Xi takes full control of China’s future

Xi Jinping has been consecrated as China’s most powerful leader since Mao Zedong after a new body of political thought carrying his name was added to the Communist party’s constitution.  The symbolic move came on the final day of a week-long political summit in Beijing – the 19th party congress – at which Xi has pledged to lead the world’s second largest economy into a “new era” of international power and influence.

At a closing ceremony in the Mao-era Great Hall of the People it was announced that Xi’s Thought on Socialism with Chinese Characteristics for a New Era had been written into the party charter. “The congress unanimously agrees that Xi Jinping Thought … shall constitute [one of] the guides to action of the party in the party constitution,” a party resolution stated.

At the same time, the new Politburo standing committee of seven was announced.  These supreme leaders are all over 62 and so will not be eligible to become party secretary in five years.  That almost certainly means that Xi will have an unprecedented third term as party leader through to 2029 and thus remain head of the Chinese state machine for a generation.

What this tells me is that, under Xi, China will never move towards the dismantling of the party and the state machine in order to develop a ‘bourgeois democracy’ based on a fully market economy and capitalist business.  China will remain an economy that is fundamentally state-controlled and directed, with the ‘commanding heights’ of the economy under public ownership and controlled by the party elite.

Foreign businesses don’t find this an appealing prospect, unsurprisingly. In a January survey of 462 US companies by the American Chamber of Commerce in China, 81 percent said they felt less welcome in China, while more than 60 percent have little or no confidence the country will further open its markets in the next three years.

Indeed, China still ranks 59th out of the 62 countries evaluated by the Organization for Economic Cooperation and Development in terms of openness to foreign direct investment. At the same time, FDI is becoming less important to the economy: in 2016 it accounted for a little more than 1 percent of China’s gross domestic product, down from around 2.3 percent in 2006 and 4.8 percent in 1996.

An even bigger cause for concern for multinationals are Beijing’s plans to replicate foreign technologies and foster national champions that can take them global. A program launched in 2015, called Made in China 2025, aims to make the country competitive within a decade in 10 industries, including aircraft, new energy vehicles, and biotechnology.  China, under Xi, aims not just to be the manufacturing centre of the global economy but also to take a lead in innovation and technology that will rival that of the US and other advanced capitalist economies within a generation.

Beijing aims to boost the share of domestically made robots to more than 50 percent of total sales by 2020, from 31 percent last year. Chinese companies such as E-Deodar Robot Equipment, Siasun Robot & Automation, and Anhui Efort Intelligent Equipment aspire to become multinationals, challenging the likes of Switzerland’s ABB Robotics and Japan’s Fanuc for leadership in the $11 billion market.

Under Xi, China has also redoubled efforts to build its own semiconductor industry. The country buys about 59 percent of the chips sold around the world, but in-country manufacturers account for only 16.2 percent of the industry’s global sales revenue, according to PwC. To rectify that, Made in China 2025 earmarks $150 billion in spending over 10 years.  A January 2017 report by the U.S. President’s Council of Advisors on Science and Technology detailed China’s extensive subsidies to its chipmakers, mandates for domestic companies to buy only from local suppliers, and requirements that American companies transfer technology to China in return for access to its market.

And American imperialism is scared.  U.S. Commerce Secretary Wilbur Ross has described the plan as an “attack” on “American genius.” In an excellent new book, The US vs China: Asia’s new cold war?, Jude Woodward, a regular visitor and lecturer in China, shows the desperate measures that the US is taking to try to isolate China, block its economic progress and surround it militarily.  But she also shows this policy is failing.  China is not accepting control by foreign multi-nationals; it is continually developing trade and investment links with the rest of Asia; and, with the exception of Abe’s Japan, it is succeeding in keeping the Asian capitalist states ambivalent between China’s ‘butter’ and America’s ‘arms’.’  As a result, China has been able to maintain its independence from US imperialism and global capitalism like no other state.

This brings us to the question of whether China is a capitalist state or not?   I think the majority of Marxist political economists agree with mainstream economics in assuming or accepting that China is.  However, I am not one of them. China is not capitalist. Commodity production for profit, based on spontaneous market relations, governs capitalism. The rate of profit determines its investment cycles and generates periodic economic crises.  This does not apply in China.  In China, public ownership of the means of production and state planning remain dominant and the Communist party’s power base is rooted in public ownership.  So China’s economic rise has been achieved without the capitalist mode of production being dominant.

China’s “socialism with Chinese characteristics” is a weird beast.  Of course, it is not ‘socialism’ by any Marxist definition or by any benchmark of democratic workers control.  And there has been a significant expansion of privately-owned companies, both foreign and domestic over the last 30 years, with the establishment of a stock market and other financial institutions.  But the vast majority of employment and investment is undertaken by publicly-owned companies or by institutions that are under the direction and control of the Communist party. The biggest part of China’s world-beating industry is not foreign-owned multinationals, but Chinese state-owned enterprises.

And here I can provide some new evidence that, as far as I know, has not been noticed by any other commentators.  Recently the IMF published a full data series on the size of public sector investment and its growth going back 50 years for every country in the world.  This data delivers some startling results.

It shows that China has a stock of public sector assets worth 150% of annual GDP; only Japan has anything like that amount at 130%.  Every other major capitalist economy has less than 50% of GDP in public assets.  Every year, China’s public investment to GDP is around 16% compared to 3-4% in the US and the UK.  And here is the killer figure.  There are nearly three times as much stock of public productive assets to private capitalist sector assets in China.  In the US and the UK, public assets are less than 50% of private assets.  Even in ‘mixed economy’ India or Japan, the ratio of public to private assets is no more than 75%.  This shows that in China public ownership in the means of production is dominant – unlike any other major economy.

A report by the US-China Economic and Security Review Commission (http://www.uscc.gov/pressreleases/2011/11_10_26pr.pdf) found that “The state-owned and controlled portion of the Chinese economy is large.  Based on reasonable assumptions, it appears that the visible state sector – SOEs and entities directly controlled by SOEs, accounted for more than 40% of China’s non-agricultural GDP.  If the contributions of indirectly controlled entities, urban collectives and public TVEs are considered, the share of GDP owned and controlled by the state is approximately 50%.”  The major banks are state-owned and their lending and deposit policies are directed by the government (much to the chagrin of China’s central bank and other pro-capitalist elements).  There is no free flow of foreign capital into and out of China.  Capital controls are imposed and enforced and the currency’s value is manipulated to set economic targets (much to the annoyance of the US Congress and Western hedge funds).

At the same time, the Communist party/state machine infiltrates all levels of industry and activity in China.  According to a report by Joseph Fang and others (http://www.nber.org/papers/w17687), there are party organisations within every corporation that employs more than three communist party members. Each party organisation elects a party secretary. It is the party secretary who is the lynchpin of the alternative management system of each enterprise. This extends party control beyond the SOEs, partly privatised corporations and village or local government-owned enterprises into the private sector or “new economic organisations” as these are called.  In 1999, only 3% of these had party cells.  Now the figure is nearly 13%.  As the paper puts it: “The Chinese Communist Party (CCP), by controlling the career advancement of all senior personnel in all regulatory agencies, all state-owned enterprises (SOEs), and virtually all major financial institutions state-owned enterprises (SOEs) and senior Party positions in all but the smallest non-SOE enterprises, retains sole possession of Lenin’s Commanding Heights.

The reality is that almost all Chinese companies employing more than 100 people have an internal party cell-based control system.   This is no relic of the Maoist era.  It is the current structure set up specifically to maintain party control of the economy.  As the Fang report says: “The CCP Organization Department manag(es) all senior promotions throughout all major banks, regulators, government ministries and agencies, SOEs, and even many officially designated non-SOE enterprises. The Party promotes people through banks,regulatory agencies, enterprises, governments, and Party organs, handling much of the national economy in one huge human resources management chart. An ambitious young cadre might begin in a government ministry, join middle management in an SOE bank, accept a senior Party position in a listed enterprise, accept promotion into a top regulatory position, accept appointment as a mayor or provincial governor, become CEO of a different SOE bank, and perhaps ultimately rise into upper echelons of the central government or CCP — all by the grace of the CCP OD.”

China’s Communist party is now writing itself into the articles of association of many of the country’s biggest companies. describing the party as playing a core role in “an organised, institutionalised and concrete way” and “providing direction [and] managing the overall situation”.

There are 102 key state enterprises with assets of 50 trillion yuan that include state oil companies, telecom operators, power generators and weapons manufacturers.  Xiao Yaqing, director of the State-owned Assets Supervision and Administration Commission of the State Council (SASAC), wrote in the Central Party School’s Study Times, that, when a state-owned enterprise has a board of directors, its party boss also tends to be the board chairman. Communist Party members at state enterprises form the “the most solid and reliable class foundation” for the Communist Party to rule.  Xiao called the idea of the “privatisation of state assets” as wrong-headed thinking.

These 102 big conglomerates contributed 60 per cent of China’s outbound investments by the end of 2016.  State-owned enterprises including China General Nuclear Power Corp and China National Nuclear Corp have assimilated Western technologies—sometimes with cooperation and sometimes not—and are now engaged in projects in Argentina, Kenya, Pakistan and the UK.  And the great ‘one belt, one road’ project for central Asia is not aimed to make profit.  It is all to expand China’s economic influence globally and extract natural and other technological resources for the domestic economy.

This also lends the lie to the common idea among some Marxist economists that China’s export of capital to invest in projects abroad is the product of the need to absorb ‘surplus capital’ at home, similar to the export of capital by the capitalist economies before 1914 that Lenin presented as key feature of imperialism.  China is not investing abroad through its state companies because of ‘excess capital’ or even because the rate of profit in state and capitalist enterprises has been falling.

Similarly, the great expansion of infrastructure investment after 2008 to counteract the impact of collapsing world trade from the global financial crisis and Great Recession hitting the major capitalist economies was no Keynesian-style government spending/borrowing, as mainstream and (some) Marxist economists argue.  It was a state-directed and planned programme of investments by state corporation and funded by state-owned banks.  This was proper ‘socialised investment’ as mooted by Keynes, but never implemented in capitalist economies during the Great Depression, because to do so would be to replace capitalism.

The law of value of the capitalist mode of production does operate in China, mainly through foreign trade and capital inflows, as well as through domestic markets for goods, services and funds.  So the Chinese economy is affected by the law of value.  That’s not really surprising.  You can’t ‘build socialism in one country’ (and if a country is under an autocracy and not under workers democracy, that is true by definition).  Globalisation and the law of value in world markets feed through to the Chinese economy.  But the impact is ‘distorted’, ‘curbed’ and blocked by bureaucratic ‘interference’ from the state and the party structure to the point that it cannot yet dominate and direct the trajectory of the Chinese economy.

It is true that the inequality of wealth and income under China’s ‘socialism with Chinese characteristics’ is very high.  There are growing numbers of  billionaires (many of whom are related to the Communist leaders). China’s Gini coefficient, an index of income inequality, has risen from 0.30 in 1978 when the Communist Party began to open the economy to market forces to a peak of 0.49 just before the global recession. Indeed, China’s Gini coefficient has risen more than any other Asian economy in the last two decades.  This rise was partly the result of the urbanisation of the economy as rural peasants move to the cities.  Urban wages in the sweatshops and factories are increasingly leaving peasant incomes behind (not that those urban wages are anything to write home about when workers assembling Apple i-pads are paid under $2 an hour).

 

But it is also partly the result of the elite controlling the levers of power and making themselves fat, while allowing some Chinese billionaires to flourish.  Urbanisation has slowed since the Great Recession and so has economic growth – along with that the gini inequality index has fallen back a little.

The Chinese economy is partially protected from the law of value and the world capitalist economy.  But the threat of the ‘capitalist road’ remains.  Indeed, the IMF data show that, while public sector assets in China are still nearly twice the size of capitalist sector assets, the gap is closing.

Under Xi, it seems that the majority of the party elite will continue with an economic model that is dominated by state corporations directed at all levels by the Communist cadres.  That is because even the elite realise that if the capitalist road is adopted and the law of value becomes dominant, it will expose the Chinese people to chronic economic instability (booms and slumps), insecurity of employment and income and greater inequalities.

On the other hand, Xi and the party elite are united in opposing socialist democracy as any Marxist would understand it.  They wish to preserve their autocratic rule and the privileges that flow from it.  The people have yet to play a role.  They have fought local battles over the environment, their villages and their jobs and wages.  But they have not fought for more democracy or economic power.

Indeed, the majority still back the regime.  The Chinese people support the government, but they are worried about corruption and inequality – the two issues that Xi claims that he is dealing with (but in which he will fail).

A recent survey by the Pew Research Center found that 77% of those asked believe that their way of life in China needs to be protected from “foreign influence”.  Political scientist Bruce Dickson collaborated with Chinese scholars to survey public perceptions of China’s ruling Communist Party. Researchers conducted face-to-face interviews with some 4,000 people in 50 cities across the country.  Dickson concluded: “No matter how you measure it, no matter what questions you ask, the results always indicate that the vast majority of people are truly satisfied with the status quo.”

It seems that Xi and his gang are here for a long time ahead.

 

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88 Responses to “Xi takes full control of China’s future”

  1. failedevolution (@failedevolution) Says:

    How the neoliberal priesthood of the West has used China’s progress to build the myth that globalization is a great success
    http://bit.ly/2gFMpAc

  2. semyorka Says:

    Suppose china is not capitalist, nor it is socialist. People use government to get rich and get higher in the command latter. At the same time, you have private entities that are somehow under partial command of that government. While you don’t have serfs or slaves, they are not “free” like in capitalism, they are all under control of the government, for the sake of unlimited primitive accumulation of a few individuals. Well, that’s pretty much the Asiatic mode of production., which seems to be getting stronger.

    So, I guess we have some regression here to Imperial times.

    • Lari Glea Says:

      Oligarchy from Left, in the name of working class (with all this means).

      • Daniel de França Says:

        I am the same person to whom you answered.

        The point is unlimited accumulation, that is, an ever growing mass of profit. Money is a commodity which can be traded with all others. Even if it is virtual, in the case case of credit, there is a promise of more money. In capitalism, it comes from the alienation of the means of production from the hands of workers. A capitalist is a compulsive hoarder, which is something that proceeds along the idea of commodity fetishism.

        I am not pretending that socialism is pure system, not at the beginning. I don’t the ultraleft position of considering personal or small business, where the owner provides a all a great part of the surplus, or collective enterprises where value is divided among the workers and excess is divided with the workers. Or that central planning implies ownership. But the managers will be more and more able to allocate resources to their own interests, until the system breaks down because it keeps in the way of private profit.

        If capitalism, in a world scale takes too long to be defeated, socialism will fall.

    • Virgens VK Says:

      There are many concepts of socialism. In my understanding, socialism is the theoretical transition system that lies between capitalism and communism. You can easily know a system is socialist if it is heading from capitalism to communism, and not a devolution from capitalism to feudalism/ancient slavery etc. (which would be barbarism). Therefore, in my concept, China is socialist — it may not be what many people dreamed, but it is what we have today.

      The problem with the Asiatic mode of production theory is that there’s no archeological or historical documentation that such system existed. Marx abstracted an Asiatic mode of production based on very limited sources he had at his time. Even if such system existed, there’s no way we can ever figure out how exactly it worked — we don’t even know how the ancient system worked with as much detail as capitalism, let alone some thousands years earlier system.

    • Virgens VK Says:

      From History’s point of view, there’s no doubt modern China is socialist.

      First, it considers itself, officially, socialist. Second, all the evidence shows this is not an empty term among the common Chinese and its armed forces. Third, there are contemporary intellectuals outside China that consider the Popular Republic of China socialist, and its main rival, the USA, not only considers it officially not capitalist, but communist (there’s even a military doctrine in the US Navy called “Chicom”).

      • sartesian Says:

        That settles that then. Forget all that other stuff about means of production, relations of production, property, the social organization of labor. What counts is what you think counts; what the military thinks counts; and what the US military thinks.

  3. Heiko Khoo Says:

    The influence of the workers on the economy is – as Preobrazhensky argued in the Soviet Union in the 1920s – felt via various forms of overt unrest and pressure, and in ways that are more discreet. These pressures represent a means by which the workers as producers and consumers impact the economy and the allocation of resources.

    Janos Kornai, the Hungarian economist of “socialism” called this the “soft budget constraint” i.e., in state owned enterprises (but not only) the workers and factory managers often form an alliance to secure resources and protect employment and conditions in their factories. The bigger and more powerful interest groups have the most weight. By extension, we can argue that the powerful state bureaucracies act as agencies of collective pressure of this nature e.g., the railway ministry- linked to its suppliers and city governments can lobby for vast resources to be allocated to it. This protects workers jobs, advances living standards, improves trade etc and of course also lines many pockets in good and bad ways. It also is the force that compels the CPC to defy the law of value – to mobilise resources to meet the demands of these groups.
    The main point being that these state bureaucracies and the party policy machine is not simply some abstract external force, but is connected to the lives of the people – although in a command based fashion.
    Nevertheless, even the issue of workers’ democracy has occasionally surfaced since the 1980s as a counter-pole to the rising private sector and to the privatisation of small and medium sized enterprises. Many of these should probably never have been nationalised anyway – as they had too low a capital intensity to be worth socialising. The CPC introduced laws to grant workers the right to veto management decision by means of Staff and Workers’ Representative Councils and to administer the companies. Now, although on paper such councils grant MORE rights to workers than in any Western democracy – this remains on paper. Even so, this is not just a paper right. The fact is, that in China when workers do go on strike, particularly in state enterprises, they use the existing laws as the reference point around which to demand their rights. So the avenues for an awakening working class to create a workers’ democracy exist. The content is decided by the level of social struggle; and this is contained by the CPC by making pre-emptive concessions and taking preemptive action to avert unrest.
    For example, housing space has hugely expanded from 3 sq m per person in 1978 to about 30 sq m per person today. More than 80% of the urban population own their own home and the figure is much higher in the rural areas.
    Although the rural migrants are often ferociously exploited by Foxconn, for Apple etc., it should be recalled that they still have a home and land, back in their villages. And the last 5 year plan 2011-15 saw 100 million (mostly migrants) provided with low cost housing by the state.
    The point being that the drive to state accumulation springs from pressures within the state sector and the CPC dominating the state bureaucracy, AND from the workers, migrants and peasants seeking to improve their lot. The workers have more freedoms and a better life than ever before and are more and more conscious of their rights.
    I say this to try to explain the inner dynamics that produced Xi Jinping’s turn to the left and keeps the CPC in power. This let us recall has taken place despite all the pundits in Sinology and the western economics profession who proclaimed this impossible.

    • Daniel de França Says:

      What you described is the usual class struggle. It’s not a big deal. They can make concession because the profits are plenty. But there is no guarantee that there will not be a hard landing, whatever that means. During the oil crisis, all countries,socialist country had an acute slowdown in growth, though it was not sudden. I doubt that China can liberalize too much without having a substantial social crisis. When there is nothing to lose, except for the chains, a socialist revolution happens. In China will very, very bloody.

      • Heiko Khoo Says:

        Not really. In the “usual class struggle” the capitalists steer economic investment by profit seeking.
        |In China the inner contradictions of the state sector – the pressures from workers and bureaucrats – drives and shapes the entire structure of investment and subordinates capital to this. The CPC “represents” these pressures and contradictions.

      • semyorka Says:

        If China were socialist, this wouldn’t happen: http://www.dailymail.co.uk/wires/afp/article-4278662/China-counts-100-billionaires-Communist-legislators.html

        This is a worse state of affairs than USA. These people do not even need a lobby, they are the capitalists themselves.

        Going up the party ladder is akin to climb a corporate hierarchy. Also, a socialist country has an ideological need to expand socialism throughout the world, if it is capable of doing so. China did do that during Mao’s time, when they were much less powerful. If it doesn’t have the need and have the capability, they are not socialists.

        Rather, they are seeking, the type of dominance that USA did in relation to Latin America. Promoting the basic infrastructure, promoting the growth of a middle class, and keeping them dependent on their finance capital.

    • Brad Says:

      I sympathize with your view, but it assumes agreement on fundamentals. The owner of the blog just announced otherwise.

    • kiers Says:

      @Heiko: just a fun aside:

      your comment regarding socialization of capital (….”as they had too low a capital intensity to be worth socialising”) brought to mind stark contrast of how Capitalism socializes risk (http://teasri.blogspot.co.uk/2017/10/socializing-risk-is-bedrock-of.html)

  4. Steve Diamond Says:

    You are describing state capitalism par excellence. Surely the global law of value impacts this gigantic state corporation?

  5. John Says:

    Dear Michael,

    I appreciate your comments here and am interested in hearing more about a few things.

    Here you write:

    These 102 big conglomerates contributed 60 per cent of China’s outbound investments by the end of 2016. State-owned enterprises including China General Nuclear Power Corp and China National Nuclear Corp have assimilated Western technologies—sometimes with cooperation and sometimes not—and are now engaged in projects in Argentina, Kenya, Pakistan and the UK. And the great ‘one belt, one road’ project for central Asia is not aimed to make profit. It is all to expand China’s economic influence globally and extract natural and other technological resources for the domestic economy.

    This also lends the lie to the common idea among some Marxist economists that China’s export of capital to invest in projects abroad is the product of the need to absorb ‘surplus capital’ at home, similar to the export of capital by the capitalist economies before 1914 that Lenin presented as key feature of imperialism. China is not investing abroad through its state companies because of ‘excess capital’ or even because the rate of profit in state and capitalist enterprises has been falling.

    How is “expanding influence” and “extracting resources” in order to benefit the national economy NOT a form of imperialism, especially in its contemporary formation? It seems to me to reflect not only the current trend in capitalist globalization, but has roots in the very conditions of imperialism that Lenin argues prefaces global conflict. Finally, isn’t China’s rise also fueling inter-imperialist rivalry, especially in its attempt to establish ties across Africa and much of the global South via “social investment?”

  6. Jonathan Morton Says:

    Thanks for your reply to my last “whether China is a capitalist state or not” You tell us China is not socialist and not capitalist, but have given no label to attach to it. Is it different from the command economy of the late USSR? Is it wrong to label that economy as State Capitalism as have some marxists? Jonathan

  7. ibonobos Says:

    China has no rival, save its own dark side. America has not been a true commercial competitor since the late nineteenth and early twentieth centuries. After the second war, she dictated terms to the world until the world grew strong and rivaled her competitively. Then the murder began.

  8. kiers Says:

    “American Imperialism is Scared” ? American Imperialism CREATED the “China” of which we read and write today. It still continues. Post Iraq, in Afghanistan, how is it that Chinese companies (SOEs) get the red carpet? You never hear bad news about China in the Oceanic news media. Hollywood is simply can not make an “anti-china” movie. All we hear is about China’s “might”. I do NOT think American imperialists are “scared”. Something else imho.

    • kiers Says:

      I think my above comment was too brief to be understood, so i would just indulge meself to expand on it a bit for the record, (because this is a truly excellent posting and excellent comment thread, and want my point to be clearly rep’d) :

      If China is practicing a “not quite socialism”, the US is practicing a “not quite democracy” by engaging with China, but both elites are getting rich off each other. The symbiosis of these two is very telling on the geopolitical front: IMHO the US is literally counting-on (!) China’s socialist characteristics to help monetize its military footprint in the world. All “hotspot” US troop positions on the globe coincide with prominent Chinese investment for resource extraction: Niger (Uranium), Afghanistan (rare earths), Iraq (oil), Myanmar (gas pipeline). The US probably “bills” these govs for security, and China pays these govs for resources at “just slightly” below market rates….far better prices than an Exxon, or BHP Billiton, etc would be willing to part with due to their hefty gross margin requirements. So, ironically, precisely because China accounts for “economic gain” differently from the oecd western “profit for the few” model, and can profitably pay higher prices for the resources, it ironically subsidizes US troop placement.

      These two are synergizing like a husband-wife team in a good marriage, not a bad one. THAT is scary. To me, it means western elites will soon be copying “best practices” on suppressing their own people from the Chinese model, like “social credit monitoring” via social media (google, facebook, etc), and homogenization of society in name of abstract nationalism (hints of which Trumpf has started) etc etc. Also note, just days after Xi’s coronation, he takes an exclusive meeting with Blackstone CEO Schwarzman, Apple, facebook CEO etc. with open arms! Husband and wife.

      (…https://www.nytimes.com/2017/10/30/business/xi-jinping-american-executives.html)

      Again this is NOT a case of “foreign businesses don’t find this an appealing prospect”, they do and will continue to work very well together. It’s very interesting and very scary too.

  9. Red Deathy Says:

    Chinese firms produce commodities, which means goods are produced for exchange: even if the exchange is at state fixed values (which in most cases they would not be).

    Profits are an inevitable consequence of paying wages, if there are fixed wages paid by Chinese firms, there are profits.

    Even if there is not free investment of capital to equalise the rate of profit, the need for the overall system to generate a profit, which will be mediated by the operation of the state owned banks and their demands for interest, means that a rough rate of profit will apply, although the economy will be dominated by rentier interests and absolute rent.

    The spontaneity of the market is of no account: waged labour for commodity production is the defining characteristic of the capitalist mode of production.

    • Edgar Says:

      This really cuts to the chase, where are the labor tokens in the Chinese economy?

      If it walks like a capitalist, talks like a capitalist, it is a capitalist!

      Ignore all the guff from the CPC about epochs, about strategy. All human systems rely on humans, spontaneous order is an illusion. The market is not supernatural, real people make real decisions that affect our lives.

      The Chinese system has empowered a small cabal of humans. It is in their interest to direct the nation on a purely commercial path.

      If China is the vision of a socialist future then I for one would prefer barbarity!

  10. louisproyect Says:

    https://systemicdisorder.wordpress.com/2017/10/25/china-stays-with-capitalism/

  11. Gilberto Callas Says:

    When China will be able to compete with USA? 2040?
    Well, when tis happens, Usa will be a latin country
    http://thedailycougar.com/2014/10/22/hispanic-population-to-become-the-majority/

  12. jonathan Says:

    Thanks for your reply to my last
    “whether China is a capitalist state or not”
    You tell us China is not socialist and not capitalist, but have given
    no label to attach to it.
    Is it different from the command economy of the late USSR? Is it wrong to label that economy as State Capitalism as have some marxists?
    Jonathan

  13. prianikoff Says:

    Evidently “capitalism” in China has been a success, since its nominal GDP today is 58 times higher than it was in 1980. This makes it the second largest economy in the world after the USA.
    Over the same period its GDP (PPP) has risen 75 times (ranked first)
    ( Guardian, IMF, World Bank)

    This doesn’t prove it’s socialist;
    India – a capitalist country with semi-feudal remnants- is now at number 6 (nominal) and number 3 (PPP)

    A better measure of the living standard of the population is GDP per capita:-
    China has raised this by 41 times since 1980, but still only ranks at 79th in the world.
    (in the same league as Brazil and Columbia, but well above India which ranks at number 124).

    http://statisticstimes.com/economy/countries-by-projected-gdp.php

    While China has clearly adopted a policy of state capitalism, it’s a logical fallacy to suggest that this means it’s a capitalist state (or even a “bureaucratic collectivist” one)

    Such terms assume that the whole economy has become a collective enterprise.
    Bukharin suggested this was a tendency inherent in modern imperialism.
    Other versions, proposed by various Left-Communists and Social democrats (and ironically some Maoists!), suggested that the Soviet Union had become “state capitalist” from as early as 1919.

    Generally such people became disoriented by their own theories.
    The key question is the nature of the *state* and the direction of its policies.
    For instance, the early Soviet state consciously employed a *policy* of state-capitalism to attract inward investment and industrialise.
    It had a significant level of commodity production under NEP and One-man management was introduced in factories prior by 1920.
    Yet the leaders of the state planned to move in the direction of socialism over a matter of decades.

    China is still run by the Communist party, which remains an obstacle to capitalist control of the economy.
    Private capitalists are a small minority of its membership.
    Most of the large companies have a majority holding by the state and the level of public investment is higher than in any major capitalist country.

    If China is already capitalist, why doesn’t the bureaucracy dissove the CPC and simply peacefully merge with Taiwan?

    • Edgar Says:

      “Yet the leaders of the state planned to move in the direction of socialism over a matter of decades.”

      That was my point, the leaders tell us of these high and mighty ideals of where they want to take society, but these strategic goals are a nonsense because the reality of day to day living and the fact that it is individuals or collections of individuals who determine the course of history. That somebody said 30 years ago China was on a strategic path to a new phase of socialism should be viewed with ridicule. As if the billionaires are going to say in 50 years time, oh the transition period is over and I now have to give you back all my wealth. Ok no problemo comrade!

      So forget what the Chinese communist puts in its literate or what this leader or that leader says on the platform, look deeper and you see the actual reality!

  14. ucanbpolitical Says:

    You are quite wrong in your characterisation. China is a capitalist state with Chinese characteristics. In the first half of your article you give the reason why. China does not have internationally competitive corporations with the exception of a handful of social media and smartphone manufactures. It has not yet completed the transition to being a producer of products for foreign multinationals to being a producer for itself. Until it does it will have to rely on the state for finance, a buffer and the creation of an internal market sufficient to nurture internationally competitive corporations.

    You also misunderstand the nature of the economy. Chinese planners divide the economy into its upstream sector and downstream sector. The upstream sector is dominated by the state and the downstream sector is dominated by private capital. The upstream sector is infrastructure, power, communications, transport etc. But it is designed to foster private capital in the manufacturing, housing, and tertiary sectors. Secondly, state assets are overstated. The state owns the freehold to much of the economy including land. But it is the leaseholds that it issues which is the economic element because it is the legal entity that attracts surplus value.

    I would urge you to read “China’s Banking Transformation” by James Stent. Stent was the only foreign banker to sit on the board of a Tier 1 bank and his conclusion is that while the Party’s presence is found on the board, it encourages banks to put profit first and to be cautious of risk. Other than that, he is of the opinion that the internal life of the bank – its intermediation, assessment of risk, its interest rate policy and so on – is no different to that found in the best international banks.

    As for the fusion of capital and the party. The party faces half a billion workers. It is steeped in history. It is just as aware of the events of 1848, as we are. Do you think for a minute that that the Chinese capitalist class is opposed to the rule of the party which has enabled their emergence as a class. I do not think so.

    Xi has elected himself an emperor for a number of reasons. Firstly, the working class is about to be restructured through automation. Secondly, the economic war with the USA is intensifying. Thirdly, precisely because the law of value prevails, China is facing increasing economic headwinds, most notably the rate of profit which fell sharply from 2011 onwards.

    A final comment. China’s belt and braces plan as you recognise is designed to break US imperialism’s stranglehold around China. It is a temporary phase designed to buy time until China achieves technological parity with the USA. It is because time is not on the side of the USA, that the next five years are so perilous with or without a Trump.

    • marthajpc Says:

      ucanbpolitical, ucanalsobeblind in seeming to argue that “emperor” Xi’s taking charge of a “capitalist” Chinese economy that is facing “economic headwinds” (in its competition with the United States) undermines mr’s understanding of China’s present economic/political situation. –That the structural limitations of world capitalism will be the prime determinant of China’s indeterminate future is the basis of mr’s argument.

      Also, ucanbebourgeois (and ahistorical) in thinking it “perilous” that time is running out for a fading capitalist USA in its imperial competition with an indisputably capitalist China. Edgar also seems blinded by a similar existential fear, preferring the known imperial savagery with democratic characteristics to …. –horrors! –socialism in England, egad!… with Chinese characteristics. Better war with China than that…

      Edgaranducanbpolitical stand in the rear of a long line of social imperialists reaching from ucanbeKautsky to ucanbHitchens.

  15. Doug Allan Says:

    Interesting post with some good data. I see the NYT believes the Chinese state is asserting its authority over private capital in new ways. The paper suggests that the party is becoming more nervous about the rising power of capital: although there has been a willingness to let private capital “flourish” there is also a desire to neutralize capitalists as a political force.

  16. Anthony Phillips Says:

    Michael Roberts’ blogs are always a model of clarity and Marxist rigor and full of fascinating detail. However I am disappointed by the latest blog on China. Michael argues that the country has yet to take the “capitalist road”. He fails to specify how Chinese society can be categorised but bases his claim that it is not capitalist by the fact that more than 50% of the economy is controlled by the state and the fact that the tentacles of the Communist Party reach deep into every area of society including private industry. He acknowledges that the law of value operates to some extent, but claims that that the state ownership of industry and banks and control of the currency and foreign exchange restricts its operation.

    On this basis, a wide range of societies that would certainly have been widely regarded as capitalist during the 20th century would not have been capitalist either. State led development was a common phenomenon in the developing world in the decades after World World Two. In states that did not necessarily call themselves socialist or non-capitalist eg South Korea, the state played a leading role in building up strategic industries with the aim of replacing imports and increasing exports in the same way that the Chinese state is looking to do today as Michael points out in his blog. Although the Chinese Communist Party claims to be building socialism with Chinese characteristics, just like the fine words in the US constitution, that is propaganda not reality. The CCP has not been a workers’ party since the defeat of the 1925-27 revolution. It became a party of peasants led by the urban intelligentsia and its aim became national liberation not socialism. The 1949 revolution was not a socialist or workers’ revolution as the working class played little or no role. The new so called Peoples’ Republic was a bureaucratic state capitalist regime whose aim was rapid primitive accumulation along the lines pioneered by Stalinist Russia with the aim of catching up with the West. Since 1978 the ruling class has opened China up to the market and encouraged foreign development while keeping control of the key levers of the economy. Chinese society today can still be categorised as a form of bureaucratic state capitalism but one in which the ruling class has adapted its strategy for growth as the economy has developed beyond the primitive accumulation stage of the 1950s and ’60s and the international economic environment has changed.

    Marx argued that the state was the executive committee for managing the common affairs so the ruling class. The economic and repressive functions of the capitalist state today may not usually involve accumulation and its employees may not be productive in Marxist terms but that does not make the state non-capitalist. Capitalism has been through a number of epochs in its history in which the role of the state has varied. In the 19th century the role of the state was solely to maintain the conditions for the accumulation including policing the working class. With the growth of giant monopolies and imperialist competition, from World War One until the 1970s, the state expanded its functions including taking over whole industries and establishing a welfare state. The 1945-51 Labour government in Britain, for example, nationalised the railways and the mines and later on the steel industry and part of the car industry. The fact that these key industries were brought under state control did not make them cease to be capitalist nor did they mean that Britain was moving towards socialism. They were nationalised because they were not profitable but were nonetheless central to the competitiveness of British capitalism. During the 1930s the British Empire was sealed off from the rest of the world economy by the system of Imperial Preference which distorted the operation of the law of value to did not eradicate it. The British Empire did not cease to be capitalist! In the neo-liberal era, the state in most countries has withdrawn from a direct role in accumulation but still plays a key role in facilitating it domestically and internationally. China is the great exception to this withdrawal from production but that does not mean that it is not a type of capitalism or that the whole Chinese economy is not subject to the law of value albeit in a distorted way.

    Michael makes much of the role of the CCP, implying that this is further evidence that China has not embarked on the capitalist road. But in a wide variety of capitalist societies there have been mass ruling parties that have penetrated throughout society in order to ensure capitalist control such as the Nazi Party in Germany or the Phalange in Franco’s Spain. Both these societies were capitalist, I hope Michael will agree, showing that capitalism and democracy frequently do not coincide and that capitalism is perfectly compatible with totalitarianism. The role of the CCP, while very important, does not on its own tell us what sort of society China is. The key question we must ask is is the aim of production the satisfaction of human need or is for profit and accumulation in the interests of the ruling class? In China today, it is clearly the latter, so Chinese society is therefore a variant of capitalism.

    • Steve Diamond Says:

      Thank you for this contribution to the discussion. This echoes the views articulated by CLR James and Raya D. inside the WP during the first debates about the nature of the USSR.

    • prianikoff Says:

      “The 1945-51 Labour government in Britain… nationalised the railways and the mines and later on the steel industry and part of the car industry. The fact that these key industries were brought under state control did not make them cease to be capitalist nor did they mean that Britain was moving towards socialism.”

      As I wrote earlier, the key question is the nature of the *state*.

      The nationalisations of 1945-51 didn’t mean that Britain was “moving towards socialism” because the Atlee government didn’t exercise full state power.
      Its limitations were shown during the Korean war, when it cut back on NHS spending and extended rationing to pay for the 100,000 troops it sent to support the US forces.
      The austerity measures Labour was forced to introduce ensured that Churchill was re-elected in 1951.

      Nevertheless, socialists and trade unionists supported Labour’s nationalisation programme and called for it to be extended.
      They later opposed Thatcher ‘s privatisations and oppose the introduction of PFI into the NHS today.

      According to your world-view, all these measures are simply “sideways moves” by capitalism; until the law of value is eliminated everywhere, it’s not possible for a socialist government to be established anywhere!

      You employ a similar methodology in discussing China.
      For you the aim of the Chinese Communist Party was “national liberation not socialism”.
      But that was the aim of the KMT, which violently expelled the Communists in 1927.
      From 1931, Chiang Kai Shek adopted a policy of “internal pacification before external resistance” .
      This meant appeasing Japan while continuing to attack the Communist forces.

      He was forced into a second United with the CPC from 1937-41 by his own supporters.
      But there was a clear class difference between the Parties;
      the Communists were supported by millions of landless and starving peasants & the Soviet Red army, while the KMT was supported by the urban elites and the USA.

      The latent civil war broke out again in 1941 and continued after the Japanese surrender.
      If these differences were just a matter of ‘national liberation’ China and Taiwan would have already re-united.
      But, despite China’s adoption of state capitalist policies, there is a qualitative class difference between them and their social systems.

      • sartesian Says:

        “According to your world-view, all these measures are simply “sideways moves” by capitalism; until the law of value is eliminated everywhere, it’s not possible for a socialist government to be established anywhere!”

        Actually, that’s your “world view” too, isn’t it? You did write “The nationalisations of 1945-51 didn’t mean that Britain was “moving towards socialism” because the Atlee government didn’t exercise full state power.”

        So if Britain wasn’t moving “towards socialism” who cares whether or not the government itself was “socialist”? It’s irrelevant.

        Sure you can have a “socialist government” in power, but where really has that gotten the working class? Allende’s UP presented itself as a socialist government. And Marxists tripped all over themselves supporting it. How did that work out? Not so good right? Not so good not because Kissinger et al mobilized the Chilean bourgeoisie and military, but because Allende and the UP not only wouldn’t mobilize the workers to disperse the parliament and the Christian Democrats who were begging, literally, for a coup, but because the UP government effectively moved to shutdown the cordones, to represss the workers after they, the workers, through the cordones, had beaten the bourgeoisie’s lock out.

        So then, why would marxists, revolutionists, of any stripe support a program of nationalization undertaken by the likes of an Atlee, or an Allende, or any Popular Front? Those formations are committed to the preservation of the bourgeoisie’s machinery, political, military, and economic.

        Why, for example, support Atlee’s program of nationalizations when you know that he’s going to do everything to maintain Britain as an imperialist power in its own right, and a partner to US imperialism, as in support the US actions in Korea?

        You identify the exercise of “full state power” as being critical. Okay but what exactly does that mean? I think you mean expropriation of the bourgeois class. At least, I know that’s what I would mean by a socialist government/movement exercising full state power: expropriating the bourgeoisie; dismantling the bourgeois military and policy; dispersing and pulverizing the forces of counterrevolution.

        Is that possible? I think it is, and it doesn’t take the overthrow of the law of value…all at once. But it does require “overthrowing” the notion that nationalization is somehow a “progressive” step, an intermediary station, on the road to revolution.

        Now we come to China: We have a situation with China where a bourgeois class was never fully in power, but was an appendage, by-product more than less of international capital.

        That bourgeoisie was completely incapable of breaking the domination of non-capitalist relations in the countryside, in agricultural production.

        The Chinese revolution did exercise full state power, expropriating the national capitalist class, destroying the pre-capitalist relations of agricultural production in the countryside, while at the same time effectively dispossessing the working class of control of the means of production.

        In these aspects, then, the Chinese Revolution of 1949 is truly an extension of the Russian Revolution, and the consolidation and regression of that revolution.

        The exercise of “full state power” is not sufficient as long as the a) the working class itself, through organs of its own class power (like cordones or soviets) is not the ruling class b) the revolution confronts the problems of development of relations between city and countryside, the problems of the productivity of labor, in isolation from resources of the “advanced” countries.

        When (a)– dispossession of the proletariat and (b) the isolation of the revolution are the distinguishing characteristics, then these revolutions inevitably, intrinsically, necessarily devolve– becoming mere mechanisms administering the impulse to capitalist reconstruction.

      • prianikoff Says:

        Sartesian:
        So if Britain wasn’t moving “towards socialism” who cares whether or not the government itself was “socialist”? It’s irrelevant.
        It’s not irrelevant at all.

        The easiest way to understand what happened is to watch this video of Dennis Skinner’s speech at the Labour Party Conference in Brighton last month.

        Socialists had to engage with working class expectations in the 1945 Labour government, not stand on the sidelines preaching.

        It was quite possible to support nationalisation without giving blanket support to Atlee’s policies.
        For instance, by exposing the generous compensation terms offered to the former owners and the lack of workers control.

        Despite these criticisms, it was also necessary to be clear that attempts to take the nationalised industries back into private hands would be resisted.

        What would have really sown reformist illusions would have been to suggest that nationalisation could be extended to the entire economy without mounting a serious challenge to the power of the capitalist state.

        In Chile the level of popular mobilisation reached a higher level, but the same basic criteria apply;
        In the absence of the working class conquest of state power, nationalisation doesn’t equal socialism.
        But without nationalisation, socialisation of the means of production won’t occur and socialism is impossible.

        As to your criteria for China;
        I don’t think it’s true to say that the Bureaucracy “effectively dispossessed the working class of control of the means of production.”
        Effectively, the Chinese working class never had such control.
        Unless you’re an anarchist, you have to accept it *can’t* have it without a long transitional period.
        During this period the working day will be reduced, the workers will be educated in administration and popular democracy will evolve to the point where distribution can be organised on basis of need.

        All this requires economic development.
        Of course, it’s quite possible that sections of the bureaucracy and the state capitalists will try to transform themselves into a more permanent ruling class during this process.

        We saw that in the USSR and Eastern Europe.
        But “new class” theorists, like Kuron and Modzelewski in Poland, who believed that the “central political bureaucracy were *already* the collective owners of the means of production and exploiters of the working class”
        failed (or didn’t want) to see the danger of privatisation.

        Kuron was actually a minister in the Solidarnosc government which adopted the Balcerowicz Plan, which drastically cut the the state’s role in Polish industry.
        It led to a 16% reduction in GDP, an inflation rate of 640% and unemployment of 15%.
        As he later admitted;
        “I have to say, “I am sorry, I fucked it up”.
        Do you think there was any relationship between his theory and practice?

      • Edgar Says:

        “Socialists had to engage with working class expectations in the 1945 Labour government, not stand on the sidelines preaching.”

        Statements like this are purely ideological, in that any group, from left to right can use this argument to support their policies. Why not apply this to Thatcher or Brexit?

        It’s a non argument.

      • Anthony Phillips Says:

        Prianikoff,

        As an activist in UNISON, the biggest public sector union in the UK, I am hoping that a Corbyn government will renationalise key industries. I have led successful campaigns against privatisation in the Fire Service where I work. I think the creation of the NHS and the welfare state were a huge step forward for the working class and must be defended. What I do not believe is that the so-called public sector is non-capitalist. For example, a healthy workforce is a productive workforce so an efficient health service is in the interest of capitalism, up to point, providing it does not absorb too much profit through taxation of big business and the rich.

        The 1925-27 Chinese revolution was a workers’ revolution in the cities which encouraged a mass peasant revol presenting a major challenge to imperialism. The KMT repressed it because it represented the interests of the big landlords and in practice the imperialists.

        The Chinese Communist Party at this time was a revolutionary workers’ partly tragically led to defeat by Moscow. After the defeat of the revolution it was forced into the remote countryside where it rebuilt itself as a party of peasants led by intellectuals. It abandoned the perspective of proletarian revolution and the struggle for socialism in practice. The KMT may have been officially a nationalist party but in practice did nothing to oppose the Japanese and was tied to imperialism.

        The CCP on the contrary was serious about liberating the country and improving the lot of the peasants. The class basis of the CCP was the petit bourgeois intelligentsia who wanted to take control of the state and develop the country following the state capitalist model of Stalinist Russia. Once the CCP took power, the need to provide food to the cities to facilitate rapid industrialisation brought it into conflict with the peasants with disastrous results in the so-called Great Leap Forward. The peasant communes had nothing in common with socialism but were a tool for extract food for the cities which is why they met resistance from the peasantry after the first few years.

        The move towards the market from 1978 was a shift in economic policy by the state capitalist ruling class aimed at boosting productivity and attracting foreign investment. I do not believe that there is a qualitative between China and its rivals in Taiwan, Japan, USA. They are all variants of capitalism.

        As a Marxist, Jlowrie, I believe that, as Marx said, the emancipation of the working class is the act of the working class itself. I do not believe that the peasantry has the collective power or interest to play an indepedent revolutionary role and Lenin did not believe that either no matter how many quotes you take out of context. Socialism can only come about through the working class smashing the state, seizing control of the means of production and exchange and running them democratically in the interest of human need not profit. This has to start in one country but then must spread in order to be crushed by the remaining capitalist states.

    • jlowrie Says:

      ”Michael Roberts’ blogs are always a model of clarity and Marxist rigor and full of fascinating detail. However I am disappointed by the latest blog on China, ” writes Antony Phillips. If only Antony’s own comments were ” a model of clarity and Marxist rigor and full of fascinating detail.”

      ”The new so called Peoples’ Republic was a bureaucratic state capitalist regime whose aim was rapid primitive accumulation.”

      ”Since 1978 the ruling class has opened China up to the market and encouraged foreign development while keeping control of the key levers of the economy. Chinese society today can still be categorised as a form of bureaucratic state capitalism .” So opening up to the market did not change anything! What was the point then?

      Now as I understand it in the Maoist era about 80% of the population was organised in communes. Jack Chen ( “A Year in Upper Felicity” 1973 ), who had this advantage over Antony that he went to live and WORK with the peasants of the village of Upper Felicity for a year during the Cultural Revolution. He writes, “With the production team as the basic accounting unit, each person in the commune receives a basic allocation of food. Calculated in cereal grain..includes beans.

      Out of the gross output of the team the grain tax ( tax in kind) is paid to the state……the net output of the production team after tax is divided after democratic discussion into four unequal parts. One part, 20%, is set aside as the reserve fund….against calamity…for investment, seed grain… finally welfare. gave members care when too old to work or sick, and burial expenses.

      The remaining parts for distribution among team members.

      The distribution fund is divided into two equal parts…..The first part is then divided by the total number of people in the the team, and this gives the amount of cereal grain allocation for each person in the team.

      The other part of the distribution fund is used for the payment of work-points earned by tea members.

      In Upper Felicity every abled bodied adult member is rated at ten work-points a day.” ( Pp 157-159) Those doing heavier work got 12 work-points, those doing lighter 7.

      This may not be Antony’s ideal of socialism (perhaps he might enlighten us here), but I fail to see anything resembling capitalism! No wage labour, no labour market, no capitalists, tax in kind. Accumulation certainly, but nothing at all that resembles the accumulation of capital. (Did the peasants use double entry bookkeeping, I wonder ???)

      • Steve Diamond Says:

        20% profit rate to the state capitalist? That’s a respectable rate of return.

      • jlowrie Says:

        ”20% profit rate to the state capitalist? That’s a respectable rate of return.”

        Whence this 20% profit rate? The figure of 20 % is the reserve fund. Read again carefully! The actual tax was 3% in 1972 in Upper Felicity.

        Now one might argue that on the morrow of the revolution the state acts as the ‘universal capitalist,’ but in order to have a rate of return, the capitalist has to have advanced his capital, and by exploiting wage labour produced surplus value. Here the state in the role of’the capitalist’ has advanced no capital, so there can be no talk of a rate of profit.

        I am sure Steve has read ‘Capital’ so let me point out to him before he again gets to Volume 3 this passage:” the total agricultural labour-necessary and surplus- of one section of society must be sufficient to produce the necessary food-stuffs for the entire society…this great division of labour must be possible between agriculturalists and industrialists …Even though the labour of the direct producers taken by itself breaks down into necessary and surplus labour, in relation to SOCIETY it thus represents the NECESSARY labour required simply for the production of foodstuffs.”( Capital Vol.3 pp773-my emphasis).

        ”The abolition of the antagonism between town and country is one of the first conditions of communal life.” (“The German Ideology” p 65). How to bring about this abolition? Mao’s plan was for the communes to develop into agricultural/ industrial communes with the size of towns being severely limited. Of course you may not agree with such a vision, but if Steve or Antony have some solution humanity will no doubt be glad to learn of it. In the meantime, as far as I can see, the Chinese and Indian bourgeoisie intend for the peasants to be forced off their land into the cities and the land handed over to industrial agribusinesses ( for which cf Wallace”Big farms Make Big Flu” 2016). How the cities are to absorb even more hundreds of millions of human beings is beyond my comprehension, but as one Chinese ‘intellectual’ told me ”these people (i.e. peasants) are backward, they have to disappear.” I did look to see if he had grown his nails long !

      • jlowrie Says:

        ”The 1949 revolution was not a socialist or workers’ revolution as the working class played little or no role. ”

        On the basis of what sacred scriptures has Antony issued this papal decree?

        Let us recall Marx’s sharp criticism of the Russian, Mikhaylovsky:” He feels he must absolutely metamorphose my historical sketch of the genesis of capitalism into a historic-philosophical theory of general development, imposed by fate on all peoples, whatever the historical circumstances in which they are placed….an all purpose formula of a general historico-philosophical theory whose supreme virtue consists in being supra-historical.” ( Letter of Nov. 1877-MECW Vol 24 p200)

        And let us recall Lenin’s article “Our Revolution”:

        “But what if the situation..gave rise to circumstances that put Russia and her development in a position which enabled us to achieve precisely that combination of a peasant war with the working class movement suggested in 1856 by no less a a Marxist than Marx himself as a possible prospect for Prussia.

        Our European philistines never even dream that the subsequent revolutions in Oriental countries, which possess much vaster populations in a much vaster diversity of social conditions, will undoubtedly display even greater distinctions than the Russian Revolution.

        it is time…to abandon the idea that it ( i.e. kautskyian social democracy) foresaw all forms of development of subsequent world history. It would be timely to say that those who think so are simply fools.”

        Now I am sure Antony is no fool, yet if he will not adjust his theories the better to discern historical development, but will insist on viewing such developments only through the narrow lens of his ideological prejudices he is in danger of a philistine myopia.

        The greater danger moreover is that such myopia blinds one from discerning the real reasons behind the persistent failures of communist revolutions, for if one starts out from the presumption that the leaders of this or that revolution were not genuine from the very start ( as with Chomsky) then one can abandon analysis for rhetoric. All too typical is the following, which I quote from the World Socialist Website (5/8/13) a Trotskyist strain of the 57 varieties of Leninism that plague Marxism. Cuban austerity ”is the result of the fact that the petty-bourgeois nationalist Castro regime has failed entirely to develop the productive forces in a scientific or coordinated way.” Now while alas I certainly sympathise with the writer’s arguments that Cuba is returning to capitalism, this rhetoric about ‘the petty-bourgeois regime’ is an all too familiar substitute for theoretical analysis, and I ask myself who in the world can be against a scientific development of the productive forces? Why do not these pure revolutionaries share their scientific insights with the rest of humanity? But No! they keep these mysteries to themselves.

        We Marxists must come up with detailed and concrete plans for the socialist transformation of society; in particular we have to address the criticisms made of the policies of Stalin by Gorbachov , of Mao by Deng Tsiao-ping and of Fidel by Raul Castro. A good start has been made by Cockshott and Cottrell’s ”Towards a New Socialism.” We have however a long way to go and time is short.

      • Steve Diamond Says:

        Thank you for the catch on the 20%. But I gather that off the top it was for a long time the case that the tax rate was 15% – still a nice profit.

      • jlowrie Says:

        ”Thank you for the catch on the 20%. But I gather that off the top it was for a long time the case that the tax rate was 15% – still a nice profit.”

        Steve, you are pandering to your prejudices:’off the top’ does not seem to be a reliable source from which to gather information. In 1967 the tax in Felicity was 5%!

        Steve, does the fact that the tax was a tax in kind not give you pause? Can you not tell the difference between a tax in kind and profit? Clearly you have not been reading your Marx. I daresay you do read your Bible though. You will then recall St Mark’s Gospel wherein it states that ”Caesar Augustus declared that all the world would be taxed.” Do you then conclude that the emperor was a state capitalist ?

    • jlowrie Says:

      Alas, I do find Antony’s latest post to consist of cliches rather than fascinating detail.

      ”it abandoned the perspective of proletarian revolution and the struggle for socialism in practice. ” What is non-communistic about the communes? Certainly there was antagonism between city and country,but as Marx explains, ”…Even though the labour of the direct producers taken by itself breaks down into necessary and surplus labour, in relation to SOCIETY it thus represents the NECESSARY labour required simply for the production of foodstuffs.”( Capital Vol.3 pp773-my emphasis). How do you yourself envisage the communist organisation of agriculture?
      ”they met resistance from the peasantry after the first few years.” No, there were no large peasant uprisings against the Party of the scale that one sees in Leninist Russia due to the absurdly named “War Communism” i.e. seizing food from the peasantry at the point of a gun. We have over the last few years seen peasant revolts against the state, but that was after the dissolution of the communes, as the new bourgeoisie aims to separate the peasants from their land in order to introduce capitalist agriculture.

      ” The class basis of the CCP was the petit bourgeois intelligentsia.” There is that phrase again ‘petit bourgeois ‘. It explains nothing. Mao was a rich peasant, Castro a doctor, see petit bourgeois, and Lenin was …a LAWYER!

      ”As a Marxist, Jlowrie, I believe that, as Marx said, the emancipation of the working class is the act of the working class itself.” Okay, give us the details!

      ”I do not believe that the peasantry has the collective power or interest to play an indepedent revolutionary role.” Independent of what ? Beliefs in the face of historical evidence and unsupported by analysis do not constitute argument. Clearly in all revolutions up to now poor peasants have played a major role. Trotsky described the Red Army as ‘ the peasantry in uniform,’ and he should have known as he led it!

      ”Lenin did not believe that either no matter how many quotes you take out of context.” God, how often have I heard this cliche. No, the quotation from Lenin is very much in context. It is after all called ‘Our Revolution’! Antony had better to have elucidated what he takes Lenin’s meaning to be.

      ” seizing control of the means of production and exchange and running them democratically in the interest of human need not profit.’
      I should be interested to learn what you understand by ‘running democratically.’ Why did Lenin and Mao and Castro etc. not run things democratically? tell us your ideas in detail.

      As I have criticised you I shall now offer some ideas on why I think revolutions keep failing and what can be done about it, and I am certainly open to your criticisms.

      • jlowrie Says:

        Marxists following Engel’s analysis in “Socialism:Utopian and Scientific” agree that nationalisation by the state does not constitute socialism. As he remarks the Royal Regimental Tailor would then count as a socialist enterprise, yet it serves the princes and not the peoples. Or as some ‘sly dog’ suggested ‘the nationalisation of the brothels.’ Suppose if after a revolution the state did nationalise the brothels, substituting a state manager for the capitalist owner, introducing an eight hour day, with holidays, health cover,sick pay and retirement pensions. Enter our Leninist, Trotskyist, Stalinist etc. ”Ah but we are working here according to a central plan serving social need, not individual profit. And we need to outperform capitalism, so we must have one-man (sic) managers, Taylorism, time and motion studies, piece work etc. Okay at this point the mind boggles, but I have only slightly parodied Leninist ideas on industrial organisation.

        Here it is easy to grasp that the social relations pertaining in such an enterprise are only a modified version of those in a capitalist one, and have absolutely nothing in common with the sexual relations appropriate to a free, socialist society. They reproduce the relations of dominance and servitude of a class society, and the fact of being a state enterprise has merely changed its juridical status.

        One recalls the odium heaped upon Alexandra Kollontai of the Workers’ Opposition by the Leninists. I do believe indeed that some of her followers were actually imprisoned, though at the moment I cannot provide an immediate reference.

        It is not that nationalisation is never in the interests of the people. The old nationalised British rail provided a far cheaper and more efficient service then the current private providers.

        In 2013 The Chancellor of the Exchequer, Osborne, sold Plasma Resources in the UK to Pruk, Mitt Romney’s private equity firm, for £230 million. In 2016 he sold it on to the Chinese Co., Creat, for £820 million. There’s vampire capitalism for you!

        The problem is, who is in command of the state and under what conditions can we envisage its disappearance?

      • jlowrie Says:

        In what is his most celebrated and indeed radical work ”The State and Revolution” Lenin argued that the communist revolution had to smash the bourgeois state and introduce a socialist state. This would be a democratic state that would recognise the right of all to administer that state. ”Any cook can run the state etc. !” This recalls ”The Manifesto”, where Marx and Engels asserted that the proletariat had to win the battle of democracy; but in the “Critique of the Gotha Programme” Marx also proclaimed that between capitalism and communism lay the period of the revolutionary transformation of the one into the other, to which there corresponded a political transition period ”that could be nothing but the revolutionary dictatorship of the proletariat.”
        Is there a contradiction between the concepts of democracy and dictatorship?

        Anyway, here is part of Lenin’s argument, which in my opinion is a fine piece of analysis.

        .
        ‘Democracy is a form of the state, it represents, on the one hand, the organized, systematic use of force against persons; but, on the other hand, it signifies the formal recognition of equality of citizens, the equal right of all to determine the structure of, and to administer, the state. This, in turn, results in the fact that, at a certain stage in the development of democracy, it first welds together the class that wages a revolutionary struggle against capitalism–the proletariat, and enables it to crush, smash to atoms, wipe off the face of the earth the bourgeois, even the republican-bourgeois, state machine, the standing army, the police and the bureaucracy and to substitute for them a more democratic state machine, but a state machine nevertheless, in the shape of armed workers who proceed to form a militia involving the entire population.’

        ‘The more complete the democracy, the nearer the moment when it becomes unnecessary. The more democratic the “state” which consists of the armed workers, and which is “no longer a state in the proper sense of the word”, the more rapidly every form of state begins to wither away.’

        Sadly this is not what came to pass. Various reasons are advanced for this : the damage and losses of the Civil War, the backward state of economic development, the low level of culture, the isolation of the Revolution. Bourgeois critics also suggest another reason, namely that the Bolsheviks lacked enough support to win an election, so they abolished democracy and replaced it with a one- party dictatorship.

        Now however cogent the other reasons for the Revolution’s failure, it is above all with the concept of the leading role of the Leninist party that the explanation should be sought.

        With remarkable prescience Trotsky, before he embraced Leninism with all the fervour of a latter-day convert, warned of ”the party organisation substituting itself for the Party, the Central Committee substituting itself for the party organisation, and finally the dictator substituting himself for the Central Committee” (”Our Political Tasks 1904). But by 1920 in “Terrorism and Communism” he was writing that the Party ”has the final word in all fundamental questions…..the last word belongs to the Central Committee….. the unquestioned authority of the party, and the faultlessness of its discipline.”

        Naturally, Comrade Trotsky did not like it when this immaculate discipline was applied to him!

        So with ‘the last word’ belonging to the party leadership in the political arena and the first word to the one-man managers in the economic sphere the proletariat and the other popular classes are disenfranchised and depoliticised. They do what they are told! As for the party organisation, as Rakovsky observed ( and look what happened to him!). ”When a class takes power, one of its parts becomes the agent of that power. Thus arises bureaucracy….this differentiation begins as a functional one; it later becomes a social one. I am thinking of the social position of a communist who has at his disposal a car, a nice apartment, regular holidays, and receiving the maximum salary…..workers and employees are divided into 18 different categories.” ( 1928). Almost 40 years later Mao is making almost the same observations,asserting that the bourgeoisie in China ”sits on the Central Committee of the Party”! Whence the paradox? Because a political party is the very antithesis of democratic; it is an oligarchy, and that is why a new bourgeoisie crystallises in its ranks. The antidote is democracy i.e. the rule of the poor. What is the mark of a democracy? Government selected by LOT ( Aristotle, ”Politics”). Incidentally, Aristotle points out that an extreme democracy would be monarchical or dictatorial, to use the Latin equivalent.

        By the way, can any butler run the government? Apparently there is a rising demand for butlers in China. If it is not capitalist, it is certainly nauseatingly and vulgarly bourgeois!

      • sartesian Says:

        Whatever disagreements I have with the details of comrade jlowrie’s latest post, they don’t stand in the way of admiring the spirit, the intention, and the meaning of his analysis.

        A radical, and rigorous egalitarianism is essential if a revolution is going to maintain, and expand, itself.

        Can every butler govern? Precisely to the extent that the revolution, that is to say the revolutionary class, creates the mechanisms, that is to say, self organization that does away with the categorization of human beings as butlers and……governors.

      • jlowrie Says:

        ”Apparently there is a rising demand for butlers in China.” I notice I neglected to reproduce President Xi’s latest take on Marx:

        “Butlers of the World unite: you have nothing to lose but our spoons!”

      • jlowrie Says:

        I feel I have not clarified my arguments sufficiently. Following Lenin I agree the revolution has to smash the existing state machine. But the revolutionary party does not take power itself and rule, rather within two or three years it introduces a democracy. A democracy, as Aristotle points out, is not properly defined as the rule of the majority, but as the rule of the poor, and the mark of a democracy is selection of the government by lot, which will always mean the poor in practice, they being normally the majority. Greek has two words for poor. By poor Aristotle means those who have to work for a living, as opposed to the rich, those who can live off their property. Election by ballot is the mark of an oligarchy, because as Aristotle, himself an anti-democratic, points out the rich will always win such ballots due to their wealth, superior education and culture.

        Ancient Athens was divided into ten tribes. The government ( Boule) consisted of 500 citizens selected by lot, 50 from each tribe, to serve for one year only. Each tribe took it in turns ( decided by lot) to serve as the equivalent of the modern cabinet for 1/10 of a year. The Boule drew up the proposals to put before the ecclesia or assembly of all the citizens, which met 40 times a year, and decided all major decisions such as declarations of war, taxation etc.

        A cornerstone of democracy was the jury system, with juries in important cases consisting of 500 or more, members chosen by lot. ( No show trials here! No judges!)

        All official offices or magistracies were filled by boards of ten, chosen by lot to serve for one year and one year only.

        The only officials to be elected were the ten generals and they were the only officials who could be re-elected, for obvious reasons. However they could be put on trial by the people, as happened on occasion, even to the most re-elected general of all, Pericles. Apart from leading the army, the generals seem to have had greater opportunities to address the Assembly. Was Pericles a kind of tyrant, as suggested by Thucydides? Clearly not, because the army which he led was the demos, i.e. the people in arms, a citizen, not a mercenary army.

        Finally, my favourite institution in Ancient Athens: the police body consisted of slaves! Think about it!

        Now it seems to me at any rate, that such democractic forms can be adopted to the modern world, and their institution would prevent the degeneration and betrayal of every revolution so far.

        An extreme or monarchical (i.e. dictatorial) democracy would today be the dictatorship of the unpropertied. Is it really difficult to understand why ancient democracy had the laws it did, namely to thwart oligarchy, i.e. the rule of the rich. Political parties only appear with the rise of capitalism, and are clearly political institutions appropriate to the rule of the bourgeoisie. History already demonstrates that the people cannot use them to emancipate themselves. They are oligarchies, including the communist ones. Recall how the socialists with a few exceptions all supported their own bourgeoisies on the outbreak of the First World War. Not a single socialist in the Reichstag voted in August 1914 against war credits. Liebknecht alone abstained ! Trotsky, in his autobiography I think, relates asking himself ”How would Engels have acted? Here I had no doubt. How about Bebel? Here I was not so sure!” Well, I am sure: Bebel at best would have equivocated.After the war the Comintern set up new revolutionary parties. All for the most part are gone. The Italian communist party, the biggest in Europe, garnering some 33% of the popular vote, liquidated itself.

        ”There are more than 100 Communist parties in the world, most no longer believe in Marxism- Leninism. Marx, Lenin have been broken into pieces” ( Mao, 1966, quoted in Minqi Li, ”The Rise of China”2008).

        How come? There is a wretched pre-war novel “Peking Picnic” in which the author avers that there is ”nothing more exhilarating than charging through the Chinese countryside in a rickshaw.” Well, that is presumably if you are not toiling away at the front. But once our erstwhile revolutionary ascends from pulling at the front to lolling at the back, his point of view changes and his revolutionary ardour is gradually extinguished.

        As the ex-revolutionary Deng Tsiao -ping put it, ”To get rich is glorious.” And ”Some must get rich first”, the Deng family naturally being among the first and not the last to become billionaires. “Capitalism with fascist characteristics!” Chiang Kai Shek would be proud.

        So it is no surprise that the former ‘communist’ and ex-secret policeman Putin has colluded with the Russian Orthodox Church to have the last Tsar declared a saint. The Lenin Museum in Moscow has been closed, but they have opened a tsarist one.

        They Russian and Chinese revolutions seem never to have happened!

      • sartesian Says:

        Keep on keeping on, comrade. I fully endorse government, administration, dictatorship by lot, as opposed to oligarchy by ballot.

    • prianikoff Says:

      Edgar
      “Why not apply this to Thatcher or Brexit?”

      The topic was nationalisation.
      I support it, Thatcher reversed it.
      In 1945 Socialists should have been in the Labour party, pushing for nationalisation to be extended.
      (only 20% of industry was nationalised)
      Those who stayed outside Labour were politically isolated.

      BTW, I would apply it to Brexit.
      Labour said it will respect the Brexit vote, even if it won’t implement it in the way the Tories want.
      If it hadn’t done this UKIP, would have done a lot better in the General election.
      But the biggest danger right now is a political fudge with the Remoaners.

      Anthony Phillips :-
      “What I do not believe is that the so-called public sector is non-capitalist.”
      Of course it’s non capitalist.
      It’s a sector where profit can’t be made on investments.
      That’s why they’re trying to privatise it, or introduce PFI.

      As to the policies of the CCP;
      Clearly they were wrong in 1927,because the Stalinist Comintern had forced them into a Pop-Front with the KMT (even making it an affiliated section)
      This severed the CCP’s connection to the industrial working class.
      In fact, the Red Army liberated Manchuria, the most important industrial area in China at the time.

      After the Shanghai/Wuhan massacres the CCP had to rebuild.
      Mao empirically broke with the Pop-Front to build a base amongst the impoverished and landless peasants
      The CCP’s subsequent alliances with the KMT weren’t analogous to a pop-fronts either.

      I agree that the Great Leap forward was a big failure.
      But this was due to the poverty of the country and its inability to industrialise using its own resources.
      The same problem (to a lesser degree) existed in Russia and Eastern Europe.
      Stalinism set itself the task of catching up with the West in isolation from the world market and international division of labour.
      It failed.

      China’s economic growth doesn’t prove the vitality of capitalism.
      It invalidates the theory of “socialism in one country”.
      This doesn’t mean that China is a classless society.
      There are still numerous political battles ahead before that happens.

      You seem to want to throw the baby out with the bath water!

    • sartesian Says:

      We have two distinct, but intertwined threads to deal with here. First, we have Michael’s argument that China is not, or not yet, capitalist, or fully capitalist, or dominated by capitalism because of the weight, specific and general, of the state property. The second thread is the long debated designation of “state capitalism” as a proper characterization of — then the former Soviet Union and now, China.

      Taking this state capitalism issue first– I think we need to temper our characterization, and our reaction to the characterization, of “state capitalism.” Any state formation, even of the most revolutionary origin and practices, assuming power in isolation, and in “underdeveloped” territories, acts “capitalist.” The state organizes the extraction and distribution of surplus. The state whether it’s a big S Soviet type, or a small s soviet type, engages this fundamental task– extracting and distributing the the surplus produced by social labor. The question is, is this extraction and distribution of surplus, the extraction and distribution of surplus VALUE? How do we determine that? We can ask if the labor power is organized as a commodity? That answer itself requires we ascertain if the means of production themselves are organized as values– as objects and relations for exchange. IMO I think as surplus only gets constituted as value when the means of production themselves are not just accumulated, expanded, but offered for exchange, and that process requires a… bourgeoisie able to trade, exchange among itself, for itself, and its cohorts, internationally.

      The state, China, Russia, Cuba, etc. may act like a capitalist, but it is not capitalist unless and until we can locate a capitalist class– a class with a unique, property relation to the means of production, that projects those means as objects, relations, of exchange.

      The actions of the state in Russia or China, engaging the world markets, may, and inevitably will, engender, facilitate, enable, the creation of that class, but I don’t think the “state” qualifies as capitalist a) simply because it is a state b)simply because it extracts surplus c)without the class of capitalists having a dominant economic relation to the means of production outside the state–

      Now what makes the relation of the “state” to the means of production “problematic” or “enabling” of these capitalist relations is 1) exactly the participation in the world markets and 2) the condensed expression of that participation in and through the assumption of debt.

      So, short short awkward version (and awkward hardly does this justice) gets us from the theoretical to the practical issue, or the first question: is China “state capitalist”? I think the answer is no, or “not yet.”

      At the same time, that answer doesn’t have any real significance as a characterization absent the dynamics unleashed by the actions the state has taken since…….pick a date, 1949, 1979? Do the actions of the Chinese state, have the actions of the Chinese state facilitated the expansion of capitalism, and undermined the state’s own control of the economy to the disadvantage of the workers? Without a doubt. We can talk all we want about the improvement in the standard of living, in the development of China, but we can’t talk about that separate and apart from the growing inequality, the growth in the outstanding mass unpaid wages, the abandonment of pension obligations, the conversion of social housing to private property, etc. etc. etc. It’s a class thing, right? China develops, as it develops it expands commodity relations. Healthcare becomes a commodity; housing becomes a commodity; education becomes a commodity. Who loses when commodity production “wins”?

      Michael’s argument is that the preponderant weight of the SOEs in the Chinese economy acts as a barrier to the untrammeled operation of the law of value, of the accumulation of capital, in China. This is an iteration of the old “commanding heights” argument that’s been around for a little bit less than the 100 years of the Russian Revolution. Certainly Xi sees it that way. And certainly Xi wants to shore up the control of SOEs, and significantly, the joint enterprises, in China. The CCP has studied, for over 30 years, the decomposition of the Soviet-bloc countries and the fSU, and I think it’s safe to say the only thing the CCP fears more than a 1991-1999 Soviet type collapse, and decimation, is a Solidarinosc type workers’ movement. To those ends we get the “tightening” of controls, the insertion of party cells in SOE and joint enterprises– which reminds me a bit of the Bolsheviks assigning party commissars to watch over former Czarist military officers in the Red Army during the Civil War.

      However, the SOE themselves are typically those enterprises that require and maintain the most extensive and intensive fixed capital plants– steel, shipbuilding, maritime ports, rail, aluminum. IIRC Marx repeatedly in his economic studies remarks how, in pre-capitalist formations- those undertakings of infrastructure etc. involving large amounts of fixed assets (and the efforts to construct those assets) are undertaken by the state. These areas in China are areas most sensitive to overproduction. They have been sustained, particularly, since 2008 by subsidies and more than subsidies; schemes leveraging real estate and other assets that, like similar schemes in the advanced countries, involve sweeping up the pools of domestic savings, expanding those pools through leveraged loans, special investment vehicles, etc.and we know how that goes. While Xi may think he’s got a tight grip around the “commanding heights” of the economy, the market forces quickened by the very attempts to sustain those commanding heights will continue to erode the stability of “socialism with Chinese characteristics”

  17. Tony of Ca Says:

    My feeling is the Chinese model is going to be the one adopted by most counties going forward. I’m not sure what to call it, but it is definitely not the Anglo/America capitalistic model.

    • sartesian Says:

      The “Chinese model” is built on app $1 trillion in direct foreign investment over 25 years; on a banking model devised by Goldman Sachs; and on a massive migration of the rural population into cities, particularly into the (former and current) special enterprise zones– all of which we should identify as capitalist penetration and expansion.

      Now it’s not quite so clear that there will be another wave of FDI quite as massive, extended, and concentrated as that for other countries “going forward,” or if the migration into SEZ’s will be (proportionately) of such a critical mass, to support that type of banking model, not to mention a manufacturing base of the size created in China.

      Whether China is totally, completely, capitalist or not misses the point, I think. The point is that the development of capitalism in China, which is the development that has occurred since the 4 reforms, runs up against the limits of capitalist development anywhere and everywhere– overproduction, declining profitability.

      • sartesian Says:

        That should be “35 years,” not “25 years”

      • Daniel de França Says:

        That was “artificial” encirclement, more than a simple migration due better quality of life on cities. Conditions on the countryside were made worse, like no more healthcare and high prices for seeds and other materials.

      • marthajpc Says:

        “The point is that development of capitalism in China…runs up against the limits of capitalist development anywhere and everywhere–overproduction and declining profitability”. Exactly! Thanks for historically contextualizing the dialectics of Michael’s enlightening argument.

  18. Charles A Says:

    The “North-South” dividing line in economic study and statistics was defensible 25 years ago. Today you muddle things beyond sense if you persist with that framework and keep China in the “South” category. Yet that is what John Smith did in his 2016 book devoted to splitting the world workers.

  19. Daniel de França Says:

    That was “artificial” encirclement, more than a simple migration due better quality of life on cities. Conditions on the countryside were made worse, like no more healthcare and high prices for seeds and other materials.

  20. Jose Tapia Says:

    I quite agree with the comments of Anthony Phillips. The role of the CCP as ruler of society at all levels is relatively akin to the role other parties have had in capitalist economies, e.g. what Anthony mentioned of that of Germany under Nazism. I find less and less compelling the idea that China is neither capitalist nor socialist, and I would say the same about the USSR. Both were backward societies where socialist forces took power just to become managers of the capitalist development of society. In both there were components of egalitarianism, but in both there was also an absolute deprivation of power for the working class as such.

    • Virgens VK Says:

      The Nazi Party was not in control of Germany. It had political power, but not economic power. The German industrialists and bankers (and many American industrialists, who, even after FDR’s prohibition, still produced and exported through Switzerland) retained their power and fully supported Hitler as a way out of Versailles. The Third Reich never even resembled a socialist state — even though it had political control over the macroeconomic direction of the economy at wartime (but by this standard, FDR’s USA was also socialist).

  21. Charles Says:

    (Baidu is a private corporation; it was incorporated in the Cayman Islands. Profit rules.)

    Baidu, Shouqi Limousine & Chauffeur to develop driverless cars

    Beijing, Oct. 28 (Xinhua) — Chinese Internet giant Baidu and Shouqi Limousine & Chauffeur, an online car rental company, have entered a strategic partnership to speed up the development of driverless vehicles. Baidu will provide Shouqi with its Baidu Map service, while Shouqi will help Baidu develop high-precision maps for self-driving cars.

    Shouqi Limousine & Chauffeur is a subsidiary of the state-owned Shouqi group and begun operation in 2015. It has more than 66,000 vehicles in 52 Chinese cities, including Beijing, Shanghai and Guangzhou.

    From http://news.xinhuanet.com/english/2017-10/28/c_136711998.htm

  22. louisproyect Says:

    China’s State-Owned Enterprises: a reply to Michael Roberts:

    https://louisproyect.org/2017/10/30/chinas-state-owned-enterprises-a-reply-to-michael-roberts/

  23. louisproyect Says:

    Goldman-Sachs bullish on China:

    http://lists.csbs.utah.edu/pipermail/marxism/2017-October/278893.html

  24. sartesian Says:

    When has Goldman-Sachs NOT been bullish on China? Anytime In the last 30 years? Wasn’t Goldman bullish during the Chinese contraction of the early 1990s? During the layoffs, shutdowns and demonstrations in the Northeast “Rustbelt” of Lianong in the early 2000s? During the shutdown of thousands of factories in Guangdong after 2008?They’re a bank, for chrissakes, they make money by trading, by flogging “opportunity,” “growth,” “accumulation.”

    What that has to do with the party Congress, the attempt to inject and maintain party committees in key industries is not quite so evident, the enshrinement of “Xi thought” is not quite as transparent as Goldman Sach’s own cheerleading for its own piece of the revenue stream. .

    Clearly we have conflicts and antagonisms at work in China. The issue is where those conflicts will lead China. Xi’s moves can be seen as the attempt to control the impulses to “complete valorization” in the economy; the devaluation of the state’s investment in the SOE’s that surely would, and will, occur if those enterprises are exposed to the unmediated forces of the world markets.

    It’s been more than a few years I believe since the “private sector” in China contributed more to the GDP than the SOEs. Several years ago, I believe the SOE contribution was below 40%. The portion of industrial output accounted for by SOEs declined all through the 1990s and the first years of the 21st century. The numbers employed in SOEs similarly declined. The portions may fluctuate; the SOE’s may claim a disproportionate share of the official financing at all levels, but I don’t think that that will change the trend and the inevitable dismantling of the SOEs.

    China has forced its way out of recessions in the past, refinancing assets by tapping into and leveraging accumulated household savings and earnings. Like everybody else, I’m speculating here, but I speculate that that particular horse has been ridden to death, and the dying horse supersedes the Goldman-Sachs bull.

  25. Azdak47 Says:

    Michael Roberts (MC) says China is not capitalist. If he is wrong, and I maintain he is, the greater part of this discussion comments are irrelevant.
    The criterion for characterizing an economy is the social relationships which human beings enter into in the course of the social production of their lives. In slave, feudal and capitalism economies these relationships are those between classes. The key class division in capitalism results from the separation of the class of labourers from their means of production. The class of labourers, once separated from their means of production, survive and reproduce themselves by selling their labour power to those who own the means of production. Their labour takes the form of value and the means of production take the form of capital. This relationship is, of course, the system of wage labour. This is the defining social relationship of capitalism. Where wage labour exists, capital exists, and from this relation is derived surplus value or profit. The motive for production becomes generating profit and accumulation of capital. Communism will end the system of wage labour and institute a system of social production for human need.
    Russia, China and Cuba etc. never ended the system of wage labour and so remained capitalist social systems. All that changed was the juridical arrangements for the holding and control of capital. Capital was largely held by the state. Juridical arrangements for holding of capital do not affect the social relationships and cannot be defining features of a mode of production. Yet it is precisely these features that MC thinks makes China non-capitalist, namely that public capital is 3 times as large as private capital and the state plans investment. What is extraordinary is that while maintaining this MC admits that the law of value, a key defining feature of capitalism, operates in China. He also admits that socialism cannot be built in one country. So what is China? A transitional economy? A transition to what?
    China is converting millions of peasants into wage labourers at a massive rate. There are approximately 400 million migrant workers, migrants from countryside to cities, engaged in wage labour and the government calls for 100 million more by 2020. In addition many of these workers, have no rights to state benefits because of the household registration system or hukou system. They are exploited with the utmost savagery often for 60 to 70 hours a week.
    Exploitation of massive amounts of wage labour is what is generating massive amounts of surplus value which becomes capital. The Chinese bourgeoisie acts like any other major capitalist power and is exporting capital all over the world, and not just to the periphery. In the EU, for example, China invested 35bn Euros in 2016. Investment the other way was 7.7 bn. Some of these investments are to provide a steady stream of income as for example China Investment Corporation buying 9% of Thames Water. To attempt to argue that the Chinese investments are not governed by spontaneous market relations is simply to say the Chinese bourgeoisie are looking for long term profits. In no way does this invalidate their capitalist nature. Red Deathy is right to say that an overall rate of profit will still be generated and over the longer term will determine investment.
    China is certainly not a society in transition to communism! If, as MC argues, having the state owning 75% of the national capital makes China non capitalist why can’t the same be said of Britain in the 60s when, railways, mines, power generation, steel production, telecoms etc. were state owned? Behind all this is the view that state capitalism is not a type of capitalism but a type of communism a transitional mode of production. In other words, what we are being told, is the standard leftist story we get from the Labour party from Stalinism and from Trotskyism.

    • marthajpc Says:

      Well, Azd47, you shot your load. The labor theory of value is explained. You’ve killed off the entire left and murdered Marx (and the King’s English). Now go off to bed.

      • S.Artesian Says:

        Murdering the king, and “his” “English” ain’t no bad thing; ain’t no minor achievement.

    • Tony Says:

      “In other words, what we are being told, is the standard leftist story we get from the Labour party from Stalinism and from Trotskyism.” I am a Trot and think that what you have said about state capitalism in China is spot on.

    • NeilP Says:

      Well said!
      Marx didn’t have to deal with this new form of capitalism but other Marxists did and subsequently developed the theory of state capitalism, (see e.g. Tony Cliff’s work, amongst others).
      Why are workers exploited in the state-capitalist economies ?
      Because those economies are in direct military and also economic competition with the private-monopoly-capitalist economies and the political and investment decisions are made accordingly by the state as collective capitalist with not a shred of genuine workers’ control.
      This results in the same social relations as in the West; surplus value extracted from workers to enable capital accumulation and constant attempts to increase the rate of exploitation. China has been protected by its great size, whatever measure you use,its huge reserves of materials and of labour but Russia and the other ex-Soviet Union countries are now a fully-fledged private-monopoly-capitalist economies and China is likely to follow eventually as it becomes more and more entwined with the capitalist world. Hopefully the working class will intervene and end capitalism before that.

      • jlowrie Says:

        ”Why are workers exploited in the state-capitalist economies ?
        Because those economies are in direct military and also economic competition with the private-monopoly-capitalist economies ”

        Could Neil adduce concrete evidence of such competition? For example was the price at which the Soviet state acquired wheat from the collective farmers influenced by price movements in Chicago?

      • sartesian Says:

        How about this: social revolutions take place in countries where capitalism really hasn’t taken hold; has not reorganized in particular the relations of land, labor, and landed labor in the countryside in its own image, but where, nonetheless, enclaves of capitalism have been “transplanted” or created, with of course a corresponding working class. Still these economies are integrated into the overall worldwide dominance of capital and react to the pressures transmitted through world markets– i.e. experiencing the results of overproduction in particular in grain, agricultural, and certain key industrial products.

        Given the archaic property relations in which capitalism finds itself.enmeshed, politically the bourgeoisie are weak, a weakness that corresponds to the pre-capitalist relations that dominate the countryside, and the working class revolution, in some shape alone maintains enough cohesion to abolish the pre-capitalist relations in the countryside, while, in isolation from the advanced countries, not having enough strength to accelerate agricultural or industrial productivity to a level equal to that of the advanced capitalist countries, and sustaining growth over the long term. Shortages arise, production stagnates; these economies are compelled to turn more and more frequently to the world markets; to hard currency earnings; to the assumption of debt; and then the state bureaucracy, formed originally in the rupture between city and countryside, in the very backwardness of agricultural production, then begins to function as an analogue to capital and capitalism; analogue– different origin serving a similar function, and in this case that function is to administer, mediate, the impulse to capitalist restoration. Sometimes the state is more successful in mediating that impulse, say China, imposing some “order” on the process which nevertheless involves a)bankruptcy, enforced and market-driven, on state enterprises b)dispossession of workers from the “social wage”– i.e. pensions, healthcare, education c)privatization of land and landed property through financial structuring– turning land into assets for financialization and then using the resulting revenue streams to finance further capitalist enterprise.

        Sometimes the process gets out of control; the state rotted away from the inside, collapses and the plunder, literally, goes ahead without mediation– i.e. Russia.

        That’s about as concise as I can make it. What does it mean? It means that neither “state capitalism” nor “degenerate (d) (ing) workers’ state” have any real relevance to the actual processes of reproduction and decomposition going on in these countries.

    • jlowrie Says:

      ”Michael Roberts (MC) says China is not capitalist. If he is wrong, and I maintain he is, the greater part of this discussion comments are irrelevant.”

      If I may make so bold, Azdak47: I did myself argue ”Here it is easy to grasp that the social relations pertaining in such an enterprise are only a modified version of those in a capitalist one……..They reproduce the relations of dominance and servitude of a class society, and the fact of being a state enterprise has merely changed its juridical status.”

      You should not assume that these rather commonplace observations are not known to Michael and others. Matters are not so simple.

      ”China is converting millions of peasants into wage labourers at a massive rate. There are approximately 400 million migrant workers, migrants from countryside to cities, engaged in wage labour .”

      If China was state capitalist before under Mao, what was capitalist about the communes, and why did the post-Mao government seek to separate the peasants from their instruments of production and their land? For me the answer is simple: to restore capitalism. But this answer is not open to you, for China was already capitalist in your opinion.

      ” Russia, China and Cuba etc. never ended the system of wage labour and so remained capitalist social systems.” This a non-sequitur. Wage labour is by no means confined to the capitalist mode of production. For example the Roman emperor, Diocletian, set up state factories in which the employees were paid both wages and rations, much like some Cuban factories until recently. If you are to argue, contra Marx, that this is capitalism, what was the source of the capital and how would the profit have been determined, seeing as the Romans had no double-entry bookkeeping?

      Moreover you assume what you have to establish, namely that what for example Cuban workers received were in fact wages advanced as variable capital and not merely certificates of labour performed. How in these societies could the parsimonious parson of Weberian fantasy convert his carefully hoarded cash into capital? What is more, the land, the buildings, the instruments of production did not assume the appearance of commodities. Under capitalism values express themselves as prices. So what was the price of a Stalinist factory, urban land in Maoist China or the post office in Cuba?

      We should not confuse economic relations with juridical status. A senior slave executing a role in the Roman Imperial Household analogous to that of a modern senior servant was not in the same economic relationship as a slave being worked to death in the silver mines.

      There is a distinction in Roman law between property as ownership and possessio, i. e. who is actually in physical command of a good. Thus I would argue that while in law the factories, etc. were codified as state property of the people in the old Soviet Union, possessio lay with the state managers and the party functionaries, who being themselves oligarchs naturally see in capitalism the mode of production most appropriate to a modern oligarchy and desire to consecrate their exploitation in the holy water of bourgeois property rights. We see this battle raging in China at the moment, as the state actors, who have to defend the body politic from the ravages of this or that capitalist,fear to lose control of the commanding heights of the economy to various factions of the new bourgeoisie.

      Finally, an interesting observation. Kang Sheng, one of the few senior followers of Mao in the Chinese leadership, on a return from Stalinist Russia described the Machine Tractor Stations on the collective farms as the return of the landlords in a new guise.An acute remark. No wonder he was posthumously expelled from the party as a Trotskyist or some other such nonsense.

      • prianikoff Says:

        lowrie asks:-

        “If China was state capitalist before under Mao, what was capitalist about the communes, and why did the post-Mao government seek to separate the peasants from their instruments of production and their land?
        For me the answer is simple: to restore capitalism. But this answer is not open to you, for China was already capitalist in your opinion.”

        I don’t agree with Adzak, but I think lowrie’s ideas about China and his definition of capitalism are rather confused too.

        Even if small holding peasants retain “their instruments of production and land” this hardly proves they are operating
        a socialist system of production.

        In fact, the majority of Chinese peasants prior to the revolution farmed between 0-2 acres of land
        i.e. they were landless labourers, or couldn’t feed their families.

        Mao’s Communes may have alleviated the worst aspects of rural poverty and been more egalitarian than the present system. But when attempts were made to base economic development on the rural communes it failed.

        Furthermore, under Mao’s government, the land inChina was nationalised and leased to the peasants (which it still is)
        Deng’s reforms may have increased inequality in absolute terms, but they’ve alse created economic development.
        There haven’t been any cases of serious famine in the countryside, as there were under Mao.
        And many peasants who work in the cities still have family farms.
        Economic development was a vital necessity, but Mao had no idea how to do it, tied as he was to the Stalinist model of bootstrapping it from the nation’s internal resources.

        You criticise the post Deng leadership for “restoring capitalism”, yet suggest we should pay attention to Gorbachev’s critique of Stalin.
        That’s an odd position, since Gorbachev’s immediate succesors created economic mayhem!

        Whereas the Chinese economy has grown enormously.
        If you’re arguing this is due to “restoring capitalism”, then capitalism must be an expanding social system.

        I think the problem could be that you’re relying on a left-communist definition of “state capitalism”, which in turn leads you to a petit bourgeois notion of socialism .

        I still await a sensible answer to the question I asked.
        If the Chinese Communist party have restored captialism, why don’t the KMT on Taiwan join them?

      • jlowrie Says:

        Prianikoff: Thank you for taking the time to address my arguments. This allows us to clarify differences, eliminate errors of fact and concept, and hopefully move forward to a theoretical consensus on the necessary measures for the socialist transformation of society. It is better to avoid ad hominem attacks unless they are warranted by intellectual depravity or moral obtuseness. I make no claim to ‘originality.’
        As for your own contributions, I shall only quote Marx, ”de te fabula narratur.”

      • jlowrie Says:

        ”Furthermore, under Mao’s government, the land in China was nationalised and leased to the peasants (which it still is)”

        Was and is in fact the land leased to the peasants? Under the 1982 law as I understand it, land was codified as the property of either the state or the collective. So all the land is not nationalised. But as Marx emphasises, we must not confuse juridical status with economic relationship. Here to help clarify matters, I have suggested we employ the concepts from Roman law, as Marx himself does, of the distinction between ownership ( dominium) and possessio. I would then argue that in fact the land was in the power ( dominium has also this meaning) of the state, while the peasants enjoyed possessio. They paided a tax to the state for the use of this land. I have already quoted Marx on why this was necessary. You say the land was leased to the peasants. I think this is the wrong concept. If it were leased ,the peasants would be able to produce these leases in order to assert their possession, but now that the Chinese state has ‘changed colour’ they are at the mercy of the new bourgeoisie that has crystallised in the ranks of the party who are able to use their power to seize the peasants’ land for speculative purposes in private developments. Remember class is a relationship of dominance and servitude. Even if the peasants were able to produce such leases, I doubt it would do them much good. It did not do the English peasantry much good. That is why I have argued for democratic courts i. e. large juries chosen by lot from ordinary citizens with no judges. Do you agree, or is this just another example my trolling?

      • jlowrie Says:

        ”Even if small holding peasants retain “their instruments of production and land” this hardly proves they are operating
        a socialist system of production.” But they were not small-holding peasants. The land was collectively owned and collectively worked, and I have described the way use values were distributed in ” Upper Felicity.” What is not communist about this? Perhaps you would care to give you own ideas of what communist agriculture would look like?

        ” But when attempts were made to base economic development on the rural communes it failed.” Well, this is the Deng story of course, and he would say that wouldn’t he? How else to justify the Deng family becoming billionaires?

        Dongping Han, a poor peasant who grew up on a commune and managed to get to university, and later emigrated to the U.S., explained how Deng Inc.worked. A friend of his, a university professor, and other university professors were given large sums of money to do research on the commune experience. Only negative accounts were acceptable.( This can be found on You Tube. His book is ”The Unknown Cultural Revolution” 2008 You should read it. Interesting details of Deng’s countrywide purges of radicals and the comeback in Jimo County not only of former dismissed officials but even landlords! Many of these officials had been dismissed during The Cultural Revolution because of their faulty policies during the Great Leap Forward). He quotes grain production for his county, Jimo County. There is no question but that there must have been increased mortality from hunger in light of the crop figures for 1960 but despite this only too real setback overall grain production increased from 163,700 tons in 1950 to 369,000 in 1975 and 381,130 in 1979. So the reasons for the dissolution of the communes must lie elsewhere.

        Interestingly, Dongping Han, who mainly supports the Deng line of one-child families, wonders with the abolition of the collective support for old people, that in fact despite the law rural families are actually secretly( pay a bribe) having more children to support them in their old age. What is certain is that the population statistics for China and India must have very large margins for error.

  26. prianikoff Says:

    jlowrie
    “Do you agree, or is this just another example my trolling?”

    It’s not trolling in this instance, because you’re not simply replying to yourself, or posting unattributed text.

    As to the nationalisation of the land; per se it’s not proof of socialism.
    As Lenin pointed out, in a pre-capitalist society, nationalisation of the land can be a precursor to the expansion of commodity production and thus capitalism.
    That implies a different definition of socialism to the one that you’ve constantly used, which sees it as the sum total of peasant communes.

    As I undestand it, many of the conflicts over land use in today’s China result from reclassification of agricultural land for industrial
    and housing development.
    Usually no form of ownership right, leashold or freehold is a protection in such situations.

    But the answer isn’t to uphold local democracy as against the state.
    That leads to petit bourgeois “socialism” and privatisation.
    As in Poland, where “Rural Solidarity” wanted to reintroduce the inheritance of private farms.
    The answer is to purge the state of capitalist influences and thoroughly democratise the running of state-owned property.
    i.e. socialise the economy.

    On the whole I agree with Michael’s analysis of the Chinese economy and not with his “left” critics, (who are all genetically similar left critics of Trotsky!)
    Of these it could be said “Dicunt qui de matris tuae”

    • jlowrie Says:

      ”As to the nationalisation of the land; per se it’s not proof of socialism.” You.

      ”Marxists following Engel’s analysis in “Socialism:Utopian and Scientific” agree that nationalisation by the state does not constitute socialism.” Me.

      ”That implies a different definition of socialism to the one that you’ve constantly used, which sees it as the sum total of peasant communes.” I have not defined socialism anywhere. If I were to, I would define it as a society in which class relations have been abolished, the division between mental and manual labour has been overcome, and likewise the division between city and country. That would mean the abolition of the social category ‘peasant.’ No more peasants, no more cooks, no more governors!

      ”As I undestand it, many of the conflicts over land use in today’s China result from reclassification of agricultural land for industrial
      and housing development.” ‘Reclassification’ is hardly the term I should expect a socialist to use of what seems to be the greatest enclosure( dispossession) act in history.

      “But the answer isn’t to uphold local democracy as against the state.” But democracy is a form of the state. ”The answer is to purge the state of capitalist influences and thoroughly democratise the running of state-owned property.
      i.e. socialise the economy.” This seems self-contradictory. Moreover, the capitalist economy is already socialised. Why do you fail to take issue with what I have written about democracy? You still have not indicated how you believe a communist agriculture would be organised. It is not enough to state what you are against; you have to clarify what you are for and more importantly how you envisage its achievement.

      ”On the whole I agree with Michael’s analysis of the Chinese economy and not with his “left” critics, (who are all genetically similar left critics of Trotsky!)
      Of these it could be said “Dicunt qui de matris tuae.”

      You do use the word ‘genetically’ in a most reactionary sense. Am I to understand that we Marxists ”are robot vehicles blindly programmed to preserve the the selfish Trotskyite genes?” Having been unfortunately myself a member of a Trotskyist organisation, I am quite amazed to be informed that this was programmed in my genes, especially as when young I was in a Stalinist one! But I shall be understanding and presume you meant ‘generically’.

      ‘of these it could be said “Dicunt qui de matris tuae.” I trust, prianikoff, you are not once more descending into ad hominem attacks, this time obscene ones. Such sallies always demand a riposte and I must therefore adapt a parody of a certain passage: ”Cavete, falsos istos eunuchos (Intellectually speaking, of course) qui se de Magnae Matris utero natos esse profiterentur!””

      • prianikoff Says:

        Nationalisation of the land is progressive, even if it’s not equivalent to socialism.

        This point was made by Lenin in his 1907 discussion of the Agrarian programme of Russian Social Democracy.
        The reason being that it abolishes the monpoly position of the big landowners and their ability to exact absolute ground rent from the small farmers.

        I’ve defended nationalisation throughout this thread.
        Whereas, you and your semi-Narodnik supporter Sartesian, have consistently adopted a petit-bourgois neutralist stance on it.

        A couple of posts back, in criticism of Adzak, you wrote:
        “why did the post-Mao government seek to separate the peasants from their instruments of production and their land? For me the answer is simple: to restore capitalism.”

        I can only conclude that you identify the People’s Communes either with “socialism”, or the existence of a “workers and peasants government”.

        I don’t accept that it’s that “simple” at all.

        There have been numerous examples of communal peasant landholding systems which couldn’t prevent the development of capitalism in the wider society. e.g. the Mexican ejido.

        The key question being, which class controls the central state apparatus?

        In China, for you (and Sartesian), it’s the capitalist class .
        Evidently it seized power when Deng Xiaoping (a CCP member from 1923 onwards, who participated in the Long March and the war against the KMT) became Paramount leader in 1978 and introduce market reforms.

        This begs the question of why didn’t he just save time and join the KMT in the first place!

        The *Capitalism* he (re?)introduced then led to China expanding its GDP 70 times since 1980.(despite the 2008 financial crash)

        “Capitalism” is now directing the largest public investment programme of any major economy and “Capitalism” has raised average living standards by far more than Mao’s programme of peasant egalitarianism ever did!

        I don’t think there was a qualitative change in the nature of the Chinese state in 1978.

        What happened was a struggle between two different policies.
        The post-1978 policies have created the danger that a new capitalist class might take power.
        But for this to succeed there would need to be a real breach of the system.
        Something akin to East Germany merging with West Germany.
        But China’s far too big to be swallowed up by Taiwan and Xi Jiping is consolidating the CCP’s control and the state owned sector of the economy.

        Undoubtedly the Chinese working class and rural poor do need to assert themselves against the neo-capitalists and the party bureaucracy in this situation.

        But I don’t think your analysis wil help them.

      • sartesian Says:

        A little parsing music, please, maestro:

        P: “In China, for you (and Sartesian), it’s the capitalist class”

        No, I’ve never argued that a capitalist class is in control of China. I have argued that the trend, the development that China has undergone is the product of introducing, abetting, facilitating, capitalist relations of production– i.e. $1 trillion of FDI; the explicit “low wage” policy of Deng; the dismantling and reductions in the “social wage”– healthcare, education, pensions.

        I have more or less identified the nature of the Chinese state is “undetermined” at this juncture, pointing out the problems with the categorizations of “state capitalist” and state socialist, and “workers’ state”– deformed degenerated and/or depraved.

        P: “There have been numerous examples of communal peasant landholding systems which couldn’t prevent the development of capitalism in the wider society. e.g. the Mexican ejido.”

        Point of historical accuracy: the ejido was not indigenous to Mexico, did not exist in the pre-Conquest era, but was introduced by the Spanish in its “reorganization” of the Aztec and other indigenous societies. It was transplanted from the mercantile-feudal relations of estates vs. villages in the Spanish mainland.

        That being said, communal landholding systems may not prevent capitalist development, but they have proven extremely resistant to capitalist development, as the case of Russia itself demonstrates.

        P: “This begs the question of why didn’t he just save time and join the KMT in the first place!”

        This is not a serious question. You could very well use the same (lack of) logic to ask, “why did the Labour party ever go to all that fuss and not just hook up with the Tories in the first place?”

        Labour after all is an instrument for maintaining capitalist rule, is it not?

        Or we could simply answer P.’s simple question with a reference to Marx characterizing the relations among capitalists as that of “hostile brothers”– if we were arguing that the CCP is capitalist, which I am not, and have not argued.

        The inadequacy, irrelevance, self-contradictory nature of P’s argument is made transparent when he writes:

        “The *Capitalism* he (re?)introduced then led to China expanding its GDP 70 times since 1980.(despite the 2008 financial crash)

        “Capitalism” is now directing the largest public investment programme of any major economy and “Capitalism” has raised average living standards by far more than Mao’s programme of peasant egalitarianism ever did!”

        and immediately follows that up with this:

        “I don’t think there was a qualitative change in the nature of the Chinese state in 1978.”

        Social developments, in evolution, and/or decomposition are not “presto, change-o” processes conjured out of a hat like a (dead) rabbit. It’s not like you wake up one morning and the great helmsman has signed over your work unit to Goldman Sachs, although that certainly might happen on an individual basis. The issue is the accumulation of changes; the transformation of policy, and what classes the accumulation of changes fosters, succors, enables.

        P. might also include in his catalog of glorious achievements since the 4 Reforms– the generation of 2.4 million millionaires in China since 1979. Hallelujah! Red millionaires, presente! Or even better! worse! the 594 billionaires, more than the 535 billionaires in the US! Yes, you see, you filthy imperialist running dogs, socialism with Chinese characteristics is really the superior system.

        Or he could include, the persistent, and expanding unemployment; the subjugation, abuse, discrimination against migrant workers who are of a reduced legal status upon leaving their home villages; or the mistreatment of (mainly) young, female workers in the factories of the Guangdong; or the bankruptcies that over decades have decimated the savings, and welfare of workers in Liaoning province, with factories walking away from wage and pension obligations to workers.

        That’s all part, in fact, a big part of the Chinese “miracle” too.

        P says: “The post-1978 policies have created the danger that a new capitalist class might take power.”

        Well then, what’s his beef with jlowrie’s arguments, or mine? That we aren’t polite enough, respectful enough, appreciative enough of the good intentions of the CCP? Let’s find out:

        P: “But for this to succeed there would need to be a real breach of the system.
        Something akin to East Germany merging with West Germany.
        But China’s far too big to be swallowed up by Taiwan and Xi Jiping is consolidating the CCP’s control and the state owned sector of the economy.”

        The issue isn’t that China’s “size” prevents Taiwan and the KMT from taking over. China’s “size” offers it no protection, however, from the relations that are much bigger than itself– namely the world markets, into which it has embedded itself to a degree far greater than ever in its history, including those periods when the capitalist countries maintained “concessions” and compelled China to allow them privileges in their exploitation of the country.

        The forces at work in China are far more powerful than the British ever were, and those forces have been facilitated, quickened, by the CCP. The “full” conversion of China to capitalism will indeed require a “breach”– a collapse, and probably a civil war. Happened in the fSU, didn’t it? Size didn’t matter then; doesn’t matter now.

        P: “Undoubtedly the Chinese working class and rural poor do need to assert themselves against the neo-capitalists and the party bureaucracy in this situation.”

        Well that’s swell, but what does that mean? Exactly how does that “need to assert themselves” manifest itself? Does it manifest itself in cheerleading for the “great accomplishments” of “socialism with Chinese characteristics”? With applauding the increase in GDP? In foreign currency reserves? In China’s new standing in the world?

        How does the working class assert itself against neo-capitalists other than opposing capitalism, and the introduction of relations of production that create capitalists, neo or retro? How do workers “assert themselves” without overthrowing the csocial relations of production?

        PS Love the characterization as “semi-Narodnik”– I’ve been called worse things. And by better people.

    • sartesian Says:

      So exactly what is your point prianikoff?

      If China is “socialist” then we might as well jettison all of Marxism and be done with it, because then the entire dynamic of social relations and technical forces which drives historical materialism is not longer applicable.

      We might ask– are the measures China has adopted, the forces it has unleashed since Deng’s four reforms building the proletariat’s capacity to organize the economy rationally, on the basis of need? Or..are the forces unleashed driving China more and more into adaptations to the stresses of the world market, and compelling the economy to a) respond to the needs of value production and b) oppose the prospects for international revolution and the abolition of capitalism?

      Now I think Xi’s actions are so fundamentally “defensive” in nature, that it leaves not doubt that the answers are that actions of the CCP have internally, internationally, and consistently, weakened the ability of the proletariat to resist capitalism, and the extension of the production of value.

      Clearly there is apprehension about this within the CCP and the state apparatchiks, who dread a collapse like that which took place in the fSU, or the emergence of a Solidarnosc movement, but there is no doubt as to which direction the CCP has taken the entire economy, the social relations of production– and that’s toward the unrestrained production of and for value accumulation; towards the accumulation and exchange of the means of production as values for the purposes of expropriating labor-power as value.

      Anybody paying the slightest bit of attention to real changes in China knows that rural areas and rural producers are being a)dispossessed and b)swept up in the streams of asset valorization through financialization.

      Claiming that the task is to “purge the state of capitalist influences” is apology not critique; it’s a excuse for not confronting the fundamental relation that it is the state, through its policies, that is enabling the capitalist influences.

      You can answer in any number of languages– French, Spanish, English, German, but spare us the Latin, please.

      • jlowrie Says:

        Sartesian has said what needs to be said, and I am tempted to leave it there, and move on. As S. says,”If China is “socialist” then we might as well jettison all of Marxism and be done with it, because then the entire dynamic of social relations and technical forces which drives historical materialism is not longer applicable.” The same evaluation would apply if it were designated as ‘non-capitalist’ or ‘degenerated workers’ state’ or with some other woolly concept.

        ‘semi-narodnik’ : J.D.White ( ”Lenin” 2001) in praising Harding’s ”Lenin’s Politicall Thought” as one of the most valuable books about Lenin ever written, however remarks,”The disadvantage….is…for Harding …there really were Narodniki…..God Builders etc. who held the views that Lenin attributed to them. Lenin the slayer.. of all these types of dragons rather than their creator…”!

        Why would Taiwanese millionaires want to unite with China? If you were a millionaire on Taiwan, would you? Such is the irreparable damage done to the ecological fabric of China that those very capitalists whose policies have caused it are themselves getting out. I read a while back that no fewer than 20,000 millionaires from China have applied to emigrate to Canada.

        As for the Chinese state, it does not have to be a capitalist state for capitalism to flourish. When Adam Smith published his “Wealth of Nations” in 1776 the British state was controlled by the landed aristocracy. Marx speaks on occasions of an absolute state. This is how I should describe the Chinese state. It is not (not yet) under control of the new capitalists, because as S. emphasises the Party leaders have a great fear of a Soviet style collapse, which would be brought about if this or that capitalist stratum were so able to assert its interests as to undermine the whole social fabric and the basis of the capitalist mode of production with it.

        ”Undoubtedly the Chinese working class and rural poor do need to assert themselves against the neo-capitalists and the party bureaucracy in this situation.”

        Well, there are armed uprisings in China every single day. On whose side is the state? And Why?

        ”“Capitalism” is now directing the largest public investment programme of any major economy and “Capitalism” has raised average living standards by far more than Mao’s programme of peasant egalitarianism ever did!”

        This is typical of your illogical non-sequiturs.Capitalism in Britain has also certainly raised living standards.The standard of living is clearly much higher now than at the time of the Peasants’ Revolt of 1381 with their absurd egalitarian demands that militated against the emergence of capital. (thus, a former Marxist friend of mine, now after a mid-life crisis become a fascist, like Deng.) So Deng went on the Long March? That was when he was young. But can you not understand what I have called the ” the view from the rickshaw” syndrome? It all depends on where you are sitting.

        You are surely aware that Short, the Labour Home secretary, and Darling, the Chancellor of the Exchequer, were in Trotskyist parties in their youth. Gordon Brown was known as ‘red Gordon.’ The sons of Ralph Miliband of ‘New Left Review’ fame and author of the excellent Marxist book “The State”, are scions of capital. One, David, lives in the U.S. and rubs shoulders with the likes of Kissinger. Perhaps he might run into Deng’s son and Kruchshev’s granddaughter. Who knows? they might even set up a dynasty.

        ”The key question being, which class controls the central state apparatus?” Well, yes and no. Of course all Marxists acknowledge this. That is why I have attempted to argue that the lessons to be learned from ancient Athenian democracy suggest a way forward. In a democracy nobody holds power for more than a year, then goes back to their old job, working. Thus is overcome the division between rulers and ruled, and the eventual disappearance of the state. But the latter could only take place on a world scale with the disappearance of standing armies.

      • prianikoff Says:

        Sartesian
        “I’ve never argued that a capitalist class is in control of China. I have argued that the trend, the development that China has undergone is the product of introducing, abetting, facilitating, capitalist relations of production– i.e. $1 trillion of FDI; the explicit “low wage” policy of Deng; the dismantling and reductions in the “social wage”– healthcare, education, pensions.”

        So basically, marshalling your array of dubious “facts”, you define China as an “undetermined state”.
        Quite an achievement!

        In fact:-

        * Wages in China are now higher than in many of the Eastern European member states of the EU.

        * The wages of U.S. workers (after inflation) have been flat or even falling since the 1950’s.

        * UK average earnings after inflation doubled between 1975 and 2013, with the highest rate of growth amongst the top 1% of earners.
        But since 2009, they’ve been static, with over a million workers on zero hours contracts and 20% earning less than the living wage. Contracting out and privatisation of the public sector is a significant factor in these figures.

        *Average wages in China have doubled since 2009.

        The inevitable conclusion must be that the $1 trillion of FDI *helped* to increase China’s living standards.
        It may be a a state capitalist policy, but despite predictions to the contrary, it has *worked*.
        The state *has retained control* over the multi-nationals, just as it retained control over the “patriotic” Taiwanese capitalists, who Deng invited to China in the early 80’s.

        Much as the semi-Narodnik Sartesian, or the embittered Mao-Stalinist lowrie, want to deny it, the annual surpluses generated by the Peoples Communes were simply insufficient to modernise the economy, or its system of health care.
        In that sense, the defeat of the Gang of Four and downgrading of Mao was a necessary task, even if there are serious dangers in the post 1978 course.

        Your criticisms actually echo those made by Michel Chossudovsky in his book “Towards Capitalist Restoration (Question Mark)” written in 1986 before he became an impresario for crack-pot conspiracy theorists.
        30 years later, there’s no real evidence that his predictions are any closer to being realised.

        Like Chossudovsky, you have no valid critique of Maoist policy and no explanation for why it failed.
        (Somewhere down the thread lowrie actually accuses Deng of being a fascist!)

        The same ultra leftism is encapsulated in your comment that
        “Labour after all is an instrument for maintaining capitalist rule, is it not?”
        Not exactly an all-sided examination of the Labour party and certainly not a Marxist one.
        More to the point, it totally fails to explain the changes which have occurred in the past 5 years (which were predictable, if you maintained the analysis that the LP is fundamentally party based on the unions)
        Nor can you use it to develop a strategy for what is now the largest party in Europe.
        (We have nearly half a million members, whereas you are publishing an obscure internet site)

        Clearly it’s essential to differentiate between the bureaucracy and membership of any political party.
        But your account of the trajectory of the Miliband Brothers & Gordon Brown elucidates nothing much about that of Deng Xiaoping.
        (The Miliband bros hardly participated in a Civil War, although their grandfather was in the Red Army!)

        It’s not really up to me to develop a detailed policy for China.
        I would support the development of unions and workplace committees (which Mao initially banned)
        I’d oppose any policy within these to extend privatisation or further liberalise the economy.
        This could best be done by ensuring that they were composed of rank and file workers, not bureaucrats or intellectuals.
        I would oppose private health & education under any circumstances.
        I would a legal minimum wage and progressive taxation of the billionaires.
        I would defend nationalisation of the land.

        But then I opposed Tianamen Square and my union branch committee was outside the Chinese Embassy with its union banner when it happened.

        Sadly they weren’t listening to us, but I’m sure there are people in China who say similar things.

        PS.
        I don’t agree with your account of the historical origins of the Mexican ejido system, perhaps you’re just talking about Mexico City?

        The Spanish initially plundered the Indian communities, introducing forced labour (the encomienda system), until it became clear that this was economically unstable.
        (The number of Spanish settlers was simply too small to dominate the large indigenous population)

        Hence the Church reformists tried to restrain the worst excesses of the Conquerors and establish a form of equilibrium with the indigenous communities, to regularise the supply of tribute and taxes payable to the Crown.
        The worst offender Nuno de Guzman was then stripped of his ill-gotten gains and packed off back to Spain, where he died in poverty.

        The free villages which still possessed land titles, came under attack when the Hacienda system developed, in response to the demands of the world market.
        Particularly in the sugar producing areas of Central Mexico, where middle peasant lands were increasingly being swallowed up to meet the export market.

        The main point being that Ejidal lands can’t be bought and sold.
        They expanded after the Mexican revolution, particularly under the Presidency of Lazaro Cardenas.
        What’s undermined them is the development of the Mexican capitalist state, its banking system and NAFTA policies, such as the import of GE corn from the USA.

        Given their differential fertility and access to water supply, it’s simply not feasible for poorer farmers to keep working them, so many are being sold off as wild-life reserves, or for tourist development – another reason why defending the nationalisation of the land is so important.

      • sartesian Says:

        “marshalling your array of dubious “facts”

        My dubious facts? Which ones are those? What you provide as “corrections” to claims I’ve never made.

        I said Deng explicitly promoted the “low wage” policy as an attraction for FDI. Did he or did he not?

        I made no comparison to wages in any Eastern European country; nor to wages in Vietnam, Cambodia, Laos, etc.

        I said nothing about the rate of increase of wages since 2009.

        I did point out that in the Great Recession 2008, thousands of factories closed, and their owners simply walked away from wages owed, and obligations to pension and welfare funds. Did that happen or didn’t it?

        I pointed out that similar actions by state owned enterprises went on for more than a decade in the northeast “Rust Belt.” Did that happen or didn’t it?

        In the discussion of China, I made no claim regarding wages in the US, but now that you bring it up, and as is typical for you, bring it up inaccurately, real wages in the US have not been flat or falling “since the 1950s.” Real US wages for hourly workers in general peaked in the late 1960s, early 1970s; US BLS generally calls the peak as occurring in 1972.

        I said nothing about the growth, or flattening of the growth of wages in the UK.

        So, all your irrelevant, and mistaken, citations lead to an inescapable conclusion: you’re blowing smoke and you don’t know what you are talking about.

        Let’s continue:

        “the annual surpluses generated by the Peoples Communes were simply insufficient to modernise the economy, or its system of health care.”

        I’ve never made any argument that the communes were or were not capable of modernizing the economy, BUT rates of increase in agricultural and industrial productivity in China were NOT NEGATIVE for the overall period from 1949-1979, despite the failure of the “Great Leap” and the disruption of the Cultural Revolution. Whether communes were capable of providing “modernization” quickly enough is a moot issue, particularly in the face of the attraction of the world markets, the foreign investment, and the prospects offered for personal aggrandizement that the CCP embraced.

        Again, the inescapable conclusion is that you don’t know what you are talking about.

        PS Regarding your PS re Mexico– the main point that I made is that the ejido was not indigenous to Mexico pre-Conquest, but was introduced post Conquest; transplanted from Spain in a feeble attempt to secure some stability for the indigenous populations who were almost completely wiped out by the Spanish conquest; and that communal ownership of land was, and remains, extremely resistant to capitalist penetration.

        You think you are arguing against that, when everything you write in refutation actually supports that.

        No one is arguing for the virtues of small-scale subsistence production. I am arguing that the dispossession of the small scale producers, whether by the PRE-Nafta legislation that was enacted in Mexico, or by the Chinese state to finance “development” and secure territory for SEZs SOEs FDI is not PROGRESSIVE or a cause for rounds of applause– hell, in your case, a standing ovation– but rather another policy administering the impulse to CAPITALIST transformation.

        PPS Do try and follow the arguments as they are actually made, rather than what you wish them to be.

  27. jlowrie Says:

    ”You criticise the post Deng leadership for “restoring capitalism”, yet suggest we should pay attention to Gorbachev’s critique of Stalin.
    That’s an odd position, since Gorbachev’s immediate succesors created economic mayhem!”

    This is yet again a non-sequitur. In fact Gorbachev himself started the mayhem, but this does not mean we can avoid his and other bourgeois critiques.

    ”Economic development was a vital necessity, but Mao had no idea how to do it, tied as he was to the Stalinist model of bootstrapping it from the nation’s internal resources.”

    I wonder where you get your information. Under Stalinism the Soviet Union demonstrated amazing economic development. Whether one would designate it as socialist is an altogether different matter. Agricultural performance was not so impressive, but making allowance for differing geographical conditions the peasants did pretty well, all things considered. By the 1980’s the Soviet citizen was consuming almost as much meat as in the West. By 2000 this had fallen to half what it had been in1913( Gundarov, Moscow 2001). Famine resulted, but not designated as such, because of taking place in a capitalist context. Russia showed an allover population depletion of 11 million. Gundarov calls this a ”demographic catastrophe.” This does not mean that 11 million people starved to death. It means people become more susceptible to various diseases and at the same time the birth rate drops, while the death rate rises.

    So why were there all the notorious shortages in Soviet stores? A hopelessly inefficient distribution system( could learn from Japan here) and subsidised foods, so that when supplies did appear in the shops Soviet consumers could quickly buy them all up. Remember that hard cash was not a problem since in Soviet times rent and utilities took only 5% of a citizen’s wage. Of course there are other criticisms to be made. But as I emphasise we Marxists need to make clear what we intend to put in its place. That is why I had hoped to attract a discussion by posting Mandel’s views on socialist planning, which to be honest I could not really get my head round.

  28. jlowrie Says:

    It is strange that you want to compare the Mao era with subsequent economic development post Mao, as if standards of living would not have continued to rise anyway. Clearly the comparison should be made with India at the same period. Despite all the advantages lying with India, China’s achievements are far superior. Moreover, China had to fight a war in Korea from 1950 to1953 ( as soon as it finished the Soviets presented their bill!) and support the Vietnam war effort between 1965 and 1975.Remember China was the poorest country in the world in 1950, the land of famines! It was under Mao that China finally abolished famines. I think they will make a comeback!

  29. jlowrie Says:

    ”(Somewhere down the thread lowrie actually accuses Deng of being a fascist!)”. Yes I do! When Deng was allowed to return to the party leadership he promised never to practise revisionism again, and this was one promise he kept, because I would designate China as a fascist state. Increased wages? Well, Hitler managed that. The invasion of Vietnam( substitute Korea), the abolition of the right to strike, the abolition of free education and health for the peasantry, the breaking of the so-called iron bowl for the workers ? Just put those measures in your Labour Manifesto, and see how you get on. As a socialist you are familiar I daresay with the Factory Acts. You will then recall that the 1833 Act banned nightshift work for young people under 18. The 1847 Act introduced the 10 hour day. its main proponents were the aristocrat Earl Shaftesbury and the capitalist John Fielden. After the 1949 Revolution the Chinese workers gained the 8 hour day. In 1850 another Act banned women and young people from working outwith the twelve hour period between 7am and 7 pm. In 1980 Deng invited Milton Friedman to China. Remember him? The economic adviser to the fascist Pinochet.
    Now, what hours do young girls of 16 and 17 work in Chinese factories today? 10, 12, even 14 hour shifts, round the clock. There’s progress for you. Yeah, sure let’s introduce those hours in Britain. it will certainly lead to higher wages.

    But this is not the worst of it. In Deng’s Great Bourgeois Cultural Counter-revolution all the vices of the old society have reappeared: opium dens, brothels, child slavery, countless industrial accidents and suicides( the main cause of death for young Chinese), and at the other end beauty contests, coming- out parties, gated communities, fancy cars. But it gets worse, much worse,namely the irreparable damage done to the environment. Your ‘miracle’ economy has all the irrational policies of capitalism carried to a diabolic insanity of demonic proportions. Let us listen to Pan Yue , a vice- minister for China’s environmental Protection Agency ( No, its not a joke, Sartesian) already in 2005, ”half of our water in the seven largest rivers is completely useless. a quarter of our citizens do not have access to clean drinking water. because air and water are polluted we are losing between 8 and 15 % of our gross domestic product…we are simply running out of time.” He was removed!

    The aquifers of north China are already drained. Most of its forests are gone, denuding mountains. 70% of the world’s e-waste is dumped in China to be recycled by children. Disappearing farm land. unbreathable air, toxic food, polluted soils, and the water, oh the water: in some places the Yangtse River, third longest in the world, is in places dangerous even to touch; 90% of China’s groundwater is polluted, which means much of the farmland in North China is DOOMED!In 2014 the government itself reported that 20% of arable land was polluted with heavy metals. The Three Gorges Dam is the World’s biggest cesspit, while the party is the biggest moral cesspit, the whole society rotten and corrupt from top to bottom, so that short of revolution nothing can be done. Half of the rich in China are making plans to leave. The land is polluted, the air is polluted, the food is polluted, the water is polluted, and so are the bourgeoisie’s wretched, fascistic souls. China faces a veritable, ecological apocalypse. If this is not capitalism, then I guess I prefer capitalism. There was an incident a couple of years back when a little girl was knocked down in a car accident, I think it was. Even the Gradgrind intellectuals of the Chinese media were ashamed, for the child lay there for hours and none of the many passers-by came to assist her in her death agonies. Would this have happened in Japan or Germany, in Cuba or Korea, or in almost any other country in the world? No, but in China it did and why not? After all, there was no money to be made in helping the child, and as Deng has stated ‘glory is to get rich!”

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