Capitalism without Democracy

"The other books that I’ve chosen examine specific facets of the broad debate between Pei and Yang, looking, as it were, ‘under the hood’ to shed new light on the dynamics of contemporary Chinese politics. For example, Kellee Tsai’s book, Capitalism without Democracy, looks at the curious fact that while an affluent class of private entrepreneurs and businesspeople has arisen in China as a result of economic reform, the new Chinese bourgeoisie has displayed no real interest in Western-style democracy. And this, in turn, appears to violate one of the most sacred canons of the classical theory of modernisation. As formulated most famously by Barrington Moore, modernisation theory predicts that the historical emergence of an affluent, self-confident urban commercial and industrial bourgeoisie, rising to challenge the traditional power exercised by a strongly conservative landed rural aristocracy, comprises a potent force for democratisation. As Moore famously put it, ‘no bourgeoisie, no democracy’. In addressing the puzzle of why Moore’s prophecy has failed to come true in China, Tsai notes that the party-state has successfully co-opted and patronised China’s new bourgeoisie. By offering aspiring entrepreneurs preferential access to state-controlled resources and opportunities, the state in effect has bought the political loyalty of China’s private sector. Unwilling to bite the hand that feeds them, most private entrepreneurs appear satisfied with China’s existing institutional arrangement. And why not? They have been among its biggest beneficiaries. In documenting this story of the party-state’s successful seduction and co-optation of the private sector, Tsai provides a powerful explanation for the absence of widespread bourgeois support for democratic political reform. It’s just another way of looking at the same issue. Pei says that Chinese communism is doomed because it is anti-historical. That is, it seeks to prevent, at all costs, economic development from generating irreversible pressure for democratic political reform. By contrast Yang says, ‘Well yes, but the Chinese have altered the very dynamics of development by creating a more adaptable and responsive version of authoritarianism that is actually working, one that doesn’t necessarily lead to a democratic future.’ Now, into this thicket wades Kellee Tsai, along with a handful of other scholars, including Bruce Dickson and Margaret Pearson, who have carefully studied the political attitudes and values of China’s new business elites. They suggest that Pei’s implicit faith in the democratising impact of economic development is misplaced. And they make a very compelling argument: because it was the Communist Party itself that oversaw the reform of the state-owned sectors of the economy, it was able to dictate the terms of private sector survival, competition and profit. Only those entrepreneurs who collaborated with the state really had an opportunity to prosper in the new economy. The result has been the marriage of state power and private affluence. You simply cannot be a successful player in the Chinese economy if you do not have the proper bureaucratic contacts and inside access. Here, Tsai helps to explain the otherwise puzzling resiliency of China’s communist regime, in an era marked by the sudden disappearance of Leninist regimes elsewhere. In so doing, she nicely complements Yang’s rather different explanation for the Chinese regime’s observed resiliency. Taken together, these two phenomena – private sector co-optation and administrative adaptation – go a long way toward accounting for the unexpected survival of Chinese communism. Yes, it’s the ‘get along, go along’ mentality. Successful businesspeople are seduced, for example, by offers of participation in party-dominated consultative bodies such as the Chinese People’s Political Consultative Conference, or they are encouraged to run for office in local People’s Congresses. Successful entrepreneurs are thus brought into the web of the state through inducements rather than intimidation, through blandishments rather than threats, and this creates a strong and diffuse network of mutually supportive relationships between state and bourgeoisie. Yes, but only when things go pear-shaped, running out of control. Normally, the system tends to protect its own. When things run off the tracks, however – for example, when a major corruption scandal emerges that cannot be swept under the rug – some sacrifices must be made, some villains must be offered up to assuage the anger of the masses. But these tend to be scattered, individual cases; and as Pei argues, the structural sources of endemic corruption that inhere in the patron-client relationships between state officials and business elites have thus far remained largely immune from systematic cleansing. To do so would require a fundamental institutional overhaul, which the party-state, fearing instability and the loss of its own power, has thus far shown no inclination to initiate. Hence Pei’s characterisation of a ‘trapped transition’. Now, the close alliance between private wealth and public power may create a ‘win-win’ situation for the state and for the bourgeoisie, but there are major ‘losers’ as well – principally China’s voiceless rural peasants and migrant labourers. These are the people whose low-cost labour and lack of basic welfare support have fuelled the spectacular export growth of the Chinese economy since the 1980s. Although Tsai is well aware that the pent-up grievances of these victims of rapid, collusive development create a potential challenge to regime legitimacy, she doesn’t really concern herself with their potential for undermining the stability of the authoritarian party-state in China. In the main, her analysis of the opportunistic alliance between state and business in post-reform China tends to complement Dali Yang’s argument that China is forging a uniquely viable pathway to authoritarian modernity, effectively bypassing democratic reform. Yet in her awareness of the great and growing gulf between haves and have-nots in China she displays an implicit, cautionary scepticism that is more akin to Pei than to Yang. So – like me – she seems to be ambivalent, vacillating between the two poles of optimism and pessimism."