Xi’s Power Problem

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In the run-up to the 100th anniversary of the founding of the Chinese Communist Party (CCP) on July 1, China has ramped up its propaganda to signify the party’s achievements and solidify its hold on power, resulting in what experts call “China’s largest mass-education drive since the Mao era”: rewriting textbooks and distorting history in order to portray Mao Zedong and Xi Jinping in a more favorable light.

However, for all the successes of the Chinese Communist Party–real and imaginary–Xi Jinping cannot erase the weaknesses of China’s system of governance. A year into the coronavirus pandemic that originated as a result of the CCP’s mistakes, it is important for the West to study the problems of China’s authoritarian system of governance in order to safeguard against dangers it poses in our globalized age.

Following Xi Jinping’s ascent to power, China’s course of liberalization came to an end, and the country has been steadily becoming a full-fledged totalitarian regime–albeit “with Chinese characteristics.” Modern China is the personification of a techno-dictatorship, as its management of the flow of information is arguably the most sophisticated and effective in the world, rivaled only by George Orwell’s dystopian novel 1984. Beijing continuously improves its machine of “public opinion guidance” by applying new technologies such as artificial intelligence. A.I.-powered propaganda is executed by the “thought management apparatus,” which helps the CCP censor social media, suppress dissenting opinions, and encourage ideologically correct content. As Xi Jinping himself said, China should “explore the application of A.I. for news collection, production, [and] dissemination… to comprehensively increase [our] ability to lead [public] opinion”.

China’s unique ability to manipulate public opinion and online discourse was demonstrated during the coronavirus crisis, as secret directives and official memos of the Cyberspace Administration of China (CAC) obtained by ProPublica and the New York Timesshow. For example, following the news of the death of Li Wenliang, a doctor who warned about the new viral outbreak and was subsequently silenced by the authorities, CAC ordered “social platforms to gradually remove his name from trending topics pages,” and “activated legions of fake online commenters to flood social sites with distracting chatter, stressing the need for discretion.” Officials in one county boasted that their efforts “effectively eliminat[ed] city residents’ panic,” while one district reported that its 1,500 “cybersoldiers” were surveilling closed chat groups on WeChat.

In this essay, I argue that the knowledge problem of dictatorships is the reason why authoritarian regimes like China engage in propaganda and spread disinformation within their countries. First, I outline the “knowledge problem” faced by all societies as defined by Austrian-British economist Friedrich Hayek, as well as the differences in the approaches of democracies and dictatorships to overcoming it. Second, I take a look at the history of dictatorships’ failures resulting from incomplete knowledge. Finally, I analyze state-sponsored propaganda as an answer to the knowledge problem.

Paradoxically, complete control of information space does not necessarily translate into effective governance. In dictatorships–and totalitarian regimes in general–there is a significant discrepancy between the regime’s understanding of reality and the actual state of affairs because the transmission of information from local authorities to the center is highly inefficient. State-sponsored disinformation cannot wholly overcome the knowledge problem–lack of awareness of the circumstances shaping social processes–because the transmission and analysis of information in centralized societies are problematic, even if public opinion and human actions are shaped and controlled by the government. This is the inherent problem of centralized regimes that, for all the boasting of the Chinese propaganda, Xi Jinping cannot ignore. Unless China returns to the path of liberalization, the country’s future may look very different from the CCP’s optimistic vision.

Hayek’s The Use of Knowledge in Society

In order to act, agents, such as the government, local authorities, businesses, and individuals, need knowledge, which is derived from the analysis of relevant information. The problem, however, is that “the knowledge of the circumstances of which we must make use never exists in concentrated or integrated form, but solely as the dispersed bits of incomplete and frequently contradictory knowledge which all the separate individuals possess,” as Friedrich Hayek wrote in The Use of Knowledge in Society. Every society, therefore, has to grapple with the knowledge problem — the inability of a single entity to efficiently collect all relevant information and make the right decisions.

Hayek argued that there are two kinds of knowledge–quantifiable scientific knowledge and “the knowledge of the particular circumstances of time and place,” “a body of very important but unorganized knowledge which cannot possibly be called scientific in the sense of knowledge of general rules.” This second type of knowledge–uncertain, non-theoretical, unquantifiable, practical and experience-based–“cannot be conveyed to any central authority in statistical form.” While Friedrich Hayek’s The Use of Knowledge in Society is famous for its powerful arguments against central planning and for free markets, it is worth applying Hayek’s insights to politics and governance.

In free and open societies, power is dispersed among many participants because there is a recognition that centralization of all information as well as the wise wielding of power for which this information is needed are impossible. Other actors, from state and local governments to private businesses and members of civil society, are endowed with the ability to both analyze information and make their own decisions because they are closer to the facts of the situation.

In centralized dictatorships, power is concentrated, but knowledge, especially of the unquantifiable kind, remains dispersed among many participants and, therefore, cannot be communicated to the center. The government does not endow other actors with power as in open societies because that would mean a reduction in its power. In dictatorships, regional authorities communicate information to the center but do not always make their own decisions, instead executing the directives of the center.

The Consequences of the Knowledge Problem

Centralization of power creates a host of problems for dictatorships. The effects of failures increase as the system becomes dependent on the fallible decisions of a single person or a group; in other words, as former U.S. Representative Justin Amash argued, “centralization multiplies the costs of human errors.” For example, the effects of China’s one-child policy would not be as disastrous if it was not enforced by the state but, say, attempted by particular provinces as an experiment.

Personalized regimes are also bad at recognizing and correcting their failures, for, unlike in open society, there are no other agents, like the free media and civil society, to point out the government’s mistakes. Perhaps most importantly, in a centralized system with an all-powerful dictator assuming an image of infallibility and invincibility, lower level officials often prefer not to convey uncomfortable facts to the leader–a situation which, as China’s history had demonstrated all too well, exacerbates the scope of crises with potentially catastrophic results.

Economist Xu Chenggang calls China’s system of governance “regionally decentralized authoritarianism,” in which, as Branko Milanovic put it in Foreign Affairs, “provincial authorities have broad powers, so long as they deploy them in the pursuit of objectives determined by the center.” In decentralized countries, there is a high level of autonomy for regional and local authorities, so that they can adapt to the peculiarities of local conditions and experiment with new policies.

China used to have a relatively high level of autonomy for regional and local authorities–before Xi Jinping took over, under whom Beijing increasingly chooses to dictate policies from the top. For example, according to Sebastian Heilmann of Trier University, the number of provincial experiments in China decreased from 500 in 2010 to about 70 in 2016. However, the CCP’s desire to centralize all knowledge and decision-making power has been accompanied by substantial problems, and not only because transmission of information from the bottom to the top is inefficient. Because rewards to the local authorities are based on their performance, they have an incentive to hide undesirable developments. China’s history abounds with demonstrations of the consequences of failing attempts to overcome the knowledge problem.

Consider the so-called Great Leap Forward, Mao Zedong’s plan to rapidly transform China into an industrial superpower. Due to the inordinate requirements on grain production imposed on provinces by the center and Mao’s misguided policies (which in reality led to a collapse in food production), local officials began to fabricate numbers. Subsequently, statistics showed that the country “overproduced” Mao’s requirements. Exuberant chairman encouraged his citizens to “eat five meals a day” and throw away what they could not finish; much of the “excess” grain was exported abroad. Several months later, more than 30 million people died of starvation in one of the worst famines in human history. In modern China, however, the true lessons of this disastrous experiment are being erased.

Another illustration of this phenomenon is China’s GDP statistics. In China, GDP data does not reflect underlying economic activity, in no small part due to the fact that data collection is based on the reports of regional authorities who often intentionally overstate their statistics because they are incentivized to increase their GDPs. This is one of the reasons why, according to the Brookings Institution, China’s real GDP growth from 2008-2016 is 1.7 percentage points lower than the official figures. Only recently did China’s National Bureau of Statistics stop relying on regional authorities and assume control of GDP data collection.

And most recently, China’s centralized system most likely hindered the communication of information from the regional authorities to the central government regarding the coronavirus outbreak, because Chinese local officials have a tendency to withhold bad information from higher authorities, just as it happened during the 2002-2003 SARS epidemic. As Vivienne Shue, a China scholar at Oxford University, told the New York Times, “This is a continuous theme in central-local relations in China. You do not want to be the one to bring bad news.”

There is a widespread belief that the CCP deliberately covered up the outbreak of the novel coronavirus and has been intentionally understating data. While this may be true (especially in the later stages of the crisis), a more likelypossibility is that the Hubei authorities have concealed the outbreak and deliberately presented false information to the center because of the fear of punishment–a conclusion supported by U.S. intelligence agencies. The cover-up of the outbreak by the Hubei authorities is therefore just another consequence of the knowledge problem of the Chinese regime: the central government is unable to know the real situation in the country because of a problematic system of the collection and analysis of information.

The CCP’s total control of information space does not translate into greater awareness of the situation, as the Great Leap Forward, GDP data, and the coronavirus demonstrate; instead, it has led to greater opaqueness. Censorship prevents potentially vital information from reaching the government. As a result, problems often turn into national crises before the central government is aware of them. The knowledge problem of centralized regimes can also be illustrated by the following observation of techno-sociologist Zeynep Tufecki: the inability of a centralized regime to gain complete knowledge of the situation in the country, in spite of total control of society, is “similar to losing sensation in parts of one’s body due to nerve injuries. Without the pain to warn the brain, the hand stays on the hot stove, unaware of the damage to the flesh until it’s too late.” The leaders of the CCP are numb to pain signals, and they begin to take steps only when the divergence between the perception of reality and the actual state of affairs becomes too large to remain unnoticeable or be ignored.

Between democracies like America and dictatorships like China stands Russia, with its peculiar semi-authoritarian model of governance. Russia too suffers from the knowledge problem, though not to the same degree as China, thanks to Russia’s relatively free and open society. For example, in May 2020, a fuel storage tank collapsed in the Siberian city of Norilsk, flooding 17,500 tons of diesel oil and contaminating a 135-square mile area, leading to the second-largest oil spill in Russian history. However, Russia’s federal government and President Vladimir Putin became aware of the problem only two days later after the event, and the information came not from local authorities, but social media.

Thanks to the dispersal of decision-making power, in a free, open, and decentralized society, the government is unable to relentlessly continue disinformation campaigns and cover up the truth like in China. The secrecy that surrounds the CCP is impossible in a liberal democracy; the U.S. government cannot keep on suppressing crucial information for a long time because its power is limited. Journalists will be quick to expose any lies. In a free society, mistakes of some actors are corrected by others through criticism, which also makes the adoption of bad policies less likely–something that does not happen in dictatorships due to monopolization of information space by the state.

The Role of Propaganda in Dictatorships

The existence of two types of knowledge complicates the task of centralized states since decisions based purely on “scientific” knowledge will not be correct; the central government acts on the basis of deficient understanding, for the knowledge of the particular “circumstances of time and place” is not taken into consideration.

This is the reason why, in totalitarian regimes, the government attempts to mold human minds and actions and make everyone behave and think according to uniform standards, in order kill what political theorist Hannah Arendt called individuals’ “inner spontaneity,” so that by virtue of the reduction of the immense variety of human experiences that comprise the uncertain element, the impossible-to-centralize knowledge, are eliminated, thereby making it possible for the government to rely purely on “scientific” knowledge. As philosopher of science Karl Popper argued in The Poverty of Historicism, “unable to ascertain what is in the minds of so many individuals,” a central planner “must try to simplify his problems by eliminating individual differences: he must try to control and stereotype interests and beliefs by education and propaganda.”

In the Soviet Union, for instance, the authorities purged those who were “too independent, too influential, along with those who were too well-to-do, too intelligent, too noteworthy… Thus the population was shaken up, forced into silence, left without any possible leaders of resistance,” as Alexander Solzhenitsyn noted in The Gulag Archipelago. This defining feature of totalitarian regimes also explains Joseph Stalin’s decision after the Second World War to pardon war deserters while sentencing escaped Soviet prisoners of war to forced labor. Solzhenitsyn suggests that perhaps Stalin believed that “cowards represented no danger to his rule, and that only the bold were dangerous.”

Xi Jinping is bringing contemporary China closer to this vision of totalitarianism by mobilizing the country’s educational system, turning teachers into the “engineers of the soul,” andfacilitating a “correct outlook on history.” This is necessary for what Hannah Arendt defined as the objective of totalitarian education in The Origins of Totalitarianism, which aims to not merely “instill convictions but to destroy the capacity to form any.” Totalitarian propaganda in education, writes David Deutsch in The Beginning of Infinity, “ensures that most of the new ideas that would have been capable of changing the society are never thought of in the first place.”

Thanks to its A.I.-powered machine of shaping public opinions, the CCP is learning how to influence humans’ subconscious and innermost feelings and motives, while possessing absolute control over people’s activity. Instead of unleashing human ingenuity and creativity through individual freedom while channeling our negative impulses–such as selfishness–into bringing forth a common good, totalitarian regimes aim to change human nature so that it better fits their predetermined plans. However, in a surveillance state with a tightly censored information space and social credit system that encourages conformity to the rules, people gradually become “docile instruments” and lose their individuality. A political system based on conformity, obedience, and compliance destroys creativity, hampers innovation and progress, and sooner or later stagnates and declines.

Will China Liberalize?

Deng Xiaoping devised China’s system of collective leadership in which the power was distributed among the general secretary of the Communist Party, the premier, and the Politburo, in order to prevent disasters that resulted from Mao Zedong’s unrestrained power. Xi Jinping, however, has dismantled China’s collective rule and concentrated power in his own hands, worsening the regime’s inability to efficiently collect and process essential information. Because government officials and citizens obey the orders of the dictator and live constantly in fear, they try to flatter their chiefs rather than provide truthful information, and, as a result, the leaders become increasingly detached from reality. This feeling of insecurity spurs dictatorships to inoculate their people with a particular worldview to make them easier to control, leading to what John Stuart Mill called a “State which dwarfs its men, in order that they may be more docile instruments in its hands.”

Authoritarian attempts to spread falsehoods within their countries, aimed at artificially reducing the complexity of the world, only change appearance, but not reality. However efficient propaganda is, due to the inherent problems of a centralized data-processing system, perception of the situation by the center does not always conform to the actual state of affairs. While this divergence characterizes open societies as well, it is present to a much lesser extent than in centralized dictatorships because the distribution of power allows for the effective utilization of decentralized knowledge, while protection of free expression allows others to correct the mistakes of the government.

For sooner or later, perception of reality diverges too much from the actual state of affairs to remain sustainable, resulting in infrequent but dramatic crises. The only way to mitigate the knowledge problem is by distributing decision-making power among the many, instead of concentrating it and letting those who have the necessary knowledge and information decide for themselves what to do instead of trying to eliminate the peculiar experiences and reduce everyone to a single standard so as to ease the control of the population.

Instead of celebrating its centennial with an avalanche of propaganda, the Chinese Communist Party should dwell on its failings. Deng Xiaoping’s liberalization and pro-market reforms made China an economic powerhouse it is today, and without further democratization and decentralization of it’s system, China–and, in our globalized age, the world–will continue to suffer from the woes of the knowledge problem plaguing centralized regimes.

Sukhayl Niyazov is an independent writer with bylines in the National Interest, City Journal, and other publications.

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