Beijing's Favorite Capitalists

By Harold Meyerson, Washingtonpost.com
Wednesday, June 3, 2009

Marx railed against "the idiocy of rural life," by which he meant its isolation and its lack of social differentiation, but 20 years ago, it was that very "idiocy" on which the Chinese Communist Party depended to maintain its hold on power. Once Deng Xiaoping decided to suppress the demonstrators in Tiananmen Square by force, the challenge for the Chinese leadership was to find army units that wouldn't shy from shooting unarmed Chinese students.

Deng's henchmen quickly despaired of finding such soldiers in the cities; they had been contaminated by too much contact with the very kinds of people they'd be called upon to kill. The military units that rolled into Beijing 20 years ago today came chiefly from the sticks. Isolated by geography and indoctrination from the liberalism flowing through Chinese cities and packed into Tiananmen Square, they were the perfect shock troops for Deng's murderous reassertion of authoritarian power.

Two decades later, however, the troops who pulled the triggers have reason to wonder who won and who lost in the class-and-culture war in which Tiananmen was but the bloodiest battle. Today, the Communist Party has proven itself, in all but one particular, a friend to the urbanites and professionals who now prosper in China's cities -- socioeconomically, the very kinds of people it gunned down in Tiananmen Square. All it asks of them in return is that they not actively seek democratic rights. For their part, the hundreds of millions of beneficiaries of China's new prosperity have kept up their end of that bargain. Knowing that they'd face the brute wrath of the party and state if they did, they've made an understandable decision.

In the countryside, where hundreds of millions of Chinese still reside, the benefits of the nation's economic miracle are far harder to detect. For many, the backbreaking drudgery of peasant life persists as it has for centuries. Some Sinologists believe that one reason the urban Chinese haven't demanded more rights is their fear that in a democratic China, they'd be outvoted by a peasantry that would demand a more equitable distribution of the nation's wealth.

According to the nostrums of Reagan Age America, the current Chinese system -- in equal measure capitalist and authoritarian -- cannot actually exist. Capitalism spread democracy, we were told ad nauseam by a steady stream of conservative hacks, free-trade apologists, government officials and American companies doing business in China. Given enough Starbuckses and McDonald's, provided with sufficient consumer choice, China would surely become a democracy.

And yet, it hasn't. And this week, Treasury Secretary Timothy Geithner has traveled there to assure its government that America won't permit China's massive investment in our government's notes to diminish in value, even if that means we have to cut back on needed public programs.

In explaining China's rise and America's decline, historians may well note that capitalism -- American capitalism, anyway -- far from spreading democracy, actually has played a key role in transforming China into an authoritarian superpower. The transfer of manufacturing from the United States to China -- driven by the rise of mega-retailers such as Wal-Mart that have been able to enforce a regime of low wages all along their global supply chains -- has diminished our middle class and expanded theirs. American companies such as Wal-Mart have not been deterred in the slightest by China's authoritarian practices; indeed, before China enacted a law that infinitesimally increased workers' rights last year, the American chambers of commerce in China joined with communist hard-liners in opposing the statute.

The attraction of authoritarian regimes to America's more authoritarian business executives is long established, if seldom noted. Henry Ford, who routinely spied on and abused his employees until the United Auto Workers came along, built and owned factories in Stalin's Soviet Union. Wal-Mart, which used to lock its night-shift stock clerks and janitors inside a number of its stores until the morning managers arrived, prefers production in Guangdong to manufacturing in the Midwest. Indeed, the director of purchasing for Wal-Mart is based in China.

As historian Nelson Lichtenstein and others have documented, Wal-Mart inspires in its managers an almost fanatical allegiance to the company's cause. In Wal-Mart world, the provincialism (if not "idiocy") of rural life is fused with a brilliance in the art of low-cost, low-wage logistics to create a company that is both authoritarian in its inner workings and a friend of authoritarian regimes abroad. The butchers of Beijing could not have found any more compatible capitalists.

meyersonh@washpost.com