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China watchers envy strong Party control

Command economy | China watchers envy strong Party control Anthony Harrington

When you come right down to it, corporations are not democracies. They may play nicely under the glare of the public spotlight and put a lot of value in being a good corporate citizen, but they are command-and-control structures, run by the Board, with sustainable profit growth as their mantra. Nothing wrong with this. It’s the name of the game and if you are a free market person, you believe that this is what ultimately drives up living standards for all – periodic crashes aside.

Of course, the Board is ultimately answerable to the shareholders and, in the wider sense, to all stakeholders, which is the magic link back to the community within which it operates. But this still doesn’t make it a democracy, and any company which tried to run itself on purely democratic lines would probably speedily find out why Athens, birthplace of democracy, made so many bad decisions. (100 years of war with Sparta? Sure, why not pick a long war with guys who do nothing but train to fight from the age of seven to seventy, while your people spend their time writing plays and discussing philosophy? Oh, the people wanted it? Fine…)

Anyway, the fact that companies are command-and-control entities is probably why Chinese style authoritarian capitalism, or command capitalism (there are any number of descriptive epithets for the Chinese model), is proving so seductive to mainstream Western capitalists.

In recent interview with Real News, Orville Schell, Arthur Ross Director of the Centre on US-China Relations China at the Asia Society in New York, returned to this theme, elaborating on a comment he made in a previous interview for the George Soros sponsored INET, or Institute for New Economic Thinking, to the effect that the ability to formulate and actually enact five year plans for the whole economy was “a real competitive advantage” for China. Personally, I’m more in the camp of those who think that the Party is hanging on by the skin of its teeth and the might of its military while the whole, unimaginably vast shebang rocks and rolls underneath it, but I can see the point Schell is making.

In the interview with Real News, immortalised on YouTube, it is not as if Schell does not see through the Party spin to the trouble and tensions beneath the surface. As he told the interviewer, “There is a huge amount of dissatisfaction, polluted villages, land grabs, corrupt officials, all making for localised unrest”. However, he pointed out that no matter how many minor flare ups occur, trouble in China always stays local. Nothing gets knit into the fabric of a national movement in the way that it has in Egypt, Tunisia and Lybia, not to mention Syria, Yemen and Bahrain. “This is where the internet is terrifying for the Party,” Schell says.

“China has spent billions to manage the internet, with packet sniffing techniques used to ferret out anti-social usage. And there is no Twitter and no Facebook in China. They are very wary of alternative networks of interaction that could rival the Party’s control.”

Schell goes on to point out that social instability in China has historically been led by rising food prices, which is precisely the problem the country is currently facing, with many sources putting food price inflation a few tens of percent ahead of the official figure of 9% or 10%. “The Chinese government is very worried by this, and they are triply alarmed by the Middle East Jasmine Revolution. But I do not see the immediate future creating this [a Jasmin revolution in China].” The key to everything for the Party, he adds, is continued economic success. They have so far managed to keep the economy growing at 10% year in and year out, which enables the vast majority of people to envisage a better future for themselves and their children. That is not the ground for revolution. The present problem for China is that choking back inflation (essential to reign in rising food prices) also chokes back growth – which makes for an interesting tight rope walk for the Party.

Further reading on China and the command economy:

Tags: China , food price inflation , inflation , Jasmine Revolution , Oliver Schell
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