Tuesday, January 17, 2006

China: The Pot Boils

For the second time in the last six weeks the Western press has reported on a very unusual event in a totalitarian society: a public protest, culminating in violence against the protesters. The society is China, and in this instance dozens were wounded and at least one person killed in fighting between protesters and security forces. On Dec. 6 it was the village of Dongzhou, where clashes resulted in perhaps thirty killed. (A roundup of media reports from the latter is here.) In neither case was the global media allowed much access, but the times being what they are, word tends to get out. (Even Kim Jong-Il can’t keep a secret anymore.)

There is much buzz over the idea that undeniably growing rural unrest over land thefts and environmental damage threatens the Chinese miracle and even the integrity of the vast Chinese state. But historical perspective is helpful. Almost every nation that goes through the sorts of transformation China is witnessing also endures tremendous upheaval. Areas emanating farther and farther out from the cities are put in play, long-established social traditions are overwhelmed by the machinations of the new robber barons, and in the end some people make out like bandits while others are swept aside in the interests of modernization. That is what we are seeing in China now – the unavoidable disenfranchisement of groups of people whom the Communist Party historically favored, but whose continuing maintenance would upset the remaking of China into a prosperous world power. The peasantry is eminently expendable in a tradeoff such as that, just as they were during the early industrialization of the UK (think of the enclosure movement, which disenfranchised the peasantry, was widely seen as unjust but was ultimately unavoidable) and continental Europe. The proletariat in the latter made their stand in 1848, but progress was ultimately irresistible. That the U.S. avoided much of this turmoil during our own modernization transformation is probably a function of easy access to land during those years and a relatively constrained state which limited the incentive to resort to redistributive rent-seeking in lieu of entrepreneurial gambles.

China is going where Britain, the U.S., Europe, Japan, Taiwan, Korea, Singapore, etc. went before them – the radical remaking of society to enable a dramatically higher standard of living. It is true that history’s castaways in the countryside (justifiably) feel cheated, as their predecessors did in other places, but it is also true that urban Chinese are seeing a dramatic increase in their standards of living and control over their own lives. And that will be the dominant effect on Chinese decision-makers and on any support for a movement (difficult in a police state to generate in any event) that proposed a radical redistribution of rights and privileges. Because of the endemic corruption and the bad economic decisions that result from the resultant hidden information, China may be due for a major short-term correction. But while the whole process of building an East Asian miracle in a totalitarian state is without precedent, it has now been going on for 25 years and is firmly entrenched.

Despite the short-term difficulties (and recognizing that there are some long-term issues that could cause everything to break down) problems such as the growing impact of sex-selection abortion and even infanticide on gender balances), the most relevant historical precedents make me on balance optimistic that the Chinese miracle will, in fits and starts, see its way through to the finish line. The most relevant precedents are the ability of a totalitarian state to ultimately crush even widespread dissent (Cuba, Hungary, Czechoslovakia), the benefits to the winners overcoming the damage to the losers in the political-pressure process (in almost every society that has modernized), the ability of East Asian nations to remake themselves in just a few decades, and the absence (with only one potential exception of which I am aware, Indonesia) of counterexamples of societies that come as far as China has and then see it fall apart. That is the way to think about China’s boiling pot – as a normal episode on the way to better things, The effects it has on geopolitics, on oil demand, etc. are another matter, but we had best start preparing for it, because historical precedents both near and far suggest that in the long run the Chinese transformative miracle is for real, whatever the papers are saying right now.


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