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Eight Principles of a Socialist Political Economy with Chinese Characteristics
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People say you don’t like China. No, I love them. But their leaders are much smarter than our leaders. And we can’t sustain ourselves with that. It’s like taking the New England Patriots and Tom Brady and have them play your high school football team. President Donald Trump.

China’s political process is probably the most transparent of any major nation’s. Because their bios and track records are constantly updated online everyone is thoroughly conversant with the top one thousand aspirants for leadership and even American observers correctly predicted Xi Jinping’s elevation to the presidency. Everyone knows exactly what the government has promised, what it has delivered and where the country is heading, thanks to public documents like this:

Anyone can–and millions do–read detailed discussions of China’s economic direction, like this one from the 200-member Party Central Committee, the Party’s highest organ of authority when the National Congress is not in session. Its members have spent a collective five thousand years governing and their report, Eight Principles of a Socialist Political Economy with Chinese Characteristics, demonstrates that there is still intelligent political life on earth:

  1. Sustainability Led by Science and Technology: the overriding mission of early stage socialism is liberating and developing the forces of production. Socialism requires a minimal foundation of material and technological development so the determining effect of science and technology needs to be fully understood so we should recognize the strategic importance of science and technology in allocating scarce resources.
  2. Orienting Production to Improving Ordinary People’s Livelihood: the chief contradiction in socialism at its earliest stage is between people’s increasing material and cultural needs and the backwardness of social production which can only be overcome through the speedy and steady development of productive capacities; this is the primary task of socialism in its initial phases. Improving people’s livelihoods is an endless task and new challenges constantly emerge. We should adopt more targeted and direct measures, helping working people as a whole to solve their difficulties and promote their well-being through legal institutions and civil society. We should realistically assess the effects of our actions on living standards, ensuring that public services create a reliable social safety net. Our objective must be a society in which all people contribute to the satisfaction of human needs to the extent they are able while enjoying access to the material, social, and spiritual resources they need for the full development of their human potential in accord with the needs of sustainability.
  3. Public Ownership Takes Precedence in National Property Rights: The institutional guarantee for all Chinese people is that they will share the fruits of development as well as an important guarantee for enhancing the party’s leading position and maintaining the Chinese socialist system. The principle highlights a basic difference between the socialist economy and the modern capitalist economic system, in which private ownership is dominant. We should learn from past errors of state-sector reform that allowed a narrow elite to amass huge fortunes through misdirection of funds. The collective and cooperative model of Chinese village economies needs further investment. New policies must be introduced to enhance the vitality, competitiveness, and risk management of the public economy.
  4. The Primacy of Labor in the Distribution of Wealth. In any capitalist economy, wage laborers are paid only for the expenditure of their labor power, and not for the value of the commodities they produce. Under these conditions, the specific wage a worker earns is associated with his or her position and performance. And while in some sectors of capitalist economies, collective labor organization can limit the rate of exploitation and give the appearance of a fair distribution of wealth, the overriding power remains the private property rights of owners and employers. The distribution of wealth in a Chinese socialist economy must be guided by the needs of labor, not capital. We must strive against exploitation and polarization. The income gap should be bridged, and increased income for all citizens should coincide with economic growth and labor productivity. It is vital to establish a sound and scientific mechanism for determining wage levels, as well as a mechanism for regular increases in wages.
  5. The Market Principle Steered by the State. The anarchic character of the capitalist market combined with individual capitalists’ drive to innovate in order to reduce labor costs leads to periodic crises of overproduction in which workers suffer most. Such crises can be short- or long-term, depending on the degree of non-market factors like the degree of monopoly. In a capitalist market economy this proportional law relies mainly on such spontaneous adjustments and the role of state regulation is relatively limited. Our principle of state-steered markets emphasizes that a socialist society can develop a market economy in a planned and proportionate way and that the fundamental role of the market in resource allocation should be carried out under government supervision. While giving the market a determining role in general allocation while promoting the regulatory role of the government, we must make every effort to address problems of imperfect market mechanisms, excessive government intervention and poor regulatory supervision. To achieve this we must advance market-oriented reforms that significantly reduce the government’s direct allocation of resources and permit allocation to occur according to market pricing and competition rules to achieve maximum efficiency. The government’s responsibility is keeping macroeconomic policy steady, strengthening public services, guaranteeing fair competition, reinforcing market supervision, promoting collective prosperity and rectifying–or compensating for–market failures.
  6. Speedy Development with High Performance: A relatively low growth rate with insufficient resource use inhibits full employment, wealth accumulation and public welfare. Yet a higher growth rate with extensive rather than intensive resource utilization is equally detrimental to ecological sustainability and distributive justice. We need a dialectical analysis[⁠1] for any index based on gross domestic product, GDP.
  7. Balanced Development with Structural Coordination: One of the principles of our political economy is the proportional distribution law of social labor (‘proportional law’), which governs the contradictory movement between social production and demand and the need to coordinate development for the entire national economy. The law requires that the overall social labor of people, tools, and materials should be distributed proportionately according to demand in order to maintain a structural balance among different industries and sectors. We must abandon the persistent misconception that, if we eliminate economic surplus caused by administrative intervention, excess production capacity and product surplus formed by marketization can be balanced automatically without government intervention. This neoliberal fallacy and its consequences explains the large structural excess capacity in the Chinese economy and goes against the spirit of Chinese socialism.
  8. Economic Sovereignty and Openness: A final principle is to open the economy to trade and investment because it is beneficial to economic growth at home and abroad, helping to optimize the allocation of resources and improve interactions between industry and technology. The manner, range and extent of this economic opening up should be implemented flexibly and be responsive to complex and changeable conditions in national and global economy. Developing countries, for example, should devote particular care to their strategies and tactics when opening up to developed countries, given the inherent risks and uncertainties inherent in such an unequal relationship.

Thanks to socialism with Chinese characteristics, by 2021 every Chinese will have a home, a job, plenty of food, education, safe streets, health and old age care, mothers and infants will be less likely to die in childbirth, children will graduate high school three years ahead of American kids and outlive them. That’s not too shabby for a country that was the world’s poorest when I was born, and it certainly has popular support:

Notes

[1] Dialectical analyses probe ideas and values, their significance and limitations. As long as you show good dialectical analysis in getting there, it does not matter what your final conclusion is.

For an in-depth discussion of the conference see A Theory of China’s ‘Miracle’ by Cheng Enfu and Ding Xiaoqin.

 
• Category: Economics • Tags: China 
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  1. Yee says:

    The plan is all very good. However, state-owned corporations make a net profit of 370 billion US$ a year. Some people will never stop trying to privatize the state-owned companies, so the yearly 370 billion dollars can go to private pockets…

  2. There’s another, crucial, reason why China’s economic policy is transparent. China ratified the ICESCR in 2001, committing to periodic review by the charter body ECOSOC.

    https://tbinternet.ohchr.org/_layouts/treatybodyexternal/Download.aspx?symbolno=E/C.12/CHN/CO/2&Lang=En

    https://tbinternet.ohchr.org/_layouts/treatybodyexternal/Download.aspx?symbolno=E/C.12/CHN/CO/2&Lang=En

    https://tbinternet.ohchr.org/_layouts/treatybodyexternal/Download.aspx?symbolno=E/C.12/CHN/CO/2&Lang=En

    This provides world-standard transparency – not US-style abstract bullshit about socialism v. capitalism, but concrete, documented human-rights fact: Does China progressively allocate all available resources to fulfill human rights? That’s something that the US won’t dare talk about, because the US kleptocracy commandeers all available resources for repressive capacity. Instead of letting the American people freely use their resources for their own economic betterment, the government pisses it away on LRADs and tasers and prisons and fusion centers and NSA surveillance and cops in tanks and NORTHCOM martial law. US government economic policy is integrally related to the government’s contempt for our civil and political rights. You always have to consider the big picture, and the biggest, most comprehensive picture is human rights.

    https://www.ohchr.org/EN/Countries/AsiaRegion/Pages/CNIndex.aspx
    v.
    https://www.ohchr.org/EN/Countries/LACRegion/Pages/USIndex.aspx

    I’d trade. If the US government didn’t run and hide from ECOSOC, we would have a lot more information on its policy of real resource allocation. We would find the trillions of dollars in weapons that fell off DoD trucks so CIA can blow shit up at home and abroad.

  3. Muggles says:

    Very useful article with interesting detail.

    However Chinese economic statistics are notoriously opaque, not “transparent” as we read above. Publishing almost anything statistical or quantitative about Chinese economic activity not from Official Sources is a crime, tantamount to treason. You go to labor camps for that.

    Likewise few if any investors rely on Chinese firm accounting data. Not merely due to style or arcane accounting theory, but because you’d be a fool to believe that at face value. This is bad enough in Western countries or the many other nations which use Western accounting principles and most importantly, independent auditing.

    The main reason for this fog is Chinese finance and banking. The State allocates most of the banking loans and props up firms (many with sizable State owners or silent partners) which lose money or fail to repay loans. Malinvestment (misdirected capital invested for political or corrupt reasons) is baked into their financial structure. Loans are called or firms bankrupted only when political decisions permit it. So don’t believe everything you read. “Sunshine” isn’t a Chinese characteristic in business.

    • Replies: @TT
  4. peterAUS says:

    ..Chinese economic statistics are notoriously opaque, not “transparent” as we read above.

    So don’t believe everything you read.

    Don’t say….

  5. Yee says:

    Muggles,

    “Not merely due to style or arcane accounting theory, but because you’d be a fool to believe that at face value. ”

    Claims like “China’s statistics is fake and the economy is collapsing” has existed for decades, but China’s economy still standing…

    Isn’t it time for a conclusion that who is telling the truth?

  6. Good article, yeah China is kicking our ass. The capitalists running our country into the ground don’t give a shit how much we all suffer, as long as they’re still getting rich, who cares, right? We need smart leaders, and a smarter system, not the corrupt puppets we currently have that are willing to sell their souls and our country for a nickel.

    Another problem hurting American small business that I can personally speak about is shipping rates in US, USPS once again raised rates on 1/27/19. Hard to explain other than the Chinese and large retailers like Amazon, Wal-Mart, Home depot are bribing the right pols and USPS officials. Its not just USPS, UPS and Fedex are constantly raising rates also.

    1/27/19, the day it became indisputable for me Gov/big business and USPS officials are working against taxpayers and small business because their actions are so blatantly unfair to US small business in favor of BIG online sellers and Asian based business.

    For decades USPS had 1st Class rates the same for all residents/small business (not zoned like Priority)– 1/27/19 changed that. Since half the population lives on either coast, almost everyone is in the highest zone and the recent price increases to USA residents is much higher than before, seems most First Class packages increased at least 20%.

    Asia online sellers saw no increase on weights up to 4.4 pounds while USA rates climbed a LOT after JUST 12 ounces. Nearly all 1st Class packages from USA online sellers increased at least $1.00 per package which is about the TOTAL paid by Asia sellers on Ebay, Amazon, Alibaba, and every other selling site.

    Almost everything in a Walmart is less than 4.4 pounds and can be sent cheaply to US and all of it is subsidized by US residents/small business.

    Problems with this is:

    1) Post Office losing hundreds of millions $$ per year delivering these Chinese packages (taxpayers left holding the bag making up for their losses and eventual USPS pension shortfalls)

    2) Uninspected goods come in, many of which are in violation of intellectual property laws and safety regulations.

    3) Small business can’t compete, thus many jobs disappeared altogether or with lower paying and reduced benefit part-time jobs.

    4) Foreign online sellers are not paying any sales tax, income tax, real estate tax, social security tax, or tariffs like the importers in the US.

    5) Lost jobs equals social security taxes not collected.

    6) With the uninspected packages coming in via the post office and not in mass thru containers, rail and truckers get less business AND there is no motivation for China to order anything to put in the container for the trip home–even its it’s freaking grain or plastic to recycle

    Not only that I can order a $5 roll of tape off of Amazon or Ebay, the product is shipped from Wal-mart or Home Depot, one $5 single roll of tape comes in a 12x8x6 inch box, if I a small business or citizen shipped this same box it would cost at least $6-15 just to ship it, depending on where it is shipping to. So how can Wal-mart ship a $5 roll of tape in a $6-15 box? They would lose money! Somebody’s paying for it, I suspect its us, small business and residents. Same deal with the Chinese packages.

    Bottom line, small online sellers cannot pay for import tariffs and all the taxes and $6 for the cheapest shipping option for even across town and then expect to compete with China or large corporations that PAY NO taxes, tariffs and get subsidized shipping. WTF?

    Call China corrupt all you want, US wrote the damn book on corruption. Getting no better under Trump. Until people start going to jail for corruption, bribery, TREASON don’t expect any change, I’ve pretty much given up on voting our way out of this BS, after Bush-obama-Trump making all those promises, then doing the exact same thing, seems collapse or revolt is all thats left. Sad!

    Check out Jimmy Dore videos, he’s a lefty so I know everyone here will be triggered, but he’s non-partisan and is on point

    • Replies: @dvorak
    , @TT
  7. dvorak says:
    @redmudhooch

    We need smart leaders, and a smarter system, not the corrupt puppets we currently have that are willing to sell their souls and our country for a nickel.

    We needed smart people, but we got dumber and dumber immigrants instead. Imagine telling a time-traveler from one hundred years ago that dumb-as-a-post Jersey Shore-type Italians would be the median intellect for an American in 2020.

  8. WOW, sounds like a wonderful country, how many people immigrated there last year?

  9. TT says:
    @Muggles

    If by purely printing & loaning money out to politicians cronies can achieve what China has, the whole world would be now all living in paradise with no poverty. And the economy power is now decided by how many $ printing machines a country has.

  10. TT says:
    @redmudhooch

    Why would US postal want to subsidize all China online sellers? For Amazon & Walmart they may have bargaining power or some political influence to do that. But what has China got to get similar subsidy? What benefit does US Postal get in return?

  11. The only time things were better for Americans was from 1945 to the 1970s, when they taxed the living shite out of rich people. You idiots of course believe that rich people “earn” a trillion dollars. I can just imagine your cross-eyed dizzy heads. Kind of like Mr. Mxyzptlk. I reference Superman because that is the level of your little brains.

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