A Major Misconception About China

Many well-known China experts have expressed the notion that the Chinese middle class, having experienced years of steady economic growth, will suddenly demand rights, freedom, and democracy, resulting in a revolution and toppling of the Communist Party. It is also widely believed that people will care less about official statistics (which in many cases appear fictional) and more about the quality of their lives and the type of government they have. Such a prognostication has been circulating for 20 years now, at least with respect to China. Meanwhile, the Chinese middle class (which can alternatively be called bourgeoisie) remains quiet, barely showing any visible intention to demand political reforms from below. No doubt, it would be great if the ruling party sooner or later realized the need for political reforms and started to incrementally introduce them. However, for the most part, the Chinese middle class has opted for wait-and-see tactics in anticipation of political reforms from above.

Here is why. The Chinese bourgeoisie encompasses well-educated and fairly well-off people (annual per capita GDP in Shanghai, for instance, was around $20,000 as of last year). They tend to carefully observe world trends and have witnessed examples of how so-called “democracies” work – both in neighboring countries such as Thailand, and in older “traditional” democracies such as the United States. To be more precise, in Thailand a “democratically elected” prime minister has finally been overthrown by the military. In Venezuela, the local middle class is also protesting against their “democratically elected” leaders. People are fed up with democracies that in reality bring populists like  Shinawatra and Maduro into power. As a result, the middle class goes out in the streets with the demand to undo a democratic voting system that benefits a parasitizing majority and exploits a working minority. The Chinese bourgeoisie looks at the United States and sees political leaders like Kilpatrick in Detroit, DeBlasio in New York, Baraka in Newark, who, although not as extreme as Shinawatra or Maduro, are quite populist. Essentially, America, a traditional democratic state, appears to be moving in the same populist direction, discrediting the idea of democracy in Chinese eyes..

In other words, the Chinese middle class can clearly observe what happens to democracies, populists systematically win elections, and thus they project potentially similar results for their country. With equality and “social justice” on their campaign banners, populist politicians promise to extract more money from the rich (who, by and large, earn the money) and then hand it out to the poor. As a result, those who work and earn money constitute a minority nowadays, whereas those who don’t work (including such categories as the unemployed, students, and retirees) have now become a majority. This majority, in turn, votes for more wealth expropriation and ever more generous handouts, demanding their “fair share,” often as reparations for prior oppression and exploitation. From the perspective of its domestic affairs, China itself is far from being perfectly calm and peaceful. Chinese peasants continue rioting against forceful confiscation of their lands by private and state actors. Chinese peasants revolt and demand higher wages too. Meanwhile, the Chinese bourgeoisie, however, does not seem to share their revolutionary sentiments, so far.

Hence the question – why would Chinese people fight for democracy as it is currently practiced (not merely as a theoretical construct)? Why would we expect that democracy in China will be any different from the aforementioned examples of both old and young democratic states? True, the ruling Communist party is obsolete and inefficient; true, the bureaucratic machine is cumbersome and hard to deal with; true, the regime overall is corrupt. Nevertheless, the Сhinese middle class believes that, for all its flaws, the current regime is stable; it is better to be ruled by the Chinese aristocracy, in the form of the Communist Party, than it is to be ruled by a crowd of hungry and illiterate peasants. Moreover, President Xi Jinping has made it clear that the country’s new administration is serious about leading China towards the market economy and has already taken notable steps in that direction. The bottom line of this story is clear: if you want to wreck 36 years of economic progress for rich and poor alike, let China’s 500 million peasants vote for another Mao.

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Populist democracies and universal suffrage

Ukraine, Turkey, Argentina, and many more countries are undergoing turmoil moments these days. Waves of protest movements and mass indignation with the ruling “democratic” regimes have engulfed these countries. The protesters require to annul the results of the last elections and conduct the new. Why is it happening in more or less steadily developing countries, whose economies just yesterday were rated as promising and rapidly growing? Why is it happening in countries whose leaders were elected democratically – with some inevitable caveats in procedure of course (due to imperfection of any elections) yet based on the principle of majoritarian vote? To find it out let’s have a look at these randomly selected country-cases.

Thailand

The protest movements have been underway here since November 2013. The protesters require to introduce voting quota based on age, property and education. Until very recently, Thailand was a rapidly developing economy. As soon as the populists (Yingluck Shinawatra) came to power they immediately started crushing the economy. The country got entangled in a network of fraud ponzi schemes. The most fraudulent and notorious one was the so called “rice scheme.” The “rice scheme” was launched in 2011. Thailand is the largest rice exporter accounting for 70% of all rice exports in the world. Rice farmers constitute the bulk of voters. Prime-minister Yingluck figured that she could play the rice card to attract more votes and announced that the government would buy rice from farmers at a price that was twice as high as the spot market price at that time. Since Thailand was the major exporter of rice to the global market at that point, the government decided to artificially raise prices, monopolize the rice market and regulate prices at its will. What happened next was quite predictable: the neighboring countries such as Kambodia and Birma (also rice producers) began exporting their rice to Thailand at a higher price. Thus Thailand generously funded the Kambodian peasants. Meanwhile, part of the rice stocks in Thailand disappeared. To date, they have 18 million tons in storage with 4 million tons of rice stolen. India has been benefitting from the populist and myopic Thai policy. Thailand being swamped by its rice stocks has therefore yielded his status of the largest rice producer and exporter to the next large rice country – India. India increased its rice cultivation and flooded the world market with cheap rice. Consequently, the world price for rice has dropped by 20%. As a result, Thailand now stores 18 million tons of rice with no intention to sell it by the current market price. Thus, the government’s loss amounts to 9 billion dollars according to some moderate sources and 22 billion dollars according to other. The Thai farmers have not been paid since last October despite endless promises from the government to pay double for their crops. Educated urban upper-class people went out to the streets in Thailand in protest to such a policy and government. They request that “those wonderful people” who voted for these politicians and their schemes should be deprived of the right to vote.

Venezuela
President Maduro invaded the local stores with militants. He established the Ministry of Happiness [Notice, it’s not Orwell it’s real president Maduro in his real country]. Recently, all international airline companies cancelled their flights to the country because Venezuela operates on two exchange rates for bolivar – the official one (6,3 bolivars for 1 US dollar) and the black market that is 10-12 times different. Thus, foreign airlines had to sell the tickets for bolivars by the official rate. In the meantime, the Venezuelan government promised to exchange the bolivars back for dollars by the official rate. However, the government kept delaying the deal so that the debt for the companies has reached the point of 3 billion dollars. The companies had to shut their flights.

Argentina

President-populist Nestor Kirchner was elected two times, for the third term he elected his own wife – Kristina Kirchner, because the electoral system in Argentina (as in any other decent democratic country) prohibits one and the same politician to serve a term three times in a row. After his succession maneuver Nestor died and Kristina started ruling on its own. She turned on money printer which brought the country to inflation of around 26%. Commodity prices skyrocketed. Kristina adopted a regulation law to keep the prices “fair”. In addition, she initiated two different exchange rates for peso – one official, the other – created by the black market. The two rates are not even close. Kristina also took control over the national media banning newspapers from publishing advertisements thus depriving the publishers of income. Noticeable that a few years ago Argentina was a country with steadily growing GDP, and the presidents have always been elected by the majoritarian vote.

These few examples of failed and essentially disruptive populist policies have explicitly shown that the belief that universal suffrage (to be especially utilized in a poor country) will bring about freedom and free market – is entirely wrong. This statement will be wrong in wealthy western democracies too. The financial crisis in Europe proves that even well-off democracies don’t benefit from universal suffrage and politicians-populists, who just increase the number of people dependent on state. The situation where people being corrupted by generous welfare programs outnumber people who work and pay taxes – is not going to not end well.