Democracy

in the transitions from planned economy

An outsiders perspective
Firstly,thereareafewpointsthatIwouldliketomakeclearbeforeweproceedanyfurther.This is by no means a serious academic study on the concerned topic, nor does it pretend to be. Instead, it is a rather personal account of the issues concerning democracy during these processes. IamfortunateormaybeunfortunatethatIdidnotexperiencetheyearsofthemostdynamicand volatile reforms in china, although I am indeed here to experience the effects such reforms brought upon us. Due to this fact, I often feel the urge of producing a collection of my own thoughts,andhereitcomes.Ofcourse,itwillonlyreflectmypersonalopinionsandissubjectto bias,prejudiceandmostlikely,incompletenessandimperfection. Intherecentyears,Ihaveheardcriticismonthenecessityoftheeconomicreforminchinathat wasputforwardon1978,largelyontheinternetfromagroupofpeoplecommonlyreferredtoas AngryYouths.TheirmainargumentisthatduringtheMaoistyears,theChineseeconomicdata wasexceptionallyglamorous,soiftheeconomicmodethatwasemployedduringtheseyearsare used now, we should see similar growth without experiencing the pains and uncertainties that market sometimes produces, and these negative effects are especially impactful on the individualsthatareinweakerpositionsintermsofpowerandinformationinthesociety.Indeed, whenMaowasalive,theChineseeconomyenjoyeddoubledigitgrowthforalongperiodoftime, savethechaoticyearsofCulturalRevolution.Butthereisanimportantfactorthatmustbekept in mind when interpreting these data. i.e. the Chinese economy after 8 years of antiJapanese war and another 3 years of civil war was in an extraordinarily bad shape, and therefore had plentyofheadroom.Thus,itisunconcludedwhichfactorcontributedmoretotheprosperity,the stability after the violent and perturbed years or the actual political and economic strategies employed. Furthermore, a progressively lower growth rate is observed across the FYPs, which coincideswiththeRussianpattern.Thelatter,bytheendof1980s,wasinseriousstagnationand even deterioration, clearly proving the fact that the Russian planned economy is unable to providenecessarygrowth.TheChineseeconomicstrategiescloselymimictheRussianone,and thus had no reason to outperform it should the FYPs carry on. Therefore, it can be safely concludedthataneconomicreformisbothnecessaryandinevitable. Now we can discuss democracy. Do people want reforms? Is the process in the interest of the majorityofpeople?Isitopenandstrictlymonitored?Thesequestionsareimportant,andalot morerelevantthanasimplefreeandfairelection. Inmyopinion,certainpeoplewantedthereforms,whilstothersmightobject.Tradingwasstrictly forbidden before the initialization of the reforms because it was regarded as the tails of capitalism,buttheconsumersneeddidntbecomeeliminatedsimplybecauseofthisban,and thereforespawnedwhatcommonlyknownastheblackmarket.Peoplewhoparticipatedinthe practiceofblackmarketofcoursehailthecommencementoftheeconomicreformnowthat

they no longer needed to worry about the legalities of their activities. But on the other hand, thosewhowerebenefitingfromtheoldsystemwereveryunhappyaboutthesituation.Alarge proportionofstateownedenterprisesweresubjecttoprivatization,andsuccessivereductionsin numberofemployees.Thiseventuallyledtotheveryfirstofficiallyrecognizedphenomenonof unemployment.Itishardtosaywhichproportionisbigger. Theprocessasweseedoesdamagecertaingroupsofpeoplesinterests,andonthismatter,the two entities performed radically differently. After reform, the Russian GDP fell by over 50%, pulling a large proportion of its population below the poverty line. Therefore, apart from the newlyestablishedelites,almosttheentirepopulationwassufferingfromthereform.Ofcourse, the whole idea behind the transition orthodoxy that Russia happily adopted from the west is pain before gain, i.e. achieve higher efficiency in the economic activities by producing an artificial contraction of production possibility frontier. The latter will inevitably introduce pain, whilstleavingthefuturegainstillunpredictable.Inchina,guidedbythephilosophyofcrossing theriverbytouchingthestones,thetransformationisratherslowandsmoother,althoughthe privatizationofstateownedassetsishardlytransparent,theslowtransitiongavetimeformore opportunities to monitor the process. Also, it resulted in a maintained production rate, and therefore the drastic drop in GDP and subsequently in living standard that took place in postreform Russia did not occur in the Chinese case. For instance, the Chinese GDP growth maintainedrelativelyhighat9.4%perannumduringthe10yearsimmediatelyaftertheinitiation ofthereform,andthelifeexpectancyoftheChinesepopulationsawa2yearincreasefrom67to 69.Fromthisaspect,theChinesewaywasalotmoredemocratic,insensethatitpreservedand protected most of its peoples interests. But on the long run, it can be observed that both the ChineseandtheRussianeconomy,onceenterstherighttrack,wouldeventuallyproducestable growthandconsistentimprovementstopeopleslivingstandards. AsupplementIwanttomakeforthepointIputforwardinthepreviousparagraphisaboutthe inherent antidemocracy nature of a rapid transition. As we know, democracy is heavily dependentonfreedomofexpression,onlywhensucharightisgrantedtoeveryoneinthesociety, will democracy function as intended. Otherwise, with voices unheard, the final decision will hardlyreflectthewillofthepopulation. Arapidtransition,althoughdoesnotdirectlyvoidthe freedom of expression, does remove the necessary time for opinions to be formed and then circulated. Therefore, it is inherently antidemocratic. And the Russian reform will forever bear thismark. Sofar,manypositivesabouttheChinesereformandmanynegativesabouttheRussianoneare presented,nowletslookatRussiassuccessesandchinasfailures. The fundamental difference between the Russian transition and the Chinese one is that china preserved its political system during the reform, whilst Russia moved to a multiparty system which is usually deemed more democratic. By combining the two transitions into one, Russia madethetwostepsinonemoveandgrantedtheRussianpeoplemanyrightsthattheycouldnot enjoyunderthecommunistregime.Butapricewasalsopaid,asbothtransitionsinvolvecertain degree of chaos, the state failed to effectively guide the economic reform. China remained a

communiststateintheory,althoughmuchofthecommunistideologywasabandoned,oneparty ruleremained.Thisgavethestatethestrengthandefficiencytodealwiththeproblemsthatrose in the dynamic years, but then voids the Chinese population of obtaining their long absent freedoms such as freedom of speech and assembly. The result was that the Chinese economic reformwasalotmoresuccessiveGDPwise,butlittlepoliticalchangeswereobserved.Insenseof democracy,especiallyinasimpledefinitionofdemocracy,i.e.afreeandfairelectionandaccess therelevantrights,theRussianreformwasmoresuccessful. NowbeingaChinesecitizen,IeagerlywanttoseeachangeintheChinesepoliticalsystem,so that I will be able to enjoy many of the freedoms that I perceive as reasonable. We did see a movementtowardsdemocracyandmorepopularinvolvementinthepolicymakingprocessfrom 1978,butitendedwiththebloodymassacreof1989,andfromthereonwards,alltheChinese leadersbecamestronglyconservativetowardspoliticalreform.Forme,thatincidentwasreallya manifestooftheantidemocraticnatureofthecommunistregime.Ifdemocracyistrulytheway togo,Iseethatthereareonlytworoutestotransformanauthoritariansocietytowardsit,being evolutionandrevolution.IntheChinesecase,theevolutionarypathismoreorlessclosed,and thus, the progress towards democracy, which usually should be accompanying the economic boom,sawitsstagnation.WhatIhopeasaChinesecitizenisthateventually,thetensionsthat hasbeenbuildingupsincepeoplebecameslightlypoliticallyawareundertheregime,eitherdue toeconomicdevelopmentorbettereducation,willnoteruptinformofabloodyrevolution. Thisshallconcludemylittlediscussionaboutthedemocracyinvolvedintransitionsfromplanned economytoamarketoneinboththeChineseandtheRussiancase.AndIsincerelyhopethatmy accounthasbeenatleastalittleentertaining.