Socialism and the end of the perpetual reform state in China
Journal of Contemporary Asia;
Manila; 2001; Harry Williams;
31
2
161-195
00472336
Politics
Socialism
Governmental reform
Future
Social conditions & trends
Geographic Names: China
Abstract:
Volume:
Issue:
Start Page:
ISSN:
Subject Terms:
Williams examines the future of socialism in China. China is not socialist today, nor
are its reforms likely to bring about socialism, but China has been "reforming" for
over two decades, and Williams argues that reform is no longer the appropriate
description for the process of change in China.
Full Text:
Copyright Journal of Contemporary Asia 2001
[Headnote]
[Abstract: This article examines the future of socialism in China. China is not socialist today, nor are its reforms
likely to bring about socialism. Indeed, China has been "reforming" for over two decades, and the author argues
that reform is no longer the appropriate description for the process of change in China. Change in China is
increasingly characterized by uneven, often unpredictable events leading to rapid changes in some areas and
stagnation in others. The institutions created over the post-Mao period contain volatile contradictions, and any
socialist movement in China must take advantage of the contradictions and volatility to push for an agenda that
promotes equality, democracy in both politics and economics, and international peace. These contradictions are
examined empirically using the legal system, the class system, and the international system as lenses into the
situation in China today and the possibilities for change. While there is a clear trend toward capitalism, this trend
faces opposition that will not easily be overcome. The ultimate power of any progressive movement will depend
on its ability to organize popular support for alternatives to China's trajectory.]
This essay examines the prospects for socialism in China. I am going to bracket the very
contentious task of making a precise definition of socialism. For the purposes of this
article, I define socialism loosely: socialism means equality and democracy in society,
politics and the economy, and insistence on peace among nation-states. By these criteria,
China is not socialist today, nor is it heading towards socialism. In the main section of
this article, I will use an extended examination of the legal system to demonstrate the
trend towards capitalist institutions, as well as the exceptions to this trend which might
become seeds for a socialist alternative. Specifically, I will examine how rural enterprises
have been subjected to capitalist laws written in Beijing, while at the local level,
experiments in communal ownership of rural enterprises demonstrate a desire for a noncapitalist alternative. I then turn to the ways the Chinese state uses the legal system to
cabin China's growing protest movement into government-controlled fora such as courts.
Any socialist movement must use these new openings for legal protest while also
recognizing their fundamentally conservative nature.
Next, I look at the class situation in China, and argue that a socialist movement in China
must dispense with simple notions of working-class solidarity and deal with the
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complicated relationships between workers in state-owned enterprises, foreign-invested
enterprises, and rural enterprises, peasants, and the emerging middle class. Finally, I
conclude with a brief discussion of China's relationship to the international system.
Despite its size, China has not used its power to modify the neoliberal Washington
consensus. Instead of China changing the global system, the global system has changed
China, a situation that progressive movements in China must seek to rectify.
To understand the possibilities for socialism in China, it will be helpful to think about
what China may look like in the future. Before turning to a substantive analysis of China
today, here I sketch four alternative futures for China.
China in 2030: Imagine the year is 2030, and you look up "China" in an encyclopedia.
What do you expect to find? How will China look to observers three decades from now?
Below, are four possible entries in this future encyclopedia.
Utopia, Capitalist Style: China's economy has grown rapidly over the past fifty years, and
China is now the world's largest economy. Economic growth has greatly increased the
living standards of the Chinese people. In many sectors of the economy, China is among
the most advanced countries in the world. China, Hong Kong, and Taiwan (the latter still
politically separate, but tightly integrated with the mainland's economy) have many of the
world's largest banks and lead the world in electronic commerce. In the United Nations
and international economic fora, China stands equal to the United States and Europe.
After 2000, steady economic growth and movement toward the Rule of Law led to the
gradual democratization of China's one party state. Although the Unity Party, as the
reformed Communist Party now calls itself, has won every national election, several
smaller parties have been able openly to challenge the Party's platform in free and fair
elections.
Of course, Chinese society is not perfect and problems remain. Income inequality
remains high, with many cities surrounded by ghettos of migrant workers. Much of
China's interior remains backward, and much of the money made in coastal regions still
depends on the exploitation of the natural and human resources of the interior. China's
population is no longer growing at any significant rate, but the tremendous number of
people it must support have put great strains on the natural environment and social
security system. These problems, while important, represent China's progress - they are
the typical problems of high and middle income countries.
Middle Way for the Middle Kingdom: In 1978, Deng Xiaoping set out to build "socialism
with Chinese characteristics," and fifty years later, he and his successors have built a
unique hybrid of statist socialism, capitalism, and Chinese tradition into a world
economic powerhouse. While China is one of the world's great trading nations, and
markets largely determine the distribution of goods, services, and income, the state
continues to play a larger role than in the capitalist states of the west. Equally important,
Chinese family businesses, run in a style similar to way they were run in imperial China,
have helped create a unique corporate-familial enterprise structure that combines
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anonymous market transactions for the company's goods and services with intrafamily
welfare distribution.
China remains a largely regional power. It is respected for its relative power and peaceful
approach to international disputes. In conjunction with other Asian states, China has led
the movement to limit the power and reach of international political organizations. China
has also been at the forefront of the movement to limit free trade in order to allow
"mercantilist" national economic policies, such as China's program of limited outside
access to domestic electronic commerce markets.
From Beijing to Rome: China's government in 2030 consists of strong state, run by the
Communist Party. Drawing selectively on the Party's revolutionary tradition, the
individual citizen is expected to sacrifice for the good of the state. Despite widespread
economic corruption, the Communist Party is a relatively disciplined political grouping.
Party leaders and their children control state corporations, weapons manufacture, and
banking. China's army is mainly concerned with maintaining its political connections
inside China and its economic empire. The PLA foments nationalism to justify its
economic role. However, China's offensive military actions remain largely symbolic, and
many have speculated that the leadership is less interested in regaining the "lost territory"
of Taiwan than maintaining power by playing on the national pride of China's people. In
all of these ways, the China of 2030 reminds many observers of Italy in 1930.
The People's Commune of China: China continues to defy predictions from western
governments and academic observers that its socialist system is bound to fail. Among the
most equal countries in the world in terms of income and property distribution, China has
also closed the gap between regions, between men and women, and between Han Chinese
and minority groups in China. Observers consider China's system of government
unwieldy, but it is conceded to be the most democratic on earth. China's example has
encouraged other developing nations to experiment with new democratic and egalitarian
forms of political and economic life, and even put pressure on richer nations to place a
higher priority on equality, diversity, and ecological stewardship.
China in 2030 may resemble one of these scenarios. It is more likely that it will have
some characteristics of each of these schematic possible futures, and the scenarios above
are meant to be suggestive, not exhaustive. The political system, the economic system,
China's relationship to the international system, the relationship between Han Chinese
and minority groups in China, the relationship between China and Taiwan, gender
relations, and the ecological system are all factors that will influence the course of
Chinese history. Many of these factors are considered in detail in the sections of the legal,
class, and international system. The first question I want to address, however, is whether
these factors influence China in the course of extended reforms, as we have seen over the
last two decades, or will they be part of a more dramatic, less controlled process of
change?
The End of Reform: China has been "reforming" since 1978. This reform era is over.
However apt the term reform may have been, it is no longer useful. To understand the
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exhaustion of reform as a description of China, or even as a metaphor or shorthand name
for China's political, economic, and social changes, we must first delineate the
assumptions of reform. A reform model assumes three things: 1) a stable reference point
for proposed changes; 2) a gradual, incremental, and largely directed process of change;
and 3) a relative consensus on the goals of change. None of these assumptions holds
today.
First, there is no agreement today on what is being reformed. For some, the object of
reform is still the vestiges of the Soviet model, symbolized by state-owned enterprises
(SOEs). For others, it is the Maoist system and its emphasis on equality that must be
reformed. In other areas, reform consists of reforms of previous reforms, as in
agriculture. What these different positions show is that China today is a fractured, uneven
set of institutions with little holding them together beyond a national fear of
disintegration. This hodge-podge of institutions cannot be discus"ed productively in
terms of reform. Reform assumes change away from something, from some starting point
that is collectively known. Since the institutions in China today are so diffuse and poorly
understood, reform is an inappropriate description, or metaphor, or short-hand
expression, for changes in China's political economy.
Second, reform assumes a gradual, incremental process of change directed by conscious
human decisions. The days of such measured change in China are past. Social tensions
have reached a point where compromise will satisfy fewer and fewer people and thus be
more and more difficult to achieve. If the metaphor of the reform period was feeling one's
way across a stream, staying dry by stepping from stone-to-stone, the new era is
characterized by leaping across the stream. When reformers were trying to cross a stream
by stepping on stones, they assumed they could see that next stone and tell society to
place its collective foot there. That is no longer true. Creating a national social security
system, for instance, is a leap - a leap of faith in the ability of markets to meet China's
needs and a jump in the level of the national government's involvement with individual
welfare. From today, change will be quicker, and some changes will be spectacular
failures - sometimes policy in China is going to leave many Chinese sitting in the middle
of the stream, soaking wet.
The third problem with reform is that it assumes common goals. Tensions in China are
great not only because of the disparate effects of two decades of reform, but because
there is no longer agreement on where China is heading. The Party once appealed to
many sectors of society, from workers in state enterprises to farmers to idealistic
socialists. Today, it appeals only to careerists of the dullest sort, those afraid to take the
risk of a career trying to make money in the market, or afraid to organize for real political
change. Except for bureaucratic careerists, Party membership is merely a perk of success.
Entrepreneurs, artists and scientists become Party members in the same way rich and
famous people become members of private golf clubs in the United States. The Party is
dead as an institution that can promote a vision of China that will appeal to a broad crosssection of Chinese.
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Indeed, reform is dead because there are no common goals. Democracy, rule of law,
social equality - through these vague slogans China's social groups are demanding their
own programs, programs which differ radically from one another. Each group tries to
promote themselves as bearers of universal claims, but these programs are, in their details
if not their rhetoric, designed to benefit mainly their own social class or group.
The key to understanding China today is to understand it as the fractured, contradictory
whole that it is. The only glue holding China together, and the only reason the
Communist Party remains in power, is the fear of China falling apart. The scar of national
fracture, and of imperialist humiliation, is deep enough to hold back the forces that are
pulling China apart. Yet the psychological need for wholeness is also deep enough to
bring about chaos - chaos on frontiers such as Taiwan, Tibet, and Xinjiang, areas where
tensions will rise if Han China does not find a way to moderate its "will to unity," a unity
that encompasses many areas where the native population has no desire to be BeijingChinese.
The era of contradictions is upon us. We must understand the contradictions in the
process of change in China, in the positions the Chinese state takes internally and
externally, the contradictory position of actors in China's political and economic systems,
and the contradictions within the institutions that make up China's political economy.
China is in a state of rebellion - but rebellion does not necessarily mean change. As
Webster's dictionary tells us, rebellion is "open ... and usually unsuccessful defiance of or
resistance to an established government" (Merriam-Webster's 1993: 974, emphasis
added). China's rebels are inchoate but mass challengers to some subset of the Party/
state's power - the individual enterprise, the law banning this religion or that, the failure
of government regulators to prevent a stock fraud. Where these rebellions bring China
will be contingent on what limits are set by national and international power structures,
and whether the rebellions become less sporadic, more focused, and able to gain support
across social groups.
Rebellion is, by definition, extra-legal activity. The next section will examine the current
developments in the legal system. One of the Party's main goals in developing the legal
system is to channel the diffuse/mass movements mushrooming throughout China into
official channels, where they can be controlled. The other goal is to further the integration
of China's economic system with that of international capitalism. As we will see, both of
these goals are still some way away. We begin with an analysis of the legal system and its
relationship to the economy.
Socialism and the Legal System: Legal "reform" is a hot topic in China today. Producing
the statutes, institutions, and actors that will lead to the coveted Rule of Law has garnered
support from forces within and outside of China (Xu, 1999). As with the rest of the
reform program, terming the changes in the legal field reform misnames them. Movement
toward the Rule of Law and the other programs that go under the rubric of "legal reform"
are not moderate, cautious steps - China is not feeling its way stone-by-- stone across the
legal stream. Instead, legal change produces and reflects sometimes radical
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reconceptualizations of economic, political, and social relationships. In this section, we
will examine the legal realm, demonstrating the exhaustion of the reform metaphor and
how the contradictory character of change in China opens opportunities for advocacy of
traditional socialist goals such as equality and economic democracy.
Law codifies economic and political relationships. Law is a part of the repressive
apparatus of the state, but also plays a positive, legitimating role (Gramsci, 1971: 247).
Law, in short, is the routine application of the state's physical power to the population
(Foucault, 1980:14). In the criminal realm, police and prisons manifest the state's power,
while in the civil realm the state protects property rights and enforces contract claims.
Laws reflect real relations of power in society, and codify and reinforce the dominance of
groups with access to state power.
Yet law is never a perfect reflection of the interests of the dominant group in society, and
law does not merely reflect (or create) the relationships between social classes in the
economic realm. Law cannot merely reflect the interests of the dominant social group
because no class has cohesive interests (Poulantzas, 1973: 85-85). For instance, the
owners of manufacturing capital may desire tariffs and other legal protections from
imported goods that compete with their products. Owners of financial capital, in contrast,
may favor more open international trading regimes. Thus even if a ruling class was aware
of itself as a ruling capitalist class, it would still have internal divisions that would render
it impossible for law to merely reflect the wishes of that class. A second problem with the
idea that law reflects social power relations is that law must be interpreted and
implemented. Each and every act of interpreting law will yield a slightly different result.1
Moreover, the enforcement and implementation of law is likely to vary from place to
place and over time.2 Because class interests are not homogeneous, and because
interpretation or implementation will always vary, law cannot merely reflect class
interests.
A final reason that law cannot merely reflect the base applies especially to Marxist
theories of law. Marxists see law as part of the socio-political superstructure that rests on
the base of economic relationships. This leads to what Tushnet has called the "The
Problem of Law as Constitutive." As Tushnet explains the problem:
How can one simultaneously believe all of the following propositions to be true: (I) The
base determines (in some strong or weak sense) the superstructure; (2) law is an element
of the superstructure; (3) the base consists of the relations of production; and (4) relations
of production are defined in terms of ownership of the means of production? (Tushnet
1983: 285)
Legal terms seem to constitute the base, but the base - that is, the economy - is supposed
to determine the legal superstructure. Thus property relations in the superstructure cannot
merely reflect the economic relationships at the base because property, the element
supposedly reflected, itself is a legal term and therefore part of the superstructure.3
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While law does not merely reflect the economic, it is not completely separated from the
base or from the relations of power within society. Instead, law is a field of struggle
between classes and class fractions, and a particularly important one because of its unique
combination of rhetorical and physical power. Law is a potent ideological weapon,
sanctioning what is "fair" and "just" in a social system, backed by the power of the
repressive apparatus of the state to compel compliance with the law (Carnoy 1984:91). It
is thus well worth our time to examine the development of the legal system in
contemporary China, because law can tell us much about the possible role of socialism in
China's future.
China's Legal System Generally: Law in China is underdetermined by statute, precedent
and procedure, making the Chinese system especially open to ideological struggle.4
Another way of stating this is that law has relative autonomy from the economic base it is
not determined by the base in any mechanical way, yet the base has a decisive influence
on legal structures. The Chinese legal environment has been, and remains, one which is
characterized by a high degree of uncertainty. China's legal system is based loosely on
the continental European Civil Law system; it is, however, a Civil Law system with a
difference: in China, there is no Civil Code. Although the Organic Law, along with
numerous new laws over the past twenty years have partly filled this void, it is still
perhaps the singular feature of China's legal system. A second important factor which
makes Chinese law underdetermined is the low, albeit rapidly developing, level of
China's legal apparatus.5 China's corps of lawyers is growing almost as rapidly as its laws
and regulations.6 Meanwhile, more attention is being focused on the quality of the
judiciary.7 Despite these developments, there is a shortage of lawyers, and corruption
remains systemic in the judicial branch (Chen, 1999: 3; Gallaher, 1997). Political
interference further undermines the independence of the judiciary,8 and this lack of
independence reduces the legitimacy of law.
One specific example of this underdetermination is that until 1999 there was no uniform
law of contract in China (Scogin and Braude, 1999). Even after the passage of the
Contract Law, there are many types of standard business contracts, including contracts
with foreign investors, which are still subject to other statutes, sometimes in addition to,
and at other times in place of, the Contract Law. Figuring out when one law supercedes,
supplements, or complements the Contract Law is a typical challenge facing those trying
to navigate China's underdetermined legal system.
Law is crucial to creating and legitimating economic institutions.9 This helps explain the
widespread interest in China's legal transformation, particularly the attempt to instill a
system of "Rule of Law."10 The Rule of Law (ROL) can be defined as "a system in
which the laws are public knowledge, are clear in meaning, and apply equally to
everyone" (Carothers, 1998: 96). Officials in the U.S. State Department, human rights
activists, and Chinese and Western academics look at the Rule of Law (ROL) as a logical
step toward building Chinese democracy. Economists, and many legal academics, see the
Rule of Law as important for establishing secure, stable property rights and a positive
environment for business (Sachs, 1998: 5). The Rule of Law is desirable because it means
consistency and predictability. ROL protects both property and individuals, and thus
7
allows for greater economic growth and personal security and freedom.11 Rule by
Individuals, in contrast, is arbitrary and capricious, and leaves people and property
vulnerable to both state-sponsored and private oppression and usurpation.
The Rule of Law and the Economy: Law is influenced by, but not completely determined
by, the social relations of power. In China, an underdetermined legal context provides
different social fractions with the opportunity to influence the development of China's
legal system. Yet, despite all the official rhetoric about "Socialism with Chinese
Characteristics," there is little that is specifically either socialist or Chinese about the
developing legal code. Instead, under the rubric of Rule of Law, China is adopting
capitalist laws virtually identical to those in the west.12 This process is not and cannot be
completely "successful" in terms of mirroring Western law. Every social institution
contains "traces" of its past which makes them unique. All institutions also embody
contradictions that can be exploited by social actors to provide support for alternatives
within the dominant system. Both the trend toward capitalist law and the availability of
alternatives within that framework are apparent in the rural enterprise (Township and
Village Enterprise or TVE) sector.
Recall for a moment the scenarios we began the article with. In one scenario, China
becomes a capitalist quasi-utopia. A related trend in the TVE sector is an emphasis on
property rights as the key to successful rural enterprises. In another scenario, traditional
Chinese social patterns shaped the economic sector. A related trend in the legal field is
the emphasis on the community, especially the village community, as the basis for TVE's
economic success. Yet another scenario portrayed China as a socialist quasi-utopia.
Again there is an analogous trend in the legal field, where creative TVE corporate
structures have been created on the hybrid basis of community, individual, and worker
ownership. The following sections deepen the analysis of the legal sector through a
detailed examination of trends in TVE law.
TVE Overview: TVEs are crucial to China's economy, and have been an important
source of economic growth and jobs over the last twenty years. In addition, the legal
system is seen as crucial to the on-going success of TVEs (Bao, 1998). But while rural
industrialization is one of the great successes of China's capitalist-style reforms, TVE
origins go back to one of the great debacles of utopian Maoism. During the Great Leap
Forward (1958-1960), Mao called on every village (then Commune) in China to establish
their own steel works, so-called "backyard furnaces" (Meisner, 1986: 227-241). The
backyard furnaces of the Great Leap, for all their irrationality, are the direct ancestors of
today's TVEs. As both Mao and reform leaders have recognized, rural industrialization
absorbs surplus labor that is freed through more efficient farming techniques, minimizes
migration to cities, increases rural standards of living, and provides inputs which increase
agricultural productivity. While backyard steel furnaces disappeared rather quickly, rural
industry continued to exist under the commune system throughout China, forming the
basis for post-Mao TVEs.
The rural areas changed rapidly after Mao's death in 1976 (Meisner, 1996: 220254). From
1977, there was rapid movement away from the communal system and towards family
8
farming. In 1984, ownership of industrial enterprises owned by the communes and
brigades was transferred to towns and villages. Economic growth in the TVE sector has
been impressive by any measure. In 1978 rural industry employed 28 million people,
while in 1998 there were 20 million TVEs with 125 million employees, creating 28% of
China's GDP and 30% of rural income (Xinhua, 1999b).
Neoclassical Approach to TVE Growth: Neoclassical economics has become the
ideological foundation of contemporary capitalism (Schamis 1991), and hence for the
proponents of China's capitalist future. For neoclassical economists, clear property rights
are essential to economic growth. For some economists, all the aspects of ownership must
be combined in one "principal" to insure efficiency, while for others, it is simply
important that each right in the ownership bundle is clearly defined (Cui 1998: 6-8).
From this perspective, China's TVEs lack clear property rights and thus are economic
failures. During the first decade of reform, however, TVEs were the engine of China's
economic growth. The reality of TVE success has led to a search for hidden efficiencies
that explain TVE dynamism. The most common explanation from the neoclassical school
is that China's slow resolution of ambiguous property rights resulted in a temporary
advantage for TVEs, reducing TVE transaction costs in China's semi-marketized
economy.13 These reduced transaction costs were mainly applicable to the early,
transitional period of China's reforms.
In the reform period, China's state firms remained tied to central government control, at
first via the plan and later by political connections. Meanwhile, private firms face
political obstacles and popular backlash. Collective firms, such as some TVEs, maintain a
middle ground. Unlike state firms, TVEs are largely free from central plans and able to
devote their entire output to economic markets. Unlike private enterprises, however,
TVEs have political connections which allow them more security than private
entrepreneurs. Local governments depend on TVEs for revenue and jobs, and, unlike
private enterprises, they are "semi-socialist" and therefore not subject to confiscation.
Indeed, many TVEs are apparently private enterprises which have been registered as
TVEs to gain the protection TVEs enjoy (Xinhua, 1998).
Cultural Explanations: In scenario two, China's unique economy was largely driven by
communal enterprises run along lineage lines. Some observers have seen TVEs success
as based in the family-communal characteristics of Chinese society. Xu Chenggang, for
instance, begins his analysis by defining TVEs as "vaguely defined cooperatives." The
chief characteristics of these cooperatives are the deep involvement of the community
government and an ill-defined legal system (Xu, 1995: 63). Xu argues that TVEs are
efficient, however, despite their ill-defined property rights (Xu, 1995: 65). Chinese
culture explains this discrepancy between economic theory, which posits that these
murky property rights must be inefficient, and the empirical reality of TVE efficiency.
Specifically, it is the Chinese cultural propensity to solve conflicts "internally, without
explicit rules, laws, rights, procedures and so forth," that has allowed TVEs to thrive in
what is, from an economic and legal standpoint, a very difficult situation (Xu, 1995: 79).
Xu attempts to further bridge the gap between economic theory and cultural explanation
by arguing that Chinese culture creates an environment that simulates an iterated
9
(repeating) game, while property rights theory has traditionally focused on single-play
games (Xu, 1995: 80).
Xu's solution to the dilemma of TVE success is ultimately unsatisfactory. First, Xu's
theory is too vague and general to encompass the myriad TVEs existing in diverse
villages throughout China today. Are factories in Shenzhen making shoes for Nike to
export around the world really like a traditional Chinese village? In addition, Xu's notion
of culture is vague. Cultural explanations demand great specificity because culture is too
broad a concept to have much explanatory power.14 Xu fails to provide this specificity.
Finally, if Xu's hypothesis were correct, we should find that state-owned enterprises,
which have a very communal atmosphere, would also benefit from Chinese culture, yet
state industry has been an increasingly weak sector of China's economy over the reform
period.
TVEs as a New Type of Socialist Property: TVEs have also been seen as a harbinger of
socialist renewal in China. The property situation in TVEs can be complex. While formal
ownership is in collective hands, actual management might be controlled by an individual
or family. Other investors, such an individuals, other companies, or the government, may
have economic rights but no right of daily control of the TVE. Could these complex
property rights, which neoclassical economics sees as an obstacle to TVE development,
help create a new socialist economic form?
The social and legal theorist Roberto Unger argues precisely that TVEs are the harbinger
of the "disaggregated" property that will be characteristic of a future progressive (or
socialist) economic system (Unger, 1998).15 Unger argues that rather than abolishing
private property, progressives need to break up the rights associated with property, and
vest these powers in different groups.16 Unger's program is quite interesting as a possible
path to the traditional goals of socialist movements, and since he has written about China,
it is worth examining Unger's work in greater detail.
The disaggregation of property rights is part of the democratization of the economy
sought by Unger's program, which he terms Democratic Experimentalism.17 This
disaggregation will take place in the course of a progressive decentralization of access to
productive resources and opportunities (e.g., the changing relationship of finance to
production). The goal is to lift up backward sectors of the economy, not just in terms of
consumption but also in access to productive resources. As these programs are deepened
or radicalized, different property regimes will emerge. For example, public investment
funds might become the center of a small network of firms which compete with each
other in selling to consumers but cooperate on issues which offer economies of scale,
such as research and development. These funds would have some rights in the firms, and,
because the funds are public, the public would be assured of a say in development of the
regional economy, down to the level of the firm.
The general thrust of property reforms, then, decentralizes and democratizes economic
opportunities and access to capital and productive resources, and also produces a
decentralized partnership between government and private parties. In the early stages of
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democratizing the economy, an intermediate level of capital funds would probably be
established. As time goes on, deals between firms and these intermediaries would
produce alternative regimes of property. These alternative regimes of property would
continue to exist experimentally within the economy; thus a single economy could
contain multiple conceptions of legal property rights.
It is in the context of this theoretical program that Unger finds practical significance in
China's TVEs. What from the perspective of neoclassical economics are unclear property
rights might be, for Unger's progressive democrats, a democratization of the economy. At
least on paper, TVEs seem to represent new forms of property that are neither pure
private property nor state property. For instance, many TVEs have been converted to
shareholding cooperatives, where ownership is divided between labor shares, state shares,
and private shares.18
But these reforms in China, as Unger admits, lack any political or even rhetorical force to
further or deepen them: "The material of institutional innovation is there lying around,
ready to be taken as a starting point for the development of an alternative. It remains,
however, truncated by the consequences of a political paradox" (Unger, 1998: 105).19
While imperfect, TVEs remain important as "an original form of association between
government and 'private' initiative" that "shows how quasi-public entities can compete
and innovate in a market just as well as traditional Western-style firms" (Unger, 1998:
106). The paradox is that while the Chinese regime stifles democratic economics, the
inchoate institutional anarchy in China today creates the opportunity for economic
experiments that central government officials and their policy advisors would oppose
because they are not based on sound, "scientific" western neoclassical economics.
China's Legal Response: If observers have seen TVEs as pregnant with various
possibilities, the official government response has been much less imaginative. Indeed, as
is typical of virtually every economic question in China, the government holds to a
basically neoliberal ideological line on TVEs, although it rarely has the power to carry
these policies out in more than a few test sites. A Ministry of Agriculture report outlines
an orthodox neoclassical economic analysis of problems in the TVE sector. The report
notes four problem areas (Xinhua, 1997). First, TVEs invested without regard to market
needs or possible returns, leading to overinvestment. Second, poorly defined property
rights led to performance and incentive problems. Third, many TVEs suffered from poor
management, high debt, poor quality and low efficiency. Finally, excessive pollution had
become a major problem with TVEs. Other reports noted similar problems, such as low
quality products, poor technology, and a lack of qualified technical personnel (Xia Jun,
1998). There were also problems of leadership succession, with well-run collectives are
having trouble finding replacements for aging leaders (Zhao, 1997). By the end of 1997,
520,000 rural enterprises, one third of the total, had been sold, annexed, declared
bankrupt or transformed into shareholding cooperative companies (China Daily, 1998).
Given these problems, the solutions seemed relatively clear, and, unlike the difficulties
experienced in the state-owned sector, amenable to statutory changes that would result in
better economic performance. Administration had to be separated from management,
11
operating and motivational mechanisms within enterprises had to be optimized, and care
had to be taken to prevent the loss of, and encourage the increase of the value of,
collective assets (Xinhua, 1997). Put simply, "Township and town enterprises" ownership
and autonomy in management should be protected by laws; units and individuals are
prohibited to occupy the properties of township and town enterprises. The method of
achieving these goals was a new Law on Township Enterprises. The development of laws
relating to TVEs has seen a movement toward capitalist norms, especially an emphasis on
property rights. However, the chaotic and largely unplanned explosion of TVE corporate
forms in various locations has prevented the Chinese government from merely
eliminating the unique aspects of TVE structure. As we saw, Unger has seen TVEs as a
progressive aspect of China's post-Mao economy. The clear desire of Beijing is to force
TVEs into a western legal regime, but forces within China, at the local level and even in
the National People's Congress, have prevented the "perfection" of TVE property rights.
The massive growth of TVEs in the late 1980s was followed by the promulgation of the
Regulation on Township and Village Enterprises of the People's Republic of China,
issued in 1990 by the Ministry of Agriculture (Che and Qian, 1998: 4). While the 1990
Regulations were directed towards former brigade and commune enterprises (as is shown
by the fact that they continued to define TVE assets as owned collectively by all rural
residents of the township or village, which would obviously not be the case with private
enterprises), they also represented the dual nature of TVE property rights: TVEs
contained both collective and capitalist property regimes.
Under the 1990 Regulations, the township or village runs the enterprise. The ownership
rights over the enterprise were exercised by the rural residents' meeting (or congress), or
a collective economic organization that represented all rural residents of the township or
village. The collective retained ownership rights when the enterprise came under a
managerial contract responsibility system, leasing, or joint operations with enterprises of
other types of ownership (Che and Qian, 1998: 4).
The 1990 Regulations did not prevent TVEs from losing momentum in the 1990s. This
trend was exacerbated by the state's increasing revenue problems due to losses at SOEs.
With SOEs bleeding money, the central government was facing a fiscal crisis with
reduced revenue and higher expenditures. At the same time, inflationary pressures in the
economy meant that printing money to cover deficits risked setting of high or even hyperinflation. This meant that local government, especially rural local government, had to
depend on the revenue it generated from local sources, such as TVEs.
While there is scant political support for progressive TVEs, such support isn't completely
absent. Thus one attempt to "corporatize" TVEs has created what is (at least formally) a
novel form of corporate organization.20 Shareholding cooperatives (gufen hezuozhi), as
this new form is known, have four main features (Smyth, 1998: 796; An 1998):
* Management and workers both bear risks.
* Each worker has about the same number of shares.
12
* Ballot-based decisions are determined on the basis of one-worker, one vote, not one
share, one vote.
* Profits are shared between management and works according to amount invested and
performance.
At least in theory, this new system clarifies the government's relationship with the
enterprise, gives workers better incentives, and help raise funds. In a shareholding
cooperative enterprise, employees are laborers as well as investors holding shares in the
enterprise, and employees and management enjoy equal rights in managing the enterprise
(Huang, 1997). Certainly this format appears to be different from, and perhaps even a
challenge to, the neoliberal consensus about the proper form of economic organization.
Even under this system, TVEs and TVE workers face many problems. It is difficult for
TVEs to raise funds, local governments still interfere with TVE management, workers are
not empowered, and some TVEs are simply shells for private corporations (Smyth,
1998:793). As Unger himself notes at several points in his work on China, the political
constraints of China's authoritarian system in many ways prevent the realization of what
he calls the emancipatory potential of TVEs (Unger, 1998: 105). Perhaps most important,
none of these legal innovations give workers a meaningful right to selforganization.
The 1997 Law on Township and Village Enterprises: Since many of the problems of
TVEs were widely discussed in China in the 1990s (Shi, 1994), we would expect that the
1997 Law on Township Enterprises, which supplanted the 1990 Regulations, would
address these problems. Yet, the 1997 Law largely followed the 1990 Regulations with
few modifications - the most important being an emphasis on property rights, including
private property rights. This being the case, it is not surprising to find that the Law hasn't
fundamentally changed the environment for TVEs or improved their performance.
The drafting of the final version of the Law on Township Enterprises was very
contentious (China News Service, 1996). Some members of the National People's
Congress (NPC), China's legislature, sought to insert language giving workers more
rights. Others worried about pollution (township enterprises are notorious polluters). The
majority of legislators, however, were most concerned that the law protect the interests of
rural enterprises against encroachment by government entities, that their property rights
be protected (Xinhua, 1996). The debate on the law was characterized by the normally
understated official Chinese news service as "fierce" (Xinhua, 1996). In the end, the
language on worker rights was included, as was language on pollution. But the law itself,
as well as subsequent commentary, demonstrate that clarifying property rights was the
most important innovation in the law (Commentator, 1997).
As under the 1990 Regulations, Article 10 of the new law specifies that ownership
belongs to investors. For TVEs established by the collective, ownership rights remain
with the entire collective. For TVEs established with other enterprises, groups, or
individuals, ownership is assessed according to investment. Once again similarly to the
1990 Regulations, if the TVE forms a partnership or establishes another TVE by
13
investment, ownership is also according to investment. The law thus allows for, but does
not require, private ownership.
Despite its focus on property rights, the 1997 Law didn't solve most TVE problems; in
fact, it may not have solved anything. Lu Guanqiu, the entrepreneurial chair of the
Wanxiang Group, a Township Enterprise, argued that by 1999 the TVEs had entered a
period of unprecedented difficulties. The key to solving these problems is for "all levels
of government" to create "a good and relaxed environment" for the development of TVEs
(Xia Jun, 1999). Lu's solutions include increased government support for TVEs, freeing
TVEs from obligations such as welfare, health insurance, and vacation benefits - but he
does not mention property rights.21
If the 1997 Law wasn't so different from the previous regulations, why was so much
importance attached to it? I believe that it is a mistaken belief in the importance of
property rights to TVE performance - a belief echoed back and forth between Chinese
officials and academics and Western academics and institutional specialists (such as the
World Bank). Capitalism has won the ideological battle at the highest levels of the central
government in Beijing, but it remains problematic to implement the elegant neoclassical
solutions in the contentious atmosphere of the Chinese countryside.
Rule of Law and Politics: The Rule of Law is both a rhetorical and a real force in shaping
China's economic structure. The Rule of Law plays a second role in China, maintaining
social stability. The government deploys the ROL to maintain economic growth, but also
as a means of simultaneously channeling and dispersing political challenges to its power.
Rule of Law should be seen as the regime's response to China's state of chronic rebellion
rather than the first signs of a democratic transition.
The Rule of Law is a tool to keep conflict within acceptable boundaries so that the
Communist Party/state apparatus can continue to control the country. ROL in China isn't
about democracy. Rather, it is part of a state strategy to prevent challenges to the regime's
political power. It is a reaction to, and an attempt to channel, the social changes and
social forces which are emerging in China. This conflict management is different from
democracy. In fact, it is perhaps more likely that democracy would arise from the failure
of ROL to manage conflicts. A failure of Rule of Law, and the resulting loss of
governmental power, might force the regime to allow real power to be placed in the
hands of the electorate.22 Rule of Law is thus a substitute for, rather than an expression
of, democracy in China.
China's Rule of Law project echoes the conservative response in the West to the popular
movements of the 1960s. Conservatives regarded these movements as dangerous, and the
situation of popular mobilization as a crisis of governability. The way around this crisis
was to create institutions that would channel protest into state-controlled institutions,
where it would be defused. As the U.S. Political Scientist Samuel Huntington said in his
famous bible of conservative "governability" theory, Political Order and Changing
Societies:
14
The most important political determination among countries concerns not their form of
government but their degree of government. The differences between democracy and
dictatorship are less than the differences between those countries whose politics
embodies consensus, community, legitimacy, organization, effectiveness, stability, and
those countries whose politics is deficient in these qualities (Huntington, 1968: 1).
Institutionalization becomes the definition order, order the prerequisite of political
development, and political institutions the key to economic development.23
Yet, despite the conservative nature of ROL, any force for socialism must take ROL into
account and use it to its advantage. Where ROL seeks to cabin protest, popular forces
must seek to use law as a tool to discipline property owners and the government to their
own will. As described below, however, in the current situation ROL is more a placebo
than a real cure for abuse of power. ROL functions to divert rebellion and smaller
protests into institutions designed to absorb their impact and leave relations of power
unchanged. We can see how this functions by looking more closely at how ROL helps
defuse two perennial problems in post-Mao China, corruption and worker unrest.
Corruption: Corruption, using a position of authority for personal gain, is one problem
which clearly threatens both government control and economic production; for instance,
the main focus of the demonstrators in the 1989 Democracy Movement was official
corruption.24 Protests against corruption are one of the main causes of what I called the
China's state of rebellion - the situation where mass but inchoate protests spring up
continuously across China. Legal reforms are intended as a means of containing
corruption.25 Legal reforms contain corruption not by eliminating the problem, but by
making victims feel that they have some recourse and recompense for their suffering.
There are three ways the Rule of Law helps reduce the impact of corruption. First, ROL
helps ferret out problems by encouraging reporting; second, ROL helps protesters against
government graft feel vindicated; finally, ROL puts cadres on notice that the Party will
not help them if they are caught.
One example of how ROL helps expose problems involves a lawsuit brought by 12,000
farmers in Shaanxi Province. The peasants filed the lawsuit claiming that the Chief
Secretary of the Jia Wan Village Communist Party ordered that eight "arbitrary" taxes be
collected from the villagers despite a severe drought in 1996. When more than twenty
peasants refused to pay the extra taxes, they were arrested. The lawsuit was then filed on
behalf of the whole village. A court determination (that ruled three of the eight taxes
invalid, but that the farmers should not be compensated) is being appealed to the Shaanxi
Province Higher People's Court. The villagers are asking for a full rebate and reversal of
the decision ordering them to pay court costs (China Labor Update, 1999b: 9). Cases such
as this are common, and their usefulness to the government is threefold. First, the case
alerts higher levels of the Party and state about a potentially volatile situation. Second, it
alerts the government to local government problems that might otherwise be covered up
by local officials, in this case a lack of funds to run basic services. Finally, it helps the
government discover genuinely corrupt officials.26
15
Of course, the courts do not always rule for the peasants, nor do peasants always accept
court rulings peacefully. At such times, the repressive apparatus of the state is used to
crush rebellions, many of which never reach the courts. Such a case occurred in Hunan in
1999. In this instance, about one hundred peasants started a campaign to 11 save the
countryside" by demanding lower taxes. On 8 January 1999 local official issued arrest
warrants for many of them, which triggered a mass demonstration of up to 5,000 enraged
farmers from the village of Qingshui. One farmer died and many others injured when
police moved in with tear gas to disperse the crowd. A protest the next day resulted in
eight farmers being released from jail, and there were at least three further
demonstrations the next week to protest the death (China Labor Update,1999c: 5). Here,
obviously, the word about local problems did not reach upper levels before the protests
turned large and violent, demonstrating that ROL will never be completely effective in
preventing rural unrest from threatening government power.
David Zweig has reported a case which demonstrates another aspect of the ROL in rural
China: helping protesters feel vindicated. Zweig's case began in 1992. The city of
Nanjing, in central China, needed more land, so it annexed two rural districts. Although
the districts were given money to compensate for the land (as well as some factories that
were torn down by the city), the Township government refused to pay retirement benefits
to the members of the formerly rural district. The old villagers took the Township to
court, and, although they lost, the government was pressured to provide some benefits to
retirees (Zweig, 1999: 15). A few years later, the community sued the Township again.
This time the court refused to accept the case, insisting the dispute be settled out of court.
A settlement was then reached through mediation (Zweig, 1999: 15). While the retirees
did not get all the funds they most likely deserved, the government was forced to
acknowledge the legitimacy of their claims and give them remuneration.
Worker Unrest: If corruption is the most common source of instability in China, worker
protests are the most dangerous. Fear of urban worker protests is one of the main factors
driving Chinese policy in the reform era (Williams, 1998). Rule of Law can help contain
worker unrest by providing a mechanism for complaints to be heard out resorting to
strikes, by preventing organizing, and allowing punishment of aggressive leaders.27
Workers can use the legal system to sue for wages and retirement benefits they are
owed,28 which keeps them off the streets. In addition, the individual nature of court cases
prevents workers from joining forces with workers in different factories or locations.29
But the authorities need to be careful, because the corruption and inefficiency of the legal
system can undermine confidence and satisfaction with the results.-' For instance, when
worker Li Chunxuan sued for his pension, "His legal foray has left him bitter. He said the
company bribed the lower court judges and his appeal had dragged on for about six
months without conclusion" (China Labor Bulletin, 1998e: 14).
The Chinese government would rather have scattered protests than an organized
opposition. Thus the government compromises whenever confronted with mass
demonstrations, but also severely punishes the leaders of those protests. As one activist
has put it, "There is a saying now: they (the authorities) are afraid of trouble makers.
16
When workers agitate and take up protests and demonstrate in the streets, when they
create a scene at the plant's director's office, they will get some payments. If you just
behave and stay at home, you'll get nowhere."
Another way ROL helps the authorities is to give the strategy of giving concessions while
attacking labor protest leaders a veneer of legitimacy. An example of punishing leaders
"according to law" is the case of the Peijiang Iron and Steel Factory in the Sichuan city of
Jiangyou. On 2 October 1998, Zhang Xucheng, Liu Dingkui, and Yan Jinhong led over
500 fellow workers from the factory in a sitdown protest over the company's refusal to
pay pensions to retired employees and living allowances for laidoff workers. Many
protesters had not been paid for three months. The protesters blocked the Baoji-Chengdu
railway line for over four hours, until police broke up the demonstration. Liu and Yan
were punished with reeducation through labor sentences, for 1 year and 18 months,
respectively. Zhang has been formally arrested and awaits trial (China Labor Bulletin.
1999f).
Summary of Socialism and the Legal System: Our examination of the legal system tells
us three things. First, the dominant trend in China is towards a capital ist/Western set of
legal-economic institutions. Second, this trend is not the whole story. In the TVE sector,
for instance, there may be opportunities to create innovative economic forms that will
increase equality and economic democracy. Finally, the Rule of Law gives Chinese a
formal, relatively protected means of protesting government and private abuse. But the
Rule of Law is designed to cabin protest in a narrow realm and to defeat the rebel's
demands. ROL, moreover, has not included the right to self-organization for citizens or
workers. Without the right to self-organization, ROL may provide little more than a way
for the government to channel citizen's demands into largely symbolic fora such as the
courts.
Who Will Lead China? Change is the only certain thing in China's future. Even if the
Party remains in power thirty years from now, the methods and institutions that
characterize its rule will be different. If the Party/state in China is going be displaced, the
character of the succeeding regime will depend in part on the social makeup of the
movement that forces the Party out of power. Given China's fractured state, any group
that attempts to seize power will need to do so in alliance with other groups. Nonetheless,
it is useful to look first at the two traditional candidates for political leadership, the
working class and the middle class, before looking at the alliances these classes must
forge to be effective political actors.
Working Class: In traditional Marxist analysis, the working class is the heart of the
socialist movement.31 Over time, this notion has been weakened by the unfolding of
various historical movements. The orthodox view that the objective position of workers
made them opponents of the capitalist system came up against two difficult facts. First, in
the Western European democracies, the working class was never a majority of the
population, and therefore the working class alone could not win socialism through
democratic elections (Przeworski, 1985). Without an absolute majority, the proletariat
had to make alliances across classes. In these alliances, the working class was forced to
17
make compromises in its economic and social policies. With no ready-made proletarian
majority, no ready-made proletarian political program could institute socialism through
peaceful, electoral methods. Thus even if the working class were "spontaneously"
socialist as a result of their position in the relations of production, they were numerically
unable to translate their preference for socialism into a victory at the ballot box.
Even more important, and more difficult for orthodox theory, was that workers did not
automatically adhere to what were, at least to the leaders of socialist parties, properly
socialist positions. The most famous example of this ambivalent reliance on the
proletariat's inherent radicalism is Lenin's vanguard party, which sought to raise the
consciousness of workers to the level of the intellectuals and activists in the party.32 This
was an admission that the objective position of workers in the relations of production
does not lead to socialism, but perhaps at best a "trade union consciousness," that is, an
awareness of the immediate economic struggle against their employers, but not a grasp of
class struggle in the larger social field. With the October Revolution in Russia and the
resulting world-wide division of the socialist movement, the notion of a monolithic
proletarian political position had to be abandoned.33
In China, Mao famously found a substitute for the proletariat in the peasants. But after
the revolution, the proletariat - that is, workers in state-owned enterprises - became a
privileged strata within China (Sheehan, 1998: 96-99). With high wages, high political
status, benefits unavailable to others and guaranteed employment, the Chinese Party/state
bought the support of a proletariat its own economic plan had largely created. But in the
post-Mao era this privileged group has become disenfranchised, falling behind
entrepreneurs and workers in foreign-invested enterprises in the race to economic
success. As state enterprises struggle under the reforms, their workers are the main
victims. Once generous pensions have been rendered inadequate by inflation, and
frequently go unpaid. Especially in central and northeast China, even the meager wages
of state workers, like pensions, go unpaid. The loss of benefits and non-payment of
wages and pensions has led to widespread, if uncoordinated, protests against individual
factories, local governments, and even the basic trajectory of economic reform. Has the
regime created a Frankenstein monster? Having called a proletariat into being and infused
them with a socialist political mindset, it now faces these workers as the greatest threat to
Party control.
Perhaps then, if there is a center of socialist consciousness and activism in China, it
appears, perhaps appropriately, to be in the proletariat. As one observer notes, "It is not
difficult to find people who continue to be concerned with the problems of inequality,
elitism, "capitalism," corruption, and increasing foreign involvement in China's
economy." (Gabriel, 1998). Li Minqi, a veteran of the 1989 protests, is perhaps the most
vocal promoter of proletarian prominence. Li argues that the working class is growing
numerically and that its ability to organize is improving (Lee, 1999: 70). Given its
growing power, the only thing keeping the proletariat from leading a transition to a new
regime is the government's ability to grant concessions, and, of course, the government
cannot do so indefinitely. Thus we can expect worker activism to reach a new level, with
better results, in the short or medium term.
18
Li is right to emphasize the contradictions that constitute the positional struggle between
SOE workers and the state, but he overstates the case for a proletarian-led alternative in
China. While state workers have staged remarkable, brave protests, we need to
understand both their position in China's economy and the nature of socialist ideology.
First, the workers who have been most active in the state sector are part of dying
industries, and the protests are largely defensive, trying first to hold on to privileges SOE
workers had under the old system (health care, housing), and finally merely demanding
wages or pensions they are owed. The government is right to fear these protests, because
they tend to take place in cities (and are therefore visible) and are carried out by
traditional supporters of the regime. However, the government's strategy - granting
limited concessions and vigorously repressing the leaders of the protests has been highly
effective in preventing these factory protests from becoming city-wide, province-wide, or
country-wide protests. Protests seeking to protect relations of production typical of a lessdynamic stage of the global economy are bound to failure.
Working Class Alliances: Given the fractured nature of the Chinese polity, any social
movement which wishes to challenge for national power will need to build alliances, and
thus we must look at the nature of the ideology of SOE workers to see if they have
created a program that is likely to gain widespread support in China. While strikes over
unpaid wages and pensions may strike a sympathetic chord with many Chinese, the
sympathy is likely to take a passive form and is therefore unlikely to help build a
movement. State workers' protests over health care, housing, and other special benefits
are even less likely to help them build a strong coalition with other social groups. If
strikes become disruptive enough they may indeed induce the government to
compromise, showing its weakness and leading to its collapse- but at that point it will
likely be some minority faction within the government that takes control, and this is more
likely to be a change within the ruling system than systemic change or revolution. The
socialist ideology of workers has little support among Chinese intellectuals and high level
party functionaries (Lee, 1999: 66). And as we saw in the section on TVEs, there is little
intellectual support for progressive socialist alternatives. Dissatisfaction with the current
situation makes China volatile, but the lack of an articulated socialist vision from within
China reduces the chances that this unrest will lead toward progressive change.34 China
has few non-capitalist intellectuals and political activists - can we expect it to have a
vigorous non-capitalist social movement?
To be effective political actors, Chinese state worker's protests must consider at least two
potential alliances. The first is with the peasants. Like state workers, peasants have been
active in protesting the government throughout the 1990s, often over similar issues, such
as unpaid government grain purchases and local corruption. Creating a program that
appeals to the peasants would greatly aid any socialist movement in China. China's
peasants are a diverse group, and any generalizations about 800 million people must be
made cautiously. Remembering this caveat, the general ideological trend of China's
peasants might be termed "socialist individualism." Socialist individualism combines the
desire for a relative egalitarian distribution of property and wealth with the assertion of
autonomy about economic decisions about how to use land.
19
China's peasants were winners of new property rights in land in the post-Mao era, and
appear to be extremely happy with their private farms. But some studies indicate that
China's peasants do not support vesting absolute property rights in the individual or
family. Instead, a recent survey indicated that almost two-thirds of peasants preferred a
system which periodically reassigns land among farm families in response to changes in
the composition of farm families (Kung and Liu, 1997: 55). These readjustments tend to
retain an egalitarian per capita or per family distribution of land. Enforcing absolute
private property rights, the preferred solution of China's intellectuals, might 11 encounter
resistance at the grass-roots level, as the new policy [of absolute private property]
contradicts the egalitarian attitudes that underpin China's present system." Only a tiny
minority of farmers think of themselves as landowners (2.5%), whereas almost 95%
believe they have contracted the land from the state or collective. In addition, only 14%
expressed a preference to become de jure land owners (Kung and Liu, 1997: 40). To
farmers, the most important rights were the right to decide what to grow and where to
market their crops. The authors of this survey believe peasant's resistance to freezing land
adjustments "is that it removes a specific right to which villagers, as members of the
community, are currently entitled: an equal share of the land as a means of guaranteeing
that basic consumption needs will be met" (Kung and Liu, 1997: 56).
Here, then, is an alternative form of property. But it isn't one that is particularly
concerned with increasing productivity. Instead, like the workers in state enterprises,
peasants emphasize security. The property rights these peasants prefer are
"disaggregated" as in Unger's progressive TVEs - the right of control is most important to
peasants, who would trade absolute right to sale of property for security. Peasant's
attitudes bode well for a worker-peasant alliance, but China's peasants produce in a large
variety of circumstances, and it may be difficult to generalize peasant attitudes.
State workers might also form coalitions with workers in Foreign Invested Enterprises
(FIEs) and Township and Village Enterprises (TVEs). FIE workers have engaged in
many strikes over the past decade. While state workers are likely to protesting to protect
benefits or for back wages, FIE protests are focused on working conditions and abuse by
managers. Although FIE and state workers protest different issues, each would greatly
benefit from the right to organize and bargain collectively, and this important right could
be the basis for a coalition of FIE and SOE workers.
In contrast to both FIE and SOE workers, workers in TVEs generally quit their job rather
than organize protests or pursue legal remedies.35 The ability to return to farming and the
availability of job opportunities at other factories apparently keeps most TVE workers
from staying to try to challenge factory management. Unlike state-owned enterprises,
TVEs promise little in the way of benefits. There are no health care, pension, or housing
guarantees, removing the largest source of protests in SOEs. The"flexibility" of the rural
labor market is, thus, one in which workers leave when conditions are bad, and
management uses its powers to dismiss workers who look to "cause trouble" by insisting
on their rights.
20
Small TVEs are generally a part of the community and are frequently family-run. These
smaller TVEs can call upon social pressures to force both workers and managers not to
publically disagree. Locals may think of the enterprise as a "big family" rather than a
balance between the interests of capital and labor. To a certain extent this is true, because
some workers will be owners and many owners will be related to workers. Nonetheless,
poor working conditions, lack of rights to engage in collective bargaining, gender
discrimination, and an absence of basic benefits are recurring features of the TVE.
Some TVEs in China are quite large, with thousands of workers.36 Larger TVEs are
often sub-contractors and/or investment partners of international firms. Such firms are
usually located in the suburbs of large cities or in areas with a high level of
exportoriented production, such as southern Guangdong. Due to these factors, the labor
problems in these enterprises probably are more like those we are familiar with in FEEs
and sub-contractors than those in counties in China's interior, with no foreign investment.
It will be difficult to target TVE workers with any specific platform. Some will have an
agenda similar to workers in FIEs, others will have an outlook similar to peasants, still
others might be more like migrant workers. A portion will also have a more conservative,
"petty-bourgeois" outlook similar to other small-scale owners of capital. Despite these
difficulties, any working class movement would do well to get the 125 million TVE
workers on their side.
The Middle Class: Democratization is perhaps the most widely held hope for political
change in China, and the bourgeoisie has long been held as the key to democratization
globally (Moore, 1966). Since World War II, the bourgeoisie has been subtly replaced by
the middle class as the power behind democratization. This change marks an interesting
difference between classical and contemporary models of democratization. The
bourgeoisie was the middle class in the transition from feudalism to capitalism - they
were neither peasants nor nobility but owners of capital, and their need for relative
independence created a movement to deepen limits on sovereign power and eventually
led the way to democratic revolutions. In the literature on democratization today, the
bourgeoisie has been replaced by the middle class. But the middle class is different from
the bourgeoisie. Being a member of the middle class is determined by income,
educational level, or professional status rather than ownership of the means of production
(Wright, 1989). Analysts have largely abandoned the idea that the owners of economic
capital, the bourgeoisie, will spearhead the drive for democracy; instead, the middle class
is the social force that is supposed to demand democracy.
Economic determinism drives idea that the middle class will be the leaders of
democratization.37 For many writers, a certain level of economic development must
precede democratization; when that level is achieved, it will have produced a middle
class of professionals to administer the economy, and it is this middle class that will
demand democracy (Rosen, 1999: 12). The capitalist class, the bourgeoisie, can no longer
be counted on to perform its progressive role in advocating for democracy because the
owners of capital in late developing nations are highly integrated with the state, and thus
less likely to challenge government power. The middle class, in contrast, is seen as
21
desiring democracy, perhaps as a political complement to its new-found power of
consumer choice in personal consumption.
The Example of South Korea: South Korea provides an interesting window through
which to view the process of democratization in a late-developing country (Pak, 1999;
Chu, 1998). Given the ideological nature of the division of the Korean peninsula, the
South was obviously going to take a capitalist development path. Capitalist development
created a new bourgeoisie, which first emerged during the war with the North and in the
subsequent period of heavy American aid. The South Korean bourgeoisie made its living
off government contacts and contracts. This set the pattern for South Korean
development: the bourgeoisie, owners of the chaebol, has been closely tied to the
government, dependent on the state for protection, access to credit, repression of labor,
and guidance for investments in new areas of production. Korea's giant chaebol were
created by preferential government policies designed to produce a new phase of Korean
industrialization based on Korean production of higher technology goods. The result is
that "the Korean bourgeoisie remains, despite its wealth and increasing political
influence; a decidedly unhegemonic class, estranged from the very society in which it
continues to grow" (Eckert, 1993: 96).
With the backing of the US government and the ideological weapon of anti-communism,
the state in South Korea was able to guide Korea's economic development and weather
repeated mass mobilizations for democracy. But these mobilizations had a profound
effect on the development of internal Korean class relations. The turning point came
when Chun Doo Hwan ordered the massacre of hundreds, perhaps thousands, in the city
of Kwangju in May 1980. The working class and progressive forces that led the Kwangju
uprising did not gain support from the middle class, especially in Seoul (Choi, 1993: 31).
The split between the middle classes and the working class represented a split between
forces, largely middle class, aligned around the dictatorship-democracy axis, and the
working class, which also focused on questions of distribution and equality.
When the authoritarian regime faltered in 1987, it fell to a coalition of the working and
middle classes, temporarily joined together by the nationalist ideology of minjung and the
rallying image of the Kwanju massacre (Kim, 1997). Importantly, the state's high level of
involvement with the chaebols, the centerpiece of Korea's development strategy for
twenty-five years, had come to be seen by big capital as interference rather than
assistance. This left the chaebol indifferent to the survival of the developmental-authoritarian state, and insured their abstention from the democratic struggle.
Yet once the popular forces had achieved an apparent victory, the middle class working
class coalition was dissolved (Lee, 1997). The split between the working class and the
middle class, symbolized by the split between Kim Dae Jung and Kim Yong Sam, was a
split over the meaning of politics and economics in the new era. Working class views of
democracy "gave centrality to the concepts of equality, social justice, and community"
(Choi, 1993: 40), while middle class views were focused on the "decompression" of
political space and free elections. Similarly, working class views of the economy
emphasized redistribution, while the middle classes were more comfortable with a
22
continued focus on economic development (Choi, 1993: 32). The formula might be stated
as follows: If the proletariat proposed radical demands beyond democratization, it is
unlikely to find middle class allies. If the proletariat does not propose radical reforms,
however, the democracy movement will not be able to move China closer to socialism.
The Lessons of 1989: In China, the most recent example of working class - middle class
cooperation was the 1989 democracy movement At the start of the protests, workers
appeared at the square to "take a look" at what the students were doing. The demands of
the students struck a resonant chord with many Chinese, who sought ways to help the
students. This appears to be how the leaders of the first independent worker federation in
post-Mao China, the Beijing (Capital) Workers Autonomous Federation (WAF) was
founded. The workers had little time to organize, and most members joined at the Square;
there was only, poorly documented, attempt to organize at the workplace. Workers in
other cities followed Beijing's lead, but none of these organizations appear to have
attained the size or coherence of the Beijing WAF (Walder and Gong, 1993; AMRC,
1991).
Labor leaders learned two things from 1989. First, although the students appeared to be
natural allies of workers, cooperation with the students proved more difficult than
expected. Second, the existing Party and union structure was too dominated by pro-management, or even pro-student (but anti-worker) political institutions to serve as an
effective vehicle for worker demands. This drove home the need for a strong,
independent worker movement.
But future movements will have the advantage of learning from 1989, and it appears that
at least some of the student leaders of 1989 have changed their views about the
importance of student-worker alliances (Lee, 1999: 65-66). Still, students are only a small
portion of the middle class, and it is difficult to know how China's middle class would
react to a closer alliance with workers. There is little evidence that the new Chinese
middle class, which, especially in the south, consciously imitates the non-political and
materialistic middle class of Hong Kong,38 would be amenable to a worker or workerpeasant coalition that emphasized equality and economic democracy. The middle class
are possible allies in a transition to parliamentary rule, but unlikely allies in broader
struggle for socialist goals.
Neo-authoritarianism: While democracy is presumed to be the future of political change
in China, authoritarianism sits in its shadow, appealing to those who fear the chaos
brought on by economic and social change and to those who hold power today and do not
wish to subject that power to direct popular approval. China remains an authoritarian
state, so it is important to consider the roots of this state and why authoritarianism will
continue to appeal to some in China.
Authoritarianism appeals to the lazy. Despite the emphasis on order and discipline that
characterize authoritarian movements, it is the ability of authoritarianism to shortcircuit
the difficult process of building coalitions for change that explains its appeal. Rather
doing the hard work of organizing people and making political compromises,
23
authoritarians dream of complete control.39 Authoritarianism is a disease of both the
right or the left. On the right, we have the example of the recently fashionable preference
for Neo-Authoritarianism (Xiao and Zhu, 1990-1991). Just before the 1989 Democracy
Movement in China, Chinese intellectuals became enamored of the idea that a strong
state led by a strong leader would be the best way forward for China. Based on the
supposedly unique Asian experience, from Taiwan to Indonesia, intellectuals came to
think that only when power was concentrated in the hands of a single, strong leader could
a nation overcome the bickering between various interests groups and focus on the task at
hand: creating wealth.
For leftists, too, authoritarianism has its attraction.40 The leftist case for authoritarianism
can be deepened by examining what is perhaps the fundamental difference between East
Asian development and Latin American development: land reform and the resulting
equality in East Asia. In Japan, land reform wasn't accomplished by the Meiji elite or
their successors, but by the occupying U.S. forces after World War II. In Taiwan, the
Nationalists, invaders from the mainland, performed a land reform they were politically
incapable of attempting when they controlled China. In Korea, although the withdrawal
of Japanese troops opened up the popular space where land reform could begin, the
process was greatly radicalized in the South by invading North Korean troops. In China,
of course, land reform was a Communist innovation, implemented at a time when the
Communist Party was largely indistinguishable from the People's Liberation Army. Land
reform was impossible in normal circumstances; so impossible, in fact, that it was carried
out by armies.
Given the difficulty and slowness of social change, it is tempting to say that real change
can only be started in authoritarian or semi-democratic circumstances, the Neo-Authoritarian solution. A weary actor comes to think, "It isn't going to be possible to
establish a democratic majority in favor of reforms in current circumstances, so
somebody must start the ball rolling." A strong leader appears to have the power to force
reluctant social, political, economic, and even ideological structures to reform. An
economic or ecological crisis could either supplement, or substitute for, an autocrat either way, faith in the political structures is shaken and larger reforms, even
revolutionary acts, appear possible. Without an autocrat or a crisis the radical reform
project itself seems doomed.
Near the beginning of this essay, we examined the possibility of a quasi-fascist regime in
China. Given the tensions we have examined in this article, and the international pressure
on China to resolve these tensions along neoliberal lines, it would be surprising indeed if
we did not see a recognizably fascist movement emerge in China. Whether such a
movement would gain any real strength or political import is another matter. Single party
rule, and especially an appeal to Han nationalism, is likely to be attractive to a part of the
population for some time to come. The contradictions that exist in every social, political,
and economic institution in China will lead many to seek the easy, authoritarian solution.
The fear of China disintegrating remains a huge psychological factor in Chinese politics,
and this can be exploited by neo-fascist movements. The strength of neo-fascism would
only increase if Uighur or other separatists brought their struggle to eastern China with a
24
systematic campaign of terror, such as the bombing campaigns conducted by the IRA in
England.
Fascism is not likely to gain political power in China, but it may influence other groups
that do gain power. While militarism would only get in the way of what most Chinese
want, which is a better, more peaceful life, an appeal to nationalism and order is likely to
attract unemployed workers and other disenfranchised groups. This popularity may cause
other political groups to make more strident nationalist appeals. The likely loser here is
Taiwan, which will continue to bear the brunt of China's nationalism as the ultimate
symbol of China's fractured psycho-political landscape.
Authoritarian solutions to China's current situation will be tempting for any contenders
for power, but authoritarianism cannot provide a solution to China's long term needs. A
diverse country such as China needs democracy so that all voices can be heard. The
current government's suppression of national minorities only feeds the fires of
separatism, and authoritarian suppression of such movements only leads to violence, as
we have seen from Northern Ireland to Chechnya. These tensions between nationalities
with the Chinese political state highlight the importance of international conflict to
China's future. The next section examines China's interaction with the global system of
nation-states and its impact on the future of Chinese socialism.
International System: The global forces of capitalism, Marx told us, were strong enough
to "batter down all Chinese walls" which sought to block their entrance. Because these
global capitalist forces were so strong, Marx assumed they would overwhelm any
national government's attempt to moderate their impact. In the 1960s and 1970s, radical
politicians and academics often advocated a strategy for developing countries based on
withdrawal from the world system. Only withdrawal offered the opportunity to develop
in a non-capitalist manner. At the time, China appeared as the paradigm case of
withdrawal, its apparently high economic growth, equality, and political radicalism
standing in stark contrast to the stagnation and inequality of many developing states.
Since it was impossible to be both socialist and integrated in the world system, socialist
states had to choose withdrawal.
The strategy of withdrawal was based on the premise that large states located on the
periphery of the world economy, such as China, offered the best chance for formulating
an alternative to North Atlantic capitalism. Today, there is no choice between withdrawal
and engagement. Politically and economically, withdrawal was unsuccessful, and may
never have even been possible (Frank, 1998). When countries withdrew from the global
economic system, domestic class struggle increased, choking economic growth without
providing benefits to workers and peasants. Countries that withdrew suffered increased
corruption, and economic innovation flagged. In addition, by the late 1970s it became
clear that the most successful examples of development, such as South Korea and
Taiwan, depended on exports rather than withdrawal or import-substituting
industrialization to propel development.41 So the question facing all countries today is no
longer whether to engage with the world system, but how to engage with it. While today
25
we concede that globalization is inevitable, the form and effect of globalization will be
shaped by domestic and international struggles.
Domestic institutions are extremely important in determining which groups within a
country benefit from engagement with the world economy (Weiss, 1999: 126). Moreover,
despite the power of institutions such as WTO to force changes in domestic institutions,
domestic institutions have a remarkable inertia that makes them resistant to change. This
so-called path dependency ("the creation of an interlocked system of ideas, norms, and
institutions which structure relations between state and society") means that domestic
politics, and institutions that result from domestic politics, are crucial in determining
whether globalization increases or decreases inequality (Weiss, 1999:129).
There are many examples of how domestic institutions have shaped countries' interaction
with the world system in a way that benefitted domestic economic growth. South Korea
and Taiwan were able to parlay their strategic importance to the United States into
effective export-led development programs (Cumings, 1983). Similarly, European
countries with a strong social-democratic tradition, such as France, have used domestic
institutions to shape the domestic impact of globalization.
The 1997 Asian currency collapse and resulting economic crisis demonstrate the
importance of having the proper international institutions and for countries to have the
flexibility to deal with crises in their own way. One of the initial reactions to the crisis
was to blame "Asian Crony Capitalism" and corruption for the panic (Wade and
Veneroso, 1998: 7-8). Opening markets for both capital and goods were seen as the only
real cure to the Asian flu. But, of course, corruption had existed in Asia for decades,
decades in which Asia's economies had grown so quickly that they were dubbed miracle
economies, and there was no reason why this corruption should suddenly cause
economies to collapse. In addition, many developing countries outside Asia have
corruption problems, but they did not suffer similar currency problems.42 A lender of last
resort, better banking regulations, in other words, political institutions (albeit institutions
that deal with money) have gained credence as the most likely way to prevent further
crisis (Sachs, 1998). Similarly, Chile has controls on capital flows which encourage longterm foreign investment but discourage currency speculation.
World Mutual Aid and Trade Organization?: As we have seen, rather than face a stark
choice between withdrawal or engagement, countries now face the difficult task of
changing the world system itself.43 Given its size, China could be an important force for
altering the global system to benefit developing nations, and to promote equality and
sound ecological stewardship. Unfortunately, in the short term it looks more likely that
WTO will change China than China will change the WTO.
WTO will be a powerful force in shaping China, and many of the changes wrought by
WTO will benefit China. Free trade can increase competition and consumer choice.
World standards in fields such as accounting can make economic transactions more
transparent, which helps root out corruption. Transparency can also help increase
equality, because incomes are known to shareholders and employees, and therefore
26
subject to public pressure. In China today, many executives are paid under the table,
shielding their income from tax collectors and popular scrutiny. Globalization may
produce institutions better suited to international problems such as pollution, arms
control, immigration, and public health.
But globalization often has a darker side - the U.S. Treasury Department and
multinational corporations seek to set an agenda which gives domestic governments little
power and offers few protections to workers or the environment. This top-down,
corporate globalization was the focus of the important street demonstrations in Seattle in
1999, which helped slow the WTO process down, and will hopefully result in more
diverse voices being heard in the creation of global treaties.
While we know that WTO membership will have an important impact on China's
political economy, it is impossible to tell what the impact will be. Some democracy
activists, such as Ren Wanding, believe that WTO membership will force legal
institutions to become more fair and push the political system toward democracy. Others
believe that WTO will keep Chinese economic "liberalization" on track, drowning out the
calls from workers and other groups hurt by WTO for relief (Rosen, 1999: 2). Still other
analysts point out that WTO will leave many important institutions in China untouched.
As labor activist Han Dongfang says, "Without the right for workers to set up unions, job
opportunities brought by WTO could turn workers into slaves" (Leicester, 1999). In
short, WTO's impact will depend on how international and domestic forces use WTO to
push their membership. If WTO is used solely to liberalize China's economy, the impact
on democracy, equality, and the environment is likely to be negative. However, groups
within China may be able to use WTO to shape legal and political institutions in ways
that make China more democratic and perhaps even advance the goal of socialism in
China.
Similarly, if China uses its WTO membership solely as a way to increase national
prestige, it will only reinforce the one-sided U.S. government view of globalization.
However, as a newly-minted member of the World Trade Organization, a progressive
China would be well-placed to help the popular groups and unions that protested in
Seattle put pressure on the world system. If China were to side with European social
democrats on labor protection issues it would make an important dent in Washington
Consensus. But if China fights its typical rearguard actions, trying to peddle its theory of
Asian Exceptionalism as a shelter for its authoritarian system, it will not be a friend to
progressive forces world wide. China is big enough to shelter experiments within its
border, as the development of TVEs shows. It may soon be big enough a world actor to
assist other nations that want to experiment within the capitalist world system. But the
current Chinese government shows little inclination to assist any group outside the ruling
clique.
China faces other nations today simply as another would-be Great Power. China's race to
put people into space orbit and challenge Taiwan has nothing to offer other nations.
Currently, China is on course to use its entry into WTO to do little more than discipline
workers and state enterprises at home and push its crypto-authoritarian Asian
27
Exceptionalism in the world arena. While those in the West who resist China's WTO
entry probably overestimate the West's power to shape China's policies through trade
agreements, they are correct that WTO entry is an important moment for China. But the
domestic forces that need to have a voice in the reform process have been shut out by the
government. Thus workers and peasants express their anxiety about WTO in sporadic
protests, protests that will only intensify if the Chinese government ignores their concerns
and implements a corporate version of WTO.
The Chinese government's Asian Exceptionalism is a form of reactive localism. This
reactive localism is not an alternative to globalism, but its complement: both oversimplify
the choices facing countries as they negotiate their status in the international community.
Socialism and internationalism were once synonymous because the socialist movement
promised to make the increasingly global world economy benefit workers. Recapturing
this idea is crucial to the future of socialism in China.
[Footnote]
Notes
[Footnote]
1. See for instance the discussion of legal realism in Bellotti (1995: 23-25)
2. The existence of written law is no guarantee that the government or other actors will follow the procedures set
forth in the statute. For instance, the protections afforded criminal defendants in China's laws on criminal
procedure are often ignored in practice (Hecht, 1996).
3. For more on the base-superstructure problem in law, see Collins, 1982: 77-93.
4. While law in all systems is somewhat indeterminate China is an extreme example of this indeterminacy. To say
Chinese law is underdetermined means that the process of executing laws is highly independent of the formal,
written rules of the Chinese legal system. See generally Althusser (1990: 89-126).
5. David Rosen reports that in mid 1998 only 25% of China's lawyers had undergraduate university degrees
(Rosen, 1999: 208).
6. The number of lawyers has grown from 34,379 in 1985 to 98,902 in 1997 (Statistical Yearbook of China,
1998: 779).
[Footnote]
7. 1999 was to be the "Year of Quality Trials," indicating that trials in previous years had been of poor quality
(Chen Jianfu, 1999: 3).h
8. See China Labor Bulletin, 1998c: 17. In which Liu Han of the CASS Legal Institute pointed out the problems of
graft and corruption: "Some judges ruled according to "slips" given them by local officials..." Liu further noted
that more than 70% of commercial cases are decided according to officials' wishes instead of law. Judges were
also cited for trading sentences for bribes. See also David Zweig's field research in which he found that actor's
believed that in Nanjing "the city's Middle Court would never make a legal judgement that challenged, let alone
overturned, a formal decision taken by the city government" (Zweig, 1999:23).
9. Even "good laws," in a situation where either enforcement is poor or the legitimacy of the new laws is low, will
not produce a conforming economic system. This is the situation in Russia today. On Russia. see Black,
Kraakman, and Tarassova, 1999.
10. On the renewed interest in the Rule of Law globally, see Carothers, 1998.
11. The Rule of Law was the rhetorical keystone of the right of abode controversy between Hong Kong's highest
court, the Court of Final Appeal, Beijing, and the Beijing appointed Chief Executive of Hong Kong, Tung Cheehwa. For a taste of newspaper coverage, see Yeung (1999).
[Footnote]
12. A recent example is the amendment to the Chinese Constitution to allow private ownership of property although this only codified the de facto changes in ownership over the past two decades (for the text of the
Constitutional Amendment, see Xinjua, 1999a).
13. Thus, "...the community government's involvement in TVEs helps overcome the problems of state predation
and underfinancing of private enterprises" (Che and Qian, 1998: 1). But one of the reasons for the 1997 law on
Township and Village Enterprises, according to my interviews in China, was to help private TVEs get funding.
14. For an excellent example of debunking cultural explanations in modern Japanese history, see Smith (1998).
28
[Footnote]
15. Michael Heller argues that these disaggregated property rights are actually the cause of Russia's postsocialist
economic problems. With too many claims on property, there are no clear owners and therefore no one who feels
it is to their economic advantage to use the property (Heller, 1998). This is very different from the view of most
observers, who have found that former bureaucrats have had little problem converting state property into their
personal property (for example, Clarke, 1993).
16. Disaggregation of property rights refers to the separation of different aspects of the control and benefits from
property. Thus the right to sell property can be separated from the right to use it, or the right to benefit from the
use of property can be divided among owners and those who work the property (see Gray, 1980).
[Footnote]
17. Democratic Experimentalism is designed as a practical-yet-radical program for the current stage of world
development combining the "conditions of practical progress" and the "requirements of individual emancipation"
with a "motivated, sustained, and cumulative tinkering with the arrangements of society." (Unger, 1998: 5, 16).
From a Marxist perspective, Democratic Experimentalism is a species of reformism, but it would be a serious and
intelligent attempt at formulating a progressive global alternative to neoliberalism.
18. The shareholding cooperative system is examined further below.
19. The most important role of TVEs is characterized as supporting agriculture and promoting general economic
growth, not promoting equality or economic democracy. See the article by Agriculture Minister Liu Jiang. (1996).
[Footnote]
20. For earlier attempts at corporatizing Chinese industry, see Fang (1995).
21. According to interviews I conducted in the Summer of 1999 in China with TVE managers and academics who
study TVEs, only the largest TVEs offer these formal benefits to workers.
22. Rural elections have raised hopes that China will become more democratic, but many observers disagree that
these elections are part of a transition to democracy. On rural elections, see U.S. Department of State (1999)
(noting that while 90% of villages have had elections and some candidates favored by the Party have lost, "...in
general the party dominates the electoral process, and roughly sixty percent of the members elected to the
village committees are party members. The final ballot is the culmination of an election process that includes
government screening of candidates and an indirect vote that eliminates some candidates. Many observers
caution that the village election system is not necessarily a precursor for democracy at higher levels of
government, and village elections - as currently practiced - do not threaten to undermine the implementation of
unpopular central policies or endanger the leading role of the Communist Party.") See also Forney (1999: A16).
23. Of course, Huntington's theory contains a normative argument that order is "good" in and of itself (indeed,
Mark Kesselman has called him "the Lenin of the Ruling Class" for his emphasis on organization). Governments
have performed horrible deeds in the name of "order" and "stability.? As Kesselman has argued, Huntington
ignores that what is order for the state is often chaos, violence, and repression for the people the state seeks to
control (Kesselman, 1973).
24. Xu Wenli, an activist in the China Democratic Party, is convinced that mass layoffs and closures in China's
state industry, and the subsequent drastic drop in worker's standard of living, can be blamed on corruption
(China Labor Bulletin, 1999a: 7).
[Footnote]
25. As a recent work report of the Sichuan People's Higher Court put it, "We severely punished economic
criminals, who undermined party and government prestige, to eliminate corruption" (Li Yulong, 1996).
26. It is important to remember that while I have termed this as a case of corruption, the local leader may not
have been enriching himself or relatives with the extra taxes, but was simply trying to maintain enough income
to run the local government. Government at all levels in China suffers from low levels of revenue and poor tax
collection, which can result in "extraordinary" taxes such as those levied in this case.
27. China Labor Bulletin, 1999d (remarks by CCP Central Committee member Luo Can on the legal field's
importance in maintaining stability).
28. About 50% of all labor issues involve non-payment or under-payment of wages (Wan and Dom, 1998: 81.
[Footnote]
29. Workers initiated 96% of all labor dispute cases in 1997, and won 56% of their cases. Wan and Kevin Dom
(1998: 7). See also China Labor Update, 1998a (noting that as many as 400 workers took part in a protest
against wage arrears. As a result, they got one month's wages); China Labor Bulletin, 1998b (the Sichuan city of
Zigong had demonstrations at two factories, one in 1997 and one in 1998, demanding back pay, pensions
payments, and subsistence allowance for laid-off workers).
30. China Labor Bulletin, 1998d: 20-22 (blaming corruption for unemployment problems).
31, "What characterizes socialism as opposed to capitalism is not... the existence or non-existence of market
relationships, money, and prices, but the existence or the domination of the proletariat" (Bettelheim, 1971: 19).
[Footnote]
32. Of course, Lenin also believed that it was naive to believe that socialism could be instituted through the ballot
29
box. Instead, he insisted that the capitalist state must be destroyed before a socialist state could be built (Lenin
Tucker reader what is to be done?).
33. For an interesting exploration of the Trotskyist alternative to Maoism in the Chinese revolution, see Benton,
1996.
34. In the protests, students and intellectuals agreed with the government on the economic future of the country
- both wanted capitalism - but disagreed on the distribution of economic power (Lee, 1999: 64).
35. Based on interviews conducted in China in June-August 1999.
36. For instance, the Huncunbe Construction Group near Beijing has 7,600 employees, including 1,600
technicians (Hsieh, 1998).
37. The view that the middle class is the key to democracy is widespread. See for instance: in the United States
(Manning, 1999); Indonesia (Ng, 1999, Richburg, 1998); and India (Statesman, 1999).
38. Hing (1997) argues that Hong Kong's middle class is more politically active, and has greater support than is
generally acknowledged. While this point is well taken, Hing was writing before the return to Chinese rule in July
1997. Since that time, middle class political activity has once again decreased in Hong Kong.
[Footnote]
39. They never get this complete control, however. Even the strongest regimes contain pockets of popular
resistance, and even the strongest individual leader can see his or her orders undermined by those charged with
carrying them out. Even Adolph Eichman, in many minds the perfect example of someone mindlessly carrying our
order in Nazi Germany, disobeyed orders from superiors, albeit in ways that furthered genocidal policies (Arendt,
1965).
40. Deng Liqun, who leads the wing of the Party most loyal to state ownership, is often termed a leftist. But he
has little to offer democratic socialists beyond his opposition to all-out privatization (see for instance Deng,
1998).
41. Of course, U.S. power, including open export markets for East Asian goods, are also part of the East Asian
miracle.
[Footnote]
42. Many countries did catch the "Asian flu," but only Russia and Brazil suffered currency crises.
43. We assume that countries have this power to decide their terms of engagement with the world economy, but
we should be cautious about this. Many developing countries, often as a result of colonialism, have weak
governments and are torn by internal strife. These nations may lack the ability to form strong policies to channel
engagement with the world economy in positive ways.
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[Author note]
Harry Williams*
[Author note]
* Yale Law School
33