Hey Tamny, Believe What Mike Gallagher Has to Say

John Tamny recently upbraided Congressman Mike Gallagher for the latter’s purported failure to discern that China under Xi Jinping is a “capitalist” nation-state and so, by implication, can be no real threat to the United States or any other country. Shame on Tamny for naïvely misunderstanding the People’s Republic of China.

First of all, making money is not the litmus test for capitalism.  People made money long before capitalism emerged as an economic system. Just ask the Medici in Florence during the 1400s. Today, you can still make a lot of money without having capitalism. Just ask wealthy families in almost any banana republic or crony-capitalist country, including the likes of Saudi Arabia and Russia. In fact, the emerging BRICS alliance (that’s Brazil, Russia, India, China, and South Africa) is becoming a veritable jamboree of crony-capitalist regimes.

Xi has told the world ad nauseum that his China is run according to “Chinese Characteristics.” What are these, you ask? Just read Xi’s words and study Chinese history. Chinese Characteristics elevate to great sophistication the use of our desire for money to control our behaviors. Those who behave are rewarded; those who misbehave are denied access to the material goods of life. This is the purpose of Xi’s social credit system. If you jaywalk, you lose points in the CCP’s game of life. You lose your access to goodies. Be a good and compliant person, and you will get points that open the regime’s cornucopia of goodies. It’s really quite simple.

Centuries ago, a clever chief minister named Quan Zhong instructed his lord how to use our human desire for profit to manipulate the people. The lord said: “I love purple cloth but it is too expensive.” Since purple dye left a smell, Quan Zhong replied: “The next time someone approaches you wearing purple cloth, hold your nose.” The lord did as he was instructed. Next thing he knew, everyone in the court dumped their purple clothes in the market and the price for purple cloth collapsed. Quan Zhong bought all the purple cloth up for a song and gave it to his lord.

Accordingly, Xi’s China is perfecting how to use profit to subordinate enterprise to the CCP.  You can’t do business without getting permission from someone. To get what you want, you must give what they want. Xi’s foreign policy of using money through the Belt and Road Initiative to buy Chinese influence and market access and obtain naval facilities far from home is nothing other than using people’s desire for profit to get what the Chinese want. Maybe we ought to call this “Capitalism with Chinese Characteristics.”

So, when Congressman Mike Gallager suspects that Tik-Tok and other “private, money-making” Chinese companies might be compliant instruments of the Chinese Communist Party from time to time, there are excellent reasons to listen to him. We misunderstand the People’s Republic of China at our own peril.

Stephen B. Young is the Global Executive Director of the Caux Round Table for Moral Capitalism (CRT). Young was educated at Harvard College and Harvard Law School. He served as an Assistant Dean at the Harvard Law School and as the third Dean of the Hamline University School of Law. His new book is Kissinger's Betrayal: How America Lost the Vietnam War.