Chinese dissidents launch a Charter for counter-revolution
By H Khoo 13th December 2008
Over 300 Chinese dissidents launched Charter 08 to coincide with the
60th anniversary of the United Nations Universal Declaration of Human
Rights. The Charter is composed of a historical forward, which
provides a potted and distorted history of the struggle for
modernization over the last 100 years, declares the groups'
fundamental principles, and lists 19 points of what they advocate.
Similar documents were circulated in Eastern Europe in the late 1980s.
They galvanized political activists from amongst the intelligentsia
prior to the protest movements in 1989, that led to a wave of
counter-revolutions in bourgeois democratic form.
The dissident movement in Eastern Europe tended to conceal its most
reactionary ideas behind the veil of "democratic demands" which most
people supported, including freedom of speech, protest, assembly,
democratic control, accountability of officials, freedom of thought
and expression.
These 'democratic demands' were able to mobilize the broad masses
against the ruling Communist parties, as the economies of the
Stalinist states suffered from a prolonged period stagnation caused by
a seizing up of the bureaucratically planned economies from the early
1980s. Poland had suffered absolute falls in production during the
period of turmoil following the birth of Solidarity, the USSR's growth
rate barely remained above zero throughout the 1980s.
This stagnation in the planned economies provided pro-bourgeois forces
within the bureaucracy, intelligentsia and the wider population with a
strong basis of social support. A layer of bureaucrats began to make
connections with the pro-bourgeois forces and lent on the discontent
of the masses with corruption and the arbitrary nature of bureaucratic
rule.
In the USSR Boris Yetsin fostered the image of a clean party member
who felt the problems of the masses, and dared to speak out on them.
In 1986 Gorbatchev became General Secretary of the Communist Party and
permitted greater scope for free expression. The apparatus of power
split into many factions, the loosening of the national and
international reins of control by Moscow, provided local bureaucratic
elites with new opportunites to enhance their power, prestige and
control of resources.
As reforms of the stagnant economy shifted wealth around, rather than
increasing the production overall, and led to reductions in living
standards for the masses, significant layers of the discontented
working class joined hands with the dissident movements in demanding
the 'reforms' which led to the restoration of capitalism.
If "history repeats itself first as a tragedy then as a farce", then
China's bourgeois dissidents provide the first major focal point for
the open programme of the counter-revolution since the vague and
confused demands of such forces in Tiananmen Square in 1989. The
inability of the Chinese leadership to respond reflects the fact that
inside the Communist Party there are many who harbour sympathy for
such a programme.
In Charter 08 (part 3 section 14) of "What we advocate" we read:
"Protection of Private Property. We should establish and protect the
right to private property and promote an economic system of free and
fair markets. We should do away with government monopolies in commerce
and industry and guarantee the freedom to start new enterprises. We
should establish a Committee on State-Owned Property, reporting to the
national legislature, that will monitor the transfer of state-owned
enterprises to private ownership in a fair, competitive, and orderly
manner. We should institute a land reform that promotes private
ownership of land, guarantees the right to buy and sell land, and
allows the true value of private property to be adequately reflected
in the market."
(http://crd-net.org/Article/Class9/Class10/200812/20081210142700_12297.html)
The aim is to smash the economic and political foundations of the
revolution by abolishing public property in the commanding heights of
the economy and banking and breaking all links between the state and
"Communism". The Charter calls for the removal of Marxist education
from schools and colleges (section 13) and a ban on Communist Party
units inside the army (section 5).
No mention is made of the rights of the working masses, except the
rights of organization. The working class is totally absent from the
minds of these great freedom loving, democratic, republican,
intellectuals. The entire history since Liberation is negated and by
omission one can only conclude that they support the republican era of
Chiang Kai Shek.
No doubt the dissidents hope by speaking out now that they will be
able to lean on (the mood described by Jorge Martin
http://www.marxist.com/china-hit-by-global-capitalist-crisis.htm)
"the already growing number of labour disputes and conflicts" and that
by doing so they can turn this into a generalised movement against the
government, the state and the leadership of the CCP. "
The Charter proclaims "The decline of the current system has reached a
point where change is no longer optional." The bourgeois dissidents
are declaring an open war on the Chinese revolution.
The toleration of over 100 US dollar billionaires and over 300,000 US
dollar millionaires, the speculative enrichment of millions through
property and other parasitic economic activities, and the untrammeled
proliferation of corruption within the state has led to the creation
of an ever more confident and arrogant bourgeoisie.
All talk of creating a harmonious society with both billionaires and
paupers is a counter revolutionary deception. "History if the history
of class struggle" many comrades in the Communist Party appear to have
forgotten that this is the ABC of Marxism and Communism.
Already this year 20 million jobs have been lost in the export sector,
whilst many of these factories were low level technologically, the
disruption to the lives of tens of millions and the loss of useful
production for the masses, requires a policy to expropriate all large
scale capitalist enterprises under the control of the trade unions and
workers' congresses. Production must serve the needs of the workers
and the poor.
Genuine Communists must place themselves at the head of the rising
labour discontent mobilizing the working masses behind a programme to
establish democratic control by the working class in the factories,
towns, cities and nation as a whole. Either genuine Communists fight
bourgeois forces now, or the bourgeoisie will seek to place itself at
the head of protest movements on a programme of counter-revolution.
The fate of the Chinese revolution hangs in the balance.
Thursday, 26 November 2009
The Cuban Communist Party and the Chinese Communist Party.
The Cuban Communist Party and the Chinese Communist Party.
It should come as no surprise that the Xinhua news agency Spanish section reported on Alan Wood's meeting in Havana. The Central Party School of the Communist Party Central Committee, the Latin American Section of the Chinese Academy of Social Sciences (CASS), the Marxism Study institute at CASS, and numerous other Socialism and Political Studies Institutes in China have links to Marxist.com. They have kept these links on their web sites even though the Internet Censors in China have blocked access to Marxist.com for two years now. This indicates that there is a layer of academics and young people around the official research institutes of the Communist Party who are interested in Marxism. How could there not be? Marxism after all remains the official ideology of the Chinese Communist Party and with an organization of 73 million party members: a larger combined total than all the Communist Parties in all the former ‘Communist states’ at their height, and all members of the Social Democratic and Labour Parties in the capitalist world, and their height, put together!
Furthermore the Chinese Communist Party is seen by the masses in China as an organisation that came to power through a revolutionary guerrilla and mass peasant army. In Cuba, Fidel and Che earned justified respect as revolutionary heroes for leading small band of idealistic revolutionary democrats to Liberate Cuba. Mao’s revolutionary war to liberate a quarter of humanity from Imperialism is justifiably seen by the Chinese masses to this day as the greatest event in Chinese history. The day the nation stood up! This mass revolutionary war smashed imperialism, landlordism and capitalism in China, and acted as a model for the Cuban revolution ten years later. To be sure Mao, like Fidel, initially had a revolutionary democratic agenda, but the weakness of capitalist forces compelled the revolution forwards -beyond bourgeois democratic limits- to begin the socialist tasks of the revolution, nationalization of the means of production and banking, laying the foundations of a planned economy.
Even though publicly Mao was an ally of Stalin, Stalin never forgave Mao for ousting his representatives in the army and party in the 1930s. Mao drove Stalin's man in China, Wang Ming, out of power in the leadership in 1938, a move Stalin fiercely resented.
Stalinism in Marxist terminology is of course not a voluntary phenomenon. The backwardness of China inevitably led bureaucratic tendencies, inherent within the Peoples’ Liberation Army command structure, to be reinforced by the need to develop China from a society of grinding backwardness in technique, science, means of production and culture. Stalinism emerges not from the will but from these objective social conditions. No matter how many times the leadership, or others, with all the best intentions and strongest will to fight ‘bureaucracy’, declare themselves anti-Stalinist, and against corrupt tendencies; material pressures inevitably consume the administration of society and come to dominate it, in conditions of shortage. Only the conscious control by the masses in countries with the most advanced means of production, technical and scientific skills, and highest cultural level in an urban revolutionary society can begin the genuinely socialist phase of human history. This is why the programme of Marxism advocates that national revolutions must become world revolutions. Otherwise if they survive, they inevitably become bureaucratised workers’ states of one form or another.
In 1956 Khrushchev denounced of Stalin. Mao opposed Khrushchev for two main reasons, firstly because Mao like Che, believed in the inevitability of violent conflict with Imperialism and not in ‘Peaceful Coexistence’, and Mao like Che, also opposed the tendency towards using incentives and markets to develop the economy. Both these revolutionary leaders had utopian non-Marxist views, that moral incentives should replace material incentives to spur development at extraordinary rates. Genuine Marxists always opposed the crazy policies of Mao and Che in seeking immediate industrialization.
In China, Zhou Enlai, whose past close connection with the urban revolutionary tradition made him more hostile to bureaucratic tendencies, launched a campaign to promote anti bureaucratic criticism. Mao made a series of important speeches in 1956 and 1957 calling for unlimited criticism of the bureaucratic tendencies in the state and society, free speech and criticism were encouraged. However the criticisms voiced in this ‘hundred flowers movement’ became too shrill and all pervasive for Mao and the leading layers of the bureaucracy to tolerate, consequently Mao took repressive police measures against many of the critics that he previously encouraged.
The ‘anti-rightist’ campaigns in 1958 and 1959 were launched and led to the repression of opponents, many of whom, including the remnants of Chinese Trotskyism, were rounded up and arrested. This was the backdrop to utopian visions of economic development known as the Great Leap Forward. This move on a smaller scale was later to be emulated by Che in Cuba. Mao sought immediate industrialization and this led to massive famine as the technical means for the Great Leap Forward were totally absent, just as when Che launched "Accelerated Industrialization" there was even less possibility of success.
“Thus, in 1961, Guevara predicted that Cuba would be an industrialised country within 12 months! Given the weaknesses of the Cuban economy such a perspective was utterly utopian”
(Cuba: analysis of the revolution Militant 1978)
Luckily for Cuba the programme was quite rapidly abandoned and was unable to inflict the scale of damage that Mao's original plan did. However, one must recognise that for millions of peasants and workers the collectivism of the early years of the revolution was enthusiastically adopted, in spite of the inevitable negative outcome of such an arbitrarily constructed and bureaucratically planned collectivism.
In recent years, in China, just as in Cuba, various factors have led to a far greater openness for discussion; within the Communist Parties, their academic institutions and the press. The Cuban Communist Party has extensively borrowed and emulated parts of China's model, but with important differences that are inevitable given the vastly superior economic foundation in China, vis-à-vis the meagre national resources of Cuba. Most worrying perhaps, is the fact that Cuba's army emulated China's army’s, business activities. This led to heavy involvement in the economy.
In 1998 the Chinese Communist Party leadership demanded immediate divestment of the PLA from business, the then General Secretary Jiang Zemin, commanded that "the military cannot run business any more or the tool of the proletarian dictatorship would be lost and the red colour of the socialist land would change." (Mulvenon Soldiers of Fortune the rise and fall of the Chinese Military Business Complex 2001 p180) Obviously the continued military business empire dominating Cuba's economy presents an extreme danger to the fate of the Cuban Revolution. This is particularly true in foreign exchange related business, they pose an even more acute threat to the rule of the Party in Cuba, than PLA businesses used to in China.
If the Chinese Communist Party paid sufficient attention to defending the Cuban revolution, rather than simply making economic deals and talking about solidarity, they should offer concrete advice about how to extricate the Cuban army from its pervasive business operations. There is a real danger that a capitalist counter-revolution in Cuba will find the foundation of its forces in the spread of corrupt commercial and criminal interests within the Cuban military. In theory, this could be carried out by means of a relatively 'cold stroke' as it appears that sections of the officer caste within the ‘armed bodies of men’ have acquired a material interest in the new property relations that have been established.
In China there is a popular text message circulated by millions last year:
1949 China overthrows Capitalism
1979 Capitalism saves China
1989 China saves Communism
2009 China saves Capitalism
When the East European Communist Parties faced collapse 20 years ago the Chinese Communist Party leadership were initially stunned. They blamed western plots, behind "peaceful evolution". By 1990 they changed their position to a more complex mixture of reasons. CASS, the Central Party School and the Marxism and Socialism Institutes began a research and analysis process that took until 2004. They studied the fate of all the countries of Eastern Europe the USSR and Cuba. The following pattern of approach and analysis to the Soviet Reforms was seen- 1986-7 Skepticism; 1987-9 Support; 1989-91 Suspicion; 1991-2 Shock; 1993-2004 Systemic Study; 2004-5 Conclusion (Chinese Communist Party Aprophy and Adaption 2008 Shambaugh p55)
The conclusions drawn by the researchers were now complex, but they consistently focused on keys issues which it was felt, unless learnt from, would lead to similar events in China and the loss of power by the Chinese Communist Party.
They blamed the loss of power of the Soviet Communist Party on:
1.The economic deterioration, 2. The great distance between the ruling parties and the masses and a lack of local party building, 3. The unions not acting as a bridge between the working class and the party 4. Peaceful evolution efforts by the west.
(ibid p50)
The analysts of the Party and CASS blamed the "bastardisation of Leninism" by Stalin and dictatorial power and totalitarian and dogmatic systems of power. (ibid p.66-7)
A comprehensive study by Zhao Yao at the Central Party School in 2003, blamed Gorbachev for; too rapid economic reforms; blindly copying western political models; degrading the party and allowing a new class to form within it; losing his belief in communism; lacking party discipline; allowing external subversion; failing in ensuring the rule of law; and allowing ethnic conflicts to escalate. (ibid p.70)
The Chinese analysis of Cuba has been extensive and positive in relation to ‘Cuban Communism’. Key researchers at the Party International Department and CASS point to Cuba's promotion of young officials and cadres, the downsizing of bureaucratic agencies to increase efficiency, frequent inspection trips by leaders, strong anti corruption measures, and inner-party democracy and the promotion of ‘party and government dialogue with different sectors of society, control over the military and security services.’ (ibid p.89)
Exchanges between the Cuban Communist Party and the Chinese Communist Party have been extensive and regular. Hu Jintao is said to have heaped praise on the Cuban Communist Party at the Forth Plenum of the sixteenth party congress in 2004, which discussed the lessons of other ruling parties for the CCP.
Following this period of studying what happened to the USSR and Eastern Europe and Cuba, and drawing lessons from this study, the Chinese Communist Party undertook a full scale "rectification campaign" in the name of the "Decision on the Enhancement of the Party's Governing Capacity" adopted in 2004.
For a period of 18 months all 73 million members of the Chinese Communist Party had to:
1. Undertake three months of study of classical Marxist texts, some of Mao’s writings and some speeches by present day leaders (during this period no party members were allowed to leave China.)
2. Spend three months writing self-criticism and three months circulating this to colleagues.
3. Then spend three months being criticised by colleagues and then rewrite their self-criticism.
The intensity of the campaign had not been seen since Mao's time and was aimed at strengthening the party in the face of the main potential dangers to its rule. On the one side, social unrest, to which party members are supposed to respond by reducing conflict, identifying causes, finding solutions and thus pacifying discontent. On the other side, the corruption endemic at the top layers of the commercial state sectors and in governmental administration is supposed to be nipped in the bud and limited by consolidating the control over party members.
Senior figures at state owned enterprises who only a few years ago were milking the opportunities provided by their tenure with impunity, now live in mortal fear of succumbing to the temptations of office. They fear they will find themselves in the same boat as so many high officials recently, in gaol or facing execution.
H Khoo 19th Feb 2009
It should come as no surprise that the Xinhua news agency Spanish section reported on Alan Wood's meeting in Havana. The Central Party School of the Communist Party Central Committee, the Latin American Section of the Chinese Academy of Social Sciences (CASS), the Marxism Study institute at CASS, and numerous other Socialism and Political Studies Institutes in China have links to Marxist.com. They have kept these links on their web sites even though the Internet Censors in China have blocked access to Marxist.com for two years now. This indicates that there is a layer of academics and young people around the official research institutes of the Communist Party who are interested in Marxism. How could there not be? Marxism after all remains the official ideology of the Chinese Communist Party and with an organization of 73 million party members: a larger combined total than all the Communist Parties in all the former ‘Communist states’ at their height, and all members of the Social Democratic and Labour Parties in the capitalist world, and their height, put together!
Furthermore the Chinese Communist Party is seen by the masses in China as an organisation that came to power through a revolutionary guerrilla and mass peasant army. In Cuba, Fidel and Che earned justified respect as revolutionary heroes for leading small band of idealistic revolutionary democrats to Liberate Cuba. Mao’s revolutionary war to liberate a quarter of humanity from Imperialism is justifiably seen by the Chinese masses to this day as the greatest event in Chinese history. The day the nation stood up! This mass revolutionary war smashed imperialism, landlordism and capitalism in China, and acted as a model for the Cuban revolution ten years later. To be sure Mao, like Fidel, initially had a revolutionary democratic agenda, but the weakness of capitalist forces compelled the revolution forwards -beyond bourgeois democratic limits- to begin the socialist tasks of the revolution, nationalization of the means of production and banking, laying the foundations of a planned economy.
Even though publicly Mao was an ally of Stalin, Stalin never forgave Mao for ousting his representatives in the army and party in the 1930s. Mao drove Stalin's man in China, Wang Ming, out of power in the leadership in 1938, a move Stalin fiercely resented.
Stalinism in Marxist terminology is of course not a voluntary phenomenon. The backwardness of China inevitably led bureaucratic tendencies, inherent within the Peoples’ Liberation Army command structure, to be reinforced by the need to develop China from a society of grinding backwardness in technique, science, means of production and culture. Stalinism emerges not from the will but from these objective social conditions. No matter how many times the leadership, or others, with all the best intentions and strongest will to fight ‘bureaucracy’, declare themselves anti-Stalinist, and against corrupt tendencies; material pressures inevitably consume the administration of society and come to dominate it, in conditions of shortage. Only the conscious control by the masses in countries with the most advanced means of production, technical and scientific skills, and highest cultural level in an urban revolutionary society can begin the genuinely socialist phase of human history. This is why the programme of Marxism advocates that national revolutions must become world revolutions. Otherwise if they survive, they inevitably become bureaucratised workers’ states of one form or another.
In 1956 Khrushchev denounced of Stalin. Mao opposed Khrushchev for two main reasons, firstly because Mao like Che, believed in the inevitability of violent conflict with Imperialism and not in ‘Peaceful Coexistence’, and Mao like Che, also opposed the tendency towards using incentives and markets to develop the economy. Both these revolutionary leaders had utopian non-Marxist views, that moral incentives should replace material incentives to spur development at extraordinary rates. Genuine Marxists always opposed the crazy policies of Mao and Che in seeking immediate industrialization.
In China, Zhou Enlai, whose past close connection with the urban revolutionary tradition made him more hostile to bureaucratic tendencies, launched a campaign to promote anti bureaucratic criticism. Mao made a series of important speeches in 1956 and 1957 calling for unlimited criticism of the bureaucratic tendencies in the state and society, free speech and criticism were encouraged. However the criticisms voiced in this ‘hundred flowers movement’ became too shrill and all pervasive for Mao and the leading layers of the bureaucracy to tolerate, consequently Mao took repressive police measures against many of the critics that he previously encouraged.
The ‘anti-rightist’ campaigns in 1958 and 1959 were launched and led to the repression of opponents, many of whom, including the remnants of Chinese Trotskyism, were rounded up and arrested. This was the backdrop to utopian visions of economic development known as the Great Leap Forward. This move on a smaller scale was later to be emulated by Che in Cuba. Mao sought immediate industrialization and this led to massive famine as the technical means for the Great Leap Forward were totally absent, just as when Che launched "Accelerated Industrialization" there was even less possibility of success.
“Thus, in 1961, Guevara predicted that Cuba would be an industrialised country within 12 months! Given the weaknesses of the Cuban economy such a perspective was utterly utopian”
(Cuba: analysis of the revolution Militant 1978)
Luckily for Cuba the programme was quite rapidly abandoned and was unable to inflict the scale of damage that Mao's original plan did. However, one must recognise that for millions of peasants and workers the collectivism of the early years of the revolution was enthusiastically adopted, in spite of the inevitable negative outcome of such an arbitrarily constructed and bureaucratically planned collectivism.
In recent years, in China, just as in Cuba, various factors have led to a far greater openness for discussion; within the Communist Parties, their academic institutions and the press. The Cuban Communist Party has extensively borrowed and emulated parts of China's model, but with important differences that are inevitable given the vastly superior economic foundation in China, vis-à-vis the meagre national resources of Cuba. Most worrying perhaps, is the fact that Cuba's army emulated China's army’s, business activities. This led to heavy involvement in the economy.
In 1998 the Chinese Communist Party leadership demanded immediate divestment of the PLA from business, the then General Secretary Jiang Zemin, commanded that "the military cannot run business any more or the tool of the proletarian dictatorship would be lost and the red colour of the socialist land would change." (Mulvenon Soldiers of Fortune the rise and fall of the Chinese Military Business Complex 2001 p180) Obviously the continued military business empire dominating Cuba's economy presents an extreme danger to the fate of the Cuban Revolution. This is particularly true in foreign exchange related business, they pose an even more acute threat to the rule of the Party in Cuba, than PLA businesses used to in China.
If the Chinese Communist Party paid sufficient attention to defending the Cuban revolution, rather than simply making economic deals and talking about solidarity, they should offer concrete advice about how to extricate the Cuban army from its pervasive business operations. There is a real danger that a capitalist counter-revolution in Cuba will find the foundation of its forces in the spread of corrupt commercial and criminal interests within the Cuban military. In theory, this could be carried out by means of a relatively 'cold stroke' as it appears that sections of the officer caste within the ‘armed bodies of men’ have acquired a material interest in the new property relations that have been established.
In China there is a popular text message circulated by millions last year:
1949 China overthrows Capitalism
1979 Capitalism saves China
1989 China saves Communism
2009 China saves Capitalism
When the East European Communist Parties faced collapse 20 years ago the Chinese Communist Party leadership were initially stunned. They blamed western plots, behind "peaceful evolution". By 1990 they changed their position to a more complex mixture of reasons. CASS, the Central Party School and the Marxism and Socialism Institutes began a research and analysis process that took until 2004. They studied the fate of all the countries of Eastern Europe the USSR and Cuba. The following pattern of approach and analysis to the Soviet Reforms was seen- 1986-7 Skepticism; 1987-9 Support; 1989-91 Suspicion; 1991-2 Shock; 1993-2004 Systemic Study; 2004-5 Conclusion (Chinese Communist Party Aprophy and Adaption 2008 Shambaugh p55)
The conclusions drawn by the researchers were now complex, but they consistently focused on keys issues which it was felt, unless learnt from, would lead to similar events in China and the loss of power by the Chinese Communist Party.
They blamed the loss of power of the Soviet Communist Party on:
1.The economic deterioration, 2. The great distance between the ruling parties and the masses and a lack of local party building, 3. The unions not acting as a bridge between the working class and the party 4. Peaceful evolution efforts by the west.
(ibid p50)
The analysts of the Party and CASS blamed the "bastardisation of Leninism" by Stalin and dictatorial power and totalitarian and dogmatic systems of power. (ibid p.66-7)
A comprehensive study by Zhao Yao at the Central Party School in 2003, blamed Gorbachev for; too rapid economic reforms; blindly copying western political models; degrading the party and allowing a new class to form within it; losing his belief in communism; lacking party discipline; allowing external subversion; failing in ensuring the rule of law; and allowing ethnic conflicts to escalate. (ibid p.70)
The Chinese analysis of Cuba has been extensive and positive in relation to ‘Cuban Communism’. Key researchers at the Party International Department and CASS point to Cuba's promotion of young officials and cadres, the downsizing of bureaucratic agencies to increase efficiency, frequent inspection trips by leaders, strong anti corruption measures, and inner-party democracy and the promotion of ‘party and government dialogue with different sectors of society, control over the military and security services.’ (ibid p.89)
Exchanges between the Cuban Communist Party and the Chinese Communist Party have been extensive and regular. Hu Jintao is said to have heaped praise on the Cuban Communist Party at the Forth Plenum of the sixteenth party congress in 2004, which discussed the lessons of other ruling parties for the CCP.
Following this period of studying what happened to the USSR and Eastern Europe and Cuba, and drawing lessons from this study, the Chinese Communist Party undertook a full scale "rectification campaign" in the name of the "Decision on the Enhancement of the Party's Governing Capacity" adopted in 2004.
For a period of 18 months all 73 million members of the Chinese Communist Party had to:
1. Undertake three months of study of classical Marxist texts, some of Mao’s writings and some speeches by present day leaders (during this period no party members were allowed to leave China.)
2. Spend three months writing self-criticism and three months circulating this to colleagues.
3. Then spend three months being criticised by colleagues and then rewrite their self-criticism.
The intensity of the campaign had not been seen since Mao's time and was aimed at strengthening the party in the face of the main potential dangers to its rule. On the one side, social unrest, to which party members are supposed to respond by reducing conflict, identifying causes, finding solutions and thus pacifying discontent. On the other side, the corruption endemic at the top layers of the commercial state sectors and in governmental administration is supposed to be nipped in the bud and limited by consolidating the control over party members.
Senior figures at state owned enterprises who only a few years ago were milking the opportunities provided by their tenure with impunity, now live in mortal fear of succumbing to the temptations of office. They fear they will find themselves in the same boat as so many high officials recently, in gaol or facing execution.
H Khoo 19th Feb 2009
Vietnam and China: What is the difference?
Vietnam and China: What is the difference?
In January 2008, one and a half years after our tendency decided that in China there has been a capitalist counter-revolution, Alan Woods states that that has not happened in Vietnam.
“Today Vietnam faces a new threat - the threat of capitalist restoration, which is already far advanced in China. Department stores sell French perfumes and Italian shoes to an emerging urban Vietnamese middle class. A French-owned five-star hotel has opened across the street from the US consulate. Even in the annual victory parade some floats, sponsored by Vietnamese banks, sport the logo of American credit card companies. US warships are allowed to visit Vietnamese ports. In Ho Chi Minh City, the renamed capital, a new elite of Vietnamese businessmen is enjoying the good life in trendy bars and restaurants, toasting business success and the new market economy. The privately owned businesses are engaged in the ruthless exploitation of the workers, just as they do now in Russia and China.
The United States has now become Vietnam's single-largest trading partner. US imperialism may yet achieve through trade and investment what it failed to achieve with bombs and napalm. Was it for this that the workers and peasants of Vietnam fought with such inspiring heroism and defeated the mightiest imperialist power the world has ever seen? Will they allow the bureaucracy to privatise the economy and, like China, lead Vietnam back to capitalism? Or will the working class fight against the pro-capitalist elements and lead Vietnam onto the road of genuine Leninist socialism, based on the democratic control and administration of the working people themselves? This question has not yet been answered by history. It is our fervent hope that it will be the second variant and not the first. The working people of Vietnam deserve no less!” (our emphasis throughout)
http://www.marxist.com/tet-offensive-offensive-part-two.htm
Unlike Alan, and presumably the whole of the IS, we are unable to detect any fundamental difference between China and Vietnam.
Consider the facts:
1. Both Vietnam and China have abolished the state monopoly of foreign trade and joined the World Trade Organisation.
2. Both China and Vietnam promote foreign investment by multinational companies. Vietnam offers cheaper labour than China.
3. Both China and Vietnam have a super rich at one end of the wealth spectrum and a slave trade at the other.
4. The proportion of the economy in state hands in China and Vietnam is similar, but the state sector is far more powerful in China than Vietnam. The states proportion of investments in fixed assets is greater in China than in Vietnam.
5. The proportion of the workforce that works for the state in China is higher than in Vietnam.
6. State Owned Enterprises function within the market. The plan is carried out through an economy dominated by market relations.
7. The ideology dominating the ruling party in Vietnam is an almost exact replica of that adopted in China.
8. In neither country have there been any major conflicts within the leadership in the past twenty years.
9. If anything a capitalist counter-revolution would be easier in Vietnam. 76% of the population in Vietnam are rural inhabitants. The state sector is weaker. The economy is weaker with higher inflation and greater indebtedness.
If you agree with China’s Long March to Capitalism then it must follow that Vietnam is also capitalist. In which case the two fastest growing economies in the Asia are both capitalist, and they will become the model of future capitalist societies seeking to escape the limitations imposed by imperialism.
If China and Vietnam are not capitalist states, then the Marxist theory of the superiority of a planned economy based on the nationalisation of the commanding heights of the economy is proven in the language of the unprecedented economic development experienced over the last decades in both countries.
In January 2008, one and a half years after our tendency decided that in China there has been a capitalist counter-revolution, Alan Woods states that that has not happened in Vietnam.
“Today Vietnam faces a new threat - the threat of capitalist restoration, which is already far advanced in China. Department stores sell French perfumes and Italian shoes to an emerging urban Vietnamese middle class. A French-owned five-star hotel has opened across the street from the US consulate. Even in the annual victory parade some floats, sponsored by Vietnamese banks, sport the logo of American credit card companies. US warships are allowed to visit Vietnamese ports. In Ho Chi Minh City, the renamed capital, a new elite of Vietnamese businessmen is enjoying the good life in trendy bars and restaurants, toasting business success and the new market economy. The privately owned businesses are engaged in the ruthless exploitation of the workers, just as they do now in Russia and China.
The United States has now become Vietnam's single-largest trading partner. US imperialism may yet achieve through trade and investment what it failed to achieve with bombs and napalm. Was it for this that the workers and peasants of Vietnam fought with such inspiring heroism and defeated the mightiest imperialist power the world has ever seen? Will they allow the bureaucracy to privatise the economy and, like China, lead Vietnam back to capitalism? Or will the working class fight against the pro-capitalist elements and lead Vietnam onto the road of genuine Leninist socialism, based on the democratic control and administration of the working people themselves? This question has not yet been answered by history. It is our fervent hope that it will be the second variant and not the first. The working people of Vietnam deserve no less!” (our emphasis throughout)
http://www.marxist.com/tet-offensive-offensive-part-two.htm
Unlike Alan, and presumably the whole of the IS, we are unable to detect any fundamental difference between China and Vietnam.
Consider the facts:
1. Both Vietnam and China have abolished the state monopoly of foreign trade and joined the World Trade Organisation.
2. Both China and Vietnam promote foreign investment by multinational companies. Vietnam offers cheaper labour than China.
3. Both China and Vietnam have a super rich at one end of the wealth spectrum and a slave trade at the other.
4. The proportion of the economy in state hands in China and Vietnam is similar, but the state sector is far more powerful in China than Vietnam. The states proportion of investments in fixed assets is greater in China than in Vietnam.
5. The proportion of the workforce that works for the state in China is higher than in Vietnam.
6. State Owned Enterprises function within the market. The plan is carried out through an economy dominated by market relations.
7. The ideology dominating the ruling party in Vietnam is an almost exact replica of that adopted in China.
8. In neither country have there been any major conflicts within the leadership in the past twenty years.
9. If anything a capitalist counter-revolution would be easier in Vietnam. 76% of the population in Vietnam are rural inhabitants. The state sector is weaker. The economy is weaker with higher inflation and greater indebtedness.
If you agree with China’s Long March to Capitalism then it must follow that Vietnam is also capitalist. In which case the two fastest growing economies in the Asia are both capitalist, and they will become the model of future capitalist societies seeking to escape the limitations imposed by imperialism.
If China and Vietnam are not capitalist states, then the Marxist theory of the superiority of a planned economy based on the nationalisation of the commanding heights of the economy is proven in the language of the unprecedented economic development experienced over the last decades in both countries.
Book Review Capitalism with Chinese Characteristics Yasheng Huang 2008
Book Review Capitalism with Chinese Characteristics Yasheng Huang 2008
By H Khoo Feb 8th 2008
Yasheng Huang has produced the seminal work of recent years on the Chinese economy, ‘Capitalism with Chinese Characteristics’. Huang’s research was picked up on quickly by China watchers at the Economist and the Financial Times. It differs from most books on China in that Huang’s investigations go beyond the realm of previous economic surveys of China. Huang studied national bank records to reveal the relative strengths of the state, private, collective and foreign sectors of the economy. He identifies a policy of ingrained hostility within state banks and the Communist Party government toward the indigenous private sector.
What Huang discovered sharply contradicts the dominant view in Sinology that private capitalism dominates in the productive forces. Huang himself believes that a form of state capitalism dominates in which the state owns the ‘commanding heights’ of the economy. Huang’s view is that this is a form of crony capitalism run by the state, a conceptual frame for which he provides no evidence even though it is in the title of his book. Instead Huang concentrates on bemoaning the complete lack institutional support for private companies and entrepreneurs and the repression of indigenous private economic forces by the state.
Huang’s evidence shows -counter-intuitively -that Shanghai is the least capitalist major city in China, and that the Shanghai elite within the Communist Party played a key role in shaping government policy on a national scale from the 1990s. Huang admits that, “State led GDP growth can still be fast in Shanghai” as it was “in certain periods in the Soviet Union-without private incentives due to huge government investments.” p208
Huang shows that in the 1990s the path towards greater ‘market freedom’ was curtailed and ‘private entrepreneurship’ was stifled by the state. Whilst the state encourages foreign investment and joint ventures, indigenous private capitalism finds itself unwelcome and repressed.
Huang argues that many economic analysts have been fooled into overestimating the size of the private sector. He puts this down to the tendency to regard ‘legal-person shareholding firms’ as private companies. The OECD for example used this method to conclude that the private sector share of industrial output is 71.2 percent. Huang argues that the actual private sector share is 39.8 percent of industrial value added. He shows that legal-person shareholding companies in China are invariably actually owned by the state.
Huang laments the result of his own research, and that the facts point to,
“the inescapable sobering conclusion: At the end of the twentieth century the size of the indigenous private sector in China was miniscule. By 2005, however the indigenous private sector did become sizable (at 22 percent of industrial value-added). The flourishing of the indigenous private sector firms is a very recent development.” p18.
“Was” a recent development is more accurate as Huang’s research predates the shake out 67,000 firms both indigenous private and private foreign owned, over the past year. The proportion of the industrial value-added in China by the private sector has suffered a major reversal as state firms have been shielded from closure during the closure of export-oriented factories over the last year. State investment from the present massive Government stimulus package will primarily be channelled through state owned enterprises and local governments, therefore the grip of the state sector over the economy; what Huang calls alternately ‘crony capitalism’ or ‘commanding heights’ government, is inevitably set to strengthen over the next years.
Huang’s book is an important contribution to understanding China’s economic and political dynamics, and is essential reading for anyone interested in the nature of the Chinese economic boom. Marxists can benefit from his detailed and accessible research, provided one can laugh at his obsessive portrayal of the fortunes of the Chinese private sector, which Huang would have us believe has suffered a tragedy comparable to Goethe’s hero in “The sorrows of the young Werther”
Capitalism with Chinese Characteristics 2008 Cambridge University Press Yasheng Huang
By H Khoo Feb 8th 2008
Yasheng Huang has produced the seminal work of recent years on the Chinese economy, ‘Capitalism with Chinese Characteristics’. Huang’s research was picked up on quickly by China watchers at the Economist and the Financial Times. It differs from most books on China in that Huang’s investigations go beyond the realm of previous economic surveys of China. Huang studied national bank records to reveal the relative strengths of the state, private, collective and foreign sectors of the economy. He identifies a policy of ingrained hostility within state banks and the Communist Party government toward the indigenous private sector.
What Huang discovered sharply contradicts the dominant view in Sinology that private capitalism dominates in the productive forces. Huang himself believes that a form of state capitalism dominates in which the state owns the ‘commanding heights’ of the economy. Huang’s view is that this is a form of crony capitalism run by the state, a conceptual frame for which he provides no evidence even though it is in the title of his book. Instead Huang concentrates on bemoaning the complete lack institutional support for private companies and entrepreneurs and the repression of indigenous private economic forces by the state.
Huang’s evidence shows -counter-intuitively -that Shanghai is the least capitalist major city in China, and that the Shanghai elite within the Communist Party played a key role in shaping government policy on a national scale from the 1990s. Huang admits that, “State led GDP growth can still be fast in Shanghai” as it was “in certain periods in the Soviet Union-without private incentives due to huge government investments.” p208
Huang shows that in the 1990s the path towards greater ‘market freedom’ was curtailed and ‘private entrepreneurship’ was stifled by the state. Whilst the state encourages foreign investment and joint ventures, indigenous private capitalism finds itself unwelcome and repressed.
Huang argues that many economic analysts have been fooled into overestimating the size of the private sector. He puts this down to the tendency to regard ‘legal-person shareholding firms’ as private companies. The OECD for example used this method to conclude that the private sector share of industrial output is 71.2 percent. Huang argues that the actual private sector share is 39.8 percent of industrial value added. He shows that legal-person shareholding companies in China are invariably actually owned by the state.
Huang laments the result of his own research, and that the facts point to,
“the inescapable sobering conclusion: At the end of the twentieth century the size of the indigenous private sector in China was miniscule. By 2005, however the indigenous private sector did become sizable (at 22 percent of industrial value-added). The flourishing of the indigenous private sector firms is a very recent development.” p18.
“Was” a recent development is more accurate as Huang’s research predates the shake out 67,000 firms both indigenous private and private foreign owned, over the past year. The proportion of the industrial value-added in China by the private sector has suffered a major reversal as state firms have been shielded from closure during the closure of export-oriented factories over the last year. State investment from the present massive Government stimulus package will primarily be channelled through state owned enterprises and local governments, therefore the grip of the state sector over the economy; what Huang calls alternately ‘crony capitalism’ or ‘commanding heights’ government, is inevitably set to strengthen over the next years.
Huang’s book is an important contribution to understanding China’s economic and political dynamics, and is essential reading for anyone interested in the nature of the Chinese economic boom. Marxists can benefit from his detailed and accessible research, provided one can laugh at his obsessive portrayal of the fortunes of the Chinese private sector, which Huang would have us believe has suffered a tragedy comparable to Goethe’s hero in “The sorrows of the young Werther”
Capitalism with Chinese Characteristics 2008 Cambridge University Press Yasheng Huang
China a Capitalist or a Workers’ State? (May 2009 unpublished)
China a Capitalist or a Workers’ State?
Socialism is a system where economic and social planning is administered and checked by democratic workers’ control of production, distribution and exchange. The lowest level of Socialism can only begin when social revolution overthrows capitalism in the richest countries of the world where the productivity of labour is highest.
Stalinism is a system of bureaucratic administration in a society where social revolution placed the commanding heights of the economy in public hands but whose average level of productivity of labour is lower than the average in the wealthiest capitalist countries. It is by definition a transitional society between backward capitalism and socialism, thus it inevitably combines elements of capitalism and elements of socialism. Stalinist states administer planning bureaucratically, without fully replacing markets as the primary mechanism of exchange and quality control.
The lack of democracy under Stalinism was not the only reason for economic stagnation. This was also caused by, a. Autarchy, b. State Control of Prices and c. Excessive Nationalisation. The removal of these three economic restrictions boosted the economy of China and revealed in a new way the inherent superiority of the planned economy.
a. Autarchy prevented technological exchange and distorted the productive system within the narrow limits of the backward national economy. China joined the World Trade Organisation and its control of foreign trade is limited. However control of the state and government and public ownership of the banks and the largest enterprises, all act as powerful levers to prevent cheap imports from undermining state planning. The benefits of participation in the world division of labour; include the use of the law of combined development through access to the latest science and technique and its application throughout the planned economy.
b. State Control of Prices when applied generally inevitably creates shortages and corruption. In a transitional economy state control of prices should be an economic tool used cautiously and strategically. The complexity of forecasting the impact of price controls can create grotesque distortions even in spheres where general consensus on price control may exist. Take rent control, when rents are set too low, revenue will not cover maintenance, improvement, or new construction costs and a black market will evolve. The law of value cannot be abolished by fiat it can only be overcome through the production of abundance.
c. Excessive nationalisation undermined the ability to meet simple consumer demands in the retail and services sector. It was often impossible to legitimately get elementary goods and services e.g. plumbing, mechanical repair of consumer goods or vehicles, goods dependent on individual aesthetic or culinary taste, quality escaped the grasp of bureaucratic control like a shadow.
Since 1978 China changed from an almost completely state owned and autarkic economy, to one in which public ownership dominates the commanding heights, the capitalist sector plays a major role and the economy is integrated into the world market.
This particular balance of economic forces corresponds closely to transitional economy model proposed by Preobrazensky, the main economic theorist of the Left Opposition in the USSR in the 1920s. Marxists often mention the New Economic Policy carried out in the USSR as a necessary retreat; but fail to concretely address the importance of identifying what was necessary. What balance of property relations should exist in the transitional epoch and by what means should the Socialist sectors be strengthened and the capitalist exploited, controlled and eventually eliminated? Preobrazensky addressed these questions in his book New Economics, in a way that bears strikingly resemblance to China’s economy today. When he wrote this book the threat of capitalist restoration hung over the USSR, it was the criticisms by the Left Opposition, adopted in a caricatured form, that prevented capitalist restoration in the USSR in 1928. Today China, Cuba, North Korea and Vietnam all stand on the precipice; pro-capitalist forces internally and externally are pushing for social counter-revolution. Marxists must engaging the questions confronting these societies and in this way defend of the planned economy.
This discussion takes us into the domain of the practical steps needed in the revolutionary programme and policy of a workers’ state. It is these issues that are at the core of the debates inside the Communist Parties and root of the class conflicts in society, in China, Vietnam, North Korea and Cuba. Indeed, the same issues are at the heart of the reasons behind catastrophic collapse of the planned economies of Eastern Europe and the USSR twenty years ago.
In most countries our programme for the economic organisation of a workers state calls for public ownership of the commanding heights of the economy. Marxists have never argued for total nationalisation of the economy even in advanced capitalist countries.
Bureaucratic control of the workers’ state caused mismanagement and corruption; excessive public ownership was a major contributory factor within this. Small and intermediate scale companies should never have been nationalised. It follows that where such companies were nationalized they should be privatized as a necessary retreat. Lenin was not afraid to invite capitalists to invest, install one-man management in the factories and promote inequality in wages. Lenin and Trotsky did not envisage the decades of existence of bureaucratic workers’ states, but they did foresee that the USSR had to combine the capitalist and socialist tasks of the revolution.
The democratic planning system of a workers’ state must focus its attention firstly on the administration of the banks and through them on the core industries and services. The nationalisation of the banks provides the means for a workers’ state to take control of the economy through a national economic plan.
In China, Vietnam, Cuba and North Korea, public ownership of the banks and the commanding heights of the economy is what identifies these countries as workers’ states and planned economies. In China and Vietnam there is a large legal private sector, in Cuba and North Korea there is a large illegal private sector, in the form of the black market.
Large private sector enterprises and the individual acquisition of capital have created a politically dangerous merging of interests between sections of the ruling bureaucracy and the capitalist class in both China and Vietnam. The command economy of Cuba is just as subject to capitalist forces as China and Vietnam, perhaps more so. In Cuba everyday life is impossible without participating in the black market. The distortions in the economy that are the result of excessive state ownership, autarchy and price controls are the breeding ground for petty capitalist gangsterism to flourish. The illegal enrichment of the few lays the foundations for the growth of capitalist forces, particularly as trade with the United States is relaxed and émigré money moves in seeking out local black-market ‘business’ partners. Cuba faces an imminent threat of capitalist restoration because its economy is so tiny that its public sector can be swamped in a matter of days. Cuba’s banking system is based on an artificial currency exchange so it cannot survive in the world market. Price controls and bureaucratic planning distortions mean that reforms will inevitably cause further dislocation and will strengthen pro-capitalist forces. Marxists in Cuba should encourage a discussion of China’s economic success explaining that it is based on public ownership of the commanding heights. This discussion can only assist the Cuban, Caribbean and Latin American revolutions to avoid the Stalinist path of excessive nationalisation, autarchy and bureaucratic administration. Marxists must explain the need for a minimum programme of public ownership of the commanding heights, democratic control by the workers over the state and major enterprises, and a thoroughgoing internationalist policy. Marxists explain that private enterprise and initiative should be supported in a transitional Socialist state, this can includes foreign investment, joint ventures, individual and cooperative private ownership. To argue for complete public ownership is an ultra-left sickness that has nothing to do with Marxism.
In North Korea the bureaucracy followed precisely such a path, everything was state owned. One would think that no serious Marxist defends the prohibition on peasants owning and raising their own pigs? Yet we read on Marxist.com that all measures by the government of North Korea that permit private incentive must be reversed! Marxists do not shy away from participation in discussions of how to develop the productive forces using capitalist methods, investment and individual incentive. We are serious revolutionaries aware of the problems of everyday life caused by over-centralised and over nationalised economic structures. The active democratic participation and supervision by the masses is the mechanism of democratic control over the petty private sector, not prohibition.
A workers’ state under workers’ control and democratic planning in the richest countries of the world would still need to identify which proportions of state, collective, private and foreign capital would be most effective for development. In a society where the bourgeois mode of production is underdeveloped and where peasant and petty individual production predominate, a prolonged period of transition necessitates a balanced and gradual transformation from individual to social production, thus also from private to public ownership. The accumulation of ‘socialist type’ productive forces in the commanding heights of the economy is the primary means of socialist accumulation in a transitional society that seeks to move from a predominantly pre-capitalist to a socialist economic formation.
If it is true that the state sector owns and controls the commanding heights of the economy then the classical Marxist position of unconditional defence of the planned economy and political revolution to establish a workers’ democracy still hold good for China. However, given the changed global balance of forces and the potential scope for engaging in fraternal discussion with the Communist Party members it would be counter-revolutionary sectarianism to call for the overthrow of the Chinese Communist Party. Our relations to the Cuban Communist Party should serve as an example and a lever in this respect.
Given the development of the productive forces at such rapid speed and the progress this has brought for the broad masses, it is inevitable that this reflects itself in widespread support for the Chinese Communist Party. This would be the case even if China were capitalist, as the Communist Party would be regarded as a sort of bonapartist-reformist party presiding over the state in a prolonged economic upswing (the greatest in human history).
We must arm socialist forces inside the Communist Party with a Marxist programme, policy and theory; oppose pro-capitalist forces and support workers’ struggles for democratic control and supervision over the administration of the state and society; and support measures to reduce inequality and realise the constitutional rights of the workers as ‘masters of the state’.
The deep-seated hatred of the new rich and particularly of corrupt bourgeois forces in the party and state must be turned into action to reduce inequality. This means a fight to limit inequality in individual wealth through progressive taxation, a cap on the income of officials and state employees by legislation and anti-corruption agencies. Enforcing such measures by democratic supervision and control will find a wide constituency of support within the Communist Party and amongst the workers and peasants.
Marxists seek to turn the trade unions and the Staff and Workers’ Representative Councils into fighting working class bodies to protect public property and take over administration, through democratic control of the commanding heights of the economy.
We support the organisation of the peasant poor in alliance with honest cadres, militant Communists, soldiers, veterans and the working class, to democratically supervise administration and accounting, fight corruption and graft, and subject planning to democratic control to serve the aspirations of the masses.
The appearance of child labour, slave markets, Dickensian factories, etc. does not determine the character of the state. Slave labour contributed to the formation of capitalism, it also played an important role in the development of Siberia in the 1930s. Marxists determine the character of a social system by the dominant sectors of the economy. The USSR was a workers’ state in 1917 regardless of the fact that the majority of the masses were peasants barely crawling out from serfdom; the state was a workers state because the commanding heights were under the control and ownership of the state.
Exploitation is inevitable in the transitional epoch between capitalism and socialism. The law of value, that socially necessary labour time determines price, remains the dominant economic law. Socialist accumulation by the state allows the amelioration and amendment of this law, but the overcoming this law is only possible when socialist productivity of labour surpasses that of capitalism. Socialist policy in the transitional epoch inevitably involves exploiting pre-socialist economic forms to accumulate capital to develop large-scale enterprises in the public sector.
Social production is the production of large-scale industry for large numbers of consumers, e.g. steel, coal, iron, electricity, transportation and infrastructure etc. This is the sphere where a transitional society needs to socialize production and thereby amend and adjust the impact of the law of value. This may be done for example, by setting prices of steel at a level that increases demand for construction; by providing cheap transport; supporting state driven investment policies and above all through state banking serving the plan.
Individual production, the production for small numbers of consumers, by artisans, workshops, food outlets, small scale farms, design, plumbing repairs, car mechanics etc. These spheres should be private or cooperative, (which is a form of collective private operation) in the transitional epoch and for the foreseeable future. The nationalization of individual production has a negative impact on the overall economy and leads to bottlenecks for consumers and industry. The detailed planning of each and every product or service is impossible under bureaucratic or workers’ control. It is not possible to foresee each and every time a plumber needs to fix your drain, nor to bureaucratically plan excellent cuisine in a restaurant, for this a great chef and a well organised division of labour is required. Recipes and cookbooks are not enough to produce excellent dishes, as anyone who has eaten school meals, or the food served to us at the world events in Barcelona can confirm!
The evidence and arguments used as the basis for ‘China’s Long March to Capitalism’ were both misleading and false.
Specifically
1. Instead of being bound to capitalism through property ownership, the Peoples’ Liberation Army is totally divested from business.
2. The capitalist class has neither, a high membership of or dominant influence within, the Communist Party
3. The cause of rapid economic growth between 1978 and 2005 was not impulses from the pre-1978 era but the dynamics of an economy in which the commanding heights are state-owned.
4. Capitalist property is subordinate to state property in the commanding heights and banking. At no stage has the Chinese Communist Party abandoned its commitment to the dominance of public ownership.
5. The post 1949 ruling bureaucracy was not and is not a continuation of the Mandarin bureaucracy
6. The regime is not more repressive than 20 years ago, it is false to characterise China as composed of the worst of capitalism and the worst of Stalinism.
7. Independent and comprehensive research shows that leftwing tendencies inside the Communist Party, led by lower level cadres, organize over 66% of strikes, demonstrations and revolts, within the villages, townships, cities and state enterprises. To present this section of the CCP as pro-capitalist means to alienate us from the leadership of the real social movements of the workers and peasants in China today.
Various objections to these arguments have been raised,
1. Many studies claim China is capitalist
The fact that most bourgeois analysts fail to understand the processes taking place in China as the economic dynamics of a workers’ state is because the concept of a workers’ state in their theoretical frame is a “centrally planned economy” with almost 100% state ownership and all or most prices fixed by the state. In addition, some ultra-left Maoists in China say the country is capitalist, Mao characterised the USSR as capitalist in 1961! Marxist must judge the issue according to Marxist criteria and not be swayed by appearances and fashion.
2. China has been affected by a crisis of overproduction
Planned economies, even in a healthy workers’ state will experience crises and periods of overproduction, particularly in the transitional epoch between capitalism and socialism, as the laws of the global market inevitably impact on the national economy. The fact that China is a major importer and exporter obviously means that capitalist crisis on a world scale adversely affects China. Only complete autarchy can avoid this. In addition as long as there are market relations expansion and contraction will follow capitalist laws, but these laws can be counter-acted by planning to limit and overcome crises, through the domination of the dominant economic levers governing finance, investment and the key means of production in state hands.
3. Chinese workers work in capitalist factories and are brutally exploited.
It is true that Capitalist relations dominate in many sectors of the economy and the law of value operates as the primary determinant of the price of labour power. A transitional society inevitably operates according to this law. It is true that in China far more people are directly subject to capitalist exploitation than in the former USSR or in China from 1949-1978. In all transitional societies the accumulation of capital for socialist type production by state owned enterprises necessitates the exploitation of man according to the law of value and the primitive accumulation from pre-socialist economic systems. Taxes on private enterprises, state ownership of the banks, and similar measures permit capitalist operations to be exploited as the means of accumulation of resources for state enterprises. In addition technological innovation produced under capitalism can be replicated, saving time in research and development costs.
4. The health, education and welfare system of the revolution has been eroded.
There has been a failure in heath, education and welfare reform in China, leaving basic services, particularly in rural areas at a miserably low level. This failure is a reflection of the misuse of power and planning errors of the ruling bureaucracy. The inadequate social welfare provision is one of the issues that can and does galvanise social discontent of the masses to demand the Communist Party ‘serve the people’. It does not however invalidate the claim that China remains a bureaucratically deformed workers’ state.
5. The Maoist forms of collectivism and social life have been undermined.
The specific form of urban power and control in Maoist China was based upon a system known as the Iron Rice bowl. This in essence was a cradle to the grave welfare system for the working class in state owned enterprises. This system was predicated on the hukou population registration system, which prevented migration from rural to urban areas. This meant that the modern socialized sector of the economy was entirely limited to urban conurbations. The peasantry outnumbered the proletariat and thus the move to socialism was postponed until some unknown epoch when the distinction between town and country would magically disappear. Whilst the move to abolish the Iron Rice Bowl was in many ways regressive, the result has been improved productivity and the strengthening of the most important state owned enterprises.
6. The market has replaced the plan as the central mode of distribution and allocation of goods and services even within the state sector.
The distribution of goods even in a healthy workers state will be predominantly by means of the market i.e. governed by the law of value. A workers’ state can amend the law of value through its control of the commanding heights of the economy and investment, taxation and credit policy. The less invasive the less bureaucratic, the more the development of the productive forces can lay the foundation to ameliorate and overcome the law of value, through attaining abundance. The struggle for socialistic principles in economy is one of generations even in the most advanced countries. However socialistic principles can be applied to specific spheres of economic priority, like universal healthcare, education, or welfare services.
7. The state sector is being developed to foster a powerful indigenous ruling class.
The state sector is the core of the Chinese economy and the Communist Party is dependent on this sector for its legitimacy and power. There is corruption and graft inherent in the mixture of bureaucratic power alongside market relations and world trade. This does not mean that the state sector is a nursery for capitalism, there is no indication the party intends to cede its power to the capitalists in the state sector, on the contrary, there is every reason for the party not to cede this power as with it would go the raison d’etre of Communist party rule.
8.The creation of billionaires and paupers and increasing inequality is clearly a capitalist tendency.
The increasing inequality in China is undoubtedly a powerful evidence for the creation of capitalist forces. When combined with political power and economic combinations with overseas Chinese capitalists and multinational capitalism, it is clear that the forces moving China on the path to capitalist restoration are powerful. However economic inequality itself is not proof of a completed capitalist restoration. The capitalists do not command the party or the state apparatus and are subject to repression. The fear of reaction by workers and the peasant poor is the main pressure on the party to limit its collusion with the capitalists. The bureaucracy fears the social discontent and increasing objective strength of the proletariat within society and it is this that holds the leadership of the bureaucracy in check.
9. The Communist Party is run by a corrupt, self-seeking caste, interested only in enriching themselves and anchoring their powers in capitalist property relations.
China’s Liberation was led by the Communist Party, which was composed of a range of forces, from heroic selfless revolutionaries to honest and dishonest bureaucrats. The tendency for members of the party and bureaucracy to seek to anchor their privileges in capitalist property is strong; the party survives however, by its claim to represent the workers and the poor. This contradiction causes periodic purges and rectification campaigns. The most recent rectification campaign involving over 70 million members was in 2004-6, all party members were subject to inspection, compelled to study Marxist and Maoist texts, and to engage in self-criticism and public self-criticism over several months. If such methods were the cause of China’s uniquely rapid economic growth then Capitalists parties around the world will begin to emulate the Chinese Communist Party!
10. China is not only exploiting Chinese workers but is also exporting capital and exploiting workers all around the world, they act as an imperialist country, particularly in Africa.
The export of Capital from China has been primarily carried out by State Owned Enterprises to secure the strategic assets required by the Chinese state for planned development. The deals made with national governments tend to exchange skills of Chinese state owned enterprises for raw materials and resources central to national strategic objectives. The Chinese in Africa are engaged in state construction projects, civil engineering, infrastructure provision and road building. This has certainly brought benefits to many recipient nations whose normal terms of trade with Imperialist capitalism means pieces of paper are exchanged for raw materials or commodities and the rulers of the exploited nations deposit these pieces of paper in imperialist banks. Stagnation and decline often characterised the economies of Africa. Many people used to accuse the USSR of exploiting its satellites and there certainly were occasions where Soviet or Russian national economic interests were placed above the collaborating countries. Did this make the export of capital from the USSR a form of imperialism?
11. The transition to capitalism was gradual and was only completed in recent years this is why China has not experienced booms and slumps of Capitalism until now.
As China has experienced more rapid and smooth growth than any other country in history from 1978, it is evident that until recent times the dominance of planning was the basis of this growth. Some argue that the shift to capitalist dominance was a recent phenomena, thus it is argued that the present economic crisis is the first truly capitalist crisis in China since 1949. Planned economies can certainly suffer internal crises, like that the Great Leap Forward or the Cultural Revolution. However, they can also suffer cyclical booms and slumps in demand, if significant proportions of their economy is organised on the basis of the market. The integration with the world market brings impacts caused by global capitalist crisis. The advantage of the public ownership of the commanding heights and state planning is revealed in the ability to shift towards state investments to ameliorate and overcome the impact of market fluctuations or declining export demand. As capitalist companies close, state companies invest and sustain demand through the main sectors of the economy starting with the banks.
CLMC’s thesis rests on a theory that the class character of China’s bureaucracy is capitalist. However analogy replaces evidence as proof. In the late 19th and early 20th century the feudal state bureaucracy in Germany and Japan encouraged capitalist development through state support and nationalization, ‘therefore’ this is what China’s Communist Party is said to be doing, nurturing Chinese capitalism to become strong with the power of the central state.
Despite the formal appearance of similarity, the analogy is fundamentally flawed. With the feudal state introducing capitalism you were dealing with a historically dying system promoting a more progressive socio-economic system. With China we are dealing with a more progressive socio-economic system, the planned economy, introducing a more reactionary and backward socio-economic system, capitalism.
The theory of the Permanent Revolution contends that the progressive phase of capitalist development on a world historic level ended with the first imperialist war in 1914-1918. The bourgeoisie proved incapable of carrying through the bourgeois democratic revolutions in countries that came late to capitalist development. The tasks of the bourgeois democratic revolution in less developed countries fell to the proletariat to complete. This did not exclude exceptions to the rule in some countries that experienced rapid industrialisation in the 1970s and 80s, like South Korea, Taiwan or Malaysia. China is not just some minor ‘exceptional’ country, it has the largest population on earth and experienced social revolution in 1949 precisely because capitalism was unable to develop the nation and solve the tasks of the bourgeois democratic revolution.
If one contends that China today, can and has developed more rapidly under capitalism than under the planned economy (albeit under Maoist mismanagement) then there are serious question marks over the entire thesis of the exhaustion of capitalist potential for all of the former Stalinist states and all of the less developed capitalist countries. This poses a question over the nature of the epoch we live in. The fastest growth rate in history has been attained in China as it introduced capitalism over the last 30 years, is such growth attainable in Africa, Latin America, India, Asia and the former USSR if they emulate the Chinese model? Indeed is this not inevitable?
We answer with an emphatic no! China’s growth rate has been attained by concentrating public ownership within the commanding heights of the economy, by strengthening the economic efficiency of the large-scale state owned enterprises and by subjecting the planning to the law of value, creating a flourishing market in which the state uses its control of the commanding heights to exercise more effective planning control. The state budget and public ownership of the banks and the commanding heights enable the system to be planned better than the Maoist system pre-1979. China was characterised by complete public ownership of all economic activity, small and large scale.
None of this leads one to praise the form of the dictatorship, inequality, corruption, nepotism, exploitation or the undermining of the welfare system etc. characteristic of the last 30 years. Indeed almost everyone accepts that precisely these processes have slowed down the rate of growth! The need to eliminate all these hindrances to development is a powerful argument for democratic control of administration of the government and economic planning system.
Democratic workers’ control of public resources in China would focus priority on eliminating corruption and reducing inequality, between rich and poor, urban and rural, east and west.
The Chinese masses demand immediate and drastic improvement in health, education and pensions, the protection of the peasant against the speculator, the worker against the exploiter. They desire balanced economic development taking account of the long-term environmental costs affecting the quality of the life of the masses and their children.
Marxists must understand and assimilate the practical experiences of the transitional economy in China, which provides powerful and practical arguments for the defence and promotion public ownership of the commanding heights of the economy.
Socialism is a system where economic and social planning is administered and checked by democratic workers’ control of production, distribution and exchange. The lowest level of Socialism can only begin when social revolution overthrows capitalism in the richest countries of the world where the productivity of labour is highest.
Stalinism is a system of bureaucratic administration in a society where social revolution placed the commanding heights of the economy in public hands but whose average level of productivity of labour is lower than the average in the wealthiest capitalist countries. It is by definition a transitional society between backward capitalism and socialism, thus it inevitably combines elements of capitalism and elements of socialism. Stalinist states administer planning bureaucratically, without fully replacing markets as the primary mechanism of exchange and quality control.
The lack of democracy under Stalinism was not the only reason for economic stagnation. This was also caused by, a. Autarchy, b. State Control of Prices and c. Excessive Nationalisation. The removal of these three economic restrictions boosted the economy of China and revealed in a new way the inherent superiority of the planned economy.
a. Autarchy prevented technological exchange and distorted the productive system within the narrow limits of the backward national economy. China joined the World Trade Organisation and its control of foreign trade is limited. However control of the state and government and public ownership of the banks and the largest enterprises, all act as powerful levers to prevent cheap imports from undermining state planning. The benefits of participation in the world division of labour; include the use of the law of combined development through access to the latest science and technique and its application throughout the planned economy.
b. State Control of Prices when applied generally inevitably creates shortages and corruption. In a transitional economy state control of prices should be an economic tool used cautiously and strategically. The complexity of forecasting the impact of price controls can create grotesque distortions even in spheres where general consensus on price control may exist. Take rent control, when rents are set too low, revenue will not cover maintenance, improvement, or new construction costs and a black market will evolve. The law of value cannot be abolished by fiat it can only be overcome through the production of abundance.
c. Excessive nationalisation undermined the ability to meet simple consumer demands in the retail and services sector. It was often impossible to legitimately get elementary goods and services e.g. plumbing, mechanical repair of consumer goods or vehicles, goods dependent on individual aesthetic or culinary taste, quality escaped the grasp of bureaucratic control like a shadow.
Since 1978 China changed from an almost completely state owned and autarkic economy, to one in which public ownership dominates the commanding heights, the capitalist sector plays a major role and the economy is integrated into the world market.
This particular balance of economic forces corresponds closely to transitional economy model proposed by Preobrazensky, the main economic theorist of the Left Opposition in the USSR in the 1920s. Marxists often mention the New Economic Policy carried out in the USSR as a necessary retreat; but fail to concretely address the importance of identifying what was necessary. What balance of property relations should exist in the transitional epoch and by what means should the Socialist sectors be strengthened and the capitalist exploited, controlled and eventually eliminated? Preobrazensky addressed these questions in his book New Economics, in a way that bears strikingly resemblance to China’s economy today. When he wrote this book the threat of capitalist restoration hung over the USSR, it was the criticisms by the Left Opposition, adopted in a caricatured form, that prevented capitalist restoration in the USSR in 1928. Today China, Cuba, North Korea and Vietnam all stand on the precipice; pro-capitalist forces internally and externally are pushing for social counter-revolution. Marxists must engaging the questions confronting these societies and in this way defend of the planned economy.
This discussion takes us into the domain of the practical steps needed in the revolutionary programme and policy of a workers’ state. It is these issues that are at the core of the debates inside the Communist Parties and root of the class conflicts in society, in China, Vietnam, North Korea and Cuba. Indeed, the same issues are at the heart of the reasons behind catastrophic collapse of the planned economies of Eastern Europe and the USSR twenty years ago.
In most countries our programme for the economic organisation of a workers state calls for public ownership of the commanding heights of the economy. Marxists have never argued for total nationalisation of the economy even in advanced capitalist countries.
Bureaucratic control of the workers’ state caused mismanagement and corruption; excessive public ownership was a major contributory factor within this. Small and intermediate scale companies should never have been nationalised. It follows that where such companies were nationalized they should be privatized as a necessary retreat. Lenin was not afraid to invite capitalists to invest, install one-man management in the factories and promote inequality in wages. Lenin and Trotsky did not envisage the decades of existence of bureaucratic workers’ states, but they did foresee that the USSR had to combine the capitalist and socialist tasks of the revolution.
The democratic planning system of a workers’ state must focus its attention firstly on the administration of the banks and through them on the core industries and services. The nationalisation of the banks provides the means for a workers’ state to take control of the economy through a national economic plan.
In China, Vietnam, Cuba and North Korea, public ownership of the banks and the commanding heights of the economy is what identifies these countries as workers’ states and planned economies. In China and Vietnam there is a large legal private sector, in Cuba and North Korea there is a large illegal private sector, in the form of the black market.
Large private sector enterprises and the individual acquisition of capital have created a politically dangerous merging of interests between sections of the ruling bureaucracy and the capitalist class in both China and Vietnam. The command economy of Cuba is just as subject to capitalist forces as China and Vietnam, perhaps more so. In Cuba everyday life is impossible without participating in the black market. The distortions in the economy that are the result of excessive state ownership, autarchy and price controls are the breeding ground for petty capitalist gangsterism to flourish. The illegal enrichment of the few lays the foundations for the growth of capitalist forces, particularly as trade with the United States is relaxed and émigré money moves in seeking out local black-market ‘business’ partners. Cuba faces an imminent threat of capitalist restoration because its economy is so tiny that its public sector can be swamped in a matter of days. Cuba’s banking system is based on an artificial currency exchange so it cannot survive in the world market. Price controls and bureaucratic planning distortions mean that reforms will inevitably cause further dislocation and will strengthen pro-capitalist forces. Marxists in Cuba should encourage a discussion of China’s economic success explaining that it is based on public ownership of the commanding heights. This discussion can only assist the Cuban, Caribbean and Latin American revolutions to avoid the Stalinist path of excessive nationalisation, autarchy and bureaucratic administration. Marxists must explain the need for a minimum programme of public ownership of the commanding heights, democratic control by the workers over the state and major enterprises, and a thoroughgoing internationalist policy. Marxists explain that private enterprise and initiative should be supported in a transitional Socialist state, this can includes foreign investment, joint ventures, individual and cooperative private ownership. To argue for complete public ownership is an ultra-left sickness that has nothing to do with Marxism.
In North Korea the bureaucracy followed precisely such a path, everything was state owned. One would think that no serious Marxist defends the prohibition on peasants owning and raising their own pigs? Yet we read on Marxist.com that all measures by the government of North Korea that permit private incentive must be reversed! Marxists do not shy away from participation in discussions of how to develop the productive forces using capitalist methods, investment and individual incentive. We are serious revolutionaries aware of the problems of everyday life caused by over-centralised and over nationalised economic structures. The active democratic participation and supervision by the masses is the mechanism of democratic control over the petty private sector, not prohibition.
A workers’ state under workers’ control and democratic planning in the richest countries of the world would still need to identify which proportions of state, collective, private and foreign capital would be most effective for development. In a society where the bourgeois mode of production is underdeveloped and where peasant and petty individual production predominate, a prolonged period of transition necessitates a balanced and gradual transformation from individual to social production, thus also from private to public ownership. The accumulation of ‘socialist type’ productive forces in the commanding heights of the economy is the primary means of socialist accumulation in a transitional society that seeks to move from a predominantly pre-capitalist to a socialist economic formation.
If it is true that the state sector owns and controls the commanding heights of the economy then the classical Marxist position of unconditional defence of the planned economy and political revolution to establish a workers’ democracy still hold good for China. However, given the changed global balance of forces and the potential scope for engaging in fraternal discussion with the Communist Party members it would be counter-revolutionary sectarianism to call for the overthrow of the Chinese Communist Party. Our relations to the Cuban Communist Party should serve as an example and a lever in this respect.
Given the development of the productive forces at such rapid speed and the progress this has brought for the broad masses, it is inevitable that this reflects itself in widespread support for the Chinese Communist Party. This would be the case even if China were capitalist, as the Communist Party would be regarded as a sort of bonapartist-reformist party presiding over the state in a prolonged economic upswing (the greatest in human history).
We must arm socialist forces inside the Communist Party with a Marxist programme, policy and theory; oppose pro-capitalist forces and support workers’ struggles for democratic control and supervision over the administration of the state and society; and support measures to reduce inequality and realise the constitutional rights of the workers as ‘masters of the state’.
The deep-seated hatred of the new rich and particularly of corrupt bourgeois forces in the party and state must be turned into action to reduce inequality. This means a fight to limit inequality in individual wealth through progressive taxation, a cap on the income of officials and state employees by legislation and anti-corruption agencies. Enforcing such measures by democratic supervision and control will find a wide constituency of support within the Communist Party and amongst the workers and peasants.
Marxists seek to turn the trade unions and the Staff and Workers’ Representative Councils into fighting working class bodies to protect public property and take over administration, through democratic control of the commanding heights of the economy.
We support the organisation of the peasant poor in alliance with honest cadres, militant Communists, soldiers, veterans and the working class, to democratically supervise administration and accounting, fight corruption and graft, and subject planning to democratic control to serve the aspirations of the masses.
The appearance of child labour, slave markets, Dickensian factories, etc. does not determine the character of the state. Slave labour contributed to the formation of capitalism, it also played an important role in the development of Siberia in the 1930s. Marxists determine the character of a social system by the dominant sectors of the economy. The USSR was a workers’ state in 1917 regardless of the fact that the majority of the masses were peasants barely crawling out from serfdom; the state was a workers state because the commanding heights were under the control and ownership of the state.
Exploitation is inevitable in the transitional epoch between capitalism and socialism. The law of value, that socially necessary labour time determines price, remains the dominant economic law. Socialist accumulation by the state allows the amelioration and amendment of this law, but the overcoming this law is only possible when socialist productivity of labour surpasses that of capitalism. Socialist policy in the transitional epoch inevitably involves exploiting pre-socialist economic forms to accumulate capital to develop large-scale enterprises in the public sector.
Social production is the production of large-scale industry for large numbers of consumers, e.g. steel, coal, iron, electricity, transportation and infrastructure etc. This is the sphere where a transitional society needs to socialize production and thereby amend and adjust the impact of the law of value. This may be done for example, by setting prices of steel at a level that increases demand for construction; by providing cheap transport; supporting state driven investment policies and above all through state banking serving the plan.
Individual production, the production for small numbers of consumers, by artisans, workshops, food outlets, small scale farms, design, plumbing repairs, car mechanics etc. These spheres should be private or cooperative, (which is a form of collective private operation) in the transitional epoch and for the foreseeable future. The nationalization of individual production has a negative impact on the overall economy and leads to bottlenecks for consumers and industry. The detailed planning of each and every product or service is impossible under bureaucratic or workers’ control. It is not possible to foresee each and every time a plumber needs to fix your drain, nor to bureaucratically plan excellent cuisine in a restaurant, for this a great chef and a well organised division of labour is required. Recipes and cookbooks are not enough to produce excellent dishes, as anyone who has eaten school meals, or the food served to us at the world events in Barcelona can confirm!
The evidence and arguments used as the basis for ‘China’s Long March to Capitalism’ were both misleading and false.
Specifically
1. Instead of being bound to capitalism through property ownership, the Peoples’ Liberation Army is totally divested from business.
2. The capitalist class has neither, a high membership of or dominant influence within, the Communist Party
3. The cause of rapid economic growth between 1978 and 2005 was not impulses from the pre-1978 era but the dynamics of an economy in which the commanding heights are state-owned.
4. Capitalist property is subordinate to state property in the commanding heights and banking. At no stage has the Chinese Communist Party abandoned its commitment to the dominance of public ownership.
5. The post 1949 ruling bureaucracy was not and is not a continuation of the Mandarin bureaucracy
6. The regime is not more repressive than 20 years ago, it is false to characterise China as composed of the worst of capitalism and the worst of Stalinism.
7. Independent and comprehensive research shows that leftwing tendencies inside the Communist Party, led by lower level cadres, organize over 66% of strikes, demonstrations and revolts, within the villages, townships, cities and state enterprises. To present this section of the CCP as pro-capitalist means to alienate us from the leadership of the real social movements of the workers and peasants in China today.
Various objections to these arguments have been raised,
1. Many studies claim China is capitalist
The fact that most bourgeois analysts fail to understand the processes taking place in China as the economic dynamics of a workers’ state is because the concept of a workers’ state in their theoretical frame is a “centrally planned economy” with almost 100% state ownership and all or most prices fixed by the state. In addition, some ultra-left Maoists in China say the country is capitalist, Mao characterised the USSR as capitalist in 1961! Marxist must judge the issue according to Marxist criteria and not be swayed by appearances and fashion.
2. China has been affected by a crisis of overproduction
Planned economies, even in a healthy workers’ state will experience crises and periods of overproduction, particularly in the transitional epoch between capitalism and socialism, as the laws of the global market inevitably impact on the national economy. The fact that China is a major importer and exporter obviously means that capitalist crisis on a world scale adversely affects China. Only complete autarchy can avoid this. In addition as long as there are market relations expansion and contraction will follow capitalist laws, but these laws can be counter-acted by planning to limit and overcome crises, through the domination of the dominant economic levers governing finance, investment and the key means of production in state hands.
3. Chinese workers work in capitalist factories and are brutally exploited.
It is true that Capitalist relations dominate in many sectors of the economy and the law of value operates as the primary determinant of the price of labour power. A transitional society inevitably operates according to this law. It is true that in China far more people are directly subject to capitalist exploitation than in the former USSR or in China from 1949-1978. In all transitional societies the accumulation of capital for socialist type production by state owned enterprises necessitates the exploitation of man according to the law of value and the primitive accumulation from pre-socialist economic systems. Taxes on private enterprises, state ownership of the banks, and similar measures permit capitalist operations to be exploited as the means of accumulation of resources for state enterprises. In addition technological innovation produced under capitalism can be replicated, saving time in research and development costs.
4. The health, education and welfare system of the revolution has been eroded.
There has been a failure in heath, education and welfare reform in China, leaving basic services, particularly in rural areas at a miserably low level. This failure is a reflection of the misuse of power and planning errors of the ruling bureaucracy. The inadequate social welfare provision is one of the issues that can and does galvanise social discontent of the masses to demand the Communist Party ‘serve the people’. It does not however invalidate the claim that China remains a bureaucratically deformed workers’ state.
5. The Maoist forms of collectivism and social life have been undermined.
The specific form of urban power and control in Maoist China was based upon a system known as the Iron Rice bowl. This in essence was a cradle to the grave welfare system for the working class in state owned enterprises. This system was predicated on the hukou population registration system, which prevented migration from rural to urban areas. This meant that the modern socialized sector of the economy was entirely limited to urban conurbations. The peasantry outnumbered the proletariat and thus the move to socialism was postponed until some unknown epoch when the distinction between town and country would magically disappear. Whilst the move to abolish the Iron Rice Bowl was in many ways regressive, the result has been improved productivity and the strengthening of the most important state owned enterprises.
6. The market has replaced the plan as the central mode of distribution and allocation of goods and services even within the state sector.
The distribution of goods even in a healthy workers state will be predominantly by means of the market i.e. governed by the law of value. A workers’ state can amend the law of value through its control of the commanding heights of the economy and investment, taxation and credit policy. The less invasive the less bureaucratic, the more the development of the productive forces can lay the foundation to ameliorate and overcome the law of value, through attaining abundance. The struggle for socialistic principles in economy is one of generations even in the most advanced countries. However socialistic principles can be applied to specific spheres of economic priority, like universal healthcare, education, or welfare services.
7. The state sector is being developed to foster a powerful indigenous ruling class.
The state sector is the core of the Chinese economy and the Communist Party is dependent on this sector for its legitimacy and power. There is corruption and graft inherent in the mixture of bureaucratic power alongside market relations and world trade. This does not mean that the state sector is a nursery for capitalism, there is no indication the party intends to cede its power to the capitalists in the state sector, on the contrary, there is every reason for the party not to cede this power as with it would go the raison d’etre of Communist party rule.
8.The creation of billionaires and paupers and increasing inequality is clearly a capitalist tendency.
The increasing inequality in China is undoubtedly a powerful evidence for the creation of capitalist forces. When combined with political power and economic combinations with overseas Chinese capitalists and multinational capitalism, it is clear that the forces moving China on the path to capitalist restoration are powerful. However economic inequality itself is not proof of a completed capitalist restoration. The capitalists do not command the party or the state apparatus and are subject to repression. The fear of reaction by workers and the peasant poor is the main pressure on the party to limit its collusion with the capitalists. The bureaucracy fears the social discontent and increasing objective strength of the proletariat within society and it is this that holds the leadership of the bureaucracy in check.
9. The Communist Party is run by a corrupt, self-seeking caste, interested only in enriching themselves and anchoring their powers in capitalist property relations.
China’s Liberation was led by the Communist Party, which was composed of a range of forces, from heroic selfless revolutionaries to honest and dishonest bureaucrats. The tendency for members of the party and bureaucracy to seek to anchor their privileges in capitalist property is strong; the party survives however, by its claim to represent the workers and the poor. This contradiction causes periodic purges and rectification campaigns. The most recent rectification campaign involving over 70 million members was in 2004-6, all party members were subject to inspection, compelled to study Marxist and Maoist texts, and to engage in self-criticism and public self-criticism over several months. If such methods were the cause of China’s uniquely rapid economic growth then Capitalists parties around the world will begin to emulate the Chinese Communist Party!
10. China is not only exploiting Chinese workers but is also exporting capital and exploiting workers all around the world, they act as an imperialist country, particularly in Africa.
The export of Capital from China has been primarily carried out by State Owned Enterprises to secure the strategic assets required by the Chinese state for planned development. The deals made with national governments tend to exchange skills of Chinese state owned enterprises for raw materials and resources central to national strategic objectives. The Chinese in Africa are engaged in state construction projects, civil engineering, infrastructure provision and road building. This has certainly brought benefits to many recipient nations whose normal terms of trade with Imperialist capitalism means pieces of paper are exchanged for raw materials or commodities and the rulers of the exploited nations deposit these pieces of paper in imperialist banks. Stagnation and decline often characterised the economies of Africa. Many people used to accuse the USSR of exploiting its satellites and there certainly were occasions where Soviet or Russian national economic interests were placed above the collaborating countries. Did this make the export of capital from the USSR a form of imperialism?
11. The transition to capitalism was gradual and was only completed in recent years this is why China has not experienced booms and slumps of Capitalism until now.
As China has experienced more rapid and smooth growth than any other country in history from 1978, it is evident that until recent times the dominance of planning was the basis of this growth. Some argue that the shift to capitalist dominance was a recent phenomena, thus it is argued that the present economic crisis is the first truly capitalist crisis in China since 1949. Planned economies can certainly suffer internal crises, like that the Great Leap Forward or the Cultural Revolution. However, they can also suffer cyclical booms and slumps in demand, if significant proportions of their economy is organised on the basis of the market. The integration with the world market brings impacts caused by global capitalist crisis. The advantage of the public ownership of the commanding heights and state planning is revealed in the ability to shift towards state investments to ameliorate and overcome the impact of market fluctuations or declining export demand. As capitalist companies close, state companies invest and sustain demand through the main sectors of the economy starting with the banks.
CLMC’s thesis rests on a theory that the class character of China’s bureaucracy is capitalist. However analogy replaces evidence as proof. In the late 19th and early 20th century the feudal state bureaucracy in Germany and Japan encouraged capitalist development through state support and nationalization, ‘therefore’ this is what China’s Communist Party is said to be doing, nurturing Chinese capitalism to become strong with the power of the central state.
Despite the formal appearance of similarity, the analogy is fundamentally flawed. With the feudal state introducing capitalism you were dealing with a historically dying system promoting a more progressive socio-economic system. With China we are dealing with a more progressive socio-economic system, the planned economy, introducing a more reactionary and backward socio-economic system, capitalism.
The theory of the Permanent Revolution contends that the progressive phase of capitalist development on a world historic level ended with the first imperialist war in 1914-1918. The bourgeoisie proved incapable of carrying through the bourgeois democratic revolutions in countries that came late to capitalist development. The tasks of the bourgeois democratic revolution in less developed countries fell to the proletariat to complete. This did not exclude exceptions to the rule in some countries that experienced rapid industrialisation in the 1970s and 80s, like South Korea, Taiwan or Malaysia. China is not just some minor ‘exceptional’ country, it has the largest population on earth and experienced social revolution in 1949 precisely because capitalism was unable to develop the nation and solve the tasks of the bourgeois democratic revolution.
If one contends that China today, can and has developed more rapidly under capitalism than under the planned economy (albeit under Maoist mismanagement) then there are serious question marks over the entire thesis of the exhaustion of capitalist potential for all of the former Stalinist states and all of the less developed capitalist countries. This poses a question over the nature of the epoch we live in. The fastest growth rate in history has been attained in China as it introduced capitalism over the last 30 years, is such growth attainable in Africa, Latin America, India, Asia and the former USSR if they emulate the Chinese model? Indeed is this not inevitable?
We answer with an emphatic no! China’s growth rate has been attained by concentrating public ownership within the commanding heights of the economy, by strengthening the economic efficiency of the large-scale state owned enterprises and by subjecting the planning to the law of value, creating a flourishing market in which the state uses its control of the commanding heights to exercise more effective planning control. The state budget and public ownership of the banks and the commanding heights enable the system to be planned better than the Maoist system pre-1979. China was characterised by complete public ownership of all economic activity, small and large scale.
None of this leads one to praise the form of the dictatorship, inequality, corruption, nepotism, exploitation or the undermining of the welfare system etc. characteristic of the last 30 years. Indeed almost everyone accepts that precisely these processes have slowed down the rate of growth! The need to eliminate all these hindrances to development is a powerful argument for democratic control of administration of the government and economic planning system.
Democratic workers’ control of public resources in China would focus priority on eliminating corruption and reducing inequality, between rich and poor, urban and rural, east and west.
The Chinese masses demand immediate and drastic improvement in health, education and pensions, the protection of the peasant against the speculator, the worker against the exploiter. They desire balanced economic development taking account of the long-term environmental costs affecting the quality of the life of the masses and their children.
Marxists must understand and assimilate the practical experiences of the transitional economy in China, which provides powerful and practical arguments for the defence and promotion public ownership of the commanding heights of the economy.
Tuesday, 25 November 2008
Chinese State intervenes amid sharp falls in growth.
Chinese State intervenes amid sharp falls in growth.
One paradox of the global financial crisis is the speed with which
China has been hit. Thousands of factories have closed down as a
result of falling orders from foreign outlets. Last week officials
claimed that 50,000 firms in Guangdong province closed this year, this
was revised on November 18th to 7000. These massaged figures cannot
conceal the fact that there is a radical shakeout in the export
sector.
Laid off migrant workers are flooding back to the interior. Some will
find employment in similar labour intensive factories, now opening to
serve the local market in the interior. Others will return to the land
until new employment prospects open up.
After initially appearing to accept the closure of these labour
intensive factories, as part of the process of -climbing the technical
ladder, improving labour rights, and shifting employment to the
interior- government fear of unrest has led to a radical shift in
policy.
In a move likely to be emulated across the country, the provincial
governments of Shandong and Hubei have banned layoffs in firms
employing more than 40 workers. This measure follows several local
cases where company owners ran away, leaving the state to foot the
bill. In Shandong province unemployment has risen by 680,000 this
year.
Private company owners claim that falling export orders, mean there is
less work to do, the natural laws of capitalism dictate factory
closures and job losses.
At the Qingdao Jintian Textile Co Ltd, a firm employing more than
1,000 workers, General Manager Li bemoaned the new laws,
"The factories aren't getting enough orders, so some workers have
nothing to do," Li said.
"I have been thinking of getting rid of some of them to cut costs. But
if the government doesn't agree to my layoff plan, what can I do? I
can't afford to pay them all."
(China Daily 18th Nov 2008)
As yet there no talk of nationalizations, but encroachment on the
operations of private companies by the state, will inevitably lead to
the takeover of many private companies to prevent social instability.
In Hubei Province, state owned enterprises seeking to reduce costs in
adverse market conditions, have been told to cut salaries rather than
staff. This in turn opens the way for conflicts inside these
enterprises, to determine if wage cuts are made from higher or lower
paid groups.
In October the national government launched a massive programme of
state investment in public works. 5 trillion yuan ($730 billion) is to
be spent on road and port infrastructure projects over three to five
years, and 2 trillion yuan ($292 billion) on railroads. On Nov 9th a
more detailed 2-year plan was announced to include; more
infrastructure projects, low cost housing, expansion of welfare
services, increased spending on health and education and a rise in
average incomes.
"In a sweeping move at a time when major projects are being put off
around the world, Beijing said it would spend an estimated US$586
billion by 2010 on wide array of national infrastructure and social
welfare projects, including constructing new railways, subways,
airports and rebuilding communities devastated by an earthquake in
southwest China in May."
"The package, announced by the State Council Sunday evening, is the
largest economic stimulus effort ever undertaken by the Chinese
government and would amount to about 7 percent of the country's gross
domestic product during each of the next two years."
China Daily 10th Nov. 2008.
This latest plan will obviously stimulate the demand for raw materials
in economies of countries dependent on such Chinese demand. However
the overall external impact will be small. The temporary euphoria of
global market traders was misplaced.
The spending will increase the influence of the state in employment,
after a prolonged period of sharp declines. Tens of millions were made
unemployed by downsizing and closure of state industries between 1995
and 2005; now tens of millions will be employed by the state to soak
up unemployment amongst rural migrants and urban workers. Urban
employment opportunities alone must rise by 10 million new jobs a
year, if unemployment and consequent threats to social stability are
to be controlled.
All fundamental transitions take place through sharp contradictions.
Theoretically the Chinese economy can shift toward the new model of
increasing state domination, from a period of decreasing state sector
influence, without upheaval. In practice such a shift engenders a new
balance of class forces and new relations between the state and
private sector. This must have repercussions inside the Communist
Party and the bureaucracy and on the fundamental determinant of
policy, social stability.
As if to highlight this, on Monday and Tuesday last week in Chongqing,
(a city of 5 million in a municipality of 31 million) cab drivers
demanding better conditions went on strike. Such is the intensity of
demand on transport, that the cab drivers strike caused chaos in the
city. The drivers demanded cheaper fuel, restrictions on illegal cabs
and limits on the penalty systems imposed on them. Strikers attacked
scabs, cars were overturned in clashes with police, and a number of
other violent incidents occurred.
The local state did not respond by force and instead made concessions
to pacify the discontent. The opportunity to lean on this discontent
was not lost on the secretary of the Chongqing Communist party Bo
Xilai, who met with the protestors and broadcast the discussions with
striking cab drivers on live TV.
Bo Xilai is the son of the revolutionary veteran Bo Yibo and has been
positioning himself within the national leadership, assiduously
cultivating his image and popularity as a new breed of political
operator, distancing himself from the old guard's modus operandi. Of
course what is good for one city party secretary may not be good for
another.
Increasingly we will see explosive disputes between conflicting social
forces not only being pacified, but also being represented. This will
pave the way for factional conflict inside the official Trade Unions,
the Communist Party and the state apparatus. This may also lead to the
creation of genuine representative organs of the working class.
One paradox of the global financial crisis is the speed with which
China has been hit. Thousands of factories have closed down as a
result of falling orders from foreign outlets. Last week officials
claimed that 50,000 firms in Guangdong province closed this year, this
was revised on November 18th to 7000. These massaged figures cannot
conceal the fact that there is a radical shakeout in the export
sector.
Laid off migrant workers are flooding back to the interior. Some will
find employment in similar labour intensive factories, now opening to
serve the local market in the interior. Others will return to the land
until new employment prospects open up.
After initially appearing to accept the closure of these labour
intensive factories, as part of the process of -climbing the technical
ladder, improving labour rights, and shifting employment to the
interior- government fear of unrest has led to a radical shift in
policy.
In a move likely to be emulated across the country, the provincial
governments of Shandong and Hubei have banned layoffs in firms
employing more than 40 workers. This measure follows several local
cases where company owners ran away, leaving the state to foot the
bill. In Shandong province unemployment has risen by 680,000 this
year.
Private company owners claim that falling export orders, mean there is
less work to do, the natural laws of capitalism dictate factory
closures and job losses.
At the Qingdao Jintian Textile Co Ltd, a firm employing more than
1,000 workers, General Manager Li bemoaned the new laws,
"The factories aren't getting enough orders, so some workers have
nothing to do," Li said.
"I have been thinking of getting rid of some of them to cut costs. But
if the government doesn't agree to my layoff plan, what can I do? I
can't afford to pay them all."
(China Daily 18th Nov 2008)
As yet there no talk of nationalizations, but encroachment on the
operations of private companies by the state, will inevitably lead to
the takeover of many private companies to prevent social instability.
In Hubei Province, state owned enterprises seeking to reduce costs in
adverse market conditions, have been told to cut salaries rather than
staff. This in turn opens the way for conflicts inside these
enterprises, to determine if wage cuts are made from higher or lower
paid groups.
In October the national government launched a massive programme of
state investment in public works. 5 trillion yuan ($730 billion) is to
be spent on road and port infrastructure projects over three to five
years, and 2 trillion yuan ($292 billion) on railroads. On Nov 9th a
more detailed 2-year plan was announced to include; more
infrastructure projects, low cost housing, expansion of welfare
services, increased spending on health and education and a rise in
average incomes.
"In a sweeping move at a time when major projects are being put off
around the world, Beijing said it would spend an estimated US$586
billion by 2010 on wide array of national infrastructure and social
welfare projects, including constructing new railways, subways,
airports and rebuilding communities devastated by an earthquake in
southwest China in May."
"The package, announced by the State Council Sunday evening, is the
largest economic stimulus effort ever undertaken by the Chinese
government and would amount to about 7 percent of the country's gross
domestic product during each of the next two years."
China Daily 10th Nov. 2008.
This latest plan will obviously stimulate the demand for raw materials
in economies of countries dependent on such Chinese demand. However
the overall external impact will be small. The temporary euphoria of
global market traders was misplaced.
The spending will increase the influence of the state in employment,
after a prolonged period of sharp declines. Tens of millions were made
unemployed by downsizing and closure of state industries between 1995
and 2005; now tens of millions will be employed by the state to soak
up unemployment amongst rural migrants and urban workers. Urban
employment opportunities alone must rise by 10 million new jobs a
year, if unemployment and consequent threats to social stability are
to be controlled.
All fundamental transitions take place through sharp contradictions.
Theoretically the Chinese economy can shift toward the new model of
increasing state domination, from a period of decreasing state sector
influence, without upheaval. In practice such a shift engenders a new
balance of class forces and new relations between the state and
private sector. This must have repercussions inside the Communist
Party and the bureaucracy and on the fundamental determinant of
policy, social stability.
As if to highlight this, on Monday and Tuesday last week in Chongqing,
(a city of 5 million in a municipality of 31 million) cab drivers
demanding better conditions went on strike. Such is the intensity of
demand on transport, that the cab drivers strike caused chaos in the
city. The drivers demanded cheaper fuel, restrictions on illegal cabs
and limits on the penalty systems imposed on them. Strikers attacked
scabs, cars were overturned in clashes with police, and a number of
other violent incidents occurred.
The local state did not respond by force and instead made concessions
to pacify the discontent. The opportunity to lean on this discontent
was not lost on the secretary of the Chongqing Communist party Bo
Xilai, who met with the protestors and broadcast the discussions with
striking cab drivers on live TV.
Bo Xilai is the son of the revolutionary veteran Bo Yibo and has been
positioning himself within the national leadership, assiduously
cultivating his image and popularity as a new breed of political
operator, distancing himself from the old guard's modus operandi. Of
course what is good for one city party secretary may not be good for
another.
Increasingly we will see explosive disputes between conflicting social
forces not only being pacified, but also being represented. This will
pave the way for factional conflict inside the official Trade Unions,
the Communist Party and the state apparatus. This may also lead to the
creation of genuine representative organs of the working class.
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