Marx or Deng?

Critical observations on China’s Great Road by John Ross

At a time when most of the world’s ostensibly Trotskyist tendencies have mistakenly declared the Chinese deformed workers’ state to be “capitalist,” in China’s Great Road, John Ross makes the case that the essential core of the social transformation achieved by the revolution of 1949 remains intact. Ross, for decades a prominent figure on the British far-left, correctly rejects the impressionist impulse of many of his former associates to denounce contemporary China as a capitalist, or even an imperialist, global power.

Ross now holds a prestigious position as Senior Fellow in the Chongyang Institute for Financial Studies at Beijing’s Renmin University and is one of the world’s foremost leftist publicists for the Chinese Communist Party (CCP). His new book highlights China’s enormous achievements in lifting hundreds of millions out of abject poverty, vastly improving the living standards of the entire population and carrying out the most rapid and massive programme of economic development in recorded history. Ross vividly contrasts China’s spectacular transformation under the CCP from a poor, predominantly peasant society into the contemporary “workshop of the world,” to the stagnation and social decay of most of the “developed” capitalist powers as their emphasis has shifted from industrial production to “financial engineering.”

The defence of the gains of China’s 1949 social revolution against imperialist aggression from abroad, as well as domestic capitalist-restorationist forces, has been of vital interest to the workers’ movement for more than seven decades. Ross traces the increasingly antagonistic attitudes of the past three US administrations, both Democrat and Republican, as it has gradually become clear that China’s integration into the world economy has not translated into the automatic hegemony of internal counterrevolutionary elements. Ross marshals a great deal of evidence to support his contention that despite its substantial capitalist component, the Chinese economy today is still effectively controlled by the central state apparatus, largely through the allocation of investment.

In the 1970s Ross was regarded by many as the most serious Marxist within the leadership of the International Marxist Group (IMG), the British section of the United Secretariat of the Fourth International (USec) led by Ernest Mandel. The USec, however, was never a particularly serious Marxist formation; it had a chequered history of a series of wholesale political adaptations to whatever “mass movement” appeared to be ascendent at any particular moment. Over the years these included Soviet Stalinists, British Labourites, Latin American guerrillas, Poland’s capitalist-restorationist Solidarnosc and even Ayatollah Khomeini’s reactionary Islamist movement. The USec’s serial enthusiasm for each of these non-proletarian formations as potential vehicles for socialism finds an analogue in Ross’s essentially uncritical attitude towards the Chinese Stalinist bureaucracy whose political dictatorship he presents as holding the key to the triumph of genuine socialism.

‘Market Socialism’: Marx vs Deng

After a review of the impressive advances in terms of life expectancy, education and other indices of human development achieved under the CCP since the introduction of Deng Xiaoping’s market-oriented economic reforms in the late 1970s, Ross asserts: “A systematic comparison of Marx’s concepts with those of the post-1929 Soviet Union makes it entirely clear that post-Deng policies in China under reform and opening up were far more in line with Marx’s than were the USSR’s”. He cites a passage from the Communist Manifesto on the initial stages of a projected transition from capitalism to socialism:

“The proletariat will use its political supremacy to wrest, by degree, all capital from the bourgeoisie, to centralise all instruments of production in the hands of the State, i.e., of the proletariat organised as the ruling class; and to increase the total productive forces as rapidly as possible.”
—Karl Marx, Frederick Engels, Manifesto of the Communist Party, 1848

A successful seizure of power by the working class anywhere would naturally require a period of transition—an entire economy cannot be socialised overnight. When Marx and Engels wrote the Manifesto in 1847, they had not yet understood that establishing the “political supremacy” of the proletariat requires smashing the existing capitalist state. In a preface to the 1872 German reissue of the Manifesto they explained:

“in view of the practical experience gained, first in the February Revolution [in France in 1848], and then, still more, in the Paris Commune, where the proletariat for the first time held political power for two whole months, this programme has in some details been antiquated. One thing especially was proved by the Commune, viz., that ‘the working class cannot simply lay hold of the ready-made state machinery, and wield it for its own purposes.’ (See The Civil War in France: Address of the General Council of the International Working Men’s Association, 1871, where this point is further developed.)”

In his 1871 address Marx described the abolition of private property in the means of production and ending capitalist exploitation as key objectives of socialist revolution:

“The political rule of the producer cannot co-exist with the perpetuation of his social slavery. The Commune was therefore to serve as a lever for uprooting the economical foundation upon which rests the existence of classes, and therefore of class rule. With labor emancipated, every man becomes a working man, and productive labor ceases to be a class attribute.”
—Karl Marx, The Civil War in France, May 1871

Presumably out of deference to the sensibilities of the CCP leadership, which has successfully cultivated a rather substantial capitalist class, Ross has little to say about “uprooting” capitalist property and ending the “social slavery” of the working class, whether “by degree” or otherwise.

The Soviet NEP: Elements of capitalism in a workers’ state

Ross claims that Deng’s economic reforms represented something “never previously seen”—in fact they were substantially similar to the measures introduced in the Soviet Union in 1921 under the New Economic Policy (NEP). Lenin reluctantly concluded that after seven years of devastating war (World War I followed by the civil war against the Whites), with no immediate prospect of a revolutionary breakthrough in Germany or elsewhere, that it was necessary to initiate a limited reintroduction of capitalist economic activity:

“You will have capitalists beside you, including foreign capitalists, concessionaires and leaseholders. They will squeeze profits out of you amounting to hundreds per cent; they will enrich themselves, operating alongside of you. Let them. Meanwhile you will learn from them the business of running the economy, and only when you do that will you be able to build up a communist republic. Since we must necessarily learn quickly, any slackness in this respect is a serious crime. And we must undergo this training, this severe, stern and sometimes even cruel training, because we have no other way out. You must remember that our Soviet land is impoverished after many years of trial and suffering, and has no socialist France or socialist England as neighbours which could help us with their highly developed technology and their highly developed industry”.
—V. I. Lenin, The New Economic Policy and the Tasks of the Political Education Departments, 17 October 1921

Lenin did not pretend that the adoption of market measures represented the fulfilment of Marx’s teachings—he openly described the NEP as a desperate expedient. Rather than marching forward on the road to a planned economy, Lenin wrote, the young Soviet Republic found itself “reverting back to capitalism—to what extent we do not know”.

The NEP was introduced as the international revolutionary tide unleashed by the Bolshevik Revolution was receding and the Communist Party of the Soviet Union (CPSU) was undergoing a bureaucratic degeneration as many in the top layers of the state and party apparatus sought to consolidate their positions through suppressing political dissent at home while pursuing a foreign policy of accommodation to global capital abroad. This was codified in 1924 with the doctrine of “Socialism in One Country” advanced by Joseph Stalin and his factional associates. Stalin personified the layer of privileged state and party functionaries who increasingly substituted political repression for persuasion even within the revolutionary vanguard, in a period when the popular masses had become demoralised by the vast disparity between the promise of a socialist future and their impoverished reality.

Leon Trotsky, who, next to Lenin, had been the most important figure in the October 1917 Revolution and had led the Red Army in the drawn-out civil war, vividly described how economic devastation laid the basis for the political degeneration of the CPSU:

“The basis of bureaucratic rule is the poverty of society in objects of consumption, with the resulting struggle of each against all. When there is enough goods in a store, the purchasers can come whenever they want to. When there is little goods, the purchasers are compelled to stand in line. When the lines are very long, it is necessary to appoint a policeman to keep order. Such is the starting point of the power of the Soviet bureaucracy. It ‘knows’ who is to get something and who has to wait.”
—Leon Trotsky, The Revolution Betrayed, 1936

Mao Zedong, who led the CCP in the protracted peasant-based guerrilla struggle that ultimately overthrew the corrupt imperialist-backed Guomindang in 1949, modelled China’s new Peoples’ Republic on the Soviet Union under Stalin. Unlike the USSR in the early years, the Chinese working class never wielded political power through workers’ councils—the Maoist formula was: “To rely on the peasants, build rural base areas and use the countryside to encircle and finally capture the cities.” This policy essentially cast the working class as spectators.

The Chinese Revolution was a great victory for the international workers’ movement. It achieved impressive gains by driving out foreign imperialism and nationalising the property of landholders and capitalists, but because China had only a very meagre industrial base, progress was slow. The CCP was itself wracked with a series of bitter internal struggles—the most dramatic of which was the Great Proletarian Cultural Revolution, initiated by Mao in 1966 to combat his “revisionist” rivals. After a decade of economic stagnation during the “Cultural Revolution,” and Mao’s death in 1976, Deng Xiaoping gained a leading position within the CCP and quickly implemented his programme of “reform and opening up.” Deng’s “NEP,” has been vastly more successful than its Russian analogue, yet the Chinese deformed workers’ state must ultimately confront the predicament Lenin described a century ago:

“We must face this issue squarely—who will come out on top? Either the capitalists succeed in organising first—in which case they will drive out the Communists and that will be the end of it. Or the proletarian state power, with the support of the peasantry, will prove capable of keeping a proper rein on those gentlemen, the capitalists, so as to direct capitalism along state channels and to create a capitalism that will be subordinate to the state and serve the state.”
—Lenin, Op. cit., 1921

The problems Lenin anticipated from reintroducing market measures manifested themselves a few years after his death in 1924, although in a somewhat different form than he foresaw, as foreign capital never became a factor in the Soviet economy. Instead, pro-capitalist sentiments developed among the wealthier layers of the peasantry. Having ignored the warnings of Trotsky and the Left Opposition, the ruling bureaucracy was eventually challenged by the wealthy capitalist “kulak” layer which began withholding grain to back their demands for higher prices. Stalin, after belatedly grasping the threat posed by the incubation of capitalism in the countryside, abruptly terminated the NEP and launched the unplanned and chaotic collectivisation of agriculture—a measure which inflicted lasting damage on the Soviet economy. (See accompanying box: “From the NEP to forced collectivisation.”)

Roots of Stalin’s 1929 ‘ultra-left adventure’

Ross correctly characterises Stalin’s abrupt 1929 turn as an “ultra-left adventure” that contradicted Marx’s model for the initial stages of socialist development:

“However, instead of this transition being spread out over a long period of time, as envisaged by Marx, it was carried out ‘at a stroke’ with the introduction of the First Five Year Plan in 1929. Simultaneously, regarding property relations, instead of the concept of The Communist Manifesto ‘to wrest, by degree, all capital from the bourgeoisie’, that is a prolonged process of transition in which both state and private property would exist, in 1929 an essentially completely state-owned or dominated system was introduced immediately in an extremely short period of time. It is therefore clear that such a system was not in line with Marx’s concepts.”

Ross omits the whole chain of events that led to the crisis in 1929, and sidesteps the prescient projections of Trotsky and the Left Opposition that could have averted the catastrophe.

The orientation to the kulaks was only one element in a larger political struggle within the CPSU that determined the fate of the Soviet workers’ state. Stalin’s victory under the banner of “socialism in one country,” signalled a rejection of the strategic framework upon which Lenin and the Bolshevik Party had predicated the October Revolution in backward Russia—the prospect that a successful workers’ uprising in Russia would touch off a revolutionary wave across Europe, particularly in Germany. With the relative stabilisation of German capitalism following the failure of the revolutionary left to take advantage of the October 1923 crisis, Stalin abandoned the perspective of international revolution in favour of the autarkic policy of ”socialism in one country.” It was this programme, not Lenin’s proletarian internationalism, which Mao Zedong adopted.

In an act of what can only be considered conscious intellectual dishonesty, John Ross, who is well acquainted with the political struggle of the Left Opposition, entirely disregards the dramatic events of the period between Lenin’s 1921 turn to the NEP and the “system introduced in 1929” by Stalin. Ross turns these years into “blank pages,” to borrow former Soviet leader Mikhail Gorbachev’s description of similarly politically expedient historical omissions by Stalin and his successors. Treating Stalin’s forced collectivisation and break-neck industrialisation policies as if they had been deliberately intended by the Bolsheviks from the beginning, Ross pedantically explains how they deviated from Marx’s ideas about the transition to a socialist economy:

“But peasant production, or individual ownership of restaurants and local shops, all of which were transferred to de facto or de jure state ownership in the USSR after 1929, were not large scale ‘socialised’ production—they were small scale, frequently purely individual, forms of production. The expropriation of such property therefore did not correspond to the concepts put forward by Marx at any time, whether in the early formulas of The Communist Manifesto, his late writing in The Critique of the Gotha Programme, or in Das Kapital.

“It is clear, therefore, that the system introduced in 1929 in the USSR did not correspond to Marx’s concept of a long transition to developed socialism. The post-1929 USSR saw the abolition of market, and all major forms of private ownership, in a single step—not a process ‘by degrees’ as Marx put it. It was an attempt to impose full state ownership on almost all major sectors of the economy—in Marxist terminology an attempt to impose a superstructure (state legal forms of ownership) on the economic base in a single step. Objectively in the economic field this post-1929 Soviet system was therefore not Marx’s but an ultra-left adventure.”

Ross’s critique of Stalin’s “single-step” abolition of market activity is clearly designed to rationalise the growth of the Chinese bourgeoisie within the People’s Republic—it is significant that he offers no suggestions about how this cancer should be controlled pending its final excision, nor about how to address the obscene inequalities generated by the expansion of for-profit activity.

Feigning naïveté, Ross coyly suggests that Stalin’s “ultra-leftist adventure” may have resulted from geo-strategic calculations:

“An argument is sometimes put forward that the system introduced in 1929 in the USSR was necessary due to military/geopolitical considerations—this administered economy was used to create a priority for military and heavy industry and this military-industrial complex, in turn, allowed the USSR to win World War II against Nazi invasion. As issues of national defence and military considerations, when faced with the threat of war, must take priority over purely economic ones, this constitutes a serious argument that the Stalin system of ‘administered economy’ was necessary in the 1930s—Deng Xiaoping himself stated that a world war would necessarily take precedence over all other factors, stating of reform and opening up that this would be the one factor that would override it: ‘Nothing short of a world war would tear us away from this line.’ Counter arguments can also be made to the argument that the administered economy of the 1929 First Five Year Plan was a necessary response to geopolitical considerations—it was introduced four years before Hitler came to power in 1933.”

The obsequious reference to “Deng Xiaoping himself” recognising that world war could complicate a market reform programme hardly balances Ross’s casual understatement of the urgency that any Soviet regime in the late 1920s would have placed on developing industry, in order, among other things, to provide the capacity to resist capitalist military aggression. The suggestion that the USSR circa 1929 had no need to prioritise industrialisation because the Nazis only came to power four years later is beyond absurd—there had been no change in the fundamental attitude of any of the “democratic” imperialists (including France, Britain and the US) who only a few years earlier had sent expeditionary forces in the attempt to “strangle Bolshevism in its cradle.” Besides, bootstrap development of a significant industrial base without foreign assistance was a process that required at least a decade.

Ross is well aware that the CCP leadership is not merely dealing with a layer of prosperous peasant bumpkins, but rather the knowledgeable owner-operators of the vital tech sector of the economy who have multiple connections with their global corporate counterparts and, inevitably, the various imperialist state agencies that serve and protect them. As a sophisticated left apologist for the Stalinist caste headed by Xi Jinping, Ross chooses to bypass the historical origins of the 1929 Soviet industrialisation drive to avoid the awkward fact that the Chinese economy today is characterised by a contradiction between private and collectivised property that has important parallels with the situation in the USSR under the NEP. He presents the shortcomings of the Soviet turn to hyper-centralisation achieved through brutal police-state repression as a natural and inevitable consequence of comprehensive centralised planning. By omitting the earlier promotion of the rural capitalists, a policy that conditioned the 1929 lurch, Ross makes a case which is so ahistorical that it amounts to conscious falsification.

Capitalism in workers’ states

As an “unashamed Dengite in economic theory”, Ross essentially ignores the risks posed by incubating an indigenous bourgeoisie and offers an up-beat account of the utility of Adam Smith’s “invisible hand” in Chinese development:

“Phrased in more popular terms, as Xi Jinping put it in his interview with the Wall Street Journal in September 2015, before his first visit to the US as President: ‘we need to make good use of both the invisible hand and the visible hand’. China can and will, because of its economic structure, use both the ‘invisible hand’ of the market and ‘visible hand’ of the state. No Western capitalist economy has such a structure. The practical consequences of this using ‘both hands’, as opposed to the West’s reliance purely on the private sector hand, can be seen both in the unprecedented economic achievements of China during the 40 years of reform and opening up and in the far superior performance of China compared to the Western economies since the beginning of the financial crisis. To adapt the famous phrase of Deng Xiaoping, China, depending on which is best, is prepared to use both the state sector cat and the private sector cat. The West, by insisting only the private sector cat is good, has left itself mired in the ‘new mediocre’.”

Ross would presumably be willing to agree that private capitalists tend to view China’s powerful state sector as an impediment to growth and a barrier to profit maximisation. The CCP periodically finds it necessary to rein in entrepreneurs:

“Once hailed as drivers of economic prosperity and symbols of the country’s technological prowess, the empires built by Ma, Tencent Holdings Ltd.’s chairman, ‘Pony’ Ma Huateng, and other tycoons are now suspect after amassing hundreds of millions of users and gaining influence over almost every aspect of daily life in China. ‘The [Communist] Party is trying to make it clear that Ma is not bigger than the party,’ says Rana Mitter, a professor specializing in Chinese politics at Oxford University. ‘But they also want to show that China is a good place to do business, and that means that the party needs to show that entrepreneurs can succeed.’”
Bloomberg.com, 22 December 2020

The threat posed by the Chinese bourgeoisie does not involve the appropriation of wealth so much as its natural inclination to promote its class interests through political activity aimed at reducing the role of the “visible hand” in order to maximise profits.

Xi Jinping and his co-thinkers in the CCP leadership, who have recently been tightening the reins on the private sector, are determined to avoid the capitalist counterrevolution that resulted from the chaotic economic implosion triggered by Mikhail Gorbachev’s market “reforms” in the Soviet Union:

Qiushi, a top political journal by the Central Party School of China’s ruling Communist Party, published excerpts Monday from Xi’s address to officials in January 2013, about two months after he was elected general secretary of the party and about two months before he became president. He recalled errors made by Moscow in the leadup to the Soviet Union’s collapse as well as ‘mistakes’ made by his predecessors, especially Mao Zedong but maintained that ‘the history of our party is, generally speaking, glorious.’

“He cautioned, however, that ‘the eventual demise of capitalism and the ultimate victory of socialism must be a long historical process’ that would present challenges for both sides. ‘We must profoundly understand the self-regulating ability of capitalist society, fully appraise the objective reality of the long-term advantage of Western developed countries in the economic, scientific and military spheres and conscientiously prepare for all aspects of long-term cooperation and struggle between the two social systems,’ Xi said.”
Newsweek.com, 4 January 2019

Socialist distribution—Marx vs CCP

Xi Jinping is apparently somewhat more alert to the potential dangers posed by free market capitalism than his British publicist who seems to regard China’s capitalist enterprises as so many stepping stones to the socialist future. Ross cites Deng’s observation that China is as yet only in “the primary stage of socialism—that is, the underdeveloped stage,” and his repetition of Marx’s description of socialism as the lower phase of communism:

“‘A Communist society is one in which there is no exploitation of man by man, there is great material abundance, and the principle of from each according to their ability, to each according to his needs is applied. It is impossible to apply that principle without overwhelming material wealth. In order to realise communism, we have to accomplish the tasks set in the socialist stage. They are legion, but the fundamental one is to develop the productive forces’.”

Ross depicts Deng’s market reform programme as being in accord with Marx’s comments about the distribution of the social product in early post-revolutionary societies:

“…the individual producer receives back from society—after the deductions have been made—exactly what he gives to it. What he has given to it is his individual quantum of labor. For example, the social working day consists of the sum of the individual hours of work; the individual labor time of the individual producer is the part of the social working day contributed by him, his share in it. He receives a certificate from society that he has furnished such-and-such an amount of labor (after deducting his labor for the common funds); and with this certificate, he draws from the social stock of means of consumption as much as the same amount of labor cost. The same amount of labor which he has given to society in one form, he receives back in another.”
—Karl Marx, Critique of the Gotha Programme, 1875

Ross refers to a speech by Deng on the “socialist principle” of distribution according to work, rather than “politics or…seniority”:

“We must adhere to this socialist principle which calls for distribution according to the quantity and quality of an individual’s work. In accordance with this principle, a person’s grade on the pay scale is determined mainly by his performance on the job, his technical level and his actual contribution. Political attitude should also be taken into account, but it must be made clear that a good political attitude should find expression mainly in a good performance in socialist labour and a greater contribution to society. If, in handling distribution, we judged mainly on the basis of a person’s politics rather than on the basis of his work, that would mean we were following the principle ‘to each according to his politics’ rather than ‘to each according to his work’. In short, distribution should be made only according to a person’s work, not according to his politics or his seniority.”
—Deng Xiaoping, Adhere to the Principle ‘To Each According To His Work’, 28 March 1978

Ross suggests that Deng’s policies correspond to Marx’s description of a society in the early stages of a socialist transition in the Critique of the Gotha Programme. Yet there is a problem—in one passage Marx explicitly stipulated under socialism there are “no class differences, because everyone is only a worker like everyone else.” This is obviously not the case in contemporary China with its billionaire “socialist” factory owners. Ross solves this problem by excision, the same technique Stalin and Mao used to rectify photographic evidence that contradicted their current version of party history. Marx is quoted at length, with the bit that does not “fit” represented by ellipses. The following is the passage cited by Ross with the deleted portion restored (and highlighted):

“… one … is superior to another physically, or mentally, and supplies more labor in the same time, or can labor for a longer time; and labor, to serve as a measure, must be defined by its duration or intensity, otherwise it ceases to be a standard of measurement. This equal right is an unequal right for unequal labor. [It recognizes no class differences, because everyone is only a worker like everyone else]; but it tacitly recognizes unequal individual endowment, and thus productive capacity, as a natural privilege. It is, therefore, a right of inequality, in its content, like every right. Right, by its very nature, can consist only in the application of an equal standard; but unequal individuals (and they would not be different individuals if they were not unequal) are measurable only by an equal standard insofar as they are brought under an equal point of view, are taken from one definite side only—for instance, in the present case, are regarded only as workers and nothing more is seen in them, everything else being ignored. Further, one worker is married, another is not; one has more children than another, and so on and so forth. Thus, with an equal performance of labor, and hence an equal in the social consumption fund, one will in fact receive more than another, one will be richer than another, and so on. To avoid all these defects, right, instead of being equal, would have to be unequal.”
—Marx, Op. cit., 1875

Ross’ omission amounts to an acknowledgement that contemporary China does not correspond to Marx’s description of a socialist, i.e., classless, society, in which “everyone is only a worker like everyone else.” It is no secret that powerful CCP bureaucrats and capitalist entrepreneurs enjoy lifestyles comparable to the bourgeoisie of the Western imperialist countries. Some estimates put the wealth of Xi Jinping’s family over one billion dollars. No one could possibly take seriously the proposition that in contemporary China wealth is distributed in accordance with work performed. The 93 billionaires among the members of the National Peoples’ Congress in 2019 are rather obviously members of a different social class than those whose labour they exploit.

Ross discusses the grotesque disparities in America between the productive inputs of billionaire owners and their employees. Breaking down the constituents of economic growth into capital, labour and total-factor productivity (TFP—a category that includes entrepreneurial innovation) he concludes:

“Given that the US is the world’s most technologically advanced economy there is no reason to suppose that all TFP growth is due to creative individual entrepreneurs, but even if that were the case it would mean inputs of labour and capital were four times as important for economic development as ‘individual entrepreneurship’.”

It seems rather odd that Ross chooses to introduce this without providing a similar analysis of the Chinese economy where the results would not likely be a great deal different. Corrupt CCP bureaucrats and China’s billionaires have amassed fortunes out of all proportion to any contribution they may have made to economic growth. There is however one very important distinction: Chinese billionaires do not (yet) wield state power and must play by rules laid down by the Stalinist CCP or face the consequences, as Jack Ma, long considered China’s richest person, recently discovered.

In April 2019, Ma, whose holdings included tech giant Alibaba, spoke out “in support of the Chinese work practice known as ‘996.’ The number refers to working from 9 am to 9 pm six days a week and is said to be common among the country’s big technology companies and start-ups.” Ma’s celebration of the brutal 72-hour workweeks imposed on his employees which have “earned” him so much money, produced an immediate backlash on social media—one Weibo user indignantly asked: “Did you ever think about the elderly at home who need care, (or) the children who need company?”

As well as praising the “996” system of hyper-exploitation, Ma, who has apparently belonged to the CCP since the 1980s, had earlier proposed that, because the government was “getting weak,” it might be a good idea to shrink the role of the CCP “visible hand” in the economy:

“‘Chinese consumption is not driven by the government but by entrepreneurship, and the market,’ Jack Ma of Alibaba said in September 2015. ‘In the past 20 years, the government was so strong. Now, they are getting weak. It’s our opportunity; it’s our show time, to see how the market economy, entrepreneurship, can develop real consumption.’”
The Guardian, 25 July 2019

On 24 October 2020 Ma finally went too far when he publicly criticised China’s state-controlled financial system. A few days later he disappeared and has only made a few brief appearances in public since; most of his time is reportedly being taken up with “regulatory interviews.” Ma’s fall was a reminder to the Chinese bourgeoisie that the CCP remains in the saddle. His shareholders discovered that there is a price to be paid for displeasing party bureaucrats:

“Alibaba’s shares have fallen by almost 30 per cent since the regulatory showdown began in late October, putting a big dent in the net worth of Mr Ma, who has not been seen in public since then. Over the same period his fortune has declined from $62bn to $49bn, according to Bloomberg data. The Hurun China Rich List estimated that Mr Ma had been the country’s richest man as recently as October 20 but would now rank fourth, his top slot taken by a bottled water tycoon, Zhong Shanshan.”
Irish Times, 13 January 2021

Forbes reports that many of Ma’s corporate peers have recently been enthusiastically supporting the party’s “common prosperity” initiative:

“Chinese technology companies are donating tens of billions of dollars for social initiatives as they scramble to fall in line with President Xi Jinping’s national goal of common prosperity.”

.                               .                               .

“The corporate giving, in the meantime, is accompanied by personal donations from the country’s richest tech billionaires. Pinduoduo founder Colin Huang, smartphone maker Xiaomi’s cofounder Lei Jun and food-delivery giant Meituan’s founder Wang Xing have each transferred blocks of their companies [sic] shares worth billions of dollars to philanthropic foundations, which have pledged to use the proceeds for education, poverty alleviation and scientific research.”
Forbes.com, 26 August 2021

Workers vs bosses in Chinese deformed workers’ state

As a good Dengite, Ross is not overly concerned about the conditions of life for the workers whose labour has created the spectacular economic growth he celebrates. Nor does he touch on the frequent eruptions of working-class struggle—particularly in China’s coastal regions where private enterprises are concentrated. This is not the attitude that Lenin took when market incentives and capitalist activity were introduced under the NEP in the early 1920s; he made a point of emphasising the necessity for workers to organise to defend their interests both in state-owned companies and private enterprises:

“As long as classes exist, the class struggle is inevitable. In the period of transition from capitalism to socialism the existence of classes is inevitable; and the Programme of the Russian Communist Party definitely states that we are taking only the first steps in the transition from capitalism to socialism. Hence, the Communist Party, the Soviet government and the trade unions must frankly admit the existence of an economic struggle and its inevitability until the electrification of industry and agriculture is completed—at least in the main—and until small production and the supremacy of the market are thereby cut off at the roots.

“On the other hand, it is obvious that under capitalism the ultimate object of the strike struggle is to break up the state machine and to overthrow the given class state power. Under the transitional type of proletarian state such as ours, however, the ultimate object of every action taken by the working class can only be to fortify the proletarian state and the state power of the proletarian class by combating the bureaucratic distortions, mistakes and flaws in this state, and by curbing the class appetites of the capitalists who try to evade its control, etc.”
—Lenin, Role and Functions of the Trade Unions—Under The New Economic Policy, 12 January 1922

Deng took a very different approach: in 1982 the CCP deleted the right to strike from China’s constitution. Under Xi Jinping there have been periodic crackdowns on corrupt party functionaries and the excesses of private capitalists. The CCP continues to oppose any sort of direct action by workers and strikes remain illegal; although in many cases, depending on the local balance of forces, this prohibition is not strictly enforced.

The All-China Federation of Trade Unions (ACFTU), which operates essentially as an adjunct of the CCP, intervenes on the side of the workers only in particularly egregious cases in the interests of maintaining social stability. Lenin projected a very different role for trade unions in the nascent Soviet workers’ state:

“Taking into account the experience of the enormous work accomplished by the unions in organising the economy and its management, and also the mistakes which have caused no little harm and which resulted from direct, unqualified, incompetent and irresponsible interference in administrative matters, it is most important, in order to restore the economy and strengthen the Soviet system, deliberately and resolutely to start persevering practical activities calculated to extend over a long period of years and designed to give the workers and all working people generally practical training in the art of managing the economy of the whole country.”
—Lenin, Op. cit., 1922

The CCP bureaucracy has no plans to relinquish its control over every aspect of social and political life in China. Young leftists who rally to the support of workers’ struggles sometimes end up alongside them in jail on charges of “stirring up trouble”:

“Just ask the workers at Shenzhen Jasic Technology, a private manufacturer of welding equipment listed on the Shenzhen Stock Exchange. In May 2018, employees attempted to unionize after frequent complaints over their poor working conditions, abusive treatment by management, and chronic low pay. One former employee told journalists from Reuters, ‘Sometimes we would work for one month straight without any time off. … They wouldn’t let us freely quit and they even watched us go to the toilet.’ Workers at the factory contacted the local branch of China’s sole recognized labor union organizer, the All-China Federation of Trade Unions, and after being rebuffed, they took matters into their own hands. The party’s reaction to the attempted unionization included a mixture of force and innuendo. On July 27, twenty-nine workers from the Jasic factory were detained for ‘picking quarrels and stirring up trouble,’ a vague charge frequently used by the authorities to quash speech or action that isn’t covered by more specific legal statutes. One month later, heavily armed police arrested fifty students and workers who had begun a campaign to push for the release of the detained workers.”
—Jude Blanchette, China’s New Red Guards, 2019

While periodically acknowledging the sorts of things Lenin described as “bureaucratic distortions of the proletarian state and…all sorts of survivals of the old capitalist system,” the CCP is betting that Chinese workers will put up with growing social polarisation if popular living standards continue to rise. Ross, timidly echoing the regime’s self-criticisms, mentions that “inequality in China, as is admitted domestically, has risen to levels which are excessive, and need to be corrected,” but offers no suggestions about how to address the problem. He is doubtless awaiting a signal from the CCP leadership before commenting on such a potentially thorny issue.

‘The proletariat organised as the ruling class’

As befits someone who apparently regards Deng as a great Marxist, Ross has no criticism of the regime’s prohibition of strikes, nor any of the various other restrictions on working-class political activity designed to ensure the total control of the CCP. The social revolution of 1949 that established a collectivised economy, thereby creating the material base for genuinely socialist development, was an indispensable precondition for seeing “the proletariat organised as the ruling class” (as the passage in the Communist Manifesto that Ross is fond of citing puts it). But direct proletarian rule does not currently exist in China. From its inception, the CCP, like its mentor, Stalin’s Soviet party, has jealously guarded its monopoly on decision-making and actively excluded meaningful participation by the masses of working people in the determination of social and economic policy.

Ross’s book contains no hint that the creation of a genuinely socialist (i.e., classless) society, will only be possible after the Chinese working class smashes the grip of the CCP and replaces its bureaucratic rule with that of delegated workers’ councils modelled on the Russian soviets of 1917. He offers no ideas as to how the current iteration of Chinese “socialism,” with its billionaires and one-party dictatorship, may one day begin to transition into the lower stage of communism, i.e., the actual socialism described by Marx as requiring “co-operative production” and the elimination of capitalism’s “constant anarchy” and “periodical convulsions”:

“If co-operative production is not to remain a sham and a snare; if it is to supersede the capitalist system; if united co-operative societies are to regulate national production upon common plan, thus taking it under their own control, and putting an end to the constant anarchy and periodical convulsions which are the fatality of capitalist production—what else, gentlemen, would it be but communism, ‘possible’ communism?”
—Marx, Op. cit., 1871

As a skilful and experienced CCP courtier, Ross knows better than to raise awkward questions. His job is to project confidence that Xi Jinping and his successors will be able to manage any problems that arise and maintain the course set by Deng for many years to come. Ross does not speculate on how the property of China’s powerful bourgeoisie may eventually be liquidated and their holdings integrated into a planned, collectivised economy. He is not concerned with how the cancerous bourgeois tumour might be eliminated but rather celebrates its role in smoothing Chinese integration into the world market which, along with the CCP’s state-directed investment programme, he identifies as the core elements of the spectacular economic expansion the world has witnessed over the past three decades.

In an approach perhaps designed to appeal to social-democrats and liberals, Ross presents China’s economic development as essentially compatible with the teachings of the famous liberal British economist John Maynard Keynes:

“…while reform and opening up was developed and formulated within a Marxist framework it is possible to understand it in different economic frameworks. … It was also shown that reform and opening up, and socialism with Chinese characteristics, can be easily understood within the framework of Keynes.”

Ross develops this theme later in the book:

“The rising proportion of the economy devoted to investment meant any downturn in investment would have increasingly destabilising consequences. This could be dealt with to some degree through budget deficits, but given that the key element was investment, and investment was determined by the interaction between profit and the interest rate, a policy of low interest rates was necessary. This would lead to the ‘euthanasia of the rentier’—for which read state ownership of the banks. However, it was unlikely interest rates would be sufficient by themselves and therefore the state would need to step in with ‘a somewhat comprehensive socialisation of investment’ which would however work alongside the private sector. But tracing this argument has now actually arrived at a ‘Chinese’ economic structure—although approaching it via a Keynesian and not a Marxist framework. ‘Zhuada Fangxiao’, grasping large state firms and releasing small ones to the non-state/private sector, coupled with abandonment of quantitative planning, means that China’s economy is not being regulated via administrative means but by general macro-economic control of investment—as Keynes advocated.”

While capitalist investment is driven by calculations of profit maximisation (by maximising the exploitation of labour) investment in China’s strategic state-owned enterprises (SOEs) is governed by different criteria. The CCP’s support for the state sector is designed to give it the leverage to effectively control the overall economy while also ensuring social stability through providing the core of the working class with secure employment. In “The Myth of Capitalist China” we discussed how, while the SOEs are generally significantly less profitable than private enterprises, under the CCP they receive preferential treatment from the state-owned financial sector.

Ross crows that “China’s economy is not being regulated via administrative means but by macro-economic control of investment,” and apparently views China’s economic growth as primarily a result of the rate of investment, rather than growth of labour productivity. There is no question that the CCP directs investment, which allows it to occasionally slap down individual entrepreneurs, or entire sectors, if they get out of line. Ross tends to downplay the pivotal role played by the CCP and its willingness to steer developments without regard for short or even medium-term profitability. In a 2015 commentary Marxist economist Michael Roberts drew a more nuanced and more accurate picture:

“…the law of value in world markets feeds through to the Chinese economy. But the impact is ‘distorted‘, ‘curbed‘ and blocked by bureaucratic ‘interference‘ from the state and the party structure to the point that it cannot yet fully dominate and direct the trajectory of the Chinese economy.

“China‘s ‘socialism with Chinese characteristics’ is a weird beast. It is not ‘socialism‘ by any Marxist definition or by any benchmark of democratic workers control. And there has been a significant expansion of privately-owned companies, both foreign and domestic over the last 30 years, with the establishment of a stock market and other financial institutions. But the vast majority of employment and investment is undertaken by publicly-owned companies or by institutions that are under the direction and control of the Communist party. The biggest part of China‘s world-beating industry is not foreign-owned multinationals, but Chinese state owned enterprises. The major banks are state-owned and their lending and deposit policies are directed by the government (much to the chagrin of China‘s central bank and other pro-capitalist elements). There is no free flow of foreign capital into and out of China. Capital controls are imposed and enforced and the currency‘s value is manipulated to set economic targets (much to the annoyance of the US Congress).”
—Michael Roberts, thenextrecession.wordpress.com, July 2015

While economic growth has been slowing and the profitability of China’s private sector declined following the global 2007 crash, public investment at low interest rates has been maintained:

“Gross investment has averaged over 47% of GDP since 2009. But real GDP growth has been slowing. So China’s productivity return on new investment (or the productivity of capital input) is declining. Back in 2006, before the global crisis, it took 2.9 units of investment to increase real GDP by 1 unit. In 2014, it now takes 6.6 units. China needs to return to its long-term average TFP [total factor productivity] rate of over 2.5% a year to sustain 7% real GDP growth.”
Ibid.

Marxists locate the origin of capitalist crisis trends in the tendency for return on investment (profit) to fall as a result of the constant imperative to acquire new, more efficient, means of production in order to gain an advantage over, or keep up with, competitors. Each major technological upgrade reduces labour inputs per unit of production—which, because labour is the sole source of value, tends to drive down the rate of profit (“surplus value”) per unit of investment, which results in periodic destabilising crises:

“The contradiction, to put it in a very general way, consists in that the capitalist mode of production involves a tendency towards absolute development of the productive forces, regardless of the value and surplus-value it contains, and regardless of the social conditions under which capitalist production takes place; while, on the other hand, its aim is to preserve the value of the existing capital and promote its self-expansion to the highest limit (i.e., to promote an ever more rapid growth of this value). The specific feature about it is that it uses the existing value of capital as a means of increasing this value to the utmost. The methods by which it accomplishes this include the fall of the rate of profit, depreciation of existing capital, and development of the productive forces of labour at the expense of already created productive forces.

“The periodical depreciation of existing capital—one of the means immanent in capitalist production to check the fall of the rate of profit and hasten accumulation of capital-value through formation of new capital—disturbs the given conditions, within which the process of circulation and reproduction of capital takes place, and is therefore accompanied by sudden stoppages and crises in the production process.”
—Karl Marx, Capital Vol. III, 1894

The global financial crisis of 2007-08 cost some 40 million Chinese workers their jobs. The fact that most of the losses were in private export-oriented companies dramatically illustrated the limits on fuelling domestic growth chiefly through relying on selling commodities in foreign capitalist markets. This has apparently not registered with Ross who does not discuss the necessity for China to undertake a gradual transition away from a market orientation as productive capacity grows. Instead, he appears to see a future in which much of China’s economy remains geared to the production for profit model, modified by occasional Keynesian interventions when necessary.

In his 1926 book The New Economics, Evgeny Preobrazhensky, Leon Trotsky’s close collaborator in the Soviet Left Opposition, observed that after the working class takes state power, ‘‘there operate at one and the same time two laws with diametrically opposite tendencies.” One is what he dubbed the ‘‘law of socialist accumulation,’’ and the other is the law of value, which stipulates that in a capitalist society, commodities tend to exchange on the basis of the amount of socially necessary labour they contain. Marx anticipated that as a socialist economy developed, and citizens had access to an ever-increasing range of products and services without charge, the role of the law of value in allocating the necessities of life and other goods (i.e., to each in accordance with their labour inputs) would shrink. As this process develops, the coercive state apparatus required to regulate and enforce this “bourgeois right” will also begin to gradually fade away until eventually it will be possible for “society [to] inscribe on its banners: From each according to [their] ability, to each according to [their] needs!” as Marx put it in his 1875 Critique of the Gotha Programme.

In analysing the bureaucratically degenerated Soviet workers’ state of the 1930s, Trotsky noted that the rapid economic development resulting from the introduction of collectivised property and the planning principle contrasted sharply with the “bourgeois norms of distribution,” through which the parasitic bureaucratic elite appropriated a disproportionate share of the social product:

‘‘Two opposite tendencies are growing up out of the depth of the Soviet regime. To the extent that, in contrast to a decaying capitalism, it develops the productive forces, it is preparing the economic basis of socialism. To the extent that, for the benefit of an upper stratum, it carries to more and more extreme expression bourgeois norms of distribution, it is preparing a capitalist restoration. This contrast between forms of property and norms of distribution cannot grow indefinitely. Either the bourgeois norm must in one form or another spread to the means of production, or the norms of distribution must be brought into correspondence with the socialist property system.

‘‘The bureaucracy dreads the exposure of this alternative.’’
The Revolution Betrayed, 1936

The top layers of the CCP and the layer of billionaire capitalists it has cultivated, have vastly greater wealth than the upper echelon of the Soviet bureaucracy under Stalin ever did. Chinese labour productivity is rapidly catching up with that of the developed capitalist countries—an achievement the Soviet Union never came close to. The contradiction which Trotsky identified in the USSR between the “socialist property system” and the bourgeois norms of distribution is therefore more acutely posed in Xi’s China today than it was in the Soviet Union under Stalin. This is a profound problem, yet one that John Ross and other CCP apologists show little interest in examining.

Perhaps Ross hopes that the contradiction can be indefinitely managed with the combination of ideological exhortations and police pressure that have characterised Xi Jinping’s ongoing “anti-corruption” drives. By targeting the worst offenders with these initiatives, the CCP leadership has burnished its popular image and discouraged ostentatious displays of ill-gotten gains by as yet undetected perpetrators, but the underlying contradiction remains.

Ross claims that it is possible to look at the Chinese economy in “a Keynesian and not a Marxist framework”; this implies an underlying compatibility between what are in fact two starkly counterposed approaches. In his discussion of the CCP’s response to the global financial crisis of 2007, Ross suggests that Deng’s metaphor about the ability of different coloured cats to catch mice can be applied to Marx and Keynes:

“Deng Xiaoping’s most famous economic statement is of course ‘cats theory’—‘it doesn’t matter whether a cat is black or white provided it catches mice’. But ‘cats theory’ can also be applied to economics itself—it doesn’t matter whether something is described in Marxist or Western economic terms provided the same economic structure and policies exist. Zhuada Fangxiao is a conclusion that may be arrived at from either a Marxist or a Keynesian framework.

*                                               *                                              *

“In China, in contrast, budget deficits have been combined with lower interest rates, a state-owned banking system (‘euthanasia of the rentier’) and a huge state investment programme. While the West’s economic recovery programme has been timid, China has pursued full blooded policies of the type recognisable from Keynes [sic] The General Theory as well as its own ‘socialism with Chinese characteristics.’ Why this contrast and why has China’s stimulus package been so much more successful than that in the West? Because in the West, of course, it is held that the colour of the cat matters very much indeed. Only the private sector coloured cat is good, the state sector coloured cat is bad.”

Ross appears to view the development of production in a workers’ state as chiefly a matter of providing sufficient investment:

“….Deng Xiaoping’s economic reform, flowed in an integration [sic] fashion from underlying theoretical economic principles through to the solving of eminently practical issues of economic policy. It was this which produced by far the greatest economic growth and social advancement seen in any country in history. This integrated system also explains why any diversion from Deng Xiaoping’s path necessarily leads to economic difficulties. Any return to an administered economy leads to the inability to take advantage of small-scale production and in practice to the ability to integrate with a world economic market. Any system which create [sic] a system in which private enterprise is dominant, however, loses the ability of the state to regulate the level of investment and thereby recreating [sic] the problems which both Keynes and Deng Xiaoping had successfully solved. In short, no one in history has ever combined such deep economic thinking with such successful economic policy as Deng Xiaoping.”

As someone whose “deep economic thinking” is circumscribed by the limitation of “socialism in one country,” Ross (following his mentor) naturally views “the [capitalist] world economic market” as a permanent feature of human society or at least one that will continue into the indefinite future. If this were true, then all discussion of how the productive forces might be developed after humanity transcends the framework of production for profit (i.e., for the anonymous market), would simply be a waste of time. But Trotsky and Preobrazhensky in considering the possible trajectory of Soviet economic growth, started from a different premise—they based their projections on Marx’s assertion that, after conquering state power, the working class should seek to “forcibly hasten” the eradication of the social inequality characteristic of class society:

“…so long as the other classes, especially the capitalist class, still exists, so long as the proletariat struggles with it (for when it attains government power its enemies and the old organization of society have not yet vanished), it must employ forcible means, hence governmental means. It is itself still a class and the economic conditions from which the class struggle and the existence of classes derive have still not disappeared and must forcibly be either removed out of the way or transformed, this transformation process being forcibly hastened.”
—Karl Marx, Conspectus of Bakunin’s Statism and Anarchy, 1874

 Workers’ states, foreign investment & international trade

In addition to state investment, Ross points to China’s participation at the centre of an ever-increasing international division of labour as the other driver of economic growth. Yet he again fails to distinguish between capitalist and proletarian modes of production and treats China’s deepening integration into the capitalist world market as an unambiguously positive development:

“This Marx/[Adam] Smith analysis of the decisive role of international division of labour, as the most advanced expression of overall socialisation/division of labour, is of course fully confirmed in the present day by the numerous factual studies showing the strong positive correlation between openness of an economy to trade and its speed of economic development—this strong correlation is the international expression of the key role played by domestic vision of labour, and the role of intermediate products/circulating, [sic] capital… Furthermore, as already noted, the low level of international trade which was an integral part of the Soviet system after 1929, which meant cutting off of the USSR from broad participation in the international division of labour, was therefore in counterposition to Marx’s concepts. In contrast to the Soviet deviation from Marx, support of globalisation is one of the most fundamental features of China’s Marxist economic policy—being incorporated into the very name of ‘reform and opening up’. This is, of course, continued and is further developed in discussion around the 19th Party Congress.”

Ross ignores the fact that the Soviet Union in the late 1920s was the object of aggressive hostility from the most powerful capitalist powers at the time; its autarkic programme of rapid industrialisation to “catch up” to its predatory rivals, while carried out in a crude and excessively brutal fashion, was not in fact “a deviation from Marx,” but essential for survival. In the decade after 1928, while the Great Depression ravaged the economies of the Western imperialist countries, Soviet manufacturing output increased 600 percent (The Rise and Fall of the Great Powers, Paul Kennedy).

In the passage quoted above, Ross abstracts from the critical distinction between capitalist and socialist modes of production in airily asserting that there is “a strong positive correlation between the openness of an economy to trade and its speed of economic development.” His patrons in the CCP have set a more sensible guideline for participating in the global capitalist economy: China’s engagement in foreign trade tends to be limited to sectors where it needs access to technology or raw materials. Foreign investment is not permitted if it impacts the objectives of the Five-Year Plans or threatens the predominance of state-owned enterprises in strategic areas.

Ross lived in Moscow between 1992 and 2000 where, according to a biographical note by his publisher, “he attempted to persuade the Russian authorities to follow a China style economic reform instead of Western shock therapy”. Russia under Boris Yeltsin demonstrated how, contrary to the sunny projections of financial conmen hawking the “Washington Consensus,” unrestricted foreign capital penetration and “free trade,” stripped prime assets and resulted in declining industrial capacity, living standards and life expectancy (see: Russia: A Capitalist Dystopia). The CCP leadership, while formally acceding to the requirements of the imperialist-dominated World Trade Organisation, has shrewdly continued to strictly limit foreign capitalist access to the Chinese economy.

Ross paints a rosy picture of China’s “national rejuvenation” via its participation in the global market. He also describes an imaginary scenario in which global imperialist predators evolve into members of a “community of common destiny” and the expansionist impulses of rival bourgeoisies are miraculously transmuted into harmonious cooperation:

“Instead of a ‘zero-sum’ situation, by engaging in division of labour both or many sides can gain—that is, international interaction is mutually beneficial. International cooperation is therefore not merely necessarily required to deal with inherently international problems (climate change, terrorism etc) but its mutual advantages in the highest possible high living standards are rooted in, and only achievable by, international division/socialisation of labour. That such benefits can only be achieved by interaction of states is therefore precisely expressed in Xi Jinping’s concept of a ‘community of common destiny’ or ‘a common future for humanity’.”

Marx ridiculed such “win-win” fantasies about a global division of labour that benefits all participants in the capitalist world market. He favoured free trade between rival national bourgeoisies because he anticipated that it would exacerbate social contradictions and “hasten the social revolution”:

“But, in general, the protective system of our day is conservative, while the free trade system is destructive. It breaks up old nationalities and pushes the antagonism of the proletariat and the bourgeoisie to the extreme point. In a word, the free trade system hastens the social revolution. It is in this revolutionary sense alone, gentlemen, that I vote in favor of free trade.”
—Karl Marx, On the Question of Free Trade, 9 January 1848

As Marx observed, producers who possess more advanced machinery, i.e., a higher organic composition of capital, are able to appropriate surplus value from their less developed competitors. This disparity is the core mechanism of global imperialist exploitation:

“Capitals invested in foreign trade can yield a higher rate of profit, because, in the first place, there is competition with commodities produced in other countries with inferior production facilities, so that the more advanced country sells its goods above their value even though cheaper than the competing countries. In so far as the labour of the more advanced country is here realised as labour of a higher specific weight, the rate of profit rises, because labour which has not been paid as being of a higher quality is sold as such. The same may obtain in relation to the country, to which commodities are exported and to that from which commodities are imported; namely, the latter may offer more materialised labour in kind than it receives, and yet thereby receive commodities cheaper than it could produce them. Just as a manufacturer who employs a new invention before it becomes generally used, undersells his competitors and yet sells his commodity above its individual value, that is, realises the specifically higher productiveness of the labour he employs as surplus-labour. He thus secures a surplus-profit.“
—Marx, Op. cit., 1894

Participants in global division of labour are not exempted from capitalism’s laws of motion:

“This is law for capitalist production, imposed by incessant revolutions in the methods of production themselves, by the depreciation of existing capital always bound up with them, by the general competitive struggle and the need to improve production and expand its scale merely as a means of self-preservation and under penalty of ruin. The market must, therefore, be continually extended, so that its interrelations and the conditions regulating them assume more and more the form of a natural law working independently of the producer, and become ever more uncontrollable. This internal contradiction seeks to resolve itself through expansion of the outlying field of production.”
Ibid.

Within the global market, firms with lower production costs will seek to circumvent trade barriers intended to protect their weaker competitors. The capitalist drive for continuous expansion must, in the long run, threaten China’s collectivised property forms and the state power that defends them, which is why the CCP maintains strict control over strategic economic sectors and investment. Ross essentially ignores this critical precondition for China’s generally successful engagement with global capitalist markets and simply celebrates the policy of “opening up.” But any serious analysis—whether Marxist or capitalist—must recognise that, at bottom, the attitude of global finance capital to the existence of a rival social structure which resists penetration or control can only be profound and intractable hostility.

The Chinese bureaucracy, acutely aware of the increasing antagonism of the declining US hegemon and its allies and vassals, has undertaken a variety of diplomatic and economic initiatives designed to win friends and frustrate aggressors while also investing heavily in developing the capacity to fight and win a military conflict if necessary. These sorts of defensive preparations represent an acknowledgment that there is no prospect of long-term “peaceful coexistence” for an isolated workers’ state in a world dominated by imperialist predators. The existence of a powerful domestic bourgeoisie, intent on pursuing its own interests and chafing at the fetters imposed by the CCP, means that, in the event of any serious future conflict, a counterrevolutionary fifth column is already in place.

Revolutionary Internationalism vs ‘Socialism in One Country’

In a famous passage written several years before the appearance of the Communist Manifesto, Marx and Engels posited the massive expansion of the forces of production as a precondition for socialism. This is a point which Ross emphasises strongly. The founders of the communist movement connected this proposition to another—that an isolated socialist regime could not long survive, much less successfully develop, in a hostile capitalist world. This reality, they observed, “makes each nation dependent on the revolutions of the others” and signifies that only after workers’ power is established across the capitalist world will the conditions exist for “the universal development of productive forces and the world intercourse bound up with communism:”

“And, on the other hand, this development of productive forces (which itself implies the actual empirical existence of men in their world-historical, instead of local, being) is an absolutely necessary practical premise [for socialism] because without it want is merely made general, and with destitution the struggle for necessities and all the old filthy business would necessarily be reproduced; and furthermore, because only with this universal development of productive forces is a universal intercourse between men established, which produces in all nations simultaneously the phenomenon of the ‘propertyless’ mass (universal competition), makes each nation dependent on the revolutions of the others, and finally has put world-historical, empirically universal individuals in place of local ones. Without this, (1) communism could only exist as a local event; (2) the forces of intercourse themselves could not have developed as universal, hence intolerable powers: they would have remained home-bred conditions surrounded by superstition; and (3) each extension of intercourse would abolish local communism. Empirically, communism is only possible as the act of the dominant peoples ‘all at once’ and simultaneously, which presupposes the universal development of productive forces and the world intercourse bound up with communism.”
—Karl Marx, Frederick Engels, The German Ideology, 1845

Marx and Engels reiterated the same idea, that socialism, i.e., the abolition of private property and social classes, requires the triumph of proletarian revolution “not only in one country but in all the leading countries of the world” in their summation of the lessons of the failed revolutionary upsurge of 1848:

“While the democratic petty bourgeois want to bring the revolution to an end as quickly as possible, achieving at most the aims already mentioned, it is our interest and our task to make the revolution permanent until all the more or less propertied classes have been driven from their ruling positions, until the proletariat has conquered state power and until the association of the proletarians has progressed sufficiently far—not only in one country but in all the leading countries of the world—that competition between the proletarians of these countries ceases and at least the decisive forces of production are concentrated in the hands of the workers. Our concern cannot simply be to modify private property, but to abolish it, not to hush up class antagonisms but to abolish classes, not to improve the existing society but to found a new one.”
—Karl Marx, Frederick Engels, Address of the Central Committee to the Communist League, March 1850

Lenin considered it an “elementary truth” that “the joint efforts of the workers of several advanced countries are needed for the victory of socialism”:

“But we have not finished building even the foundations of socialist economy and the hostile powers of moribund capitalism can still deprive us of that. We must clearly appreciate this and frankly admit it; for there is nothing more dangerous than illusions (and vertigo, particularly at high altitudes). And there is absolutely nothing terrible, nothing that should give legitimate grounds for the slightest despondency, in admitting this bitter truth; for we have always urged and reiterated the elementary truth of Marxism—that the joint efforts of the workers of several advanced countries are needed for the victory of socialism. We are still alone and in a backward country, a country that was ruined more than others, but we have accomplished a great deal.”
—V. I. Lenin, Notes of a Publicist, February 1922

John Ross is of course very familiar with Marx’s contention that a truly socialist society presupposes cooperative division of labour on a global scale. But this proposition directly conflicts with the essentially nationalist orientation of Deng and the current CCP leadership, all of whom, following Mao Zedong and his mentor Joseph Stalin, set as their maximum programme the construction of “socialism in one country.” Lenin’s observation that, “there is nothing more dangerous than illusions,” is of course entirely applicable to any hope of protracted peaceful coexistence with the ravenous wolves of global finance capital. Yet this is the necessary corollary of the utopian-reactionary programme of “socialism in one country.” Lenin recognised that “We must trade with the capitalist countries as long as they exist,” but considered it critically important to build the Communist International by offering political guidance and material assistance to revolutionaries attempting to build mass revolutionary socialist parties in their own countries. When the Soviet Union was a healthy workers’ state, with Lenin and Trotsky at the helm, a high priority was placed on the struggle to win a mass following for revolutionary Marxism within the international proletariat.

The reactionary implications of the pursuit of the national interests of a single “socialist” country are evident in China’s periodic clashes with Vietnam over territory and access to resources in the South China Sea—a conflict in which the ruling bureaucrats in Beijing and Hanoi each seek to advance their own narrow interests. There is a parallel with the Sino-Soviet split of the 1960s and 70s when the CCP, under Mao’s leadership, entered into a strategic alliance against the USSR with US imperialism—a betrayal which facilitated “opening up” to the world capitalist market. Washington expected that economic engagement with the world market and the incubation of a domestic capitalist class would open the door to capitalist restoration in China. The CCP has thus far managed the relationship with the West far more adeptly than many, including ourselves, anticipated. This success, however, was conditioned by a unique geo-political conjuncture that no longer exists. What has not changed is that the survival of the Chinese deformed workers’ state requires the extension of socialist revolution internationally—particularly to the “advanced capitalist” (imperialist) countries.

Ross is of course well aware of the threat posed by American hostility to China’s collectivised property system:

“The most fundamental danger of all, which US neo-cons seek to achieve, is to overturn the socialist system in China. If that were achieved the mechanisms that have made reform and opening up the greatest economic success in world history, not only for China but for the overall well-being of humanity, would be destroyed and China would suffer national catastrophe—precisely as occurred in the former USSR. This would be disastrous not only for China but for humanity.”

Capitalist restoration in China would indeed represent an enormous defeat for the international workers’ movement, comparable in its impact to the triumph of capitalist counterrevolution in the Soviet bloc. American imperialism’s aggressive “Pivot to Asia,” initiated by Democratic president Barack Obama, and continued by Donald Trump and Joe Biden, represents an acknowledgement that economic engagement has not resulted in an appreciable increase in momentum for capitalist restoration. Ross recognises this strategic shift, but borrows from Karl Kautsky’s playbook, rather than Lenin’s, in advising Biden that a “rational foreign policy” that lowered international tensions could pay dividends at election time:

“If Biden does not pursue a rational foreign policy, and continues an aggressive international policy, the lack of sufficient reduction in international tension will reduce Biden’s ability to give concessions to the population in the US—thereby undermining its domestic support and ability to maintain the high level of mobilisation of Democratic Party voters on which his electoral victory in 2020 rested. An aggressive international policy by Biden will therefore significantly increase the likelihood of the Democrats [sic] defeat in the mid-tern [sic] Congressional elections in 2022 and in the 2024 Presidential race.”

Ross regrets that there are no viable Marxist parties in the US or other imperialist countries with the capacity to counter imperialist military and commercial pressure on China with militant workers’ actions:

“Pressure by the population within the advanced capitalist countries can be significant in limiting the room for action by the US—as was seen dramatically after Vietnam and on a lesser scale by the general US assessment that the invasion of Iraq turned out to be an error. But as long as the US retains overall political control within its own country it can always strike back against threats to its key policies—and no Marxist party capable of challenging ruling class control has anything other than marginal support in either the US or any other advanced capitalist country.”

In the 1970s, following China’s rapprochement with US imperialism, much of the once sizeable Maoist milieu in North America and Europe followed the CCP’s injunction to liquidate. Previously China had provided large quantities of books and pamphlets, including key texts by Marx and Lenin (as well as Mao), at little or no cost to overseas supporters. All such activity ceased when the CCP bureaucracy decided that collaboration as a junior partner of US imperialism in the struggle against “Soviet social imperialism” was a more practical means of securing its interests than attempting to stir up trouble for the imperialists at home. This shift by the CCP was roughly analogous to Stalin’s far more consequential dissolution of the Communist International in 1943 as a gesture of goodwill to his British and American imperialist allies in the midst of World War II.

The effective renunciation of revolutionary internationalism is a necessary aspect of the profoundly counterrevolutionary Stalinist programme of “socialism in one country,” which reversed the strategy pursued in the Soviet Union under Lenin and Trotsky. Lenin considered the Communist (Third) International and the development of effective, mass revolutionary workers’ parties around the globe to be both essential to the survival of the Soviet workers’ state and its greatest accomplishment:

“The international alliance of the parties which are leading the most revolutionary movement in the world, the movement of the proletariat for the overthrow of the yoke of capital, now rests on an unprecedentedly firm base, in the shape of several Soviet republics, which are implementing the dictatorship of the proletariat and are the embodiment of victory over capitalism on an international scale.

*                                   *                                   *

“The proletarian and peasant Soviet Republic has proved to be the first stable socialist republic in the world. As a new type of state it cannot die. It no longer stands alone.

“For the continuance and completion of the work of building socialism, much, very much is still required. Soviet republics in more developed countries, where the proletariat has greater weight and influence, have every chance of surpassing Russia once they take the path of the dictatorship of the proletariat.”
—V. I. Lenin, The Third International and Its Place in History, 15 April 1919

Lenin celebrated the fact that the imperialists were “mortally afraid of the ideological infection coming from a ruined, starving, backward, and even, they assert, semi-savage country.” He viewed the breakthrough in Russia as no more than a link in a chain of revolutionary uprisings:

“Leadership in the revolutionary proletarian International has passed for a time—for a short time, it goes without saying—to the Russians, just as at various periods of the nineteenth century it was in the hands of the British, then of the French, then of the Germans.”
Ibid.

This perspective starkly contrasts with the CCP’s nationalist-reformist orientation. Ross apparently approves of the party’s refusal to promote the idea that workers and peasants in other countries should follow the Chinese example and uproot the imperialist bloodsuckers and their domestic allies:

“China, rightly, does not advocate that other countries follow its ‘model’—although it cannot prevent countries from learning from China’s success and some of them will do so. The great majority of countries in the Global South will remain capitalist, although some countries will move towards socialism—these latter will be particularly close allies of China. But for the reasons already analysed the great majority of developing countries do not wish to pursue the anti-China policies which the US attempts to impose. These Global South countries therefore form a very large series of allies for China—and the international relation of forces is moving towards them. The combination of, as the main factor, the strength of China’s own development, but also the growth of the Global South economies, means a slow but growing shift in the relation of forces towards China. The conclusion that flows from that is clear and the same as, in a difference [sic] context, that noted in ‘On Protracted War’—China cannot win quickly, but it will prevail.”

China’s economic engagement with the “Global South” has, in contrast to the imperialist countries, generally been regarded as beneficial by the populations affected. This is because the CCP is not compelled to seek to maximise short-term profits but can make investments in pursuit of longer-term, geostrategic objectives through mutually beneficial initiatives. This distinction is one which many of China’s foreign capitalist partners who have experience with the exploitative and rapacious terms typically imposed by imperialist investors appreciate.

The neo-colonial rulers who China makes deals with, remain, in the final analysis, the local agents of global capital and certainly cannot be counted on as reliable “allies” in any serious confrontation—despite the upbeat speculations Ross offers regarding a shift in the balance of forces in the “Global South” in favour of China. Any meaningful shift would require new social revolutions to expropriate both foreign and indigenous capitalists and sever the link to imperialist finance capital.

Chinese workers need Leninist-Trotskyist leadership!

Ross competently outlines the enormous achievements of the Chinese deformed workers’ state and the vast improvements in living standards for the masses of the population. China’s spectacular technological and industrial ascent has transformed it into the workshop of the world and allowed it to successfully compete in the global marketplace. This is something the Soviet Union, despite very important industrial and technological achievements, never accomplished.

The CCP has thus far successfully utilised market mechanisms to spur production and raise its technological level while imposing strict limits on both foreign and domestic capital. Yet the existence of a layer of powerful and extremely wealthy capitalists, with multiple connections to foreign imperialism, presents a serious strategic problem that cannot be resolved by recruiting billionaires to the CCP, or police repression of rule breakers and corrupt bureaucrats. The interests of those who benefit from collectivised property forms cannot in the long run be reconciled with the owners of private enterprises—one class must ultimately triumph over the other.

The CCP, despite its self-description, is a bonapartist formation which mediates between the two fundamental classes of modern society—the bourgeoisie and the working class. Its power derives from its position atop the system of collectivised property and its political monopoly affords it both substantial material privileges and the ability to shape social and political policy. But it has no necessary relationship to the means of production; it is a parasitic and historically transitory entity organically incapable of creating a genuinely socialist society. That task can only be realised through the creation of a political order in which all major aspects of social, economic and political policy are directly determined by the masses of working people. The great Marxist revolutionary Rosa Luxemburg, writing from prison in 1915 where she was sent for daring to speak out against imperialist war, explained:

“Friedrich Engels calls the final victory of the socialist proletariat a stride by humankind from the animal kingdom into the kingdom of liberty.…But it will never be accomplished, if the burning spark of the conscious will of the masses does not spring from the material conditions that have been built up by past development. Socialism will not fall as manna from heaven. It can only be won by a long chain of powerful struggles, in which the proletariat, under the leadership of [revolutionary socialists], will learn to take hold of the rudder of society to become instead of the powerless victim of history, its conscious guide.”
The Junius Pamphlet

There are no administrative or bureaucratic short-cuts to the creation of a classless society—the active, conscious participation of the masses of working people is the very core of socialism. In his Inaugural Address to the First International in September 1864, Karl Marx declared:

“That the emancipation of the working classes must be conquered by the working classes themselves; that the struggle for the emancipation of the working classes means not a struggle for class privileges and monopolies, but for equal rights and duties, and the abolition of all class rule”

Marx linked this to the observation:

“That the emancipation of labour is neither a local nor a national, but a social problem, embracing all countries in which modern society exists, and depending for its solution on the concurrence, practical and theoretical, of the most advanced countries”.

The victory of the Chinese Revolution in 1949 represented an important step forward for humanity; its amazing industrial/technological development over the past few decades is of potentially world-historic significance. Unlike the Soviet Union, China over the past 40 years has persistently narrowed the productivity gap with the “advanced capitalist” world. But the victory of socialism, as Marx envisioned, not only requires the overturn of all “class privileges” and a social order characterised by “equal rights and duties,” it also requires the extension of proletarian revolution to “the most advanced countries,” i.e., the heartlands of imperialism.

The Chinese working class in recent years has fought many struggles against both capitalist exploiters and their bureaucratic protectors in the CCP; in many cases they have won substantial concessions. In the past year alone there have been over a thousand labour protests—half in the construction industry and another 35 percent in transport and logistics. The CCP tolerates such actions as long as they remain very localised—what the Stalinist bureaucrats are unwilling to countenance is the development of any embryonic formations that might presage the emergence of a potential alternative leadership for the restive working class.

In order to open the road to socialism “with Marxist characteristics” in China—i.e., a society in which the working class is directly in control of decision making—it will be necessary to carry out a political revolution, one that preserves the collectivised property system while breaking the political monopoly of the CCP. This requires the construction of a new political leadership based on a programme that closely approximates that developed by the Soviet Left Opposition during the 1920s.

The “ultra-left” turn imposed in the Soviet Union in 1929 which Ross is so critical of, came as the direct result of the implosion of the Stalin-Bukharin leadership’s bet on the kulaks in the countryside. The Left Opposition’s warnings about the growing danger posed by rural capitalists were ignored. In a parallel fashion Stalin pushed aside the objections of the leaders of China’s nascent Communist Party, as well as the Left Opposition, and decided that the CCP should join the bourgeois-nationalist Guomintang headed by Chiang Kai-shek. Stalin’s policy was aimed at promoting a diplomatic alliance with China’s rulers under the banner of a bloc of two classes. In The Third International After Lenin, Trotsky quoted Stalin’s directive to East Asia’s Communist parties:

“The communists must pass from the policy of a united national front…to the policy of a revolutionary bloc between the workers and the petty-bourgeoisie. In such countries this bloc can assume the form of a single party, a workers and peasants party, akin to the Kuomintang….”
—quoted in The Third International After Lenin, 1928

In early 1926 the Guomintang was admitted to the Communist International as an “associate” party. A year later Chiang’s military massacred tens of thousands of militant workers after they carried out Moscow’s instruction to disarm. With this the CCP’s working-class base was shattered. Just as in the USSR, Stalin sought to make up for the catastrophic failure of a rightist adaptation to capitalist elements with an abrupt “ultra-left” turn. Moscow ordered party supporters in Canton who had escaped the Guomintang massacre to stage an armed uprising, without any serious political or material preparation. The result was another disaster. With the liquidation of most of its urban proletarian base, the CCP was transformed into a peasant-based organisation which, under Mao Zedong’s leadership, embraced a strategy of protracted rural guerrilla warfare. The Chinese proletariat had no role in the social revolution of 1949; when Mao’s militarised peasant party finally captured the cities and took power it immediately proceeded to create a regime modelled on Stalin’s bureaucratic dictatorship in the USSR.

By both political inclination and training, Ross inclines to an objectivist view of historical development and a tendency to worship the accomplished fact. These deficiencies, which long predate his arrival in China, have no doubt been reinforced by a reluctance to bite the hand that feeds him. He is well aware that Marx, Engels, Lenin, Trotsky, Luxemburg and every other serious Marxist thinker considered that the creation of a genuinely socialist society required the international extension of a revolutionary breakthrough in one country to the leading capitalist powers; they also considered it axiomatic that socialism meant a society in which “the proletariat [is] organised as the ruling class.” Ross avoids speculating about how what is currently billed as “socialism with Chinese characteristics” might somehow one day make a transition into a society where workers exert actual, rather than hypothetical, political supremacy.

The successes recorded to date on the basis of the social gains of the revolution of 1949, great as they are, can only be fully secured through a political revolution that displaces the CCP bureaucracy and establishes the rule of the masses of the Chinese working class through representative workers’ councils modelled on the “soviets” which were pivotal in the Russian Revolution of October 1917. In any such struggle a large section of CCP cadres, particularly those from more plebeian social strata, would go over to the insurgents, as a majority of Hungarian Communists did in 1956.

An under-appreciated aspect of the famous 1989 Tiananmen Square events was the development of the kernel of representative workers’ councils, as we described in 2006:

“In early April 1989, when student protesters occupied Tiananmen Square to demand democratic reforms, they were soon joined by delegations of workers from Beijing factories. By the end of the month, the Beijing Workers Autonomous Federation (WAF) had sprung up, based in rail, steel and aviation. Similar formations soon emerged in other major cities. Initially, these organizations focused on demanding the legalization of independent trade unions separate from the ACFTU; however, they soon began to raise issues of wages, living standards, bureaucratic privilege, income differentials and workplace democracy. Workers’ organizations in different cities began linking up and many sent representatives to the Beijing WAF, which had started to function as the leading center of the movement.

“On 18 May 1989, one million people, mostly workers, demonstrated in Beijing. A week later a preparatory committee for a national “workers’ self-governing federation” was established. The CCP bureaucracy saw this as a serious threat to its rule. On 2 June 1989, the ACFTU, which had previously acceded to mass demands for a general strike, suddenly began to demand that the WAFs be outlawed. Two days later, army units loyal to the regime brutally attacked the demonstrators, killing hundreds. Thousands of workers who were charged with having participated in the autonomous workers’ movement were thrown in jail or executed.

“While the WAFs were crushed by the repression, they provided the workers’ movement with a powerful demonstration of the potential for independent working-class political action.“
1917 No. 26, 2004

The CPC leadership is rightly nervous about the implications of the growing popularity of Maoism among sections of the population who mistakenly identify it with communist egalitarianism. In China, as in Stalin’s USSR, the ruling bureaucracy brooks no criticism and ruthlessly stamps out anything it perceives as having the potential to perhaps develop into an alternative political centre. “Socialism in One Country” is a profoundly pessimistic doctrine that reflects the interests of an entrenched, but historically transitory, bureaucratic caste. Like every variant of bourgeois social theory, Stalinism is premised on the notion that scarcity and economic inequality are permanent features of human existence, and that consequently civilisation requires social hierarchy. Marxism is based on the opposite proposition: to reach its full potential—indeed even to survive in the long run—humanity must work towards the creation of an egalitarian social order. This requires a planned reorganisation of the global economy in the interest of achieving a level of ecologically sustainable production sufficient to raise the living standards of the mass of the world’s population to levels currently enjoyed by the comfortable upper petit-bourgeois layers in the advanced capitalist countries.

The direct participation of the working class in economic and political administration is the only basis upon which a social order can be created that will make possible the ascent to a truly classless society, the first step in the transition to the higher stages of communism. Ross may view deepening the “reform and opening up” domestic policies initiated by his hero Deng Xiaoping, while placating foreign imperialism, to be a more “practical” approach. But the attempt to balance the demands of capital with the needs of the masses must inevitably generate tension, instability and class conflict. Deng’s model is an ersatz hybrid which is not sustainable—which is why the political monopoly of the CCP cannot long be maintained. The critical question is what will replace it.

China’s immensely powerful working class needs a new, revolutionary leadership to lead a political revolution that removes the CCP bureaucracy while defending and extending the collectivised property system. A genuinely revolutionary workers’ party—a Trotskyist party—must base itself on the principles and programme elaborated by Marx and Engels, the legacy of Lenin and the Bolshevik Revolution and Trotsky’s struggle against the Stalinist degeneration of the Soviet workers’ state. Assembling the initial cadres to create the nucleus of such an organisation is the most critical task facing Chinese Marxists today.

A victorious political revolution which expropriated the big capitalists and established the direct rule of workers’ councils composed of shop floor delegates—following the example of the pioneering “Workers Autonomous Federation” of 1989—would unleash a revolutionary tsunami across Eurasia, the effects of which would be felt across Africa and Latin America and which would even inspire a revolutionary upsurge in the politically backward US imperialist heartland. It could propel billions of human beings into the struggle to end social oppression and economic insecurity through socialist revolution.

The global retreat of revolutionary Marxism over the past many decades has not been rooted in capitalism’s success in meeting the objective needs of humanity. It is, rather, a function of the reformist servility, cowardice and demoralisation that characterises virtually every significant formation in the leadership of the international workers’ movement. A resurgent Chinese proletariat, seizing control of an advanced economy with enormous productive capacity and highly sophisticated technology, would be a world-historic event capable of bringing to an end what Marx described in 1859 as “the prehistory of human society” characterised by poverty and exploitation, and raising the curtain on a future of abundance and social harmony made possible by rational, socialist economic planning on a global scale.