The emperor was still above the law. The value system was based on
social contracts, and violations of these were punished according to
judgments handed down by legal courts. Legal positions of leaders
were filled by the emperor’s authority.
This three-part system was the framework in China until the last
emperor. Even the many invasions of China failed to change the
Chinese way. However, the fall of the emperor and his replacement
by Chairman Mao and his party spelled the tragic end of the Chinese
system. As outlined in Chapter 7, Maoism (1950) replaced the
emperor with the Chairman of the Communist Party, replaced intel-
lectual merit by party loyalty during the Long March, elevated ‘‘peas-
ant values’’ to the highest level, and sought to punish all enemies of
the Revolution. Leaders were appointed by the Chairman and those
who made the Long March were favored. Mao’s ten-year Cultural
Revolution was successful in tearing apart much of the Confucian
system for a generation of Chinese, but the Confucian system still
remains strong in Taiwan and other places outside China.
After Mao’s death, Deng became Chairman and opened the door
for trade with the world (D). The final say was by the Party although
a weak legal system remained. The Party was above the law and
used selective enforcement to attract foreign funds and modern manu-
facturing technology. China was open for international business
and privatization was encouraged for all state-owned enterprises. All
of the necessary conditions for capitalism were put in place except the
transparent economic and legal due process required by the American
legal system. Dengism struggles to find a Chinese way to achieve these
two missing components, but China prospers without them.
Today Taiwan’s system is a mixture of Confucianism and American
legalism that makes it very different from mainland China. What
may work well in Taiwan, such as the paternalistic model (this
Volume, Chap. 6), may not work so well in mainland China. Entre-
preneurs in China must deal with resource systems that are controlled
by the state. Clearly Taiwan has developed a system that works in
international trade based on a post-modern mix of Confucian values
and Western legalism. Progress on this in China is encouraging as
portrayed in a recent incident involving human rights.
On November 29, 2006, in China, people were outraged by the
local police parading in the street citizens accused of being or visiting
prostitutes. They saw this as a violation of their legal rights. Moreover,
278 George Bear Graen