This post is in response to three recent articles from the Trotskyist press--one by Jeff Mackler, another by Michael Roberts, and a short piece by Roy Landersen.
Mr. Mackler's piece is entitled The Myth of a New “Cold War” Between the U.S. and China/Russia. He's addicted to the word imperialism--the word fragment imperial- shows up 28 times in the article. This despite the fact that he has no clue what the word means. He's not alone--nobody else knows what it means either.
What I think he thinks it means is something like unequal exchange. That is, on the one hand US capitalists will exploit Chinese workers who manufacture cheap products for American consumers by paying them "near slave wages." On the other hand, the US will export expensive, overpriced products back to China. Thus the capitalist realizes excess profits on both legs of the round trip. The problem is it doesn't work that way. Why would China volunteer their citizens for slavery? And why would they agree to buy overpriced products when the same can be had for cheaper from other countries?
Mr. Mackler actually admits that the imperialism model doesn't fit. He writes,
In the 20 years since China was admitted to the WTO, China went from operating as one of the world’s lowest technology nations to today, when Chinese technology rivals or exceeds almost all other nations on earth. In the past 20-plus years China was transformed from providing “internal migrant” teenage girls from the countryside, producing garments in prison-like foreign-owned dormitory factories at six cents per hour and seven days a week, to a nation with some of the most modern Chinese-owned factories in the world, producing world-class industrial tools and machinery and state-of-the-art 5G (fifth generation) electronics and telecommunication products.
So--in a mere 20 years those migrant slave girls went from being ruthlessly exploited to becoming middle class citizens of an increasingly wealthy country. There is still a lot of poverty in China, but the collaboration between Walmart, on the one hand, and Chinese entrepreneurs on the other has lifted 400,000,000 people into the global middle class--an achievement unprecedented in human history. Mr. Mackler needs to explain how "imperialism" wrought such a change, and if so, then why is "imperialism" such a bad thing?
It's not like American consumers suffered. Walmart reduced prices across the board, sharply lowering the cost of living, especially in rural areas. More, Walmart kept its operating margins at 3%, thereby passing nearly all the benefits of the China trade on to American consumers. Sam Walton only got a small slice.
The problem with Mr. Mackler's version of Marxism is that he sees trade as being a zero-sum game. He thinks anybody who trades with the USA is getting ripped off. Other people postulate the reverse: the US is getting ripped off by foreigners selling cheap products to Americans (I put Barry Sheppard into this category here). Though Mr. Mackler is inconsistent: he also believes Cuba's suffering is due to the US trade embargo, i.e., Cuba can't trade with the US.
There are social and geopolitical reasons why the US needs to curtail its trade with China--but we will pay an economic price by doing so.
Michael Roberts' article, entitled China at a turning point?, is much better--not least because the word imperialism isn't mentioned even once. More, Mr. Roberts actually knows something and is careful about terminology--nothing he says can be dismissed out of hand.
The article is inspired by the collapse of the giant real estate developer, Evergrande. I think Mr. Roberts' analysis of the near-term consequences is accurate. It is not a financial collapse on the order of Lehman Brothers, nor will it bankrupt the entire Chinese economy. But it will lower the standard of living by a misallocation of resources. Mr. Roberts suggests that China is creating "zombie companies" such as exist in many capitalist countries. He writes,
The real problem is that in the last ten years (and even before) the Chinese leaders have allowed a massive expansion of unproductive and speculative investment by the capitalist sector of the economy. In the drive to build enough houses and infrastructure for the sharply rising urban population, the central and local governments left the job to private developers. Instead of building houses for rent, they opted for the ‘free market’ solution of private developers building for sale. Evergrande-like development in China wasn’t just capitalism doing its thing. It was capitalism facilitated by government officials for their own purposes. Beijing wanted houses and local officials wanted revenue. The housing projects helped deliver both. The result was a huge rise in house prices in the major cities and a massive expansion of debt. Indeed, the real estate sector has now reached over 20% of China’s GDP.
I think this diagnosis is largely correct, except I wouldn't blame the free market, but instead government intervention in the market. "Beijing wanted houses and local officials wanted revenue" has nothing to do with free market capitalism.
The Chinese problem is in a sense the opposite of that of the USA. In our country we subsidize housing demand: Section 8 vouchers, eviction moratoria, generous tax benefits, subsidized mortgages, concerted government efforts to extend home sales to poor people, etc. At the same time, housing supply is sharply limited, mostly by local zoning and environmental regulations. Many Greenies want to ban single family housing altogether. The result, of course, is sharply higher housing costs as subsidized demand outstrips constrained supply.
In China it's the other way round. Both the local and national governments want more houses--and boy, have they built houses! Whole ghost cities full of them. Supply is hugely subsidized, leading to falling prices. But the government can't have falling prices since that would destroy middle class savings. The result is a bankrupt Evergrande that is building houses that nobody really wants to pay for anymore.
My take on this is government regulation--on either the demand side or the supply side--screws things up. It's not capitalism anymore, but rather government cronyism, which eventually morphs into fascism/socialism.
Mr. Roberts' solution is to prohibit consumers from buying what they want. In the US consumers by a large majority want to live in single family homes in the suburbs. Chinese consumers want to own their own apartment and drive a car. But Mr. Roberts and his fellow socialists are against that--they think they know what the people want more than the people themselves. His penultimate paragraph makes precisely that point.
What is needed is not a further expansion of consumer sectors by opening them up to ‘free markets’, but instead state-led investment into technology to boost productivity growth. And that state sector investment can be directed towards environmental goals and away from uncontrolled expansion in carbon-emitting fossil fuel industries. As Richard Smith has put it: “The Chinese don’t need a higher standard of living based on endless consumerism. They need a better mode of life: clean unpolluted air, water and soil, safe and nutritious food, comprehensive public health care, safe, quality housing, a public transportation system centred on urban bicycles and public transit instead of cars and ring roads.” Rising personal consumption and wage growth will follow such investment, as it always does.
Somehow I doubt Chinese consumers prefer to ride around on bicycles instead of owning a car.
Mr. Landersen, writing for The Militant, pens a piece entitled Embracing Mao, Chinese rulers continue assault on working people. The premise is much the same as Mr. Mackler's--Chinese workers were exploited and oppressed by their Stalinist masters (which makes me wonder why The Militant offered the Maoists critical support for all those years). That oppression continues near unabated to this very day--the dramatic rise in China's material well-being is barely mentioned.
China's travails are contrasted with Cuba's virtues:
This is the opposite of the working-class trajectory of the Marxist leadership of Cuba’s socialist revolution. Under Fidel Castro and the July 26 Movement, workers and farmers were led to take political power into their own hands and to take on ever-greater control over all aspects of economic and social life, transforming themselves in the process. Working people became conscious actors in history, extending their hand to anti-imperialist struggles around the world.
Yet China has manifestly been more successful than Cuba! Cities like Shanghai and Beijing look a lot more like New York than Havana. There are good restaurants, excellent public transportation, and nice stores. As mentioned China has a sizeable middle class.
None of that exists in Cuba. Smart and ambitious Cubans have all been exiled. Those still living in Cuba are hungry, live in housing so dilapidated that they're functionally homeless, and survive without electricity for much of the day.
China has a lot of problems--but there is no way that Cuba compares favorably with China.
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