The following is from the archives of Monthly Review. David Kotz, author of “Revolution From Above: The Demise of the Soviet System”, one of the best works on the fall of our Soviet motherland, gives a report on the various views aired at a conference on property rights held in China. The similarity of the terms of the debate to those in the late USSR is striking
During November 13–14, 2006, I participated in an “International Conference on Ownership & Property Rights: Theory & Practice,” in Beijing. This was not just an academic conference, it was related to a sharp debate taking place in China at that time over a proposed new law on property rights.1 Although none of the presentations at the conference made any direct reference to the proposed new law, everyone knew that it was the subtext of the conference debate.
The positions put forth by the participants in this conference provide an interesting window into the ideological struggle over the direction of social change in China. They illustrate the ways in which Marxist language and Marxist propositions, intermixed with ideas drawn from mainstream Western neoclassical economic theory, are used today in China to support the completion of China’s shift to private property and a market economy. Below I will reproduce some of the statements and positions voiced (and written) at this conference. But first some background information will help to place the statements in their historical context.
The supporters of the proposed property rights law were arguing that further economic progress in China required that private ownership of business enterprises and other assets must be made more secure. To achieve this end, a new law was needed specifying, and more importantly guaranteeing, the rights of owners of private property.
Critics resisted the proposed new law, charging that it represented a step toward abandoning the socialist system. They argued that guaranteeing private property rights, and elevating them to the same level as public property rights, would undermine the key role of state owned enterprises (SOEs) in a socialist system. To make matters worse, critics charged, the new law could potentially even safeguard the ownership claims of those who ended up in control of former SOEs that had been privatized through a corrupt insider deal.2 This would encourage further fraudulent privatizations of SOEs. Further, they argued, it would legitimize the exploitation of labor which occurs in private enterprises.
Such political debates are normally difficult to observe in China. This debate had been taking place in various locations in Chinese society, including academic institutions and various Communist Party and state institutions. The above conference provided a way for an outsider directly to observe, and even participate in, this debate.
The main sponsor of the conference was a little-known bureau of the Central Committee of the Chinese Communist Party (CCP) called the Central Compilation and Translation Bureau. The conference was cosponsored by the Rosa Luxemburg Foundation of Germany, which is attached to the Party of Democratic Socialism. The latter is descended from the Communist Party of the former German Democratic Republic.
While there were a few foreign participants, most were from China. The Chinese participants included professors from various Chinese universities, researchers from the Academy of Social Sciences, and some party and state officials. Among the latter there was one from the Development Research Center of the State Council, which provides policy advice to the prime minister, and one from the Central Party School. The foreign participants were quite diverse intellectually and politically, with most of them selected by the Rosa Luxemburg Foundation. I am known in China as a critic of neoliberalism in general, and privatization in particular, and I was invited to present a Marxist analysis of ownership and property rights in the United States that might be relevant to the property rights and privatization debate in China.
It has long been commonplace to read in the mainstream media that political debates in China are typically conducted, not just behind the scenes, but in a kind of Aesopian language. In this conference Marxism was the official language of discussion, at least for the Chinese participants. Despite the enormous transformation of China’s economic and social system since the beginning of what is called the “market reform and opening” in 1978, a kind of “official Marxism” remains the formal state ideology and the language for discussion of economic issues. Thus, most of the Chinese speakers at this conference, whichever side of the debate they were on, couched their views in Marxist language and often used traditional Marxist propositions to buttress their claims. However, Western neoclassical economic thought has become dominant in the leading economics departments at universities in China, and in many cases it was neoclassical ideas that underlay the comments of the speakers, whatever the language used to express them.
A final relevant piece of background information concerns the class structure of China today and its relation to the CCP. Originally membership in the CCP was open to workers, peasants, and intellectuals. The rapid development of private business starting in the early 1990s created a class of indigenous capitalists who, while wealthy and increasingly influential, were at least officially barred from membership in the ruling CCP. Then a few years ago, after a sharp political struggle, the CCP membership rules were changed to open membership to “entrepreneurs.” Reverberations of that political battle, as well as the one over property rights, could be heard in some of the conference presentations.
Readers can now appreciate the remarkable statements and positions put forward by various participants in this conference. In a few cases I provide a direct quotation, but most of the statements below paraphrase the main theses or points made by various Chinese speakers at the conference. Each statement below was made by at least one Chinese speaker, and some were repeated, with variations, by several speakers. In some cases I have added interpretive or clarifying comments in brackets. I begin with statements by participants who favor the current direction of social change in China—which represented the vast majority of speakers—and end with pronouncements by the few who either oppose China’s march to capitalism or are at least resisting the distortion of Marxism to justify that march.
Statements and Themes from the Conference
- When an SOE is turned into a joint stock corporation with many shareholders, it represents socialization of ownership as Marx and Engels described it, since ownership goes from a single owner to a large number of owners [among others, this was stated by someone from the Central Party School].
- If SOEs are turned into joint stock corporations and the employees are given some shares of the stock, then this would achieve “Marx’s objective of private ownership of property.”
- In dealing with the SOEs, we must follow “international norms” and establish a “modern property rights system.” [As in the Soviet Union and Eastern Europe at the end of the 1980s, the terms in quotes were euphemisms for capitalist norms and capitalist property rights.]
- Enterprises can be efficient in our socialist market economy only if they are privately owned. [This statement, voiced by several people, comes directly from Western “neoclassical” economic theory.]
- SOEs exploit their workers and are state capitalist institutions, and SOEs often have a very high rate of exploitation. [The point was that privatizing SOEs will not introduce exploitation or capitalist relations since both are already present in SOEs.]
- The nature of ownership of the enterprises has no bearing on whether a country is capitalist or socialist. Enterprises should always be privately owned and operated for profit. What makes a country socialist is that the government taxes the surplus value and uses the proceeds to benefit the people through pensions and other social programs. [Along with justifying privatization, this implies that, as China’s economy becomes much like those of the United States and Western Europe, China is not abandoning socialism since, by this definition, all of the industrialized capitalist countries are actually socialist.]
- The United States has companies with millions of shareholders, which is a far more socialized form of ownership than anything that exists in China.
- “[After the Second World War] Capitalism not only gave up its fierce antagonism to labor, but even began combining with labor….Modern capitalism…is gradually creating a new type of capitalism that is more like socialism.”
- The CCP followed the correct approach, in line with classical Marxism, during the period of New Democracy [i.e., the period directly following the 1949 liberation, when the party said it was completing the bourgeois democratic revolution but not yet trying to build socialism]. The change in policy after that period [when the party shifted its aim to building socialism] was an error, and instead the New Democracy policy should have been continued. [This was spookily similar to the widespread argument in Moscow in 1989–91 that the Soviet Communist Party should have stayed with the New Economic Policy of 1921–27, which called for a mixed economy with a significant role for private business and with market forces playing the main coordinating role.]
- Besides current labor and past labor [the latter the Marxist term for the labor required to produce the means of production], there is a third type of labor, namely “risk labor.” Marxist theory should take account of this third type of labor, which is expended by those who take risks through entrepreneurship. [The obvious point was that “entrepreneurs,” i.e., capitalists, are a type of worker, and hence it is correct that they are allowed to join the Communist Party.]
As I listened to these themes—and as I raised questions about them in the question/discussion periods—I had a strong feeling of déjà vu. Many of them were the same themes I had heard (and had argued against) in Moscow in 1991, the last year of the Soviet Union, coming from Soviet academics and party and state officials.
Now for some comments by Chinese conference participants that swam against the private property and privatization tide:
- A thorough study of the original German versions of Marx and Engels’s writings on communism shows that they clearly viewed communism as involving the abolition of private property. Those who have argued that this idea arose from a mistranslation of Marx and Engels’s works are mistaken. We should not distort Marxism to justify current policies. [Some “Marxists” in China have been arguing that Marx and Engels never actually wrote that communism would involve abolition of private property.]
- Privatization is not the right solution to the problems of the SOEs. The right to use capital should belong to the workers and serve their interests.
- “Informal privatization” [in which an SOE’s director illegally turns it into his private company] creates capitalist enterprises and should not be permitted.
- While some SOEs may have low profit rates, profitability is not a good measure of an enterprise’s contribution to social and economic welfare.
- The many Chinese economists who support the theories of Ronald Coase [a rightwing British property-rights theorist who is known for opposing any significant state regulation of private business] are mistaken. The Chinese followers of Coase claim that Marx had no theory of property rights and that Coase supplies the property rights theory that China needs. On the contrary, property rights are the legal manifestation of production relations, a relationship which Marx analyzes at some length. Contrary to Coase’s view, private property is not necessary for efficiency. Public ownership should be primary. [This older leftist academic economist cited at some length statements by the well-known U.S. left-of-center economist Joseph Stiglitz condemning the work of Coase. The reliance by a leftist Chinese economist on the pro-capitalist—yet somewhat heretical—U.S. economist Stiglitz to make a criticism of Coase reminded me of 1991 in Moscow, when the few leftist Soviet economists struggled to criticize free market theory by citing people such as John Kenneth Galbraith.]
Notes
1. The new “Property Rights Law of the People’s Republic of China” was passed by the National People’s Congress on March 16, 2007.
2. After such corrupt insider privatizations, the newly privatized enterprise is often then sold to a third party, who at least officially was not involved in the original privatization process. Opponents charged that one of the provisions of the proposed new law (article 106) would hold the final owner blameless and secure that person’s right of ownership, as long as the final owner could claim that she or he obtained the property with “benign intent.”
Filed under: Historical Materialism Conference, Imperialism, Marxism, Neoliberalism, Rob, Theory
Saturday
I rolled in a bit late on Saturday, so I missed the first session of the day. Not that I would really have listened to it much. The next session I attended was on ‘Marxism, Pashukanis and the Law’. In this session I actually ‘presented a paper’ on Pashukanis, Legal Nihilism and Legal Strategy, which I will probably put up here at some time (once I’ve cleaned it up a bit – the notes were really only intended for my consumption only). There weren’t too many people here (although there were a few), which was kind of predictable, as law is not a particularly glamorous topic for Marxist analysis. There were two other contributors aside from me – Andreas Harms presented a paper on ‘Commodity Form and Legal Form’ and Bill Bowring presented a paper on ‘International Law, Lenin and Self-Determination’. Both of the papers were of high quality and we got some good discussion in as well. It feels kind of weird summarising this session, so I’ll leave it for the atendees to do so (hopefully some of them blog).
There weren’t any more ‘sessions’ for the day, as it extended into a ‘meet the editors’ session and a lunchbreak, I did have some pretty interesting conversation during this period, so it was all to the good.
The next ‘session’ was a plenary one, featuring some rather big hitters, the talk was on ‘Neo-liberalism and Neo-imperialism’ and the speakers were Alex Callinicos, Robert Brenner and David McNally.
Robert Brenner
The central thrust of Brenner’s argument was the relationship between the war in Iraq and the US’ geopolitical strategy. Brenner argued that the Iraq war was a puzzling phenomenon which represented a real rupture with previous US strategy in content if not form. Brenner argued that during the 2000 election no one would have predicted that the Iraq war would come around in the time that it did. The Republicans seemed to have a fairly low-key foreign policy, certainly not the type of messianism that seemed to characterise them post-9/11. Furthermore, it was argued that the US had fulfilled its three key strategic aims (which it had held since World War 2); these aims were
- To freeze and weaken ‘communism’, third world statist nationalism and statism more generally so as to allow the free movement of [US] capital throughout the globe.
- Consolidate US hegemony in Japan and Europe – depriving them of their ability to disrupt the framework of international capitalism; key to this aim was depriving them of their military power and compensate them for this by providing them with security.
- As a consequence of the above two aims the US intended to implement a neo-liberal agenda throughout the world, with all the consequences thereof
Brenner argued that the US was willing to do this since US capital was so powerful that it didn’t require the formal protection of the US state. So on this reading the US had – according to Brenner – recognised the essential validity of the Leninist critique of imperialism – namely that monopoly-capital imperialist states vying for domination of the world’s resources inevitably culminated in war, which was not conducive to the continued position of the US and global capitalism. To combat this the US entered into a ‘radical Kautskyite’ project of restructuring the global situation as above – the only question was whether the US was disciplined enough to continue enforcing the consensus.
All of this was encapsulated in the term ‘New World Order’ as used by Bush et al. This meant that there was a new approach to the international use of force:
- Don’t use force unless you can use massive amounts of force
- Other conflicts should just be ‘policing’ or assymetrical conflict
- Avoid committing ground troops if you can – use cruise missiles, bombs etc.
All of ths as summarised in a phrase by Madeline Allbright that ‘military force’ but not war should be used (which got a big laugh from the audience, but really the distinction isn’t as ridicoulous as it first, certainly international law tends to distinguish between the use of military force and an armed attack or war). This was basically a neo-liberal form of imperialism and one in which generally states toed the line (the thrid world accepted the neo-liberal consensus the [not yet] axis of evil was going to the table, etc.).
So US policy in Iraq has to be understood in relation to this. It is therefore necessary to view US policy towards Iraq in this context. What the context what seem to suggest is that no US adminstration would really want regime change in Iraq, as this would be internationally counterproductive – it would be costly, destabilising and could whip up Arab resistance across the Middle East. Futhermore, the Shia could not be trusted to serve as a counterweight to Iran. This is why Saddam was not overthrown following the first Gulf War and a policy of ‘containment’ was pursued in relation to Iraq.
Against this backdrop the recent war in Iraq does seem to be a break (and to a lesser extent so does Afghanistan). Brenner’s next task is to explain how this could happen. Brenner traces the strategic rupture to the ascendence of the neo-conservative movement within the American state apparatus and their huge influence within the State Department. It was only with 9/11 that they were able to gain control over foreign policy.
Brenner then gave an internal examination of this movement. According to Brenner the key theoretical position for the neo-conservatives is the ‘fungibility of force’. By this they mean that American military domination can be used to do anything, and the neo-conservatives were interested in ‘harvesting the fruits of military dominance’.
It is then necessary to understand how the neo-conservatives gained this power. Brenner roots the neo-conservative movement in the Republican far-right, who had taken over Congress in 1994. They had always had trouble gaining power and were only able to do so by pushing the foreign policy aspect. Once they had gained power they acted as a ‘Shadow Cabinet’ that pushed Clinton into all sort of things (like passing the Iraq Liberation Act) but they could only achieve limited success and certainly couldn’t impose their domestic agenda. But 9/11 changed all of this and gave the neo-conservatives the pre-text they needed to actualise both their domestic and international agenda.
Brenner’s analysis was pretty damn interesting (he’s also a very good speaker). I quite liked his focus on concrete, ‘micro’ US politics and the way in which they interact with the global sphere, a Gramsci quote seems particularly relevant here:
Do international relations precede or follow (logically) fundamental social relations? There can be no doubt that they follow. Any organic innovation in the social structure, through its technical-military expressions, modifies organically absolute and relative relations in the international field too. Even the geographical position of a national State does not precede but follows (logically) structural changes, although it also reacts back upon them to a certain extent (to the extent precisely to which superstructures react back upon the structure, politics on economics, etc.). However, international relations react both passively and actively on political relations (of hegemony among the parties). The more the immediate economic life of a nation is subordinated to international relations, the more a particular party will come to represent this situation and to exploit it, with the aim of preventing rival parties gaining the upper hand (recall Nitti’s famous speech on the technical impossibility of revolution in Italy).
Gramsci, The Modern Prince
So I actually thought that Brenner’s analysis was a niecly dialectical one, similar in the way that Gramsci presented it. I also see nothing a priori wrong with the ascription of such a decisive role to a ‘subjective’ factors. Especially as these subjective factors are in a dialectical relationship with the objective situation (Lukacs comes immediately to mind on this point). This isn’t to say that I think Brenner is entirely right, but I don’t think we dismiss his analysis out of hand.
Alex Callinicos
Callinicos delivered another pretty awesome speech (you will hear this a lot, because I thought the quality of this session was absolutely stellar, even if the sweltering heat of the lecture theatre left much to be desired!). Alex presented his argument as one diametrically opposed to Brenner’s. He argued that Brenner had only given us description, but no analysis – we can’t just see Iraq as a random event we need a larger perpective and so must look at the historical connection between liberalism and imperialism.
Callinicos noted that the US has always eschewed formal imperialism – and continuously legitimated itself with reference to this. He looks back to the ‘imperialism of the open door’ – in which the role of military power was only to enforce the conditions of a liberal world economy, this of course should not – as a rule – involve the use of ground troops. The predecessor of this type of imperialism was the ‘imperialism of free trade’ practiced by the British Empire in the 19th century and Britain relied heavily on informal empire in Canada and China. The US has a consistent, radical version of this.
Following World War 2 the US dominated the advanced capitalist world and built up a series of institutions, but this liberalism was only ever transnational. After the collapse of the Soviet Union the US was able to convert this transnationalism into global liberalism. This means that for Callinicos there was no fundamental break in the project – and it was one vigorously pursued by the Clinton administration. For Callinicos therefore, Clinton was the true pioneer of the fungibility of military power.
But of course hegemony is always about force and consent, and they are always combined in different ways. The manner in which these methods are combined is what differentiates the neo-cons from Clinton. Thus, for Callinicos this is a matter of quantity not quality there is no rupture. Callinicos further argues that the Bush administration was radicalised post-9/11 and that in this context the neo-cons cannot be considered ‘mad’. He argues that in the face of the increasing threat of China’s economic power a rational argument could certainly be made out for the US using its only comparative advantage in this conjuncture that of military force. Iraq was therefore important because rising captialist powers were dependent on its oil and the US needed to assert this.
The question Callinicos thinks we need to ask is ‘what are the interests of US imperialism’? When we do this we understand that the US ruling class is complex and the best strategy is always a contested question – we have to look at te question of the imposition of ideology on a world scale, and the geo-political is central to this.
All well and good – but I think Brenner responded pretty well by saying ‘we don’t really disagree on much’. I think this is probably the case – all they really disagree is whether there is a qualitative or quantitiative difference between Clinton and Bush (which sounds big but – meh – scales). Brenner just helps us to understand why it is that one side won the argument. But I’d actually go further than this. Callinicos seems to argue two contradictory things. On the one hand he argues that there is no rupture between Clinton and Bush, but on the other hand he seems to argue that China posed a qualitatively new threat to the US. Because of course post-WW2 there has been no capitalist power that posed a threat to the US in the way China has (although I guess the state-cap people would argue the USSR was a rival capitalist power, so maybe change the reference to post-1989?), since every other ‘threat’ was pretty damn friendly to the US, and were happy to allow the US maintain Pax Americana. So, on this reading, Alex seems to be arguing that the emergence of China has disrupted the ‘radical-Kautskyism’ of the US, since it doesn’t accept the US’ managerial role. But surely this would indicate a rupture, in line with Brenner.
David McNally
Although I really liked the first two talks David McNally’s was far and away my favourite (I think much of the audience agreed with this too). In contradistinction to the first two McNally’s position was to start from a general theoretical analysis and proceed from there. So for McNally the central point of depature was that of Marxist value theory. We need to begin from this perspective – so McNally argues – because we live in a world of alienated social relations and theory must de-fetishise them.
McNally’s talk revolved around 5 arguments:
- Neo-liberalism involves radically extending and intensifying the commodity form
- This is achieved through ‘monetarising’ more and more aspects of human life
- This involves the extension of primitive accumulation
- This occurs on a variety of levels and entails imperialism
- World money becomes decisive
So McNally’s basic argument is that the phenomenon we call ‘neo-liberalism’ must be understood as the extension of the commodity form – not a conscious project of the capitalist class but a result of the value form itself. It is fundamentally connected to new forms of discipline, and is primarily exercised through the discipline of money – the IMF, the World Bank etc. This leads to a reversal of the partial decommodification of labour.
Dispossession is also fundamental to this (hence the importance of primitive accumulation) because land has to be converted into capital. But since this land is occupied by other people, they have to be turfed off. For this reason there is a nexus of land, violence and dispossession – which gives rise to new enclosures and modalities of class struggle arise against this. Furthermore, ecological disaster is incorporated into this, so disasters which displace people are taken advantage off (Hurricane Mitch was used to get rid of the Honduran indigenous population).
McNally further linked this process to militarisation – war is of course central in ‘clearing out’ areas of land, be that through death or fleeing. All of this has also led to a great rise in the industrial reserve army, which has grown massively as people have been forced out of their land in the process of dispossession.
McNally went on to criticise the approaches of David Harvey and Rosa Luxemborg, who he thinks failed to properly elaborate the ‘laws’ of this economic process – meaning they cannot properly theorise it. Instead they often remain at the level of (very powerful) description. [He also made a really interesting point about dialectics and subjects positing their own presuppositions – but I’ll ignore that]. Further, his problem with Rosa’s approach is that she assumes this form of imperialism requires permanent occupation, which is clearly not the case, as the discipline of money suffices to compel national elites to implement dispossesion.
McNally then went on to focus heavily on what he called ‘world money’. By this he means the currency which serves as the ‘global’ medium for exchange. He argues that there has beeen an intensification of unequal currecny exchange, with the global South losing out on this. But the concept has been under theorised, and it is important, because the state that issues ‘world money’ will get the surplus on exchange, and so can appropriate value. This means that different nation states struggle over who is to issue world money.
McNally argues that this can be illustrated by the Euro project in the European Union, where the states of the European Union have tried to create a currency with all the characteristics of world money. McNally describes this as a form of inter-imperialist rivalry and denies that such rivalry need be militarised.
McNally ended with the argument that we need to emphasise anti-neo-liberalism and anti-imperialism highlight the need for a de-commodification of labour – that is to say the socialist revolution (which earnt him a rousing cheer).
What I really liked about McNally’s talk was the way that he was able to articulate linkages between his theoretical paradigm and our practical trajectory. His analysis does explain rather well a lot of contemporary phenomena in a basic theoretical way, and I think this is to be welcomed.
Ultimately, I think all of these talks worked well, and frankly if we could have combined them all into one big talk it would have been awesome. So David sets the economic-theoretical scene for us, Alex embedded it in a broader historical context and Bob examined the specific way in which ruling classes responded to the broader need for the expansion of value. Each therefore had the merit of contributing to a totalising perspective, and with a little work we could trace the analysis of value directly into Alex’s and Bob’s talk. Of course this is the inherent weakness of the short talk format, but nonetheless I was impressed by this session.
OK, I’ve clearly gone on long enough, so I’ll stop now, and do something else. Tomorrow (maybe?) I want to at least outline the talk on ‘Global Flashpoints’ that was also on Saturday, particualrly as I felt it offered a really interesting perspective on the Palestinian resistance.
