Economic Update: China: Capitalist, Socialist or What?

Welcome friends to another edition of economic update a weekly program devoted to the economic dimensions of our lives jobs debts incomes our own and those of our kids i'm your host Richard Wolff today's program is devoted to one huge subject the People's Republic of China. China has become a very very important part of our lives and that is going to stay that way if not become more so people are asking me questions people are talking about it the president of the united states is bashing the country there are lots of reasons to be interested in what is happening it is the world's up-and-coming number one economy it is scheduled within a decade to become a bigger player in the world economy than the united states the first country to surpass the united states since the united states became the dominant player in the world economy so i want to talk with you about china i want to focus first on what china is where does it fit in the continuum between capitalism socialism and communism and then secondly i want to talk more focusedly about the relationship between china and the united states as that plays itself out across our lifetimes so let's begin one of the reasons i have to begin at the beginning in a way with china is because of an effect of the cold war that struggle between the united states and the soviet union that occupied most of the second half of the 20th century one of the results as often happens in wars hot and cold is that the first casualty as the slogan goes is the truth war makes people think and say things that aren't true because they hope one side or the other wins and the truth gets lost and that happened with everything having to do with socialism and communism in the period from roughly 1945 to the end of the century and for many americans for sure it hasn't stopped yet let me give you some examples here's one that'll be relevant to china too that the soviet union represented a system that was opposed to private property that got rid of private property and that substituted public property or the government's ownership for private ownership that was a nice story to tell because you could then say gee here in the united states we celebrate and protect private property whereas in the soviet union they got rid of it it's a nice story to tell but it has nothing whatever to do with the truth the soviet union and this is important because of the education or miseducation as you would have it the soviet union never got rid of private property that's simply not the case let me be more specific in the immediate aftermath of the revolution back in 1917 one of the first acts of the new soviet government was to divide the land the land most of russia was agricultural at the time taken away from the huge landowners carved up and given to individual farming families as their you guessed it private property so that was the act of the revolution to give private property to the mass of rural people since they were the vast majority the following sentence is true more people gained private property as a result of the revolution than ever had it before so not only did they not get rid of private property they expanded it okay let's now go 10 years later end of the 1920s beginning of the 1930s there is a collectivization of agriculture putting together by the government of many little farms into smaller large farms most of those were collective farms collections groups of farmers working together but the land that they worked and the horses they used and the tractors they used were the private property of that collection of farmers they were not the property of the government later on state farms coexisted with private collective farms but the notion that there was no private property in the means of production on agriculture is simply not true some of you may have heard that lenin or stalin who took over after lenin died let the farmers have their own little private plots they did you know why because they had to because the farmers demanded their own here we go again private property which stalin had to give them because he would not have been able to govern the country without it so he made a concession and private plots as they were called were the norm in the soviet union's entire history which allows me to go to the second myth victim of the truth being lost in the cold war here's the idea russia had planning the government planned everything they didn't allow markets where people come and decide how much to give of tomatoes for a bushel of potatoes or whatever that's also 100 percent false markets always existed in the soviet union always sometimes the markets were free in the sense that the soviets allowed a buyer to come a seller to come and they negotiated what they would both agree to and if they could agree a transaction happened and if they couldn't it didn't free market many many goods particularly food were handled in this way some markets were regulated supervised that's where the government planning comes in they said okay you can have a market but the price can't be more or less than this it has to be this number or within this range just in case you don't remember we have that in the united states too we have a minimum wage you can't pay a person for his or her labor less than a certain amount and we have maximum prices for things etc etc so the soviet union always had markets always had private property why is that news for some of you because the casualty of the cold war was the truth well let's move on because there's a second lesson about the soviet union and the cold war that leads us into the discussion of china toward the end of his life lenin the first great leader of the soviet union made a speech and in that speech he described how he understood the new soviet society that the revolution of 1917 had brought into being he referred to what they had as and this is crucial state capitalism what did he mean he said very clearly we socialists have taken over the government that's what the revolution accomplished so now we have enterprises some run by private enterprise owners some run by the state okay and that's good because we have the power of the government so we can move this society to where we as socialists want it to go in other words the state capitalism that they had socialists in charge of the government but private and government-owned enterprises underneath them that was a transitional phase that state capitalism and it was now the government's job to move it forward to socialism proper that was the old idea socialists had that capitalism was something fundamentally different from socialism well what would then socialism be well the word they used for that was communism communism is where we're going they called to their political party the communist party not because they had a communism they never claimed that they said they wanted to get to communism that socialism or this state capitalism they moved between these two terms lenin himself as almost synonyms equals of one another this is a transitional temporary fray uh phase of our development and the job of socialists is to move through the transition to get to where communism would exist and what would that be well lennon never spelled it out so let me it's when you don't have employers and employees anymore when you have made a community out of the workplace a community in the sense that we're all equal it's a democratic community that together decides what is going to be produced how it's going to be produced where it's going to be produced and what we're going to do with the net revenue our production realizes in other words we run it as a democratic community the way we hopefully run a residential community only this is a workplace community that's what communism which comes from the same root as community that's what it means a new economic system no master no slave no lord no serf no employer no employee we are a community working together that's what we call communism and that's where we're going socialism is just an in-between transitional a phase and now here comes the big punch line that will lead us into discussing china in my judgment and i should mention for those of you that are interested that some years ago my close friend and colleague steven resnick and i published a book called class theory and history excuse me capitalism and communism in the ussr an entire book devoted to the detailed elaboration of what i can only summarize here published in 2002 by rootledge publishers in england and the united states class theory and history a detailed analysis of the state capitalism that constituted the soviet union what happened in the soviet union was that the transition was never gone through the waste station of socialism on the way to communism was blocked you couldn't get beyond it when stalin takes over at the end of the 1920s lenin dies as an aneurysm dies 19 1923 when that happens stalin struggles takes over defeats trotsky and the soviet union decides they're going to stay there they can't make the further transition they don't admit it in so many words but that's what they do they enshrine a system with the communist party in charge overseeing a network of enterprises mostly owned by the state but many privately in which the employer employee relationship remains it doesn't make the transition it gets frozen stalled blocked in the position of state capitalism and as you'll see after we make our break that's where china's story begins we've come to the end of the first part of today's show please remember to subscribe to our youtube channel follow us on facebook twitter and instagram and be sure to visit democracy at work dot info our website to learn more about our shows our unique co-op store and the two books we've published understanding marxism and understanding socialism last but never least a special thanks to our patreon community whose invaluable support helps make this show possible stay with us we'll be right back with a focused analysis on china welcome back friends to the second half of today's program devoted to the people's republic of china in the first half we talked briefly about the soviet history that's relevant to understanding china so let me jump right in at that point china is like the soviet union in this specific way we focused on in the first half of the show namely that china is a socialism that has not moved forward towards communism it is stuck or stalled or blocked from making a further transition in other words like the soviet union you have a group of socialists in charge of the government the communist party of china took over the government in their revolution in 1949 just like the russians did in 1917 and they preside over a system of public government-owned enterprises and private citizen-owned enterprises just like in the soviet union and they haven't moved further they made some experiments back in the 1950s and 60s having to do with communes but they put those aside and they have been a successful what lenin would call state capitalism ever since there are some differences from the soviet union and they're worth pointing out number one the chinese made a decision to take advantage of the world economy and world trade in a way that the russians did not probably because the russians could not they were isolated the world was hostile towards this first socialist country the chinese didn't have that particular burden and the chinese have done very very aggressively entering into the world economy so the role of the world in the chinese story it's much greater than the role of the world in the soviet story and correspondingly the chinese did something else the russians never did they allowed the private capitalist sector to become much much larger than the russians ever did so that for example today huge parts of the chinese economy are private capitalist enterprises both owned and operated by chinese private citizens and by foreigners americans british japanese french german and so on so there are clear differences between the two but their story as a socialist related to capitalism and communism is really very simple and very similar they are societies where socialists made a revolution set up a state capitalism a domination of the state which was controlled by these socialists they called themselves communists both the russians and the chinese because they wanted to make a transition but they never did and they accepted that they never did one of the ways we know that is both of those societies run by a communist party never called themselves communist calling russia and china communist is something that was done in the west by people who didn't know or care what the difference between socialism and communism might be but it is very clear that they didn't call themselves communist never because they wanted to hold on to the notion that there was something more to socialism than the state capitalism which lenin had the courage to call by its name but was later changed to say well that's socialism this transitional phase we haven't gone beyond how does all this impact the relationship between china and the united states well besides all the confusion here in the united states as to where china fits in the capitalism socialism communism continuity that range we have a unique relationship problem between these two countries china is clearly an ascending rising economic political and cultural power in the world no one should be confused on that subject in contrast the united states is a descending power that is the footprint of the united states is smaller in the world economy with each passing year the heyday the dominance of the united states is shrinking and the economic political and cultural role of china is rising and that has always in the history of the world and particularly the history of capitalism been a big problem i'm going to come back to that in a couple of minutes but i want to show you that there are also similarities between china and the united states let me explain it this way in china you could divide the society into three parts at the top is the communist party and the government it clearly controls underneath that are the private and publicly owned enterprises the things that make the economy run and at the bottom the working class and it's been the job of the government and the political party that run everything at the top to make all this work out to make sure that the mass of the working class is educated disciplined to work for the enterprises foreign and domestic they've been very successful at that it's also been their job to make the mass of people support the system generally favor it be willing to elect those people to office that they elect in the party in the government and to work and to accept the decisions made and they've been successful at that the united states can also be divided into three very similar parts but it's the relationship among the parts that's a little different in the united states what's at the top are private capitalist enterprises the big businesses that we all know run this society underneath them are the parties and the governments that they control and then at the bottom again the mass of the working class it's been the job of the politicians and the government to keep all this working and they have done a middling job of that that's why this country is descending and the chinese are ascending their government at the top party and government mobilizing have proven themselves able to do things that the slightly different system private enterprise on top party government in the middle massive workers at the bottom haven't been so successful at let me give you some examples because they're really important over the last 30 years the chinese system has grown much faster economically than the united states two to three times faster it's not even close that's why the chinese are now the only rival to the united states and the european union and becoming more powerful as a rival literally every month so they've managed to faster economic growth but that's not all they've been better able to mobilize society to solve key social problems one of them we're living through right now the coronavirus pandemic look at the difference between the chinese focus on closing down wuhan and closing down the promise of the province of which wuhan was a capital really crunching down on this virus so it didn't spread versus the united states whose parties and government bicker and delay and stall and can't mobilize anything comparable so that we have here the united states four percent of the world's population and 25 of the world's corona cases and corona deaths they've been better able to handle that kind of emergency with their system and they've also been able to undertake enormous decisions the likes of which we haven't they committed themselves 20 years ago to develop their infrastructure their roads their highways their trains their cities their apartment buildings they have been so successful they build in advance of the demand they have whole cities fully equipped with transportation building that are empty these are not failures these are intentional making the materials available for the country to grow into extraordinary achievement we don't have that they committed themselves to become less dependent on world trade and more focused on their own domestic economy and they've made enormous strides and they wanted to focus their energies to not be destroyed by the crash of 2008 and then again by the crash of 2020 and they have gotten through those economic crashes better again than the united states here is an irony to consider part of the movement towards strong power governments the kind of thing donald trump imagines he could become is in its way a backwards upside down recognition that the kinds of social organization that the chinese have put into place are what other countries need to learn from the kind of person mr trump is the kind of party the republicans are could never admit what i just said so i do them a favor and explain that they are less the competitors and more the wannabes of this world there are two ways forward now as there were before the united states and china can and i say this with all seriousness can end up going to war against each other each with their nuclear weapons and we could all be gone if and when that happens and make no mistake there are historical precedents for this one of the reasons we had world wars 1 and 2 in the 20th century was because up and coming powers germany japan in particular threatened the dominance of what had been the dominant powers britain france and its ally the united states and war twice killing tens of millions of people and destroying huge parts of the world where the price paid for the struggle between an ascending and a descending power so could that happen again you bet but there is an alternative and the alternative is to understand that we could learn from each other's strengths and weaknesses the chinese have both and so do the united states and an exchange of information an exchange of products an exchange of technologies could make both societies continue the prosperous coexistence that characterized the last 30 years and could continue but we would have to recognize it finally there's another option that none of the above have considered that a movement could develop both here in the west and in china to do what i have been telling you is the theme of this entire program to finish that transition to finally take society beyond the employer employee relationship of private capitalism of state capitalism and of that blocked transition that constitutes what socialism has been in our lifetimes maybe now we can finish the transition go to something better than capitalism now that it's so clear that it leaves plenty to be desired this is richard wolff for democracy at work thank you for your attention and i look forward to speaking with you again next week

Channel: Democracy At Work

Views: 327,944

Rating: 4.881916 out of 5

Keywords: Richard Wolff, democracy, work, labor, economy, economics, inequality, justice, capitalism, capital, socialism, wealth, income, wages, poverty, yt:cc=on, agriculture, food, food supply, epidemiology, pandemic, virus, coronavirus, COVID-19, epidemic, viral pandemic, money supply, interest rates, inflation, rents, eviction, Marx, Understanding Socialism

Id: 3Tbf2bpgs-E

Length: 29min 25sec (1765 seconds)

Published: Mon Aug 24 2020

Reddit Comments

[u/timoyster]

Wolff is a tankie confirmed lol

[u/thelasthoxhaist]

cant wait for the libs to claim wolff is a genocide denier

[u/ShittyInternetAdvice]

I'm not a fan of his overemphasis on co-ops but he usually presents the most balanced take of actually existing socialism compared to many other prominent western Marxists

[u/DialecticalShitposts]

It would have been nice if he explained that China has a target for when the transition from state capitalist to socialist economy will happen.

[u/The_Filthy_Commie]

https://twitter.com/GeorgeKalaitza2/status/1299425445813850112

Wolff helped wake me up back in the day, now I do my part...They're on their way, they ain't ''stuck'' or ''stalling''.

http://www.xinhuanet.com/english/2020-07/28/c_139244475.htm

http://www.xinhuanet.com/english/2020-07/23/c_139234378.htm

[u/sleepingham]

If anyone has lib friends who need Marxist economics spelled out for them (if they refuse to read as well) then Wolff is a great option.

[u/GreatInternationale]

And r/communism called him liberal...