Tuesday, July 5, 2011

If China is capitalist...





China – an issue of fundamentals

Posted: 05 Jul 2011 04:13 AM PDT


By Jane West

It is extremely difficult for those in imperialist countries, although as we shall see not for those in semi-colonial ones, to understand the full importance of the Chinese Revolution – which is, with the Russian Revolution of 1917, the most important event in modern human history.

The are several reasons for this. First, those in Europe or the US find it hard to imagine the low level of economic development of China at the time of its revolution – the leading economic historian Angus Maddison calculates that China’s level of GDP per capita in 1949 was lower than Britain in 1500. Nor is it easy to grasp the sheer size of China – it has two and a half times the population of the European Union and more than twice the population of the entire Latin American continent. The level of sacrifice involved in achieving China’s revolution is almost incomprehensible compared to the strikes, demonstrations and other things which are figure as ‘big events’ in Europe or the US. Thirty million people died in China in the war against Japanese imperialism and the succeeding civil war culminating in the establishment of the People’s Republic of China in 1949. This is the largest loss of life in absolute terms in any such struggle in history – although in terms of the proportion of the population killed the USSR suffered even more in the struggle to defeat Nazi Germany.

But it is exactly for these reasons that the left in the semi-colonial countries understand rather easily the significance of China and its revolution. A country which only sixty years ago literally had an income per head equivalent to medieval Europe will, within ten years, overtake the United States as the world’s largest economy. A country where in 1949 only around 5-10% of women could read and write now has universal literacy. The might of China’s economy increasingly gives countries such as Venezuela or Cuba, and non-socialist ones such as Brazil or South Africa, far greater room to create an alternative economic orientation to subordination to the US. It is the junction of the left wing struggles in Latin America with China’s growing economic strength that constitutes the most important progressive axis in the world. China is achieving what every progressive semi-colonial country dreams of.

China comprises one fifth of the world’s population. It has the largest working class of any country. Its economy will be the only one capable of confronting the US for several decades to come. For these reasons, as 1 July 2011 marked the 90th anniversary of the founding of the Chinese Communist Party, which led these processes, it is important to reflect on the significance of China’s revolution not via short term impressions but from a fundamental angle.

China’s growth threatens US hegemony

To take first economic development, China’s growth is profoundly altering the international situation. China’s is already the world’s second largest economy, it has been growing at almost 10% a year for three decades, and within ten years it will overtake the US to become the world’s largest economy. It is the possibility of trade with China this process creates that has begun to radically change the economic policy that can be pursued by developing countries – making it possible to have an economic strategy of which the most important element is relations with China rather than subordination to the US.

The South African Trade Minister Rob Davies, for example, summarised the situation neatly, during an extended trade mission to China by President Zuma in August 2010. He told The Financial Times that China’s expanding presence in Africa ‘can only be a good thing’ because it enormously increases choices for semi-colonial countries: ‘We don't have to sign on the dotted line whatever is shoved under our noses any longer… We now have alternatives and that’s to our benefit.’

US imperialism is therefore determined to prevent China’s present growth trajectory if it can, as its continuation will destroy US global economic hegemony. It therefore campaigns for China to pursue economic policies that would undermine its growth, seeks to whip up an international campaign for China to revalue its currency and shift resources away from the investment that drives its growth, seeks to block China’s imports through accusations of ‘dumping’, and numerous similar policies.

At the same time the US is seeking to step up the military pressure on China by encouraging the military build-up in China’s near neighbours. The US is also seeking to put in place a series of encircling alliances stretching from Japan through the Korean peninsula, Taiwan, and the South China Sea to, in some measure, Vietnam. If possible the US would like to involve Russia and India in this encirclement.

The aim of these US moves are less an immediate military confrontation with China than about forcing China to defensively shift resources from its productive economy to military spending. This constitutes a US attempt to repeat the Reagan policies of the 1980s in which the ailing Soviet economy was pressurised through an unaffordable arms race.

China, however, is a far harder economic nut to crack than the USSR by the 1980s. China’s economic growth this year will probably exceed nine per cent, the fastest of any major economy in the world and far outstripping the US. This continues a rate of growth China has enjoyed for the last thirty years.

So far, China has also continued to resist US demands that it commit economic suicide via a large revaluation of its currency or by substantially reducing its level of investment – both of which would lower its growth rate.

Living standards in China

China has not only sustained the fastest rate of growth of any major economy in the world for over 30 years but its rate of increase of consumption, that is in living standards, is also the highest of any major country in the world. This growth has produced the extraordinary achievement that 630 million people in China have been lifted out of internationally defined poverty. To give an idea of the scale of that achievement it is simply necessary to note that this is greater than the entire population of either Latin America or the European Union.

Those who claim China’s economic success is based on ‘super-exploitation’ are simply engaging in bullshit without any sense of perspective or comparison. A peasant in China who moves to the city to work in a factory on average increases their income by 300%. Are working conditions in China what we would want in an advanced country? Certainly not and there are many avoidable abuses. But China is not an advanced economy. It will take decades to achieve that position and to gradually improve conditions of life and work. But most of the world’s population would literally jump for joy at a 300% increase in income. The economic progress of the China’s population dwarfs what has been achieved in the rest of the world.

Between 1981 and 2005 the UN estimates that China’s internationally defined poverty rate fell from 85% to 15%. This has completely transformed the quality of life, education, choices and life expectancy for hundreds of millions of people. It is a gigantic contribution to the well-being of humanity.

Independence of China

To pursue the path that has brought China such dramatic economic and social improvements it was necessary, first of all, for China to achieve independence from imperialism – without this China could not refuse to subordinate the interests of its economic development to those of imperialist states.

Prior to its revolution in 1949 China had suffered over a century of imperialist military attacks, deliberate promotion of opium imports as a commercial policy by Britain, occupation of its ports and key commercial centres, imposition of ‘unequal treaties’ to give the imperialists trading advantages, wilful destruction and theft of its cultural heritage, racism towards its people so that even in their own country Chinese people encountered signs reading ‘No dogs or Chinese’ in parks and on public benches, and finally full scale invasion by Japanese imperialism with the aim of reducing the country to a colony. China freed itself from imperialism only after more than a century of the most intense class struggles culminating in full scale war against Japanese imperialism followed by civil war.

The Chinese Communist Party

The force which led this successful struggle against imperialism was the Chinese Communist Party (CCP). The successful strategy and tactics of the Mao Zedong leadership of the CCP were its own invention. Its fundamental concepts – ‘the countryside will surround the cities’, ‘prolonged people’s war’ – were not remotely a mechanical copy of those of Lenin and the Russian Revolution. Those tactics which the CCP did derive from the Russian Revolution and the Communist International, for example the united front tactics in the struggle against the Japanese invasion, were applied with great tactical flexibility. This entire policy was a brilliant application of Marxism to the concrete conditions of China. And its result was to throw off imperialism, bring to an end more than a hundred years of national subjugation of China, and launch an economic course that has transformed for the better the economic and social conditions of the Chinese people – that is, of one fifth of humanity.

It is for this reason that, whatever were the post-revolutionary tragedies of the Great Leap Forward and Cultural Revolution, the Maoist leadership of the Chinese Communist Party overall wrote one of the most glorious pages in the entire history of the international working class. It is for this reason that the overwhelming majority of the left and socialist forces in China consider themselves ‘Maoist’. As Li Minqi, one of the ‘dissidents’ in China who evolved to the left and to openly Marxist positions, wrote in his book The Rise of China and the Demise of the World Capitalist Economy: ‘the rediscovery of China’s own revolutionary history has been an integral part of the rise of the Chinese “New Left”. Today, it is virtually impossible for someone in China to be a leftist without also being some sort of Maoist.’

Naturally China, at the time of its revolution, was an extremely economically underdeveloped country and the political forms it adopted to achieve its revolution do not apply in other countries. But the economic and social gains made by its people were a gigantic step forward. The left in China overwhelmingly considers itself ‘Maoist’ not in the sense that it wishes to return literally to the policies pursued by Mao, or is unaware of mistakes made, but in the sense that Mao Zedong led one of the two greatest revolutions in history without which the present enormous achievements of the Chinese people would have been impossible. Nothing of a progressive character will be created in China by denying that legacy, but only be building on it to confront the new problems of today.

If China is capitalist

Curiously some people attempt to present as a ‘left’ argument that all these achievements in China have been carried out by ‘capitalism’ or ‘state capitalism’. They simply fail to see the logic of their arguments – which are the exact reverse of ‘left wing’! If it were the case that capitalism, whether in a ‘state’ or any other form, were still capable of throwing off the yoke of imperialism and taking one-fifth of humanity out of underdevelopment and poverty then capitalism would continue to be a profoundly progressive system.

Politics in the Chinese Revolution

Some socialists also mistakenly argue that because the greatest part of the social forces that made the Chinese Revolution were peasants, the rural petit-bourgeoisie in strict class terms, this means that the revolution could not be socialist. This confuses politics and sociology. It also has a profoundly wrong line regarding social alliances in the struggle against imperialism. A successful revolutionary struggle in a semi-colonial country, in which the overwhelming majority of the population live in the countryside, could not be a struggle by the working class against the petit-bourgeoisie, i.e. the peasantry. It had to be a struggle of the working class in alliance with and leading the petit-bourgeoisie.

The politically dominant forces in the Chinese Revolution – as in the Russian Revolution – were proletarian. It was led by an explicitly Marxist party. The rule of that party did not see a consolidation of ‘peasant interests’ against the working class, but on the contrary a gigantic expansion of the working class and a shrinking of the peasantry. The class character of a revolution is defined by which class leads it politically, which class interests it represents, and what it does when it takes state power – not by the social composition of the forces mobilised on the streets or in the revolutionary army. To analyse otherwise is to engage in a crude sociological reductionism. A revolution, especially in a country dominated by imperialism, is not waged by just one class, but has to bring together the entire ‘people’, that is all the oppressed and exploited, in a struggle for liberation against their imperialist oppressors and their capitalist servants in the country concerned. Far from being a peasant revolution, the real facts of development in China are the following:

First, the Chinese Revolution in 1949 eliminated the landlord and the capitalist class, redistributed land to the peasants and engaged in a huge process of building up the working class through development of industry and manufacturing.

Second, while the post-1978 economic reform did restore private – that is, capitalist – ownership in some sectors of the economy, the state has maintained ownership and control of the banking system, the largest companies in the country, most major construction companies, most rail and infrastructure companies, most coal, oil and chemical companies and other sectors.

While there is indeed a considerable private – that is, capitalist – sector in China, it remains the case that the key levers of the economy are in state hands. To give an idea of the scale of this, the operating surplus generated by the two largest state-owned companies is bigger than the top 500 private companies put together. The decisive role of the state-owned sector was seen clearly during the international financial crisis from 2008, when China’s state sector was used to lead a stimulus package on a scale, and in a form, no capitalist economy could match.

China and the market

A further erroneous criticism of China is that ‘the market’ exists there. It does. But economies in transition to socialism cannot successfully eliminate the market in one swoop. To attempt to do so was one of the economic errors deriving from Stalin and was second only to the reactionary policy of ‘socialism in one country’ in bringing about the eventual collapse of the USSR. The consequences of such a wrong economic conception can be seen today in North Korea, and mistakes in that direction were responsible for errors in economic policy in Cuba despite all that country’s huge achievements – as Cuba’s leadership has admitted in launching its new economic reforms. As this matter is, therefore, of great significance for socialist strategy it is necessary to examine it in fundamental Marxist terms.

Marx noted that the transition from capitalism to communism would be prolonged – constituting an entire historical epoch. As he wrote in The Communist Manifesto: ‘The proletariat will use its political supremacy to wrest, by degree, all capital from the bourgeoisie, to centralise all instruments of production in the hands of the State, i.e., of the proletariat organised as the ruling class; and to increase the total productive forces as rapidly as possible.’ Note the ‘by degree’, not ‘all at once’ as Stalin carried out in 1929 – or Pol Pot did in Cambodia to take an extreme example of such a policy!

Marx wrote in the ‘Critique of the Gotha Programme’ of this transition, even within the socialised sectors of the economy:

‘What we have to deal with here is a communist society, not as it has developed on its own foundations, but, on the contrary, just as it emerges from capitalist society; which is thus in every respect, economically, morally, and intellectually, still stamped with the birthmarks of the old society from whose womb it emerges.’

In such a first stage of transition from capitalism to a fully developed socialist society, payment in the economy, and distribution of products and services, necessarily has to be largely according to work, and cannot in the first stage be according to need no matter how much that is the final goal. But payment in terms of work performed parallels the commodity, that is, market form itself. Therefore the transition from the market to distribution according to need cannot take place ‘at a stroke’ but only over a prolonged historical period. As Marx put it:

‘Accordingly, the individual producer receives back from society – after the deductions have been made – exactly what he gives to it. What he has given to it is his individual quantum of labour. For example, the social working day consists of the sum of the individual hours of work; the individual labour time of the individual producer is the part of the social working day contributed by him, his share in it. He receives a certificate from society that he has furnished such-and-such an amount of labour (after deducting his labour for the common funds); and with this certificate, he draws from the social stock of means of consumption as much as the same amount of labour cost. The same amount of labour which he has given to society in one form, he receives back in another.

‘Here, obviously, the same principle prevails as that which regulates the exchange of commodities, as far as this is exchange of equal values. Content and form are changed, because under the altered circumstances no one can give anything except his labour, and because, on the other hand, nothing can pass to the ownership of individuals, except individual means of consumption. But as far as the distribution of the latter among the individual producers is concerned, the same principle prevails as in the exchange of commodity equivalents: a given amount of labour in one form is exchanged for an equal amount of labour in another form.

‘Hence, equal right here is still in principle – bourgeois right… The right of the producers is proportional to the labour they supply; the equality consists in the fact that measurement is made with an equal standard, labour.’

In such a transitional society inequality would therefore necessarily still exist:

‘One… is superior to another physically, or mentally, and supplies more labour in the same time, or can labour for a longer time; and labour, to serve as a measure, must be defined by its duration or intensity, otherwise it ceases to be a standard of measurement. This equal right is an unequal right for unequal labour… Right, by its very nature, can consist only in the application of an equal standard; but unequal individuals (and they would not be different individuals if they were not unequal) are measurable only by an equal standard insofar as they are brought under an equal point of view, are taken from one definite side only – for instance, in the present case, are regarded only as workers and nothing more is seen in them, everything else being ignored. Further, one worker is married, another is not; one has more children than another, and so on and so forth. Thus, with an equal performance of labour, and hence an equal in the social consumption fund, one will in fact receive more than another, one will be richer than another, and so on. To avoid all these defects, right, instead of being equal, would have to be unequal.’

Only after a prolonged transition would a payment according to work be replaced with the ultimately desired goal, distribution of products according to the needs of members of society. Marx noted:

‘Right can never be higher than the economic structure of society and its cultural development conditioned thereby. In a higher phase of communist society, after the enslaving subordination of the individual to the division of labour, and therewith also the antithesis between mental and physical labour, has vanished; after labour has become not only a means of life but life’s prime want; after the productive forces have also increased with the all-around development of the individual, and all the springs of co-operative wealth flow more abundantly – only then can the narrow horizon of bourgeois right be crossed in its entirety and society inscribe on its banners: From each according to his ability, to each according to his needs!’

The elimination of all small-scale commodity production and ownership by Stalin ‘at a stroke’ after 1929, and the continuation of this policy by his successors in the USSR, was therefore not in line with Marxist theory. That such a policy initially industrialised the Soviet Union, producing superior economic growth to that which existed in most of the world at that time, was due to the specific conditions that existed in 1929, not to Stalin’s policy’s conformity to overall Marxist analysis. The year 1929 was not only that of the launching of Stalin’s first Five Year Plan, but of the onset of the Great Depression. The capitalist world economy fragmented into a series of protectionist empires amid a generalised collapse of production in a process culminating in World War Two. Under such conditions, i.e. of the greatest economic crisis of capitalism in its history, Stalin’s policy, despite its departure from overall Marxist theory, produced rapid economic growth. Stalin demonstrated that essentially total immediate statification of the entire economy, and ‘socialism in one country’, as he termed his policy, produced greater economic growth than ‘capitalism in one country’ – or more correctly that socialism in one country was more successful than capitalism in fragmented and warring colonial empires. But the reintegration of the world capitalist economy after World War Two demonstrated that ‘capitalism on a world scale’ was more efficient than the voluntaristic attempt to replace the market by fiat, rather than by a historical process, introduced by Stalin.

The analysis of the CCP that China is in the ‘primary stage of socialism’, that is, one in which it is impossible to eliminate the market, is correct. It is also a conception advanced, with different terminology, by Trotsky and Preobrazhensky, among others, in the USSR in the 1920s before they were purged, and eventually murdered, by Stalin – although China, of course, arrived at such an analysis independently.

China is not a capitalist state, nor a capitalist country. It is a society in transition to socialism operating in a capitalist world economy which it does not control, but in which China’s growth and improvement in the living standards of its people are due to the fact that it wrested control of its economy from imperialism and capitalism. Today, as shown again by the events after the international financial crisis, the state, not private capitalists, controls the decisive levers of China’s economy. The maintenance of large elements of market relations in the ‘primary stage of socialism’ in China, even under conditions of state ownership of the most powerful means of production, is in line with Marxist theory and is necessary – and helps explain the success of China’s economy. As in every country the elimination of the market, with all the abuses and inequalities it creates, can only be a prolonged historical process.

The class struggle in China

Does this mean that the necessary and correct reintroduction of a market, and therefore of allowing the recreation of a capitalist class, is without dangers in China? On the contrary, a class struggle goes on inside China – indeed it is objectively the most important class struggle in any country in the world. There is an ongoing struggle in China between capitalism and those who have illusions in the capitalist market on the one hand, who would take China’s economic reform decisively in the direction of the restoration of capitalism, and on the other, those seeking further progress of the transition to socialism – those who think that it is precisely state control and ownership that has allowed China its success. The imperialists constantly seek to exploit these differences. They support those who want to move in a capitalist direction, and make economic demands – like the constant calls for a sharp revaluation of the RMB – that would subordinate the interests of the Chinese economy to the interests of the US and imperialist economies. At the same time a clear left wing also exists in China – primarily, for the reasons already outlined, defining itself as ‘Maoist’.

The progress of China aids struggles internationally, but events in the international class struggle also crucially affect China. The international financial crisis helped discredit those in China who praised a ‘US model’ and sought decisive steps towards capitalism. The rise of the left in Latin America, a continent with increasingly important ties with China, equally aids socialist forces in China.

The policies of the CCP

While the international situation impacts strongly on China, nevertheless developments within it are still dominated by internal processes – this is reinforced by the enormous scale of the country. Furthermore for a prolonged period virtually all forces in China became wary of foreign entanglements and events. Chinese illusions in the role of the leadership of the USSR were destroyed by the reactionary pro-imperialist policies of Khrushchev and Brezhnev, who attempted to sabotage China’s economic development by withdrawing Soviet advisers, and who in the 1970s even inaugurated military clashes with China. The enormous success of China’s economic reforms after 1978 coincided with a period of huge retreat for the class struggle internationally with the defeats of the revolutions in Nicaragua, the ‘lost decade’ under neo-liberalism in Latin America, and then the collapse of the USSR. The conception that China could rely only on itself, and furthermore that it was large enough to do so, deeply permeated all layers of Chinese society.

This did not mean that China abandoned all progressive actions and stances in the international struggle. China maintained extremely good relations with Cuba – President Hu Jintao and future president Xi Jinping, for example, demonstratively meeting Fidel Castro on recent trips to Latin America. China resisted intense US pressure not to launch a satellite for Venezuela, and trade with China aided innumerable semi-colonial countries. But China’s attitude to such developments might be summed up as ‘if you make a revolution, good, but please do not ask us to promote it – we are not in the business of exporting revolution.’ China, seeking to limit conflicts with the US, also refused to veto reactionary UN resolutions on issues such as Iran or Libya.

Domestically the Chinese leadership, while successfully promoting the development of China’s economy, adopted many social and political positions that were wrong. The failure to take adequate steps against corruption and abuse of power, the excessive use of the death penalty, past open discrimination against lesbians and gays (a policy that has now changed) were examples of wrong positions. But the CCP’s replacement by a leadership that conceded to imperialism and which was seeking to reintroduce capitalism in China would be a gigantic defeat not just for the Chinese people but for all progressive struggles worldwide. It would once more subordinate China to imperialism and result in enormous social and economic regression – as seen in the former USSR. The only way that represents progress in China is not overthrow of the CCP by the capitalist right, the project of imperialism and pseudo ‘liberals’ in China, but the strengthening of the anti-imperialist and anti-capitalist left within China. The very fact that openly capitalist forces in China complain that since the onset of the international financial crisis increasing layers in China believe that this crisis shows the superiority of China to the capitalist model indicates the rising strength of such currents. Furthermore, at present, the leadership of the CCP itself is introducing a series of policies – radical increase in social housing, moving towards reintroducing free health care, increasing the length of free education, increases in the minimum wage – which strengthen the position of the working class and at present move China in a progressive direction.

The stance of the international left on China

Precisely because China, and the possibility of economic relations with China, is one of the most important threats to the position of US imperialism, the US administration has made it one of its top international priorities to attempt to strangle China’s development.

That means the US is not only stepping up economic pressure on China but is also seeking to step up military pressure. The US is currently intervening sharply to try to create a military encirclement of China. The aim of this is both to try to create a relationship of military forces where it can directly threaten China – which is not easy to achieve – or, as a more realisable goal, where it forces China to redirect resources towards military defence away from developing its economy and improving living standards.

As US imperialism is ruthless, and determined to drive China back, it will use every means at its disposal to achieve this. Its offensive against China has a number of components:

* The US is seeking to force China to sharply revalue the RMB, making its exports less competitive, a tactic it successfully used against Japan in the 1980s. So far the US is making little headway in this, as very few forces within China see anything to be gained from this.

* The US is encouraging a false debate about ‘consumption’ in the Chinese economy, arguing that for ‘balanced’ growth the proportion of the economy devoted to consumption should be increased and the proportion devoted to investment reduced. This would have the effect of slowing the Chinese economy overall and therefore the actual rate of increase of living standards of the population would also fall.

* The US argues that foreign investment in China should be redirected elsewhere.

* The US seeks to create a pro-imperialist fifth column among the capitalist and privileged layers within China.

* The US is aiming to pin China down militarily through its network of alliances in the region.

China’s growth and its resistance to imperialism is one of the most decisive question in the international class struggle. It is a therefore also a decisive test of line of all political forces. Within the semi-colonial world there is little ambiguity on this struggle. Almost all progressive forces support China in its struggle against the attacks of US imperialism. In the imperialist countries however, under the pressure of the imperialist ruling classes, some political forces in the left wing of the labour movement become confused in this clash and even align themselves with imperialism in attacks on China.

Given the enormous stakes not only for the Chinese people but for all progressive struggles in the world, and in the first place for all those struggling against imperialism internationally, there is no place for such ambiguity. Defence of China against the attacks on it by the US and other imperialist powers is one of the most important of all issues facing the international working class. On the outcome of that struggle depends the fate of the one fifth of humanity who live in China and the position of all those struggling against imperialism throughout the world. Simultaneously the rise of the struggle against imperialism in Latin America and elsewhere is the greatest defence and aid that can be offered to China globally.

It is for this reason that when dealing with such a gigantic event as the Chinese Revolution it is necessary to concentrate on fundamentals.

Recomended also to read is: The US attempt to militarily encircle China

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