China’s Social Contract

19 July 2009

Sunday

The abridgment of ambition

The first sentence of David Rapport Lachterman’s book The Ethics of Geometry: A Genealogy of Modernity is something I think of often: “To write a book is to be schooled in the abridgment of ambition.” Anyone who has tried to write knows how true this is. Writing a post for this forum is a daily abridgment of ambition, as to say something coherent and meaningful in the space of the stolen moments that constitute the interstices of my day is not always an easy task. A few days ago I started writing about China, and of course the post became impossibly large in my mind even before I began to type.

One must, in a context such as this, confine oneself to the smallest possible thought that can be coherently assembled in the space of a few paragraphs. This entails obvious compromises and precludes any kind of systematic or historically adequate treatment of a question. One is more or less limited to commenting on a sound bite, so for today’s sound bite I will cite a recent BBC story.

A “sound bite” on China

In Sink or swim in modern China by Chris Hogg, we find the following:

“There is an implicit bargain in modern Chinese society between the leaders and the led. Beijing tells its people ‘we will give you opportunities’ — to earn more, to enjoy a better standard of living than your parents did. But you, in return, will behave yourself.”

This has been a consistent theme of commentary on the Chinese political situation over the past decade or so. The Chinese ruling elites of the communist party and the Chinese people are abiding by an informal social contract, such that the government will continue to deliver economic growth and opportunities to its people, and the people will not challenge the leadership of the Communist Party of China (CPC). I have encountered this in many different contexts, enough so that it may be considered part of the standard repertoire of talking points for talking heads.

Going beyond conventional wisdom

Thinking individuals have a duty and a responsibility to question conventional wisdom, to subject it to scrutiny, and to push such conventional wisdom beyond the bounds of convention to determine its value and veracity. What, then, is the value and veracity of the current conventional wisdom that the CPC and the Chinese people are abiding by an implicit social contract?

Is the Chinese governing elite in a position to guarantee to its people sustained and significant economic growth? And, whether or not they can in fact do so, do the Chinese political elites believe that they can do so? Well, starting with the second, the Chinese communist leadership has shown itself to be sufficiently pragmatic to remain in control of China, and this is no small feat. We must assume that they are rational and not deluded in regard to the basic way the world works. Thus we should assume that they have no illusions about their ability to continue to deliver economic growth and opportunities if it is simply not possible. Which brings us back to the first question, and the answer to this is obviously that the growth cannot be sustained indefinitely, but it can nevertheless be sustained for a significant period of time.

China’s Industrial Revolution

It is been my consistent talking point that China is experiencing an industrial revolution, a one-time historical transition that began in England in the late eighteenth century, occurred in Western Europe in the nineteenth century, and in Japan and North America in the late nineteenth and early twentieth century. China’s industrial revolution spans the late twentieth century to the early twenty-first century.

As long as China’s industrial revolution is transforming the economy of that country, China can sustain continued economic growth even while the rest of the world experiences recession. And despite being in the third decade of an industrial revolution, China has a long way to go. While the coastal cities are wealthy and have more or less completed the process of industrialization, the poorer, agriculturally dominated interior of the country is in places untouched by industrialization, and wherever there remains a primarily agricultural economy the work of an industrial revolution is not completed.

Even in advanced industrialized economies in Western Europe and North America there are areas of poverty, but this poverty is no longer defined in terms of subsistence agriculture but rather in terms of unemployment, and unemployment is only a meaningful figure when subsistence agriculture has been abandoned and the majority of the population must earn its living by other means. Thus the poverty of Western China, with its dense pattern of villages engaged in subsistence agriculture, is not unlike the poverty of Appalachia prior to the arrival of the coal industry in the early twentieth century.

China as a mature industrialized economy

When China’s industrial revolution reaches a plateau, and its economic development levels out, what has been identified as China’s de facto social contract will no longer be able to function. The Chinese political elites can maintain growth at present without showing any great measure of imagination or inventiveness. They must be competent and shrewd managers, and since the Chinese have long had a deserved reputation as businessmen, we can expect that China’s current leadership will be capable of sustaining the present status quo of growth. The virtues of competent men of business will play into the hands of the current communist party leadership in China. But when real imagination and inventiveness are required, these same virtues will fail the leadership, and they will continue to behave like stodgy businessmen when it is the flair of the entrepreneur (if not the vision of a prophet) is what is needed.

How long can this go on? Several decades more, at least. Each society that industrializes has its own unique culture and its own unique history. This culture and this history facilitates some things while frustrating others. Development is always a mixed bag, always leaves some dissatisfied and disenfranchised, and reaches some sooner than others.

Is the pragmatic leadership of China content with assuring their rule for the next few decades, and leaving the farther future to chance? Or does the CPC believe in its ability to maintain a one-party system with ideological control in the advanced industrial economy of China’s future? Clearly the Chinese interest in space exploration implies that the party is looking to the long term, and wants something at once both visionary and nationalistic in which the people can take pride. Will this, along with other initiatives, be enough to satisfy the mass of the Chinese people?

It was enough to satisfy the US during the Cold War. Similar forces were at play: international rivalry, a space race that was the focus of national pride (though not the only focus), and political repression that did not seriously affect America’s technological and industrial expertise. The McCarthy-era political repression stifled dissent in the US for a generation while not preventing its international competitiveness. And the McCarthy era was not ended by a revolution or a sudden change, but by social evolution. It could be argued that the social evolution of the US, which in the 1960s came close to being revolutionary, only could take place once a social consensus had been established that simply excluded the possibility real and fundamental radicalization. Once revolution is taken off the table, as it were, it becomes easier to tolerate dissent, because everyone knows that the dissent is ultimately impotent. However vociferous the left may be in the US, everyone knows that behind the rhetoric there is no threat of social revolution or even of general strikes.

Perestroika and Glasnost in China

Making the appropriate changes for differences in culture and history (mutatis mutandis, as they say), it would be plausible to expect parallel developments in China over the next hundred years, picking up as China’s industrial revolution tapers off. The important difference being that the communist leadership in China will, through selective political repression, seek to create a social consensus that simply takes Western-style political liberalism off the table altogether, though in the long term the Chinese leadership will need to allow liberalization of press freedoms. In other words, the Chinese have perestroika in full swing; next they will need to accommodate glasnost.

This seems to me to be a sufficient realistic and pragmatic assessment that the communist leadership of China could plausibly believe in its ability to secure its long term rule by such means. What this scenario neglects is the likelihood of “strategic shocks” that could be game-changes for the international system. The “international system” such as it is always errs on the side of stability and predictability, and so shuns developments that might upset the apple cart. But strategic shocks, by their very nature unpredictable, are virtually guaranteed by a system that, by favoring stability, perpetuates unsustainable arrangements that become increasingly more catastrophically unstable over time. As we all know, the bigger they come, the harder they fall. The international system is big indeed, and its fall would be hard in proportion.

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Note added 29 July 2010: A BBC story, China considers big rocket power, discusses the proposed Chinese development of quite large rockets that would be a real boost to the Chinese space program, thus a boost to national prestige in a time of economic uncertainty, thus a boost to the CPC.

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