- Three Stages of Development in Post-revolutionary China
The Chinese government is rare phenomenon in world affairs. We can search through the pages of history for similar regimes. But we are unlikely to find any outside China itself that arevery much like it. For in some waysthe Chinese government is a bit like the governments of the Confucian emperors in ancient times, but with Marx playing the role of Confucius, and the Communist Party (the CPC) that of the elite body of Confucian scholars who interpreted the edicts of the Emperor to the populace, and interpreted the Confucian traditions required to accommodate them. And, this analogy is really not as far-fetched as it may seem to the Western mind, as I will shortly explain.
Firstly, Xi Jinping fairly clearly sees himself, Karl Marx, and the CPC as having precisely such roles in China today. When, for example, he speaks (as he often does) of his ambition to create ‘a socialist state with Chinese characteristics’ this arrangement is fairly precisely what he means. Clearly, the CPC is not the body of revolutionaries it was in 1940s or 50s. For, just about everyone who is important in China—economically, socially or politically—is now likely to be a member of the CPC. It is a huge organization. So, the body of CPC members is already an elite (socially, politically and technically), just as the Confucian scholars of old were in their time.
It is reasonable to think that there have been three stages in the evolution of modern China since the 1949 revolution. The first was the revolutionary regime of Mao Zedong, which ruled, as Russia did after its Revolution in 1917, with an iron fist to impose its laws upon the peoples of mainland China. This was, no doubt, a brutal regime, which demanded strict obedience to Mao’s rule.
.The second was the state capitalist regime created by Deng Xiaoping in the years following his election to the leadership in 1978, which set the pattern of Chinese development for the next 35 years. Dengwas responsible for introducing a market economy to serve the people of China. And, in doing this, he appeared to be putting China firmly on the capitalist road—although, of course, there was no formal announcement to this effect. But Deng’s strategy was not to commit China to a laissez faire capitalist future. That would have been a step much too far for any Chinese leader at that time, even though the Chinese people had suffered greatly in the Cultural Revolution. Most plausibly, Deng’s strategy was just to make full use of the opportunities that the United Nations was offeringto all third world countries(through the WTO and the World Bank) at that time. China joined this program, and invested very heavily in manufacturing industries for first-world markets.
But, unlike the industries of most other market economies,China’s were centrally controlled.It’s principal productive enterprises were wholly or largely state-owned and directed. So, the enrichment that followed in China, was not primarily an enrichment of wealthy entrepreneurs, although that also happened; it was the enrichment of China itself, the modernization of its cities, the employment of its people, and the flood of development inChina’s infrastructure that followed.
Deng’s bid to open China up to the world, and to benefit maximally from world trade was stunningly successful. According to a World Bank Report in late 2017, the Chinese economy not only grew very rapidly in the following thirty years to 2013, it succeeded in lifting 850million people out of poverty. Think about that. The poverty level fell from 88.3% of the population in 1981, to 66.6% in 1990, and was down to a staggering low of just 1.9% in 2013, when Xi Jinping was elected to power. So that, in this period, China became a country to be reckoned with in the capitalist world. It was no longer the wounded giant of Asia. It was by thenwidely regarded as the world’s power-house, producing a wide range of cheap manufactured goods for world markets.
China was able to do this, I believe, because this is precisely what they planned to do originally. They marshalled their huge, and more or less poverty-stricken, workforce to live in pre-planned cities, which were built and equipped: (a) to manufacture the things required by first-world countries, and (b) to accommodate the required city-workforces and their parents, partners and dependants in reasonable comfort. And, they did all this, because the workforce they needed for their productivity drive had to be brought in from the country-side, where they would otherwise have remained in poverty. Had they not done this, the huge workforce of China would have been left to assist,as best they could, in their traditional family businesses out in the country, or in rural townships to survive.
But China has never aspired to be a powerhouse of the laissez faire variety, as the US is. The modernization of China was planned from the beginning in the lead-up to Deng Xiaoping’s reign. For Deng had understood the logic of the Cold War, better than most. For, he believed that the Cold War was basically an economic one. Certainly there was a nuclear stand-off, with the super-powers each threatening the other with total annihilation. But this, he thought, was really just a side-show. Surely, no one would ever be silly enough to launch a nuclear strike on another nuclear-armed state. Mutually Assured Destruction, as its acronym says, was plainly MAD. In any case, it was better to stay out of all that.
Deng understood that the US aim in the Cold War was not just to ward off an existential nuclear threat. It was, rather, to break the USSR economically, and to win the hearts and minds of the uncommitted Third World by directing business in their direction, so that they too would follow the capitalist road to prosperity.
But, this was not the message that the Chinese took from the Cold War. They saw it as a way of getting rich quickly, but not as a way of life. Their attitude to capitalism was therefore very different from that of the West. For many of the white population in the USA, and for many of the British upper classes, laissez faire capitalism was always seen as the freest, and ultimately the most productive, of all ways of life. Welfare, they thought, was really only for the destitute, never for the indolent, and was best funded by charities.
Yet, the welfare states, which did flourish in Britain and the Commonwealth at that time,were reluctantly accepted by the conservatives in their midst. They accepted them as political necessities.Keynesian economic theory, which dominated social and economic theory in the seventies, demanded national spending to balance demand with capacity to supply. And how better to do this, it was argued, than to spend money required on health, education and infrastructure. Acting on Keynesian precepts, they would increase expenditure in these areas in times down-turn or recession, and ease up on spending in boom times. Consequently, when the governments of the US (under Ronald Reagan), and the UK (under Margaret Thatcher) chose laissez faire capitalism as their economic weapon of choice in the Cold War against the USSR, and decided to push hard for free trade agreements to reduce production costs, conservatives everywhere in the English-speaking world rallied to the cause.
The conservatives rallied to laissez faire capitalism (i.e. neoliberalism), I believe, because: (a) the Keynesian strategy of demand management, which welfare states everywhere had used to control inflation, or to boost their economies in times of recession, came under a cloud by the end of the 1970s, and (b) the conservatives had a convenient scapegoat for these economic problems, viz. the Labour and Social Democratic parties that were supportive of the welfare state.
The stagflation that was occurring at this time could not in fact be managed by standard Keynesian strategies. If the government pushed more money into the economy, it would increase demand, and hence inflation, but if it took money out of the economy, it would reduce productivity, and thus make the economy more stagnant than ever. But the same is true of the neo-classical theory of economic management. For the kind of inflation that was occurring was not being driven by excess demand. It was being driven by OPEC’s decision to raise the price of crude oil to punish the US for its support of Israel in the Yom Kippur war.
Keynesian economic theory is well equipped to deal with the rises and falls in prices that occur in all capitalist economies. And such occurrences are normal in commercial the business cycles. Keynesian economic managers would use what they called a‘counter-cyclical’ strategy of :(a) increasing government demand in response to falling commercial demand, or (b) decreasing it in response to increasing commercial demand. But the period of stagflation, which occurred in the capitalist world of the 1970s, was not part of any business cycle. The kind of inflation that was occurring at this time is what is known as ‘cost-push’ inflation. And, ‘cost-push’ inflation is very different from the ‘demand-driven’ variety. Inflation that is driven by excess commercial demand, may be countered by counter-cyclical demand management. But stagflation cannot be.
To manage stagflation, it is necessary to use some of the strategies employed in times of war, which are designed to control wages or otherwise reduce production costs. Consequently, while OPEC kept pushing up the cost of crude oil, the degree of stagflation kept on increasing, so that by the end of the decade, with the cost of crude oil increased to about ten times its 1973 level, the stage was set for a revolution in the capitalist world: out with the old welfare state managed by Keynsian strategies, and in with the new free-trade liberalism, which is laissez faire in character, but shifts the ownership of most of the means of production, distribution, information and exchange from the social sphere to the commercial one, and invites businesses to manufacture its products in third world countries to reduce their costs.
China was probably the greatest beneficiary of this revolution in global capitalism. And Deng planned to profit from it as much as possible, with attention being paid to all of the logisitics of this complex operation. Thus the way of life that China was seeking was not like that of the laissez faire capitalist world, where businesses, with limited resources and powers, are the planners and innovators of the nation. Rather, Deng proceeded to milk the Western world for all he could, to gain a significant share of the world’s productivity. And, the organization he used was systematic—just like that of a military campaign.
But the campaign was not to produce armaments, or train military personnel for warfare. Rather, it was to out-produce and out-manage the capitalist world at its own game. And, in doing so, he thought, the Chinese would be able to bring their people out of poverty, and provide them with the amenities to live well, while contributing to the economic transformation of their country.
That this is the case has become increasingly evident since the election of Xi Jinping to the Presidency in 2013.The Chinese did, undoubtedly, exploit the capitalist system to promote its economic interests. But we must not be misled by this. Modern China has never really believed in the capitalist road it followed in the years since 1978. It wanted the West’s prosperity, but it has never thought that all prosperous states should have alaissez faire philosophy, or that this is the most desirable form of capitalism. The welfare states of Scandinavia, and of northern Europe, are certainly both prosperous and socially progressive. And, there is no reason to think that they are going to degenerate into tyrannies of any kind. Why then should anyone think that the capitalist road, as defined by Hayek and his admirers in the British and American governments, is the best road for capitalism to follow? The best capitalist road is surely yet to be defined. And, the Hayekian one certainly does not impress as being even a good candidate for this pivotal role.
Hayek is the man who warned the world that social democracies would inevitably create governments that are much too powerful for their own good, and that all such governments are greatly to be feared. Those who suffered under Hitler, Stalin or Mao can perhaps be forgiven for this warped perspective. But warped it certainly is.
- Chinese Social Philosophy
To understand the ambitions of Deng and Xi properly, I think we need to reflect on Eastern philosophy and science. Eastern science was, until quite recently, very different from Western. The Western tradition was informed by Euclid, which gave the West the concept of an axiomatic system. In Euclid’s day, the axioms of such a system (e.g. those of his system of geometry) were thought to be self-evident truths—things that are known a priori to be true, i.e. true,independently of experience. Now, these axioms were thought to transmit their certainty through to the theorems of their systems. For the rules of deduction in such systems were thought to be no less certain than the axioms themselves. Thus, the whole of each such system came to be thought of as a body of a priori knowledge.
This development turned out to be very important historically. Firstly, it enabled the development of Newtonian mechanics in the seventeenth century, which proved to be one of the main inspirations for the European Enlightenment.Secondly, and even more importantly, it helped to define clearly the structure of modern scientific theories. For, you only have to change the presumed status of the assumptions (from that of axioms to hypotheses) to obtain the structure of any empirically testable theory in modern science.
There were no parallels to these theoretical developments in any of the great Eastern traditions of learning,either in ancient times, or at the time of the European Enlightenment. Consequently, the Eastern mind was not well equipped to understand or adapt to the changes that were occurring in West.
But the European Enlightenment had a flip side. The conception of a priori knowledge, which exercised such power over the minds of Enlightenment thinkers of both the ancient and modern worlds, proved to be a source of misunderstanding and misjudgement in the social sciences. Historically, a priori reasoning was an enormously powerful forcefor good in the development the physical and mathematical sciences. In ancient Greece, the sciences of number, harmony, regularity and proportion led to the first great European enlightenment, viz. that of the Hellenistic age. And, in the seventeenth to eighteenth centuries, the a priori development of classical statics and dynamics led to the second great period of enlightenment, viz, that of Europe itself.
In my view, the power of a priori reasoning in the physical sciences deruves from the specific properties of the particular part of the universe in which we live. For the plain scientific fact is that, to a very close approximation, the world really is both a Euclidean structure, and also a Newtonian one. Indeed, no one, until the eighteenth century, could even conceive of a world that was neither of these. So, in the seventeenth century, nearly everyone thought that the propositions of Euclidean geometry were not only true, but also necessarily and precisely true. This, for example, is what the philosopher René Descartes thought. In his Discourse on Method, he said:
The long chains of simple and easy reasonings by means of which geometers are accustomed to reach the conclusions of their most difficult demonstrations, had led me to imagine that all things, to the knowledge of which man is competent, are mutually connected in the same way, and that there is nothing so far removed from us as to be beyond our reach, or so hidden that we cannot discover it, provided only that we abstain from accepting the false for the true, and always preserve in our thoughts the order necessary for the deduction of one truth from another. (Discourse on Method p.16)
But in the social sciences, supposedly axiomatic foundations for our theories of morals, politics and economics have been a constant source of misdirection. For, while we have powerful, and basically accurate, spatial and dynamical intuitions, as all hunting animals must have if they are to survive, we do not have any such powerful intuitions concerning the complex social structures required for living in modern nation states. We have strongly-developed family kinship relationships, and quite strong tribal instincts. But there are no comparable civic or national instincts common to all civilisations that have such manifestly good survival value. On the contrary, our untutored instincts of social behaviour in these areas are more likely to lead to tribal warfare, than to peace or harmony.
The case for this extraordinary claim has been presented and defended at length in my recent book: Rationalism: A Critique of Pure Theory(2017). In moral philosophy, rationalism has focussed attention on what we can know a priori about how we should behave in society. Thus, Immanuel Kant took the view that what is morally right must be what it would be ideally rational for perfectly well-informed, but intrinsically selfish beings, to do. Adam Smith likewise argued that fair trade is the natural result of intrinsically selfish beings acting rationally in buying or selling things, provided that they operate as perfectly well-informed traders in a neoclassical perfect market.
But no one has seriously tried to show that a good social conscience is the inevitable consequence of self-interested rationality, however well-informed it might be. And, indeed, it isn’t. How would you persuade a perfectly rational cat not to torture mice to death?
Nowadays, we look with profound scepticism upon anyone who argues for the common good. And we have, consequently, been systematically destroying the social consciences of young people in our own society. For the natural way to think about moral philosophy is the Eastern way, not the Western. The Eastern way of thinking about how we should behave socially is primarily motivated by family and tribal values, and mostly it involves the hope that these values can be extended out and into the wider community. The Eastern way therefore supports the strategy I have suggested of seeking ever-widening social contracts in our efforts to achieve peaceful co-existence. For Eastern moral philosophy never starts with the view that there is an objective moral law that is discoverable by a priori reasoning. So, it is not corrupted by rationalistic delusions. Nor do its theorists think that human beings are born free, and would never be willing to deny anyone the freedom to do as they please (e.g. own sub-machine guns), provided only that their actions do not interfere with the freedom of others to do likewise.
Confucius is probably the dominant influence in Xi’s thinking. Confucius was a humanist—who believed that everyone should aim to become fully human, and try to develop a kind of mastery over nature, tapping into the earth’s resources, developing its produce, and seeking to live in harmony with nature, and with each other. But, to do these things, Confucius thought, people must work at it all their lives, beginning in their families, and carrying it into the fields and workshops of the nation. He does not try to articulate this position. He just urges that people should devote their lives to trying to achieve it. He envisages that they must work with respect for each other, for the traditions of the families they serve, and participate,as appropriate,in the rituals that regularise these practices.
Confucius was also a social moralist. By that I mean a person with a moral philosophy that aims to discover how best to live together socially, for the good of all concerned. For, it is clear that his moral thinking embraced the whole of society, and that he derivedhis analects from his lived experience of seeking to becomea better human being. So, there is no clear division, as there is in most Western cultures, between individual conscience and social conscience. In Christian culture, for example, individual conscience is, supposedly, the source of all morality. For it, and it alone, is supposedly the source of all moral knowledge. For Muslim culture, moral knowledge is transcendental, in that it transcends all experience. It is therefore privileged knowledge—knowledge which is given only to the elect—to the disciples of God—about how to live one’s life the manner that God intended. But, for a Confucian, morality must be the practice of living harmoniously together in society. And this is something that, ultimately, we ourselves must learn to do.
Confucian moral philosophy contains no moral rules other than its version of the golden one: Do not do to others what you would not want them to do to you. But this rule, which is cast in a negative mode, is not an instruction to behave in any specific way. It is just a blanket restraint. So, it does not give priority to anyone’s predilections.
- The China of Xi Jinping
If I am right about Xi Jinping’s program, it is not the development of a new form of capitalism that he seeks. It is really just the development of a social market economy suitable for the Chinese culture.
There have been many forms of capitalism.The welfare states of Scandinavia, Northern Europe, the UK, and much of the British Commonwealth all had large state-owned enterprises, just as in China.And, inevitably, China must become more responsive to the demands for greater press freedom.
But, I do not think that China would everallow media companies to dominate their public broadcasting, as most other capitalist countries have. For media companies like to stir up trouble, and set one group of people against another. It grabs attention and favours some parts of the economy over others. My guess is that China will eventually licence media outlets, which are bound by law to operate according to strict public broadcasting charters, which they find acceptable to their basically Confucian traditions.
The third stage, then,in the development of post-revolutionary China is the present one, led by XiJinping. Ithas been marked by two trends: (a) to stamp out corruption, (b) to extend the reach of the Chinese state much further into welfare and social service provision than Deng ever did. Deng’s primary aim was to harness the forces of laissez faire capitalism to overcome poverty and to make China a major producer of goods and services on the world stage—results he achieved with spectacular success. Xi’ takes over the reins of power, with all this in place.
But Deng’s achievement has inevitably been marred by corporate corruption, which presumably includes many kinds of behaviours that would not be sanctioned in the West. So, when Xi speaks of eliminating corruption, it presumably means much more than what we in the West would regard as criminal behaviour. Certainly, Xi wishes to eradicate criminal behaviour, as much as we do. But, I think that when Xi speaks of eradicating corruption, and makes such a point of it, the kind of behaviour he has in mind, is something more like ‘putting one’s corporate interests ahead of the national interest’, i.e. corporate behaviour that harms or brings discredit to the Chinese state.
Xi’s stated aims are: (a) to eliminate corporate corruption, (b) to increase greatly the levels of public provision for health, educational and welfare services, (c) to make China the most prosperous country in the world by 2050, (d) to provide the infrastructure that is needed for such a state, and (e) to achieve all this in a way that reflects traditional Chinese values, and ways of doing things.
The Chinese themselves have described their state as ‘a socialist one with Chinese characteristics’. And, indeed it is already such a state in some ways. But, at present, it is no more socialist than it is capitalist. If anything, it is more like the USA than the Soviet Union. If the Chinese system can be described as a socialist one with Chinese characteristics, the Soviet Union should be described as a socialist system with Russian characteristics. Both were created by revolutionary movements. And both were initially ruled by doctrinaire revolutionary councils, which promised to develop their states as Marxist regimes. But the Chinese system has evolved into something much more interesting and stable than the Soviet Union ever did.
Structurally, China has begun to acquire some of the characteristics of ancient China, when the dynastic emperors ruled. It has an educated elite, which liaises between the executive committees of the government and the people they govern. And these committees determine the directions of imperial policy. But today’s educated elite arenot Confucian scholars, as they once were, but members of the Chinese Communist Party (the CPC). And the Communist Party of China is not a bunch of anti-capitalist revolutionaries, as it once was. For, it has developed to become a major power as a capitalist country, but it now just wants to take it on the road to becoming the greatest welfare state the world has ever seen. And this, I believe, is Xi’s ambition.
Membership of the CPC includes many of the socially and economically most powerful people in China: the business leaders, senior academics, influential journalists, engineers, worker’s representatives, researchers, representatives of the professions, and so on. For, the elites of these classes all know that real influence lies in CPC membership, and that this does not in itself commit them to anything much more than that of a social democratic party in, say, Scandinavia—apart, that is, from democracy itself. Thus, it is not at all like the communist parties of western Europe or the Soviet Union, which were, (until recently at least), all Marxist-Leninist groups, with little understanding of the demands of people in a 21st century society.
Critics of the Chinese regime always make much of its failure to allow press freedoms, or otherwise to provide adequately for human rights. But press freedom is not a human right, according to the Universal Declaration. The only mention of freedom of speech in the human rights charter is in its Preamble, where it says:
Whereas disregard and contempt for human rights have resulted in barbarous acts which have outraged the conscience of mankind, and the advent of a world in which human beings shall enjoy freedom of speech and belief and freedom from fear and want has been proclaimed as the highest aspiration of the common people.
And in this passage, ‘freedom of speech and belief’ is linked with ‘freedom from fear and want’, as high aspirations, rather than human rights. But in the document itself, there is no mention of either. For there are clear cases where freedom of speech must be curtailed, and freedom from fear or want cannot be guaranteed. The CPC believes, surely with good reason, that their present system is working, and the vast majority of Chinese citizens would seem to agree with them.
There are many dissidents among the ethnic minorities of the Chinese empire—the Uyghur and Tibetan peoples, for example.
We all hope that the people of China will one day recognize the peoples of Tibet, Sinkiang, and other remote regions of China as founding members of the Chinese community, with profound and ancient bonds to the lands in which they currently live. And, of course, we also wish that all Chinese will eventually be able to enjoy the press freedoms that those living in genuine social democracies elsewhere still have. But we are not one-sided in these hopes. As an Australian, I hope that the ancient peoples of this land will one day be officially recognised in our Constitution as the original occupants of Australia, with deep bonds to the land we all now inhabit. For the US I would hope that it would one day apologise to the disadvantaged peoples of their own society for their neglect of the social, economic and cultural rights of the UDHRas they are set out in Articles 22 to 29.
Brian Ellis is Emeritus Professor of Philosophy, La Trobe University
 Newton’s Mathematical Principles of Natural Philosophy was developed as an axiomatic system, just as Euclid’s Elements had been.
 Which was fully titled: A Discourse on the Method of Rightly Conducting our Reasoning in the Sciences
 If, for example, Mark Zuckerberg were a Chinese national, and was found guilty of collecting the personal data of individuals on Facebook (gathered and stored without their express permission), and then selling it on to political parties to enable them manipulate election results, then this would presumably be a form of corporate corruption. If it occurred in China, then, presumably, this would be case of what they would regard as corporate corruption.