Chinese State Capitalism
The first label that comes to mind to describe Chinese reality is state capitalism. Very well, but this label remains vague and superficial so long as the specific content is not analyzed.
It is indeed capitalism in the sense that the relation to which the workers are subjected by the authorities who organize production is similar to the one that characterizes capitalism: submissive and alienated labor, extraction of surplus labor.
Brutal forms of extreme exploitation of workers exist in China, e.g., in the coalmines or in the furious pace of the workshops that employ women. This is scandalous for a country that claims to want to move forward on the road to socialism. Nevertheless, the establishment of a state capitalist regime is unavoidable, and will remain so everywhere. The developed capitalist countries themselves will not be able to enter a socialist path (which is not on the visible agenda today) without passing through this first stage. It is the preliminary phase in the potential commitment of any society to liberating itself from historical capitalism on the long route to socialism/communism. Socialization and reorganization of the economic system at all levels, from the firm (the elementary unit) to the nation and the world, require a lengthy struggle during an historical time period that cannot be foreshortened.Beyond this preliminary reflection, we must concretely describe the state capitalism in question by bringing out the nature and the project of the state concerned, because there is not just one type of state capitalism, but many different ones. The state capitalism of France of the Fifth Republic from 1958 to 1975 was designed to serve and strengthen private French monopolies, not to commit the country to a socialist path.
Chinese state capitalism was built to achieve three objectives: (i) construct an integrated and sovereign modern industrial system; (ii) manage the relation of this system with rural petty production; and (iii) control China’s integration into the world system, dominated by the generalized monopolies of the imperialist triad (United States, Europe, Japan).
The pursuit of these three priority objectives is unavoidable. As a result it permits a possible advance on the long route to socialism, but at the same time it strengthens tendencies to abandon that possibility in favor of pursuing capitalist development pure and simple. It must be accepted that this conflict is both inevitable and always present. The question then is this: do China’s concrete choices favor one of the two paths?Chinese state capitalism required, in its first phase (1954-1980), the nationalization of all companies (combined with the nationalization of agricultural lands), both large and small alike. Then followed an opening to private enterprise, national and/or foreign, and liberalized rural and urban petty production (small companies, trade, services). However, large basic industries and the credit system established during the Maoist period were not de-nationalized, even if the organizational forms of their integration into a ‘market’ economy were modified. This choice went hand in hand with the establishment of means of control over private initiative and potential partnership with foreign capital. It remains to be seen to what extent these means fulfill their assigned functions or, on the contrary, if they have not become empty shells, collusion with private capital (through ‘corruption’ of management) having gained the upper hand.
Still, what Chinese state capitalism has achieved between 1950 and 2012 is quite simply amazing. It has, in fact, succeeded in building a sovereign and integrated modern productive system to the scale of this gigantic country, which cannot be compared with that of the United States. It has succeeded in leaving behind the tight technological dependence of its origins (importation of Soviet, then Western models) through the development of its own capacity to produce technological inventions. However, it has not (yet?) begun the reorganization of labor from the perspective of socialization of economic management.
The Plan— and not the ‘opening’—has remained the central means for implementing this systematic construction.In the Maoist phase of this development planning, the Plan remained imperative in all details: nature and location of new establishments, production objectives, prices. At that stage, no reasonable alternative was possible. I will mention here, without pursuing it further, the interesting debate about the nature of the law of value that underpinned planning in this period. The very success—and not the failure—of this first phase required an alteration of the means for pursuing an accelerated development project. The ‘opening’ to private initiative—beginning in 1980, but above all from 1990—was necessary in order to avoid the stagnation that was fatal to the USSR. Despite the fact that this opening coincided with the globalized triumph of neo-liberalism—with all the negative effects of this coincidence, to which I shall return—the choice of a ‘‘socialism of the market’’, or better yet, a ‘‘socialism with the market’’, as fundamental for this second phase of accelerated development is largely justified, in my opinion.
The results of this choice are, once again, simply amazing. In a few decades, China has built a productive, industrial urbanization that brings together 600 million human beings, two-thirds of whom were urbanized over the last two decades (almost equal to Europe’s population!). This is due to the Plan and not to the market. China now has a truly sovereign productive system. No other country in the South (except for Korea and Taiwan) has succeeded in doing this. In India and Brazil there are only a few disparate elements of a sovereign project of the same kind, nothing more.
The methods for designing and implementing the Plan have been transformed in these new conditions. The Plan remains imperative for the huge infrastructure investments required by the project: to house 400 million new urban inhabitants in adequate conditions, and to build an unparalleled network of highways, roads, railways, dams and electric power plants; to open up all or almost all of the Chinese countryside; and to transfer the center of gravity of development from the coastal regions to the continental west.
The Plan also remains imperative—at least in part—for the objectives and financial resources of publicly owned enterprises (state, provinces, municipalities). As for the rest, it points to possible and probable objectives for the expansion of small urban commodity production as well as industrial and other private activities. These objectives are taken seriously and the political economic resources required for their realization are specified. On the whole, the results are not too different from the ‘planned’ predictions.Chinese state capitalism has integrated into its development project visible social (I am not saying ‘socialist’) dimensions. These objectives were already present in the Maoist era: eradication of illiteracy, basic healthcare for everyone, etc. In the first part of the post-Maoist phase (the 1990s), the tendency was undoubtedly to neglect the pursuit of these efforts. However, it should be noted that the social dimension of the project has since won back its place and, in response to active and powerful social movements, is expected to make more headway. The new urbanization has no parallel in any other country of the South. There are certainly ‘chic’ quarters and others that are not at all opulent; but there are no slums, which have continued to expand everywhere else in the cities of the Third World.
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