Globalisation, now the working extension of what was once the traditional western imperialism, has started to reverse capitalism's development. In the last blog (Is the nation state finished?) it was pointed out that Lenin's perception - that the height of western imperialism was not the 'end' of capitalism per se - instead it was the highest stage, and that capitalism would be able to progress no further, has, in turn, been finally confirmed.
The confirmation of Lenin's idea was, inevitably, a combined and uneven process. Shattered by not one but two world wars, western imperialism continued to lead the world after WW2, but more and more western states, led by the US, increased their internationalisation and then accepted the swollen corporations, which promoted global capitalism themselves. That effectively replaced and re-focused the declining role of the failing imperialist wars and the weakening military success of the West. Instead, the concentration of wealth, the utilisation of international debt and the focus on secret high-tech and novel communications, in the hands of western corporations, became the new version of global hegemony - an imperialist type construction that maintained western global domination.
And here is the consequence; Lenin's insight is finally confirmed; modern 'imperialism' or 'globalisation' is now creating the decline of the West and is reversing its previous 'development'. Today's western and particularly the US's capitalism, no longer expands development. Instead in the West it reverses economically and eventually declines both politically and in any social progress. Now it will diminish even the rise of the East and specifically, China.
Previous POLECON blogs, over many years, have put the argument that capitalist progress in the West has wound down. More generally, the comparison of the internet and its social network, AI (for ever on the horizon) nano-tech that in reality only means 'smaller', space opera, some medical advances etc., compares very little to the first part of the 20th century's progress. Politicians and other public figures try to dazzle today's population with the handful what amounts to modern baubles. A tiny, international-set of $ billionaires grow fast. But more and more millions and billions in the West discover that their lives are no longer better than their parents and will be significantly worse for their children. The United Nations claim that the modern world's population has become less poor is almost entirely the result of China's development of its previously impoverished population.
But what of China and the East? In the East, led by China, rapid, indeed spectacular development has occurred; contradicting the slow-down and reverse of the West. (This development remains the greatest shift of human society out of poverty in human history.) The reason is simple (but often blurred or denied in the West.) In particular China used a different form of capitalism than the inevitable system that the developed West was forced to apply. If the traditional nature of Western imperialism was as powerful as it was in the 19th and early 20th centuries, China (and the rest of the East) would still have remained as satraps to powerful western states. But the West was pushed back by revolution and failed wars after WW2 and the creation of the 'globalisation' of capitalism, operating as the domination of wealth and debt became the extension to the 'old fashion' style of imperialism.
China used the failure of the West's multi-imperialist domination and their settlements to open up its own style of capitalism. State capitalism was a method that allowed private enterprise but is controlled by the state. (Early communist Russia desperately argued for the implementation of this stage as its post-WW1 industry collapsed!) The Chinese market was controlled by the state. And for nearly 30 years it has become a tremendous success. The Chinese CP leaders suggest that their political system, managed by the leaders of the Chinese CP, is the reason for this immense development. But the leaders are still there with a vengeance and China's state capitalism, despite (or because?) of its leaders is now starting to fail.
State capitalism is itself a paradox - and the early Russian communists were aware of that too. Its momentum can create extraordinary development - as has been seen - but it cannot remain capitalist without competition and private ownership - and these two features cannot be controlled by the state. Accordingly, this state-capitalist momentum, the fast rise of unfettered development, becomes stuck. Other capitalist forces, particularly in the global era, begin to press against the 'unfair' production of state capitalism and begin to block the previous balance where the machinery of development is sold for mass, basic, cheap products in return. The critical engine of globalisation 'provides' the wealth and loans but with China, they are dealing outside of the institutions and banks which mobilise these machines. They, more and more, exert pressure on China's independence of wealth.
Secondly, the key aspects of further development become contradictory as state-capitalism, as it once churned out basic goods, so now requires the purchase of the most developed imports to go further - and therefore presses further for dangerous reforms in relation to the Chinese model. Here is the parts of a speech recently given to the 'Great Hall of the People', China's assembly that gives key messages to the many hundreds of Communist Party leaders.
'We are at least thirty years from becoming a manufacturing nation of great power. Industries heavy dependence on US high tech products such as semi-conductors (is) a strategic weakness. Core technologies are in the hands of others (and threaten) being hit in the throat.' The pivot to service-based model in China 'now means that in 2020 manufacturing is one quarter of the gross domestic product. 'The ratio of manufacturing has reduced too quickly. There is too much of the big but not strong.' Miao Wei made these statements to his vast audience. He was the industrial and information technology minister and a member of the equivalent of the polit-bureau for ten years. He has recently retired. There can be no doubt that his words were deliberately said, so dramatically, with the backing of Xi Jinping.
Miao Wei offered his solutions. He identified the weakness of 'insufficient market-orientated reforms.' The reforms mean reduction of tax burdens, the need for investments and a much greater of innovated high tech.'
These messages are partly aimed at reducing US tariffs but more significantly the warning from Miao is the need to break out from at least some of state-capitalism and to allow capitalist 'freedom' and personal ownership to take the next step of capitalism in Chinese society. It seems that state capitalism has reached its ability in China to continue the immense development it created. China is speculating on a turn towards full globalisation. It is taking hesitant steps into capitalism's increasing failure.
The East, or at least China, is appearing to tentatively join the declining West.
The world's economic future is already shaping its politics. Leading scholars and public figures try to grasp the meaning of the unsettled democracies in the West. Identity politics? The terror that labour will be run by robots? Fear of the East? Nukes are now proliferating as means to keep the door closed from the bandit states that they 'trade' with. It's junk. Capitalism is breaking down - even in the future of China. And this is why billions fear for the future - their lives are going to get worse. Trying to rev-up capitalism or growing more nukes are just parts of the problem. There will be revolution(s). And from them, no matter how long, we need a new civilisation.
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