The projection of the nation’s growth to a $5trillion economy and hopes of it being a superpower by year 2047 marking the century of India’s Independence are often met with cynicism by so called left liberals in India. They prise the Chinese economy growth model which happened by the initiatives and government support to Chinese oligarchy of communist party but they criticize the government initiatives in India for liberalisation and private participation for the reasons best known to them. Indian left liberals follow a double standard – they call Chinese model as Decentralization and Indian model as Crony capitalism…..
As per credible media reports, the wealth of crony capitalists around the world has grown exponentially by 850% in the past 25 years to $3 trillion, a survey has shown. “Some 65% of the increase has come from America, China, India, and Russia. Overall, 40% of crony-capitalist wealth derives from autocratic countries and amounts to 9% of their GDP”. Countries are moving from crony capitalism to oligarchy. Crony capitalism is when businessmen with friends in power get undue favours from the government; but in an oligarchy, even among the capitalists, some get favoured more than others and this is amply demonstrated in China. However, many scholars consider the Chinese economic model as an example of authoritarian capitalism, state capitalism or party-state capitalism.
“Before the onset of its market reforms in the 1980s, the People’s Republic of China had a clearly defined elite typical of the single-party hierarchy and command economy that it inherited from the Soviet Union. Career paths into positions of power and privilege were controlled by the Communist Party organization, access to which required demonstration of loyalty through party membership and a record of loyal service. The only alternative career path was through higher education, a credential that could lead without party membership to relatively well-compensated professional positions (Li and Walder 2001; Walder, Li, and Treiman 2000). Material privileges that determined a family’s style of life were determined by rank in the hierarchy: housing standards, salary, access to scarce consumer items and higher-grade services, the ability to travel domestically and internationally, and the use of private automobiles. Enjoyment of these privileges was premised on continued good standing in the political hierarchy. Expulsion from the party or from leading posts led to a loss of privileges (Walder 1992). Because material living standards were so clearly linked to the political hierarchy, the elite could be defined very precisely, with reference to the number of positions at different ranks”.
Since China began to open up and reform its economy in 1978, GDP growth has averaged over 9 percent a year, and almost 800 million people have lifted themselves out of poverty. There have also been significant improvements in access to health, education, and other services over the same period. Major reforms including rural DE collectivization, SOE reform, and rural health care reform almost always began first as decentralized local experiments subject to intervention from high level Communist Party officials before they were more widely adopted. The economic reforms were initially accompanied with a series of political reforms in the 1980s, supported by Deng Xiaoping. However, many of the planned political reforms ended after the 1989 Tiananmen Square protests and massacre. Lack of political reform contributed to the serious corruption issue in China.
The oligarchic tendency in China’s political economy as a result of power-capital nexus has accelerated with high speed. China’s oligarchic transition from a communist revolutionary regime to blatant self-enriching organized theft at unexpected scale is an important historical event in the history of the world. Economic and political experts and observers categorize China as an authoritarian one-party state, with some saying it has shifted to neo authoritarianism. Some characterize it as a dictatorship but so called India left liberals hardly notice this observation and they blindly support the Chinese initiatives no matter what course it takes. The rapid growth of Chinese economy is acknowledged worldwide.
To bring the narrative of growth picture in China, the following paragraph is quoted from an online magazine “Taylor and Francis” on the article “Deciphering the Chinese Economic Miracle: The Resolution of an Age-Old Economists’ Debate — and its Central Role in Rapid Economic Development”
“The great transformation is attributed to the structural reforms under the aegis of the architect of modern China: Deng Xiaoping. His market liberalization policies commencing in late 1978 led to a high and stable annual growth rate outshining established market economies such as the USA, UK, Germany, and France (see Figure 1) with a traditional institutional order (North and Weingast Citation1989; Acemoglu and Robinson Citation2012, Citation2019). The World Bank (Citation2019) recognized that China’s unmatched growth is ‘the fastest sustained expansion by a major economy in history’. With an astounding double-digit annual growth rate, China doubled the size of the economy every seven or so years: ‘real per capita income increased by a cumulative rate of 1,759 percent, from $714 in 1980 to $13,277 in 2015’ (Wei et al. Citation2017, p. 49). In the event, more than 850 million people were lifted out of extreme poverty (i.e., living on less than $1.9 per day), more than ever before. The poverty rate fell from 88 per cent in 1981–0.7 per cent in 2015. The country is thus well on track to eliminate absolute poverty. Nonetheless, an estimated 373 million people face the middle-income trap as they live below the upper middle-income line of poverty ($5.50 a day) (Naughton Citation2007; World Bank Citation2019)”.
China’s capitalist evolution is more like the Western experience than most people think: The Chinese economic model is called a socialist market economy, and it is characterized by state- and privately-owned businesses. Further, the Chinese government regulates the economy strictly, much more than what is seen and perceived outside. Project Syndicate, World’s Opinion page (https://www.project-syndicate.org/onpoint/china-gilded-age-crony-capitalist-boom-role-of-corruption-by-yuen-yuen-ang-2024-05) mentions..
“Global corruption metrics capture “corruption of the poor,” but not “corruption of the rich.” Relying on these partial indicators has obscured an important historical pattern: capitalist superpowers like the US did not necessarily eliminate corruption; rather, their corruption evolved toward legalized elite exchanges that often precipitated financial bubbles. Thus, China appears anomalous only if one takes the idealized West as the benchmark. But once the mythology has been stripped away, it becomes clear that China’s capitalist evolution is more like the Western experience than most people think. China’s old development model focused wholly on GDP, and thus paid scant regard to the quality of growth. In this context, the abundance of access money enriched a handful of capitalists who paid for privileges and rewarded the politicians who served their interests. But, of course, this system also incentivized officials to pursue perverse, unsustainable modes of growth that maximized benefits for themselves and their cronies at the expense of social welfare. From the 2000s onward, local governments sold off land and over-invested in real estate, because that was the most expedient way to fill public coffers and line their own pockets”.Conclusion: it can be said that the crony capitalism and oligarchy in India and China may not be different. What is different is bringing down the policy of “ease of business” at the root level in China which India is trying to do now with lot of political hurdles of vote politics. Both countries are better off, but China is much better off than India due to its economic reforms at a scale which is much opposed and debated in India. Thus, while India roughly trebled its income, China increased it sevenfold. In earlier periods China, while more populous than India, was not noticeably richer. But what about the double standard of left liberals of India who are critical of reform policies like “Make in India in India” and they are acting like Chinese agents in India territory. These so-called left liberals in India tirelessly praise the growth model of Chinese economy, which inherently include crony capitalism and oligarchy but they oppose any sensible reform by any government of India. Indigenous Defence R&D is one sector which is on constant target of these left liberals in India in spite of the fact that it is needed to make India self-reliant for the security of the nation.
