Views on China

The Chinese Communist party’s central committee recently held its sixth plenum, to discuss “the major achievements and historical experience” of the party in its 100-year-history, as well as to consider policy “for the future.”  Just after this, Jamie Dimon, the JPMorgan Chase chief executive, joked that the Wall Street Bank would outlast the Chinese Communist party. “I made a joke the other day that the Communist party is celebrating its 100th year. So is JPMorgan. I’ll make a bet that we last longer,” he said, speaking at the Boston College Chief Executives Club, a business forum.

What is the experience and future for China and its Communist party rule?  It seems appropriate to consider a number of new books on China that have been published that try to answer this question.

Let us start with Isabelle Weber’s, How China escaped shock therapy.  This has had a wide and significant impact in academic leftist circles, endorsed as it is by Branco Milanovic, the leading global inequality expert and also author of a recent book, Capitalism Alone, in which he argues that socialism can never happen and the choice for human social organisation for the foreseeable future is between ‘liberal democratic’ capitalism (the US and the ‘West’) or ‘political capitalism’ of an autocratic state (China, Russia).

Weber’s book is an account of how and why China did not go down the road of restoring capitalism through the ‘shock therapy’ of privatisation and the dismantling of state control as Russia did in the early 1990s.  Instead, according to Weber, China’s leaders under Deng in the late 1970s debated what direction to take and opted for a gradual opening-up of the planned state-owned economy to capitalism, partly through privatisation but mainly through foreign investment.

Weber argues that the ‘gradual marketization’ of the Chinese economy facilitated China’s economic ascent but without leading to ‘wholesale assimilation’ to capitalism. The decision of the Chinese leaders for a gradual move to capitalism was anything but a foregone conclusion or a “natural” choice predetermined by Chinese exceptionalism, Weber claims. In the first decade of “reform and opening up” under Deng Xiaoping (1978– 1988), China’s mode of marketization was carved out in a fierce debate. Some argued for shock therapy-style liberalization while others preferred gradual marketization beginning at the margins of the economic system.  Indeed, on at least two occasions, Deng opted for a “big bang” in price reform, but stepped back from the brink.

From the 1980s, the influence of the dominance of neoclassical economics in the West, both in universities and in government set in motion the process of China’s marketization. Those Chinese economists who favoured a gradual dual economy development were replaced by economists with neo-classical market zeal. But the neoclassical policy of allowing the market to set prices led to increased inflation and eventually the Tiananmen Square protests, the ensuing military crackdown and the imprisonment of Zhao, then General Secretary of the CCP.  Even so, according the Weber, throughout the 1990s, the economics profession in China continued to align with the international neoclassical mainstream.  Neoliberal reformers made deep inroads in the arenas of ownership (selling or liquidating state enterprises), deregulating the labour market and the healthcare system (partly privatised) – things that I think have come back to haunt China’s leaders now, forcing them to advocate under Xi a new turn towards ‘common prosperity’.

However, Weber reckons that the core of the Chinese economic system was never destroyed in one big bang. Instead, it was ‘fundamentally transformed’ (?) by means of a dynamic of growth and globalization under the activist guidance of the state.  In October 1992, Deng Xiaoping made the formal decision to establish a ‘Socialist Market Economy with Chinese Characteristics.’  This formulation was a hybrid concoction which Jiang Zemin, explained as “whether the emphasis was on planning or on market regulation was not the essential distinction between socialism and capitalism. This brilliant thesis has helped free us from the restrictive notion that the planned economy and the market economy belong to basically different social systems, thus bringing about a great breakthrough in our understanding of the relation between planning and market regulation.”  Market socialism was born.

Under Zemin, China moved further towards a capitalist market economy.  Weber says that the Chinese leadership of the 1990s “was willing to shatter all remaining boundaries to the operation of market forces, in the name of economic progress.” Controls over essential consumer and producer goods were now dismantled step-by-step. However, the impact of this “big bang” was far smaller than it would have been a few years earlier. By 1992, “the liberalization effort was akin to jumping off a low-standing rock at the base of a mountain from which one has just descended” (Weber). Weber argues that the state maintained its control over the “commanding heights” of China’s economy as it switched from direct planning to indirect regulation through the state’s participation in the market. “China grew into global capitalism without losing control over its domestic economy.”

Weber’s book is insightful in showing the debates on policy among the CP leaders about what direction to go and the factors that dominated their thoughts.  However, Weber appears to do so from the viewpoint that China was capitalist at least from the point of Deng’s leadership and all the debates after were about how far to go – whether to go for ‘shock therapy’ or moderate moves towards ‘more capitalism’. Weber appears ambiguous on the economic foundation of the Chinese state.  For her, China ‘grew into global capitalism’ but still “maintained its control over the commanding heights”. What does that mean for the future?

In sharp contrast, there is no ambiguity from John Ross, in his new book, China’s Great Road. Ross is Senior Fellow at Chongyang Institute for Financial Studies, Renmin University of China and writes profusely in defence of China and its economic model as he sees it.  Ross provides the reader with a wealth of data on China’s unprecedented economic success, taking over 900m out of poverty (as defined by the World Bank) and outstripping every other economy in output and wage growth over the last 30 years. 

Ross’ view of the Chinese model of development, ‘socialism with Chinese characteristics’, is in reality a ‘radical version’ of Keynesianism. But it is different to Keynesian policies in the US and Europe, where budget deficits have been utilised, low central bank interest rates have been pursued and some forms of quantitative easing, driving down long-term interest rates through central bank purchases of debt have been applied. “In China, in contrast, relatively limited budget deficits have been combined with low interest rates, a state-owned banking system and a huge state investment programme. While the West’s economic recovery programme has been timid, China has pursued full blooded policies of the type recognisable from Keynes General Theory as well as its own ‘socialism with Chinese characteristics”.

Ross argues that it was Deng’s lack of ideology or commitment to either a market or state-led economic model that was the reason for China’s economic success.  (Deng: “I don’t care if the cat is black or white, so long as it catches mice.”). Ross says: “Because in the US and Europe, of course, it is held that the colour of the cat matters very much. Only the private sector coloured cat is good, the state sector coloured cat is bad. Therefore, even if the private sector cat is catching insufficient mice (ie the economy is in severe recession), the state sector cat must not be used to catch them. In China, both cats have been let loose – and therefore far more mice are caught.”  So Ross seems to accept Deng’s view that the planning mechanism and public ownership were not vital to China’s success and the market could and can do as well, if not better, in developing China’s economy.  Ross asserts: “A systematic comparison of Marx’s concepts with those of the post-1929 Soviet Union makes it entirely clear that post-Deng policies in China under reform and opening up were far more in line with Marx’s than were the USSR’s”.  

But is it really the case that opening up the economy to a capitalist sector and foreign investment, while necessary for China’s economic development from the 1980s, has no serious contradictions and consequences for China’s ‘socialism’?  That’s not how Lenin saw it when he reluctantly opted for the New Economic Policy (NEP) in 1921 in Russia in order to restore agricultural production after a world war and a civil war.  For Lenin, NEP was a necessary step back in the transition to socialism forced on the Soviet Union by the wars and the failure of other revolutions in Europe.  Russia was on its own.  With NEP Lenin put it this way: “You will have capitalists beside you, including foreign capitalists, concessionaires and leaseholders. They will squeeze profits out of you amounting to hundreds per cent; they will enrich themselves, operating alongside of you. Let them. Meanwhile you will learn from them the business of running the economy, and only when you do that will you be able to build up a communist republic.”

Lenin called the NEP ‘state capitalism’, not ‘socialism with any special characteristics’. China’s ‘long NEP’ as described by Weber is not a fulfilment of Marx’s teachings, as Ross claims, taking China gradually towards ‘socialism’; but in reality, it was a forced step back to capitalism.  Lenin in 1921 posed the contradiction for Russia that Ross ignores for China now: “We must face this issue squarely—who will come out on top? Either the capitalists succeed in organising first—in which case they will drive out the Communists and that will be the end of it. Or the proletarian state power, with the support of the peasantry, will prove capable of keeping a proper rein on those gentlemen, the capitalists, so as to direct capitalism along state channels and to create a capitalism that will be subordinate to the state and serve the state.”

Ross unfortunately goes close to echoing the views of that anti-socialist socialist, the recently deceased Hungarian economist Janos Kornai, widely acclaimed in mainstream economic circles.  Kornai argued that China’s economic success was only possible because it abandoned central planning and state dominance and moved to capitalism. According to Kornai, democracy (undefined) can only exist under capitalism as socialism is restricted to dictatorial and autocratic forms: “democratic socialism is impossible”.

Combining public ownership of the commanding heights, indicative planning and a large capitalist sector with market prices has taken China forward, but it has also increased the contradiction between the law of value and the market and planning for social need.  In my view, this is the key contradiction in all ‘transitional’ economies and also within the Chinese economy.  But Ross seems to argue that the combination of markets and planning as the way forward to a ‘socialist China’ has no contradictions. He quotes Xi: ‘we need to make good use of both the invisible hand and the visible hand’. China can and will, because of its economic structure, use both the ‘invisible hand’ of the market and ‘visible hand’ of the state.” But can Deng’s private sector cat and the state sector cat live together in harmony for the foreseeable future or will the contradictions inherent in this combination increase and intensify? – the current crisis in the post-COVID Chinese economy suggests the latter.

Ross recognises that “inequality in China, as is admitted domestically, has risen to levels which are excessive, and need to be corrected,” but he does not explain why there is such inequality and how it may be reduced.  Yes, there have been periodic crackdowns on corrupt party functionaries and the excesses of private capitalists (Jack Ma, for example). But the Chinese leaders continue to oppose any sort of independent action by workers and strikes remain illegal, although in many cases, this prohibition is not strictly enforced.

Ross reckons China’s economic success is based on ‘socialism’ Keynesian-style: “reform and opening up, and socialism with Chinese characteristics, can be easily understood within the framework of Keynes.”, referring to Keynes concept of the ‘socialisation of investment’.  “China’s economy is not being regulated via administrative means but by general macro-economic control of investment—as Keynes advocated.” 

But this is a distortion of both Keynes and China.  Keynes’ socialisation of investment’ never involved massive public ownership of the commanding heights of an economy – he was strongly opposed to that.  And China’s economic success is based primarily on state-owned and led investment not on Keynesian ‘macro management’ of credit and fiscal measures as in capitalist economies.  Ross’ explanation of China’s economic success implies that capitalist ‘macro management’ can work – when it has clearly failed in the advanced capitalist economies. 

This is not a Marxist view of China. A Marxist model of China’s economy should not start by looking at the rate of savings or investment in an economy. Marxist theory starts from the law of value. China’s success is because the law of value which operates in capitalist markets, foreign trade and investment was at first totally blocked and later controlled by a large state-owned sector, central planning and macro policy, as well as by restricted foreign ownership of new industries and controls on the flow of capital in and out of the country. The Keynesian analysis misses a key ingredient and contradiction of economic development, the productivity of labour versus the profitability of capital. 

The Marxist model argues that the level of productivity will decide economic growth because it reduces the cost of production and enables a developing nation to compete in world markets. But in a capitalist economy where the law of value and markets operate, there is a contradiction: profitability. In the Marxist model, there is a long-term inverse relationship between productivity and profitability. Profitability comes into conflict with productivity growth in a capitalist economy and so will result in regular occurrences of crises in production. A developing economy needs to restrict this conflict to a minimum.

In so far as China’s private capitalist sector increases its contribution to the overall economy and the public sector’s role is reduced, then the profitability in the overall economy becomes relatively more important and the contradiction between productivity growth and profitability intensifies. Both the neoclassical and Keynesian models of development ignore this contradiction.

Richard Smith is his new book definitely does not miss the contradictions in a transitional economy with the contradictory forces of planning and the market in play.  He considers China is a “bureaucratic hybrid”, neither capitalist nor a ‘command’ economy.  China’s rulers preside over the largest and most dynamic economy in the world, a powerhouse of international trade whose state-owned conglomerates count among the largest companies in the world. They profit immensely from their state-owned enterprises (SOEs) market returns. But they’re not capitalists, at least not with respect to the state-owned economy. Communist Party members don’t own individual SOEs or shares in state companies like private investors. They collectively own the state which owns most of the economy. They’re bureaucratic collectivists who run a largely state-planned economy that also produces extensively for market. But producing for the market is not the same thing as capitalism.

But Smith concentrates his fire on the failure of the Chinese government to handle the continued rise in carbon emissions and environmental degradation that China’s economic expansion has generated.  Both capitalist and state-owned enterprises continually ignore or flout climate and ecological directives and Xi accepts this because otherwise economic growth will slow and unemployment increase and undermine Xi’s drive industrial self-sufficiency in the face of the attempts of imperialism to isolate and strangle China.

Smith argues that there is just no way that Xi can “peak China’s emissions before 2030 and achieve carbon neutrality before 2060” while also maximizing growth. He can “pursue development at the expense of protection” or he can “transition to green and low-carbon development… [and] take the minimum steps to protect the Earth, our shared homeland.” He can’t do both. Actually, what Smith shows is that no one country can deliver on controlling emissions and avoiding climate disaster – by definition this is a global existential threat. 

The countries of the global south are not the historical polluters of the world. That honour falls to the imperialist countries that industrialised from the 19th century onwards and continue to shift the generation of emissions to the periphery by consuming the manufacturing and resource commodities produced in the likes of China, East Asia, India, Latin America and Russia.  These countries need help to reduce emissions and stop destroying nature as they seek to ‘catch up’ with the global North.  That help won’t come as long as imperialism continues.  Rather than coordinate with China to deal with climate change, the ‘international community’ is aiming to ‘contain’ and isolate China globally.

92 thoughts on “Views on China

  1. I belive their are two decisive factors for understanding China today. First I believe its economy, no matter how much is state owned (it is less than in fascist Italy under Mussolini), functions centered on guarranteeing the profit rate of capitalists. This makes it a capitalist state. The regression from a burocratic state to a capitalist state was attained through a conterrevolution that was international in nature (including the return to capitalism in the USSR and all other burocratic workers states). It started in China with Deng and acquired greater impulse with the defeat of the Tienanmen ressistance movement.
    The second factor is the pressence of the Chinese Communist Party as the center of the regime. In historical terms its role can be compared (not equated) with that of the absolutist states (Perry Anderson) in the beggining of capitalism. Though the absolutist states were the last expression of feudalism, they promoted the expansion of the capitalist economy in Europe both through the privatization of agriculture and land, turning feudal landlords into capitalist owners of the land, and in the international expansion of capitalism. The stalinist-capitalist government of China has had great success in developing the capitalist economy and China as a new international power, having a comparable role to absolutist states of the past in the present era of capitalist imperialism. There are other examples of stalinist-capitalist governments in Cuba and North Corea, though as we know with very different results.
    The contradictions that appear between the capitalist structure of the country and the pressence of the Communist Party in the super structure are of a secondary nature. The country is capitalist as a whole and the Communist Party with all its contradictions is clearly assimilated. There is no fraction of the bureaucracy calling for a return to “socialism”.

  2. An observation on the connections brween intra class struggle and between inter class struggle. Soon after the society reopened, with localised lockdowns, logistics drivers have been at the center of wage and productivity strikes and resistance, so much so that one driver who ‘collated’ strikes and disputes was arrested. His arrest will have no impact on the pattern of struggle. Coincidentally, or because of, the central government announced a rise per parcel delivered. I read a recent China Labour Bulletin report that this rise has gone to the bosses instead of the drivers. This will promote more struggle.

    On Sun, 28 Nov 2021, 12:30 Michael Roberts Blog, wrote:

    > michael roberts posted: ” The Chinese Communist party’s central committee > recently held its sixth plenum, to discuss “the major achievements and > historical experience” of the party in its 100-year-history, as well as to > consider policy “for the future.” Just after this, Jamie Di” >

    1. To be precise, i argued in my book that China’s economy is a hybrid bureaucratic collectivist-capitalism. It’s hybrid in two senses. First, in terms of ownership and share of the GDP, the bureaucratic collectivist economy established by Mao and modeled on Stalin’s soviet economy — viz. the state-owned state-planned share of the economy– still accounts for well over half of industrial and agricultural ownership and output. State-owned enterprises (SOEs) dominate the entire economy. The foreign-invested mostly export oriented Special Economic Zone (SEZs) account for about 30% of GDP, and the free market share which includes small businesses, self–employed, and large firms such as Alibaba, accounts for the rest, something under 20% of the GDP. (See my evidence and citations for this claim in chapter 5 of my book). So China’s is a hybrid tripartite economy in which the state sector is overwhelmingly dominant and the private sector, never large to begin, continues to shrink under Xi Jinping’s relentless crackdown. In my article “Why China isn’t capitalist (despite the pink Ferraris),” Spectre, https://spectrejournal.com/why-china-isnt-capitalist-despite-the-pink-ferraris/?fbclid=IwAR1xcmYEteEX2eDhZKGLzCPxc5FBWeP0_fsXwR6kfWQyOU9QLIyq9c1hLC0, I described how China’s leaders from Deng Xiaoping to Xi Jinping have been concerned to use capitalism to their advantage but to keep it confined “as a bird in a cage” in chief planner Chen Tun’s words.

      it is hybrid in the sense that many SOEs produce not only for plan but also produce for the market on the side. As part of his “reform and opening” Deng Xiaoping cut a deal with the nominal “owners” of most SOEs in which he gave them what were then called the “8 rights” including the right to hire and fire, and the right to sell both over-plan output on the new free markets and also to develop new products to market outside the plan. Thus the “socialist-market” economy. These reforms were key to China’s industrial takeoff.

      Hope this helps to somewhat clarify China’s extraordinarily complex economy.

      1. “To be precise, i argued in my book that China’s economy is a hybrid bureaucratic collectivist-capitalism.”

        When you use the term “bureaucratic collectivist,” do you mean that there is a unique class of “bureaucratic collectivists” that have ownership of the means of production?

        “It’s hybrid in two senses. First, in terms of ownership and share of the GDP, the bureaucratic collectivist economy established by Mao and modeled on Stalin’s soviet economy — viz. the state-owned state-planned share of the economy– still accounts for well over half of industrial and agricultural ownership and output. State-owned enterprises (SOEs) dominate the entire economy. The foreign-invested mostly export oriented Special Economic Zone (SEZs) account for about 30% of GDP, and the free market share which includes small businesses, self–employed, and large firms such as Alibaba, accounts for the rest, something under 20% of the GDP. (See my evidence and citations for this claim in chapter 5 of my book). So China’s is a hybrid tripartite economy in which the state sector is overwhelmingly dominant and the private sector, never large to begin, continues to shrink under Xi Jinping’s relentless crackdown.”

        China may have a hybrid mode of production, but I think you make a mistake when you exclude, or omit, the ” foreign-invested mostly export oriented” sector from the private sector, particularly in the class relations that sector expresses and reproduces.

      2. Mr. Smith’s argument FOR China as a “bureaucratic-collectivist capitalist hybrid state” doesn’t quite make the case in that a) he argues that China does not have a system of generalized commodity production b) labor-power itself isn’t a generalized commodity because China has areas, sectors, moments where unfree labor, compulsory labor is the mode of aggrandizement c) he fails to explain the dominant mode of production unique to a bureaucratic collectivist capitalist hybrid state, and how that state has a different condition of labor, a different organization of labor that dominates social relations.

        Regarding a)– this issue needs to be quantified as well as qualified. Personal consumption in China, has declined from about 70% of GDP pre Deng’s reforms to about 55% today. However, if we include the contribution of the export sector, this “market-driven” portion of GDP has dramatically expanded.

        Item (b) is just pure formalism. We might as well argue that the US wasn’t capitalist not just pre, but post Civil War, given the persistence of unfree labor (masked as prison labor, share cropping, tenant farming, etc) in the US South– not to mention, which I will now mention, the reliance of major machine producers in the North (McCormick Harvesting Machine for one, with its reliance on impressed labor on hemp plantations in Yucatan for the twine so necessary to the functioning of its machines) on product of unfree labor. Or perhaps Britain wasn’t thoroughly capitalist given its reliance slave produced cotton. Generalized commodity production? How do we account for cotton production, consistently the product of unfree labor? The answer of course is that the inability, obstacles, limitations to “generalized commodity production” are immanent, intrinsic to capitalism itself; intrinsic to the boundaries of capitalist property, which accommodates, absorbs, while undermining the “non”- or “pre” capitalist forms.

        The discussions of state vs. private sectors; planning vs. the market are necessary, but not sufficient. The issue isn’t right now if China is capitalist or “transitional.” The issue is what social relations of production, what type of condition of labor is being quickened by the economic forces unleashed over the past 40 years. Clearly the answer to that, regardless of Xi’s “clampdowns” “restrictions,” represent shifts, swings, and not fundamental changes to the expanding condition of labor as wage-labor, as a commodity to be exchanged for the value of, or a value equivalent to the value of the means of subsistence.

      3. The discussions of state vs. private sectors; planning vs. the market are necessary, but not sufficient. The issue isn’t right now if China is capitalist or “transitional.” The issue is what social relations of production, what type of condition of labor is being quickened by the economic forces unleashed over the past 40 years. Clearly the answer to that, regardless of Xi’s “clampdowns” “restrictions,” represent shifts, swings, and not fundamental changes to the expanding condition of labor as wage-labor, as a commodity to be exchanged for the value of, or a value equivalent to the value of the means of subsistence” Very succinct! I agree entirely. Surely the point of departure in any Marxist analysis should be the dominant relations of production? And has not the trajectory of Chinese economic development post-Mao been that of the expanding dominance of wage labour? The abolition of the workers’ iron rice bowl, the decollectivisation of the commune, then the commodification of the instruments of production and next the privatisation of land and the plan for a wholesale exodus of surplus peasants into the cities to make way for industrial, capitalist agriculture. The ruling ideology seems to see the peasant as a relic of backwardness. Has not South Korea mostly got rid of its peasants and look how advanced it is? But it also imports 70% of its food! Maybe China can do the same? Not for the first time I quote the thesis of the Canadian scientist Dr William Rees, who helped create the ecological footprint analysis: modern cities are entropic blackholes and sustainable modern cities an oxymoron!

  3. Very fruitful post. A lot of points of discussion.

    First, a clarification of methodology is required, because Ms. Weber makes this mistake in her book: the economist class is not as powerful in China as they are in the West (where it essentially serves a clerical role in capitalist society). Yes, there are a lot of dyed-in-the-wool neoliberal economists occupying high offices in China – but they’re not as influential as their counterparts in the West. Weber’s “enigma”, with which she builds up tension in her book, is solved by this simple consideration of Chinese society.

    Second, I think it is a scientific mistake trying to compare NEP (State Capitalism) with Deng Xiaoping’s “reform and opening up”. The comparison is irresistible for a non-historian and even some historians, but it is completely wrong from a historical viewpoint. NEP never extended to industry, only to agriculture and commerce, and it happened in a context where the proletarian-socialist republic was already established. Most importantly, the NEP collapsed quickly (1923-1928), under its own inner contradictions. “Reform and Opening Up” arose from a late and critical stage of the very important debate in Comintern about the historical tasks of the abstraction of “bourgeois-democratic revolution” in the colonial countries. Long story short, they don’t even have the same starting points, they’re completely different types of reform. It’s textbook “comparing apples to oranges”, and it’s astonishing many Marxists in the West still insist on this scientifically debunked absurdity. This debate, so far as I know (unless one resorts to the very few “Westernized” Chinese Marxists), doesn’t exist in China – that’s not a dilemma at all.

    Indeed, the reform that most resembles the NEP is not “Reform and Opening Up” but nothing more, nothing less than the events that culminated in the now infamous Great Leap Forward, which was the era where the CPC really and honestly tried to make and alliance with the national (local) bourgeoisie in order to enforce the Comintern’s “bourgeois-democratic revolution” to the recipe. One cannot think about the turbulent times that led to Deng’s ascension without the collapse of the “bourgeois-democratic revolution” doctrine of the Comintern, applied in China at the final period of Mao’s leadership.

    Third, there’s this very interesting quote by Jiang Zemin: “Whether the emphasis was on planning or on market regulation was not the essential distinction between socialism and capitalism.”

    Jiang Zemin is absolutely correct in this affirmation. Take Black Friday as an example: it is a sell off on a general scale. Commerce around the West come to a consensus to get rid of their old inventories at the same date (the Friday after Thanksgiving, which always falls in a Thursday). This is central planning. The fact that it is covered with fetish doesn’t change that cold, objective economic fact. Everything you consume and think in capitalism is decided by a team of bureaucrats: the difference is that those bureaucrats are corporate executives doing brainstorm behind closed doors, without any transparency, which gives the worker the illusion of free will and anarchism, while in socialism it is “in your face”, decided by State decree. Again, from the economic point of view, the fact is the same (central planning exists in both capitalism and socialism) – the only difference being capitalism has the resource of fetishism of the commodity and reification as an effective propaganda device to control the masses, while, in socialism, this whole relation happens in its most crude form.

    Central planning is not the determining factor of socialism or capitalism, as it exists in both. The difference is the metabolic factor that regulates them: profit rates rules planning in capitalism, while, in socialism, it is the productivity of labor. In this sense, the question of legality of workers strike (which do happen in China all the time either way in high numbers even by Western European standards) is immaterial, because, as long as the CPC enforces rising labor productivity (robots, automation), the interests of the working class are – from a historical viewpoint – satisfied. The historical role of the proletariat is not to satisfy the unionist agenda (“minimum program”) or pursue the post-war liberal concept of “happiness” – but to develop the productive forces to a level where humanity exerts almost absolute domination over nature, i.e. where human destiny if fully humanly controlled.

    1. If collective human consciousness is (in Engel’s description) “nature conscious of itself” then the idea that human beings should seek “absolute domination over nature” is a self contradiction. You’ve created a dychotomy (an ideological rift so to speak) between material and thinking beings, not a synthesis. This approach is not dialectic but mechanical and bourgeois: technical solutions for everything. Such (profit seeking) mastery over nature has led to environmental and social collapse …which China (alone in the world) seems to be making some effort to address…

    2. Except Zuyao Yu and many of the early political economists in the Deng era evoked the NEP constantly. Yu’s pivotal 1979 paper at the CASS was extremely clear that it would be the model for a “rewind” from the intermediate stage to the primary stage and that the market was “not a scourge”. I don’t blame people for not reading these documents but there is enough scholarly work in English at this point that if you want to know, all you have to do is seek the information.

      1. Inspirations abounded and still abound in the CPC. A lot of ideas were ventilated during that era (as Weber’s book itself points out). If we took those debates too seriously, we would have to consider the equal possibility of China becoming a neoliberal country, as per Weber’s hypothesis. So, we have this situation where China was, at the same time, as near neoliberalism as it was from NEP, which is an extraordinary hypothesis that would require extraordinary evidence (it would require demonstration by overwhelming evidence, which, on its part, would require access to the CPC’s archives, which, even if possible, would easily take the whole lifetimes of many historians to be tested).

        Reform and Opening Up turned out to be completely different from NEP. I will not point all the differences because this is not the place, but, outside the conceptual level (“retreat”), they were completely different plans for two completely different realities.

        You could, at most, consider the NEP as a proto-Reform and Opening Up. But the USSR was already fully embargoed by the imperialist powers at that point, and the result was the infamous “scissors crises” (an endless cycle of self-exploitation between city and countryside, with virtually zero FDI). It was a completely different scenario.

        Those kinds of debates that, in hindsight, look like turning points in History, generally fascinates non-historians (and non-Marxist historians), but reality was much more prosaic: Deng Xiaoping was a politician after all, and he had to consolidate his victory over the “Gang of Four”; ultimately, he had to find some kind of middle of the road solution not to, at the same time, rock the boat and guarantee the survival of the victorious Revolution. That’s why his most famous quote in China is not the cat one, but the river crossing one.

        The fact that Deng Xiaoping had to find a middle of the road solution, at the same time, proves that Mao’s era was not an economic failure many in the West claim it was. And this is widely accepted in China, even by the sources that should be hostile to him (i.e. the descendants of the victims of the Cultural Revolution, Xi Jinping included). All the data indicate that Mao’s era was, overall, a success. Also, there’s the public and notorious fact that Deng Xiaoping is (correctly) called a reformer, not a revolutionary, in the context of his 1978-9 policies. The Chinese consider Deng a continuation, not a break, of the Mao era. The CPC frequently lauds itself in official documents of its capacity for self-reform, which it considers one of the crucial factors for its survival.

    3. “Central planning is not the determining factor of socialism or capitalism, as it exists in both. The difference is the metabolic factor that regulates them: profit rates rules planning in capitalism, while, in socialism, it is the productivity of labor.”

      I think this is a point more people need to take seriously. I’ve tried to allude to that in my previous long comment in a previous post, probably not successfully. Planning and market relations can go together, the difference again is what class holds the levers of power. Alienation was always a blurry and ambiguous definition in early Marx until he attempted a more concrete analysis of (capitalist) alienation in Ch.3 Vol I. I am talking about fetishism of course. This is regarded by most Marxists as something “bad”. It is not bad, and it is not good. It is a necessary aftereffect of (economies of) scale and the limitation of technical infrastructure to properly account for labor time expenditure. Moreover, “alienation” will necessarily exist in any community where the population exceeds a certain number. You simply can’t have people living in a city of millions doing their intellectual/scientific work in the morning, go fishing and hunting in the afternoon and critique at night. It is physically impossible because, and I am being purposefully pedantic here, hunting and fishing grounds (even agriculture) have definite(finite) spatial constraints that will eventually reinforce themselves. In essence, division of labor is a necessity and, yes, leads to a certain kind of alienation because “some” will have to be “concerned” with producing food for the rest, whether this is a state directive(“socialist”) or done using an indirection (labor market + reserve army of labor, law of value). In both cases you are producing for someone else, not for you. And I would go on and say that even this indirection (reserve army + capitalist labor market) is a very good (bourgeois) plan to enforce discipline, consent and compliance in a huge community of producers/consumers. Very good not in the sense that I “agree” with it, but effective. State directives, even if they can be more rational and more precise, they don’t fit well with the human phycological ecology encountered in “normal” civil society. You need additional tools for humans to sustain direct command and control for longer periods in large scale networks. The military, which is such an organism, does it through nationalism and fear of the enemy and it is no wonder that some “socialists” turned to war efforts to find inspiration for a potential realistic socialist system. The capitalist class uses similar tricks to condition the public in the civil society sphere, through the marketing science (it is a science). You need a different type of planning, with its own indirections (effective ways of alienation if you will) that will serve the working class.

      1. «Planning and market relations can go together, the difference again is what class holds the levers of power.»

        Even “The Economist” wrote that the internal politics and economics of megacorporations is essentially soviet, with soviet-style planning, echoing in effect a long standing thesis by J.K. Galbraith. Also separately “The Economist” defined “soviet” as “run for the benefit of management” and that applies so very much to most megacorporations, especially in Wall Street and the City.

        Of course it applies also to many chinese megacorporations, whether “state” or “private”.

  4. Michael, you say “They collectively own the state which owns most of the economy.” However, researchers say the opposite. “PRC economy specialist Professor Nicholas Lardy found that the public sector accounted for 11 percent of urban employment in 2016.[3] Data from the PRC National Bureau of Statistics shows the public sector, which includes SOEs, accounted for 13 percent of urban employment in 2018.” So the state sector dominates by employing only one in seven workers, and even less now. The only thing that dominates China is the law of value which is why the growth rate in investment fell from 25% to close to 0% in 2019 because the rate of profit collapsed after 2013. Xi should be nominated Firefighter for Life rather than President, because that is all the CCP is doing as it is buffeted here and there by market forces.

    As for the difference between the Russian Big Bang and the Chinese sideways privatisation, think working class. The Russian working class dominated Russian society by its weight, the Chinese working class did not. The Chinese aspirants could take their time privatising the economy the Russian aspirants could not. In Russia they needed to politically concuss their working class, get it over with before workers could look back, make it irreversible.

    In terms of the CCP tightening its grip on the commanding heights of the economy, think war economy. Nothing to do with socialism, everything to do with Trump and Biden. The war on corruption, think the need to centralise the Chinese state. The sideways privatisation from the 1980s designed to embrace regional and local bureaucrats led to a decentralised state which is something of contradiction when talking of the state regulating the economy. Until recently duplication on a profound scale took place between regions driven by the interests of local bureaucrats and local capitalists. Only now under Xi has centralisation started to take place, hence the debacle with coal based electricity production recently after Xi ordered the regions to cut back.

      1. The 2019 statistical year book Tables 4.3 and 4.6 published by the National Bureau of China statistics confirms this data. 4.3 deals with non-private employment and 4.6 with private employment.

      2. Free market enthusiasts like the Peterson Institute’s Nicholas Lardy have a long history of getting China wrong. As late as September 2014, for example, Lardy wrote that:

        The new leadership of President Xi Jinping and Premier Li Keqiang likely will further enhance the role of market forces . . . Vested interests may seek to thwart this initiative, but it is unlikely that President Xi and Premier Li will follow the Hu-Wen leadership in abandoning fundamental economic reform and attempting to use industrial policy to promote growth that some see as ever more reliant on state firms. . . The central finding of this study is that the economic reform process that began in the late 1970s has transformed China from a state-dominated economy into a predominantly market economy in which private firms have become the major source of economic growth, the sole source of job creation, and the major contributor to China’s to China’s still growing role as a global trader. . . . Going forward, however, China must deregulate to increase competition in those portions of the economy where state firms have been protected and complete the reform of factor prices . . . that continue to impede the efficient allocation of resources throughout the economy.” Markets Over Mao (Washington DC: Peterson Institute For International Economics, 2014), p.2.

        -Richard Smith

  5. Lots of concept-juggling, little in the way of telling facts. Read the daily press and you’ll get plenty of examples of the state-owned enterprises as well as private corporations as they put profit first, contend with other state-owned and private firms, form cartels with them, and so on.

    Meanwhile, “left” defenders of the PRC cannot even get their Marxist arithmetic straight.

  6. There are a couple of typos in my comment on the hybrid character of China’s economy but unfortunately there seems to be no way to edit one’s post. First typo: “Chen Tun” should be “Chen Yun”. Second typo, the next sentence which begins “it is hybrid in the sense that . . . ” should read “Secondly, it is hybrid in the sense that . . .”

  7. It’s been my recent experience that the 40+ year wall of western ignorance on PRC issues is as alive as ever, largely relying on the same old troupes to justify not actually reading Chinese sources and making a mess of discerning a loose combination of economic data and western media sources as a bedrock “reality” of what’s happening in China.

    Even CPC sympathetic authors like Ross tend to jumble a bunch of unrelated concepts together and then present them in language the west seems to understand.

    The most important book to come out that accurately describes China since Losurdo is Roland Boer’s “Socialism with Chinese Characteristics: A Guide for Foreigners”. Finally a western academic took the time to learn both Mandarin and Russian and study the sources closely. He also is the first “westerner” to hold a teaching position in a school of Marxism in China.

    Michael, I think this is where you need to start, or rather “re-start” your understanding of Chinese Marxism. Until then we are limited to vague subject engagement about China being “Capitalist or Socialist”.

    The NEP troupe is a common one, and it’s misused historically as well as ideologically. A great place to start there is to understand some of Zuyao Yu’s early work, specifically “A Discussion on Socialist Market Economy” from 1979. Yu there describes what became and still is the official party line on what the role of Lenin’s NEP in SWCC is.

    Another horrible troupe, also used by Ross, is the old “black and white cat”. Deng said this in 1962 referring to a literal situation of a cat in a house and is totally unrelated to economics or Deng’s later work or to SWCC. It isn’t used in any reference at all in Chinese Political Economy and it’s simply a silly non sequitur that appeals to western affections.

    Unfortunately outside of Boer and maybe Losurdo, very few western Marxists have taken the time to really try and understand SWCC. Sad and irresponsible because this is the largest and most successful socialist project in history, one that is actually doing the only real anti-imperialism really left in the world- quite the “contradiction” for academics supposedly “analyzing” it from afar without giving it any due.

  8. “indicative planning” – What is that? Chinese firms both private and state get their investment funds by negotiation with banks, investment funds, bond markets, and provincial and local governments. In that environment, who enforces “indicative planning” and how? What evidence is there that such “indicative planning” does more than tinker around the edges of the capital markets?

      1. The Economist: “In the era of Mao Zedong, China’s five-year plans were strictly implemented. The Communist Party set production quotas—for instance, for steel and grain—that work units had to meet. This central direction and, often, misdirection squandered resources, leaving much of the country impoverished. In the 1980s, as the party loosened its grip on the economy, it also became more relaxed about the five-year plans. Rather than rigid agendas, they became more like manifestos for how the party wanted to steer the country. Yet these manifestos still pack a punch. Local officials, banks and big companies, whether owned by the state or not, adjust their strategies and their rhetoric to be in line with the plans.”

      2. The Five-Year Plans also degenerated into “indicative plans” in the USSR after Stalin.

        This phenomenon, alone, cannot explain the Chinese case.

        The argument that the Five Year Plans were, at the same time, strictly and perfectly implemented and fundamental failures was capitalist propaganda cliché during the Cold War era. They shouldn’t be taken too seriously.

    1. On indicative planning, the information linked in the previous replies confirms that is pretty much like the industrial policy that Japan and France used in the 1950s and 60s. Nothing socialist about it. No serious blow against the drive for profit, directing accumulation to where the money is. “Indicative planning” did not prevent the Evergrande and general real estate bubble/collapse. “Indicative planning” did not prevent the Gini coefficient of inequality from rivaling that of the United States.

  9. Dear Michael, Thank you very much. I found your analysis very informative. Will you write a review of these new books on China for the Canadian Dimension website: http://www.canadiandimension.com. ?

    Cy Gonick

    From: Michael Roberts Blog Reply-To: Michael Roberts Blog Date: Sunday, November 28, 2021 at 7:31 AM To: Cy Gonick Subject: [New post] Views on China

    WordPress.com michael roberts posted: ” The Chinese Communist party¹s central committee recently held its sixth plenum, to discuss ³the major achievements and historical experience² of the party in its 100-year-history, as well as to consider policy ³for the future.² Just after this, Jamie Di”

  10. I have fun much when I read the interpretations of the Western economists about the Chinese economy.
    If you had time and disposition you would make a collection of the failures predicted by Keynesianos, orthodox, monetas, …. in the last 30 years they were all.
    If no one knows for sure what is state-owned and what is private, how are you going to do any correct analysis?

  11. The discussion here revolves around methods and means: state economy or private sector, plan or market, power and role of the CP, etc. What is neglected here are the goals sought – the goals of the Chinese communists as well as the goals of the Chinese people. When I came to work in China as a communist at the age of 35, I was dismayed and frustrated to discover that neither the people nor the organized communists shared my vision of socialism and communism. The longer I lived in China (it became more than 10 years and I also learned the language), the more insecure and cautious I became with my judgment about China and the Chinese. They had much closer goals than I did: a chicken in the pot and a formidable state in a hostile international environment.
    All those who criticize or even condemn China and the Chinese Communist Party behave like a new Comintern that wants to prescribe a single development model for all of the world. But we will not be able to solve China’s problems, and China will not be able to solve our problems in Europe. We should break away from our “inner Comintern” and we should part with the idea that we can slip into the role of the world spirit and can find the only suitable answer to all world problems.

    Wal Buchenberg, Hannover

    1. They figured out through dialectical materialism that there was no contradiction between planning and market, it’s SWCC 101. It’s a non-opposite, non-contradiction, and it certainly is not antagonistic. After the DoTP, there is no reason to keep pretending that markets are somehow intrinsically linked to Capitalism. They existed long before in practically any kind of economy.

      I don’t know why this is impossible for so many Western Marxists to understand. The “Comintern” you speak of seems like a stand in for a club of failed idealist Marxists who can never make the jump into the 21st century.

    2. «The longer I lived in China (it became more than 10 years and I also learned the language), the more insecure and cautious I became with my judgment about China and the Chinese. They had much closer goals than I did: a chicken in the pot and a formidable state»

      IIRC Deng said: “I did not lose so many friends and family to war, purges, massacres, famines for the chinese people to remain poor”.

      «in a hostile international environment.»

      To say the least…

      https://www.jstor.org/stable/40396396
      “Opening and dividing China”, The World Today, May 1992:
      «Needless to say, not all these regions are like to have the same views on foreign policy questions. Coastal regions would be less willing to see relations with the United States deteriorate, or take a hard line with Honk Kong or Taiwan. Worries over stategies of “peaceful evolution” pursued by outsiders would be different if one thought of Islamic, Mongolian, or Taiwanese ideals. In sum, domestic reform in China is helping create several Chinas, with potentially different foreign policies. […] As the Soviet empire collapses, it is time to ask far-reaching questions about the shape of the Chinese empire. Of course there are major differences between the two cases, but there are nevertheless increasing signs that as China continues its economic reforms and opens to the outside world, it will also run the risk of fragmenting.»

      The strategy of the USA elites is basically so repetitive: it is always encircle, isolate, breakup. I can’t blame them though: it is highly effective, and they can afford it over the long term.

    3. Your concern is entirely correct.

      Despite the 30 years of political propaganda before Deng’s reform and opening up policy , there are always many very different political views among Chinese people: some people are traditionalist, Some people are nationalist (this kind of nationalism is not just like the Nationalists we see today, but a complete denial of revolutionary views.) after the reform and opening up policy, this difference has become more and more serious. Young people begin to accept some other thoughts, such as American conservatism, democracy, etc. Therefore, you are unlikely to meet real people who agree with you “Communists” (some of them may be in prison)

      Fortunately, however, the development of student organizations, the increase of workers’ action and the awakening of class consciousness have made the new left constantly put aside their existing prejudices and seek unity among the left. This is one of the few things to be thankful for in a regressive political environment.

  12. The two drivers of the Chinese economy currently are property and exports both private. Goldman considers that Chinese Property is the biggest asset class in the world. Over the weekend the State Council sought to breathe life into the property market to inflate the sagging economy by instructing local council to increase their issuance of special bonds, you know the ones that rely on private investors not the state. The only problem, even before Evergrande, private investors were disinclined to buy these bonds. For a so called in-betweener economy this reliance on the private sector serms strange.

  13. Perhaps I should have added, given the ‘non-capitalist’ (!) nature of the economy should the CCP not simply have launched a massive social housing build programme instead of relying on special bonds. Oh no, it would have crashed the property market and with it prices if it did this, riots and Lehman’s would follow. Seems that the CCP is caught in the same toxic claws of leverage as happens in the UK and the USA where social housing is severely limited to control the supply of homes to keep up prices. Or the CCP could embark on a programme of reversing private healthcare that blights the lives of Chinese workers. Oh no, the CCP and its mates would lose the billions they are making from the privatization of heath care.

    The morale of all of this. When deciding on metrics one has to be careful.

    1. I agree that is what the CCP should have done but instead allowed the capitalist sector to rule in these key areas of the social wage. They are now facing the consequences. But the non-capitalist nature of the economy is not decided by the ‘mistakes’ of the CCP leaders in their promotion of ‘market socialism’

    2. Isn’t it true that the state has moved to increase it’s investment in public health infrastructure? It seems that bourgeois economists don’t do the “metrics” of non-market industrial or service production in China, which, along with public land ownership, is the submerged, and largest, part of China’s economy.

      1. You are correct and more coming. However. Xi’s addressing of the grotesque levels of inequality is not an idea. The CCP sits at the centre of a Web of surveillance of their population. They are aware that the urban youth are becoming disaffected and resentful unwilling to work in the same places and conditions their parents worked in. But the alternatives generally found in the tertiary sector pay less making housing an issue. Also now that the economy is trending towards stagnation, historic wage rises are out. Thus the CCP is posing as their friend saying by squeezing the rich they will have more opportunites except of course they won’t. Truly a “socialist economy” with neo-liberal characteristics.

      2. Inasmuch as China’s market economy produced a class of nouveau riche and an aristocrisy of labor (as was inevitable and expected), the privatization of (some?most?) of the public medical infrastructure made sense: let the benficiaries of the private market sector pay for their own services, and the state invest the savings in public infrastructure. China built much of it’s industrial might by such “squeezing” of “the rich” (or fighting capitalism with capitalism).. ….That the CCP is “posing…etc”… as the friend of Chinese labor is your opinion. The CCP has almost 100 million member, some corrupt. But capitalists hate and fear Xi Jinping not because he is corrupt and venal, but because they fear he is not.

        The contradictions within China’s gamble to fight capitalism with capitalism seem to have come home to roost. The “neoliberal characterists” in China’s market sector was part of the gamble (capitalism is neoliberal everywhere). China’s huge public sector, however, is socialistic (not socialist) and has since 2008 succeeded in guarding the country against the steep downturn of the rest of the capitalist world. …But I follow Samir Amin: at some point (as appears to be now) the contradictions within China’s (necessry) gamble will come home to roost– then China will be faced with two choices: falling into comprador status or “de-linking”. The thousand variables question is, is that possible?

        …But then the contradictions within the capitalist system itself seem to have come home to an historical roost… It seems that facism is the most likely upshot for US/NATO core states, which would make China’s delinking (and probably war) inevitable…while Western marxists continue arguing (maybe in our cells) about whether China is really socialist or not. Hopefully, if history will be repeated, it will be as farce rather than tragedy.

      3. How are capitalist neoliberal realities in China “coming home to roost’? Are we going to pretend that Xi’s reforms don’t exist, that the “Golden Center” and ML rehabilitation of Mao Zedong thought and it’s basis in Soviet Dialectical Materialism from the 1930’s isn’t becoming the new status quo? The new two thirds / one third public/private goal, and the limitation of all market forces to the inputs and outputs of consumer economy? The new reforms to nationalize? The policy of “pairing up” that specifically evokes Mao’s New Democracy and the rehabilitation of the untied Front without the red tape Bureaucracy? Direct interface of CPC officials sitting on top of elites and business magnates to the point where they share a morning jog and coffee with practically everyone on a daily basis?

        Or is this list of responses simply a bunch of western educated neophytes on Chinese analysis that can’t actually follow any trends within Chinese politics?

        Has anyone here, including Michael, actually read Guoguang Liu, Zuyao Yu, and Enfu Cheng? Wan Huning? Any of premier Chinese political economists? Has anyone here heard of the CASS? The CPS, as well as all of it’s dissenting opinions enfranchised by the Chinese State?

        And it’s CPC, not CCP. This makes anyone look foolish considering 1.4 billion people refer to this as the CPC.

      4. Chris, you obviously are more informed than I, and am more than pleased with your comments (Though embarassed by the “typo” CCP which I repeated a couple of times.)

        My chief concerns regarding “contradictions” (they do exist) coming home to roost” are not so much about how China is handling them, but by capitalism’s inability to address its own contradictions, the absense of an coherent left here in the US (and its Western satrapies), the rise of facism as a “solution”, and the beating of the drums of war. Hopefully China’s strength (and a couple of allies) will serve as a deterence.

      5. typo corrections: I have to say I am embarrassed by “embarassed” in the first sentence, by the absence of another “I” in the second clause of that sentence, and the “s” in “absence” in the second paragraph. But I still stick with my point!

      6. «But capitalists hate and fear Xi Jinping not because he is corrupt and venal, but because they fear he is not.»

        I have a different impression:

        * The “capitalists” usually like democracy because it can be easily corrupted, the representatives of voters are easy to buy, also because they constantly need campaign funds. The principle is “you can do all the voting you want, as long as we do all the nominating we want”.

        * Xi and his cohort have *an independent power base*, they cannot be easily bribed, any more than the CEOs of JP Morgan or Google or General Electric can be bribed.

        * Therefore in the “west” the business elites control the political elites, in China the political elites control the business elites, and that is what the “western” elites find unacceptable in China (and Russia).

        Put another way Xi may or may not be corrupt and venal, what is “wrong” is that he is a principal, not hired help like “western” politicians are (called “gatherers of consensus professionals” by political scientists).

  14. ”If Russia continues to follow the path she has followed since 1861 she will lose the the finest chance ever offered by history to any people and undergo all the fatal vicissitudes of the capitalist regime” and ”once taken into the bosom of the capitalism regime she will experience its pitiless laws” ( Marx). Deng may have said that Marx was out of date, but it seems China is about to experience capitalism’s vicissitudes and pitiless laws! Frankly, if China is socialist, I prefer British or Japanese capitalism!

    1. Hm, British or Japanese capitalism over Chinese ‘socialism’. That’s a view unlikely to be endorsed by the Chinese people but maybe they dont understand that the British form of capitalism would be much better for them.

      1. Michael, you mean the Chinese people would not appreciate ‘free’ education and health care? How about an 8 hour day or the right to strike? Or the greater Japanese equality? As for state directed plans, the Japanese state did such postwar very well. Recall that the leading Japanese companies were set physical targets, while the Bank of Japan produced the requisite capital (soft budgets). In the 1980’s US ‘trained’ economists at the bank of Japan deliberately created a financial boom to produce a crisis that would usher in a more ‘market’ oriented economy. If China is not capitalist, then neither was Japan in its immediate postwar decades, nor for that matter the UK! The ‘commanding heights’ of the economy were state owned, not to mention e.g. local government housing, transport etc.

      2. In the immediate post war period banking, major industry and services were owned by capitalist companies inBritain, Japan etc but after 1950 they were not in China. The capitalist class in China had been expropriated and its representatives fled to Taiwan. That did not happen in Britain etc even if the British people have free education and healthcare (relatively). I think that makes a difference to the nature of the economy and the accumulation process. The comparison is not between China and Britain but between China and Brazil or India or South Africa.

      3. ”In the immediate post war period banking, major industry and services were owned by capitalist companies inBritain,” Clearly Michael knows this is false: coal, rail, iron and steel, aviation, post office,roads. One could go on. I think 10% of the labour force was employed in the nationalised industries. But more interesting is the status of some banks like rbs post 2008. To what extent might they be said to be nationalised? As I have argued before, we must get away from a juridical definition of capitalism. The CEO of a modern capitalist company is not its owner; nor yet are its share holders.The important point is who exercises power over such industries and enterprises, and to what extent producing for profit realised on the ‘market’ determines their structure. It certainly seems to me that China is less socialist than Britain and today less of a planned economy than Japan in the 1950’s. Of course I might well be wrong. I should like the debate to continue. What is certainly true is that state control and direction is fundamental to economic success. Post-soviet Russia offers an alternative of the wonders of the free market: its population today is less than in 1991!

      4. ”your suggestion that I knowingly tell falsehoods ”’ I do apologise. Such was far from being my intention. What I wanted to say was that if you had thought about it you would have seen that your assertion was false.

      5. Getting back to the data. The size of publicly owned corporations in the UK economy after the post-war nationalisations took publc corporations assets to a maximum of just 10% of GDP, 14% of GDP and 10% of employment. The size of the public corporations in the UK economy now is just 7% of GDP.
        https://www.centreforpublicimpact.org/case-study/privatisation-uk-companies-1970s
        That’s way less than China’s state enterprise sector even now. See my paper here from line 301 https://thenextrecession.files.wordpress.com/2021/11/china_three_models_of_development_by_mic.pdf
        and see Richard Smith here https://spectrejournal.com/why-china-isnt-capitalist-despite-the-pink-ferraris/?fbclid=IwAR1xcmYEteEX2eDhZKGLzCPxc5FBWeP0_fsXwR6kfWQyOU9QLIyq9c1hLC0
        Moreover, the UK nationalisation programme only touched loss-making heavy industry or ‘natural monopolies’ and never extended to profit-making sectors of the economy and left the commercial banks and other financial institutions untouched. Even now, China’s banking system is dominated by state banks.
        So I do not think it was false to say that the UK nationalisations (and others post-war in the advanced capitalist countries) did not match the dominance of the state sector in China (almost total from 1950-78 and still dominant now). What happened in 1949 in China was qualitatively different from what happened in the UK or Japan in 1949.

      6. ”a local guy who married into the family of Deng Xiaoping, suddenly in 2014 listed assets of US$295 billion after children and grandchildren of Deng and other leaders vested vast sums (of unknown provenance), then used Anbang to move their money offshore buying up foreign properties including New York’s Waldorf Astoria.

        In the deeply opaque ownership picture in China today, it’s all but impossible to know which firms are really, or fully private.” How does Richard Smith explain the origins of this $295 billion dollars of the Deng family and others? Again I stress the point that the juridical status of a company or enterprise may obfuscate the real economic relations that pertain e.g.unknown provenance, opaque.The fact of a company’s having the juridical status of ‘state property’ clearly does not mean that such enterprises are managed for the good of the citizens and not the enrichment of the managers. Moreover, and this is the really fundamental point: what do we mean when we say ‘production according to a plan’ or ‘production for the market’ as if all advanced capitalists companies did not plan. I come again to J.K. Galbraith’s argument that socialist planning abolishes the market, while capitalist planning is to meet its demands. But the latter posits ‘the market’ as antecedent to the economic relations that themselves constitute ‘the market.’ As Marxists we need to get behind the real economic relationships that pertain when we speak of planning or market production, as if the economic content of such terms were self-evident. I regard this post by Michael and his one on Kornai as the most important he has made, but am I alone in thinking that we are still in a state of some confusion ( I know I am) and that we need more debate on the issues that have been raised. If some Marxists regard China as capitalist and others as heading (eventually) for socialism, then clearly we have a grave scientific problem.

      7. Jlowrie’s comments about Deng’s granddaughter and her marriage to Wu Xiaohui and the subsequent Anbang scandal is exactly how Westerners get everything wrong and it’s intellectually dishonest. First of all, he lifts the narrative from a 2016 NYT article by Michael Forsythe and Jonathan Ansfield entitled “A Chinese Mystery: Who Owns a Firm on a Global Shopping Spree?”. It seems to allege that because Wu Xiaohui married Zhuo Ran, a granddaughter of Deng, that this is some kind of proof to a massive CPC conspiracy related to Anbang.

        If these detractors of the CPC would just read for a few more minutes you would read that Wu Xiaohui was subsequently arrested in 2017 (well after the NYT article was published), Anbang was seized by the CPC. Wu pled guilt to charges of corruption in 2018. He was sentenced to 18 years in prison.

      8. ”Our only hope is to support democratic struggles everywhere to bring those systems down before they destroy us, and to replace them with ecosocialist societies based on public ownership and democratic governance. As much as we stand against Trump and his fascist base, so we must “Stand With Hong Kong” and Stand with East Turkestan (Xinjiang) against the Chinese Communist Party because if we don’t succeed, we face extinction.” This illustrates, albeit in the political rather than the economic sphere, what we must get away from. Richard Smith affirms that we must struggle for democratic governance. Well sounds good. Who could be against it. After all, do we not enjoy democratic governance in the West unlike China? But what are the concrete institutions of democratic governance? Smith invites us to ‘stand with Hong Kong’ but does not explain what was democratic about these riots. I shall outline what I think are the democratic institutions appropriate to a socialist society: the government to be chosen by lot, no member to serve for more than a year; all major laws and decisions to be put before the citizens in referenda; all litigation to be decided by large popular juries chosen by lot without judges. Now these are concrete measures and would enable the unpropertied to dominate. We will get nowhere with vague rhetoric. Unfortunately, when we turn to the economy it is not so easy: what is meant by public ownership and do they not have it in China already? If Smith could give concrete details on what he means by public ownership, that would be decidedly useful.

      9. ”Jlowrie’s comments about Deng’s granddaughter and her marriage to Wu Xiaohui and the subsequent Anbang scandal is exactly how Westerners get everything wrong and it’s intellectually dishonest. ” If Chris had read more carefully, he would have seen that I was quoting Richard Smith, whom Michael attested as a reliable source. However that may be, are the families of Deng and Xi not billionaires? Moreover, and most importantly, while I was not persuaded by Smith’s analysis and thought his potted history of China’s revolution a travesty, what he has to say about the ecological disaster that China faces, and of course not just China, cannot be gainsaid. If China is the future, I doubt there is one! All those pink Ferraris! I saw an advert a couple of years back for butlers in China. ”Butlers of the World unite: you have nothing to lose but our spoons”!

      10. ” China should give free money ” No free money! The watchword of finance capitalists everywhere.

      11. Chris Daniel Morlock,

        It surpises me (maybe it doesn’t) that people who wear red coloured glasses will not consider the notion that the CPC is corrupt and the regime rotten to the core. It can’t all be CIA concoction and propaganda. These people are utterly incapable of contemplating that the reality might other that what they see through their ideologically tainted glasses. (And of course I bear my own ideologically tainted glasses.)

        And Xi’s shift to strict socialist principles may just be the regime taking back control and containing the emerging power of the Chinese capitalist elites for no other reason than it fears loss of its power and hegemony.

        If you’re in the wrong faction at the wrong time, you pay the price.

        China, having prospered on the back of Western capital, Western technology, Western education and Western markets now feels confident enough that it can decouple from the West – in any event the West is forcing the decoupling anyway. Xi’s hardline is more evidence for this decoupling.

      12. The difference between me and you is that I am a Marxist Leninist that has taken the time to actually read Chinese Marxism, to navigate the language barrier (I do not speak Mandarin),, and not see the situation solely from Western sources but rather the horse’s mouth. I would be happy to share the reading materials- the best way to begin Roland Boer’s important new book: Socialism with Chinese Characteristics : A Guide for Foreigners.

        My bias is towards Marxist Leninism, but as an American growing up in an American ML family, the status quo was to NOT consider Chinese Marxism at all. The Soviet line was as harsh as the Western one against China: clothed thinly in orientalism and prejudice, both political and ideological.

        Around 6 years ago I started to rigorously study the issue, and read everything I could on the subject. It’s true that obtaining economic data and economic theory is nearly impossible from CPC sources as the issue is considered a state secret, but there is a plethora of political economy and philosophy available. There is the excellent blog started by a Canadian academic in 2017 called reading the China Dream which sole purpose to is translate into English the CPS (Central Party School) intellectuals papers on various issues, showing the full range of Chinese State sponsored dissent evident in it’s over half dozen different political and intellectual factions. There is rigorous debate from neoliberals to reactionary traditionalists, and there are no less than 4 major schools of thought on Marxism.

        My question to all these critics in this thread, including Michael, is have any of you spent the time to read these sources and follow their citations to read into the depth of SWCC before coming to c conclusion on it? The best I can say of most western academics is that they might have read a little bit of Losurdo, who is the only other Marxist who gave China an honest go.

        Why do I get the feeling that no one has read any of it?

      13. That’s great Michael, would love to hear your analysis, especially after absorbing Boer’s latest work. I know it’s not “hard economics”, but it is extremely important in political economy.

      14. Chris Daniel Morlock,

        “I would be happy to share the reading materials”

        Thanks, I will take a look at the suggested title. (I am overwhelmed by the reading assignments that have been set for me. 🙂 )

        “…reading the China Dream which sole purpose to is translate into English the CPS (Central Party School) intellectuals papers on various issues…”

        I’m sure it is all very interesting.

        However, one thing I have learnt in my nearly 70 years is that one should look at what is done and not what is said. Words are cheap.

        When one looks at what China has done all one can say is that it is not democratic, it is imperialist, it is governed by a totalitarian regime that brooks no dissent and brutally suppresses free speech. It allows no political competition. It has invaded and subjugated peoples without compunction. It flouts international law to suit its interests.

        No amount of reading academic texts will change the facts.

        The other fact of note is that the Chinese economic miracle was won through the agency of Western capital, Western technology, Western education and Western markets. If these were not present, China would still be a third world country.

      15. «It has invaded and subjugated peoples without compunction»

        Indeed so many people have died in the numerous bombings and cruise missile salvos of targets by the PLA Air Force during chinese invasions over the past 20-30 years that I am sure you can give us a summary. Just like as many people died in the Ukraine because of Russian Air Force bombings and cruise missile salvos during the russian invasions of Crimea and the Donbas :-).

    2. It’s interesting you raise this point, because it brings us to the subject of “universalism” (as a form of hegemony).

      If you read the documented evidence from the 1920s-1950s, you can see that the social-democratic consensus of the post-war that was enforced in some corners of Western Europe and Japan was completely accidental.

      Best illustration of this is Churchill’s writings from this same era. Before the end of WWII, Churchill was your typical upper class British imperialist, borderline fascist. From the end of WWII to the 1950s, however, he completely changes his stance, to a more typical “liberal man”, humanist which has become an archetype of the post-war miracle in the First World. He looks like a changed man.

      Obviously, Churchill didn’t change who he really was. The reason for his sudden transformation can be no other than the imminent (and later confirmed) victory of the Soviet Union and complete destruction and demoralization of the Third Reich in 1944-1945.

      The point is, even though he didn’t change, the reality around him changed. And it changed according to factor that were completely out of the United Kingdom’s control. It was by complete accident of History that the welfare state was created in some countries of Western Europe and Japan. This phenomenon cannot be ever replicated, either in time or space.

      1. ” It was a complete accident of history that the welfare state was created in some Western European countries and Japan. This phenomenon can never be repeated, neither in time nor in space. ’’
        The Welfare States accidents of history ?. That is as much as saying that its cause, the socialist revolutions of 1917 and 1959, are accidents in history. They are not at all, quite the opposite. Both causes and effects are very, very determined. The unpopular but benefactor, when it is known, economic and materialistic determinism is true that it exists, I am afraid. If you read just a little about K. Marx – revolutions as engines of history -, Rosa Luxemburg – revolutions and their impulses – Ragnar Frisch – economic impulses and their propagation -, Inmanuel Wallerstein and his theory of cycles, and the multitude of academic authors who have studied the Kondratieff cycles (cycle that is one of the main effects of revolutions) has reached a contrary conclusion. It is concluded that there are few or no “accidents” of significant relevance in history. And that revolutionary cycles, cycles of class struggle, are no accident.

      2. A single addition: I should have made it clearer in my previous comment, and I say it now, that the Western Welfare States of the 20th century are only propagations, spatial and temporal, of socialist revolutions. More intense propagations the closer they are to the place and date of the revolution and weaker propagations that lose strength and recede as they move away spatially and temporally from the revolutionary act. What happens in the border countries with the USSR and Eastern European socialisms, with the creation of the Nordic Welfare States and the German Social State, much stronger and broader Social States than in the other Western countries, and the privatization of Those same Welfare States and the same privatization in the countries of real Socialism from the 80’s are proof and irrefutable empirical evidence of this type of propagation.

      3. @ Antonio

        But that’s my point: “Market Socialism” has as much legitimacy as “State Capitalism”, or “Western Welfare State”. It makes no sense for European economists and politicians to dismiss China’s concept of their own system only to, unashamedly, classify them as “State Capitalist”. It’s like they automatically assume their own viewpoint is the universal one by default.

    3. ” Frankly, if China is socialist, I prefer British or Japanese capitalism!”

      Imperialism is indeed sweeter and more appealing, huh.

      1. Well, I believe China has just seized Uganda’s airport for non-payment of a loan! In any case, do you hope to persuade the British proletariat of the ‘socialist’ advantages of commodified education and health provision, a 12 hour working day and the wonders of increased wealth disparity? Good luck

      2. Correction: China is not to take physical control of Uganda’s international Airport but under the loan agreements, revenues from the airport’s operations are to be deposited in an escrow account where all withdrawals have to be sanctioned by China’s Exim Bank. Sounds like Finance Capitalism to me! Lenin and Imperialism, anyone?

      3. @jlowrie
        Funny how these “news” spread like fire, especially within “leftist” western audience. China should give free money ofc. And, like Richard Smith says, it should forfeit its security, decarbonize and let the US Navy take control of its region.

        Not many things have changed for the so-called british proletariat since Engels days. It still is at the heart of the imperial system, even if the UK is no longer the primary empire. So I don’t think there is much work to be done there. Also, aren’t UK universities “commodified” already? At least most EU satrapies have proper public education with close to zero costs.

      4. Here is the official announcement of the Ugandan Airport Authority:

  15. >But the neoclassical policy of allowing the market to set prices led to increased inflation and eventually the Tiananmen Square protests, the ensuing military crackdown and the imprisonment of Zhao, then General Secretary of the CCP.

    Wrong. Tiananmen was led by the people who were furious that the reforms went “too slow”, and turned into the “wrong” direction for them anyway. To make a comparison, it was Gorbachevs trying to force CPC to move towards China’s dissolution.

  16. >But the Chinese leaders continue to oppose any sort of independent action by workers and strikes remain illegal

    So what? China is a proletarian state. Do capitalsts feel any shame or guilt, do they feel contrained by getting forced to do their business through the state instead of doing it independently? “Every kitchen-woman must learn to how rule the state” – that’s Lenin’s words, isn’t it? Workers must learn to wield state power to their advantage, and that means instead of independent disunited action they do their business through the state institutions – just like bourgeoisie does in the West. And just like in the West workers don’t like their enemy-class state and need to organize independently to resist, so is Chinese bourgeoisie feels the need to get independence, to oppose the state, to try and do their business outside the state.

  17. For people who orient themselves towards Karl Marx, it is clear that a more humane post-capitalist society must preserve and perpetuate all the positive achievements of capitalism. This applies above all to the shortening of the necessary working hours through increased productivity and also to the high level of education of all members of society.
    For people who orient themselves to Karl Marx, it is clear that neither the historical Soviet Union nor today’s China can provide a model or a future picture for the wage workers in the capitalist metropolises. The dispute over whether China is “socialist” or not is splitting hairs.
    A completely different question is what positive role the communists in the Soviet Union or in China play or have played for their country.

    1. That the First World Left-wing has already made very clear to the rest of the world.

      The problem is not that the First World Left-wing doesn’t want to copy the Soviet or the Chinese models, but that it wants to destroy them (it was successful with the first, it is trying hard with the second).

      1. Really? What constitutes the “First World Left-Wing”? Does that include every group from Maoist to Social Democrat to anarcho-communist? The characterization is so flabby that it can include everything and mean nothing at the same time

        Secondly, no matter what you think makes up a “First World Left Wing” that amalgam did not destroy the fSU. The internal make up of the fSU fractured under the relentless pressure of capitalism. The “left wing” is hardly powerful enough to influence a school board much less destroy a state.

        And no, a imaginary first world left-wing did not singlehandedly destroy the prospects for world revolution, the only practical solution to the conflicts and limits intrinsic to the fSU or the current condition of China. In that regard the fSU and China itself have contributed much more to that destruction than the advocates of the Russian or Chinese models will acknowledge.

  18. Wage labour produces capital. The commodification of wealth is not production of wealth for use with distribution based on need. Wage-slaves are not in control of any State. Marx and Engels barracked for workers to emancipate themselves from the wages system of slavery.

    “With the seizing of the means of production by society production of commodities is done away with, and, simultaneously, the mastery of the product over the producer. Anarchy in social production is replaced by systematic, definite organisation. The struggle for individual existence disappears. Then for the first time man, in a certain sense, is finally marked off from the rest of the animal kingdom, and emerges from mere animal conditions of existence into really human ones. The whole sphere of the conditions of life which environ man, and which have hitherto ruled man, now comes under the dominion and control of man who for the first time becomes the real, conscious lord of nature because he has now become master of his own social organisation. The laws of his own social action, hitherto standing face to face with man as laws of nature foreign to, and dominating him, will then be used with full understanding, and so mastered by him. Man’s own social organisation, hitherto confronting him as a necessity imposed by nature and history, now becomes the result of his own free action. The extraneous objective forces that have hitherto governed history pass under the control of man himself. Only from that time will man himself, with full consciousness, make his own history — only from that time will the social causes set in movement by him have, in the main and in a constantly growing measure, the results intended by him. It is the humanity’s leap from the kingdom of necessity to the kingdom of freedom.

    “To accomplish this act of universal emancipation is the historical mission of the modern proletariat. To thoroughly comprehend the historical conditions and thus the very nature of this act, to impart to the now oppressed class a full knowledge of the conditions and of the meaning of the momentous act it is called upon to accomplish, this is the task of the theoretical expression of the proletarian movement, scientific socialism.”

    Socialism? Ain’t happened yet and it won’t until the workers become class conscious enough to emancipate themselves from the bondage of the social relation Marx called, “Capital”.

    1. Great, Mike. I doubt a single contributor on this thread would dissent. So what concrete measures do you propose, seeing as time is running out?

      1. Actually, Jlowrie, Mike’s comment was not so “great”. In itself it, says nothing. But it does insinuate that both China and the Soviet Union flunk living up to Marx’s fundamental characteristics of a true socialist order. It’s (idealist?) orthodoxy serves to confirm VK’s (maybe too sweeping) condemnation of the “First World’s left wing” as fundamentally imperialist.

      1. I think the same in spite of what even famous Marxists affirm: The USSR and China have not “failed” in the construction of socialism. However, the thesis of Mike Ballard that these countries have not reached the desired socialism of a democratic socialism, with the command, dominance and real control – that is, with the ownership – of the workers over the means of production with the elimination absolute value of salaried work, it also seems to me to be a true thesis, demonstrated and supported by the data. What reconciles and unites the two theses ?: the thesis of the cycle of class struggle.

  19. It is good that there is so much discussion on China. At the moment the USA is ramping up its military assets around China. Its Plan A was to crush China technologically, instead the opposite has happened, China’s Tech advanced have accelerated. Plan B is the old imperialist fall back, war. Having refurbished all the old second World War Island airfields, Australia’s northern territories are now being turned into its rear base. It is also no accident that the USA is using the diversionary tactic of provoking Russia over Ukraine using those rank Baltic regimes as its mouthpiece.

    Warn the international working class, danger threatens.

  20. I very much sympathize with CD Morcock’s position that there is a wide debate in China, and there has been for a long time, about economic policy, and there has been for decades, and it is very serious and well informed. I have been very impressed by part 3 of Zhao Ziyang’s “Prisoner of the state” book, which is devoted to that debate from the point of view of one of the protagonists (who reports being indeed influenced by neoclassical Economists).

    More recently I have been equally impressed by a truly important, history changing, paper by Xi Jinping: http://en.qstheory.cn/2021-07/08/c_641137.htm

    There is a lot of boilerplate as usual but it contains clear, sharp insights and directions (for example starting “Given the backlash against economic globalization” and “there are some misunderstandings that we need to guard against”).

    Between Zhao Ziyang and Xi Jinping it is evident to me that the quality of China’s top cadres is astounding, and the mandarinate of the Gongchan dynasty is very good.

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