Cameron's Guardian article (Nov 17) is cynical. It tries to undermine Labour-voting, white-collar public sector workers who read the Guardian, by emphasising how bloody foreigners look set again to wreck Britain's economic progress so far achieved under the Coalition government. This is designed to reduce any possible confidence that a Labour government would have the means to restore public services and that the priority is still the much more basic need to 'save' the economy and therefore to vote for a 'steady pair of hands.'
The British economy is shakier than Cameron admits. In 2014 the Coalition have increased the government's spending deficit, despite deficit reduction being the government's number one purpose, despite falling unemployment, despite the low rate of inflation and low interest rates, despite wage increases creeping above inflation in the last quarter for the first time in 4 years and despite all the cuts. Why? Because British working class people have had the greatest reduction in the value of their incomes over the shortest period since records began. (For example 4 million people now 'work for themselves.' They are, on average, two-thirds poorer, not including pension and holiday benefits, than they were when they were employed.) And the British system has still managed to saddle them with the highest personal debts of any European country. So, their taxable income is less than it used to be historically, and the Treasury miscalculated.
The deficit is here to stay. It is not only the poor who pay less taxes. Besides the hacking away of services, of welfare payments and of incomes of the working and non working poor, the rich are also not paying much tax and they are certainly not investing. In the case of the rich it is the increases in their incomes that has led to their reduction of tax payments. The spectacular concentration of wealth in the hands of the rich in the last ten years, notwithstanding the 2008 banking bust (which saw precisely no brokers or bankers jumping from office windows) has led to immense new centres of wealth in tax havens, amounting, according to a recent UN report, up to $40 trillion. (The wealth of everybody in the world, including all of their possessions, is estimated to be $241 trillion.) In addition, none of the big corporations based in Britain pay anything like their national tax bills, as these giant companies are now technically located behind a brass plaque on a post office door in a Swiss village called Zug (in the case of Boots) or Luxembourg (in the case of Vodaphone) or Monaco (in the case of Top-Shop.)
Additionally big corporations in Britain are on investment strike. They are holding vast reserves of Capital estimated at £75 billion. Why? Because Britain is a mainly low tech, service economy. Speculative enterprise on the stock exchange (boosted as it was by huge injections of Quantitative Easing) and investment in the BRIC economies seemed to be the ticket, but even these possibilities are now fragile. The idea that there will be sizable private investment in new technologies and production is laughable. Just look at the profits guarantee over 20 years that the pro nuclear government needed to make in order to get one power station built.
What all this boils down to is that the government's deficit spending can only be resolved through further cuts and tax rises on essential spending. And so the Tories are winding up for a new package as severe or more severe than the last. (Labour says it will reduce the deficit but 'more fairly.') Britain will then become a country where for a decade (at least) major social services were cut to a half or less of their size, and the new, shrivelled provision that emerged after this decade becoming a permanent fixture, but one dealing with an older and larger population. And of course even this prediction may be optimistic. There is no reason to assume that productivity (fuelled by investment) or incomes (fuelled by stronger bargaining power of workers) or increased taxes from the rich (fuelled by law and coercion) will rise to a point where the government's overall tax base stops dwindling. No. The total reconstruction of British capitalist society, towards the privatisation of all essential services, in the direction of the USA, or more realistically Japan, may well be well underway and will shortly become irreversible. They may have to be rebuilt from the ground..
Which means that austerity, whoever promotes it, and however they present it, is the road to hell. The reality emerging after the first five years of this policy is that it is, and has to be, a virtually permanent priority for our rulers. They are prescribing a revolutionary change to the world of the workers, the sick, the old, indeed the whole of the working and non working poor. They are rolling back all the main social gains of the struggles of the 20th century.
Equally radical measures are as required to reverse this future as those being used to create it. Only the boldest government, determined to reduce inequality by direct measures like removal of all anti-union laws, which would increase the power of workers to expand their portion of national income and therefore their tax payments, and to force open investment in new production by law and by punitive seizure in the event of recalcitrance, can reverse this destructive process.These and other far reaching inroads into the tremendous resources and power that big capital has now built up will be required.
The first step in this direction will be taken as a truly politically independent, mass movement against austerity emerges that will provide the engine room for the political developments needed. The Peoples Assembly is the best step yet taken in that direction. Its growth and success can be a real factor in changing our future.
Monday 17 November 2014
Wednesday 12 November 2014
You say you want a revolution ... Greece's future
We are reaching a new focal point
It is shattering to face the indisputable evidence that the much-mocked bureaucrats of the European Commission and the European bank, bolstered by the IMF, have deliberately caused the destruction of a modern European society. This programme of despair was subsequently supported by all Greek's main parties as well as all those who already had wealth and power in Greece and across Europe. Most of the Greek population, who had to deal with the effects of the international austerity plan, had no reference point to compare with the conscious and organised dismantling of their health service, the dramatic reduction of their living standards, the rise in the national death rate, including infant mortality and chronic diseases, the new hunger faced by what the UN designates as a third of the population - nothing to compare it with, except for the very oldest people in Greece who remembered the impact of the Nazi occupation.
It is shattering to face the indisputable evidence that the much-mocked bureaucrats of the European Commission and the European bank, bolstered by the IMF, have deliberately caused the destruction of a modern European society. This programme of despair was subsequently supported by all Greek's main parties as well as all those who already had wealth and power in Greece and across Europe. Most of the Greek population, who had to deal with the effects of the international austerity plan, had no reference point to compare with the conscious and organised dismantling of their health service, the dramatic reduction of their living standards, the rise in the national death rate, including infant mortality and chronic diseases, the new hunger faced by what the UN designates as a third of the population - nothing to compare it with, except for the very oldest people in Greece who remembered the impact of the Nazi occupation.
How can soft-skinned euro bankers and commissioners, who have only ever had to worry about ensuring the best seat in a restaurant, preside over, then regularly monitor, enthusiastically promote and defend the destruction of millions of people's lives? Who better? These people and their families will never experience the effects of what they are doing.
In 2011 Greece rose against its tormentors. The public squares became occupied territory. The police were cowed and governments fell. Most important, those who saw the possibility of a new future started to build Europe's most successful new party, Syriza. And for months now Syriza has led all the polls. Next February, say Syriza's leaders, they will probably form a government. And that is what Europe, indeed the world, and certainly the left must study and prepare for.
The current Greek parliamentary majority may fall next February over a technicality; its inability to muster a two thirds majority to initiate the new Presidency. But there is much behind this technicality. First is the claim of the current Greek government that Greece has pulled through; that Greece has succeeded in dealing with the debt and the economy is recovering. The government's claim has no credibility in Greece, and nor does it register in the centre of the euro zone, where, today, they are preparing for a new crisis. Second, the current Greek government have stated that they intend to continue with full blown austerity measures even when the 'memorandum' with the EU, the ECB and the IMF is over. This closes all hope of a reasonable future for Greek's majority by way of the current political leadership. But the Greek majority is not crushed and does not accept endless austerity for itself or for its children. 3 million (from a population of 10 million) have already used the Syriza solidarity clinics and markets initiated barely a year ago. This amounts to an immense political act of defiance.
A Syriza led government by next February may yet be avoided by chicanery or corruption in Parliament. But the critical political contradiction in Greece will not be dodged in the next period. The future of Syriza has now become the next battlefield for Greek's contending social classes and for the struggle against euro-austerity. The potential, the promise, the successes or otherwise of an anti-capitalist government in Greece will mark the whole next stage in the future of all the social classes of the country and reshape European politics as a whole.
Syriza
Syriza is a conglomerate of various left strands in Greek politics. Its leadership, assembled around the charismatic Alexis Tsipras, is partly drawn from the Euro-Communist movement (although a movement emerging in very different conditions to that of Italy, France or Spain.) Some ex PASOK people have broken from the Social Democrats. The main Trade Union spokesperson for Syriza is an ex member of the traditional Greek Communists - who up to now have taken a deeply sectarian position on the new party. Greens play a major role. Finally a significant far left trend comprising ex anarchists, Maoists, Trotskyists etc., have formed a substantial part of Syriza's most active cadre. Additionally there are tens of thousands from no particular political tradition who have been won to its non-sectarian approach, its undogmatic message and its ability to turn, in the terms of its own slogan, 'hope into practise.'
For the last four years Syriza has developed a coherent opposition to austerity and through its non-sectarian and active politics driven deep roots down in the urban centres and started to develop them, through initiatives like the 'no middlemen' markets, in the countryside too. And now Syriza's support and alliances, both internally and across Greek society, are about to be tested to their limits.
An anti-capitalist government?
In a summer-storm of abstraction (full of sound and fury but ...) all sorts of potential futures for Greece with a government led by Syriza might be envisioned. The historical experiences of Chile and more close to home, of the Greek Colonel's coup, loom threateningly across a political landscape partly created by the fear of a Syriza government among Greece's traditional rulers. But rather than issue magisterial warnings from a singular distance and from a place with no such experience in living memory, to those currently committing everything to winning popular change, it is perhaps more useful to see the Greek perspective through the eyes of the anti austerity activists on the ground as they grapple with the problem of a new and different future for their country.
For many of these militants, who come from the battle of the squares, who are building collective solidarity not charity, their most fruitful repository of radical thinking comes from the most recent experiences in Latin America. This starts with an acute understanding of the social interpenetration of what used to be called 'first' and 'third world' conditions. The social character of Greece is marked by 30% unemployment (60% of youth) and by the fact that 95% of those who are employed are working in businesses with 10 or less employees. Only 8% are employed in industry. There are 4000 unions mainly organised on a local or regional basis and while new workers formations have been built, for example between groups of workers occupying employer - deserted factories, the traditional union movement is highly bureaucratically led with a 'special interest' perspective in many cases. About 13% of workers (not including owners or renting farmers) work on the land. 24% of Greek's population live there.
This is the world of the mass movement. Class identity here flows from social and political action taken by 'the people' in the streets. It does not stem from the great units of production as in Petersburg in 1917 or Germany in 1919. The mass movement, including cooperative and self-help actions, are the living profile of a new class 'becoming' itself.
What moment has a subversive and radical government in this constellation? Inevitably it takes the political form of centralising and thereby providing the piston for the movement's energy. We have witnessed this before. Bela Kun's government in 1919 Hungary was an early and unsuccessful example. More recently and more successfully we have experienced the Latin American and more particularly the Venezuelan experience. The government leaders are a leading part of the movement itself. That is how they have won the election and why they sustain power. The government is a popular force in its own right which amalgamates the power of the administration with the power of the streets. Most important of all, it relentlessly and systematically defends, supports and advances the cause of the poor. The government is seen as an extension of the movement by the poor. The cause of the poor is the cause of the government.
Of course promoting the lives and conditions of the poor means making decisive inroads against traditional wealth and power, through taxes, through seizures of property, through fines and other legal punishments. It may also mean, in the Greek case, the repudiation of bankers' loans from the EU and even a change of currency. And it means having a decisive policy in relation to forces that sit at the centre of the state. Greece has an army of 130 000 and a population of 10 million. (The UK has a population of 60 million and an army of 80 000.) Greece (still) spends more per capita than any other European country on its armed forces. Greece has 50 000 police, about 450 for every 100 000 of the population. And the force is highly politicised by fascists. Following the end of the Colonel's coup in 1974 and the strong links between many poorer Greek families and their relations in the army it is unlikely that the army will mobilise against a genuine peoples government unless a deep crisis in their social alliances emerges. Nevertheless, the police's loyalty will be a difficult issue to resolve from day one, and the peoples' movements may need to cordon off certain units and departments of the force as part of their action against provocation and racist disorder, with associated and prompt government remedial action.
No promises in history
There are no promises in history. Many groups of leftists, including inside Greece, already write off Syriza's capacity to take the step of becoming what would be, ultimately, an anti-capitalist government. Unfortunately at this time of possibility and hope they choose to stay outside the political front that will create a new goverment of Syriza, the better one supposes to critisise it and prepare for its 'betrayel.' Others doubt the reemergence of the mass movement that dominated Greek politics in 2011 and 2012. In reality the defence of a government that really did defend and promote the lives of the poor would emerge in greater volume of numbers and with a clearer set of objectives that anything that has happened before in Greece. It would be the greatest moment of their history. So much has been proved over and over again, including in Greece, in parallel situations. So much is clear.
But the project; to set up and then defend a government in Greece whose main priority is the poor; must surely be decisive political priority for every leftist in the world and especially in Europe. The evolution of this project will no doubt take many turns. Life is infinitely more creative than any theory. But, surely the point is 'On S'engage; Et Puis, On Voit!'
Syriza
Syriza is a conglomerate of various left strands in Greek politics. Its leadership, assembled around the charismatic Alexis Tsipras, is partly drawn from the Euro-Communist movement (although a movement emerging in very different conditions to that of Italy, France or Spain.) Some ex PASOK people have broken from the Social Democrats. The main Trade Union spokesperson for Syriza is an ex member of the traditional Greek Communists - who up to now have taken a deeply sectarian position on the new party. Greens play a major role. Finally a significant far left trend comprising ex anarchists, Maoists, Trotskyists etc., have formed a substantial part of Syriza's most active cadre. Additionally there are tens of thousands from no particular political tradition who have been won to its non-sectarian approach, its undogmatic message and its ability to turn, in the terms of its own slogan, 'hope into practise.'
For the last four years Syriza has developed a coherent opposition to austerity and through its non-sectarian and active politics driven deep roots down in the urban centres and started to develop them, through initiatives like the 'no middlemen' markets, in the countryside too. And now Syriza's support and alliances, both internally and across Greek society, are about to be tested to their limits.
An anti-capitalist government?
In a summer-storm of abstraction (full of sound and fury but ...) all sorts of potential futures for Greece with a government led by Syriza might be envisioned. The historical experiences of Chile and more close to home, of the Greek Colonel's coup, loom threateningly across a political landscape partly created by the fear of a Syriza government among Greece's traditional rulers. But rather than issue magisterial warnings from a singular distance and from a place with no such experience in living memory, to those currently committing everything to winning popular change, it is perhaps more useful to see the Greek perspective through the eyes of the anti austerity activists on the ground as they grapple with the problem of a new and different future for their country.
For many of these militants, who come from the battle of the squares, who are building collective solidarity not charity, their most fruitful repository of radical thinking comes from the most recent experiences in Latin America. This starts with an acute understanding of the social interpenetration of what used to be called 'first' and 'third world' conditions. The social character of Greece is marked by 30% unemployment (60% of youth) and by the fact that 95% of those who are employed are working in businesses with 10 or less employees. Only 8% are employed in industry. There are 4000 unions mainly organised on a local or regional basis and while new workers formations have been built, for example between groups of workers occupying employer - deserted factories, the traditional union movement is highly bureaucratically led with a 'special interest' perspective in many cases. About 13% of workers (not including owners or renting farmers) work on the land. 24% of Greek's population live there.
This is the world of the mass movement. Class identity here flows from social and political action taken by 'the people' in the streets. It does not stem from the great units of production as in Petersburg in 1917 or Germany in 1919. The mass movement, including cooperative and self-help actions, are the living profile of a new class 'becoming' itself.
What moment has a subversive and radical government in this constellation? Inevitably it takes the political form of centralising and thereby providing the piston for the movement's energy. We have witnessed this before. Bela Kun's government in 1919 Hungary was an early and unsuccessful example. More recently and more successfully we have experienced the Latin American and more particularly the Venezuelan experience. The government leaders are a leading part of the movement itself. That is how they have won the election and why they sustain power. The government is a popular force in its own right which amalgamates the power of the administration with the power of the streets. Most important of all, it relentlessly and systematically defends, supports and advances the cause of the poor. The government is seen as an extension of the movement by the poor. The cause of the poor is the cause of the government.
Of course promoting the lives and conditions of the poor means making decisive inroads against traditional wealth and power, through taxes, through seizures of property, through fines and other legal punishments. It may also mean, in the Greek case, the repudiation of bankers' loans from the EU and even a change of currency. And it means having a decisive policy in relation to forces that sit at the centre of the state. Greece has an army of 130 000 and a population of 10 million. (The UK has a population of 60 million and an army of 80 000.) Greece (still) spends more per capita than any other European country on its armed forces. Greece has 50 000 police, about 450 for every 100 000 of the population. And the force is highly politicised by fascists. Following the end of the Colonel's coup in 1974 and the strong links between many poorer Greek families and their relations in the army it is unlikely that the army will mobilise against a genuine peoples government unless a deep crisis in their social alliances emerges. Nevertheless, the police's loyalty will be a difficult issue to resolve from day one, and the peoples' movements may need to cordon off certain units and departments of the force as part of their action against provocation and racist disorder, with associated and prompt government remedial action.
No promises in history
There are no promises in history. Many groups of leftists, including inside Greece, already write off Syriza's capacity to take the step of becoming what would be, ultimately, an anti-capitalist government. Unfortunately at this time of possibility and hope they choose to stay outside the political front that will create a new goverment of Syriza, the better one supposes to critisise it and prepare for its 'betrayel.' Others doubt the reemergence of the mass movement that dominated Greek politics in 2011 and 2012. In reality the defence of a government that really did defend and promote the lives of the poor would emerge in greater volume of numbers and with a clearer set of objectives that anything that has happened before in Greece. It would be the greatest moment of their history. So much has been proved over and over again, including in Greece, in parallel situations. So much is clear.
But the project; to set up and then defend a government in Greece whose main priority is the poor; must surely be decisive political priority for every leftist in the world and especially in Europe. The evolution of this project will no doubt take many turns. Life is infinitely more creative than any theory. But, surely the point is 'On S'engage; Et Puis, On Voit!'
Thursday 6 November 2014
China fever; the world in peril; a short essay.
According to some indicators, China already has the largest economy in the world. China's growth, as it embraced the international capitalist market, was by far the main feature of the end of the 20th century and the early part of 21st century history. Why? Because, in twenty years, nearly a billion Chinese people, one sixth of the world's population, were lifted out of mind-numbing poverty while the Chinese economy became the engine room of a new stage in the development of international capitalism.
Apologists for capitalism argue that the economic progress of China is a proof of the preeminence of the market system when it comes to potential world-wide economic growth. Capitalism, in this conception, will just go on and on developing the world. Others, including Chinese scholars, comprehensively rejected this abstraction and instead argued that an immense weakness of western Imperialism at the end of the 20th century had combined with a huge Chinese state effort to create national infrastructure and transport, to mean that the relatively well educated and very cheap labour force of China could be accessed by international capital, but without foreign powers being able to dictate terms, or push over the Chinese leadership and carve up Chinese political and social organisation and create a structural dependency in China on the Imperialist centres. The strength of the 1948 Chinese revolution - with its successful twenty year war against Imperialists led by the Japanese invasion and their domestic allies - was sufficient to allow the emergence of the biggest market in the world in China without it liquidating key domestic political and social priorities. At the same time, western Imperialism, the strongest force on the planet, was already coming to the end of its unquestioned international dominance. (For example after the Vietnam defeat in 1974, local ruling classes in the Middle East created their own investment capital by means of their ransom of the west over oil prices. Since the outset of the catastrophic 'war on terror' parts of Latin America have partially or completely broken with US hegemony.) Moreover, Imperialism even found itself no longer able to routinely export its own internal conflicts and the various crises that they produced, to its various empires.
In this rather different perspective, rapid Chinese economic development was not 'organic' to capitalism, but rather it emerged as a result of a particular political and economic conjuncture where, on the one hand, the 1917 revolutionary wave had been definitively defeated but, on the other, where that same global struggle over the legacy of 1917, and its world wide consequences, had exhausted Western Imperialism, its main enemy. The West found it had no alternative but to mount vast new internal offensives against its own labouring classes to shift the accumulated balance of forces at home while simultaneously making concessions to key, previously colonial or under developed countries, which included having to accept the terms of the Chinese leadership, in order to open up Western profits from China.
A new and different capitalist future?
Is China to become the equivalent of Britain, the first capitalist world power that built its vast reserves of capital through a century of domination of the slave trade which then powered the industrial revolution and helped it dominate one fifth of the globe for a century? Or is China to be a 'new' US which, through the industrial exploitation of its own continental market and its policing of the world, reorganised global capitalism, created new technologies and launched the new electronic revolution? In other words will China now begin to usher in a new period of growth of the world's productive forces in the way that previous leading nations and their empires did? And if so, will this new form of dynamic capitalism cast off the political trappings of western democracy with the rest of western dominated history?
US and other western thinkers talk and write of a new leadership of the capitalist world now emerging. They shake their wise old heads and despair that the new power in the world wide capitalist system will not be led by the benign democracies of the west as previously. Instead the autocratic and centralised Communist Party of China and its vast machine will be the world's ultimate capitalist political 'model.' It is interesting that both the main party idealogues in China and the intellectuals in various western agencies and think tanks, like Chatham House and the 'Foriegn Affairs' journal, basically share the same view. Abandoning relatively recent assertions (eg GW Bush) that it is capitalism that produces democracy, the more pessimistic oracles of the 21st century seem to have a different take on the relationship between succesful capitalism and democracy it seems. As do their counterparts in the CCP.
But this line of reasoning is a cul de sac. In fact, historically speaking capitalism has had little to do with democracy. Those democratic gains forced open in the West in the first part of the twentieth century by workers and the women's movements have been effectively marginalised for decades. G.W. Bush may think that it matters which millionaire wins the US presidency. The poor in the US and the rest of the world have little regard for the impact on them of this sort of 'democratic' exercise. No. The key question for understanding the growth of China and its impact on the rest of the world is nothing to do with idle speculation about the integral links, or otherwise, between democracy and the market system; it is rather the question can China lead the world out of the capitalist crisis, opening the world to a new period of development? Is capitalism, albeit unevenly and brutally, creating, via China and the rest of the BRIC economies, a new epoch for itself and therefore for the rest of us?
Where are we now?
China's per capita GDP in 2013 was $6807. (GDP per capita is the worth of goods and services produced per year, per head of the population.) The US's was $53143. China's per capita GDP rose by nearly half since 2009. In the US it rose by $6000 approx. As Chinese Communist Party leaders often say, China, from the point of view of the overwhelming majority of its population, is still a developing country. It is the sheer size of China's population that means that China's overall GDP will outstrip that of the US's in the next decade or so.
It turns out that China is far from opening a new epoch for capitalism. China has been brutally effected by the current capitalist crisis and deep contradictions are emerging from beneath the surface of every day Chinese life.
It has been the case for a decade that UN figures show social upheaval in China competing with that of South Africa as the most prononounced in the world. Now government debts in China have balooned to 240% of GDP as more and more social measures are required to 'flatten' social unrest and deal with the estimated extra 30 million thrown out of work by the collapse of the US import market. As government debt has expanded so quickly debt interest is high. This year China is set to pay an interest bill of about $1.7 Trillion (an amount that is larger than the total economies of South Korea, Mexico and Indonesia.) The Chinese population have, in the meantime, been exhorted to 'work hard and live plainly; do not wallow in luxuries and pleasures' by President Xi Jinping. At the end of October this year Chinese officials announced the lowest quarterly growth rate in the economy for five years (7.3%) and warned the Chinese people that they should prepare for 'a new normal' of slower economic expansion. But when an estimated 32% of new credit received by companies and agencies is used for paying off interest in loans and $1290 of China's per capita GDP (see above) is debt servicing, then productive expansion is undermined.
These trends show how modern China, with one leap, is moving from the productive expansion of its economic life, initially stimulated by the market ushered in by Deng Xiaoping in the late 1980s, directly to the economic 'debt model' followed by the decaying West for the last forty years. There is not a new model of capitalism here; there is no great rennaissance of the market system with a new vision of a dramatically reorganised world premised on its emergence. Rather the slow, painful history of vigour and victory followed by decline and decay witnessed over a century in Britain, rather less in the case of the US is now repeating itself, this time not accompanied by great new technological breakthroughs, over a period of a few decades, in the case of a barely developing China. The historical cycle of capitalism is repeating itself, in compressed ways, less creatively, with less hope for the future.
The leadership of the CCP is of course responding to these realities but in the classic way of those bureacratic castes that have emerged, increasingly distantly from some great social tumult which remains the entirely theoretical grounds of their own legitimacy. In fact they respond in all the colours of the political rainbow, levened only by self interest. As the market grows in its power and influence in Chinese society so the bureaucracy defends its role in meeting society's needs by being the managers of that market. Moral and judicial campaigns are carried out against corruption in the state machine as greater demands are made on the people encouraging the virtues of thrift. The reality is, as the sea of corruption bubbles over, that the market is remaking the political leadership in China and not the otherway around. Indeed some of the main targets of the CCP's anti-corruption campaign have been seen as political critics of the leading CCP faction rather than the source of greedy malpractice. The growing political corruption of the CCP echoes the growing day to day dynamics of the relations between the people and their state, the state with enterprises, the enterprises with the state, and on it goes. The political crisis in China is supressed only by the governement's perceived role in the massive expansion of living standards. It is no longer seen as a moral force. The vast majority of ordinary Chinese people will therefore not willingly 'prepare for the new normal.' And capitalism has not embarked on a new stage of history; a new global adventure. It turns out that project will be of an entirely different character and be in entirely other peoples' hands.
Apologists for capitalism argue that the economic progress of China is a proof of the preeminence of the market system when it comes to potential world-wide economic growth. Capitalism, in this conception, will just go on and on developing the world. Others, including Chinese scholars, comprehensively rejected this abstraction and instead argued that an immense weakness of western Imperialism at the end of the 20th century had combined with a huge Chinese state effort to create national infrastructure and transport, to mean that the relatively well educated and very cheap labour force of China could be accessed by international capital, but without foreign powers being able to dictate terms, or push over the Chinese leadership and carve up Chinese political and social organisation and create a structural dependency in China on the Imperialist centres. The strength of the 1948 Chinese revolution - with its successful twenty year war against Imperialists led by the Japanese invasion and their domestic allies - was sufficient to allow the emergence of the biggest market in the world in China without it liquidating key domestic political and social priorities. At the same time, western Imperialism, the strongest force on the planet, was already coming to the end of its unquestioned international dominance. (For example after the Vietnam defeat in 1974, local ruling classes in the Middle East created their own investment capital by means of their ransom of the west over oil prices. Since the outset of the catastrophic 'war on terror' parts of Latin America have partially or completely broken with US hegemony.) Moreover, Imperialism even found itself no longer able to routinely export its own internal conflicts and the various crises that they produced, to its various empires.
In this rather different perspective, rapid Chinese economic development was not 'organic' to capitalism, but rather it emerged as a result of a particular political and economic conjuncture where, on the one hand, the 1917 revolutionary wave had been definitively defeated but, on the other, where that same global struggle over the legacy of 1917, and its world wide consequences, had exhausted Western Imperialism, its main enemy. The West found it had no alternative but to mount vast new internal offensives against its own labouring classes to shift the accumulated balance of forces at home while simultaneously making concessions to key, previously colonial or under developed countries, which included having to accept the terms of the Chinese leadership, in order to open up Western profits from China.
A new and different capitalist future?
Is China to become the equivalent of Britain, the first capitalist world power that built its vast reserves of capital through a century of domination of the slave trade which then powered the industrial revolution and helped it dominate one fifth of the globe for a century? Or is China to be a 'new' US which, through the industrial exploitation of its own continental market and its policing of the world, reorganised global capitalism, created new technologies and launched the new electronic revolution? In other words will China now begin to usher in a new period of growth of the world's productive forces in the way that previous leading nations and their empires did? And if so, will this new form of dynamic capitalism cast off the political trappings of western democracy with the rest of western dominated history?
US and other western thinkers talk and write of a new leadership of the capitalist world now emerging. They shake their wise old heads and despair that the new power in the world wide capitalist system will not be led by the benign democracies of the west as previously. Instead the autocratic and centralised Communist Party of China and its vast machine will be the world's ultimate capitalist political 'model.' It is interesting that both the main party idealogues in China and the intellectuals in various western agencies and think tanks, like Chatham House and the 'Foriegn Affairs' journal, basically share the same view. Abandoning relatively recent assertions (eg GW Bush) that it is capitalism that produces democracy, the more pessimistic oracles of the 21st century seem to have a different take on the relationship between succesful capitalism and democracy it seems. As do their counterparts in the CCP.
But this line of reasoning is a cul de sac. In fact, historically speaking capitalism has had little to do with democracy. Those democratic gains forced open in the West in the first part of the twentieth century by workers and the women's movements have been effectively marginalised for decades. G.W. Bush may think that it matters which millionaire wins the US presidency. The poor in the US and the rest of the world have little regard for the impact on them of this sort of 'democratic' exercise. No. The key question for understanding the growth of China and its impact on the rest of the world is nothing to do with idle speculation about the integral links, or otherwise, between democracy and the market system; it is rather the question can China lead the world out of the capitalist crisis, opening the world to a new period of development? Is capitalism, albeit unevenly and brutally, creating, via China and the rest of the BRIC economies, a new epoch for itself and therefore for the rest of us?
Where are we now?
China's per capita GDP in 2013 was $6807. (GDP per capita is the worth of goods and services produced per year, per head of the population.) The US's was $53143. China's per capita GDP rose by nearly half since 2009. In the US it rose by $6000 approx. As Chinese Communist Party leaders often say, China, from the point of view of the overwhelming majority of its population, is still a developing country. It is the sheer size of China's population that means that China's overall GDP will outstrip that of the US's in the next decade or so.
It turns out that China is far from opening a new epoch for capitalism. China has been brutally effected by the current capitalist crisis and deep contradictions are emerging from beneath the surface of every day Chinese life.
It has been the case for a decade that UN figures show social upheaval in China competing with that of South Africa as the most prononounced in the world. Now government debts in China have balooned to 240% of GDP as more and more social measures are required to 'flatten' social unrest and deal with the estimated extra 30 million thrown out of work by the collapse of the US import market. As government debt has expanded so quickly debt interest is high. This year China is set to pay an interest bill of about $1.7 Trillion (an amount that is larger than the total economies of South Korea, Mexico and Indonesia.) The Chinese population have, in the meantime, been exhorted to 'work hard and live plainly; do not wallow in luxuries and pleasures' by President Xi Jinping. At the end of October this year Chinese officials announced the lowest quarterly growth rate in the economy for five years (7.3%) and warned the Chinese people that they should prepare for 'a new normal' of slower economic expansion. But when an estimated 32% of new credit received by companies and agencies is used for paying off interest in loans and $1290 of China's per capita GDP (see above) is debt servicing, then productive expansion is undermined.
These trends show how modern China, with one leap, is moving from the productive expansion of its economic life, initially stimulated by the market ushered in by Deng Xiaoping in the late 1980s, directly to the economic 'debt model' followed by the decaying West for the last forty years. There is not a new model of capitalism here; there is no great rennaissance of the market system with a new vision of a dramatically reorganised world premised on its emergence. Rather the slow, painful history of vigour and victory followed by decline and decay witnessed over a century in Britain, rather less in the case of the US is now repeating itself, this time not accompanied by great new technological breakthroughs, over a period of a few decades, in the case of a barely developing China. The historical cycle of capitalism is repeating itself, in compressed ways, less creatively, with less hope for the future.
The leadership of the CCP is of course responding to these realities but in the classic way of those bureacratic castes that have emerged, increasingly distantly from some great social tumult which remains the entirely theoretical grounds of their own legitimacy. In fact they respond in all the colours of the political rainbow, levened only by self interest. As the market grows in its power and influence in Chinese society so the bureaucracy defends its role in meeting society's needs by being the managers of that market. Moral and judicial campaigns are carried out against corruption in the state machine as greater demands are made on the people encouraging the virtues of thrift. The reality is, as the sea of corruption bubbles over, that the market is remaking the political leadership in China and not the otherway around. Indeed some of the main targets of the CCP's anti-corruption campaign have been seen as political critics of the leading CCP faction rather than the source of greedy malpractice. The growing political corruption of the CCP echoes the growing day to day dynamics of the relations between the people and their state, the state with enterprises, the enterprises with the state, and on it goes. The political crisis in China is supressed only by the governement's perceived role in the massive expansion of living standards. It is no longer seen as a moral force. The vast majority of ordinary Chinese people will therefore not willingly 'prepare for the new normal.' And capitalism has not embarked on a new stage of history; a new global adventure. It turns out that project will be of an entirely different character and be in entirely other peoples' hands.
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