China is different - but why?

Michael Roberts's latest blog is entitled "Which way for China - part one", and has some interesting ideas to offer. He discusses the following concerns of "mainstream economics":

"Mainstream economics is confused about which way the Chinese economy is going.  Some media and economists reckon Chinese growth is slowing fast from its double-digit pace seen in the last few years and indeed is heading towards a crisis or slump brought on by ‘over-investment’, a reversal of a credit-fuelled property bubble and a spiralling of hidden bad debts in the banking system. On the other hand, some economists reckon that economic growth may be slowing, but the Chinese authorities will be able to engineer a ‘soft landing’ through the easing of credit and financing of the writing-off of debt from cash reserves built up over past years. 

"Behind this debate on the immediate future also lies a debate on whether China can continue to grow fast through investment in industry, infrastructure and more exports or will need to switch to a consumer-led economy that imports more and supplies goods to a ‘rising middle-class’ like advanced capitalist economies supposedly do.  Mainstream economics reckons that this cannot be done without developing a more ‘market-based’ economy i.e. capitalism, because the ‘complexity’ of a consumer society can only work under capitalism and not under ‘heavy-handed’ central planning of government and state industries."

http://thenextrecession.wordpress.com/2012/03/19/which-way-for-china-part-one

I made the following comment:

Yup. China is different. But why?

Given the usual total failure of "mainstream economists" to understand anything, even in the world imperialist system, we can dismiss their explanations as ravings when it comes to general economic principles and long-term economic prospects. So what else is there?

If China was capitalist, it would have stalled and crashed long ago. But if it's not capitalist, what is it?

For my money the answer is more historical and political than economic as such. But an economic inkling can be found in Eugene Preobrazhensky's mid-20s book "The New Economics", which dealt with a similarly contradictory political-economic contradiction - the nascent Soviet Union. He describes the setup as "proto-socialist" and the process involved as "primitive socialist accumulation".

Historically I think we're witnessing the long overdue transition of the world mode of production from capitalism to socialism. This can only be understood in an orthodox Marxist perspective (ie grounded in the analysis of the capitalist system in Capital, based on the Law of Value). Marx views the general development of the forces of production as irreversible, and often enough describes capitalism with a fully formed credit system as having developed as far as it could while still remaining capitalist. Social production had grown so much that private appropriation was nothing but a straitjacket preventing further development, in terms of principle. In other words "capitalism pregnant with socialism", or capitalism negating itself. And Lenin rubbed this in by entitling his book Imperialism - the *ultimate* stage of capitalism. Not so much the "highest so far", but the ultimate ie final.

Which is where the political aspect comes in.

The Soviet example showed that the transformation of the capitalist mode of production into a socialist mode of production doesn't happen peacefully, does happen country by country, and is dependent on conscious political action. It also shows (as is made explicit in Preobrazhensky's book) that there is a long road to travel from a non-capitalist (ie workers) state in one or a number of countries to what we can call a viable socialist state (ie one forming part of a world economy dominated by socialist relations of production.

The USSR also showed that the predictions of mainstream bourgeois economists regarding imminent  collapse were totally wrong. Despite the appalling political regime the system survived for seven decades, having started from next to nothing.

Well, China was able to start its proto-socialist career after three decades of an economically expanding workers state in the USSR, and together with many new non-capitalist states and anti-imperialist states. So we can assume that both historically and economically it has been much less vulnerable than Russia. It had a flying start.

Which brings me to what might be the greatest problem facing us today when it comes to understanding and explaining exactly what makes China tick. One Country, Two Systems. That is, how capitalist is China fundamentally?

How would you approach this problem, Mike?

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'Waistline' commented on this, just the way a good blog discussion should take place!

"To shift to a comment from one reader concerning their interpretation of Marx, I would suggest a very different interpretation of Marx. It was stated:

“Marx views the general development of the forces of production as irreversible, and often enough describes capitalism with a fully formed credit system as having developed as far as it could while still remaining capitalist. Social production had grown so much that private appropriation was nothing but a straitjacket preventing further development, in terms of principle.”

"Marx speaks of a fetter on production rather than the halting of further expansion and development. In my view “capitalism cannot be pregnant with socialism.” While productive force accumulation is irreversible, this primarily applies to means of production. That is to say society cannot be de-evolved back into manufacturing with the impact of the long history of the industrial revolution somehow being negated. Manufacture as a configuration of means of production evolved from handicraft and these world no longer exist for society to go back to. Negation and sublation do not operate backwards as a law system. In this sense of means of production development, Marx spoke of people never relinquishing what they have won.

"Rather than speak of “social production” in conflict with private appropriation, let’s speak of the quantitative growth of industrial means of production in unity and conflict (contradiction) with their bourgeois – capitalist – integuments. Exactly what production beyond the stage of primitive communism is not inherently social or “social production?”

"A different reading of Marx is possible. The bourgeois mode of commodity production – capitalism – enters its final irresolvable crisis NOT ON THE BASIS OF ITS LAW SYSTEM IMMANENT TO IT. Capital is birthed in contradiction expressed as the primary classes of its productive relations; bourgeois and proletariat. Something else other than the basic classes constituting the mode of production causes capitalism to enter into antagonism. That something else is new means of production, the electronic revolution or as a new generation is starting to describe things; the robot economy. Max “Preface to a Contribution” can be read different than the understanding of previous generations of communist.

"This debate about what constitutes “the limit” of the bourgeois mode of commodity production is old. I believe the solution to the question is that qualitatively new means of production creates a new social organization of labor and brings the old system and classes connected to the old system to antagonism.

"At any rate, I look forward to reading more of this.

"Waistline

and I responded:

Hi Waistline, I should perhaps have written the "socialization" of production rather than "social" production - I thought I covered that by writing that it had grown too much to be developed any further under capitalism. Except maybe in so far as a fully developed baby could keep growing in the womb for months or years after nine months gestation. But this growth is not exactly "development". Everything necessary for a viable child is ready. Capitalist expansion is cannibalistic once a certain stage of development has been reached. Once this ultimate stage is reached - and tendency of the rate of profit to fall gives us a good barometer of this - then there is too much capital for the capitalist system to handle. For the rate of profit to rise, huge amounts of capital need to be rendered unproductive (incapable of producing surplus value). Hence war, the extreme growth of military spending (the ultimate capitalist luxury good), and the obscene expansion of unproductive sectors of the economy (lawyers, advertising, and a myriad other sterile ways of divvying up surplus value), and at the same time the appropriators of surplus value (unpaid labour) need to become fewer and fewer so the profit isn't diluted more than necessary. The contradictions are obvious.
Marx was quite clear about the antagonisms leading to the passing of one mode of production into another, including capitalism into socialism -  they are *all* the product of class struggle. Relations between living people, not between dead things (ie not technology). To claim that new means of production bring about the final crisis of capitalism is a) to ignore the fact that human labour power is a means of production, and b) to fall into the trap of commodity fetishism attributing human qualities (living drives and aspirations) to dead things. Commodity fetishism is one of the most fundamental concepts in Marx, it is crucial to understanding his whole analysis of the capitalist mode of production.
For Marx capitalism was pregnant with socialism in his own time, as is perfectly clear from Capital III -- not only pregnant but overdue. In the 1860s. Lenin just expresses Marx's conclusions with respect to the even more cataclysmic political and economic world of his day. One of Stalin's most appalling theoretical mistakes was to trumpet that Marx only wrote about free competition capitalism. He didn't.
Anyhow, if we don't get clarify the human relationships involved in the Chinese situation, ie the character of the class struggle taking place there, and the relationship between the economic system in China and the rest of the world, we'll be as confused by it as the mainstream economists, and make a very poor job of trying to change things for the benefit of living labour rather than dead capital.
Which is why I'm looking forward to what Mike has to say on this subject.

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Commenter 'hydeparkspeakers' took the discussion forward with the two following contributions:

First a couple of minor issues.

The NPC is (nominally) the decision making body of ‘the people’ not the leadership, the leadership is vested in the Party hierarchy not in government institutions.
I think the exponential growth rate has to be seen in a longer-term context than the last decade. Why this is important? There are very few countries that have ‘caught up’ and modernized since the 1945, and of those no other country has achieved such a long period of such rapid growth as China has over 30 years. Its developmental growth is in a league of its own in a world-historical sense.

The World Bank, under the influence of Justin Yifu Lin, claims that sustained long term growth is primarily due to the exploitation of comparative advantage, (low cost labour -low capital intensity -export driven growth) backed by strategic support from the state to create the infrastructure to assist the private sector.

The reduction in target GDP for 2012 is not a reaction any newly changed conditions, but corresponds with the reduced GDP targets outlined in the 12th Five Year Plan (FYP) adopted by the NPC in March 2011.

The land sales are not all to private developers, state owned entities buy land off each other, there are various levels of state control over public land assets and a turf war between state owned entities characterizes the root of the land sales system. Only part of this is confrontation between the township and village, the lowest level of the state land hierarchy.
The economic impulse derived from the private purchase of apartments is replaced by state construction of low cost rental apartments in the 12th FYP. Local governments often rent out or sell land use rights (leases) that they acquire at below market rates (at agricultural land-use prices) to attract investment. They themselves also invest in creating the infrastructure for the investors to encourage growth, as meeting targets set by the FYP are the critera for ‘success’ or ‘failure’ of officials.

The infrastructure growth in China, is however, very much a state driven urbanization strategy, it has been compared to the Great Leap Forward, but one that is more or less matched by capacity, unlike its predecessor. Now the question is, will Chinese urbanisation continue to produce a significant growth impetus?

A second and connected question is, can the emulation of infrastructure, development and urbanisation models in the interior of China produce the same dynamics of growth as they have in Eastern China?

It seems to me that the private sector, and foreign capital is following the designs of the state planning system, which at the driving seat of economic growth, having all the key levers of the economy in its hands.

***

The motive forces driving the system determine its systemic characterisation. Any number of circumstances can produce rapid growth, but the specifics of Chinese growth are unique and extraordinary and certainly force the question of its systemic dynamics to the fore.

In think the systemic critera used by the Hungarian theorist Janos Kornai are useful, (regardless of his own view of China, or of Marxism and socialism).

1. What ownership form dominates the commanding heights?
2. Is the coordination system dominated by bureaucratic plan or markets?
3. Is the political regime hostile or friendly to capitalism?

If you study the details I think you will find that:

1. The commanding heights are overwhelmingly in state hands .

2. Factor prices are state determined and the planning system drives the economic dynamic. The five year plan drives the economy, not market forces, and the state economy is mobilised wholesale to attain state objectives.

3. The structure of power systematically favours bureaucratic forces over private forces; repressing private finance, indigenous private enterprise, imposing arbritary taxes, expropriations, and so on, as well as repressing any organised capitalist political opposition.

Although it is true that this is probably the most capitalist tolerant and friendly ‘planned economy’ in history- at present -the state and political regime is not in the hands or the pay of capital.

----

  

I added the following comment giving quotes from Capital to corroborate what I wrote in reply to 'Waistline' about Marx being 'perfectly clear about capitalism being pregnant with socialism':

I think the following quotes from a single short chapter of Capital III (Ch 27 ‘The role of credit in capitalist production’) are necessary to relate this discussion on China to Marx’s historical socio-economic perspective, ie to historical materialism. This chapter is practically ignored in discussions among Marxists, reformist or revolutionary, academic or political. It is however possibly the single most important chapter in III, and the most explosive, as it shows just how far behind Marx we still lag after 150 years – he wrote this before 1867 – and how overripe he considered capitalism to be for the transition to socialism, or as he called it the associated mode of production. Only Lenin in “Imperialism” and Trotsky in “The Revolution Betrayed” have this perspective at the core of their work.

Capital III, Ch 27 The role of credit in capitalist production:

III. Formation of stock companies. Thereby:

2) The capital, which in itself rests on a social mode of production and presupposes a social concentration of means of production and labour-power, is here directly endowed with the form of social capital (capital of directly associated individuals) as distinct from private capital, and its undertakings assume the form of social undertakings as distinct from private undertakings. It is the abolition of capital as private property within the framework of capitalist production itself.

3) [… ] In stock companies the function [of management and administration] is divorced from capital ownership, hence also labour is entirely divorced from ownership of means of production and surplus-labour. This result of the ultimate development of capitalist production is a necessary transitional phase towards the reconversion of capital into the property of producers, although no longer as the private property of the individual producers, but rather as the property of associated producers, as outright social property. On the other hand, the stock company is a transition toward the conversion of all functions in the reproduction process which still remain linked with capitalist property, into mere functions of associated producers, into social functions.

[… ] This is the abolition of the capitalist mode of production within the capitalist mode of production itself, and hence a self-dissolving contradiction, which prima facie represents a mere phase of transition to a new form of production.

IV. Aside from the stock-company business, which represents the abolition of capitalist private industry on the basis of the capitalist system itself and destroys private industry as it expands and invades new spheres of production, credit offers to the individual capitalist; or to one who is regarded a capitalist, absolute control within certain limits over the capital and property of others, and thereby over the labour of others.[3] The control over social capital, not the individual capital of his own, gives him control of social labour. […C]entralisation of capital, […] expropriation on the most enormous scale. Expropriation extends here from the direct producers to the smaller and the medium-sized capitalists themselves. It is the point of departure for the capitalist mode of production; its accomplishment is the goal of this production. In the last instance, it aims at the expropriation of the means of production from all individuals. With the development of social production the means of production cease to be means of private production and products of private production, and can thereafter be only means of production in the hands of associated producers, i.e., the latter’s social property, much as they are their social products.

[…] The co-operative factories of the labourers themselves […] show how a new mode of production naturally grows out of an old one, when the development of the material forces of production and of the corresponding forms of social production have reached a particular stage. […] The capitalist stock companies, as much as the co-operative factories, should be considered as transitional forms from the capitalist mode of production to the associated one, with the only distinction that the antagonism is resolved negatively in the one and positively in the other.

So far we have considered the development of the credit system — and the implicit latent abolition of capitalist property — […]

[…] the credit system accelerates the material development of the productive forces and the establishment of the world-market. It is the historical mission of the capitalist system of production to raise these material foundations of the new mode of production to a certain degree of perfection. At the same time credit accelerates the violent eruptions of this contradiction — crises — and thereby the elements of disintegration of the old mode of production.

The two characteristics immanent in the credit system are, on the one hand, […] to reduce more and more the number of the few who exploit the social wealth; on the other hand, to constitute the form of transition to a new mode of production.

In response to Waistline I wrote: “For Marx capitalism was pregnant with socialism in his own time, as is perfectly clear from Capital III — not only pregnant but overdue.” As the quotes show, this is a gross understatement. He is not just ‘perfectly clear’, but he hammers the point home. Bang, bang, bang, bang. Count the number of times he uses the term ‘mode of production’. And note his explicit location of it in the context of transition from an old, worn-out mode of production — capitalism — to a new and superior mode of production of associated producers.

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.

Judging China using western economic criteria

China is different - as I argue below in a FaceBook discussion

China's epic hangover begins - Telegraph

www.telegraph.co.uk

China's credit bubble has finally popped. The property market is swinging wildly from boom to bust, the cautionary exhibit of a BRIC's dream that is at last coming down to earth with a thud.

December 15, 2011 at 10:53am

Choppa Morph China can't be judged using western economic criteria. In the first place western economic theory is bollocks - they can't understand their own economy (nation-based imperialism and world capitalism) for starters - just look at the mess in the US and Europe that they are helpless before and can't give any coherent explanation for. In the second place - and I assert this with tremendous confidence - China is not fundamentally capitalist. It's still a deformed workers state. The Stalinist USSR degenerated monstrously in the political field, less in the economic. China is monstrously deformed economically, less in the political field (Trotsky made direct comparisons with fascism, and was right - this can't be done with China, however much we detest its repression.
So it's a proto-socialist state that is mismanaging this appallingly - cos it doesn't understand or want to understand Marx's economic theory. But as such it isn't subject to capitalist laws of investment or credit. Above all it doesn't need to subject itself to western-style demands for short and medium term returns on infrastructural/large-scale productive investment. The USSR outperformed all the imperialists in terms of pave of development throughout the 30s. (Good stuff on this in The Revolution Betrayed by Trotsky, of course.)
Mistakes will be made and losses and lurches - how not?! - but they will have nothing   the effect such things have in the imperialist world.
If China fucks up it will be because of political action by the top bureaucracy changing horses and selling out to imperialism - as in the USSR. I don't think the conditions for this are present now, for lots of reasons. The most obvious one at the moment is that imperialism is an visibly stinking and bubbling economic cesspool and who would voluntarily jump into that? The top bureaucrats can do very well thank you expanding their present positions as is.

December 15, 2011 at 10:53am ·   ·  1

Kriya Zur I don't think real estate and "property market" constitutes fixed capital investments... That is allowed greater flexibility in China than fixed Capital investments . Additionally, since land below the structure is all nationalized in China the real estate market appears very different than what it does in India which also means that the property market "swindling" in China would have much lesser effect

December 15, 2011 at 11:58am · 

R H S ‎> since land below the structure is all nationalized in China...
Just   in Australia....

December 15, 2011 at 12:06pm · 

Kriya Zur Eminent domain ?

December 15, 2011 at 12:07pm · 

Kriya Zur ‎@Robert : What acc. to you would be non-capitalist ownership of land then ?

December 15, 2011 at 12:24pm · 

R H S Not sure if state ownership is necessarily non-capitalist. In Australia you only can rent land, not buy. This gives income to the state and a certain 'grip' on real estate, but the overall effect does not seem to be very different from owning land and pay taxes over it perceived value.

December 15, 2011 at 12:45pm · 

Kriya Zur That still doesn't answer my question. Presuming that government ownership of land is merely another form of capitalism where private property technically doesn't exist, what then IS non-capitalist property ? Also there's a contradiction and vagueness in your comment you say that the government has a "grip" over real estate but then say that "the overall effects don't seem to be very different from owning land and pay taxes over it perceived value" . The contradiction is that there is no ownership of land by private persons and all land is owned by the government so how is the tenant able to SELL the land which he does not own ?

December 15, 2011 at 12:57pm · 

R H S The very word property is a capitalist concept, so I'm at a loss what you're looking for.
When the stae owns all land, the possesor of a certain piece of land does not sell, it, but just passes the lease contract to somebody else. He can charge whatever he  s, providing he finds a candidate. I assume however that 'the state' (/municipality/whatever) has a veto. Not very different from the western concept where the state may veto or regulate the *use* of any land, whoever the owner.

December 15, 2011 at 1:04pm · 

O C China is not so strong than we believe. Not all people live well. There is a big difference between towns and country. The last people live   Mao´s times.

December 15, 2011 at 3:11pm · 

Adhiraj Bose ‎@Robert : There cannot not be a Socialist property that is an impossibility. Every social form be it Capitalist or Socialist is based on how property is used and organized. In fact the very difference between systems in how property is organized between one and the other. Capitalism differs from Feudalism in that it can be freely transferred and owned by private persons excersizing their free will based on their wealth rather than their birth as it was with feudal nobility. Under Socialism the private aspect of ownership logically would stand abolished in favor of Social ownership. In transition this necessarily means the state having complete ownership of property. More important than that of course ... is who controls the state i.e. which class controls the state.

December 15, 2011 at 5:09pm · 

R H S Evidently we live a world apart, both geographically and historically. When we had a feudal system, in what we call the Middle Ages, a big and wealthy middle class existed and they transferred property between them all the time.
"Social ownership" as in 'Everything belongs to all of us and nobody is responsable'? I wish you a great future.
The question 'Which class controls the state' reveals where you're coming from; in a functional democracy there are no classes and the state is controilled by whover won the last elections.
BTW My son H S lived in Pune the last half year!

December 15, 2011 at 7:39pm · 

Kriya Zur ‎@Robert : Read up some English history then :-) and see how Common law came into existence. On the point of 'responsibility' have you heard of such things as COOPERATIVES ! :-) *( P.S : Amul cooperative is a $3bn enterprise :) )

December 16, 2011 at 9:35am ·  

Cuba - imperialism, bureaucracy, socialism

An article in Havana Times dealt with some pressing issues, and got a dismissive "workers control of the workplace" response, so I responded to both the article and the comment.

Cuba: Counter-revolution vs. Socialist Utopia

http://www.havanatimes.org/?p=58814 

Pedro Campos
HAVANA TIMES, Jan 1 — The genuine counter-revolution doesn’t conceal itself, it protests openly against socialist utopia with arguments like this:

“No. It’s not possible. It can’t be done under the current conditions. We cannot develop large-scale cooperativism, self-management and the consequent democratization of society. The objective and subjective conditions don’t exist.

“We have to first develop capitalism, letting domestic and foreign capital develop the country. They will return to modernize the sugar industry and all other industries, ports and communications for us, though we need a strong and organized working class. Furthermore, imperialism is right here; it could easily appropriate self-managed cooperatives and enterprises and take advantage of democratization to get rid of the historic leaders and put the old oligarchy back in power.”
Those who express such notions — and reveal their leanings toward the new Chinese imperialism — cannot even fool elementary school children. In any case, imperialism, which is one sole entity, can paint itself blue, yellow or red and it would be very easy to appropriate the assets of the government.

These assets belong to “all” in words, but which in truth, the only ones who feel like they are owners are the members of the bureaucratic class, who are increasingly isolated from the people.

If properties belong to the people — to individuals or collectives, to work groups or community groups, to freely associated workers or the self-employed — then all of this would indeed be very difficult for imperialism.

It would not be the same to confront and expropriate a bureaucratic state, ready and willing to share economic power with foreign capital, as it would be to take on people who own the means of production and control their destiny.

The supporters of statism spout a line that sounds orthodoxly Marxist (“the great development of the productive forces of capitalism and the wealth it generates is what will bring on socialism”).

Yet they have destroyed the country’s economy, squandered its resources and compelled its youth, professionals and technicians trained by the Cultural Revolution to choose between leaving the country or selling churros [strips of fried dough] and ice cream cones.

They have in fact become the main brake on the development of new forms of socialist production.

The enemies of de-statization are opposed to the turning over the management and control of the profits of state-run enterprises to workers’ councils. The statists are the ones who are blocking the establishment of an extensive cooperative law for industry and services, while at the same time they prioritize wage exploitation by private wealth.

They are preventing the elimination of the multitude of absurd state monopoly regulations on the market, rejecting the urgently needed unification of the currency and impeding other changes.

In short, they are the ones who are retarding the development and strengthening of the Cuban revolutionary process. They are obstructing the socialization and democratization of economic and political power.

Whether they achieve their objectives or not, only time will tell. What is clear is that many young people, workers, professionals, technicians, homemakers and retirees who have spent their lives for this lamentable system of “state socialism” are unwilling to continue putting up with the deceit.

They’re demanding radical changes to the state-centric economic and social policies of the party/government.

These same people from below — on their own and without waiting for the readiness or approval of the established bureau-bourgeoisie — are carrying out various life-important economic, social, cultural and political initiatives outside of state institutions.

It is within those institutions where many are grabbing on, attempting to control everything possible in society while accusing their opponents complicity with the imperialist enemy.

Any initiatives from outside bureaucratic control are met with the slogan, “Either you are with us, or you are with the imperialist enemy.” For them, then, there are no more options.

One has to ask themself: Who have been the true accomplices of the imperialist enemy?

Have they been those who have shown through their policies that “socialism” — which has never existed — has been a social, economic and political disaster. Are they those who have succeeded in making most people not even want to hear the word “socialism”? Those who have made Latin Americans reject socialism as an approach to people bettering their lives and living more freely?

Are the true accomplices of the imperialist enemy those of us who want socializing and democratizing changes now, with less state and bureaucratic control over the economy and politics?

Alternatively, are they the supporters of counter-revolutionary immobilism, who are counting on foreign investment and private capitalism to save their state-centered bureaucratic wage-labor model of the neo-Stalinist cut, to later “try” to reintroduce the cycle of bourgeoisie expropriation by the “working class”?

Are the accomplices of the enemy the ones who have never set out to change production relations of capitalism?

Are they the ones who wish to deepen the revolution and change everything that resists it or are they those who in the name of change don’t want to change anything, so that everything remains the same, especially the same bureaucracy that has held political power for a half a century and has led the country to the current disaster?

Are they the ones who turn to various forms of violence and repression to combat those who peacefully advocate different ideas?

Likewise, the following will also have to be answered: Can the majority of those old, reactionary, conservative, stiff and accustomed brains, with their old, authoritarian, bureaucratic-centralism-educated ways of command and control change their mindsets, as is demanded by those at the heights of power when self-recognizing the incapacity of the centralized system?

Wouldn’t it be better to set aside those stuck in neo-Stalinism thought and instead empower the people, the younger generations, to democratically develop new forms of social, economic and political organization and new leaders demanded by the changing situation, instead of seeking a “cadre policy” aimed at ensuring the perpetuation of “everything that must be changed”?

I hope the party conference this January will help in finding answers to these questions, whether by action or omission.

2 RESPONSES TO “CUBA: COUNTER-REVOLUTION VS. SOCIALIST UTOPIA”

1. Grady Ross Daugherty says:

   January 3, 2012 at 2:32 am

   Like all Marxists, comrade Pedro apparently believes that only state property is socialist, and that socialist property can only be that owned by the state. The fact that he calls for democratic running of state-owned enterprise by the workers does not alter the fact that he is, in a programmatic sense, a state monopoly socialist.

   The old Utopians made the programmatic error of abolishing private productive property rights immediately. Those entering their exemplary communes put everything into the communal pot, and this was going to show the world how communism could be exampled and built right now, without a multi-generation bridge to is elimination.

   The Marxists speak of socialism as a bridge to a society without private property, then force the abolition of private property onto society at the beginning of the bridge journey. It has never worked.

   Marxism makes the same programmatic error as the Utopians, by making everything productive common, state property, as did Cuba by 1968. Pedro Campos still cannot understand that workers can only achieve democratic self-management of the workplace by owning it directly. He clings to the fantasy that someday, somehow the workers could and would achieve workplace democracy under state monopoly ownership socialism.

   Reply
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     THIS IS MY RESPONSE:

     
     

     January 4, 2012 at 4:57 am

     Grady thinks that direct workers ownership of the workplace will bring socialism. If that ownership is capitalist – which it will be if the state hasn’t expropriated the capitalist bourgeoisie – then the workers will start off exploiting themselves and before long transform themselves into capitalists using the labour of workers imported from outside the workplace. This is anarchist, autonomist utopianism.

     
     But for a state to expropriate capitalism, it can’t be a bourgeois state – the bourgeoisie won’t expropriate itself. Individual bourgeois rivals – of course! But not the whole class. And to create a non-bourgeois non-capitalist state you need an anti-capitalist revolution that tears the means of production (land, factories, finance) out of the hands of the bourgeoisie, and takes them into its own hands defending them against the raging bourgeoisie/imperialism by force of arms.

     
     The problem of a non-capitalist state run by a reactionary privileged bureaucracy is one facing every workers (plus peasants) revolution. Revolutions can degenerate, and the harsher the pressure from imperialism, and the less well-developed the material preconditions for modern production, the easier this degeneration is. This was seen in the USSR in the 1920s in the losing battle fought by the revolutionary Left Opposition against the degenerating Stalin-led wing of the Communist Party. The defeat of the revolutionaries led to the political degeneration of the USSR and ultimately to its capitulation to imperialism in 1991. And made the successful anti-capitalist revolutions in Yugoslavia, Vietnam and China deformed from the start, since they took the degenerated Soviet Union as their model. No workers democracy – in fact, anything but workers democracy!

     
     Before the threat of imperialist restoration in China (the biggest threat) or Cuba (most important for Latin America and the Americas including the US) can be properly tackled, all this historical experience needs to be examined, understood and assimilated. Which means spreading and discussing in depth the issues and arguments in the 1920s when the revolutionary fire was still bright in the Soviet Union. Which means discussing the Left Opposition and most significantly the arguments and positions of its leader, Leon Trotsky, whose role in the October Revolution together with Lenin can be compared to the teamwork of Fidel and Che in Cuba, with the difference that Lenin and Trotsky were incomparably better versed in Marxism and more deeply rooted in working class revolutionary activity.

     
     Pedro passes over this completely. And this makes his well-meaning words a bit like foam on the waves. History and the workers revolutionary movement are the ocean and the Gulf Stream, speeches detached from these are liable to be flung in the air by a rock and swept away by the wind.