One communist country went through a destruction of collusions for collective action that was equivalent to the organizational destruction in Germany and Japan. This was China during the cultural revolution. For whatever reasons, Mao started a revolution against his own upper-level and middle- level subordinates—the red mandarins. He decimated the very administrators and managers on which his economy depended. Only the military was spared. The immediate result was extreme instability and administrative chaos: the economic performance of the Chinese economy during the cultural revolution was much worse than in other communist countries. A longer-run result was that, when Mao died, there were not nearly as many well-entrenched coteries of administrators as in the Soviet Union and the European communist states. So when Deng and the other pragmatists defeated Mao's widow and the rest of the "gang of four" shortly after Mao's death, there were few industries, enterprises, or coteries of administrators whose insider lobbying could undermine Deng's market-oriented reforms. Deng was presumably also helped because virtually everyone was glad to see the end of the chaos. The encompassing interest of Deng, the new pragmatic autocrat, prevailed, largely because the cultural revolution had destroyed the narrowly entrenched interests with a stake in the status quo. Deng could do what Gorbachev and the other European communist reformers could not do: win out over the countless cliques engaged in covert collective action and other insider lobbies. The lion's share of the then-poor Chinese economy—agriculture—was promptly put under an individual responsibility market system. Other market-oriented reforms followed. The result, as we know, was rapid economic growth: output has often increased at 10 percent or more per year. This difference between China and the European countries that were communist, but had no cultural revolution, is precisely consistent with the argument offered here.

What It Means

This is a placeholder explanation generated by the low-overhead model. It interprets "One communist country went through a destruction of collusions for collective action that was equivalent to the organizational destruction in Germany and Japan. This was China during the cultural revolution. For whatever reasons, Mao started a revolution against his own upper-level and middle- level subordinates—the red mandarins. He decimated the very administrators and managers on which his economy depended. Only the military was spared. The immediate result was extreme instability and administrative chaos: the economic performance of the Chinese economy during the cultural revolution was much worse than in other communist countries. A longer-run result was that, when Mao died, there were not nearly as many well-entrenched coteries of administrators as in the Soviet Union and the European communist states. So when Deng and the other pragmatists defeated Mao's widow and the rest of the "gang of four" shortly after Mao's death, there were few industries, enterprises, or coteries of administrators whose insider lobbying could undermine Deng's market-oriented reforms. Deng was presumably also helped because virtually everyone was glad to see the end of the chaos. The encompassing interest of Deng, the new pragmatic autocrat, prevailed, largely because the cultural revolution had destroyed the narrowly entrenched interests with a stake in the status quo. Deng could do what Gorbachev and the other European communist reformers could not do: win out over the countless cliques engaged in covert collective action and other insider lobbies. The lion's share of the then-poor Chinese economy—agriculture—was promptly put under an individual responsibility market system. Other market-oriented reforms followed. The result, as we know, was rapid economic growth: output has often increased at 10 percent or more per year. This difference between China and the European countries that were communist, but had no cultural revolution, is precisely consistent with the argument offered here." in the context of "Mancur Olson, Power and Prosperity (2000), Chap. 9 : Implications for the Transition" to mean that wisdom is timeless.