[Marxism] Michael Keany on MR China article (from a-list)

[Louis Proyect <lnp3@xxxxxxxxx>]

In his introduction to the recently published Transaction edition of "The
Fiscal Crisis of the State" (Transaction Publishers, 2002), James O'Connor
relates his intellectual and political trajectory since the 1950s. In this
connection he discusses the reception given to the book upon its original
publication in 1973. While O'Connor charts his growing realisation that both
typical Marxist and neoclassical treatments of public finance were overly
empiricist in their approach, he describes his parallel development of a
theoretical perspective that could best be described as a combination of
political economy and political sociology. Falling between so many of the
disciplinary stools that are the reified building blocks of acadème,
O'Connor's book received a mixed reception, including outright hostility
from avowedly Marxist economists who had settled upon a particular way of
viewing "the economy".

Some months before he died, Mark Jones and I were discussing our mutual
frustration at the inability of certain individuals to recognise whatever it
was we were arguing over. I have forgotten the subject of our arguments, but
recall with clarity Mark's explanation: "But you see, they're economists.
They can't understand." Mark was getting at the same problem described in
much more detail by O'Connor, and alluded to by Thorstein Veblen in the
latter's famous reference to the "trained incapacity" of most economists to
address, let alone recognise, what was really happening in "the economy".
While Veblen was referring specifically to mainstream economists (he was
very respectfully critical of Marx), to the extent that those ascribing to
Marxism of a sort make their living within the academy which generally
rewards on the basis of adherence to orthodoxy, the same problem can be said
to exist. Within Marxism it may be compounded by a historic attachment to
the sort of "scientism" associated with Engels -- whatever the justice or
accuracy of that association. The fact is that many Marxist economists are
profoundly gifted technicians (number crunchers) but mentally and
emotionally ill-equipped to tackle what might be regarded (or even
dismissed) as "institutional" detail. As a result they practice an
abstracted empiricism analogous to that of mainstream economists, whose
"professional expertise" and recognition is based on technical prowess
rather than any ability to contribute knowledge of any earthly use, even to
the capitalist interests that might appreciate some sort of ideological
defence/justification. It is enough that they perpetuate the sorry state of
affairs that remains the economics "discipline" and "profession" -- they
will receive due reward (part of which is the opportunity to sneer at lesser
colleagues who insist upon wasting time "talking about things" rather than
"measuring" them).

Yet a Marxist perspective of "the economy", or, better, the social world
(incorporating economy, polity, society, culture) is indispensable to the
understanding of that world. For all the limitations to which Marxist
economics might be subject, it has the potential to overcome these through
recourse to a rich theoretical resource which enables the construction of a
more robustly-founded economic analysis that is placed in its proper social
context thanks to the unifying properties of Marxist theory. Institutional
economics, for example, is justifiably regarded as richer than mainstream
approaches because of its attention to the context of the phenomena it
addresses. But it has always been vulnerable to the charge of sacrificing
theory to mere description -- effectively empiricism, if not nearly as
abstracted as that typically practised by mainstream economists. Now is not
the time or place to rebut these charges, which are to a large extent
unjustified. The point is that, contrary to the economistic caricature of
Marxism routinely presented by its institutionalist opponents, Marxism, as a
body of theory, encompasses the breadth of the social world as that is lived
under capitalism. And its dialectical approach negates (or should negate)
teleologies or determinisms that, whatever the errors of past Marxists, have
no place in such an approach.

So what has this got to do with the special issue of Monthly Review of
July-August 2004? "China and Socialism: Market Reforms and Class Struggle"
by Martin Hart-Landsberg and Paul Burkett is an extended analysis of China's
trajectory since 1978, when Deng Xiao-Ping wrested control of the direction
of Chinese policy from those who would have followed (presumably) a more
Maoist path. As an analysis of China's economic development, it is copiously
referenced and backed up with extensive statistics where possible. The
authors present a case in which the first relaxation of the proscription on
bourgeois property relations leads, inexorably, to ever larger segments of
the Chinese economy reconfigured along capitalist lines, with increasingly
serious knock-on effects on what remains of the state and cooperative
sectors. By the end of book, the reader is left in no doubt that, for the
Chinese people (working class and peasantry), the "reforms" instigated in
1978 have been an accumulating disaster, portending an even greater
international crisis triggered by the Chinese government's adoption of an
export-led strategy that is already displacing the economies of other East
Asian countries (South Korea, Malaysia, Thailand, Singapore) and is now
hollowing out Japan's manufacturing sector. And this bodes ill for us all,
because the inevitable consequence of this will be increasing immiseration
of ever-larger segments of the populations of the developing and developed
world, and with that will come fertile ground for reactionary movements that
propagate nationalism, nativism, racism. In short, it constitutes an
absolute reversal of the internationalism embodied in the Chinese
revolution.

Throughout the book, Hart-Landsberg and Burkett address the specific problem
of progressive praise of the Chinese development model. Apparently there is
a significant number of Marxist, Marxian, Marxish, radical or progressive
economists and others who are delighted with China's recent economic
performance, and are using that example to tout the superiority of "market
socialism". I must admit to having been ignorant of this groundswell of
support for China's reform path, and so looked forward to identifying the
culprits. The hall of shame is in fact rather less impressive than one might
believe on the basis of the authors' alarm-raising. Aside from the Cuban
economists reported to be investigating ways of replicating the Chinese
model there (despite Fidel Castro's rejection), the list of offenders is
distinctly underwhelming: Victor Lippit in a 1993 "Rethinking Marxism"
article (has he changed his mind since then?), Walden Bello writing in 1999
on the solid basis for development achieved by the Chinese revolution and
the "respect" earned  by the Chinese government from international
investors, John Roemer throughout the 1990s invoking China as a successful
example of market socialism. This constitutes the list of authors I would
recognise as even remotely Marxist or radical, although Roemer's position is
a matter for debate. As regards Bello, Hart-Landsberg and Burkett arguably
are too harsh, decontextualising his remarks which were made with reference
to the plight of other east Asian governments in their respective
negotiations with global capital. Socialist revolution had in fact
strengthened the ability of China's leaders to dictate terms, whilst
neo-colonialism and imperialist tutelage had rendered other governments
relatively supine before the demands of investors. Saying this does not
amount to an unequivocal endorsement of China's development strategy -- only
a recognition of the superiority of China's position over that of, say, the
Philippines.

But when we move along to Joseph Stiglitz, it becomes clear that the
descriptor "progressive" is being applied very broadly indeed. As William
Robinson notes in "A Theory of Global Capitalism" (Johns Hopkins UP, 2004),
Stiglitz is part of a group of neoliberals including George Soros and
Jeffrey Sachs who have stepped back from the laissez faire abyss and now
campaign for a more tightly regulated global capitalism in keeping with the
founding philosophy of the Trilateral Commission. As such, he (and they) are
"progressive" to the extent that they advocate some sort of downward
redistribution as a means of keeping a lid on popular discontent and acting
as a type of Keynesian automatic stabiliser to mitigate the volatility of
global financial flows. That Stiglitz proclaims the success of the Chinese
model can be viewed as him merely taking it as a vindication of his
"capitalist cadre-ist" line which has been grafted onto the World Bank's
developmental philosophy since the appointment of James Wolfensohn, and can
be gleaned from the World Development Reports of 1997 and 2002 in
particular. Namely, the state is an indispensable component of economic
development, contrary to the laissez faire ideologues who are churned out of
the University of Chicago, and so ensuring the compatibility of the state
with the neoliberal blueprint is a much more effective means of achieving
successful integration into the global economy than by simply obliterating
state apparatuses in the name of a Friedmanite notion of freedom.

Thus the continuous thread throughout the book warning progressives against
uncritical support of China's development model tells us a lot about what is
happening in the US, maybe even as much as what is happening in China. And
this is where O'Connor's points with respect to the inadequacy of
conventional reified disciplinary labels and their constricting effect upon
scientific inquiry ring more than a little true. Although it is probably
unfair to ask more of Hart-Landsberg and Burkett in the space of 120 pages,
the task of the reader must be to build upon their analysis and augment it
with material that is conspicuous by its absence from the portrait offered.
There is barely any content that could be described as political
sociology -- nothing referring to the social forces at work within and
outside and China acting to produce this state of affairs, and nothing
discussing the composition of and struggles within the Chinese state. There
is also nothing discussing the effect of imperialist menace and intervention
upon China's affairs, something symbolised by the absence of Taiwan from the
rudimentary map of China printed on the book's cover. Taiwan is not even
mentioned, aside from inclusion in the statistics concerning foreign direct
investment and exports. The continuing stand-off in the China Strait between
the government of the PRC and that of Taiwan, in which the latter is
supported militarily by the US, rates not a mention. And it is this context
which renders the book somewhat limited in application. As a rebuttal of US
(and Cuban?) progressives' admiring references to Chinese economic
development, it is utterly convincing. But as a means of understanding more
deeply what is going on inside China and how that relates to and is/has been
affected by regional and global factors, it is adequate to the extent that
the perils and pitfalls of an export-led capitalist development strategy are
exposed. Nowhere is it asked why such a path should have been chosen in the
first place. This is important because it is in answering this question that
the burden of responsibility would revert to those in the West who might
presume to lecture the Chinese government upon what it should be doing.

Hart-Landsberg and Burkett do offer an answer to why the Chinese government
embarked on its reform process, taking at face value the statements of CPC
leaders that criticised Mao's legacy of overly centralised
industrialisation, stagnation, and waste. This is not to say that they agree
with Deng's critique -- they offer evidence to show that the Chinese economy
had in fact achieved a degree of strength that belied the depiction of Mao's
rule as overly ideological and insufficiently attuned to "objective
realities". In other words, just as Walden Bello is cited as saying, the
Chinese economy was in rather good shape when it was inherited finally by
Deng and his entourage in 1978. Hart-Landsberg and Burkett, however, then go
on to demonstrate that the first incorporation of "market forces" (i.e.
bourgeois property relations) was the first step on a slippery slope that
leads inexorably to capitalist hegemony. This is certainly arguable, but it
elides the question of why Deng and company should have embarked upon such a
course in the first place.

The answer is that, despite China's absolute improvements in economic
performance achieved under Maoist socialism, relative to the capitalist
world (and Japan and Taiwan loom large here, both backed by US imperialism),
it was falling further behind and thereby threatened to undermine those
achievements, given the pathology of imperialist aggression inherent in
capitalism. In order to accelerate the process of development the law of
value was put to work, as opposed to the Stalinist industrialisation
strategy of the 1930s that had rendered the USSR capable of withstanding and
repulsing the Nazi invasion of 1941. The subsequent stagnation of the USSR's
economy would not have been lost upon the Chinese leadership, whose dilemma
was exactly the same as that of Stalin and his successors: how to preserve
the revolution without succumbing to imperialist pressure? Learning from the
experience of the USSR, China's leaders chose a different path, whose
development is still unfolding and whose outcome is by no means
predetermined. One reason for this is that within China's leadership there
is not unanimity. For now, as Henry Liu has written, China's leadership is
advancing along a nationalist path, albeit within the still-powerful
constraints set by the revolution's institutional legacy. It would take
someone with far greater knowledge of the political sociology of China and
the struggles on-going within the Chinese state than me to proffer some sort
of convincing explanation as to why China has developed the way it has since
1978. But a lack of specific knowledge is no barrier to recognition of its
necessity.

In summary, Hart-Landsberg and Burkett offer the reader as comprehensive an
analysis of China's economic development since 1978 as could be hoped for in
such a limited space. They write clearly and accessibly, and have gone to
great lengths to base their claims upon documentary evidence. Their
scholarship is not at fault. Given their overriding objective of  refuting
those "progressives" who applaud China's recent economic performance as
indicative of the superiority of a market socialism that could be applied
elsewhere, they have achieved what they set out to do, and very
convincingly. The problem remains, however, of why China's leaders decided
to embark upon and travel down this path of export-led capitalist
development. This would require a different perspective -- one capable of
tackling the imperialist context within which China's leaders must negotiate
survival, and the struggles being fought inside China within and through the
Chinese state and society. For that, readers will have to look elsewhere.

Michael Keaney


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