Tuesday, April 20, 2010

Endgame

“The Rise of China and the Demise of the Capitalist World Economy – Minqi Li, 2008

While your favorite philosopher is pondering the dialectical relationship between “F-Troop” and the war in Afghanistan, or considering the need to increase his alienation from nature, or finding the rosy side of the Catholic Church, others are making more useful points. Minqi Li has written an excellent short book detailing the coming collapse of world capitalism. A subject dear to all Marxist hearts, of course. Li, a Maoist, synthesizes the systems theory of Emanuel Wallerstein and the Marxist environmentalism of John Bellamy Foster to create a reasonable picture of what lies ahead. One of Marxism’s strengths is its ability to predict the course of events, and much of what Li says makes sense.

Li begins his book with a defense of Mao against his right-wing detractors in China and others – arguing convincingly that Mao did not support the ultra-leftism of the “Great Leap Forward.” Li lays this at the feet of Liu Shaoqi and Deng Xiopeng, who later moved to the right. He considers the Great Proletarian Cultural Revolution Mao’s revolt against bureaucratism and capitalist-roaders. He insists that Mao had no precedent to refer to. In the process, Li ignores the struggle of the Left Opposition and others against the growing bureaucratism of the Soviet regime in the 20s and 30s. Which did, in 1991, finally lead to the restoration of capitalism in Russia and other states.

Li thinks capitalism was restored in China when the “Gang of Four” lost their intra-party battle to the conservative faction in the Chinese CP in 1976. I myself was in a Maoist organization that insisted that Chinese capitalism was restored in 1971, when Mao made a deal with Nixon and the USA, and made the USSR the ‘main enemy of the people.’ Both ‘restorations’ share one thing – they occurred without the overthrow or disintegration of the workers’ state, and instead happened in the realm of policies and leadership personalities. Some might call this ‘idealism.’ Some, of course, don’t.

Li also shows how China, under Mao and a worker’s government, increased living standards far more than many similar countries, like capitalist India.

At any rate, this is prologue to Li’s arguments:

  • Neo-liberalism was a successful attempt by world capital to reverse the falling rate of profit, which had been dropping. It succeeded for 30 years by lowering wages, lowering taxes on business and reducing services to the working classes and poor all over the world. It was able to loot the commons across the globe, including the former workers states. However, at present neo-liberalism has been rejected in many quarters, and is failing economically.
  • The history of capitalism shows that it needs a leading force to organize it on a world scale. First the Dutch, then the English, then the Americans. As capitalism spreads across the world, it creates the need for a larger and larger ‘leading’ nation to organize it. Right now, that nation is the US. However, as events are showing, the US is starting to fail as the organizing force of world capitalism. The adventures in Iraq and Afghanistan have drained the US militarily and economically. The failure to confront the environmental crisis – most notably at Copenhagen – indicates that the US does not have the where-with-all to solve this problem. The banking and debit crisis that has engulfed world capitalism, and created a severe and long term recession, has further weakened the neo-liberal model fully represented by the US. Moves away from the dollar and American debt are already underway. Without a leading force, capital cannot organize itself internationally.

  • Without a leading organizing force, imperialism cannot coordinate its actions, and will become increasingly chaotic. However, a group of nations that is ‘too’ large and dominant will crush the nation state. And capitalism is based on competition between nation states. Capital cannot organize itself to transcend the nation-state in any real sense.

  • Li does not think any nation or group of nations has the financial, geographic or natural qualities to replace the US. He rejects China, Russia, Brazil and the Euro-zone. There is no one after the US.

  • According to Wallerstein, the world is made up of the core imperialist countries, the semi-periphery and the periphery. This structure is modeled on the stability structure for most core capitalist nations – a tiny ruling class buffered by a more numerous middle class, sitting atop even more numerous working and poor classes. The rise of China, and to a lesser extent India, Brazil and other ‘semi-peripheral’ countries is reducing the share of capital for the core, as these countries are becoming like a larger and larger ‘middle class’ that must be assuaged. IE, there are becoming not enough people in the world to super-exploit.

  • The race to the bottom will be reached quite soon. The world is a finite space, and capital is running out of places to find low wages, poor conditions and no environmental regulation. Imperialism has been successful as long as it can find another area to exploit. As capital moves into a country, the workers, farmers and middle classes start to attempt to improve their condition. This is almost axiomatic.

  • The exploitation of the world’s environment is reaching an end. Peak oil, peak natural gas, peak plutonium, water, and every other non-renewable mineral will reach peak in the period 2025-2050. Many observers consider world peak oil to have been passed in 2005. Capital’s endless desire for the accumulation of profits is based on the exploitation, not just of labor, but of the environment. The environment is being destroyed in the pursuit of those profits – a process that capital cannot stop.

  • Climate change, based on increasing use of fossil fuels, will also come to a head in this same period. The baseline 350 ppm of carbon advocated by serious environmentalists is not even considered now by the ‘realists’ in the capitalist market camp, who think of 450 ppm or even 550 ppm is ‘doable.’ The latter two figures will create a disaster for civilization. Essentially, the market environmentalists cannot impede ‘growth’ or ‘profits’ to reach levels that are survivable. As Evo Morales, a former lama herder and coca grower just maintained at the alternative ecological summit in Cochabamba, "Either capitalism dies or it will be Mother Earth."

  • Li carefully goes through all the alternatives to oil and coal, and by his figures, no combination of alternative technologies – and this includes massive solar and wind – can maintain the present rate of ‘growth’ or maintain the present capitalist economies.

  • China has contributed greatly to the destruction of the Chinese and world environment by embracing massive capitalist production and some capitalist market methods on their soil. Li details all the consequences of China’s headlong crash to industrialize and produce for capital.

  • China has become the workshop of the world. The Chinese proletariat is the largest in the world, and what they do will determine, in a way, the future of the world.


Li sees several alternative scenarios responding to these multiple crises of capital - essentially 'endgame.' A, a renewed offensive by capital to increase the rate of profit, but this time basically fascistic. Liberal democracy will be gotten rid of, as it will be unaffordable. B, a descent into chaos and barbarism C, social revolution, the overthrow of capital in nation after nation, and the institution of planned economies that can provide for the basics of human existence. Lee believes that time is running out and capital must be overthrown as soon as possible.

Li’s book is full of statistic and graphs, and many quotes from Immanuel Wallerstein. Li fully understands the environmental crisis, and pulls no rosy punches. His use of many economic facts bolsters his argument throughout. At the end, he raises Marx’s point about going from the ‘realm of necessity’ to the ‘realm of freedom.’ This would involve a shorter work day, that would still supply all the basic needs of humanity, as freedom is predicated on the end of wage slavery. Li finishes optimistically by asserting that this ‘realm of freedom’ is still possible.

One of my objections to this book is that Li makes no mention of the impact of having up to 40% of the world’s economy under workers state production for many years after World War II. This had a stabilizing effect even on capitalist crises. However, the removal of the planned economies in Russia, eastern Europe and partly in China has helped increase instability for the world’s workers. For instance, China recently announced that they would allow a derivatives market in their country. The very fact that China DID NOT BUY derivatives from Wall Street in the last few years helped stabilize the world economy, and kept it from completely melting down. The establishment of a dangerous market like this is not good news.

I also do not believe China is a fully-capitalist country. Real counter-revolutions do not happen in the dark of night. Believing China is fully capitalist is common among US pundits, and reflects a belief that capital is omnipotent. Some key sectors and firms in China are still nationalized, and the Party still controls economic policy, which means that some degree of planning still exists. The state or organization established by the 1949 revolution has never disbanded or been smashed. The Chinese Red Army and Party still exist, though certainly in a greatly changed shape. Certain benefits still exist for the working classes, although they are being whittled down every day. A book detailing the exact extent of capital’s inroads would be invaluable, as the more capital controls China, the more the world is in danger. It is up to the Chinese proletariat to put China back on the road to socialism.

And I bought it at Mayday Books!
Red Frog, April 20, 2010

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