone point me to it). But in terms of results, the current one is working, and working in spades. The 'New Left' alternative isn't even an alternative:

critics of the New Left, such as Professor Shi Yinhong, director of the Center for American Studies at the People's University in Beijing, say the group has no real alternative to the current global economic system.
Richard cannot help but have a go at America's economic system while he's citing this article.
What the New Left is saying resonates with me. Jiang is most responsible for today's wasteland of corruption that fouls so much of the country, resulting in a nation of obscenely rich cowboys riding roughshod over the people. Now, we have this situation in America, too, especially under our current regime, where might (i.e., money) makes right. But we do have controls for reining it in, as we saw when some of the more repellent aspects of the "Patriot Act" were rejected last week. And we're sending the Tyco robber barons to jail where they belong. I think wherever you have capitalism, you're going to have this situation to some extent; the owner-worker model lies at the heart of capitalism, making it, as they say, the world's worst economic system except for every other system.
America is the world's largest, richest and most successful economy of all time. There are plenty of Chinese citizens who would gladly have American style income equality in return for something like American living standards. Richard's right in one respect: inequality is a key part of the capitalist system. That's because people are all different. Shocking, I know. Just like we cannot all be gold medal hurdlers, we cannot all be wealthy tycoons.

To Richard's credit he notes the vacuousness of the 'New Left':

If the New Left's strategy and tactics were a bit less amorphous I'd be more optimistic. Right now, it sounds like a lot of ideas without much of an action plan.
Sounds a lot like the Democrats.

Update For more comments and my response to the comments below please check my response on China's new left.

My original comment to Richard's post:

Let's do a simple comparison. China's swing from Communism to its current quasi-capitalism has seen several hundred million people lifted out of poverty in the space of a few decades, the fastest rise in history and far more effective than any number of trendy pop concerts. The current system is being compared to "19th century laissez-faire economics" but with no basis in fact. A consequence of capitalism is some do better than others. Here's a newsflash for you: that's because some people ARE better than others...some in art, some in music, some in tennis, some in commerce. It's called being human. The problem with Communism is it doesn't work because we are not all the same. Likewise efforts at artificially dealing with income inequality. If you force equality you simply drag 50% of the population down to the average in order to drag the other 50% up to it. Is that fair? I suppose it depends which side of average you fancy yourself. And if forcing equality sounds like a good idea, I suggest you read Hayek's Road to Serfdom and come back to me.

What are we talking about here? The article Richard sites says:

the New Left's adherents don't offer a coherent set of alternate policies. Some are hard-liners, who say they rue the violence of the Maoist years, but remain enchanted with the sociopolitical initiatives of that period, such as collectivization.
This is what you're all praising and lionising? A slogan in search of an ideology? A yearning for collectivization, the system that lead to massive famine?

If someone can define New Left for me, we can start a proper debate. In the meantime let's call these people what they really are: reheated nostalgic Communists. Or from the article:

The degree to which the New Left's rhetoric meshes with that of the government's indicates that President Hu Jintao and his team are tacitly supporting the New Left.
Read it again. And again.

posted by Simon on 06.22.05 at 07:15 PM in the China politics category.


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New Leftists debate over at Simon's World
Excerpt: Go see Simon's response to my post on the New Leftists, and the comments. And be sure to leave your own....
Weblog: The Peking Duck
Tracked: June 23, 2005 02:28 AM


I posted an article on the same subject, mostly focussing on the New Left in relation to the Party. I think you and I probably disagree quite a lot in relation to China and the rest of the world!

I think it's interesting that Hu Jintao and especially Wen Jiabao are in some ways keen to be associated with this kind of thinking. It's a credibility exercise for them, I think; and it's flattering for the leadership if people, especially abroad, think that they are part of a common project which has as its goal Social Justice. But ultimately what this comes down to is theory, and not what the Party does and stands for in practice. Maybe a few scattered projects will spring up around the country, but what's on offer is not fundamental change.

Ultimately I think this agenda is so unfocussed and watered down; all that may result is a rebranding exercise for the CCP, whatever about the sincerity and good intentions of a lot of people interviewed as representatives of the 'New Left'.

And let's not forget, as people pointed out at the time of 'New' Labour in the UK, that 'New' is the oldest word in politics!

posted by: Richard W on 06.22.05 at 10:15 PM [permalink]

Okay, Simon, so you don't like the bleeding heart equality sentiments of Richards - but he brings up an important point - that democracy is, to an important extent, based upon the perception of equality, and that while we make sacrifices in equality to push a capitalist economy, if the split got too obscene and the perception of second-class citizenship of the poor too obvious, there would probably be a push for more socialist reforms within any democracy.

I don't disagree with what you are saying: that people in China basically feel that the "Pie getting bigger" is better than anything else. However, it should be noted that although China is not a democracy, perceived equality is still a tremendous issue, and the "????“?doesn't alleviate the issue, any. china needs desperately to reach rule of law and sort the rest out from there.

posted by: Laowai19790204 on 06.22.05 at 11:15 PM [permalink]

that's "liangjifenhua" - increasingly stratifying social classes.

posted by: Laowai19790204 on 06.22.05 at 11:16 PM [permalink]


Your analysis is flawed.

You think China's current road is a good one because the 'pie is getting bigger' and millions of people are being lifted out of poverty?

30 years ago the entire country was below the standard poverty level and, as Richard has said many times on Peking Duck, the government haven't acutally 'done' anything at all, apart from dismantle the worst excesses of Maoist insane economic theories and 'allow' the people to crack on by allowing basic freedoms of choosing where they work and what they do for a living.

The opening up of foreign investment, prohibited under Mao with his almost paranoid ideal of self-sufficency also contributed hugely to China's recent quantum leap in modernizing the country.

The 'pie' to which you refer, is divided up amongst the political elite and the crumbs that remain mean that the majority of people living in China are existing on 1,000 yuan or less in the cities and less in the country and that's a fact.

The ideas of the New Left are a natural and welcome consequence of, and progression from today's system where the political and economic elite pillage the nation's wealth, while tightly controlling society with an iron grip, fire rockets up into the air and allow anti-Japan riots in the name of patriotism and social stability.

The next time I hear someone here in China complaining about having to work damn hard for subsistence wages, facing a crap present and a crap future, I'll be sure and say to them "We cannot all be gold medal hurdlers, we cannot all be wealthy tycoons." A guy I know know who lives in Hong Kong told me so.

posted by: Martyn on 06.23.05 at 12:21 AM [permalink]

What Martyn said, and everyone else (especially Martyn).

This is one heck of a post Simon. I am immensely surprised to see you give the CCP so much credit for the economic boom. It happened on their watch, so we do need to give them some credit, certainly. But I urge you to read Joe Studwell's China Dream to understand how the boom started -- despite, rather than because of, the CCP. The launchpad for the boom was simple: the industrious workers simply ignored CCP edicts and did things their own way. When they were successful beyond anyone's dreams, the CCP simply stole all the credit (no surprises there).

You quote a sentence from the article indicating some of the New Leftists believe in collectivazation, and you write, "This is what you're all praising and lionising? A slogan in search of an ideology? A yearning for collectivization, the system that lead to massive famine?" This is bullshit. Simon, if you read my post carefully and truly concluded that I am in support of collectivization, then something is seriously wrong. Do you really see any "lionising" whatever? If so, where do I lionise and what do I lionize? Look me in the eye look into your heart and tell me, do you think my post is about lionising collectivization, one of the most atrocious experiments ever conducted?

Where do I once say I support anything the New Leftists advocate? I wrote:

What the New Left is saying resonates with me. Jiang is most responsible for today's wasteland of corruption that fouls so much of the country, resulting in a nation of obscenely rich cowboys riding roughshod over the people.

If you think this makes me a communist sympathizer, what can I say? Their argument resonates with me, meaning I agree that many of the impoverished and expolited Chinese deserve better and need help. It's not blanket agreement - and I think you know it. This single phrase is the only positive thing I said about them, and then I said they had no plan or strategy and were basically hot air.

About my throwing in criticism of America: No matter how great and successful America is, it is not beyond criticism. Especially now, when obscene tax cuts are being lavished on the super-duper-ultra rich whilst working people are being deprived of even the traditional right to declare bankruptcy. Especially now, when our leaders are virtually at one with super-big business, with a revolving door leading from the White House to either K Street or the corporate board room. It's the best system in the world, but it can be better. I would be unpatriotic not to demand the best, and right now we are seeing the very worst. To imply that because poor Chinese still want to come to America we should therefore leave it alone and not strive to bring the corrupt to justice and hold our own officials to acount -- well, I just don't get it.

Just to make sure no one forgets, let me quote from Martyn's superb coment above, which is infinitely more articulate than my own:

The ideas of the New Left are a natural and welcome consequence of, and progression from today's system where the political and economic elite pillage the nation's wealth, while tightly controlling society with an iron grip, fire rockets up into the air and allow anti-Japan riots in the name of patriotism and social stability.

The next time I hear someone here in China complaining about having to work damn hard for subsistence wages, facing a crap present and a crap future, I'll be sure and say to them "We cannot all be gold medal hurdlers, we cannot all be wealthy tycoons." A guy I know know who lives in Hong Kong told me so.

Amen to that. Last point I want to address is from your comment above:

Here's a newsflash for you: that's because some people ARE better than others...some in art, some in music, some in tennis, some in commerce. It's called being human. The problem with Communism is it doesn't work because we are not all the same.

Thank you, Ayn Rand. I don't disagree. But this is implying that those who have made it to the top in China did so on the basis of rugged individualism and talent and hard work. As opposed to buckets of guanxi, stolen tax dollars from the working poor, dirty deals, under-the-table payments in plain brown envelopes and, in some instances, outright violence. Many have made it the old fashioned way, true enough. But go through my site or Conrad's old site and see the number of times the CCP took everything away from its people on a whim. My favorite example was the loving old man who created an orphanage for AIDS children. He had a vision and a dream and he made it happen, giving these children a better life. A charity in the West found out and made a large donation to the orphanage. What did our ingenious local leaders do? They immediately closed the orphanage, seized all the money and sent the terrified children off to state-run orphanages, where I'm sure they'll get state-of-the-art treatment for their disease. This is to make the simple point that in China there needs to be protection against corrupt and venal officials who know that the poor and disenfranchised are easy targets for highway robbery. And in this regard, I believe the New Leftists are correct. Sometimes people with no repreentation need help. I know that seems an odd concept to some, but I believe it with all my heart and it's the main reason I run my own blog, to shed light on the plight of those who are torn apart by the cruel version of capitalism that is both rescuing and damning China.

posted by: richard on 06.23.05 at 01:44 AM [permalink]

I would also add, that with the dismantling of the "Iron Rice Bowl," as inefficient as that state-owned system was, many Chinese people now lack access to medical care, to education and to any kind of support in their old age.

posted by: Other Lisa on 06.23.05 at 02:49 AM [permalink]

That's okay Lisa. The tough will rise to the top and thrive, stepping on the backs of the weak and the miserable, who will fall to the bottom and drown.

Look, I'm all for progress and competition. I just happen to believe that the vulnerable need some protections, lest you end up with a slave-master society, with your status determined at birth.

posted by: richard on 06.23.05 at 03:02 AM [permalink]


Richard's right when he talks about the CCP taking all the credit. Taking all the credit for what exactly?

China's GDP in 1949 (as a percentage of global economic output) was 1%. Fair play, civil war, Japan's invasion and WW2 etc.

Nearly 30 years later, in 1978, China's global GDP share was STILL 1%. (In the late 1700's China share was approximately 40%).

Since the 'pie has been increasing in size' for the last few decades, it's present share is approximately 5%. Not quite time to pop open the Champagne and blow up the balloons just yet.

Consequently, people's lives haven't improved as much as you seem to think.

The last figure I read suggested that 45% of the nations farmers had not seen their incomes significantly rise since 1990. As a consequence, millions of kids around the country, particularly girls, do not go to school as their parents simply can't afford it.

Even though elementary school is supposed to be free and compulsory, the average school charges Rmb2-300 per year. Average annual income for farmers is around Rmb4-500 per year---before local taxes of course.

That pie is certainly getting bigger.

Effectively, huge amounts of the population remain only partially-educated and therefore fit to do nothing except either toil in the fields or hit the jackpot and become an unskilled migrant worker for Rmb4-500 per month.

Should a child be lucky enough to receive a full high-school education, university fees are approximately Rmb3,000-5,000 per year which effectively prohibits the majority of the population from even dreaming of going to university.

Love that big pie.

According to the IMF figures 2003, out of 179 countries, China's annual GDP was US$1,087 per person or 110th in the world. That's less than half the average per capita global GDP.

Next time I travel to the poorer areas of Guangzhou City or anywhere in the Chinese countryside, I'll be sure and tell the good folks there about that pie of yours that just keeps getting bigger. They could do with some real good news.

posted by: Martyn on 06.23.05 at 03:23 AM [permalink]

Apologies, I should have said:

"millions of kids around the country, particularly girls, do not FINISH school".


posted by: Martyn on 06.23.05 at 03:30 AM [permalink]

For a scholarly look at China's actual progress in poverty reduction do a google search on China's (Uneven) Progress Against Poverty by Martin Ravallion and Shaohua Chen of the World Bank. Some of their key conclusions:
1. China has made huge progress against poverty, but it has been uneven progress. Half of the decline in poverty achieved since reform and opening up came in the first few years of the 1980s. Poverty reduction stalled in the 1990s.
2. Inequality has been rising. In marked contrast to most developing countries, relative inequality is higher in China's rural areas than in urban areas. Absolute inequality has increased appreciably over time between and within both rural and urban areas.
3. The pattern of growth matters. Growth in the primary sector (mainly agriculture) did more to reduce poverty and inequality than either the manufacturing or service sectors. Rural economic growth reduced inequality in both the urban and rural areas, as well as between them.
4. Inequality is a concern both for economic growth and poverty reduction. With the same historical economic growth rates and no rise in inequality in rural areas alone, the number of poor in China would have been less than 1/4 of its actual value today. Rising inequality is not a "price" of high growth: statistics show that the periods of more rapid growth did not bring more rapid increases in inequality. The statistics suggest that more uneual provinces will face a double handicap in future poverty reduction: they will have lower growth and poverty will respond less to that growth.

posted by: dylan on 06.23.05 at 07:03 AM [permalink]

I am so happy to see capitalism start to thrive in China. As poverty is reduced and their economy grows, the whole world will benefit.

posted by: Nathan Peters on 06.23.05 at 09:17 AM [permalink]

I know a lot of farmers and children of farmers who'd be happy to tell you that, if not fabulously wealthy, they can afford to send their kids to college now. I know a lot of non party members who've raised their standard of living immensely in the last ten years.

I wouldn't be surprised if the average person lives on 1000 kuai a month, but that's a hefty jump from the 200 of five years ago. and when you consider that housing costs as little as 100 kuai a month outside the big cities, with usually more than one working individual per household, that thousand kuai starts looking a little more comfortable.

of course, a lot of cadres are getting filthy rich. but it's not only them who is seeing some benefit.

I think there are a lot of extremes in the above conversation. simon looks at the inherent inequality (true) while others focus on the ideal of equality (lovely idea). the reality should perhaps lie in the middle. the chance to rise as far as you can should exist, but those working two jobs should at least be able to affford basic standards of living. it shouldn't be about making everyone the same, but about making sure even those who might not be 'qualified' don't fall through the cracks.

nepotism, etc, can't last in a fully free market system. if the genes are good it really doesn't matter, but when unqualified people lead businesses the business fails. if/when china stops bailing out companies I think it's possible that the 'making money' portion of the equation might outdo the 'but he's my nephew' argument.

posted by: echo on 06.23.05 at 10:17 AM [permalink]

I've always suspected that Simon was really a closet neo-mercantilist.

Long live the tycoons! Long live connections over competition! Long live cronyism!

As long as the pie gets bigger, the British East India Company should be allowed to keep its monopoly on trade!

As for the US economy, Simon fails to take in to account the MASSIVE income inequality the economic policies of the Reagan/Bush administrations have put in to place. But it's nice to note that Simon prefers arguments put forth by the likes of HindRocket, who argue economics via anecdotes, over Krugman, who argues using actual data and facts.

posted by: Tom - Daai Tou Laam on 06.23.05 at 11:00 AM [permalink]

When I was a graduate student some years ago, a professor of mine called Jean Oi had made some interesting arguments about the kleptocracy, corruption and nepotism in China. She raised the possibility that far from impeding growth in China, the initiative of well-placed cadres sitting astraddle both quasi-state, quasi-private assets appropriating them for their own needs may actually have assisted GDP growth.

The argument is this: corruption, or 'bureaucratic deviance' provided the requisite level of fixed capital formation to create enterprises with economies of scale. Without high levels of fixed capital investment, China would still be a backwards agrarian nation.

As you know, I love history. To tie two strands of your debate together, it seems that the United States in the late 19th century, in the age of the robber Railway barons, corruption, insider trading, nepotism and 'guanxi networks' were also indeed the way America got enough capital together to generate sufficient 'steam' for the economic locomotive of the American economy to really get going.

Obviously, in large developing nations depending largely upon domestic capital investment (i.e. including Korea, Taiwan and Japan but ruling out Singapore and Hong Kong) this perhaps may be a necessary but insufficient condition. Nigeria, Burma ad the Philippines are examples of this (hope you had a good trip by the way). It requires that the government have some limits on the scale of the corruption, enough to maintain a self-sustaining mechanism.

What does all this have to do with your debate? A lot, I feel. While it is true that China today is seeing a rising inequality between rich and poor, much like America did in the late 19th century (and as your interlocutors say, since the Reagan-Bush era), overall the country is becoming a more prosperous place. It seems you have tried to say, and I certainly agree with this, that overall the growth that China has undertaken over the past quarter century has benefited the largest number of people and has taken more people out of poverty than any other regime in history, and we should be lauding this achievement rather than denigrating the scale of difference between the village hut and the millionaire's skyscraper.

I am not entirely sure about the corruption being beneficial to growth, certainly it is not true in more mature economies as it leads to dangerous misallocations of resources. But I do think that it may have had actually an early beneficial effect to growth in the first two decades of Deng's reforms. While the CCP is not to be commended for this corruption or the individual initiative that brought it about, they have kept enough of a lid on it to prevent the Chinese economy from spiralling out of control as a result.

Best of luck for your rebuttal! I do sympathize with some aspects of the other side's views, but ultimately find your argument more compelling.

posted by: David on 06.23.05 at 06:43 PM [permalink]

Income inequality is a dangerous idea. As Simon notes, as long as the pie is growing and large numbers of people are getting ahead in life, what does it matter if some are gettign ahead faster. If GDP were 1% in the past and is now 5% that is a 500% advance. An astronomical leap for the masses.

When are people going to realize that we did a 100 year experiment and every time capitalism allevaited poverty better and faster than other systems. Whether it was Marxist Socialism, Fascist Socialism, National Socialism, or the socialism du jour Democratic Socialism, they did all fail (the jury is still out on the last but with 10% plus unemployment Euroland is about to confirm the trend as they have ate their rich already).

Have any of you excoriating Simon actually read Hayek's Road to Serfdom. If so, I would like to hear your critique of where Hayek is wrong. Every one of his predictions has been proven true in the real world. Every faux New Left experiment since Marx wrote his idiotic book has failed.

btw China is now a classic Fascist state, not capitalist. But stepping back from totalitarianism to mere fascism, allowing private property plus the CCP's increasing difficulty in maintaining control has led to the latest gains. Imagine if they would let go and really try capitalism instead of allowing it to floursih in pockets because they can no longer maintain control...

posted by: kennycan on 06.24.05 at 09:37 AM [permalink]

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