[Marxism] Re: [ Marxism] Inflation Delivers a Blow to Vietnamâ?Ts Spirits

[Marvin Gandall]

Ruthless Critic posted:

Capitalism in Asia at the End of the Millennium by Prabhat Patnaik

<http://www.monthlyreview.org/799pat.htm>

[Prabhat Patnaik is an Indian economist and political commentator. He is a
professor at the Centre for Economic Studies and Planning in the School of
Social Sciences at Jawaharlal Nehru University in New Delhi. He is currently
Vice-Chairman of the Planning Board of the Indian state of Kerala.]

MG: Thanks for this. Comments follow.

"There is a view that restrictions on capital flows and regulatory oversight
on financial sector liberalization are adequate for combatting the danger of
getting caught in the vortex of international finance capital. This view is
a facile one...globalized finance capital would oppose such restrictions
tooth and nail. The advanced capitalist states, which (as a surrogate for
the nonexistent single global imperialist state) act in unison to provide
support for such capital, would buttress its opposition...On the other hand,
if restrictions were imposed by particular countries unilaterally, those
countries would certainly face immediate hardships as capital flight
occurred or as financial flows bypassed them. In short, the tragedy of the
present predicament of the third world is that if getting caught in the
vortex of globalized finance is painful, getting out of it is equally
painful.

MG: Although no state can expect to export to capitalist countries while
prohibiting direct or portfolio investment from foreign manufacturers and
banks, states can impose "restrictions on capital flows and regulatory
oversight on financial sector liberalization".  These are subject to
negotiation on a bilateral or multilateral (WTO) basis, and, like all
negotiations, the outcome is dependent on the relative bargaining power of
the parties. China, for example, is able to limit foreign participation in
its manufacturing sector to joint ventures and to cap foreign institutional
investment in its financial sector because it has the power to do so.
Foreign firms are willing to accept these terms, while continually pressing
for more generous ones, because they are so covertous of China's labour and
consumer markets.

The Chinese authorities do not see themselves "caught" in the "painful
vortex" of global capitalism; they are eager participants. And as I've
previously noted, there's little evidence that their view is not shared by
the mass of the Chinese population which attributes its rising living
standards - or the promise of same - to expanded export trade and foreign
investment and technology transfers into the domestic economy. This same
holds true for smaller nations, as well, although their ability to impose
restrictions and otherwise adjust trade and capital flows to their own
benefit is more limited than that of the larger BRIC and other newly
emergent economies which have greater resources and bargaining power.

"Getting out, therefore, must be supported by the people. This means that
even restrictions on international finance have to be accompanied by an
alternative economic program, bringing palpable benefits to the people, and
an alternative political agenda entailing thoroughgoing democratization of
society and the polity. People must be directly involved in decision-making
and hence remain politicized and able to confront imperialism.

MG: Easier said than done, of course. As noted above, it presupposes that
these states have the will or ability to "get out" of the global capitalist
sphere and to mobilize the people to that end. The desire to restrict
foreign investment which is "accompanied by an alternative economic program,
bringing palpable benefits to the people, and an alternative political
agenda entailing thoroughgoing democratization of society and the polity is
true" may be true of the Cuban and Venezuelan governments, but of very few
others. Even in Cuba and Venezuela, the outcome remains uncertain. Where
mass movements from below have arisen to push their pro-capitalist
governments in this direction, they have  met with little success.

"The precise contours of this program would vary from country to country.
But land reforms (where they have not been carried out); a revival of public
investment, especially in rural infrastructure and employment generation
programs, financed by taxes on the rich; a reduction of income inequalities
to generate domestic demand for a range of simple and non-import-intensive
commodities; decentralization of resources and decision-making to directly
elected bodies at the local level; the strengthening of democratic
institutions and enforcement of greater accountability of the state, would
constitute some of the essential ingredients of such an alternative program.
There would, of course, have to be controls over capital flows, over the
financial sector (especially including political control over the central
bank) so that it serves the needs of development, and over trade, so that
domestic food availability is not reduced through agricultural exports, and
domestic industry is not destroyed through indiscriminate imports or
dumping.

MG: Good program. Developing good programs (or rather inheriting them) is
the easy part.

[...]

"This route is not easy. The collapse of actually existing socialism over
large tracts of the globe, and the fact that inter-imperialist rivalries are
relatively muted, implies that imperialism will have an easier job snuffing
out any challenge mounted against it in some particular corner of the world.
But if the challenge emanates from a large enough country or group of
countries, if it is based on broad popular support, and if it is accompanied
by a strengthening of democratic institutions through which the people can
remain politically active (unlike under old socialism, in which they became
rapidly depoliticized and power was exercised in their name by what, in
effect, was a dictatorship of the Party), then it may well prove a harbinger
of a renascent socialism."

MG: If, if, if, if..."then it may well prove a harbinger of a renascent
socialism." Who can disagree? I'm not being cynical here. It's that this is
true to the point of banality, and is usually asserted by
self-congratulatory optimists of the will as a riposte to those who point to
the objective constraints which make such projections unrealizable in the
foreseeable future, and which result in political conclusions and demands
which are little more than wishful thinking - especially damaging in those
countries where serious class and national struggles are being waged.