From the start of Deng Xiaoping’s economic reforms in the early 1980s through the first decade of the 21st century, China’s socialist-capitalist hybrid society has worked remarkably well.

Previously in this series: On Agency Part V, Deng’s Accidental Revolution

The Chinese economy has grown rapidly, and the Chinese people – after Tiananmen Square, anyway – have accepted the CCP as their undisputed master. “Give us all the power,” the CCP said, “and we will make you rich.” For a desperately poor society, this was an offer they could not refuse.

That’s not to say storm clouds didn’t gather. But those clouds went largely unnoticed by the West, whose leaders were mired in the deeply mistaken belief that China would gradually evolve into a more democratic society.

But if we analyze what was happening in China through the prism of individual versus collective action – that is, by resorting to Chinese history – we can easily see where Western observers went wrong.

While the West had its head in the sand, serious problems were accumulating in China, most of them related to the conflict between the two traditional Chinese forms of human action. The most serious issues were:

Chinese economic growth was inevitably going to slow down, despite the policies of individual agencies, simply because big economies cannot grow as fast as small ones. China would get richer overall, but remain poor per capita. This outcome would ultimately undermine the “give us the power and we’ll make you rich” rationale for the CCP’s monopoly on governance.

Because the rule of law is so weak in a communist one-party system, corruption within the CCP would gradually reach gargantuan proportions – to levels totally unheard of in the democratic West.

Collective agency strategies that would artificially stimulate economic growth – that is, debt-fueled growth policies in the housing sector – should be employed, but would ultimately prove unsustainable.

A collectivist party – the CCP – that could murder its own citizens in Tiananmen Square would not hesitate to commit genocide against non-Han groups (especially Uyghurs) suspected of disloyalty.

Due to the power of individual agencies operating in the economic sphere, it was inevitable that private companies and individuals would eventually accumulate influence that would threaten the CCP.

China’s collective agency response to issues such as overpopulation and COVID would lead to short-term gains but threaten long-term disasters.

Although the West has blamed President Xi for adopting inhumane, anti-democratic, vehement nationalist and anti-free market policies, the reality is that Xi took power precisely when the aforementioned problems arose.

So the question is not whether or not China had to take drastic measures to deal with its problems; the question is whether Xi would focus on collective agency solutions or individual agency solutions. Clearly, the Chinese story offered both options, and clearly Xi has chosen to take collective agency approaches to deal with every dark cloud hanging over China:

As China’s economic growth rate plummeted – the IMF predicts 4.8% growth for 2022 – Xi could have doubled down on Deng Xiaoping’s free market (individual agency) policies. Instead, Xi has cracked down on China’s most successful businesses and industrial sectors, favoring state-linked businesses (i.e. collective agencies) that are far less productive and grow at much slower rhythms.

Rather than subject CCP members to the rule of law – the individual agency approach – Xi has chosen to attack his enemies within the Party under the guise of overwhelming corruption. True, the Party figures who were overthrown were corrupt – but so were all the other Party members.

To deal with slowing growth, Xi opted to encourage ever more corporate borrowing in the housing sector (think Evergrande). It has certainly given the economy a short-term boost, but debt-fueled growth is still hitting the wall.

Using excuses like terrorism and alleged threats to the primacy of the Chinese Communist Party, Xi asserted collectivist, Orwellian control over the Chinese people.

As companies like Alibaba and Tencent grew big and powerful, Xi did not recommend stricter antitrust laws (the individual agency approach being followed in the West), he simply cracked down on them arbitrarily. Rather than relying on the policies of individual Deng agencies, Xi has turned to state-owned companies that are much easier to control.

As noted, China’s approach to overcrowding and COVID has been collectivist and arbitrary – albeit impressively short-term in effectiveness.

President Xi is the fifth supreme leader of the dynasty launched by Mao Zedong but, with Mao and Deng Xiaoping, one of the three most important. Mao founded the dynasty after defeating the Nationalists in a major civil war, but then overthrew the country. Deng introduced individual agency to the Chinese economy, with tremendous results. But as China’s challenges multiplied, it fell to Xi to find solutions.

As noted, Xi has chosen collective agency approaches to all issues facing the country, following a tradition started more than 3,000 years earlier by the Shang dynasty. Collectivist policies have historically appealed to Chinese emperors because they assign all decision-making to the ruler, consolidating his power, at least in the short term.

But the Shang were eventually – and fairly easily – defeated by the Zhou. The Qin, another collectivist dynasty, accomplished great things but only lasted 14 years. Emperor Wu’s collectivist policies enabled him to conquer territory after territory, but these policies also made his people miserable – he repented, introduced individual agency policies and launched the Golden Age. from China.

If Chinese history is any guide, we can expect President Xi’s collectivist policies to accomplish much in the short term: strengthen China’s military capabilities, threaten and perhaps even invade Taiwan, intimidate China’s neighbors China, asserting ever greater control over the Chinese population, forging alliances with other authoritarian regimes (especially Russia), etc.

We can also expect Xi’s policies to ultimately fail: China’s economic growth, which has been fueled by individual free market agency, will eventually fossilize; Xi’s aggressive approach to international relations will spawn a broad anti-China coalition; Omicron (or the next variant) will break into China’s tyrannical lockdown system; the Chinese people, having tasted individual agency in their economy, will eventually revolt against Xi’s collectivist policies – and powerful rivals within the CCP will engineer Xi’s downfall.

Next week we will return to the West and examine where human agency stands in contemporary America.

Next step: On the agency, part 7