The Crisis of Coercion
The crises of the twenty-first century demand conscious public control. But this power is conspicuously absent, on both right and left.
Life has been hard on Luo Yunghao since his tech startup began to flounder in 2017. After “Smartisan” declared bankruptcy, he was hounded by creditors, forced to personally cover his company’s debts, and blacklisted by the state. These actions were followed by complete ostracism—Yunghao could no longer take a train, fly, or otherwise travel outside of China. To crawl out of insolvency, he began hawking his defunct company’s wares on streaming channels, publicly auctioning off old office chairs and smartphones, finally squeaking out of a debtors’ blacklist by 2020.
American reporters at the Financial Times found it hard to suppress their culture shock at the story. “Once blacklisted”, they noted, “it is nearly impossible for individuals to start another business”, while debtors “are also blocked from a range of economic activities.” Given the relative underdevelopment of Chinese bankruptcy law, China’s tech founders are usually personally liable once their company dissolves. Some regional authorities go so far as to seize a founder’s medical insurance fund.
The contrast with the light-handed treatment of tech renegades in Europe and the United States is easily noticed. One can only imagine where the current president of the United States and his DOGE condottiere would be if American bankruptcy law were like its Chinese counterpart. Unlike in China, where Yunghao and his ilk are turned into politico-economic pariahs, in America, the tech sector seems to hover in a world without gravity or interest rates, responsible to no one but themselves.
Yet what makes stories like Yunghao's so alluring is that they reveal what is lacking in many societies: a capacity for public control. This capacity is not simply a function of the authoritarian methods of the Chinese party state—which is more decentralized and haphazard than the Western commentariat is likely to acknowledge. The United States is also quite punitive, imprisoning large parts of its population and policing the world, but it is hard to see how it could now rewrite bankruptcy law in accordance with its Chinese analogue. Where is the difference?
