China may be close to achieving something “never before tried at any time in history,” the scholar Nicholas Eberstadt said last week. That new creation: “market totalitarianism.”
A dictator like Mao Zedong can, through brute force, drag his country from peasant poverty to early industrialization. But investors need a predictable rule of law. Capitalists depend on a free flow of information. Innovation emerges from schools that encourage creativity and debate. And success creates demand for more liberty: As people enter the middle class, they insist on a greater say in their governance.
Or so it has ever been. The partial exception would be Singapore, but that is a tiny city-state that also, as it grew, was politically freer than China is today.
Can China defy this rule? That was a question underlying much of the discussion at a Hoover Institution forum convened by former secretary of state George Shultz where Eberstadt, an American Enterprise Institute scholar, spoke.
If the answer turns out to be yes, one reason will lie in that phenomenon that not so long ago we assumed would be a great force for freedom: the Internet.
More than 730 million Chinese are online, and they can neither expect nor demand privacy for their data. Therefore, China knows more about its people — where they are at every moment, whom they communicate with, what they like, what they think — than any dictatorship in history.
It plans to use this information to rank everyone according to their pliability and social utility, and it will reward and punish them accordingly.
But as Maria Repnikova of Georgia State University pointed out at the same forum here, on the campus of Stanford University, China’s ruling Communist Party does not use technology only for control.
In a system she calls “responsive authoritarianism,” the party employs thousands to gauge, hour by hour, people’s satisfactions and discontents.
Local officials create public pages to let people blow off steam — though complaints about national leaders or the party itself are not tolerated. The officials in turn take what they learn to respond to some public concerns while creating “a new language of propaganda,” Repnikova says, more playful and effective than the turgid People’s Daily of old.
Total knowledge also may enable a more targeted kind of censorship. China’s Communists can stop cold any discussion about, say, Tiananmen Square or democracy in Taiwan while allowing the free exchange among scientists, engineers and business people that is the life force of modern capitalism.
None of this is to say that market totalitarianism will in fact succeed. If the party has advantages unlike any before in history, it also faces unprecedented headwinds.
One is that, because the party enforced a one-child-per-family rule for so long, the nation is locked onto a demographic path that guarantees far fewer people of working age and far more old people who need support. Eberstadt, a demographer, said by 2040, China will contain a quarter-billion more people over the age of 50 than it does today and a quarter-billion fewer who are under 50. Unlike any country before it, China will be old before it is rich.
Nor does technology alter the essential brittleness of dictatorships. As Xi Jinping consolidates power with massive purges, he raises the risk of making bad decisions while removing mechanisms for correction. The party’s brutal roundup of ethnic minorities in Xinjiang — more than 1 million are now confined in a gulag of reeducation camps — bespeaks a mistrust that may not be sustainable in the long run.
As another China hand said at Hoover, the path from beginning industrialization to democracy was 40 years long for many Asian countries; China’s “miracle” is only a quarter-century old, and crunch time for its dictators may lie ahead.
If so, one crucial factor may have nothing to do with China: whether Western democracies offer a better model. China’s rulers were said to be shocked by the United States’ financial collapse in 2008, and shocked again in 2016 that our system could yield such an unsuitable president. They watch as our democracy seems unable to act in its own self-interest: to fix its immigration system, build needed infrastructure or invest in the right kinds of training and education.
There isn’t much we can do to shape the success or failure of market totalitarianism inside China. But getting democracy back on track would show the Chinese people, if they are ever allowed to learn freely about the world, that freedom and prosperity can bolster each other.
Which is to say: Don’t forget to vote Tuesday.
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