Shoe Makers under "Communism"
lnp3 at SPAMpanix.com
Tue Jun 6 10:04:14 MDT 2000
Any comments, Henry?
NY Times, June 6, 2000
FOREIGN AFFAIRS / By THOMAS L. FRIEDMAN
Commies and Demmies
Now that the smoke has cleared from the debate over whether to grant China
permanent normal trade with the U.S. and membership in the World Trade
Organization, it's time for some wild and irresponsible predictions. I'd
like to start the bidding.
My prediction is that in the wake of the China vote two parties in the
world will never be the same again: the Communist Party in China and the
Democratic Party in America.
Let's look at each. For years Deng Xiaoping, the architect of China's shift
to a free market, described China's economic system as capitalism with
socialist characteristics, or was it socialism with capitalist
characteristics? I could never keep it straight -- and neither could they.
But it no longer matters, because China is now committed to capitalism with
W.T.O. characteristics. And that is going to be a huge challenge. If the
Chinese Communist Party doesn't adapt, either it will implode or China will
Here's the problem: By joining the W.T.O., China is basically agreeing to
replace its current mixed economy -- part free market, part state
controlled -- which is run by the arbitrary decisions of the Communist
Party, with an increasingly free-market economy that will abide by
international rules, on trade, tariffs and investments, set by the W.T.O.
This means the Chinese Communist Party is going to have to back off and
shape up or ship out. You can't have a flourishing free enterprise system
with party hacks interfering with businesses and distorting prices; you
can't have W.T.O.-style foreign investment without moving toward an
independent judiciary that is free of arbitrary party meddling and is
capable of fairly enforcing contracts; and you can't live up to W.T.O.
norms without government agencies ready to enforce W.T.O. rules, not
Communist Party whims. All that means a different Communist Party.
"The ideal situation would be if the Communist Party would serve as the
bridge and tutor for China's move toward a free-market, rule-of-law-based
system," argued the Stanford University China scholar Michael Oksenberg.
"If that doesn't happen voluntarily, I see three other possibilities: One
is that there will be some catalytic event, like a downturn in the economy,
that will force the party to adapt, or face losing power and legitimacy.
Second, there will be a split in the party leadership, between those who
want to move forward and those who refuse. And third, there could be a mass
movement from below. The longer the Chinese Communist Party puts off the
first two, the more likely becomes the last scenario."
As for the U.S., the China vote was not really a vote about China. It was a
vote about how Americans feel about globalization. And it revealed a deeply
fractured Democratic Party. The unions were opposed and advocated building
walls; the new-economy types, led by President Clinton, favored further
globalization; and a large group of old Democrats advocated some middle
ground, but had no leader or program to offer.
"We are becoming the party of resentment and fear, and that is not who we
were and that is not who we want to be," said Senator Daniel Patrick
Moynihan, about the number of Democrats who voted against normal trade with
The challenge for the Democratic Party, if it is to remain united, is to
articulate a new progressivism that addresses the worries of working
Americans about globalization -- without resorting to trade barriers. There
is obviously a strong feeling among the party's rank and file that Mr.
Clinton's "progressivism-lite" is insufficient. Which is why a lot of
Democrats are now groping for a new combination of tax policy, labor policy
and social policy that could form a modern progressivism. (It would help if
the unions got their heads out of the sand. Imagine if all the money and
energy they wasted lobbying against China were applied to health or
Without articulating a new progressivism, the Democrats will either become
indistinguishable from Republicans, especially under George W. Bush, or, if
the unions have their way, the Democrats will become just kinder, gentler
So in the wake of the China vote the key question is: Can the Chinese
Communists become a real democratic party and can the real Democratic Party
become a true progressive party? Nobody gets to stay the same.
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