China is retooling the capitalist paradigm

Russia’s war on Ukraine both reflects and deepens a global split that should remind us of Karl Marx’s famous remark: “No social order ever disappears before all the productive forces, for which there is room in it, have been developed; and new higher relations of production never appear before the material conditions of their existence have matured in the womb of the old society.” Britain has already lost its particular social order — its empire — and the United States is now losing its.

Despite differences, both of these social orders shared a mostly private form of capitalist relations of production (the organisation of enterprises centred on private employers and employees). That social order has given way to a different, mostly public form of capitalist relations of production where state officials are major employers. The latter form of capitalism is developing most dramatically in China.

As defined by its core productive relation of employer/employee, capitalism is now developing its productive forces and its GDP growth faster in China’s public form of capitalism than in the US’s private form of capitalism.

The role of the state is central to this decline of capitalism in one area and form and its ascent in another area and form. In the West, the relation between capitalism, and especially its defenders and ideologues, on one side, and the actuality of the state apparatus, on the other, is hypocritical.

Part of China’s embrace of a strong state emerged from its affiliations with the Soviet Union and the history of socialism in the 19th and 20th centuries. Most socialists then subscribed to one or another version of the idea that the transition from capitalism to socialism required the workers to seize the state via ballots or bullets.

The state became key to this transition to a socialist system. Many socialists advocated strong state apparatuses on the basis of what they hoped such states might then do, namely make the social transition to socialism beyond capitalism, that is beyond the employer/employee production relationship.

Yet those states, where and when socialists achieved power, proved to be limited. They never accomplished that transition beyond short-lived experiments. Ever since, socialists have analysed and debated the lessons of those experiments.

A more basic and important cause of today’s developing state capitalism is the history of capitalism itself. Its earliest incarnations in Western Europe emerged from and against the strong states of dying feudalism (as seen in Europe’s “absolute monarchies”). Early capitalisms had thus strongly advocated against strong state commitments in concepts such as “laissezfaire,” “free enterprises,” and “free markets.”

When British and then US capitalism achieved profitable global empires, they credited their professed success to their anti-statism. The hypocritical tendency of this claim resurfaces in the fact that it was their state apparatuses whose military arms acquired and secured their colonies and whose administrative arms ruled them.

Competing capitalist empires produced catastrophic world wars and global economic crashes. They learnt the need to increasingly rely on, fund and legitimise strong states.

After World War II, the majority of the world that broke free of colonial subjugation immediately embraced strong states in their Keynesian or socialist forms to accomplish the “economic development” that they prioritised.

Western capitalism was yet again torn in its ambivalence. Capitalists wanted to grab the profits of rapid growth. Ideologues warned against the strong states in the “emerging economies” as the leaders of that growth. The result was a global resurgence of both strongstate-led economic growth on the ground and intense ideological reversion to antistatism. No wonder the name “neoliberalism” stuck to the time.

Both old Western capitalisms and the newer mostly Eastern capitalisms have evolved considerably over the last generation. Those evolutions are now offering a limited resolution for the inherited tension between actually enhanced social tendencies toward strong state capitalisms and the remaining ideological objections to them.

Everywhere, even in Britain and the US, those ideological expressions are weakening. The strong states are now increasingly advocated by “conservatives” such as former US president Donald Trump and British Prime Minister Boris Johnson, as well as social democrats and liberals. China’s economic performance has carried the day even as Western capitalists try not to admit that publicly.

In China, a powerful state apparatus combines with a powerful political party apparatus to supervise and control an economy divided into private capitalist enterprises (private individuals as employers and employees) and public capitalist enterprises (state officials as employers and private individuals as employees).

China’s performance not only of economic growth but also of remarkable initial control over containing the spread of Covid-19 suggests that the final stages of capitalism may well be in the state-capitalist forms such as the form the Chinese have developed. The state can transform “backward” forms of capitalism into more “advanced” forms.

Before a post-capitalist system (where the employer/employee relation gives way to democratised workplace organisations that reject the employer/employee division) can take hold, the state-capitalist form enables the system’s productive forces to be most fully developed. We are living through that period now.

We might add that the social left thus finds itself in a situation rather like what it faced at the end of the 19th and early 20th centuries with an important difference: the socialist left now, as during earlier centuries, advocates for an economic system that does not yet exist in any nation.

But the socialist left does so with the knowledge of what happened to those experiments in socialism that turned out to be and still are forms of state capitalism. Hopefully, 21st-century socialism will not need to repeat those experiments. It can attend to what they lacked, namely the transition at the micro level of workplace organisation. That means moving enterprises (factories, offices and shops) from the employer-versus-employee organisation to the democratic community (or worker cooperative) organisation.

Thus, the Fiscal Responsibility Commission takes note of the red flags highlighted and works with necessary agencies of government to forestall the violations of the Act. The Fiscal Responsibility Commission should scrutinise the financial inflows and activities of government owned enterprises to ensure that they do not divert the remittances of their operating surpluses to the CRF for political activities.

of the Fiscal Responsibility Commission to ensure the promotion and enforcement of the nation’s economic objectives; and for related matters can be subject to abuse. For instance, there are usual delays in the implementation of the budget during this period.

The budget was signed by the president early January 2022, the early signing should have been a good reason to attain the macro-economic targets set for the first quarter implementation of the budget. The Fiscal Responsibility Act, in S. 30 provides that the Minister of Finance, through the Budget Office of the Federation, monitors and evaluates the implementation of the annual budget, assesses the attainment of fiscal targets and reports thereon on a quarterly basis to the Fiscal Responsibility Council and the Joint Finance Committee of the national Assembly.

Sub section (2) also states that the Minister of Finance shall, cause the report prepared pursuant to subsection (1) of this section to be published in the mass