It doesn’t matter if a cat is black or white, so long as it catches mice. Deng Xiaoping
The current Chinese dynasty was established by Mao Zedong in 1949, following his victory over Chiang Kai-shek and the Nationalists. The People’s Republic of China (the PRC) found fertile soil in the country because there was probably never a school of Chinese thought – not even Legalism – that so emphasized collective agency over individual agency as did Communism.
But the inherent collective nature of Communism – as seen, for example, in the USSR – was put on steroids by Mao. Individual agency wasn’t just deemphasized, it was essentially eliminated.
Between 1949 and Mao’s death in 1976 collectivist zeal seemed only to grow and grow, from Mao’s violent attack on landlords, his Campaign to Suppress Counterrevolutionaries, and the Three-Anti and Five-Anti Campaigns. Millions of Chinese died during this period, but Mao was just getting warmed up.
Between 1953 and 1958, Mao’s industrialization program, the Sufan movement, and the Anti-Rightest Campaign purged virtually every intellectual in the country. In 1958, the Great Leap Forward led to the deadliest famine in the known history of the world, causing perhaps fifty million deaths. By this time, the creation of Mao’s cult of personality ensured that all other personalities were irrelevant.
But following Zhou Enlai’s death in January 1976, a power struggle rocked the highest echelons of the PRC. Supporters of Mao’s radical collectivist policies, especially the so-called Gang of Four – which included Mao’s widow, Jiang Qing – faced off against the reform element, led ultimately by Deng Xiaoping.
Although the balance of power shifted this way and that, Mao’s death in September of 1976 decisively undercut the Gang of Four, who were arrested and later tried for treason. Jiang Qing would commit suicide in a prison hospital, leaving a suicide note denouncing Deng: “Today the revolution has been stolen by the revisionist clique of Deng.”
And, indeed, Deng’s main claim to fame was his introduction of capitalist ideas into China’s economy, something that would have shocked Mao. (When challenged about deviating from Communist orthodoxy, Deng responded with the quote reproduced at the beginning of this essay, above.)
While Mao had been slogging ever deeper into collectivism, Deng was, instead, observing the extraordinary success Lee Kuan Yew was having building Singapore into an economic superpower.
Channeling Lee, Deng de-collectivized the rural areas of China, allowing farmers to make their own decisions about what and how much to plant. He deemphasized state control over broad swaths of the Chinese economy, supporting entrepreneurs who could make quicker and smarter decisions. He created Special Economic Zones (Shenzhen, for example, the “Silicon Valley of China”) that were in effect geographically delimited capitalist economies.
Deng is rightly given credit for turning the Chinese economy spectacularly around. But, in the context of the subject of this series of essays, we can easily see that what Deng was more fundamentally doing was deemphasizing collective agency and emphasizing individual agency in the economic sphere. Free market policies are simply that – shifting economic decision-making away from the collective (the state) and toward individual agents.
The shift from Mao to Deng was analogous to the shift from the Shang Dynasty to the Zhou Dynasty, or from the first part of Emperor Wu’s rule to the second part, and the results were similar: a happier, more prosperous Chinese people.
That’s not to say, of course, that Deng was interested in expanding individual agency beyond the economic sphere. For example, Deng never denounced Mao personally, instead coining the term “7 parts good, 3 parts bad.” I.e., Mao was mostly good and when he was bad it was the fault of his no-good advisors (like the Gang of Four).
Although it isn’t much commented on, what drew Deng to Lee and Singapore wasn’t just the latter’s economic success. After all, why not just copy the US? No, it was economic success combined with authoritarian, one-party rule that Deng found so interesting – interesting enough, in fact, that he sent tens of thousands of Chinese officials to Singapore to figure out how Lee did it.
Like the Mao Dynasty in China, since the founding of the modern state of Singapore the latter has been governed by one party – the People’s Action Party, founded by Lee back in 1954 and which continues to rule the city-state to this day.
The experience of Singapore suggested to Deng that individual agency could be emphasized in the economic sphere while continuing to emphasize collective agency – the primacy of the Chinese Communist Party, or CCP – in the political sphere. And while Deng seemed to be a kinder, gentler leader compared to Mao, his responses when the CCP was challenged would have warmed Mao’s heart.
In the 1980s Deng, worried about the brittleness of the CCP after decades of one-man rule under Mao, proposed a series of reforms designed to lead to a more consensus-driven leadership at the CCP. Pushback by conservatives led to yet another power struggle, and in 1989 the suspicious death of reformer Hu Yaobang triggered weeks of demonstrations culminating in the notorious Tiananmen Square incident.
The CCP, terrified that it was losing control of the country, cracked down hard, imposing martial law and sending tanks into the Square to massacre demonstrators and crush dissent. Deng, fearful for his position, ordered the crackdown personally. Although Deng’s goal of a consensus-driven CCP did in fact advance, all further political liberalization came to a screeching halt, and Deng slowly disappeared from view.
Except for one last initiative. Worried that the demise of political reforms might also lead to the demise of his economic reforms, Deng, though long retired from office, launched his famous “southern tour of China” in 1992. During that trip Deng employed his great credibility with the Chinese people to bully military and civilian officials into continuing the free market (individual human agency) initiatives Deng had championed when he was in office.
At this point – the early 1990s – individual agency had been increased in the Chinese economy but not in the political sphere. Could such a situation persist, i.e., could an entire society be economically free but politically enslaved? Next week we’ll take a look at Mao’s dynasty post-Deng.
[Shameless self-promotion: Blogs I’ve written about interesting people over the years – including André Heintz (a member of the French Resistance), Lady Jean Fforde, Baron Rothschild, Joe Biden and others – have been collected in my recent book, Ten Interesting People, illustrated by artist David Biber. It’s now available on Amazon.]
Next up: On Agency, Part 5
[To subscribe or unsubscribe, drop me a note at GregoryCurtisBlog@gmail.com.]
Please note that this post is intended to provide interested persons with an insight on the capital markets and other matters and is not intended to promote any manager or firm, nor does it intend to advertise their performance. All opinions expressed are those of Gregory Curtis and do not necessarily represent the views of Greycourt & Co., Inc., the wealth management firm with which he is associated. The information in this report is not intended to address the needs of any particular investor.