Milton Friedman’s Misadventures in China
The stubborn advocate of free markets tangles with the ideologues of a state-run economy
By Julian B. Gewirtz
December 5, 2016
On a hot June day in 1989, the general secretary of the Chinese Communist Party listened in stony silence as the most powerful leaders in Beijing denounced him. Just weeks earlier, as the world watched in horror, China’s rulers had turned their troops against the student protesters massed in Tiananmen Square—violence that General Secretary Zhao Ziyang, a steadfast reformer, had opposed.
“[You were] attempting to topple the Communist Party and wreaking havoc with the socialist system in coordination with hostile powers at home and abroad,” accused one wizened party elder. Another conservative piled on: “Our party and people have paid a price in blood for Zhao Ziyang’s serious mistakes.” Zhao, with his graying crown of swept-back hair, spoke up in his own defense, but his fate had been determined. He was dismissed as the party’s general secretary and placed under house arrest, where he would remain until his death in 2005.
A few days after Zhao’s dismissal, on June 30, the mayor of Beijing read out his report on the protests. Zhao had sought to overthrow the socialist order in China and replace it with a liberal capitalist system, the mayor declared. He offered damning evidence of how Zhao developed his supposed plot: “Especially worth noting is that last year on September 19, Comrade Zhao Ziyang met with one American ‘extreme liberal economist.’ ”
Which “extreme liberal” had Zhao met on September 19, 1988? The answer opens the door to a strange, incongruous tale, because the American economist who had allegedly plotted with the general secretary of the Chinese Communist Party was none other than Milton Friedman.
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Julian B. Gewirtz is the author of Unlikely Partners: Chinese Reformers, Western Economists, and the Making of Global China, which will soon be published and from which this article is adapted. He is a Rhodes scholar and doctoral candidate in history at Oxford University.