Thirty-five years ago this month, the "Great Helmsman" Mao Zedong disbanded the Red Guards, who were causing chaos. Although Mao recognised his mistake of giving students virtually free rein to terrorise the populace, he did not abandon his utopian vision of a socialist state, nor did he end his ruthless suppression of "capitalist roaders" and other so-called bad elements during the Cultural Revolution.
Deng Xiaoping, himself a victim of the Cultural Revolution, rose to lead the Communist Party in late 1978. By opening the nation to the outside world and introducing market forces, he began a new chapter in China's long history. Deng's mantra was: "Seek truth from facts."
Unlike Mao, Deng was not ideologically rigid. His favourite expression was: "It doesn't matter if a cat is black or white, as long as it catches mice." The economic system was to be judged by its performance: "Poverty is not socialism. To be rich is glorious." Thus, market socialism took the place of pure socialism.
There is no doubt that China's economic liberalisation has been highly successful. But institutional incompatibilities between state planning and the market still exist, especially in the financial sector. Real capital markets depend on private property rights, and China's leaders are in no hurry to sanction those rights for fear of losing power. But there is a more serious problem - namely, the need for fundamental political reform to create a government whose power is limited by laws and to end the party's authoritarian regime. The future of liberalism in China will depend on meeting that challenge.
Cao Siyuan, a leading proponent of political reform and privatisation in China, said: "If the current political system is not reformed into a civilised political system (one in which the citizens are sovereign), it is entirely possible that tragedies like the Cultural Revolution will happen again."
Behind the injustice and violence of the Cultural Revolution lay the Communist Party and its leader. Although China's leaders are now more civilised than Mao, they and the party still have political supremacy, and Mao's picture continues to dominate Tiananmen Square.
The monopoly on power leaves little scope for independent thought or freedom of expression, especially in the political realm. Open criticism and discussion are a threat.
The party does not want people, especially the young, to openly examine its past. Although it has called the Cultural Revolution a serious mistake and a national disaster, it has not allowed full disclosure of the facts or publication of critical accounts of that period. The reason is obvious: the party's legitimacy would be tested and found to be fraudulent. The "mandate of heaven" would dictate a new political order, based on the consent of the people - a constitutional order of liberty. Nien Cheng, in her best-selling book, Life and Death in Shanghai, tells how party officials dodged responsibility for the violent tactics used by the Red Guards: "When there was excessive cruelty that resulted in deaths, the officials would disclaim responsibility for an `accident' resulting from `mass enthusiasm'."
The truth about the Cultural Revolution, as historian John King Fairbank wrote, is that it "fed upon ... public dependence on, and blind obedience to, authority. There was no idea of morality being under the law". That truth must not be forgotten.
The party's deliberate attempt to hide the truth about its role in the Cultural Revolution, by banning books by Cheng and others, and by romanticising Mao, may protect its hold on power in the short term, but not in the long run. Eventually, economic liberalisation, a growing middle class and the global flow of information through the internet will generate increasing pressure for political reform.
China's new mantra should be: "Seek truth from freedom." Global competition has driven China's economic development since 1978; now it is time to apply that same force to politics and to constitutional change. Truth cannot come from facts if the facts remain hidden. China needs freedom and transparency: a government whose power is strictly limited and whose fundamental purpose is to protect life, liberty and property.
The major lesson of the Cultural Revolution is not that it was "fun", as a former Red Guard recently told his college-aged son. Rather, in the words of Cheng: "Unless and until a political system rooted in law, rather than personal power, is firmly established in China, the road to the future will always be full of twists and turns."