China gags economic speech too
In the week and a half since the Chinese government detained artist Ai Weiwei on suspicion of “economic crimes,” Western governments and the global arts community have condemned China’s repression of free speech. Regular Americans, too, should care about China’s habit of stifling information that it doesn’t like to hear. China is applying the same habit to another type of speech, economic speech. And the results could hit Americans more directly — in the pocketbook.
When China’s arrest of Ai on April 3 at the Beijing airport became public, it made news in the West. Britain’s Financial Times reported, “Mr. Ai is in grave danger of being tortured and is probably being deprived of medicines he needs regularly.” The U.S. State Department called his arrest “inconsistent with … fundamental freedom.”
Why is the Chinese government afraid of an artist, one whose latest popular work is an exhibit at London’s Tate Modern museum made up of 100 million ceramic sunflower seeds?
China’s problem is that the regime legitimized Ai leading up to the 2008 Summer Olympics in Beijing, when it asked him to help design the “Bird’s Nest” stadium. Ai has used his art and growing fame to question the regime, and the Chinese people have taken notice.
More than a year ago, Ai called attention to the schoolchildren killed in China’s 2008 earthquake — children who died in part because of shoddy construction. He mounted an installation in Europe comprised of 9,000 brightly colored backpacks. The artist also wrote an opinion column last year in the Wall Street Journal Asia edition in which he asked “how a state based on limiting information flows and freedom of speech can remain powerful.”
Ai has more than 70,000 Twitter followers — a force that China increasingly considers a threat, as officials have watched Arab revolutionaries organize through social networks. Later this spring, Ai was to travel to New York to open an exhibit outside the Plaza Hotel — another chance for him to use art to push for freedom.
In a story echoing Ai’s that went almost unnoticed, China moved to stifle another party’s right to express itself. That party, despite having vast resources, declined to mount a vigorous defense.
In late March, the British-Dutch consumer-products giant Unilever moved to raise prices up to 15% on such staples as shampoo and laundry detergent in the Chinese market. But Beijing asked Unilever to hold off, because officials were worried about inflation-related unrest. Chinese customers had already flooded stores, clearing the shelves of dry goods on rumors of price increases.
It’s easy to see why Unilever acquiesced. The stakes are as high for the company as they are for China. China doesn’t want to experience unrest unleashed by rising prices, and Unilever doesn’t want to lose access to China’s more than 1 billion potential consumers — or investors. In fact, Unilever recently issued its first bond in the Chinese currency, helping it raise funds cheaply.
The Chinese government has treated Unilever exactly as it has treated Ai. That is, the government has restrained Unilever’s ability to express itself freely. (To add some irony, Unilever is the sponsor of Ai’s sunflower exhibit at the Tate Modern.)
But prices, after all, are an expression of free speech. Only by charging consumers what it thinks is a fair price without government intervention can Unilever signal to consumers its view of how much it expects the cost of its raw materials to rise. That in turn lets consumers decide if the product is still worth the increased price. If not, the consumer cuts back. Similarly, Ai signals to his fellow citizens his views of the Chinese government through free artistic and political expression.
Price is a form of market self-regulation, just as artistic expression is a form of democratic self-regulation. Just as with its attitude toward Ai’s political and artistic signals, though, China has chosen to stifle these important market signals. And China, thanks to the West’s embrace of its economy, has the ability to spread the effects of its oppression of free-market speech all over the globe.
If Unilever can’t pass its rising costs on to Chinese consumers, those consumers are likely to buy more of its products because they’re cheap. Unilever would have to make up for this imbalance of supply and demand elsewhere — meaning that American consumers would have to pay more for things like Ben & Jerry’s ice cream, Ragu, Vaseline and Popsicles.
Alternatively, Unilever could slash its global investment budget, affecting growth and profits — and job creation around the world.
Beijing’s move is not trivial. China’s government has also asked its domestic companies in industries ranging from steel to noodles to beer to hold off on raising prices. When China aggressively distorts the prices of global goods, we’ll all feel it.
China’s mistake, then, could hurt our own recovery. But it’s not China’s mistake, really. It’s the West’s mistake.
Americans and other Westerners may complain, but over the years, the West has allowed China to think that it can get away with repressing artistic and political speech. So why shouldn’t China think that it can get away with repressing market speech, through its control of prices?
Free markets are free speech. It’s that simple.
Nicole Gelinas is a contributing editor to the Manhattan Institute’s City Journal.
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