Beijing's Property Rights Revolution

China: Somewhere James Madison is smiling. China's ancestral traders are vindicated, too. Their country's communist legislature has just passed a law to protect property rights.

The law's passage is a major milestone, a crowning of the post-Maoist entrepreneurship, launched by the Great Helmsman's successor, Deng Xiaoping, and sustained by current President Hu Jintao and Prime Minister Wen Jiabao.

Their nearly three-decade-long encouragement of privatization and market economics must be credited for the Asian giant's phenomenal economic growth.

Because few political acts could more completely undermine the Marxist ideology that justified Beijing's rule since Mao Zedong's 1947 revolution, Hu and Wen moved the law through the National People's Congress stealthily.

The two maintain silence about it even now, not wanting to rouse leftist opposition; indeed, a year ago, sensing poor timing, they withdrew it from the legislature's consideration. They also censored public discussion of the idea.

Can such a radical legislative change be taken away just as stealthily? Unquestionably. But this one flows consistently with China's remarkable transformation to a market economy.

The country's robust entrepreneurial class demands it, as does its burgeoning middle class, which fears arbitrary moves by political functionaries to take away recent gains. World markets themselves, prospecting for 1.3 billion customers, also expect China's legal system to mesh more reliably with the West.

Opposition comes from old-line ideologues who witness mounting corruption as party bosses assure themselves pieces of the privatized action. The graft is woefully real, but the ideologues' failure is to be blind to its remedy: even more free-market competition. Beijing, for its part, set up a classic conflict. While guaranteeing one necessary condition of freedom, it stifled another.

American historians will note that our own constitutional convention was conducted in secrecy, the framers needing a quiescent period in which all the articles could come together without public discord. But come together it did, even after a fractious debate over whether to include a Bill of Rights. Madison would later declare, "Government is instituted to protect private property of every sort."

It's flattering to think Hu and Wen learned from the principal architect of the U.S. Constitution, as indeed they almost certainly did. But in protecting private property, China restores -- after a 60-year flight from reality -- its own mercantile tradition going back thousands of years.

And before we dance on communism's grave, understand that China's officially atheist regime recognizes no pre-political source of rights. Contradictorily, the same leaders have not buried the principle that all property belongs to the state.

Beijing also remains intent on using its booming economy to fuel its military expansion, a continuing anxiety for the West.

Still, if Madison et al. are smiling, that obtrusive portrait of Mao, even now gazing stonily over Tiananmen Square, may now depict a discernible frown.

Copyright 2007 Investor's Business Daily, Inc.