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Why Dengism Matters for America

Why Dengism Matters for America

Message from Adam: “Intellectual Takeout depends on donors like you to continue sharing great ideas. If our work has ever made you stop to think, smile, or laugh, please consider donating today.”


Former Chinese dictator Deng Xiaoping is little known in the West, but his ideas should be common knowledge. He developed a new political-economic model for China, one often called “authoritarian developmentalism,” that helped hundreds of millions of people escape grinding poverty. However, “Dengism” maintained the Communist Party’s firm grip on society—and Western countries are starting to adopt this approach today.

Dengism arose as a response to Maoism. Under Mao, the Chinese Communist Party (CCP) murdered tens of millions of innocent people and kept the population in dire poverty. Mao was unwilling to introduce common-sense economic reforms because he wanted to ensure CCP dominance over all aspects of life. Deng Xiaoping, on the other hand, thought that the Communists could maintain political control while introducing elements of capitalism into Chinese society.

The results were nothing short of miraculous. In 1969, Chinese GDP per capita was just $100. By 1980, it had more than tripled, almost reaching $1 a day. Growth had finally arrived. By 2010, GDP per capita was a respectable $4,550, and today, it is well over $12,000, placing the Chinese firmly in the ranks of the world’s emerging economies. That is something worth celebrating.

Yet even though Deng limited the CCP’s control over China’s economy, he ensured that businesses toed the party line. Today, the Chinese government requires a (Chinese Communist) party committee in every significant company. The committee has significant say on business decisions. Moreover, high-level executives are often chosen from party organizations. Party “stakeholders” are more important than shareholders.

By preserving the power of party elites, Deng put hard limits on the economic potential of his nation. After all, when elites have unchecked powers, they tend to use them to give themselves unlimited wealth. Corruption is thus endemic throughout China.

More importantly, because companies are routinely forced to put regime interests above their own, they often end up wasting resources on bad business decisions. Even though , the CCP won’t let people do what is best for them. Instead, the Chinese must do what is best for the CCP.

Deng knew exactly what he was doing. In the 1980s, he thought the reforms were taking too long to improve the economy, so he commissioned a secret task force to identify necessary reforms. The commission reported that China would benefit from the rule of law. Deng nixed its proposals.

In China, the government does not follow the rule of law. Rather, it exerts its powers through rule by law. In other words, it creates a complicated maze of rules and decrees to give each of its dictates the appearance of law, without actually binding itself to universal principles. If it did, it would impose limits on its own authority, leaving Chinese people free to do what they think is best for themselves.

For the CCP—and authoritarians everywhere—the good of the people can never come before the good of the state. So instead of letting Chinese citizens make their own decisions about their own businesses, the government requires a “whole of society” approach to development.

In practical terms, this means that state decrees must be obeyed by private companies. This is simply communism with a facelift.

That’s what makes it so interesting that “stakeholder capitalism” is a buzzword in American corporate circles. As Microsoft CEO Satya Nadella explained in 2020, American business leaders think it is time “to essentially have a referendum on capitalism. We all have to recognize what is that social core purpose of a corporation.” Apparently, it is not to make profits by delivering the products and services that customers need at prices they can afford.

According to Microsoft’s stakeholder engagement documents, the corporation engages with thousands of groups, including non-governmental organizations, international bodies like the UN, and policymakers, “in the governance of corporate social responsibility.” Instead of delivering the goods that people want, businesses are going out of their way to align themselves with certain ideologies. For instance, more than 500 major corporations have signed on with the left-wing Human Rights Campaign (HRC) to support the “Equality Act,” which would—among other things—allow men identifying as women to use women’s restrooms.

The result? “Whole of society” governance is no longer unique to China. As FBI Director Christopher Wray explained of the FBI’s cyber strategy in 2020, “That team approach is central to how we work with both the public and private sectors, from other government agencies, to companies of all sizes, to universities, to NGOs.” N.S. Lyons has shown that this framing is now in place all over the Western world.

Yet resistance to it is alive and well. In recent months, companies such as Ford, Harley-Davidson, and Molson Coors have backed out of the HRC’s Corporate Equality Index, which ranks companies based on their “practices and benefits pertinent to lesbian, gay, bisexual, transgender and queer (LGBTQ+) employees.” This change is largely thanks to Robby Starbuck, who has publicized embarrassing stories about the wacky policies these companies have been pressured to support.

Perhaps there is a possible future in which corporations focus on delivering high-quality goods—in which it’s possible to live free of politics, at least in the workplace. But that future is a long way off.

Image credit: public domain

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Adam De Gree
Adam De Gree
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2 Comments

  • Avatar
    Jeff
    October 21, 2024, 3:53 pm

    Excellent article!!

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  • Avatar
    Al Broberg
    October 22, 2024, 11:11 am

    Authoritarian developmentalism looks like nothing more than fascism with a new name.

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