China at 60: Misunderstood

China-60.svgMao’s China has been annihilated. 60 years on from its founding on the 1st October 1949 there is little recognisable about it.

Although some on the left will lament the loss of this slightly more presentable face of state Socialism, this is a cause to celebrate. The Cultural Revolution and Great Leap Forward are two of the biggest tragedies to hit humanity. The gains which accrued under Mao are too small to outweigh the horror which occurred.

From ardent globalisers to hardline socialists it seems everyone can find something to celebrate in the New China.

Unfortunately the things highlighted by Andy and Tim underline the misunderstanding that surrounds the success of modern China.

But as the scholar and writer Perry Link has observed, it is more accurate to say that the people lifted the Communist party out of poverty – once it had the sense to get out of the people’s way.

This? This good sense in The Guardian?

Tongue-in-cheek, Tim highlights the Guardian’s coverage of China’s 60th and approvingly asks “So when do we start applying it in the UK?

The only problem is that Communist Party hasn’t got out of the way. Or at least not in the way Tim implies.

From the earliest days of agricultural reform to the performance of state owned industries now, the party has very much got in the way. The Chinese have found a recipe that works for them, for the moment.

That Tim wants to score political points from it is telling of the difficulty that the libertarian/classical liberal/free trading right has discussing China.

xin_5021006010642328146348Of course elements of the left are little better at understanding the complexities of modern China.

For some bizarrely reason, Andy Newman of Socialist Unity uses a PRC propaganda photo as evidence of the change in China.

It is certainly worth celebrating the victory which Mao won in 1949, however, to use it as a a reason to stifle legitimate criticism of the regime and its policies is ludicrous.

Both Tim and Andy fall into the same trap that most analysts of China do.

Although most people recognise that China cannot be easily placed on a continuous Left and Right, people still want to label elements of its economy as a left-wing or right-wing policy. I apologise for these caricatures of left and right but they illustrate major failings in some analyses of China.

The leftist penchant for state intervention can be totally inappropriate for China.

China’s agricultural economy was only really successful once peasant farmers once the Household Responsibility System was set up. In this, after selling a set amount of their crop at the low state determined price, peasants were allowed to sell their surplus at market rates. This fermented a boost in productivity not seen since the redistribution of land which followed the establishment of the PRC.

The right have of course been as wrong as the left when it comes to China.

In a developing economy state intervention is essential in creating, extending and maintaining a market. The traditional rightist view that state intervention equals bad does not hold.

It must be made clear that a lack of state involvement is not synonymous with the free market. The withdrawal of the state in China is often applauded, but institutions which were smashed by the retreating party cadres have not been replaced.

In a survey quoted in Hart-Landsberg and Burkitt’s China and Socialism 72.5% of respondents had at some stage had their wages withheld. David Harvey uses this as an explanation for how so much wealth has been accumulated by so few in such a sort amount of time.

In fact, most of the time this is presented as the evidence of how “extreme” capitalism has become in China. But the theft of labour is not part of capitalism. This is evidence of how poorly China has instituted its new economy. Capitalism relies on functioning markets and as Chris Dillow argues, markets can be undersupplied like all public goods.

It is this difficult framework which has made it so difficult for the big L Left Left and big R Right to discuss China. This is why I think the work of Karl Polanyi is so important to understanding China. In the next post I will outline some of Polanyi’s thought and why it is so useful when discussing China.

Dana Ali Update

Dana Ali’s story was cross posted from the Third Estate here some months ago. Since the original piece was run things have improved, however, there is still a long way to go.

Since the successful campaign to secure Dana’s release from Oakington detention centre last month, he has been tagged and living under curfew, unable even to go into his backyard for a cigarette after 8pm…

…read more at The Third Estate.