Preservation of power as a system

BORDER CROSSINGS Op-ed by Katja Gentinetta, published at Money & Mind, by NZZ am Sonntag

China’s propaganda directed  at its domestic population  is also a wake-up call for the West. The leadership in Beijing needs to not only be successful, but also be perceived positively. China is on the rise: technologically, economically, and politically; and it is increasingly asserting its influence around the world. No one doubts that any more. What is astonishing is that it took the outbreak of the Corona pandemic to develop a certain skepticism about this rising power. In Switzerland, the influence of Chinese compatriots in local companies has been the main topic of recent discussion. The fact that certain executives and board members are members of the Communist Party is largely regarded by companies as a personal matter and consequently little attention is paid to them. China experts, on the other hand, point out emphatically that party affiliation in an authoritarian one-party state is by no means a purely private matter, especially since it is carried out at a higher level through strict selection.

Systematic propaganda

Increasingly, references are made to the so-called „United Front“, an organization in the Chinese state whose task is to carry out systematic propaganda both at home and abroad. That it was further strengthened under the powerful strategist Xi Jinping is not surprising. How threatening are such developments for global companies in the West? One possible answer lies in taking  a closer look at China’s economic policy system, as presented by the Serbian-American economist Branko Milanovic in his new book «Capitalism Global». For the system commonly referred to as „state capitalism,“ he chooses the term „political capitalism,“ adhering to the definition by Marx and Weber, characterizing capitalism as a majority of private means of production, wage workers, and decentralized decisions about products and prices, and drawing attention to the addition „political“ when, according to Max Weber, political power is used to achieve economic profits. According to Milanovic, the most important features of this system in China are highly efficient bureaucracy, unclear ownership and legal relations, and „endemic“ corruption. This development, however, is not an aberration, but  inherent to the system or even more: system-preserving. Arbitrary interpretation of laws secures the power of the state, corruption secures the wealth of the party. Corruption is therefore not really combated.

Arbitrary interpretation of laws secures the power of the state, corruption secures the wealth of the party. Corruption is therefore not combated, no matter how sensational some lawsuits may appear, but kept under control  so far that it does not threaten the recognition of the ruling system. Economic growth is only there to secure the party’s power. Far removed from our understanding of the state and society, Milanovic sees a decisive difference from Western liberal capitalism in that entrepreneurial success is valued and promoted, but not rewarded with political power. On the contrary, as soon as entrepreneurs express a political opinion or even make demands, they become dangerous.

The Strange Dive of Jack Ma

Remember the short-term cancellation of the IPO of Alibaba subsidiary Ant: its successful founder, Jack Ma, had spoken critically about the political leadership at a high-profile conference in Shanghai and a few days later, he disappeared – and only recently reappeared with the video message that he was going to devote himself even more to his charitable work. This example shows that economic success must not endanger the power of the party. This explains, at least in part, the lack of democratization to this day: a bourgeois revolution like the one in Europe in the middle of the 19th century will hardly take place in China. In principle, only one thing can really threaten the regime: that it does not „deliver“. Without economic growth and wealth growth, political capitalism could lose its attractiveness.

Alternative to democracy

This is precisely why the Chinese system needs not only to be successful, but also to be perceived positively. It must also be a valid alternative to liberal democracy for its own citizens. This leads to the conclusion that Chinese propaganda is primarily directed inward rather than outward. Is that reassuring? Hardly, because the system competition reaches  us in any case. We must therefore be all the clearer in defending our principles of freedom and the rule of law – at least for ourselves.