When I first went to China in the mid-1970's, I was confused as to how Hong Kong, with no resources, could be so rich, and China, with massive resources, could be so poor. Nowhere was the contrast so stark as crossing the bridge at Lo Wu, where we had to disembark the Hong Kong train and stroll across the border to re-embark on a Chinese train to Canton. The Hong Kong border police were sharp, disciplined, lively, friendly and their cousins across the bridge, literally cousins, were sloppy, unhappy, sullen and dull. That difference ran through everything on both sides. How could this be? How could the China that gave the world Shang bronze, silk, paper, tea, amazing ceramics, stunning architecture, gunpowder, the stirrup, not to mention literature and ten thousand other useful things, could end up so poor, so uninventive?
I mention in my book that China has been under foreign control for some 500 of the last 1,000 years. I developed a hypothesis that under foreign domination, China does not thrive. Further, given Chinese history, there is nothing in Chinese culture that would bar China from assuming a position in the first rank among the nations today. Later, when I took a sabbatical from work to finish a bachelors degree in Asian studies, I came across a professor who made the same point, except about the Chinese under the Yuan Dynasty when poetry and art flourished. He proposed since all industry would benefit the Mongols, the Chinese elite retreated into the reflective arts, and the industrial arts re-emerged when the Ming tossed the Mongol invaders out.
But here is the problem with my hypothesis, China was poor, and is poor, but clearly Mao Tse Tung and all his associates were Chinese, so China clearly spent the last century under Chinese control.
Or not.
I just finished two books by Laszlo Ladany, a Hungarian lawyer, fluent in Chinese, who spent the 1940's in Shanghai and North China and moved to Hong Kong in 1949 eager to see how the new China would develop. He started China News Analysis, a weekly summary of Chinese media and party documents. His reports were required reading in all of the intelligence services around the world, if nothing else to double check what the home services were learning. He died in Hong Kong in 1990. The first book "Law and Legality in China" is a summary of Chinese law in history, and then covers specifically law under the Peoples Republic of China. In essence Ladany demonstrates China had all power in the hands of the party, with party members exempt from the law, and chaos otherwise. So, under Chinese communist rule, things can be very bad indeed. Think power with no responsibility.
The next book was more to the point: The Communist Party of China and Marxism, 1921-1985: A Self Portrait. It is a strange title. But his success as a China watcher stems from his discipline of working strictly with documents from the Chinese Communist Party, and reading their official publications. Hence the "self-portrait," that is, Chinese Communism as the Chinese Communists tell it. Ladany also met with escapees, refugees, defectors and anyone else heading in or out of China (recall China was closed to the world for at least 10 years, and had only one ambassador, to Egypt, during the cultural revolution). Ladany even consented to meet with me a couple of times, but back then there were only a couple of hundred Americans let in China twice a year, and I was one of them.
As the Communist party tells it, Chiang Kai Shek and Mao were revolutionaries... both looking for something to fill the vacuum of the crumbling Qing dynasty. Chiang choosing nationalism, and the founders of the Chinese Communist Party in the 20's, Mao among many others, turned to the recently victorious communists in Russia for a plan of action. The degree to which the Chinese "communists" did not understand what communism was, and the degree to which they slavishly followed Moscow is astonishing to read. All this by page six! As the book progresses, communism in China was a Russian operation, which begs the question, how could so few people, under foreign direction, manage to take over a country? Ladany lays this out, translating from the Chinese documents.
According to the communists, the nationalists were winning the war on the communists at every step, forcing a grand retreat, or the Long March to Yan'an. Lucky for the communists, the Japanese invaded, tying up the nationalists, and Moscow directed the Chinese communists to ally with the nationalists in the fight against the Japanese. At the same time, the communists were to avoid any heavy lifting in the struggle while doing everything they could to undermine the nationalists, especially in public opinion. One result was after the US victory over Japan, US generals, short of the manpower necessary to garrison North China, had to rely on surrendered Japanese troops to maintain order. So in spite of the victory, the Chinese citizens were still facing Japanese bayonets and soldiers. The communists offered an alternative. The communists were given equal rank in international negotiations, as the Soviets insisted. Although a history, the book proceeds almost like a novel, so read it for the details. But as I proceeded, I felt confident that my hypothesis was in fact a worthy theory. Chinese communism was merely a Eastern European import, not Chinese.
I recall reading Mao's little red book in China, and being astonished at how banal it was. (This is not unique, everything I've ever read by any politician has since proven to be as bad). Through constant struggles, anyone with any education or wisdom was purged in China, so the farther along the communist progressed, the cruder and more ignorant the leaders left standing. Forgive me for repeating myself, but this is what the communists say about themselves, after Deng Xiaoping gained power. Recall the rehabilitation of many past leaders, such as Liu Shaoqi, and criticism of even Chairman Mao.
I took particular delight in Mao's campaign for More Faster Better Cheaper, an effort to bring material benefits to the Chinese peasant through communism. Now, correct me if I am wrong, but more faster better cheaper comes through free markets, or given human nature, relatively free markets.
To review the argument in How Small Business Trades Worldwide, innovators introduce new and better products, and eventually conservators "steal" the product and lower the cost and widen the access to the item, service or agricultural produce, through economies of scale. At the same time access (distribution) widens, the quality improves and options emerge, giving more better cheaper faster.
Think telecommunications, travel, energy, distribution, and even beer. In the last 3 decades we saw all `deregulated' to some extent, and in that measure in these fields we got more better cheaper faster.
This free market is not what democrats or republicans call free markets... when they say free market they mean policies that reward their friends and punish their enemies (each has a different set of friends and enemies, while there is a super class that benefits either way, not unlike the super bowl, where one loses and one wins, but the owners clean up regardless, making money off of taxpayer funded stadiums).
The free market is not `capitalism.' Capitalism is a term coined by the enemy of free markets, slick because it describes one function in the free market, and that is capital formation. Capitalism is to a free market as a carburetor is to a car: important, but not the thing. Free markets precede governments, let alone any "ism." Free markets are merely exchanges between neighbors, and cultures evolve in part to protect (the root of the word "legal") free trade from either coercion or fraud, or both. Like natural law, indeed as part of the natural order, free markets already are, and how, given the terrain, climate, resources and human genius the Chinese cultures grow around what is natural in man, so it is different from what, say the Saxon cultures grow around what is natural in man.
When Chinese revolutionaries grasp something temporary and possibly the worst experiment in human history and manage to impose it on China, the results were starvation, murder, theft and every other conceivable disaster. (And to read Ladany, about the riskiest career choice a human could make in the last century was to become a communist. No one slaughtered more communists than communists.) Not only did China fail to get more better cheaper faster, they ran out of toothbrushes. Forget about vitamin E. The Chinese clinched it...in every attempt, socialism bring less, slower, more expensive and worse. You can say the Chinese had astragalus and other wonderful home remedies from traditional Chinese medicine, but they did not have those either since production and distribution of everything collapsed.
The book entertains the question as to whether China was ever communist at all, or simply in a constant conflict of a Trotskyite sort. In any event, constant purges wiped out the educated class, leaving the army in control of the country, with Mao on top. Well, of course, if communism had just one more chance, like Cambodia, it would work, but it never does. (Of course pure communism works, but only in monasteries where a closed economy of people who have died to the world and prove their dedication to Christ by submitting to a Prior. Not everyone is called to that life.)
I watched the change from the Maoists being in control to Deng Xiaoping gaining control, and I was under the impression that the chaos stopped with Deng. Not so, according again, to the communists. And obviously, in 1989, the Tien An Men square debacle showed the conflicts continue. No one can riot like the Chinese, and films come out of China regularly proving this art is gaining popularity. They do have the advantage that in a riot, the more the merrier, and in all things Chinese, a large crowd is assumed.
Back to my hypothesis: on page 453 of the latter book, there it is... Ye Qing, who studied in Paris with Zhou Enlai, and with the Communists in Moscow in the 1920's left the communists in 1927 calling them "just more warlords who split the unity of the country." He said "communism was a European product, an imported foreign commodity" His argument was the divided China presented a temptation the Japanese could not pass up. Because of the communists the Japanese invaded, and 50 years of misery ensued. Ye's argument from the 1920's was recalled in the 1980's because precisely that question was being asked in China... how did communism ever help China? To ask the question is to know the answer.
But one thing is clear. Can you name the leader of China? I had to look it up. No more all-powerful Chairman. Rational law is being instituted. Freedom is growing and economic opportunity with it. Anyone who travels to China can see it is changing, growing fast. China now lends the United States money, to help us out!
It is not so much that China has instituted reforms that are helping Chinese, but that the communists have so little control that the Chinese people are very free indeed. What we are seeing, are Chinese, relatively free of foreign influence, are exhibiting the creativity any nation would show, and succeeding quite well. As Chinese.
The communists tried to wipe out China's past, as the Soviets tried in Russia, as Pol Pot tried in Cambodia. It didn't work. There is a group in China, in charge, called the communist party. They are about as communist as I am. There is no Soviet Union calling the shots (so to speak.) The Chinese are rebuilding China after a disastrous century, a century in which China's fate was largely decided by foreigners. This next century I think we'll see China reassume it's natural place in the world and begin to offer mankind the fruit of its genius. In the natural course of events, a China that is 1/4 of the world's economy would be a very good thing, no more a threat than New York is to California. Each getting rich benefits the other. Competition means to "strive with," competition is not combat.
India is reassuming its rightful place as well.
Magnetism belongs to nobody, and the Chinese are making great strides in magnetic levitation transportation, a cheap clean and fast way of moving things. Coupled with computer technology, they very well may leapfrog America in advanced transportation and distribution. Just as Jobs at Apple took GUI from Xerox and built a fortune on it while Xerox could not catch a profit, so China will take what naturally belongs to everybody, in their relative freedom and their natural genius as humans, (merely Chinese in this instance), and profit.
USA cannot do mag lev for the simple reason too much of our economy is based on subsidies to the auto and airline industry. In 30 years, taking a flight in USA will be as quaint (and as embarrassing) as riding a rickshaw in Hong Kong is today, when Red Wind Transport can deliver you door-to-door 300 miles away in one hour flat, providing any personal services you desire on the way.
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