Economic reform in China
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So, is it possible that workers can benefit from the ‘Tool Market’ in a way that they can’t from the ‘Free Market’?
According to the SPGB review that I quoted above, the answer to this seems to be ‘Yes’.
And if that is possible in China, can that provide a model to be followed elsewhere in the world?
Is the 21st century likely to prove that the Chinese model will replace the US/UK myth of the ‘Free Market’?
Whatever economic method they are trying to implement, everything was outlined in the four modernizations. Many bourgeois economists had predicted that China was going to implement a large internal market, too
SPGB article wrote: ” “Let us”, President Sarkozy of France told the UN on 23 September, “rebuild together a regulated capitalism in which whole swathes of financial activity are not left to the sole judgment of market operators, in which banks do their job, which is to finance economic development rather than engage in speculation.”
This would normally be regarded as a position taken up by leftwing critics of what they call “neoliberalism”. Thus Green Party MEP Caroline Lucas, when asked for her views on the global financial crisis by the Guardian (17 September), answered that “we are going to have to return finance to its role as servant rather than master of the global economy”. ”
Yes, this ‘regulated capitalism’ seems to be similar to China’s ‘Tool Market’.
But that article was from 2008, and the US/UK (nor any others in ‘The West’) have not been able to introduce ‘regulated capitalism’, nor has France, with or without Sarkozy. It has remained an idealistic dream.
Whereas China has implemented a ‘Tool Market’, based upon philosophical notions of ‘Light/Heavy’, dating back to ancient Chinese thought.
And it seems to have been successful, and continues to provide a model of economic reform for the ‘Global South’ as the 21st century proceeds.
The Belt and Road Initiative seems to be helping this replacement of ‘Free Market’ capitalism, and the continued economic weakening of the US/UK/West.
Regulated capitalism has existed for several decades, and free market capitalism has never existed. Capitalists have been imposing tariffs on themselves for several decades, too. Nationalization, which is a form of regulated capitalism, started in England many years ago. Engels, before Lenin, and Bukharin had already spoken about state capitalism
Citizenoftheworld wrote: “Regulated capitalism has existed for several decades, and free market capitalism has never existed. Capitalists have been imposing tariffs on themselves for several decades, too. Nationalization, which is a form of regulated capitalism, started in England many years ago. Engels, before Lenin, and Bukharin had already spoken about state capitalism”
But how does that statement help us to analyse the changes within China over the last several decades, and help us to predict what other changes might happen during the coming century, both in China and in the US/UK, which will clearly affect the world proletariat?
It’s not much of discussion to simply post old SPGB articles, reviews and commentary, as if nothing new happens in the world.
Unfortunately capitalism is same old same old. And the articles, reviews and commentary in the Socialist Standard are largely just as valid now as when they were written.
It’s not much of discussion to simply post old SPGB articles, reviews and commentary, as if nothing new happens in the world.
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We might say the same things about Marx old conceptions which are still applicable to our times.
There are thousands of ‘old’ articles published by the Socialist Party that are applicable to our time, and the Socialist Party has predicted many event that history has been that they were correct including the old events taken place in the Soviet Union.
Whatever is taking in China at the present time is nothing new, they are just moving from state capitalism into private capitalism as it took place in Russia, they are just applying capitalist methods that have been applied in other capitalist countries, free market system has never existed, and the state has always intervened in the economic affairs of all class societies.
Capitalism and the capitalists are just like a chameleon, they adapt themselves to the external world situation but in essence capitalism is the same old system of exploitation and domination which has existed for several centuries,
It is like Nazism/fascism which was a form that capitalism in Germany and Italy adopted in order to survive it from the Great Depression, it was defeated and capitalism continued in the hands of other groups of capitalists,
China is going thru the same crisis like any other capitalist country and it is trying to find ways to avoid those crisis
With the war in Ukraine the US capitalists killed two birds with one shot, they weakened russia and they stop the expansion of China Euro-Asian Silk Road, and the USA and England have tried more variations, and forms of domination than the Chinese capitalists
Russia seems to be much stronger now, with all its new BRICS allies. It is the US which is imploding, and Europe is economically killing itself whilst courting military self-destruction.
Russia is apparently getting stronger now, but they went thru a period of great difficulties when the war in Ukraine started, capitalism is a very unstable system, and several countries which are members of the BRICS are also experimenting economic difficulties . The US at the present time is taking the risk of losing its own allied and partners in order to avoid its own crisis, the US is going thru a period of hegemonic decline but it is not collapsing
Governments’ nationalization and regulated capitalism have existed for a long time; some writers like Raya Dunayevskaya said that the Roosevelt New Deal was a form of state capitalism. State and private capitalism existed during his government, and some of his measures have been progressively reversed.
Kamala Harris is now saying that Donald Trump is an authoritarian communist leader like in China because the US government is taking over part of the chip industry, but Roosevelt, who was a Democrat president, nationalized many industries, including land, private boats, yachts, and farming.
She has not read Engels, who said that state capitalism was another form of capitalism.
has-trump-gone-state-capitalist/
https://en.wikipedia.org/wiki/Agricultural_Adjustment_Act
https://en.wikipedia.org/wiki/McKinley_Tariffhttps://www.communistvoice.org/00China.html
This organization has been publishing articles on China for several years. They were part of MLPUSA.
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If Mao was a communist, then Trump can be too.
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If Lenin, Stalin, and Trotsky were communists, then Trump can be too.What, if anything, is a Tool market?
Gross Domestic Product (GDP)*The gross domestic product (GDP) of a country is the market-price of all goods and services a country produces in a year. It leaves out imports and foreign content of domestic goods and services — such as imported parts of a car assembled and sold in the country.
In Marxian categories, which are summarised in a glossary below:
The gross domestic product (GDP) of a country is the monetary expression of its living-labour (v + s) in a year.
The Marxian definition is precise. By excluding past-labour (c), it automatically excludes imported content. It also explains why GDP ≠ total-labour (c + v + s).
* Before anyone decries GDP as a bourgeois smokescreen, it needs pointing out that GDP analysis was initiated way back in the 17th century by William Petty who Marx, in a celebrated footnote on page 1 of Capital, calls the discoverer of the law that labour creates values, but nature provides the means.
Market-Sectors of the GDP — China and USA country’s living-labour (v + s) is realised on the world market, for exports, and on the domestic market, for investment, retail and government expenditure. (Imports and non-domestic content are excluded.)
GDP = (exports − imports) + investment + retail + government
The investment market is where living-labour (v + s) produces the past-labour (c) of the future (Cap. Vol. II, Department I).
The retail market is where living-labour (v + s) is realised as v for workers and s for capitalists.
The government market is where the taxed component of living-labour (v + s) is spent politically through social expenditure.
Market Sectors as % of GDPSector 1995 2005 2015 2025* – – – – – – – – – – – – – – – – – – – – Exports China 21 27 21 19 US 8 9 8 10 Imports China -18 -23 -19 -13 US -10 -1 -12 -13 Investment† China 29 34 39 36 US 17 17 18 18 Retail† China 41 45 49 49 US 60 63 62 61 Government† China 14 13 15 14 US 15 16 16 16 ====================================== GDP (100%)‡ China 105 119 124 114 US 100 105 104 102 ====================================== * Provisional 2025 figures † Imported content excluded. ‡ Totals ≠ 100% reflect accounting methods: China NBS, US BEA/NIPA, IMF WEO, World Bank WDI- China’s export and investment sectors are double US’s
- China’s import and government sectors are similar to US’s
- China’s Retail sector is 2/3 of US’s
- China runs a trade surplus; US runs a trade deficit.
Marxian GlossaryValue
Value is the socially necessary labour-time required to produce a commodity under standard social conditions of capitalist production.
Means-of-production
Means-of-production are conditions of labour (such as, raw materials, machinery and buildings) that make standard capitalist production possible. If you control them you are a capitalist. Otherwise you remain a worker.
Labour-power
Labour-power is a worker’s capacity to expand value. The capitalist pays for labour-power in wages. Its value is determined by the socially necessary labour-time to replenish the worker as a standard expander of value.
Capital
Capital is value that expands value — it procreates new value. New value comes from unpaid living-labour. In capitalist jargon, it is an investment M that yields a positive net return M + ΔM.
Variable-capital
Variable-capital (v) is the value of labour-power. It is ‘variable’ because labour-power expands value.
Constant-capital
Constant-capital (c) is the value of means-of-production. It is ‘constant’ because means-of-production do not expand value.
Circulating-capital
Circulating-capital is constant-capital (c) that is used up in a single production cycle. Examples are raw-materials, power and component parts. Its value ‘circulates’ back to the capitalist after one production cycle.
Fixed-capital
Fixed-capital is constant-capital (c) that is used in multiple production cycles. Examples are machinery, machine tools and buildings. Its value appears ‘fixed’ (or stuck) in production. In capitalist jargon it is a long-term investment. Its value returns to the capitalist, in stages, over multiple production cycles.
Surplus-value
Surplus-value (s) is unpaid living-labour (v + s). It is appropriated by capitalists with legal claims to it, as profit, rent and interest, and by the government as taxation.
Living-Labour
Living-labour (v + s) is socially necessary labour time. Its capitalist purpose is to expand value.
Past-Labour
Past-labour is labour-power embodied in constant capital (c). It is “dead-labour” — not value expanding labour.
Total-Labour
Total-labour (c + v + s) is past-labour + living-labour.
Values → Prices
The “monetary expression of labour time” is represented by λ.
Price = λ * Value.
A country’s λ can be estimated by dividing its GDP by its living-labour.
China: λ ≈ $10/h (US $18.5trillion / 1.85trillion hours)
US: λ ≈ $100/h (US $25.7trillion / 257billion hours)
Exploitation Rates — China and USWe are now equipped with Marxian tools to estimate exploitation rates in China and the US.
Barber
Living-labour (v+s) ≈ 30 minutes
Constant-capital (c): ChatGPT → ILO, OECDValue Price Barber Marx CH US CH US – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – Inputs c 2m 2m $0.3 $3.3 Wages v 12m 6m $2 $10 Surplus-value s 16m 22m $2.7 $36.7 =========================================================== Revenue c+v+s 30m 30m $5 $50 =========================================================== Profit s/(c+v+s) 54% 73% Exploitation s/v 135% 367%
Big Mac Worker
Living-labour (v+s) ≈ 21 minutes China, 7 minutes US
Constant-capital (c): ChatGPT → Numbeo, McDonaldsValue Price Big Mac Marx CH US CH US – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – Inputs c 9m 1m $1.5 $1.5 Wages v 6m 2m $1 $3 Surplus-value s 6m 4m $1 $6.5 =========================================================== Revenue c+v+s 21m 7m $3.5 $11 =========================================================== Profit s/(c+v+s) 29% 59% Exploitation s/v 100% 217%
Farm Work (per hour)
Living-labour (v+s) ≈ 1 hour
Constant-capital (c): ChatGPT → ILO, FAO, USDAValue Price Farm Worker Marx CH US CH US – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – Inputs c 30m 36m $5 $60 Wages v 18m 8m $3 $10 Surplus-value s 12m 16m $2 $20 =========================================================== Revenue c+v+s 1h 1h $10 $96* =========================================================== Profit s/(c+v+s) 20% 22% Exploitation s/v 67% 200% – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – * Includes US gov. subsidy of 20% of living-labour (v+s)
4. iPhone (Assembler vs. Marketer)
Living-labour (v+s) ≈ 5 hours China, 10 hours US
Constant-capital (c): ChatGPT → IHS Markit, TechInsights, NGO audits, BLSValue Price iPhone Worker Marx CH US CH US – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – Inputs c 2h 2h30m $200 $250 Wages v 1h 6m $10 $10 Surplus-value s 2h 7h24m $20 $740 =========================================================== Revenue c+v+s 5h 10h $230 $1000 =========================================================== Profit s/(c+v+s) 9% 74% Exploitation s/v 200% 7400%
Marxian ConsiderationsMarkets are places where value is realised; production is where it is created.
Chinese exploitation rates are low compared to the US, and may stay low so long as its rapid growth continues, since exploitation is where growth (reinvestment of surplus) comes from.
LBird’s praise of capitalist China’s dictatorial politicians and billionaire oligarchs for creating a compliant working class betrays self-satisfied, anti-socialist, leftism.
We don’t have to guess how Marx would have replied. We have Marx’s writings on Napoleon III’s “Bonapartism” and the “Haussmannisation” of Paris following the 1848-49 revolutions.
Marx to Kugelmann (11 July, 1868): “In France, under Louis Bonaparte, there arose the artificial system of public works — Haussmann’s rebuilding of Paris, for instance — as an artificial means of swindling capitalists [through speculation] and keeping the labouring classes employed [and politically quiet].”
Lord Keynes would interpret it differently, like LBird, and applaud.
Unfortunately, twc, I didn’t ‘praise’ China, any more than the SPGB review did, by calling it ‘broadly progressive’.
You really should try discussing issues.
Chinese capitalists have not done anything that the US and European capitalists have not done, and still, they have not obtained the same level of capitalist development. And workers are still living in extreme poverty. During the post-war boom, the USA had a much better standard of living within the framework of a capitalist society.
TWC has published and compiled very real economic statistics and Marxist explanations about China vs other advanced capitalist nations; they are much better than those published by Richard Wolff, who is always praising the Chinese capitalist economy
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