Crossroad of socialism: Market-economy reforms in survivors of Communist regimes

“Poverty is not socialism!”  The reinterpretation of Marxist conception of socialism and communism of Deng Xiaoping, de facto core of CPC leadership then, is best manifested by this quote in 1987. Without democratic transition during the Third Wave, China and Vietnam had eminently reenergized their societies through implementing economic reforms of liberalization and marketization, while economic performances reversely consolidated their Marxist-Leninist Party-State regimes. China’s GDP per capita in 2018, the 40th anniversary of the start of the Reform and Opening Up, had grown to $9,975 from $229 of 1978. (NBSC, 2017 & 2019) Vietnam’s GDP per capita, on the other hand, was $422 in 1986, the year Doi Moi was initiated, in contrast to $2,192 in 2016, its 30th anniversary. (WB, 2020) 

The sociopolitical consequences, however, is viewed paradoxical: ideological orthodoxy is undermined, the demographic pyramid is increasingly shifting to the middle, struggles within the Party occur between the reform-minded and the old guards, and the popularity of social medias stimulates political socialization. Foreign observers often note that the lack of democratic institutions and healthy civil society would inevitably lead to the unsustainability of economic growth, and thus the longevity of economic growth necessitates a transition of political institution; democratization studies may even predict that growth under market economy would give or have already given birth to a powerful middle class who are open-minded and deserve more political participation, which would in turn promote democratic transition. The reality is, though, after all these theoretical reasonings, neither democratization nor pro-democracy social movement, civil unrest, or any tendency could be observed.

This paper, henceforth, intends to evaluate the success of market-oriented economic reforms in Marxist-Leninist authoritarian states whereas democratization is absent, by a comparison between the People’s Republic of China and Socialist Republic of Vietnam, aiming to answer the question that does the triumph of market economy in durable socialist regime actually increase the potential for democratization by giving birth to a mature middle class, who is usually supposed to support democratization. It will be shown that the mode of implementing economic reforms, in which the state and the civil society both actively engage and contradict each other, restructures social stratifications in favor of a rising middle class; these trends, nonetheless, cannot serve to democratize the regime if the state victoriously secured its dominance through this state-society contradiction and exertion of control over civil society. 

I. Pattern of reforms: the struggle between party-state and society

Examining the entirety of economic reforms in either PRC or SRV with the desire to identify a singular explanatory model would be a conceit, trapped in what Paul Veyne (1978) termed “singular constellations”. Even CPC’s official documentation on the history of the Reform and Opening-Up is cautious with any grand narrative other than the vague notion that achievements had come “under the Party’s righteous leadership.” No single theme could capture the paradoxical multiplicity of events proceeding over today: the fact that both reforms were commenced by internal struggles, the crackdown of the Gang of Four in China and the death of Le Duan in Vietnam, suggests the Party’s central role, whereas the rapid expansion of small, commune-level businesses stimulating economic growth directly in both states indicates the significance of private sectors.

Such multiplicity could be structured, to facilitate the following research rather than conceptualizing a catch-all model, in a two-dimensional framework thanks to theoretical foundations in political science and sociology. This model is solely descriptive, arranging constellations of historical factors in a logical way, rather than interpretative so this paper will not explain it much. Della Porta (1995) proposes a three-level analysis on social movements, macro-level for political cultures and structures, meso-level for societal and organizational factors, and micro-level for individuals’ agency. As she also deals with a subject without clearly demarcated explanatory or leading factors, such threefold model could be utilized to catch the complication of economic reforms. Rosanvallon (2004) on the other hand interprets the long-term model of political changes in France since the 1789 Revolution as a consistent contradiction between Jacobinism, the unitary political culture advocating for an omniscient state and its direct imperation to the popular sovereignty, and civil society. Contemporary revolutionary regimes, similarly, embody such Jacobinism as they are always ready for a Marxian (1847) “general reshuffling of the society” while Rosanvallon (2004) also notes that the pursuit of a unitary society characterizes any revolutionary political culture. Since the subjectivity of this unitary political culture is the state and its apparatus while Leninist Party-state genes of PRC and SRV has secured sizable state capacities, in the following research on the two state, the state-society contradiction would replace the abstract Jacobinism-civil-society one.

The following table summarizes the two-dimensional framework of describing the factors leading to economic growth in respective reforms. The state-society division, however, is more than being descriptive: there exists a struggle over the dominance of economic sphere between the state and the civil society, shown by empirical evidence like CPC’s ban on recruiting Party members from private sectors after the 1989 Tiananmen Incident or Jack Ma’s recent condemnation on China’s fiscal policy, or more directly a scramble for the reforms’ profit. For long, this division is what had energized the economic reforms by that state granted autonomy and facilitation to business expansion and the businesses in return comply with the state-set focuses of developments. An organic interaction between them prevent both the inefficiency of command economy and the irregularity of free market. When the growth is obstructed, however, such division soon results in contradiction, like China’s inflation in the 1980s and Vietnam’s depression in the Asian Financial Crisis, which manifest in periods of unrest or dissident. The long-term tendency is, despite the still considerable rate of growth in both states, that state-society contradiction has turned intensified and governed popular support after the decadence of ideological legitimacy in the two states. 

II. “Departure from revolution”: restructuring socialist society

The two-dimensional framework does not directly interpellate an explanatory theme, but it helps to understand the reforms’ socio-political and -economic impacts `impacts on party-states’ resilience. Resonating with Skocpol’s (1999) theory on state’s autonomy and Poulantzas’s (2008) theory that state is the battleground over hegemony, economic reforms are the arena where state and civil society compete for more dividend of reforms and the dominance in economic sphere, for that reforms often bring transformations to the roots of society. The above framework builds a more comprehensive model of this contradiction, in which reform’s history is divided into three stages, each with a primary level where state-society interaction took place, although at each stage levels other than the primary one are also energetic but less important.

At the initial stage, the late 1970s in China and the late 1980s in Vietnam, both party-state and civil society acted on the micro-level, or individuals’ contingent actions, each for its own sake. Palace politics within Party had shaken unchallengeable dogmas. In October 1976, a coup d’état by pro-reformist military arrested the prominent ultra-Maoist Gang of Four, and in November 1978, on the preparatory conference before the 3rd Plenary Session of the 11th Central Committee, Hua Guofeng, the old-guard General Secretary succeeding Mao, faced a mutiny from reformists, after which Deng Xiaoping, “reform’s designer,” seized the power. (Li and Yang, 2008) In Vietnam, the death of Le Duan, the pro-Soviet hardline leader who just consolidated his clique’s power by staffing central agencies with supporters, helped the pro-China, pragmatist faction strike back and paved the way for an economic reform after China’s model. The outcomes of power struggles did not mean the immediate start of reform, though, but rather leaving vacuums in institutional and ideological control of the society, which let adventurous individuals of the civil-society side act to challenge existing principles. The most celebrated example is the establishment of the Household-Responsibility System, a privatized reform against agricultural collectivization: it was initiated in 1978 by 18 peasants in Xiaogang Village, Anhui who agreed to end the local People’s Commune and recognized such a rebellious move’s risk of losing lives. The editorial “Practice is the only standard to examine truths,” another example, was written by a brave professor who wished to challenge the restrictive atmosphere and Maoist philosophy since the Cultural Revolution. 

The second stage was remarked by macro-scale adjustments: in China’s 1980s and in Vietnam’s 1990s, competition has occurred over ideological directions, but the still huge profitability of reforms prevented further escalation. The previous power struggles and individuals’ adventures had levered virtually everything, from the party’s centrist discipline to civilians’ personal belief, leaving vacuum for radical transformations. Vietnam’s coming of macro-adjustments was compelled by the decline of pro-Soviet factions, which led to its early-1990s unwilling acceptance of the WB’s advice for structural liberalization. The 7th National Congress of CPV reset macro ideological agenda, the most radical move possible, by codifying the “Socialist-oriented Market Economy.” The 1981 Resolution, similarly, by the 11thCentral Committee of CPC was equivalent to Khrushchev’s Secret Speech, marking an irreversible departure from Maoism by denouncing Mao’s role in the “disastrous” Great Leap Forward and Cultural Revolution. (Central Committee, 1981) More structural reforms followed, some as posteriori recognition of civil society’s radical actions like the Household-Responsibility System being implemented nationally, others as the party-state’s own attempts like the relaxation of price controls by introduction a dual-track pricing. The civil society also acted to compete. Notable ideological moves included the slogan “Time is money, Efficiency is life” by Shenzhen SEZ, manifesting an “un-socialist” and even capitalist proposition contrary to the orthodoxy. Radicals even openly proposed slogans on democracy, multiparty system, and bringing an end to the one-party-state, signified by the “Democracy Wall” at Xidan Street, Beijing. New social strata are formed, especially the intelligentsia being filled by liberal-minded university students. 

The third stage, the 1990s to early 2010s of China and the 2000s to present of Vietnam, was the peak of both state-society struggle and the reform itself: economic growth had triumphed in the variety of meso-level changes, but the closing profit margin and the maturing civil society intensified the competition to an unprecedented scale. Most legislative and institutional changes, in both China and Vietnam, upon which later growth miracles based were formulated during this period, like codifying modern contract laws and entering WTO. Most cornerstone enterprises, on the side of civil society and private sector, were constituted during this period too, like Tecent and Alibaba in China. The competitive interaction also peaked in many ways, and Part II will discuss the party-state’s response. 

III. PRC: Authoritarian resilience and the party supremacy

The four decades since reform witnessed democratic movements, civil disobediences, minority problems, rising social inequality, increasingly suppressive political atmosphere, but Chinese party-state’s stability and control over society seem to be unprecedently consolidated. CPC’s resilience, confronting the rising middle class and ideological decadence similar with failed socialist regimes like USSR and Mexico, is to be traced through analyzing impacts of each stage’s power dynamics.  

Paradoxically, while scholars observed the middle class emerging during economic growth often later turned to oppose the authoritarian regime and demand political changes in most cases of democratization, like Mexico’s structural adjustment under PRI or South Korea’s Chun Doo-hwan junta, the Chinese middle class has rapidly grown demographically but been politically insignificant. Depoliticization characterized both China’s economic reform and middle class resulted: quantitative research shows middle-class individuals have “no desire for…any reform that occurs outside the purview of the state” and seldom participate “real-life socio-political events.” (Miao, 2016) Chen and Lu’s (2011) quantitative study further illustrates that the more middle-class individuals depend on the state and enjoy social/economic wellbeing, the more they tend to support not democratic vision but “Law and Order.” 

The historicity of Chinese middle class would provide a feasible explanation, that the party-state’s active response, backed by its omniscient state apparatuses established during the first thirty years of PRC, to the expansion of civil society secured its dominance and facilitated the law-and-order ideology. Born in economic developments enriching some among the mass, the middle class did not enter the arena until the end of the above mentioned first stage, when reform had initiated growth and previous lower-class population strived to become richer in the vacuum of levered political atmosphere. The 1989 Tiananmen Incident remarked the end of macro-level struggle over the general direction of the reform, thus the end of the second stage: during and before the movement, new social strata, notably college students and small capitalist-business owners, attempted to advance their agenda on further political liberalization, combatting the party-state’s emphasis on economic development, SME and SCC’s core. Structural reforms launched also intensified the struggle, as the inflation and corruption followed dual-track pricing was widely targeted by demonstrators. The history of China’s reform has no difference with Mexico’s or USSR’s until CPC acted determinedly to destroy those civil-society challengers and their sympathizers within the Party, the massacre thus coming.

The state’s initial victory ensured that since the start of the third stage, meso-level civil actors of entrepreneurs and industrialists interested in nothing but making money, as they had witnessed the risk of demanding reforms outside the party-state’s purview. Struggles appeared only occasionally until the 2008-2012 wave of discontent, after long time of recovery of meso-level civil actors, particularly intelligentsia, and development of private sectors, triggered by scandals relevant to both Wenchuan Earthquake and Beijing Olympics: 2008 is remarked by many as the “Zero year of China’s civil society” when the majority of intelligentsia, sympathized and funded by private entrepreneurs, formed various NGOs and acted to criticized governmental incapability and corruption. Again, the party-state acted determinedly, establishing social-media censorship and GFW, to undermine middle class’s potential of politically associating, followed by massive detentions and even arrests since Xi’s presidency. The contrast between impressive economic growth, together with rapidly rising well-being, and increasingly repressive political atmosphere ultimately exterminated “sociological middle class” who were reconstituted, voluntarily or forcefully, into “income-defined, consumerist middle class.” (Shen, 2012) The state-society struggle is ended with the party-state’s absolute dominance, especially obvious after the 2020 inquiry on Jack Ma, China’s leading oligarch.

IV. SRV: Revolutionary factionalism and the party’s indetermination

It should be noted that China’s success in depoliticizing the middle class is preconditioned by its state capacity and remarkable growth, the former empowering party-state’s crackdown of challengers while the latter encouraging middle class to focus on profiting. Vietnam’s case, comparing China’s miraculous reform, illustrates the logics behind such depoliticization: the data at the beginning show, during the Cold War, Vietnam’s economy had significantly outstripped China, but today China’s GDP per capita is five times of Vietnam’s. With similar party-state institutions and cheap labor, examining Vietnam’s relatively worse performance will show the secret of resilience and provide predictions of their futures. 

At the first stage, CPV failed to reach a decisive conclusion of its power struggle: Le Duan’s clique had consolidated its leadership in all ways before his death, after which the succession of reform-minded cadres found themselves coexisting with Le Duan’s conservative supporters in central agencies. From the 6th to 9th National Congresses of CPV, factional struggles had slowed the reformists’ agenda, until the “Four Pillars” system, in which four most powerful positions – General Secretary, Premier, President, and President of National Assembly – are distributed to four regional factions, was informally formulated in the late 1990s, which, however, necessitates more internal bargaining for future decision-making. (Bathke, 2018)

Factional struggles have manifested in the reform’s incomprehension. The doctrine SOME, in the second stage’s macro-arena, comparing to its Chinese foil SME, preserves much legacy of the command economy like the central role of state-owned enterprises. This further undermines the third stage’s potential of growth, such as the unwillingness to privatize monopolistic state-owned enterprises, unlike China’s determination, blocking energization of private sectors. Presuming that meso-level actions of both party-state and civil society link most directly with economic output, as they deal with employment, consumption and production, while micro- and macro-levels are more like facilitators guaranteeing suitable conditions or motivation, factional struggles at least partially contribute to the insignificance of “Vietnamese miracle” comparing to China’s. 

Indetermination due to factional struggles becomes also implicit when confronting civil-society challengers. CPV’s attitude over Facebook exemplifies that it wished to constrain Western social media like China, but it could take step after long deliberation within the Party: when Facebook and other social medias facilitated spreading discontent for the first time in the early 2010s, China acted decisively to block them all while Vietnam took ambiguous stance; but recent news regarding Vietnam’s repressive manipulation of social medias demonstrated that CPV has the willingness to control them. (Al Jazeera, 2020)

Although, obviously, factional struggle is not the sole but one of many factors leading to CPV’s failure of taming the middle class and completing its dominance over civil society like its Chinese ideological brethren, the above analysis shows premises of depoliticizing middle class of ensuring both repressive state capability and considerable economic growth. 

Conclusion:

Reforms became party-state and civil society’s battleground where they have consistently competed for dominance over the reform’s direction and profitability on macro-, meso-, and micro-levels. The middle class born by economic growth under reforms became the primary meso-actors in such contradictions, namely small entrepreneurs and intelligentsia, who drive most directly both growth and democratization but meanwhile could be tamed and depoliticized by party-state’s victorious dominance. The premise of party-state’s dominance and thus resilience includes high repressive state capacity and constant, sizable growth: China’s earlier extermination of internal rivals preconditions its miracle and resilience, whereas in Vietnam, internal rivalries prevented state’s dominance from being established and one could predict a prolongation of the struggle between the state and the civil society. The potential of political transition in the resilient party-state of China requires other factors, but one could predict that if CPC fails to maintain sustainable growth or Party’s internal discipline, chances for re-politicization of the middle class and therefore democratic transition would occur.

Abbreviations:

CPC = Communist Party of China

CPSU = Communist Party of the Soviet Union

CPV = Communist Party of Vietnam

GFW = Great Firewall

HCM = Ho Chi Minh

HCMT = Ho Chi Minh Thought 

NBSC = National Bureau of Statistics of China

PRC = People’s Republic of China

PRI = Revolutionary Institutional Party of Mexico

SCC = Socialism with Chinese Characteristics

SME = Socialist Market Economy

SOME = Socialist-oriented Market Economy

SRV = Socialist Republic of Vietnam

USSR = Union of the Soviet Socialists Republics 

WB = World Bank

WTO = World Trade Organization

Bibliography:

[1] National Bureau of Statistics of China, 2017. Statistical Communiqué of the People’s Republic of China on the 2017 National Economic and Social Development.

[2] National Bureau of Statistics of China, 2019. National Economy was Generally Stable in 2019 with Main Projected Targets for Development Achieved.

[3] World Bank, 2020. World Bank national accounts data, and OECD National Accounts data filesdata.worldbank.org/indicator/NY.GDP.PCAP.CD?locations=VN.

[4] Paul Veyne, 1978. “Foucault Revolutionizes History. ” Foucault and His Interlocutors, edited by Arnold Davidson, 1997. The University of Chicago press.

[5] Pierre Rosanvallon, 2004. Le Modèle politique français. La société civile contre le jacobinisme de 1789 à nos jours. Éditions du Seuil.

[6] Karl Marx, 1847. The Poverty of Philosophy: Answer to the Philosophy of Poverty by M. Proudhon. Marxists Internet Archive. www.marxists.org/archive/marx/works/1847/poverty-philosophy/

[7] Donatella della Porta, 1995. Social movements, political violence, and the state: A comparative analysis of Italy and Germany. Cambridge University press.

[8] Theda Skocpol, Peter Evans, and Dietrich Rueschemeyer, 1999. Bringing the state back in. Cambridge University press.

[9] Nicos Poulantzas, 2008. The Poulantzas Reader: Marxism, Law and the State. edited by J. Martin. Verso.

[10] Li Yang and Yang Zhongxu, 2008. “Thirty-six days that changed China.” China Newsweek, 9(39).

[11] Central Committee of CPC, 1981. Resolution on certain questions in the history of our party since the founding of the People’s Republic of China. Marxists Internet Archive. https://www.marxists.org/subject/china/documents/cpc/history/01.htm

[12] Ying Miao, 2016. “The Paradox of the Middle Class Attitudes in China: Democracy, Social Stability and Reform.”Journal of Current Chinese Affairs, 45(1).

[13] Jie Chen and Chunlong Lu, 2011. “Democratization and the Middle Class in China: The Middle Class’s Attitudes toward Democracy.” Political Research Quarterly, 64(3).

[14] Ruiying Shen, 2012. On the middle strata of China and the problems of social order in period of transformation. Shanghai Academy of Social Sciences press.

[15] Benjamin Bathke, 2018. “Is Vietnam sliding deeper into authoritarianism?” Deutsche Wellehttps://www.dw.com/en/is-vietnam-sliding-deeper-into-authoritarianism/a-45769864

[16] Al Jazeera, 2020. “Facebook, YouTube accused of complicity in Vietnam rights abuses.” Al Jazeera.https://www.aljazeera.com/news/2020/12/1/facebook-youtube-accused-on-complicity-in-vietnam-rights-abuses

Leave a Reply

Your email address will not be published. Required fields are marked *