Gwynne Dyer: China poorer for revolution

Arriving in Beijing on August 23 for his third China visit in five years, Venezuelan President Hugo Chavez praised the country's Communist leaders to the skies for having rescued China from a "practically feudal" situation and making it one of the world's largest economies in less than half a century.

It was an entirely predictable remark by the firebrand Venezuelan leader. It was also entirely wrong.

According to Chavez, China's emergence as a leading economic power is "an example for Western leaders and governments that claim capitalism is the only alternative.

"We've been manipulated to believe the first man on the moon was the most important event of the 20th century. But no, much more important things happened, and one of the greatest events of the 20th century was the Chinese revolution."

In the late 1980s, when mocking communist believers had become a popular sport in the former Soviet Union, one of my favourite gambits was to point out Russia would have done far better economically if the Communist revolution of 1917 had never happened.

No matter how pessimistic your assumptions about the way a non-communist Russia would have developed, it simply couldn't have done as badly as the Communists.

To prove your point, all you had to do was to pick some other country about the same stage of industrial development as Russia just before the World War I - Italy was the most obvious candidate - and to compare the outcomes in the present.

Italy went through the Great Depression in the 1930s and was on the losing side in World War II.

Nobody would claim that post-1945 Italian governments (all 50-odd of them) have been models of good governance, and Italy is far poorer in natural resources than Russia.

But by the late 20th century Italians were four or five times richer than Russians and a lot freer, too.

The Soviet Communists always compared circumstances before the revolution with the situation 70 years later, and gave "the Revolution" full credit for all the changes for the better.

Even in the late 1980s, they effectively claimed that it would still be like 1917 if the Communist revolution had not happened.

So here we are again, with the Chinese Communist regime taking credit for improvements and foreign leftists like Chavez holding out China as an example of a accomplishments under "socialism".

But what would China be like now if the Communists had not won power in 1949? Much richer and much freer.

The right comparison is not between China in 1949 and China now. It is between China's economic progress since 1949 and that achieved by its neighbours.

The two closest parallels are South Korea and Taiwan. Both had been Japanese colonies for decades before 1945 but then Taiwan's population grew overnight by almost 40 per cent in 1949 as Nationalist refugees from the lost civil war flooded in, and Korea was devastated by the war of 1950-53.

Both were ruled for the next three decades by oppressive, ruthless military regimes. And neither country adopted raw free-market capitalism - the state protected infant industries and nourished them with low-interest capital - but at least they weren't tied to Marxist economics.

By the 1980s both countries had achieved economic takeoff, and democracy came soon afterwards.

Meanwhile China had the Great Leap Forward, the Cultural Revolution, and various other man-made disasters which meant that per capita income did not even double between 1949 and 1979 (although misery was redistributed on a more equal basis).

Then under Deng Xiao-ping in the 1980s, China finally abandoned "socialist" economics and adopted the same style of state-assisted capitalism its neighbours had been practising for 30 years - at which point, finally, its economy began to grow fast.

So today the average Chinese income is about one-tenth of that in South Korea or Taiwan: slowly, they are starting to catch up.

There is still no democracy, of course. The Party constantly exhorts the people to be grateful for all that it has accomplished on their behalf, but they would probably have been much better off if it had never existed.

Chavez must know all this, and presumably thinks it doesn't matter. His socialist project is fuelled by oil revenues, so he doesn't have to observe rules of normal economics. But he does need allies against the wrath of the United States, so he says the right things to his hosts, the Communist rulers of China.

They may be closet capitalists these days, but if they don't have the myth that the revolution was beneficial, how can they justify their own power monopoly?

Well, they can't, actually.