The role of the Chinese developmental model in the context of a history of societal coordination

A rewrite of my X diary series, #BauwensInChina, on X.com/mbauwens, with 70 entries so far.

China plays a very specific role in the evolution of coordination models. This is my hypothesis of how it fits in a larger ‘macro-historical’ view. So bear with me as I set the stage for this interpretation.

What justifies looking at world history as a competition between ‘coordination elites’ is that each coordination regime creates a different kind of surplus value, which will be distributed to different fractions of the population. Each coordination system creates its own elite. Thus both internally, and externally, competing factions struggle for hegemony, to determine the fate and the management of the societal surplus, which will also determine the potential lifestyle of respective elites.

Also remember my other writings in which I describe the other side of the struggle, i.e. between unadulterated extraction regimes, which favour elites, and the purification engines, i.e. the attempts to redistribute the surplus and create more moral and ethical rules, for the benefit of the people as a whole. I will not stress this aspect in the following article.

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(1): Until WWI : the defeat of Empire

The history of human societal coordination starts with gifting and commoning, in indigenous, tribal, kinship based societies. This is what Kojin Karatani, in his magnum opus, The Structure of World History, calls ‘Mode A’.

After the emergence of conquest-based societies, i.e. militarized civilization, based on states-and-markets, (in that order!!), create a new societal coordination mechanism,

• first a combination of agriculture and mining, which respectively enables the emergence of cities and armies, whose coordination is enabled through writing

• then industrial, whose coordination is enabled by printing

• and finally, moving towards the new extraction regime that we see emerging today, the cognitive stage, in which a lot of human labor will be replaced by artificial intelligence and machines.

In Greece, for the first time, as documented by Michael Hudson in the Destiny of Civilization, a private class of rent-seekers takes power, leading to a ‘democratic’ counter-revolution in the form of the Polis, the democratic city state, an ever uneasy combination of unequal property, i.e. oligarchy, and political equality.

This model is continued by Rome, and even in the medieval times, with numerous assemblies and free cities moderating the power of Church and State.

But on the Eastern side of Eurasia, and especially in China, the Mandarins, the state-centric writing caste, an intellectual class, takes precedence, serving Emperors and monarchs, and the latter are considered the guarantors of societal harmony. In this ‘Eastern’ Eurasian variant of the class society, the merchants always know their place, unlike in the West, where they take power, starting in the free cities of the 14th cy, when they become the strongest of the guilds, and there is no Empire to keep them down. The kings need their skills and capital to contend against the aristocracy, and this ultimately leads to the formation of a fully capitalistic society. This creates a form of ‘democratic’ but capitalistic society that is run by the private propertied classes, but moderated by the state which is itself the seat of permanent class conflict.

* (2): WW II, and the Fall of the Soviet alternative model

WWI is a struggle between the transformed nation-state, and the older imperial model which has become dysfunctional: Habsburgs, Ottomans, Tsarist Russia all collapse, just as China had succumbed to Western imperialism already some decades before. Western liberal parliamentary democracy, in the form of the nation-state, becomes the dominant model, but the next phase of the struggle now emerges: how to manage the now dominant industrial nation-state model!,

Therefore, we should see WWII as a struggle for the management of nation-states. ‘Communism’, born in 1917 in Russia, contends with ‘Fascism’, and the now increasingly US-dominated West. Fascism was defeated in WWII, Russia in 1989-1991.

This is when the Chinese leadership remembered the success of the NEP in post-war-communism Soviet Russia. The New Economic Policy worked extremely well before Stalin introduced the full planning-based industrial model.

But remember: Both Russia and China, using state planning, did very well for agricultural transformation and industrial development, growing at 3 times the pace of the West, and sending out space rockets ahead of the U.S.

It’s now easily forgotten that capitalist states were very much in a panic at their success. Remember, it was Russia who first sent rockets in space, and, as we can read in Francis Spufford’s Red Plenty, the first cybernetician was not a Westerner, but the Russian Bogdanov!

Of course, that success came at a horrific price, but likely not exceeding the late Victorian holocausts of the 19th century. Both the ‘Black Book of Communism’ and the ‘Black Book of Capitalism’ estimate the human toll of the industrial transition at more or less 100 million violent deaths.

(3): The failure of the Soviet Internet, Cybersin, and Deng’s SEZs

So contrary to neoliberal myth-making, the ‘socialist’ system of the Soviets was not a developmental, ‘industrial’ failure!

What it failed to do however, is adapted to the cybernetic potential: while the Soviets invented the first internet to conduct cybernetic central planning, the decentralized implications of this system frightened the central leadership, which killed the experiment.

<THIS> is what killed the Soviets, their inability to adapt to cybernetic potential!!

And this is what the neoliberals succeeded in doing, learning it from the left, as it is the Santiago Boys, i.e. Stafford Beer and his pioneering Chilean colleagues, who indirectly instructed the Chicago Boys.

Indeed, faced with the middle class revolt of the Chilean truckers, the democratically elected socialist prime minister Allende hailed in Stafford Beer, whose Cybersin successfully overcame the strike, after creating a cybernetic ‘war room’ to coordinate replacement transport. An experimental form of democratic cybernetic planning was born, the first in history.

Therefore, Pinochet’s first priority was not the bombing of the palace, but the bombing of Cybersin. The experience was not lost however, but applied by the Chicago advisers of the new dictatorship, responsible for a major social genocide of the Chilean left, to create the coordination model of neoliberalism. Global supply chains, cybernetically steered, but under the control of ‘empty shell’ Western corporations like Nike and Apple, who refined the model. It is the cybernetic infrastructure that enabled the neoliberal coordination of supply chains throughout the world. While externally, market pricing determined consumption, much of the internal functions were effectively planned, as is very well documented in ‘The Socialist Republic of Walmart’.

Thus, the stage was set for the Chinese response.

(4): The Chinese ‘Integrative’ Response to the cybernetic challenge.

Remember that the Chinese Maoist leaders, despite their growing conflict with the Soviet Russian state, had been trained in the Stalinist interpretation of Marxism, and were very familiar with the debates within the Soviet leadership.

So the Chinese leadership had intimate knowledge of the New Economic Policy conducted by the Soviets after their victory in the civil war, which had meant that the super-centralized form of ‘War Communism’, had become obsolete. They knew it had been a relative success to introduce market dynamics in a socialist economy, but they also knew it freed forces that could overcome them. Being in an even more agrarian country, with a very small intellectual and managerial base, the Chinese Maoist leadership was very aware of the possibility that they would be overtaken by ‘capitalist roaders’. They could also see the early success of Taiwan, as well as the flocking of many Chinese to Hong Kong. All motivating factors for their next choice.

Indeed, Deng’s choice to use experimental SEZ’s (special economic zones), starting with Shenzen, made eminent sense . This meant allowing market dynamics to unfold, but only as controlled experiments. In the meantime, all the checks and balances remained in place: collective ownership (run by the village committees) of the land, more or less 70% state ownership of crucial industrial sectors; and a still significant cooperative sector. This allowed an expansion of the party base while, at the same time, limiting capitalist representatives to 3% of the party membership, and denying them a role as owners of media companies, which remained state controlled. Unlike the Western private classes, China remains run by a collectively reproduced ruling class, subjected to meritocratic exams, and step by step career experience within the context of Communist Party membership. It may not be ‘socialism’, as historically understood as the self-rule of the working class, but it certainly was not classical capitalism either. It was this peculiar combination of a strong ‘collective’ state, using capitalist dynamics in a controlled way.

This created a three-layered cybernetic machine:

1) continuous planning and monitoring by the planning and party apparatus, with strong industrial policies to support strategic sectors, using overproduction as a way towards global influence. This is now at play on a global scale, with Chinese solar ‘greening’ Africa for example.

2) strong market dynamics motivating the entrepreneurial spirits of the Chinese population

3) cybernetic management of the multiple feedback loops, including the management and monitoring of public opinion. Foreign observers underestimate the multiple feedback loops present in the Chinese system, including participatory and deliberative consultation processes. I have witnessed them myself in the context of my last visit which included three rural revitalization projects.

4) a cultural management of the ‘Civilizational State’ to avoid the woke cultural disintegration visible in the West, as well as the influence of the neoliberalism which Chinese elite children are trained into when they study abroad.

See the latter ‘conservatism’ as a ‘regression in the service of the Ego’, at civilizational scale. This is social engineering at the highest possible level. The aim is to slow down the disintegration and atomization processes which are inherent to modernization, giving Chinese society more time to adapt. Don’t forget they had to modernize at a pace that is a multiple of the centuries of adaptation that were possible in the West.

And this is it. While Western corporations do the same ‘internally’ (’Walmart socialism’) while embracing woke racial theories, and apply a socialism that only applies as support for the rich, the governments they fund and influence end up destroying public infrastructure to insure private gain; in contrast, the Chinese have found a way to use it at a larger societal and systemic level, applied to public infrastructure and the ‘common good’ of the system as they see it.

As many observers have often said, the West is now playing ‘bad’ chess, the Chinese play longterm ‘Go’.

This is what the Rest is seeing, while Western elites now seem to want to accelerate civilizational decline to insure continued private benefit. Even if we are convinced of the overall negative spiral of the world system, within that context, there is still a positive sub-spiral that is showing a way forward.

The only question here is the matter/energy limits of the system, but the double priority of Common Prosperity (through extraction) and Ecological Civilization, does seem to work much better than the ‘fake’ carbon markets of the Western model.

(5): The next step is beyond market and state

The question though is: are those the two only solutions? As you know, my work is dedicated to a potential ‘Third Way’ of decentralized coordination mechanisms using P2P and commons-based dynamics and infrastructures.

So, how does the Chinese developmental model relate to this third alternative?

China has developed a working model of industrial that is functioning well in the early stages of the development of the cognitive stage of civilization.

China represents a synthesis of the market and planning methodologies that were instrumental for industrial development, but also the cybernetic tools that allow a successful transition to the cognitive and automated models of societal coordination. It represents a successful synthesis that many other Global South nations will look at to secure their own industrial development, now that the West is losing its power to sabotage this development. However, the China model still operates within the civilizational paradigm of market and state dominance, using a state-centric model of societal integration. It’s a rematch of what the Soviets failed to succeed in. But more important, China is still using a high extraction model, that was appropriate for a world that will not exist for much longer. The reality today is that of planetary overshoot, and ‘peak resources’. While there is a real commitment to Ecological Civilization as a great struggle against pollution and the most egregious forms of ecological damage, there is no sign that the Chinese economy is ‘in balance’, and it that model is emulated, it will increase the global imbalance between human resource use and the need for regerative remediation. So in a way, China’s success is the last great success of modernity and its industrial model of development. The finale in the struggle between the market-centric West and the state-centric tradition of Eastern Eurasia.

As Chorn Pharn would say, we need a model that is compatible with a Type-1 model of human civilization, one in which the expenditures for humanity and its lifeworld, is compatible with the long term co-existence with the Web of Life, and the material and energy resources on which both depend. Economies of scale, the model of commodity pricing, requires ever more expenditure in matter and energy to keep the unit price down and competitive, while it continues to create externalities.

In contrast, the new model needs systematic ‘economies of scope’, doing more with the same, and needs to calculate externalities, positive and negative, social and ecological, as a routine part of its own calculations. This can be called Ephemeralization, as Buckminster-Fuller would have it, but also ‘mutualization’, it is only obtainable through the smart mutualization of resource use. In other words, it needs a commons-centric approach.

This is what the new digital models are offering, as they combine peer to peer coordination on a massive scale, through mutual signaling (“stigmergic coordination”), and a mutual reliance of commons of knowledge, code and design. And other the other side of the ledger, numerous and fast-growing productive communities are applying physical mutualization, ‘on the ground’. Our future depends on the phygital synthesis of both these aspects.

The third model, present only as a potential emergent reality in the Chinese context, i.e., its reliance on industrial commoning through the Shanzai and Gonkai practices we discussed in our last article, also sets the stage for this necessary post-market-and-state model of coordination, i.e. a new coordination model where peer to peer stigmergic coordination, based on knowledge commons and the phygital integration of physical and digital commons, creates a new post-civilizational societal order, based on cosmo-local coordination mechanisms.

So China stands at the cusp of this transition, the master only of a industrial-cognitive synthesis that still relies on the domination of highly extractive market and state institutions.

The future will be planetary, cosmo-local, with integrated localization, bioregionalization, and cosmo-localization practices, in which markets and states will be subsumed to a higher order of constraining commons-centric institutions. It’s up to us to construct them.