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MYTH OF THE SOCIAL VOLCANO

STANFORD UNIVERSITY PRESS

Contents

List of Illustrations..........................................................................................ixAcknowledgments................................................................................................xiINTRODUCTION Is Rising Inequality Propelling China Toward a "Social Volcano"?.................................1CHAPTER ONE China's Post-Socialist Transition and Rising Inequality...........................................11CHAPTER TWO The China National Survey on Inequality and Distributive Justice..................................33CHAPTER THREE What Do Chinese Citizens See as Fair and Unfair About Current Inequalities?.....................43CHAPTER FOUR Chinese Views on Inequality in Comparative Perspective...........................................68CHAPTER FIVE Chinese Attitudes Toward Current Inequalities....................................................95CHAPTER SIX Perceptions of Current Inequalities...............................................................104CHAPTER SEVEN Preferences for Equality and Inequality.........................................................117CHAPTER EIGHT Views on Stratification and Class Conflict......................................................139CHAPTER NINE Views About Opportunities and Social Justice.....................................................163CONCLUSION Beyond the Myth of the Social Volcano..............................................................181Notes..........................................................................................................203Bibliography...................................................................................................233Index..........................................................................................................241

Chapter One

Since 1978 China has carried out fundamental reforms of its economic system, transforming itself from a centrally planned socialist economy largely isolated from the outside world to a primarily market-oriented system fully integrated into the global economy. As noted in the Introduction, in the process of market reforms China has become much more unequal in multiple ways, and many of the forms of status differentiation, elite privilege, and disadvantages of the poor that China's revolution had attacked and abolished have returned with a vengeance.

The study reported in these pages analyzes the results of a national survey conducted in 2004 devoted to determining how ordinary Chinese citizens view inequality trends and distributive injustice issues. Do most Chinese feel that the overall improvements in living standards and increased opportunities to become prosperous make the heightened inequalities of the reform era acceptable, or perhaps even necessary? Or is it more common to feel angry about the inequalities and unfair distribution of opportunities in Chinese society today, or perhaps even nostalgic for the now officially repudiated socialist patterns of distribution? In order to set the context for later discussion of these and related questions, the current chapter describes the nature and importance of the socialist transition in general and then provides a description of the complicated steps and stages through which China first created its socialist system and then, after 1978, proceeded to dismantle it.

THE IMPORTANCE OF THE POST-SOCIALIST TRANSITION

Arguably the most dramatic and important change in the global political economy in the last century is the rise and then collapse of the challenge to world capitalism posed by centrally planned socialist economies. After the Bolshevik revolution in 1917 and then the establishment of a centrally planned socialist economy in the USSR in the 1930s, the Soviet Union proclaimed that socialism provided a route to economic development that was both more rapid and more equitable than capitalism could provide. That challenge remained provocative but isolated until after World War II, when a combination of the advance of Soviet troops into Eastern Europe and the victory of the Chinese Communist revolution in 1949 (as well as the establishment of socialist systems in Yugoslavia, North Korea, North Vietnam, Laos, and, after 1959, Cuba) produced a situation in which close to one-third of the world's people were living under socialism.

During the 1950s and 1960s, the challenge to world capitalism posed by this much enlarged group of socialist countries appeared formidable. Given the more rapid rates of economic growth of most socialist economies in that period, as well as such stunning accomplishments as the Soviet launch of the world's first artificial earth satellite in 1957, many observers found convincing the claim made by Soviet leader Nikita Khrushchev that the USSR was poised to overtake the United States and lead the way to dominance of the socialist camp over the capitalist world. We all know that this is not what happened. For a variety of complex reasons that we cannot go into in detail here, by the 1970s and 1980s the world situation had changed dramatically, with capitalism again ascendant and socialism in retreat. Economic difficulties and slower growth rates in Eastern Europe and political turmoil and economic troubles in China, when combined with the revival of Western Europe and the dramatic rise of East Asian capitalist economies, helped negate the triumphalism of the advocates of socialism and hastened the eventual dismantling of most socialist systems.

Efforts to enliven faltering socialist economies by introducing markets and private enterprises as supplementary devices began in Eastern Europe in the late 1960s and early 1970s, led by Hungary (see Szelenyi 1988). These limited reforms were not sufficient to cure the growing problems of socialist economies, and China's launching of gradual but eventually much more extensive market reforms after 1978 gets credit as the beginning step that led to the collapse of socialist economic systems generally. Vietnam followed the Chinese example by launching its own program of market reforms (Doi Moi) in 1986, and 1989 saw the sudden collapse of Communist Party rule throughout Eastern Europe, followed in 1991 by the collapse of Communist Party rule in, and the breakup of, the Soviet Union, the latter two events leading to the dismantling of centrally planned socialism and a rapid and chaotic effort to create (or re-create) capitalism in the former Soviet bloc. As a result of these turbulent changes, within a decade and a half socialism as an economic system virtually vanished from the globe. Today a system that once organized the daily lives of close to a third of the world's population survives only in two marginal places with a combined population of less than 35 million: North Korea and Cuba. Even in these two countries, some timid experiments with market reforms have begun.

As already noted, China's path and experience in market transition have been substantially different from those of the countries of the former Soviet Union and Eastern Europe. Communist Party rule did not collapse, and in fact the Chinese Communist Party (CCP) has led and guided the process of market transition throughout. Chinese leaders also rejected the advice (followed to...