China's New Left

An email suggests this article on the New Left's struggle to build a social model in China that moves away from neoliberal ideas:

China's New Left calls for a social alternative, by Pankaj Mishra, The New York Times Magazine: One day earlier this year I met Wang Hui at the Thinker's Cafe near Tsinghua University in Beijing, where he teaches. ... Co-editor of China's leading intellectual journal, Dushu (Reading), and the author of a four-volume history of Chinese thought, Wang ... has emerged as a central figure among a group of writers and academics known collectively as the New Left.

New Left intellectuals advocate a "Chinese alternative" to the neoliberal market economy, one that will guarantee the welfare of the country's 800 million peasants left behind by recent changes. And unlike much of China's dissident class, which grew out of the protests in Tiananmen Square in 1989 ..., Wang and the New Left view the Communist leadership as a likely force for change.

Recent events - the purge of party leaders on anticorruption charges late last month and continuing efforts to curb market excesses - suggest that this view is neither utopian nor paradoxical. Though New Leftists have never directed government policy, their concerns are increasingly amplified by the central leadership.

In the last few years, Wang has reflected eloquently and often on what outsiders see as the central paradox of contemporary China: an authoritarian state fostering a free market economy while espousing socialism. On this first afternoon, he described how the Communist Party, though officially dedicated to egalitarianism, had opened its membership to rich businesspeople.

Many of its local officials, he said, used their arbitrary power to become successful entrepreneurs at the expense of the rural populations they were meant to serve, and had joined up with real estate speculators to seize collectively owned land from peasants. ... The result has been an alliance of elite political and commercial interests...

Wang readily acknowledges that China's efforts at economic change have not been without great benefits. He applauds the first phase, which lasted from 1978 to 1985, for improving agricultural output and the rural standard of living. It is the central government's more recent obsession with creating wealth in urban areas - and its decision to hand over political authority to local party bosses, who often explicitly disregard central government directives - that has led, he said, to deep inequalities within China.

The embrace of a neoliberal market economy has meant the dismantling of welfare systems, a widening income gap between rich and poor and deepening environmental crises not only in China but in the United States and other developed countries. For Wang, it is the task of intellectuals to remind the state of its old, unfulfilled obligations to peasants and workers. ...

For Wang, the problems associated with China's uneven development were first identified by the demonstrators in Tiananmen Square in 1989. He described how a "broad social movement" began to grow out of the distress caused by the shock therapy of market reforms.

The students demanding freedom of speech and assembly were certainly the most visible. But there were, he said, many more Chinese in the cities - workers, government officials and small businessmen - demanding that the government control corruption and inflation, which had shot up to 30 percent after price controls on basic commodities were lifted.

Wang himself was one of the last protesters to leave the square on the morning of June 4, 1989, as the tanks of the People's Liberation Army closed in. He had decided to stay and to try to persuade the students not to sacrifice their lives. "I knew," he said, "that if the result was violence, it would be disastrous for the whole country." ...

Wang said that his fears had proved right: violence shrank the space for political debate, and the Chinese government used the period of intellectual silence that followed to begin dismantling more aspects of the welfare state, like the state-owned enterprises that had long offered cradle-to-grave benefits to workers.

When Wang returned to Beijing in late 1989, the authorities were waiting for him. After interrogations lasting for many months, he was sent to the central province of Shaanxi, where dozens of other young scholars from Beijing were already undergoing - in the uniquely Chinese way - "re-education" by exposure to rural conditions.

In Wang's case, punishment by pedagogy seems to have been more successful than the Chinese authorities could have anticipated. He dates his "real education" to the time he spent in Shaanxi, one of the poorest regions of China. He was shocked by the obvious disparity between the coastal cities, then enjoying the first fruits of economic change, and the provinces. He was shocked, too, by his own ignorance and that of his colleagues in the 1989 social movement. "We had no idea that the old order in much of rural China was in deep crisis," he said.

The commune system in Shaanxi was dismantled as part of Deng Xiaoping's reforms, and land was redistributed. But the area produced nothing of much value, not even enough food. Deepening poverty led to a sharp increase in crime and social problems; violent conflicts broke out over land; men took to gambling, beating up and selling their wives and daughters.

"It was during that year," Wang said, "that I realized how important a welfare system and cooperative network remained for many people in China. This is not a socialist idea. Even the imperial dynasties that ruled China kept a balance between rich and poor areas through taxes and almsgiving. ...

When Deng sought to bury the ghosts of Tiananmen for good by calling for speedy market reforms in 1992, he may well have calculated that the prospect of personal wealth - and access to Western brand-name goods - would compensate many newly enriched people for the lack of political democracy. If so, he seems to have been proved right. The largest public disturbance in China since Tiananmen occurred in August 1992, when hundreds of thousands of Chinese tried to buy shares in the newly opened stock exchange of the southern city of Shenzhen.

The effort to create wealth in urban areas through export-oriented industries - part of the "let some get rich first" policy announced by Deng and affirmed by his successors - has given the Chinese economy an average growth rate of 10 percent and made it the fourth largest in the world. Yet China remains one of the world's poorest countries. More than 150 million people survive on a dollar a day. About 200 million of the rural population are crowding the cities and towns in search of low-paying jobs. ...

Much of this, Wang said, could be laid at the feet of the "right-wing radicals" or neoliberal economists who cite Milton Friedman and Friedrich Hayek ... and who argue for China's integration into the global economy without taking into account the social price of mass privatization. And it is they, Wang added, who have held favor with the ruling elite and have dominated the state-run media.

Only in the last decade, Wang said, have intellectuals of the New Left begun to challenge the notion that a market economy leads inevitably to democracy and prosperity. China's intention to join the World Trade Organization (which it did in 2001) provoked unexpectedly sharp debates among scholars. As Wang described it, the terms of the debate had changed: "Many people knew by then that globalization is not a neutral word describing a natural process. It is part of the growth of Western capitalism, from the days of colonialism and imperialism." ...

In January of this year, Wang published a long investigative article exposing the plight of workers in a factory in his hometown, Yangzhou, a city of about one million. According to Wang, in 2004 the local government sold the profitable state-owned textile factory to a real estate developer from Shenzhen. Worker-equity shares were bought for 30 percent of their actual value, and then more than a thousand workers were laid off after mismanagement of the factory led to losses.

In July 2004, the workers went on strike. In what Wang calls an agitation without precedent in the history of Yangzhou, the workers obstructed a major highway, halted bus traffic and attacked the gates of local government buildings.

Wang told me that he was helping the workers to sue the local government. "People claim," he said, "that the market will automatically force the state to become more democratic. But this is baseless. We only have to think about the alliance of elites formed in the process of privatization. The state will change only when it is under pressure from a large social force, like the workers and peasants."

This spring it began to become clear that the New Left's advocacy of a welfare state is being echoed within the Communist leadership, which is fearful of social instability and eager to consolidate its power and legitimacy. In March, the National People's Congress convened in Beijing and unexpectedly became a forum for the first open ideological debate within the party for years.

Legislators accused government officials of selling out China's interests to market forces. Such was the antimarket mood... Describing major new investments in rural areas, Prime Minister Wen Jiabao emphasized that "building a socialist countryside" was a "major historic task" before the Communist Party. He also outlined steps to balance economic growth with environmental protection.

"It is a huge achievement," Wang said with a smile on his face, "that the premier should openly admit that health care and education is a failure. It has never happened before."

Wang said he thought that the government was sincere about eradicating rural poverty. But he was still cautious. "There has been so much decentralization in China," he said, "that it is not easy to translate central government policy into action." ...

The dangers of failing to improve conditions for the majority are clear to Wang: "If we don't improve the situation, there will be more authoritarianism. We have already seen in Russia how people prefer a strong ruler like Putin because they are fed up with corruption, political chaos and economic stagnation. When radical marketization makes people lose their sense of security, the demand for order and intervention from above is inevitable."

Comments

[a]

I have to say that it is great to see some mature Chinese thinkers, who don't blindly go to one extreme (Marxism) or another (Free Market Capitalism).

It is also interesting to see that the Central government is getting approvals from this group of thinkers.

I recall on the blog, there has been post about central government's lack of control in local areas. I think it will be interesting to see if the central government has any ideas on how to "correct" that.

[anne]

Relative control and lack of control over local areas has been a 2000 problem or benefit depending on contemporary view. Early on the problem was resolved by philosophical education and transportation improvement, especially canals. Mao again wished to resolve the problem by education and philosophy, and I suspect only education and shared philosophy is a realistic resolution in a vest land.

[anne]

"a 2000 year problem"

[happyjuggler0]

I would like to remind everyone, assuming they already knew that is, that ideally one would move the entire curve to the right and everyone will be wealthier.

This is exactly what China has been doing. They have taken hundreas of millions of people out of third world definition poverty and in the parts of China where a reasonable proximity of capitalism has taken root the price of labor continues to be bid up organically instead of by government fiat. In the more developed parts of China there is in effect a labor shortage and this is why wages are being bid dramatically upwards, just like capitalist theory says it should.

This is a link to a post from Mark Thoma on this site showing this graphically. Click on the link after the dot. Then when you get the macromedia files, unclikc "the world" and click on China. Watch the whole curve shift to the right as the country becomes more prosperous through market reforms.

Reading the post about "China's New Left" I was struck by the absence of anti-market rhetoric. What they are complaining about is the lack of economic growth in the countryside and they want what the coastal urban regions are getting, i.e. market investment. They also want the government to stop stealing from them. Quite frankly this sounds like anything but leftist rhetoric and instead comes right of the Chicago School playbook: More business investment, less government theft.

[happyjuggler0]

Oops, I forgot Thoma's link.

http://economistsview.typepad.com/economistsview/2006/04/evolution_of_th.html

[happyjuggler0]

Thoma's link

[happyjuggler0]

Sorry, one more point. After viewing China, view Nigeria instead. This is what the absence of free(r) markets looks like.

[Emmanuel]

I'd shut my trap if I were these guys. Sure they talk pretty tough now, but I'll bet they won't after they get detained and have their private parts electroshocked.

If even a torture dominatrix like Condi Rice cites you for human rights violations, it must be absolutely terrible out there. Like American human rights, Chinese human rights are an oxymoron [bzzzzt...Aiiiiighhh!].

[China Law Blog]

What specifically does Wang propose should be done in China to reduce poverty and inequality of wealth?

[anne]

Mark Thoma addressed this:

http://www.nytimes.com/2006/10/12/world/asia/12china.html?ex=1318305600&en=9a57311596986985&ei=5090&partner=rssuserland&emc=rss

October 12, 2006

China Makes Commitment to Social Harmony
By JOSEPH KAHN

BEIJING — China's Communist Party, devoted in recent years to expanding the economy at any cost, on Wednesday endorsed a new doctrine that puts more emphasis on tackling the severe side effects of unrestrained growth.

The annual meeting of the ruling party's Central Committee formally adopted President Hu Jintao's proposal to "build a harmonious socialist society," a move some analysts said was one of most decisive shifts in the party's thinking since Deng Xiaoping accelerated the push for high growth rates in the early 1990's.

The leadership declared that a range of social concerns, including the surging wealth gap, corruption, pollution and access to education and medical care, must be placed on a par with economic growth in party theory and government policy.

"There are many conflicts and problems affecting social harmony," the Central Committee said in a statement released Wednesday after the close of its four-day planning session. "Our party has to be more proactive in recognizing and dissolving these contradictions."

China's economy has recently been expanding at better than 10 percent annually, faster than any other major economy in the world, and the party shows no signs of trying to sharply reduce that rate soon.

China needs much higher growth rates than most developed countries to absorb tens of millions of surplus workers, and even the plans for addressing environmental woes and creating a sounder welfare system assume surging tax revenues to pay for them....

[anne]

A policy implication:

http://www.nytimes.com/2006/10/13/business/worldbusiness/13sweat.html?ex=1318392000&en=004aed0cd97ca2c1&ei=5090&partner=rssuserland&emc=rss

October 13, 2006

China Drafts Law to Empower Unions and End Labor Abuse
By DAVID BARBOZA

SHANGHAI — China is planning to adopt a new law that seeks to crack down on sweatshops and protect workers' rights by giving labor unions real power for the first time since it introduced market forces in the 1980's.

The move, which underscores the government's growing concern about the widening income gap and threats of social unrest, is setting off a battle with American and other foreign corporations that have lobbied against it by hinting that they may build fewer factories here.

The proposed rules are being considered after the Chinese Communist Party endorsed a new doctrine that will put greater emphasis on tackling the severe side effects of the country's remarkable growth....

[anne]

Freeing schooling for all children in China, especially for rural children, is another policy implication. What may be most promising however is a continued discussion of equity in growth in China, from which policy change can come. Chinese unions are of course imperfect, but having unions through Wal-Mart, even as Wal-Mart expands in China is encouraging. After all, Wal-Mart has no American union.

[dissent]

It is noteworthy that the American corporations in China moaned and threatened to run off to countries with more exploitable workers, if indeed the Chinese union measures were enforced.

One consequence of globalization is a world-wide general decline in commitment to workers and working conditions, as well as a decline in first world wages. This is the beginning of the race to the bottom.

[anne]

Dissent:

"It is noteworthy that the American corporations in China moaned and threatened to run off to countries with more exploitable workers, if indeed the Chinese union measures were enforced."

Thank you.

[a]

It is interesting to see the reaction of the American Corporations to the new Chinese Labour Law (due to be effective next May). By NYT, it is estimated that the workers income will increase by 50% if the new law is implemented successfully.

I doubt if the corporations will really run away from China though: China has better infrastrcutures to make it competitive with other low-labour-cost countries. China also has a tremendous domestic market (with the 50% increase in income, it becomes simply more attractive).

I think if in previous times, China has much less power to take care of the people's interest, now it has some more. It should use it and build up a big middle class.

[a]

I think Wang is proposing a European Style Social-capitalism, where the government plays also an active role to ensue that the well being of the citizens is not trumpled by corporate interest, like in the worker's dispute. My sense is that he would love to see more worker's protection by the laws and insurance. He also mentioned the health/education reform failures that the government acknowledges, which is a huge issue for China. As Prof. Stiglitz pointed out that China is trying to build social programs to give people good insurance for their future so that people can stop saving at 50% and start spending and have a healthy domestic consumer market, and not to be so dependent on the US consumer market...

[ninjaplease]

Well, perhaps the group of New Lefties are pragmatists, if they decided the current Chinese government was the enemy, they would be taken to a soccer field shot and buried beneath it.

Let's not pretend the Chinese government extends the olive branch to dissident groups. They are on the short list of countries that would rather change history or distort information than allow disagreement with "the party."

A perfect model for the Neo Cons.

[calmo]

Thanks for turning on the light bulb here for me 'a' [Why is there such a propensity to save in China (and Japan)?]:to give people good insurance for their future so that people can stop saving at 50% and start spending and have a healthy domestic consumer market, and not to be so dependent on the US consumer market...
The terror of being at the mercy of the American consumer, especially given the history, I find very compelling.