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Review of “Deng Xiaoping and the Transformation of China” by Ezra F. Vogel

I have tried to understand China by reading about her political economy and her history. Among others, I have read histories (in order of birth) of

The biography of Deng I read, however, essentially stopped at him taking power. As such it provided a good early biography, but was silent on later events. Therefore I asked what the best up-to-date biography of Deng Xiaoping. I got an answer, and I read it.

Deng Xiaoping and the Transformation of China is an insightful, thought-provoking, and disappointing book. I am glad I read it. I give it four stars.

Deng Xiaoping and the Transformation of China is the first detailed, western-written book on high level personal politics during the post-Mao era. There’s much that’s new in this book, and it changes the way that I understand the factions of the post-Mao era.

The book makes clear that the high-level leadership team of the People’s Republic saw the Great Leap Forward and the Cultural Revolution as symptomatic of where one-man rule would take personality. That is, the the problem of Mao Zedong was not that Mao was alive, or even in leadership, but that he had acquired so much power among so many elements that it was impossible to stop him until after tens of millions of people died. This makes sense: in recent European politics, Vladimir Meciar was an important democratically elected leader of Slovakia while Slobodan Milosevic was a war criminal who died in prison: the difference between them was the systems they ruled in, rather than their temperament or personality style.

Given that, Deng’s work in displacing Hua Guofeng — China’s Gerald Ford — was more involved than I had thought. It was not merely the question of “opening” China v. keeping China closed, as Hua had begun engagement with both the west and the communist bloc. Rather, members of Deng’s own generation (including Chen Yun and Ye Jianying) sought to keep Hua in power precisely because he was week. What’s even most surprising is that Deng’s first designated successor, Hu Yaobang, also missed the Hua years.

The central event of Deng’s term may have bene the Tiananmen Massacre of 1989, which Vogel discusses both directly and obliquely. Vogel, who calls it the “Tiananmen Tragedy,” draws a direct comparison to the Tiananmen Incident of 1976. The ’76 events at Tiananmen Square (closer in time to the ’89 events than the ’89 events are to us) was a mass protest against the rule of the aging Mao Zedong and the Gang of Four by workers, students, and cadres. Like the ’89 events, the ’76 events had as their proximate cause the death of a beloved leader who had been persecuted by the Surpeme Leader (Zhou Enlai by Mao Zedong, Hu Yaobang and Deng Xiaoping).

For those looking for ominous parallels, the leadership team in charge of China during the ’76 protests were dead or in prison within six months.

Of course there were differences: the ’89 protests were larger in scale, and the government’s reaction was more violent. Indeed, confirming my earlier suspsicions after read wikileaks cables, Vogel states that the government lost control of Beijing out to the Third Ring Road – a 30 mile beltway around Beijing.  (For comparison, the DC Beltway is 64 miles long.)

For the most part, Vogel does an excellent job in his discussion of the events. Vogel criticizes the notion that the protestors were primarily interested in democracy as a form of government. Rather, Vogel interprets the protests were organized against inflation, against totalitarianism, and against anti-bureacraticism.

Zhao Ziyang, Deng’s designated successor at the time the protests began (and who would spend the rest of his life under house arrest, secreting dictating his memoirs), blamed his own policies for leading to inflation as a primary cause. The role of inflation as a cause of social stress is well known, and the fight over inflation may be a especailly important in Chinese politics.

Additioanlly, China in 1989 was still a totalitarian regime for educated youths. Vogel’s writing here is clear, so I’ll just quote from it:

But in 1989, with a shortage of trained graduates in key industries and government offices, government policy still mandated that graduates be assigned their jobs. Since one’s job assignment was based in part on what the political guides who lived with the students wrote in the “little reports” in each student’s secret records, the political guides became the symbol of government surveillance. The political guides were rarely as well educated as the students on whom they were reporting; some were suspected of favoritism and flaunted their authority to influence a student’s future. Many cosmopolitan, independent-minded students detested the constant worry about pleasing them. “Freedom,” to them, meant eliminating these political guides and being able to choose their jobs and careers on their own.

This focus on individual liberty was exacerbated by the fact that “intellectuals” (those with at least a high school education) were the primary losers of the economic reforms of the early and mid 1980s. While local entrepreneurs were providing jobs, creating goods, and revolutionizing the countryside, the decline of the regulatory state combined with the totalitarian control of city life to create an explosive situation:

Party and government workers, state enterprise employees, and others with fixed salaries were furious to see rich private businesspeople flaunting their material wealth and driving market prices higher, threatening the ability of salaried workers to pay for their basic food and clothing needs. The problem was exacerbated by corruption: township and village enterprise workers were enriching themselves by siphoning off needed materials and funds from state and public enterprises; independent entrepreneurs were making fortunes, in part due to government loopholes; and “profiteering officials” were finding ways to use society’s goods to line their own pockets as the incomes of law-abiding officials stagnated.6 Migrants beginning to stream into the cities also contributed to the inflation problem.

As post-1989 say an end to rapid inflation, and end to totalitarianism, and the establishment of a modern regulatory state, perhaps the Tiananmen Protestors were successful in their objectives?

If the protestors were successful, one would expect the man who opposed them to have failed, and Deng Xiaoping might have. To me this is the biggest revelation of this book: Deng was shut out of government as completely post-Tiananmen as Mao had been post-Great Leap Forward. Just as biographies of Mao have to wonder when the best time for him to retire would have been, a good argument can be made that Deng should have stepped down in 1987.

High-level officials either saw the Tiananmen incident as an example of a bumbled overreaction, the consequences of bad policies, or both. Hu Yaobang had used earlier student protests of 1987 as a method of cementing his own popularity with the party and the people. If Deng had allowed this transition to take place, he could have maintained primary in a system where the next ruler was a close long-term companion with similar views. Indeed, the only official who seems actually in favor of it is Li Peng (the adopted son of Zhou Enlai who argued for a crackdown at the time), who appears to be so out of China’s leadership he had his diaries published by a the same company that published Zhao Ziyang’s memoirs! (Vogel also mentions that since the time of the protests, the terms used for it in the government have evolved from Counterrevolutionary Riot, to Riot, to Mass Disturbance, to Event, implying a slow “reversing of the verdicts”).

The other stand-out figure from the 1987 protests was Jiang Zemin, who met protesting students in front of a “mass audience.” When he was heckled, Jiang invited the hecklers to the stage to criticize him directly. After they did so, Jiang emphasized that democracy is a result of the development in society, and in English stated that the essence of democracy in America was:

Four score and seven years ago our fathers brought forth on this continent a new nation, conceived in liberty, and dedicated to the proposition that all men are created equal.

Now we are engaged in a great civil war, testing whether that nation, or any nation, so conceived and so dedicated, can long endure. We are met on a great battle-field of that war. We have come to dedicate a portion of that field, as a final resting place for those who here gave their lives that that nation might live. It is altogether fitting and proper that we should do this.

But, in a larger sense, we can not dedicate, we can not consecrate, we can not hallow this ground. The brave men, living and dead, who struggled here, have consecrated it, far above our poor power to add or detract. The world will little note, nor long remember what we say here, but it can never forget what they did here. It is for us the living, rather, to be dedicated here to the unfinished work which they who fought here have thus far so nobly advanced. It is rather for us to be here dedicated to the great task remaining before us—that from these honored dead we take increased devotion to that cause for which they gave the last full measure of devotion—that we here highly resolve that these dead shall not have died in vain—that this nation, under God, shall have a new birth of freedom—and that government of the people, by the people, for the people, shall not perish from the earth.

Jiang reciting the Gettysburg Address in English wasn’t just a cheap parlor trick: it simultaneously demonstrated a serious understanding of what democracy looks like while also emphasizing that building a society in a process driven by “intellectuals” (thus emphasizing the critical role of students and the bureaucracy in Chinese civilization) as opposed to mass movements.

If Deng had selected Jiang as a future replacement earlier, he could have started the Jiang administration earlier and cemented the role of the modern regulatory state.

Vogel cites the old Chinese saying, “the Soviet Union’s today is our tomorrow,” in the context of the Tiananmen protests. It is interesting to think of the great impact that the Soviet Union had one Chinese thinkers. Vogel states that Deng Xiaoping was in the class and same study group as Chiang Ching-kuo. At the time they were studying in Moscow, Russia had moved from War Communism (central planning) to the New Economic Policy, intended to be the first stage of socialism (market-based reforms aimed at increased production). The reforms that Deng and Chiang completely revolutionaized daily life, based on a Soviet model that in the USSR had been killed by Stalin. Indeed, Vogel observes the trend of the Communist Party to re-establish continuity with the Xinhai Revolutionary era, when the Communist Party operated on the directions of Moscow in a United Front with KMT.

Vogel’s amazing work is nearly ruined, however, by his almost random lapses into ridiculous propaganda. My impression after reading this book is that he does this to flatter specific soureces. This is most obvious at the beginning and end of the book, where the Deng hagiography is greatest

“He possessed the natural poise of a former wartime military commander.”

“He made it clear that he did not represent on locality, one faction, or one group of friends.”

But it occurs most often when Vogel is speaking generally, and so a careful reader can ignore it. Sometimes the text is coded, such as this reference to Mao Zedong (in which “errors” are mistakes within the party, and are explicitly not “crimes”):

In his later years Mao was to commit devastating errors, yet he remained a brilliant political leader with deep insight and bold strategies.

And this reference to Lin Biao, which seems internally inconsistent. Is Lin a hypochondriac, is he suffering from a head injury, or he is suffering from PTSD? These options seem mutually exclusive:

Lin Biao, a reclusive hypochondriac after his head injury in World War II…

Chiang Ching-kuo is often the target of Vogel. Whether in this sentence, which is so beyond wrong it is stupid:

When he was informed of Deng’s proposal, however, Chiang Ching-kuo was defiant: he repeated his intention to increase the military budget, build up his fighting forces, and eventually retake the mainland.

to the repeating of insults:

Deng explained that Chiang Ching-kuo could be extremely cocky.

to an Orwellian erasing of history. For instance, in the discussion surrounding this photo:

Vogel notes that Li Peng was with Zhou Enlai at Tiananmen Square. He completely ignores the identify of the first facing straight into the camera: Wen Jiabao (China’s current Prime Minister).

As Vogel does not let these propagandistic statements guide the narrative, the simplest explanation seems to be that he is repeating lines given to him by sources, in hopes of flattering those sources and gaining access to more information later.

This disappointing note is perhaps shared by the similarly hagiographic: The Generalissimo: Chiang Kai-shek and the Struggle for Modern China, It weakens an otherwise great narrative and forces the reader to be very cautious about what the author’s agenda is.

So Deng Xiaoping and the Transformation of China is an insightful, thought-provoking, and aggravating book. Recommended!

What Mao meant by “Left” and “Right”

How could Mao Zedong call the Chairman of the Communist Party, the President of the People’s Republic of China, and the Prime Minister of the People’s Republic of China “Rightist,” while also labeling the Soviet Union “Rightist,” while confiding to Nixon that he trusted governments of Rightists more than governments of Leftists?

Because those terms meant different things to Mao than they mean to us.

The iconic picture from Tiananmen Square, showing the Goddess of Democracy starring at Chairman Mao Zedong, is often interpretted to show Democracy starring down Communism. Rather, the Goddess and the Chairman were two faces of what intellectualls in the square would have identified as Leftism: a belief in the spontaneous power of the people to organize amongst themselves for the common good when an oppressive regime has been removed.

Both the portrait of the Chairman and the statue of the Goddess were positioned along the Central Axis, or “Dragon Line,” of Beijing. While they face each other, they both look at right angles away from Zhongnanhai, a former imperial garden and public park where the Communist leadership lives and works. At the time of Tiananmen the party machinery was led by Deng Xiaoping and Chen Yun, two survivors from the old days fighting the KMT. Deng and Chen were two faces of what reflective officials in Zhongnanhai would have identified as Rightism: a belief in the importance of an educated bureaucracy to guide a people basically incompetent to look after themselves.

In the days before the Massacre the protesters showed classic signs of what Mao would have termed the people’s spontaneous energy



(If the liberated area of Beijing actually stretched to the Third Ring Road, as Wikileaks implies, this would have included all of non-suburban Beijing in 1989. The term ‘Tiananmen Square Massacre’ may thus be as much of a misnomer as if the fall of 1871 Battle of Paris as the “Place de la Concorde Massacre'”)

Understanding that the Massacre was interpreted by all reflective individuals involved as a a Left/Right struggle is critical to understanding the 40 years that proceeded it, and the 22 since:

Under slogans such as “Down with one-party dictatorship!” and greatly aided by the KMT (full of spies, wildly corrupt, and distracted by the greatest purge in the history of 20th-century regimes), the Chinese Communist Party established “New China” in 1949. After referring itself to a time as simply the Republic of China, and then trying on Democratic People’s Republic of China, the new regime soon settled on calling itself the “People’s Republic of China.”

The Communists made many promises to gain power, and broke nearly all of them.

The regime was lead by its Chairman, Mao Zedong, with tremendous help from Returned Students (including Deng Xiaoping) and the Whampoa Clique (such as Lin Biao). Certainly highly-influential people, including Premier Zhou Enlai, acted as godfather to both factions. But 1949 China had not yet been purged of ideology, and both Left and Right tendencies were visible to Mao in the party.

Mao’s dilemma, as a Leftist, is that naive attempts to simply exterminate the bureaucratic class had failed as early in the Chinese Soviet Republic (1931-1937). The CSR’s attempt at Leftism failed for the same reason the first liberal Chinese Republic failed in the 1910s: material conditions had not created a sufficient number of liberals to lead the country in the 1910s, as it had not created a sufficient number of educated peasants to lead the CSR in the 1930s.

Mao’s struggle, from 1949 till his head, was to allow the Right to build up the State, the Military, and the Bureaucracy, to safeguard the development of the peasantry until the time they were able to spontaneously organize. Thus, Mao typically governed as a Rightist in order to build Leftism.

Mao’s right-hand man and nemesis, Zhou Enlai, had the opposite estrategy. Zhou’s great legacy was to rebuild the bureaucracy that had nearly been destroyed by a serious of revolutions following 1911. Mao needed Zhou as a Rightest leader to give the Leftist cohorts he was building up time to mature. Zhou needed Mao’s political power and cover to build a Rightist bureaucracy. Between the two of them they allowed 100 million Chinese to die, because neither was willing to abandon the other in their opposing quest to change China.

Mao’s first designated successor, Liu Shaoqi, was a Rightist whose prestige was greatly helped by Mao’s failed Left-wing shock, the Great Leap Forward. Unfortunately for Liu, he was one of the first victims of the Cultural Revolution.

Mao’s second designated successor, Lin Biao, spoke and agitated as a Leftist, while secretly believing in Rightism and governing as one, as well. Lin became one of the last victims of the Cultural Revolution.

Mao’s third designated successor, Wang Hongwen was a Leftist. He also was proof of Mao’s fear that the peasantry was not yet competent enough to govern. Wang was simply shoved aside due to general incompetence and political impotence, though he would be arrested, tried, and jailed (for a time) later following Mao’s death.

Mao’s fourth designated successor, Hua Guofeng, and Hua’s successor, Deng Xiaoping both attempted to straddle the Left-Right divide, but for different reasons than Mao.

Mao was a Leftist who used Rightists as tools. Hua was a harmless opportunitist whose only contribution was to promise to say whatever Mao would have said, and do whatever Mao would have done (really!). Deng, in contrast, viewed both the Left and Riught as tools to helping China stand up.

Deng, like Mao, was an earthy fellow. Both enjoyed shocking audiences, Mao with profanity and Deng with undiplomatic honesty. Both felt extremely comfortable granting and taking favor from former peasants. While Mao was a romantic who truly believed in the self-organizing ability of the people, however, Deng had traveled abroad and learned a much deeper lesson: being poor sucks. From watching his friends die at a French factory, to learning his father had to sell land to support his living experiences overseas, Deng keenly believed that China’s problem was not a distant bureacracy but grinding poverty.

Like Mao, Deng could attack the Bureaucrats when it suited him (and both called them “women with bound feet” at times). Like Mao, Deng could rely on Rightists to govern for him, or take away their power when it seemed to obstruct the economic power of the people. Unlike Mao, however, Deng lived without a romantic sensibility, and so could easily believe cases were disasterous levels of incompetence emerged from trusting the common people.

Deng’s lack of heart-felt Leftism lead him to be purged three times (and to the crippling of his son), but his usefulness as an attack-dog against bureaucrats, his focus on results, his ability to praise Mao as long as Mao lived, and his wide network of friends meant he was never permanently gone.

Mao used the right to built the Left, Zhou used the Left to build the Right, Deng used the Right and Left to build China.

In the present day, China has a Bureaucracy that runs the second-largest economy in the world. While it’s relative size is probably smaller than in ancient days, this is the greatest performance for the bureaucracy in China’s history since the Great Divergence.

Also in the present day, China has a population that is connected to the world and knowledgeable about it. While it’s relative freedom is probably smaller than during the Republic, this is the greatest performance for the people since the Nanjing Decade.

When I visit China I am struck by the admiration for Mao, Zhou, and Deng, though of the three only Zhou is considered to be perfect. Opinions on Mao range from “Mao is #1” to “Mao is Evil,” while Deng’s reputation is admiration for the economic miracle combined with sadness at the increase in crime, corruption, and class differences.

In both China and the West the terms “left” and “right” seem to originate with the idea that the “right” is in support of the ruling powers while the “left” is opposed. At the time these terms were first used, however, the sttaus quo in the West meant rich landowners whose origins traced to the feudal era, while in Chian the status quo meant the powerful bureaucracy. In both China and the United States the Left/Right divide relates to the citizen’s relation to power: in China Left therefore meant being opposed to the bureaucracy, while in the West Left meant being opposed to the rich or the socially normal.

When Stalinism is a Good Thing

The birth of modern science in the 19th century allowed the emergence of the modern state. Previously, the state could only spend extracted wealth in two ways:

  • Consumption by elites
  • Fighting other states
  • Charity

The evolutionary consequences of these actions have been described by Greg Clark in his history, A Farewell to Alms. In the context of generations, it was not obvious which of these is the best strategy. Pre-scientific production methods meant that the population would equal a land’s carrying capacity, adjusted for hygiene.  Thus, luxuries and wars that reduced the number of people through starvation and death lead to an increase in quality of life, as the society’s essentially fixed resources were shared by fewer people. Conversely, charity lead to an increase in the population, leading to greater misery among more people.

In this pre-scientific, zero-sum world, people still competed for power — two stable solutions seem to have been found. The first involved monopolizing trade routes, allowing a small but technologically advanced population to live in significant comfort. The Mongol, Dutch, English, and Americans were examples of this strategy. The second involved monopolizing access to land, allowing an even smaller but powerful elite to live off the taxes extracted from a larger, and more miserable, population. The Habsburg dynasties of Europe, and the Han of China, tended toward this solution.

The Scientific management of the economy was a breakthrough, new way of organizing a country, in which a rational allocation of resources would lead to economic growth. Public education rapidly spread this method, and by the early twentieth centuries the bureaucratic power needed to fix this solution had become ingrained in the United States, United Kingdom, France, Spain, Germany, Italy, Russia, and (through educated and westernized bureaucratic elites) most countries in the world. New Deal Liberalism, Socialism, Fascism, Aryanism, and Communism were all modern ideologies that assumed a scientific approach toward growth.

The last significant attempt to turn back this tide began in 1966, during Mao’s launch of the Great Proletarian Cultural Revolution (GPCR),  in which he purposefully destroyed the Party and State apparati which gave him scientific control over his country, and tried to turn back the hands of history.

The part of the CR that puzzled me when I called it “insane” was that nearly all obvious political objectives were achieved immediately. The President, the head of the military, the Party Chairman, the Mayor and Vice-Mayor of Beijing — the entire faction that had attempted to minimize Mao’s influence as a result of the Great Leap Forward were kicked out of power within a year.

If Mao had taken notes of Stalin’s purges, if he had instituted a scientific approach to terror, the history of the Cultural Revolution would have been radically better. Stalin went about rationally eliminating political groups he posed a threat to him — the Old Bolsheviks, the Trotskites, the Kulaks, the Generals, etc. By comparison, among Mao’s enemies were medicine, engineering, and Chinese characters.

While in Russian history Soviet Gigantism is a soulless epoch of architecture, in Chinese history it is a rare moment of sane civil planning. Gigantic public works assume that one is able to rationally control forces of nature through the application of mathematics.

The question is not one of power-maximization v. polity service. Indeed, I doubt Mao and Chiang Kaishek (CKS) would disagree with Louis XIV that “l’etat cest moi,” and see the dichotomy as an artificial one. Rather, Mao and CKS rejected rational planning, the strategic offense, the engaged executive, and other universal aspects of western management as foreign.

Mao and CKS only had exposure to Stalin as a source of funding, organizational support, and/or adversary. From 1921 to about 1945, the USSR was consistently more pro-KMT than the United States. It was the next generation of leadership — and in particular the Returned Students such as Deng Xiaoping and Chiang Chingkuo (CCK) — that actually were educated in a Stalinist system. Deng and CCK would exhibit a degree of rational inhumanity that was completely beyond Mao and CKS’s reach. A good example is political prisoners:

  1. Upon his accession to supreme power, Deng began a general amnesty that freed a variety of “class enemies,” including surviving officials of the pro-Japanese Collaborationist Government, KMT officials, East Turkestani officials, and Tibetan franc tirerus, but not supporters of Lin Biao. Thus, actual, unreformed enemies of the state were granted freedom, though heroes of the revolution whose only crime was to stop Mao at a time that Deng himself was in internal exile were kept in prison.
  2. Following (1), CCK denied applications for political asylum but active KMT members who were released from Custody by Deng, and censored an ailing CKS’s mails to prevent him from receiving petitions. However, CCK’s own protege Lee Tenghui had been a member of the Chinese Communist Party and had joined out of a “hatred of the KMT.” Thus, while the KMT hierarchy was composed of former Communist cell members, KMT political prisoners were forced to live either in China or in Hong Kong (if they could evade Crown border security).

I am not aware of CKS or Mao acting in such a Stalinist manner. Both men were stylized as Emperors — both were hailed with “Ten Thousand Years!” a public display of personal immortality that makes Hitler’s Thousand Year Reich seem humble by comparison. Stalin, Hitler, and for that matter Deng and CCK, shared an essentially mechanical and modern view of history. They are recognizably 20th century figures, and would be profoundly out of place in the 12 century. Mao and CKS both would have been happier in that world.

A last comment on purges: Mao’s purges differed greatly from Stalin’s in that (a) they were completed almost immediately, (b) outside the judicial system, (c) without blood. Removing any official was easy — Mao would ‘suggest’ they issue a self-criticism outlining their ‘mistakes’ (not crimes, mistakes), at which time the party would issue a censor, either a temporary reassignment or (at an extreme) stripping of party membership. Stalin’s victims would have greatly preferred this treatment!

The “craziness,” — that is the rational anti-modernism — of the CR was the targeted destruction on modern tools of state power. The Communist Party and People’s Republic were abolished as administrative entities, and the resulting ad hoc Red Guard committees were themselves banished to the countryside. One cannot imagine Hitler simultaneously destroying both the Reich and the Nazi Party, as we would expect him to somehow be acting in a modernist fashion, executing a rational plan with the expectation that his power would be greater at the end. Mao did not believe in western notions of planning or control, and attempted to eradicate the means of doing either. This is not unique to him — the Empress Dowager launched an almost identical campaign against her government that was known to the world as the Boxer Rebellion.

Taiwan, in contrast, benefited from the filial piety of the Chiang family. It was expected that CCK would be loyal to his father, and that CKS would transfer his power to his son as part of his inheritance. Thus, as conditions changed between generations, CCK was able to harness elements of power that CKS would not have had patience for (that is, planning and control).

An almost identical transition occurred between the Kangxi Emperor and his father, the Shunzhi Emperor, in the 17th century. In that case, filial piety allowed the Manchus to transition from a kinship-based tribal kingdom to a national-based Imperial elite. Similarly, the Chiang’s filial piety allowed the KMT to transition from a national-level government of warlords to an island-level Leninist state.

Stalinism killed ten million people in the Soviet Union. It may have been marginally worse than Nazi rule of eastern Europe. However, as a scientific ideology, it was infinitely better than the dead and violent end of Mao Zedong Thought.

Beijing, after 1976 and 1989

In China, Deng won. In Iran, "Deng" is certainly on the side of the protesters. For all the talk of an Iranian Tiananmen, the dynamic in Tehran is much closer ot 1976 (where the Communist government crushed demonstrators, and lost all legitimacy) than 1989.

The fruits of both the 1976 Tiananmen Incident and the 1989 Tiananmen Massacre are on display in Beijing.

Canon EOS5DmkII, One night in Beijing. from Dan Chung on Vimeo.

The hope for pro-globalization reforms in Iran depends on the current government in Tehran losing its credibility and legitimacy. If Tehran will ever be as synonymous with growth and openness and Beijing, the Supreme Leader should face the same road as Madam Mao.

The Consequences of the Tiananmen Massacre

First, it must be understood that Deng won. He triumphed over the Leftists, the Planners, and the Liberals, to reinforce the principles of party dictatorship and economic growth.


Deng Xiaoping was, at various times, the General Secretary of the Secretariat of the Chinese Communist Party, the Chairman of the Central Military Commission fo the Chinese Communist Party, the Chairman of the Chinese People’s Political Consultative Conference, and the First Vice Premier of the People’s Republic of China. Most imporantly, his rise in 1978 was also the rise of market reforms in Communist China.

Deng’s political philosophy combined Sun Yatsen’s theory of political tutelage (that China required an indeterminately long period of party dictatorship)
along with an appreciation of the ability of the market to better allocate resources than government dictate, in cases where public goods were not an issue. Deng was opposed to democratization, because it was inefficient, and ideologically-driven economic policies, they are are inefficient.

That is, Deng believed in (1) a party dictatorship and (2) whatever economic policies achieve the most growth. His enemy was inefficiency.

When analysts write China has “totally abandon[ed] its ideology,” they are either saying that Mao is more representative of the true nature of Chinese Communism than Deng, or that Soviet-style Communism is the ideology of Communism. The first is arguable, but as Deng was in high government office much longer than Mao, I think it is incorrect. The second is simply Sovietcentric.

Here is a brief history of Chinese politics, from the Cultural Revolution to now:

Chinese politics was first dived between Leftists and Pragmatists. The Leftists were either ideological (such as the Gang of Four) or opportunitist (such as Lin Biao, or Hua Guofeng). The Leftist wing of the Chinese Communist Party collapsed between 1971 (during Lin Biao’s bizarre coup attempt) and 1976 (when Hua was maneuvered into inviting Pragmatists to overthrow the Gang of Four).

The Pragmatists themselves were divided into Road to Serfdom-style Planners (who favored a closed, command-and-control economy) and Liberals (who argued for growth through market forces, with political openness serving as a check). Deng was in between these two factions, agreeing with the Planners on the importance of a party dictatorship, and with the Liberals on the importance of the free market.

The Protests of 1989 was the greatest challenge to Deng’s combination of party dictatorship and economic growth, as both factions actively attempted to undermine each other. For a while, the Planners seemed to be emerging on top. The liberal General Secretary of the Chinese Communist Party Hu Yaobang was ousted in 1987, and his replacement, Zhao Ziyang was arrested two years later.

The Tiananmen Massacre was the destruction of the influence of the liberal wing of the Pragmatists of the Chinese Communist Party.

Three years later, Deng likewise marginalized the Planners of the CPP. The Southern Tour of 1992 did to the planners what the Tiananmen Massacre did to the Liberals. From Wikipedia:

His southern tour was initially ignored by the Beijing and national media, which were then under the control of Deng’s political rivals. President Jiang Zemin showed little support. Challenging their media control, Deng penned several articles supporting reforms under the pen name “Huang Fuping” in Shanghai’s Liberation Daily newspaper, which quickly gained support amongst local officials and populace. Deng’s new wave of policy rhetoric gave way to a new political storm between factions in the Politburo. President Jiang eventually sided with Deng, and the national media finally reported Deng’s southern tour several months after it occurred. Observers suggest that Jiang’s submission to Deng’s policies had solidified his position as Deng’s heir apparent. Behind the scenes, Deng’s southern tour aided his reformist allies’ climb to the apex of national power, and permanently changed China’s direction toward economic development. In addition, the eventual outcome of the southern tour proved that Deng was still the most powerful man in Chin

China is currently as Deng would have had it: a party dictatorship dedicated to economic growth. The collapse of the Leftists in 1971-1975 paved the way for the Pragmatists to take power, and the collapse of of the Liberals in 1989, and the Planners in 1992, sharply limited the influence of those opposed to Deng’s line.

Boris Yeltsin was the Deng Xiaoping of Russia

Russia has lost her “Deng Xiaoping.” She lost her chance at a “Jiang Zemin.” Instead, she got Putin.

No Jiang Zemin for Russia
No Jiang Zemin for Russia

Boris Yeltsin was China’s Deng Xiaoping. Like Deng, he introduced dramatic free-market reforms that opened up investment with the west. Yeltsin, like Deng, initailly worked but eventually eclipsed the party-line communists of a previous era (Liu Shaoqi and Mikheil Gorbechev). Yeltsin, like Deng, cleverly managed political reforms, at some times leaning towards democracy (to put pressure on unpopular political opponents) and at other times leaning towards authoritarianism (to prevent radicals from changing course).

Unfortunately for Russia, Yeltsin proved as physically frail as Deng was physically dynamic. Yeltsin’s alcoholism (an inherited condition) and a back injury (an environmental one) compounded each other, and led to a shift in political power a generation early. In China, Deng realized that change was a generational affair, and so an entire generation of successors was bypassed (such as Hu Yaobang) until a new one that had politically matured under the reform period was ready to assume power (such as Jiang Zemin). In Russia, by contrast, Yeltsin was too physically weak to hold on, and Russia got Putin instead.

It has been clear for years that Putin is dismantling Yeltsin’s diplomatic legacy. The Moscow Times has a good piece on how Putin is dismantling Yeltsin’s economic legacy, too:

Russia’s nationalistic energy policy after 2003 has stalled the development of major new energy investments (apart from the Sakhalin projects, which date back to the Boris Yeltsin era). Gazprom and Rosneft have financed themselves with foreign debt rather than with equity capital, accounting for almost one-fifth of Russia’s corporate foreign debt of $490 billion. Gazprom’s aggressive pricing and delivery disruptions have scared away customers, reducing the demand for its gas.

Huge public funds are being diverted to state corporations, which either hoard the money or siphon it off. In their new book “Putin and Gazprom,” Boris Nemtsov and Vladimir Milov have offered a staggering and credible account of how Putin and his friends pilfered assets of $80 billion from Gazprom during his second term as president. Investors have taken notice, slashing Gazprom’s market capitalization from $350 billion last spring to $70 billion at its nadir. Although Russia is the 46th-richest country in the world in per capita terms, it is ranked 147 out of 180 countries on Transparency International’s corruption perception index for 2008. Only Equatorial Guinea is both richer and more corrupt than Russia.

Under Putin, transparency has systematically been reduced, and we no longer dare to trust the government’s public statements on its currency reserves. Officially, they have declined by $163 billion, or 28 percent, from $598 billion in early August to $435 billion in early December. But when Vneshekonombank was given $50 billion of state reserves to help Russian oligarchs with refinancing, nothing was deducted from the official reserves as it should have been. In an article on Gazeta.ru on Oct. 24, Alexei Mikhailov plausibly claimed that another $100 billion or $110 billion of “other reserves” had been transferred to the banking system and were nothing but rubles. To my knowledge, no official denial has been issued. If that were correct, the reserves have fallen by more than half to less than $300 billion, but the government sheds no light on this.

Russia’s largest corporations have turned out to be much more leveraged than anybody had thought. The government has made clear that it will refinance their foreign loans to secure “strategic” ownership. So far, $13 billion has been paid, out of which United Company RusAl has received $4.5 billion and Altima $2 billion, but such private pledges are huge. Vneshekonombank has $37 billion left to spend, but it has already asked for $30 billion more from the government, and more is likely. Thus, Russia can swiftly lose more than $100 billion of reserves.

Instead, Vladimir Putin
Instead, Vladimir Putin

Putin has persistently denied that anything is wrong with the country’s economic policy, while everything but its fiscal policy has been wrong. Domestic and foreign businesspeople realize that he does not talk about reality, which undermines confidence in the Russian market. Without free public debate, rational policy decisions are unlikely.

Incredibly, the government is repeating its mistake from 1998 to maintain a pegged exchange rate in the face of falling commodity prices. Until this summer, this policy provoked speculative capital inflows that boosted the money supply excessively and propelled inflation to 15 percent. Now, the pegged exchange rate, which is probably overvalued by up to 25 percent, promotes speculative capital outflows, quickly reducing the currency reserves. Devaluations in very small steps only convince the market that a major depreciation is inevitable. The coming combination of loose fiscal policy, negative real interest rates, current and capital account deficits and an overvalued ruble is unsustainable. The incentives for capital flight are overwhelming.

The global economic crisis is testing Putin’s system. He has undermined the ground under the house Yeltsin built, transforming the country into a house of cards ready to tumble. He has wasted the oil wealth rather than investing it in infrastructure, health care, education and law enforcement reform. Russia needs fundamental change; above all, it needs to uproot — or at the very least contain — the country’s pervasive corruption, which has gotten markedly worse under Putin. Nothing would serve the country better than the retirement of the failed prime minister, but that is evidently not in the cards.

When Boris Yeltsin gave way to Vladimir Putin, Russia lost her chance to continue opening up to the world. Instead, she faded into the gap of the global economy, and is once again a country that produces nothing war, death, and vodka.