It is popular to say that to survive the ongoing economic turmoil of the age, we all need to be more like the Chinese – by which it is generally meant that the supposedly sclerotic democracies of the West should think more along the lines of Beijing’s supposedly-enlightened despotism which can, for all its faults, “get things done”.
They may be right about the Chinese bit, but wrong about which Chinese. Liberty and prosperity rely on us not thinking less like technocrats and despots and more like humble pastoralists: From the US’s National Public Radio*, an amazing, if cautionary, tale of farmers in the little village of Xiaogang who, impoverished by years of forced collectivism at a time when such activity could mean a grizzly death, gathered in secret in a mud hut to sign a contract that would return to each of them a bit of the fruit of their labours:
In the winter of 1978, after another terrible harvest, they came up with an idea: Rather than farm as a collective, each family would get to farm its own plot of land. If a family grew a lot of food, that family could keep some of the harvest…
The farmers agreed to divide up the land among the families. Each family agreed to turn over some of what they grew to the government, and to the collective. And, crucially, the farmers agreed that families that grew enough food would get to keep some for themselves…
The key was incentives:
Before the contract, the farmers would drag themselves out into the field only when the village whistle blew, marking the start of the work day. After the contract, the families went out before dawn.
“We all secretly competed,” says Yen Jingchang. “Everyone wanted to produce more than the next person.”
It was the same land, the same tools and the same people. Yet just by changing the economic rules — by saying, you get to keep some of what you grow — everything changed.
At the end of the season, they had an enormous harvest: more, Yen Hongchang says, than in the previous five years combined.
It also eliminated the free riding that was a huge problem under the collectivist regime:
In theory, the government would take what the collective grew, and would also distribute food to each family. There was no incentive to work hard — to go out to the fields early, to put in extra effort, Yen Jingchang says.
“Work hard, don’t work hard — everyone gets the same,” he says. “So people don’t want to work.”
Not surprisingly, the villagers were eventually found out. But with modernism – and Deng Xiaoping –coming to the fore, the brave farmers were not only spared, but held up as a model for the rest of the country. If only the Chinese bureaucracy took the lessons to heart. Fast-forward to today:
Yen Hongchang [the farmer who wrote the original contract] told us he started a couple businesses over the years, but the local communist party took them away once they became profitable. He also said that the new factories springing up around Xiaogang these days are largely empty, and haven’t created many jobs.
The Prick has long been agnostic, if not downright sceptical, about claims that this will be Beijing’s century: for all the change and growth of the past few decades, China’s economy and culture is still infected by a toxic brew of cronyism, corruption, and opacity, leading to any number of bubbles waiting to burst. This has been in no small part enabled by admirers in the West who never learnt the lessons of their forebears’ infatuation with the Soviet Union and still reckon one-party autocracy is a great idea. Indeed, in the farmers’ description of the bad old days of collectivism, and the bad new days of wealth confiscation, you can hear echoes of Barack Obama and Elizabeth Warren: Those crops? You didn’t grow them. After all, where would anyone be without the warm embrace of the collective?
* For Australian readers, NPR is roughly equivalent politically to Radio National.