June 24, 2005

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Response to China's new left

As I expected my piece on China's new left (deliberately not capitalised) provoked mixed reactions. I hope to compose a rebuttal of the comments made both here and at Richard's either today or tomorrow. My full response is below the fold.

I recommend this collection of other reading on the same topic:

* Richard's original post: China's New Left seeks to rein in market reforms and his summons to his minions to denounce debate the issue.
* Richard Willmsen's well-considered thoughts on China's New Left, who concludes the new left are mere window dressing for the CCP leadership.
* Asiapundit's original comments on china's new left are on the same wavelength as me.
* The excellent Zenpundit asks will China's new left be a force to reckon with? A short but incisive piece.
* Imagethief rightly says the point isn't income gap - it's opportunity.
* Manuel L. Quezon III article New Left movement emerging in China could challenge United States (found via his blog).
* Adam Morris joins the fray: The New Left. Not "new" but very "left".

Your thoughts and comments are welcome. Now read on for my response...

The first part of my response is to cover the ground the vast majority share. None of us are fans of the CCP in its totality. We all want to see a successful and vibrant China will the spoils widely shared. Today's China is a far from perfect place, economically and politically. On that we can all agree.

I will again recommend you read Hayek's Road to Serfdom. Other relevant readings are China's (Uneven) Progress Against Poverty and Edward Kaplan's China Economic History (thank you for the pointers).

Amongst all the critiques I've still yet to have anyone spell out precisely what new left thinking actually is. Richard agrees with Martyn on this:

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.
That implies the new left is a guise for socialism as a successor to the current system. It is just a touch ironic that the successor to the failure of central planning and Communism is socialism. Marx would be turning in his grave at this inversion in the progression of revolutionary change. If my characterization of the new left is wrong, please direct me to a clear and lucid exposition of their philosophy. Until then it very much seems the new left is the old left reheated, like those supermarket products proclaiming themselves "new and improved".

Let's be honest. No country or economic system truly afford equality. Richard compares me to Ayn Rand when I say that people are different. Guilty as charged. Again if anyone can point me to research showing we are all exactly the same, I'd be much obliged. Until clones walk the Earth, we are blessed in our vast diversity. As an aside, it is ironic that those most devoted to the concept of diversity and celebrating differences also work so actively to minimize those differences. Equality is a chimera, an impossible dream that is dangerous to pursue. Why dangerous? Because the sacrifices made in its name do not justify the result. The ends do not justify the means. Very simply, unequal does not mean unfair.

Some took exception to my pie analogy. Martyn laments China's share of world GDP has gone from 1% to 5% in the last 30 years. During a period of unprecedented global economic prosperity, China outpaced the world to such an extent it has increased its share of world GDP by 5 times! I'm not a shill for the CCP but whether it was because or in spite of them (more on that soon), since Deng took the helm the country and its people have been the beneficiaries of what can only be described as a miracle. Martyn, forgive me but I'm popping the bubbly and thankfully there's several hundred million people just over the border able to afford the same. Martyn also falls into a common trap:

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.
In economics there is a concept called purchasing power parity. In English it means a dollar in one country is not the same as a dollar in another. Quite simply you get more bang for your buck in China than you do in the United States. The latest estimate is China's PPP per capita GDP is US$5,600 (from the CIA's China factbook). I've written extensively about this and other China's economic issues elsewhere on the site.

Richard's turn. Let me quote from his comment:

If you think this [his agreement with the new left] makes me a communist sympathizer, what can I say? Their argument resonates with me, meaning I agree that many of the impoverished and exploited Chinese deserve better and need help.
I always suspected, but now we have proof! Richard is, at least in this case, a Commie! Even worse, he compares me to Ayn Rand and then agrees with my sentiment! Richard, you're one confused fellow.

More seriously, Richard's original post was honest is seeing through the empty rhetoric of the new left. If I did not make that clear in my original post, I will do so now. But it doesn't wash. In the very same comment Richard excerpts Martyn's thoughts that the new left are the natural progression and great white hope. For a group that don't stand for anything, that's quite a statement.

Who's responsible for the China economic boom? I will read the book Richard recommends. But even if you say that all Deng did was undo the excesses of Maoism (and he did far more than that), it was a crucial and massive step for the country at that time. Deng's famous Southern tour is the second biggest travel event in modern Chinese history. I don't have the time or energy to devote to this topic, but either by providence or good planning (or both) the CCP have been the stewards of China's economic miracle. I highly recommend a read of ZenPundit's short piece on this topic:

the " correct line" on China's economy was decided in the contest for power between Hu Yaobang and Deng Xiaoping after the fall of the Gang of Four. Then subsequently reaffirmed in the adoption of Deng's " Four Modernizations" and the aftermath of Tiannamen in 1989 when elderly Maoist senior statesmen limited their crackdown to political dissent and did not try to reverse economic liberalization.
I will look into this more in a future post.

Naturally there are valid points being made. China's current system is not perfect. There is plenty of corruption, nepotism, guanxi, onerous government officials and more. Richard hits the nail on the head:

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 representation need help.
If only he had omitted that middle sentence, I'd agree. The problem with China's system is the lack of participation, of redress, of protection of property rights - in sum, a lack of rule of law. This is the point Chris drove at in suggesting the new leftists look to de Soto. But the new leftists don't offer any solution to this.

While on the badness of the corruption of China's system, David's incisive comment bears repeating in spades:

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...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. It requires that the government have some limits on the scale of the corruption, enough to maintain a self-sustaining mechanism...

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...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.

Smart fellow. Do his tour. Tom notes the growing inequality in America since the Reagan era. A quick reminder: Bill Clinton was President for 8 years between the two Bushes (and I dare say that's not the only time Bill's been between two bushes).

The other Richard suggests the new left is using European social democrats as a model. He's right which is why the new left are wrong. The formerly great social democratic economies of Europe are now laggards. It is no co-incidence that when Eastern Europe was faced with a choice between social democrats or a more Anglo-Saxon model, they chose and have had great success with the latter. I fully agree with his conclusions:

I don't think that China's New Left are in any way insincere about their project of bringing social justice to China. But I think they're misguided and possibly naive about the organization they are members of. Unfortunately I think their efforts only go to provide window dressing for the Party leadership - it enables them to say 'Look! We have open debate inside the Party! No need for dissidents! Don't you see how wrong Wei Jingsheng and all those other foreign agents were? China is marching straight down the road to democracy all by itself and we don't need any advice or criticism from outside!'
The new left are fig-leaves for more sinister forces who seek to reverse the gains made by China's market based economy in the past 25 years. They represent a dangerous combination of nostalgia and social engineering. Think that's overly dramatic? Any system that strives for equality must forcibly take from some to give to others. It is one thing to provide support for the poor and destitute (a point Hayek makes). It is quite another to go from a safety net to a blanket. ZenPundit notes the political dimension:
But these inchoate anticapitalist forces may try to outflank Party centrists on issues of nationalism, particularly on Taiwan and Sino-American relations and thus acquire a larger constituency for their economic policies while driving the centrists toward a harder line. They bear watching.
So the new left are both empty and dangerous. The last word goes to Adam Morris in commenting on Imagethief's important additional point:
I appreciated Simon's point that (paraphrasing) "it doesn't matter who has the bigger pie as long as it's getting bigger" but thought that there was something missing in that equation. I'm glad you pointed out it was unequal opportunity.
That is a telling point that was missing from my original post. I'm glad it was made. The same point applies in America and elsewhere. A governments' role is in creating and giving access to opportunity and then letting people get on with it on their own.

Let me conclude on a positive note. The path for continued economic success for China is based on two simple truths:

1. Strengthening of rule of law and property rights.
2. The expansion of and increased access to opportunities.

Call it my New Rightist manifesto.

posted by Simon on 06.24.05 at 03:46 PM in the China politics category.


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late saturday links
Excerpt: It was a busy week, here are some items of interest that Asiapundit missed from yesterday and last week: Daniel Drezner asks whether the liberal paradigm - that markets bring democracy - is failing in China. At Diacritic, a look
Weblog: asiapundit
Tracked: June 25, 2005 03:07 PM


Simon, I tend to agree with you with some specifications.
It's pretty obvious that some sort of capitalist development is the best thing happened in China in the last 20-25 years. China is the umpteenth - and in this case still living - proof of the failure of communism: it grows and creates hopes when and where abandons ideology, it is bent and produces fear and oppression where keeps it.
At the same time what we're seeing in China is not a free-market economy western style. It's more a State-capitalism, an economic "boom" run by the State, driven by the State. A power so worried about mantaining and tightening control can't allow a real free economy. This is the point. And this is also the irremediable contradiction of chinese system and the greatest challenge to CCP rule: one day we're (likely) going to see a break-point, a final challenge between capitalist development and political despotism. It's all about politics, once again.
Simon is right because he gets the big picture. Some of his critics are right because they underline distorsions. But the problem is not capitalism. The problem is the regime.



posted by: Enzo on 06.23.05 at 04:56 PM [permalink]

I guess one of the things one has to watch out for is that words like "left or right" (political), "liberal or conservative" can have vastly different meanings from one country to the next and across different cultures.

posted by: Matt Waters on 06.23.05 at 09:04 PM [permalink]

A general economic history of China, titled "From Stone Age to Mao's Age", by Dr. Edward H. Kaplan, was on the www not long ago. He, I believe has just passed away, taught at Western Washington university at Bellingham. His history is excellent, well worth reading. These were his lecture notes for a class in Chinese economic history.

posted by: JFS on 06.23.05 at 11:17 PM [permalink]

Thanks for the pointer, JFS.

posted by: Simon on 06.24.05 at 12:41 PM [permalink]

Well said. I'll happily call myself a New Rightist. 'Classical liberal' just confuses the yanks, while 'libertarian' makes people think I live in a log cabin, smoking pot and shooting at tax collectors (hmmm, actually that doesn't sound too bad as a retirement option).

posted by: myrick on 06.24.05 at 08:10 PM [permalink]

Hey, I've got minions!

This has certainly mushroomed into a multi-blog discussion. We should do this more often.

posted by: richard on 06.25.05 at 02:41 AM [permalink]

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