Wednesday, November 26, 2008

The Pinochet paradox (Or, why so many conservatives get Communist China wrong)

The gleaming facade that the Chinese Communist Party hoped to show the world continues to crumble.

Another foreign firm (MYOB - Australia) has come to the realization that the CCP is an immovable barrier to profitability (AAP via Epoch Times). The "1.3 billion customer" mantra has been attracting outside investors and companies for years; more and more of them find themselves throwing good money after bad. MYOB was merely the latest.

Many believe the investment climate in Communist China has nothing to do with its political repression. I disagree. A regime that can brook no dissent (BBC and the Epoch Times) usually has trouble with criticism or bad news on any front - including economics, but especially regarding corruption, which continues to be rife within the CCP (Epoch Times). Corruption greatly increases the operational cost for any business enterprise, and when that includes less than perfect information on the economic state of affairs, it can make business planning almost impossible.

Meanwhile, when the regime itself behaves in such a criminal, the very definition of "crime" becomes relative - as was seen in Shanghai, where an executed cop killer was lauded as a hero for standing up to the bloodthirsty regime (BBC). Many, many Chinese citizens identified with Yang Jia, who himself was a victim of police brutality, but foreign investors or firms - who mostly have no experience with tyranny at home - either have no concept of Yang's plight (meaning they see a dangerous society glorifying a murderer) or recognize that for a regime this brutal, nothing is sacred (including an outside firm). This is especially true given the CCP's ultimate weapon - trumped-up espionage charges (BBC) - to which foreigners are especially vulnerable.

Yet, despite all of the above, despite the continuing anti-American policies (Weekly Standard), and despite the antics of the obviously controllable Korean colony (One Free Korea), the CCP not only continues to get away with this on the world stage, but even continues to gain "engagement" supporters throughout the democratic world.

The reasons for this are myriad, but for one of the most important pieces of the Communists' charm offensive puzzle - bedazzled American conservatives - the answer can be found in an old Latin American dictator who gave up power two decades ago and died two years ago - Chilean General Augusto Pinochet.

By almost any account, Pinochet's tenure (1973-1990) began brutally. After taking power in a military coup against a democratically elected yet increasingly unpopular Marxist, Pinochet was every bit the bloodthirsty tyrant. Yet as the 1970s wore on, he also radically reoriented Chile's economy in a free-market direction, and turned it into one of the most prosperous nations in Latin America. By the time he stepped down in 1990, Chile was an economic model.

For many American Cold Warriors of the time, Pinochet (a staunch Western ally) was himself a model dictator (to the extent that dictators could ever be a model), and the trajectory of his tenure was touted as evidence of the inevitable progress of economic freedom to political freedom. This has colored the view of most (if not all) CCP-"engagement" supporters on the American right. It is also spectacularly wrong for two reasons.

For starters, unlike Pinochet, the Communist Chinese economy is hardly a free market. The CCP still owns the major industries (either outright or through high-ranking cadres and their relatives). Even outside firms have to enter joint-ventures with regime-run domestic firms (which usually steal information from the foreign group and hand over to domestic "competition" for either a hefty bribe or a piece of the action). Pinochet's actual reforms would be considered dangerously radical to any CCP cadre per se.

Secondly, we must remember the reactions of the tyrants themselves. Pinochet was faced with a painful choice (for him) in the 1980s: his legacy (the revitalized Chilean economy) or his power. When the Chilean people told him he couldn't have both, he chose the former, and honored the referendum calling for him to step down.

The CCP by contrast, has never chosen to cede power - even slightly. There has never been a China-wide referendum similar to the 1988 Pinochet vote. Moreover, even in the "village elections" so highly touted by the cadres, anti-Communists and reformers who manage to win them risk jail, or worse, if they dare exercise the power their fellow villagers tried to bestow on them.

In fact, contrary to being a "model," the Pinochet experience was actually quite unique. Far more common is the method the CCP is attempting: fake reforms to fool the locals, win Western support, and buy time (in Eastern Europe, that came with national elections that had enough freedom to dislodge the Communists from power; the CCP refuses to let that happen).

Augusto Pinochet - for all his many flaws - gave his people real economic freedom, and rather than risk its extinction, added to it real political freedom. By contrast, the Chinese Communist Party has combined fake economic freedom with fake political freedom, and has chosen to toss each into the trash heap whenever either threatened its "mandate from heaven."

In other words, the CCP is nothing like Pinochet, and the sooner Pinochet's apologists and defenders on the right can see that, the sooner we will all be to a democratic world ready to see the Communist regime for what it really is and act accordingly until the Chinese people (hopefully with our help) can rise up and take their country back.

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