Neoliberalism: not so bad?

I don’t really like the term ‘neoliberal’ because it is used lazily as an alternative to pro-capitalist policies or even to the word ‘capitalism’ itself. In doing so, it causes confusion in explanations about trends and failures in capitalist development.  What flows is the argument that if ‘neoliberalism’ is ended, then we can return to ‘managed capitalism’ or social democracy’, neither of which, in my view, should be used to suggest something different from the capitalist mode of production itself.

And if leftists continue to use ‘neoliberalism’ as a term to replace capitalism (or as some nasty ‘free market version), they open the door to the sort of nonsense that economic journalist Noah Smith concocted last week, as expressed in his Bloomberg piece: “Neoliberalism should not be a dirty word on the left”.

In his piece, Smith argues that by attacking neoliberalism,“Too many people forget the contribution markets have made to human well-being.”  He justifies the success of neoliberalism (as defined by him as capitalist market forces and policies that support such) with three main stylised facts.

The first is that “Market liberalization in countries such as India and China seems to have precipitated a shift to faster growth, while trade and investment links with rich countries have helped these and other developing countries tremendously.”  So China’s growth miracle is a product of neoliberal policies of ‘market liberalisation’, presumably introduced by Deng in the late 1970s and supplemented by foreign investment and China joining the World Trade Organisation (WTO).

This story has been perpetuated by many mainstream economists.  But it does not hold water.  Yes, China opened up sectors of the economy to foreign investment and the market, particularly in agriculture.  But the bulk of investment and foreign trade was still controlled by the state and state corporations; and capital controls were in force.  The state was everywhere in the operation of the economy.  So was China’s success really a product of neoliberalism?  See my post on this misconception here.

The second argument is that neoliberal policies have “helped pull a billion people out of desperate poverty, and billions more are on the way to becoming middle class.”  This is yet another myth offered by the apologists for global capitalism by the likes of Microsoft billionaire, Bill Gates, among others. Smith follows in those footsteps to justify ‘neoliberalism’.

Anthropologist Jason Hickel has provided an excellent refutation of this claim that global poverty is being solved and falling fast, thanks to capitalism.  Much depends on how to define poverty.  Hickel:  “If we use $7.40 per day, we see a decline in the proportion of people living in poverty, but it’s not nearly as dramatic as your rosy narrative would have it. In 1981 a staggering 71% lived in poverty. Today it hovers at 58% (for 2013, the most recent data). Suddenly your grand story of progress seems tepid, mediocre, and – in a world that’s as fabulously rich as ours – completely obscene…. “And if we look at absolute numbers, the trend changes completely. The poverty rate has worsened dramatically since 1981, from 3.2 billion to 4.2 billion, according to World Bank data. Six times higher than you would have people believe. That’s not progress in my book – that’s a disgrace.

In his pursuit of praise for neoliberalism (in reality capitalism) Smith has elsewhere tried to trash Hickel’s arguments that global poverty has not really declined.  But, as usual, Smith and others who take his line, ignore the key fact that the fall in global poverty levels, whatever the threshold points chosen, is mostly down to the massive reduction in poverty levels in China – a country that can hardly be considered having an economy that operates on neoliberal free market forces (although Smith seems to claim it does!).

Of the billion that Smith cites, there are over 800m Chinese who have been taken above the poverty threshold in the last 30 years.  Sanjay Reddy looked at the poverty data excluding China. He found “modest decreases in total poverty headcount or even increases, sometimes sizable, especially at higher poverty lines & over longer periods, more marked in certain regions.”

Smith supplements his argument for neoliberalism by arguing that in the last 30 years “progress in the developing world has been impressive — something for which neoliberalism probably deserves a lot of credit — but it is far from complete; most of South Asia is still very poor, and much of Africa is just beginning to industrialize.” Indeed, far from complete.  The inhabitants of Nigeria, Africa’s most populated country or those of the Congo can tell Smith that progress in their countries has not been “impressive” at all. And not just there.  According to Ha-Joon Chang, a Cambridge economist, during the 1960s-and-70s per capita income in Sub-Saharan Africa was around 1.6% per annum; however, after they were imposed with a neoliberal economic model by the West, during the 1980s and 90s, per capita income fell to only 0.7% per year.

What industrialisation that has taken place in recent decades (beyond just basic resource and agro commodity production) in Africa is mainly due to the investment being offered and applied by China – the opposite of Smith’s model of neoliberalism, in my view.

Smith also argued that “neoliberal policies might have led to faster productivity growth in the 1990s and early 2000s” in the advanced capitalist economies.  You see “The spurt of growth is commonly attributed to the information-technology boom, but that boom might not have been possible if the US had more strictly regulated emerging industries in order to protect favored incumbents.”  This is just speculation without evidence.  Whatever “spurt” in productivity took place in the hi-tech boom of the 1990s, it was still way less than in the pre-neoliberal period of the 1950s and 1960s (see graph).

Moreover, it has been the state that has sparked much of that ‘innovation’ back in the 1960s and after, Mariana Mazzacuto, in her book, The Entrepreneurial State, explains thatthe real story behind Silicon Valley is not the story of the state getting out of the way so that risk-taking venture capitalists – and garage tinkerers – could do their thing. From the internet to nanotech, most of the fundamental advances – in both basic research but also downstream commercialisation – were funded by government, with businesses moving into the game only once the returns were in clear sight. All the radical technologies behind the iPhone were government-funded: the internet, GPS, touchscreen display, and even the voice-activated Siri personal assistant.”

Contrary to Smith’s neoliberal view, state-owned industry and economic growth often go together – “the seldom-discussed European success story is Austria, which achieved the second highest level of economic growth (after Japan) between 1945 and 1987 with the highest state-owned share of the economy in the OECD.” (Hu Chang).

Smith claims neoliberal reforms in the labour market helped to achieve lower unemployment rates in places like Germany. “Germany suffered high unemployment in the 1980s and 1990s, thanks to its rigid labour market regulations; eventually, it eased those restrictions, which substantially lowered the unemployment rate.”  Here he refers to the infamous Haartz labour reforms that introduced a tiered employment system, putting millions into low wage programmes that boosted German industry’s profitability while keeping real wage incomes stagnant.

About one quarter of the German workforce now receive a “low income” wage, using a common definition of one that is less than two-thirds of the median, which is a higher proportion than all 17 European countries, except Lithuania.  A recent Institute for Employment Research (IAB) study found wage inequality in Germany has increased since the 1990s, particularly at the bottom end of the income spectrum. The number of temporary workers in Germany has almost trebled over the past 10 years to about 822,000, according to the Federal Employment Agency.  In my view, this is not the best example of the ‘success’ of neoliberal policies, at least not for labour.

It is ironic that Smith pushes the policies of the ‘free market’ at a time when all the trends in the current neoliberal world show slowing growth in real GDP, productivity and investment, along with stagnant real wages and rising inequality.

And yet, Smith presses on with the argument for neoliberal policies to “restrain social democrats’ more ambitious impulses” and “to protect the US economy’s entrepreneurial private sector, and to make sure that technological progress and international trade don’t get forgotten.”  In other words, he  reckons that we need to balance, against the urgent need for decent public services, proper labour rights and conditions, control of the corrupt and unproductive finance sector and the avoidance of disastrous economic slumps, the fundamental (neoliberal) aim to raise the profitability of the capitalist sector.  Because we must not ‘forget’ the “contribution of markets to human well-being.”

40 Responses to “Neoliberalism: not so bad?”

  1. penelopecole2013 Says:

    Good blog Michael. I’ve a question for you, entirely unrelated! What is affecting the profitability of outsourcing companies? Is it the crushing of the public sector with austerity, such that public sector bodies are constantly seeking cheaper prices for contracts. Or is there something inherently unprofitable about delivering public services? Does the specifying of minimum wage or living wage and stable employment affect it? Of course Cuadrilla was using the sub-contractor route to driving down wages, common in construction. But what about Interserve? Capita?

  2. Rosa Lichtenstein (@RosaL100) Says:

    Michael, thanks for this, but your link to Jason Hickel’s site doesn’t work.

  3. Wal Buchenberg Says:

    I lived in China from 1985 to 1996. I am not convinced by the thesis of “reduced poverty” in China. Poverty is measured here as money income. A peasant family that has lived largely self-sufficient, is in this statistic poorer as a wage earner, who must live on a pittance.
    But this is exactly what happened in China between 1985 and 2005: millions of self-sufficient Chinese farmers were driven partly into production for the market, partly into wage dependency. This transformed independent producer-consumers without money into wage-earners whose labor is exploited, and who provided for the enormous increase in capital and wealth in China, and the peasants who remained in agriculture increased agricultural productivity.
    This corresponds to the primitive accumulation in the 17th and 18th centuries in Europe. The Chinese Communists have the merit, in my eyes, that they have organized this process largely bloodless. But they were not guided by socialist ideas and goals.
    Wal Buchenberg, Hannover

    • michael roberts Says:

      I have not ever said that China is socialist or the Chinese CP leaders are socialists. But the shift from rural peasants into exploited urban workers still transformed living standards for hundreds of millions.

      • Wal Buchenberg Says:

        Yes, that is beyond question and all Chinese people I know support this development. I do not want to talk bad about it. It is no more and no less than a catching-up development that hopefully other parts of the world (Africa in particular) still face.

    • vk Says:

      The same logic could be applied to modern capitalism: today’s homeless people in, say, San Francisco, could be self-sufficient by picking berries and hunting mammoths in the virgin forests and taigas of the neolithic disease-free (because diseases were a by-product of sedentarism) instead of scrapping for food in the dumpster. You can’t compare different systems.

      The Chinese didn’t choose to live in the capitalist world; it was imposed to them by the colonial superpowers of the 19th Century. It was only then that the Communists were born, and they worked with the objective conditions given to them. To keep being a feudal system was never an option.

      Besides, the old Chinese system suffered from periodical famines (not to say the plagues). It was not the idyllic scenario many people today paint. The self-sustaining peasant image is largely a myth.

      China is a socialist country. What many people don’t realize is that the peasant class is not a revolutionary class, but a fossil of the old feudal system, a reactionary class. They operated to crush the Russian Revolution after 1917 (because they didn’t want the collective big farms; they wanted to keep the Russian agriculture divided into millions of micro-properties where every excedent would be sold in the external market) and they were maneuvered in the Chinese case. But, if you want to implant socialism, the peasant class has to be extinct.

      • jlowrie Says:

        ”China is a socialist country.” Even Mao himself questioned that. If China is today socialist, then I guess I prefer British capitalism.

        ”What many people don’t realize is that the peasant class is not a revolutionary class, ” There is no peasant class. The peasantry itself is divided into classes. The rich peasantry owns its own land; the poor peasantry are day labourers, owning neither land nor instruments of production. If the Chinese revolution does not demonstrate to vk the revolutionary nature of the poor peasant class, then then no concrete lesson in historical materialism ever will.

        ” They operated to crush the Russian Revolution after 1917.” According to Trotsky the Red Army was the peasantry in uniform. And did he not lead it?

        ”But, if you want to implant socialism, the peasant class has to be extinct.” I suggest the metaphor of ‘implanting’ is ill-chosen. All classes have to disappear.

        Classes arise with the division into cities and countryside. To abolish such classes communism has to overcome this division. Two paths have been attempted: the Stalinist whereby the road to communism lies in turning the peasantry into proletarians, and the Maoist one whereby the peasant commune becomes industrialised, and such communes become self- reproducing as industrial- agricultural communities. ( Morris had similar views, but he was denounced as ultra-left by Eleanor Marx among others!).

        Now, the Chinese and Indian bourgeoisie certainly see the peasants as a barrier to the expansion of capital relations. They seem to be contemplating gigantic mega-cities with 50 or even 100 million inhabitants. How sustainable are they? I recall a distinguished American scientist, whose name I forget, affirming that to claim that modern cities are sustainable is an oxymoron.

        The Chinese Marxist Minqi Li presents the evidence for China in his Ch 7 ”The Unsustainability of Chinese Capitalism” ( “China and the 21st Century Crisis” 2016). He argues that there has to be a return to the countryside, but even so in the future China will be able to support a population of only 500 million. I guess he’s something of an optimist!

      • jlowrie Says:

        I think the scientist was a certain Anderson ,Professor of Physical Chemistry at Harvard, in a speech at Chicago University when receiving a prize for his work which included identifying damage to the ozone.

        Still we need not worry. One Marxist explained ” One planet but the potential to harvest resources from others.” Note the ‘harvest’ : very Green, quite idyllic!

      • vk Says:

        @ jlowrie

        And I live in Brazil (a capitalist country), and would exchange places with China in a heartbeat.

        Maybe things are (still) better in the few First World countries, but capitalism is not just the First World countries.

      • vk Says:

        @ jlowrie

        According to the Chinese themselves, China’s system is “market socialism with Chinese characteristics”. That’s not my definition, it’s what the Chinese themselves call their own system.

        You can deny the objective reality all you want, but it’s still there.

    • Magpie Says:

      The point Wal Buchenberg made about China is the same point Jason Hickel made in general, both in his Guardian piece and the one Micheal Roberts linked to above.

      From Hickel’s Guardian op-ed:

      Prior to colonisation, most people lived in subsistence economies where they enjoyed access to abundant commons – land, water, forests, livestock and robust systems of sharing and reciprocity. They had little if any money, but then they didn’t need it in order to live well – so it makes little sense to claim that they were poor. This way of life was violently destroyed by colonisers who forced people off the land and into European-owned mines, factories and plantations, where they were paid paltry wages for work they never wanted to do in the first place.
      https://www.theguardian.com/commentisfree/2019/jan/29/bill-gates-davos-global-poverty-infographic-neoliberal

      • vk Says:

        Only for some peasants. The artisan class was also living well in Europe at least. Both classes were crushed by the capitalist class in the 19th Century. Those feudal artisan served as the social base for the first socialist movement, what we now call “utopian socialists” (represented by Proudhon et al).

        There is vast documentation of periodical mass famines in China in the centuries before the republican revolution. To say late feudalism was some kind of idyllic, Romantic utopia is a falsification of History.

      • jlowrie Says:

        ”According to the Chinese themselves, China’s system is “market socialism with Chinese characteristics”. That’s not my definition, it’s what the Chinese themselves call their own system.” Which Chinese? To which class do they belong? The peasantry? The proletariat? Mr Deng’s new bourgeoisie? I would define their system as capitalism with fascist characteristics.

      • jlowrie Says:

        For an account of pre-revolutionary China cf “Ways That Are Dark: the Truth about China” by the very right wing US vice-consul in Shanghai, Ralph Townsend, published in 1933. He writes, ”It is a situation for which we have no parallel in world history: A country knee-deep in blood, every province squeezed and looted by endless succession of tyrants, millions killed and tortured and starved aimlessly from year to year ( Page 209). “”It is little wonder that infant mortality in China as computed by foreign medical workers exceeds 50% for children under five years of age alone”( P80).

        ”There is vast documentation of periodical mass famines in China in the centuries before the republican revolution.” Do you not mean the Communist Revolution? Under the Republican period mass famines counted apace with no evident increase in population from the Taiping events up until 1949, a whole century. Thereafter the population increases dramatically.

  4. Bradley Mayer Says:

    Kudos, I dislike the term “neoliberalism” as well, but for reasons of historical analysis, especially as they pertain to the United States. The US bourgeoisie was statist and protectionist, and not liberal, until after WW2 with the ascendancy of what I call AFL style “labor liberalism” that sought a level playing field for “free trade” in the commodity, labor power, rather than social democratic reform. The ideology also corresponded to the historically high wages of white American labor until the 1970s. This is the secret of why “no majority socialist movement” in the US. Since wage labor was the majority of the population by the New Deal, the resort to state intervention to level the field accorded with US bourgeois democratic norm, moreover labor liberalism promised to replace the now decayed agrarian basis of the old 19th century regime. Hence in the US case there was no “neo” to return to, and the assault unleashed at the end of the 1970s produced social conditions unprecedented in US labor history.

  5. Mike Ballard Says:

    China? Socialist? And you expect us to choose to live under the socialism you advocate? It’s just another wage system to me and my mates. Why should I choose to live with fewer civil liberties under another wage system?

    What is it with the sacrificial sanctimonious left? Isn’t the “call out culture” just another version of stoning the sinner? They’ve forgotten the wage system. In their amnesia, they’ve created a moralistic ideology similar to ones espoused by Christians, Muslims, Jews, Buddhists and so on.

    Communism is the end of treating wealth as an “accumulation of commodities”. Commodities are for sale by their owners. The social product of labour and the wealth contained in natural resources should not be seen as a thing to be bought and sold anymore than workers labour time and skills should be seen as a price fluctuating in the sea of supply and demand, regulated by exchange-value.

    • vk Says:

      I will assume you’re answering to me and posted in the wrong place.

      China’s system, according to their own definition, is “market socialism with Chinese characteristics”. That’s the official definition, not mine, but it’s one point that favors my position.

      By “market socialism”, the Chinese themselves define as the most primitive stage of socialism (I don’t have the exact quote), that is, the beginning of the transition (since socialism is a transitory system by definition, the “dictatorship of the proletariat”).

      Let’s be real: we don’t know how the real socialist system will take shape exactly. Even today’s bourgeois model of representative decmocracy was a born after centuries of experimentation (trial and error). Just one example: why we have to have exactly three powers (executive, legislative and judiciary)? Where’s the science behind it? One guy idealized it (Montesquieu), but that doesn’t mean it was the only option back then. Rome wasn’t built in one day.

      It is highly unrealistic that socialism will surge as a world revolution. That is the case because capitalism has a “combined and unequal development” style of projection: it acts in the direction of specializing different parts of the globe into a unified, giant social capital. I bet a white collar worker sees himself more akin to a capitalist (a CEO, or a high executive) than to a janitor, even when they are in the same country — let alone in different countries, where the technical division of labor is even more stark.

      What will probably happen is a series of collapses and revolution over a period of maybe a couple centuries, that future generations of historians may or may not call a “world revolution” — just like we nowadays call the “Bronze Age Collapse” a period that extended for some three centuries (and that historians stablished 1177 BC as the reference point).

      My opinion is this: if there’s one country that has the morale to claim to be not only socialist, but the spiritual successor of the USSR, it is China. I simply cannot, and will not, give reason to a residual left in the West, that has no real popular support, let alone a victory (revolution) in its name, in detriment to a party which has won a civil war and done a socialist revolution in a country with almost 1.4 billion people. That would be not only scientific dishonest, but ethically irresponsible.

    • mandm Says:

      Those who try to understand the nature of China do not advocate its social system (that is still evolving) as some kind of model for the future, but as still evolving out of a it’s revolutionary rejection of humanly intolerable imperial domination. In that sense alone it has to be supported by the “left” (including marxists) at the imperial centers, whose (“neoliberal”) ruling classes can not allow it to develop fully, either capitalistically or socialistically.

      China’s necessary attempt to achieve either line of development, therefore, has been and will remain defensive in nature (there is no room for capitalist development even among capitalists.) In my opinion, China should be supported in this struggle.

    • vk Says:

      Here’s the link to Xi’s speech at the Ceremony Commemorating the Bicentenary of the Birth of Marx. I strongly recommend to read until the end:

      http://english.qstheory.cn/2018-09/07/c_1123371913.htm

      This is not a speech by a closeted neoliberal or by a vulgar Marxist by any standards.

      • jlowrie Says:

        Well, if billionaire Mr Xi is not a vulgar Marxist or rather a phoney one, why is in this very speech does he deny the reality of class struggle? Those who do deny such a reality of course wage class struggle all the more ardently against the dispossessed and working classes.

        Only a few weeks ago was exposed the plight of university students who have been imprisoned for months( and tortured?) merely for forming a Marxist discussion group.

      • vk Says:

        Xi mentions class struggle and its importance many times in the linked speech.

        You should not practice exegesis.

  6. GrahamB Says:

    Agree with much of what Hickel says, but not the use of “minus China” as part of his analysis of global poverty. Even less so on the basis of China exceptionalism – it may not be the fully-fledged free market capitalism of Bill Gates and apologists, but a transition to capitalism nevertheless.

    • vk Says:

      I don’t deny the possibility that China may suffer a capitalist counter-revolution, I’m just saying China is not yet a capitalist country. We don’t have crystal balls, History doesn’t operate linearly.

      • jlowrie Says:

        ”I don’t deny the possibility that China may suffer a capitalist counter-revolution, I’m just saying China is not yet a capitalist country. We don’t have crystal balls, History doesn’t operate linearly.”

        It has already experienced its counter-revolution. Mr Deng virtually spelled it out for all but the most obtuse. For example he banned the playing of the Internationale, claimed Marx was out of date, and invited Milton Friedman in 1980 to China to give ”economic advice.” Remember Friedman, the advisor on matters economic to Pinochet? Do you bother to read what Chinese Marxists say? That is those not in Jail, even for the most elementary offence of reading Mao. So a long life to Chairman Pinochet from all market-socialists!

      • vk Says:

        Maybe he did all that. But, if he did, you’re certainly taking it out of historical context.

        If Deng did the counter-revolution, then why did 1989 happened? Why is Xi in power? Your narrative simply has no coherence.

      • jlowrie Says:

        ”f Deng did the counter-revolution, then why did 1989 happened? Why is Xi in power? Your narrative simply has no coherence.”

        These are non-sequiturs lacking coherence. 1989 is part of the counter-revolution. Xi is in power because he is a billionaire representing the capitalist class. If you advocate class struggle in China you go to jail; if you advocate and practise ”to get rich is glorious” you join the National people Congress!

  7. Alex Says:

    And an ethnologist would tell you that hunting-gatherers had better lives than people who were forced to do agriculture. The good life ended 10 000 BC. This thinking only ends in anarcho-primitivist fantasies.

    But doesn’t Noah Smith has a point, that it was clearly a movement toward markets and less state planning that caused China’s rise? Even if we say they are still socialist, they were even more socialist before. The direction is towards markets.

    The argument that Steve Jobs didn’t do it alone is sound, but the military-industrial complex isn’t an argument a leftist should make. And that the cold war (and Korea, Vietman, Iraq…) was necessary for technological innovation, doesn’t mean it was sufficient. Why should the military try to invent smartphones? So this is more an argument for private markets plus a strong military with lots of research facilities. Nothing Marxist about that. It only shows that a lot of real existing “socialism” was part of the war economy. The same goes for the Soviet Union.

    By the way, it’s not self-evident why Marx’ critique of capitalism should be understood as a critique of markets. The core of Marx’ critique is that in capitalism profits rule over productivity. If we could create a market which delivers high productivity and full employment even when there are no profits, capitalism in Marx’ sense is over. The enemy is not markets, but production only for positive profits. M-C-M’ has to be short-circuited.

    • vk Says:

      If it was because of the “markets”, then we have two problems:

      1) there was a huge delay. Deng’s China remained extremely poor and chaotic for almost 20 years, and almost fell in 1989 (the Celestial Square counter-revolution). China really geared up in 2001 and, more so, in 2012, between 23 and 35 years after Deng’s reforms;

      2) other countries in Asia did the same openings, without nearly the same result (the most illustrative example here being India, which did its version of opening up in the early 1990s). The only country which got similar results was Vietnam — which is also socialist. And even Vietnam did a more aggresive opening up and is now showing clear signals it will fall to the “middle income trap” (without the middle income part) — a typical capitalist feature for emerging countries (e.g. Brazil).

      Only China has been showing a capacity to avoid typical traps of capitalist development, combining GDP growth, per capita income growth and geopolitical projection growth. Other capitalist countries had to give up at least one (e.g. the G7 minus the USA, which had to be content with being vassals of the Americans) or all of them (basically, all the countries in the world that are not “emerging” or from the “First World”).

      To give a concrete example: in nine months (August 2016 – June 2017), usurper president Michel Temer easily destroyed all the gains from 13 years of Workers’ Party rule in Brazil. Most of Brazil’s social indicators are back to at least 2009 levels best case scenario; many workers’ rights from the 1930’s (!!) were eliminated, and the country is back to FAO’s World Hunger Map (with more than 4.4 million Brazilians back to extreme poverty). All of that in a space of less than two years.

      So, I’ve always said: if you can’t and don’t know how to do better, sit, listen and learn. The Chinese are the best option available since the fall of the USSR.

      • Anti-Capital Says:

        “The Chinese are the best option available since the fall of the USSR.”

        Perfect. Says it all. China is the best gravedigger of revolution since the fall of the previous number 1 gravedigger of revolutions.

        Yes, there are numerous strikes, job actions, and actions off the job, pertaining to unpaid wages, expropriation of people’s living quarters etc. etc. in China.

        And it isn’t a question if I or J or any individual can do better, it’s a question of can the CLASS do better. If the working class cannot, then capitalism certainly has nothing to fear from the “Chinese model.”

        Xi calls it “market socialism with Chinese characteristics”? Well, that settles it then. And the US is a democracy, grits ain’t groceries and Mona Lisa was a man, to quote the old song.

        With socialism like that, the counterrevolution is already two legs up.

      • Alex Says:

        Interesting.
        I didn’t meant to say markets alone explain Chinas rise. Only that China was clearly more socialist in the past (if you measure socialisms by state ownership). So the trend is towards markets.

        Countries which avoided the middle income trap (I’m thinking of Japan, then South Korea…) had lot of state planning. But their protectionism didn’t try to keep traditional sectors alive, but enabled their own companies to compete with developed countries. High investments especially in education seems to be key. One could argue that the developed countries were in middle income traps throughout the 1930s and only heavy interventionist policies enabled through ww2 aloud them to escape.

  8. Wal Buchenberg Says:

    The issue here is the poverty development over the past 30 years and the question of what it means that 800m Chinese have been taken above the poverty threshold.
    Who comes with comparisons that refer to 1930 or even to the 19th century, disqualify themselves for any scientific discussion. The living conditions of 120 years ago do not matter to us and to today’s generations. And for the improvements that have occurred over these 120 years we cannot praise today’s capitalists or today’s communists.

  9. jlowrie Says:

    ”So, I’ve always said: if you can’t and don’t know how to do better, sit, listen and learn. The Chinese are the best option available since the fall of the USSR.”

    Are you acquainted with China’s fresh water predicament? Do you really believe that industrial capitalist agriculture represents a sustainable future for China and India? Start with Minqi Li. Unlike plutocrat Xi he is a genuine Marxist!

    • vk Says:

      Minqi Li has a right to his opinion, but he’s not the owner of Marxism.

      I disagree with his general view. In fact, I find it funny: he claims China is capitalist because there are a lot of labor strikes annually. But other Chinese “intellectuals” claim China is a communist “dictatorship” because there are no strikes! So, are there strikes in China or not?

      I mean, at least those experts should decide among themselves first.

      • jlowrie Says:

        ”’ find it funny: he claims China is capitalist because there are a lot of labor strikes annually.”

        Socialists should read Minqi Li’s books and see if this is other than a travesty of his arguments.

        ”China’s ecologically sustainable maximum amount of fresh water runoff that is available is about 500 cubic metres. China’s current total water use is about 620 cubic metres. in terms of fresh water supply China has already overshot the the ecological systems’ regenerative capacity by a significant margin” (op/ cit. p 181). Has vk any counter-evidence?

        The general lines of his assertions remind me of those old supporters of Soviet Socialism that denied any possibility of the restoration of capitalism in Russia.

  10. jlowrie Says:

    ”India’s Agrarian Crisis: Dismantling ‘Development’”
    Colin Todhunter in today’s Off Guardian. China is allowing peasants to lease their land to capitalist industrial agriculture conglomerates, though who will guarantee the agricultural bit. Agricultural land in China is not only being degraded, it is disappearing! Still as with Brazil, when the water runs out let them drink coke! !00 litres of fresh water to make a litre of coke. Nothing illustrates more tragically the pernicious effect of market prices in determining the use of natural resources. If China represents the future, then that future is the extinction of humanity. I recall back in 2011 I met a group of Chinese girl students studying English at the university (Wordsworth and T S Eliot !). Already in discussion with them I learned that they did not contemplate enjoying the full span of their natural existence. Deng’s pact with capitalism is Faustian one! I can only repeat Marx, who said something to the effect ”Thank God I shall not be around to see it.”

    • vk Says:

      In this we agree: India is a symbol of capitalism failure.

      And all the accusations against China’s agriculture in the article, your comment and in the comments of the article are unadultered lies. There’s no other way to put it. There are no more different nations than China and India.

  11. jlowrie Says:

    Todhunter’s article can also be found on Global Research.

  12. jlowrie Says:

    ”England is set to run short of water within 25 years, the chief executive of the Environment Agency has warned.” What hope for China and India? Need to make ‘extinct’ all those thirsty peasants!

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