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Essay Number 1
August 1998 
 

Capitalism, Socialism, and the 1949 Chinese Revolution:
What Was the Cold War All About?

thin rule
By Satya J. Gabriel

Alone I stand in the autumn cold
On the tip of Orange Island,
The Xiang flowing northward;
I see a thousand hills crimsoned through
By their serried woods deep-dyed,
And a hundred barges vying
Over crystal blue waters.
Eagles cleave the air,
Fish glide under the shallow water;
Under freezing skies a million creatures contend in freedom.
Brooding over this immensity,
I ask, on this bondless land
Who rules over human destiny?

-----Mao Zedong (1925)

The 1949 Chinese Revolution was a transformative, epochal event, not only for the Chinese but for the rest of humanity, as well.  If the 1917 Bolshevik Revolution in Russia (that resulted in the creation of the Union of Soviet Socialist Republics or Soviet Union) inaugurated an international competition for the hearts and minds of people all over the globe, the Chinese revolution raised the stakes of that struggle. The popular media, academics, political leaders and others in the "West" produced an understanding of this struggle as between "capitalism" and "communism," although these terms are rarely defined in more than loose and unusually flexible terms, and in spite of the fact that the Chinese revolution was shaped by domestic struggles with a long history within China, much more so than by global struggles between two super-systems.

Nevertheless, the intensity of the perceived global struggle between super-systems was shaped, in part, by the fact that communist ideology, as represented by certain statements of Vladimir Lenin, the central intellectual and political figure of the Bolshevik Revolution, was understood as grounded upon an idea of worldwide revolution --- all nations would, according to the logic (teleology) of this (orthodox) version of Marxism, ultimately succumb to communism. (The Soviet leadership expressly supported the idea of "worldwide revolution" and took steps to help achieve this objective, including organization and leadership of the Communist International or Comintern, although C.L.R. James, among others, argued that Stalin's political machinations sabotaged international solidarity within the communist movement.) The threat to "spread the revolution" created, at the least, the illusion of a mortal conflict (mortal from the standpoint of the elites who stood to lose if the resolution went against them). In other words, this idea of worldwide revolution and the efforts by Soviet leaders and communists in other countries to make it a reality presented little room for compromise between the opposing camps (on the one side, the supporters of the existing social system in the Western nations and, on the other side, the communist movement). Thus, the communist victory in China (the most populous nation on Earth) created a stronger sense of threat in one camp and of impending victory in the other. It also contributed to the way this bipolar struggle came to overshadow all other international relationships and many domestic conflicts within nations, as well. 

The conflict was mystified by both sides: it took on the dimensions and intensity of a religious crusade that permeates all aspects of social life.[1]   Indeed, if societies are really formations of social and environmental processes, all interacting and shaping one another, then the introduction of this polar conflict into the fiber of existing social relationships could not help but impact virtually every society (or social formation) and transform numerous cultural, economic, and political processes within those societies. The mystified (metaphysical) nature of the conflict served both sides: those who wanted to defend the status quo (the moral, political, and economic arrangements that predominated) in the "Western" nations were able to promote anti-communist attitudes and actions by depicting the other side as opponents of freedom, goodness, democracy, and light; while those who supported the goals of the Comintern could rally greater support for overturning the status quo by making use of the rhetoric of the Soviet or Chinese versions of Marxism (which looked all the more prophetic and, therefore, True, in the wake of the Chinese revolution). The existence of the new "Chinese model" was particularly troubling to one side and encouraging to the other precisely because it opened the door to a "domino effect" of revolutionary change in the less industrialized world, creating the possibility of accelerated social change that might threaten the established order in the advanced capitalist nations. [2]

Sometimes the effects of this conflict were quite unexpected. For instance, many individuals have argued that the "Cold War" (particularly the post-1949 Chinese Revolution version of the Cold War) may have been critical to the success of the Civil Rights Movement in the United States, as U.S. political leaders sought to win the hearts and minds of leaders in newly independent African nations and intellectuals throughout the "Third World" by demonstrating the openness, flexibility, and fairness of the American way of life (including the American economic system, which was presumed to be the embodiment of capitalism and diametrically opposed to the "communist" alternative). Ironically, the Civil Rights Movement was also interpreted, within certain anti-communist circles, as a subsidiary operation of the international communist movement. Civil Rights leaders, such as Martin Luther King, were often accused of being communists (or, at the least, "fellow travelers"). Thus, the new language and logic of communism and anti-communism (mostly in rhetorical and metaphysical form) transformed the rules of social engagement over racism, as well as many other issues.[3]

In a larger sense, the conflict between these two camps reshaped popular culture. New images and ways of thinking about the self and society permeated the media, from literature to the motion pictures. For the most part, the conflict was not waged in terms of social theories or ideas about the proper organization of society. Instead, the conflict took on a religious connotation. In the West, communism was portrayed as "sinister," even "evil." Behavioral norms were changed, influenced by images of impending threat from the communist menace, whether from without or within. Anti-communism coalesced into a form of paranoia. This paranoia was promoted in a wide range of films and books. One of the classics of this era was the science fiction film, Invasion of the Body Snatchers. In this and other films, the concept of threat from infiltration of family and friends was supportive of notions prevalent within the anti-communist movement that communism would capture the hearts and minds of the innocent and turn them into obedient slaves of the world communist movement.

But this cultural battle begs the question --- was the struggle really between capitalism and communism? Does this notion capture the essence of the conflict in question? Or were these words simply misused tools in a conflict over more mundane issues, such as whether a relatively old and established elite would control the resources and political machinery in certain countries or whether a new elite would come to power and take their place. It would distort matters to imply that this struggle between different political and economic agencies, at a minimum it was a struggle between the governments and corporations of the West versus the government and bureaucracy of the newly formed USSR, could be reducible to either a conflict between capitalism and communism (as two distinct, non-arbitrarily defined economic systems) or a contest for control by two different sets of elites. Similarly, it would be a distortion to imply that it is not possible for the conflict to simultaneously satisfy both the capitalism versus communism condition and the contest between elites. However, it is no less distorting to begin with the assumption that either of these conditions is correct. We need to know that the Bolsheviks were genuinely interested in communism if we are to assume that the initial conflict --- the USSR versus the West --- was ever between capitalism and communism, as alternative, oppositional, and mutually negating social systems. This is not proven by the simple statements of the Bolsheviks about their interest in creating communism at some unspecified date in the future.[4]   We must have a clear sense of what communism is and whether or not the Bolsheviks were working to establish the conditions for the existence of such a social formation.

After all, if a new slave master were to take control of a slave plantation and tell his slaves, "My ultimate goal is to free you and to create a new form of social arrangement in which you shall never be oppressed again," would the slaves believe him? What would be necessary for them to believe him?  Does it matter in terms of defining the class structure of the society whether or not they believe him? If a conflict breaks out between this new slave master and the slave masters at other plantations then perhaps this might reinforce the idea that something extraordinarily different (and threatening to the old social order) was happening.  But would that conflict be sufficient to convince us, as social analysts, that this conflict was between slavery and an alternative social system in the making, much less already present, and not simply between two variant forms of slavery?  In other words, what would we need to know in order to conclude that this new slave master was a "revolutionary" intent upon ending slavery (or having already revolutionized class processes, ending slavery on the plantation in question)?  This question would be further complicated if instead of a single slave master, the group claiming to oppose slavery was a collective of leaders, each with a different understanding of slavery and revolution, including a subset of these leaders who understood that an immediate end to certain conditions of slavery was utopian and dangerous to social cohesiveness (perhaps arguing in favor of ending private ownership/private appropriation-based slavery in favor of state ownership/state appropriation-based slavery as a first stage in their new society, but not ending slavery altogether).  To imply that the conflict between the West and the USSR (and the later expanded conflict between the West and the Communist Bloc) was a struggle between capitalism and communism is to imply that the "Communist Bloc" was genuinely interested in creating communism (and ending or, at least, minimizing non-communist forms of surplus appropriation and distribution, if not having already brought this dramatic change in the operating system for surplus control into effect).

In the West, there is a tendency to speak of the USSR, China, and other members of the "Communist Bloc" as already communist nations. If we took this seriously, we would need to believe that the software of communism, which is the control of surplus value by the workers themselves, had been implemented in the USSR, China, and these other so-called communist nations. However, this leap of faith is avoided within the discourse by defining communism in purely polemical (non-scientific) fashion as synonymous with the set of political, economic, and cultural processes that developed in the USSR under the dictatorship of Joseph Stalin (a definition of communism that is dependent upon the post hoc rise to power of a specific dictator and the implementation of his vision of society) . In other words, communism is not defined based on the software of labor processes and the control over surplus labor, as in Marx's definition (which did not presuppose a Josef Stalin), but on the hardware of the physical social structures and institutions without regard to the underlying software. Thus, the discourse of the Cold War ignored the fact that the wage labor/capital blueprint which Marx defined as the capitalist mode of production (Marx's name for the capitalist operating system) was operative in both the "West" and the "East," but in the one case implemented by state-owned firms within a bureaucratic structure (the hardware of the so-called socialist bloc) and in the other case implemented by public corporations with the support of state institutions (the hardware of the Western bloc). This Cold War discourse ignored prior discussions of communism in philosophy and social science, including Marx's few references to this system. Similarly, capitalism gets defined in simple terms as the commonly recognized features of the economic and political system(s) prevalent in the "Western" nations, particularly the presence of relatively unregulated corporations operating in relatively "free" markets and popular voting for certain governmental positions (in contested elections with at least two political parties). In the most simplistic version of this polemic, capitalism is simply conflated with "free" markets. Indeed, there is no need for the word "capitalism" since the phrase "free markets" would capture the entire meaning for purposes of discourse and analysis. For many social analysts and commentators, their definition of capitalism is ad hoc, changing over time or occasion to meet polemical demands or simply to reflect the present set of idealized characteristics of particular high income societies, usually the United States suffices as the model. Unlike typological work in the "hard" sciences, the typology upon which these ad hoc definitions rest are almost never subjected to much scrutiny nor required to meet even minimal standards of uniqueness (non-arbirariness) and clarity. It is as if an animal could legitimately be classified as a reptile based on the whims or polemical requirements of the particular biologist who deploys the term in his scientific analysis or policy statements, rather than based on non-arbitrary and easily identified criteria with unambiguous scientific implications.

It is interesting that despite Marx's perceived role in shaping the bi-polar communism-capitalism conflict (his name is often invoked by one side or the other for polemical reasons), his multi-volume attempt at producing new knowledge about the specificity of capitalist economic processes (where the word capitalism is produced as a social concept defining a unique set of social relationships (which can occur in a variable historical context) by which certain individuals perform surplus labor and a different set of individuals appropriate this surplus labor) is ignored. Thus, it may be useless, in the context of this polemical "debate" over capitalism and communism, to try to distinguish whether or not the conflict between the West and the "Communist Bloc" was a conflict between actual capitalism and actual communism, understood as strictly defined and alternative economic systems. In the polemical debates, the terms capitalism and communism lose all social scientific meaning. The entire history of thought within which capitalism was defined as a unique economic system formed around a distinct class process and communism was defined as an alternative mode of producing and appropriating an economic surplus is absent from the arena of these debates. Think of capitalism and communism as alternative forms of software for shaping the creation and distribution of surplus value (whether in product or monetary form). But this is not the way capitalism and communism are discussed in popular discourse. Instead, in the popular rhetoric, capitalism and communism become simple proxies for two specific sets of contending social formations (distinct in many ways but not necessarily in terms of prevalent class processes).

But we cannot play so fast and loose with these concepts (or the underlying software or social codes governing who performs labor and who receives the fruits of such labor upon which the concepts are based) if we are to make sense of the internal struggles and debates within the Chinese leadership that came to power in 1949 (anymore than it would make sense to ignore the historical definitions of capitalism and communism if one wanted to make sense of the post revolutionary struggles and debates within the Bolshevik leadership). In our survey of the Chinese economy, we will attempt to gain a better understanding of what was at stake in the Chinese Revolution of 1949, of the contending visions within the leadership of the Communist Party of China (Gong Chang Dang) as to what constituted capitalism and communism, and whether or not there is any "objective" way to determine if China underwent a revolution as sweeping as the term communism implies (a revolution that implies a complete change of the underlying software, or operating system, if you will, shaping the relationship between direct producers and appropriators of the fruits of labor of those direct producers). This will be important as we explore the current phase of "economic reform" in China and attempt to make sense of where China is going in the future.

But first, let me be clear about something on this point. China's leadership never claimed to have inaugurated communism with the 1949 Revolution. As was the case with the Bolsheviks, China's leaders were members of a communist party but never claimed to have instituted communism --- a society without exploitation --- with their revolution. [5]   They claimed merely to have overthrown the political leadership of the "bourgeois" state --- to have made a political revolution against a pro capitalist state --- and by so doing to have cleared the way for the construction of "socialism." Socialism was understood as an intermediate stage between capitalism and communism.  During this intermediate phase, the preconditions for communism would be gradually put into place to allow for the eventual attainment of communism, which some of the opponents of communism have described as a form of utopian (and therefore unattainable) society. No one ever said how long the society would have to be in this intermediate "socialist" stage, nor was the stage itself or the preconditions for communism that were to be instituted clearly defined. It was also anticipated that worldwide revolution would result in rapid growth of communist party led governments around the world and that these governments would develop socialism in a coordinated effort. Socialist solidarity was understood as an inevitable consequence of the movement of social forces that could be delayed but not permanently forestalled. Thus, the Soviet leaders saw the Chinese revolution as just another step along this road to the coordinated building of socialism. Socialism was never conceived, within communist ideology, as a system that would be developed sui generis in individual countries. There would not be a Soviet form of socialism and a Chinese form, for instance. This way of thinking not only caused tensions between Soviet intellectuals and political leaders and their Chinese counterparts but also caused some rather serious squabbling among leaders of the Communist Party of China (CPC), which was founded only four years after the Bolshevik Revolution, with some taking the internationalist line and others arguing in favor of the idea of a unique Chinese form of socialism.

To further complicate matters, the Chinese Nationalist Party or Guomindang --- the party that was overthrown by the Chinese Communist Party and subsequently fled to the island of Taiwan --- did not view itself as an instrument of a ruling capitalist class (which would be consistent with the notion of a "bourgeois" party). To the contrary, the Guomindang, many of whose leaders were openly supportive of and supported by the Soviet Union (and some, such as Chiang Kai-shek, studied in the Soviet Union), was generally described as nationalist and socialist. Sun Yat-sen, the Guomindang's Lenin, was one of the strongest supporters of the Soviet Union. And the Soviets provided the Guomindang with financial support, armaments, and advisers. (If this is not sufficient to make the ideological waters murky, then consider also that the Chinese Communist Party made nationalism an important aspect of its constitution, eliminating another potential ideological difference.)  On numerous occasions the Guomindang and the Chinese Communist Party were allied, particularly in the anti-imperialist struggle against the Japanese and there were even members of the Guomindang who simultaneously held membership in the Chinese Communist Party (at least until Chiang Kai-shek began his purge of communists from the Guomindang).  The Communist Party officially recognized the valuable role of the Guomindang in bringing about the transition from the monarchist regime, embodied most recently in the form of the Qing Dynasty, to a modern state.  This, of course, begs the question of who would control that state as the Chinese nation continued along a path that both the Guomindang and the Communist Party called modernization.  When the Guomindang, under Chiang Kai-shek's leadership (after Sun Yat-sen's death), turned against the Chinese Communist Party in 1927, assassinating most of the communist leadership (leaving a void that would be filled by the rural based Mao Zedong), the motivation may have been less ideological than part of an effort to eliminate any possible competition over control of this "modern" state. Thus, the Chinese Communist Party, who won the struggle against the Guomindang despite the aforementioned assassinations, overthrew one version of socialism in favor of another version, at least when viewed in purely polemical terms.

This leaves us with some perplexing questions. What exactly was/is socialism? What did the Chinese Communist Party leadership mean by this term? What do they mean when they use it today? Is there a narrow enough definition of the term "socialism" as to allow us to test whether one society is or is not socialist?

For that matter, in order to make sense of the aforementioned struggle between communists (who are portrayed and portray themselves as opponents of capitalism) and anti-communists, we will need to ask similar questions of the concepts of capitalism and communism? Because these terms are frequently used for polemical purposes, we often think we know what they mean and can very easily end up like the Caterpillar in Alice in Wonderland (with these words meaning whatever we want them to mean --- there being no test for whether the conditions of the concept are or are not met). For our purposes, however, we will need to both understand what political and intellectual leaders in China (and elsewhere) meant by these terms and to attempt to find social scientific definitions (very strictly defined and testable terms used in a consistent manner within a consistently logical framework of argumentation) that could be used to analyze the economic, political and cultural dynamics driving change in Chinese society. These are two very different ways of talking about the concepts of capitalism, socialism, and communism.

Let us begin with the latter problem---finding a social scientific meaning of these terms. We need a social scientific definition of capitalism, socialism, and communism that can be deployed in our analysis of the Chinese economy, Chinese economic history, and the intellectual debates about China's "communist" revolution and its current transition (from what to what?).

Since the concept of communism was/is largely understood as oppositional to capitalism, then lets start with capitalism. What is this thing that the communist party leaderships (in China, the Soviet Union, and elsewhere) wanted to transcend and ultimately replace with communism? The term capitalism began its life as an economic concept, although today it is often used to describe political and cultural elements, as well. Nevertheless, a concept of capitalism that is overly general or synonymous with other widely used concepts --- such as the conflation of market economies with capitalism --- becomes less useful as a device for categorizing and analyzing. What we want is a concept of capitalism (and communism) that is narrow and unique enough as to allow us to distinguish something profoundly different or similar between the societies under analysis (and, in a more micro context, between different social relationships within the economy).

Since Marx is often implicated in the various debates over this and related issues, it might help to get an idea of how Marx understood capitalism. Marx, in his attempt to distinguish the different social processes that shape people's lives, discussed a wide range of social relationships and processes: property, exchange, and power relationships played an important role in his analysis, for instance. However, Marx thought that many social commentators had, over time, done a great deal to analyze, even criticize, existing forms of property ownership, exchange relationships, and political arrangements. Social analysts who opposed the existing social order, capitalism, because they felt it was oppressive generally criticized these particular aspects of the capitalist societies of the day. Marx believed that even if these factors were changed --- property ownership, exchange relationships, and political arrangements --- it was not guaranteed that one would get to the heart of the problems created by capitalism. In particular, he believed that there existed a form of oppression that was poorly understood, rarely discussed, whose genesis had required dramatic changes in the living conditions and social status of countless human beings, and which was critical to understanding what it was that made capitalist society unique vis-a-vis other unjust societies (Marx was clearly making some important value judgments in his criticisms of capitalism, feudalism and slavery). This unique form of oppression is what he called capitalist exploitation.

But capitalist exploitation, to be understood, had to be strictly defined as distinct from other forms of exploitation. And exploitation, as an economic concept, had to be strictly defined as distinct from other forms of oppression. Marx defined exploitation as the product of a generalized social process, called class. Since capitalism is the prevalence of a specific type of class process, i.e. the capitalist class process, then we should begin by understanding this generalized concept of class before moving to the more specific instances. In other words, we want to be able to answer the question of what is a class process before answering the more specific question of what is the capitalist class process. Once we can answer both of these questions, then we will be in a stronger position to test whether or not the facts of the Chinese revolution and post revolutionary society have, indeed, been anti-capitalist (as might be anticipated by the rhetoric employed by many of those engaged in the communist/anti-communist debates of the Cold War era).

In order to understand class, we will use the conceptual language that has been developed by Stephen A. Resnick and Richard D. Wolff, two noted economists from the University of Massachusetts and the founders of the journal Rethinking Marxism.  Resnick and Wolff's reading of Marx leads them to avoid defining class as a noun, as is common practice. For Resnick and Wolff, the issue that Marx focused upon in his major theoretical works ( Capital, Theories of Surplus Value, and Grundrisse) was not a struggle between classes but a struggle over class as a social process (the term process implies a continually changing phenomenon --- a phenomenon that only exists in motion --- a verb). For this and other reasons they use the term class process in describing the unique type of social interaction that Marx was concerned about in his social scientific work.

What is class process?  Firstly, Marx understood that society depended, among other processes, upon human beings physically transforming raw materials and other material inputs (machinery and other products of past labor) into new and useful products. Food has to be grown and prepared. Cloth has to be created and clothing made. Construction materials and housing have to be made. And so on. For Marx this productive effort was general to all societies, irrespective of the existence and/or type of class process. All human beings do not, however, engage in activities resulting in such useful products. And even for those who are so engaged, they may, under certain conditions, consume such products in excess of the value of what they produce. Thus, under certain social conditions it is necessary for some workers to produce output in excess of the output they take as compensation for their efforts. This extra work has been defined by Marx and others as surplus labor. The extra product created by surplus labor was defined as surplus product. And the social value of the surplus product (as typically determined in market exchange relationships) was defined as surplus value.  Now we have all of the ingredients necessary to a relatively strict definition of class process. Class process is the social process that results in i) human beings performing surplus labor, ii) the surplus products (of this labor) being appropriated and iii) the distribution of the surplus value (in surplus product form or in monetary form) to other human beings.

What distinguishes one class process from another? In other words, how can we distinguish capitalism from feudalism or feudalism from communism? All these are class processes in so far as they involve the production, appropriation and distribution of surplus products. The difference between the various class processes is the particular social arrangement that results in the worker performing the surplus labor and the appropriator taking possession of the fruits (the product or value) of that surplus labor. And these social arrangements have been variable over time and place. Marx spent a great many pages attempting to specify the historical process that brought into being the social arrangement that is peculiar to capitalism. It was the primary purpose behind the writing of the three volumes of Capital, his best known social scientific work (although less well known than his shorter more polemical Communist Manifesto). In a nutshell, the social arrangement that distinguishes the capitalist class process from other class processes is the existence of a free market in labor power (the capacity to work) under conditions where it is possible for someone other than the actual laborers/direct producers to take possession of the fruits of their labor. This definition tells us that capitalism, if it is to exist and be reproduced over time, requires a particular type of market, a free market in the buying and selling of labor power, and a particular type of ownership, the ownership of the fruits of the labor of an employed wage laborer by someone other than that employed wage laborer.

However, capitalism is not reducible to either markets or ownership. There must be a free market in labor power, meaning that potential laborers must have the freedom to seek employment (for a wage) in an environment where, under normal conditions, there are choices about possible employers. There must be a political and cultural environment within which it is possible for someone other than the worker who created a product to take ownership of that product. The worker is paid a wage, embodying a certain amount of economic value, in exchange for her giving up the right to own the fruits of her labor. She accepts this contract willingly and retains the right (the freedom) to quit her employment and seek employment elsewhere. That's it. That is capitalism. This simple but powerful definition provides all that is necessary to determine if the capitalist class process exists under concrete social conditions. We do not need to know who rules the state or whether voting plays a role in determining the composition of an existing legislative body. We do not need to know if there are flexible exchange rates. We do not need to know if there are gun laws. We do not need to know whether people in the country speak Putonghua or English. Of course all of these topics might be useful in any attempt to tell the story of how capitalism came to exist or not or the particular context within which it exists.

If the capitalist class process is the appropriation of the surplus value of free wage laborers (laborers who seek employment for a wage in a free market in labor power) by human beings other than the free laborers themselves, then we can easily see where some of the confusion has originated. Instead of seeing free markets in labor power as a condition of existence of capitalism, it has become a commonplace to think that free markets in general are a condition of existence of capitalism. This is very misleading, of course, since it is possible to have free markets in everything except labor power and not have capitalism. (Indeed, the presence of free markets in labor (power) is a necessary but not sufficient condition to define a society as capitalist. Simply because the capitalist class process may exist in a society does not imply that this type of class process prevails over all others, in terms of numbers of workers involved, total output generated, or any number of other possible criteria. Similarly, the existence of instances of slavery would not define an entire society as a slave society, if this economic arrangement were not typical.) China has been the site of numerous debates over and experiments with free markets, dating as far back as the Han Dynasty (202 B.C.E. to 220 C.E., when debates over state intervention versus free markets are documented) and the well field system of the Tang Dynasty (618 C.E. to 755 C.E., or thereabouts) where output generated on that subset of peasant plots not allocated to producing in-kind rents for the aristocracy could be consumed by the peasant household or sold in village markets, but free markets in labor power have been very rare, indeed. In the ante-bellum South of the United States, where there was even a free market in the buying and selling of human beings, the market in the buying and selling of human labor (power) was relatively underdeveloped. Most direct producers in the ante-bellum South were either slaves or self-employed producers, not capitalist wage laborers. Under the system of slavery, a large number of productive laborers in the southern states of the United States existed in a condition of servitude, living out their lives in work camps as the owned property of other human beings, despite the presence of free markets in most goods and services. Indeed, most of the products created by these slave laborers were sold in markets, where buyers and sellers were relatively free to interact and engage in exchange. And the ideology of free markets was also very strong in the ante-bellum South. For slavery based entrepreneurs the freedom to engage in the buying and selling of human chattel and the concomitant freedom to put those human beings to productive use was no minor matter. Indeed, it was the pro-slavery forces in the U.S. Congress who led the fight for free trade and other policies that presage "neo-liberalism."  Thus, there can be no doubt that markets played a critical role in the economic life of the southern states. Nevertheless, the predominant class process of the South, typically assumed to have been the slave class process (whereby the performance of surplus labor depended upon the existence of a human chattel arrangement) was clearly distinct from the capitalist class process (which is understood to have prevailed in the northeastern states of the United States), whereby workers could seek and quit employment according to their own volition.

We can also see why it might have been possible to expand the role of ownership as a condition of existence of capitalism beyond the simple condition whereby it must be possible for someone other than the free wage laborer to take ownership of the surplus value created by that laborer (and then to distribute this surplus value so as to secure the conditions for further appropriations in the future). It is commonplace to believe that private ownership in general is a defining characteristic of capitalism. But again, slavery provided wide scale private ownership and yet is an economic arrangement profoundly different from capitalism. Similarly, feudalism and self-employment (the ancient class process) often exist in the presence of wide scale private ownership.

Thus, neither private ownership nor the existence of free markets in commodities other than labor power is, in these general terms, a sufficient condition for the existence of the capitalist class process. And since we call a society capitalist if and only if the capitalist class process prevails (is the predominant source of the social surplus), then the existence of such free markets and/or private property is not sufficient for a society to be labeled capitalist. It is also the case that the absence of wide scale free markets and private property are not sufficient to determine that a society is not capitalist.

As for the more ambiguous term, socialism, the intellectual and political leader of the Bolsheviks in Russia recognized that capitalism and socialism were not incompatible. On the eve of the Bolshevik Revolution of 1917, Vladimir Lenin wrote that "Socialism is nothing but a state-capitalist monopoly used for the benefit of the entire nation and thus ceasing to be a capitalist monopoly." Thus, it appears that Lenin is defining socialism as a variant form of capitalism, rather than a different type of society from capitalism.

In support of Lenin's argument, the existence of a command economy, wherein the allocation of goods and services is largely controlled by agencies of the government, does not preclude the presence of a free market in labor power per se and, therefore, does not preclude the continued prevalence of capitalist relations in the economy. But was this the case in practice? In particular, was it the case in China that the creation of a command economy was coincident with the establishment and/or reproduction of free labor (power) markets? Were Chinese workers free to choose their place of employment or, at least, to choose where they would seek employment? 

In thinking about these questions, you should give some thought to the definition of capitalism developed in this brief essay. In particular, you might want to think about how a command economy could also be capitalist. In other words, as an exercise in deploying this strict definition of capitalism, you might define a capitalist command economy as one variant form of capitalism. 

On the other hand, what if workers, like generations of peasant farmers and artisans during the various dynastic periods in Chinese history, were not free to choose where they would seek employment? If workers were assigned by the government to a particular work site (danwei or commune) and did not have the freedom to quit, then what sort of economic system, in class terms, would have prevailed in China? This question is of no minor importance to our investigation of the ongoing transformation of the Chinese economy and the implications of that transformation.

Finally, you may ask why any of this matters. It's been asked before. Oddly, it is often asked by U.S. conservatives who normally would have considered the question of whether or not a particular entity is "communist" or "capitalist" to be very consequential but somehow lose interest in the question when challenged to think more carefully about the social scientific meaning of these terms. In any event, it matters because it goes directly to the heart of whether or not there is some fundamental difference between China and the Chinese economy and the "West" and "Western" economies, including the United States of America or between the various post-revolutionary states of the Chinese social formation and states during the aforementioned dynastic periods. What is similar and what is different? What has changed and what has been reproduced? If it turns out that China's communist party is engineering capitalism, rather than something opposed to capitalism, then it will certainly make some difference in how the United States and China interact. And it will also make a significant difference in the lives of the people of China.
 

The Road Ahead (added Nov. 11, 2003)

What do we intend to accomplish with this lecture series? We begin with an historical exploration of the institutional creations and alterations that lead from the 1949 Revolution in China up to what we know as contemporary China. Historical processes are necessarily always relevant to the political, cultural, environmental, and economic processes of the present. The past is always articulated with the present. Nevertheless, our main objective is to understand the China of the current period, to be in a position to make sense of the multiple possible paths that society may take from yesterday to tomorrow. In the process, we will need to debunk some myths about China. That means necessarily stepping on some toes. For example, we will critically analyze the meaning of the terms market economy, socialism (with or without Chinese characteristics [6]), communism, capitalism, ancientism, feudalism, exploitation, vanguard party and dictatorship of the proletariat, among others. How are these terms defined within and what role do they play in the versions of Marxian theory prevalent within the Communist Party of China and in the strategies and concrete policies of that ruling party? What is the relationship between these terms and the actual functioning of the Chinese economy, which can be understood as a complex and changing set of algorithms: an algorithm is a process that follows some sort of logic --- this logic can change according to certain rules, which are, in turn, the result of other algorithms. Face it, we humans love rules. We need them. Some animals have their algorithms hard wired into their brains (and maybe to a certain extent so do we), but more so than any other creature on this planet we sentient beings seem to constantly and creatively order our lives (for better or worse) with our own consciously constructed algorithms. We sometimes produce beautiful algorithms of behavior and interaction that serve to make life better and other times, well, we do the opposite. The possibilities for human interaction (and therefore human society) are far greater than any individual's imagination. Let us keep that in mind as we explore the specific dimensions of the Chinese social formation.

Is the transformation taking place in China likely to alter the social relations on the planet in such a dramatic fashion as to inaugurate a distinctly new epoch in human history? If so, what are the dimensions of this seachange? What new algorithms will arise in the human family? And is it inevitable or are there possible obstacles that could block this transition and lead global civilization down alternative paths?

And there is that sticky question that underlies this entire first essay in the series: Is the change in China a transition to capitalism, as many have now come to believe (even if operating from very different conceptions of the meaning of the word capitalism)? Does this matter? If it is such a transition, what is it a transition from? And does this matter?

Most of the analyses of China, including those originating within China, operate from an explicit or implicit teleology: the belief that the changes in China are following some form of Hegelian logic that leads from one stage in human social development to a higher, more advanced, and logically necessary next stage. This is a common way of thinking within the social sciences. It was not only the province of Hegel, but also of the German Historical School, end-of-history neoconservatives, and most Marxists. People are often quite passionate about their teleologies. For the sake of full disclosure, let me say up front that I am not a believer in such teleologies. Indeed, my use of the term "ancient class process" to refer to productive self-employment is, in part, a stab at the heart of teleology. By making the adjective "ancient" into an ahistorical term I hope to make clear that one can identify distinct economic (as well as cultural, political, and environmental) processes that can be located at various moments in temporal space, that are not wedded to a specific interval in that temporal space (in class terms, ancient Greece was not unique, nor was the class ancient-ness of Greece a one-to-one function of temporal location), but are rather temporally autonomous, so to speak, influencing other processes at various moments in both temporal and geographic space. Ancient producers can exist in the New York City of 2003, for example, as well as in the India of 1203. Ancient production (productive self-employment) can prevail in societies of the future, as well as having prevailed in societies of the past. There is no law of social evolution that says that ancient societies (in these terms) must be a thing of the past only. In other words, there are a large variety of social conditions that may foster ancientism, just as there are a large variety of social conditions that may foster capitalism or feudalism or slavery and the temporal dimension is in no way a restriction on the potential existence of some variant form of these social formations (or the underlying class processes). I'm not saying "stuff happens" as if it is in some way random, but that there are multiple paths to any type of social formation based on the known five fundamental class processes (ancientism, communism, capitalism, feudalism, and slavery). This is an attempt to get us to stop thinking of the world in non-thinking ways: such as separating human social evolution into an ancient world and a modern world and therefore missing certain fundamental similarities, as well as unexpected differences. We need to do the analysis. I guess that is the theme of these lectures/essays. In other words, in addition to trying to understand China, I want us to do so with an aggressive use of the conceptual framework and, as much as possible, to avoid prejudging prior to the theoretical work having been done.


 

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NOTES

[1] Indeed, the polarity of the conflict was itself part of the mystification. The heterogeneity of struggles between and within the multifarious nations of the global community were reduced to a singular bipolar conflict. All struggles were understood as reflections of this bipolar conflict between good and evil.

The economics subfield of comparative economic systems was constructed as an academic mirror of the contours of the Cold War. As such, the early work in comparative economic systems ignored the social scientific and philosophical literature on communism and socialism in favor of the conflation of these terms with certain specific characteristics (read overgeneralizations) of the so-called Soviet bloc.

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[2] As we now know from history, the 1949 Chinese revolution and the creation of the ever-changing "Chinese model" proved to be a real pain in the theoretical edifice of the Stalinists ruling the Soviet Union. China's leaders were intent upon interpreting Marx for themselves, which often meant rejecting the Stalinist (orthodox Marxist-Leninist) interpretation of Marxism, producing their own alternative epistemologies and ontologies. These differences in theory led to different strategies. The Soviet leadership believed there should be only one strategy (which they would teach to the leaders of the other socialist nations). Soviet dogmatism would inevitably lead to a split with the Chinese and a great deal of hostility (rather than solidarity) between the two socialist giants. Ironically, this split seems to have been an important influence upon the the closer relationship between the leaders of China and the United States (after Nixon's famous visit). It turned out that "communist solidarity" was a mountain of sand. 

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[3] The displacement of social scientific definitions of capitalism and communism by metaphysical notions was, indeed, compatible with racism in a larger sense. Racism depends upon the displacement of scientific notions of genetics (which clearly indicates the nonexistence of "races") with a supernatural notion of races: phenotype has been mystified, given a supernatural meaning by which humans may see and understand themselves and others. The metaphysical nature of racism is such that it can exist only in a climate wherein agents accept the existence of phenotype as supernatural sign. The rhetoric of anti-communism contributes to such a climate by the signification of certain words and actions such that supernatural meaning could be assigned: civil rights marches as sign of communism and communism as embodiment of evil or the USA flag as sign of anti-communism and anti-communism as embodiment of purity and goodness (of course, among the most fundamentalist racists, the USA flag was insufficient as a signifier -- it could also represent the coherence of American society wherein all people are equal citizens before the law -- and for these fundamentalist racists a better symbol was, and still is, the confederate battle flag, which was resurrected in the 1950s as sign of white supremacy and white supremacy was understood as embodiment of goodness and purity). The mystification process is self-reinforcing. It creates a religious coherence to both racism and anti-communism. 

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[4] The official party line in China parallels that of the Bolsheviks. The Chinese Communist Party is understood as the vanguard leading the people to realization of communism. The Party's role in this regard is understood in religious terms, as fulfillment of a sacred mission. Similarly, in religious terms, communism is understood teleologically as the necessary next stage of human development after the necessary demise of capitalism. Communism has no successor stage and, therefore, represents a sort of Hegelian "end of history." As for the definition of communist society, the official line is that it will be a society within which class exploitation will cease to exist and, therefore, the state will cease to act as a ruling tool for certain social classes. A key precondition for this non-exploitative social arrangement is the development of the productive forces, i.e. a high level of technological development. If this condition for the existence of communism sounds vague, it is. The Communist Party, presumably, gets to decide how to get to communism and when the proper conditions for communism have been met. It is simply understood that communism can be attained only after a "long historical process." 

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[5] The attachment of the appellation "communist" to the USSR and post-1949 revolution China seems to have been a purely ideological phenomenon: an attempt to taint the concept of communism with the particular problems of these two societies. I would challenge any reader to find even a single reference to having created a "communist" society by the leadership of either of these countries. All of their statements about the nature of the societies created by the 1917 and 1949 revolutions used the term "socialism" for the immediate state of being of the society. Using the term "socialism" in this way was completely consistent with the body of Marxian thought that existed at the time and since. On the other hand, misusing the term "communism" seems to be one of those little polemical tricks used by anti-communists {not unlike mispronouncing the name of a political leader hated by the "Western" establishment (e.g. Ayatollah Khomeini) or, in the USA context, even mis-stating the name of one's political foes, as in Republicans (who, at the national level, have had hours of media training on the use of language to alter public perception) calling their opposition party the Democrat Party, rather than more properly the Democratic Party, because market research indicated that "Democrat Party" leaves a negative impression on voters}. 

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[6] (note added December 23, 2003) The text of the proposed constitutional amendment put before the Third Plenary of the National People's Congress includes a revision of the line that reads ""along the path of building socialism that has Chinese characteristics" (yan zhe jian she you zhong guo te se she hui zhu yi dao lu) to read "along the path of building socialism with Chinese characteristics" (yan zhe jian she zhong guo te se she hui zhu yi dao lu). The text goes on to state: "The basic task before the nation is to concentrate its efforts on socialist modernization along the path of building socialism with Chinese characteristics. Under the leadership of the Communist Party of China and the guidance of Marxism-Leninism, Mao Zedong Thought, Deng Xiaoping Theory, and the important thinking of the 'Three Represents,' . . ." The addition of "the important thinking of the 'Three Represents'" is a victory for Jiang Zemin, who coined the phrase "three represents," as an embodiment of the changes he promoted in the composition of the Communist Party of China (expanding the membership to include top level managers in capitalist enterprises, both state and privately owned, and professionals, and giving these "entrepreneurial" credentials equal or even more than equal weighting with "peasant" and "worker" credentials in determining upward mobility within the Party). The constitutional amendment also provides new protections for private property, placing private property on an equal footing with public property under the law. These changes are indicative of the meaning of "socialism with Chinese characteristics." 

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