Capitalism

By Noam Chomsky
Alternet.org, March 5, 2013

There is “capitalism” and then there is “really existing capitalism.”

The term “capitalism” is commonly used to refer to the U.S. economic system, with substantial state intervention ranging from subsidies for creative innovation to the “too-big-to-fail” government insurance policy for banks.

The system is highly monopolized, further limiting reliance on the market, and increasingly so: In the past 20 years the share of profits of the 200 largest enterprises has risen sharply, reports scholar Robert W. McChesney in his new book “Digital Disconnect.”

“Capitalism” is a term now commonly used to describe systems in which there are no capitalists: for example, the worker-owned Mondragon conglomerate in the Basque region of Spain, or the worker-owned enterprises expanding in northern Ohio, often with conservative support – both are discussed in important work by the scholar Gar Alperovitz.

Some might even use the term “capitalism” to refer to the industrial democracy advocated by John Dewey, America’s leading social philosopher, in the late 19th century and early 20th century.

Dewey called for workers to be “masters of their own industrial fate” and for all institutions to be brought under public control, including the means of production, exchange, publicity, transportation and communication. Short of this, Dewey argued, politics will remain “the shadow cast on society by big business.”

The truncated democracy that Dewey condemned has been left in tatters in recent years. Now control of government is narrowly concentrated at the peak of the income scale, while the large majority “down below” has been virtually disenfranchised. The current political-economic system is a form of plutocracy, diverging sharply from democracy, if by that concept we mean political arrangements in which policy is significantly influenced by the public will.

There have been serious debates over the years about whether capitalism is compatible with democracy. If we keep to really existing capitalist democracy – RECD for short – the question is effectively answered: They are radically incompatible.

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By Atlee McFellin
SolidarityEconomy.net via Common Dreams

In a recent article about success in the sharing economy, Van Jones explained the degree to which sharing, crowdfunding, and other similar concepts are fundamentally transforming the economy as we know it. He turned to examples like Zipcar, Solar Mosaic, AirBnB, and Couchsurfing to show this transformation happening on the ground.

For the few who don’t know, Jones founded Green For All, one of the central organizations within the growing green economy movement. His tremendously poignant article makes one wonder to what extent this sharing economy is similar to the green economy and how are we to understand their relatedness theoretically and organizationally? One could certainly say they have much in common, from the role the above-mentioned firms play in helping protect the environment by crowdfunding solar panels or reducing people’s need to own their own car.

It’s one thing to see what ideas or outcomes they have in common. For the broader purposes of looking towards our collective potential to fundamentally transform the economy, it’s also important to look at how they relate to one another organizationally. This two-part series attempts to do just that. The first part looks at the green economy movement theoretically and organizationally, while the second part looks at the sharing economy, solidarity economy, and new economy to make the case for a New Economy Coalition acting to unite them all.Credit: New Economy Institute

Even though the green economy has been growing in the U.S. for decades, its birth into mainstream social consciousness very much began with the push for a Green New Deal as an immediate solution to a collapsing economy in late 2008. We saw the potential for job creation through public investment with the Green Jobs Act prior to the collapse and the subsequent American Recovery and Reinvestment Act. (1)  The hope behind the push for a Green New Deal is based upon FDR’s New Deal legislation in the 1930s and the works of economist John Maynard Keynes. The focus is a massive reinvestment by the government into the economy. With a Green New Deal that investment would be focused on renewable energy, energy efficiency, public transportation, improvements to the electrical grid, and other carbon-reducing strategies for job creation.

The AP’s High-Impact Three-Part Series on Joblessness and Stalled Recovery

Middle-Class Jobs Cut in Recession Feared Gone for Good, Lost to Technology

By Associated Press

NEW YORK, Jan 25 2013 — Five years after the start of the Great Recession, the toll is terrifyingly clear: Millions of middle-class jobs have been lost in developed countries the world over.

And the situation is even worse than it appears.

Most of the jobs will never return, and millions more are likely to vanish as well, say experts who study the labor market. What’s more, these jobs aren’t just being lost to China and other developing countries, and they aren’t just factory work. Increasingly, jobs are disappearing in the service sector, home to two-thirds of all workers.

They’re being obliterated by technology.

Year after year, the software that runs computers and an array of other machines and devices becomes more sophisticated and powerful and capable of doing more efficiently tasks that humans have always done. For decades, science fiction warned of a future when we would be architects of our own obsolescence, replaced by our machines; an Associated Press analysis finds that the future has arrived.

“The jobs that are going away aren’t coming back,” says Andrew McAfee, principal research scientist at the Center for Digital Business at the Massachusetts Institute of Technology and co-author of “Race Against the Machine.” ‘’I have never seen a period where computers demonstrated as many skills and abilities as they have over the past seven years.”

The global economy is being reshaped by machines that generate and analyze vast amounts of data; by devices such as smartphones and tablet computers that let people work just about anywhere, even when they’re on the move; by smarter, nimbler robots; and by services that let businesses rent computing power when they need it, instead of installing expensive equipment and hiring IT staffs to run it. Whole employment categories, from secretaries to travel agents, are starting to disappear.

“There’s no sector of the economy that’s going to get a pass,” says Martin Ford, who runs a software company and wrote “The Lights in the Tunnel,” a book predicting widespread job losses. “It’s everywhere.”

The numbers startle even labor economists. In the United States, half the 7.5 million jobs lost during the Great Recession were in industries that pay middle-class wages, ranging from $38,000 to $68,000. But only 2 percent of the 3.5 million jobs gained since the recession ended in June 2009 are in midpay industries. Nearly 70 percent are in low-pay industries, 29 percent in industries that pay well.

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By Gar Alperovitz and Steve Dubb
Alternet, Jan 15, 2013

Most activists tend to approach progressive change from one of two perspectives: First, there’s the “reform” tradition that assumes corporate control is a constant and that “politics” acts to modify practices within that constraint. Liberalism in the United States is representative of this tradition. Then there’s the “revolutionary” tradition, which assumes change can come about only if the major institutions are largely eliminated or transcended, often by violence.

But what if neither revolution nor reform is viable?

Paradoxically, we believe the current stalemating of progressive reform may open up some unique strategic possibilities to transform institutions of the political economy over time. We call this third option evolutionary reconstruction. Like reform, evolutionary reconstruction involves step-by-step nonviolent change. But like revolution, evolutionary reconstruction changes the basic institutions of ownership of the economy, so that the broad public, rather than a narrow band of individuals (i.e., the “one percent”) owns more and more of the nation’s productive assets.

1. A People’s Bank

One area where this logic can be seen at work is in the financial industry. At the height of the financial crisis in early 2009, some kind of nationalization of the banks seemed possible. It was a moment, President Obama told banking CEOs, when his administration was “the only thing between you and the pitchforks.” The president opted for a soft bailout, but that was not the only possible decision.

When the next financial crisis occurs – and many experts think it will —a different resolution may well be possible. One option has already been put on the table. In 2010, 33 senators voted to break up large Wall Street investment banks that were “too big to fail.” Such a policy would not only reduce financial vulnerability, it would alter the structure of institutional power.

Nor is an effort to break up banks, even if successful, likely to be the end of the process. The modern history of anti-trust and finance suggests that the big banks, even if broken up, will ultimately regroup. So what can be done when breaking them up fails?

Traditional reforms have aimed at improved regulation, higher reserve requirements and the channeling of credit to key sectors. But future crises may bring into play a spectrum of sophisticated proposals for more radical change. For instance, a “Limited Purpose Banking” strategy put forward by conservative economist Laurence Kolticoff would impose a 100% reserve requirement on banks. Since banks typically provide loans in amounts many times their reserves, this would transform them into modest institutions with little or no capacity to finance speculation. It would also nationalize the creation of all new money as federal authorities, rather than bankers, directly control system-wide financial flows.

More striking is the argument of Willem Buiter, the chief economist of Citigroup, that if the public underwrites the costs of bailouts, “banks should be in public ownership.” In fact, had the taxpayer funds used to bail out major financial institutions in 2007-2010 been provided on condition that voting stock be issued in return for the investment, one or more major banks would have become essentially public banks.

Nor is this far from current political tradition. Unknown to most, there have been a large number of small and medium-sized public banking institutions for some time now. In fact, the federal government already operates 140 banks and quasi-banks that provide loans and loan guarantees for an extraordinary range of domestic and international economic activities.

The economic crisis has also produced widespread interest in the Bank of North Dakota, a highly successful state-owned bank founded in 1919. Between 1996 and 2008, the bank returned $340 million in profits to the state. The bank enjoys broad support in the business community, as well as among progressive activists. Legislative proposals to establish banks patterned in whole or in part on the North Dakota model have been put forward by activists and legislators in more than a dozen states.

2. Move to Universal Healthcare

That austerity and failing reform might open the way to "evolutionary reconstructive" institutional change is also suggested by emerging developments in healthcare.

Cost pressures are also building up—and, critically, in ways that will continue to undermine U.S. corporations facing global competitors, forcing them to seek new solutions. The federal Center for Medicare and Medicaid Services projects that healthcare costs will go up from the 2010 level of 17.5 percent of GDP to 19.6 percent in 2019. It has long been clear that over the long-haul cost pressures are ultimately likely to force development of some form of single-payer system —the only serious way to deal with the underlying problem. 

A national solution may come about either in response to a burst of pain-driven public outrage, or more slowly through a state-by-state build-up. Massachusetts already has a near universal plan. In Hawaii, health coverage (provided mostly by nonprofit insurers) reaches 91.8 percent of adults in part because of a 1970s law mandating low-cost insurance for anyone working 20 hours a week. In Vermont, Governor Peter Shumlin signed legislation in May 2011 creating “Green Mountain Care.” Universal coverage, dependent on a federal waiver, would begin in 2017 and possibly as early as 2014. In Connecticut, the legislature in 2011 authorized a “SustiNet” non-profit public health insurance program, which it aims to launch in 2014. In all, bills to create universal healthcare have been introduced in nearly 20 states.

3.  Build Community Wealth

“Social enterprises” that undertake businesses in order to support specific social missions now increasingly comprise what is sometimes called a "fourth sector” (different from the government, business and non-profit sectors). Roughly 4,500 not-for-profit community development corporations are largely devoted to housing development. There are now also more than 10,000 businesses owned in whole or part by their employees; nearly 3 million more individuals are involved in these enterprises than are members of private sector unions. Another 130 million Americans are members of various urban, agricultural and credit union cooperatives. In many cities, “land trusts” are underway using an institutional form of nonprofit or municipal ownership that develops and maintains low- and moderate-income housing.

In Cleveland, Ohio, an integrated group of worker-owned companies has been developed, supported in part by the purchasing power of large hospitals and universities. The Cleveland effort, which is partly modeled on the 85,000-person Mondragón cooperative network, based in the Basque region of Spain, is on track to create new businesses, year by year, as time goes on. The goal is not simply worker ownership, but the democratization of wealth and community building in general. Linked by a community-serving non-profit corporation and a revolving fund, the companies cannot be sold outside the network; they also return 10 percent of profits to help develop additional worker-owned firms.

A critical element of the strategy points to what is essentially a quasi-public sector planning model: Hospitals and universities in the area currently spend $3 billion on goods and services a year—none, until recently, from the immediately surrounding neighborhoods. The “Cleveland model” is supported in part by decisions of these substantially publically financed institutions to allocate part of their procurement to the worker-co-ops in support of a larger community-building agenda. Numerous other cities are now exploring efforts of this kind, including Atlanta; Pittsburgh; Amarillo, Texas; and Washington, DC. Related institutional work is now underway, too, through the leadership of United Steelworkers, a union that has put forward new proposals for a co-op-union model of ownership.

Another innovative enterprise is Market Creek Plaza in San Diego, a $23.5 million, mixed-use, commercial-retail-residential development. The project was conceived, planned and developed by teams of community members working with the Jacobs Center for Neighborhood Innovation. Market Creek Plaza is also a green project, and aims to expand to become a transit-oriented village with 800 units of affordable housing and extensive facilities for nonprofit organizations. The project has restored 1,400 linear feet of wetlands, while generating 200 permanent jobs (70 percent filled by local residents), provided 415 residents with a 20-percent ownership stake in the project, and generated $42 million in economic activity (in 2008).

4. Leverage City Assets

Yet another arena of institutional growth involves municipal development. By maintaining direct ownership of areas surrounding transit station exits, public agencies in Washington, DC, Atlanta and elsewhere earn millions, capturing the increased land values their transit investments create. The town of Riverview, Michigan has been a national leader in trapping methane from its landfills and using it to fuel electricity generation, thereby providing both revenue and jobs. There are roughly 500 similar projects nationwide. Many cities have established municipally owned hotels. There are also nearly 2,000 publicly owned utilities that provide power (and often broadband) to more than 45 million Americans, generating $50 billion in annual revenue. Significant public institutions are also common at the state level. CalPERS, California’s public pension authority, helps finance local community development needs; in Alaska, state oil revenues provide each citizen with dividends as a matter of right; in Alabama, public pension investing has long focused on state economic development.

5. Organize for the Long Haul

You can think of the slow buildup of democratizing strategies as the pre-historical developmental work needed to clarify new principles for larger scale application. Just as in the decades before the New Deal, state and local experiments in the “laboratories of democracy” may suggest new larger scale approaches. The new direction has four aspects; democratization of wealth; community, both locally and in general; decentralization in general; and substantial but not complete forms of democratic planning. Let’s take a look at each of these.

Democratization of Wealth: Institutions like public banks challenge the idea that private corporate enterprise offers the only possible way forward. They also help open new ways of thinking about how to get meaningful larger scale democratization. Historically, cooperatives and other federations also helped establish institutional and organizational support for explicit political efforts in support of specific policies. Critically, they also help stabilize local community economies, since such institutions tend to be anchored locally by virtue of their democratic ownership structure.

Rethinking Community: If you want to alter larger patterns of wealth and power, you have to build a culture that reconstructs “community.” In economic terms, building community means introducing and emphasizing practical forms of community ownership. In the Cleveland effort, for example, the central institution is a community-wide, neighborhood-encompassing non-profit corporation. The board of the non-profit institution includes representatives both of the worker cooperatives and of key community institutions. Worker co-ops are linked to this (and to a revolving fund at the center), and though independently owned and managed, they cannot be sold without permission from the founding community-wide institution. The basic principle is that the effort should benefit the broader community, not only or simply workers in one or another co-op.

Decentralization: Can there be meaningful democracy in a very large system without far more rigorous decentralization than is commonly assumed in the United States? It is a commonplace that Washington is “broken.” But part of the problem has to do with scale. We rarely confront the fact that the United States is a very large geographic polity: Germany could easily be tucked into Montana. The United States is also very large in population—currently more than 310 million, likely to reach 500 million shortly after mid-century.

Decentralization in these circumstances is nearly inevitable, and if the continental nation is too large and most states are too small to deal with economic matters, what remains is the intermediate scale we call the region— a unit of scale that is likely to become of increasing importance as time (and population growth) go on. The question is almost certainly how to regionalize, not whether to do so—what powers to maintain at the center and what powers to relegate to various smaller scale units. The principle of subsidiarity—keeping decision-making at the lowest feasible level, and only elevating to higher levels when absolutely necessary—is implicit as a guiding principle.

Democratic Planning: A well-designed planning system can change relationships between firms, the community and the market. Planning also needs to be democratic at all levels.

Take a look at Brazil’s innovations in participatory budgeting, where citizens determine major public expenditures – an idea that is gaining traction in Chicago. So far these experiments have definite limits since they are restricted to municipal budget decisions. But if the practice can be extended in scope and scale over time, it could provide an important mechanism for increasing meaningful democracy.

High-speed rail and mass transit are another area in which we can think about larger scale planning approaches. The United States has limited capacity to build equipment for any of this. But when the next crisis occurs in the auto or other industries, a public bail-out might restructure firms so that we could use public contracts needed to build mass transit and high-speed rail in ways that also help support the development of quasi-public national and community-based firms—both to produce what is needed and simultaneously to help stabilize local communities.

6. Cut Corporate Power Down to Size

To deal with economic issues, ecological challenges and local community stability, we must also come to terms with corporate power dynamics. Public corporations are subject to Wall Street’s first commandment: Grow or die!” You can’t just wish or regulate that idea away.

In addition to carbon emissions, countless studies have documented growing energy, mineral, water, arable land and other limits to unending growth. Yet the trends continue: The United States, with less than 5 percent of global population, consumes 22 percent of the world’s oil, 13 percent of world coal, and 21 percent of world natural gas. From 1940 to 1976, Americans used up as large a share of the earth’s mineral resources as did everyone in all previous history.

At some point, a society like the United States that already produces the equivalent of over $190,000 for every family of four must ask when enough is enough. As Juliet Schor has argued, one key change is to encourage less consumption and more leisure time. That means reforming unemployment insurance policy to encourage work sharing, changing government labor practices to model shorter working hours, and discouraging excessive overtime. We need to restore balance on a personal level, but we can’t ignore the big systemic challenges. As former presidential adviser James Gustav Speth has observed: “For the most part we have worked within this current system of political economy, but working within the system will not succeed in the end when what is needed is transformative change in the system itself.”

As a matter of cold logic, if some of the most important corporations have a massively disruptive and costly impact on the economy and environment—and if experience suggests that regulation and anti-trust laws are likely to be largely subverted by these corporations—a public takeover becomes the only logical answer. This general argument was put forward most forcefully not by liberals, but by the founders of the Chicago School of economics. Conservative Nobel Laureate George Stigler repeatedly observed that regulatory strategies were “designed and operated primarily for [the corporation’s] benefit.” Henry C. Simons, Milton Friedman’s mentor, was even more forceful. “Turned loose with inordinate powers, corporations have vastly over-organized most industries,” Simons held. The state “should face the necessity of actually taking over, owning, and managing directly…industries in which it is impossible to maintain effectively competitive conditions.”

For many decades, the only choices to many have seemed state socialism, or corporate capitalism. When traditional systems falter and fail, new ideas spring to life. Little noticed by most observers, handholds on processes of potentially important new forms of change have been quietly developing around the country. These changes build upon each other to create an evolutionary process that has the power to transform the way we live – for the better.

Under Construction

Our Historical Tasks at the Primary Stage of Socialism and Several Issues Concerning China’s Foreign Policy

By Wen Jiabao
Premier, PRC

China Daily, March 2007

I. Our Historical Tasks at the Primary Stage of Socialism

A keen appreciation of China’s national conditions and its historical stage is the basis for our Party to put forward theories in a scientific way and adopt correct principles and policies. It is also a key prerequisite for ensuring the success of all our endeavors.

China is at the primary stage of socialism, and will remain so for a long time to come. The primary stage means a stage of underdevelopment, which manifests itself, first and foremost, in the low level of the productive forces. Therefore, we must unswervingly take economic development as the central task and go all out to boost the productive forces. However, when we talk about the primary stage, we should not just think about the underdeveloped productive forces. We should also recognize that the socialist system still has room for improvement and that it is not yet a mature one. Comrade Deng Xiaoping pointed out that in essence, socialism is about liberating and developing the productive forces, eliminating exploitation and polarization, and ultimately, it is about achieving prosperity for all. This means that in consolidating and developing socialism, we must be clear about and focus on two major tasks: one is to liberate and develop the productive forces to vastly increase the material wealth of the whole society, and the other is to achieve social fairness and justice, fire the creativity of the whole nation and promote social harmony. The two tasks are interconnected and reinforce each other. As a holistic endeavor, they should be pursued throughout the historical course of all the development stages of socialism. Without the sustained and full development of productive forces, it will be impossible to achieve social fairness and justice, an essential requirement of socialism. Without gradual progress in social fairness and justice along with the growth of productive forces, it will be impossible to give full play to the initiative and creativity of all the people and ensure sustained and full development of productive forces. In implementing Deng Xiaoping Theory and the important thought of “Three Represents”, following the scientific thinking on development and building a socialist harmonious society, it is critical that we have a full and scientific understanding of the essence of socialism.

When China began to build socialism, it was way behind developed countries in terms of productive forces. It will take a fairly long historical period before China can achieve industrialization and modernization. Since the founding of the People’s Republic of China, and particularly since the introduction of reform and opening-up policy, China has greatly enhanced social productive forces and its overall national strength, and markedly improved the well-being of its people. China has achieved a historic leap from meeting the basic living needs for its people to making life moderately prosperous for them. However, given China’s huge population, weak economic base and development imbalances between urban and rural areas and among different regions, its low level of productive forces remains basically unchanged. While continuing economic reform, we have steadily proceeded with reform in the political system. Socialist democracy and legal system are being enhanced, and the Chinese people are playing an increasingly active role in political affairs. People’s political, economic, cultural, social and other rights are duly protected. Nonetheless, China’s socialist market economy and its democracy and legal system are not yet fully developed. Social unfairness, graft and corruption still exist. The socialist system is not yet mature. Therefore, China still has a long way to go before it can move to a stage higher than the primary stage of socialism. It remains a developing country. Regarding the overall long-term development of socialism, Comrade Deng Xiaoping made a keen observation in 1992 in his remarks during his inspection tour to south China: It will take a very long historical period to consolidate and develop the socialist system, and it will require persistent struggle by many generations, a dozen or even several dozens. We can never rest on our oars.

In the process of reform, opening-up and modernization, we will gain a deeper understanding of what is socialism and how to develop socialism, and we will be able to enrich and advance socialism by adhering to the principle that practice is the only criterion for testing truth. In this connection, two points must be made clear: First, we need to have a full and profound understanding of the basic conditions of China at the primary stage of socialism. To build a country of more than one billion people into a prosperous, strong, democratic, civilized and harmonious modern socialist country is an unprecedented endeavor in human history. It is a historical mission that requires persistent and arduous efforts. Second, we must press ahead with reform and encourage innovation. Comrade Jiang Zemin pointed out, “The great progress our people have achieved under the leadership of our Party in reform, opening-up and modernization in the past more than 20 years has been possible because of the theoretical innovation, institutional innovation, scientific and technological innovation we have pursued.” In pursuing reform and innovation, we should not only benefit from and carry forward the inexhaustibly rich and valuable experience our Party has gained in the long years of socialist development and reform; we should also boldly draw upon all the progress of human civilization and all advanced business and managerial expertise that embody the laws governing modern social production. This is the only way for our socialist system to gain strength in competing with the capitalist system. It is with this in mind that we say that socialism is like an ocean which never runs dry as it admits hundreds of rivers. It will take a considerably long historical process for socialism to gain maturity in terms of both theory and practice. Therefore, we must unswervingly adhere to the basic lines of the Party for the primary stage of socialism for the next 100 years and persist in carrying out reform and innovation to ensure enduring vigor and vitality for socialism with Chinese characteristics.

Leading officials at all levels should develop historical and global perspectives and view things from an overall and strategic angle. Only with a full and deep appreciation of the long-term nature of the primary stage of socialism and our historic mission can we truly understand why we have adopted the policies we are pursuing today instead of any other policy and work with stronger commitment, determination and creativity.

II. The Period of Strategic Opportunities for China’s Development

The first 20 years of this century will be a period of important strategic opportunities for China. We must not miss it, and we must make full use of it. To embrace this period of strategic opportunities and make good use of it is of utmost importance to our goal of building a society of moderate prosperity in all respects and building socialism with Chinese characteristics.

China did not have many major opportunities for development in its history. In modern times, China closed itself and fell victim to imperialist aggressions. As a result, China lost an opportunity for development and fell behind. After the founding of New China, great achievements were made in its socialist development endeavors. However, we missed a major development opportunity because of some big policy mistakes, and particularly the disastrous ten-year-long “Cultural Revolution”. Opportunity is rare. When it presents itself, we must seize it, or it will be lost for good. In the past 28 years of reform and opening-up, China’s economy has maintained fast and sustainable growth. This is a miracle. Will China have another period of opportunity in the future? My answer is yes. How long will it last? This will depend on what domestic and foreign policies we follow and on our ability to respond to new developments.

Profound and complex changes are taking place in the world, and many new international developments deserve our close attention. But the overall international environment is a favorable one for China. Peace and development remain the general trend of the times and no major war is likely to break out. It is fully possible for us to have a fairly long-term peaceful international environment and a favorable neighborhood environment. History shows that those remaining backward are invariably despised and bullied by others. We must seize the favorable international opportunities to speed up our development. Achieving development is the overriding principle. It is the basis for solving all problems in China and for China to conduct effective diplomacy. Competition between states is based on strength. There are major principles and secondary principles, and the latter should be subjected to the former. Then what is the major principle? It is to accomplish the central goal of socialist modernization drive. People of all walks of life in China should recognize the larger interest of the modernization drive, comply with it and work to advance it.

III. Take the Path of Peaceful Development

China takes the path of peaceful development. This is made necessary by its national conditions, cultural traditions and its embracing of the global trend of development. And, in the final analysis, it is determined by the nature of China as a socialist country led by the Communist Party of China and by the goal of achieving socialist modernization in China. What is the essence of the path of peaceful development? It is to foster a peaceful international environment to develop itself and, in turn, promote world peace with its development. Taking the path of peaceful development is an initiative that has both external and domestic dimensions. Thus, we must keep firmly in mind our overall interests on two fronts, both internal and external.

Domestically, we need to rely mainly on our own effort in pursuing development. We should promote development by expanding the domestic demand to meet the people’s growing material and cultural needs. China is the most populous country with a vast territory, relatively rich resources and a market of huge potential. All this has made it possible for China to achieve development mainly through its own efforts. In the course of development, China is bound to encounter bottleneck constraints in areas such as natural resources, energy and the environment. But thanks to years of hard work, we have succeeded in embarking on a path leading to all-round, coordinated and sustainable development. Our goal is to foster and implement a scientific thinking on development and build a resource-conserving and environment-friendly society. At the same time, we must give a strong impetus to the modernization drive by continuing to deepen our reform, opening wider to the outside world and removing institutional obstacles to development. It is important that we send a clear message to the world that China will achieve its development mainly through its own efforts, and this will help fundamentally remove misgivings in the international community that China is bound to engage in external plundering and expansion when it reaches a certain stage of development. As China develops itself, it will make greater contribution to both the development of its neighborhood areas and that of the whole world.

Internationally, we should advocate peace, development and cooperation and pursue an independent foreign policy of peace. China works to uphold its independence, sovereignty, unity and territorial integrity, makes judgment independently on the merit of each international issue and takes position accordingly. It does not use ideology and social system as a criterion in conducting diplomacy, nor does it impose its values on others. China does not enter into alliance with any country or country group. It does not interfere in other countries’ internal affairs, nor does it allow others to interfere in its internal affairs. China opposes hegemonism and power politics and will never seek hegemony. In conducting foreign exchanges, we should fully implement the independent foreign policy of peace. This means we should live in friendship with all other countries on the basis of the Five Principles of Peaceful Coexistence, and treat all countries, whether big or small, rich or poor, strong or weak, as equals. It means we should work for a just and equitable international political and economic order which is based on equality, respect and mutual benefit and whose ultimate goal is to build a harmonious world. It means we should follow the principle of mutual benefit and mutual respect in expanding overseas business ties and conducting cultural exchanges. And it means we should follow a defense policy that is defensive in nature and do not engage in arms race or military expansion. Since it suffered bitterly from imperialist aggression and oppression for more than a century after the Opium War (1840-1842), China knows just too well what foreign aggression and oppression will bring to a nation. We are sincere and firm in our commitment to taking a path of peaceful development.

To take a path of peaceful development is a strategy and foreign policy to which China is committed. It is definitely not an expediency. In following this guiding principle, we should seize opportunities, remain unswayed by provocations and concentrate on our development, and we will not seek a leadership role in the international arena. It is thanks to following this policy that we have been able to gain more room for the conduct of China’s diplomacy. As China’s overall national strength and international standing grow, the international community will have higher expectation on China. One might ask if it is still necessary for China to follow this policy. The answer is yes, as there is no reason whatsoever to change it. Of course, we should remain actively engaged in international affairs. China is a permanent member of the UN Security Council and a member in other important international organizations. We should make full use of this favorable condition to uphold China’s fundamental interests. We should take an active part in the formulation of international rules to work for a fair and equitable international political and economic order. We should be actively involved in economic globalization and promote international and regional economic cooperation to achieve mutual benefit and win-win progress.

IV. Cultural Development and Exchanges

If China is to gain respect of the international community, we must grow our economy, advance science and technology and ensure that our people live a prosperous and happy life. We must also raise the educational level of our people, improve democracy and legal system and raise cultural and ethical standard. In recent years, at the same time of speeding up economic development, we have endeavored to promote political and cultural development and the building of a harmonious society, and we have given high priority to cultural exchanges with other countries. We have thus fostered an image of China as a country that is committed to reform and opening-up, a country of unity and dynamism, a country that upholds equality and values friendship, and a country that is sincere and responsible. As a result, China is increasingly viewed in an objective, rational and friendly light, and there is growing call for strengthening cooperation with China. All this has created a favorable external environment for China’s modernization program. Therefore, we should enhance cultural development and exchanges and view it as a key endeavor in building socialism with Chinese characteristics in all respects.

Cultural diversity should be respected. There are more than 2,000 ethnic groups in the world. Human civilization has evolved and enriched itself through interactions among different ethnic communities. Diversity of world culture and civilization has existed for centuries and will remain so in the future. Science, democracy, legal system, freedom and human rights are not something peculiar to capitalism. Rather, they are common values pursued by mankind in the long historical process and they are fruit of human civilization created by mankind. It is only that at different historical stages and in different countries, they are achieved through different means and in different forms. There is not just one model for the realization of these values. The diversity of civilization is a reality, whether you face it or not. It is the coexistence, interaction and convergence of different cultures that have promoted human progress. Cultural diversity in the world should be recognized. Different cultures should not discriminate against, be hostile to or exclude each other. They should respect and draw on each other’s strength, and this will make it possible to create a harmonious and colorful human culture.

China should take its own path in enhancing democracy. We never view socialism and democracy as something that is mutually exclusive. As a matter of fact, we see a high degree of democracy and well developed legal system as the inherent requirement of socialism and a key important feature of a mature socialist system. We are fully capable of building China into a country of democracy and rule of law under socialist conditions. We should explore ways to develop democracy with Chinese characteristics in light of China’s particular conditions. We should focus on efforts to promote economic development, protect lawful rights and interests of the people, fight corruption, increase public trust in government, strengthen government functions and enhance social harmony. And we should continue the reform in the political system by expanding democracy and improving the legal system. This will enable other members of the international community to better appreciate and accept the path of development taken by the Chinese people.

We should fully improve the educational level of the Chinese people. This means giving a high priority to the development of education. The government must work with a stronger sense of responsibility to extend and consolidate compulsory education. More efforts should be made to develop vocational education and improve higher education. The scientific and cultural level of the whole Chinese nation should be uplifted. That requires a major effort to foster values and ethics among the people and accelerate the establishment of a system of values and ethics which is in keeping with the socialist market economy and which carries forward the traditional virtues and values of the Chinese nation. In particular, high priority should be placed on fostering a sense of honesty and integrity so that the public will have greater sense of integrity and credibility. In international exchanges, we should be credible and trustworthy, act in good faith and honor commitment. Thus, we need to ask people to act in a civilized way in their contacts with foreigners, respect local laws, regulations and customs and behave properly in public places overseas so that they will contribute to promoting China’s culture and its image. As more Chinese are traveling overseas, we should strengthen foreign-affairs administration and crack down hard on crimes such as smuggling, human trafficking and drug trafficking to ensure order in people-to-people exchanges.

We should expand cultural exchanges with other countries. Cultural exchanges are a bridge connecting the hearts and minds of people of all countries and an important way to project a country’s image. The rich and profound Chinese culture, which has a time-honored history, has made significant contribution to the progress of human civilization. The traditional Chinese culture is noted for its many luminous ideas: the philosophical precept of “harmony without uniformity”, the political belief that “people is the foundation of the nation”, the educational guideline of “respecting teachers and valuing education”, and the moral ethic of “do not do to others what you would not have them do to you”. We should use various forms and means, including tour performance and exhibition, Chinese language teaching, academic exchange and sponsoring culture year activities, to promote Chinese culture and increase its appeal overseas. We should implement a “going global” cultural strategy, develop culture industry, improve the international competitiveness of Chinese cultural enterprises and products, increase the export of books, films, TV programs and other cultural products, so that these Chinese cultural products and particularly the best of them, will reach the rest of the world.

We should conduct public diplomacy in a more effective way. We should inform the outside world of the achievements we have made in reform, opening-up and modernization in a comprehensive, accurate and timely manner. At the same time, we should be frank about the problems we have. We should be good at using flexible and diversified ways in conducting public diplomacy programs. We should use persuasive ways to communicate with the international community to ensure that our message is effectively put across. We should work to enable the international community to develop an objective and balanced view on China’s development and international role, so as to foster an environment of friendly public opinion for China.

Michael Lebowitz: Socialism for the 21st Century — Re-inventing and Renewing the Struggle

[The following presentation was delivered to launch La Alternativa Socialista, the Chilean edition of The Socialist Alternative, in Concepcion, Santiago and Valparaiso, November 2012.]

By Michael A. Lebowitz
SolidarityEconomy.net via Links International Journal of Socialist Renewal

Jan 9, 2013 – Every socialist in the 21st century should try to answer two questions.

First, why don’t workers put an end to capitalism – given its destruction of human beings and the environment (something Marx was so conscious of). In particular, given the declining standards of life for decades in the United States, the economic disaster in Europe and the current crises, how is it that the system is reproduced without a significant challenge by the working class?

Second, why did the working class within what has become known as “real socialism” [the former Soviet Union and Eastern Europe] allow those systems to revert to capitalism without resistance from the working classes, who were presumably its beneficiaries?

These two questions are interrelated both in practice and theory. In terms of practice, the failure within capitalism certainly had its impact upon the shaping of “real socialism”. And, in turn, the character of “real socialism” contributed to the view of workers in capitalism that socialism was not a desirable alternative. I can recall many arguments about socialism with my father, who was a machinist, and I remember in particular his comment, “Why would I want a bigger, stronger boss?”

On the theoretical level, the two questions are linked because we rarely explore the question of what kinds of people are produced under particular relations of production. There is no lack of discussion, for example, among Marxists about the rate of profit in capitalism, economic crisis, the intricacies of the so-called transformation problem, and indeed the process of exploitation itself. But there’s little examination of the working class as subject and how that subject is shaped within capitalist relations of production.

Capitalism cripples workers

Marx certainly didn’t make that mistake. In his book, Capital, he explained what capital is — that it is the result of the exploitation of workers. But, in addition to demonstrating that we are dominated by our own products, he also described at length what happens to workers within capitalist relations of production. Workers dominated by the logic of capital are merely the means to capital’s goal, the goal of profits. And in the process, they are crippled. The capitalist division of labour under the system of manufacture deformed workers. Did the introduction of machinery, though, change the one-sidedness that this division of labour produced? Marx answered: no, it perfected it. It completed the division between thinking and doing; it completed that deformation of workers.

This was the source of Marx’s passion. This was the source of his hatred for capitalism. Not simply the exploitation that creates capital but the deformation and destruction of human beings who are merely means for capital. Our products are a power over us — but not simply because they are a power. It is also because we are not. Capitalism does not simply impoverish us because it extracts from us the things we produce. It impoverishes us because of the people it produces.

And, Marx looked to an alternative – an alternative which he articulates in Capital. Indeed, that alternative is the premise of his book. He evokes there a society characterised not by the capitalists’ impulse to increase the value of their capital but by “the inverse situation in which objective wealth is there to satisfy the worker’s own need for development”. This “inverse situation” is the perspective from which Marx persistently critiques capitalism. He talks about capitalist production and how the means of production employ workers as “this inversion, indeed this distortion, which is peculiar to and characteristic of capitalist production”.

The spectre haunting Marx’s Capital is the vision of a society oriented to “the worker’s own need for development”, the inverse situation. It is a call to invert the capitalist inversion, a call to build a society oriented toward human development, one which recognises the necessity for the workers’ own needs for development.

Marx pointed to the need to create new relations that end the division between thinking and doing, the need to develop what he called “rich human beings”, that rich individuality that is all sided in needs and capacities. Very simply, it is the call to build a society of associated producers, a socialist society with productive relations through which people are able to develop. But that’s not so easy. If it were only a matter of calling for the negation of capital, capitalism would have ended long ago.

Marx grasped something that so many have failed to see since — that capital has the tendency to produce a working class that views the existence of capital as necessary. “The advance of capitalist production”, he stressed, “develops a working class which by education, tradition and habit looks upon the requirements of this mode of production as self-evident natural laws”.

Here is the crux of the problem: capital tends to produce the workers it needs, workers who look upon capitalism as common sense. Given the mystification of capital (arising from the sale of labour-power), which makes productivity, profits and progress appear as the result of the capitalist’s contribution, Marx argued that “the organization of the capitalist process of production, once it is fully developed, breaks down all resistance”. That is strong and unequivocal language; and Marx added that capital’s generation of a reserve army of the unemployed “sets the seal on the domination of the capitalist over the worker”. Accordingly, he proposed that the capitalist can rely upon the workers’ “dependence on capital, which springs from the conditions of production themselves, and is guaranteed in perpetuity by them”.

Of course, we often struggle. Workers struggle over wages, working conditions and the defence of past gains. But as long as workers look upon the requirements of capital as “self-evident natural laws”, those struggles occur within the bounds of the capitalist relation. Subordination to the logic of capital means that, faced with capitalism’s crises, workers sooner or later act to ensure the conditions for the expanded reproduction of capital. And that’s why capitalism keeps going. It keeps going because we are convinced that there is no alternative — no alternative to barbarism. As a result, the “realistic” left, the so-called good left of social democracy, tells us that the best we can get is barbarism with a human face.

Alternative common sense

To go beyond capitalism, we need a vision that can appear to workers as an alternative common sense, as their common sense. To struggle against a situation in which workers “by education, tradition and habit” look upon capital’s needs “as self-evident natural laws”, we must struggle for an alternative common sense. But what is the vision of a new society whose requirements workers may look upon as “self-evident natural laws’? Clearly, it won’t be found in the results of 20th century attempts to build socialism, which, to use Marx’s phrase, ended “in a miserable fit of the blues”.

“We have to reinvent socialism”. With this statement, Hugo Chavez, president of Venezuela, electrified activists in his closing speech at the January 2005 World Social Forum in Porto Alegre, Brazil. “It can’t be the kind of socialism that we saw in the Soviet Union”, he stressed, “but it will emerge as we develop new systems that are built on cooperation, not competition”. If we are ever going to end the poverty of the majority of the world, capitalism must be transcended, Chavez argued. “But we cannot resort to state capitalism, which would be the same perversion of the Soviet Union. We must reclaim socialism as a thesis, a project and a path, but a new type of socialism, a humanist one, which puts humans and not machines or the state ahead of everything.”

There, at its core, is the vision of socialism for the 21st century. Rather than expansion of the means of production or direction by the state, human beings must be at the centre of the new socialist society. This is a return to Marx’s vision of the “inverse situation” oriented to the worker’s own need for development, a return to the vision of a society which would allow for “the all-round development of the individual”, the “complete working out of the human content”, the “development of all human powers as such the end in itself”, a society of associated producers in which “the free development of each is the condition for the free development of all”.

But the focus upon full development of human potential was only one side of Marx’s perspective. What Marx added to this emphasis upon human development was his understanding of how that development of human capacities occurs. In his Theses on Feuerbach, Marx was quite clear that it is not by giving people gifts, not by changing circumstances for them, not by populism nor by those at the top deciding for us. Rather, we change only through real practice, by changing circumstances ourselves. Marx’s concept of “revolutionary practice”, that concept of “the coincidence of the changing of circumstances and of human activity or self-change’, is the red thread that runs throughout his work.

One aspect of this, certainly, was his explicit recognition of how the struggles of workers against capital transform “circumstances and men”, expanding their capabilities and making them fit to create a new world. But there was more. In the very act of producing, Marx indicated, “the producers change, too, in that they bring out new qualities in themselves, develop themselves in production, transform themselves, develop new powers and new ideas, new modes of intercourse, new needs and new language”. And, of course, the relations within which workers produce affect the nature of the workers produced. After all, that was Marx’s point about how capitalist productive relations “distort the worker into a fragment of a man” and degrade her/him and “alienate from him the intellectual potentialities of the labour process”.

Indeed, every human activity has two products; every human activity has as its result joint products — both the change in the object of labour and the change in the labourer themselves. In my book, The Socialist Alternative, I identify this combination of human development and practice as Marx’s key link. And, if we grasp that key link, we can see its obvious implications for building socialism. What are the circumstances that have as their joint product “the totally developed individual, for whom the different social functions are different modes of activity he takes up in turn’? To develop the capacities of people, the producers must put an end to what Marx called, in his Critique of the Gotha Programme, “the enslaving subordination of the individual to the division of labour, and therewith also the antithesis between mental and physical labour”.

For the development of rich human beings, the worker must be able to call “his own muscles into play under the control of his own brain”. And, not by themselves but through a democratic, protagonistic process. When workers act in workplaces and communities in conscious cooperation with others, they produce themselves as people conscious of their interdependence and of their own collective power. The joint product of their activity is the development of the capacities of the producers — precisely Marx’s point when he says that “when the worker cooperates in a planned way with others, he strips off the fetters of his individuality, and develops the capabilities of his species”. Here, then, is the way to ensure that “the productive forces have also increased with the all-around development of the individual, and all the springs of co-operative wealth flow more abundantly’.

Creating the conditions in workplaces and communities by which people can develop their capacities is an essential aspect of the concept of socialism for the 21st century. But it is only one element. How can the workers’ own need for development be realised if capital owns our social heritage — the products of the social brain and the social hand? And, how can we develop our own potential if we look upon other producers as enemies or as our markets — i.e., if individual material self-interest is our motivation?

Capitalism is an organic system, one which has the tendency to reproduce the conditions of its existence (including a working class that looks upon its requirements as “self-evident natural laws”). That is its strength. To counter that and to satisfy “the worker’s own need for development”, the socialist alternative we envision also must be an organic system, a particular combination of production, distribution and consumption, a system of reproduction. What Chavez named in January 2007 as “the elementary triangle of socialism” (social property, social production and satisfaction of social needs) is a step forward toward a conception of such a system.

Consider the logic of this socialist combination, this conception of socialism for the 21st century:

1. Social ownership of the means of production is critical within this structure because it is the only way to ensure that our communal, social productivity is directed to the free development of all rather than used to satisfy the private goals of capitalists, groups of producers or state bureaucrats. But, this concerns more than our current activity. Social ownership of our social heritage, the results of past social labour, is an assertion that all living human beings have the right to the full development of their potential — to real wealth, the development of human capacity. It is the recognition that “the free development of each is the condition for the free development of all”.

2. Social production organised by workers builds new relations among producers — relations of cooperation and solidarity. It allows workers to end “the crippling of body and mind” and the loss of “every atom of freedom, both in bodily and in intellectual activity” that comes from the separation of head and hand. Organisation of production in all spheres by workers, thus, is a condition for the full development of the producers, for the development of their capabilities — a condition for the production of rich human beings.

3. Satisfaction of communal needs and purposes as the goal of productive activity means that, instead of interacting as separate and indifferent individuals, we function as members of a community. Rather than looking upon our own capacity as our property and as a means of securing as much as possible in an exchange, we start from the recognition of our common humanity and, thus, of the importance of conditions in which everyone is able to develop her full potential. When our productive activity is oriented to the needs of others, it both builds solidarity among people and produces socialist human beings.

There’s an old saying that if you don’t know where you want to go, then any road will take you there. I disagree. If you don’t know where you want to go, then no road will take you there. A vision of a socialist alternative such as that organic system summarised by the socialist triangle is essential if we are put an end to capitalism. Of course, knowing where you want to go is not the same as getting there. But, it is essential for indicating where you don’t want to go. And one place we don’t want to go is to a 21st century version of “real socialism”.

‘Real socialism’

To explain the nature of “real socialism” from the 1950s through the 1980s, I introduced (in my new book, Contradictions of ‘Real Socialism’) the concept of vanguard relations of production — a particular set of productive relations characterised by a vanguard whose logic was to deliver socialism to the masses from above and to do so without permitting that underlying population to develop its own capacities through practice and protagonism. There were definite benefits for workers. In particular, there was a social contract whereby the vanguard promised, among other things, full employment, job security, subsidised necessities and rising income over time — as long as the working class accepted its lack of power and the opportunity to develop its capabilities in the workplace and society.

Precisely because of the nature of vanguard relations, though, the workers produced were not subjects able to build a new society nor, indeed, able to respond as the system ran into problems. But, there were further implications of this crippling of workers. In The Socialist Alternative, I noted that if workers don’t manage, someone else does; and, if workers don’t develop their capabilities through their practice, someone else does.

In ‘real socialism’, it was the enterprise managers who developed capabilities, and they emerged as an incipient capitalist class – a class oriented to the logic of capital but constrained by the logic of the vanguard. Their ultimate victory brought with it a very significant loss for the working class — the jettisoning of the social contract, i.e., the ending of job security, full employment, subsidisation of necessities, etc. — the loss of all the benefits that workers obtained within vanguard relations in this period. That loss was significant, and there is much nostalgia among workers about that period. But the point is not to return to it. “Real socialism” was never the alternative to which Marx looked — that “inverse situation in which objective wealth is there to satisfy the worker’s own need for development”.

We need to be explicit that “real socialism” is not where we want to go in the 21st century. We need to identify what we do want — we need the vision of a socialist alternative. Like the worst architect, for the revolutionary labour process we must build the goal in our minds before we can construct it in reality. But that is not enough — knowing where you want to go is not at all the same as getting there. Indeed, how is it possible to get there given that capital has the tendency to produce a working class that by education, tradition and habit looks upon the requirements of capital as “self-evident natural laws”?

Struggle

The answer, I suggest, is that people do struggle even though mystified by the nature of capital. They struggle for what they see as fair, and they struggle against violations of their conception of fairness. This moral economy of the working class points to possibilities. Even though their goals in these struggles may be limited to ending the immediate violations of norms of fairness and justice and may be aimed, for example, at achieving no more than “a fair day’s wage for a fair day’s work”, people change in the course of struggle. Despite the limited goals involved in wage struggles, Marx argued that they were essential for preventing workers “from becoming apathetic, thoughtless, more or less well-fed instruments of production”; without such struggles, workers “would be degraded to one level mass of broken wretches past salvation”.

People, in short, struggle over their conceptions of right and wrong, and what Marx attempted to do was to explain the underlying basis for those struggles. By itself, the moral economy of the working class can never explain its basis — why those particular beliefs as to what is fair are present — and thus why those norms can change. Accordingly, it is essential to recognise the importance of the moral economy of the working class but also to go beyond it. To grasp the conditions which underlie concepts of fairness at a given moment, it is necessary to move from the moral economy of the working class to the political economy of the working class.

In short, the starting point should be real people with particular ideas and concepts. To articulate what is implicit in their concepts and struggles and to show how these contain within them the elements of a new society is essential. To see the future in the present is what is needed if we are to build that future.

In The Socialist Alternative, I propose the importance of linking existing struggles to a focus upon the right of everyone to full development of their potential. I am convinced that this focus allows us to link separate struggles and to demonstrate the importance of a socialist alternative.

Accordingly, I introduced there the idea of a Charter for Human Development. The goal of such a charter is to try to redefine the concept of fairness. To stress that it is unfair that some people monopolise the social heritage of all human beings, that it is unfair that some people are able to develop their capacities through their activities while others are crippled and deformed, and that it is unfair that we are forced into structures in which we view others as competitors and enemies.

Is it possible to redefine the concept of fairness and to build a new moral economy of the working class? Certainly, it is not inevitable. But in this period of economic and ecological crisis, there is no alternative but to try. We are at the point when Marx’s statement that capitalism destroys human beings and nature has taken on a new urgency.

The choice before us has been noted often: socialism or barbarism.

The 15-hour working week predicted by Keynes may soon be within our grasp – but are we ready for freedom from toil?

By John Quiggin
SolidarityEconomy.net via Aeon Magazine

Sept 27, 2012 – I first became an economist in the early 1970s, at a time when revolutionary change still seemed like an imminent possibility and when utopian ideas were everywhere, exemplified by the Situationist slogan of 1968: ‘Be realistic. Demand the impossible.’ Preferring to think in terms of the possible I was much influenced by an essay called ‘Economic Possibilities for our Grandchildren,’ written in 1930 by John Maynard Keynes, the great economist whose ideas still dominated economic policymaking at the time.

Like the rest of Keynes’s work, the essay ceased to be discussed very much during the decades of free-market liberalism that led up to the global financial crisis of 2007 and the ensuing depression, through which most of the developed world is still struggling. And, also like the rest of Keynes’s work, this essay has enjoyed a revival of interest in recent years, promoted most notably by the Keynes biographer Robert Skidelsky and his son Edward.

The Skidelskys have revived Keynes’s case for leisure, in the sense of time free to use as we please, as opposed to idleness. As they point out, their argument draws on a tradition that goes back to the ancients. But Keynes offered something quite new: the idea that leisure could be an option for all, not merely for an aristocratic minority.

Writing at a time of deep economic depression, Keynes argued that technological progress offered the path to a bright future. In the long run, he said, humanity could solve the economic problem of scarcity and do away with the need to work in order to live. That in turn implied that we would be free to discard ‘all kinds of social customs and economic practices, affecting the distribution of wealth and of economic rewards and penalties, which we now maintain at all costs, however distasteful and unjust they may be in themselves, because they are tremendously useful in promoting the accumulation of capital’.

Keynes was drawing on a long tradition but offering a new twist. The idea of a utopian golden age in which abundance replaces scarcity and the world is no longer ruled by money has always been with us. What was new in Keynes was the idea that technological progress might make utopia a reality rather than merely a vision. continue

Nguyen Phu Trong Meeting with Raul Castro

Socialism and the Path to Socialism – Vietnam’s Perspective

By Nguyen Phú Trong
General Secretary of the Communist Party of Vietnam

Nguyen Phu Trong, general secretary of the Communist Party of Vietnam, paid an official friendship visit to Cuba and gave a presentation at the Nico Lopez Party School of the Cuban Communist Party.

Following are excerpts from Party leader Trong’s presentation.

Socialism and the path to socialism is a fundamental and practical theoretical topic with broad and complicated content, demanding thorough and in-depth study. I hereby mention just a few aspects from Vietnam’s perspective for your reference and our discussions. And several questions are focused: What is socialism? Why did Vietnam choose the socialist path? How to build socialism in Vietnam step by step? How significant has Vietnam’s renewal and socialism building process been over the past 25 years? And what lessons have been learnt?

As you know, socialism can be understood in three different aspects: socialism as a doctrine, socialism as a movement, and socialism as a regime. Each aspect has different manifestations, depending on the world outlook and development level in a specific historical period. The socialism I want to discuss here is a scientific socialism based on Marxist-Leninist doctrine in the current era.

Previously, when the Soviet Union and its constellation of socialist countries existed, striving for socialism in Vietnam seemed logical and implicitly validated. But after the collapse of the Soviet Union, socialist regimes fell in many countries and the worldwide socialist revolution began to ebb. Now, the cause of socialism has been revived, sparking widespread interest and heated debate.

It is true that capitalism has never been more widely accepted than it is now, and it has achieved great successes, especially in liberating and developing productive capacity and advancing science and technology. Many developed capitalist countries have established social welfare systems which are more progressive than ever before, thanks to strong economies and long struggles by their working class. However, capitalism cannot overcome its inherent fundamental contradictions.  We are witnessing a financial crisis and economic decline which originated in the US in 2008, rapidly spread to other capitalist centers, and has impacted every country around the globe.

In addition to this economic crisis with its related food and energy crisis, a depletion of natural resources and deterioration of the environment are posing great challenges to the existence and development of humankind. These are the consequences of a socio-economic development process which champions profits, considers wealth and material consumption the measures of civilization, and makes individualism the main pillar of society. They are the essential characteristics of capitalism’s mode of production and consumption.  The ongoing crisis once again proves that capitalism is anti-advancement, anti-humanity, and unsustainable economically, socially, and ecologically. As Karl Marx said, capitalism damages the things that constitute its wealth, namely, labor and natural resources. According to scientists, the current crisis cannot be completely resolved in the framework of a capitalist regime.

Recent social protest movements flaring up in many developed capitalist countries have exposed the truth about the nature of capitalist political entities. In fact, democratic regimes which follow the “free democracy” formula advocated and imposed by the West never ensure that power truly belongs to the people and for the people—the natural factor of democracy. Such a power system still belongs mostly to the wealthy minority and serves the interests of its major capitalist groups. A very small proportion, as small as 1% of the population, holds the majority of the wealth and means of production, controls most of the financial institutions and mass media, and dominates the whole society.

We need a society where development is truly for humans, instead of exploiting and trampling on human dignity for the sake of profits. We need economic development in parallel with social progress and fairness instead of a widening gap between the rich and the poor and social inequality. We need a society which yearns for progressive and humane values, a society of compassion, unity, and mutual assistance instead of rivalry for the selfish benefits of individuals and groups. We need sustainable development and harmony with nature to make our living environment clean for present and future generations, instead of exploiting, appropriating resources, infinitely consuming materials, and destroying the environment. And we need a political system under which power truly belongs to the people, by the people, and serves the interests of the people, instead of a wealthy minority. These are the authentic values of socialism, aren’t they?

As you comrades and friends know, the Vietnamese people have undergone a prolonged, harsh, sacrifice-filled revolutionary struggle against colonialist and imperialist domination to win national independence and sovereignty in the spirit of the slogan “There is nothing more precious than Independence and Freedom”.

National independence associated with socialism is the basic guideline of Vietnam’s revolution and the essential point of Ho Chi Minh’s legacy. His rich experience combined with the revolutionary theories and science of Marxism-Leninism led Ho Chi Minh to the conclusion that only socialism and communism can create a truly free, prosperous, happy life for every person in every nation. Advancing to socialism is the objective and the inexorable path of the Vietnamese revolution, harnessing the people’s aspirations and historical trends.

But what is socialism? And how does one advance to socialism? This is what absorbs our thoughts—finding our way step by step, creating orientations and guidelines which fit the specific circumstances of Vietnam.

* * *

To date, though there remain some issues that need further study, we realize that the socialist society that the Vietnamese people are striving for is a society of prosperous people in a strong nation characterized by democracy, fairness, and civilization. It’s a society where the people are the masters, which has a highly-developed economy and is based on modern forces of production and progressive relations of production. It has an advanced culture imbued with national identity, and a prosperous, free, and happy people who are blessed with opportunities for comprehensive development. Ethnic groups in the Vietnamese community are equal, united, respectful and supportive of each other. A law-governed socialist state of the people, by the people, and for the people is led by the Communist Party and has friendly and cooperative ties with countries all over the world.

To achieve these goals, we should speed up national industrialization and modernization; develop a knowledge-based and socialist-oriented market economy; build an advanced culture imbued with national identity; boost human resource development; improve people’s living standards; promote social progress and fairness; ensure national defense; safeguard national security and social order; implement a foreign policy of independence, self-reliance, peace, friendship, cooperation, and development; proactively integrate into the world; build a socialist democracy; exercise national unity; expand the national unification front; build a law-governed socialist state of the people, by the people, and for the people; and build a stronger, more transparent Party.

The more we delve into reality, the more we are aware that the transitional period to socialism is a long, extremely difficult and complicated process because it needs to create a profound change in all areas of social life. Vietnam is bypassing the stage of capitalism and moving on directly to socialism from an obsolete agricultural society with low productivity further weakened by decades of wars. Constant attempts at sabotage by hostile forces have hindered Vietnam’s path to socialism, which unavoidably involves a lengthy transition period through various stages and forms of socio-economic organization accompanied by inevitable conflicts between the old and the new. By ‘bypassing the stage of capitalism’, I mean bypassing a regime of oppression, inequality, and capital exploitation, bypassing evils and political entities inappropriate to a socialist regime. This doesn’t mean that we must ignore the achievements and civilized values that humankind has achieved during the process of capitalist development. Indeed, the inheritance of these achievements should be based on an attitude of selective development.

The concept of a socialist market-oriented economy is a creative and fundamental theoretical breakthrough for our Party and an important fruit of the 25-year renewal process, which stemmed from Vietnam’s reality and accumulated experiences of the world. In our opinion, a socialist market-oriented economy is a multi-sector commodity economy, which operates in accordance with market mechanisms and a socialist orientation. It is a new type of market economy in the history of the market economy’s development. It is a kind of economic organization which abides by market economy rules but is based on, led by, and governed by the principles and nature of socialism reflected in its three aspects—ownership, organization, and distribution—for the goal of a prosperous people in a strong nation characterized by democracy, fairness, and civilization. This is neither a capitalist market economy nor a socialist market economy.

In a socialist-oriented market economy, there are multiple forms of ownership and multiple economic sectors. Economic sectors operating in accordance with the law are major components of the economy and equal under the law in the interest of co-existence, cooperation, and healthy competition. The state economy plays a key role; the collective economy is constantly consolidated and developed; the private economy is one of the driving forces of the collective economy; multiple ownership, especially joint-stock enterprises, is encouraged; the state and collective economies provide a firm foundation for the national economy. The relations of distribution ensure fairness, create momentum for growth, and operate a distribution mechanism based on work results, economic efficiency, contributions by other resources, and distribution through the social security and welfare system. The State manages the economy through laws, strategies, plans, policies, and mechanisms to steer, regulate, and stimulate socio-economic development.

Typical characteristic of the socialist orientation in Vietnam’s market economy is the combination of economics and society, the coordination of economic and social policies, economic growth in parallel with social progress, and fairness applied at every step, in every policy, throughout the development process. This means that we neither wait for the economy to reach a high level of development before implementing social progress and fairness, nor “sacrifice” social progress and fairness to the pursuit of mere economic growth. On the contrary, every economic policy should target the goal of social development and every social policy should create momentum to boost economic development. Encouraging people to enrich themselves legally should go hand in hand with reducing poverty and taking care of the disadvantaged and those who have rendered great service to the nation. These are the principles required to ensure a healthy, sustainable, socialist-oriented development.

Our Party sees culture as a spiritual foundation of society and considers cultural development on a par with economic growth and social progress in its fundamental orientation toward socialism building in Vietnam. The culture Vietnam is building is progressive and imbued with national identity, a united-in-diversity culture based on advanced humanitarian values, where Marxism-Leninism and Ho Chi Minh’s thoughts play a leading role in social spiritual life, where we inherit and uphold the fine traditional values of all ethnic groups in Vietnam, absorb humankind’s cultural achievements, and strive to build a healthy, civilized society that promotes human dignity, higher knowledge, morality, physical fitness, aesthetics, and a fulfilling lifestyle. We believe that people should play the central role in any development strategy; that cultural development and human resources development are both the target and the momentum of the renewal process; that the development of education and training and science and technology should be priorities of national policy; that environmental protection is one of the vital issues and a criterion of sustainable development; that building happy, progressive families to be healthy cells of society and implementing gender equality are criteria of advancement and civilization.

A socialist society is a society that yearns for progressive and humane values based on people’s common interests, which is totally different from competitive societies based on the interests of individuals and groups. A socialist society fosters social consensus rather than social opposition and antagonism. In a socialist political regime, the relationship between the Party, the State, and the people is a relationship of entities unified in their goals and interests. Every Party guideline, every government policy, law, and action is in the people’s interest. The political model and overall mode of operation is that the Party leads, the State manages, and the people are the master. Democracy is the nature of the socialist regime and both the goal and the momentum of socialism building. Building a socialist democracy, ensuring that real power belongs to the people, is the ultimate and long-term task of Vietnam’s revolution. We intend to unwaveringly uphold democracy, build a law-governed socialist State truly of the people, by the people, and for the people on the basis of an alliance between workers, farmers, and intellectuals led by the Communist Party of Vietnam. The State represents the people’s right to mastery and at the same time organizes the implementation of Party guidelines. There are mechanisms for the people to exercise their right to direct mastery in all areas of society and to take part in social management. We realize that a law-governed socialist State is by nature different from a law-governed capitalist State. Legislative power under a capitalist regime is really a tool to protect and serve the interests of the bourgeois class, while legislative power under a socialist regime is a tool to reflect and exercise the people’s right to mastery and protect the interests of the masses. By enforcing laws, the State enables the people to wield political power and dictate against all acts that violate the interests of the fatherland and the people. At the same time, we define national unity as a source of strength and a decisive factor for the lasting victory of the revolutionary cause in Vietnam. Equality and unity between ethnicities and religions are constantly promoted.

Being well aware of the Communist Party’s leadership as a factor that decides the victory of the renewal process and ensures a national development in line with socialist orientation, we pay special attention to party building, considering it a key and vital task for the Party and the socialist regime. The Communist Party of Vietnam is a vanguard of the Vietnamese working class. The Party was born, exists, and develops for the interests of the working class, the laborers, and the nation as a whole. When the ruling Party leads the nation, it is acknowledged by the entire people as their vanguard. Therefore, the Party is the vanguard of the working class, the laborers, and the Vietnamese nation as a whole. This doesn’t mean playing down the Party’s class nature, but reflects a more in-depth and more complete awareness of the Party’s class nature since the working class is a class whose interests match the interests of the laborers and the nation as a whole. Our Party unswervingly considers Marxism-Leninism and Ho Chi Minh’s thoughts as the ideological foundation and lodestar of our revolutionary activities, and considers democratic centralism as the basic organizing principle. The Party leads with its platforms, strategies, and policy guidelines, with its communications, persuasion, mobilization, organization, and supervision, and with Party members’ role models and unified leadership of personnel work. Considering corruption, bureaucracy, and moral deterioration as threats to the ruling Party, particularly in a market economy, the Communist Party of Vietnam demands constant self-reform, self-rectification and rejection of opportunism, individualism, corruption, bureaucracy, waste, and moral deterioration within the Party and the entire political regime.

The renewal process, including the development of the socialist-oriented market economy, has truly brought about positive changes in our country over the past 25 years.

Vietnam used to be a poor, war-torn country, with devastated human lives, infrastructure, and environment. Food and other necessities were in critically short supply, and people’s lives were extremely hard, three-fourths of the population being below the poverty line.  That was the reality in Vietnam before the renewal process.

Thanks to the renewal process, the economy has been growing steadily over the past 25 years at an average annual rate of 7 to 8%. Per capita income has increased 11 fold. In 2008 Vietnam escaped from its former status as a low-income country. From a country with chronic food shortages, Vietnam now not only ensures its own food security but also has become a leading exporter of rice and other agricultural produce.  Industry has developed rapidly with industry and services now accounting for 80% of GDP. Exports have increased steadily, topping 100 billion USD in 2011. Foreign investment had climbed to nearly 200 billion USD by the end of 2011. Economic growth has enabled the country to escape the socio-economic crisis of the 1980s and improve its citizens’ living standards. The poverty rate falls 2 to 3% every year. It went from 75% in 1986 to just 9.5% in 2010. Vietnam completed the eradication of illiteracy and popularization of primary education in 2000 and popularization of secondary education in 2010. The number of tertiary students has increased 9 fold over the past 25 years; 95% of Vietnam’s adult population is literate. Many common diseases have been successfully contained. The poor, children under 6, and the elderly are provided free health insurance. The child malnutrition rate has been slashed 3 fold. The new-born mortality rate has fallen 6 fold. Life expectancy has increased from 62 in 1990 to 73 in 2010.  Vietnamese cultural life has expanded to include an ever-wider range of cultural activities. Vietnam now has about 25 million internet users and is one of the countries experiencing the fastest growth of IT technology. The United Nations has recognized Vietnam as one of the leading countries in reaching its Millennium Development Goals.

So it can be said that the renewal policy has brought about very positive changes in Vietnam: economic growth, higher productivity, rapid poverty reduction, a higher standard of living, reduced social problems, more political and social stability, ensured security, enhanced national posture and strength, and greater trust in the Party’s leadership. Reviewing 20 years of renewal, our 10th National Party Congress remarked that the renewal has recorded “great achievements of historical significance”. In fact, the Vietnamese people are now enjoying better living conditions than at any time in the past. That’s why the renewal initiated and led by the Communist Party of Vietnam has received the Vietnamese people’s full and active support. Renewal achievements in Vietnam have proved that socialist-oriented development not only has a positive economic effect but also resolves social problems much better than capitalist development at a similar development level.

Despite all these achievements, there remain shortcomings, limitations, and new challenges to be overcome in Vietnam’s pursuit of national development.

Economically, the quality of growth remains low, infrastructure development is uneven, the efficiency and capacity of businesses—including state-owned enterprises—are limited, the environment is polluted in many areas, and market management and regulation are inadequate.  Meanwhile, competition is becoming fiercer with globalization and international integration.

Socially, the gap between the rich and the poor is widening, the quality of education, healthcare and many other public services is low, culture and social ethics are deteriorating, and crimes and social vices are becoming more complicated. In particular, corruption, waste, and the deterioration of political ideology and personality morality are tending to spread among cadres and Party members.

We realize that Vietnam is now in a transitional period towards socialism. During this transition, socialist factors have been established and developed, intermingling and competing with non-socialist factors, including capitalist factors.  The intermingling and competing are more complicated and aggressive in the current context of market opening and international integration. Along with positive aspects, there will always be negative aspects and challenges that need to be considered wisely and dealt with timely and effectively. It is a difficult struggle that requires spirit, fresh vision, and creativity. The path to socialism is a process of constantly consolidating and strengthening socialist factors to make them more dominant and irreversible. Success will depend on correct policies, political spirit, leadership capacity, and the fighting strength of the Party.

At present, we are revising our growth model and restructuring our economy with greater priority being given to quality and sustainability by focusing on infrastructure, human resources and administrative reforms. Socially, we are continuing to pursue sustainable poverty reduction, improve healthcare, education, and other public services, and enrich the people’s cultural life.

Theory and experience agree that socialism building means creating a new type of society, which is by no means an easy task. The challenges and difficulties before us require that the Party’s leadership role be matched by the creative ideas, political support, and active participation of the people. The people will accept, support, and enthusiastically take part in carrying out the Party’s guidelines when they see that those guidelines answer their needs and aspirations. The ultimate victory of Vietnam’s development is deeply rooted in the strength of the Vietnamese people.

At the same time, the Party’s directions and policies must originate not only in the reality of Vietnam and its history, but also in the reality of the world and era in which we all live. In today’s globalized world, no country can stand aloof from the world community and its complex interactions. We therefore intend to proactively integrate into the world and implement a foreign policy whose pillars are independence, self-reliance, peace, cooperation, and shared development. Vietnam is committed to multi-lateralization and diversification of its international relations on a basis of equality, mutual benefit, and respect for national sovereignty, territorial integrity, and non-interference in each other’s internal affairs.

Even more important is that we should be consistent and firm on the foundation of Marxism-Leninism, a scientific and revolutionary doctrine of the working class and the masses of laborers. The radical scientific and revolutionary characteristics of Marxism-Leninism are lasting values and have been pursued and implemented by revolutionaries around the globe. It will continue to develop and prove its vitality in the reality of revolutions and scientific development. We need to selectively accept and supplement in the spirit of criticism and creativity of the latest ideological and scientific achievements so that our doctrine will be forever fresh, energized, and filled with the spirit of the era.

We are aware that ours is an extremely complex and unprecedented undertaking, which will require us to learn the lessons we will need as we go along. The steps we have already taken are just the first steps of a long journey…The goals of socialism may be the same in every country, but the methods necessary to achieve those goals are diverse, depending on the specific circumstances of each country.

Our journey will demand all of our ingenuity and vitality.

www.talkvietnam.com

November 17, 2012

From Bbs.people.com.cn
May 6, 2008

Today China’ s statesmen use slogans like ‘One World, One Dream’, ‘Harmonious Society’ and ‘Scientific Development Concept.’. And yet all these terms were used in Kang Youwei’s utopian blueprint ‘Da Tongshua’. To westerners it might seem strange that the same men who in the 1920s embraced the radical ideas of Marxism, in the 1980s led China through pragmatic market reforms. And yet if one understands the mindset of their predecessor Kang Youwei, the seeming contradiction will not seem so strange. Kang laid out a vision of a world socialist republic, in which boundaries of class, race, nation, sex, family, and language were entirely abolished. A futuristic direct democracy in which virtue was the only competition. And yet the same visionary utopian, let the incredibly pragmatic 100 Days Reform. The pragmatic Mao Zedong of the 1930s, spoke of the same three staged Great Harmony, while pursuing moderate polices and alliances with the Kuomintang. If the theoretical foundations and historical experiences of Marxism-Leninism are seriously examined, it becomes clear that the market reforms of Deng Xiaoping and his successors to not represent a radical break with the vision lay out by Mao Zedong.

To observers ignorant of the basic fundamentals of Marxist-Leninist theory, Socialism with Chinese Characteristics, appears as a major break with Marxist principles, however scientific study of the historical experiences and theories of Marx, Lenin, Stalin and Mao reveal that there is in fact much continuity between Chinese Socialism and the historical legacy of Marxism. Despite antagonisms with Deng Xiaoping and Liu Shaoqi, Mao Zedong’s development of Leninist theory actually laid the groundwork for market reforms. Marx and Lenin had both seen capitalism as a necessary stage of development, and had condemned any attempt to leap from feudalism into socialism. Lenin has seized power in 1917 when Russia was still a semi-feudal nation; nonetheless he saw the role of the proletarian as one of leadership in the bourgeois democratic revolution. In the 1920s Lenin established the New Economic Policy which was very similar to the Chinese economy of the 1980s, and allowed market forces to regulate areas of the economy. Mao Zedong followed the model of the New Economic policy during the Yanan period. Having learned from the Soviet experience, Mao never launched a vigorous campaign to wipe out capitalism like Russia had during the ‘War Communism’ era. In his development of the theory of New Democracy, Mao recognized that the national bourgeoisie would have a major role to play for many years after the revolution. During the First Five Year Plan, Liu Shaoqi ensured that the state cooperated with the national capitalists. No attempt was made to wipe out private industry only to ensure that there was no exploitation. Stalin had recognized in his theory of socialist economics that the law of commodity and value still applied to socialist nations.[1] Socialist nations were not free from the objective laws of economics, instead it was their responsibility to study those laws and harness them.

Xue Muqia belonged to the generation of Chinese radicals who idealistically joined the Party in the 1920s and yet saw the need for market reform in the 1980s, while little known in the west his textbook on political economy laid the theoretical foundations for Deng Xiaoping’s epic reforms. Xue was a leader of several major workers movements in the 1920s and 1930s, and in the 1940s he governed the economic policies of large provinces. A supreme pragmatist, Xue admitted that he had not read ‘Das Kapital’ until the 1960s. Like Deng Xiaoping, Xue used his exile during the disaster of the Cultural Revolution to return to the Marxist classics, and find a way to save China from the brink of collapse. Immersing himself in the works of Marx, Engels, Lenin, Stalin and Mao, Xue saw how the feudal-fascist reign of terror by the Lin Biao-Gang of Four clique stood against Marxist ideas. With the victory of genuine Marxists over the ultra-equalitarianism, Xue proceeded to complete his masterpiece on political economy. Marx and Engels had laid out the need for a lower and higher stage of communism. Xue pointed out that during the lower stage of communism, the law of supply and demand, and commodity relations still governed.

Mao had recognized in his ‘Critique of Soviet Economics’, and ‘On The Ten Major Relationships’, that Stalinist over-centralization would be harmful to the economy. The lessons from 10 Major Relationships bear a striking resemblance to the Four Modernizations of Zhou Enlai, and the market reforms of Deng Xiaoping. Mao recognized that contradiction was the key to expanding the economy. To increase military power, it was necessary to cut back on military spending and put resources in the civil economy. To increase heavy industry it was necessary to invest in light industry and agriculture to build foundations. To expand the communes it was necessary initially to make the districts smaller. All of these brilliant insights were abandoned during the Great Leap Forward and the feudal-fascist rule of Lin Biao.[2] Marx had pointed out that just as reactionary social relations could harm production so could over-futuristic social relations. The Gang of Four had attempted to impose radical equalitarianism while China was still emerging out of feudalism. This allowed various bad elements to take advantage. In addition the productive areas were punished and the wasteful areas rewarded. No incentive existed to expand the economy, and an anti-democratic bureaucracy dictated to the economy. Xue saw that overambitious goals would be ‘punished’ by the objective laws of value.

Upon taking power Mao’s chosen successor Hua Guofeng attempted to find a balance between reform and opening up and the First Five Year Plan, while this was a progressive step it failed to create the economic dynamism needed to compete with the imperialist west and social imperialist Soviet Union. After the disasters of the Great Leap Forward and Cultural Revolution, many in the party idolized the First Five Year Plan period. However Deng recognized that a 1950s style economy could not compete in the 1980s. Deng returned to the scientific ideas laid out by Mao, and followed Mao’s command to ‘seek truth from facts’. Deng initiated radical reforms in both industry and agriculture. Just as Mao had recognized the peasants would play a decisive role in political revolution, Deng recognized their supreme role in economic revolution. Deng created a more democratic collectivist system. Because of China’s low level of development, it was not yet possible to create an ‘ownership of the whole people’. Instead collectives would be democratically owned by those who worked. [3]Collectives were separate from the state economy and were responsible for their own profits and losses. The trend towards smaller collectives had been taking place since the Great Leap Forward. Deng legalized and expanded this trend by creating the household responsibility system. [4]The system made local households responsible for their own profits, and gave them the option of farming for private surplus profit. Instead of rigid plans, Deng created more indirect planning through guidelines. Another imposition was the creation of a dual pricing system that recognized supply and demand. [5]

Marx had stated that during socialist development ‘to each according to his work’ was the principle that governed not ‘to each according to his needs’. Mao had stated that the only criterion for correct theory was practice. That was exactly what Deng Xiaoping did with the Special economic Zones. The SEZs were essentially scientific experiments that sought to test the merits of opening up and reform. The spectacular success of the early SEZs convinced even conservative party members to continue Deng’s policies.[6] The rapid growth of foreign trade and rural development helped China’s productive forces grow at an incredibly rapid rate. Despite difficulties and inequalities the Chinese Communist Party succeeded in lifting more people out of poverty than any organization or government in human history.

Hu Jintao has greatly expanded on the principles of the Three Represents, and applied it in a manner to create a more just society. The theorists of Deng Xiaoping theory recognized that reform and opening-up would necessarily create dangerous social divisions. Nevertheless they foresaw that the danger of China falling even further behind the imperialist nations, was a far greater threat. While inequality has grown at an appalling rate, the rise in productive forces has given the state the power to deal with inequality. As of 2008 only 60% of China’s population remains rural and state-owned industries account for less than 40% of the economy.[7] Jiang Zemin’s Three Represents did not mean abandoning the plight of the peasants and workers. Jiang simply recognized that in line with Deng Xiaoping Theory, the best way to help the poor was to increase productivity. Hu Jintao’s concept of a Harmonious Society called for a more even development of China’s produce. Hu Jintao has also devised plans to revive China’s fledging state owned industries. By introducing more democratic management structure, and modernizing to compete in the market, state owned companies may suceed in securing their permanent role in China’s ecnonmy.

The achievement of the Chinese Communist Party is of epic proportions. If the CPC succeeds industrializing and modernizing a nation of 1.4 billion people, it will be a feat without parallel in history. Despite constant demonization from the imperialist west, China has become a model to many developing nations. The last task remaining for the CPC is the creation of democracy. The CPC has already granted the left-Kuomintang 30% of the seats in the People’s Congress, and allowed rival parties to hold high government office. [8]As social productive forces increase China will strive towards democracy. However China cannot and does not seek to build an inequitable bourgeoisie democracy, instead China seeks to construct a shining Socialist Democracy in which the voices of all people are expressed, and which at last allows the Chinese people to reach their full human potential. The achievement of a Harmonious Society will be the realization of Kang Youwei’s dream of the Great Harmony. The construction of Socialist Democracy will prove to be an even great challenge, and even greater source of inspiration than that of the socialist economy.

Andors, Stephen. 1977. China’s industrial revolution: politics, planning, and management, 1949 to the present. New York: Pantheon Books.

Borthwick, Mark. 1992. Pacific century: the emergence of modern Pacific Asia. Boulder: Westview Press.

Eckstein, Alexander. 1977. China’s economic revolution. Cambridge: Cambridge University Press.

Hsu?eh, Mu-ch?iao. 1981. China’s Socialist economy. China knowledge series. Beijing: Foreign Languages Press.

Lardy, Nicholas R. 1978. Economic growth and distribution in China. Cambridge [Eng.]: Cambridge University Press.

Lippit, Victor D. 1987. The economic development of China. Armonk, N.Y.: M.E. Sharpe.

McNally, Christopher A. 2008. China’s emergent political economy: capitalism in the dragon’s lair. Routledge studies in the growth economies of Asia, 75. London: Routledge.

Prybyla, Jan S. 1978. The Chinese economy: problems and policies. Columbia: University of South Carolina Press.

Riskin, Carl. 1987. China’s political economy: the quest for development since 1949. Economies of the world. Oxford [Oxfordshire]: Oxford University Press.

Wei, Lin, and Arnold Chao. 1982. China’s economic reforms. Philadelphia: University of Pennsylvania Press.

Xue, Muqiao. 1960. The Socialist transformation of the national economy in China. Peking: Foreign Language Press.

[1] Xue 16

[2] Xue 87

[3] Wei 49

[4] Lippit 24

[5] Ibid 68

[6] Riskin 135

[7] McNally 12

[8] McNally 45 “

by Keith Joseph

I think that capitalism is a perfectly adequate term to describe the international system and I think that Marx’s critique of political economy provides the conceptual apparatus that we need to apprehend the world system. Lenin’s theory doesn’t add anything useful and in fact adds a great deal of confusion. I have made this comment before. Lenin’s theory is usually dogmatically defended (I define “dogma” as assertion without evidence), but here is my critique in a nutshell.

The four main features of Lenin’s theory are:

1. The combination of industrial capital with bank capital, creating a new form of capital called “Finance Capital.”

2.The move from competition among many capitalist concerns to huge transnational monopolies.

3.The move from mere export of products to export of capital; i.e. capital moving all over the globe in search of maximum profits.

4. Competition and wars between rival capitalist powers.

Each is wrong. Let’s take these one at a time:

1. The combination of industrial capital with finance capital.

Lenin gets this idea from the Rudolph Hilferding who elaborated it at great length in his text: “Finance Capital.” The problem is that this is not a theoretical discovery. It is a empirical observation. And Marx’s theory was/is adequate to deal with it. In the second volume of Das Kapital Marx explains that circuit of industrial capital has three moments: money capital, productive capital, and merchant capital. Collectively these three moments make up the circuit of “industrial capital.” In other words, money capital, be it institutionally controlled by a bank or not, is already a part of the circuit of industrial capital. The relationship between productive capital and banks can certainly be one of struggle and banks can dominate productive capitals but so can merchant capitals. Wal-Mart’s domination of productive capitalists – in mainstream literature productive capitals are referred to as wal-marts “suppliers”—is legendary. In any event, the idea that “Finance capital” is a merger of bank and industrial capital is redundant. It freezes a momentary empirical observation into a universal theory and only adds confusion.

Here is a quote from Marx making the point:
“The real circuit of industrial capital in its continuity is therefore not only a unified process of circulation and production, but also a unity of all its three circuits” The three circuits are money, production, circulation. (that is on page185 of volume 2 penguin edition)

What we need is a class analysis of the corporation. “Wall Street” is the colloquial term for financial capital. Investors, i.e., finance capitals, own shares of the corporation and some of those share holders elect a board of directors. The board of directors main jobs are hiring top managers and appropriating and distributing the surplus value pump out of labor. Top management takes on many of the same duties as the capitalist entrepreneur of smaller enterprises, namely overseeing the production process and seeing the commodity to market for the realization of value. All three of these moments, financing, production, selling could be accomplished by one capitalist, usually in a smaller enterprise, or they could be separated: a shoe making enterprise finance itself and markets its products in branded retail shops (For example, I just bought a pair of red wing work boots at a store that only sells red wing work boots. I didnt look that deeply into the companies operations but I assume the retail store is owned by the productive capital). Or the enterprise borrows money from the bank, produces shoes and delivers them to Footlocker (a separate retail store with wares from many different productive capitals) for realization of the value. In any case it is an empirical difference that we grasp with the same theoretical apparatus. In this case the theoretical apparatus developed by Marx. Hilferding and Lenin add nothing here but confusion.

2. the theory of monopoly capitalism
This is Lenin’s most egregious error and, in my view, his most pernicious. Have you ever wondered why so few Marxists read Marx? The theory of monopoly capitalism is the answer.

Everyone familiar Lenin ‘s theory, and the history of the communist movement, knows the following catechism:
Marx studied 19th century competitive capitalism. But in the 20th century a new and higher monopoly stage of capitalism emerged, analyzed by Lenin.

This, of course, renders Marx’s magnum opus Das Kapital and his labor theory of value to the dustbin of academia, and thus Lenin’s short propaganda pamphlet displaces Marx’s critique of political economy (competition between capitals is the mechanism that enforces what Marx called “the law of value” without competition there is no labor theory of value). Why bother reading Marx. The capitalism Marx talks about no longer exists. Or so 20th century communists believed. But they were: WRONG!

But just because it displaces Marx does not make it wrong. Let’s see how Lenin’s theory is wrong.

The theory of monopoly capitalism posits two stages of capitalism: a nineteenth century competitive stage, and a twentieth century monopoly stage. This dichotomy, the very notion of a “competitive stage,” and a “monopoly stage” is incontrovertible evidence that Lenin is working with a different theoretical paradigm then Marx. In other words, Lenin and Marx have very different theories of competition and monopoly. In Lenin monopoly negates competition (if this weren’t the case there would be no need to identify a “new stage”), and thus the law of value is negated. In Marx monopoly intensifies competition.

The idea that there are stages of capitalism with different laws is a radical error. Lenin’s theory is linear. Marx’s is dialectical. In Marx competition leads to monopoly and monopoly leads to competition. The laws of capitalism do not change. There are not new “stages” of capitalism. The application of capitalism’s “laws of motion” first analyzed by Marx are intensified and more perfectly applied over more and more geographic space as capitalism develops. They are not negated as in Lenin’s theory.
Indeed, the world of globalization is not one of monopoly. Quite the opposite, it is one of HYPER-COMPETITION. This is obvious, no?

Global capitalism is the law of value enforced ruthlessly across the face of the entire planet. Everyday more people enter into capitalist social relations. Globalization is capitalism perfecting itself and creating the conditions for its transcendence.

Jonas Zonninsein has a somewhat obscure text entitled “Monopoly Capital Theory” which offers a rigorous critique of Lenin and Hilferding’s theory. I highly recommend it.

3. Export of Capital
The United States, as in “U.S. led imperialism.” is a net importer of capital, not an exporter. Capital is imported and exported regardless of the countries status in the system. Lenin is empirically wrong. Again a momentarily correct empirical observation is transformed into an incorrect theory.

4. Competition between rival capitalist powers
On this point Lenin’s theory has more in common with bourgeois international relations theory than with Marx. And this is the reason why communist analysis is pre-occupied with the nation state and power relations and when it comes to the international arena and has precious little to say about class. We should leave the analysis of power relations to Kissinger.

What we need is a global class analysis.
To just hint at such an analysis: the uprisings in the middle east are uprisings against LANDLORD States. The Gaddaffi regime, for instance, did not tax the Libyan people. The state collected rents on its oil field. The state was a landlord. Indeed, the OPEC countries are all landlord states. Landed Property is a one of the main classes of the capitalist epoch even though it is a feudal class (Marx has a lot to say about landed property in the Eighteenth Brumaire and in the third volume of Capital). The wars in Afghanistan and Iraq are wars of industrial capital against landed property.

There is a collection entitled “The Rentier State in Africa” that develops the idea of the state as owner of landed property collecting rent. Cyrus Bina’s text: “Economics of the Oil Crisis” uses Marx’s theory of rent as do some essays in Peter Norre’s edited volume “Oil and Class Struggle” Also Fernando Coronil’s book “The Magical State” – a study of Venezuela– has a very good analysis of the landlord state in the introduction and first chapter.

Once we grasp that Lenins’ 4 central theses are wrong we realize that the whole theory of imperialism is wrong. We dont need a theory of imperialism. The uselessness of the theory is painstakingly obvious whenever anyone tries to use it to analyze contemporary events (the statement above is a good example). Especially the events it is supposed to explain: wars, global inequality, poverty. We need a theory of capitalism. Because capitalism is war, poverty, inequality, among other things. Do you know the best theory of capitalism? Marx’s value theory elaborated in the three volumes of “Das Kapital” and his “Theories of Surplus Value.”

We need a global class analysis. Our global class analysis must include: financial capital, productive capital, merchant capital, landed property, the working class (stratified across nationally boundaries, by race, by gender, by differential wages and skills, by rates of exploitation etc.)

These are obviously immensely complicated questions. Unfortunately, Lenin’s theory is not a help, it is in the way.

It is time to put away the meager gruel of Lenin’s “Imperialism” pamphlet and get to the feast that is the inheritance of the working class: Marx’s “Das Kapital.” We have good tools, we just have to learn to use them.