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K-State Today

July 26, 2011

Sociologist shares thoughts on China in his new book

Submitted by Tyler Sharp

Although China has become an economic power in recent years, the communist dictatorship failed to achieve any real economic growth during its early years. Robert Schaeffer, professor of sociology and the author of "Red Inc: Dictatorship and the Development of Capitalism in China, 1949 to the Present" argues that the regime failed to promote economic growth during its first 30 years in power because “Mao’s economic policies -- the collectivization of agriculture and the Great Leap Forward -- led in the 1950s to economic disaster and cataclysmic famine, while a growing population prevented the regime from realizing any real economic gains during the 1960s and 1970s.”

The regime’s economic problems in this period were compounded by the political turmoil associated with the Great Proletarian Cultural Revolution.

“Unfortunately, this so-called revoution did not result in any significant political or economic change,” Schaeffer said. “Mao was the leader at the outset of the conflict, which was really a battle between factions of the ruling class for control of the party and the bureaucracy, and he was the leader at its conclusion. So it is difficult to claim that it was a 'Great Revolution.' It should instead be regarded as a miserable, tawdry affair that killed a lot of people and ruined millions of lives.”

When Mao died, a brief battle for succession ensued, and Deng Xiaoping emerged the victor. In the late 1970s, Deng introduced a series of measures designed to promote economic development and curb population growth.

“Too much credit has been given to Deng’s one-child policy, which took a terrible toll on women and female children — including forced abortions and sterilizations, child abandonment, and record-breaking rates of suicide for women — and not enough credit to the women who voluntarily decided to have fewer children in the years before the one-child policy was introduced.”

Deng’s economic policies contributed to modest economic growth in the 1980s. Then, during the 1990s and 2000s, China’s economic growth accelerated. But China’s growth was underwritten by massive foreign investment, amounting to trillions of dollars, what Schaeffer described as a vast and ongoing “stimulus package” for the dictatorship. During this period, “successive economic crises in Asian and the Americas persuaded foreign investors to exit from democratic countries and invest instead in China, where the dictatorship suppressed political dissent and kept wages unnaturally low.”

U.S. investors flocked to China because they hoped to capture markets in China, an objective of U.S. policymakers since Richard M. Nixon. However, foreign investors have been unable to capture Chinese markets because the dictatorship there has fixed exchange rates to give Chinese firms an unfair advantage in foreign and domestic markets and provided them with cheap land, no-interest capital, pirated technology, and low-wage labor.

“These mercantilist policies have made it difficult, if not impossible, for U.S. and other foreign firms to compete in Chinese markets, while the open-door policies of World Trade Organization members have given Chinese firms easy access to overseas markets,” Schaeffer said.

U.S. policymakers have long argued that the emergence of a Chinese middle class would eventually promote democracy in China. Schaeffer argues that this has not occurred.

“In the 21 years since Tiananmen Square, the regime has become stronger, not weaker, in political and economic terms. Moreover, there is no middle class in China, but instead an expanded ruling class composed of corrupt bureaucrats and entrepreneurs who have fattened themselves on the collective and individual wealth made available to them by the regime. This ruling class has zealously defended the mercantilist dictatorship. They have no interest in democracy and are averse to sharing their wealth with the masses. As a result, income inequality has increased dramatically during the last 20 years.”

Looking back at the 60-year history of the dictatorship, Schaeffer concludes that China grew economically because “the cruel, corrupt, mercantilist dictatorship was assisted by democracy-averse foreign investors. This enabled the regime to flout its obligations as a member of the World Trade Organization, prohibit economic competition, and suppress political freedom in China.”

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