A relatively short article with some key assertions. The first paragraph is definitely going to irritate some people here. But the main thrust of the article is presented later, which is -
China’s late Cold War role as the great anti-communist power in the East, and its subsequent role in financing the American empire as it invaded Afghanistan and Iraq.
The article lays out a lot of history as it relates to the Sino-Soviet relations and shows how as a result -
The CCP picked the side of capital in the Cold War, doomed the international communist movement in the process
Most important is this paragraph w.r.t the Cold War -
The first sign of betrayal was China’s active role in supporting Pakistan during the 1971 genocide in Bangladesh By 1972, Mao’s meeting with Richard Nixon signaled that the full anti-communist pivot was complete. With this pivot, China became a close American ally and the bulwark of anti-communism in East Asia and beyond. By the middle of the decade, the CCP was giving out loans to Pinochet, supporting UNITA in Angola alongside South Africa and the US against Cuba and the Soviet Union and had opened diplomatic relations with reactionary capitalist powers, from the Marcos regime in the Philippines to Japan. Deng Xiaoping sealed this alliance by invading Vietnam in 1979 in defense of the US-backed Khmer Rouge which the Vietnamese government had been attempting to overthrow. The CCP claims to have killed 100,000 Vietnamese communists in that war, which broke the back of the communist movement in East Asia and essentially ended it as a Cold War front , thus allowing the US to fully pivot to its massacres in Latin America and Africa in addition to the defense of Europe against the USSR and domestic communist movements.
And in the post-Soviet world -
Unlike other major American bond purchasers (Japan, South Korea, Germany) who are American military protectorates and can thus even be coerced into increasing the value of their currency, China subsidizes the American war machine ... CCP funds America’s wars in order to maintain the high value of the dollar relative to the yuan, which gives China a massive competitive edge in manufacturing and is a critical source of China’s massive economic growth.
In coalition with the East Asian American military protectorates, China filled the massive budget shortfalls that resulted from the combination of the Iraq War, Bush era tax cuts, and the early 2000s recession, propping up the flailing US economy as the war commenced. Chinese bond purchases intensified with US spending in both Afghanistan and Iraq. Indeed, the CCP became an eager participant in the new War on Terror by allying closely with Israel, adopting American counterinsurgency techniques and technologies from the rapidly burgeoning trade, and eventually hiring American mercenary Erik Prince for themselves for deployment in “Xinjiang.”
I don't have to take the CCP at their word.
I have the benefit of hindsight, and I can observe the incredible gains that this plan of action has won for the working class whose interests the party claims to represent. I can see that the party consistently meets or exceeds the stated developmental and economic goals that they commit to in each of their publicly available 5-year plans. This combination of consistently fulfilling their promises, and committing to 5-year plans that consistently advance the interests of the working class, would lead me to conclude that the CCP is an organization that is committed to representing the interests of the working class, and is doing the best they can with the set of options available to them.
As for where you draw the line, that always depends on the material conditions you are molding your theory of change to, and what is required to address those conditions. If, for example, America turned socialist tomorrow, I would never endorse a plan of Chinese market socialism for this new socialist states of America, because you wouldn't be able to make a case for what needs are being met and what contradictions are being resolved in exchange for permitting private enterprise. America isn't going to imperialize itself, so you can't make the case for shared economic development acting as a deterrent to aggression. And America is already a highly developed economy, there's no need to attract foreign investment to help build up your productive forces. You can just follow the standard playbook of "seizing the means of production," because that theory of change was written with the highly developed western economies like America in mind.
Also, I would argue that capitalists are the ones making a "deal with the devil," in this case, and not China.
To explain this idea, let's step back into the realm of theory and ask why would we expect this theory of market socialism to work. I've already laid out the case for why the CCP, as a representative of the interests of the working class, would find value in sitting down at the negotiating table to make some compromises with capital. But what is the motivation of capital to play along?
Well, if we trust Marx, and we trust that the labor theory of value holds true, then we know that capital is worthless without labor. A capitalist who owns all sorts of equipment and machinery and other inputs of production, but who has no labor, in reality only has piles of lifeless junk, which on average can only be resold for the same price he paid for it, and in all likelihood will actually depreciate in value over time, either through the ravages of time and weather, through costs affiliated with maintenance and storage, or through the forward progression of technology rendering his current tools and equipment obsolete. The only way to increase the value of these inputs of production is to have them be brought to life by the application of labor, and transformed into new use values and exchange values.
So, at the end of the day, even though the capitalist tries everything in his power to increase his leverage and power over labor, he will always be subservient to labor in the end. All of his property is worthless without labor, and will tend to continue to lose value until he can offload it. If conditions existed where the capitalist enjoyed none of the leverage that he does today, then he would gladly pay labor the full value that it contributes and take no profits for himself, simply so that he could rid himself of his investment at cost rather than hemorrhaging money due to holding onto a depreciating asset.
But, unfortunately, capital currently does hold leverage over labor. Most of that leverage comes in the form of the industrial reserve army of labor. The idea here being that if I can buy and sell labor as a commodity on the labor market, and there is a surplus of labor that is desperate for work and willing to work for scraps, then that's the price that wages will tend to be depressed towards. After all, why would I pay you a fair wage when there's someone else starving on the street who's willing to work for pennies?
So when China began the reform and opening up period, their leverage was tied to the labor conditions in the global labor market, and specifically tied to the conditions of other global south and previously colonized countries. When you're trying to attract foreign investment, the same idea of the industrial reserve army applies, but on a national scale. "Why would I open a factory here when I can hire cheaper labor in Malaysia or Indonesia or the Philippines?"
As a result of this lack of bargaining power and a desperate need for investment, this often meant accepting sweatshop conditions and poverty wages.
However, a capitalist roader would've stopped here. You have private control of markets and production, you have super profits driven by hyper exploitation, all the capitalist aligned people are happy.
But this is obviously not where the CCP stopped. They continually built up the leverage of the working class, and continually applied more and more leverage on behalf of the working class, pushing through mandatory pay increases and improved labor conditions, constantly developing public enterprise alongside private enterprise and in competition with private enterprise, which then exerts more pressure and creates more leverage, as well as using revenue from taxing these private enterprises to build up public infrastructure that massively improved quality of life outside of work too.
One of the downsides of relying on investment from capital is that your hands are largely tied by how much leverage you have, and how desperately you need that investment. But what I consistently see out of the CCP is the transformation of self sufficiency into new leverage over capital, and the use of that leverage to consistently improve wages and labor conditions.
It's basically like if your whole country was one big union, but when the company collapses or leaves for cheaper labor markets under this pressure, you can just nationalize that work place and keep running it as a public enterprise.
And you can see this same logic applied to their current day foreign policy and investment strategy with the development aid they give to Africa and the infrastructure being built up with the belt and road initiative. China is deeply aware how intertwined the bargaining power of labor in the global south is with the rest of the world, and that hyper-exploitation is made possible by virtue of how desperate and struggling these nations are, and how capitalism uses that as leverage. So China has a policy of aiding the economic development of these nations, regardless of political affiliation. The idea being that ruling classes are fickle and ephemeral, but real, material development will bring about lasting change.
The reason that this is a "deal with the devil" for capital is that while they are getting short term profits out of the deal now, their leverage over huge segments of the labor market is being eroded in the process, which shifts the balance of power between labor and capital to where capital is the weaker of the two, and exploits the fact that capital will always need labor, but labor won't always need capital.
This write-up deserves its own post.
Please post this on main to counter the ridiculous resurgence of western chauvinists. I thought we were done with this bullshit.
Thank you for this reply. Once again you explain it in a way I've never heard before but makes so much sense. You were able to take the theory we are all familiar with and actually apply it to the real world in a way I couldn't do. One last question.
Wages were rising every year in the US post WWII till the 70s. In this era, the American working class (specifically the white, male, cis workers) thought they this was the way it was always going to be. This period saw the rise of medicare, social security, the civil rights movement etc. You will live better than your parents did was a statement of fact like water is wet. We now know this isn't the case.
What differentiates modern-day Chinese wage (and general quality of life) increases from this one? I know here the increases are driven by the government itself rather than the market (which took them away from the American workers when countries like China opened up). But if the government is dependent on markets (and capital) then as capital goes to cheaper locations what will stop the conditions in China from declining like they do in the US?
So I kind of answered this question already. Because you're right, the increased bargaining power of labor in one labor market is met by capitalists outsourcing jobs to cheaper labor markets, and you do see this happening as Chinese wages increased just as it had happened when wages were high in America. The difference being that when a business closes their doors in America the result is that everyone is out of work. When a business closes its doors in China, in comparison, all of the fixed capital, the warehouses, the factories, the machinery, ect, becomes property of the state at which point production can either resume as a public enterprise, or other public works can step in to "fill the void," so to speak.
Chinese wages are also a result of Chinese labor. The post war period in America was a unique time period that was a result of the convergence of several factors. One of which is being a major actor in a war that they were largely untouched by, which means that all of the wartime spending and production was basically just a huge public works program and a massive stimulus for the working class, with none of the domestic economic destruction that is typically accompanied by war. Couple this with European markets that have been crippled by the war resulting in the increasing domination of US capital over these markets, things like the Marshall plan making the US the center of international trade and how that creates leverage for mechanisms of unequal exchange with the global south, and the US labor movement still representing somewhat of an organized threat to capital and having just won some important victories, you have a recipe for an American capitalist class that is experiencing super-profits on a global scale and is willing to be conciliatory with domestic labor because it's not costing them much comparatively. The unique conditions of the US labor movement is covered pretty thoroughly in this /r/AskHistorians thread. But at some point, when you wages are being subsidized by the hyper-exploitation of imperialism abroad, that well is eventually going to run dry. Capital may have been willing to placate an organized working class at the time, but the same fundamental relationship between labor and capital still exists.
The opposite is true for China. If you accept the premise that the CCP is a representative of the working class and maintains control over the markets, and you understand that the profit motive of private enterprise is used to encourage needed investment that is mutually beneficial for the private enterprise and the Chinese working class, and you can see that once this arrangement is no longer beneficial for both parties then the state steps in on the side of labor and manages production as a public enterprise instead, then what you have is an economy that is not organized around capitalist principles. In capitalism, the profit motive is what all production is organized around, and the entire point is to maximize the profits of private enterprises. In the Chinese market, the profit motive is simply used as a mechanism for exchange that is used to gain access to important investments in labor saving tools and technologies that are needed to develop advanced productive forces that are capable of providing for everyone.
And you can see this evolving process take place over the course of China's development throughout these market reforms. As time goes on, more and more of production is happening under these State-Owned enterprises, with around half of production today being State-Owned. Traditional economists observe this growing trend of State-ownership, and decry these enterprises as incredibly "inefficient" in terms of maximizing profits, and therefore doomed to fail. As one economist observes:
Source
What this kind of analysis misses is precisely the point that they are not profit oriented organizations, they are organizations that are meant to provide a public service. These services aren't "losing" money, they cost money. Or, rather, they cost labor and resource inputs. But that's precisely the point of socialist development. You are spending our shared resources in ways that maximize the public good and advances our mutually shared interests. You aren't "losing" money when you build housing for the homeless, you are providing a service that "costs" money. So the declining rate of profit that inevitably plague capitalist economies don't have a depressing effect on the wages of Chinese labor, because China is poised to take over development and administer it according to a public plan once the profit motive is no longer sufficient for organizing production.