Bus/Taxi Coop in Cuba
By Cliff DuRand
Cuba is engaged in a fundamental reshaping of its society. Calling it a renovation of socialism or a renewal of socialism, the country is re-forming the economic system away from the state socialist model adopted in the 1970s toward something quite new. This is not the first time Cuba has undertaken significant changes, but this promises to be deeper than previous efforts, moving away from that statist model. Fidel confessed in 2005 that “among the many errors that we committed, the most serious error was believing that someone knew how to build socialism.” That someone, of course, was the Soviet Union. So, Cuba is still trying to figure out for itself how to build socialism.
To understand the current renovation it is important to distinguish between ownership and possession of property. The productive resources of society are to remain under state ownership in the name of all the people. Reforms do not change the ownership system. Reforms are changing the management system, bringing managerial control closer to those who actually possess property. So while the state will continue to own, greater autonomy will be given to those who possess that property. In effect, Cuba is embracing the principle of subsidiarity, which holds that decisions should be made at the lowest level feasible and higher levels should give support to the local. This means more enterprise autonomy in state enterprises and it means cooperatives outside of the state.
It is expected that in the next couple years the non-state sector is expected to provide 35% of the employment. Along with foreign and joint ventures, the non-state sector as a whole will contribute an estimated 45% of the gross domestic product (PIB). Hopefully coops will become a dominant part of that non-state sector.
Already 83% of agricultural land is in coops. Much of that has been in the UBPCs (Basic Units of Cooperative Production) formed in the 1990s out of the former state farms. But these were not true cooperatives since they still came under the control of state entities. Now they are being given the autonomy to become true coops.
Even more significantly, new urban coops are being established in services and industry. 222 experimental urban coops are to be opened in 2013. As of 1st of July, 124 have been formed in agricultural markets, construction, and transportation. A big expansion in this number is expected in 2014.
In December 2012 the National Assembly passed an urban coop law that establishes the legal basis for these new coops. Here are some of its main provisions:
This is a big step forward for Cuba. Since 1968 the state has sought to run everything from restaurants to barber shops and taxis. Some were done well, many were not. One problem was worker motivation. Decisions were made higher up and as state employees, workers enjoyed job security even with poor performance. However, their pay was low. Now as socios in cooperatives they will have incentives to make the business a success. The coop is on its own to either prosper or go under. Each member’s income and security depends on the collective. And each has the same voting right in the General Assembly where coop policy is to be made. Coops combine material and moral incentives, linking individual interest with a collective interest. Each socio prospers only if all prosper.
By Marta Harnecker, translated by Federico Fuentes
[Paper presented at the International Scientific Academic Meeting on Methodology and Experiences in Socio-environmental Participatory processes, Cuenca University, November 13-15, 2014.*]
December 19, 2014 — Links International Journal of Socialist Renewal — These words are aimed at those who want to build a humanist and solidarity-based society. A society based on the complete participation of all people. A society focused on a model of sustainable development that satisfies people’s genuine needs in a just manner, and not the artificial wants created by capitalism in its irrational drive to obtain more profits. A society that does all this while ensuring that humanity’s future in not put at risk. A society where the organized people are the ones who decide what and how to produce. A society we have referred to as Twenty-First Century Socialism, Good Living or Life in Plenitude.
The question is how can we achieve this complete participation? How can we guarantee as much as possible that all citizens, and not just activists or leftists, take an interest in participation? How can we achieve the participation of middle class sectors alongside popular sectors? How can we ensure that solidarian interests prevail over selfish ones? How can we attend to the concerns of the poorest and most forgotten and repay the social debt inherited by previous governments?
I am convinced that it is through what we have called “decentralized participatory planning” that we can achieve these objectives. We have reached this conclusion not on the basis of reading books and academic debates, but through the study of practical experiences of participatory budgets and participatory planning, primarily in Brazil, Venezuela and the Indian state of Kerala.
We were very attracted to the experience of participatory budgeting undertaken by the regional Workers’ Party government in Porto Alegre, Brazil, because we saw it as a new, transparent, rather than corrupt, way of governing, that delegated power to the people.
In Venezuela, we got a strong sense of how the popular subject was strengthened through the initiative taken by Chávez to promote the creation of communal councils and his decision to grant them resources for small projects. This was not done in a populist manner, with the state coming in to satisfy the community’s demand; rather it occurred after a process of participatory planning where the citizens of the community implemented what he called “the communal cycle”, which involved the following actions: diagnosis, elaboration of a plan and budget, execution of the project, and control over how it was carried out.
Lastly, our work was been greatly enhanced by what we learnt from one of the first experiences in the world of “decentralized participatory planning” that occurred in the Indian state of Kerala. There, a communist government decided to carry out an important process of decentralization, not only of monetary resources, but also material and human resources, to aid with the implementation of local development plans that were based on the active participation of local residents. The end result of this has been a more egalitarian economic development when compared to the rest of India, and a growth in resident’s self-esteem and self-confidence. This type of decentralization allowed for greater local government autonomy when it came to planning their development, which facilitated the progress of a much more effective participatory planning.
The type of planning we advocate is the antithesis of the centralized planning implemented under the Soviet Union. In the old USSR, it was thought that to coordinate all efforts towards building a new society, a central authority was required to decide objectives and means. It was a process in which decisions were always made from above, on many occasions without taking into consideration that down below was where people best knew the problems and possible solutions.
Similarly, often processes that claim to be participatory limit themselves to being processes of simple consultation. Rather than promoting a process of decision-making by citizens, local politicians limit themselves to consulting citizens. The people in the local area are called upon to participate in working groups where they are asked to point out their main priorities for public works and services for their respective communities. A technical team collects these and it is the technicians and not the people who decided upon which projects to implement. We don’t deny that a willingness to listen to people represents a step forward, but it is very limited.
We advocate a more integral process in which it is the people who genuinely discuss and decide upon their priorities, elaborate, where possible, their own projects and carry them out if they are in the condition to do so without having to depend on superior levels. We seek to fully involve citizens in the planning process, which is why we refer to it as participatory planning.
To achieve complete citizen’s participation we must take the plans of small localities as our starting point, where conditions are more favorable for peoples’ participation, and apply the principle that everything that can be done at a lower level should be decentralized to this level, and only keeping as competencies of higher up levels those tasks that cannot be carried out at a lower level. This principle is referred to as subsidiarity.
Photo: Interesting lineup. Stalin dropped, Chou En-Lai and Deng added
By Li Hongfeng
Literature of Chinese Communist Party, Issue 4, 2014
Abstract: As the chief architect of China’s reform and opening up and socialist modernization drive, Deng Xiaoping created a new historical period of reform and opening up. During the historical process of advancing reform and opening up, Mr. Deng thoroughly demonstrated a strategist’s strategic thinking, judgment, design and decision. He created a new historical period, starting reaffirming and reinstating the Party’s ideological guideline of seeking truth from facts. After deeply studying the profound changes of domestic and foreign situations, Mr. Deng gave two important strategic judgments: China being and to be in the preliminary phase of socialism; and peace and development being two great issues of the contemporary world. On the basis of such two judgments, he made a series of far-reaching strategic decisions centering on his belief in socialist and communist causes. Mr. Deng suggested leadership should have principles, systematicness, foresight and creativity, which reflected Deng’s understanding of regularity in leadership and essential characteristics of his leading style.
In Deng’s life, he fell three times and rose up again. After Mr. Deng was reinstated at the third time, his career ushered in full swing and he created a new historical period of China’s reform and opening up. Looking back on the great historical process of Deng Xiaoping boosting reform and opening up and learning about his strategist’s wisdom in strategic thinking, judgment, design and decision can be beneficial to deepening reform comprehensively and carrying forward reform and opening up and socialist modernization drive.
I. Strategic starting point of defining ideological guidelines
The “cultural revolution” resulted in a ten-year-old turmoil and brought about severe calamities, incurring great costs to our Party, country and nation. The “left” wrongdoings can’t be continued and it is a must to correct those mistakes.
Deng Xiaoping undertook duties in a dangerous situation. As soon as taking office, Mr. Deng manifested a great strategist’s foresight. Facing the complex situation of many things waiting to be done, Deng Xiaoping grasped the most important link – starting from establishing the ideological guideline.
For Deng’s creation of a new historical period, it is a strategic starting point to reaffirm and reinstate the Party’s ideological guideline of seeking truth from facts.
Seeking truth from facts is our Party’s ideological guideline in both correctly understanding and changing the objective world. The China’s revolutionary process has fully proved: only on the basis of the guideline of seeking truth from facts, our Party could create the China’s revolutionary path of encircling the cities from the rural areas; our Party could find the three valuable approaches of the armed struggle, united front and party building; our Party could correctly resolve a series of basic problems on the nature, objective, driving force, goal and transformation of Chinese revolution; our Party could establish the correct political, military and organizing guidelines; our Party could build up a Marxist working-class vanguard in a semicolonial and semifeudal society with a large rural population and a small working-class population; our Party could successfully Sinicizing Marxism and create and develop Mao Zedong Though; our Party could surmount numerous hardships, overcome mistakes and frustrations in the progress, correctly sum up experience and lessons, unite all Party’s members and the whole Chinese nation and continuously accomplish new achievements. As the Party and Chinese people were armed with the ideological guideline of seeking truth from facts, the Chinese revolution embarked on the path to successes.
After become the ruling party, our Party had various mistakes and errors, especially the all-round wrongdoing of the “cultural revolution,” which was caused by various complex reasons but basically, resulted from the diversion from the ideological guideline of seeking truth from facts.
After smashing Gang of Four in 1976, the whole Party and nation were inspired. However, the wrong proposition of “two whatevers” remained restricting people’s thinking. The discussion on the criteria of truth succeeded in breaking the barriers of “two whatevers.” To support and promote the discussion on criteria of truth, Deng Xiaping made 26 remarks and speeches in less than two years in order to repeatedly expound on the essential reasons of seeking truth from facts.
Mr. Deng definitely pointed out: the “two whatevers” are wrong and don’t comply with both Marxism and Mao Zedong Thought. Marx, Engles, Lenin, Stalin or Mao Zedong proposed any “whatever.” It is not allowed to impair the whole Mao Zedong Thought with several or partial words and sentences. To follow Mao Zedong Thought shouldn’t focus on citations of Chairman Mao’s remarks but highlight the exertion of Mao’s essential thought.
By Andrew Wedeman
The Communist Party of China has been grappling with corruption almost from its birth. Corruption was one of the major issues during the 1989 anti-government demonstrations.
The leadership, in fact, responded to public anger over corruption and what was then known as “official profiteering” by launching a major campaign, in the course of which the number of individuals charged with corruption jumped from 33,000 in 1988 to 77,000 in 1989, and 72,000 in 1990.
Since the 1989 campaign, the leadership has waged an ongoing “war” against corruption and routinely prosecutes substantial numbers of officials. Between 1997 and 2012 the Supreme People’s Procuratorate reported that it indicted 550,000 individuals on either corruption or dereliction of duty charges, including three members of the powerful Politburo (Chen Xitong in 1997, Chen Liangyu in 2006, and Bo Xilai in 2012).
These prior efforts notwithstanding, upon assuming the office of General Secretary of the party in November 2012, Xi Jinping announced yet another campaign, which was formally approved by the Third Plenum of the Eighteen Party Congress in early November 2013. At first, the campaign appeared to be a repeat of the same old song and dance. Many of the steely toned slogans about the necessity to fight a life-and-death struggle against corruption and the need to put an end to extravagant spending by officials and cadres had been raised many times before.
Announcements of new regulations mandating fewer dishes at official banquets, banning the purchase of luxury sedans and their use for unofficial business, and the construction of lavish government buildings all reiterated orders issued in past years. Eighteen months on, however, it appears that far from a smoke and mirrors attempt to create the impression of action, Xi Jinping’s anti-corruption campaign may well be the most sustained and intensive drive against corruption since the start of the reform era.
By the Numbers
Measuring the intensity of an anti-corruption campaign is, admittedly, a tricky business given that we cannot even roughly estimate the true extent of corruption. Instead, we can at best guess at the extent by asking experts for their impressions of how bad things are or tracking changes in the number of officials who suddenly stop being corrupt because they get caught. Indices such as the popular Corruption Perceptions Index (CPI) published by Transparency International would have us believe that rather than getting worse, corruption in China has actually been on the decline for at least a decade, with its score falling from 7.6 (out of a maximum of 10, where 10 is the most corrupt and 1 the least corrupt) in 1995 to 6.0 in 2013, which would put China just below the 75th percentile and hence not among the worst of the worse.1
Data on prosecutions tell a different story. The number of criminal indictments was up 9.4 percent in 2013, with the total number of corruption and dereliction cases increasing from 34,326 in 2012 to 37,551 in 2013 (see Figure 1). The number of officials holding position at the county and departmental levels who were indicted rose from 2,390 to 2,618, a 9.5 percent increase. The number of officials the prefectural and bureau levels who were indicted shot up more dramatically, from 179 in 2012 to 253 in 2013, a 41.4 percent jump. Although nine percent increases in the total number of cases and in the number of county and department officials indicted may seem modest for a highly trumpeted campaign, these increases followed a decade in which the total number of indictments had been slowly decreasing. Increases in 2013, moreover, follow more modest increases in 2012. As a result, the total number of indictments in 2013 was 16.2 percent more than in 2011, and the number of country and department officials indicted was up 12.6 percent compared to 2011. More critically, the 41 percent increase in prefectural and bureau level officials indicted is the largest such increase since 2004, and represents a 27.8 percent rise over 2011. Finally, eight officials at the provincial and ministry levels were indicted, compared to five in 2012. The party’s Discipline Inspection Commission (DIC) also reported a 13.3 percent increase in the number of party members who faced disciplinary action.
Sources: Zhongguo Jiancha Nianjian [Procuratorial Yearbook of China], (Beijing: Zhongguo Jiancha Chubanshi, various years) and Zuigao Renmin Jiancha Yuan Gongzuo Baogao [Work report of the Supreme People’s Procuratorate], 3/18/2014, available at http://www.spp.gov.cn/tt/201403/t20140318_69216.shtml, accessed 6/12/2014.
Note: To provide a long-term perspective, I have transformed the raw data on cases filed into an index anchored on the years 1997-8. I do this because the 1997 revision of the criminal code decriminalized a large number of low-level offenses. The dramatic drop in cases filed thus creates the misleading impression that either corruption fell dramatically, which it did not, or that enforcement suddenly slacked off, which it did not either.
It is also possible to look at the type of corruption a campaign is targeting and who is getting caught to get a more nuanced sense of whether Xi’s roar is that of a paper or a real tiger.
Oct. 27, 2014 – AMBERG, Germany–The next front in Germany’s effort to keep up with the digital revolution lies in a factory in this sleepy industrial town.
At stake isn’t what the Siemens AG plant produces–in this case, automated machines to be used in other industrial factories–but how its 1,000 manufacturing units communicate through the Web.
As a result, most units in this 100,000-plus square-foot factory are able to fetch and assemble components without further human input.
The Amberg plant is an early-stage example of a concerted effort by the German government, companies, universities and research institutions to develop fully automated, Internet-based "smart" factories.
Such factories would make products fully customizable while on the shop floor: An incomplete product on the assembly line would tell "the machine itself what services it needs" and the final product would immediately be put together, said Wolfgang Wahlster, a co-chairman of Industrie 4.0, as the collective project is known.
The initiative seeks to help German industrial manufacturing–the backbone of Europe’s largest economy–keep its competitive edge against the labor-cost advantages of developing countries and a resurgence in U.S. manufacturing.
Underpinning the effort is the Internet of Things, where the Web meets real-world equipment. Google Inc. made a big push on the consumer front this year with its $3.2 billion purchase of Nest Labs Inc., which makes thermostats that can be remotely controlled by smartphones and other connected devices.
Full-fledged smart manufacturing is still in the pilot phase. But the German Research Center for Artificial Intelligence has worked with German industrial companies to engineer some of the most advanced demonstrations in the field.
Part of the CCDS team at the conference: Kathy Sykes, Janet Tucker, Harry Targ, Paul Krehbiel
By Paul Krehbiel
Committees of Correspondence for Democracy and Socialism
"The capitalist class is in a serious crisis without solution," said David Schweikart at the Moving Beyond Capitalism conference held in San Miguel de Allende, Mexico from July 30-August 5, 2014. "But there is a solution," he said, "economic democracy, democratic socialism." Over 200 people from 15 countries discussed how to make this happen, organized by the Center for Global Justice.
Chronic high unemployment, depression of wages and benefits, cuts in social services, and growing inequality and repression, and social and political resistance are endemic to nearly all capitalist countries, said Schweikart, a Philosophy professor at Loyola University in Chicago, and author of After Capitalism.
Schweikart’s model of democratic socialism calls for a regulated competitive market economy, socialized means of production and democratic workplaces (he advocates worker-run cooperatives as an example), non-profit public banks to finance projects, full employment, and a guarantee that human needs will be meet for everyone.
Cliff DuRand, a conference organizer, said people are creating alternatives to capitalism today all over the world. "If we’ve built these alternative institutions, the next time the capitalist system collapses…we will be able to survive without it."
Gustavo Esteva, a former Mexican government official, founder of the University of the Land in Oxaca, and an advisor to the Zapatistas in Chiapas in southern Mexico, gave a good account of how the indigenous people of this region are creating a new democratic and socialist-oriented society that they control, within the borders of a capitalist Mexico. The Zapatistas launched an armed uprising in the mid-1990′s to stop NAFTA and the Mexican government from allowing multi-national corporations to come into Chiapas to extract minerals to enrich the corporations and destroy their lives and their local economy.
Ana Maldonado of the Venezuelan Ministry of Communal Economy could not attend, so University of Utah Professor Al Campbell filled in for her. Campbell has worked in Venezuelan with the Community Councils, a new form of grassroots democracy and socialism. Created in 2006 by the late socialist president Hugo Chavez, there are 20,000 Community Councils today, each holding meetings in neighborhoods where all residents can attend, discuss, and vote on decisions for their community.
Private, for-profit banks came under sharp attack for causing the 2008 Great Recession, and for ripping off billions of dollars from people world-wide, primarily through charging high interest rates. Ellen Brown, founder of the Public Banking Institute based in California, declared, "Without interest payments, there would be no national debt," which now stands at over $15 trillion. Politicians use the debt as an excuse to cut funds for education, health care and other social programs. An example of local bank rip-offs is a bank loan for the purchase of a house, where the homeowner pays the bank 2-3 times or more than the cost of the house due to interest payments.
Brown said the solution is to set up not-for-profit public or state banks — like the Bank of North Dakota. She describes how to do it in her book Democratizing Money: The Public Bank Solution. Since the 2008 economic crash, 20 other states including California have introduced bills to study or establish publicly-owned state banks.
"The US controls third world countries," Brown explained, "by putting them in debt and then forcing repayment with high interest rates," which they can’t afford to pay. Brown said the book, Confessions of an Economic Hitman, by John Perkins, explains how devastating this is.
Coops in Cuba
Camila Pineiro Harnecker, a leader of the cooperative movement in socialist Cuba, explained that her country is giving much more attention to the development of worker-run cooperatives as a way to help workers create jobs for themselves, and learn how to become masters of their work and work lives. The state socialist sector dominates the economy, but coops now comprise 12% of the workforce and are expected to increase in number.
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By Liu Zhenying
CHINESE SOCIAL SCIENCES TODAY
September 24, 2014
The Chinese version of Capital in the Twenty-First Century (2014) by French economist Thomas Piketty hasn’t been published for good reason. It is inappropriate for Piketty to associate his book with Das Kapital, the 1887 critical analysis of political economy by German philosopher Karl Marx.
Difference in political tendency
The political leaning of Capital in the Twenty-First Century can be classified as left-wing. It suggests imposing a progressive tax each year ranging from 0.1 percent to 10 percent on returns on capital, or 80 percent of punitive capital holding tax on the revenue of over $5oo,ooo. This has led US right-wing pundits to label Piketty a Marxist. But Piketty isn’t a Marxist in the conventional sense, which can be seen from his proposition of not scrapping the capitalist system.
Capital in the Twenty-First Century examines the relations between rate of returns on capital and rate of economic growth, explaining the former is higher than the latter with existing materials. This indicates an analytical framework of confrontation between capital gain and labor income, whereby the increased portion must be the reduced portion of workers’ labor income. It is the same as Das Kapital, which is based on confrontation between labor and capital, specifically paid employment. This doesn’t prove Piketty is a Marxist, however, because classical political economics are also based on labor-capital conflicts.
Conflicts between labor and capital are common in classical political economics. Based on these conflicts, Piketty pivots from the stance of contemporary Western mainstream economics to classical political economics. He doesn’t draw such a conclusion from self-contradiction of the capitalist mode of production as Marx did in Das Kapital, which urged the overthrowing of the capitalist system and establishment of capital public ownership.
Piketty once asserted that he has returned to the stance of classical economics due to his dissatisfaction with mainstream economics. However, it is a big leap to go from classical economics to Marxist economics.
Piketty imagines solving the problems caused by capitalist fundamentalism without solving core contradictions, which indicates he hasn’t realized the gap. Commentators accuse him of being a “utopian.” Indeed, Piketty makes the case that the bourgeoisie would rather see the collapse of capitalism than adopt his proposed tax reforms.
Difference in research methods
Capital in the Twenty-First Century shouldn’t be considered a modern Das Kapital. Both books differ in research subjects. More importantly, they have different research methods and both therefore draw inevitably different conclusions. Capital in the Twenty-First Century explains “polarization” with data, strongly refuting theories that distort so-called facts.
No matter how reasonable Piketty’s ideas are, the bourgeoisie will never acknowledge he is right nor accept his proposed policies.
Piketty’s proposed policies have historically been adopted and are even being implemented in some North European countries. However, whether these proposals will be adopted on a greater scale doesn’t depend on whether the ruling classes are clear that the rate of return on capital must conform to economic growth rate. It instead depends on whether their interests can be guaranteed. The capitalist system defines human nature as individualistic and selfish, with the bourgeoisie only caring about their own interests without considering greater mankind.
Without attempting to persuade the bourgeoisie to become reasonable, Das Kapital proposes not having any illusions about them. For this reason, Das Kapital presents an insurmountable critique without comparison.
This isn’t to say that Das Kapital, as a 19th-century book, can explain all phenomena in the 21st century. Marxist theorist Ernest Mandel thought Das Kapital was more suitable for the 20th century. Based on the inherent negativity of capitalism, however, it is in the 21st century that the logic of Das Kapital has been actually realized.
Marx researched virtual capital, but there was no virtual economy in his era. Marx realized the self-denial of capital would inevitably result in socialism, but he didn’t seesocialism which would have the same level of productivity under capitalism and even has lower level of productivity than developed countries . If a 21st-century adaptation of Das Kapital is written, its logic should follow Marxist theory.
The author is a teacher at the Shanghai Party Institute First Branch School at the Communist Party of China’s Shanghai Administration Institute.
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Employees of the Sanli Engine Company, a privately-owned company based in Jinjiang, Fujian Province, assemble lawnmowers for sale outside of China(Photograph taken on August 10, 2009). More than three decades of reform and opening up have fueled considerable advances in China’s state-owned and private sectors, enabling various forms of ownership to develop side by side in a mutually-complementary fashion. / Photo by Xinhua reporter Zhang Guojun
From:English Edition of Qiushi Journal
Journal of the CC of the Chinese Communist Party
Vol. 6 No.3 July 1, 2014
Modernization is the dream of all developing countries. While many countries have pursued dreams of modernization, pushing themselves forwards to achieve development and progress, none have overcome as many difficulties and obstacles as China, which has succeeded in putting an economically and culturally backward country of 1.3 billion people on the fast track to modernization. In light of this fact, we may say that the Chinese path represents a successful attempt to overcome difficulties that developing countries commonly face in modernization.
I. The success of the Chinese path indicates that developing countries no longer have to rely on Western approaches to modernization
All developing countries, including China, face the challenge of identifying a path of development. Following the Second World War, the majority of the world’s developing countries—with the exception of socialist countries, as represented by the Soviet Union—opted to emulate the Western model of modernization.
The path that Western countries have guided developing countries towards takes its roots in neoliberalism—an economic philosophy that emerged in the 1920s-30s, the core ideas of which are marketization, liberalization, and privatization. In 1989, the US government and the Western financial world formulated a set of ten policy prescriptions aimed at guiding economic reforms in Latin America. Later dubbed the “Washington Consensus,” these proposals were essentially a continuation of neoliberal thinking. However, with the introduction of this so-called “consensus” into Latin America in the 1990s, Latin American countries began to experience a phase of continued economic and financial crisis, and have since been confronted with serious economic recessions, polarization, and intense social conflicts. Moreover, following the drastic changes that occurred in the Soviet Union and Eastern European countries, the “shock therapy” of neoliberalism was at one point the cause of serious economic recession in Eastern Europe. Therefore, it is fair to say that the global spread of neoliberalism has been the cause of bitter suffering in many developing countries.
As an approach to modernization that has been developed outside the capitalist system, the Chinese path represents a fundamental departure from the Western model of modernization that has previously been relied upon. Through its glorious achievements, China has shown the world a path of development that differs completely from the one predetermined by Western countries. As a result, the world has begun to shift its gaze to the East.
The Chinese path differs fundamentally from neoliberalism and the “Washington Consensus” in several regards. Firstly, the differences between the two can be seen from an institutional perspective. The socialist system with Chinese characteristics is founded on the fundamental political system of people’s congresses. This fundamental political system serves as the basis for China’s basic political systems, which include multi-party cooperation and political consultation. The socialist system with Chinese characteristics also comprises a basic economic system whereby public ownership is the mainstay while various forms of ownership are able to develop side by side. Secondly, the differences between the two are evident from the guiding principles they follow. China’s socialist market economy attaches great importance to the role of macro control, laying emphasis on exerting the strengths of both planning and market forces. Thirdly, the differences between the two are evident from the role of the government in economic activities. A great deal of research, including research by Western scholars, has argued that the success of the Chinese path is attributable to the fact that China not only boasts a “big government,” but also a “good government.” These features fundamentally distinguish the Chinese path from neoliberalism, which takes the capitalist political system and private ownership as its basic political and economic foundations, and which advocates “small government” that is governments that do not intervene in the economy. Other distinctive features of the Chinese path include export-oriented policies, high savings and investment rates, and an emphasis on education and human resource development. Together, the aforementioned features constitute the main aspects of the Chinese path.
Fact has demonstrated that the Chinese path—a path that differs from the developmental models advocated by the West—has been the strongest driving force behind China’s development. This path has enabled the Chinese nation to proudly reassert itself among the nations of the world. Moreover, it will guarantee that the Chinese dream of national rejuvenation will eventually come true. The Chinese path has delivered the message that every country should choose its own path of development in accordance with its own national conditions. It has demonstrated that the socialist system, a strong government, a mixed economy, and macro control are equally capable of becoming factors for successful modernization. In the future, the Chinese model will continue to shatter the myth that surrounds neoliberalism and the “Washington Consensus.”
II. The Chinese path has effectively overcome the “late starter’s disadvantage” that developing countries face in modernization
It is a widely-held view that developing countries enjoy a number of advantages as they are attempting to modernize: advanced scientific and technological achievements that can be borrowed from developed countries; a wealth of existing knowledge and experience with regard to modernization; open international markets; and abundant demographic and natural resource dividends. Capitalizing on these “late starter’s advantages,” some developing countries have formulated “catch-up” strategies, which have been successful in certain cases. However, in most circumstances, the “late starter’s advantage” is only seen during the early stages of modernization. Once a country has reached a certain level of economic and social development, this advantage will begin to diminish, being increasingly replaced by a “late starter’s disadvantage,” which severely obstructs the modernization process in that country. The “late starter’s disadvantage” is demonstrated in the following aspects.
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Venezuela’s president Nicolas Maduro with Marta Harnecker at the award ceremony.
The speech was given by Marta Harnecker on August 15, 2014, accepting the 2013 Liberator’s Prize for Critical Thought, awarded for her book, A World to Build: New Paths towards Twenty-first Century Socialism; translated by Federico Fuentes
By Marta Harnecker
August 24, 2014 – I completed this book one month after the physical disappearance of President Hugo Chávez, without whose intervention in Latin America this book could not have been written. Many of the ideas I raise in it are related in one way or another to the Bolivarian leader, to his ideas and actions, within Venezuela and at the regional and global level. Nobody can deny that there is a huge difference between the Latin America that Chávez inherited and the Latin America he has left for us today.
That is why I dedicated the book to him with the following words:
To Commandante Chavez, whose words, orientations and exemplary dedication to the cause of the poor will serve as a compass for his people and all the people of the world. It will be the best shield to defend ourselves from those that seek to destroy this marvellous work that he began to build.
When Chávez won the 1998 presidential elections, the neoliberal capitalist model was already foundering. The choice then was whether to re-establish this model, undoubtedly with some changes such as greater concern for social issues, but still motivated by the same logic of profit-seeking, or to go ahead and try to build another model. Chávez had the courage to take the second path and decided to call it “socialism”, in spite of its negative connotations. He called it “21st century socialism,” to differentiate it from the Soviet-style socialism that had been implemented in the 20th century. This was not about “falling into the errors of the past”, into the same “Stalinist deviations” which bureaucratised the party and ended up eliminating popular participation.
The need for peoples’ participation was one of his obsessions and was the feature that distinguished his proposals from other socialist projects in which the state resolved all the problems and the people received benefits as if they were gifts.
He was convinced that socialism could not be decreed from above, that it had to be built with the people. And he also understood that protagonistic participation is what allows people to grow and achieve self-confidence, that is, to develop themselves as human beings.
I always remember the first program of “Theoretical Aló Presidente”, which was broadcasted on June 11, 2009, when Chavez quoted at length from a letter that Peter Kropotkin, the Russian anarchist, wrote to Lenin on March 4, 1920:
Without the participation of local forces, without an organization from below of the peasants and workers themselves, it is impossible to build a new life.
It seemed that the soviets were going to fulfil precisely this function of creating an organization from below. But Russia has already become a Soviet Republic in name only. The party’s influence over people … has already destroyed the influence and constructive energy of this promising institution – the soviets.
That is why very early on I believed it necessary to distinguish between the socialist project and a model. I understood project to mean the original ideas of Marx and Engels, and model to refer to one form that this project has historically taken. If we analysis Soviet-style socialism, we see that in those countries that implemented this model of socialism, one that Michael Lebowitz has recently called the socialism of conductors and conducted based on a vanguardist mode of production, the people were no longer the protagonist, organs of popular participation were transformed into purely formal entities, and the party was transformed into an absolute authority, the sole depositary of truth that controlled all activities: economic, political, cultural. That is, what should have been a popular democracy was transformed into a dictatorship of the party. This model of socialism, that many have called “real socialism” is a fundamentally statist, centralist, bureaucratic model, where the key missing factor is popular participation.
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By John Ross
China.org.cn, August 22, 2014
August 22, 2014 is the 110th anniversary of the birth of Deng Xiaoping. Numerous achievements would ensure Deng Xiaoping a major position in China’s history – his role in shaping the People’s Republic of China, his steadfastness during persecution in the Cultural Revolution, his extraordinarily balanced attitude even after return to power towards the development and recent history of China, his all-round role after 1978 in leading the country.
But one ensures him a position among a tiny handful of people at the peak not only of Chinese but of world history. This was China’s extraordinary economic achievement after reforms began in 1978, and the decisive role this played not only in the improvement of the living standards of Chinese people but the country’s national rejuvenation. So great was the impact of this that it may objectively be said to have altered the situation not only of China but of the world.
China’s economic performance after the beginning of its 1978 reforms simply exceeded the experience of any other country in human history. To give only a partial list:
• China achieved the most rapid growth in a major economy in world history.
• China experienced the fastest growth of living standards of any major economy.
• China lifted 620 million people out of internationally defined poverty.
• Measured in internationally comparable prices, adjusted for inflation, the greatest increase in economic output in a single year in any country outside China was the U.S. in 1999, when it added US$567 billion, whereas in 2010 China added US$1,126 billion – twice as much.
• During the beginning of China’s rapid growth, 22 percent of the world’s population was within its borders – seven times that of United States at the beginning of its own fast economic development.
Wholly implausibly, it is sometimes argued that this success was merely due to "pragmatism" and achieved without overall economic theories, concepts, or a leadership really understanding the subject (particularly with no knowledge of U.S. academic economics!). If true, then the study of economics should immediately be abandoned – if the greatest economic success in world history can be achieved without any understanding of the subject, then it is evidently of no practical value whatever.
In reality this argument is entirely specious. Deng Xiaoping’s approach to economic policy was certainly highly practical regarding application – the famous "it doesn’t matter if a cat is black or white provided it catches mice." But it was extremely theoretical regarding foundations – as shown clearly in such works as In Everything We Do We Must Proceed from the Realities of the Primary Stage of Socialism, We Are Undertaking An Entirely New Endeavour, and Adhere to the Principle to Each According to his Work. Deng Xiaoping’s outstanding practical success was guided by a clearly defined theoretical underpinning, which can be understood particularly clearly in its historical context and in comparison with Western and other economists.
As is generally known, after 1949 the newly created People’s Republic of China constructed an economy, fundamental elements of which were drawn from the Soviet Union. It is important to understand that there was nothing irrational in this – the USSR, up to that time, had the world’s most rapidly growing economy.
Indeed, the immediate post-1929 success of the USSR was of extraordinary dimensions. During 1929-39 the USSR achieved 6 percent annual GDP growth, which until then was by far the fastest ever achieved by a major economy, and almost twice the historical growth rate of the United States. Despite colossal destruction in World War II, by 1949 the USSR had already regained its prewar production level.
The elements which produced such historically unprecedented economic growth were clear. From 1929, Stalin, with the First Five Year Plan, launched the USSR on an economic policy never previously attempted in any country – construction of a national basically self-enclosed administered economy. Resources were not allocated by price but by material quantities – a steel factory did not buy iron ore on the market but had it allocated by administrative decision. Foreign trade was minimized. State ownership was applied even to small scale private enterprises such as restaurants. Farmers’ small holdings were eliminated and agriculture organized into large scale collective farms.
Despite verbal claims that this policy was "Marxist," Stalin’s economic structure was in fact radically at variance with that of Marx himself. To use the Marxist terminology common to both China and the USSR, Soviet economic policy in 1929, in a single step, replaced economic regulation by prices (exchange value) by allocation by material use (use value).