Lawrence Person's BattleSwarm Blog

Mark Steyn is justly famous for many things: His stalwart opposition to Jihad, his grasp of demographics, his clever and eminently readable prose, and his once (and future?) gig on the last page of National Review (currently held by the also-formidable James Lileks). He’s also known for stating that China, thanks to its one-child-per-couple mandate, will get old before it gets rich.

However, on reading this Lawrence Solomon piece on China’s inevitable collapse, something occurred to me. Particular in response to this part:

Like the Soviet Union before it, much of China’s supposed boom is illusory — and just as likely to come crashing down

In 1975, while I was in Siberia on a two-month trip through the U.S.S.R., the illusion of the Soviet Union’s rise became self-evident. In the major cities, the downtowns seemed modern, comparable to what you might see in a North American city. But a 20-minute walk from the centre of downtown revealed another world — people filling water buckets at communal pumps at street corners. The U.S.S.R. could put a man in space and dazzle the world with scores of other accomplishments yet it could not satisfy the basic needs of its citizens. That economic system, though it would largely fool the West until its final collapse 15 years later, was bankrupt, and obviously so to anyone who saw the contradictions in Soviet society.

The Chinese economy today parallels that of the latter-day Soviet Union — immense accomplishments co-existing with immense failures. In some ways, China’s stability today is more precarious than was the Soviet Union’s before its fall. China’s poor are poorer than the Soviet Union’s poor, and they are much more numerous — about one billion in a country of 1.3 billion. Moreover, in the Soviet Union there was no sizeable middle class — just about everyone was poor and shared in the same hardships, avoiding resentments that might otherwise have arisen.

In China, the resentments are palpable. Many of the 300 million people who have risen out of poverty flaunt their new wealth, often egregiously so. This is especially so with the new class of rich, all but non-existent just a few years ago, which now includes some 500,000 millionaires and 200 billionaires. Worse, the gap between rich and poor has been increasing. Ominously, the bottom billion views as illegitimate the wealth of the top 300 million.

How did so many become so rich so quickly? For the most part, through corruption. Twenty years ago, the Communist Party decided that “getting rich is glorious,” giving the green light to lawless capitalism. The rulers in China started by awarding themselves and their families the lion’s share of the state’s resources in the guise of privatization, and by selling licences and other access to the economy to cronies in exchange for bribes. The system of corruption, and the public acceptance of corruption, is now pervasive — even minor officials in government backwaters are now able to enrich themselves handsomely.

In light of that: What if “one child per couple,” like paying taxes for members of the Obama administration, is just for the little people? What if the upper crust of China feels such rules don’t apply to them? Assume both that the Chinese ruling class can pop out offspring to their heart’s content and still manages, somehow, to avoid the explosion Solomon posits. (Dictatorships can run a whole lot longer than you think possible. Just ask Saddam Hussein or Kim Jong-Il.) Just how much cheating would it take for China to put off its demographic crash until they do get rich?