The new form of hybrid institutions

One of the more interesting aspects of the current redrawing of the Chinese government’s organization chart on is the combination of Communist Party and state institutions. For instance, the government agencies regulating print and broadcast media are being folded into the Party’s Department of Propaganda, while agencies for religious and ethnic affairs are being absorbed by the Party’s United Front Work Department (historically, the agency in charge of making strategic alliances with non-Party elements in society).

The move that perhaps most symbolically captures what is going on is the merger of the Central Party School (mainly a venue for mid-career training of Party cadres) and the National School of Administration (for civil servants) into a single organization called the Central Party School (National School of Administration). Who gets to be outside the parenthesis and who has to be inside the parenthesis tells you what is going on. (The People’s Daily has a helpful Chinese-language infographic that summarizes the changes.) I’m going to call these combinations of party and state organizations “hybrid institutions,” stealing the term from Timothy Snyder, who used it in a somewhat different context.

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In the recent post in which I tried to pull together my thoughts on the Party-state restructuring, I generally argued that the changes aim at making explicit what has always been true: that the Communist Party is in charge of the country. But it would also be wrong right to imply that these changes were somehow inevitable and widely expected. They very much were not.

One reason why is that the general drift of organizational changes in China had for a while been in the opposite direction: they de-emphasized the Party in favor of the government. I recently came across an excellent example of this in Barry Naughton’s 2003 account of the creation of SASAC, the agency supervising the large state-owned enterprises controlled by the central government. Before its creation, such supervision had been done by a secretive Party body known as the Central Enterprise Work Group. So at the time, SASAC was also a kind of hybrid institutions, as it absorbed and replaced this Party body:

The composition of the SASAC must represent a balancing act between Chinese Communist Party and State Council interests, just as the Central Enterprise Work Group before it represented such a compromise. Indeed, we find ample evidence that this expectation holds true. The SASAC has eight full commission members. It is possible to identify four as coming primarily from the State Council system and four as coming primarily from the Chinese Communist Party system.

Interestingly, the head of the SASAC, Li Rongrong, is not the party secretary of this body. Instead, this job is held by Li Yizhong, who is first vice chairman of the SASAC. But the SASAC web site is unusually specific about the responsibilities and duties of commission members. It specifically says that Li Rongrong is the boss: he “assumes the main responsibility of SASAC and he is the first person of responsibility in SASAC. He will take charge of the SASAC party committee’s work when Mr. Li Yizhong is out of Beijing for business.” Li Yizhong, in turn, takes over the main responsibility when Li Rongrong is out of town. Thus, the web site in effect says, “even though Li Rongrong isn’t the party secretary, he’s still the boss.” It is stretching things only a little to say that the SASAC is a joint venture of the State Council and the Chinese Communist Party, with the State Council having 50 percent plus one share.

What’s interesting is that SASAC was originally a hybrid institution in which the Party was fairly explicitly subordinate to the state. In the hybrid institutions being created in 2018, the state is fairly explicitly subordinate to the Party. That shift encapsulates how Xi Jinping has changed Chinese politics.

Timothy Snyder rehabilitates the state

Timothy Snyder’s Black Earth: The Holocaust as History and Warning has been sitting on my list for a while, and I have benefited from finally reading it. The book is bracing, well written, and clearly argued.

In particular I found it a useful corrective to the conventional view of the Holocaust that I had absorbed, in which the Holocaust appears as the dark side of modern civilization, a result of state power and technology being applied to the gruesome business of ethnic extermination. Snyder’s key argument is that Nazi Germany was in fact a very different thing. The summation in his final chapter deserves quoting at length:

The dominant stereotype of Nazi Germany is of an all-powerful state that catalogued, repressed, and then exterminated an entire class of its own citizens. This was not how the Nazis achieved the Holocaust, nor how they even thought about it. The enormous majority of the victims of the Holocaust were not German citizens; Jews who were German citizens were much more likely to survive than Jews who were citizens of states that the Germans destroyed. … Not only the Holocaust, but all major German crimes took place in areas where state institutions had been destroyed, dismantled, or seriously compromised. The German murder of five and a half million Jews, more than three million Soviet prisoners of war, and about a million civilians in so-called anti-partisan operations all took place in stateless zones. …

Since the Holocaust is an axial event of modern history, its misunderstanding turns our minds in the wrong direction. When the Holocaust is blamed on the modern state, the weakening of state authority appears salutary. … On both the Left and the Right, postmodern explanations of the Holocaust tend to follow German and Austrian traditions of the 1930s. As a result, they generate errors that can make future crimes more rather than less likely.

On the Left, the dominant current of interpretation of the Holocaust can be called the Frankfurt School. The members of the group known by this name, largely German Jews who immigrated to the United States, portrayed the Nazi state as an expression of overgrown modernity. Theodor Adorno and Max Horkheimer, in their influential Dialectic of Enlightenment, began (as did Hitler) from the premise that “bourgeois civilization” was about to collapse. They reduced scientific method to practical mastery, failing (as did Hitler) to grasp the reflective and unpredictable character of scientific investigation. Whereas Hitler presented the Jews as the creators of bogus universalisms that served as façades for Jewish mastery, Adorno and Horkheimer opposed all universalisms as façades for mastery in general. The murder of Jews, they claimed, was just one instance of the general intolerance for variety that was inherent in attempts to inform politics with reason. It is hard to overstate the depth and significance of this error. Hitler was not a supporter of the Enlightenment but its enemy. He did not champion science but conflated nature with politics.

On the Right, the dominant explanation of the Holocaust can be called the Vienna School. Followers of the Austrian economist Friedrich von Hayek claim that the overweening welfare state led to National Socialism, and thus prescribe deregulation and privatization as the cure for political evil. This narrative, though convenient, is historically indefensible. There has never been a democratic state that built a social welfare system and then succumbed to fascism (or communism) as a result. What happened in central Europe was rather the opposite. Hitler came to power during a Great Depression which had spread around the world precisely because governments did not yet know how to intervene in the business cycle. Hayek’s homeland Austria practiced capitalism according to the free-market orthodoxies of the time, with the consequence that the downturn was awful and seemingly endless. The oppression of Austrian Jews began not as the state grew, but as it collapsed in 1938.

The main “warning” of the title is that the collapse of the state creates the conditions in which humanitarian disasters and mass killing are possible. If this was the lesson that had been learned from the Holocaust, perhaps it would have been easier to see how foreign interventions that destroyed functioning states without replacing them (Iraq, Libya) would lead to evil consequences for their people.

Snyder generally seems to want to emphasize the importance of the state’s Weberian role in maintaining the monopoly on legitimate violence, and preventing its widespread use against citizen. It is when the citizen-state relationship breaks down that violence overwhelms. Hitler, Stalin and Mao were thus ultimately alike in that their ideology subordinated citizenship and the state to their imagined struggles of class or race:

Yet in a certain respect Nazi Germany as a regime confirms everything that we know from decades of research on mass killing. On the one hand, social scientists have shown that ethnic cleansing and genocide tend to follow state collapse, regime changes, and civil war. On the other hand, historians emphasize that certain kinds of polities, communist party-states such as the Soviet Union, the People’s Republic of China, and Cambodia under the Khmer Rouge, are capable, in times of peace, of killing large numbers of their own citizens as a matter of deliberate policy. In these communist regimes the populations were not citizens in the traditional sense, since the party was the politically decisive instance, and could ordain that killing was required by the logic of history. These systems killed almost entirely their own citizens, almost exclusively on their own territory. Nazi Germany united these two logics of death, synthesizing order and chaos to produce the single most murderous outburst in human history. It was party-state that artificially generated state collapse in other countries, thereby creating a zone beyond its own prewar borders where a Holocaust was possible.

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What is changing about the rule of the Chinese Communist Party?

The past six months have been an extraordinary period for Chinese politics, with a steady series of high-level events and major changes unprecedented in recent history. The two themes running through all of this, in both the propaganda and the substance, have been the primacy of Xi Jinping personally and the Chinese Communist Party institutionally. Here is a sample of what this sounds like, taken from the recent organizational reform plan that aims to expand the Party’s role in decision-making and management.

The leadership of the Communist Party of China is the most essential feature of socialism with Chinese characteristics. Party, government, military, civilian and academic; east, west, south, north, center, the Party leads everything. … We must improve the Party’s ability to set the direction, plan for the big picture, determine policies and promote reforms; we must ensure that Party leadership is comprehensive, and we must ensure that Party leadership is stronger.

This is not simply a rhetorical change: the whole organization chart of the Chinese government is being redrawn. In my bailiwick of economics, a new Party economic and finance committee has taken over the setting of policy priorities, a task that in previous administrations had been considered the main responsibility of the State Council (essentially the executive branch of the Chinese government). The first meeting of this committee this week sent an important signal that “the centralized and unified leadership of the Party Center in economic work is being strengthened,” according to the official Xinhua News Agency.

But what does “strengthening“ Party leadership really mean? It’s not as if anyone was in doubt that the Communist Party is in charge of China, and has been for six decades now. The Party and the government may be separate institutions, but they meet at the top: Xi Jinping is both the head of the Party and the head of state, and so was Hu Jintao before him, and so was Jiang Zemin before him. Almost every person making any political or administrative decision of any import in China is a Party member.

The truth is that the Communist Party’s role is both obvious and rather difficult to explain. It is in charge, but how exactly it is in charge, and how exactly it exercises its leadership, are not well understood by outsiders. It is difficult to draw an organization chart that includes both the Party and government bodies and clearly explain the relationship between them (the official organization charts you do find usually keep the Party and the government separate). If we want to understand what is changing about Party leadership in China now, we need to start from how it functioned before.

The best short explanation of the Party’s role in China that I have found recently is from Frank Pieke’s Knowing China: A Twenty-First Century Guide (a book I have previously praised):

The CCP is not an electoral machine or vehicle of competition with other political parties. It is also not a platform for political cooperation and competition between like-minded people. The Party is not even an institution, as commonly understood, but only exists in symbiosis with other institutions: the organs of the state, representative government, judiciary and the army, service organizations (hospitals, schools), enterprises, mass organizations, collectives, non-governmental organizations and even other political parties. This symbiosis is always unequal. The CCP acts as the superego of society that guides, inspires, evaluates, coordinates, directs and decides; other institutions will have to follow. …

The Communist Party does not govern. Instead, it leads, controls and inspires all institutions of government and governance. The Party’s continued control over the people who lead and administer the institutions of governance continues to be the most vital feature of China’s uniquely socialist mode of governance. Known as cadres in China and other socialist societies, these people should not be thought of simply as bureaucrats or, alternatively, politicians, officials or managers: the concept of cadre includes all of these. … The recruitment, training and deployment of cadres are the most important ways in which the Party inserts itself directly into all institutions of state and society and guides and directs the project of socialist transformation.

Pieke’s description is I think very accurate, and captures the reality that the Party and the government are parallel and closely intertwined organizations. The Party’s key roles are to set ideological direction and to control the appointment of personnel to governing institutions, rather than to govern directly. But Pieke may have captured the essence of the Party role just as it is changing into something else (his book came out in 2016).

I think what Xi is doing is turning the Party into a proper institution, and changing the Party’s role into something you could draw on an organization chart. Rather than have the Party exist in parallel with other institutions, Xi wants to have the Party be clearly in charge of those institutions. In the new organization chart, the Party does not overlap with over bodies, or hide in the background appointing key personnel: it is plainly and obviously on top. The Party is moving from a background role of political inspiration to a foreground role of political decision-making. In a way, this shift just makes more explicit what has always been true: the Party is ultimately in charge (the illustration below is from a 2013 CRS report by Susan Lawrence).

Lawrence-CPC-org-chart

This comes out fairly clearly in the public explanations and defenses of the recent changes, which are not at all shy. A good example is this op-ed by Eric X. Li, possibly the Party’s most effective apologist writing in English:

Since the founding of the People’s Republic in 1949, the leadership of the party has been central to China’s political DNA. However, institutionally the system has gone through significant growing pains. At first, China adopted the Soviet system that separated, at least on the institutional level, the party and government. The top organs — the party central committee, the National People’s Congress and the State Council were parallel. But in reality, the party led everything. …

The party has now stepped forward to the front and center of Chinese governance. … While the party’s leadership has always been politically paramount, the administrative separation of party and government has produced institutional contradictions and confusion. [The new arrangement] lifts the veil of pretense that, somehow, the party and state governance are not one, which is untrue and wholly unnecessary and counterproductive at this stage of China’s development.

The tendency of the Western media has been to conflate the trend toward the strengthening of the Party’s role with Xi Jinping’s grabbing power for himself. So all these developments are made to serve one undifferentiated narrative of China becoming more authoritarian.

But there is also clearly a sense in which what Xi is doing is fundamentally rationalization: he is taking a confusing structure inherited from history, and redrafting it in a more straightforward way. If the Communist Party is ruling China, which no one has ever doubted, then why should its rule be indirect and its role hidden? If you were going to have an authoritarian developmental state, would you really have arranged things this way? Wouldn’t it just be simpler to have an organization chart where all the lines meet at the top?

Much of the writing about recent political changes emphasizes how Xi is breaking with “norms” and upending established practices. But it would be wrong to see Xi as some kind of interloper who is recklessly destroying carefully balanced institutional arrangements with a long history. (This recent piece by Francesco Sisci captures well how the political institutions of the past were unstable compromises set up to address issues of the moment.) Xi is a believer in China’s system, and he takes its logic seriously. He is not overthrowing the fundamental principles of Chinese politics, but trying to apply them more systematically.

What I’ve been listening to lately

  • Pierre Fournier – Bach: Six Suites for Solo Cello. I have enjoyed rediscovering these mindblowing, heartbreaking compositions in this classic 1961 recording; I have no educated opinion on the merits of Fournier’s version versus the many other recordings, but it is widely praised and sounds very good to me.
  • Nicole Mitchell – Ice Crystals. Mitchell has been a frequent appearance on these lists in recent months, and so far I have not found a dud recording from this master of the flute. This one is a lovely, spare quartet with Jason Adasiewciz on vibes. 
  • Errol Brown – Orthodox Dub. It seems like brilliant-but-obscure reggae albums should be a finite resource close to exhaustion, yet somehow those crate-digging reissue mavens continue to unearth new gems for the rest of us to enjoy, like this 1978 instrumental masterpiece.
  • Charlie Haden – Time / LifeThis posthumous release combines two live recordings by Haden’s Liberation Music Orchestra, with three tributes arranged by Carla Bley and recorded in 2015, a year after his passing. All are truly beautiful examples of large-ensemble jazz.
  • Alice Coltrane – The Ecstatic Music of Turiyasangitananda. One of the more interesting reissues to come down the pike in a while, these self-produced pieces were never released commercially. Those who, like myself, are fans of Alice Coltrane’s 1970s recordings will find a lot to like here, though they can get pretty far from the jazz idiom.

Mudde & Kaltwasser on populism

I found Populism: A Very Short Introduction by Cas Mudde and Cristobal Rovira Kaltwasser to be very useful and conceptually clear, a worthy addition to Oxford’s charming Very Short Introductions series.

The real contribution of the book is that it provides a definition of populism that is both conceptually clear and empirically useful–no mean feat. Here it is:

We define populism as a thin-centered ideology that considers society to be ultimately separated into two homogeneous and antagonistic camps, “the pure people” versus “the corrupt elite,” and which argues that politics should be an expression of the general will of the people. …

Populism must be understood as a kind of mental map through which individuals analyze and comprehend political reality. It is not so much a coherent ideological tradition as a set of ideas that, in the real world, appears in combination with quite different, and sometimes contradictory, ideologies.

The points that populism is a set of ideas but not exactly an ideology, and that those ideas can mesh with both left-wing and right-wing political programs, seem to me clearly true. A lot of writing about populism or populist phenomena considers it to have some essential nature, but what I think this book is good at is showing how “thin” that essential nature is, and therefore how flexible and various populism is in practice.

The book is also good at explaining the relationship between democracy and populism, another fraught topic of late:

Populism is essentially democratic, but at odds with liberal democracy, the dominant model in the contemporary world. Populism holds that nothing should constrain “the will of the (pure) people” and fundamentally rejects the notions of pluralism and, therefore, minority rights as well as the “institutional guarantees” that should protect them. In practice, populists often invoke the principle of popular sovereignty to criticize those independent institutions seeking to protect fundamental rights that are inherent to the liberal democratic model. Among the most targeted institutions are the judiciary and the media.

In sum, I found the book to be a helpful aid in getting closer to an objective understanding of our present moment.

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Centralization and the crisis mindset

The centralization of power is the theme of much of the news out of China recently: power is shifting to the central government relative to the provinces, to the Party relative to the government, and to Xi Jinping personally relative to the Party elite. So, why? What thinking is behind the drive to centralize?

The public justification for these moves is generally that they are necessary for China to surmount difficulties and achieve urgent tasks. Here for instance is what the Global Times quoted Su Wei, a professor at the Chongqing Party School, as saying immediately after the proposal to remove term limits on the presidency was publicized:

Especially in the period from 2020 to 2035, which is a crucial stage for China to basically realize socialist modernization, China and the Communist Party of China need a stable, strong and consistent leadership. So removal of the section of the clause about the presidency in the Constitution is serving the most important and fundamental national interest and the Party’s historic mission.

The “crucial stage” is an interesting formulation. It does not quite rise to the level of “crisis”–and it would be difficult for China’s leaders to claim the country is in crisis while at the same time taking credit for its decades of increasing prosperity. But it is commonplace in Chinese official rhetoric to emphasize that China faces both opportunities and risks, that it has done very well but faces great challenges in the future (and, of course, it helps that this is actually true).

As Xi Jinping himself put it in a speech to senior officials in December:

The general trend in our country is good, but we also face many difficulties and risks in our way forward.

He also used a Chinese idiom that is usually translated as “be prepared for danger in times of peace” and called on officials to have a “sense of urgency” (忧患意识); another translation might be “crisis mindset.” In other words, China might not be in crisis yet, but it could fall into a crisis if it does the wrong things.

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Discouraging historical parallels are all the rage at the moment, though I think the comparisons with Mao are usually overdone. Having been doing some reading on the early days of the Soviet Union recently, one that is top of mind for me is its transition from the mixed economy of the 1920s to full-on central planning. This radical centralization was very much driven by a crisis mindset: the government felt internationally isolated and at risk of invasion, which necessitated the rapid state-driven buildup of defense industries:

The Bolsheviks in the 1920s had fresh memories of the intervention by the West and Japan that took place during the civil war. Stalin’s “socialism in one country” represented a realistic recognition of the fact that no immediate socialist revolution could be expected in Western Europe. However, the regime was still fully committed to its revolutionary goals and was aware of the inherent tension in its relations with the West. The state of isolation in which it found itself and the overwhelming military and technological power of the capitalist countries “encircling” the Soviet Union caused great fear of another foreign invasion. The “plots of Chamberlain and Poncare,” the breaking off of diplomatic relations in 1927, and the activities of the the Japanese in the Far East all added to the threat perceived by the regime. Although some war scares were fabricated by factions in the party, the general belief in the party as a whole was that the regime would face war before very long. In order to defend the revolution, rapid industrialization was considered a necessity.

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“More metal – more weapons!”

That quote is from Yu-Shan Wu, Comparative Economic Transformations: Mainland China, Hungary, the Soviet Union, and Taiwana very interesting 1994 book.

Of course, it seems pretty obvious that China today is not in a panic about imminent invasion and is not about to put the economy on a war footing. Official rhetoric is not martial and war-fearing; quite the opposite. In the same set of constitutional amendments that abolished term limits on the presidency and vice-presidency, a phrase was also added stating that China

follows a path of peaceful development, and pursues a mutually beneficial strategy of opening up in developing diplomatic relations and economic and cultural exchanges with other countries and working to build a community with a shared future for mankind.

So the crisis imagined in official rhetoric does not seem to be primarily a military one resulting from China’s unstable international position.

I think that the sense of threat and the crisis mentality have instead been transposed to the realm of capitalism: the danger to China comes from the economic competition between nations rather than military rivalry.

The clearest exposition of this view is in the Made in China 2025 plan, an industrial policy document whose importance and influence have only become more apparent since it was issued in 2015. The plan aims to achieve a massive transformation of China’s manufacturing sector to take advantage of new technologies and strengthen its capabilities.

But this transformation is motivated primarily by fear. While in Europe and America Chinese manufacturing is sometimes perceived as a world-conquering giant that has laid waste to traditional industries and thrown millions out of work, Chinese leaders see more weakness rather than strength. The world is being transformed by new technologies that are being invented outside of China and controlled by companies that are not Chinese. Meanwhile labor costs are rising are and China is losing market share in low-end industries like textiles and clothing.

These comments about the plan from an MIIT official in Chinese state media are revealing:

China is being pressured from both sides. Advanced economies such as the United States, Germany and Japan have all formulated policies supporting further development of their own manufacturing. At the same time, emerging economies such as India and Brazil are also catching up with their own advantages.

It is remarkable how similar this formulation is to the World Bank’s original definition of the “middle-income trap,” which was used to describe economies that were

squeezed between the low-wage poor-country competitors that dominate in mature industries and the rich-country innovators that dominate in industries undergoing rapid technological change.

It seems that the centralization of power, therefore, is conceived to be necessary in order to help China overcome the middle-income trap. To successfully escape the middle- income trap and navigate the crucial period requires a wholesale transformation of the economy, which only enlightened leadership from the top can achieve.

If this interpretation is correct, one obvious implication is that external threats are not going to make China give up on its industrial policies. The Trump administration is reportedly preparing a broad package of tariffs and other restrictive measures aimed at punishing China for its “industrial policy apparatus that is designed to suck technology out of the world.” But such punishment will only reinforce the crisis mindset in China, and the sense that it is at great risk of losing out to the West. The  likely response is that China will double down on its centralization and industrial policy, which will be seen as even more necessary as the world trade environment becomes more hostile.

Symptoms of pseudoreform at the National People’s Congress

The annual meeting of China’s National People’s Congress, underway this week, is that time of year when the bureaucracy of the Chinese government displays itself in all its ponderous glory, with all its reports, meetings, and discussion sessions. While it’s usually wrong to expect excitement from such process-heavy events, I’m still finding it underwhelming this year. A lot of the big initiatives that are being trumpeted seem to me like the phenomenon that János Kornai called pseudoreform, or “substitutes for deeper and more radical reforms,” in socialist countries.

One big current theme is the so-called “three critical battles” against financial risk, poverty, and pollution, a set of priorities that Xi Jinping has been emphasizing since last year. These campaigns are increasingly supplementing the traditional focus on sustaining economic growth–if not replacing it, with the GDP growth target for this year unchanged at 6.5%.

All of those three goals are certainly worthy ones, and are clearly an attempt to correct some of the problems caused by the mandate to force high growth, which led to a buildup of risk in the financial system and massive environmental degradation. The “three critical battles” nonetheless seem to represent a style of pseudorefrom Kornai called the “perfection of control.” The problems arising from government targets can be fixed by just finding better things to target:

Another trend in the perfection of planning is to try to transform the system of plan indicators. The representatives of this tendency … are not arguing for or against retaining the command nature of plan directives. Their concern is with exactly what needs prescribing.

Another major item on the agenda for the National People’s Congress is the approval of legal and constitutional changes that will create the National Supervision Commission, in effect transforming the Party’s anti-corruption agency into a new branch of government. This will allow it to lead campaigns not just against graft, but against laziness, ineptitude, and any inexplicable failure to follow Party priorities. Again, this intense focus on discipline is very much a symptom of “perfection of control” type of thinking; here is another passage from Kornai:

The bureaucratic mesh must be narrowed, so that nothing slips through. If some designated aggregate indicator or other is evaded, more and more detailed indicators are required. If a regulation is too general and comprehensive, others that go into more detail are needed. If the existing apparatus cannot perform all its regulatory tasks, extra authorities need setting up.

The way bureaucratic coordination can perfect itself most is by completion, trying to regulate every detail. The obvious concomitant is more vigorous action to apply the decisions, tighter discipline. This was reemphasized in the Soviet Union not only under Andropov but in the early Gorbachev era, when attacks began on absenteeism and alcoholism eroding work discipline.

Both quotes are from Kornai’s The Socialist System: The Political Economy of Communism; here is a previous post on the book.

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