The protesters' yearning for political change, embodied by the "Goddess of Democracy," and their anger about disruptive economic reform, expressed in nostalgia for Mao Zedong's rule, were on display in Tiananmen Square. 1Photo: Peter Charlesworth / LightRocket

Remembering Tiananmen Square’s Radical Reactionaries

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June 4 (Bloomberg) -- During the spring of 1989, Chinese activists gathered in the heart of Beijing to fight for democracy. The tragic conclusion of the events around Tiananmen Square, 24 years ago today, is well known.

What isn’t widely recognized, however, is that many of the protesters were reactionaries who opposed the Western-style economic reforms introduced a decade earlier.

In 1978, the regime, led by the recently installed leader Deng Xiaoping, decided to pay farmers higher prices for the crops purchased by the state and allow them to sell surplus produce for even higher prices in newly opened free markets.

These incentives were intended to persuade farmers to grow more food to satisfy the needs of a hungry and growing population. Farmers responded with enthusiasm, increasing grain production to 407 million metric tons in 1984 from 305 million tons in 1978. Food production then leveled off, and as the population continued to expand, growing demand drove up prices on the open market.

At the same time, the regime was using money from foreign loans and international investors to finance break-neck industrialization, which raised prices for energy, natural resources, and industrial and consumer goods. Prices rose 19 percent in 1988 and 28 percent in 1989, though Western economists have estimated that the real rate was closer to 40 percent.

Food Prices

Higher food prices were good for rural farmers, who improved their diets and increased their incomes for the first time since the early 1950s. But inflation impoverished urban residents living on fixed incomes and government salaries. For the first time since the 1950s, urban workers’ living standards declined. This was a shock because the urban minority in China had long received benefits and privileges that were unavailable to the huge rural majority.

In response, many urban residents sought to protect their savings from inflation. For example, one elderly man in Beijing bought seven refrigerators as a hedge against rising prices. Unfortunately, this kind of hoarding led to shortages of many goods (such as refrigerators) and boosted prices further. Other urban workers tried to increase their incomes by taking on extra work. The scholar Kathleen Hartford observed that many Chinese “staved off the threat of inflation only by exhausting themselves moonlighting, and young people felt they faced a dead-end future of low pay and boring work -- if they could find a job at all.”

As the inflation rate soared, support in the cities for economic reform plummeted. A 1986 poll found that only 29 percent of urban residents thought that the economic changes were beneficial; some urbanites even expressed nostalgia for Mao Zedong’s rigid rule.

The reforms also encouraged widespread corruption because the regime bought some food at a low, fixed price, while also allowing farmers to sell a portion of their crop at higher, market prices. Party officials began to take advantage of the two-tier system by purchasing low-priced food, diverting it to higher-price open markets and pocketing the difference.

At the same time, the regime’s refusal to raise salaries forced many low-level bureaucrats to supplement their incomes by demanding bribes. Officials in cities routinely asked for kickbacks to install telephones, start electricity service, deliver mail or provide medical care. A 1989 poll found that 84 percent of urban residents regarded corruption as the most disturbing social problem.

Urban Movement

The angry mood of urban residents eventually found expression in the streets. Students first gathered in Tiananmen Square to mourn the death of Hu Yaobang, the Communist Party chief who was deposed in 1987. That gathering evolved into a celebration of the arrival in China of the reformist Soviet leader Mikhail Gorbachev -- the movement was soon joined by urban workers and embraced by residents in cities across China.

This unlikely alliance of students and workers was forged by a shared dissatisfaction with inflation and corruption. By calling for Deng’s ouster, the demonstrators demanded not only an end to dictatorship, but also an end to capitalist economic reform. They favored radical political change, but they also harbored a deeply conservative view of economic change.

Deng wouldn’t budge. During the crisis, he described the students as crybabies who wanted to return China to the destructive politics of the Cultural Revolution. He urged his fellow octogenarians in the party leadership to take military action against the protesters and to “use a sharp knife to cut through knotted hemp.” He rejected any concessions, saying, “We do not fear spilling blood, and we do not fear the international reaction.”

From April 6 until June 3, the party leadership debated and the army balked at using force against the demonstrators. But Deng eventually purged from the leadership those inclined to make concessions, replaced recalcitrant army leaders with stalwart supporters, and inserted fresh rural troops into the capital. On the night of June 3 and the morning of June 4, soldiers assaulted the unarmed demonstrators and killed between 1,000 and 2,600 civilians. “This was a test,” Deng said later. “And we passed.”

(Robert Schaeffer, a professor of sociology at Kansas State University, is the author of “Red Inc.: Dictatorship and the Development of Capitalism in China, 1949 to the Present.” The opinions expressed are his own.)

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