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AUSTRALIAN
MARXIST
REVIEW

Journal of the Communist Party of Australia

ISSUE 49NOVEMBER 2008

Ideological struggle and the socialist market economy

by Erwin Marquit*

In an article in the July 2007 Political Affairs, “Class Struggle in a Socialist Market Economy,” I attempted to illustrate the different form of class struggle that takes place in a socialist-oriented mixed economy with a strong capitalist component.

I wrote it because the Communist Party of China (CPC) under the leadership of Hu Jintao holds that harmonious social relations can be maintained as China proceeds with its current stage of economic development. Marxist theory, on the other hand, has always stressed that the conflict of interest between labour and capital can be eliminated only with the abolition of capitalist relations of production.

My article aimed to reconcile this apparent contradiction. I argued that if the class interests that dominate the state are those of the working class, then the trade-union movement can utilise the leverage of the state to require the capitalist sector to accept levels of wages and conditions of labour appropriate to the level of economic development. In this situation, Hu Jintao’s goal of harmonious development — that is, development without confrontational class relations between capital and labour — is a possibility.

This goal, however, cannot be equated with the current reality of class relations in China. In fact, the current reality is far more complex.

China’s development continues to be precipitous. The average standard of living is doubling every ten years, although unevenly among the various segments of the population. Although some problems still remain, universal primary school education is essentially a reality, the poorest families being exempted from payment of school fees; universal secondary education is now the immediate target; and the number of university students continues to grow.

By 2010, the entire population is to be covered by medical insurance, assuring real medical care provided by doctors with medical degrees, in contrast with the low-level care offered in the past. Housing construction proceeds on an unprecedented scale. In 2007, peasant incomes, which have greatly lagged behind urban incomes, have been rising faster than urban incomes. During a two-week trip to China this past June, which included minority areas in Yunnan Province (on the border with Tibet), I was struck by the absence of the homelessness and abject poverty that I encountered during a recent trip to India.

Despite such achievements and laudable goals, the extensive privatisation of industry and the emphasis on entrepreneurial activity, both accompanying the shift to a market economy, have caused dramatic and unanticipated social inequalities. Scarcely reporting the positive developments in China, the New York Times almost daily reports cases of labour abuse; industrial accidents; pollution of air, land and water; and other calamities. These developments involve, in many instances, violation of national laws on labour rights, occupational health and safety, and environmental protection.

How can these conditions exist in a state led by a Communist Party? How is it possible when China’s constitution declares China to be “a socialist state under the people’s democratic dictatorship led by the working class and based on the alliance of workers and peasants”?

First of all, we must remember that China is still a relatively underdeveloped country, in which local and regional bodies must have considerable autonomy to provide the necessary infrastructure necessary to maintain its rapid pace of economic development. With China’s large area, most of which still lacks an adequate economic and data accumulation/data processing infrastructure, the national government is unable to devote the resources necessary to monitor and control sufficiently the implementation of national laws. It relies on the often-unreliable political level of development of the local authorities anxious to demonstrate impressive economic performance. Compounding the difficulties is the corruption universally associated with underdevelopment.

As demonstrated at its 17th Party Congress in October, the CPC is committed, under its present leadership, to the long-term goal of socialist development, retaining within the state sector the key elements of its economy in order to control the general direction of development. Indeed, despite United States and World Trade Organisation objections, foreign and domestic capital are excluded from investing in a wide number of branches of the economy.

Despite these restrictions, foreign and domestic capitalist investments account for some 70 to 80 percent of China’s industrial output, which has made possible China’s rapid pace of development. China’s political leadership considers it necessary to maintain its current high rate of development. The growth of its productive capacity serves as the basis for better satisfying the needs of its people.

The high rate of development is leading to a comparable expansion of its domestic market, which, in turn, continues to attract domestic and foreign capital investments with the latest technologies in joint ventures with enterprises in the state and capitalist sectors. The increase in the productivity of the Chinese labour force as a result of the introduction of modern technologies is necessary to continue to attract capital investment in China despite the rising wage levels.

This situation forces the Party and state to seek a compromise between the environmental and social costs of maintaining rapid growth rate, and its need for economic development.

For these reasons, the Party considers it necessary to maintain a delicate balance between defending the interests of the working class and enabling domestic and foreign capitalist sectors to function in a globalised world economy. Hence the goal of social harmony is high on the nation’s agenda.

These tasks must be accomplished in difficult conditions. Most of the Chinese trade-union members do not work under negotiated collective-bargaining agreements as would be expected in unionised enterprises in capitalist countries. Change is beginning in this area, but trade unions at present, insofar as they have organisational structures within enterprises, function largely as workplace social-service organisations.

Lenin characterised the trade unions as the school of communism. In the absence of a well-developed trade-union movement, it is hard to imagine that the working-class members of the Communist Party can meaningfully contribute to the stability of the class orientation of the party leadership.

The presence of a large capitalist sector in the economy is certain to be reflected ideologically within the country’s intelligentsia in both the party and the state. The pressure from the bourgeoisie for concessions to its material and ideological interests is ever-present, as is its insatiable appetite for capitalist profit.

On November 5-6, 2007, I attended an economics conference entitled “Karl Marx’s Capital and Its Contemporary Value” at the Shanghai Party Institute of the Communist Party of China (CPC). Apart from a dozen or so foreign scholars, the conference was attended by professors and researchers from the Party Institute, the Academy of Marxism of the Chinese Academy of Social Sciences, the Shanghai University of Finance and Economics, and other Chinese academic institutions.

The overall thrust of most of the Chinese papers was a vigorous defence of Marx’s labour theory of value, which even some Marxists argue no longer applies in view of the decline of the role of manufacturing in market economies. Although most of the papers displayed a high level of Marxist scholarship, I was surprised by some of the views expressed, such as the contention that capitalists also create value, or that capital does not, under “socialism with Chinese characteristics,” exploit labour.

Most surprising to me was a talk in which a professor of economics stated that Western-oriented neo-liberal economists dominate the economics departments at Chinese universities. He said that in order to build up his publication record so that he could become a professor, he had to hide his Marxist views in his papers and to incorporate the mathematical methods usually employed by Western economists even though he abhorred these methods.

Why this interest in Western mathematical methods in economics?

Western market economies involve a variety of complex financial operations. Mathematical methods have been developed to determine when and where the most profitable investments are available. Mathematical methods are also used for various production and marketing decisions. The economists of the capitalist countries have developed these mathematical methods to deal with such operations.

In China’s socialist-oriented market economy, both the private-sector and state-sector industrial, commercial, and financial enterprises also must borrow these mathematical methods from the West (or develop them independently) in order to compete in the world market economy. It is not surprising, then, that Chinese economists, unless they are strongly committed to socialism ideologically, will very likely accept the bourgeois ideology that comes packed with the borrowed Western economic methods. The accumulation of profit becomes, in itself, a focus of life, often absorbing both body and soul.

During this visit, and a previous two-week study tour in China this past June, I attended three conferences with Marxist scholars. Although the theoretical grounding in the basics of Marxist theory was at a high level among these Chinese scholars, a disturbing number of them lacked an understanding of the social dynamics for the formation of a socialist consciousness in the working class.

Such a socialist consciousness is needed in any country embarking on the path to socialism. Its lack is apparent. One deputy head of a CPC Central Committee academic unit remarked, “Why do workers in foreign enterprises need trade unions? Their wages are higher.”

The CPC is bearing the consequences of a 35-year neglect of ideological struggle to sustain a socialist consciousness in the population, especially among its intelligentsia. While Marxist education has been maintained in the school curriculum, including the university level, students have told me that Marxist education was generally limited to classes on Marxism, and largely ignored in other courses.

The new CPC leadership, under Hu Jintao, is attempting to instill a new socialist spirit in the country. This is quite clear if one compares the ideological content in his recent speech at the 17th Party Congress with the speech of his predecessor, Jiang Zemin, at the 16th Party Congress, who considered his main theoretical contribution to the development of Marxist thought in China to be the principle of the “Three Represents,” which are: “keep pace with the times, maintain the party’s progressiveness, and exercise the state power in the interest of the people.”

To give new strength to the dissemination of Marxist thought in China, the Academy of Marxism was created in the Chinese Academy of Social Sciences in 2006. Under the initiative of Marxist economists in China, the World Association for Political Economy was also established last year, and is serving to raise the level of Chinese Marxist scholarship in economics through participation of Chinese scholars in international conferences of Marxist economists.

Its First Forum, in Shanghai in April 2006, issued a manifesto ending with the words, “Marxist political economists of the world, unite!” Its Second Forum, held in October 2007 at Shimane University in Japan, included some 40 Chinese scholars, about half of the participants. The Third Forum, “Marxism and Scientific Development,” will take place May 24-25, 2008, in Beijing, and the fourth will probably be in Paris in 2009. The Academy of Marxism has appealed to Marxists worldwide to suggest Marxist works for China to translate.

For the first time since the annual international meetings of Communist and Workers Parties was initiated in the 1990s, China sent a delegation to the meeting just held in Minsk in November 2007. The delegation actively participated in the proceedings.

The day after the conference I attended at the Shanghai Institute of the CPC, I conversed with four students enrolled in university-level degree programs at the Institute, two of whom were party members. All four thought China would hold to a socialist course. They all thought highly of Hu Jintao’s leadership. When I asked them what they thought of his predecessor, Jiang Zemin, they replied by asking me for an explanation of the meaning of the Three Represents!

Although Hu Jintao set the goal for a harmonious society as a key characteristic of the development of socialism with Chinese characteristics, it is clear that a vigorous ideological struggle will have to be waged within the party and state organs to create the conditions for this harmony. We can only hope the outcome of this struggle is a successful one for a socialist future.

*Erwin Marquit is a contributing editor of Political Affairs.

Reprinted from Political Affairs (CPUSA).

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