The Chinese Mirror
If you kindly allow me just once to personify society, I would say that the featured image of this post represents how America should feel when seeing itself in the Chinese mirror.
The Economist tells us that Chinese president Xi Jinping and his Communist Party “pressed high-income enterprises to ‘return more to society.’” (“Business This Week,” August 28, 2021. See also the accompanying article, “Xi Jinping’s talk of ‘common prosperity’ spooks the prosperous.”) He is using a Western platitude that is actually nonsense in anything resembling a free society. A free business benefits consumers by benefiting its owners and employees; there is nobody else to whom it should be forced to “return” anything. In an exploitative regime like in China, on the contrary, the state and its crony corporations should return everything, including Mr. Xi’s remuneration and perks, to the taxpayers who have been forced to pay for it.
Look at the phenomenon in another, more general, way. The legendary Martian (not very philosophically astute) landing on Earth might think that the Chinese state is rapidly converging to the Western world’s freedom. The Chinese state is doing things like boosting its antitrust laws, expanding regulation, and attacking high-tech companies, all of that, it seems, in the name of competition. It even adopted what is said to be one of the world’s strictest data-privacy laws. It would appear to our Martian that Western-style laws and regulations are being introduced in China. This illusion is very misleading.
Chinese rulers and apparatchiks do not use the concept of “law” or “constitution” in the theoretical sense it has here or at least in the ideal sense it had in the Western classical-liberal tradition. Legal concepts were closely related to the “rule of law,” a system of general and abstract rules that allowed individuals to interact, trade, and arrange their own affairs without ad hoc bans or orders from the government. The power of government was equally bound by the rule of law. Two classic treatments of these issues, at the frontier of law and economics, are due to Friedrich Hayek: Law, Legislation and Liberty, especially vol. 1: Rules and Order (University of Chicago Press, 1973); and his The Constitution of Liberty (University of Chicago Press, 1960). On the contrary, what they mean by “law” in China is just the form in which the government issues its arbitrary orders and bans.
When the Chinese political authorities imitate Western governments’ interventions, they imitate precisely what has, over a century or so, most undermined the rule of law: antitrust laws, attacks on industries that the state doesn’t like (or whose executives it doesn’t like), mercantilism, investment and trade controls, government surveillance, etc. The Chinese privacy laws are meant to constrain independent businesses, not government agencies.
China has become a deforming mirror of the West, where the state is using corrupted Western ideals to become a worse Leviathan. It remains to be seen whether the US government and other Western governments, as well as the public, will be repulsed by what they see in the Chinese mirror and will rediscover classical-liberal values, or whether they will be led to look more and more like the deformed image they see in the mirror. Thus far, the latter seems to be happening. Another example: the US government and other governments in the West are expanding industrial policy, which has long been proved inefficient and been gradually (if only formally) abandoned, but is now rekindled for the illusory goal of competing with a planned economy under a tyrannical state.