China and capitalist restoration

In a discussion on FaceBook (11 March 2012) Gerry Downing answers MT and takes the opportunity to  justify the idea that capitalism has been restored in China.
Gerald Downing FaceBook

I don't know why you think I think that China is a deformed workers state but you are wrong. In my view the date of transition was 1992, although that is arguable (Workers Power put it at about the same time). Here is what I think:Let us list the features of the Chinese economy and state to see which it is;1. The “iron rice bowl” is basically gone. Mao’s welfare state has been abolished apart from in a few places. The Gini Coefficient shows a sharply rising graph of income and wealth inequality in China since the early 1980s as in India, not yet as high as Brazil, Mexico and South Africa but getting there. 2. There is a thriving capitalist sector with its own class differentiated bourgeoisie and working class. China now has more millionaires than the UK, Germany or Japan, although at 450,000 it is still a long way behind the U.S. even though that fell by 2.5 million to 6.7 million in 2008. All deformed and degenerated workers’ states expropriated their capitalists and prevented that class arising anew. 3. There is a Stock Exchange and capitalist banks, although, a la Bismarck, Stolypin and Keynes, they are state controlled (unlike in Britain under Blair and Brown) to ensure the better development of capitalism. All deformed and degenerated workers’ states had/have no stock exchanges. This is not neo-liberal capitalism but it is capitalism nevertheless.4. The monopoly of foreign trade is gone but the state still retains strategic control over trade as good capitalist planners. All deformed and degenerated workers’ states had/have a state monopoly of foreign trade.5. They are developing as an imperialist power; their investments in Africa, South America and Sri Lanka, for example, are for purely commercial and strategic/military purposes. This is totally unlike the practice of the USSR where support and investment was to strengthen their hand and give them more pawns in the chess game of achieving peaceful cooperation and compromise with the world Imperialism. The USSR was prepared to sponsor, ideologically and materially, armed opposition to imperialism to this end, China arms its clients but has no ideological opposition to imperialism, however distorted, to offer. However China still retains strong elements of a semi-colonial state in its far-flung backward regions, which are prey to US/CIA interventions to begin the breakup of a developing rival. It is still a long way from a fully fledged imperialist power and history never proceeds in a straight line without wars and revolutions so its uninterrupted development is far from certain.Comrades, when we see a bird that walks like a duck and swims like a duck and quacks like a duck, we call that bird a duck. James Robertson had pragmatically seen the significance of the long swim of the capitalists from Cuba to Miami by 1966 but the International Committee of Gerry Healy and Pierre Lambert refused to look at what had happened there after 1959. In his play Galileo Bertolt Brecht’s Galileo invites the leading scholars of Florence to peer into his telescope for the ultimate proof that Aristotle was wrong; but the men refused to look, instead making evasive, dogmatic speeches about why the telescope could not possibly show any such thing. A little more pragmatism and common sense would now assist comrades, before we progress to the more complex world of the Marxist dialectic. China is capitalist, look; it waddles and paddles and quacks, it’s a duck!.

I responded: 

Sorry, Gerry, I think your duck might turn out to be a swan - even though it's exceedingly ugly as a duckling ;-)

Your version of the history of the capitalist mode of production in the era of transition to socialism is impressionist because it ignores all the important historical questions. 

Most importantly it ignores the question of how modes of production develop and transform - from slave-ownership to feudal to capitalist etc. Despite occasional hiccups they don't head back. It's not straightforward, but it's irreversible. If the new mode of production breaks down, you get chaos and catastrophe - in our day formulated as socialism or barbarism.

So if imperialism is the ultimate stage of capitalism (ie can develop no further scientifically speaking, but just decay or metamorphose into something new and non-capitalist) and is essentially capitalism pregnant with socialism, we must ask what the direction of history is and why capitalism can so easily return to a country where its foundations were destroyed. Against the tide. This tide - clearly seen by Marx in the 1860s, where he states (in Capital III) that capitalism is socialized through and through in every respect except ownership and the direct consequences of ownership), and fully accepted by Lenin - is important for understanding the history of the 20th century. Especially the Soviet Union and its character.

First of all, it's the only possible explanation for the survival of revolutionary Russia and the Soviet Union for seven decades. Trotsky recognizes this in the Revolution Betrayed where he attacks impressionist notions that the Soviet Union was no longer a workers state in 1936. The political distortions in the Stalinist USSR were at least as great as the economic distortions in China today, if not greater - Trotsky didn't hesitate to draw direct parallels between the Stalinist regime and the Nazi regime in Germany. He characterized it as counter-revolutionary. But the foundations of the USSR were different. The capitalist "integument" had "burst asunder", and social economic productive forces were no longer constrained by private appropriation. The results of the newly unleashed productive forces were skimmed off by the bureaucrats, of course, but this isn't the same.

Right, so despite a counter-revolutionary regime that banned all political opposition and critical Marxist thinking, crushed oppositional organizations and individuals, didn't understand Marxist economics, and spread lies and confusion about socialism, the new workers state, crippled, weak and impoverished, survived for seven decades and put the imperialist world to shame on many fronts.

When the bureaucratic regime finally sold out to imperialism we got to see real economic counter-revolution in the mode of production sense. First and only time. No lessons have been drawn from this in relation to China. Impressionism talks as if real economic counter-revolution has taken place there too. This is making a nonsense of the category of counter-revolution. Both poltical and economic. Counter-revolution on this scale is spectacular. 1991 in Russia, however well prepared it was politically, and however eagerly and non-militarily embraced it was by imperialism, was not a reformist transition, an undramatic gliding over to capitalist ownership and management.

The urban and rural workers - trampled and despised under Stalinism - were stripped of what little they had left. But this little was HUGE - it was the fundamentally different relationship between a worker and the forces of production in a non-capitalist state. Every speck of inequality and meanness and brutalization in the USSR had arisen AGAINST the nature of a workers state, even a backward and isolated one in a world dominated by imperialism. Superficial analyses (eg the State Capitalist view) missed this aspect of the USSR completely. 

In China, however well prepared the political and some of the economic conditions might be, we have seen nothing approaching the devastation and barbarity of post-restoration Russia. The political chaos. The human destruction. Reversing a mode of production from non-capitalist to capitalist is non-trivial. It means (historically speaking) ramming a big bouncing baby back into a womb that was already too small before it was born. In Russia the only way the restoration has survived is by reshaping the womb, so to speak. The social scale of the forces of production could only be handled by the state taking over the role of capitalist - leading to a real state capitalism run by loyal oligarchs and powerful politicians. Foreign imperialism is nowhere. 

No one has bothered to envisage what might actually happen in China following a real restoration. We have lazily watched capitalist techniques being introduced and just nodded sagely saying: "look - restoration - goodness me..." This has also led to idiotic reinterpretations of "pre-restoration" such as "Mao's welfare state".

In the Revolution Betrayed Trotsky castigated those who treated the bureaucracy as one featureless mass. He pointed out that the class struggle doesn't vanish because its surface expression is suppressed. But the same error is being made in relation to China. And this is the second big problem of the China is Capitalist view. The Chinese bureaucracy is larger and more powerful and far more stable than the Soviet bureaucracy ever was, but it is just as riven by economic, social and political differences - the material interests of the lower, middle and upper bureaucracies are not the same, and often they are in complete contradiction. Lower bureaucrats would stand to lose everything in a restoration. Middle bureaucrats (as always) feel more secure with the status quo. Upper bureaucrats (the equivalent of the Soviet nomenclatura) would probably prefer restoration. Now - and this is BIG - for Marxists a state is an apparatus mobilizing violent force to maintain and defend a particular mode of production. The army, militias, and the elements making them up. Not just leaders but rank and file. Not just general staff but higher and lower officer castes, and the foot soldiers. This organized violence is inextricably bound up with the political and economic management of the state. 

So where does the army stand in relation to restoration? Well, bugger me, how should I know, is the answer, to judge by the total lack of inquiry into the question. 

In short, it's reasonable to assume that there are very powerful forces in China working in both directions - for restoration and against it. Much stronger and more contradictory than they were even in the Soviet Union, as China is a larger and more powerful nation.

Further, just as the USSR prospered (in spite of everything) during the 30s while imperialism was on its knees, China has been prospering during the loooong drawn out death rattling of the great capitalist crisis following the post-war reconstruction (etc) boom. Since say 1980 (when Thatcher and Reagan initiated a desperate reactionary assault on the core imperialist working class) China has been doing very well thank you.

Now, if I were a Chinese bureaucrat of any rank (particularly perhaps a top bureaucrat) I would be asking myself this question: "if imperialism is making such an intolerable mess of things, getting bogged down in expensive unwinnable wars, rotting away socially, lurching from one deep crisis to the next even deeper crisis... and I'm doing just fine with things the way they are here, getting kickbacks from my industrial and financial cronies... and my cronies are doing just fine being looked after by me... Why the fuck would I ever be stupid enough to give everything up and join a losing side? Why should I go aboard their sinking ship?? They are now coming to me with a begging bowl. Asking for bail-outs and handouts, begging for mercy. Nope, I'll carry on as I am for a bit, I think. So, as far as full frontal restoration goes, thanks, but no thanks."

These questions I raise are all fundamental. They can't be answered with trade figures or organizational charts. Economy is Political economy, not company economics, and the big political questions just aren't being asked.

If we hold with Trotsky, then we should move beyond the Revolution Betrayed (1936) to the Transitional Programme (1938), a much more general document assimilating the lessons worked out in the Revolution Betrayed and all of Trotsky's and the class's previous Bolshevik-Leninist experience.

The most important single sentence in the TP is the very first: "The world political situation as a whole is chiefly characterized by a historical crisis of the leadership of the proletariat."

We need to work out what this means ACTIVELY in relation to problems of capitalist restoration and the fate of Russia and China. It's not enough to passively sit around and bemoan "restoration" and counter-revolution without even considering this aspect of the matter. Because what is happening in Russia and China, obviously, is an expression of the class struggle today in a period of extreme imperialist putrefaction. If "restoration" can be brought about at the stroke of a pen, at the whim of some highly placed bureaucrats in Beijing, and does not depend on a social cataclysm involving a direct confrontation between the working class and the bourgeoisie, then we might as well go into "politics" and fight for a place by the trough in Brussels or Washington. There was no bourgeoisie in the Soviet Union when restoration occurred (which is one reason why it took so long to materialize), so the confrontation was far from straightforward and extremely mediated. There is no real bourgeoisie in China (no state power, no control of commanding heights or army etc etc) so there will be no straightforward confrontation there. 

What we have to do is to work out what social (ie class forces) will be involved in the decisive confrontation, how the bourgeois element will be mediated in China, and in what way we can bring an end to historical crisis of the leadership of the proletariat.

We can't do this by handing our enemies a walkover and letting them win by default. "Oh shit, capitalism just restored itself in China. Well, ain't that a shame. Still, it'll be our turn soon..."

I think if a political Galileo were to ask today's "scholars of Florence" to look into his telescope, the thing they would shrink from observing would be "capitalism pregnant with socialism", and a Chinese workers state whose social and economic fate is by no means decided yet.

This very ugly duckling might make quacking noises, but if we use Galileo's microscope (well, today's equivalent :-) we will see that the DNA is that of a swan.