Two
sea changes and the most difficult problem in working class political
economy
by: Wadi'h
Halabi
April
30 2015
The
class struggle is essentially over control of the surplus. At no time is this
more evident than during periods of capitalist crisis.
A
socialist revolution transfers control over the surplus from the capitalist
class to the working class, even though the latter may not rule directly. In
Russia, the transfer occurred in November 1917 (and reversed in 1991); in
northern Vietnam the transfer took place in August 1945; in northern Korea, in
May 1948; in China in October 1949; in Cuba, in the fall of 1960; in Laos, in
December 1975. It has also occurred in several others states, including Albania,
Yugoslavia, the GDR - states that later fell to counter-revolution, like the
USSR. The struggle for power is difficult enough, governing afterwards is even
more challenging.
However,
following the transfer of power, the new state - backed by its army - can
allocate and reallocate the surplus both to address needs of the new social
system and to keep unavoidable economic imbalances from ballooning into crises.
That ability to reallocate surplus is why economies formed by socialist
revolutions are not cyclical, in distinct contrast with boom-bust capitalist
economies. But the non-cyclical economies are part of a single world economy;
they cannot evade comprehensive challenges -- economic, political,
environmental, military, value and others -- until capitalism is no longer a
significant force in the world.
Capitalist
economies, on the other hand, are regulated by the boom-bust laws of commodity
production and exchange elucidated by Marx. The capitalist class and its state
do not control a capitalist economy, but the class does appropriate what surplus
is generated. The capitalists' one goal in life is their personal enrichment,
and maintaining their power and ability to exploit.
The
exploiters view their system's periodic busts as crises of 'overproduction' -
more commodities have been produced than they can sell profitably. Workers and
oppressed experience the same crises as rising unemployment, misery and
conflicts.
As
mentioned earlier, at no time is the contrast between the two social systems
more visible than in periods of crisis. The Soviet Union, for example, grew at a
9% rate through the Great Depression years, while capitalist economies tumbled
from crisis to crisis-and to war, including on the Soviet
Union.
The
first sea change since 2008
The
difference between the two systems has led to two sea changes since September
15, 2008. This was when the general crisis of capitalism - which is still
unfolding -- openly hit the imperialist center. Although the Chinese state is a
product of a socialist revolution, it was not immune to the crisis. Some 24
million Chinese workers producing for export lost their jobs in a few weeks
after the bankruptcy of Lehman Brothers, Merrill Lynch, AIG and other Wall
Street stalwarts. This was because demand from capitalist countries suddenly
collapsed.
The
Chinese state responded with a genuine stimulus program, based on its existing
five-year plan. It accelerated several state-controlled projects, including
development of rural infrastructure; launched the construction of millions of
homes; the expansion of mass transit in cities all across China; and the
development of a remarkable high-speed rail network. (The bullet-train network
grew from zero miles at the start of 2008 to a remarkable 10,000 miles today;
the trains currently average over 200 miles an hour, with 300mph trains in
development.)
China's
leadership also mandated that banks direct nearly all loans to projects
consistent with the five-year plan and the corresponding stimulus. This meant
lending primarily to state-owned and state-controlled enterprises, and cutting
loans to private businesses. (A 'shadow banking' system arose to lend to
private businesses, albeit with limited funds and high interest rates.) In just
five months after Lehman collapsed, nearly all 24 million workers in China had
regained their jobs, and the economy was soon growing at a 9% annual rate.
Unemployment did not skyrocket, and has actually dropped since the end of
2008.
The
first sea-change then is the significant relative strengthening of the state
sector in China since 2008, and consequently the relative weakening of the
private sector. Inevitably, this has led to heightened resistance from domestic
and international exploiters and their representatives.
A
second sea change since 2008
After
the crisis, tens of millions of workers in capitalist countries also lost their
jobs. But the ruling class and its states directed their resources to cover the
capitalists' losses and bad debts, not to address unemployment or meet human
needs. In sharp contrast with China, there was a near-halt in productive
investment in capitalist countries -understandably, since from the exploiters'
point of view, the problem was massive "over-investment" (as in the auto
industry), and the resulting losses. For the capitalists, charity starts at
their home - and ends there.
Industrial
production plummeted in capitalist countries after September 2008, while
unemployment skyrocketed. By March 2009, industrial production in Japan was down
34.2% compared to a year earlier; in the euro zone, it was down 20.2%; in
Britain, it was down 12.4%; in the USA, it was down 12.5%. (In China it rose
7.3% in the same period.) Real unemployment in most capitalist countries remains
higher today than in 2008. Most jobs that have opened since then are temporary,
part-time, low-paying or 'informal'. Oppressed nationalities, women, youth,
unionized, migrant and older workers have been hit especially hard. Capitalist
states' "stimulus" efforts, such as the US Federal Reserve banks' "quantitative
easing" programs, have been directed primarily to cover the ruling class's
losses and bad debts.
In the
US, it has been estimated that the state apparatus (mainly the Fed and the
Treasury) has transferred some 18 trillion dollars since 2008 to the ruling
class's main properties, especially its banks and insurance
companies.
Five
years after the crisis of 2008, industrial production had not recovered in most
imperialist countries. In 2013, Japan's industrial production was down 17.1%
from its 2007 level. (Japan is now in its third consecutive 'lost decade'.)
Industrial production in Europe fell 9.3% between 2007 and 2013. In the USA,
industrial production was down 1.2% in the same period. (Production in the US
has now slightly exceeded its 2007 level, partially thanks to the enforced
destruction of production in Japan, Europe, Iran, Iraq, Libya, and other
countries.) Furthermore, without China and Vietnam's rapid growth in purchases
(imports) from capitalist countries, there is reason to believe that the entire
capitalist world would now be in all-out crisis.
The
contrast between the US and China since 2008 is remarkable. In 2007, the UN
estimated industrial production in China at 62% of that of the US. Four years
later, in 2011, China's industrial production had risen to 120% of the US level.
(It now almost certainly exceeds 150% the US level; furthermore, UN calculations
ignore unequal exchange, which skews estimates of US industrial production
upwards.)
On
three basic measures of industrial activity -- steel , copper and cement -
China's production or consumption nearly equals or exceeds that of of all
capitalist countries combined. Even more important, the number of
regularly-employed industrial workers in China now appears to exceed that in all
capitalist countries combined. (This is in part because informal and
self-employment has become pervasive in capitalist industry - construction, even
mining and manufacturing.) The large concentrations of industrial workers in
China is unparalleled.
The
second sea change since 2008, then, points to the significant relative
strengthening of the international working class through the five states where
it holds power; and the significant relative objective weakening of the world
bourgeoisie. As Lenin predicted, far from reconciling themselves to the
superiority of working-class rule, the accomplishments of China, Vietnam, Laos,
etc., the exploiters' resistance has only multiplied.
The
question now is how these relative gains in the objective strength of the
international working class are used. They can be mobilized to complete
humanity's transition from capitalism to socialism, or to maintain the status
quo. The latter course will lead humanity to catastrophe.
Why the
future of humanity will be written in China
It was
once said that the future of humanity would be written in the USA. The two main
reasons were the size of 'manifest destiny' America, from sea to Gulf to shining
sea, and the superior productivity of labor in the US. Things have
changed.
Today,
the overall productivity of labor in manufacturing in China appears consistently
higher than anywhere in the capitalist world, rich or poor. (Agricultural
productivity remains a major weakness.) One reflection of this is that China's
share of world exports has continued to grow after 2008, even though hourly
wages have climbed, and are now eleven times those of Bangladesh, for example
and four times those in India.
China's
productivity in manufacturing has been achieved thanks to planning; its superior
educational system; its unparalleled infrastructure; and its social system's
capacity to maintain domestic demand, in sharp contrast with the boom-bust
cycles and deepening poverty in capitalist countries. (The Soviet Union
unfortunately did not achieve capitalist levels of productivity.) This, then, is
a first reason why the future of humanity will be written in
China.
A
second reason is that size matters. China's population is over four times that
of the US.
A third
reason is China's social system, formed by its 1949 socialist revolution, which
permits it to plan and allocate and reallocate the surplus to address imbalances
and social needs.
The
fourth reason, still emerging, is the considerable recent strengthening of
Marxism in China. This is reflected in its English-language Marxist journals,
such as Marxist Studies in China, the
World Review of Political Economy and
International Critical Thought,
published by organs of the Chinese state or the Communist Party of China; and
even more so in the boom in Chinese-language work devoted to advancing Marxism
and its application. Marxism inexorably points to the need to complete
humanity's historic transition, through comprehensive strengthening of the
domestic and international working class, and its conscious
unity.
The
most difficult problem in working class political economy
Perhaps
the most difficult problem in working class political economy today can be posed
as follows: What organizational vehicle will lead the completion of humanity's
transition from capitalism to socialism?
There
is no ready answer. But the "two sea changes" and the "four reasons" both point
to this: the decisive preparations for
humanity's historic transition will take place among the Communist Parties of
the world. (Another way to say the same thing is that a failure by our
parties to prepare will also be decisive for humanity, catastrophically.)
Why the
Communist Parties? We were formed by the Russian Revolution, the greatest step
forward in the entire history of humanity. We share the same reference point,
1917 - in other words, taking the working class's liberating interests to their
conclusion, seizure of power and reorganization of society - and the world - to
meet human needs. This historical role of Communist Parties was reinforced above
all by the Chinese Revolution; but all socialist revolutions since 1917, without
exception have been headed by a Communist Party. We have survived terrible
defeats and serious errors - the defeats, errors and resulting confusion are why
there is a 'most difficult problem'. But we are unlike any other political
parties in history.
Communist
Parties are in power today in all five states formed by socialist revolutions.
They command economic, organizational, educational and military resources that
not even the largest workers' parties or union in any capitalist country can
match. And Communist Parties are in existence in most capitalist countries,
again despite severe errors and major weaknesses.
More
than sixty Communist Parties have been meeting annually since 1995. Since 2002,
and especially in recent years, the Communist Party of China or one of its
sub-organizations has been hosting meetings with participation by a growing
number of Communist Parties from the rest of the world.
The
outline thus begins to emerge to address "the most difficult problem" in Marxist
political economy. Achieving effective working class unity requires building
cooperation around necessary tasks, and scientific (Marxist) clarity on the
major recent world economic and political developments.
The
most important of these developments is the counter-revolution in the Soviet
Union and eleven similar states (mostly in Eastern Europe). But we must surely
also include the present, general crisis of capitalism and the associated
environmental crisis; China's extraordinary economic development and superior
productivity of labor; and the effects of the two social systems' interacting
and conflicting within one world economy.
Among
necessary tasks around which we can build cooperation are the environment and
occupational safety and health; good, unionized jobs to meet human needs;
organizational tasks, including organizing the unorganized and addressing
internal weaknesses; and defending workers and oppressed facing capitalist
repression.
SUMMARY
-
A decisive question is how the international working class, the Communist Parties and five states formed by socialist revolutions act on the two sea changes since 2008. The changes point to objective gains in our class's relative strength. But the gains have come at a cost, and have multiplied resistance from the exploiters and their representatives.
-
If the gains are used to maintain the status quo, this will lead to certain defeats, and possibly a fatal environmental and social catastrophe for humanity.
-
Mobilizing the recent and historic gains of the working class - in philosophy, education, political organization, and state power -can change the global relationship of class forces and set the stage for human liberation.
-
The responsibility of class-conscious workers everywhere is clear: to strengthen our Communist Parties in every way - organizationally, ideologically, financially, in class composition - and conscious unity between our parties worldwide.Communist Parties of the world, unite, consciously!DATA SOURCES: John Ross, various articles in Global Times and China.org.cn, 2010-2014, provided by Cde.Al Sargis, Boston China Study Group; The Economist, "Economic and Financial Indicators" tables, 2008-2015; The Economist, "Asia's Tightening Grip [on manufacturing]", March 14, 2015; New York Times, "Chinese Exports Still Grow, Despite Rapidly Increasing Labor Expenses", January 10, 2014; Federal Reserve Bank of the U.S., "Industrial Production and Capacity Utilization", monthly releases, 2007 through March 16, 2015; US Commerce Department, "Quarterly Survey of Plant Capacity Utilization", 2007-2015.Special thanks to comrades Gary Hicks, CPUSA, Richard Levins, Albert Sargis and David Ewing, and to many comrades in the Communist Party of China, including comrades Jin Huiming, Li Shenming, Liu Shuchun, Cheng Enfu and Wu Enuyan.This article can be found at:
Endorsed
by: Global Network Against Weapons and Nuclear Power in Space, Mass
Peace Action, Veterans For Peace - Chapter 9, United for Justice with Peace,
American Friends Service Committee (Boston), Women’s International League for
Peace and Freedom, Watertown Citizens for Peace 
By Bob Meola, Courage to Resist. September 17,
2015
