Louis Proyect: The Unrepentant Marxist

November 16, 2006

David Schweickart follow-up

Filed under: China,economics,socialism — louisproyect @ 3:26 pm

David Schweickart posted a comment on my blog entry about his debate with Michael Albert. I will respond to the key passage:

I do think material incentives are necessary so long as the problem of scarcity persists–which may be quite a long time. To rely prematurely on moral incentives alone is a recipe for disaster. Does Proyect disagree with this? I also happen think that an economic system should be concerned with what people would like to consume. I don’t think “consumer satisfaction” should be equated with the desire for designer jeans. I think, even after the revolution, people will be concerned the “mundane” things of life–the kind of food they eat, the clothes they wear, the houses they live in and how they are furnished, etc, etc. Try telling workers that they should settle for what the Russian doughboys had in 1916, and that all these other things to which they have grown accustomed are bourgeois frivolities. (I’m not saying that consumption habits won’t have to change, but does Proyect really think that after the revolution, we’ll all be so concerned with impending ecological catastrophe that we won’t worry about birthday presents anymore? Do only “shopkeepers” worry about such things?)

To begin with, I certainly understand the need for markets after a revolution takes place. However, my objection is not to inexorable realities dictated by the relationship of class forces in a given moment in time but in wasting time writing blueprints for how future socialist societies should implement them. From my perspective, Schweickart’s market socialism is as much of a utopian schema as Parecon or any other such attempt at crystal-ball gazing. If a powerful capitalist nation like Japan has a socialist revolution, it is conceivable that a planned economy can be implemented with no concessions to NEP-like mechanisms.

Socialist economics proceeds mostly from a combination of class principles and pragmatism as my trips to Nicaragua in the 1980s taught me. The last thing that Carlos Fonseca had on his mind when he launched the FSLN was how to transform the Nicaraguan economy, except for the obvious: radical land reform, expropriating the Somozista kleptocracy, etc. It is only in advanced capitalist countries that are extremely far removed from challenging capitalist rule that you find socialists having heated debates about what a future socialist society should look like. This, sadly, reminds me of the “hot stove league” baseball fans who phone into sports talk shows about whom they would trade. This is about as close as they ever get to the action.

I also want to say a thing or two about an article that Schweickart wrote defending the idea that China is not capitalist. Titled “What’s Wrong with China?”, it is an answer to Burkett and Hart-Landsberg’s MR book-length article and was referred to by Carl Davidson in a comment on my original post.

Schweickart first poses the question of what capitalism is and considers various plausible definitions:

–There’s the structural definition. Capitalism is an economic system in which private ownership of means of production, wage labor and the market constitute the dominant economic institutions.

–There’s the class-based definition: Capitalism is a society controlled by the economically-dominant capitalist class, this class usually defined as a class whose considerable income derives primarily from ownership of productive assets, not from employment.


Perhaps the difficulty I have with Schweickart’s entire approach is that it is grounded in formal logic. When you begin to search for definitions, you are entering the troubled waters of Aristotelian scholasticism, especially since he next poses the question: Does China fit any of these definitions? He additionally asks whether China is “socialist”. Since he once again resorts to a formal definition, namely “a society in which the working class is the ruling class,” he can answer his own question by stating that China is not socialist.

In the end, he concludes that China is neither socialist nor capitalist but I am afraid that his conclusion has little in common with the analysis found in Trotsky’s “The Revolution Betrayed,” which described the USSR as being in transition from capitalism to socialism. There might have been a case for China being such a society 20 years or so ago, but the preponderance of evidence suggests that the transition to capitalism is pretty much complete.

I really have too little time and even less incentive to make the case here that China is capitalist and would only refer you to my summary of the arguments that Burkett and Hart-Landsberg made. Of course, your best bet is to purchase their book from MR.

However, I do want to comment briefly on point that Schweickart makes:

To be sure, there now exists a small capitalist class, but it is by no means in control of the economy or the society. This is a new class and it remains politically vulnerable.

An important distinction has to be made here. State ownership in China must not be identified as socialist in character, even though it has obvious affinities with an earlier period when the “iron rice bowl” was intact. Even though the direction is against state ownership of any sort, the men at the top of state-owned firms have much in common with their fellow bourgeoisie by the evidence of a new trend:

A couple of hours’ gallop from the Great Wall at Badaling is a spectacle not seen in this part of communist China for many a decade, if ever.

On a verdant field surrounded by mist-shrouded mountains, a team of horsemen elegantly decked out in helmets, breeches and boots, and armed with wooden mallets are practising that most socially exclusive of colonial sports: polo.

The sight of the riders swinging hard, turning sharply and charging their mounts after the ball is more familiar in an English country club, an emir’s stables or the grounds of a wealthy landowner in Argentina or Australia.

But a Beijing businessman is determined it should become just as common for a new generation of Chinese rich, who now have the financial clout, the leisure time and the confidence to take on the world’s elite at their own game.

Xia Yang, an architect and property entrepreneur, is the founder of the Beijing Sunny Times Polo Club, which he describes as the only establishment of its type in mainland China…

Polo is far less well known. Mr Xia’s club, which is built on his own land, has only 20 members, but he says it includes the head of the state oil firm, Sinopec, and the head of the company which built the trains on the new Tibet railway. But he insists he is not being elitist.

–The Guardian (London) – Final Edition, September 12, 2006 Tuesday

When the head of the state oil firm has taken up the sport of princes and playboys, I think it is high time to rethink the nature of the Chinese economy, in either the private sector or the nominally “socialist” sector.


UPDATE–posted to the PEN-L mailing list on 11/16/2006:

Many people continue to celebrate the Chinese experience, largely on the basis of the country’s rapid and sustained industrialization and export successes. Some still call it a socialist success story, often on the basis of Chinese party claims or Chinese foreign policy initiatives which are seen as supporting Venezuela, Cuba, or other countries under US pressure. Unfortunately very few people have actually looked at the accumulation process underpinning Chinese growth, in particular its consequences for working people. Paul Burkett and I have been doing some work on this, and I want to share some information that I think raises important questions about how we understand success and socialism.

The ILO has recently completed a major study of the Chinese labor market. Its results closely match work done by the IMF and the Asian Development Bank.

The ILO created five employment categories for urban sector workers:

TF is employment in traditional formal enterprises (state and collective enterprises);

EF is employment in emerging formal enterprises (cooperative enterprises, joint ownership enterprises, limited liability corporations, shareholding corporations and foreign-funded enterprises);

EP is employment in small-scale private registered enterprises;

ES is employment in individual registered businesses;

IRR is irregular employment (which includes casual wage employment or self-employment–often in construction, cleaning and maintenance of premises, retail trade, street vending, repair services or domestic services).

Looking at the period 1990-2002, the ILO found that:

TF Employment fell from 139.1 million to 79.7 million.

EF Employment rose from 1.6 million to 25.7 million.

EP Employment rose from 0.6 million to 20 million.

ES Employment rose from 6.1 million to 23.5 million.

IRR employment rose from 15.3 million to 95.3 million.

Thus almost all the urban job creation over this twelve year period has been irregular.

Not only are growing numbers of Chinese workers being forced into irregular employment, many others are suffering from outright unemployment. According to the ILO, “A major consequence of the reforms of the 1990s has been the emergence of open unemployment in China’s urban areas.” More specifically, the ILO estimates that the 2002 unemployment rate for long term urban residents was between 11-13 percent. This is a strikingly high rate given that the Chinese government counts as unemployed only those persons with non-agricultural household registration at certain ages (16-50 for males and 16 to 45 for females) who are capable of work, unemployed and willing to work, and have been registered at the local employment service agencies to apply for a job. And this rate has been kept down only by the fact that the labor force participation rate of urban residents fell from 72.9 percent in 1996 to 66.5 percent in 2002.

Marty Hart-Landsberg




  1. Really interesting post.

    China presents the worst of all worlds, capitalist wage exploitation combined with a lack of democracy.

    Chiina’s first capitalist expansion, is bringing its system to North Korea, which will be a real state capitalist model.

    Comment by Renegade Eye — November 17, 2006 @ 7:11 am

  2. One should not be blinded by China’s measures of support for countries like Venezuela, as these just fit a very traditional great power game. China is in a very fortitious position at the moment: too big to be threatened by the US, too weak military to be seen as a threat on the scale of the old USSR, very necessary at the moment to the US-led capitalist system and hence in a very good position to undermine the US, which can be done by protecting local adversaries of the US.

    Comment by Martin Wisse — November 18, 2006 @ 11:25 am

  3. You want to rethink the nature of an economy involving one-fourth of humanity because a top bureaucrat plays polo with rich foreign capitalists?

    There’s lots to criticize or be concerned about in China, but this would be way down on my list.

    The problem, as I see it, is that few, in any, of China’s critics can offer a practical alternative to the main thrust of Deng’s NEP-style reforms, ie, the socialist market economy. Some can carry on about how it violates this or that principle, but what to do, practically speaking, is another matter.

    There’s a number of options being debated and implemented in China today, from worker-controlled firms along the lines Schweickart talks about (one reason some trends there study him and keep bringing him back) to straight up neoliberalism and a variety of other points in between.

    I think the collapse of Stalinism shows GOSPLAN is not the path forward, and the collapse of the Maoism of the GPCR shows economies can hardly be sustained by revolutionary will alone. And if you think the sweatshops of today’s China are bad, I’ve seen what preceded them, working the fields from dawn to dusk with 5000-year-old methods, that was the lot of most of China only a few decades back, and I wouldn’t wish a return to it on anyone.

    Comment by Carl Davidson — November 21, 2006 @ 7:45 pm

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