Capitalist blossoms in China?

Capitalist Blossoms in China?

LET A THOUSAND capitalist flowers bloom. The Thoughts of Chairman Adam Smith have at last penetrated the inscrutable reaches of the Middle Kingdom. The Central Committee of the Chinese Communist Party has announced a far-reaching reform of China's economy, based on such revolutionary concepts as the free marketplace, supply and demand, minimal government interference in setting prices and wages, and the right of enterprises to hire and fire as they please. According to a directive issued by the Central Committee on October 20, Chinese enterprises will henceforth be "put to the test of direct judgment by consumers in a marketplace so that only the best survive.' Even Chrysler never had it so bad.

China's sudden sallying onto capitalist turf evidently was inspired by the dramatic success of an earlier reform, announced in 1978, that created a system of incentives for the country's peasants--with the result that inefficient rural communes began to break up and agricultural output increased. Like the Soviet Union before it, the People's Republic learned that the peasants would not feed the country if the country denied them any claim to the fruits of their labors.

The USSR has also on occasion attempted more basic reforms similar to those that China has announced --Lenin's New Economic Policy (NEP) and the Liebermann reforms come to mind--but they have never endured for long. The problem has never been that free-market experiments have failed to increase output; rather, they have threatened the political control of the Party apparatus. When Lenin announced the New Economic Policy in 1921, he admitted frankly that it would mean the growth of capitalism, but a capitalism, he claimed, that Communists did not need to fear.

But fear it they did; and soon a host of prosperous "Nepmen'--small businessmen and entrepreneurs-- gained prominence in Leningrad, Moscow, and other cities, their wealth and prestige a direct threat to the power and authority of petty and not so petty Party bureaucrats, who soon beseeched the Kremlin to move against them.

Which it did. The Liebermann reforms of the Brezhnev era died an even quicker death at the hands of wary Party activists who recognized a capitalist threat to their dominance when they saw it--the blessing of the Kremlin notwithstanding. Communists who try capitalism soon learn there is no dividing line between economic freedom and political liberty; to permit the first is to invite demands for the second. If you would control the people, you must control their means of livelihood.

The Chinese Communists will learn this soon enough --or they will cease to be Communists. Since totalitarian regimes tend to cling to their power and to their ideology, it is likely that either the Chinese experiment will fall short of the announced ends of the leadership, or the leadership will announce shortfalls and bring the experiment to an end. It is one thing to plant flowers in a prison courtyard; it is quite another to knock down the walls that they might have sufficient light to bloom.