Opinion End of a bad idea

But the lack of ideology in Chinese politics does not mean that Chinese politics has no dominant ideas. If we probe a little more deeply,we should find one particular idea that has decisively influenced the thinking of Chinese elites and society for the last three decades. It is always tricky to label ideas. For the sake of simplicity,we may call this dominant idea “economic determinism”. Its essence is fairly straightforward,although it means different things to different people.

From the perspective of the Communist Party,economic determinism simply means that,after the bankruptcy of communism as an ideology,its political legitimacy and ability to hold on to power are determined by its capacity to deliver economic growth and improve the standards of living of the Chinese people. For some Chinese liberals,opposed as they are to one-party rule but denied the means to change it right away,economic determinism offers a possible alternative. If economic growth can transform Chinese society and undermine the socioeconomic foundations of authoritarian rule,then they would rely on both market forces and modernisation to help democratise China. For most Chinese technocrats eager to see China become a successful market economy,economic determinism means that,if the party really wants to stay in power,it will have no choice but to embrace market principles.

The influence of economic determinism reaches beyond Chinese borders. Many leaders in western democracies have also apparently fallen for this intellectually seductive theory when it comes to dealing with China. Based on their (flawed) interpretations of democratic transitions in Taiwan and South Korea,they believe that,like its neighbours,China will become more liberal and democratic as its economy grows. Western businessmen are victims of economic determinism as well. They think that if China’s economic self-interest determines that it must be more open to foreign businesses and reciprocate the benefits it gains from free trade,Beijing should have every reason to do so.

Alas,the experience of all those believers in economic determinism in the last decade shows that,like communism,this idea is not only bogus,but has now gone intellectually bankrupt.

For example,the ruling party now finds that economic growth has not bought itself a permanent claim on power or stability. Along with economic growth has come higher inequality,more corruption,and greater social tension. The effects of economic prosperity on its legitimacy are temporary at best.

Those Chinese liberals who assumed that the party would have to allow more democracy in a Chinese society with more middle-class members have been sorely disappointed. While it is true that per capita income has increased several fold since the Tiananmen pro-democracy movement,the official policy of the Communist Party has become,if anything,more reactionary. Instead of permitting more civil liberties and political rights,the party has deployed the growing wealth of the state in suppressing dissent,censoring the Internet,and burnishing its credentials as a successful autocratic model. So there is no direct correlation between economic growth and an autocracy’s propensity to make the transition to democracy. (Incidentally,with a per capita income of $5,000,China is already in a group of nations where 70 per cent are democracies.)

Chinese technocrats committed to market reforms have experienced a rude awakening in the last decade as well. They have witnessed a massive reversal of reform and a return of state capitalism. Compared with the 1980s,China today is less market-oriented and more statist. The imperatives of economic efficiency did not have much sway over Chinese rulers,who have ignored friendly advice from the likes of the World Bank and the International Monetary Fund and maintained unsustainable economic policies.

Needless to say,westerners have become thoroughly disenchanted with China over the last decade,in no small part because the political benefits of economic engagement with China,predicted by economic determinism,have failed to materialise. A more wealthy China has failed to democratise. Its human rights record has in fact deteriorated. Instead of becoming a partner of the West,which has enabled China to grow much faster through free trade,China increasingly behaves like a strategic competitor. Its defence spending has maintained double-digit growth. Its armed forces are busy acquiring weapons designed to deny the American navy unfettered access to the Western Pacific. Economically,western frustrations with Chinese mercantilism have reached a boiling point. After fruitlessly beseeching Beijing to change its trade policies,the Europeans and the Americans are now finally playing hardball by targeting Chinese products with anti-dumping charges and lawsuits in the World Trade Organisation.

The intellectual bankruptcy of economic determinism in changing China’s political system,economic policy,and external behaviour should not come as a surprise to us. As a theory,economic determinism,which does have empirical basis (otherwise it would not be so influential),fundamentally misunderstands the nature of modern authoritarian regimes.

Unlike European autocracies which had constitutional rule but no democracy,a post-communist authoritarian regime such as the Chinese Communist Party faces no internal constraints on its power. This reality allows the ruling elites to use the power of the state primarily for self-enrichment,an objective that overrides both economic rationality and public well-being. In addition,because such a regime is maintained mainly through political patronage and violence,its economic policies must serve the narrow interests of the regime’s core constituencies (the bureaucracy,the military,and state-owned enterprises) even though such policies undermine efficiency and long-term prosperity.

Most importantly,for ruling elites in a wealthy society,giving up power also means exposing their ill-gotten wealth to possible confiscation by a democratically elected government. Thus they have all the reasons to resist democratisation at all cost.

For China and the world,the bankruptcy of economic determinism could not have come at a better time. Bad ideas must go before people make the right choice. When China’s new leadership is finally installed this fall,their first order of business should be to search for a better idea.

The writer is a professor of government at Claremont McKenna College in the US
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