Can Xi Jinping’s fight against corruption, inequality and mounting debt end China’s ‘Gilded Age’?
- America’s Gilded Age provides a historical lens for assessing Xi’s actions and suggests the problems facing China today do not spell doom
- Xi is trying to start China’s Progressive Era through command and control, though no government has yet overcome the side effects of capitalism by decree
Within the span of a generation, a new super-rich class emerges from a society in which millions of rural migrants toil in factories for a pittance. Bribery becomes the most common mode of influence in politics.
Opportunists speculate recklessly in land and real estate. All of this is happening in the world’s most promising emerging market and rising global power.
This is not a description of contemporary China, but rather of the United States during the “Gilded Age” of the late 19th century. This formative period of American capitalism is remembered as gilded, not golden, because many problems festered beneath the rapid industrialisation and economic growth.
Public backlash against the Gilded Age triggered wide-ranging economic and social reforms that ushered in the Progressive Era. This domestic revolution paved the way for America’s rise as the superpower of the 20th century.
But he also faces a host of problems that come with a middle-income, crony-capitalist economy, particularly corruption. As he warned in his first speech to the Politburo, corruption “will inevitably doom the party and the state”.
In recent decades, China’s economy has soared alongside a particular type of venality: elite exchanges of power and wealth, or what I call “access money”.
These simmering crises should not be viewed in isolation but as interconnected parts of China’s Gilded Age. Corruption in the form of access money spurred government officials to aggressively promote construction and investment, regardless of whether it was sustainable.
Thus, Xi is determined to take China out of its Gilded Age, both to save the party and cement his legacy as the leader who delivers on its “original mission”. Whereas Deng Xiaoping aspired to make China rich, Xi wants to make China clean and fair as well.
America’s Gilded Age provides a historical lens for assessing Xi’s actions. All crony-capitalist economies, no matter how fast-growing, eventually run into limits. If US history is any guide, the problems facing China today do not necessarily spell doom. Much depends on what policymakers do next.
But whereas the American Progressive Era relied on democratic measures to fight crony capitalism – for example, through political activism and a “muckraking” free press that exposed corruption – Xi is attempting to summon China’s own Progressive Era through command and control. The world has yet to witness a government overcome the side effects of capitalism by decree.
Progressivism in America laid the foundation for the country’s rise in the 20th century. Whether Xi can order China out of the Gilded Age will determine the continuity of China’s rise this century.