China’s Revolutionary Myth

LONDON -- Arriving in Beijing on Aug. 23 for his third China visit in five years, Venezuelan President Hugo Chavez praised the country's Communist leaders to the skies for having rescued China from a "practically feudal" situation and made it one of the world's largest economies in less than half a century. It was an entirely predictable remark by the firebrand Venezuelan leader. It was also entirely wrong.

According to Chavez, China's emergence as a leading economic power is "an example for Western leaders and governments that claim capitalism is the only alternative. We've been manipulated to believe that the first man on the Moon was the most important event of the 20th century. But no, much more important things happened, and one of the greatest events of the 20th century was the Chinese revolution."

Back in the late 1980s, when mocking the few remaining Communist believers had become a popular indoor sport in the former Soviet Union, one of my favorite gambits was to point out that Russia would have done far better economically if the Communist revolution of 1917 had never happened at all. No matter how pessimistic your assumptions about the way that a non-Communist Russia would have developed, it simply couldn't have done as badly as the Communists did.

To prove your point, all you had to do was to pick some other country that had been at about the same stage of industrial development as Russia just before World War I -- Italy was the most obvious candidate -- and to compare the outcomes in the present.

Italy went through the Great Depression in the 1930s (which the Soviet Union escaped), and was on the losing side in World War II. Nobody would claim that post-1945 Italian governments (all 50-odd of them) have been models of good governance, and Italy is far poorer in natural resources than Russia. And yet, by the late 20th century Italians were four or five times richer than Russians, purely because they had avoided Communist rule. They were a lot freer, too.

The Soviet Communists always compared the circumstances before the revolution (which were pretty dreadful) with the situation 70 years later, and gave "the Revolution" full credit for all the changes for the better -- as if other Russians, using less violent and oppressive means, could never have changed the country. Even in the late 1980s, they effectively claimed that it would still be like 1917 in Russia if the Communist revolution had not happened.

So here we are again, with the Chinese Communist regime taking credit for all the improvements in China since they won the civil war in 1949, and foreign leftists like Hugo Chavez holding out China as an example of what wonderful things can be accomplished under "socialism." But what would China be like now if the Communists had not won power in 1949? Much richer, much freer, and not much less equal, either.

The right comparison is not between China in 1949 and China now. It is between China's economic progress since 1949 and that achieved by its neighbors that were in a roughly similar state of development at that time. The two closest parallels are South Korea and the "other China," Taiwan. Both had been Japanese colonies for decades before 1945, so they were a bit ahead of the mainland -- but then Taiwan's population grew overnight by almost 40 percent in 1949 as Nationalist refugees from the lost civil war flooded in, and Korea was devastated by the war of 1950-53.

Both Taiwan and South Korea were ruled for the next three decades by oppressive and ruthless military regimes. Neither country adopted raw free-market capitalism -- the state protected infant industries and nourished them with low-interest capital -- but at least they weren't tied to Marxist economics. By the 1980s both countries had achieved economic takeoff, and democracy came soon afterward.

Meanwhile, China had the Great Leap Forward, the Cultural Revolution, and various other man-made disasters which meant that per capita income did not even double between 1949 and 1979 (although misery was redistributed on a more equal basis). Then under Deng Xiao-ping in the 1980s, China finally abandoned "socialist" economics and adopted the same style of state-assisted capitalism that its neighbors had been practicing for the past 30 years -- at which point, finally, its economy began to grow fast.

So today the average Chinese income is about one-tenth of that in South Korea or Taiwan: slowly, they are starting to catch up. There is more freedom in China now, too, though the state is still above the law. There is still no democracy, of course.

The Party constantly exhorts the people to be grateful for all that it has accomplished on their behalf, but they would probably have been much better off if it had never existed.

Chavez must know all this, and presumably thinks that it just doesn't matter: His socialist project is fueled by oil revenues, so he doesn't have to observe the rules of normal economics. But he does need allies against the wrath of the United States, so he says the right things to his hosts, the Communist rulers of China. They may be closet capitalists these days, but if they don't have the myth that the revolution was beneficial, how can they justify their own monopoly of power?