Anti-Capitalist Chronicles: China's Economic Rise - Part 1

this is david harvey and you're listening to the anti-capitalist chronicles a podcast that looks at capitalism through a marxist lens this podcast is made possible by democracy at work uh there is a significance to china's presence in the global economy which is not really made very central in many of the accounts we have of what's going on in the world yet as evidenced by this last incident what is happening in china is going to be pretty determinate for global capitalism in general and in fact i want to argue it has been really determinate particularly since the crisis of 2007-2008. in general i want to argue that capital and capitalism in general was rescued in 2007-2008 by an expansion of the chinese economy and the other reason i think is that you have to come to terms with the size of china's economy and we have to come to terms with the speed of transformation i mentioned for example that in three years major cities in china the one i visit is nanjing uh went from a cash economy to a cashless economy in a space of three years uh there are other speedier things uh as well which i will talk about uh in a little bit uh but the size of the chinese economy uh is something that really needs to be recognized at the outset you're dealing with the second largest economy in the world by conventional measures of gdp if you take the price parity measure which is a measure based upon what a local currency is worth and what it can buy then it turns out that the chinese economy is in fact right now the largest economy in the world and if the chinese economy flourishes then the rest of the world flourishes if the chinese economy goes into a recession which there are signs is that it's going into a gentle version of recession right now if that is the case then this has a tremendous impact uh upon the evolution of capital but the other side of this and this is why it's so important to think about it from an anti-capital standpoint is that china is still formally committed to its marxist position it is still governed by a communist party and while many people will kind of say the communist party is in fact uh sort of a capitalist class party but it's still a communist party they still believe in the heritage of marx of lenin of mao deng xiaoping and now xi jinping as being absolutely central to their ambitions at the last party congress they are declared that they plan to be a fully socialist economy by the year 2050 and that fully socialist economy will be characterized by equality by democracy by a benign relationship to nature by a cultural uh cultural world of of of of beauty and excellence and this is all going to be accomplished through the agency of the communist party the declaration made very clear that they had no chance there was no chance of democracy right now that the domination of the party was absolutely crucial but it was the party there was going to be the instrument for this transition to socialism with chinese characteristics so if we are interested in the future of socialism i think we need to take what is happening in china seriously and to see it in a if you like with two questions in mind to what degree does the future of capitalism actually depend upon what is happening in china and if so what kind of future will it be the second question is will the future of socialism be determined by what might happen in china by this programmatic transformation of its own economy towards a socialist economy with chinese characteristics and i think that actually for anybody on the left we should pay attention to this because in a sense we live in a world where what marx called the coercive laws of competition play a very important role in defining who we are and we are very much in competition with china and china is very much in competition uh with us and i think that this is one of the things that of course the trump administration has brought forefront into our consciousness so that we now think about china and have to think about china in a more coherent way china developed very rapidly the world bank estimated by i think 200 2014 that whereas there had been 850 million people in abject poverty in in 1980 there were now only about 40 million people in abject poverty and most recently china has argued that it is going to make sure that there's zero poverty in the country by 2022. so there is still a kind of strong social and whatever you may think of of this there's no question that the standard of living of of people in china uh their access to commodities and goods and and so on has increased very very substantially and that it is therefore a very major is really when you think of it an astonishing achievement to bring 800 million people out of poverty uh in a period of 20 or 30 years this is i think china's accomplishment but it's not only done that it's also developed completely new ways of living and in particular one of the games of things we would see is a rapid urbanization of chinese society that by the time you get to the mid 1990s there are several there are hundreds of cities which have more than a million inhabitants you now will see a rate of urbanization which is about 15 percent uh per year and a tremendous migration of the population of populations from rural areas in into the city there are estimates in the 1990s for example that something like 300 million people had actually moved from the cities into or moved from the countryside into the cities over the last 10 or 15 years now if you look at the total migration from ireland to the united states you're looking at about four or five uh you know maybe like maybe 30 million people something like that i mean in other words when we start to compare what is going on in china with what has happened globally and what's happened elsewhere the speed of transformation is enormous the scale of it is enormous and let me give you here i think one of the crucial examples which was important for saving of global capitalism in 2007-2008 you get the global crash global crash crashes the consumer market in the united states the crash of the consumer market the united states means that those companies in those countries feeding that consumer market are in recession china it is said lost around 30 million jobs in 2007 2008. there was a tremendous labor unrest in china during that time uh there are reports on the the numbers of uh uh of of uh incidents of uh protest labor protest in china and during that year a lot of companies went bankrupt they didn't pay wages that they owed for six months uh people were left on the streets with nothing you know so there was a a tremendous kind of problem in china yet having lost what many people said was something like 30 million jobs by by 2009 there was a survey done by the imf and the ilo uh to say what was the net job loss from the crash of 2007-2008 and that job loss in the united states was around 14 million people the net job loss in china was 3 million so somehow rather china had created 27 million jobs in one and a half years now again that is something which is absolutely phenomenal and when i was writing about this i was saying you know nobody's ever heard of this anything before until i started to read further and i'd read actually china right throughout the 2000 was creating 20 million jobs a year and again this is this is huge this is a huge transformation now in 2007 2008 they couldn't create jobs in the export centers export industries because the export industries were dead and many of them were going bankrupt so what china did was to expand something which had been beginning in the 1990s which was to expand infrastructural investment so you have this politics of austerity in the capitalist world saying the crisis of 2007 2008 was a debt crisis we've got to pay off the debt how are we going to do that through a politics of austerity people have to suffer uh in order to retire the debt and get out of the economy back onto on onto a good basis and then you look at what you know what that meant for countries like greece and you see an apollo you know that appalling kind of uh politics the chinese did exactly the opposite they said okay we've got this problem we've got all these people milling around with tremendous social unrest we have to put these people back to work we've got to create millions of jobs and make do it very fast we're going to do it in construction and we're going to build and build and build how are we going to pay for it we don't care we're actually going to pay for it indebtedness in whatever way and the chinese borrowed in their own currency not in a foreign currency and this then allowed them to get out of the crisis now as they got out of the crisis of course if you're building like crazy then you need raw materials to build and one of the consequences was that all of those countries and all of those economies that were actually supplying raw materials to china came out of the crisis of 2007 2008 fairly quickly china's increasing gdp has actually been the most significant element in the revival of the global economy since 2007-2008 but as i've indicated a lot of it was debt financed and the debt limit was exceeded the second thing that happened was that the china was not only you know using debt financing uh but was having to to to build in a situation where uh they needed consumers so they had to start to push very hard uh to start uh to build the the consumer capacities of the chinese economy now this is something that's very very uh again very very important globally because the interest of foreign capital is not only in using china as a place to produce low uh you know low-cost goods there's also an interest in china as a market now in the cultural revolution uh before you know 1978 uh banks basically did not exist in china banks were abolished during the cultural revolution in the ordinary kind of retail sense of the word so there was no banking they grew came back into the picture very fast during 2000 you know after 2000 and well particularly particularly after 1995 or so the banks started to play a much more vigorous role in in chinese society but again look at something which is significant what what are the largest banks in the world today the four largest banks in the world today are chinese now you you go from a situation in 1978 when when when the chinese banks don't exist to a situation where the four largest banks in the world the fifth largest bank is a japanese bank and the sixth largest bank in the world is jp morgan so you know we like to think we we have the biggest and most powerful banks in the world but the chinese have four banks which are far bigger than anything else and these banks are are lending money to developers and they're also lending money of course to to to consumers so the chinese boom is also financializing at a very very rapid rate and again the chinese economy is being transformed radically now there is at the same time a kind of uh attempt by the chinese to recognize that you cannot actually build in a really vigorous economy in the long run if the only form of industrialization you have is the low-wage high labor content forms of uh uh production so there starts to become a kind of interesting kind of question of how do you how do you change chinese uh the chinese economy so you start to produce high-value goods and this is where the chinese computer companies and all the rest of it come into the suddenly come into the picture and again notice the speed with which this this happened we were thinking of china as a country uh and an economy which is about low-wage labor and it still is a very important low-wage industrial economy but since 2010 in effect china has suddenly moved into this area and within the space of about eight years has positioned itself to be a major competitor uh so if you take the ten top uh high-tech uh companies in the world four of them are now chinese and that was not the case in 2011. so this is if you like the the chinese model in in motion it is very fast it is very quick it is backed by government it is not uh and and it is it has mixed in with it strong government interventions but it's also highly decentralized and highly decentralized in a way in which that entrepreneurial spirit that i'm talking about of entrepreneurial culture has become absolutely central uh to to what you might call almost a gladiator capitalism uh which is emerging in the chinese context i want now to talk more about the state of our current economic economy but to do it against the background of uh this relationship which i think is important of value transfers that occur under a free market economy and through the equalization of the rate of profit now the argument i've been making then is that the equalization of the rate of profit is the problem uh not the market uh that when uh hayek and friedman and all the rest of it talked about uh the perfection of the market and uh law did it marx actually goes along with it and kind of says you know the market is a radical leverage leveler and a cynic it actually contains within it possibilities of equality and all the rest of it so that marx is not opposed to the market per se marx is not opposed uh to uh free trade through the market what he is opposed to is the equalization of the rate of profit because through the equalization of the rate of profit we start to see the accumulation of wealth within certain metropolitan regions and certain centres of the global economy and an accumulation of wealth that promotes an even greater accumulation of wealth over time and therefore what we get is greater greater levels of inequality through this equalization of the rate of profit thank you for joining me today you've been listening to david harvey's anti-capitalist chronicles a democracy at work production a special thank you to the wonderful patreon community for supporting this project you

Channel: Democracy At Work

Views: 20,213

Rating: 4.9536424 out of 5

Keywords: Richard Wolff, democracy, work, labor, economy, economics, inequality, justice, capitalism, capital, socialism, wealth, income, wages, poverty, yt:cc=on, David Harvey, China, People's Republic of China, technology, 5G, intellectual property, global economy, power

Id: lzZ2N6stTE4

Length: 19min 22sec (1162 seconds)

Published: Thu Feb 25 2021