Deng’s Accidental Revolution

“Deng Xiaoping knew what he did not know!” — Deng Xiaoping

Since the Mao Dynasty was launched in 1949 there have been five “emperors” – what the Chinese Communist Party (CCP) calls “paramount leaders” – but only three have mattered. Mao, of course, and Deng, and now President Xi Jinping. And the dynasty has followed a course – viewed in terms of collective versus individual human agency – not unlike those of earlier dynasties, some of which we’ve talked about.

Under Mao, the founder of the dynasty, collective agency didn’t just predominate but dominated utterly. This reflected Mao’s overweening personality, but it also reflected the need to assert control over a vast country that had just been wracked by a violent civil war. Mao was, in this sense, analogous to Emperor Wu during the first part of his reign.

The disastrous outcome of so heavy an emphasis on collective agency led Deng to move decisively away from collectivist policies – Emperor Wu during the latter part of his reign – at least in terms of the economy. When Deng assumed control of the government the Chinese economy was in tatters and the credibility of the CCP was at a nadir. It was urgently necessary that something be done to get the economy moving.

To jump-start the Chinese economy Deng suddenly announced that “A fundamental contradiction does not exist between socialism and a market economy” (Karl Marx promptly rolled over in his grave). And for more than three decades China partly followed individual agency policies in its economy while adhering doggedly to collective agency in its government.

Deng, and the next two paramount leaders, seemed to believe that this hybridized system would be sustainable indefinitely. After all, the system had been based on Lee Kuan Yew’s experience in Singapore, where robust free markets had long coexisted with one-party rule.

In fact, though, Singapore’s version of one-party rule was profoundly different from China’s version. Most important, in Singapore there is no overriding necessity that Lee’s party, the People’s Action Party (PAP), must remain in power.

Regular elections are held in Singapore and the power of the PAP waxes and wanes. When the PAP loses seats in the Singapore legislature, it promptly alters its policies to acknowledge the voting public’s expressed desires (albeit often without admitting it).

As a result of the PAP’s flexibility, of the ability of Singaporeans to vote for other parties, and of the continuing robust economic growth under the PAP, the latter has managed to hold onto power long after Lee himself stepped down.

But none of this is true of China. The highest and most urgent goal of the CCP is simply to remain in power. There are no elections, the CCP is ideologically rigid, and China’s growth rate has plunged, from the mid-teens a decade ago to less than 5% today.

Given these differences between Singapore and China, the question whether the latter can indefinitely follow a free-market economy and an unfree political system has always been an interesting one. Two decades ago Your Humble Blogger pointed out that:

“[D]emocratic political systems cannot persist outside the context of free market economies. We cannot be free politically but enslaved economically.” (Creative Capital)

But can the opposite work? Can we be economically free but politically unfree?

For three decades China seemed to make this mongrel system work. Except for the 1989 Democracy Movement – protests in 400 Chinese cities that culminated in the Tiananmen Square Incident – there have been few serious threats to the CCP’s rule. Why haven’t the Chinese people demanded more political freedom?

We can approach this question through the lens of human agency. When Deng assumed power in 1978 China had been in chaos for 140 years. The troubles began with China’s “Century of Humiliation,” starting in 1839 with the First Opium War.

For more than 100 years China was dominated by more advanced outside powers, especially in the West but also including Japan. That period of submissiveness ended only with the final defeat of the Japanese by the Allies in 1945. (Did anyone notice the irony of China being freed from outside oppression by its worst oppressors, the West?)

But China’s troubles didn’t end there, because the defeat and expulsion of the Japanese was followed by a brutal civil war between Mao and Chiang Kai-shek. That war was won by Mao, who promptly launched a long series of brutal “reforms” – discussed earlier in this series – that kept the country in turmoil for another three decades.

Deng brilliantly, though possibly accidentally, solved the problem. He satisfied the Chinese peoples’ desperate desire for peace and stability by bringing Mao’s cultural experiments to a sudden end, instead governing with a steady hand.

True, liberals inside and, especially, outside China may have been horrified by Deng’s decision to crush the 1989 demonstrations, but the great bulk of the Chinese people supported the crackdown – to them, the demonstrations were just another unwanted upheaval.

But peace and stability can get old fast if you are poor and enslaved. Deng’s decision to abandon Communist orthodoxy and inject free market ideas into China’s economy simultaneously satisfied the Chinese people’s need for individual human agency and preserved the CCP’s monopoly on power.

I say that Deng may have accomplished all this somewhat “accidentally” because Deng admitted that, being a good Marxist, he understood very little about economics. (See the quote at the beginning of this essay.)

Deng was, in fact, astonished at the success of his own economic reforms. Not only did Chinese agricultural production explode, but many farmers didn’t stop at revolutionizing farming – they began opening tiny factories that produced cheap but much-in-demand products like toys, hair ribbons, and underwear.

Accident or not, Deng’s reforms revolutionized China. But did that mean that the odd combination of high individual agency in the economy and (very) low individual agency in government could persist indefinitely? We’ll take a look at that issue next week.

Next up: On Agency, Part 6