“Rulerism” - the Chinese Historical Model and its Derivatives

I refer to the current form of governance as “Capital Rulerism,” which emerged following Mao Zedong's demise. The state leadership subsequently learned from its past mistakes; as a result, the agricultural sector saw a restoration of the family economy, while non-strategic industries, in the industrial and commercial sectors, were opened up to private capital. However, the ruling clique continued to dominate politics, with the economy serving the interests of politics.

Without question, numerous terms seek to define China’s current system. Let's now compare the concept of capital rulerism with three well-known terms.

(1) Crony capitalism
Capitalism is central to this concept, but the emphasis is on the dominance of cronies rather than capital; thus, the term "capital rulerism" is more accurate.

(2) Socialism with Chinese characteristics
This official term refers to the abandonment of the Soviet model and the development of a market economy and private enterprise in China. However, the term socialism essentially means maintaining the leadership of the party; therefore, the equation is as follows:
Socialism with Chinese characteristics = market (capital) + party leadership (state) = capital rulerism.

(3) State capitalism
In this case, the question is whether power or capital is the dominant factor. The Leninist definition used in China emphasizes the dominance of state power, with capital subservient to state power. However, since the state still belongs to the rulers before popular sovereignty is realized, the equation is as follows:
State capitalism = capital rulerism.

In summary, the core structure of capital rulerism has remained stable and unchanged, with violent groups and their proxies controlling the people; the supreme power, with the violence factor at its core, has not yet transformed into popular sovereignty.

The Basic Logic of Rulerism

Three laws have consistently held sway, whether in Chinese history or in contemporary times.

Law No.1 of rulerism: Exertion of total control (such control will only be abandoned when it is no longer beneficial). The various forms of control include:

• Control of thought processes and viewpoints, such as the "script prison" [Those who did not adhere to censorship regulations could be severely punished, including relatives and friends.]
• Political control: a surveillance system to control civilian officials.
• Economic control, such as monopolies on salt, iron, tea, and alcohol, as well as granting special foreign trade licenses
• Social control, such as managing all households and individuals through household registration

Historical evidence demonstrates that implementing such institutions was the opposite of Hayek's notion of "spontaneous order." Rather, it was a system created by those in power. As long as the benefits of market distortion or replacement exceed the costs, there will be interventions by those in power. Conversely, when the advantages of reducing control outweigh the costs, those in power will gradually relax control and alter relevant laws and political-economic systems, for instance, the privatization of state-owned enterprises in specific sectors today. The cost-benefit analysis of those in power determines whether it is privatization or nationalization, decentralization or centralization; this is the law of the economy controlled by those in power.

Law No.2: Unwritten rules and the expansion of beneficiary groups.

All groups and bureaucratic representatives pursued their interests and established unwritten rules that suited their respective levels; for example, During the Ming Dynasty, in Chun'an County, Zhejiang Province, the postal horse changing station imposed certain costs on the population; under the administration of an upright official named Hai Rui, every taxpayer was to pay approximately 9 euros per year to support this station; however, Hai Rui believed this amount was still too high and instead suggested 0.9 euros; in contrast, before his term in office, the actual burden was 126 euros per year per taxpayer.

The flexibility of such hidden rules led to the exploitation, distortion, and erosion of centralist autocracy; the groups benefiting from the unwritten rules and the rules themselves supported each other and spread.

3) Law No.3: The cycles of government and chaos

The beneficiary groups expanded, and the army and bureaucracy bloated and became inefficient, which led to continually increasing overall costs. After one or two centuries, ruling became increasingly top-heavy, and an imbalance emerged between the rulers and the ruled (comparable to a disproportion between carnivores and herbivores); this led to regime collapse and a period of chaos in addition to population growth, natural disasters, and invasions; afterward, a new group took over and began the cycle of government and chaos again.

Ways Out of the Rulerism Model

The three vital subjects of Chinese rulership (emperors, offices, officials) have changed significantly in the last century.

The most substantial change was the abolition of the monarchy (1911); this ended the inheritance of power in China; although the Communist Party established a regulation for the ruler to determine his successor, this proved to be problematic.

An unclear transfer of power rule poses high risks and leads to those in power prioritizing their safety and reputation in history; the popular election of a president offers a possible solution, as the experiences in Eastern Europe and Taiwan show.

The interests of the party organization also speak in favor of the above option, as it ensures the long-term ability to govern: The transformation of the political system in Taiwan, for example, has made the Kuomintang the permanent candidate for the ruling party; the election of a president by the people can be in the interests of the individual ruler and the party, provided the benefits of this transformation outweigh its costs.

The second most significant change was the horizontal and vertical network of offices, which was transformed into a National People's Congress, a Political Consultative Conference, and Congresses of Party Deputies - the counterparts of the estates’ assemblies under an absolutist regime; usually, they are derided as rubber stamps but in times of crisis, when the control of the supreme power weakens, they are very likely to transform into decisive power factors, similar to what happened during the transformations in the Soviet Union and Eastern Europe.

The civil servant caste, as the third subject of the ruling clique, supports the system; however, there are currently two differences compared to previous generations: first, the values of democracy and the rule of law have replaced Confucian values, and officials' support of the autocratic system is just an opportunistic decision; second, when the top leadership carries out major purges, as Stalin and Mao Zedong did, harming real interests, the opportunists will support constitutional democracy and the limitation of supreme power.

As for the people, producing and trading groups can now move assets or remain idle (referred to as “Tangping”, literally: to lie flat) without active investment; intellectuals possess human capital that facilitates easy transfer, particularly as the knowledge economy becomes increasingly relevant. Both capital and knowledge have become negotiable commodities, as they can vanish when coercion is applied; this precarious freedom resembles that of scholars and merchants during European absolutist regimes; their bargaining power in the Estates Assembly, if it exists, hinges on their ability to leave or adopt a passive stance. However, the significance of the Chinese peasantry has waned. Following the abolition of agricultural taxes in 2006, their satisfaction with the government increased. Nevertheless, a formidable military superiority held by rulers renders successful peasant rebellion practically impossible.

The external environment of Chinese rulerism has also transformed. While historical threats from neighboring foreign entities have receded, new challenges have emerged—stemming from trade dynamics, technological advancements, and Western industrial manufacturing. Western ideologies and economic forces have reshaped China, giving rise to new social strata—such as intellectuals and the affluent class. Simultaneously, the emergence of political institutions influenced by Western models, such as parliaments, presents internal and external tests to the traditional rulerism of China.

Overall, the Chinese rulerism system has undergone significant structural changes. These changes potentially elevate the risks associated with coups, popular uprisings, and usurpations. Nonetheless, the ruling clique continues to wield the strength necessary to uphold their system and demonstrate efficiency in providing public goods. Amidst this transformation and reconstruction, internal conflicts persist. The fundamental question of China’s identity—who we are—remains unanswered in the foreseeable future.

Audio length: 29:38