Paweł Krawczyk

China

There are two primary groups of people who talk about #China being a “communist” country and for both it had replaced USSR as the archetype country – an absolute evil of “central planning” for US neoliberals, and a modern “socialist utopia in making” for diehard communists.

The opinions I've see in discussions with the latter indicate quite clearly that the picture of China as “success of #communism” is being actively distributed by some left-wing activists. Just as in case of neoliberals, whose semantic confusion about socialism I discussed in the past, China – although formally ruled by a Communist Party of China – is as far from communism as practically possible.

State-owned-enterprises (SOE), which could be considered one way of “collective ownership of means of production”, are a significant part of Chinese economy and control strategic sectors, but in total they account for just 40% of GDP.[^1] The remaining 60% is output from a very broad spectrum of micro, medium and large private enterprises. It's hard to call a country “communist” if more than half of its enterprises is privately owned...

Second argument I've heard is that China maybe departed from communism in 70's but is now gradually nationalising its economy again, and thus is “on its way to communism”. Indeed, since then the People's Bank of China has gradually nationalised most of the private banks as they defaulted in wild-west economy. With entry of China into WTO however, banking market had been significantly liberalised and has a number of banks fully privately owned such as China Merchants Bank.

As an anecdotal evidence, do watch this Voice of China (posted by Channel 4 in UK, 2011) where students from China talk quite openly about what does work in their home country, and what doesn't:

China is facing difficulties internally, when people from outside look at China, they just see 8% growth, but people inside China see unemployment, inflation, increasing cost of houses.

Notably, under communist doctrine unemployment cannot even exist![^2]

Lastly, if the objective of communism is increasing income equality then China had departed from it by light years: Gini index for China is 0.385 (per WolframAlpha), only 7% smaller than... USA (0.414), a model capitalist economy. In 2010 income inequality in China peaked at 0.44, beating USA and Russia. For comparison, Czechia income inequality is just 0.249, but nobody calls it “communist”.

China is certainly a country with high share of state enterprises in the economy, but this is no way a criterion of economy being communist or not. I have already discussed the postulates of communism in detail, and very few of these are even present in modern China.

[^1:] WEF How reform has made China's state-owned enterprises stronger, 2020 [^2:] USSR dealt with unemployment simply by... mandatory employment: everyone had to be employed somewhere by law. Housing on the other hand was “given for free” in a very Soviet way – they were neither given, as people were allocated as tenants in state-owned houses, nor for free, as they paid a basic rental. Families also could wait 20 years to get an allocation due to never-ending “temporary shortages”, and they could be kicked out of the state-owned flat if they engaged in opposition activity.

— Paweł Krawczyk https://krvtz.net/ Fediverse @kravietz@agora.echelon.pl

As of 2020 in the political discourse on social media there seems to be only two paths: “socialist” or “capitalist”. In reality, the true choice lies between pragmatism and dogmatism, but the line of division between these two is not exactly where most people expect it to be.

What can we learn from rise and fall of USSR?

There's little doubt that USSR was “socialist”, as it not only had “Socialist” in its name, but also, and most importantly, pursued policies of socialist thinkers, specifically #Marx, #Engels and #Lenin. In their socialist economy private for-profit trade was replaced by a transitional solution to #communism, still involving prices and money, but with state owned means of productions and central planning. For-profit private trade was actually a crime (of “speculation”), punished under article 154 of criminal code of USSR.

As result, #USSR experienced a fast growth, shortage of goods, strong industrial production, flourishing black market, free high education and public health, stagnation and secret loans from the “imperialist” powers it condemned in official propaganda.

An important checkpoint was the New Economic Policy of 1922, when Lenin decided to relax the ideological position of the Soviet state and allowed for-profit enterprises, specifically with the objective of stimulating economy.

That certainly was a pragmatic decision and it resulted in accelerated growth of agricultural and industrial production.

Then however #Stalin decided it was too much of a “compromise” and reintroduced harsh collectivisation and nationalisation in all sectors. This step marked USSR's return from pragmatism back to dogmatism.

Was USSR policies dogmatic? Certainly so, placing all private trade and production in criminal code was dogmatic. Was it sustainable? At the time of its dissolution in 1991 USSR owed over $70m to the Paris Club, and was unable to pay not only installments, but even salaries and pensions internally.

Capitalism... or what exactly?

While Marxism-Leninism was a very detailed, even prescriptive ideology that described both social and economic relations at every level of society, most definitions of “#capitalism” are based on presence of a few typical features: private ownership of means of production and for-profit trade.

There's however nothing in “capitalism” that precludes operations of other forms of economic activity: cooperative, state-owned, non-profit enterprises are all widespread and coexist along with private for-profit ones. Pragmatic “whatever works” approach seems to be at the very core of capitalist economies.

As result we have extremely diverse world of economies, that are very different in their social and political organisation, but all share the common features of capitalist economy: Russia, USA, France, China, India and practically all others.

Wait... communist #China? Yes, China is an interesting case because in spite of the country being run by Communist Party of China, it's hard to argue that a country with 60% of GDP produced in small and medium private for-profit enterprises is indeed “communist”. It just defies all postulates of communism, at least in the economic sphere.**

As result of this diversity, when talking about “capitalism” we need to be quite precise which one we mean: French, Russian, some other? Because all of these systems differ dramatically in their policies on income and inheritance tax, social welfare, social housing, public healthcare and dozens of other policies.

A frequent counter-argument here is that Western Europe was forced to introduce socialist elements as result of Soviet Union inspiring workers in the West. In the first place, it's not quite true as social policies predate Soviet revolution by a century.*** But even if it was the case, so what? These policies were introduced specifically because of the “whatever works” attitude and lack of any specific ideological rigidity as seen in USSR.

Dogmatism in capitalist economies

Make no mistake, capitalist economy can drift towards dogmatism just as well: US political discourse is the best example of it.

When people start talking about “#socialism” or “#communism” in response to any suggestion that barely mentions the word “public” (as in “public healthcare”), you know that they have abandoned the pragmatic approach and turned into ideology.

Now, if it's done against outcomes of process efficiency analysis (“ok, at this point having public healthcare might be actually cheaper”), then we are facing precisely the same bias that led USSR to ban private trade against all the experience that suggested otherwise.

This particular bias has its own name and it's called “#neoliberalism”.

Footnotes

  • * Nikolay Shmelyov “Credits and debts” (1987) explains in great detail the state of Soviet economy in mid-80's.
  • ** China started to abandon its hard Marxist-inspired economic policies starting from 80's, shortly after death of Mao. These changes were said to be inspired by Soviet NEP, and are a great example of economic pragmatism that made China the industrial power it is today.
  • *** In case of UK, first labour and what we would today describe as welfare laws were introduced in 18-th century. Public schooling and healthcare were proposed by no one else than Adam Smith around half century before Marx.

— Paweł Krawczyk https://krvtz.net/ Fediverse @kravietz@agora.echelon.pl