[Marxism] An exchange on China

[Louis Proyect]

>There's a great deal I don't understand about the economic conditions in 
>China, but I'm confused by assertions I've seen that China is capitalist, 
>which you seem to agree with.
>
>If China is truly capitalist at the present time, are we to think there is 
>no agitation for a capitalist restoration/counterrevolution in China along 
>the same lines as that which happened in the Soviet Union, and that if 
>incidents occurred which could develop in such a direction, that foreign 
>capitalist regimes (the ones which we all agree are capitalist) would not 
>attempt to develop them in this direction? This is an argument that I find 
>convincing and that Henry Liu seems to work out of.
>
>The problem I have with saying that China is "capitalist" is that, taken 
>by itself, it implies that at the level of property relations China is the 
>same as, say, the US. How can this possibly be true? I can understand 
>arguing that beneath the appearance of socialized property forms, the 
>mechanics of the economy are capitalist. But surely the outward appearance 
>of socialized property forms is based on some political or cultural 
>element that counts for something in this analysis? How else would there 
>be a recognition that "the revolutionary socialism built under Mao" 
>represents a way forward without there being some type of concrete state 
>element embodying that socialism around which to rally? From what I've 
>seen in my time there, many people, even in urban areas in China, still 
>think they live in a socialist state.
>
>Sincerely,
>R


Hi, R, I am taking the liberty to answer you publicly with a blind-cc since 
your points are shared by others, I am sure.

I am not that familiar with Henry Liu's position on China nowadays since 
most of his writings are focused on questions of international finance but 
the main agitation going on in China today seems to be directed toward a 
socialist restoration than anything else. There is absolutely no difference 
between the Russian and Chinese mode of production today, except for the 
possibility that the state sector in Russia is being bolstered while it is 
being eroded in China.

I don't know about what people in China think, but I have never met a 
Chinese programmer on my job who believes that the country is "socialist", 
including Ming who just returned from a visit. By comparison, I doubt that 
there is a single person in the world who believes that Cuba is 
capitalist--outside of the "state capitalist" current.

More importantly, our class enemy has a pretty good clue as to what is 
going on, since their very existence relies on being able to detect 
challenges to private property.

"Why the Cuban Trade Embargo Should Be Maintained"
John P. Sweeney, November 10, 1994, The Heritage Foundation

Those who favor lifting the embargo often point to the examples of Vietnam 
and China to justify their position, claiming that eliminating the embargo 
will encourage the growth of a free-market economy which will undermine the 
communist regime. Such comparisons are not valid. Capitalism is destroying 
communism in China, but the driving force is not international trade. It is 
a strong domestic market economy tolerated by the communist government. 
China's market economy is dominated by many millions of small entrepreneurs 
who are devouring the communist command economy. Moreover, China's market 
economy has been growing in depth and diversity since the mid-1980s. Free 
trade is promoting faster market growth and expanding the personal freedom 
of millions of Chinese, encouraged by entrepreneurs and investors from 
Taiwan, Hong Kong, and elsewhere who are providing the capital, 
entrepreneurial skills, and international trade contacts which are 
compelling China to transform its economy. In the process, a vast and 
prosperous middle class is being created.

In Cuba, however, the Castro regime is not willing to liberalize the 
economy and create a free market. Cuban exile communities in the United 
States, Latin America, and Europe are not willing to work with Castro, and 
market initiatives by the Castro regime to encourage them to do so are very 
recent, dating from 1993 for the most part. The basic orientation of the 
hard-liners surrounding Castro is to contain and restrict all initiatives 
that unleash individual entrepreneurship and creativity. For example, the 
government has arrested people for earning "too much" money in the 
dollarized informal economy, the variety of legally permitted "family 
businesses" has been restricted, and tax rates on the income of 
self-employed Cubans have been increased. Moreover, Cuba's constitution and 
legislation specifically prohibit all private initiative, notwithstanding 
recent reforms allowing self-employment by Cubans in approximately 140 
categories of economic activity from which all professionals (the core of 
any middle class) are expressly barred. For over three decades, the regime 
has operated on the basis of divide and rule. Castro's bitter enmity toward 
the Cuban exile community precludes the possibility of replicating in the 
Caribbean what China's exile community has accomplished in China.

None of the alleged "market reforms" undertaken to date in Cuba are true 
free-market initiatives. Free enterprise remains highly restricted. Foreign 
investors doing business in Cuba today deal mainly with Castro's regime. 
Cuban partners in joint ventures and mixed companies are approved by Castro 
as "safe." Moreover, unlike China, Cuba has barely started to open up its 
economy, and what little has been done to date has been permitted with 
great official reluctance and with the objective of assuring the communist 
government's political survival. China's economic transformation has been 
under way since 1978, when important agricultural reforms were introduced, 
including the right of peasant farmers to grow the crops they wished and 
retain some of their profit. Moreover, the government of China has 
encouraged the marketization of the country's coastal provinces, and since 
1992 the Chinese constitution has incorporated the concept of the 
"socialist market economy." Although China remains a communist nation where 
political freedoms are sharply restricted, the ruling regime has permitted 
vigorous development of the private sector, thus laying the seeds for its 
eventual demise and potential replacement by a politically pluralist, more 
open society.


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