B&E | China and the Global Crisis of Capitalism by Norman Markowitz
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B&E | China and the Global Crisis of Capitalism by Norman Markowitz

By Norman Markowitz

THE LECTURE | China and the Global Crisis of Capitalism by Norman Markowitz

First let me say that I am an historian, a Marxist Leninist historian, not an economist. If we are to try to understand what China is trying to accomplish in the present world situation, we should apply Marxism as a guide, looking as Marx and Lenin and Mao Tse-tung did at contemporary events in terms of both history and political economy.
China is trying to do, as I see it, what the Soviet Union sought to do from the early 1920s-that is build socialism in one country, a very large country like the Soviet Union, albeit a very different one. The Soviets from the beginning of their revolution faced a hostile capitalist world, one where the capitalist /imperialist powers fought among each other. They were united only by their commitment to suppress workers movements in their own countries and colonies and quarantine contain the Soviet revolution until they were in a position to destroy the USSR.    After WWII and many revolutions, they finally achieved their goal, but not without a great deal of help from their "friends", the Gorbachev leadership of the CPSU.
The relationship of the major capitalist/imperialist powers toward China in regard to trade and investment is profoundly different than their previous relationships to the Soviet Union throughout its history. But the major capitalist/imperialist states, as I see it, seek to liquidate both Chinese socialism and the leading role of the CCP while  at the same time preventing a future  capitalist China from emerging as a major competitor to them, returning to the old dreams of a "China market" and cheap Chinese labor that they would in effect control, completing the "new world order" they proclaimed when the Soviet Union was dismembered.
So far, they have failed miserably and have even lost ground, because the CCP has maintained its leading role and has implemented serious developmental policies rather than the Potemkin Villages that passed as policies in the Gorbachev era. Nor has the CCP followed the appeasement policy that the Gorbachev leadership advanced toward the Reagan and Bush I administrations and the whole U.S./NAT0 bloc, a policy that after 1989 turned from appeasement to collaboration in the dismemberment of the USSR.
China's strategies, while superficially resembling some Soviet strategies, particularly the New Economic Policy (NEP) of the 1920s are essentially different from those policies.  Of greater importance, China's overall concept of socialist construction is different from the Soviet model. The Soviets during the last years of Lenin's leadership embarked upon the NEP to recover from the devastations of WWI and the ensuing Civil War, and to establish, as a kind of stop gap, a mixed economy that would permit capitalist relations in agriculture and in internal trade.  The NEP would permit the Soviets to import foreign capital and technical assistance for internal development, while controlling what Lenin called the "commanding heights" of industry.
The NEP was never seen as a long-term model for socialism.   Its contradictions and failures, along with fierce factional conflicts in the CPSU led to its elimination  and the establishment of the five year plan economy, based on no private enterprise or market relations,  the rapid collectivization of agriculture, and  the use of the surplus so developed to rapidly develop industry.
This meant, the removal of all internal capitalists, rich peasants and money lenders or Kulaks,  and commercial middlemen/facilitators, directing and profiting from the flow of goods or "NEP men" as they were called. The Kulaks especially had been undermining the policies of the central Soviet government with demands for higher prices for the agricultural surplus and openly ignoring party committees and cadre in the countryside.
The Five Year Plan Planned Economy then became the Soviet model for Socialism, for the rest of Soviet history and the basis for socialist construction globally.  This was true not only in socialist countries led by Communist parties, but also an influential force in countries emerging from colonial domination and seeking a path of development. India under the leadership of Nehru and his daughter Indira Gandhi is the best example of this, although examples can be found in Near Eastern and African countries
Against the background of the World Depression(1928-1939), where the export of capital in effect dried up and global trade plummeted, the Soviet model was, I would say, essential and necessary, with all of its contradictions and destructive distortions, for the rapid industrialization of the Soviet Union, the most dramatic industrialization in history, which was then decisive in the defeat of the fascist Axis in WWII and all that followed, including the Chinese Socialist revolution. While their aid to revolutionary forces was distorted and hugely exaggerated in capitalist propaganda, the Soviet Union through this period served as the principal bulwark against imperialism in all of its forms and a beacon to all progressive and revolutionary forces in the world.
 Although many factors were involved, the failure of the Soviet Union and China, following the triumph of the Chinese revolution, to maintain an economic/political alliance that would serve as the foundation for a global socialist community was a central factor in the deceleration of revolutionary socialist movements from the 1970s on, followed by the "long march to the right" which has characterized capitalist political economy for nearly four decades.
 We do not have time to analyze the policies advanced by the Chinese Communist party in the period from the establishment of the Peoples Republic to today: the initial Soviet influenced model of development; the reasons behind the  collapse of the Sino-Soviet alliance and China's subsequent Great Leap Forward without any Soviet aid in material and human resources which doomed it to failure; the Great Proletarian Cultural Revolution and its Impact; the planned and categorized modernizations; and the concept of a Socialist Market Economy which has develop since the end of the 1970s. None of these policies both in regard to their achievements and failures  were static or empty and the Peoples Republic of China, unlike the Soviet Union, learned from its tactical errors rather than learning to live with them.
Like the Soviet NEP of 1920s, the Chinese Communist Party today is seeking to advance what is essentially a mixed economy strategy, but one where the Chinese are not hampered by a lack of capital or industrial development as was the case of the NEP, which  undermined Lenin's "Commanding Heights" concept. Unlike the Soviets, China even with its huge population and limited internal natural resources, is no longer capital poor, but is a major exporter of high value consumer goods to the capitalist world. Unlike the Soviets from their beginning to their end, China is a creditor nation, holding both a part of the U.S. debt and its own investments in capitalist countries. For China though the Socialist Market Economy is something different than the New Economic Policy of the 1920s or Mikhail Gorbachev's Perestroika, the "paper tiger" policy which dismantled the centrally planned Soviet economy and replaced it with nothing except a shell. China is attempting to establish a viable model for socialist construction.  Its success or failure will be a vital force in determining the fate of both the socialist movement and social economic development globally for generations to come.
Many on the left in the U.S. are indifferent to China, and others are hostile. This I would say should tell them more about themselves than it does about China. 
First, on the social democratic left, those who look toward a mixed economy as a road to social progress, condemn China's internal labor and environmental policies while turning a blind eye to the Social Democratic led mixed economies of Western Europe, which have been in sharp decline as austerity policies and denationalization of industry have become the "new normal." It is ironic, perhaps, to see those who have long hailed Sweden, a very small country, as the "third way" model for the mixed economy/welfare state path, today refuse to see that Sweden and all other West European mixed economies are trapped in capitalist austerity policies while China's mixed socialist market economy continues to advance, moving forward in  terms of the welfare of the Chinese people.
On the far left, those who continue to support the globalization of some version of the Soviet model, ironically groups who derive from Joseph Stalin's most important left adversary, Leon Trotsky, condemn the Chinese Communist Party as they did the Soviet Communist Party as a state capitalist dictatorship and an imperialist force. These groups use phrases like "workers power" and "workers democracy" to call for  the overthrow through revolution of all existing governments, including China's and the spread somehow of a world revolution (the doctrine when Trotsky lived was called "the permanent revolution") rapidly through the world.   In practice, these groups see China as completely capitalist and an Asian version of Gorbachev's Perestroika.
However, China's struggle to construct a socialist market economy and socialism with Chinese characteristics is radically different in both theory and practice than the Gorbachev policies. Whereas Perestroika permitted already established Black Marketers to join with Soviet bureaucrats to siphon off resources from the public socialist planned  economy, to use Perestroika  as a shill to accumulate wealth for themselves and drain ii until it became a shell of itself, the Chinese Communist Party is using the internal capitalist sector  and attempting to use foreign direct investment to pursue dev elopement  along the lines of the socialist market economy, controlling the commanding heights of  internal finance/investment capital, as I understand it.
Whereas Gorbachev, proclaiming a policy of "glasnost'(openness) and using slogans like "more socialism, more democracy," used his position to have the Communist Party of the Soviet Union formally relinquish its leadership role in social construction in 1988, the Chinese Communist party has never dreamed of such  action. While some fairly sophisticated capitalist commentators contend that the CCP is today faction ridden, even these commentators do not see CCP groups forming "united fronts" with open anti-Communist groups, as happened in the Soviet Union with the encouragement of the Gorbachev leadership in the last years of the USSR.
But what is happening in the global economy today? Economists increasingly call the period from 2008 to the present "the great recession."
The Great Depression saw the victory of fascism in Germany, a top five industrialized nation which sought to solve the economic crisis by creating what was a colonial empire in Europe. At the same time Japanese imperialism's embarked on what was essentially a strategy to colonize and  control China, settling Japanese in Manchuria, ruling through occupation zones and local warlords, controlling the entire economy by brutal conquest comparable to the Hitlerite strategy of controlling Europe by brutal conquest and the colonization of Eastern Europe along with the dismembering of the USSR.  This was the old fascist imperialism, decisively defeated in WWII.
Today, fascist movements are being used as a weapon against capitalist dominated Russia, and the danger of a fascist party winning out in a major country, France, is real, thanks to the austerity policies advanced throughout Europe and in the French case by the nominally socialist government, which controls the commanding heights of nothing, proving the truth of Lenin's view of the Social Democrats that the Communist movement broke from as serving the interests of capital. There are also reactionary forces in Japan, whose current Prime Minister, Abe, the grandson of a member of the Tojo cabinet whom the U.S declared to be a "class a war criminal," plays with nationalist sentiments and is praised by U.S/NATO bloc countries for his authoritarian rule. These are real dangers to world peace-a militarized Japan seeking to restore its power in Asia, a xenophobic France, joining perhaps with rightist forces in Germany to "defend Western civilization" from Asians and Africans, with Muslims playing the part for the new fascists that Jews played for the old fascists.
Unlike the Soviet Union, through its history and the Russian Rump of the dismembered USSR today, China is not yet directly threatened by these developments in military terms (although I know that some fear it is).  The U.S./NAT0 bloc, which itself is increasingly weakened by the divisions between U.S. and EU capitalist states, is pursuing dangerous anti-Chinese "containment" policies, reminiscent of the anti-Soviet cold war policies we know so well.
First, the policy of using Vietnam as an anti-Chinese containment state, exacerbating conflicts between Vietnam and China by bringing Vietnam into the TPP is an excellent example.
If we remember or want to remember Lenin's theory of imperialism, these various trade/investment alliances, in the name of "free trade" and development in reality are, like the creation of great monopolies such as Standard Oil, U, S. Steel, and General Electric more than a century ago in the U.S, the establishment  of syndicates of capital that will absorb or destroy smaller competitors through collusive agreements and then  fight for global control of markets, raw materials and labor pools with rival  large syndicates.  Eventually, the creation of these syndicates and economic alliances led to military alliances to re-divide the globe, to militarization and world wars which were, using the technologies and "global reach", the greatest wars in history. This could, even in the present nuclear age, happen again.
We can discuss China's economic achievements and failures, its commitment to developing its mixed socialist market economy policy, "socialism with Chinese characteristics" which potentially offers the people of the world a model of socialism, what the Soviets used to call "real existing socialism," that will supplant the Soviet model. 
Whether China will succeed or fail will as I see it depends on the leadership of the Chinese Communist party in controlling the flow of investment internally. This will mean using rather than being used by foreign direct investment, and developing economic policies toward the predatory imperialist powers of the U.S. NAT0 bloc which will discourage these states from escalating political or military conflicts against China, developing an anti-Chinese military alliance in Asia, and  engaging in the sort of reckless actions that they currently are toward Russia in Ukraine. In capitalist Russia, the remnant of the former Soviet Union, they achieved through Gorbachev and Yeltsin the victory that they still dream of gaining over China, which at present remains an impossible dream.
China would like to play the role that the U.S. did from the Civil War to the end of WWII, not the role that the Soviet Union played from the Revolution to its dismemberment.  I mean China would like to profit from economic relationships with the capitalist states but stand a world apart from their political/military alliances, and thus profit from the divisions among its capitalist imperialist blocs, avoid the global costs, especially the military costs of its rivals, and export goods as against capital.  It does not wish to be the beacon and center of a global revolutionary socialist movement, which the Soviets were, combining a commitment to construct socialism in one country with a commitment to the building of global revolutionary socialism.
But I would suggest that in this difficult time China, if it is to advance its model of socialist construction, must try to do something of both. Instead of merely engaging with governmental and business power structures, organization men and institutional managers, it should begin to engage more with the people's movements in the world which want what it wants, protection and rights for labor and the people, a road out of poverty, exploitation and oppression.
China must seek, for its own defense, to be a deterrent to the abuses of the U.S./NAT0 bloc not as the Soviets were at the center of a military alliance engaged in arms races with the U.S. NAT0 bloc but as a force for peace and at the same time a force against the more predatory examples of jungle capitalism through the world.
The best way it can overcome the propaganda of its left critics is to identify itself with the movements in the world to raise minimum wages in countries like the U.S., protect the environment and save public education.
At a time when social democracy is collapsing in Western Europe and the Democrats in the United States are doing business as usual politics that they expect will put the organization woman Hillary Clinton in the White House, China by identifying itself, not with dogmatism and the sectarian positions of its left critics, but with labor and peoples movements can advance its own vision of socialist construction and at the same time begin to, to paraphrase Mao Tse -tung, both struggle and win the ideological battles of our time.
Let me conclude by saying  that China, regardless of what Mao Tse-tung used to call the running dogs of capitalism and imperialism and the left tails to some of those dogs,  has been advancing while the major capitalist states have been stagnating and declining.  China  is becoming not only more prosperous as it develops among its people many millions of technical and professional  workers, but it is also becoming a more humane society sensitive to human needs while the capitalist societies, which both do business with it and smugly mock, it become more desensitized, and fragmented in their thinking and acting.
There is a real danger developing in the world out of the global capitalist crisis. China's role relative to the nations of the U.S./NATO bloc has been and continues to be a positive a force for both peace and an emerging socialist alternative to contemporary capitalism. 
This lecture was presented by the author at the Left Forum At CUNY in June 2015 and licensed under Creative Commons 3.0 United States

About The Speaker:

Norman Markowitz is a Contributing Editor of Political Affairs . He has Ph.D., University of Michigan, 1970,M.A., University of Michigan, 1967, B.A., CCNY, 1966, , And teaches history at Rutgers University since 1971