Has Red Capitalism Wrecked China?


An Inquiry into the Fate of Chinese Socialism, 1978-1994

By Maurice Meisner

Hill & Wang 544pp $30

It has been nearly three years since Deng Xiaoping was last seen in public. Now 92, China's once-powerful leader is still seen as the catalyst of bold reforms that triggered an unprecedented economic boom nearly two decades ago. Over the long term, many believe, the open-door policies set in motion by Deng will lead to a freer, more democratic society, as China's huge population grows wealthier and demands greater rights.

Not so, argues Maurice Meisner, Harvey Goldberg professor of history at the University of Wisconsin. In The Deng Xiaoping Era, Meisner takes a cold, hard look at Deng and his policies. Rather than promoting a better society, Meisner says, Deng's reforms have given rise to a "bureaucratic capitalism" dependent on the Communist state and its repressive apparatus for survival. By emphasizing economic well-being over everything else, Deng's approach has led to "the death of spirit," the author says. Furthermore, he adds, the combination of a Stalinist bureaucracy and capitalist economics has created massive social upheaval.

Meisner is clearly unhappy about the breakdown under Deng of socialist values and policies, to which he attributes problems ranging from rising social inequality to inefficient farming. For that reason, this scholarly work offers an interesting contrast to more bullish accounts. Yet there is a fundamental problem with The Deng Xiaoping Era: It is unclear what economic model Meisner thinks is right for China, particularly since most other communist or socialist economic systems have collapsed. To make matters worse, Meisner often uses cumbersome Marxist economic jargon, such as the "commodification of labor."

But Meisner's emphasis is as much on politics as on the economy. The author observes that Deng finds centralized political control necessary if China is to maintain social order and avoid luan, or chaos. Over the years, Deng has hardly been a civil libertarian, regularly opposing all who have challenged the central authorities. It's true that in 1978, Deng helped rehabilitate the victims of the chaotic Cultural Revolution, but prior to that he was behind many of Mao's infamous purges. For example, Meisner tells us that in the late 1950s Deng was the "chief witch-hunter" in Mao's antirightist campaign, which "claimed several million victims." In 1978, Deng at first supported the Democracy Movement--whose young supporters condemned the oppressive Cultural Revolution and yearned for democracy--but then quashed it when protesters criticized him and the primacy of the Communist Party. In 1989, he was the key advocate of the use of force to silence students at Tiananmen Square.

Moreover, under Deng's tenure, the Communist Party bureaucracy swelled enormously. Officials purged during the Cultural Revolution returned. And although Deng got many Maoist party hacks to retire, they were replaced with technocrats as professional expertise was stressed over political cronyism.

This new Communist elite, which engineered Deng's economic reforms and enriched itself in the process, is at the heart of China's problems, according to Meisner's view. In his chapter on bureaucratic capitalism--the book's best section--Meisner argues that groups of officials used their privileged Communist Party positions to become a new "capitalist class." In rural areas, collective farms were dismantled and local officials became the backbone of the new "rural bourgeoisie." In the cities, relatives of those in top party cadres, including Deng's two sons, have used their influence for private gain.

So, rather than challenge the authorities, as the emergent middle class has done elsewhere, the newly rich in China support the political status quo. "The new entrepreneurs, having largely sprung from the bureaucracy, are psychologically as well as economically dependent on the Communist state--and ultimately rely on that state for political protection as well," writes Meisner. Meanwhile, "the savage capitalism that operates under the cloak of a socialist market economy," says the author, is ushering in "more intensive forms of exploitation, greater alienation, enormous gaps between rich and poor, and growing economic and social differences between town and countryside." To back up this assertion, the author describes alarming factory conditions, inadequate social welfare, and environmental damage.

Clearly, all is not as bleak in China as Meisner describes. He notes that its special economic zones sputtered at first but fails to mention their subsequent successes as magnets for huge amounts of foreign investment. Meisner laments the decline of the "iron rice bowl"--China's mostly industrial state-owned enterprises that have provided lifetime jobs and generous benefits--without acknowledging that many of these are money-losers that sap the system of funds and reward inefficiency and waste. And he fails to note that economic change has clearly improved the lives of millions. True, no politically insurgent middle class has emerged--yet.

That said, Meisner does remind us that all cannot possibly be calm in a country where the Communist Party must promote capitalist policies in order to survive. With Deng now weak and feeble, it's up to his successors to sort out the controversial legacy of China's paramount leader.

Before it's here, it's on the Bloomberg Terminal.