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Essay Number 16
May 2002 

Three Represents, Transnational Cyber-superorganisms, Capitalism, and the Struggle over Political Policy in China

thin rule
By Satya J. Gabriel


Jiang Zemin's Three Represents has been put forth as a new component in the ideology of the Communist Party of China (CPC), alongside Mao Zedong Thought and Deng Xiaoping Theory.  One can think of it as an upgrade to CPC software, CPC 3.0, if you will.  Whereas, Mao Zedong Thought was grounded in the notion of continual revolutionary struggle to destroy the vestiges of the pre-revolutionary political economy and Deng Xiaoping Theory was designed to shift the CPC algorithm from this internal struggle mode to one of pragmatic experimentation, focused on generating technological advance and the presumed consequent economic growth, this new algorithm for the CPC calls for a rearrangement of the internal composition of the Party itself, in order to solidify the technology/growth mission over the Maoist revolutionary mission.  The core of CPC 3.0 is the idea that the Party represents i) the majority of the Chinese people, ii) advanced culture, and iii) advanced technology.  The first of the three represents is probably just a way of formalizing the shift of the Party from trying to represent (or at least pretend to represent) workers and farmers to a more "broad-based" Party.  This can mean whatever the Party leadership wants it to mean, although I can't really see how that is any different from past practices.  On the other hand, it does mean that one does not need "worker" or "peasant" credentials to rise within the Party ranks and that may be of some consequence in internal struggles within the Party.  The second represent is just a pet concept of Jiang Zemin, who was enamored with Lee Kuan Yew's Singapore, the model for "advanced culture" in Jiang's mind's eye.  The last of these represents is more concrete than the other two and therefore more powerful as an indicator of the underlying Party mission and more influential as a factor in internal Party decision-making: to promote advanced technology.  The PLA elements within the Party understand this as meaning they will eventually get the same sort of neat toys that the American military has to play with.  Those who are involved in the industrial sector understand it to mean that they will get the latest production technologies.  And so on.  This focus on technology is not new for the CPC.  As I've argued in other essays, technological advance, not revolutionary changes in class processes, has been and continues to be the most persistent defining goal of the CPC.  Jiang Zemin's Three Represents simply reinforces this prevailing ideology of technological determinism within the CPC.

The pragmatists have solid empirical support for their technological determinism. It certainly looks as if the innovation (if not invention) of technology is a guiding influence on determining winners and losers in the Darwinian struggle among "civilizations" over the sweep of human history. In the aggregate, technological invention and innovation has, on the average, been on an exponential curve for the entire history of the species homo sapien sapiens, with a few significant bumps along the path due to wars, pandemics, and other interruptions, although we have spent the better part of human history on the flatter slope of that exponential curve and have only of late moved out to an obviously steeper portion of the curve.  This is probably not true for social evolution, taken as a whole, because social relations are less subject to invention and innovation than material technology.  Social inventions are more likely to be stymied by existing social relationships and institutions.  Nevertheless, social inventions, like capitalism, can serve as vehicles for not only continuing but shaping the advancing complexity of technology: the type of technology selected for innovation is influenced by the social organization of society.  And this is also the case for the manner in which technology (both hard and soft) are diffused among the species.  As Richard L. Brinkman wrote in Cultural Economics, ". . . in order to maintain the economic process, as an ongoing function, there is a need for continuous change in structure, both material and social." (p. XV)  Thus, despite the resistance to social change, we find within the larger exponential curve of technological advance that successful economic transformation is accompanied by dramatic transformations in social organization (combined with the aforementioned transformation in material technology), such as the growth in transnational capitalism and the simultaneous evolution of the transnational firm into a cyber-superorganism.

It is in this context that we can observe that 21st century globalization is the latest stage in a process of shrinking economic distance and decentering capitalism, interrupted at certain intervals by world wars, political isolationism, and failed attempts to create competing political-economic power centers (such as the CMEA). In the "West" the social technic of the transnational corporation (within which political, economic, and cultural power is increasingly congealed) has been the catalyst for this transformation. Transnationals have become geographically decentered cyber-superorganisms with internal and external elements connected by increasingly complex computer/internet/telecommunication/financial/legal networks. These "high technology" networks facilitate rapid communication and determinate lines of control between operating and related units directly inside the corporate structure of the transnational and quasi-independent firms connected via outsourcing arrangements for production, design and testing spread around the globe. They also facilitate similar connections between the transnational and various local and multinational governmental bodies, providing the mechanisms by which globalization is programmed to serve the interests of transnational growth.

The transnational cyber-superorganism is comprised of a culturally diverse population of cyberorganically linked workers and managers, with relatively looser connections to external political, cultural, and economic agents (such as managers of government regulatory agencies, trustees of think tanks dependent upon contributions from transnationals or related parties, and directors of quasi-independent corporations dependent upon contractual receipts of cash flow from transnationals).  The ability to rapidly transmit commands and communicate information across geographic space has become increasingly sophisticated, with the quantity and quality of data transmission rapidly approaching the boundaries of virtual presence, where corporate employees can interact across geographic space in ways that had previously only been possible by physical travel.  These advances in communication technology, coupled with computer assisted design and manufacturing, has made it possible to disperse the production process across greater geographic space without losing centralized control.  And managers, attorneys, and sales personnel within these cyber-superorganisms use the same technology to facilitate rapid consummation of agreements as commercial relationships routinely cross international (and currency) boundaries. 

The transnational firm qua cyber-superorganism is the nuclear force transforming the meaning of community and citizenship --- the USA and other "Western" nation states have, to a significant extent, been captured by the transnationals. Transnationals control significant aspects of the culture producing machinery, either directly (oligopolistic control over major mass media production and distribution) or indirectly (such as via their advertising budgets, vendor and clientelist relationships), and increasingly command the webs of communication technology (broadband, private corporate communications networks, data collection, storage and processing networks, including effective control over information on both citizens and firms, etc.) necessary to the new cyber social formation. By developing patron-client relationships with political leaders and other government officials (including promises of corporate life after political death/dormancy), these cyber-superorganisms connect their power centers directly to the agencies of the state and direct the flow of public policy in the interest of further enhancing the economic, political, cultural, and environmental hegemony of the collective of transnationals. The entire structure of imperial power, emanating primarily from the United States government and the legitimating institutions of the United Nations, NATO, and other U.S. dominated multi-national superorganisms, has been subsumed within the hegemonic sphere of influence of these transnational corporations. This dynamic process has been exported to Russia, Eastern Europe, and other emerging competitive capitalist spaces. The interconnectivity of input and output markets, global trading agreements, and changing technology (internet, cell phones, satellites, etc.) that allows for rapid and seamless global communication results in the decentering of both production and exchange relationships, even as political power is simultaneously decentralized and recentered within the corporate executive offices and board rooms (from parliaments and government offices). 

China has yet to be fully incorporated into this process.  The Chinese government remains relatively autonomous and plays a significant leadership role in shaping corporate behavior within the political boundaries of the People's Republic. Government ministries, under the leadership of the State Council, continue to exercise regulatory control over the expansion of factories and other construction within China in ways that do not always serve the interests of the transnationals or local firms (although this does not necessarily distinquish chinese capitalism from the variant forms of capitalism in the European Community or North America, where there are often occasions where local or national interests conflict with the specific interests of transnational firms). Nevertheless, there are signs of transformation along "Western" political lines, in that the relative power balance may be shifting towards the collective of capitalist firms and away from relatively autonomous government ministries and agencies.  The Chinese government has made significant changes to the taxation system to accomodate foreign transnationals, including tax breaks and other subsidies that advantaged foreign firms over domestic firms and, most importantly, has signed onto the World Trade Organization, which is a critical mechanism for extending and protecting the political rights of transnational capitalism against the parochial interests of local citizenries.  These policy decisions do not so much reflect the clout of foreign firms as the aggressive strategy of China's pragmatist leadership in seeking to attract foreign firms into specific locations within China and to encourage technological diffusion.  The "Four Modernizations" required this diffusion and so China's leaders were consciously trying to find ways to attract ideas and hard technology into the country. The advance of China to the status of top recipient of foreign direct investment (FDI) is one indication of the success of this strategy. (Between 1991 and 1996, FDI grew by an astounding average rate of 60% per annum.) Transnational firms from Hong Kong, Taiwan, Japan, South Korea, Germany, the United States, Sweden, etc. have transported advanced technology (both in material technics, the hardware of technological development, and in the structure of industrial organization, the software of technological development) into mainland China, in many cases sharing the technology with Chinese state-owned enterprises (SOEs) through joint ventures or other forms of cooperative arrangements, but in all cases working closely with local, provincial, and often national political leaders.

A clearer sign that political power is becoming increasingly decentered, with capitalist firms gaining more influence over public policies can be seen in the growing clout of domestic capitalists.  This has even been evident in recent changes to the tax code.  In 1994 the Chinese government moved to satisfy the complaints of executives in domestic firms that the tax code favored foreign firms by adopting a new uniform taxation system designed to tax all firms, foreign and domestic, at the same corporate tax rate of 33 percent and value added tax rate of 17 percent.  But the most dramatic example of the growing clout of domestic capitalists has been within the Communist Party of China (CPC) and is embodied in Jiang Zemin's Three Represents, which explicitly calls for broadening membership within the Party (and similarly broadening the constituency the Party serves).  The CPC has been actively recruiting new members from among those occupying management positions within both state-owned and private capitalist firms.  The process of changing the "class composition" of the CPC is shaped, in part, by the growing power and influence of indigenous capitalist firms, both state-owned (including town-village enterprises) and private.  The distributive payments of surplus value from state-owned and private capitalist firms, as well as the power these firms hold over the magnitude and income of wage laborers, spreads their influence throughout various levels of government and the larger social formation. 

Domestic capitalists are not the only force changing the internal political dynamics in China. Foreign capital has become an increasingly important element in the Chinese economic matrix, both in direct and indirect involvement in surplus appropriation and distribution.  Foreign transnational directors have been primarily interested in exploiting cheap Chinese labor to lower unit production costs and gain competitive advantages in sales of commodities in the U.S. and other higher income economies.  However, the Chinese domestic market has always been a source of lust for these transnational directors and their managers.  It is difficult (perhaps even foolhardy) to ignore the potential of 1.3 billion people in the Chinese social formation.  Foreign transnationals are likely to continue their expansion in the Chinese economy.  Over time, these non-Chinese firms will become more and more embedded in the domestic economy of China.  It may be only a matter of time before non-Chinese based transnationals, producing increasing amounts of surplus value, hiring ever more wage laborers within China, paying tax revenues to various levels of government, and hiring relatively well paid managerial personnel from among China's educated elite, who have been increasingly exposed to the hardware and software deployed by foreign transnational firms in the realization of surplus value (the quantum matter of economic and social transformation), capture their own elements within the CPC and Chinese government (perhaps this would necessitate a fourth "represent") to a significant enough extent to shape and/or reshape public policy. 

Thus, it may simply be that Jiang Zemin was a pioneer in translating this change in political dynamics into ideological form with his doctrine of Three Represents, but the policy of opening the Party to the managerial elite within domestic capitalist firms, as well as other professionals and private entrepreneurs critical to the development of a private capitalist (and, to a lesser extent, ancient) economy, may have already been baked in the reform cake, so to speak. The Engineers have, therefore, moved to decidely alter the demographics of the CPC in accord with changes that have already occurred in the linkages between the political apparatuses of the Party-state and the growing private capitalist sector.  Nevertheless, it is no minor matter that Jiang set in motion a transformation in the internal composition of the Party by bringing the agents of capitalism inside to directly participate in shaping public policies and laws. It is not surprising then that the "Three Represents" unleashed a fierce struggle within the CPC that seems to have been won by Jiang and carried forward by new president Hu Jintao. [1]  

Thus, the nature of the internecine struggles over policy within the CPC may be significantly different in the future from conditions described in previous essays.  The basic Left versus Right struggle may be displaced by various struggles between politicians linked to different economic constituencies. And the divisions will not be simply between domestic versus foreign capitalist firms.  Foreign manufacturers seeking easy access to domestic Chinese markets or low cost labor in China (including low-cost skilled technical and managerial talent), either through direct operations, joint ventures, mergers with or acquisitions of Chinese firms, or through subcontractors may cultivate their own group of loyal politicos within the CPC and government.  This will be all the more likely as it becomes easier for foreign transnationals to become majority/controlling owners of domestic enterprises, inheriting a complex web of financial relationships and personal ties.

Similarly, foreign banks, insurance firms, and other financial institutions may capture their own clique within the CPC. Foreign telecoms may do the same. These cliques may struggle on the same side for certain policies and be in opposition on other policies. Similarly, politicians linked to domestic textile firms may ally with politicians more closely linked to foreign wholesalers or retailers of clothing in support of certain policies. The undemocratic nature of the CPC-dominated state may actually foster this sort of pro-capitalist clientalism. When and if the Chinese state moves to democratize electoral politics, the power of capitalist firms over citizens' lives and over which politicians are funded may be such that the policy choices might not be significantly altered from those under the present less democratic political arrangements.  After all, politicians under democratic rules are more likely to be vulnerable to negative shifts in economic conditions and a more privatized economy will place the levers of employment creating (or destroying) investment decisions squarely in the corporate board rooms, rather than in the government ministries.  Capital strikes can be a very effective tool for disciplining wayward politicians (who are subject to being voted out of office by disenchanted voters).

A shift to more "Western-style" politico-economic arrangements at the national level would, in a sense, be compatible with the current politico-economic status quo at the local level. We've already seen, in previous essays, the dynamic growth effects of the close relationship between local political leaders and the TVEs (most of which are former commune enterprises). Read just about any paper on the post-Mao economic reforms and related double digit growth rates and you will hear about the pivotal role of these TVEs. As pointed out in the 13th essay in this series, the TVEs are local-government-owned corporate entities managed by private parties in contractual arrangements with local authorities. The local authorities closely monitor the activities of the TVEs, but also provide regulatory support and sometimes access to resources at favorable prices. In exchange, in the language of post-structuralist Marxian theory, the TVEs provide the local governments with distributive class payments from their appropriated capitalist surplus value. These distributive class payments are a significant revenue source for local government budgets. In addition, it is not unusual for TVE management to provide local government politicos with additional "private" payments (in cash, in-kind, or in favors). The bottom line, so to speak, is that the local politicos become beholden to TVE management (and vice versa), creating a politico-economic alliance that can influence policy formation and implementation.  The same dynamic is at play in the relationship between local political leaders and transnational firms.  These local politicos have been engaged in their own competitive battle to gain favor with the transnationals in pursuit of foreign direct investment (FDI) for their areas.  Once they have succeeded in gaining an increase in FDI, they must work just as diligently to keep it.

Thus, the basic mechanism for connecting political bureaucracies to the transnational networks, distributive class payments and the use of communicatons technology to transmit information, requests, and commands is the same under democratic institutional relationships and the less democratic CPC monopoly political power (over the central government bureaucracy) arrangements. Indeed, even the mechanism of capital strikes might be no less effective under the latter arrangement than the former. A severe drop in FDI (which now represents almost 20% of productive investment in Chinese industry), for example, might arguably pose an even larger threat to the CPC under the current monopoly than to democratically elected politicians. And either arrangement poses serious problems for those who would favor more local control over public policies (including policies shaping the quality of the natural environment, employment, infrastructure, and so on), although the more democratic the political processes shaping public policy the more likely citizens will be in a position to exert the primacy of policies that would not be favored by the transnationals (or the bureaucracy).

In the world of WTO and cybercommunications, it has become relatively easy for top-level managers of transnational corporations to transmit information (e.g. commands and plans) and move financial resources across distant geographic space. In addition, it has become easier to process information on both economic and political transactions. The ability to connect "local" politicians to transnational headquarters should facilitate increasing corporate influence over political policy. In this case, local would include national level politicians. A carefully constructed politico-economic strategy for a transnational corporation might include developing close links to political leaders in Beijing, Shanghai, and in various provincial locations, as part of their overall plan for managing production and market conditions and political risks. The impediments to closing the political distance are now mostly linguistic and cultural (and the spread of USA culture and American English language is eroding this barrier). New cybertechnics, especially the Internet, provide the mechanisms for linking transnational elements across vast geographic space and for incorporating political agencies into the transnational super cyber-organism. 

I believe the Maoist philosophy of "permanent revolution," in its current Dengist pragmatist manifestation, is supportive of these changes in China. The constant experimentation with public policy, a by-product of the idea of permanent revolution, has led to a degree of uncertainty about national policy. Add to that the decentralization that has come out of the Dengist-era and you have the ingredients for strategic behavior by local officials that supports globalization. Why? Because uncertainty about future policy shifts has created a willingness on the part of both local officials and firms to support Chinese participation in WTO and other international arrangements that might "lock-in" economic liberalization. In addition, the desire to reduce uncertainties about future economic policies may increase support for closer links between political officials and corporate entities, including the transnational corporations operating within China.

The financial fragilities created by a growing public debt (particularly when one includes the debt owed to state-owned banks by state-owned enterprises), rising unemployment (which is likely to worsen as a result of the increased competition resulting from WTO), and the difficulties in maintaining legitimacy based on traditional views of citizenship rights under "socialism" are likely to push the CPC into the arms of corporate patrons (both domestic and foreign). [2]   This is not guaranteed, mind you.  The Chinese state is still a strong state, even if not as strong as the state that Chris Bramall had in mind when he described the "suppression of growth-retarding interest groups" as "one of the main achievements of the Maoist era." In particular, one should not underestimate the continuing influence of the senior leadership of the People's Liberation Army (PLA) which has not yet lost its clout within the Party.  And even outside of China the network of close ties between transnationals and political institutions does not go unchallenged.  Indeed, there is a continuing struggle by grassroots organizations of citizens to regain popular democratic control over public policy, if not to completely sever the lines of transmission connecting transnational power centers to government agencies and legislative bodies.  Nevertheless, opening up the CPC to a larger number of capitalist managers and others dependent upon capitalist surplus value for their livelihood (either directly or indirectly), as well as private capitalists, linking China to international markets (and cultures) via WTO, and reorienting the Chinese economy towards market determined levels of employment and income (including growth in export-oriented manufacturing) creates connections between the Chinese state and the transnational firms that will be difficult to challenge, much less sever, in the future.  As more and more Chinese citizens work for foreign firms (or domestic firms whose livelihood is linked to foreign markets and/or firms) and political leaders depend on such firms for distributed surplus value (either for public or personal well being), it will become less likely that Leftist (much less Maoist) political policies would gain much acceptance within either the CPC or the general public. 

 
 

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NOTES

[1] (Note added December 22, 2003) The victory of the pro-capitalist wing of the CPC and the leadership of the Engineers faction of Jiang Zemin and Hu Jintao is being solidified at this point. The Central Committee of the CPC has proposed amending the 1982 constitution by adding the three represents into the document as one of the guiding principles of the nation and recognized as "heritage and further development of Marxism, Leninism, Mao Zedong Thought and Deng Xiaoping Theory" according to Wang Zhaoguo, vice chairman of the National People's Congress Standing Committee. Wang explained this to NPC representatives in his capacity as a member of the Political Bureau of the CPC Central Committee. See People's Daily Online --- http://english.peopledaily.com.cn/ (Thanks to Al Sargis for forwarding this information.)

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[2] (Note added Dec. 27, 2003) Ironically, the growth in autonomy of domestic firms (which have been transformed from state-run enterprises to merely state-owned or privatized enterprises) simultaneously takes away the central and provincial government's powers to guarantee employment to millions of Chinese workers but also makes these governments more vulnerable to the decisions of newly autonomous managers in these enterprises precisely because it is now the managers who control the allocation of employment (and other inputs). As firm managers (and boards of directors) gain greater control over the number of employed and unemployed in Chinese society, they also gain greater influence over the public authorities who must learn to respond to the concerns of these managers or face the prospect of social instability (or greater social instability) when firms increase layoffs or refuse to invest. At the extreme, capitalist managers and directors can threaten capital strikes, refusing to invest and forcing a sharp fall in aggregate demand, if the government authorities do not satisfy their demands. See He Qinglian's 1998 text Xiandaihua de Xianjing (The Trap of Modernization) published in Jinri Zhongguo Chubanshe for a discussion of the impact of granting firms more autonomy over investments and hiring practices (rising unemployment and poverty, increased inequality, etc.).

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