By N. S. Lyons
Palladium
October 2021

One day in August 2021, Zhao Wei disappeared. For one of China’s best-known actresses to physically vanish from public view would have been enough to cause a stir on its own. But Zhao’s disappearing act was far more thorough: overnight, she was erased from the internet. Her Weibo social media page, with its 86 million followers, went offline, as did fan sites dedicated to her. Searches for her many films and television shows returned no results on streaming sites. Zhao’s name was scrubbed from the credits of projects she had appeared in or directed, replaced with a blank space. Online discussions uttering her name were censored. Suddenly, little trace remained that the 45-year-old celebrity had ever existed.

She wasn’t alone. Other Chinese entertainers also began to vanish as Chinese government regulators announced a “heightened crackdown” intended to dispense with “vulgar internet celebrities” promoting lascivious lifestyles and to “resolve the problem of chaos” created by online fandom culture. Those imitating the effeminate or androgynous aesthetics of Korean boyband stars—colorfully referred to as “xiao xian rou,” or “little fresh meat”—were next to go, with the government vowing to “resolutely put an end to sissy men” appearing on the screens of China’s impressionable youth.

Zhao and her unfortunate compatriots in the entertainment industry were caught up in something far larger than themselves: a sudden wave of new government policies that are currently upending Chinese life in what state media has characterized as a “profound transformation” of the country. Officially referred to as Chinese President Xi Jinping’s “Common Prosperity” campaign, this transformation is proceeding along two parallel lines: a vast regulatory crackdown roiling the private sector economy and a broader moralistic effort to reengineer Chinese culture from the top down.

But why is this “profound transformation” happening? And why now? Most analysis has focused on one man: Xi and his seemingly endless personal obsession with political control. The overlooked answer, however, is that this is indeed the culmination of decades of thinking and planning by a very powerful man—but that man is not Xi Jinping.

The Grey Eminence

Wang Huning much prefers the shadows to the limelight. An insomniac and workaholic, former friends and colleagues describe the bespectacled, soft-spoken political theorist as introverted and obsessively discreet. It took former Chinese leader Jiang Zemin’s repeated entreaties to convince the brilliant then-young academic—who spoke wistfully of following the traditional path of a Confucian scholar, aloof from politics—to give up academia in the early 1990s and join the Chinese Communist Party regime instead. When he finally did so, Wang cut off nearly all contact with his former connections, stopped publishing and speaking publicly, and implemented a strict policy of never speaking to foreigners at all. Behind this veil of carefully cultivated opacity, it’s unsurprising that so few people in the West know of Wang, let alone know him personally.

Yet Wang Huning is arguably the single most influential “public intellectual” alive today.

A member of the CCP’s seven-man Politburo Standing Committee, he is China’s top ideological theorist, quietly credited as being the “ideas man” behind each of Xi’s signature political concepts, including the “China Dream,” the anti-corruption campaign, the Belt and Road Initiative, a more assertive foreign policy, and even “Xi Jinping Thought.” Scrutinize any photograph of Xi on an important trip or at a key meeting and one is likely to spot Wang there in the background, never far from the leader’s side.

Wang has thus earned comparisons to famous figures of Chinese history like Zhuge Liang and Han Fei (historians dub the latter “China’s Machiavelli”) who similarly served behind the throne as powerful strategic advisers and consiglieres—a position referred to in Chinese literature as dishi: “Emperor’s Teacher.” Such a figure is just as readily recognizable in the West as an éminence grise (“grey eminence”), in the tradition of Tremblay, Talleyrand, Metternich, Kissinger, or Vladimir Putin adviser Vladislav Surkov.

But what is singularly remarkable about Wang is that he’s managed to serve in this role of court philosopher to not just one, but all three of China’s previous top leaders, including as the pen behind Jiang Zemin’s signature “Three Represents” policy and Hu Jintao’s “Harmonious Society.”

In the brutally cutthroat world of CCP factional politics, this is an unprecedented feat. Wang was recruited into the party by Jiang’s “Shanghai Gang,” a rival faction that Xi worked to ruthlessly purge after coming to power in 2012; many prominent members, like former security chief Zhou Yongkang and former vice security minister Sun Lijun, have ended up in prison. Meanwhile, Hu Jintao’s Communist Youth League Faction has also been heavily marginalized as Xi’s faction has consolidated control. Yet Wang Huning remains. More than any other, it is this fact that reveals the depth of his impeccable political cunning.

And the fingerprints of China’s Grey Eminence on the Common Prosperity campaign are unmistakable. While it’s hard to be certain what Wang really believes today inside his black box, he was once an immensely prolific author, publishing nearly 20 books along with numerous essays. And the obvious continuity between the thought in those works and what’s happening in China today says something fascinating about how Beijing has come to perceive the world through the eyes of Wang Huning.

Cultural Competence

While other Chinese teenagers spent the tumultuous years of the Cultural Revolution (1966-76) “sent down to the countryside” to dig ditches and work on farms, Wang Huning studied French at an elite foreign-language training school near his hometown of Shanghai, spending his days reading banned foreign literary classics secured for him by his teachers. Born in 1955 to a revolutionary family from Shandong, he was a sickly, bookish youth; this, along with his family’s connections, seems to have secured him a pass from hard labor.

When China’s shuttered universities reopened in 1978, following the commencement of “reform and opening” by Mao’s successor Deng Xiaoping, Wang was among the first to take the restored national university entrance exam, competing with millions for a chance to return to higher learning. He passed so spectacularly that Shanghai’s Fudan University, one of China’s top institutions, admitted him into its prestigious international politics master’s program despite having never completed a bachelor’s degree.

The thesis work he completed at Fudan, which would become his first book, traced the development of the Western concept of national sovereignty from antiquity to the present day—including from Gilgamesh through Socrates, Aristotle, Augustine, Machiavelli, Hobbes, Rousseau, Montesquieu, Hegel, and Marx—and contrasted it with Chinese conceptions of the idea. The work would become the foundation for many of his future theories of the nation-state and international relations.

But Wang was also beginning to pick up the strands of what would become another core thread of his life’s work: the necessary centrality of culture, tradition, and value structures to political stability.

Wang elaborated on these ideas in a 1988 essay, “The Structure of China’s Changing Political Culture,” which would become one of his most cited works. In it, he argued that the CCP must urgently consider how society’s “software” (culture, values, attitudes) shapes political destiny as much as its “hardware” (economics, systems, institutions). While seemingly a straightforward idea, this was notably a daring break from the materialism of orthodox Marxism.

Examining China in the midst of Deng’s rapid opening to the world, Wang perceived a country “in a state of transformation” from “an economy of production to an economy of consumption,” while evolving “from a spiritually oriented culture to a materially oriented culture,” and “from a collectivist culture to an individualistic culture.”

Meanwhile, he believed that the modernization of “Socialism with Chinese characteristics” was effectively leaving China without any real cultural direction at all. “There are no core values in China’s most recent structure,” he warned. This could serve only to dissolve societal and political cohesion.

That, he said, was untenable. Warning that “the components of the political culture shaped by the Cultural Revolution came to be divorced from the source that gave birth to this culture, as well as from social demands, social values, and social relations”—and thus “the results of the adoption of Marxism were not always positive”—he argued that, “Since 1949, we have criticized the core values of the classical and modern structures, but have not paid enough attention to shaping our own core values.” Therefore: “we must create core values.” Ideally, he concluded, “We must combine the flexibility of [China’s] traditional values with the modern spirit [both Western and Marxist].”

But at this point, like many during those heady years of reform and opening, he remained hopeful that liberalism could play a positive role in China, writing that his recommendations could allow “the components of the modern structure that embody the spirit of modern democracy and humanism [to] find the support they need to take root and grow.”

That would soon change.

A Dark Vision

Also in 1988, Wang—having risen with unprecedented speed to become Fudan’s youngest full professor at age 30—won a coveted scholarship (facilitated by the American Political Science Association) to spend six months in the United States as a visiting scholar. Profoundly curious about America, Wang took full advantage, wandering about the country like a sort of latter-day Chinese Alexis de Tocqueville, visiting more than 30 cities and nearly 20 universities.

What he found deeply disturbed him, permanently shifting his view of the West and the consequences of its ideas.

Wang recorded his observations in a memoir that would become his most famous work: the 1991 book America Against America. In it, he marvels at homeless encampments in the streets of Washington DC, out-of-control drug crime in poor black neighborhoods in New York and San Francisco, and corporations that seemed to have fused themselves to and taken over responsibilities of government. Eventually, he concludes that America faces an “unstoppable undercurrent of crisis” produced by its societal contradictions, including between rich and poor, white and black, democratic and oligarchic power, egalitarianism and class privilege, individual rights and collective responsibilities, cultural traditions and the solvent of liquid modernity.

But while Americans can, he says, perceive that they are faced with “intricate social and cultural problems,” they “tend to think of them as scientific and technological problems” to be solved separately. This gets them nowhere, he argues, because their problems are in fact all inextricably interlinked and have the same root cause: a radical, nihilistic individualism at the heart of modern American liberalism.

“The real cell of society in the United States is the individual,” he finds. This is so because the cell most foundational (per Aristotle) to society, “the family, has disintegrated.” Meanwhile, in the American system, “everything has a dual nature, and the glamour of high commodification abounds. Human flesh, sex, knowledge, politics, power, and law can all become the target of commodification.” This “commodification, in many ways, corrupts society and leads to a number of serious social problems.” In the end, “the American economic system has created human loneliness” as its foremost product, along with spectacular inequality. As a result, “nihilism has become the American way, which is a fatal shock to cultural development and the American spirit.”

Moreover, he says that the “American spirit is facing serious challenges” from new ideational competitors. Reflecting on the universities he visited and quoting approvingly from Allan Bloom’s The Closing of the American Mind, he notes a growing tension between Enlightenment liberal rationalism and a “younger generation [that] is ignorant of traditional Western values” and actively rejects its cultural inheritance. “If the value system collapses,” he wonders, “how can the social system be sustained?”

Ultimately, he argues, when faced with critical social issues like drug addiction, America’s atomized, deracinated, and dispirited society has found itself with “an insurmountable problem” because it no longer has any coherent conceptual grounds from which to mount any resistance.

Once idealistic about America, at the start of 1989 the young Wang returned to China and, promoted to Dean of Fudan’s International Politics Department, became a leading opponent of liberalization.

He began to argue that China had to resist global liberal influence and become a culturally unified and self-confident nation governed by a strong, centralized party-state. He would develop these ideas into what has become known as China’s “Neo-Authoritarian” movement—though Wang never used the term, identifying himself with China’s “Neo-Conservatives.” This reflected his desire to blend Marxist socialism with traditional Chinese Confucian values and Legalist political thought, maximalist Western ideas of state sovereignty and power, and nationalism in order to synthesize a new basis for long-term stability and growth immune to Western liberalism.

“He was most concerned with the question of how to manage China,” one former Fudan student recalls. “He was suggesting that a strong, centralized state is necessary to hold this society together. He spent every night in his office and didn’t do anything else.”

Wang’s timing couldn’t have been more auspicious. Only months after his return, China’s own emerging contradictions exploded into view in the form of student protests in Tiananmen Square. After PLA tanks crushed the dreams of liberal democracy sprouting in China, CCP leadership began searching desperately for a new political model on which to secure the regime. They soon turned to Wang Huning.

When Wang won national acclaim by leading a university debate team to victory in an international competition in Singapore in 1993, he caught the attention of Jiang Zemin, who had become party leader after Tiananmen. Wang, having defeated National Taiwan University by arguing that human nature is inherently evil, foreshadowed that, “While Western modern civilization can bring material prosperity, it doesn’t necessarily lead to improvement in character.” Jiang plucked him from the university and, at the age of 40, he was granted a leadership position in the CCP’s secretive Central Policy Research Office, putting him on an inside track into the highest echelons of power.

Wang Huning’s Nightmare

From the smug point of view of millions who now inhabit the Chinese internet, Wang’s dark vision of American dissolution was nothing less than prophetic. When they look to the U.S., they no longer see a beacon of liberal democracy standing as an admired symbol of a better future. That was the impression of those who created the famous “Goddess of Democracy,” with her paper-mâché torch held aloft before the Gate of Heavenly Peace.

Instead, they see Wang’s America: deindustrialization, rural decay, over-financialization, out of control asset prices, and the emergence of a self-perpetuating rentier elite; powerful tech monopolies able to crush any upstart competitors operating effectively beyond the scope of government; immense economic inequality, chronic unemployment, addiction, homelessness, and crime; cultural chaos, historical nihilism, family breakdown, and plunging fertility rates; societal despair, spiritual malaise, social isolation, and skyrocketing rates of mental health issues; a loss of national unity and purpose in the face of decadence and barely concealed self-loathing; vast internal divisions, racial tensions, riots, political violence, and a country that increasingly seems close to coming apart.

As a tumultuous 2020 roiled American politics, Chinese people began turning to Wang’s America Against America for answers. And when a mob stormed the U.S. Capitol building on January 6, 2021, the book flew off the shelves. Out-of-print copies began selling for as much as $2,500 on Chinese e-commerce sites.

But Wang is unlikely to be savoring the acclaim, because his worst fear has become reality: the “unstoppable undercurrent of crisis” he identified in America seems to have successfully jumped the Pacific. Despite all his and Xi’s success in draconian suppression of political liberalism, many of the same problems Wang observed in America have nonetheless emerged to ravage China over the last decade as the country progressively embraced a more neoliberal capitalist economic model.

“Socialism with Chinese Characteristics” has rapidly transformed China into one of the most economically unequal societies on earth. It now boasts a Gini Coefficient of, officially, around 0.47, worse than the U.S.’s 0.41. The wealthiest 1% of the population now holds around 31% of the country’s wealth (not far behind the 35% in the U.S.). But most people in China remain relatively poor: some 600 million still subsist on a monthly income of less than 1,000 yuan ($155) a month.

Meanwhile, Chinese tech giants have established monopoly positions even more robust than their U.S. counterparts, often with market shares nearing 90%. Corporate employment frequently features an exhausting “996” (9am to 9pm, 6 days a week) schedule. Others labor among struggling legions trapped by up-front debts in the vast system of modern-day indentured servitude that is the Chinese “gig economy.” Up to 400 million Chinese are forecast to enjoy the liberation of such “self-employment” by 2036, according to Alibaba.

The job market for China’s ever-expanding pool of university graduates is so competitive that “graduation equals unemployment” is a societal meme (the two words share a common Chinese character). And as young people have flocked to urban metropoles to search for employment, rural regions have been drained and left to decay, while centuries of communal extended family life have been upended in a generation, leaving the elderly to rely on the state for marginal care. In the cities, young people have been priced out of the property market by a red-hot asset bubble.

Meanwhile, contrary to trite Western assumptions of an inherently communal Chinese culture, the sense of atomization and low social trust in China has become so acute that it’s led to periodic bouts of anguished societal soul-searching after oddly regular instances in which injured individuals have been left to die on the street by passers-by habitually distrustful of being scammed.

Feeling alone and unable to get ahead in a ruthlessly consumerist society, Chinese youth increasingly describe existing in a state of nihilistic despair encapsulated by the online slang term neijuan (“involution”), which describes a “turning inward” by individuals and society due to a prevalent sense of being stuck in a draining rat race where everyone inevitably loses. This despair has manifested itself in a movement known as tangping, or “lying flat,” in which people attempt to escape that rat race by doing the absolute bare minimum amount of work required to live, becoming modern ascetics.

In this environment, China’s fertility rate has collapsed to 1.3 children per woman as of 2020—below Japan and above only South Korea as the lowest in the world—plunging its economic future into crisis. Ending family size limits and government attempts to persuade families to have more children have been met with incredulity and ridicule by Chinese young people as being “totally out of touch” with economic and social reality. “Do they not yet know that most young people are exhausted just supporting themselves?” asked one typically viral post on social media. It’s true that, given China’s cut-throat education system, raising even one child costs a huge sum: estimates range between $30,000 (about seven times the annual salary of the average citizen) and $115,000, depending on location.

But even those Chinese youth who could afford to have kids have found they enjoy a new lifestyle: the coveted DINK (“Double Income, No Kids”) life, in which well-educated young couples (married or not) spend all that extra cash on themselves. As one thoroughly liberated 27-year-old man with a vasectomy once explained to The New York Times: “For our generation, children aren’t a necessity…Now we can live without any burdens. So why not invest our spiritual and economic resources on our own lives?”

So while Americans have today given up the old dream of liberalizing China, they should maybe look a little closer. It’s true that China never remotely liberalized—if you consider liberalism to be all about democratic elections, a free press, and respect for human rights. But many political thinkers would argue there is more to a comprehensive definition of modern liberalism than that. Instead, they would identify liberalism’s essential telos as being the liberation of the individual from all limiting ties of place, tradition, religion, associations, and relationships, along with all the material limits of nature, in pursuit of the radical autonomy of the modern “consumer.”

From this perspective, China has been thoroughly liberalized, and the picture of what’s happening to Chinese society begins to look far more like Wang’s nightmare of a liberal culture consumed by nihilistic individualism and commodification.

The Grand Experiment

It is in this context that Wang Huning appears to have won a long-running debate within the Chinese system about what’s now required for the People’s Republic of China to endure. The era of tolerance for unfettered economic and cultural liberalism in China is over.

According to a leaked account by one of his old friends, Xi has found himself, like Wang, “repulsed by the all-encompassing commercialization of Chinese society, with its attendant nouveaux riches, official corruption, loss of values, dignity, and self-respect, and such ‘moral evils’ as drugs and prostitution.” Wang has now seemingly convinced Xi that they have no choice but to take drastic action to head off existential threats to social order being generated by Western-style economic and cultural liberal-capitalism—threats nearly identical to those that scourge the U.S.

This intervention has taken the form of the Common Prosperity campaign, with Xi declaring in January that “We absolutely must not allow the gap between rich and poor to get wider,” and warning that “achieving common prosperity is not only an economic issue, but also a major political issue related to the party’s governing foundations.”

This is why anti-monopoly investigations have hit China’s top technology firms with billions of dollars in fines and forced restructurings and strict new data rules have curtailed China’s internet and social media companies. It’s why record-breaking IPOs have been put on hold and corporations ordered to improve labor conditions, with “996” overtime requirements made illegal and pay raised for gig workers. It’s why the government killed off the private tutoring sector overnight and capped property rental price increases. It’s why the government has announced “excessively high incomes” are to be “adjusted.”

And it’s why celebrities like Zhao Wei have been disappearing, why Chinese minors have been banned from playing the “spiritual opium” of video games for more than three hours per week, why LGBT groups have been scrubbed from the internet, and why abortion restrictions have been significantly tightened. As one nationalist article promoted across state media explained, if the liberal West’s “tittytainment strategy” is allowed to succeed in causing China’s “young generation lose their toughness and virility then we will fall…just like the Soviet Union did.” The purpose of Xi’s “profound transformation” is to ensure that “the cultural market will no longer be a paradise for sissy stars, and news and public opinion will no longer be in a position of worshipping Western culture.”

In the end, the campaign represents Wang Huning’s triumph and his terror. It’s thirty years of his thought on culture made manifest in policy.

On one hand, it is worth viewing honestly the level of economic, technological, cultural, and political upheaval the West is currently experiencing and considering whether he may have accurately diagnosed a common undercurrent spreading through our globalized world. On the other, the odds that his gambit to engineer new societal values can succeed seems doubtful, considering the many failures of history’s other would-be “engineers of the soul.”

The best simple proxy to measure this effort in coming years is likely to be demographics. For reasons not entirely clear, many countries around the world now face the same challenge: fertility rates that have fallen below the replacement rate as they’ve developed into advanced economies. This has occurred across a diverse array of political systems, and shows little sign of moderating. Besides immigration, a wide range of policies have now been tried in attempts to raise birth rates, from increased public funding of childcare services to “pro-natal” tax credits for families with children. None have been consistently successful, sparking anguished debate in some quarters on whether losing the will to survive and reproduce is simply a fundamental factor of modernity. But if any country can succeed in reversing this trend, no matter the brute-force effort required, it is likely to be China.

Either way, our world is witnessing a grand experiment that’s now underway: China and the West, facing very similar societal problems, have now, thanks to Wang Huning, embarked on radically different approaches to addressing them. And with China increasingly challenging the United States for a position of global geopolitical and ideological leadership, the conclusion of this experiment could very well shape the global future of governance for the century ahead.

N.S. Lyons is an analyst and writer living and working in Washington, D.C. He is the author of The Upheaval.

China’s planning and state enterprises overcame 2007-2009 world capitalist crisis

Without state planning in the economy, China might have been dragged down by the 2007-2009 economic crisis. In June 2013, this author wrote an article entitled, “Marxism and the Social Character of China.” Here are some excerpts:

“More than 20 million Chinese workers lost their jobs in a very short time. So what did the Chinese government do?”

The article quoted Nicholas Lardy, a bourgeois China expert from the prestigious Peterson Institute for International Economics and no friend of China. (The full article by Lardy can be found in “Sustaining China’s Economic Growth after the Global Financial Crisis,” Kindle Locations 664-666, Peterson Institute for International Economics.)

Lardy described how “consumption in China actually grew during the crisis of 2008-09, wages went up, and the government created enough jobs to compensate for the layoffs caused by the global crisis,” this author’s emphasis.

Lardy continued: “In a year in which GDP expansion [in China] was the slowest in almost a decade, how could consumption growth in 2009 have been so strong in relative terms? How could this happen at a time when employment in export-oriented industries was collapsing, with a survey conducted by the Ministry of Agriculture reporting the loss of 20 million jobs in export manufacturing centers along the southeast coast, notably in Guangdong Province? The relatively strong growth of consumption in 2009 is explained by several factors.

“First, the boom in investment, particularly in construction activities, appears to have generated additional employment sufficient to offset a very large portion of the job losses in the export sector. For the year as a whole the Chinese economy created 11.02 million jobs in urban areas, very nearly matching the 11.13 million urban jobs created in 2008.

“Second, while the growth of employment slowed slightly, wages continued to rise. In nominal terms wages in the formal sector rose 12 percent, a few percentage points below the average of the previous five years (National Bureau of Statistics of China 2010f, 131). In real terms the increase was almost 13 percent.

“Third, the government continued its programs of increasing payments to those drawing pensions and raising transfer payments to China’s lowest-income residents. Monthly pension payments for enterprise retirees increased by RMB120, or 10 percent, in January 2009, substantially more than the 5.9 percent increase in consumer prices in 2008. This raised the total payments to retirees by about RMB75 billion. The Ministry of Civil Affairs raised transfer payments to about 70 million of China’s lowest-income citizens by a third, for an increase of RMB20 billion in 2009 (Ministry of Civil Affairs 2010).”

Lardy further explained that the Ministry of Railroads introduced eight specific plans, to be completed in 2020, to be implemented in the crisis.

According to Lardy, the World Bank called it “perhaps the biggest single planned program of passenger rail investment there has ever been in one country.” In addition, ultrahigh-voltage grid projects were undertaken, among other advances.

Socialist structures reversed collapse

So income went up, consumption went up and unemployment was overcome in China — all while the capitalist world was still mired in mass unemployment, austerity, recession, stagnation, slow growth and increasing poverty, and still is to a large extent.

The reversal of the effects of the crisis in China is the direct result of national planning, state-owned enterprises, state-owned banking and the policy decisions of the Chinese Communist Party.

There was a crisis in China, and it was caused by the world capitalist crisis. The question was which principle would prevail in the face of mass unemployment — the rational, humane principle of planning or the ruthless capitalist market. In China, the planning principle, the conscious element, took precedence over the anarchy of production brought about by the laws of the market and the law of labor value in the capitalist countries.

Socialism and China’s standing in the world

China has lifted hundreds of millions of people out of poverty. According to a United Nations report, China alone is responsible for the global decline in poverty. China’s universities have graduated millions of engineers, scientists, technicians and have allowed millions of peasants to enter the modern world.

Made in China 2025

In 2015, Xi Jingping and the Chinese CP leadership laid out the equivalent of a ten-year plan to take China to a higher level of technology and productivity in the struggle to modernize the country.

Xi announced a long-range industrial policy backed by hundreds of billions of dollars in both state and private investment to revitalize China. It is named “Made in China 2025” or “MIC25.” It is an ambitious project requiring local, regional and national coordination and participation.

The Mercator Institute for Economics (MERICS) is one of the most authoritative German think tanks on China. It wrote a major report on MIC25 on Feb. 7, 2019. According to MERICS, “The MIC25 program is here to stay and, just like the GDP targets of the past, represents the CCP’s official marching orders for an ambitious industrial upgrading. Capitalist economies around the globe will have to face this strategic offensive.

“The tables have already started to turn: Today, China is setting the pace in many emerging technologies — and watches as the world tries to keep pace.”

The MERICS report continues, “China has forged ahead in fields such as next-generation IT (companies like Huawei and ZTE are set to gain global dominance in the rollout of 5G networks), high-speed railways and ultra-high voltage electricity transmissions. More than 530 smart manufacturing industrial parks have popped up in China. Many focus on big data (21 percent), new materials (17 percent) and cloud computing (13 percent). Recently, green manufacturing and the creation of an “Industrial Internet” were given special emphasis in policy documents, underpinning President Xi Jinping’s vision of creating an ‘ecological civilization’ that thrives on sustainable development.

“China has also secured a strong position in areas such as Artificial Intelligence (AI), new energy and intelligent connected vehicles. …

“Chinese state-owned enterprises (SOEs) continue to play a critical role for the development of strategic industries and high-tech equipment associated with MIC25. In so-called key industries like telecommunications, ship building, aviation and high-speed railways, SOEs still have a revenue share of around 83 percent. In what the Chinese government has identified as pillar industries (for instance electronics, equipment manufacturing, or automotive) it amounts to 45 percent.”

Breakup of U.S.-China relationship inevitable

The tariff war between the U.S. and China has been going back and forth. It may or may not be resolved for now or may end up in a compromise. The Pentagon’s provocations in the South China Sea and the Pacific are unlikely to subside. The witch hunt against Chinese scientists is gaining momentum.

The U.S. has just appropriated $2.2 billion for arms to Taiwan. National Security Adviser and war hawk John Bolton recently made a trip to Taiwan. The president of Taiwan, Tsai Ing-wen, made a recent stopover in the U.S. on the way to the Caribbean and is scheduled to make another one on the way back.

All these measures indicate the end of rapprochement between Beijing and Washington. This breakup between the two powers is not just the doing of Donald Trump. It flows from the growing fear of the predominant sections of the U.S. ruling class that the gamble they took in trying to overthrow Chinese socialism from within has failed, just as the previous military aggression from 1949 to 1975 also failed.

High technology is the key to the future

Since as far back as the end of the 18th century, the U.S. capitalist class has always coveted the Chinese market. The giant capitalist monopolies went charging in to get joint agreements, low wages, cheap exports and big superprofits when China “opened up” at the end of the 1970s.

But the stronger the socialist core of the PRC becomes, the more weight it carries in the world and, above all, the stronger China becomes technologically the more Wall Street fears for its economic dominance and the more the Pentagon fears for its military dominance.

The example of the stifling of international collaboration on cancer research is a demonstration of how global cooperation is essential not only to curing disease, but also to the development of society as a whole. International cooperation is needed to reverse the climate disaster wrought by private property — none of this can be carried out within the framework of private property and the profit system. Only the destruction of capitalism can bring about the liberation of humanity.

Marxism asserts that society advances through the development of the productive forces from primary communism, to slavery, feudalism and capitalism. Marx wrote: “The hand-mill gives you society with the feudal lord; the steam-mill society with the industrial capitalist.” (“The Poverty of Philosophy,” 1847) And now the revolution in high technology lays the basis for international socialism.

The bourgeoisie knows that the society that can advance technology to the highest degree will be triumphant in shaping the future. This is why imperialism, headed by the U.S., imposed the strictest blockade of the flow of technology to the Soviet Union, as well as the Eastern Bloc and China. This was done by COCOM, an informal organization of all the imperialist countries, which was created in 1949 and headquartered in Paris.

The main targets were the USSR and the more industrialized socialist countries, such as the German Democratic Republic, the Czech Republic, etc. Detailed lists were drawn up of some 1,500 technological items that were forbidden to export to these countries.

Marx explained that developed socialist relations depend upon a high degree of the productivity of labor and the resulting abundance available to the population (“Critique of the Gotha Program,” 1875).

However, as Lenin noted, the chain of imperialism broke at its weakest link in Russia — that is, the revolution was successful in the poorest, most backward capitalist country. The result was that an advanced social system was established on an insufficient material foundation. This gave rise to many, many contradictions. The countries that revolutionaries correctly called socialist, were in fact really aspiring to socialism. Their revolutions laid the foundations for socialism. But imperialist blockade, war and subversion never allowed them to freely develop their social systems.

The great leap forward in technology in China today has the potential of raising the productivity of labor and strengthening the socialist foundations. It is this great leap forward that is fueling the “new cold war” with China and the real threat of hot war.

When Cold War philosophy tied rational choice theory to scientific method, it embedded the free-market mindset in US society

By John McCumber

Aeon Magazine

McCumber is professor of Germanic Languages at the University of California, Los Angeles. His latest book is The Philosophy Scare: The Politics of Reason in the Early Cold War (2016).

The chancellor of the University of California, Los Angeles (UCLA) was worried. It was May 1954, and UCLA had been independent of Berkeley for just two years. Now its Office of Public Information had learned that the Hearst-owned Los Angeles Examiner was preparing one or more articles on communist infiltration at the university. The news was hardly surprising. UCLA, sometimes called the ‘little Red schoolhouse in Westwood’, was considered to be a prime example of communist infiltration of universities in the United States; an article in The Saturday Evening Post in October 1950 had identified it as providing ‘a case history of what has been done at many schools’.

The chancellor, Raymond B Allen, scheduled an interview with a ‘Mr Carrington’ – apparently Richard A Carrington, the paper’s publisher – and solicited some talking points from Andrew Hamilton of the Information Office. They included the following: ‘Through the cooperation of our police department, our faculty and our student body, we have always defeated such [subversive] attempts. We have done this quietly and without fanfare – but most effectively.’ Whether Allen actually used these words or not, his strategy worked. Scribbled on Hamilton’s talking points, in Allen’s handwriting, are the jubilant words ‘All is OK – will tell you.’

Allen’s victory ultimately did him little good. Unlike other UCLA administrators, he is nowhere commemorated on the Westwood campus, having suddenly left office in 1959, after seven years in his post, just ahead of a football scandal. The fact remains that he was UCLA’s first chancellor, the premier academic Red hunter of the Joseph McCarthy era – and one of the most important US philosophers of the mid-20th century.

This is hard to see today, when philosophy is considered one of academia’s more remote backwaters. But as the country emerged from the Second World War, things were different. John Dewey and other pragmatists were still central figures in US intellectual life, attempting to summon the better angels of American nature in the service, as one of Dewey’s most influential titles had it, of ‘democracy and education’. In this they were continuing one of US philosophy’s oldest traditions, that of educating students and the general public to appreciate their place in a larger order of values. But they had reconceived the nature of that order: where previous generations of US philosophers had understood it as divinely ordained, the pragmatists had come to see it as a social order. This attracted suspicion from conservative religious groups, who kept sharp eyes on philosophy departments on the grounds that they were the only place in the universities where atheism might be taught (Dewey’s associate Max Otto resigned a visiting chair at UCLA after being outed as an atheist by the Examiner). As communism began its postwar spread across eastern Europe, this scrutiny intensified into a nationwide crusade against communism and, as the UCLA campus paper The Daily Bruin put it, ‘anything which might faintly resemble it’.

And that was not the only political pressure on philosophy at the time. Another, more intellectual, came from the philosophical attractiveness of Marxism, which was rapidly winning converts not only in Europe but in Africa and Asia as well. The view that class struggle in Western countries would inevitably lead, via the pseudoscientific ‘iron laws’ of thesis, antithesis and synthesis, to worldwide communist domination was foreign to Marx himself. But it provided a ‘scientific’ veneer for Soviet great-power interests, and people all over the world were accepting it as a coherent explanation for the Depression, the Second World War and ongoing poverty. As the political philosopher S M Amadae has shown in Rationalising Capitalist Democracy (2003), many Western intellectuals at the time did not think that capitalism had anything to compete with this. A new philosophy was needed, one that provided what the nuanced approaches of pragmatism could not: an uncompromising vindication of free markets and contested elections.

The McCarthyite pressure, at first, was the stronger. To fight the witch-hunters, universities needed to do exactly what Allen told the Examiner that UCLA was doing: quickly and quietly identify communists on campus and remove them from teaching positions. There was, however, a problem with this: wasn’t it censorship? And wasn’t censorship what we were supposed to be fighting against?

It was Allen himself who solved this problem when, as president of the University of Washington in 1948-49, he had to fire two communists who had done nothing wrong except join the Communist Party. Joseph Butterworth, whose field was medieval literature, was not considered particularly subversive. But Herbert Phillips was a philosophy professor. He not only taught the work of Karl Marx, but began every course by informing the students that he was a committed Marxist, and inviting them to judge his teaching in light of that fact. This meant that he could not be ‘subverting’ his students – they knew exactly what they were getting. Allen nevertheless came under heavy pressure to fire him.

Allen’s justification for doing this became known across the country as the ‘Allen Formula’. The core of it ran like this: members of the Communist Party have abandoned reason, the impartial search for truth, and merely parrot the Moscow line. They should not be allowed to teach, not because they are Marxists – that would indeed be censorship – but because they are incompetent. The Formula did not end there, however. It had to be thoroughly argued and rigorously pervasive, because it had to appeal to a highly informed and critical audience: university professors, whose cooperation was essential to rooting out the subversives in their midst. Ad hoc invocations of the ‘search for truth’ would not suffice. It had to be shown what the search for truth – reason itself – really was. Allen’s ‘formula’ thus became philosophical in nature.

Conveniently, rationality was now a matter of following clear rules that went beyond individual disciplines

Like the logical positivists of his day, Allen identified reason with science, which he defined in terms of a narrow version of the ‘scientific method’, according to which it consists in formulating and testing hypotheses. This applied, he claimed in a 1953 interview with The Daily Bruin, even in ‘the realm of the moral and spiritual life’: Buddha under the banyan tree, Moses on Sinai, and Jesus in the desert were all, it appears, formulating hypotheses and designing experiments to test them.

The Allen Formula gave universities two things they desperately needed: a quick-and-dirty way to identify ‘incompetents’, and a rationale for their speedy exclusion from academia. Since rationality applies to all human activities, the Formula could be used against professors who, like Butterworth, were competent in their own disciplines, but whose views in other fields (such as politics) had not been formulated ‘scientifically’. Moreover, and conveniently, rationality was now a matter of following clear rules that went beyond individual disciplines. This meant that whether someone was ‘competent’ or not could be handed over to what Allen called members of ‘the tough, hard-headed world of affairs’ – in practice, administrators and trustees – rather than left to professors actually conversant with the suspect’s field. Professors thus found themselves freed from having to deal with cases of suspected subversion. Small wonder that, according to the historian Ellen Schrecker, Allen’s actions, and his rationale for them, set a precedent for universities across the country, and catapulted Allen himself to national fame – and to a new job at UCLA.

The Allen Formula was administered, at UCLA and elsewhere in California, through something called the California Plan. Imitated to varying degrees in other states, the Plan required the head of every institution of higher education in California, public and private, to send the name of every job candidate at their institution for vetting by the state senate’s committee on un-American activities. The committee would then consult its database of subversives and inform the university whether the candidate was in it. What to do next was, officially, up to the university; but the committee’s policy was that if an identified subversive was actually hired, it would go public, issuing subpoenas and holding hearings. As Schrecker notes in No Ivory Tower (1986), no college could hope to deal with such publicity, so the Plan effectively gave the committee ‘a veto over every single academic appointment in the state of California’.

The California Plan was supplemented at the University of California by a memo in April 1952 from President Robert G Sproul to department chairs and other administrative officers, directing departments to canvass the publications of job candidates to make sure that they ‘prohibited the employment of persons whose commitments or obligations to any organisation, communist or other, prejudiced impartial scholarship and teaching and the free pursuit of truth’. As the language here makes clear, it is not merely communists who are the problem, but anyone who is not ‘impartial’. Sproul, like other academics, followed the Allen Formula.

This official emphasis on scientific impartiality excluded adherents of a number of influential philosophical approaches from employment in California. Non-communist Marxists whose beliefs reposed on readings of history rather than on logic and mathematics were said to have abandoned what was rapidly defined as philosophy’s ancient concern with strict objectivity in favour of what Allen called ‘leading parades’. Existentialists and phenomenologists did not follow the experimental method (and the former tended to be atheists as well). Many pragmatists did not even believe that there was a single scientific method: true to their name, they believed that scientific enquiry should be free to apply whatever procedures worked. Moreover, whether a method ‘worked’ or not in a given case should be a matter of its social benefit, a dangerously collectivist standard in those difficult days. It was far safer to see the scientific enterprise as what Allen called it in Communism and Academic Freedom (1949): a ‘timeless, selfless quest of truth’.

We will never know the number of job candidates who lost their careers before they even started

The California Plan operated in the greatest secrecy. Ending someone’s career in public required extensive justification, multiple hearings, and due process, all of which could provoke damaging public outcries. The need for secrecy also explains why the Plan emphasised preventing hires rather than rooting out subversives already in teaching positions. As the committee noted in its annual report for 1953, professors already on campus had networks of friends and supporters. Efforts to remove them often produced loud backlashes which, in the committee’s view, invariably benefitted the Communist Party.

According to its advocates, the Plan was a great success. In March 1952, 10 months after it was implemented, the committee’s staffer, Richard Combs, estimated that it had prevented about one academic hire per day in the state. The next year, Allen himself declared that ‘so far, the arrangement is working to mutual advantage’.

As long as Allen remained chancellor, the Plan’s secrecy was successfully maintained at UCLA. Two years after he left, however, attacks resumed: the anthropologist John Greenway was fired in 1961 for suggesting that the Roman Catholic Mass exhibited traces of cannibalism. Three years after that, the philosopher Patrick Wilson was denounced by leading Los Angeles clergymen for the way he taught philosophy of religion. The seven years of silence while Allen served as chancellor at UCLA are testimony to his, and the Plan’s, success at tamping down controversy. We will never know, of course, the number of job candidates who lost their careers before they even started.

Things took a different turn at the university’s other campus, Berkeley. Unlike Allen, Berkeley’s chancellor, Clark Kerr, refused to cooperate with the Plan – with the result that, unbeknown to Kerr, a university security officer named William Wadman took it over. Wadman’s view of his job went well beyond merely forwarding the names of job candidates. It amounted to a general political policing of the faculty, and this attracted national attention. In March 1954, after Wadman’s activities became public, an article in the far-off Harvard Crimson quoted Richard Combs: ‘If, after looking over charges against a professor and investigating them, Wadman thinks the man should be removed, he goes to the state committee and discusses the case. If the … committee agrees with him, the information is passed on to the president of the university [Sproul], who calls for the professor’s resignation.’

The initiative in this arrangement clearly belonged to Wadman. The committee itself was known to be rabidly anti-communist and eager to justify its existence by capturing ‘subversives’, while Sproul’s assent to its findings is portrayed as virtually automatic. The Crimson article goes on to summarise Combs as saying that ‘any professor in the college – not merely those in classified research – can be dealt with in this manner’. Which means, if true, that every professor in the college – not just those in classified research – owed his job to the benign disregard, at least, of Wadman.

As all this was happening, US academics also faced the task of coming up with a philosophical antidote to Marxism. Rational choice theory, developed at the RAND Corporation in the late 1940s, was a plausible candidate. It holds that people make (or should make) choices rationally by ranking the alternatives presented to them with regard to the mathematical properties of transitivity and completeness. They then choose the alternative that maximises their utility, advancing their relevant goals at minimal cost. Each individual is solely responsible for her preferences and goals, so rational choice theory takes a strongly individualistic view of human life. The ‘iron laws of history’ have no place here, and large-scale historical forces, such as social classes and revolutions, do not really exist except as shorthand for lots of people making up their minds. To patriotic US intellectuals, rational choice theory thus held great promise as a weapon in the Cold War of ideas.

But it needed work. Its formulation at RAND had been keyed to the empirical contexts of market choice and voting behaviour, but the kind of Marxism it was supposed to fight – basically, Stalinism – did not accept either free markets or contested elections as core components of human society. Rational choice theory therefore had to be elevated from an empirical theory covering certain empirical contexts into a normative theory of the proper operation of the human mind itself. It had to become a universal philosophy. Only then could it justify the US’ self-assumed global mission of bringing free elections and free markets to the entire world.

Scientific method was already installed as coextensive with reason itself – philosophically by the logical positivists, and politically by the Allen Formula. All that was needed was to tie rational choice to the scientific method. This was accomplished paradigmatically by the UCLA philosopher Hans Reichenbach’s book The Rise of Scientific Philosophy (1951). In a crucial paragraph, Reichenbach wrote:

a set of observational facts will always fit more than one theory … The inductive inference is used to confer upon each of these theories a degree of probability, and the most probable theory is then accepted.

Facts always underdetermine theories, and this requires scientists to choose from an array of alternative theories, under a preference for highest probability. Science thus becomes a series of rational choices. Which meant that by 1951 there was a unified intellectual response to the two pressures: appeals to science fought the domestic subversives, and when science was integrated with rational choice theory it entered the global conflict. The battle was on, and what I call Cold War philosophy began its career, not only in fighting the Cold War of ideas, but in structuring US universities – and US society.

To be sure, interest in the California Plan seems to have petered out well before California’s anti-communist senate committee was disbanded in 1971. Even before then, the Plan was not entirely successful, as witnessed by the hiring in 1964 of the Marxist philosopher Herbert Marcuse to the philosophy department at the University of California, San Diego. That hiring was not without problems, however; public outcries against Marcuse culminated, in 1968, in armed guards, organised by his graduate students, spending the night in his living room.

Many countries, of course have meritocracies – but few pin them as tightly to rational choice as the US does

But to say that with the waning of McCarthyism Cold War philosophy itself vanished from the scene is far too simplistic. The Cold War lasted until the dissolution of the Soviet Union in 1991, and Cold War philosophy is still with us today. Thus, humanists long ago abandoned McCarthy-era attempts to subject their work to scientific method (as New Criticism was held to do). But in universities at large, intellectual respectability still tends to follow the sciences.

Cold War philosophy also continues to structure US society at large. Consider the widespread use of multiple-choice tests for tracking students. Whether one takes an ACT or a SAT, one is basically being tested on one’s ability to choose, quickly and accurately, from a presented array of alternative answers – under a preference, of course, for agreement with the test designers. Rational choice thus became the key to one’s placement in the national meritocracy, as illustrated by what I call the ‘40’s test’: if you know that someone has got 440, 540, 640 or 740 on the SATs (under the scoring system in effect until March 2016), you usually know a lot about their subsequent life. Someone who scored a 440, for example, likely attended a community college or no college, and worked at a relatively humble job. Someone with a 740 was usually accepted into an elite university and had much grander opportunities. Many countries, of course have meritocracies – but few pin them as tightly to rational choice as the US does.

Cold War philosophy also influences US society through its ethics. Its main ethical implication is somewhat hidden, because Cold War philosophy inherits from rational choice theory a proclamation of ethical neutrality: a person’s preferences and goals are not subjected to moral evaluation. As far as rational choice theory is concerned, it doesn’t matter if I want to end world hunger, pass the bar, or buy myself a nice private jet; I make my choices the same way. Similarly for Cold War philosophy – but it also has an ethical imperative that concerns not ends but means. However laudable or nefarious my goals might be, I will be better able to achieve them if I have two things: wealth and power. We therefore derive an ‘ethical’ imperative: whatever else you want to do, increase your wealth and power!

Results of this are easily seen in today’s universities. Academic units that enable individuals to become wealthy and powerful (business schools, law schools) or stay that way (medical schools) are extravagantly funded; units that do not (humanities departments) are on tight rations. Also on tight rations nationwide are facilities that help individuals become wealthy and powerful but do not convey competitive advantage on them because they are open to all or most: highways, bridges, dams, airports, and so on.

Seventy years after the Cold War began, and almost 30 after it ended, Cold War philosophy also continues to affect US politics. The Right holds that if reason itself is rooted in market choice, then business skills must transfer smoothly into all other domains, including governance – an explicit principle of the Trump administration. On the Left, meritocracy rules: all three of Barack Obama’s Supreme Court nominees attended law school at either Harvard (as Obama himself did) or Yale (as Hillary Clinton did). The view that choice solves all problems is evident in the White House press secretary Sean Spicer’s presentation of the Republican vision for US health care, at his press briefing last March 23: ‘We’ve lost consumer choice … The idea is to instil choice back into the market.’

Part of the reason for Cold War philosophy’s continuing dominance is that though it is really a philosophy, proffering a normative and universal theory of correct reasoning, it has never been directly confronted on a philosophical level. Its concern with promulgating free markets and contested elections gave it homes in departments of economics and political science, where it thrives today. Philosophers, for their part, have until recently occupied themselves mainly with apolitical fields such as logic, metaphysics and epistemology.

On a philosophical level, however, Cold War philosophy has some obvious problems. Its ‘ethics’, for example, is not a traditional philosophical ethics at all. From Plato to the pragmatists, philosophical ethics has concerned the integration of the individual into a wider moral universe, whether divine (as in Platonic ethics) or social (as in the pragmatists). This is explicitly rejected by Cold War philosophy’s individualism and moral neutrality as regards to ends. Where Adam Smith had all sorts of arguments as to why greed was socially beneficial, Cold War ethics dispenses with them in favour of Gordon Gekko’s simple ‘Greed is good.’

Another problem with Cold War philosophy’s ethics concerns what I will call ‘disidentification’. Whatever I choose has at least one alternative; otherwise there would be no choice. But if I identify myself at the outset with any of my plurality of alternatives, I cannot choose any alternative to it; doing that would end my identity and be suicidal, physically or morally. Therefore, any alternative I consider in the course of making a rational decision is something I can walk away from and still be me. This is not an issue for rational choice theory, which concerns cases where my identity is not at stake, such as choosing which brand of toothpaste to buy, or (usually) which candidate to vote for. But when rational choice theory becomes Cold War philosophy, it applies to everything, and everything about me becomes a matter of choice.

Free markets are wonderful tools for enhancing human life; so are MRIs: but both need proper installation and tending

This in turn leads me to abandon my own identity, in the following way: suppose that what I am choosing is my religion, and that my alternatives are Catholicism and Hinduism. If I am already a Catholic, however, Hinduism cannot be a serious alternative, because one’s religion is (usually) part of one’s identity. If I am to choose between Catholicism and Hinduism, I must put both at a distance. I must ‘disidentify’ with them. And since Cold War philosophy bids us to take this stance on all things, at the limit the moral agent must be disidentified from everything, and can have no other fundamental identity than being a rational chooser, ie someone who first orders her preferences according to transitivity and completeness, and then opts for the highest utility. That is a pretty thin identity. Everyone has certain characteristics that they simply cannot or will not relinquish under any circumstances. What else is there to live for?

The widespread success of rational choice theory, coupled with the problems of Cold War philosophy, suggests that the problem lies in what differentiates the two: Cold War philosophy’s claim, inherited from Allen, to universal, and indeed sole, validity as an account of human reason. If we look at the history of philosophy, reason has been many things. For the Greeks, it was basically the capacity to grasp universals – to see present givens as instantiations of underlying structures. For René Descartes, it was the ability to provide an a priori and so ‘unshakable’ foundation for beliefs. For Immanuel Kant, it was the ability to generalise conceptions to the maximum, which provided the foundation for the absoluteness of the moral law. Similarly, freedom has not always been merely a matter of choice. For Aristotle, you act freely, are responsible for an action, when you desire to perform that action and your reason tells you it is the correct action in the circumstances. To act freely is thus to act from your entire moral being. This idea, that freedom is really the capacity for complete self-expression, is summed up in Hegel’s pithy remark that true freedom is the apprehension of necessity: it is to understand, in a particular situation, what it is that you have to do in order to be you.

None of this suggests that we should stop valuing freedom of choice. But we should stop assuming that making choices amounts to freedom itself, or that making them rationally is the whole job of human reason. Freedom of choice, like free markets and contested elections, is valuable only when situated within wider horizons of value. Divorced from them, it becomes first absolute and then disastrous. Free markets, for example, are wonderful tools for enhancing human life. So are MRIs; but you can’t just drop an MRI on a street corner and expect it to function. Both kinds of device require proper installation and constant tending. The penalties for ignoring this became evident in the financial crisis of 2008.

The absolutising of things such as freedom of choice – the view that free markets and contested elections suffice for a good society – is a view that came into prominence with the early Cold War, when the proliferation of choices was our main contrast with Soviet Marxism. In reality, there is much more to a good society than the affordance of maximum choice to its citizens. With market fundamentalism dominating the US government, and with phantasms being paraded in the media under the sobriquet of ‘alternative facts’ that you can choose or reject, forgetfulness of the McCarthy era and the Cold War philosophy it spawned is no longer a rational option.