Yanis Varoufakis: ‘Karl Marx was responsible for framing my perspective of the world we live in, from my childhood to this day.’
By Yanis Varoufakis
The Guardian / UK
Feb 18 2015 – In 2008, capitalism had its second global spasm. The financial crisis set off a chain reaction that pushed Europe into a downward spiral that continues to this day. Europe’s present situation is not merely a threat for workers, for the dispossessed, for the bankers, for social classes or, indeed, nations. No, Europe’s current posture poses a threat to civilisation as we know it.
If my prognosis is correct, and we are not facing just another cyclical slump soon to be overcome, the question that arises for radicals is this: should we welcome this crisis of European capitalism as an opportunity to replace it with a better system? Or should we be so worried about it as to embark upon a campaign for stabilising European capitalism?
To me, the answer is clear. Europe’s crisis is far less likely to give birth to a better alternative to capitalism than it is to unleash dangerously regressive forces that have the capacity to cause a humanitarian bloodbath, while extinguishing the hope for any progressive moves for generations to come.
For this view I have been accused, by well-meaning radical voices, of being “defeatist” and of trying to save an indefensible European socioeconomic system. This criticism, I confess, hurts. And it hurts because it contains more than a kernel of truth.
I share the view that this European Union is typified by a large democratic deficit that, in combination with the denial of the faulty architecture of its monetary union, has put Europe’s peoples on a path to permanent recession. And I also bow to the criticism that I have campaigned on an agenda founded on the assumption that the left was, and remains, squarely defeated. I confess I would much rather be promoting a radical agenda, the raison d’être of which is to replace European capitalism with a different system.
Yet my aim here is to offer a window into my view of a repugnant European capitalism whose implosion, despite its many ills, should be avoided at all costs. It is a confession intended to convince radicals that we have a contradictory mission: to arrest the freefall of European capitalism in order to buy the time we need to formulate its alternative.
Why a Marxist?
When I chose the subject of my doctoral thesis, back in 1982, I deliberately focused on a highly mathematical topic within which Marx’s thought was irrelevant. When, later on, I embarked on an academic career, as a lecturer in mainstream economics departments, the implicit contract between myself and the departments that offered me lectureships was that I would be teaching the type of economic theory that left no room for Marx. In the late 1980s, I was hired by the University of Sydney’s school of economics in order to keep out a leftwing candidate (although I did not know this at the time).
After I returned to Greece in 2000, I threw my lot in with the future prime minister George Papandreou, hoping to help stem the return to power of a resurgent right wing that wanted to push Greece towards xenophobia both domestically and in its foreign policy. As the whole world now knows, Papandreou’s party not only failed to stem xenophobia but, in the end, presided over the most virulent neoliberal macroeconomic policies that spearheaded the eurozone’s so-called bailouts thus, unwittingly, causing the return of Nazis to the streets of Athens. Even though I resigned as Papandreou’s adviser early in 2006, and turned into his government’s staunchest critic during his mishandling of the post-2009 Greek implosion, my public interventions in the debate on Greece and Europe have carried no whiff of Marxism.
Given all this, you may be puzzled to hear me call myself a Marxist. But, in truth, Karl Marx was responsible for framing my perspective of the world we live in, from my childhood to this day. This is not something that I often volunteer to talk about in “polite society” because the very mention of the M-word switches audiences off. But I never deny it either. After a few years of addressing audiences with whom I do not share an ideology, a need has crept up on me to talk about Marx’s imprint on my thinking. To explain why, while an unapologetic Marxist, I think it is important to resist him passionately in a variety of ways. To be, in other words, erratic in one’s Marxism.
If my whole academic career largely ignored Marx, and my current policy recommendations are impossible to describe as Marxist, why bring up my Marxism now? The answer is simple: Even my non-Marxist economics was guided by a mindset influenced by Marx.
By James M. McPherson
During the fateful years of 1860 and 1861 James A. Garfield, a representative in the Ohio legislature, corresponded with his former student at Hiram College, Burke Hinsdale, about the alarming developments in national affairs. They agreed that this "present revolution" of Southern secession from the Union was sure to spark a future revolution of freedom for the slaves.
Garfield quoted with approval the famous speech by Republican leader William H. Seward, in which Seward had characterized the ideological conflict between the proslavery South and the free-labor North as "an irrepressible conflict between opposing and enduring forces" which "means that the United States must and will, sooner or later, become either a slave-holding nation, or a free-labor nation." Garfield echoed Seward’s certainty of the outcome. The rise of the Republican party, they agreed, was a "revolution," and "revolutions never go backward." Southern secession meant that this revolution would probably triumph in the violence of civil war.
If that turned out to be the case, wrote Garfield, so be it, for the Bible taught that "without the shedding of blood there is no remission of sins." Or as Hinsdale put it: "All the great charters of humanity have been writ in blood . . . England’s was engrossed in [the blood] of the Stuarts – and that of the United States in [the blood] of England." Soon, perhaps, the slaves, would achieve their charter of freedom in the blood of their masters.1
Shortly after the beginning of the Civil War, James Garfield joined the Union army and rose eventually to the rank of major general. From the outset, he believed that Northern victory would accomplish the revolution of freedom for the slaves. In October, 1862 he insisted that the war must and would destroy "the old slaveholding, aristocratic social dynasty" that had ruled the nation, and replace it with a "new Republican one." A few months later, while reading Louis Adolph Thier’s ten-volume History of the French Revolution, Garfield was "constantly struck" with "the remarkable analogy which the events of that day bear to our own rebellious times."2
In December 1863 Garfield doffed his army uniform for the civilian garb of a congressman. During the first three of his seventeen years in Congress, Garfield was one of the most radical of the radical Republicans. He continued to view the Civil War and Reconstruction as a revolution that must wipe out all traces of the ancien regime in the South. In his maiden speech to the House of Representatives on January 28, 1864, he called for the confiscation of the land of Confederate planters and the redistribution of this land among freed slaves and white Unionists in the South. To illustrate the need for such action, Garfield drew upon the experience of the English revolutions against the Stuart kings in the seventeenth century and the American Revolution against Britain in the eighteenth. "Our situation," he said, "affords a singular parallel to that of the people of Great Britian in their great revolution" and an even more important parallel to our forefathers of 1776. "The Union had its origin in revolution," Garfield pointed out, and "confiscation played a very important part in that revolution . . . Every one of the thirteen States, with a single exception, confiscated the real and personal property of Tories in arms." The Southern planters were the Tories of this second American revolution, he continued, and to break their power we must not only emancipate their slaves, "we must [also] take away the platform on which slavery stands – the great landed estates of the armed rebels . . . Take that land away, and divide it into homes for the men who have saved our country." And after their land was taken away, Garfield went on, "the leaders of this rebellion must be executed or banished from the republic. They must follow the fate of the Tories of the Revolution." These were harsh measures, Garfield admitted, but "let no weak sentiments of misplaced sympathy deter us from inaugurating a measure which will cleanse our nation and make it the fit home of freedom . . . Let us not despise the severe wisdom of our Revolutionary fathers when they served their generation in a similar way."3
Garfield later receded from his commitment to confiscation and his belief in execution or banishment. But he continued to insist on the enfranchisement of freed slaves as voters, a measure that many contemporaries viewed as revolutionary. Garfield linked this also to the ideas of the first American Revolution. The Declaration of Independence, he said in a speech on July 4, 1865, proclaimed the equality of birthright of all men and the need for the consent of the governed for a just government. This meant black men as well as white men, said Garfield, and to exclude emancipated slaves from equal participation in the government would be a denial of "the very axioms of the Declaration of Indepedence."4
In 1866, Congress passed the Fourteenth Amendment to the Constitution as a moderate compromise that granted blacks equal civil rights but not equal political rights. When the Southern states refused to ratify this moderate measure, Garfield renewed his call for revolutionary change to be imposed on the South by its Northern conquerors. Since the Southern whites, he said in early 1867, "would not cooperate with us in rebuilding what they had destroyed, we must remove the rubbish and rebuild from the bottom . . . We must lay the heavy hand of military authority upon these Rebel communities, and . . . plant liberty on the ruins of slavery."5
By Yang Chungui
Translated by Jiang Yajuan and Zhang Hongyan, from Zhongguo shehui kexue, 2000, no. 1 Revised by Yu Sheng and Su Xuetao
January 9 2012
Tremendous changes have taken place in the history of mankind during the twentieth century. In the first half of the century socialism shocked the world with its great successes over large areas of the earth. However, in the final years of the century its setbacks also astounded the world, especially its failure in the Soviet Union and Eastern Europe. These great changes raised the question of the future and destiny of socialism.
In view of the ecstatic response of Western hostile forces to the "grand failure of communism," and the pessimism of those who once believed in socialism, Deng Xiaoping said categorically, "After a long time, socialism will necessarily supersede capitalism. This is an irreversible general trend of historical development…..Some countries have suffered major setbacks, and socialism appears to have been weakened. But the people have been tempered by the setbacks and have drawn lessons from them, and that will make socialism develop in a healthier direction."[i] This conclusion has been borne out by the successful practice of socialism with Chinese characteristics in China and will be further borne out in the coming century by socialist practice throughout the world, including that in China.
I. Socialism Is a Historical Process With Twist and Turns in Its Development
Dialectical materialism tells us that things develop with a combination of progress and reverses. The general trend in towards progress and development, but the road is full of twists and turns. This is the case in the natural world and also in social life. Every new social system undergoes numerous difficulties during its birth and development. Capitalism was finally substituted for feudalism after 48 years of struggle against the restoration of feudalism in Britain, and 86 years of repeated trails of strength in France. It took two to three hundred years for capitalism as a whole to grow from its infancy to a mature stage amidst continuous economic and political crises. This was the case in the development of capitalism, in which a new form of exploitation replaced the old, let alone the socialist movement that will destroy all systems of exploitation. It is entirely impractical to expect socialism to enjoy a favorable wind all the way and encounter no resistance.
Socialism has experience many setbacks and low ebbs, but the general trend towards socialism replacing capitalism has never changed. During the more than 150 years since the appearance of the theory of scientific socialism, it has developed from the conception of revolutionary teachers into the guiding principle of the workers’ movement all over the world, from theory into practice, and from the practice in one country into that in many countries, presenting a constantly growing dynamic movement. It is inevitable that there will be local reverses and temporary low tides or even reverses during this process. Marxists who keep a clear head with regard to the development law of human society do not feel puzzled by these outward phenomena, but unswervingly believe in the final victory of socialism and communism, and face the harsh realities with high morale, calmly taking up the gauntlet.
In 1987 during the Paris Commune uprising, Karl Marx scientifically predicted that, "whatever therefore its fate in Paris, it will make le tour du monde."[ii] More than forty years later, the victory of the October Revolution in Russia confirmed Marx’s brilliant foresight. When the first socialist country in the world faced grave crises due to armed intervention from fourteen imperialist states, in addition to domestic rebellion, Lenin firmly pointed out that, "Only a proletarian socialist revolution can lead humanity out of the impasse which imperialism and imperialist wars have created. Whatever difficulties the revolution may have to encounter, whatever possible temporary setbacks or waves of counter-revolution it may have to contend with, the final victory of the proletariat is inevitable."[iii] The revolutionary road followed by the Chinese people was even more difficult and convoluted. In the 28 years before the founding of the People’s Republic of China, the Chinese democratic revolution suffered repeated setbacks and failures. On 12 April 1927, Jiang Jieshi staged a bloody coup d’etat against the revolution and threw the Chinese people into bloodshed. But the Communist Party of China (CPC) and the Chinese people were neither cowed, conquered nor exterminated. They picked themselves up, wiped off the blood, buried their fallen comrades and went into battle again. Furthermore, they learned to use armed revolution against armed counterrevolution and went to the countryside to build rural base areas. In the beginning, in the face of a very powerful enemy, some people asked: "How long will the red flag fly?" With foresight comrade Mao Zedong pointed out that, "A single spark can start a prairie fire." But the prairie fire also experienced many ups and downs and, particularly the last days of the land revolution, Wang Ming’s "Left error led to the loss of 90 per cent of the Party and revolutionary forcers in the base areas and an almost complete loss in the Guomindang-controlled areas. However, after the Red Army arrived in northern Shaanxi, the CPC summed up its experiences and lessons learned and went on to defeat all its enemies and win the final victory of the democratic revolution.
The road to socialist construction was equally uneven. In addition to minor upheavals, there were two events of major significance; the three-years Great Leap Forward beginning in 1958, and the ten-year "cultural revolution" beginning in 1966. These errors caused enormous losses and led to grave crises in China. However, after the Third Session of the Eleventh Central Committee of the CPC we became more mature and initiated a new phase of constructing socialism with Chinese characteristics. History is a mirror and tells us that no matter how difficult the situation, and whatever setbacks the revolution may experience, it will win in the end because it follows the law and direction of historical development.
Violent changes took place in the Soviet Union and Eastern Europe in the late 1980s and early 90s. The communist parties lost their ruling position, socialism was abandoned, and the world socialist movement suffered its greatest setback this century. Hostile forces in the West were excited and asserted categorically that Marxism and socialism were bankrupt. The future and destiny were pregnant with grim possibilities and some people became pessimistic. Confronted by local failure and temporary setbacks, Comrade Deng Xiaoping solemnly stated with the foresight of a great statesman, "Don’t panic, don’t think that Marxism has disappeared, that it’s not useful any more and that it has been defeated. Nothing of the sort!"[iv] When socialism was at a low ebb across the world it radiated vigor and dynamism in China. China’s economy has been developing rapidly and in a healthy manner, the living conditions of the people have been improving and the overall capacity of the country has been strengthened. All these indisputable achievements have been highly appreciated by all those who harbor no prejudice against China. The great cause of building socialism with Chinese characteristics under the guidance of Deng Xiaoping theory is not only a pioneering undertaking in. China but also of world significance. Deng Xiaoping pointed out that if we can achieve the strategic goal of reaching the level of moderately developed countries by the middle of the next century, "we shall not only have blazed a new path for the peoples of the Third World, who represent three quarters of world’s population, but also – and is even more important – we shall have demonstrated to mankind that socialism is the only path and that it is superior to capitalism."[v]
Complex objective and subjective reasons account for the twist and turns in the development of socialism. First, the long-term existence of class struggle both at home and abroad. "The tree desires stillness but the wind will not cease." Class struggle exists independent of man’s will. Where there is a struggle there will inevitably be fluctuations, and high and low tides, victory and defeat, and progress and setbacks are just normal phenomena and are not unexpected. Second, the socialist system is a completely new social system in the history of mankind and its development has to undergo a long historical process from inexperience to experience, from imperfect to perfect, from immature to mature. It is hard to completely avoid mistakes, twists and reverses during this process. We can try to arrive at a correct understanding by following the patter, "practice, knowledge, and then back to practice, knowledge," constantly summing up our experiences and moving step by step from the realm of necessity to the realm of freedom. Third, if the party and government leadership of a socialist country cannot earnestly correct their political errors or effectively combat corruption within their ranks, the situation will become complex and grave, and major reverses or even great historical retrogression will follow. The first two are objective in nature, while the third is subjective. If no major problems occur with regard to the leadership, the wheel of history will not be turned back even though it is impossible to avoid minor setbacks. However, from a long-term perspective, no matter what twists and turns may take place, these only constitute a link in the whole chain of historical development, they do not, and cannot, after the general trend of historical development. This is just like the, Yellow River: it has many turns and meanderings, but it nevertheless continues to flow into the eastern seas. In this regard we must pay attention to the following points: 1. Do not take the temporary setbacks as the end of point of historical development. On the contrary, we should observe things from the perspective of historical development and take the setbacks for what they reality are, a temporary phenomenon and a link in the chain in human history. We must be firm in our faith and conviction in the face of any difficulties and grasp the general trend of historical development. 2. We should earnestly summarize our experience and the lessons learned and try by every means to avoid losses that could be avoided. The pivotal point in this connection is to strengthen the building of the Party and maintain the correctness of leadership. 3. We are convinced that even in the Soviet Union and Eastern European countries in which there have been great historical reverses, the broad masses and the true communists will re-select the socialist road after conscientious reflection – this process may be and painful, but undoubtedly things will develop in this direction – this is a historical law independent of man’s will.
II. Summarizing the Historical Experience of Socialism in a Scientific Way
Engels pointed out that, "There is no better road to theoretical clearness of comprehension than to learn by one’s mistakes, durch Schaden klug werden."[vi] Deng Xiaoping said, "In building socialism we have had both positive and negative experience, and they are equally useful to us."[vii] "The experience of successes is valuable, and so is the experience of mistakes and defeats. Formulating principles and policies in this way enables us to unify the thinking of the whole Party so as to achieve a new unity: unity formed on this basis is most reliable."[viii]
By Sven Beckert
Dec 12, 2014 – Few topics have animated today’s chattering classes more than capitalism. In the wake of the global economic crisis, the discussion has spanned political boundaries, with conservative newspapers in Britain and Germany running stories on the "future of capitalism" (as if that were in doubt) and Korean Marxists analyzing its allegedly self-destructive tendencies. Pope Francis has made capitalism a central theme of his papacy, while the French economist Thomas Piketty attained rock-star status with a 700-page book full of tables and statistics and the succinct but decisively unsexy title Capital in the Twenty-First Century (Harvard University Press).
With such contemporary drama, historians have taken notice. They observe, quite rightly, that the world we live in cannot be understood without coming to terms with the long history of capitalism—a process that has arguably unfolded over more than half a millennium. They are further encouraged by the all-too-frequent failings of economists, who have tended to naturalize particular economic arrangements by defining the "laws" of their development with mathematical precision and preferring short-term over long-term perspectives. What distinguishes today’s historians of capitalism is that they insist on its contingent nature, tracing how it has changed over time as it has revolutionized societies, technologies, states, and many if not all facets of life.
Nowhere is this scholarly trend more visible than in the United States. And no issue currently attracts more attention than the relationship between capitalism and slavery.
If capitalism, as many believe, is about wage labor, markets, contracts, and the rule of law, and, most important, if it is based on the idea that markets naturally tend toward maximizing human freedom, then how do we understand slavery’s role within it? No other national story raises that question with quite the same urgency as the history of the United States: The quintessential capitalist society of our time, it also looks back on long complicity with slavery. But the topic goes well beyond one nation. The relationship of slavery and capitalism is, in fact, one of the keys to understanding the origins of the modern world.
For too long, many historians saw no problem in the opposition between capitalism and slavery. They depicted the history of American capitalism without slavery, and slavery as quintessentially noncapitalist. Instead of analyzing it as the modern institution that it was, they described it as premodern: cruel, but marginal to the larger history of capitalist modernity, an unproductive system that retarded economic growth, an artifact of an earlier world. Slavery was a Southern pathology, invested in mastery for mastery’s sake, supported by fanatics, and finally removed from the world stage by a costly and bloody war.
Some scholars have always disagree with such accounts. In the 1930s and 1940s, C.L.R. James and Eric Williams argued for the centrality of slavery to capitalism, though their findings were largely ignored. Nearly half a century later, two American economists, Stanley L. Engerman and Robert William Fogel, observed in their controversial book Time on the Cross (Little, Brown, 1974) the modernity and profitability of slavery in the United States. Now a flurry of books and conferences are building on those often unacknowledged foundations. They emphasize the dynamic nature of New World slavery, its modernity, profitability, expansiveness, and centrality to capitalism in general and to the economic development of the United States in particular.
The historians Robin Blackburn in England, Rafael Marquese in Brazil, Dale Tomich in the United States, and Michael Zeuske in Germany led the study of slavery in the Atlantic world. They have now been joined by a group of mostly younger American historians, like Walter Johnson, Seth Rockman, and Caitlin C. Rosenthal, looking at the United States.
Oct. 27, 2014 – AMBERG, Germany–The next front in Germany’s effort to keep up with the digital revolution lies in a factory in this sleepy industrial town.
At stake isn’t what the Siemens AG plant produces–in this case, automated machines to be used in other industrial factories–but how its 1,000 manufacturing units communicate through the Web.
As a result, most units in this 100,000-plus square-foot factory are able to fetch and assemble components without further human input.
The Amberg plant is an early-stage example of a concerted effort by the German government, companies, universities and research institutions to develop fully automated, Internet-based "smart" factories.
Such factories would make products fully customizable while on the shop floor: An incomplete product on the assembly line would tell "the machine itself what services it needs" and the final product would immediately be put together, said Wolfgang Wahlster, a co-chairman of Industrie 4.0, as the collective project is known.
The initiative seeks to help German industrial manufacturing–the backbone of Europe’s largest economy–keep its competitive edge against the labor-cost advantages of developing countries and a resurgence in U.S. manufacturing.
Underpinning the effort is the Internet of Things, where the Web meets real-world equipment. Google Inc. made a big push on the consumer front this year with its $3.2 billion purchase of Nest Labs Inc., which makes thermostats that can be remotely controlled by smartphones and other connected devices.
Full-fledged smart manufacturing is still in the pilot phase. But the German Research Center for Artificial Intelligence has worked with German industrial companies to engineer some of the most advanced demonstrations in the field.
Part of the CCDS team at the conference: Kathy Sykes, Janet Tucker, Harry Targ, Paul Krehbiel
By Paul Krehbiel
Committees of Correspondence for Democracy and Socialism
"The capitalist class is in a serious crisis without solution," said David Schweikart at the Moving Beyond Capitalism conference held in San Miguel de Allende, Mexico from July 30-August 5, 2014. "But there is a solution," he said, "economic democracy, democratic socialism." Over 200 people from 15 countries discussed how to make this happen, organized by the Center for Global Justice.
Chronic high unemployment, depression of wages and benefits, cuts in social services, and growing inequality and repression, and social and political resistance are endemic to nearly all capitalist countries, said Schweikart, a Philosophy professor at Loyola University in Chicago, and author of After Capitalism.
Schweikart’s model of democratic socialism calls for a regulated competitive market economy, socialized means of production and democratic workplaces (he advocates worker-run cooperatives as an example), non-profit public banks to finance projects, full employment, and a guarantee that human needs will be meet for everyone.
Cliff DuRand, a conference organizer, said people are creating alternatives to capitalism today all over the world. "If we’ve built these alternative institutions, the next time the capitalist system collapses…we will be able to survive without it."
Gustavo Esteva, a former Mexican government official, founder of the University of the Land in Oxaca, and an advisor to the Zapatistas in Chiapas in southern Mexico, gave a good account of how the indigenous people of this region are creating a new democratic and socialist-oriented society that they control, within the borders of a capitalist Mexico. The Zapatistas launched an armed uprising in the mid-1990′s to stop NAFTA and the Mexican government from allowing multi-national corporations to come into Chiapas to extract minerals to enrich the corporations and destroy their lives and their local economy.
Ana Maldonado of the Venezuelan Ministry of Communal Economy could not attend, so University of Utah Professor Al Campbell filled in for her. Campbell has worked in Venezuelan with the Community Councils, a new form of grassroots democracy and socialism. Created in 2006 by the late socialist president Hugo Chavez, there are 20,000 Community Councils today, each holding meetings in neighborhoods where all residents can attend, discuss, and vote on decisions for their community.
Private, for-profit banks came under sharp attack for causing the 2008 Great Recession, and for ripping off billions of dollars from people world-wide, primarily through charging high interest rates. Ellen Brown, founder of the Public Banking Institute based in California, declared, "Without interest payments, there would be no national debt," which now stands at over $15 trillion. Politicians use the debt as an excuse to cut funds for education, health care and other social programs. An example of local bank rip-offs is a bank loan for the purchase of a house, where the homeowner pays the bank 2-3 times or more than the cost of the house due to interest payments.
Brown said the solution is to set up not-for-profit public or state banks — like the Bank of North Dakota. She describes how to do it in her book Democratizing Money: The Public Bank Solution. Since the 2008 economic crash, 20 other states including California have introduced bills to study or establish publicly-owned state banks.
"The US controls third world countries," Brown explained, "by putting them in debt and then forcing repayment with high interest rates," which they can’t afford to pay. Brown said the book, Confessions of an Economic Hitman, by John Perkins, explains how devastating this is.
Coops in Cuba
Camila Pineiro Harnecker, a leader of the cooperative movement in socialist Cuba, explained that her country is giving much more attention to the development of worker-run cooperatives as a way to help workers create jobs for themselves, and learn how to become masters of their work and work lives. The state socialist sector dominates the economy, but coops now comprise 12% of the workforce and are expected to increase in number.
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By Liu Zhenying
CHINESE SOCIAL SCIENCES TODAY
September 24, 2014
The Chinese version of Capital in the Twenty-First Century (2014) by French economist Thomas Piketty hasn’t been published for good reason. It is inappropriate for Piketty to associate his book with Das Kapital, the 1887 critical analysis of political economy by German philosopher Karl Marx.
Difference in political tendency
The political leaning of Capital in the Twenty-First Century can be classified as left-wing. It suggests imposing a progressive tax each year ranging from 0.1 percent to 10 percent on returns on capital, or 80 percent of punitive capital holding tax on the revenue of over $5oo,ooo. This has led US right-wing pundits to label Piketty a Marxist. But Piketty isn’t a Marxist in the conventional sense, which can be seen from his proposition of not scrapping the capitalist system.
Capital in the Twenty-First Century examines the relations between rate of returns on capital and rate of economic growth, explaining the former is higher than the latter with existing materials. This indicates an analytical framework of confrontation between capital gain and labor income, whereby the increased portion must be the reduced portion of workers’ labor income. It is the same as Das Kapital, which is based on confrontation between labor and capital, specifically paid employment. This doesn’t prove Piketty is a Marxist, however, because classical political economics are also based on labor-capital conflicts.
Conflicts between labor and capital are common in classical political economics. Based on these conflicts, Piketty pivots from the stance of contemporary Western mainstream economics to classical political economics. He doesn’t draw such a conclusion from self-contradiction of the capitalist mode of production as Marx did in Das Kapital, which urged the overthrowing of the capitalist system and establishment of capital public ownership.
Piketty once asserted that he has returned to the stance of classical economics due to his dissatisfaction with mainstream economics. However, it is a big leap to go from classical economics to Marxist economics.
Piketty imagines solving the problems caused by capitalist fundamentalism without solving core contradictions, which indicates he hasn’t realized the gap. Commentators accuse him of being a “utopian.” Indeed, Piketty makes the case that the bourgeoisie would rather see the collapse of capitalism than adopt his proposed tax reforms.
Difference in research methods
Capital in the Twenty-First Century shouldn’t be considered a modern Das Kapital. Both books differ in research subjects. More importantly, they have different research methods and both therefore draw inevitably different conclusions. Capital in the Twenty-First Century explains “polarization” with data, strongly refuting theories that distort so-called facts.
No matter how reasonable Piketty’s ideas are, the bourgeoisie will never acknowledge he is right nor accept his proposed policies.
Piketty’s proposed policies have historically been adopted and are even being implemented in some North European countries. However, whether these proposals will be adopted on a greater scale doesn’t depend on whether the ruling classes are clear that the rate of return on capital must conform to economic growth rate. It instead depends on whether their interests can be guaranteed. The capitalist system defines human nature as individualistic and selfish, with the bourgeoisie only caring about their own interests without considering greater mankind.
Without attempting to persuade the bourgeoisie to become reasonable, Das Kapital proposes not having any illusions about them. For this reason, Das Kapital presents an insurmountable critique without comparison.
This isn’t to say that Das Kapital, as a 19th-century book, can explain all phenomena in the 21st century. Marxist theorist Ernest Mandel thought Das Kapital was more suitable for the 20th century. Based on the inherent negativity of capitalism, however, it is in the 21st century that the logic of Das Kapital has been actually realized.
Marx researched virtual capital, but there was no virtual economy in his era. Marx realized the self-denial of capital would inevitably result in socialism, but he didn’t seesocialism which would have the same level of productivity under capitalism and even has lower level of productivity than developed countries . If a 21st-century adaptation of Das Kapital is written, its logic should follow Marxist theory.
The author is a teacher at the Shanghai Party Institute First Branch School at the Communist Party of China’s Shanghai Administration Institute.
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Employees of the Sanli Engine Company, a privately-owned company based in Jinjiang, Fujian Province, assemble lawnmowers for sale outside of China(Photograph taken on August 10, 2009). More than three decades of reform and opening up have fueled considerable advances in China’s state-owned and private sectors, enabling various forms of ownership to develop side by side in a mutually-complementary fashion. / Photo by Xinhua reporter Zhang Guojun
From:English Edition of Qiushi Journal
Journal of the CC of the Chinese Communist Party
Vol. 6 No.3 July 1, 2014
Modernization is the dream of all developing countries. While many countries have pursued dreams of modernization, pushing themselves forwards to achieve development and progress, none have overcome as many difficulties and obstacles as China, which has succeeded in putting an economically and culturally backward country of 1.3 billion people on the fast track to modernization. In light of this fact, we may say that the Chinese path represents a successful attempt to overcome difficulties that developing countries commonly face in modernization.
I. The success of the Chinese path indicates that developing countries no longer have to rely on Western approaches to modernization
All developing countries, including China, face the challenge of identifying a path of development. Following the Second World War, the majority of the world’s developing countries—with the exception of socialist countries, as represented by the Soviet Union—opted to emulate the Western model of modernization.
The path that Western countries have guided developing countries towards takes its roots in neoliberalism—an economic philosophy that emerged in the 1920s-30s, the core ideas of which are marketization, liberalization, and privatization. In 1989, the US government and the Western financial world formulated a set of ten policy prescriptions aimed at guiding economic reforms in Latin America. Later dubbed the “Washington Consensus,” these proposals were essentially a continuation of neoliberal thinking. However, with the introduction of this so-called “consensus” into Latin America in the 1990s, Latin American countries began to experience a phase of continued economic and financial crisis, and have since been confronted with serious economic recessions, polarization, and intense social conflicts. Moreover, following the drastic changes that occurred in the Soviet Union and Eastern European countries, the “shock therapy” of neoliberalism was at one point the cause of serious economic recession in Eastern Europe. Therefore, it is fair to say that the global spread of neoliberalism has been the cause of bitter suffering in many developing countries.
As an approach to modernization that has been developed outside the capitalist system, the Chinese path represents a fundamental departure from the Western model of modernization that has previously been relied upon. Through its glorious achievements, China has shown the world a path of development that differs completely from the one predetermined by Western countries. As a result, the world has begun to shift its gaze to the East.
The Chinese path differs fundamentally from neoliberalism and the “Washington Consensus” in several regards. Firstly, the differences between the two can be seen from an institutional perspective. The socialist system with Chinese characteristics is founded on the fundamental political system of people’s congresses. This fundamental political system serves as the basis for China’s basic political systems, which include multi-party cooperation and political consultation. The socialist system with Chinese characteristics also comprises a basic economic system whereby public ownership is the mainstay while various forms of ownership are able to develop side by side. Secondly, the differences between the two are evident from the guiding principles they follow. China’s socialist market economy attaches great importance to the role of macro control, laying emphasis on exerting the strengths of both planning and market forces. Thirdly, the differences between the two are evident from the role of the government in economic activities. A great deal of research, including research by Western scholars, has argued that the success of the Chinese path is attributable to the fact that China not only boasts a “big government,” but also a “good government.” These features fundamentally distinguish the Chinese path from neoliberalism, which takes the capitalist political system and private ownership as its basic political and economic foundations, and which advocates “small government” that is governments that do not intervene in the economy. Other distinctive features of the Chinese path include export-oriented policies, high savings and investment rates, and an emphasis on education and human resource development. Together, the aforementioned features constitute the main aspects of the Chinese path.
Fact has demonstrated that the Chinese path—a path that differs from the developmental models advocated by the West—has been the strongest driving force behind China’s development. This path has enabled the Chinese nation to proudly reassert itself among the nations of the world. Moreover, it will guarantee that the Chinese dream of national rejuvenation will eventually come true. The Chinese path has delivered the message that every country should choose its own path of development in accordance with its own national conditions. It has demonstrated that the socialist system, a strong government, a mixed economy, and macro control are equally capable of becoming factors for successful modernization. In the future, the Chinese model will continue to shatter the myth that surrounds neoliberalism and the “Washington Consensus.”
II. The Chinese path has effectively overcome the “late starter’s disadvantage” that developing countries face in modernization
It is a widely-held view that developing countries enjoy a number of advantages as they are attempting to modernize: advanced scientific and technological achievements that can be borrowed from developed countries; a wealth of existing knowledge and experience with regard to modernization; open international markets; and abundant demographic and natural resource dividends. Capitalizing on these “late starter’s advantages,” some developing countries have formulated “catch-up” strategies, which have been successful in certain cases. However, in most circumstances, the “late starter’s advantage” is only seen during the early stages of modernization. Once a country has reached a certain level of economic and social development, this advantage will begin to diminish, being increasingly replaced by a “late starter’s disadvantage,” which severely obstructs the modernization process in that country. The “late starter’s disadvantage” is demonstrated in the following aspects.
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Venezuela’s president Nicolas Maduro with Marta Harnecker at the award ceremony.
The speech was given by Marta Harnecker on August 15, 2014, accepting the 2013 Liberator’s Prize for Critical Thought, awarded for her book, A World to Build: New Paths towards Twenty-first Century Socialism; translated by Federico Fuentes
By Marta Harnecker
August 24, 2014 – I completed this book one month after the physical disappearance of President Hugo Chávez, without whose intervention in Latin America this book could not have been written. Many of the ideas I raise in it are related in one way or another to the Bolivarian leader, to his ideas and actions, within Venezuela and at the regional and global level. Nobody can deny that there is a huge difference between the Latin America that Chávez inherited and the Latin America he has left for us today.
That is why I dedicated the book to him with the following words:
To Commandante Chavez, whose words, orientations and exemplary dedication to the cause of the poor will serve as a compass for his people and all the people of the world. It will be the best shield to defend ourselves from those that seek to destroy this marvellous work that he began to build.
When Chávez won the 1998 presidential elections, the neoliberal capitalist model was already foundering. The choice then was whether to re-establish this model, undoubtedly with some changes such as greater concern for social issues, but still motivated by the same logic of profit-seeking, or to go ahead and try to build another model. Chávez had the courage to take the second path and decided to call it “socialism”, in spite of its negative connotations. He called it “21st century socialism,” to differentiate it from the Soviet-style socialism that had been implemented in the 20th century. This was not about “falling into the errors of the past”, into the same “Stalinist deviations” which bureaucratised the party and ended up eliminating popular participation.
The need for peoples’ participation was one of his obsessions and was the feature that distinguished his proposals from other socialist projects in which the state resolved all the problems and the people received benefits as if they were gifts.
He was convinced that socialism could not be decreed from above, that it had to be built with the people. And he also understood that protagonistic participation is what allows people to grow and achieve self-confidence, that is, to develop themselves as human beings.
I always remember the first program of “Theoretical Aló Presidente”, which was broadcasted on June 11, 2009, when Chavez quoted at length from a letter that Peter Kropotkin, the Russian anarchist, wrote to Lenin on March 4, 1920:
Without the participation of local forces, without an organization from below of the peasants and workers themselves, it is impossible to build a new life.
It seemed that the soviets were going to fulfil precisely this function of creating an organization from below. But Russia has already become a Soviet Republic in name only. The party’s influence over people … has already destroyed the influence and constructive energy of this promising institution – the soviets.
That is why very early on I believed it necessary to distinguish between the socialist project and a model. I understood project to mean the original ideas of Marx and Engels, and model to refer to one form that this project has historically taken. If we analysis Soviet-style socialism, we see that in those countries that implemented this model of socialism, one that Michael Lebowitz has recently called the socialism of conductors and conducted based on a vanguardist mode of production, the people were no longer the protagonist, organs of popular participation were transformed into purely formal entities, and the party was transformed into an absolute authority, the sole depositary of truth that controlled all activities: economic, political, cultural. That is, what should have been a popular democracy was transformed into a dictatorship of the party. This model of socialism, that many have called “real socialism” is a fundamentally statist, centralist, bureaucratic model, where the key missing factor is popular participation.
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By John Ross
China.org.cn, August 22, 2014
August 22, 2014 is the 110th anniversary of the birth of Deng Xiaoping. Numerous achievements would ensure Deng Xiaoping a major position in China’s history – his role in shaping the People’s Republic of China, his steadfastness during persecution in the Cultural Revolution, his extraordinarily balanced attitude even after return to power towards the development and recent history of China, his all-round role after 1978 in leading the country.
But one ensures him a position among a tiny handful of people at the peak not only of Chinese but of world history. This was China’s extraordinary economic achievement after reforms began in 1978, and the decisive role this played not only in the improvement of the living standards of Chinese people but the country’s national rejuvenation. So great was the impact of this that it may objectively be said to have altered the situation not only of China but of the world.
China’s economic performance after the beginning of its 1978 reforms simply exceeded the experience of any other country in human history. To give only a partial list:
• China achieved the most rapid growth in a major economy in world history.
• China experienced the fastest growth of living standards of any major economy.
• China lifted 620 million people out of internationally defined poverty.
• Measured in internationally comparable prices, adjusted for inflation, the greatest increase in economic output in a single year in any country outside China was the U.S. in 1999, when it added US$567 billion, whereas in 2010 China added US$1,126 billion – twice as much.
• During the beginning of China’s rapid growth, 22 percent of the world’s population was within its borders – seven times that of United States at the beginning of its own fast economic development.
Wholly implausibly, it is sometimes argued that this success was merely due to "pragmatism" and achieved without overall economic theories, concepts, or a leadership really understanding the subject (particularly with no knowledge of U.S. academic economics!). If true, then the study of economics should immediately be abandoned – if the greatest economic success in world history can be achieved without any understanding of the subject, then it is evidently of no practical value whatever.
In reality this argument is entirely specious. Deng Xiaoping’s approach to economic policy was certainly highly practical regarding application – the famous "it doesn’t matter if a cat is black or white provided it catches mice." But it was extremely theoretical regarding foundations – as shown clearly in such works as In Everything We Do We Must Proceed from the Realities of the Primary Stage of Socialism, We Are Undertaking An Entirely New Endeavour, and Adhere to the Principle to Each According to his Work. Deng Xiaoping’s outstanding practical success was guided by a clearly defined theoretical underpinning, which can be understood particularly clearly in its historical context and in comparison with Western and other economists.
As is generally known, after 1949 the newly created People’s Republic of China constructed an economy, fundamental elements of which were drawn from the Soviet Union. It is important to understand that there was nothing irrational in this – the USSR, up to that time, had the world’s most rapidly growing economy.
Indeed, the immediate post-1929 success of the USSR was of extraordinary dimensions. During 1929-39 the USSR achieved 6 percent annual GDP growth, which until then was by far the fastest ever achieved by a major economy, and almost twice the historical growth rate of the United States. Despite colossal destruction in World War II, by 1949 the USSR had already regained its prewar production level.
The elements which produced such historically unprecedented economic growth were clear. From 1929, Stalin, with the First Five Year Plan, launched the USSR on an economic policy never previously attempted in any country – construction of a national basically self-enclosed administered economy. Resources were not allocated by price but by material quantities – a steel factory did not buy iron ore on the market but had it allocated by administrative decision. Foreign trade was minimized. State ownership was applied even to small scale private enterprises such as restaurants. Farmers’ small holdings were eliminated and agriculture organized into large scale collective farms.
Despite verbal claims that this policy was "Marxist," Stalin’s economic structure was in fact radically at variance with that of Marx himself. To use the Marxist terminology common to both China and the USSR, Soviet economic policy in 1929, in a single step, replaced economic regulation by prices (exchange value) by allocation by material use (use value).