Tags: marxism

The Nazi Invasion of the USSR was NOT Like their Invasion of Western Europe

This is a guest post by Denis Churilov who was born in St Petersberg but now lives in Australia.

I think it’s necessary to say a few things about the Nazi invasion of the Soviet Union and explain why most Russians take such topics very seriously, even nowadays. 

Just want to begin by telling a few documented stories to illustrate how Nazis treated the Soviet people on occupied territories. 

Mikhail Lukinov, who was taking a part in counter-attack under Moscow in December 1941, for instance, describes in his memoirs the aftermath of German occupation he witnessed in liberated villages, and all the stories the locals told him back then. In particular, there was a story about Nazis who stayed in a hut with a local family who had an infant child. At nighttime, the child was crying, the mother couldn't calm him down. One of the Nazi soldiers got so irritated that he got up and killed the baby by piercing his body with a bayonet. Then the soldiers pushed the crying mother, who was barely dressed, outside into the freezing cold, shut the door and went back to sleep.

Lots of similar documented stories like that of Nazis killing small children, by shooting them, bashing their head against the wall, throwing them out at night time into subzero temperatures, etc, simply for being too loud and/or interfering with their rest. Many of those accounts were later officially presented at the Nuremberg Trials. 

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China's“Socialist” Investment in Australia is No Different from that of Other Capitalist Wolves

IF IT WALKS LIKE A DUCK AND QUACKS LIKE A DUCK...
In Australia we have a quaint saying: If it walks like a duck and quacks like a duck, it's a duck. Most of this article consists of an imperfect and incomplete description of Chinese investment in Australia. I defy anyone to explain how Chinese “socialist” investment is any different from investment by the US, UK or Japan.

At the moment China is the fifth largest investor in Australia. It has also recently become the second largest foreign owner of Australian land. It has only 2 million hectares less than the UK. Much of the investment is not by China's State Owned Enterprises (SOEs). These are gradually being turned into privately owned companies as required by the Communist Party of China. While most investors are private individuals or privately owned companies, the investments are guided by government policies, such as the One Belt, One Road Initiative (OBOR). Investments clearly tied to the OBOR policy are the acquisition of the Ports of Newcastle, Melbourne and Darwin. Newcastle is the largest coal port in the world, Melbourne is Australia's largest port, and Darwin is important for animal exports. Other areas of Chinese investment include mining, real estate, infrastructure, and electricity.

It is important to realise that Chinese investors often invest jointly with foreign investors or Australians. In other words, they invest in Australia in the same way as any other foreign capitalist investors. They put money into Australia in order to take money out or use their profits to expand into other areas. Chinese investment is not a socialist swan but a capitalist duck. The discussion of Australia's wine exports to China shows that like most other countries, China's trading relations are connected to broader political concerns.

Investment in Australia:(1)

The following chart shows the pattern of foreign investment in Australia between 2015 and 2017, recorded in A$billion.



For some reason the information from the Australian Department of Foreign Affairs and Trade separates the investment from Honk Kong and the People's Republic of China even though they have been united for years. Adding the two together, the total Chinese investment in Australia is A$181.6 billion, which makes it the fifth largest investor in this country. Between 2012 and 2017 the most rapid increases in investment are 21.6% for China and 17% for Hong Kong. Even though the increase for China is the highest over this three year period, investment fell considerably from 2016 to 2017. According to a recent report by KPMG:

Chinese government regulations which were implemented to address concerns about speculative, irrational global investments and massive capital outflows have impacted the Australia result, as have recent changes to Australia’s foreign investment regulations for strategic infrastructure assets.

Australia remains globally competitive for attracting Chinese investment, retaining its position as the second largest recipient of accumulated Chinese investment – only behind the United States – with just under USD 100 billion since 2008.

Chinese investors continue to be drawn to projects in Australia that relate to growing Chinese consumer demand and Chinese government priority initiatives – health and wellbeing, tourism and lifestyle, real estate, technology, services and a continuing demand for mining commodity resources.

The breakdown of Chinese investment in 2017 and 2016 was:

Mining - 35% (4% in 2016)
Real Estate – 33% (36% in 2016
Healthcare – 12% (9% in 2016)
Food/Agribusiness – 8% (Same in 2016)
Infrastructure – 4%. (28% in 2016 )

Private investors accounted for 83 percent of the Chinese deal volume and 60 percent of deal value in 2017, up from 78 percent in number and 49 percent in volume in 2016. Chinese SOE investment dropped in both the number and value of investments for the first time since 2014.

The breakdown of Chinese investment varies from year to year depending the projects they are interested in. It will be more useful to look at the important areas individually.

Mining:
The mining sector saw 12 deals announced in 2017 totalling AUD 4.6 billion, a rise of 448 percent from 2016. This large increase was mostly driven by the AUD 3.4 billion acquisition of Rio Tinto’s thermal coal assets by Yancoal.

Commercial Real Estate:
This remained an important sector for Chinese investment in 2017, accounting for AUD 4.4 billion of investment, with Australia attracting 11.5 percent of China’s total global overseas real estate investment.

Agricultural land:

Chinese investment in land is very important. In 2017 UK owned the largest amount of land with 16.4 million hectares, followed by China with 14.4 million hectares. By contrast US ownership has fallen to 2.6 million hectares. The rise was largely due to the Australian Outback Beef joint venture between mining magnate Gina Rinehart and Chinese partner Shanghai Cred buying the 10 million hectare S Kidman & Co cattle empire.(2)

Ports:
Ports are a vital component of Australian trade infrastructure, underpinning 20 percent of Australian GDP.
In 2014 the world's biggest coal port, the Port of Newcastle, was sold in a deal worth A$1.75 billion. A consortium made up of Hastings Funds Management and China Merchants made the successful bid for the New South Wales Government asset.(3)
A consortium of global and domestic funds, backed by investors including China Investment Corp, agreed to buy Melbourne, Australia’s busiest port, for A$9.7 billion.(4)
In 2015 the Chinese Landbridge corporation bought a 99 year lease for the Port of Darwin for A$506 million.(5) The Chairman of Landbridge Ye Cheng sees this as part of China's One Belt , One Road initiative.(6) He also bought the Brisbane-based gas producer WestSide Corporation in 2014.(7) Landbridge also paid US$900 million for a port in Panama which fits in the One Belt, One Road plan.(8)

Infrastructure:
Chinese investment in large Australian infrastructure assets continued in 2016 at a record level. Chinese companies with technical expertise and financing capabilities are keen to work with Australian and international partners in infrastructure provision. China’s comprehensive and global "Belt and Road" Initiative ties into their investment activities in Australia. Chinese investment in infrastructure comprised two very large deals with minority shares taken by Chinese investor CIC Capital in Asciano Limited and the Port of Melbourne.

Electricity:
EnergyAustralia is owned by Hong Kong-based China Light and Power.
Cheung Kong Infrastructure/Power Assets owns a 51-per-cent share, on a 200-year lease, in SA Power Networks Electricity Distribution network.
Chinese Government-owned State Grid Corporate has holdings in the following jurisdictions:
In the ACT the government owns 50% of ActewAGL Distribution Ltd. and State Grid Corporate holds a 30 per cent share.
In Victoria State Grid Corporate holds shares in three of the five electricity distributors in that state.
In South Australia, State Grid Corporation has a 46.5 per cent share of ElectraNet, the transmitter in SA.(9)

Australian Wine Exports:
While the focus of this article is on Chinese investment in Australia, this year an interesting conflict has appeared in one area of Australian exports to China, namely wine. In the last few years wine exports to China have rapidly increased to $A1 billion annually. However earlier this year Prime Minister Turnbull complained about Chinese political interference in Australia and took steps to develop tougher laws aimed at cracking down on foreign interference in Australian politics. After this announcement it seems Australian wine now take two months to clear customs in China while wine from other countries only took two weeks. Major exporters such as Treasury Wine Estates and McWilliams Wines as well as Wolf Blass, Penfolds and Rosemont have reported such delays. Global Times, among a few Chinese newspapers, is calling for China to slash Australian imports to teach Australia a lesson.(10)


This article is one part of four articles on Chinese "Socialism"


China's Transition from Socialism to State Controlled Capitalism
https://australianvoice.livejournal.com/39112.html

China's State Controlled Capitalism is Not Very Different From Capitalism in the West
https://australianvoice.livejournal.com/39306.html

The Damage Caused by China's “Socialism” to Workers Around the World
https://australianvoice.livejournal.com/39545.html



Footnotes:

1. Much of the information on Chinese investment in Australia comes from the three sources given below. Where there is another source of information it is given in the other footnotes.
https://dfat.gov.au/trade/resources/investment-statistics/Pages/statistics-on-who-invests-in-australia.aspx;
https://home.kpmg.com/au/en/home/media/press-releases/2018/06/chinese-investment-in-australia-remains-strong-despite-global-outflow-slowdown-12-june-2018.html; and
https://assets.kpmg.com/content/dam/kpmg/au/pdf/2017/demystifying-chinese-investment-in-australia-may-2017.pdf

2. https://www.weeklytimesnow.com.au/agribusiness/decisionag/china-to-become-biggest-foreign-owner-of-australian-farmland/news-story/ba27742491380f55568bc3d5ada296cb

3. http://www.abc.net.au/news/2014-04-30/nsw-government-sells-port-of-newcastle-for-1.75-billion/5421800

4. https://www.reuters.com/article/us-australia-privatisation-ports/australian-port-sold-for-7-3-billion-to-consortium-china-fund-among-backers-idUSKCN11P04O

5. https://www.theguardian.com/australia-news/2016/dec/18/how-the-sale-of-darwin-port-to-the-chinese-sparked-a-geopolitical-brawl

6. https://www.afr.com/news/world/asia/how-landbridges-purchase-of-the-darwin-port-killed-perceived-wisdom-on-china-20170706-gx66r8

7. https://www.theguardian.com/australia-news/2016/dec/18/how-the-sale-of-darwin-port-to-the-chinese-sparked-a-geopolitical-brawl

8. https://www.ft.com/content/b4d35440-5a68-11e7-9bc8-8055f264aa8b

9. http://www.abc.net.au/news/2016-08-21/chinese-investment-in-the-australian-power-grid/7766086

10. https://www.thedrinksbusiness.com/2018/06/pernod-ricard-facing-wine-delays-in-china/; https://www.acbr.com.au/treasury-wine-facing-china-customs-delay-amid-diplomatic-rift; and https://www.smh.com.au/politics/federal/pressure-on-turnbull-as-china-puts-a-cork-in-wine-exports-20180605-p4zjns.html

The Damage Caused by China's “Socialism” to Workers Around the World


Apart from the control exercised by the USSR over Eastern Europe, socialism in the USSR had little direct influence on the jobs of workers around the world.(1) The case of socialist China from Liberation to the death of Mao is the same. Workers gained a powerful demonstration that it was possible to create a society without capitalist exploitation, but the existence of these societies had no impact on the economies of their own countries.

By contrast the rise of the “market socialism” in China during the last 40 years has produced massive changes throughout the world. An ever increasing flow of basic consumer items, electronic equipment, cars, steel, etc. has helped to destroy jobs in all countries in the West and many more in the “developing world”. Marty Hart-Landsberg and Paul Burkett's book China and Socialism looked at this question more than 15 years ago.

"They regard the hypergrowth of the Chinese economy as something that cannot be viewed in isolation from the development requirements of neighboring states. As should be obvious to anybody who lives under capitalism, there can only be winners and losers. If China is "winning" today - even on a highly distorted basis - other nations have to lose. With a race to the bottom, foreign investment will always be persuaded to leave some place like Mexico and flow to China. So, looking at capitalism as a world system, China's gain can only be understood in terms of some other country's loss.


"In Malaysia, for example, 16,000 jobs have disappeared from the country's high tech production hub as new investment flows to China. A J.P Morgan report states that China's growth in high technology has 'eroded' Singapore's status as an electronics exporter. South Korea has found it profitable to relocate in China as well where militant unionized workers are not a problem. Samsung, Daewoo and LG Electronics now make half their goods outside of Korea, many in China.


"Although Japan is often seen as a strategic partner for China, the benefits of such an alliance will be lost no doubt on Japanese workers who will increasingly see their jobs disappear to China. Under newly instituted WTO rules, it will be much easier for Toyota and company to relocate where they can save 10 to 20 percent on manufacturing costs. The World Bank predicts a major contraction of automobile production in Japan, just around the time when a 10 year old slump appears to be ending."(2)


David Harvey also notes that “Mexico lost 200,000 jobs in just two years as China (in spite of NAFTA) overtook it as the major supplier of the US market in consumer goods.” He reports the same trends noted above:

“During the 1990s China began to move up the value-added ladder of production and to compete with South Korea, Japan, Taiwan, Malaysia, and Singapore in spheres such as electronics and machine tools. This occurred in part as corporations in those countries decided to move their production offshore to take advantage of the large pool of low-cost and highly skilled labourers being churned out by the Chinese university system.”
(3)

Call it what you want, socialism or capitalism, the last 40 years of China's history can be seen as a “success” only by using the values of neo-liberal and globalist economics. We saw in a previous article that the level of inequality in China rose rapidly from 1994 to 2010, and has only been changed by abandoning some of the neo-liberal dogmas used to create a giant pool of workers forced to work for very low wages.(4) The neo-liberal/globalist paradigm for the whole world is one giant interconnected system in which the task of each country is to find and/or develop exports which are cheap enough to be competitive in the world market. These commodities and/or services – like call centres – can be bought or used by consumers or companies around the world.

In this neo-liberal utopia a country like China is a perfect model for the rest of the world to follow. But the “world market” has a deeper purpose, to drive down wages everywhere by a combination of shifting work to low wage countries or allowing people from low wage or impoverished countries to have unrestricted access to work in countries which do not have low wages – know as the open borders policy. Whether you want to think of China as socialist or not, the way their economic policies fit into the “world market” is obviously of absolutely no benefit to the workers in the rest of the world. Some of them may have jobs, but they will be jobs which will be at or below subsistence levels, just the sort of jobs capitalists are always looking for. This is why I said the policies of the USSR had virtually no effect on the workers in the rest of the world. They had virtually no effect on workers compared with the effect China's policies have had.

The following passage sums up my central point:

“When confronted by Argentina’s worries about cheap Chinese imports destroying the vestiges of its indigenous textile, shoe, and leather industries that began to revive in 2004, the Chinese advice was simply to let such industries die and concentrate on being a raw material and agricultural commodity producer for the booming China market. It was not lost on the Argentines that this was exactly how Britain had approached its Indian empire in the nineteenth century.”
(5)

So what is new here? The Chinese answer to the question put to them is essentially the globalist strategy explained above. The British wanted to wipe out the domestic manufacture of cotton so they could replace it with their own manufactures. Now in 21st century globalism expects most countries like Australia and Argentina to produce the raw materials the countries like China cannot provide for themselves. Few people seem to realise that globalism dictates to each nation how they are to run their economies without any regard to the impact of these policies on the people living in these countries. Countries must fit into the globalist New World Order. There is no alternative, or so we are told by today's dispensing economic wisdom.

There is another way to look at this question. The workers in China expend their labour power to create commodities for sale in other countries. What that means is that they do not benefit themselves from the fruits of their labour. The benefits are enjoyed by the people in the importing countries. Under Mao's policy of self-reliance, the fruits of the labour of Chinese workers were enjoyed by themselves and other Chinese who could buy and use the products they produced. The income derived from the export of these commodities is divided between the workers, their employers and the middlemen who handle the trade in these commodities.

This show us the real alternative for all countries, even China. There is nothing wrong with international trade, but each nation must be able to plan and carry out its own economic plans which should focus on the well-being of the people who live there.


This article is one part of four articles on Chinese "Socialism"


China's Transition from Socialism to State Controlled Capitalism
https://australianvoice.livejournal.com/39112.html

China's State Controlled Capitalism is Not Very Different From Capitalism in the West
https://australianvoice.livejournal.com/39306.html

China's“Socialist” Investment in Australia is No Different from that of Other Capitalist Wolves
https://australianvoice.livejournal.com/39849.html





Footnotes:

1. Some will say that Soviet policy with respect to Spain and Nazi Germany was in the end detrimental to the working class in Spain, Germany and France. Even if this is true, it is not relevant to the point I wish to make here.

2. Martin Hart-Landsberg and Paul Burkett, "China and Socialism: Introduction", https://monthlyreview.org/2004/07/01/introduction-china-and-socialism/

3. David Harvey, A Brief History of Neoliberalism, Oxford University Press, 2005, https://erenow.com/common/a-brief-history-of-neoliberalism/6.php

4. China's State Controlled Capitalism is Not Very Different From Capitalism in the West,

5. David Harvey, A Brief History of Neoliberalism, https://australianvoice.livejournal.com/39306.html

China's State Controlled Capitalism is Not Very Different From Capitalism in the West



WHAT IS THE NATURE OF THE CONFLICT BETWEEN CHINA AND THE UNITED STATES?
We can all see a growing antagonism between China and the United States. One area of conflict is over the use of the US dollar in world trade. Because the US dollar is essential for payments between nations, giving it the status of the world's reserve currency, the US is able to harm other nations by restricting their use of the US dollar for trade. A current example is the way the US wishes to block Iran's sale of oil and gas to China by not allowing its dollars to facilitate such trade. The EU is trying to find a way out of this problem, and both Russia and China are working to set up a financial system which does not depend on the US dollar. When an alternative system has been established the US will have lost one of its important mechanisms for exercising power over the rest of the world.

Both sides of this conflict would like us to understand it as a conflict between different kinds of economic systems or different sets of important values. The previous article has explained how what once was a genuine socialist system in China has been changed into a powerful neo-liberal state controlled capitalist system.(1) The only difference is the way that the owners of the means of production relate to the state. In the West, the owners of the means of production exercise their ownership and control via a web of interconnected banks and large corporations who select and advise the political leaders in the US, UK, the EU, Australia and many other countries. In China the owners of the large corporations are answerable to the leadership of the Communist Party of China which formulates policy and controls the banking system. In a simplified comparison, we can say that in the West the banks control the state, while in China the state controls the banks.

Anyone who wishes to believe that this difference constitutes a conflict between the capitalist West and socialist China needs to explain the importance of this difference to the workers in Australia who have seen their jobs disappear in the last few decades. They all know that capitalists cannot resist the urge to move their activities to countries with the lowest wage levels. Socialist countries focus their economies on looking after the people living in that country. People before profits.


NEO-LIBERALISM IN THE WEST
There are two important ways that the form of neo-liberalism developed in China is different from the neo-liberalism introduced in the West. When the basic doctrines of neo-liberalism were formulated by the members of the Mont Pelerin society in the late 1940s they took the form of two interrelated themes. Both themes were focused on freedom. The early neo-liberals were reacting to to recent phenomena. The first theme was political freedom, and arose from a reaction against the rise of Nazi Germany, Fascist Italy and the socialist USSR, all of which created powerful states to control their populations. This was feared by the political theorists in the West who wished to see a society with much greater personal and political freedom.

The second theme was economic freedom. This arose arose from a reaction against Keynsian economics and/or state planned economies which had been adopted by most countries in the world after WWII. In the democratic West, including the US, UK and Western Europe, governments adopted measures such as limiting the power of banks, nationalising industries and concentrating their economic policies on creating full employment. Of course in the USSR and Communist China, there was a much stronger form of state control of the economy. Some of these early neo-liberals even claimed that economic freedom helped create and sustain personal and political freedom. We have seen, however, that economic freedom in the West has brought with it the elimination of both the personal and political freedoms once prized in the West.

While a few of the founding fathers of neo-liberalism may have been concerned with personal and political freedom, the real legacy of neo-liberalism in the West today is economic freedom or the “free market”. In fact most sectors of the economy in the West are dominated by cartels. While these are totally at odds with the idea of a “free market”, these cartels are of no more interest to neo-liberals than the powerful snooper states which have developed along side of the cartels. The only economic freedom neo-liberals in the West really care about are “free trade” between countries, where there must be no restrictions on what can be imported into any country, and “free markets” in which there are no restrictions on foreign investment and take-overs. This means large firms can invest in anything anywhere they find profitable and buy out any rivals.


CHINA'S "MARKET SOCIALISM" IS DEBATED AT THE WORLD TRADE ORGANISATION
The by contrast, the CCP places limits both on Chinese investors and foreign investors in violation of the “free market” principles demanded by neo-liberals in the West. If we step beyond the nearly invisible world of the left – invisible at any rate from the tops of our sky-scraper cathedrals to imperialist success – virtually all investors and market analysts in the mainstream neo-liberal press assume China is a de-facto “market economy”. Othewise, why would they think it was a good place to make a profit?

While the nature of the Chinese economy is not debated in the mainstream media, there is actually a significant dispute about this topic going on in the World Trade Organisation (WTO). The problem is that while China has been a member of the WTO for 15 years, it has not been allowed full membership. This can only be granted to countries deemed to be “market economies”. Currently the US and the EU argue that China is not a market economy. According to Forbes:

“They (the US and EU) remain implacably opposed for the simple reason that this would restrict anti-dumping measures against China’s vast export surplus. Equally, China has made no inroads in persuading either the U.S. or the EU that it is, in fact, a market economy, doing almost nothing to ensure EU or U.S. companies actually gain market access to China without endless conditions and habitual delays. Specifically, China continually promises open market access for EU and U.S. exporters, but then frustrates them in practice, demands investment takes place through joint ventures, often with SOEs, and routinely insists upon technology transfer.”
(2)

The Forbes article begins with a rather blunt dismissal of the US/EU claims: “China’s status as a 'market economy' is once again under dispute. Not, of course, by anyone who knows anything about the Chinese economy.” For the US and the EU the Chinese economy is not as open as they would like. There are restrictions on access which they don't face in countries like Australia.


THE WEST HAS A NEO-LIBERAL STATE WHILE CHINA HAS STATE NEO-LIBERALISM
The basis of the US/EU objection to China joining the WTO is the role of the state in the Chinese economy. In the West, neo-liberals demand the state be small with little or no role in the economy. In practice this means that the giant corporations themselves control the economy and the government. Politicians are “democratically elected” puppets of the largest banks and cartels. In China the Communist Party has gone to great lengths to stop the newly formed capitalist class in China from controlling economic and political decisions. This means that foreign corporations cannot control economic and political decisions either. There is one element of Marxist theory the Chinese have not abandoned: either the state controls large corporations or the large corporations control the state. This is an unstable situation, but the Chinese leadership are all too well aware of the way foreign corporations politically control most countries in the world.

Just as the Chinese state is not a typical neo-liberal state, its economy does not follow all of the policies demanded by the neo-liberals in the West. While the state in China is working to minimise its ownership of all enterprises, the CCP still maintains control over major investment decisions and lending by banks. For the neo-liberals in the West this is perhaps the worst economic sin a government can commit. Another difference is that the Chinese state has used a Keynesian strategy to deal with the unemployment caused by disbanding the rural communes and the collapse of many SOEs as they were privatised. Since 1998 the CCP had sought to confront their unemployment problem through debt-financed investments in huge mega-projects to transform physical infrastructures. For neo-liberal economists in the West this is seen as the sin of "deficit spending". China has undertaken very ambitious projects like the Three Gorges Dam to divert water from the Yangtze to the Yellow River. Astonishing rates of urbanization (no fewer than forty-two cities have expanded beyond the 1 million population mark since 1992) require huge investments of fixed capital.

New subway systems and highways are being built in major cities, and 8,500 miles of new railroad are proposed to link the interior to the economically dynamic coastal zone, including a high-speed link between Shanghai and Beijing and a link into Tibet. The Olympic Games also prompted heavy investment in Beijing. Furthermore, China is planning to build an interstate highway system more extensive than that in the US, and practically every large city is building or has just completed a big new airport. At last count, China had more than 15,000 highway projects in the works, which will add 162,000 kilometres of road to the country, enough to circle the planet at the equator four times.(3)

Alvin Y. So and Yin-wah Chu give an account of how other neo-liberal policies have been abandoned after 2006. If these policies look like “socialism” to people today, it is only because they were born after the changes forced on the capitalists after WWII were dismantled. Chinese capitalism is adopting the concessions used by capitalists in the West to revive their system at the war's end.

“In contrast to the neoliberal doctrine which calls for the dismantling of the welfare state, the Chinese party-state under Hu/Wen leadership has recently presented a new policy of building a new socialist countryside and a harmonious society in 2006 . The above policy is significant because it could signal a change of ideological orientation of the Chinese state. Whereas the pre-2006 Chinese party-state adopted a neoliberal orientation, it is now moving toward a more balanced one between economic growth and social development. While market reforms would continue, this new policy indicates that the state would play a more active role in moderating the negative impacts of marketization. In the new policy, the state will need to include ―the people and environment in its developmental plan, and not just focus narrowly on GNP indicators and economic growth.

“Thus the new policy advocates a transfer of resources from the state to strengthen the fiscal foundation of the countryside. Not only was the agricultural tax abolished to help relieve the burden on farmers, but the state increased its rural expenditure by 15 percent (to $15 billion) to bankroll guaranteed minimum living allowances for farmers, and an 87 percent hike (to $4 billion) for the health-care budget. These policies indicate a massive infusion of funding from the state onto the peasants and rural areas. In addition, there is a de-commodification of human services. Rural residents would no longer have to pay many miscellaneous charges levied by schools; fees at primary schools will be abolished as part of a nationwide campaign to eliminate them in the countryside for the first nine years of education. The state will also increase the subsidies for rural health cooperatives that will be available in 80 percent of the rural counties by 2008. For now, rural residents have to pay market rates at the villages‘ private clinics and most of them do not even have medical insurance and spend more than 80 percent of their cash on health care. Furthermore, the new policy is aimed at reducing social inequality, especially the widening gap between the countryside and the city. Thus, pensions are to be made available for everyone, not just those enjoying a privileged status as registered urban residents. Over the past two years, the state has also been promoting the spread of Minimum Living Standard Assistance for the rural population. This is potentially a highly significant development, opening up for the first time the real possibility of instituting a social safety net that covers the whole of the population, whether urban or rural”(4)

Noting that China's economy under neo-liberalism has been far more successful than in the West, Alvin Y. So and Yin-wah Chu have concluded that “China has pursued a different mode of neo-liberalism – what we called state neo-liberalism – from the mainstream neo-liberalism that is promoted in the Washington Consensus model.”(5) With state neo-liberalism, the state “interferes” in the economy by controling major investment projects and deficit spending, while adopting all the other neo-liberal policies.

The following chart gives us an interesting way to look at the Chinese economy in a global perspective.(6)



In 2017 the Chinese debt to income (=gross domestic product (GDP)) ratio rose to 266 percent.(7) We can also see that Australia and many of the major NATO countries have debt to income=GDP ratios as large or larger than China. The difference is that while the absolute size of the Chinese debt is small, it has the same size relative to its income as many major Western economies. In contrast, China has the same per capita income as Brazil, South Africa and Indonesia, but has the same debt to income level as the major Western countries. In other words, it is unique in having a low per capita income and a high ratio of debt to income, just as Saudi Arabia is unique with its very high per capita income and its low debt to income level.


WHY CCP MANAGEMENT OF LOANS AND INVESTMENT IS NOT SOCIALISM

Some might be tempted to believe that the significant role played by the CCP in the economy show that China is after all socialist. As we saw in the previous article: “A share of stock is merely a title of ownership to a corresponding portion of the surplus-value to be realised by it.”(8) The Chinese state does not own the newly liberated State Owned Enterprises (SOEs). They are owned by their stockholders. Some of the people who own stock in these SOE may be members of the CCP and as individuals have a role in state decisions, but the state itself does not own the means of production.

Oddly, much the same situation can be seen in the US today. It is well known that leaders in banking and other sectors of the economy occupy powerful positions in the state apparatus of the US. There is a “revolving door” between the largest companies and the highest offices. Clearly these individuals have almost total control the US government foreign and domestic policy, but the US state does not own these giant corporations. So if anyone thinks the dual role of CCP members in the state economy and the stocks they hold as individuals or families shows China is socialist, they same must be said for the US itself.


CHINA'S GINI MYSTERY
An admittedly imperfect but widely used measure of social inequality is called the Gini coefficient. Here is a graph of the changes in China's gini coefficient from 1994 to 2013. Remember that the higher the number the higher the level of inequality.(9)



There are an number of calculations of China's Gini coefficient. Because of these differences I will not compare China's rating with other countries. Here I have relied on only one study which is based on the following research paper: BOFIT Discussion Paper, Ravi Kanbur, Yue Wang and Xiaobo Zhang, The great Chinese inequality turnaround.(10)

China's Gini mystery is this: How can a socialist country generate almost two decades (or more) of increasing social inequality? My answer of course is that China has been dismantling its formerly socialist relations of production for the last 40 years. The purpose of neo-liberal policies where ever they are introduced is to concentrate wealth in the hands of those with the most wealth. Even in 1994, China's inequality as measured by the Gini coefficient was much better than it is now. It has a long way to go to attain the level of inequality it had 25 years ago.

Perhaps it is useful to cite the conclusion of Ravi Kanbur, Yue Wang and Xiaobo Zhang, authors of a 20 page study of income inequality in China:

“We have argued in this paper that the long period of inequality increase in China is coming to an end. The data, seen from different perspectives, seem to indicate a turnaround towards the latter part of the 2000s. The explanations for this turnaround need to be explored further, but there is prima facie evidence of economic forces and government policy tightening labor markets in rural areas, together with government transfers and social policy mitigating inequality in urban and rural areas, which may explain the observed trends. This of course, raises the further question of why government policy changed over a 20-year period from allowing inequality to increase to mitigating it. The political economy of the Chinese state (Wong, 2011) may provide an explanation, but that takes us beyond our present remit. Although China’s inequality has come to a turnaround, the level is still rather high compared with many countries. More efforts are still needed to keep the momentum.”(11)

The authors ask “why government policy changed over a 20-year period from allowing inequality to increase to mitigating it.” I would speculate that the CCP realised their neo-liberal policies were producing a level of unrest that might threaten social stability and and with it their rule. This forced them to depart from the hard-line neo-liberal policies they introduced since 1979. The policies explained by Alvin Y. So and Yin-wah Chu in a previous section explain how the growing inequality was reversed.

In contrast to the leaders of the CCP, who have broadcast their "reforms" in well publicized policy announcements, the leaders of the developed economies of the West have introduced neo-liberal policies more slowly, carefully and secretly. In this way most of the population fail to appreciate that their current situation has come from many unnoticed changes. These changes have created a class of super-rich who are now on the way to controlling the whole world under the policy of globalisation. This policy removes all national sovereignty and the ability of people to use the power of their government to stop giant banks and corporations from doing anything they want to in pursuit of maximising their profits.


This article is one part of four articles on Chinese "Socialism"

China's Transition from Socialism to State Controlled Capitalism
https://australianvoice.livejournal.com/39112.html

The Damage Caused by China's “Socialism” to Workers Around the World
https://australianvoice.livejournal.com/39545.html

China's“Socialist” Investment in Australia is No Different from that of Other Capitalist Wolves
https://australianvoice.livejournal.com/39849.html




Footnotes:

1. China's Transition from Socialism to State Controlled Capitalism, https://australianvoice.livejournal.com/39112.html

2. https://www.forbes.com/sites/douglasbulloch/2017/12/08/china-is-not-a-market-economy-and-the-wto-wont-survive-recognising-it-as-such/#2aa0877e37fc

3. David Harvey, A Brief History of Neoliberalism, Oxford University Press, 2005, https://erenow.com/common/a-brief-history-of-neoliberalism/6.php

4. Alvin Y. So and Yin-wah Chu, "The transition from Neoliberalism to State Neoliberalism in China at the turn of the 21st Century", https://www.researchgate.net/publication/304795946_The_Transition_from_Neoliberalism_to_State_Neoliberalism_in_China_at_the_Turn_of_the_Twenty-First_Century

5. Ibid.

6. https://www.bloomberg.com/news/articles/2018-02-08/sizing-up-china-s-debt-bubble-bloomberg-economics

7. https://www.bloomberg.com/quicktake/chinas-debt-bomb

8. Karl Marx, Capital, Vol III, Part V, Ch XXIX.

9. https://qz.com/937137/chinas-extreme-income-inequality-appears-to-be-improving-after-decades-of-deterioration/

10. BOFIT Discussion Paper, Ravi Kanbur, Yue Wang and Xiaobo Zhang, The great Chinese inequality turnaround. Pdf available here: https://helda.helsinki.fi/bof/bitstream/handle/123456789/14667/dp0617.pdf;jsessionid=4F2E45518BA4A14CB84E84F7A9A72726?sequence=1

11. Ibid.

China's Transition from Socialism to State Controlled Capitalism

Marxism 1894


Marxism 1994


After the changes introduced by Deng Xiaoping, China has continued to resist control by the US Empire and has increased the living standards of the Chinese people. China can now challenge the West in advanced technology and, unlike the application of neo-liberal policies in Russia, the Chinese Communist Party has maintained its political control. Many admire this success in the last 40 years, but is China still a socialist country?

This article will discuss the changes in China's relations of production and its ideology in the last 40 years. We will see how China's recent economic development is a shining example of neo-liberal capitalism, not socialism. As Harvey explains: “By taking its own peculiar path towards ‘socialism with Chinese characteristics’ or, as some now prefer to call it, ‘privatisation with Chinese characteristics’, it managed to construct a form of state-manipulated market economy.”(1)


BACKGROUND: CHINA'S “SUCCESS” IS BASED ON NEO-LIBERALISM IN BOTH THE WEST AND CHINA
China's success is usually measured in capitalist and neo-liberal terms: China's GDP has grown rapidly and it has an ever increasing volume of exports to the rest of the world. It can now begin to rival the West in advanced technology. Many are in awe of the giant skyscrapers and traffic jams typical of major cities in the West. These “achievements” are the result of a subtle implementation of essentially the same neo-liberal policies forced on Chile in 1973 and most of the world including the US, UK, and Australia.

David Harvey has pointed out there is what he calls a “remarkable coincidence” between the application of neo-liberal policies in the West and in China:

“These reforms would not have assumed the significance we now accord to them, nor would China’s extraordinary subsequent economic evolution have taken the path and registered the achievements it did, had there not been significant and seemingly unrelated parallel shifts in the advanced capitalist world with respect to how the world market worked. The gathering strength of neo-liberal policies on international trade during the 1980s opened up the whole world to transformative market and financial forces. In so doing it opened up a space for China’s tumultuous entry and incorporation into the world market in ways that would not have been possible under the Bretton Woods system. The spectacular emergence of China as a global economic power after 1980 was in part an unintended consequence of the neoliberal turn in the advanced capitalist world.”(2)

Those who realise the super-rich have worked for decades to create a globalised system in which giant banks and multi-nationals control the economic development of the world would be reluctant to accept that these changes are just an interesting coincidence in world history. China's amazing success simply could not have happened if its rush headlong into an export-oriented economy had not been accommodated by the rest of the world adopting neo-liberal “free trade” policies which welcome cheap imported products instead of restricting them by tariffs or other means.

Neo-liberalism and globalism are two sides of the same coin. This system has created permanent unemployment - called post-industrial society - in the West and a vast army of cheap labour in China. After the death of Mao, there must have been an agreement between the leaders of the Chinese Communist Party (CCP) and the representatives of the super-rich in the West. The goal of the super-rich was to implement neo-liberal policies everywhere they could. The goal of the CCP was to use these same neo-liberal policies to dismantle the socialist relations of production in China and create the necessary pool of cheap labour needed to undercut the better wages and conditions achieved by workers in the West after WWII. What follows will focus on the steps taken by the CCP to carefully reverse all the socialist relations of production and related policies like the “iron rice bowl” created after China's liberation.


FIRST PHASE: NEO-LIBERAL POLICIES APPLIED TO THE RURAL SECTOR

Privatisation of agricultural communes.
Land formerly owned and worked in common was divided into separate plots and allocated to peasant families. They were then responsible for their own success or failure They were also encouraged to sell their products to rural markets, engage in rural industries, and seek work in nearby township enterprises. Eventually peasants could lease or rent land as well a hire labour. Still they did not have full ownership of their land, which was held by the newly constituted local government bodies that replaced the communes.

Health and education in rural areas had been provided by the commune system When they were taken over by the local government bodies these benefits disappeared. These services were replaced by a standard neo-liberal “user pays” systems which required an up-front fee for access to education and heath care. Public health-care covered 90 percent of the population in 1978, but only covered 4 percent in 1997.(3) These changes helped to create a giant floating workforce which had been previously kept out of urban areas by a system of residency.

Creation of small capitalist enterprises:

The new organisations operating on capitalist principles created by the reforms were called township and village enterprises (TVEs). They were set up by the local government bodies from assets which were in effect privatised from the agricultural communes. They operated in an open labour market with no regulations for wages or conditions and no job security. In such an unregulated labour market, there was little opportunity to bargain for increased wages or better conditions. By 1993, these enterprises numbered 25 million and employed over 123 million workers.(4) According to Harvey:

“Accounts as to what these TVEs were about vary greatly. Some cite evidence that they were private operations ‘in all but name’, exploiting dirt-cheap rural or migrant labour—particularly young women—and operating outside of all forms of regulation. The TVEs often paid dismally low wages and offered no benefits and no legal protections. But some TVEs provided limited welfare and pension benefits as well as legal protections. In the chaos of transition, all manner of differences emerged, and these frequently had marked local and regional manifestations.”(5)

These changes put peasants into essentially the same system which was replaced by the introduction of the communes 30 years earlier. Some peasant families could do well by selling extra produce, and hire other peasants as labourers. Members of families who could not produce an adequate surplus to feed themselves or sell on the open market could work for those who could afford their wages or they could work for the TVEs.

Contract labour introduced:
Another development was that workers began to be hired on a contract basis with no social protections and limited tenure. This replaced the older policy called the “iron rice bowl' which involved lifetime employment together with housing, schools, health care and pensions paid by the state owned enterprises (SOEs). By April 1987, the state-owned enterprises were using 7.5 million contract workers, about 8 percent of the industrial workforce.(6) SOEs were also given the ability to hire and fire workers in the name of enhancing productivity and efficiency, another policy requirement of neo-liberalism. During this period price controls were also removed, another standard neo-liberal policy.

Privatisation of “human services”:
In the socialist system created after liberation housing, health care, welfare, education and pensions were provided free of charge to all who needed them by the SOEs, rural communes or the state. Starting in the late 1970s one of the key neo-liberal policies introduced by the Communist Party was to force people to pay for these basic necessities. Now workers must find their own housing in the newly emerged private housing markets. Needless to say the unemployed found themselves homeless. This explains why the workers building the giant office towers and apartments in Chinese cities live in these construction sites. Their housing is provided in a neo-liberal way by their employers. Now workers must also pay a part of the costs for services in most welfare fields and social insurance, such as pensions, medical care, unemployment insurance and higher education,

Foreign investment introduced:
Another policy change allowed foreign investors to manufacture commodities for export using Chinese workers. It began with the establishment of four special economic zones in 1979. Later 14 coastal cities and Hainan Island were opened to foreign investment in 1984, and the policy extended to three delta areas (Pearl River Delta, Yangtze River Delta, and Yellow River Delta) in 1985. After the Revolution Chinese workers had been protected from both foreign and domestic exploitation in which surplus value is taken by private firms rather than used by the state for the benefit of the workers and the rest of the population. Foreign investment and the expanding role of the TVEs provided work for the millions of unemployed who left their villages or who were no longer employed in the SOEs.

These vast social changes removed many of the protections provided by the liberation of China in 1949 and created significant problems for ordinary people. In addition to the very high levels of unemployment, lower wages and new expenses for education and health care, there was inflation as price controls were removed and more pressure on workers as “reforms” began to exert tighter control over work schedule and raise work quotas. People were also angered by corruption and tax evasion by the new capitalists similar to trends in the deregulated neo-liberal West.

According to Alvin Y. So and Yin-Wah Chu these problems helped to fuel the pro-democracy movement which mounted a protest at Tiananmen Square:

“In the late 1980s, economic problems and social grievances had triggered a democracy movement that led to a confrontation between the protesters and the party-state in the Tiananmen Square. The Tiananmen Incident was a first major challenge to the Chinese communist party-state during the Post-Mao era.”(7)

This protest was put down by the leadership allied with Deng who wished to continue introducing neo-liberal policies, and later more changes were introduced.


SECOND PHASE: PRIVATISATION OF SOEs AND CREATION OF A STOCK MARKET

“In the first wave of neoliberal reforms in the 1980s, the reform policies were aimed mostly to expand the private sector; they had left the public sector largely intact. Thus the reformers in the 1980s used the term 'market socialism' to stress that China was still socialist because it had a dominant public sector and the party-state was still in control of the strategic sector (or the commanding height) of the Chinese economy. However, (in the second wave) the party-state turned to the public sector.”(8)

Privatisation of state owned enterprises:
In the 1990s most of the SOEs were no longer funded by the state and had to operate independently in the market. In effect the SOEs were expected to run like an independent private profit- making enterprise. They could go bankrupt if they were losing money. The SOEs were allowed to layoff workers, to increase work intensity and to cut worker‘s benefits to remain competitive in the market. In the late 1990s millions of state workers became unemployed or their benefits were reduced.

Then in 2003 with a new leadership team in place a significant change in policy was decided:

“On Oct. 14, the Central Committee passed a resolution that quietly called on the party to push ahead with privatisation and cleared the way for the sale of medium and large state-owned enterprises. For the first time, the party said it would "vigorously develop a mixed economy" with stock ownership playing a dominant role. "Before the policy was 'Grasp the Large, Release the Small,' but now the large enterprises can be released too," said Zhang Wenkui, a researcher at the State Council Development Research Center, which advises the leadership. He said the resolution also opened the door for the state to sell majority stakes in strategic industries.”(9)

The number of SOEs fell from 100,000 to 60,000 between 1995 through 1999. From 1996 to 2001, some 36 million state-enterprise workers were laid off; over the same period collective farms let go of 17 million workers. By the end of the 1990s, SOEs employed only 83 million people, which is just 12 percent of the total employment and only 1/3 of urban employment. As of 2001, state enterprises accounted for only 15 percent of total manufacturing and less than 10 percent of employment in domestic trade.(10)

Increased role for banks:
Initially the TVEs were funded by assets from the communes. Many failed but successful ones were able to grow through connections with overseas Chinese who could find export markets for their products. Eventually both TVEs and SOEs could gain access to foreign capital and loans from Chinese banks:

“The state-owned banking system expanded during the 1980s and gradually substituted for the central state in providing lines of credit to the SOEs, the TVEs, and the private sector. These different sectors did not evolve independently of each other. The TVEs drew their initial finance from the agrarian sector and provided markets for outputs or furnished intermediate inputs to the SOEs. Foreign capital integrated into the TVEs and the SOEs as time went on, and the private sector became much more significant both directly (in the form of owners) and indirectly (in the form of stockholders). When the SOEs became less profitable they received cheap credit from the banks. As the market sector gained in strength and significance, so the whole economy moved towards a neoliberal structure.”
(11)



Chinese stock exchange reappears:
The Shanghai Stock Exchange was closed in 1949. It was reopened in November 1990. Stocks, bonds and shares in mutual funds are traded in a system divided into type A or Type B. Financial instruments of type A are denominated in renminbi, while those traded in US dollars are of type B. Initially trades involving type A financial instruments could only made by domestic investors. However, after 2001 financial instruments pf type B were open to both domestic and foreign investors. In 2003 a Qualified Foreign Institutional Investor (QFII) program was introduced in which foreign investors were allowed limited access to trading type A financial instruments.(12) Now, in 2018, there are 287 overseas institutions in the QFII system with quotas amounting to $99.5 billion.(13)

SOEs to be fully privatised:
In August 2015 the Central Committee of the Chinese Communist Party released a document entitled: “Guiding Opinions of the CPC Central Committee and the State Council on Deepening the Reform of State-owned Enterprises”. The report was summarised by Xinhua news service. Here are the main points:

“China will modernize SOEs, enhance state assets management, promote mixed ownership and prevent the erosion of state assets, according to the guideline released by the Communist Party of China Central Committee and the State Council. The government will improve the competence of SOEs and turn them into fully independent market entities.
“The government plans to achieve major reforms in key areas by 2020, when SOEs are expected to be more robust and influential and have greater ability to avoid risks. The government should nurture a group of SOEs that are creative and can face international rivals by that time.
“According to the guideline, China's SOEs will be divided into two categories, for-profit entities and those dedicated to public welfare. The former will be market-based and stick to commercial operations and should aim to increase state-owned assets and boost the economy, while the latter will exist to improve people's quality of life and provide public goods and services.
“In terms of mixed-ownership reforms, the government should introduce multiple types of investors so SOEs can achieve mixed ownership and encourage them to go public, the guideline said.”
(14)

While the policy separates commercial enterprises from those which provide public goods and services, since the state will not be contributing to the provision of these goods and services, they must operate on the neo-liberal “user pays” principle. If the state no longer contributes to the provision of these goods and services, they will either go bankrupt or the fees they charge must cover the cost of delivering these goods and services



CHINA'S NEW IDEOLOGY: BACK TO CONFUCIANISM

Alvin Y. So and Yin-wah Chu focus most of their discussion on China's economic transformation, but they do make a brief comment on China's ideological changes:

“In the post-reform era, China was experiencing an ideological vacuum since the state could no longer be legitimized by Marxism or communism. Thus, nationalism became the state‘s only hope to get the support of the Chinese masses. The Chinese state seems to believe that the best response is to build a strong sense of national cohesiveness based on cultural heritage and tradition rather than to develop a nationalism based solely on hostility toward the outside world.”(15)

So and Chu themselves would know exactly what the Chinese “cultural heritage and tradition” consists of, but those who have only lived in the West might need to have it explained:

“The last several years have seen an official revival of Confucianism in China. President Hu Jintao has developed the idea of a 'Harmonious Socialist Society,' drawing on Confucian ideas. The government has set up a network of cultural Confucius Institutes around the world. And earlier this year, a statue of Confucius was erected in Tiananmen Square.”
(16)

The last time I visited our local university I was surprised to find a Centre of Confucian Studies had been established there.

Sadly I have thrown out most of the books I owned during my life, but there is one small pamphlet I have kept for over 40 years. It is entitled Confucius - “Sage" of the Reactionary Classes by Yang Jung-kuo. It was published by the Foreign Languages Press in “Peking” in 1974. It is perhaps the best assessment of the way an ideology works to maintain class rule I have ever read. Appendix I gives a few extracts.

In the first chapters Yang sets the historical stage as background for Confucius' life and actions. He explains that during the Spring and Autumn Period when Confucius lived there was a wide-spread class struggle taking place between advocates of two different modes of production. The older mode of production was based on private ownership of the land worked by slave labour, similar to the system which prevailed at the time of the Greek city-states and the Roman Empire. The new system was also based on private ownership of the land, but the land was to be rented to free peasants who would work the land and pay the owner in kind. This is similar to the feudal system which appeared in Europe around the time of Charlemagne (742 - 814). Eventually the slave-owning system disappeared, but the important fact about Confucius was his implacable opposition to this change.

Like Plato, who attacked the limited democratic system in Athens, Confucius did not influence events by political action but through his writings in which he developed a reactionary ideology calculated to reinforce class rule of the slave owners. The irony of Confucius' efforts is that his ideology was later adopted by the feudal land-owners to defend their own system from change. In another similarity with Plato, Confucius distinguished between “superior men” and “mean men”. Superior men were “broad minded (Shu Erh) and need not concern themselves with the necessities of life. Their sole concern was the so-called tao or Way.” By contrast, the mean men “led an animal existenced, miserable to the core and burdened with cares, the leisure and contentment of the superior men was unknown to them. They worried all day long about their livelihood.”(17)

Just as the feudal landholders could use the Confucian ideology to defend their rule, it is easy to see how the new rulers of China in the CCP can do the same. They are the new superior men, and we all know who the mean men are, don't we? They are the millions of workers trying to survive in the neo-liberal heaven created in the People's Republic of China since the death of Mao.


This article is one part of four articles on Chinese "Socialism"


China's State Controlled Capitalism is Not Very Different From Capitalism in the West
https://australianvoice.livejournal.com/39306.html

The Damage Caused by China's “Socialism” to Workers Around the World
https://australianvoice.livejournal.com/39545.html

China's“Socialist” Investment in Australia is No Different from that of Other Capitalist Wolves
https://australianvoice.livejournal.com/39849.html




APPENDIX I:

SOME EXTRACTS FROM CONFUCIUS - “SAGE” OF THE REACTIONARY CLASSES

Confucius lived at the end of the Spring and Autumn Period, at a time when the tribal-slave-holding state of Chou Dynasty was collapsing.(p.1)
Under tribal slavery, the slaves not only lived worse than beasts of burden, but their very lives were in the hands of the slave-owners, who could put them to death at will. When a slave-owner died, many slaves were killed as human sacrifice, the number sometimes reaching several hundred at one time.(p. 2)
Where there is oppression, there is bound to be resistance. Whether in the Yin or Chou Dynasty, under the ruthless rule of tribal slave-owners the slaves continuously put up resistance. (p. 3)
By the time of the Spring and Autumn period, not only had the Chou kings become rulers in name only as result of the slaves' continual escapes and revolts, but the rule in the various vassal states was also quite unstable.(p.5)
(Yang then explains that senior officials began to introduce a new system because of the anarchy caused by slave revolts and killing of slave-owners. Some, such as the house of Chu of Lu state, changed its methods to respond to the new conditions.)
In dealing with the (land) holdings he received, Chi Sun acted according to the new situation and freed the slaves allotted to him, renting land to them to till as tenants.(p. 6)
The slaves were rebelling, and the new rising feudal land-lord forces were taking the offensive. Pounded by the tide of history in the stream of great social change, the slave owning aristocrats were in desperate straits and on their way out.(p. 7)
Confucius entered officialdom in the state of Lu, not however becoming a senior official until he was 52, when he presided over justice and acted in the capacity of prime minister. But Confucius' ecstacy in his official career was short-lived, for he held the position only three months.(p.10-11)
As justice official for the state of Lu, Confucius modelled himself in every action after Duke Chou, who was a harsh and vicious official. After only seven days in office as acting prime minister he had Shaocheng Mao, a reformer in the state, executed.
How did Confucius justify this verdict against Shaocheng Mao? According to him, anyone guilty of the following “crimes” should be put to death:
Understanding the changes of things and launching out on venturesome acts.
Not following the orthodox ways prescribed by the slave system, but stubbornly taking the path of so-called reform.
Talking glibly about the reasons for such reform.
Knowing too much about the decadent and unstable phenomena occurring under the rule of the slave-owners.
Using stern, just words to describe why the slave system should be opposed.(p. 11)


APPENDIX II

PEOPLE WHO FOLLOWED AND SUPPORTED THE CHINESE REVOLUTION COULD SEE SOCIALIST POLICIES WERE ABANDONED BY MAO'S SUCCESSORS

People may not realise that in the 1960s and 1970s during the anti-Vietnam war period, there was a considerable interest on the left in the recent Chinese Revolution. One widely read book about China was Fanshen by William Hinton (1919-2004), published in 1966. In 1948 Hinton was working for the United Nations as a tractor-technician, providing training in modern agricultural methods in rural China.

“When the communist party liberated the province in which he was working in 1948, he asked to join the university-staffed land reform work team in the village of Long Bow on the outskirts of Changzhi. By 1948, his then-wife Bertha Sneck had also joined him in China. Hinton spent eight months working in the fields in the day and attending land reform meetings both day and night, and during this time he took careful notes on the land reform process.”
(18)

When Hinton returned to the US in 1953 his papers were seized, he was hounded by the FBI, and blacklisted from any employment. In the end he turned to farming a plot of land he acquired by inheritance. When he finally won a legal battle to recover his papers he began writing his book Fanshen. It was

“a documentary account of the land reform in Long Bow village in which he had been both observer and participant. After many mainstream U.S. publishers had turned it down, it was published in 1966 by Monthly Review Press and was a success, selling hundreds of thousands of copies, with translations in ten languages. In the book, Hinton examines the revolutionary experience of the Long Bow village, painting a complex picture of conflict, contradiction and cooperation in rural China. After the death of Edgar Snow, Hinton became the most famous American sympathetic to the People's Republic of China, and he served as the first national chairman of the US China Peoples Friendship Association from 1974-1976.”(19)

Like many on the left at the time he rejected the “reforms” introduced by the Communist Party after the death of Mao.

“Hinton cooled toward official policy as market reforms under Deng Xiaoping moved away from the type of socialism originally associated with Mao Zedong. Eventually he wrote Shenfan (read as the opposite of Fanshen) and The Great Reversal, and became an outspoken opponent of the socialist market economy ("socialism with Chinese characteristics") and Chinese economic reform that the CPC continues today.“(20)

In case people do not realise the extent of his writing on China, I will reproduce a list of his works from Wikipedia:

1966, Fanshen: A Documentary of Revolution in a Chinese Village, Monthly Review Press.
1970. Iron Oxen; a Documentary of Revolution in Chinese Farming. New York: Monthly Review Press.
1969. "Fanshen" Re-Examined in the Light of the Cultural Revolution. Boston, MA: New England Free Press.
1972, Hundred Day War: The Cultural Revolution at Tsinghua University, Monthly Review Press.
1972, Turning Point in China: An Essay on the Cultural Revolution, Monthly Review Press.
1984, Shenfan, Vintage.
1989, The Great Reversal: The Privatization of China, 1978-1989, Monthly Review Press.
1995, Ninth Heaven to Ninth Hell: The History of a Noble Chinese Experiment (with Qin Huailu and Dusanka Miscevic), Barricade Books.
2003, "Background Notes to Fanshen", Monthly Review. 55.
2006, Through a Glass Darkly: American Views of the Chinese Revolution, Monthly Review Press.

In 2004 Martin Hart-Landsberg and Paul Burkett wrote a book entitled China and Socialism: Market Reforms and Class Struggle, which they summarised in an article “Introduction: China and Socialism” published by Monthly Review. They summarised their conclusion in the book as follows:

“As we will argue in this book, it is our position that China’s market reforms have led not to socialist renewal but rather to full-fledged capitalist restoration, including growing foreign economic domination. Significantly, this outcome was driven by more than simple greed and class interest. Once the path of pro-market reforms was embarked upon, each subsequent step in the reform process was largely driven by tensions and contradictions generated by the reforms themselves. The weakening of central planning led to ever more reliance on market and profit incentives, which in turn encouraged the privileging of private enterprises over state enterprises and, increasingly, of foreign enterprises and markets over domestic ones.”(21)

At the end of their article they produced a list of six authors who, like William Hinton, were critical of developments in China from a Marxist perspective. The list is reproduced below.

Questions about the economic system or relations of production in China cannot be settled by counting books and articles on each side of the debate. Rather my point is to show that serious doubts about the direction of the post-Mao reforms existed virtually from day one by people who were well acquainted with events in China and sympathetic with the Chinese Revolution up to that time. In the 21st century, where we are encouraged to live in the moment and think that the past does not exist, people can overlook the fact that it still might have some merit when it considers issues we still care about today. This question is not new. Intellectual history is the story of reinventing the wheel with new treads each time it comes around.


List of six authors who were critical of developments in China from a Marxist perspective:

Maurice Meisner, The Deng Xiaoping Era: An Inquiry into the Fate of Chinese Socialism, 1978–1994 (New York: Hill and Wang, 1996)
Robert Weil, Red Cat, White Cat: China and the Contradictions of “Market Socialism” (New York: Monthly Review Press, 1996)
Gerard Greenfield and Apo Leong, “China’s Communist Capitalism: The Real World of Market Socialism,” in Leo Panitch (ed.), Socialist Register 1997: Ruthless Criticism of All That Exists (New York: Monthly Review Press, 1997)
Barbara Foley, “From Situational Dialectics to Pseudo-Dialectics: Mao, Jiang, and Capitalist Transition,” Cultural Logic (2002), http://eserver.org/clogic/2002
Liu Yufan, “A Preliminary Report on China’s Capitalist Restoration,” Links, No. 21 (May–August 2002)
Richard Smith “Creative Destruction: Capitalist Development and China’s Environment,” New Left Review 222 (March–April 1997)
Eva Cheng, “China: Is Capitalist Restoration Inevitable?,” Links 11 (January–April 1999).


FOOTNOTES:

1. David Harvey, A Brief History of Neoliberalism, Chapter 5 "Neoliberalism ‘with Chinese Characteristics’", Oxford University Press, 2007, https://erenow.com/common/a-brief-history-of-neoliberalism/6.php

2. Ibid.

3. Martin Hart-Landsberg and Paul Burkett, "China and Socialism: Introduction", https://monthlyreview.org/2004/07/01/introduction-china-and-socialism/

4. Ibid.

5. David Harvey, A Brief History of Neoliberalism.

6. Martin Hart-Landsberg and Paul Burkett, "China and Socialism: Introduction".

7. Alvin Y. So and Yin-wah Chu, "The transition from Neoliberalism to State Neoliberalism in China at the turn of the 21st Century", https://www.researchgate.net/publication/304795946_The_Transition_from_Neoliberalism_to_State_Neoliberalism_in_China_at_the_Turn_of_the_Twenty-First_Century

8. Ibid.

9. Phillip Pan, "China Accelerates Privatization, Continuing Shift from Doctrine", https://www.globalpolicy.org/component/content/article/213/45729.html

10. Martin Hart-Landsberg and Paul Burkett, "China and Socialism: Introduction".

11. David Harvey, A Brief History of Neoliberalism.

12. "Shanghai Stock Exchange", https://en.wikipedia.org/wiki/Shanghai_Stock_Exchange.

13. "China QFII quota hits $99.5b", http://www.chinadaily.com.cn/a/201804/25/WS5ae09330a3105cdcf651a7ad.htmlhttp://www.xinhuanet.com/english/2015-09/13/c_134620039.htm

14. "China issues guideline to deepen SOE reforms", http://www.xinhuanet.com/english/2015-09/13/c_134620039.htm

15. Alvin Y. So and Yin-wah Chu, "The transition from Neoliberalism to State Neoliberalism in China at the turn of the 21st Century".

16. "Confucianism in China Today", https://berkleycenter.georgetown.edu/events/confucianism-in-china-today

17. Yang Jung-kuo: Confucius -“Sage” of the Reactionary Classes, Peking, Foreign Languages Press, 1974. (p.16-17) Available online: https://www.marxists.org/history/erol/china/confucius-1.pdf

18. "William H. Hinton", https://en.wikipedia.org/wiki/William_H._Hinton

19. Ibid.

20. Ibid.

21. Martin Hart-Landsberg and Paul Burkett, "China and Socialism: Introduction".

22. Ibid

Was Stalin Responsible For More Deaths Than Hitler?

Guest Post by Denis Churilov
(https://www.facebook.com/chdv1991)

People who say that Stalin killed three (five? six? twenty eight!?) times more people than Hitler haven’t grown beyond moronic Cold War propaganda.

These days we know the exact number of people who fell victims to the so called Stalin repressions, with all the dynamics already taken apart by researchers month by month. The NKVD were documenting everything they were doing pretty pedantically for internal use. All their archives have been studied thoroughly throughout the late 1980s and the 1990s since they became open for historians and statisticians during the Perestroika years, most notably by the international research group led by Zemskov.



As such, we know that the GULAG population reached its historic maximum in the post-War time, in the year 1950 at 2,561,351 people. The percentage of “politically repressed” out of the total number of inmates reached its maximum of 59% in 1945-1946. Lots of people were accused of Nazi collaboration, often rightly so, after occupied territories were liberated. 

By the way, many people don’t seem to realise it these days, but GULAGs were correctional labour camps, where inmates were working, sometimes they were even paid for their labour, with the results of their labour being used by the government/society. Even though, in the majority of cases, working conditions were tough, GULAGs weren’t “death camps” unless you believe in fiction written by Solzhenitsyn. Any comparison to the Nazi concentration camps, which were specifically built to eliminate people in large quantities, should be viewed as nothing but ahistorical nonsense. 

As for those who were sentenced to death for “counter-revolutionary” actions, which often included any serious crimes against the state, e. g. armed robberies during or shortly after the Civil War, large scale fund embezzlement, and such, between 1921 and 1953, around 800,000 were sentenced to death by shooting and around 600,000 died in prisons/GULAGs due to illnesses and harsh conditions. Therefore, the total number of people who died because of political repressions during Stalin’s rule – almost 30 years - is around 1.4 million. 

Obviously, there were also people who died during the civil war in the late 1910s and the 1920s, as well as those who fell victim to the famines in the early 1930s. And, no, those famines weren’t engineered. (I will talk about them in-depth some other time.) But attributing those deaths to Stalin - Marxism/Socialism/Communism/etc. - would be facile, as both sides in the civil war were equally brutal to each other. Besides, civil wars and famines are not exclusive to the history of Soviet Russia or even to the history of Russia in general. 

The total Soviet population increased by about 50 million during Stalin’s era despite WWII. So, when we look at the EMPIRICAL, verifiable data, we see that there were 2.5 million people locked up in GULAGs during the worst times. 

As a side note, there were 2,220,300 adults in the US federal and state prisons in 2013, according to the US Bureau of Justice Statistics, and that’s not including people who were on probation and parole. And, unlike the Stalin’s Soviet Union, the modern day United States hasn’t experienced any major revolutions/regime changes, civil wars or foreign invasions in over 140 years. 



How does Stalin compare to Hitler? Well, I haven’t studied it in such depth, but the general estimates give a figure of around 6 million Jews (Jews alone!) exterminated by the Nazis during the Holocaust. And that not including the people who died as a result of the Nazi military aggression against other states. The Soviet Union, for instance, lost up to 27 million lives due to Nazi invasion. Stalinism stands nowhere near Hitlerism/Nazism when measured by the death toll for each of them. 

There’s also one crucial point that many people fail to understand about history, either deliberately or due to the fact that no-one bothered to explain it to them. Unlike Stalin’s Soviet Union, Hitler’s regime was exterminating millions of people based on their ethnicity ON PURPOSE. Yes, Stalin was a merciless dictator responsible for death of many innocent people (Still some would argue that, given all the tragic complexities of those times, Stalinism saved Russia form far worse tragedy that could’ve happen if the country failed to stabilise and industrialise in time.) Stalin wasn’t killing people just for the sake of it. Again, repressions and mass executions have been happening during and after every major civil war throughout the entire history of mankind. But Hitler was a whole different level of pure evil. Genocide was a deliberate, ideological function of Nazism. Look into the works of Himmler, the ideas expressed by Goebbels, or even Hitler’s own Mein Kampf. People who happened to rule German back then were all pretty explicit about their views, making them into official policies and facilitating one of the worst genocides in modern history. 

Again, those who died under Stalin died because of historical tragedy, like people who died during and after the French Revolution, with authorities inventing guillotine to behead people faster, or during the land reforms in England, or during the American Civil War. But people who died under Hitler, those who died during the Holocaust, they were the victims of direct, DELIBERATE genocide that was directed against people based on their ethnicity. 

Not being able to see the difference between the two requires a special kind of intellectual dishonesty and moral underdevelopment. 

***

So, was Stalin responsible for more deaths than Hitler? No, neither empirical research nor inferential analysis, that is looking into demographic data and its dynamics over the years, support this assertion. And casually comparing the victims of Stalinism to the victims of Nazism is like comparing a lethal traffic accident on a busy road to a deliberate, cold-minded killing spree.
 
Besides, there’s only one logical step between saying that Stalin was worse than Hitler - he wasn’t - and saying that Hitler was better than Stalin. Not surprisingly, most of the “communism death toll” nonsense is really just old Goebbels propaganda that was repackaged by the Cold War think tanks to slander the Soviet Union. 

Too sad many people still believe this horseshit.

A Discussion Surrounding Karl Marx’s Recent 200th Anniversary

Guest Post by Denis Churilov
(https://www.facebook.com/chdv1991)

I’ve been saying for a long time that it is beyond absurd to compare communism/socialism to capitalism and the free market without considering geographical, socio-cultural and historic factors in each particular case. 

Everyone laughs at North Korea and their quasi-communism. Yet nobody takes into account that the country has been under brutal economic sanctions for decades, and that it is geographically situated in a region where you can’t farm anything substantial. And almost no-one talks about the regional geopolitical configuration that explains the strictness of the current North Korean regime. And yet, despite all those unfortunate circumstances, North Koreans still manage to develop submarines, ballistic missile systems and thermonuclear weapons. Can the capitalist and the natural resource rich Democratic Republic of the Congo develop its own missile system and build thermonuclear weapons? I doubt it. 



When people attempt to compare communism/socialism to capitalism, they always compare Cuba to the United States and the European Union. Nobody compares Cuba to, say, Haiti, which is a fully capitalist country under the US influence. How come nobody compares poor and “miserable" socialist Cuba to “rich” and “happy” regional capitalist states such as Columbia? Or the capitalist state of Mexico, where there is a huge gap between rich and poor, and where they’ve been having totally capitalist drug cartel wars, with death toll estimated to go over 100 thousands in the last 10 years? Shall we compare the 1960s version of quasi-capitalist state of Iraq with, say, the socialist state of the Soviet Union? 

“Socialism is a retarded system that doesn’t work.” some retarded far right cuckoos say on the Internet. Well, that “retarded” system managed to defend itself and crush the world’s most advanced war machine in the 1940s and then proceed with developing world leading nuclear and space programs. 

Many people in the West are not aware of this nowadays, but in World War II, the Soviet Union wasn’t just fighting Nazi Germany. It was fighting all of Europe with a combined population of around 400 million, while the USSR had less than 200 million. Further, about a third of Third Reich tanks were produced in Czechoslovakia, most of the occupied countries were providing resources, working hands and soldiers to Hitler. There were more French soldiers serving in the Nazi forces in the Eastern Front than there were people in the entire French Resistance.

The Soviet Union was fighting Nazi Germany more or less alone until 1944. The Red Army was already advancing through Europe when the Allies finally decided to launch the Normandy Landing. Then the Soviet Army singlehandedly defeated the Manchurian army of Imperial Japan (which was a capitalist power too, by the way), kicking them out of mainland Asia in just a few weeks. That happened before the US “stopped the war” and “saved lives” by nuking 400,000 civilians in Hiroshima and Nagasaki. 

And then, after the devastating war, the socialist Soviet Union managed to rebuild everything. Then this “retarded” system conducted its first successful nuclear test in 1949. And then it successfully conducted the thermonuclear tests in 1953, proving again how “retarded” and “impotent” it is. Then the “retarded” Soviets did it again when they launched the first man-made space satellite, Sputnik-1, in 1957. Then again, in April 1961, when “retarded” socialists sent the first man to space.

Not to mention the healthcare and the nearly 100% literacy rate. Before the 1917 October Revolution, about 70% of Russian population was illiterate with average life expectancy hardly exceeding what is observed in Central Africa nowadays. 

So much for “Socialism failed every time it was tried.”. Those “retarded” socialists managed to build the World’s second most powerful superpower in the second half of the 20th century. Ignoring that is to ignore the historic reality. 

Yes, the Soviet people didn’t have all the luxuries enjoyed by the citizens of America, but they still lived better than 80% of the world's population, most of whom lived under global capitalism, despite relatively harsh climate conditions. 

“Oh, but how did it all end for USSR?”. The Soviet Union collapsed, indeed. I am not going to go into details of why it happened now. It wasn’t because of the objective economic reasons, but I just want to say that, arithmetically, there have been more capitalist regimes and empires that ceased to exist in the last 150 years compared to socialist/communist states. 

Oh, and let’s not forget about China! Far from being strictly socialist nowadays, as China has greatly relaxed its policies and largely hybridised its economy since the late 1980s, it is still officially ruled by the Communist Party, it has government exercising control over the economic sector and it has been one of the world's fastest growing economies. Just to illustrate the point, some sources say that they build about a thousand airports every year. Needless to say that China is now emerging as a global superpower. 

“Oh, but what about all those who died under communist/socialist dictatorships?” What about them? Yes, many people died in socialist countries when the system was forming, but 1) people almost never get the figures right, overestimating the number of victims by 10s and even 100s of times, for ideological and propaganda purposes and 2) people misattribute and misinterpret the causes from objective historical processes that occur after any regime change by strictly blaming it all on communism/socialism. 

Throughout history, whenever there was a revolution, or a regime change, it has always been accompanied by a bloodshed, usually in the form of civil wars and repressions. In such light, we can talk about the horrors of the French Revolution, where they were executing so many people they had to invent guillotine to behead people faster and that was considered humane at the time! We can talk about the victims and all the people executed during the land reforms in England, and similar events in Germany, Spain, the Netherlands, and everywhere else around the world. If we take each case and compare it to what was happening in the Soviet Union and Communist China in their early years, percentage wise, the figures will be comparable. In fact, the soviets weren’t as bad as their European counterparts from a century before them. 

It’s the genesis of history, the history itself that has always been forged in blood, pain, and suffering. Take a look at the American history, for instance. See how many native tribes had to perish and how many people had to die in America’s own civil war for the US to form in its current shape. 

That brings us to the next point. If you want to talk about the victims of communism, you should also talk about the victims of capitalism. It’s hard to tell when it started exactly, but, for the argument’s sake, let’s go from 1776, the year in which Adam Smith formally explained the mechanics of the capitalism and the free market in his “Wealth of Nations", although, de facto, capitalism formed centuries before that. We can talk about Triangular Slave Trade in which African slaves were initially used by capitalists to work on their sugar plantations and how that resulted in millions of deaths. We had the Chinese Opium wars and the subsequent opium epidemic when the British companies forced China to buy drugs. There are some estimates that say that up to 10% of the Chinese population fell victims of opium. We had all the imperial wars, including the World War I. We had the colonialism and all the colonial wars, the effects of which are still experienced by Africans because the current civil wars come as a result of national borders being thoughtlessly marked by old European powers who had no regard for the organic ethnocultural/tribal configuration of those lands. These kill thousands every single year. If we were to estimate the numbers of victims of free market and capitalism, the figures would be, literally, in the hundreds of millions. 

So lets stop perceiving the world and the history in black & white, peddling the scary tales about “evil communist regimes” and how “Marxism is responsible for over a hundred million deaths!”, and other ideological bullshit that tends to replace genuine analysis and understanding. Let’s not put simplistic labels on everything. 
I am not advocating Socialism. It would be somewhat stupid and naive to think that the United States, Australia and Western European countries would be able to go full communism at this stage. It’s just not realistic, given the current socio-economic configuration and the Western mindset. Capitalism isn't as bad after all; much better than, say, feudalism, that's for sure. Besides, each country/society has its own destiny, and I don’t think that the Western world can/should accept communism any time soon. There are some intellectuals, such as Anatoly Wasserman, who argue that “Digital Socialism” would be achievable on a global scale through smooth transition and that it will be too good to resist, but such concepts are still within the realm of science fiction and I don’t think it would be possible within the next 20-30 years. 
I just want people to stop viewing history and reality in simplistic cliches that were developed by Goebbels and then consolidated through decades of Cold War propaganda. 

Think. Be aware of the context. Look for analogies. View things in a wider perspective. Compare everything with everything. We, as humanity, will never be able to go forward if we don’t start thinking and analysing things holistically. We can never move forward if we don’t see history objectively and understand our past genuinely.