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Archive for the ‘Opinion’ Category

The fiction of the Ideology of Pakistan-Yasser Latif Hamdani

Posted by admin On December - 3 - 2018 Comments Off on The fiction of the Ideology of Pakistan-Yasser Latif Hamdani


On the Higher Education Commission’s data base, one finds two PhD theses on Jinnah, one discussing his leadership skills and the other his brief time as the Governor General of Pakistan. Both are quite mediocre, badly researched and based on literature review of only a piddling subsection of the biographies on Mr Jinnah. It would seem that PhD on Jinnah is unofficially banned in Pakistan.

There is a very good reason for it and I only discovered it once I started researching my second book on the life of Mr Jinnah, which is a detailed biography of our founding father to be published by an international publisher. Since this was a very serious undertaking, I spent the last several months going through the great man’s speeches and letters right from his days in Lincoln’s Inn to his dying day.

The answer to why the committed secularist, Indian Nationalist and the Best Ambassador of Hindu Muslim Unity turned into an apostle of Muslim Nationalism is there in that primary record for those who want to actually research it. It also contains conclusive answers to what kind of state Jinnah wanted and what his ideas were with respect to citizenship, constitution and organisation of the state. No the answer cannot be found in snippets and out of context quotes but you have to see the documents in a continuity as a lawyer would in the process of due diligence. The reason why PhDs on Jinnah are actively discouraged is because any honest perusal of the record would bury the fiction of the ideology of Pakistan as it is taught in Pakistani schools, colleges and universities. This ignorance and sheer dishonesty is not limited to Pakistan based professors and PhD scholars. Many a professor emeritus of political science who apparently taught at European Universities also suffer from this delusion that they can comment on history without looking at primary source record.

This legal fiction called the ideology of Pakistan has made it into our constitutional oaths but any attempts to get the courts or the parliament to define what it means inevitably fail. Ideology of Pakistan means essentially what General Ziaul Haq thought it was; which is that Pakistan was created as an ideological Islamic state

This legal fiction called the ideology of Pakistan has made it into our constitutional oaths but any attempts to get the courts or the parliament to define what it means inevitably fail. Ideology of Pakistan means essentially what General Ziaul Haq thought it was which is that Pakistan was created as an ideological Islamic state. Misquotes, fabricated quotes and quotes out of context are taken to prove this position and meanings are extracted from them which had nothing to do with the circumstances that led to the partition of India and the resultant twin Dominions that replaced British India as successor states. It has been invented to control constitutional democracy in Pakistan and give unelected institutions a whip to beat up elected ones from time to time.

It certainly has nothing to do with Jinnah, whose one major consistent theme was the unfettered march of humanity — something that he harked back to throughout his life in a multitude of his speeches. He did not believe for example that any one generation could bind the next for all times to come. This was the essence of Jinnah’s political thought — that nothing is static in politics and that the march of humanity will not be thwarted. A militarised Pakistani state at odds with its neighbour and non-identical fraternal twin was not what Jinnah had in mind. The mutual hatred and constant interference in each other’s affairs was not Jinnah’s idea of India post partition. This was not Jinnah’s idea of a Pakistani state.

A modern democratic state does not need an ideology of any kind to exist. Pakistan has to be what the people of Pakistan decide in consonance with Pakistan’s international obligations. It cannot be a shibboleth or an outmoded idea of national identity that can hold a country of 210 million people together. It is service delivery, economics, and constitutional rights. You cannot continue to impose this fiction of ideology of Pakistan on the state indefinitely, just as you cannot go on jailing legislators as was the case with Mohsin Dawar and Ali Wazir, both gentlemen who I have huge disagreements but who are the elected representatives of the people. To treat them as they were treated in Peshawar recently is the defeat of reason, logic and power of persuasion. If you are going to drive people to desperation, you will force them into roles that they have so far abjured. By adopting Constitutional method of elections and democracy, Dawar and Wazir were putting their faith in the state to mature and finally become a democracy. By denying them their liberty you are undermining their freedom.

The powers that be in Pakistan need to rethink their hackneyed narrative and instead think of history, ideology and identity holistically, informed by real history and facts. No one can undo a country that has nuclear weapons, except its own people. Do not alienate our own people for god’s sake. Bury this fiction of the ideology of Pakistan and instead focus on making Pakistan a progressive and liberal state. Nothing will serve our people and indeed our religion better than a Pakistan that is at peace within and without, at home and abroad. This can be the only ideology that Pakistan can truly have because everything else is necessarily a personal choice and the personal faith of an individual. I did not say it, the founding father did. Time to follow to what he actually said instead of concocting a historical fiction that has no roots in reality.

The writer is practicing lawyer and was a visiting Fellow at Harvard Law School in Cambridge MA, USA. He blogs at http://globallegalforum.blogspot.com and his twitter handle is @therealylh

Published in Daily Times, December 3rd 2018.

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China: From Mao to Deng-Ahmed Shawki

Posted by admin On November - 29 - 2018 Comments Off on China: From Mao to Deng-Ahmed Shawki


China: From Mao to Deng

Ahmed Shawki looks at the rise of Mao and the development of China up to the death of Deng Ziaoping. He shows that “socialism with Chinese characteristics” had–and has–very little to do with the socialism of Marx, Lenin and Trotsky.
The Honorary Chairman of the Chinese Bridge Association died February 19 of “complications of lung infections” associated with Parkinson’s disease. At 92 years of age, this was the only formal post Deng Xiaoping held at the time of his death. But before taking up bridge, he was chairman of the Central Military Commission until he resigned in 1989, the year of the violent suppression of the Tiananmen Square protests. Despite his official departure from politics, Deng continued to be China’s “Paramount Leader,” wielding enormous influence and power.

Deng Xiaoping belonged to a tiny core of leaders of the Chinese Communist Party (CCP) who had survived the bloody crushing of the 1925-1927 revolution, the Long March and years of guerrilla struggle, Japanese invasion, and the subsequent upheavals and purges that followed the establishment of the People’s Republic of China on October 1, 1949. Indeed, Deng not only survived where others disappeared but managed several comebacks. Before his “rehabilitation” and return to power in 1973 and then again in 1977-1978, he had been denounced as one of the “two main capitalist roaders” and purged in 1967 and then again in 1976. Deng was one of the main targets of denunciation during the Cultural Revolution. The “Great Helmsman”–Mao Zedong–didn’t mince words. “Deng is a rare talent,” said Mao. “He is like a needle wrapped in cotton. He has ideas. He does not confront problems head-on…His mind is round, but his actions are square.”

Henry Kissinger, who as Secretary of State under the Nixon administration helped engineer “normalization” of U.S.-China relations, dismissed Deng as “a nasty little man.”

This “nasty little man” oversaw the violent repression of demonstrators at Tiananmen square, and said of them: “We should never forget how cruel our enemies are. We should have not one bit of forgiveness for them.”

The official appraisal of Deng was more flattering. The New China News Agency offered this assessment:

The death of Comrade Deng Xiaoping is an immeasurable loss to our Party, our army and the people of various ethnic groups throughout the country and will certainly cause tremendous grief among the Chinese people.
We must conscientiously study Deng Xiaoping’s theory of building of socialism with Chinese characteristics, learn from Comrade Deng Xiaoping’s revolutionary style and his scientific attitude and creative spirit in applying a Marxist stand, viewpoints and method to studying new problems and solving new problems.

Without Comrade Deng Xiaoping’s theory, there would not be the new situation of reform and opening up in China, and there would not be the bright future of China’s socialist modernization.

It is not only in China that Deng was viewed reverently. Uniformly, the leaders of the major western capitalist powers and their media were quick to eulogize him. “Such a rare combination of skills and political genius does not come often in a national leader,” the Wall Street Journal solemnly declared February 20. Bill Clinton said Deng would be remembered as an “extraordinary figure on the world stage over the past two decades.”
Ironically, “Communist China” is now one of the showcases for pro-capitalist ideologues. China has become the favorite example of the benefits of the market and of untrammeled capitalism.

The “market reforms”–or in Deng doublespeak “Socialism with Chinese characteristics”–have indeed had a massive impact on China. With a growth rate averaging 9 percent per year since 1978, China now boasts, according to the 1996 World Almanac, the second biggest economy in the world. The U.S. investment bank Salomon Brothers notes that China is “probably the most attractive long-term environment for equities in Asia.”

“Deng Xiaoping Theory” was summed up by his slogan: “We should let some people get rich first, both in the countryside and in the urban areas. To get rich by hard work is glorious.” Deng himself knew that this was really a Reaganite trickle down theory saying: “When I die they will not call me a good marxist.”

The critical question, however, is not how good a Marxist Deng was, but whether he was a Marxist at all. Most commentators on China, whether they approve or disapprove the changes that have taken place in the last two decades, share a common framework: that China has been moving away from some form of socialism towards capitalism (as the western pundits argue), or from some form of socialism to another form of market-oriented socialism. The problem with such views, however, is that they can make no sense of the Chinese revolution, of Maoism or of the present day.

Take just one example of what such thinking produces on the left. Writing in a journal whose title he hasn’t quite digested, Victor Lippit informs readers of Rethinking Marxism in the Spring 1993 issue:

China can be thought of as a society potentially in transition to socialism. The movement away from central planning is a movement away from statism and bureaucracy, not a movement away from socialism. The dramatic gains in living standards, growing rural-urban equality, and the rapid decrease in poverty suggest that substantial gains in the reform era are accruing to the working population, both rural and urban. It is also true that some capitalist entrepreneurs have become quite prosperous, as have some bureaucrats through various forms of corruption. Nevertheless, it appears that the lion’s share of the rising surplus has been garnered by people who work for a living. This suggests that the reform era is at least consistent with an ongoing transition to socialism.
Such views not only fail to explain the fundamental dynamic of Chinese society but also make a mockery of any concept of genuine socialism. The essence of socialism is no longer workers’ control over society, but which bureaucrats are in power and what state policies they pursue. Many on the U.S. left in the 1960s and 1970s dismissed or failed to even consider the position of the working class in a so-called workers’ state. The fact that a tiny handful of men ruled China with an iron fist was ignored, and their empty rhetoric about “Proletarian Revolution” was taken as gospel. When the rulers of China curtailed the rhetoric and embraced U.S. imperialism, their cheerleaders on the U.S. left found themselves disillusioned and disoriented. Worse, many became vocal opponents of “socialism” because they’d seen it and it didn’t work.
But to judge what is going on in China by what its rulers say is as misguided as judging what goes on in the U.S. on the basis of White House press releases. It’s a useless–not to mention boring–exercise. Of course, Deng Xiaoping maintained that his reforms were intended to improve the socialist system in China–even if some of the measures were antithetical to any notion of socialism. By the mid-1980s China had become a “socialist planned commodity economy.” By the 14th National Congress in 1992, China underwent another metamorphosis and become a “socialist market economy.” “A market economy is not capitalism,” explained Deng, “because there are markets under socialism too.” Apparently, “socialism with Chinese characteristics” appears to have all the features of capitalism.

Notwithstanding commentators east and west, there is not a huge gulf between Mao and Deng. Mao and Deng represented different approaches, different strategies to the same end: the economic development of China under the direction of a state capitalist ruling class. No matter what their differences–and there were many–they never disagreed on the need to defend the bureaucracy against the mass of workers and peasants.

What existed under Mao and what exists today have nothing to do with socialism and workers’ power. Socialism–as this article will aim to show–is not in China’s past, but in its future. “Marxism,” as Simon Leys wrote, “has acquired a very bad name in China–which is quite understandable, though somewhat unfair: after all, it was never really tried.”

Marxism and China at the Turn of the Century

Through the 19th century, China’s imperial dynasty decayed under the impact of imperialist penetration by Britain, France, Russia, Japan and the U.S. China’s great wealth was siphoned off as the competing powers took control of China’s coastal cities. Opium was imposed by force of arms by the British and French in the mid-1800’s. China’s traditional methods of production collapsed under the impact of imperialist guns and cheaper European goods.

As the dynasty became weaker, China came to be ruled by local fiefdoms of gangsters, bandits and mafiosi. In the coastal cities the Chinese nobility and civil servants moved in to take advantage of the cash generated in trade and bribes. Central government irrigation and drainage systems fell into disrepair, and the land became subject to terrible disasters causing famines and peasant rebellions. Weakened beyond repair, the old dynasty collapsed in the revolution of 1911. Historian Harold Isaacs explains:

Internal corrosion had already reduced the dynasty to a cipher. Only a tiny push was needed to erase it. The revolution of 1911 generated enough energy to produce this tiny push, no more. No class or group emerged from it capable of directing the transformation of the country, of solving the agrarian crisis, of regaining national independence and building strength to resist the pressure and incursions of the imperialist powers.
With the collapse of central authority–nominal as it was–power passed into the hands of regional warlords and the main imperialist powers–each carving out their “spheres of influence” and maneuvering for an advantage over the others.
The revolution of 1911 was led by Sun Yat Sen, representing a section of the bourgeois intelligentsia influenced by Western ideas. But the Chinese bourgeoisie feared the peasantry as much as they desired an end to imperialist domination. Isaacs elaborates:

In the earlier classic bourgeois revolutions of the West, the nascent capitalist class had been able to win and consolidate power by terminating feudal relations on the land. But in China this class was too closely identified with these relations to lead the impoverished peasantry out of its difficulties.
The Chinese bourgeoisie was therefore too weak to establish a centralized state under its own control. Regional, communal and ethnic divisions also helped fragment the Chinese bourgeoisie. The pursuit of sectional interests allowed warlords to keep their own armies with which they controlled certain territories and plundered others. By making temporary alliances with each other and individual imperialist powers, the warlords ensured the continued division of China.
The Guomindang , a nationalist party of the Chinese Bourgeoisie, was founded in 1911. It was led by Sun Yat Sen and based itself on his three principles: nationalism, democracy and the people’s livelihood. But its influence in its initial years–which was slight–reflected the weak position of the Chinese bourgeoisie.

The outbreak of the First World War in 1914 and the Russian Revolution in 1917 gave rise to forces that would fundamentally change China–namely, a rapid and significant expansion of industry, and consequently, the emergence of an urban working class as a social force in Chinese society.

The Chinese working class, numbering at the time little more than 11 million (just over three million were industrial workers), quickly established itself as a force in China. The first trade unions were formed in 1918. By 1926, three million Chinese workers were organized into trade unions.

The war also gave birth to a mass anti-imperialist movement, after Germany’s holdings in China were transferred to Japan. The agitation against the Versailles Treaty–known as the May 4th movement–very quickly drew thousands into its ranks. A number of intellectuals active in the May 4th Movement, like Chen Tu Hsiu, later were instrumental in forming the Chinese Communist Party in 1921.

The Russian Revolution was a powerful example and inspiration for both the newly-formed nationalist movement and the workers’ movement. Not only had the Bolsheviks succeeded in overthrowing the Tsar, but the new state renounced any claims on Chinese territory and promised to return any part seized by the Tzarist empire. The new Soviet government pledged solidarity and support to all movements of oppressed peoples in their struggle for independence and self determination.

The Guomindang began to grow as a result of the nationalist movement. One of its leaders, Chiang Kaishek, saw himself as a Garibaldi or Ataturk who was destined to lead a united China to victory and independence. But he had no social weight. He was therefore willing, for a time, to be in a formal coalition with the CCP and to accept help from Russia while he built up his own forces. The interaction of three forces–the nationalist movement, the CCP and the Communist International–would decisively shape events.

The Chinese Communist Party

The Chinese Communist Party began as a small group of intellectuals but over the space of a few years grew into a mass workers’ party.

The founding convention of the CCP held in Shanghai in 1921 was attended by 12 delegates representing a total membership of 57. At the second congress the same number of delegates spoke for 123 members. There were still no more than 900 Party members in the whole of China at the beginning of 1925. It is a testament to the scale of the crisis facing Chinese society that by 1926 the CCP’s membership topped 57,000.

The political basis of the CCP was the line of the Communist International, to which the new party immediately applied for affiliation.

The manifesto of the CCP’s Second Congress made clear that the new party had an orientation to the workers’ movement:

The proletariat’s support of the democratic revolution is not (equivalent to) its surrender to the capitalists.
The CCP is the party of the proletariat. Its aims are to organize the proletariat and to struggle for (the establishment of) the dictatorship of the workers and peasants, the abolition of private property, and the gradual attainment of a Communist society…

…the working class must not become the appendage of the petty bourgeoisie within this democratic united front, but must fight for their own class interests.

This perspective echoed those of the Second Congress of the Communist International. In 1920, the Second World Congress of the Comintern adopted a set of “Theses on the National and Colonial Questions.” They were meant to define the general approach that parties like the CCP would adopt in building their organizations. The theses made a sharp distinction between imperialist and colonized countries, calling for revolutionaries to support every genuine struggle for national liberation and against imperialism. But Lenin was careful to point out that this did not mean revolutionaries subordinating themselves to nationalist forces:
A resolute struggle must be waged against the attempt to clothe the revolutionary liberation movements in the backward countries, which are not communist, in communist clothes…
The Communist International has the duty of supporting the revolutionary movement in the colonies and backward countries only with the object of rallying the constituent elements of the future proletarian parties…

The Communist International should collaborate provisionally with the revolutionary movement of the colonies and backward countries, and even form an alliance with it, but it must not amalgamate with it; it must unconditionally maintain the independence of the proletarian movement, even if it is only in an embryo stage.

On the advice of the Dutch Communist Maring, the Comintern’s representative in China, the CCP entered the Guomindang in 1922. The aim at first was not to subordinate the CCP to the Guomindang, but to operate as an independent force inside it. Wrote Maring, “The form of Guomindang organization was loose and the possibility existed of advancing our ideas in the nationalist movement and of developing a revolutionary anti-imperialist movement.”
Maring recalls that when he went back to Moscow in September of 1922, “It became clear to me that they were more interested there in military affairs than in propaganda… [T]wo lines, two centers of gravitation [were forming], the center of Russian interest and the center of the revolution.”

With the arrival of Borodin, the new Comintern representative, “The work shifted to a new tack. What happened later is clear,” recalls Maring, “Presented with the chance to develop a real mass movement and real mass organizations, the Communists became the tools of the Guomindang leaders.” Borodin ordered the CCP to dissolve itself into the Guomindang and accept its leadership uncritically.

In Russia, the failure of the European revolutions and the isolation of Russia had led to the disintegration of workers’ power and the beginning of the development of a bureaucracy committed not to workers’ power, but the survival of the Russian state against foreign rivals. The chief beneficiary of this was Stalin, general secretary of the Party. The Comintern, formed in 1919 as a means to spread workers’ revolution internationally, degenerated through the 1920s into an arm of Russian foreign policy. Its policy in China was one of the first manifestations of its degeneration.

Stalin–along with Nicolai Bukharin–were the architects of this new line. Because China was nationally oppressed by imperialism, it was argued, national unity of the workers, peasants and the bourgeoisie was imperative. Since the coming revolution was a bourgeois revolution and the Guomindang was the party of the revolutionary bourgeoisie, the CCP should maintain unity with the Guomindang at all costs. The new “theory” of class collaboration was called by Stalin the “Bloc of Four Classes.” At the Third Congress in 1923 Mao Zedong was first elected to the Party’s Central Committee. An article he wrote immediately after the Congress enthusiastically endorsed the new Comintern line:

The present political problem in China is none other than the problem of the national revolution… The merchants, workers, peasants, students, and teachers should all come forward to take on the responsibility for a portion of the revolutionary war…We know that the politics of semi-colonial China is characterized by the fact that the militarists and the foreign powers have banded together to impose a twofold oppression on the whole country. The people of the whole country naturally suffer profoundly under this kind of dual oppression. Nevertheless the merchants are the ones who feel these sufferings most acutely and most urgently. (emphasis added)
The Guomindang was admitted into the Comintern as an associate party, and the Executive Committee of the Communist International (ECCI), amid great fanfare, made Chiang Kaishek an honorary member in 1926. The Comintern leaders fawned over him. In January 1926 the Presidium of the Fourteenth Party Conference of the Soviet Communist Party sent the following telegram to the presidium of the Second Congress of the Guomindang:
To our Party has fallen the proud and historical role of leading the first victorious proletarian revolution in the world…We are convinced that the Guomindang will succeed in playing the same role in the east, and thereby destroying the foundation of the rule of imperialists in Asia.
Lenin’s admonition that revolutionaries ally with, but not subordinate themselves to, bourgeois nationalists was reversed. The Guomindang was transformed from a bourgeois nationalist party into a “revolutionary bloc”–at least on paper! This “model”–the “bloc of four classes”–was in fact borrowed from the Guomindang.
Stalin’s “model” had nothing to do with Bolshevism. The Russian revolutionaries–led by Lenin and Trotsky–had argued that the Russian bourgeoisie was too weak and cowardly to lead the struggle against Tzarism. Only the Russian working class, organized independently of the Russian bourgeoisie–who feared the working class more than it chafed under the yoke of Tzarism–could lead the fight, with the support of a rebellious peasantry. It was on this basis that the Bolshevik Party was able to lead the revolution, which overthrew the Tzar and established workers power. The parallels with China, with its bourgeoisie too weak to unite, tied by a thousand threads to imperialism, were striking. “What does this mean anyway–bloc of four classes?” asked Trotsky:

Have you ever encountered this expression in Marxist literature before? If the bourgeoisie leads the oppressed masses of the people under the bourgeois banner and takes hold of state power through its leadership, then this is no bloc but the political exploitation of the oppressed masses by the bourgeoisie.
And this was more than a matter of semantics. The logic of the situation was clear–the bourgeoisie would capitulate to the imperialists. Far from being a “revolutionary bloc,” the Guomindang would in the end play a counterrevolutionary role. Trotsky noted that:
The Chinese bourgeoisie is sufficiently realistic and acquainted intimately enough with the nature of world imperialism to understand that a really serious struggle against the latter requires such an upheaval of the masses as would primarily become a menace to the bourgeoisie itself…
Chiang understood this well. He repaid the Comintern for its material and political support by launching his first anti-communist coup on March 20, 1926 in Canton. He barred Communists from all posts at the Guomindang headquarters, banned criticisms of Sun Yat Sen’s politics, and demanded that the CCP central committee submit a list of all Party members who had joined the Guomindang. Under protest, the leadership of the CCP submitted to Russian pressure and obliged. When stories of the coup began appearing in China and in the international press, the Comintern issued vehement denials.
Claiming that a Communist coup was being organized against him, Chiang consolidated all power into his hands. Chiang’s claims of a CCP coup were a complete fabrication. But that didn’t prevent Ch’en Tu-hsiu, general secretary of the CCP, from calling Chiang Kaishek “one of the pillars of the national revolutionary movement,” arguing that any Party member advocating the overthrow of Chiang should be “shot.”

If anything, relations between Chiang Kaishek and Borodin, Russia’s agent in China, only got more cordial. In Borodin’s view, “The present period is one in which communists should do coolie service for the Guomindang.”

In July 1926, Chiang launched the Northern Expedition–a military campaign aimed to conquer Central and North China. The expedition was aided by Russian arms, Russian advisers and a vast propaganda effort organized by the CCP. The Northern Expedition coincided with and helped encourage a nationwide mass revolutionary movement. Writes Harold Isaacs:

The northern and central provinces were astir with risings against Chang Tso-lin’s administration and the corrupt warlords who supported it. The urban workers were the most active element in the political movement. The Communist Party stood at the head of the trade unions, which had sprung into being overnight and found enthusiastic mass support in liberated cities and towns. All along the route of Chiang Kaishek’s advance the peasantry welcomed his troops and, counting on their support, rose against warlord, landlords and usurers, ready to dispossess them.
Chiang set about suppressing the rebellion. On July 29, he declared martial law in Canton. Three days later an order was issued “forbidding all labor disturbances for the duration of the Northern Expedition.”
The Comintern leaders not only held their course but tried to defend it theoretically. According to Bukharin:

The present stage of the Chinese revolution is characterized by the fact that the forces of the revolution are already organized into a state power with a regular, disciplined army…The advance of the armies, their brilliant victories…are a special form of the revolutionary process.
The only problem, however, was that “this special form of the revolutionary process” wouldn’t conform to Stalin and Bukharin’s prescriptions. As the CCP delegate to the Seventh Plenum of the ECCI in November 1926 put it, there was a danger that the CCP had “sacrificed the interests of the workers and peasants” in safeguarding the alliance with the Guomindang at all cost. As the movement continued to grow in leaps and bounds, the CCP found itself trying to dampen its scope and aims.
Chiang Crushes the Revolution

A week before Chiang’s Northern Expedition marched into Shanghai, Stalin proclaimed:

Chiang Kaishek is submitting to discipline…Chiang Kaishek has perhaps no sympathy for the revolution but he is leading the army and cannot do otherwise than lead it against the imperialists…So they [the Guomindang’s right wing] have to be utilized to the end, squeezed out like a lemon, and then flung away.

As it turned out, the Communist Party was squeezed out and flung away.

On March 21, 1927 the workers of Shanghai took over the city and opened it up to Chiang’s forces. The Shanghai General Labor Union issued the call for a general strike. Six hundred thousand workers responded to the call–effectively paralyzing the city–and prepared to welcome Chiang’s forces into the city. But Chiang had different plans. He held back his advance some 25 miles outside the city, thereby allowing warlord Sun Ch’uan-fang’s thugs to begin an assault on the mass movement. Rumors abounded that Chiang had decided to throw in his lot with the reactionary warlords against the communists. Though Chiang’s intentions were clear, the ECCI ignored all the evidence. As late as March 30, the official bulletin of the ECCI in Moscow declared: “A split in the Guomindang and hostilities between the Shanghai proletariat and the revolutionary soldiers are absolutely excluded right now.”

When Chiang entered Shanghai, he immediately joined forces with the warlords and unleashed a reign of terror. Thousands of trade unionists were executed.

Even then, Stalin insisted that the CCP remain loyal to the Guomindang–although now it was the “left wing” of the Guomindang under the leadership of Wang Chin-wei who seceded from Chiang and set up a competing government (with communist participation) in Wuhan. The tragic course of events was predictable. A few months later, in July 1927, the “left Guomindang of Wang Chin-wei,” which Stalin had described as playing “approximately the same role” as the 1905 soviets, broke with the CCP and made peace with Chiang.

As Jean Chesnaux describes it:

The unions were dissolved, strikes were banned, the peasant unions were liquidated, the Communists were hunted down, and military workers were fired. A few weak attempts at retaliation were immediately crushed. A new chapter had begun.
Incredibly, after Shanghai the Comintern insisted even more doggedly that the CCP maintain the same course, insisting that the CCP “curb the agrarian movement” in order to placate the Guomindang leadership.
When it became impossible to conceal the scale of the defeat– as the Comintern once again tried to do–Stalin and Bukharin switched tacks. In what was an early rehearsal for the Comintern’s ultraleft Third Period, a policy of putschism was imposed on a dazed and disoriented Party leadership. Indeed, the Comintern absolved itself of any responsibility for events in China, choosing instead to scapegoat individual members of the CCP’s leadership. In August 1927, a special conference of the CCP was convened, where several top leaders were denounced and purged for restraining the workers and peasants and “retreating” in order to maintain the alliance with the Guomindang “left.”

Having led the CCP down a blind alley, the Comintern now conspired to bury it. A series of hastily-planned uprisings were carried out. They failed miserably, thousands of CCP members cut down in the process, and in their aftermath the CCP virtually disappeared from the cities. The Chinese revolution was led into a horrible defeat by Stalin and the Comintern. An estimated 230,000 people lost their lives over the year that Chiang established his power.

The Chinese workers’ movement had developed with astonishing speed. Though they constituted a small proportion of Chinese society, their concentrated power in China’s main cities placed them in a unique position as the spearhead of the Chinese revolution. Their struggles had been at the center of the revolution of 1925 to 1927. Now, decimated and defeated, they were abandoned by the CCP for the countryside.

The Shift to the Countryside

The initial turn to the countryside was not a result of a conscious political choice, but rather the result of a series of defeats and disasters. After an abortive rising in Chiangsa, Mao retreated with a force of a thousand into the mountains, later linking up with two other surviving bands to make up a rag-tag force of about 10,000. Poorly-armed, the CCP remnants were continually encircled and attacked by Guomindang forces, causing them to move several times. Yet they managed to establish several bases, including a major one in Jiangxi province. Then in 1934, surrounded and in danger of annihilation by Chiang’s forces, the CCP embarked on a retreat in what has become known as “The Long March.” Hounded by the Guomindang all along the way, Mao’s “Red Army” was forced deeper and deeper into the hinterland, finally settling in Shaanxi. Fifty thousand died along the way in a trek that covered over 5,000 miles.

Mao’s understanding of events–and solution to the problem–was almost entirely military. The CCP had suffered a military defeat at the hands of Chiang Kaishek and could only regroup if they established bases outside of the cities. The stress was no longer on workers’ social power and class struggle, but on military power:

Every Communist must grasp the truth, ‘Political power grows out of the barrel of a gun.’ Our principle is that the Party commands the gun, and the gun must never be allowed to command the Party. Yet, having guns, we can create Party organizations, as witness the powerful Party organizations which the Eighth Route Army has created in northern China… Everything in Yenan has been created by having guns. All things grow out of the barrel of a gun.
Who needs workers, let alone theory, when one wields the All-Powerful Barrel of the Gun? The idea that weapons and a Red Army are subordinated to the struggle for workers’ power was completely abandoned, along with workers’ themselves. The transformation of the CCP from a party seeking to lead the working class to power into nationalist guerrilla bands seeking to unify China and free it from foreign domination had begun.
Of all the ideas jettisoned from the old CCP, it’s important to note that Stalin’s “bloc of four classes” was not one of them. The CCP would express different views to those of the Guomindang, but they were formally agreed that their aim was national liberation. Workers’ power and socialism became decorative rather than operational. After the Third Period was dropped and alliances with “progressive” bourgeoisies became the Comintern’s line, criticism of Chiang gave way again to adulation. Thus, Wang Ming, the Chinese representative of the Comintern who had only recently denounced Chiang, stated in 1934: “We Chinese Communists openly declare that we support the Guomindang and the Nanking Government [Chiang’s government] and will fight shoulder to shoulder with them against Japanese imperialism.”

Praise for the butcher of Shanghai went from the comical to the absurd: Chin Po-Ku, Party leader in the mid-thirties, said:

China needs Generalissimo Chiang Kaishek’s leadership more urgently than ever today when the national crisis has reached a life and death stage. His remaining in office and his valuable services to the Chinese nation are essential and imperative in the struggle leading to final victory.

This new line was mirrored in the Party’s social program; Mao drew out the consequences of this policy:

We have already adopted a decision not to confiscate the land of the rich peasantry, and if they come to us to fight Japan, not to refuse to unite with them. We are not confiscating the property and the factories of the big and small Chinese merchants and capitalists. We protect their enterprises and help them to expand so that the materials supply in the Soviet districts necessary for the anti-Japanese campaign may be augmented in this way.
The Red Army’s recovery from the Long March was astounding. At first relatively small and hounded by the Guomindang, the CCP was able over a period of years to build a mass army numbering in the hundreds of thousands. They built upon the growing hatred among peasants of the Japanese invaders and upon the utter bankruptcy of Chiang, whose forces offered only token resistance to Japanese imperialism. Indeed, the Guomindang preferred plundering China’s wealth to fighting Japanese advances. Moreover, though they did not overthrow the landlords, the CCP, wherever it controlled territory, reduced land rents and put a stop to the arbitrary brutality of the warlords. At the end of the Second World War, the formal alliance between the CCP and the Guomindang dissolved into all-out civil war. Over a period of five years, Mao’s armies defeated the disorganized and completely corrupted forces of Chiang Kaishek and seized control of China.
The New Regime

The proclamation of the Peoples’ Republic of China in 1949 crowned one of the greatest nationalist revolutions in history. But what kind of revolution was it and what did it have to do with socialism?

Most obviously, it was not a workers’ revolution. The retreat of the communists into a series of rural bases was accompanied by a dramatic fall in the urban membership of the Party–in particular its working-class membership. In 1935, the Long March reduced the number of partisans from 300,000 to 30,000. The proportion of workers in the Party fell from 66 percent in 1926 to 2.5 percent in March, 1930, to 1.6 percent in September of that year, and dropped even more by the end of the year. The number of industrial workers continued to remain negligible right up to the conquest of power.

When the Guomindang banned strikes in 1937, a Communist Party spokesperson told an interviewer that the Party was “fully satisfied” with the government’s conduct of the war.

The working class played only a passive role in the victory. Indeed, as Mao’s army crossed the Yangtze River on its way to the southern cities, he issued a proclamation expressing the hope that “workers and employees in all trades will continue to work and that business will operate as usual.”

Nor can the Chinese revolution be characterized as a “peasant revolution”–not in any real sense. The leadership of the CCP was drawn, primarily, from the urban classes, particularly intellectuals. The peasants who did join the People’s Liberation Army–after several years of guerrilla war–could no longer be regarded as expressing peasant interests. They had become professional soldiers. The struggle was not a class struggle but rather a military one.

Capitalism as a social system was not the primary target. Mao’s 1945 On Coalition Government made this clear.

The national bourgeoisie at the present stage is of great importance…To counter imperialist oppression and to raise her backward economy to a higher level, China must utilize all the factors of urban and rural capitalism that are beneficial and not harmful to the national economy and the people’s livelihood and we must unite with the national bourgeoisie in common struggle.
Another CCP leader, Zhou Enlai, denounced egalitarianism as a
petty bourgeois outlook which encourages backwardness and hinders progress. It has nothing in common with Marxism, and a socialist system. It dampens down the enthusiasm of workers and employees in acquiring technical skills and raising productivity.
The revolution placed in power a party committed not to socialism, but to using its control of the state as a lever to develop China’s economy. With the first Five-Year Plan in 1953, the Chinese state attempted to launch a program similar to Stalin’s industrialization of Russia–starting from a much lower base.
With income per head three to four times less than that of Russia in 1928, the new plan required a policy of extreme hardship–of intensive exploitation–for the mass of the population. The plan accorded a whopping 55 percent of investment to heavy industry. But to implement such an ambitious plan, the Party had to have control of the economy. Over time, in a piecemeal way, the Party nationalized and placed sections of the economy under its control, absorbing into its ranks the former owners and directors of the private enterprises it nationalized. This was not socialist nationalization conducted by workers themselves, but the absorption of the old, private bourgeoisie into a new, bureaucratic state-capitalist class.

The Great Leap Forward

The CCP’s efforts to emulate Russia’s plan could not succeed because the industrial base from which China was starting was far lower. Investment for heavy industry required siphoning off an enormous surplus from agriculture–a process that in China caused a decline in agricultural production. It was clear by the end of the first Five-Year Plan that the economy’s growth rate had begun to slow down. The social consequences of trying to squeeze workers and peasants even more were becoming obvious to Party leaders. The Second Session of the Eighth Party Congress in 1958 acknowledged the “need to increase consumption, otherwise there would be a serious contradiction between the Party and the masses which would lead to unforgivable errors.” But Mao would have none of it. After an inspection trip around the country, Mao wrote:

During this trip, I have witnessed the tremendous energy of the masses. On this foundation it is possible to accomplish any task whatsoever…There are still a few comrades who are unwilling to undertake a large scale mass movement in the industrial sphere. They call the mass movement on the industrial front “irregular” and disparage it as “a rural style of work” and a “guerrilla habit.” This is obviously incorrect!
This was the old adage “where’s there a will, there’s a way” gone berserk.
Mao effectively pre-empted the second Five-Year Plan by launching a frenetic economic drive in 1958 which became known as “The Great Leap Forward.”

The whole basis of the Great Leap Forward was to jump-start the economy through a massive effort to mobilize the human resources of the entire country. Circumventing China’s large steelworks, thousands of backyard foundries were set up throughout the countryside. The aim was to overcome China’s economic and industrial underdevelopment. Fantastic targets were set and the Party cadres were instructed to exhort the masses to meet the targets.

At first, the grotesque character of the Great Leap Forward was offset by the excellent harvest of 1958 and by the fact that if Mao could ask for outlandish targets, the local cadres could just as easily report outlandish results. Thus, the output of steel, which was 5.3 million tons in 1957, allegedly reached 11 million tons in 1958 and was planned to reach 18 million in 1959. The grain output which was 175 million tons in 1957, allegedly reached 375 million tons in 1958, and was planned to reach 500 million in 1959. The Central Committee solemnly endorsed this farce and planned for more. Zhou Enlai repeated and supported these fantastic figures and announced that the targets laid in the second Five-Year Plan (1958-1962) had been reached in the plan’s first year!

The grand deception that was being foisted on China’s workers and peasants even intoxicated those at the top. In their book, Tell the World, Liu Binyan, Ruan Ming and Xu Gang tell an anecdote which is exemplary of the whole process:

One day, Bo Yibo was swimming with Mao. Mao asked him what the production of iron and steel would be for the next year. Instead of replying, Bo Yibo told Mao that he was going to effect a turn in the water; Mao misunderstood him and thought that he had said “double.”
A little later, at a Party meeting, Bo Yibo heard Mao announce that the national production of iron and steel would double the next year.
But despite Mao’s fantasies, objective reality could not be willed away in a collective act of faith. Each new method of production introduced to raise production, each innovation, instead led to a disaster. Thus, the backyard furnaces, designed to expand steel output, in fact deprived the modern steel mills of iron ore and coal–and produced an iron of too poor a quality to be refined.

The whole project could simply be dismissed as pathetic stupidity–were it not for the fact that it had a profound negative effect on China’s workers and peasants. Writes Simon Leys:

Not only did the movement fail to achieve the exhilarating aims it had set for itself, but the entire Chinese economy was plunged into chaos when the construction effort met paralysis and breakdown. Natural catastrophes followed to complete the disaster. The population, exhausted by the frenzied and fruitless efforts enforced upon it, began to experience famine.
Graphic details of the subsequent famine were provided in the official press only a few years ago, confirming what was already known through the testimonies of countless eyewitnesses. As early as 1961, China News Analysis reported some of these stories by Chinese travelers from all parts of China:
All spoke of food shortage and hunger; swollen bellies, lack of protein and liver diseases were common. Many babies were stillborn because of their mothers’ deficient nutrition…In Shenyang the newspaper reported cannibalism. Desperate mothers strangled children who cried for food.
It is now estimated that anywhere between 30 and 50 million people died in the famines that resulted from the “Great Leap Forward.”
The image of the frugal Mao leading a “people’s republic” is as outlandish as the targets set during the Great Leap Forward. According to Mao’s personal physician, Dr. Li Zhisui, a banquet was held for Mao’s birthday in 1959. While millions starved, the Party served

the finest, most expensive delicacies Chinese cuisine can offer. And as so many of my countrymen starved, I sat…celebrating the sixty-sixth birthday of the absent emperor Mao…
It was a paradise, free from restraint, subject only to the whim of Mao and the guilt that gnawed those of us whose consciences remained intact.

The disasters brought on by the Great Leap Forward produced revolts against the regime by workers and peasants, but also produced revolts within the Party bureaucracy itself. Mao was forced to retreat. Replying to an attack on the Great Leap Forward by Peng Teh-huai, Minister of Defense, Mao confessed the error of his ways. Effectively, he cut his losses and saved himself to fight for another day. At the Lushan Plenum of the Central Committee in August, 1959, Mao took the lead in attacking Mao–offsetting some of attacks leveled on him by his opponents:
Coal and iron cannot walk by themselves; they need vehicles to transport them. This I did not foresee. I and the Premier did not concern ourselves with this point. You could say that we were ignorant of it…I am a complete outsider when it comes to economic construction, and I understand nothing about industrial planning…But comrades, in 1958 and 1959 the main responsibility was mine, and you should take me to task…Who was responsible for the idea of the mass smelting of steel? I say it was me…With this, we rushed into a great catastrophe, and ninety million people went into battle…The chaos caused was on a grand scale, and I take responsibility. Comrades, you must all analyze your own responsibility. If you have to shit, shit! If you have to fart, fart. You will feel much better for it.
Mao agreed to step aside at the Second National People’s Congress in April 1959 and stepped down as head of state–complaining bitterly that he was being treated like a “dead man at his own funeral.” The dispute was formally settled, but the cracks in the ruling bureaucracy could not be permanently papered over.
Unfortunately, this was not the last “great catastrophe” Mao would engineer. Simon Leys writes:

Three themes in Mao’s thinking give us a clue to the philosophy of the Great Leap Forward. (1) China’s strength lies in her poverty: China is a ‘blank page’ lying open to Mao’s inspiration so that he may paint upon it the unspoken poem of his revolution. (2) Revolutionary fervor alone can and must effectively overcome material obstacles and so transform matter (the primacy of ‘red’ over expert.) (3) The villager’s gift for improvisation and native ‘make-do and mend’ (t’u fang-fa) can and must effectively replace the scientific, technical and industrial means.
These themes would be repeated, ad nauseum, during the “Great Cultural Revolution”–Mao’s fight to regain power.
Stalin and Mao

Not long after the death of Stalin in 1956, Russia and China severed diplomatic ties. The Sino-Soviet split in 1960 produced splits in the Communist Parties internationally. For many radicals in the 1960s, Mao was seen as a more radical alternative to Soviet-style communism. Nothing could be further from the truth.

Insofar as Mao had any allegiances to Russia, it was to Stalin. This is certainly not because Stalin helped the Red Army’s march to power. Quite the contrary. During the war, Stalin took pains to belittle and deride the Chinese Communists, telling Harriman, the U.S. ambassador, on June 10, 1944: “The Chinese communists are not real communists. They are ‘margarine communists’.”

It was only when the victory of the Peoples Liberation Army was certain, that Russia changed it line. Mao could forgive Stalin for this–after all, he understood the need to appease–in this case not the national, but the international–bourgeoisie.

What tied the two dictators together went much deeper. In Mao’s China, Tony Cliff writes:

The basic facts of the Stalinist regime are the subordination of consumption to the needs of quick capital accumulation, the bureaucratic management of industry, the limitation of workers’ legal rights, the enforced “collectivization” of agriculture, the differentiation of society into privileged and pariahs and the totalitarian police dictatorship. All these traits are to be found in Mao’s China…
Stalin and Mao were both elevated as supreme leaders to the status of all-seeing, infallible demi-gods. But whereas Stalin “tried to pull Russia up by her bootstraps industrially-militarily,” writes Cliff, “Mao tries to do the same thing without boots and without straps.” Consequently, the cult of personality around Mao as a leader capable of all things reached even greater heights. Superhuman feats were attributed to him, like swimming nearly 14 kilometers in the Yangtze river in just over an hour, faster than the world record!
Mao’s writings were treated as holy writ, his pictures and statues placed in every nook and cranny of China. Poems and songs were written comparing him to the rising sun. One example, from commanders and privates in the People’s Liberation Army, will suffice:

Respected and beloved Chairman Mao, if all the trees in the world were pens and all its waters ink we still could not say enough about your love and concern for our upbringing. You are our greatest teacher, leader, supreme commander and helmsman.
The Cultural Revolution

“The Cultural Revolution,” writes Simon Leys in The Chairman’s New Clothes,

had nothing revolutionary about it except the name and nothing cultural about it except the initial tactical pretext. It was a power struggle waged at the top between a handful of men and behind the smokescreen of a fictitious mass movement. As things turned out, the disorder unleashed by this power struggle created a genuinely revolutionary mass current, which developed spontaneously at the grass roots in the form of army mutinies and workers’ strikes on a vast scale. These had not been prescribed in the program, and they were crushed pitilessly.
Burned by the disaster of the Great Leap Forward, the ruling bureaucracy eased Mao from control over the day-to-day running of the state, and relegated him to a figurehead with little power. The disasters of collectivized production were gradually replaced by private landholding in the countryside and economic incentives like piecework and greater managerial control in productive enterprises.
Mao counterattacked to regain his leading position in the Party and the state. In January 1965, he produced a document which launched the “Great Cultural Revolution.” The document argues:

There is a sharp class struggle, with the enemies of socialism seeking to take advantage of a “peaceful evolution” to restore capitalism. The class struggle is reflected in the Party, where various levers of command have been corrupted or usurped.
It is a question of rectifying and purging those who, bearing the authority of the Party, have taken the capitalist road–some of them are very highly placed, and beneath their mask have changed their real nature.

Mao had tremendous prestige, but little real power. For Mao to regain power, he had to attack sections of the bureaucracy. But the bureaucracy paid lip-service to his ideas and then effectively sabotaged them. Mao needed to create a counterforce where he had none. Unable to find an instrument within the bureaucracy itself, Mao resorted to looking outside of the Party apparatus to a force which he thought he personally could control. Unorganized youth and students became that force, whom he urged to form Red Guard detachments and destroy his adversaries.
On August 18, 1966, a million Red Guards arrived in paramilitary formation to hear Defense Minister Lin Biao, Mao’s “closest comrade-in-arms” explain the big-character poster “Bombard The Headquarters.”

The Headquarters, they found, were those of the Communist Party, where they would find “persons in authority taking the road back to capitalism.” China’s 11 million students were urged to go out, seek and destroy. To speed up the process, Mao shut down much of China’s educational system in 1966. For several years, China’s school and universities ceased functioning altogether. Mass meetings, show trials, processions and street fighting became a regular feature of life. Bands of young people ransacked homes in search of proof of bourgeois ideology, destroyed historical monuments as “feudal remnants” and burnt “bourgeois” books.

In the beginning Mao was elated with the activities of the Red Guards. But by August and September, it was clear that things were moving in a direction not anticipated by Mao. Workers and Red Guards clashed, and a series of directives were issued by Mao ordering workers to stay at work. A collapse in production and a descent into social chaos were clearly results of the campaign. Moreover, the anti-capitalist slogans and cries for equality raised by the Red Guards were taken seriously by thousands of ordinary people. The “Great Cultural Revolution” threatened to unleash a real revolution. Mao tried to beat a hasty retreat by softening some of the attacks on individual Party leaders, and on the Party itself.

Once more, Mao apologized for his mistakes: “I myself had not foreseen that as soon as the Beijing University poster was broadcast, the whole country would be thrown into turmoil…Since it was I who caused the havoc, it is understandable if you have bitter words for me.”

But the apology didn’t end the revolt. Again, Leys:

The smoldering discontent that had accumulated over the years just beneath the surface, unseen by Mao, now flared up. At the turn of the year, Shanghai workers exploded in a rash of strikes and agitation that were echoed around the country. They raised quite different issues and not at all “cultural,” issues of wages, conditions, and the right to independent trade unions, all the issues of the “economism” that Mao had denounced for years. This time, Mao did not retreat defensively. In the third week of January, the army was ordered to take over the administration of the country. The army was to take control of factories, villages, institutions of finance and commerce, of learning, Party organs, administrative and mass organizations.
One commentator describes the mushrooming of the “self-organization of workers” which “spread like a plague all over China.”
What had begun with the organization of “contract workers” (seasonal workers employed on a temporary basis) in 1966, spread to the whole working class in the following years. In some places, autonomy and indirect control of the work-group level was temporarily transformed into autonomy at the factory level. It took the army two years–from 1968 to 1970–to clear the way for the return of the Party to the factories.

All through the 1970s there have been outbursts of trouble, very often with roots in the factional struggles of the Cultural Revolution.

Those who had actually believed Mao’s rhetoric about revolution, about the importance of the youth revolt, were in for a rude shock. In July 1968 he told the four main Red Guard leaders: “I am the black hand that suppressed the Red Guards.” State repression was intensified.

By 1969 the regime had successfully regained the upper hand. The need for restoring stability was paramount. Armed clashes with Russia in that year placed the question of defense–and therefore of economic development–back at the center of the bureaucracy’s priorities.

The End of the Road for Mao

The main preoccupation of China’s leaders in the period after the Cultural Revolution was to strengthen the central state apparatus over the main institutions of Chinese society, reverse the massive drop in production and repair the economy, reestablish the Party’s authority and mend China’s diplomatic fences. This served to temporarily cement all factions within the bureaucracy around the need to reestablish order. Despite the various splits and feuds at the top, all involved understood the need to defend their positions from the threat from below.

There was a sharp retreat from the slogans and aims of the Cultural Revolution. By 1981, the Resolution on CPC History published by the Party officially characterizes the Cultural Revolution as responsible for “the most severe setback and the heaviest losses suffered by the Party, the state, the people since the founding of the People’s Republic of China.”

The Party no longer pushed “Bombard The Headquarters” but “It is the Party that exercises leadership in everything.” By 1970, the economy had resumed its growth under the slogan “Grasp revolution and promote production.” A new diplomatic initiative was launched in 1971 when Beijing invited the Vietnam War criminal Richard Nixon to visit China in February, 1972. In the countryside, private plots for peasants were no longer denounced but praised. Thousands of Party cadres were rehabilitated including some of the principal Party leaders ousted during the Cultural Revolution–like Deng Xiaoping. Indeed, all of the elements that were later to become known as Deng Xiaoping’s “reforms” were launched during this period–even if more limited and tentative. The direction of the central leaders of the Party–especially Mao and Zhou Enlai–was clearly set out.

The history of the 1970s is largely punctuated by big purges and shakeups in the bureaucracy, this time against those who had risen to prominence during the Cultural Revolution. This was not a smooth process, but one which moved in fits and starts. Overall, it represented a departure from the extreme voluntarism of the Great Leap Forward and the Cultural Revolution. Simon Leys, once again, summarizes it very well:

In Maoist sailing, each lurch of the boat meant spilling half of the crew overboard: in the end, after having been repeatedly thrown in the water and fished out, then thrown in again and fished out, the wretched cadres, exhausted and terrified, just kept hanging on for dear life to the slippery ideological bulwarks without daring a single move, or attempting the slightest initiative. This state of paralysis, uncertainty and fear, so damaging to the basic functioning of government, further confirmed the new leadership in its determination to eradicate the last active remnants of Maoism, while on the other hand confining the doctrine itself to a safe and prophylactic isolation of a glass showcase in a holy museum.
In August 1970, Chen Boda, Mao’s personal secretary for 30 years, a man slavishly devoted to Mao who acted only as his shadow, who was rewarded for his loyalty by being promoted to number four in the hierarchy (after Mao, Lin Biao, and Zhou Enlai), was suddenly accused of being a “sham Marxist and political swindler.” But this was only the beginning. Two and a half years later Lin Biao, a leading military figure in the Party for more than 40 years, Mao’s chief supporter as head of the PLA in the Cultural Revolution, and the Vice Chairman of the Party, was exposed as a fraud. He was no longer Mao’s “close comrade-in-arms,” but a “bourgeois careerist, conspirator, counter-revolutionary double dealer, renegade and traitor” and his upholding of Mao’s Thought had now become “trash [representing] the wishes not only of the toppled landlord and bourgeois classes for restoration but also of the new bourgeois elements in socialist society.”
Lin Biao’s downfall was accompanied with the glorious reinstatement of Deng Xiaoping, who for years had been vilified and pilloried by hundreds of millions of militants. Forever the pragmatist, Mao knew that Deng, an old-timer with roots in the Party, was the only one capable of running the state and disciplining the People’s Liberation Army–whose role had greatly expanded in running the country since 1969.

In August 1973, at the Tenth Party Congress, Deng Xiaoping was formally rehabilitated and he became deputy prime minister–effectively heir to Zhou Enlai. But his path to power was blocked by a powerful group of leaders of the Cultural Revolution which included Mao’s spouse, Jiang Qing. The “Gang of Four”–Jiang Qing, Zhang Chunqiao, Yao Wenyan, Wang Hongwen–as they were known, made a bid for power while Mao was still alive but unable to supervise the project he had begun. They were able to manipulate the removal of Deng from his posts in the Party and were under the illusion they could reverse the whole course of development since the end of the Cultural Revolution. Deng and his cohorts were denounced in 1976 as “leaders of the Party linked to the bourgeoisie of our society, as well as landowners, rich peasants, counter-revolutionaries, bad elements, and badly re-educated bourgeois right wingers.”

Their illusions were quickly shattered. The death in 1976 of three of the most central leaders of the CCP–Zhu De, Zhou Enlai and Mao–gave the central leadership of the Party the opportunity to silence the Gang of Four without fear of Mao’s intervention. Months later, at the Eleventh Congress, Deng was made Vice Chairman of the Party–as well as Vice Premier, Chief of Staff of the PLA, and Vice Chairman of the Military Affairs Commission. The Gang of Four was, conveniently, denounced as “typical representatives in our Party of landowners, rich peasants, counter-revolutionaries, bad elements, as well as other old and new bourgeois elements.”

Deng continued, but with increased vigor and no opposition, the program that had been launched almost a decade earlier. He informed the 11th Party Congress that there be “less empty talk and more hard work.” In January of 1979, he assured the U.S. that the “honeymoon would last for a long time.” “There is much in common between us on matters of global strategy,” he said, and “the antihegemonies principle is our greatest common point politically.”

The Cultural Revolution had finally been buried. As a recent ‘Letter from the Central Organs to the Party, Army, and People’ put it, when Deng took over in December 1978, “China was faced with a very grim situation and extremely arduous tasks. It was imperative to break away from the calamities caused by the ‘Great Cultural Revolution.’”

Calamities indeed there were. And there was clearly a break with the “Great Cultural Revolution.” But this break was not a sign of a fundamental transformation of class relations in China. Rather it was another path by which the aims of China’s ruling class could be most effectively be met. Workers in China are as much out of power today as they were under Mao. Socialists should not in any way give credence to the idea that socialism in any form existed or exists now in China.

The mythology spun by market-apologists–which include many disillusioned Maoists–must also be rejected. The Tiananmen Square massacre of 1989 was not an aberration on the road to democracy. But that is the subject of the next article.

Special sidebars:

Deng and Mao

The mainstream media has downplayed Deng’s role in the Tiananmen Square massacre and highlighted his skill at transforming China into a market economy. Most commentators treat Deng’s policies as representing a sharp break from the politics of other CCP leaders, especially Mao.

The problem with this view is that it forgets that Deng–who became a member of the party in 1924–shared an outlook that united him with Mao and other party leaders more than it divided them. Depending on what period is selected, Mao and Deng can be shown to have the identical view on China’s future. The official ideology which has them representing the “proletarian” and “capitalist” interests respectively reflects not class struggle but the clashes within the same class of bureaucrats. The different fractures and struggles in China’s top leadership represented the falling out–and often different strategies–for achieving the same ends. By the early 1970s, Deng’s “reforms” were known as Mao and Zhou’s reforms.

The most frequently mentioned saying of Deng, “It doesn’t matter if a cat is black or white so long as it catches mice,” is interpreted as meaning that it didn’t matter whether or not China was socialist or capitalist. But this is only accepting the meaning given this phrase when Mao wanted to get rid of Deng. The real discussion was much more limited. Deng’s full statement reads as follows:

For the time being, the most important thing is to increase food production. In so far as individual enterprises can further this production they are a good thing. It is not important whether the cat is black or white as long as it catches mice…The best form of production is that which, within the framework of local conditions, is most likely to restore and develop production.
Deng and several other leaders of the CCP became irritated at Mao’s habit of acting independently of the bureaucracy. It became more than an irritation after Mao launched the Great Leap Forward that set back the economy by a decade. Deng’s approach was to try and curb Mao and concentrate power among the party leadership.
Mao couterattacked and ousted Deng for a time. But after the chaos created by the Cultural Revolution, Mao brought Deng–a tried and tested organization man–back to restore the authority and prestige of the Party.

The Tiananman Square massacre was not an aberration. Deng always repressed dissent that threatened him and tolerated that which served his purposes. He organized the inner-party “rectification” campaign in 1937; ran the “anti-rightist” campaign in 1957; shut down the Democracy Wall protest in 1978; launched the “anti-spiritual” campaign of 1983; directed another purge in 1983-86 and expelled leading dissident intellectuals in 1987. Like Mao, Deng died with blood on his hands.


China’s Foreign Policy

If the Maoist rhetoric served to foster illusions about the character of the regime in China, the foreign policy it pursued should have dispelled any doubts about its character.

Until the break with Moscow in 1960, China’s foreign policy mirrored that of the USSR. So, for example, after the suppression of the Hungarian revolution by Russian tanks, the Chinese press came out in full support of Moscow. The editorial of November 5, 1956 in the People’s Daily, under the heading “Celebrate the Great victory of the Hungarian People,” says, “The joyful news has arrived that the Hungarian people. . .with the support of the Soviet armed forces have overthrown the reactionary Nagy government which betrayed the Hungarian people and the Hungarian nation.”

Stalinist orthodoxy was combined with Third World nationalism. The underdeveloped countries, according to Mao, had become “the storm centers of world revolution. . .undermining the foundations of the rule of imperialism . . .[so that] the whole cause of the international proletarian revolution hinges on the outcome of the revolutionary struggles of the people of those areas, who constitute the overwhelming majority of the world’s population.”

The break with Russia and a series of foreign policy failures in the early 1960s forced the bureaucracy to shift. The Chinese line, exalting the revolution and preaching “fraternal” obligations between Communist Parties, was received coolly by other Communist Parties–with the exception of Albania. Alliances with nationalist governments fell flat, largely because China’s Indonesia policy failed miserably. Sukarno’s foreign policy had suited China, and he had also called on the powerful Indonesian Communist Party (PKI) to cooperate with the “national bourgeoisie” in the framework of an anti-imperialist front. This course, however, left the PKI virtually defenseless when the right began an all-out assault to wipe it out. The fall of Sukarno and the resulting disaster for the PKI ended China’s hopes of creating a new Third World UN.

The political direction that Chinese foreign policy took during the Cultural Revolution was an extension of the previous attempts to develop a ‘third alternative.’ According to Lin Biao, in 1965 the world situation was similar to that of guerrilla struggle in China:

Taking the entire globe, if North America and Europe can be called “the cities of the world,” then Asia, Africa and Latin America continued the “rural areas of the world”…In a sense, the contemporary world revolution also presents a picture of the encirclement of the cities by the rural areas. In the final analysis, the whole cause of the world revolution hinges on the revolutionary struggles of the Asian, African and Latin American peoples who make up the overwhelming majority of the world’s population.

A doctrine of self-sufficiency was now preached–revolutionaries of each country were to stand on their own two feet. In practical terms, moral support became the only kind of solidarity to be expected from the Maoist regime.

But this was still better than what was to follow. In the late 1960s, Zhou Enlai’s became the dominant voice in foreign policy. The winding down of the Cultural Revolution and the 1969 attack by the Soviet Union resulted in an abrupt change of line. The USSR was now China’s “Number One Enemy,” and the regime set out to make friends with anyone it could–including yesterday’s “Number One” enemies. Foreign Minister Chen Yi’s remark in 1965, “Peaceful coexistence with U.S. imperialism, which is pushing ahead its policies of aggression and war, is out of the question,” was quickly buried. A shift in U.S. policy toward China in 1971 strengthened this development. By 1973, the U.S. was no longer the enemy, but on the contrary, became a friend.

Talk of “storm centers of revolution” disappeared. The Chinese government made not a sound over the massacres of the population of Bangladesh, and left-wing opposition in that country was discouraged. The Ceylon (Sri Lankan) government’s liquidation of the left was applauded. In the Sudan, China supported General Nimeiry’s government when it crushed the pro-Soviet Sudanese Communist Party and hanged its members. After the September 1973 military coup in Chile, which overthrew Salvador Allende’s Popular Unity government, the first country to expel the ambassador of Allende’s fallen government was China. China supported Pakistan’s military dictatorship against leftist rebels. President Nixon was wined and dined in Beijing just after the mining of Haiphong in North Vietnam by the U.S. In Angola, China supported the CIA and the South Africa-backed FNLA. In Europe, China supported the strengthening of NATO as a counterforce to the Eastern Bloc. When the fascist Spanish dictator Franco died, Chinese party leader Zhu De was sent to his funeral. Zhu shared the experience with Chile’s Pinochet and Bolivia’s General Banzer–the only heads of state from Latin America who attended.

A broad range of intellectuals had become enamored with the Cultural Revolution. The French philosopher Louis Althusser was, according to Perry Anderson, the most

prominent and influential Marxist thinker to invest much of his hope for a democratic communism in the Maoist project…But the wave of sympathy and admiration for the Cultural Revolution swept up a very broad range of socialist intellectuals, not to speak of student militants: affecting in different degrees and different ways Dutschke and Enzensberger in Germany; Poulantzas, Glucksmann and Kristeva in France; Rossanda and Arrighi in Italy; Sweezy and Magdoff in the USA; Robinson and Caldwell in Britain.

Many of these intellectuals had replaced one Stalinist–Stalin–with another–Mao. Thousands of people looked to China as an alternative to Western capitalism. But the verbal extremism used by the Chinese bureaucracy began to lose its appeal. The gap between what China did and who it leant support to and its professed aims was getting too wide. The result was mass disillusionment among a whole layer of people who had become radicalized in the 1960s and 1970s.

The Thoughts of Chairman Mao

One of the enduring myths about Mao is that he began to see through the bankruptcy of the Comintern’s policy in China as early as the mid-1920s and began to formulate an alternative strategy. The mythmakers argue that Mao stressed the revolutionary role of the peasantry in countries where the working class was a tiny fraction of the population. In short, argue his admirers, Mao adapted Marx and Lenin to fit conditions in China–and by extension other countries like it.

But this is pure fantasy. One of the chief characteristics of Chinese Stalinism was its anti-intellectualism, its systematic ostracism and persecution of intellectuals and its break with Marxism. Stalinism in Russia of course shared these qualities. But Stalin was forced to justify himself by some reference to orthodoxy–to some distorted Marxism. Mao had no such obligation. What is startling is not the originality of Mao Zedong Thought, but how banal, parochial and vulgar his thinking is. This is immediately apparent on even the most cursory reading of Mao’s writings and speeches. Leszek Kolakowski’s three-volume study of the main currents of Marxism concludes:

Maoism, especially the theoretical writings of Mao himself, appear in fact extremely primitive and clumsy and sometimes even childish; in comparison, even Stalin gives the impression of a powerful theorist… Maoism in its final shape is a radical peasant Utopia in which Marxist phraseology is much in evidence but whose dominant values are completely alien to Marxism… His two philosophical essays are a popular and simplified exposition of what he had read in Stalin and Lenin, plus some political conclusions adapted to the needs of the moment; to put it mildly, much good will is needed to perceive any deep theoretical significance in these texts.
Even more stunning, therefore, is the fact that Mao’s pronouncements have assumed the status of political thought and philosophy among many so-called revolutionaries and Marxists.
Millions of copies of Mao’s “Little Red Book”–a short collection of homilies and quotes taken from different articles and speeches of Mao–were produced and sold all over the world. At one time in the late 1960s and early 1970s, Maoist groups were dominant both in Europe and the U.S. For many, Mao had made a critical contribution to Marxism.

Mao rose to prominence in the party not because of his “Thoughts” but in spite of them–he had very few of a Marxist variety and had little attachment to the working class.

Mao spoke of the divisions in society as being between “bad gentry” and “good gentry,” “corrupt officials” and “honest officials,” rather than peasants against landlords, officials and the gentry. Likewise he spoke of a “new democratic order,” not of a social revolution.

Guerrilla war, and not peasant revolution, was elevated into a theory. The “Red” Army, and not the poor peasants, became the new all-encompassing reality–political as well as military, philosophic as well as economic. The CCP as armed force might or might not win support from the peasantry when it took over an area and introduced agriculture reform. But with or without the peasant’s backing, its military control of the area gave the party state power over the peasantry.

Mao’s “contribution” was to elevate the immediate tactical necessity into a general truth. For Mao, theory became an afterthought–a convenient means to justify particular actions and tactics. Since the revolution was not to be the conscious act of a class, but fundamentally a military struggle, theory was a luxury, not a necessity. There was no longer a necessary connection between theory and practice.

What Mao had concluded theoretically from the trials of the People’s Liberation Army is that with the proper amount of effort anything is possible. Turning Marx on his head, Mao thus declares:

Men are not the slaves of objective reality. Provided only that man’s consciousness be in conformity with the objective law of the development of things, the subjective activity of the popular masses can manifest itself in full measure, overcome all difficulties, create the necessary conditions, and carry forward the revolution. In this sense, the subjective creates the objective.
Socialism is no longer tied to the question of economic development, but to sheer will power. The approach was summed up in Mao’s astonishing description of the Chinese people as subjects to be molded by the party.
Apart from their other characteristics, China’s 600 million people have two remarkable peculiarities: they are, first of all, poor, and secondly blank. That may seem like a bad thing, but is really a good thing. Poor people want change, want to do things, want revolution. A clean sheet of paper has no blotches, and so the newest and most beautiful words can be written on it, the newest and most beautiful paintings can be painted on it.
For Mao, class becomes a question of mood, of thought, of allegiance to Mao and to the Party: Mao uses the terms “proletariat,” “peasant,” “capitalist,” in a similarly loose fashion. The terms do not refer to objective categories, to different relationships to the means of production, but to political attitudes, degrees of support for the Communist Party (which is itself the “proletariat”).
Mao’s extreme voluntarism is the most shockingly expressed in his view of nuclear annihilation:

If the imperialists should insist on launching a third world war, it is certain that several hundred million more will turn to socialism. Then there will not be much room left in the world for the imperialists, while it is quite likely that the whole structure of imperialism will utterly collapse.
Small price to pay!
Though Mao clumsily used some of the rhetoric of Marxism filtered through the prism of Stalinism, his thought is miles away from Marxism. Nationalism, not Marxism, was the main strand in Mao’s thought. Mao and the CCP did exactly what Lenin had warned against in 1920: painted nationalism in communist colors.


Several books and articles were used liberally in writing this article. Several were published in International Socialism Journal [old series], a journal published by the ISO’s sister group in Britain. These are:

“Marxism: Leninism-Stalinism-Maoism,” by Nigel Harris, International Socialism 26

“Crisis in China,” by Tony Cliff, International Socialism 29 (reprinted in ISJ 61)

“Wither China,” by Tony Cliff, International Socialism 37

“China” by Nigel Harris, International Socialism 78

“Chou Enlai, Obituary,” by Nigel Harris, International Socialism 85

“Mao and Marx,” by Nigel Harris, International Socialism 89

“Mao Zedong,” by Nigel Harris, International Socialism 92

Several books deserve to be read:

The Tragedy of the Chinese Revolution, by Harold Isaacs

Mao’s China, by Ygael Gluckstein

The Mandate of Heaven, by Nigel Harris

Marxism and Freedom, by Raya Dunayefskaya

The Chairman’s New Clothes, by Simon Leys

Broken Images, by Simon Leys

Chinese Shadows, by Simon Leys

Problems of the Chinese Revolution, by Leon Trotsky

The Road to Tiananmen Square, by Charlie Hore

Simon Leys is one of the most informed and astute–not to mention extremely talented and humorous–writers on China. His books are unfortunately out of print. Anyone wanting a sampling should get his article in the New York Review of Books, October 11, 1990. “The Art of Interpreting Nonexistent Inscriptions Written in Invisible Ink on a Blank Page.”

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China: Deng’s Legacy-Ahmed Shawki

Posted by admin On November - 29 - 2018 Comments Off on China: Deng’s Legacy-Ahmed Shawki

This is the second of a two-part article by Ahmed Shawki (the first, China: From Mao to Deng, appeared in ISR #1) that looks at the Deng Era and shows how China’s enormous growth rates so lauded by the West are creating gross inequality, unemployment and regional imbalances that threaten the reemergence of instability and struggles even more explosive than those of Tiananmen Square in 1989.

In 1994, Business Week produced a special issue on “21st Century Capitalism.” The editors could hardly contain themselves:

The death throes of communism clearly gave birth to the new era, leaving most nations with only one choice–to join…the market economy…Almost 150 years following the publication of the Communist Manifesto…the bourgeoisie has won.1

Unbridled greed was, according to Business Week, the only–and most moral–way to ensure human progress. Strangely, though, despite all the talk of the victory over communism, the symbol of this “new age” capitalism was, and still is, a “Communist” country. Less than a decade after the brutal massacre of protesters in Beijing’s Tiananmen Square, China has become the toast of western capitalism and the mass media.

The following description of China by the New York Times is typical of the salivating adulation which litters the press:

There is not an adjective that soars high enough or detonates with enough force to describe China’s economic explosion or the promise of its future. One fifth of humanity, for decades locked in the dungeon of Mao Zedong’s proletarian revolution, where for decades they were whipped and exhausted by meaningless mass movements, are now fully unleashed in an epic pursuit of material wealth.2

In these “We’re all pro-market” times, Reaganite supply-siders and ostensibly left-wing academics have found common ground in admiring China. A recent article in the Wall Street Journal, for example, by a senior fellow at the Hoover Institution, argues that China is the model to emulate. In what can only be described as a rather idiosyncratic article, Alvin Rabushka concedes: “It is somewhat ironic that Communist China… provides the best evidence of the supply-side approach.”3

Conservatives are not the only ones to have caught “China fever.” There are some on the left who accept the view that China’s market reforms have produced miracles–and they simply declare them “socialist.” As a recent article in New Left Review put it:

Born-again post-Maoist China scholars now discourse about entrepreneurship, market efficiency and rationality. Marxist philosopher John Roemer applauds China’s market-oriented township and village industries (TVEs) as models of “egalitarian” “market” socialism.

And Paul Bowles and Xiao-yuan Dong, writing in the same issue of NLR assert without irony, that “China is not simply a case of successful state-led development, it is an example of successful socialist state-led development.”4

China has certainly experienced rapid growth. But for those who want to look below the surface, severe contradictions underlie the process. The glitter of China’s new-found wealth belies growing extremes of wealth and poverty, both regionally and between social classes. Moreover, China’s “miracle” economy is riven with contradictions which threaten to throw the country into massive economic, social, and political crisis.

The origins of market reform

The origins of Deng Xiaoping’s post-1978 market reforms lie not in some disagreement between pro-socialist and pro-capitalist bureaucrats, but in the economy’s increasingly poor performance after the First Five-Year Plan (1953-57). Mao’s brainchild, the “Great Leap Forward,” produced an economic disaster and famine in the countryside. It also produced a sharp battle within the leadership of the Chinese Communist Party (CCP). This battle involved all the key figures who shaped the major political events in the three decades before Deng’s accession to power.5

The basic framework of China’s command economy was modeled on Russia’s and set up with Russian help during the First Five-Year Plan, and remained intact until the late 1970s. Overcoming China’s economic backwardness was the new regime’s central preoccupation.

The bulk of state investment in the Mao era went to heavy industry; only 12 percent of total state investment went to agriculture and barely 5 percent to the development of consumer goods industries. Not surprisingly, therefore, while the gross output of heavy industry increased ninety-fold between 1949 and 1979, light industry only increased twenty-fold and agriculture a pitiful 2.4-fold.

The fundamental problem with the “Great Leap Forward” was not simply that it emphasized heavy industry over agriculture; it was an unmitigated disaster which led to the deaths of millions–even as Chinese leaders were trumpeting China’s leap from feudalism to communism.

It is only possible to understand today’s “reforms”–and the various roles played by key individuals–by understanding the monstrous scale of the disaster that Mao willfully inflicted on China.

Mao’s Great Leap Forward caused grain yields to decline by 25 percent–41 percent for wheat yields alone, and the number of pigs declined by almost half. Yet during this same period Mao’s regime exported almost 12 milion tons of grain and record amounts of pork and other products.6

Not until after Mao’s death in 1976 did per capita grain production reach the level of 1957.7 Millions of peasants died in the famine caused by Mao’s policies. A Washington Post reporter, Daniel Southerland, reports:

One government document that has been internally circulated and seen by a former Communist Party official now at Princeton University [Chen Yizi] says that 80 million died unnatural deaths–most of them in the famine that followed the Great Leap Forward.8

By the end of 1960, it was no longer possible to ignore the death that stalked the countryside–with the exception of Mao, who still insisted that all was proceeding well.

China is not going to sink into the sea and the sky won’t tumble down simply because there are shortages of vegetables and hairpins and soap. Imbalances and market problems have made everybody tense but this tension is not justified, even though, I am tense myself.…You ought to try sleeping pills if you feel uptight.9

The regime was in real danger of collapse. Liu Shaoqi and Deng Xiaoping successfully challenged Mao and began implementing a nationwide emergency program which allowed production teams –though not individual peasants–to contract out fields. Most of the cadres who had been denounced as “right opportunists” and purged were now rehabilitated. The collective farming system was modified to allow peasants to raise their own livestock and grow food on small plots of wasteland. They could trade everything in open markets except grain, which went to the state. Peasants were permitted to grow a certain amount of grain for the state on communal land but also to sell the remainder.

Mao launched a counterattack to regain his diminished authority. Between 1962 and 1966, the country was effectively paralyzed by the bitter fight at the top. Jasper Becker writes:

For twenty years after the famine China stagnated. The population grew rapidly but little was built…After the famine, Mao ruled for another fourteen years but remained obsessed with justifying his Great Leap Forward and rooting out those whom he felt had betrayed him. Huge numbers were killed or imprisoned in the Cultural Revolution.10

As Simon Leys commented bitterly, but not inaccurately: For Mao, “The ruin of China was a small price to pay if, in the end, this savage chaos could enable him to recover the power that the Central Committee had forced him to relinquish.”11

The Road to Deng

Deng Xiaoping’s rehabilitation after the fiasco of the Cultural Revolution (see ISR #1) was made necessary by the fact that he more than anyone else of the old timers carried enormous political weight, not only among the party bureaucracy, but critically among the leaders of China’s military, the People’s Liberation Army (PLA). Deng had another strength: He had always pushed for more systematic economic policies and development. In the early 1970s, Deng stressed the need for a return to order, the re-establishment of the leadership’s authority over the party, and the party’s authority over society–and in particular over economic matters. As Deng had said to a Communist Youth League gathering in 1962:

In the past, we’ve had too many political movements…When it comes to ways of optimizing the relations of production, I think we should take this attitude. Adopt whatever pattern will restore and develop agricultural output in each locality quickly and easily.12

Mao Zedong died in September 1976. But in many respects “Maoism” had already died–under the weight of its own failure and through the efforts of other members of the bureaucracy. Mao’s body would be embalmed and he would be hailed as the “Great Helmsman,” but the ruling bureaucracy had to marginalize him and his policies in order to assure the survival of the regime that he had played so large a role in creating.

On September 18, 1976, Hua Guofeng delivered the official eulogy on Mao, establishing himself as Mao’s legitimate successor. In it, he called for a deepening of “the struggle to criticize Deng Xiaoping.” Hua claimed Mao had told him on his deathbed, “With you in charge, I am at ease,” to promote himself as Mao’s legitimate succesor. Hua and his associates further and rather rashly pledged in a highly publicized declaration in February 1977 “to support whatever decisions were made by Chairman Mao,” a declaration that was to earn them the name the “whateverist faction.”

Hua’s power was based on a precarious balance that could not last. Relying heavily on Mao’s alleged favorable nod toward him on his deathbed, he balanced between attacking the Gang of Four and denouncing Deng. But once Hua had arrested the Gang of Four, he was inevitably forced to open the door to Deng. Hua’s fortunes were further compromised when his proposed ten-year economic plan–ironically, modelled on earlier plans proposed by Deng himself–overheated the economy and forced the regime to halt a number of major capital-intensive construction projects. In a short time, Deng was able to sideline Hua and ease himself into positions of party leadership. The Eleventh Party Congress placed the official stamp on Deng’s victory. The Congress called for an effort to “bring about great order” across the country.

Launching the Reforms

At a national party meeting in 1978, the Third Plenum of the Thirteenth Central Committee, the centrality of economic development was made paramount. The meeting declared: “Economic construction is the core of our national work; on the one hand, we pursue reform and the open door policy; on the other, we uphold the Four Cardinal Principles.” The Four Cardinal Principles were the CCP’s political “commandments” formulated in 1979: unwavering alliegiance to socialism, the people’s democratic dictatorship, Communist Party leadership, and Marxism-Leninism, Mao Zedong Thought. Deng’s meaning: the bureacracy should combine market reforms with strict, centralized party control. All the talk of politics was useless. In fact, socialism was not about political power or workers’ control of society. The Third Plenum set the course declaring, “The aim of the party in leading the whole nation in making revolution and taking over political power, is in the final analysis, to develop the economy.” Deng put it even more plainly: “The purpose of socialism is to make the country rich and strong.”14

Deng and his fellow reformers targeted agriculture first. In the mid-1970s, per capita output of grain was no greater than two decades earlier. The slow growth of farm output, combined with strict controls over the nonfarm activities of the peasantry, led to near stagnation in farm incomes. By 1978, China was no longer self-sufficient in grain and had to import grain to feed about 40 percent of its urban population. In 1978, 200 million Chinese peasants–one in four–were not getting enough to eat, and productivity had fallen to levels lower than during the 2,000-year-old Han dynasty.14

To turn this around, the “responsibility system” was adopted. Each peasant household would now farm its own land and undertake responsibility to produce a given output, on a contractual basis, which the state guaranteed to purchase. The first major step in the reforms was to increase farm prices by 25 and 40 percent in 1979, the first significant adjustment in farm prices in twelve years. The multitiered price system that was set up provided better prices, increased production, and boosted marketing through state channels. This constituted a massive transfer of wealth from the state back to the peasantry.

These reforms proved initially successful. By the end of 1983 about 95 percent of farm households were managing their own plots under contracts from collectives. Grain output grew from 305 million tons in 1978 to a record 407 million in 1984, an average annual rate of almost 5 percent. Grain production per capita has exceeded both the government’s benchmark level of 302 kilograms per capita in 1957 and the level of per capita achieved in the early 1930s–the last normal years before World War II.

Another key feature of the new economic order were the Special Economic Zones (SEZs). These zones would allow foreign companies to operate free of high taxation or government restrictions–allowing them to institute new labor policies.

In 1984 the bureaucracy moved into a second, more intensive phase of reform that set three interrelated goals–enterprise profitability, creation of a free labor market, and price deregulation. One aim of the bureaucracy was to intensify the rate of exploitation of workers by abolishing any guarantee of life-time job security and welfare benefits for state workers, or what Deng’s economic advisors referred to as “the iron rice bowl.” Enterprises were now expected to produce a profit or sink. In line with this, managerial methods and disciplinary codes became more stringent, and enterprises began to lay off workers.

Bureaucratic capitalism

Many observers failed to understand what was becoming obvious in China. The reforms were not against the interests of the bureaucracy, but primarily benefited them. Those sections of the bureaucracy who were suspicious of Deng’s reforms were not concerned about defending “socialist” principles. Rather, as Maurice Meisner puts it:

Their desire to preserve their positions and privileges, reinforced by a preference for the bureaucratic virtues of predictability and stability as well as by simple habit and inertia was sometimes disguised as a defense of “socialist principles.” But if there were initial suspicions of the reform program, it soon became apparent to China’s bureaucrats that they were in a uniquely favorable position to personally profit from the new market mechanisms. Many hastened to do so.15

This did not simply apply to the state-controlled sections of the economy but also to the newly-privatized sector. As a recent study put it: “[T]he private economy is still under the control of officials–everything must be done through them.”17 Liu Binyan, an investigative journalist fired by the People’s Daily and twice expelled from the CCP, explained the process this way:

After the economic reform was implemented in 1979, the market economy and open [door] policy created even more opportunities for officials to use their power for private ends. In foreign trade alone, these people make shockingly illegal profits from sales commissions provided by foreign businessmen…Many of the foreign trade projects were monopolized by children of high-ranking officials. Within a few years’ time, China has produced a new bureaucratic bourgeois stratum.17

China’s bureaucrats haven’t only enriched themselves individually. State allotments have been so severely cut that whole bureaucracies have thrown their lot in with the market. Government departments, elementary schools–even the People’s Liberation Army–have been instructed to balance their budgets by going into business for themselves.

So, for example, the Ministry of Public Security owns luxury hotels in joint ventures with foreign capitalists; the State Security Ministry operates an import-export company, an employment agency servicing foreign companies, and several domestic businesses. The biggest of the bureaucratic capitalists is the PLA, which is estimated to own more than 20,000 businesses, including for example, the deluxe five-star Palace Hotel in Beijing. There are even more bizarre examples: the All-China Federation of Women, an organization originally founded to combat sexual inequality and oppression, hires Russian prostitutes to boost business at its luxury hotel.

The reforms have not replaced one type of system with another. Rather, China has moved from bureaucratic state capitalism to a mixture of state and private capitalism, in which both sectors are dominated by the CCP bureaucracy and their relatives.

The effects of market reform

By 1985, Deng had become the darling of the Western press. He was Time magazine’s “Man of the Year.” But while Deng was becoming more popular in the West, China was hit with severe economic and social problems. High growth rates caused extreme imbalances in the economy:

The economy was out of alignment, and indeed out of control, regulated neither by state nor by market.…Shortages of energy and raw materials grew increasingly severe over the year, threatening to close factories and idle workers. Production of coal, oil, and electricity could not satisfy the increasingly voracious appetites of the booming industries.18

Rapid growth produced rampant inflation and drastic cuts in living standards. The official national inflation rate for 1988 was 19 percent, triple the already high rate of the previous year and by far the worst since 1949. The actual inflation rate was probably in the range of 25-30 percent, and considerably higher in the cities. The burden fell hardest on those dependent on state salaries–workers in state enterprises, teachers, intellectuals, and minor governmental functionaries. The government had already acknowledged that living standards fell for 20 percent of urban families in 1987.19

Other social problems became more acute, especially in the coastal cities and other growing cities where an estimated 400 million people–more than a third of the total population–now live. Seven milion children dropped out of school in 1988, along with tens of thousands of unpaid teachers. The crime rate increased by almost 50 percent in the same year–exacerbated by a proliferation of youth gangs.20

The bureaucracy and their hangers-on enriched themselves through rampant corruption, whose scale has become grandiose. A book by Cheng Li, Rediscovering China, reports:

Before I left the United States in 1985, most corruption in China consisted of petty bribery of a few hundred dollars; now officials steal several million or even several hundred million dollars. Chen Xitong was accused of embezzling over $1 billion. Some high ranking government officials and children of revolutionary veterans have turned state-property, including China’s large international corporations, into their own private firms.21

Meanwhile, in response to growing inflation and sagging profits, state enterprise managers began reducing wages and laying off workers. In Shenyang municipality alone, 400,000 workers were laid off from 700 factories in the spring and summer of 1988.22

The combination of–and obvious relation between–deteriorating economic conditions and ever-more brazen corruption among party officials hardened the attitudes toward the bureaucracy of much of the population, especially in the cities. It was a combination of these factors that underlay the biggest revolt to take place under Deng’s rule: the protests at Tiananmen Square.

The Tiananmen Square revolt

The Tiananmen Square protests had a rather innocuous beginning. Former party premier Hu Yaobang–a loyal lieutenant of Deng who had helped push economic reforms, but who had been removed in 1987 after being accused by hard-liners of being soft on student protests–suffered a heart attack during a Politburo meeting on April 8. Hu’s death one week later acted as a spark igniting student unrest. Beijing students quickly began planning a march organized for the evening of April 17, two days after Hu Yaobang’s death. Student protests adopted the form that had been a political tradition for the CCP, to embark on “long marches” to Tiananmen Square, the center of state power and also a traditional center of protest against the government. By the time the march got to the square it had swelled to some 4,000. On April 18, 1,000 students staged a sit-in and refused to leave until members of the National People’s Congress received their petition, which demanded, among other things, a reevaluation of Hu Yaobang’s role; publication of the salaries of top party and state officials and their offspring; freedom of the press and public expression; and increased salaries and stipends for students, teachers, and educational programs. During the day the number of people in the square had grown to 10,000. As the demonstrations grew larger, the government announced that the public would not be allowed into the square on the day set aside for Hu’s memorial service, April 22.

The students took the government by surprise when, on the night of April 21-22, they funneled thousands of students into the square. When soldiers and the police arrived at the square at 6:00 A.M. they found more than 10,000 students camped. An estimated 100,000 people joined them in the morning. Party leaders were forced to conduct services for Hu Yaobang in front of an audience of 10,000. Beyond the square, some 1 million people lined the route of the motorcade that transported Hu’s body to its burial site. The regime strongly denounced the demonstrations, but they only grew in size.

Students were organizing in several cities, but all attention was focused on Beijing, where students were organizing in Tiananmen Square just as China’s top leaders were preparing to receive Soviet president Mikhail Gorbachev.

The regime was split over how to deal with the demonstrations, with party general secretary Zhao Ziyang offering some sympathy to the students, and Prime Minister Li Peng firmly calling for an end to all public protest. As the scale of the protests grew, party leaders began to worry about their ability to maintain control of the capital. There was much concern that many rank-and-file soldiers might be unreliable in a showdown.

The student protest began–in many ways despite some of the efforts of student leaders–to give confidence to others to fight. Maurice Meisner recounts:

Workers not only marched by the hundreds of thousands in the massive demonstrations in the capital on May 17-18; they also established their own organizations. The Beijing Workers’ Union was organized in April, and the Beijing Workers’ Autonomous Union was founded in Mid-May…23

But it was the massive participation of factory workers in protests on May 17 and subsequently that alarmed party leaders. The fear of a “Polish revolt” had haunted them for a decade–and is what finally prompted them to crack down.

The regime declared martial law and on May 19 began moving thousands of as yet unarmed troops into Beijing. Alerted by protesting students, massive numbers of Beijing residents came out into the streets to block the army’s entrance into the city, immobilizing many army units in a sea of people. On May 21, a million Beijing residents demonstrated against martial law. Many ordinary soldiers were shaken, but the army did not disintegrate. In a matter of days, the regime was able to arm and position tens of thousands of loyal troops for a planned crackdown.

Spring 1989 in Beijing was reminiscent of Poland in 1981 on the eve of martial law when “Almost no one believed that Polish soldiers could be used against Polish workers.”24 But this belief among Beijing residents, like that held by many Solidarity activists in Poland in 1981, proved equally misplaced. As the participation of nonstudent groups increased, Deng was able to convince those party leaders who hesitated to use force that a crackdown was necessary. The regime–led by Deng Xiaoping and other party veterans–moved the troops into action on June 4. Hundreds were killed in the military crackdown as Beijing citizens fought pitched battles at makeshift barricades set up to stop the army’s advance on Tiananmen square.

The Tiananmen Square demonstrations showed how deep was the hatred for the regime. This was a tremendous mass movement, but it had serious weaknesses, not the least the elitism of the student activists. According to one historian, workers “were not, for example, permitted to use student facilities to publicize their call for a general strike; and they were repeatedly reminded that the protest movement was under the control of students, not workers.”25 The movement was also unable to draw in Chinese peasants, an enormous part of the population. In the end, the regime was able to crack down before workers were able to gather their forces and organize effectively in the factories and workplaces, though they participated in large numbers in street demonstrations. Tiananmen was not the end, but the beginning, of future, even more explosive, social unrest in China.

Tiananmen doesn’t halt reforms

The Beijing Spring strengthened those in the bureaucracy who believed the reform process had gone too far and would further undermine party control. The balance shifted even more in their direction after the Soviet coup attempt in August 1991. Deng was temporarily thrown on the defensive as those in favor of slowing the reforms and strongly opposed to any “Liberalization”–dubbed as the “leftists”–pointed to the Tiananmen Square demonstrations as proof that the party’s ideological and political control had slipped too far.

Deng regrouped and launched a counterattack. The problem in Eastern Europe, he argued, was not liberalization or reform, but the lack of it. He reminded his opponents that Romanian leader Caucescu had opposed reforms in 1989 and had lost his life.

In February and March 1992, Deng–then aged 87–took an imperial tour (called nanxum) of the South to advance his case for expanding and accelerating market reforms. Pointing to Guandong province’s efforts to “catch up with Asia’s four little dragons [South Korea, Taiwan, Hong Kong, and Singapore] in 20 years,” Deng called for not just a resumption of market reforms but their acceleration, saying, “We must speed up the reforms starting now.26 Deng’s nanxum reinvigorated the reform process. The 1992 14th Party Congress endorsed all of Deng’s proposals.

Chinese living outside the mainland played a pivotal role in financing the majority of projects, but also provided much needed funds in the aftermath of the Tiananmen square massacre. According to official Chinese figures, of the $44 billion foreign investment in China between 1979 and 1993, almost half of that came after the beginning of 1992. Of that, Hong Kong investors accounted for over half, and overseas Chinese for 80 percent of the total foreign investment.27

Speaking to a conference of overseas Chinese businessmen in Hong Kong on November 22, Lee Kuan Yew, a former prime minister of Singapore, identified the turning point:

After Tiananmen on June 4th 1989, Japan and the West stopped their tourists and investors from going into China. During this critical period, ethnic Chinese from Hong Kong, Macao and Taiwan seized the opportunity and increased their trade and investments, profiting from China’s increasingly free-market economy. After they succeeded, ethnic Chinese from South-East Asia joined in. Three years later, in 1992, the results startled the world. China’s growth went up to 12 percent per annum. This has revived American, European and Japanese interest in China.28

The U.S. coddles butchers and Tyrants

Yew was right. A little repression never did stop a good investor. The “protest” by western powers was mild and short-lived. While on the campaign trail in 1992, Clinton promised that if elected his administration would “not coddle tyrants, from Baghdad to Beijing,” in the way that George Bush had.

Predictably enough, he not only coddled but defended the tyrants in Beijing. On May 26, 1994, Clinton moved from a policy which linked trade preferences granted by the United States to China’s human rights to a policy which did not link them. Yet another disheartened Democratic staff member in the House of Representatives figured out what was obvious: “It turned out that MFN was useful as a tool only to bludgeon George Bush.”

Clinton gave a lead to the other advanced capitalist countries. The World Bank, for example, resumed lending on new projects, largely because of the U.S. announcement in January 1990 that it would no longer oppose all lending to China. Aside from a brief hiatus after Tiananmen, the World Bank has rapidly expanded its lending activities to China, and the country is currently the bank’s largest single borrower ($13.5 billion as of May 1996).

Clinton soon dispatched Warren Christopher to China to patch things up with China’s butchers. On leaving Beijing, Christopher announced that his discussions with the Chinese leaders were “businesslike and productive.”

“The differences between China and the U.S. were narrowing somewhat,” Christopher informed the press, though he “was hard put to point to examples of specific progress on the vexed human rights issue beyond a memorandum of understanding on trade in prison labor products,” the Financial Times commented.29

What has happened to the chinese economy?

The scale and scope of the transformation taking place in China is massive. China has recorded one of the world’s highest growth rates since reforms began in 1978. Real Gross National Product (GNP) grew by 9.3 percent per year in the period 1979-1993. In 1993 and 1994, its growth rates exceeded 13 percent–making it the fastest-growing economy in the world.30

At the outset of its economic reforms in the late 1970s, China was an insignificant participant in the international market for goods and capital. In 1977, the sum of its imports and exports, or its total trade turnover, was less than $15 billion, and it was only the thirtieth largest exporting country in the world. Its share of world trade in that year was only 0.6 percent, significantly less than in 1927-29, when China’s trade attained its peak pre-communist levels, accounting for little more than 2 percent of world trade.

By the early 1990s, China’s role in the international economy had been totally transformed. In 1992, China’s total trade exceeded $165 billion, accounting for 2.2 percent of world trade. In 1993, turnover was $196 billion, accounting for about 2.5 percent of world trade. By 1992, China was the world’s tenth largest exporter, lagging behind only the largest and most advanced industrial states. It was also a significant recipient of foreign aid and a major borrower on international capital markets. For example, in both 1992 and 1993, it was the single largest borrower from the World Bank and sold large quantities of bonds on the international bond market.31

China is particularly exciting for those who worship the market because it apparently proves their case. But China’s growth, though impressive, is hardly unprecedented. China’s growth is comparable to that of other economies at a similar stage of development, like Japan in the 1960s, for example.32

China has experienced such high growth rates because it began at such an economically low level. It seems impressive to say that China’s car production has almost doubled in the last five years. Yet that growth rate still puts China’s car production–and car market–far below that of the advanced industrial countries. If the U.S. increases its GNP by 1 percent, per capita income in the United States increases by $180. By contrast, if China’s GNP increases 10 percent, per capita income in China increases only $30.

Contradictions of the chinese boom

The Chinese “miracle” economy has several fault lines and, not unlike yesterday’s miracle economies–Mexico, Thailand, Japan, and South Korea, to name a few–China’s economy is not capitalism’s savior. The July 1997 Wall Street Journal put it this way:

China’s own economic picture isn’t rosy. Unemployment is rising. Many state-owned factories are idle. Domestic growth is relatively weak. High levels of foreign investment and an earlier era of cheap credit have left China with a painful hangover: excess capacity in autos, televisions, textiles, petrochemicals and a score of other major industries. Chen Zhao, editor of the economic monthly The China Analyst, says the average Chinese factory uses less than 60 percent of its capacity, a level that would be considered depressionary in other countries.33

Moreover, the growth process has been accompanied by a wildly fluctuating business cycle. Writes Cyril Lin of the Oxford Review of Economic Policy,

China’s high growth has been characterized by persistent macroeconomics instability and stop-go cycles. Each downturn brings into question the sustainability of its dynamism…[T]he emergence of socially divisive and politically explosive problems such as corruption, high-level unemployment, worsening urban-rural and coastal-inland income disparities, etc., give rise to concerns about the prospects for further reform, political stability and the integrity of the Chinese State.33

Let’s take each aspect of the crisis in turn:

Uneven development between regions

Probably the most striking feature of China’s growth is its extreme unevenness. The coastal cities account for most of the country’s growth rate, while other regions have experienced little or no growth at all–or have even declined. For the first part of the 1990s, economic growth in the delta has been a third higher than in China as a whole. Between 1990 and 1993, industrial output in the Delta grew, in real terms, by 67 percent according to official figures.

Significant regional disparities highlight differential growth between interior and coasts. Per capita income in the rural, coastal Zhejiang was 1,015 yuan in 1991, almost 50 percent again the national rural average of 701 yuan, and almost three times that of a poor hinterland province such as Yunnan (329 yuan). In 1990, 119 of China’s counties reported a per capita income of less than $43; one-fifth of China’s peasants are without electricity, and one-tenth are not served by public roads.

The province of Guangdong is more its own country. Guangdong covers an area of 180,000 kilometers and has a population of 63 million (only fourteen countries have larger populations). Although Guangdong is only one of China’s twenty-two provinces and autonomous regions, by 1991 it contributed 20 percent of China’s gross domestic product (GDP). In 1978, 90 percent of Guangdong’s income came from farming, today 90 percent comes from industry, and only 10 percent from farming. During the 1980s the province more than trebled its output from industry and agriculture, from U.S. $14 billion to $44 billion, an average growth of 12.5 percent.34 Fueled by foreign capital and trade, Guangdong enjoyed over 22 percent growth last year.

Shanghai alone accounts for 1 percent of China’s population, but 8 percent of its GDP and more than 20 percent of its foreign investment.35 The town of Shenzhen is perhaps the most spectacular example of growth. Orville Schell describes the growth of Shenzhen since 1978:

In 1978, Shenzhen was a small fishing village of 70,000 between Hong Kong and Canton. In 1980, it was designated as one of four Special Economic Zones (SEZs). By 1990, Shenzhen had been transformed into a city of more than 2 million. In 1991, Shenzhen’s GDP hit $3.16 billion, an average growth rate of 50 percent since 1980, and its exports reached $3.4 billion, having grown an average of 75 percent annually.36

The Chinese bureaucracy is grafting onto China the most modern development in industry, through foreign, state, and private investment, yet the effects are by no means uniform. William Greider captures the contradiction when he writes,

Stunning advancements were surrounded still by the primitive. Higher education was expanded dramatically in the 1980s, yet according to Canadian scientist Vaclav Smil, China would have to double or triple its pace to catch up with the university-educated citizens of India or even Indonesia. Most urban homes now had electricity, but three fifths of them lacked indoor toilets. China’s railroad system was approximately the size of America’s in 1863.37

Though Trotsky’s reference point was early Twentieth Century Russia, his insights apply equally well to China:

Although compelled to follow after the advanced countries a backward country does not take things in the same order.…Unevenness, the most general law of the historic process, reveals itself most sharply and complexly in the destiny of the backward countries. Under the whip of external necessity, their backward culture is compelled to make leaps. From the universal law of unevenness thus derives another law which, for the lack of a better name, we may call the law of combined development–by which we mean a drawing together of different stages of the journey, a combining of separate steps, an amalgam of archaic with more contemporary.38

Regionalism Gone Mad

The uneven development of the country is creating tensions, not only between different regions and the government, but sharp conflicts between the various provinces as they compete with one another for virtually any advantage. One commentator writes:

Regionalism poses major challenges for China, especially as interprovincial tensions and trade protectionism rise. World Bank research shows many provinces trading more with the outside world while trade with domestic counterparts falls, both in real terms and as a percentage of a province’s total trade. At the same time, higher wages in coastal regions allow provinces such as Guangdong to buy material and labor from the hinterland, increasingly without central control. There have been numerous clashes, such as the “rice war,” when Guangdong used military units to ensure access to cheap rice in Hunan. A number of provinces have set up inspection stations along rail lines to restrict domestic imports. Others, such as Hubei, Hunan and Jiangxi, have used their own de facto currencies.39

As they have grown rich, the southern coastal provinces–and because of them, other provinces as well–have become increasingly independent of Beijing. The central government’s tax revenues as a percentage of the GDP have plummeted from 34 percent in 1978 to less than 15 percent over the last five years.

The coastal provinces have also begun to bypass Beijing when dealing with international economic matters. Guangdong, whose growth rate is twice the national average, has on occasion bought oil on the international spot market and hired its own tankers to deliver it. When Beijing determined that Shanghai would be the site of the communist mainland’s first stock exchange, Guangdong simply went ahead with its own plans and opened its exchange a day earlier.40

China’s rulers live in mortal fear that the centrifugal tendencies will lead to anarchy and breakdown–both politically and economically–within China. An eighty-six page report, written for the Chinese Academy of Sciences in 1993 held out the possibility of disintegration after Deng’s passing from the scene. The report claimed: “It is possible that a situation like post-Tito Yugoslavia will emerge. In ten years, at the soonest, and at the latest between ten and twenty years, the country will move from economic collapses to political breakup, ending with its disintegration.”41


Although the Chinese economy is growing, productive capacity is growing even faster. The result is that many industries are using only a small proportion of the capacity they have built. As a result, price wars are common as firms try to dump excess stock. The price wars cut into profits, threatening some of those enterprises involved with collapse.

The amount of excess production over what Chinese consumers can buy is staggering:

The country manufactures one million men’s shirts a day, joining the glut of 1.5 billion already stashed in warehouses. There are also 10 milion unsold watches, 20 million extra bicycles, and 100,000 stockpiled autos and other vehicles.42

The auto industry is perhaps is a classic–although by no means exceptional–example of extreme overcapacity. China now boasts eight foreign companies which between them have fifteen ventures making vehicles in the country. But none of the companies are making any money, and the prospects of making any soon don’t look good. One of the first companies into China has decided to pull out of its South China venture in Guangzhou. Volkswagen has a successful joint-venture with Shanghai Automobile Industry Corp. (SAIC), but it is running up heavy losses in its partnership with First Auto Works in Changchun. Two years ago, Mercedez-Benz was ecstatic about snatching a contract from Ford and Chrysler. Now the $1 billion investment it made has stalled.

China’s auto market currently isn’t very big. As recently as 1993, 96 percent of all vehicle sales in China were to government departments or state enterprises. The trickle of private buyers since then has seen car sales growing at around 20 percent a year, compared with overall vehicle sales growth of only 8 percent. But this is from a tiny base. China has only two vehicles for every 1,000 households. The total market for cars is below 400,000 vehicles. The cost of a car prices the vast majority of Chinese workers and peasants out of the market.

This doesn’t even begin to take up the problem of where to drive cars in China. The country is desperately short of roads: for every 1 million Chinese, there are 900 km (560 miles) of roads, 11 percent of them paved. Compare this to the U.S., with 24,000 km (14,930 miles) of roads, 42 percent of them paved, for every 1 million Americans.43

The unrestrained growth of China’s consumer industries has contributed to an inventory glut which accounts for 8 percent of gross domestic product, according to Economic Daily, and has masked a slowdown in growth. Economists estimate that economic growth would have been 1-2 percentage points lower without the artificial build-up of inventories. China’s GDP grew in 1996 at 9.8 percent.

China’s economy over the past two years has undergone a sharp slowdown in demand which has been accompanied by massive inventory growth. Says one economist, “Many industrial commodities may never be sold because their quality does not meet market demand; grain stocks may perish.”44

The State Sector

The state-owned enterprises (SOEs) are one of the regime’s biggest headaches. Up until now, the regime has avoided carrying out full-scale privatization and market reforms, to the disappointment and frustration of the likes of the World Bank.

An economist from the Organization of Economic Cooperation and Development (OECD) pulled no punches in reporting his views of China’s state sector in 1992. “[U]nambiguous evidence paints a picture,” he wrote, “of widespread technological stagnation, high costs, low efficiency, poor management and low skills in most industrial sectors.”45

In 1978, the state sector accounted for 78 percent of China’s industrial output. By 1992, the non-state sector accounted for 52 percent of gross industrial output and more than 57 percent of non-agricultural employment; government expenditure as a share of GNP has dropped from 41 percent in 1978 to 20 percent in 1992.

Despite the decline in output, however, state-owned industries still employ the bulk of China’s 170 million-strong urban workforce–despite the further drop of their share of industrial output to less than a third by 1995. Among some 103,000 larger state-owned enterprises, employment grew from 31 million in 1978, when reform began, to 45 million in 1992.

And certain aspects of the “marketization without privatization” policy of the central government has only made things more chaotic. The decentralization of control of certain aspects of production from central to local officials has produced a situation in which massive duplication of effort takes place. Thus, for example, China still has more than 120 television manufacturers, 700 beer companies, and 30,000 rubber-belt makers.

The state sector acts as a massive drain on the rest of the economy. According to official figures, the percentage of enterprises that lose money rose from 27 percent in 1990 to 43 percent in 1995. A World Bank report issued in June estimates that something like one-half of state enterprises lost money in 1996. Furthermore, 70 percent of new investment capital in China was going into state-owned factories, and their claim on the new capital rose sharply during the investment boom of the 1990s. State-owned enterprises absorb 60 percent of national investment and receive subsidies totaling one third of the budget.

Bad Debts

Perhaps 80-90 percent of all the loans by state banks are made to state-owned enterprises. The money lent by banks to the state sector has risen, from 500 billion yuan ($86 billion) at the end of 1993 to over 1 trillion yuan ($120 billion) today. Conservative estimates put the increase in bad debts each year at 50-60 billion yuan. Total bad debts may be more than the 25 percent of the banks’ assets. Last year banks increased their lending to state companies by 18 percent, after inflation. Much of the borrowing went just to pay wages.

So at present, one part of the state–the SOEs–-is massively bilking another part: the banks. Then there is the mutual bilking among SOEs known as “triangular” debts: debts that are owed to other SOEs but which go unpaid because of insufficient funds. These come to over 800 million yuan.

State industry owes the state banking system a great deal of money. For a start, the 5 trillion yuan ($600 billion) of bank loans outstanding in China, nine-tenths of it to state industry, account for an unusually high proportion of all financing, equivalent to about 70 percent of GDP.

Since China has only one private bank, investment is financed by state banks. Those banks also have an unusually high proportion of bad loans stuck on their books– equivalent to well over 30 percent of GDP. For comparison, the bad loans that arose from America’s savings and loan crisis were equivalent to 2 percent of GDP, and those of Japan’s banks are less than 10 percent of GDP.46

Crisis in Agriculture

China’s initial takeoff in growth was spurred by a transfer of wealth from the state to the peasants, producing, as we have seen, improvements in agricultural production up to 1985. But the shift in emphasis to agriculture in the late 1970s soon gave way to a return to industry. The grain harvest declined from 407 million metric tons in 1984 to 379 in 1985. By 1987, the country had reverted to being a net importer of grain, and in 1988 the grain harvest declined to 394 million tons. In 1989, per capita grain consumption was actually lower than it had been four years earlier.47

Since 1990, annual growth rates of industrial output, gross domestic product, and population have averaged 22.8 percent, 11.4 percent, and 1.16 percent respectively. Grain output on the other hand has edged up an average of only 0.1 percent. Government investment in agriculture, mainly in infrastructure, has fallen sharply, from 13 percent of total fixed investment in 1978 to 1.8 percent last year. And cultivated land has fallen by about 2.7 percent since 1985, in the wake of rapid urbanization and as peasants try to find jobs in the cities.

The Myth of a Mass Consumer Market

The idea being peddled by many corporations–the new market of 1.2 billion customers–is an illusion. As William Grieder explains:

The labor ministry reported in 1994 that notwithstanding the industrial boom, the nation would have 268 million unemployed by 2000, most of them in the underdeveloped countryside. Something like 100 million surplus workers were already adrift in rural areas, many trying to get to the cities in search of wage jobs.48

While China has 1.2 billion potential consumers, some studies estimate that 120 million or so urban Chinese have enough money (with an annual income of more than $1,000) to afford even such modest items as detergent or packaged food.49

The gap between potential and reality is becoming clearer to some of the companies that have invested in China on the basis of its potential and are facing losses in the present. A big investor in China, Yaohan, a Japanese retailer which planned to open more than 1,000 supermarkets and stores there by 2005, went so far as to move its group headquarters to Shanghai, where it now operates one of the world’s largest department stores. It is now faced with mounting debts and has put any further expansion on hold.

And it is not likely that consumer spending will be growing or spreading out to larger numbers. The Wall Street Journal reported June 18, 1997:

Officially, joblessness is just 3 percent, but it is many times higher if furloughed workers and idled farmers are included. The number of industrial jobs, at 147 million, has fallen steadily. But now private factories are laying off workers at a faster rate than state-owned companies, recent government statistics show. And we can expect the layoffs to go on in the state sector. In March the prime minister, Li Peng, said reforming the state-owned enterprises (SOE’s) was the country’s most pressing issue.

Reforming the state sector, though, will not be easy, because it promises to increase social unrest sharply. By 1997, the government had decided to try to put aside some money for those laid off, for fear that layoffs will produce an eruption of class struggle. Business Week commented in 1996:

Signs of restiveness are everywhere. Workers have been demonstrating over unpaid salaries, rising unemployment, and falling standards of living. In early December, 500 migrant workers from the interior clashed with police in a bloody riot in Guangdong. To minimize unrest, Beijing’s leaders want to decentralize power. The government, for example, is beefing up a new tax system to ensure that Beijing gets a bigger slice of the pie from the richer provinces, which would allow it to pour more funds into inland areas for infrastructure, agriculture, and education.50

But collecting taxes is proving to be not so easy, despite Beijing’s efforts to beef up its 600,000 tax collectors. The government’s revenue from taxes is still quite low. From 31 percent in 1979, the ratio of taxes collected to GDP fell to 10.7 percent, but last year it edged up to 10.9 percent and this year is expected to top 11 percent. (In the U.S., federal tax receipts as a percentage of GDP averaged about 19 percent in recent years.) And there is considerable resistance to paying. In the countryside as many as thirty tax collectors have been killed in the last decade, and hundreds are beaten up every year.

And even if successful, these “welfareist” policies are very unpopular with foreign investors. Again, the Wall Street Journal comments:

Last year, foreign investment totaled a massive $47 billion. But for the first time since the 1990s boom began, the government expects foreign investment to fall this year to $40 billion. Says a Japanese official involved in trade with China. “We need stable policies for three to five years, but every six months, they change their policies. This gives foreign companies a bad impression.”

The rich get richer

Deng Xiaoping liked to talk about the virtues of wealth. “To get rich is glorious,” he announced, leaving out a minor detail–that for a few to get rich, many must be further impoverished. And the few are getting rich in a massive way.

There are two Chinas in the 1990s. One is the China of the expanding cities, the coastal boom, and the entrepreneurial ethic promoted by Mao Zedong’s successor and veteran political survivor Deng Xiaoping in his final years.…The second China lies further inland, in the provinces away from the coast, and within each province in the more remote rural areas away from the towns. Here millions of Chinese peasants continue to live at the mercy of their traditional enemies: flood, drought, and official corruption which has returned to plague them. The effects of modernization and change are patchy and uneven, widening the gaps between urban and rural China, between rich and poor.51

Wealth is flaunted in China today as it is in Los Angeles or Monte Carlo. One writer comments:

The “new wealth” enjoyed by many leading party and state functionaries, military officers, public enterprise managers, and especially business people, is increasingly apparent. Many of these people can be found in the top hotels and the Pierre Cardin stores, flaunting their cellular phones and beepers, fancy western-style clothes, and air of self-importance and indulgence…

It is they who can afford to join the new Jingnan Yongle golf facility in Beijing with dues of $12,000, and the Country Horse Racing Club, where membership in 1993 cost 80,000 yuan, or almost $14,000.52

The regime and the press acknowledge the massive inequality that uneven economic development produces. Writing in the Beijing Review, Lui Guoguang explained that socialism and egalitarianism are incompatible:

Socialism promotes the development of the productive forces, whereas egalitarianism hinders them. Therefore socialism and egalitarianism are not compatible. This is not a new form in theory, but merely a reversal of the reversed Marxist truth.53

The Workers’ Daily editorialized in 1983:

The discrepancy in prosperity in the present-day countryside is only a matter of “some get rich first and others get rich later.” In no way can this be considered polarization. We adhere to the road to general prosperity. But it is illusory to think that early one morning over 800 million peasants could find themselves in affluence.54

But some obviously get rich first and others don’t get rich at all. This is perhaps made most obvious by looking at China’s mostly rich coastal provinces and mainly poor inland ones. Shanghai is eighty times wealthier than Guizhou, and Guangzhou is three times wealthier than Guizhou. The differences even within the provinces are massive. Within the single province of Guangdong Zuhai city, a favorite with foreign investors, is thirty times richer than the province’s poorest county.55

It is not known how many millionaires China has at present, although some scholars place the figure at 1 million. Altogether, 340,000 luxury apartments or houses (each unit costs over 1 million yuan) were sold in the country by 1993; approximately half of the purchasers were Chinese citizens. Shenzhen City alone has 1,000 millionaires; one in ten of them has more than 10 million yuan ($1,724,000).

In industry, the gap between workers and managers would make even U.S. bosses pause. In pre-reform days, enterprise managers received salaries only three or four times higher than the pay of the average worker. Now they can earn up to 300 times more, not counting wealth gained through corruption, connections, and outright theft.


Western commentators who praise China’s economic changes write as though the introduction of the market will automatically produce democratic reforms, making China less repressive. They have to gloss over what really takes place. The Economist reported on April 5, 1997:

Every year about now China’s official press trumpets the country’s progress on human rights…The trumpeting is timed to coincide with the annual six-week sitting of the United Nations Human Rights Commission in Geneva. Every year since the Tiananmen massacre of 1989, resolutions have been put forward condemning China’s human rights record. Each time, China calls in favors from those many little countries it has assiduously courted over the years and the motion fails.

This year it looks as if China may not even have to bother. France, a relatively big country, has announced that it will no longer co-sponsor resolutions censuring China for its human rights abuses. The West’s change of tack can hardly be attributed to improvements in the situation in China… The government’s “Strike Hard” anti-crime campaign, now over a year old, has led to mass arrests and executions, with scant regard for due process.

All trials concerned with “counterrevolutionary activities” may be held in secret. The judicial system permits sentencing before the actual trial. The concept of innocent until proved guilty is considered a “bourgeois western aberration.”

Today, China has some 2,000 labor camps with a total population of 10 million. Number Thirteen Labor Reform Detachment, has some 20,000 inmates and is seventy kilometers wide, sited in Qunghai province on the edge of the Gobi desert. The government’s figures show that there are an average of 200,000 new admissions to labor camps every year.

Far from economic growth bringing with it more democracy, the opposite has taken place. As The Economist put it:

On the contrary the forces of incipient capitalism appear to have bred a whole new list of crimes with severe punishments. In 1980 some 21 crimes were punishable by death. Today 68 are. People have recently been executed for, among other things, hooliganism and reselling VAT receipts. Two peasants in Henan province were shot for stealing 36 cows…

The number of imprisoned dissidents, labor activists and human-rights promoters is hard to pin down. The justice ministry admits to holding 2,700 in jail for “counter-revolutionary offenses.”56

According to Amnesty International, China executed at least 4,367 people in 1996–more than all other countries combined. The judicial process is fast and brutal. In one case, a man was arrested, tried, sentenced and executed in the space of six days.57

Deng Xiaoping made his views on the government’s “Strike Hard” policy clear: “Generally speaking, the problem now is that we are too soft on criminals. As a matter of fact, execution is one of the indispensable means of education.”58

The Working Class

China’s economic miracle is not the result of some newfound vigor or promise to the world capitalist system, but rather is a sign of how economically underdeveloped China was as of 1978. It is also testimony to the level of exploitation that China’s workers and peasants are subjected to. It is of course the case that the standard of living has gone up. From 1978 to 1994 the annual net per capital income of peasant farmers more than tripled, to $146. Urban net incomes in the state sectors more than doubled to $380. But as the latest World Bank report showed this year, more than 300 million Chinese still earn less than $1 a day. Other studies estimate that only about 10 percent of the population have incomes greater than $1,000 a year.59

Some 17 million Chinese are employed in coastal factories funded by foreign investors, largely from Taiwan, Hong Kong, and South Korea. The workers, the great majority of them women from rural areas, make shoes, toys, garments, and other products for export, often under sweatshop conditions. Low wages are not the worst of the workers’ problems. The most repugnant abuse is physical punishment, including beatings inflicted by supervisors or private guards, some carrying electric batons. As a result, even verbal threats are intimidating.

In some cases, the coercive regulations that management imposes on workers during and after working hours are unbelievably detailed: prohibitions on talking, even while eating; marked routes for walking within the factory-dormitory compound; bans on leaving the compound at any time without special permission; prohibitions against getting pregnant, married, or even engaged. In one factory, anyone using the toilet more than twice in a work day forfeits nearly a fifth of her monthly wage. Violating such rules can bring not just fines but also physical punishment, psychological harassment, the deduction of at least two weeks’ pay or even dismissal.

Workplace health and safety in such enterprises is often scandalous. In the Xiamen Jiamei Cutlery Company, a Taiwanese-owned factory in Fujian province, nearly a quarter of the 400 workers have been maimed or injured. Unable to get jobs elsewhere because of missing fingers or arms, some continue working under the same hazardous conditions and sustain additional injuries. In November 1993, a fire at the Zhili Toy Factory in Guangdong killed 87 workers and injured more than 60, their escape blocked by barred windows and locked doors.

In foreign-funded factories, which employ about 6 million Chinese in the coastal provinces, accidents abound. In some factories, workers are chastised, beaten, strip-searched, and even forbidden to use the bathroom during work hours. At a foreign-owned company in the Fujian province city of Ziamen, 40 workers–or one-tenth of the work force–have had their fingers crushed by obsolete machines. According to official reports, there were 45,000 industrial accidents in Guangdong last year, claiming more than 8,700 lives.60

In Guangdong alone, the number of fatalities in industrial accidents climbed to 836 in 1992, jumping 63 percent in just one year, while throughout China 15,000 workers died, up 3.3 percent from 1991.

Though less publicized, sweatshop conditions have also permeated China’s state-owned enterprises. Sociologists Zhao Minghua and Theo Nichols, writing in the July 1996 China Journal, detail three state textile mills in Henan province, describing the crushing daily routine of 200,000 workers, most of them women. Their situation resembles the plight of most workers in the foreign-funded sector: exhausting hours, no overtime pay, complex work rules, fines for breaking them, ever increasing quotas, draconian sick leave policies and so on, all under the guise of “scientific management.”

A practice common in Asian foreign-invested enterprises in southern China, a “secretive wage system” has spread to town and village enterprises as well as the state sector. Now pay day is often a day of mystery. A worker in Henan explained, ” You never know how much money you will be given for the month.”61

Inflation has drastically cut living standards for workers. In 1993, inflation averaged 13 percent nationwide and 23 percent in the largest thirty cities. Prices for meat went up 33 percent, for grain staples 40 percent, and for vegetables 54 percent. To compensate, the government has raised officials’ salaries 36 percent and military salaries somewhat more than that. At the beginning of 1994, the leadership vowed that it would keep nationwide inflation to under 10 percent; in April the goal was revised upward to 15 percent.

Growing unrest

The predictable result has been, and will continue to be, social unrest–with class conflict increasingly at center-stage. Readers may be surprised to learn (although it was reported in the Chinese-language press around the world) that one year ago 100,000 peasants in Renshou County, Sichuan, protested new taxes and delayed grain payments by confronting officials with scythes. The protesters took hostages and set fire to the house of deputy Party secretary. During 1993, peasant protests occurred in twenty of China’s twenty-nine provinces; in the same year industrial workers, according to a classified government report, staged more than 6,000 illegal strikes and joined more than 200 “riots.”

Layoffs are fueling workers’ anger. The government got a taste of worker anger recently in the northeastern province of Heilongjiang, where some 2 million workers lost their jobs in 1993. According to Hong Kong and diplomatic sources, in March some 100,000 workers took to the streets in the province’s two major cities, Harbin and Quqhaer, to protest pay cuts. In mid-April, China’s economic czar, Vice-Premier Zhu Rongji, visited the province and sacked its governor, these sources say. That won’t deter workers, who have engaged in unpublicized strikes or slowdowns across China to demand such things as decent wages and better working conditions.62

John Gittings cites a volume of Chinese government documents on party-peasant relations that the previous occupant of a hotel room left behind. The book was classified as confidential, and in earlier years its loss could not have gone unnoticed.

The book contained all the confidential material prepared for a conference called to investigate the breakdown of Party authority in Lingxian County to the south of Anyang. Its conclusions were startling: the Party had not only lost control of the peasants but of many of its own members, and the “new contradictions between the masses and the cadres [were] emerging all the time.”

“The Party has become ineffective,” the handbook admits, ” and some Party branches play no role at all…Problems are especially serious with family planning, state purchases of grain, taxation, house building, and planned crop production…The masses have no respect for the cadres and retaliate against them. They even abuse the cadres’ families, beat them, steal their crops, cut down their trees, and threaten their property…”

The Party’s aim is to reimpose its authority where it has lost control. “We must arouse initiative with one hand,” says one document, and “confine excess with the other.”63

After Deng

China is today’s miracle. But judging from past successes, it will become one of the world system’s biggest nightmares. This is just beginning to become clearer to some commentators. In August, a study by DRI/McGraw Hill argued that China was one of the world’s most dangerous emerging stock markets because of the danger of a banking crisis. The recent plummeting of other formerly bouyant stockmarkets in Thailand, Malasia and elsewhere may be a foretaste.

It will be extremely difficult for the regime to continue reforms in the state sector. The Wall Street Journal reported August 6, 1997:

According to state statistics, 10 million workers lost their jobs in the first half of the year, but only half of them have found new jobs. In the same period, labor disputes have jumped 59 percent, and demonstrations by unpaid state workers like those in Sichuan last month provide a foretaste of the trouble to come if these masses don’t find new jobs in the private sector.”64

Maurice Meisner describes it this way:

The reformist zeal that was so evident in the autumn of 1993 dissipated over 1994 as workers’ protests, especially in the interior cities, made Party leaders fearful of the consequences of massive unemployment that would surely follow from the wholesale capitalist restructuring of state enterprises, especially in a land lacking an adequate social welfare system. Thus little was done to reform the urban state sector in 1994, and by the early months of 1995 Party leaders had grown silent on the matter of economic reform, instead stressing the need for social and political stability.65

In spite of these worries, the regime is pushing ahead with further reforms. Deng Xiaoping’s successor, Jiang Zemin, is making sure that he is true to “Deng Xiaoping Thought.” The British Financial Times reported in August, 1997:

China’s offficial press has beaten the economic reform drum so insistently recently the reformist mainstream could be accused of overkill. Scarcely a day passes without press commentary about the desirability of market reform with Chinese characterisitics… President Jiang Zemin, at best a lukewarm reformer, seems intent on burnishing his reformist credentials before a National Party Congress due in September, and in the process outflanking opponents on both left and right.66

This overkill has produced innovations in what the ruling gang in China call “Socialism” that match some of Deng’s memorable pronouncements such as “To get rich is glorious.” In August, the government paper, the People’s Daily announced on its front page editorial that “the words ‘market ecconomy’ have been writ large on the flag of socialism for the first time.” At their annual retreat at the seaside resort of Beidaihe, the leadership of the Chinese Communist Party was preparing itself for the Fifteenth Party Congress, the first national party gathering to take place since the death of “the paramount leader” Deng Xiaoping last February. The central concern of the party chiefs is how to achieve a “restructuring” and “downsizing” of the state-owned industries–without provoking a massive rebellion from below.

The propaganda campaign began with a speech by Jiang Zemin to the elite Central Party School on May 29. Jiang openly attacked notions that until recently were still repeated by leaders of the CCP including himself. It was a masterful piece of double-speak. Jiang argued that “non-public ownership… including private individual and foreign investment,” is not the same as “privatization.” “Some people,” he continued, “are concerned that the rapid development of non-public ownership may shake the leading position of public ownership.” Zemin rushed to reassure anyone who might be under such an impression, adding,

This concern is unnecessary. China is a socialist country, therefore public ownership should be preserved. We cannot go down the path of privatization. This is firm and unshakable.

Zemin then proceeded to outline how private insurance funds were really a form of public ownership, and their establishment would actually “uphold public ownership” as the leading component of “the socialist market economy.” “The State should withdraw step by step from fast-growing competitive industries and concentrate on the key fields of the national economy.”68 In short, Zemin’s speech was a declaration of the government’s intent to privatize large chunks of the economy.67


The changes in China do not at all mark a change from a socialist to a capitalist society. China was not socialist under Mao–and it clearly isn’t now. China is a capitalist society–run by a bureaucratic capitalist class that embraces both state and private enterprises; a class that seeks to squeeze Chinese workers and peasants in order to rapidly expand China’s industrial and military capacity vis-a-vis its world rivals.

Massive rebellion in China is not some distant possibility. In order to sustain high growth rates, the Chinese ruling class will be forced to reform the state sector–which now acts as an enormous drain on China’s capital expenditures. Meanwhile, China’s massively overinflated production rates are bound to produce periods of slowdown.

As growth slows, China’s economic contradictions will come to the fore even more glaringly–overcapacity, unemployment, disparities of wealth between provinces and within them. Rather than privatization bringing greater democracy, further reforms will require an even harsher response to growing anger and resentment from below. The regime is continually forced to zig-zag between “opening up” society in order to continue pushing the reforms, and violent repression in order to prevent an explosion of discontent created by those reforms. This process– combined with a sense of rising expectations among workers and peasants–cannot but create an atmosphere of chronic instability and rising discontent.

This explosive combination may provoke what Chinese leaders fear most, a mass revolt of workers. Tiananmen gave them a taste of what is to come, before Deng snuffed it out. The future of socialism in China lies in the hands of these workers–and over the ruins of China’s “socialism with Chinese characteristics.”

It is worth remembering that all the talk of free markets is not new to China. In the 1840s, it was called the open door policy. Britain imported opium into China in order to gain access to markets. But the economic boom of the coastal cities did not produce stability. Quite the opposite. It led to the emergence of one of the biggest rebellions and civil wars yet seen–the Tiaping rebellion.

1. Cited in David Korten, When Corporations Rule the World (London: Earthscan Publications, Ltd., 1995), p. 85.

2. New York Times, January 2, 1994. Cited in Richard Smith, “Creative Destruction: Capitalist Development and China’s Environment,” New Left Review, No. 222 (March-April, 1997), p. 5.

3. “The great tax cut of China,” by Alvin Rabushka, Wall Street Journal, August 7, 1997.

4 Smith, op. cit., pp.5-6

5. See Ahmed Shawki, “China from Mao to Deng,” International Socialist Review No. 1 (Summer, 1997), for background.

6. Jasper Becker, Hungry Ghosts: China’s Secret Famine (London: John Murray, 1996), p. 239.

7. Ibid., pp. 257-258.

8. Ibid., p. 274. Becker quotes a number of apologists. C.K. MacDonald’s textbook, Modern China, states boldly: “Between 1960-62 famine hit China. This was due mainly to the bad weather. In some parts of China there were floods, in other parts drought.…It is difficult to judge how many people died in the famine. But one thing is certain; the big improvements made in farming in the 1950s saved millions more Chinese people [from] starving to death.” Cited in Becker, ibid., p. 301.

9 Ibid., p. 89.

10 Ibid., p. 255.

11 Simon Leys, The Burning Forest (New York: Henry Holt and Company, 1986), p. 145.

12 Orville Schell, Mandate of Heaven: The Legacy of Tiananmen Square and the Next Generation of China’s Leaders (New York: Simon and Schuster, 1995), p. 351.

13 Maurice Meisner, The Deng Ziao Ping Era: An Inquiry into the Fate of Chinese Socialism 1928-1994 (New York: Hill & Wang, 1996), p. 99.

14 Becker, op. cit., pp. 260-261.

15 Meisner, op. cit., p. 304.

16 Ibid., p. 338.

17 Ibid., pp. 305-306.

18 Elsbeth Thomson, “Reforming China’s Coal Industry,” China Quarterly, No. 147 (September, 1996), p.726. When China launched its economic reforms in 1979, coal shortages were crippling almost every sector of the economy. Some 30 percent of China’s industrial capacity was idle because of the lack of energy.

19 Meisner, op. cit., p. 304.

20 Ibid., p. 385.

21 Cheng Li, Rediscovering China (Lanham, Md.: Rowman & Littlefield, 1997), p. 308.

22 Richard Baum, Burying Mao: Chinese Politics in the Age of Deng Xiaoping (Princeton, NJ: Princeton University Press, 1994), p. 228.

23 Meisner, op. cit., p. 450.

24 Adam Michnik, Letters from Prison (Berkeley, Calif: University of California Press, 1985), p. 31.

25 Baum, op. cit., p. 272.

26 John Gittings, Real China: From Cannibablism to Karaoke (London: Simon and Schuster, 1997), p. 271.

27 The Economist, November 27, 1993, p. 33.

28 Ibid.

29 Cited in Noam Chomsky, World Orders, Old and New (London: Pluto Press, 1994), p. 177.

30 Cyril Z. Lin, “The Assessment: Chinese Economic Reform in Retrospect and Prospect,” in Oxford Review of Economic Policy, Vol. 11, No. 4 (Winter, 1995), p. 1.

31 Nicholas Lardy, China in the World Economy (Washington, D.C.: Institute for International Economics, 1994), pp. 1-2.

32 Paul Hirst and Grahame Thompson, Globalization in Question (Cambridge, U.K.: Polity Press, 1996), pp. 107-108.

33 Wall Street Journal, July 14, 1997, p. A10

34 Lin, op. cit., p. 2.

35 Dick Wilson, China: The Big Tiger: A Nation Awakes (London: Abacus, 1997), p. 273.

36 Financial Times, June 16, 1997, Hong Kong Survey, p.xiv.

37 Schell, op. cit., p. 332.

38 William Greider, One World, Ready or Not: The Manic Logic of Global Capitalism (New York: Simon and Schuster, 1996), p. 162.

39 Leon Trotsky, The History of the Russian Revolution (London: Pluto Press, 1977). pp. 26-27.

40 Richard Hornik, “Bursting China’s Bubble,” in Foreign Affairs, Vol. 73, Number 3, May/June 1994, p. 37.

41 Newsweek, July 17, 1997.

42 The Economist, September 25, 1993, p. 44.

43 Washington Post National Weekly Edition, August 11, 1997, p. 23.

44 The Economist, June 8, 1996, p. 63.

45 Financial Times, March 21, 1997.

46 Quoted in Wilson, op. cit., p. 273.

47 The Economist, March 8, 1997.

48 Meisner, op. cit., p. 238-240.

49 Greider, op. cit., p. 162.

50 The Economist, January 25, 1997, p.62.

51 Business Week, January 15, 1996, p. 45.

52 Gittings, op. cit., p. 1.

53 Robert Weil, “China at the Brink, Part II,” Monthly Review, Volume 46, Number 8, (January 1995), p. 11.

54 Gerald Greenfield and Apo Leong, “China’s Communist Capitalism: The Real World of Market Socialism,” The Socialist Register, 1997 (London: Merlin Press, 1997), p. 104..

55 Wilson, op. cit., p. 277.

56 Ibid., p. 288.

57 The Economist, April 5, 1997, p. 36.

58 The New York Times, August 26, 1997.

59 Richard Evans, Deng Xiaoping and the Making of Modern China (London: Penguin Books, 1995), p. 260.

60 Washington Post Weekly National Weekly Edition, August 11, 1997, p. 23.

61 Business Week, August 1, 1994, p. 40.

62 Anita Chan and Robert Sanser, “China’s Troubled Workers,” in Foreign Affairs, March/ April, 1997, p. 109.

63 Business Week, Agusut 1, 1994, page 40.

64 Gittings, op. cit., p. 44.

65 “Swimming in China,” Wall Street Journal, August 6, 1997, p. 14.

66 Meisner, op. cit., p. 490.

67 Financial Times, August 14, 1997, p. 56.

68 Ian Johnson, “China’s Jiang Outlines Privatization Steps,” Wall Street Journal, July 31, 1997.


“We should not be the slaves of democracy”

In an article published in 1993 called “A Millionaire a Minute,” Business Week celebrated the pursuit of profits in Asia.

Wealth. To most Asians just a generation ago, it meant moving to the U.S.–or selling natural resources to Japan. But now, East Asia is generating its own wealth on a speed and scale that is probably without historical precedent. The number of non-Japanese Asian multimillionaires is expected to double to 800,000 by 1996.…to find the nearest precedent you need to rewind U.S. history 100 years to the days before strong unions, securities watchdogs and antitrust laws.

This apparently is the best capitalism can offer: a return to 19th century sweatshop conditions under the protection of an authoritarian state.

Western politicians and capitalists don’t seem in the least bit bothered that the “Asian Tiger” economies can hardly be described as “free market” economies and are wholly lacking in democracy. After all, there’s money to be made.

Indeed, the gangsters who run these countries are explicit in their rejection of such “liberal” notions.

Here are some of the thoughts of some of the key players.


Lee Kuan Yew, Singapore’s former prime minister, visited the Philippines in November 1993 and told his hosts (who included President Fidel Ramos) that they had made a mistake in embracing American style democracy:

What a country needs to develop is discipline rather than democracy. The exuberance of democracy leads to undisciplined and disorderly conditions which are inimical to development.


Mohammed Mahathir, Malaysia’s intolerant and authoritarian Islamic prime minister says: “We should not be the slave of democracy; in Malaysia we accept democracy, but we must not be too extreme. Unlimited freedom is dangerous.”

Mahathir goes on to argue that the “West would do well to learn from the success of East Asia and to some extent Easternize. It should accept our values, not the other way around.”

Mahathir is not keen on free markets. “We are told we must open up, that trade and commerce must be totally free. Free for whom? For rogue speculators?” Mahathir told the July, 1997 meeting of the Association of South-East Nations (ASEAN). “Or for anarchists wanting to destroy weak countries in their crusade for open societies, to force us to submit to the dictatorship of international manipulators.”


In a speech shortly after the crackdown in Tiananmen Square, Deng Xiaoping declared:

[B]ourgeois liberalization…exponents worship the ‘democracy’ and ‘freedom’ of western capitalist countries…This cannot be allowed. China…must absolutely not…liberalize…Firm measures must be taken against any student who creates trouble at Tiananmen Square…No concessions should be made…if any of them disturb public order or violate the law, they must be dealt with unhesitatingly. We cannot do without this dictatorship.…If we… back down, we shall only have more trouble down the road. We should not be afraid that it will damage our reputation abroad… the trouble-makers amount to just 1 or 2 percent of all college and university students. The democracy in capitalist societies is bourgeois democracy–in fact, it is the democracy of monopoly capitalists.

From China’s Peoples Daily:

It is imperative to persist in the four cardinal principles [adherence to socialism, the dictatorship of the proletariat, the leadership of the Communist Party, and Marxism-Leninism and Mao Zedong thought], oppose bourgeois liberalism, smash the ‘peaceful evolution’ schemes of antagonistic international forces and inspire patriotism and socialist consciousness.

Industrial Capacity Utilization rate 1996; Percent of Total

Below 25% Electrical power equipment; personal

computers, microwave ovens

25-37.5% Air conditioners, photo copiers, cars color televisions

37.5-50% Tape recorders, washing machines, bicycles, sugar, cameras

50-60% Refrigerators, cooking oil products

The Specter of Class Struggle

There are a growing body of reports from China that indicate that clashes with the regime are on the rise in the wake of factory closings and non-payment of wages to state workers.

According to the Chinese goverment’s Labor Ministry, the number of labor disputes has risen this year 59 percent over the previous year. The ministry has heard 26,600 cases and resolved 24,873.

In July, according to New York based Human Rights in China, 100,000 workers clashed with police in the Sichuan town of Mianyang after being laid off from their state jobs. Police arrested 80 workers and injured 100. At a state-run silk factory in the Sichaun town of Nanchong, thousands of workers took their manager hostage. They hadn’t seen a paycheck in six months. A state-owned bank was ordered by the government to lend the factory money to pay the workers’ wages.

In Guandong province in late August, farmers who complained of being underpaid for grain rioted. Earlier this year there were reports that the army had to be called in to crush a Guandong village protesting against the interference of Party officials in a local election.

Dozens of similiar protests have been reported by journalists, diplomats, human rights groups and ordinary Chinese.

It isn’t clear yet to what degree these struggles have produced new workers’ organizations. Human rights groups report that Shen Liangqing, a know dissident and labor activist, was arrested at the end of August for issuing a statement in support of abused workers.

President Jiang Zemin is expected to reaffirm at the Fifteenth Congress the CCP’s comitment to privatize the vast majority of state enterprises.

The September 6 issue of the Chicago Tribune reported,

Local media reports indicate the leadership wants to privatize the vast majority of state enterprises, whose number could reach up to 400,000, while devoting state funds to ensuring the survival of 2,000 to 3,000 core enterprises. The exposure of so many enterprises to market forces could push even more people out of work, but economists say the government has no choice because it cannot afford to prop up these businesses any longer

The Chinese government recently revised its estimate of urban unemployment from 3 percent to 7.5 percent–a massive increase.

The latest phase of “reform” are creating pressure-cooker conditions in China; and in the inevitable explosions ahead, workers are replacing students as the focal point of struggle.

Hong Kong

Britain’s handover of Hong Kong back to China took place at the end of June 1997. The flurry in the press over the event might give the uninitiated the impression that Hong Kong is giving up a great democratic tradition. That is a lie. Britain ruled over Hong Kong as a colony for 156 years, never showing any inclination to let the Hong Kong Chinese take part in the politics of the island. The colony’s governor appointed the members of Hong Kong’s Legislative Council, insisted on his right to approve public gatherings, scrutinized the local press, and sometimes threw editors in jail for objecting to British rule.

In the negotiations between Britain and China on the terms of the handover, British negotiators convinced Beijing that, although Britain had not done so, Beijing should institute a significant degree of democracy in Hong Kong. In 1989, Beijing and London solemnly agreed that, within a year of the July 1 transfer, Hong Kong’s people would for the first time elect their Legislative Council. But Chris Patten, the last British Governor jumped the gun by staging elections in Hong Kong in 1995, two years before the handover. These were the first elections to ever be held in British-controlled Hong Kong.

Though millions of ordinary Hong Kong resident’s have an interest in fighting for democratic rights regardless of who runs it, the Hong Kong bourgeoisie is not worried about their new rulers in Beijing. On the contrary, they are looking forward to the stable business climate that they expect integration with China to produce. Speaking of China’s hand-picked new millionaire governor of Hong Kong, Tung Chee-hwa, Henry Tang, Chairman of the Federation of Hong Kong Industries said, “We have full confidence in him. There are many people in the business community who want more emphasis on strong government and economic issues and not on politics. They feel political struggles have done a lot of damage.”

Tung Chee-hwa is clearly impressed by the example of Singapore–a dictatorial society with a market economy. He says: “In the past five years we have become too politicized as a community. Politics should be a means to an end, not an end in itself.”

Hong Kong had already become a vital economic component of China’s phenomenal growth over the last several years. Hong Kong’s investments in China now total more than $100 billion, making it by far the largest source of outside capital.

The new legislature that took office on June 31 is solidly pro-business. More than two-thirds of its members are company directors or major shareholders–the most impressive is “Trouser King” Yeung Chun-kamm, a textile magnate who holds 211 directorships and has shares in 258 companies.

Hong Kong workers and political activists will be the ones to suffer under the new arrangement. Under the new laws, demonstrators require a notice of no objection for planned rallies and police are empowered to ban protests on grounds of national security.

Hundreds of demonstrators marched in Hong Kong in mid-July in a growing dispute over plans by the post-colonial government to suspend laws strengthening labor rights. The laws, passed in the final days of British sovereignty, give workers the right to collective bargaining in pay negotiations. The new government argues that they were passed hastily and threaten to blunt Hong Kong’s competitiveness. In the face of criticism, the government agreed finally to allow several days to debate the laws, rather than impose an immediate suspension.

Business leaders have urged the government to suspend the laws, arguing that they threaten to disrupt peaceful industrial relations between management and employees. Sir Donald Tsang, financial secretary, has also criticized the laws, arguing that they could damage the investment climate in Hong Kong.

Bottom line, the “investment climate” is what concerns capitalists worldwide–not least those in the U.S. The U.S. stake in Hong Kong is large: U.S. investments there total $14 billion, more than 40,000 Americans live in the city, and bilateral trade tops $24 billion, much of it flowing originally from China. The rumblings in the U.S. about “freedom” in Hong Kong are no less hypocritical than those about human rights in Beijing. Profits come first, and in the last analysis, democracy should not be allowed to get in the way of profits.

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The siege and resistance in Gaza: Interview with Toufic Haddad-Written by Omar Hassan

Posted by admin On October - 24 - 2018 Comments Off on The siege and resistance in Gaza: Interview with Toufic Haddad-Written by Omar Hassan


Toufic Haddad is an activist, academic, and author of Palestine Ltd: Neoliberalism and Nationalism in the Occupied Territory (I.B. Tauris, 2016). He recently completed a postdoctoral research fellowship from the Arab Council for Social Sciences, entitled “The Political Economy of Siege and Resilience in the Gaza Strip”. He was interviewed by Omar Hassan.


Palestine solidarity activists the world over have been incredibly inspired by the courageous protests taking place in Gaza since March 30. Can you explain the conditions in Gaza that have led to this important development?

There are many interrelated issues going on here, both historical and more contemporary. The most immediate and pressing issue, of course, is the overall conditions of siege that the Gaza Strip has been subject to since the 2006 electoral victory of the Islamic Resistance Movement – Hamas.

The UN High Commissioner for Human Rights has recently described Israel’s siege as “caging Gazans in a toxic slum”. Here is a territory where 97 percent of water is polluted and in less than two years the poisoning of ground aquifers will be irreversible. You have 48 percent unemployment, 63 percent youth unemployment, and an economy that has collapsed due to debt and a lack of liquidity. On top of this you have education, electricity, wastewater and health sectors in states of advanced disrepair and collapsing. The overwhelming majority of the Strip’s two million residents have not been able to leave Gaza for 12 years, gravely impacting everything from education and health to family life and livelihood, to say nothing of the psychological dimension. The regime of control Israel imposes over Gaza is unprecedented globally, with some academics calling it a “digital occupation”. Remote control machine guns and the constant presence of drones monitor and police this tiny territory (360 km2) while Gaza’s access regime is so sophisticated that Israel counts every calorie and controls every chemical compound that enters the territory.

It would be imprecise, however to explain or reduce protests to purely humanitarian questions. Gaza has been under siege because the international community and Israel want to prevent an alternative political model emerging within Palestinian politics there. Hamas has led this alternative political project, and has and could again legitimately take power in Palestinian politics if elections took place. This counters the existing Western state approach to “managing” the Israeli-Palestinian conflict, through the US-sponsored Oslo process. These actors have thus imposed the siege in an effort to prevent this tendency from making any gains or spreading further to the West Bank.

But the issue is far larger than Hamas. The entire peace process had no solution to the question of Palestine overall, and which is represented in its most concentrated form in Gaza.

People tend to forget that “the Gaza Strip” only exists by virtue of the results of the 1948 war. Namely it is a rump territory where the victims of the Zionist campaign to ethnically cleanse Palestine ended up. Three-quarters of the Gaza Strip residents are refugees originating from the coastal and southern regions of Palestine. This is the demographic reverse of the West Bank, where refugees constitute only a quarter of the population.

The collective experience of displacement and its harsh living conditions transformed Gaza into the crucible of Palestinian nationalism and the refugee return movement, with the territory birthing the most significant vanguard political tendencies of the Palestinian movement historically – from the Communist Party in the 1950s and ’60s, to Fateh in the late 1960s, and Hamas and Islamic Jihad more recently. These protests are the latest incarnation of these dynamics, where we witness yet another popular uprising being launched around all the historical issues of the Palestinian movement (for return, self determination, liberation, etc.), and all the new means that Israel, and now the international community, have used to try to control and subvert Palestinian rights.

The catastrophic humanitarian situation in Gaza has been known for a long time, and there is no shortage of reporting on it from all the major international agencies. But the humanitarian approach has been a means used by international actors to guise Gaza’s political significance, which embodies all the main questions of Palestine – from the question of the right of return of Palestinian refugees, to 50 years since the occupation of the West Bank and Gaza, to 12 years of siege, to the political question of the Palestinian opposition to the Oslo process.

In addition to all these historical factors and the issue of the siege, there is yet another important factor that has arisen. Hamas, which won the 2006 elections and attempted to reform the Palestinian national movement through its capture of the Palestinian Authority’s state-like institutions via elections, eventually came to the conclusion that Gaza is ungovernable within existing constraints. That meaning: they are abandoning civil governance and service provision because they understand – correctly – that it is a trap. The pretence that the institutions of the Palestinian Authority could manage Gaza and its contradictions, without sovereignty and freedom of movement and goods, is false. Self-governance – the crowning achievement of Oslo – became a way to alleviate Israel from the most “burdensome” elements of its occupation, while Israel remained and remains in ultimate control. When we add that the Fatah government in Ramallah has cut its spending on Gaza in recent years as a means to pressure Hamas, we realise that the protests are both a popular rejection of the Occupation, the siege, the political crisis of Palestinian politics, as well as a way for Hamas to kick the “problem” of Gaza back to its rightful address – Israel and the international community, who are the main parties responsible for the perpetuation of the problem of Palestine for 70 years.

Israel has tried to justify its massacre of over 120 Palestinians in these protests by claiming that the protests have been organised and led by Hamas “terrorists”. On the left we obviously reject this characterisation of Hamas, but can you tell us about the political leadership of the movement and how it has related to the various political factions?

Any attempt to define the protests as a creation of Hamas is reductionist and seeks to put the Israel/Palestine conflict back into the “war on terror” framework, which I think the demonstrations have been very successful in breaking out of. This has not stopped Israeli commentators from attempting to repackage these demonstrations within this discursive logic, with one describing the protests as a “collective suicide bomb” on Israel’s “border”, and Israeli defence minister Avigdor Lieberman describing Hamas as “cannibals” sending children to be killed in order to make Israel look bad.

But as noted, the protests have deeper roots and considerations deriving from Gaza’s historical and contemporary predicament. With Hamas’ recent decision to abstain from governance, the path was opened for popular forces, and particularly a younger generation of activists, to take initiative and see what could be done to change the situation, not relying on the existing political order – be it international or domestic. Having said this, the traditional structures of the Palestinian national movement – the PLO factions, together with Hamas and Islamic Jihad, have all gathered around the new mobilisations and their organic leadership to form the Higher Committee for the Great March of Return, which oversees the movement and protests. So it is a combination of new and old actors, experimenting with new and old tactics.

At the end of the day, Hamas is still the dominant political player in Gaza, and its ability to mobilise forces in Gaza is unmatched there. In this regard, Hamas’ decision to abstain from governance essentially greenlighted its members to join popular mobilisations, providing numerical and logistical weight. This should not however be confused with Hamas being the organisers of the demonstrations. At the same time, we should reject arguments that attempt to counterpose Hamas to them. Hamas is an organic actor in Gaza, and it is and will be a part of any mobilisation against the occupation there – whether it initiates these movements or follows them. Islamophobia has played a negative role in attempting to reduce the question of Gaza to a “war on terror” logic, but at the end of the day, the majority population of Gaza is Muslim, and Islamic institutions have played a major role in providing services and political leadership for the national movement under occupation, in light of the failures and impasse of the secular national movement of the PLO, stuck in the trap of Oslo. In this light, there is no reason to apriori delegitimise Islamist mobilisation within the Palestinian national context, while we can also still support, and should support, progressive wings of Palestinian politics – parts of which will also include Islamists by the way. Ultimately it is the racist Zionist settler colonial project in Palestine and Western imperial support for it which is the source of the conflict, and we should reject explanations that lose sight of that.

Finally, it is important to note that the current protests represent the evolution of struggle dynamics whereby the broader Palestinian theatre has witnessed the failure of the political leadership and strategies of all factions. This includes the failure of Fateh’s “Oslo approach”, and the stalemate/dead end of approaches which rely upon armed struggle. We are thus witnessing the evolution of new dynamics and social forces which also gives the initiative a particularly exciting feel.

Can we talk a little bit more about some of the individual stories of the martyrs killed by IDF snipers? The statistics can be numbing – over 120 killed, thousands wounded, etc. Can you give us a sense of who these people are and what their motivations might have been?

Although it is difficult to answer your question without being on the ground in Gaza – which is almost impossible at this stage – I think it is safe to say that the base of the movement is composed of what can be termed the “Oslo generation”. These are youth, mainly up to 30 years old, who grew up in Gaza during the Oslo years (now, a quarter-century on) and who have never left the Gaza Strip, and never had minimal opportunities for a decent living. Their parents would have witnessed or participated in the first (1987) intifada, but have since also witnessed the drastic deterioration of life quality as a result of the Oslo process itself. Keep in mind that the “peace process” was used as a cover for Israel to implement apartheid, beneath the joint guise of “security needs” and “withdrawal from population centres” for the purposes of “Palestinian self-governance”. Israel used the peace process to forcibly impose “closure” on the West Bank and Gaza as a way to pen Palestinians in, particularly Gaza residents, and to take their lands. The majority of Gaza’s labour force used to work inside the Israeli labour market, and almost everyone was thrown out of work and imprisoned in the economically unsustainable Gaza Strip as a result of “peace”. A fence was built to hermetically seal the Gaza Strip in 1995 – the height of the peace process – seven years before Israel would build its apartheid wall across the West Bank. So youth in Gaza have grown up totally isolated from the rest of the world – without opportunities for normal living, with a historical understanding of their refugee status and its causes, and with the dashed hopes of the peace process. We can add to this the sense of betrayal of the international order to their cause, and the ineffectuality of their leadership and parents’ generation to change their condition. Let’s not forget that the land, just on the other side of these Israeli snipers – is refugee property. So it is right there – they can see their land, but not access it. The starkness of the injustice is only compounded by the difficulty of daily living and the brutality and trauma of Israeli actions that have killed 4,500 Palestinians in Gaza alone since 2008.

This is the context which drives the protests on the ground, and this context forms the personal life experience of the protesters. Israeli journalist Amira Hass recently interviewed some of these youth, who told her “We’re dying anyway, so let it be in front of the cameras”. The international order has been deaf to the cries of Gaza, so these protests de facto represent a prison riot that is attempting to put Gaza back on the table, after Western governments and Israel, together with the Arab order, thought they could bury it in a debilitating siege, and through isolation.

When I think of the protesters, I think of the figure of Wissal Shaikh Khalil, the only woman killed on the horrific May 14 protest, where almost 70 Palestinians were killed – more than 500 shot in the head, and with more than 3,000 injuries from live ammunition. The picture we get from her is of a young woman who is frustrated by the situation, who sees the older generation as having been passive and acquiescent to conditions. She stood up and said “I don’t believe in this, I’m not taking it, and I want to go out with the boys and challenge the Israelis as well”. On that note, while the overall situation perpetually generates protest, protest itself becomes a way of also overcoming social and traditional restrictions on life. Because obviously, when you’re under siege and in states of extreme poverty, what happens is that society becomes much more dependent on extended family and tribal networks as a way of survival and welfare. This has enormous negative consequences on people’s sense of individuality, and reinforces patriarchal values which is very stultifying for youth and women in particular.

The demonstrations also witness clear participation of older people protesting because the siege means that they cannot take care of their families. I’m reminded of Mu’een Assa’i (58) who, a day before he was killed in the protests, offered one of his kidneys for sale online to feed his family, describing life in Gaza as “unbearable from all sides”, and that he was serious and of sound mind. The siege is crushing new and old generations alike while preventing the transition of youth into adulthood, and social actors performing their traditional roles. Society is on the brink of collapse. The explosive conditions can either lead to implosion and social and political collapse, or explosion, towards Israel, the primary source of Palestinian oppression. It has done the latter, to avoid the former. An Arabic news correspondent went to the buffer zone where the demonstrations were taking place and interviewed an elderly woman there. He joked that most women of her generation would be at home, making bread, and asked her what she was doing? With cold resolve, she responded: “My husband has been killed, two of my sons have been killed, another is in a wheelchair, and I don’t care if a bullet hits me through the forehead”. People clearly feel they have little to lose. Non-action is a form of certain slow death. Under these conditions, why not risk active/faster death, if there is at least a chance something can change?

I’d like to talk about what seems to me to have been quite a stark contrast between the scenes in Gaza and then the relative passivity inside the West Bank and in the 1948 areas of Palestine, even in response to Trump’s decision to move the embassy. While there have been protests, there seems to be a “gap” in energy. Am I overstating that, or is this a fair point to make? And if so, what’s behind it?

I think it’s somewhat accurate, though it is more helpful to understand matters in their specificity, which includes appreciating how Israel has undoubtedly fragmented the Palestinian people geographically, politically and socially. Folks need to take into consideration that Israel has different interests in different parts of historical Palestine, and therefore implements different strategies to realise its goals. Political actors and mobilisations take on different forms as a result of these dynamics, and hence it becomes difficult to generalise a common type of struggle, because the means of oppression and control, and with it resistance, vary in each locality.

In this reading, Gaza is the most intense of the theatres, because it is the least important for Zionist aspirations. Gaza is the territory that Rabin – the Nobel peace prize winner – wished would “sink into the sea”. But the West Bank is different. Israel has key strategic interests there in so far as the territory is much larger, contains the strategic high grounds, contains important water reserves, and also contains the historical sites which are important for the Zionist movement to assert its mythology of “returning the Jewish people to the land of Israel”.

This is why Israel basically used the peace process to be able to “separate” from the Palestinians across the 1967 occupied territory, while investing its energies in massive colony construction projects in the West Bank, tripling the number of settlers there since 1993. Israel aims to annexe these territories, thereby uniting the conquests of 1948 Palestine with those of 1967.

In more recent history – because of the Palestinian rejection of the Oslo framework with the eruption of the Al Aqsa (second) intifada in 2000, and especially after the 2006 elections – Israel and the Western states have tried to make the West Bank seem more prosperous compared to Gaza, as a way to lessen the anti-Oslo political tendency, manifested most coherently in Hamas. Namely, the West Bank was given a “carrot” while Gaza was given the “stick”, with the entire logic of the arrangement aimed at getting Palestinians to believe that resistance was futile. While there were nominal improvements to economic conditions in the West Bank since 2007, one should not be deceived, as the situation there remains extremely unstable, with worsening economic conditions in recent years, and no less a brutal occupation regime, albeit administered differently. We must not forget that the West Bank is much larger and more difficult to organise, while Israel is also on the ground there, and on a daily basis enters the hearts of Palestinian cities and towns to conduct arrest campaigns. This does not happen in Gaza, which also helps resistance experience and leadership to accumulate.

Israel currently holds around 7,000 Palestinian prisoners, and the overwhelming majority of these represent the political leadership of the West Bank. If these persons were free to organise, the West Bank context would certainly look different. Israel well understands this, which is why it doesn’t rely upon the Palestinian Authority to arrest these persons – they do it themselves.

On top of this is the dynamic of Fateh, and in particular the majority branch of the party loyal to Abu Mazen [Palestinian president Mahmoud Abbas], nominally in control of Palestinian governance functions in the West Bank. These actors see the West Bank as their last stronghold. Fateh in general has a different strategy to addressing the Palestinian condition, which derives from its historical experience of struggle through the PLO. As far as Fateh is concerned, the Palestinians have paid the price of armed resistance (winning recognition through it) while Palestinians should use current conditions to avoid a damaging frontal confrontation with Israel. They believe this will ultimately defeat Zionist ambitions because as long as Palestinians survive and remain in Palestine, organised as self-identifying Palestinians, they will remain “the non-Jews” within the “Jewish democratic state” from an Israeli perspective. Fateh believes this contradiction will eventually force either statehood or the collapse of Zionism. So the PA and Fateh in the West Bank are not interested in a popular mobilisation that could threaten their hold on power, and displace their claim as the sole legitimate representative of the Palestinian struggle. They are interested in maintenance of status quo and demobilisation. Thus a debilitating , divided internal situation prevails across the Palestinian political sphere and within the West Bank in particular, where factional unity cannot be achieved on the ground, and with the Israeli occupation army doing its part to ensure that none of the Palestinian actors in the West Bank gain much traction – including Fateh.

Alternatively, in Gaza we see the opposite: all factions – including most Fateh branches there, together with the left, are increasingly unified. There are even joint operations rooms and the exchange of military expertise and equipment. But this is hardly possible in the West Bank where the Abu Mazen faction of Fateh dominates and will not allow alternative strategies and actors to gain momentum and potentially displace it and its strategy. We also must acknowledge that Abu Mazen and Fateh still have a fairly wide political and social constituency, with about 16 percent of employed persons working in the Palestinian Authority in the West Bank (with wages significantly higher than the private sector), and a public sector driving at least 40 percent of consumer demand. The PA is the main economic player in the West Bank, and there are few opportunities besides it – work in Israeli settlements, or the majority state of private sector actors who struggle in a “race to the bottom” in their “mom and pop” shops. There is always unemployment. Israel’s broader “de-development” policies can be thanked for this as well.

On a popular level of course, the West Bank and Palestinians everywhere are inspired by Gaza, and we do witness demonstrations taking place, including among Palestinian communities inside 1948 Palestine (Haifa in particular). But it would be wrong to compare their size and intensity to Gaza, because the political conditions for organising, and the political interests and tactics of Israel vis-à-vis each population and territory differ.

Let’s move to the regional level now. Palestinian protests have historically been a trigger for democratic and anti-imperialist forces across the region, but at this moment the counter-revolutionary aftermath of the Arab spring seems to be making practical solidarity extremely difficult. How do you read this current moment, and where do you see the Palestinian movement in this broader context?

Historically Palestine has been the “cause of the Arabs”, but it’s been obvious to most that this hasn’t been the case for decades, if it ever was, and Palestinians have been left to their own fate, especially after Oslo. With the Arab uprisings of 2010/11, the limited support the cause received further deteriorated in light of local revolutionary dynamics understandably becoming more important. Moreover the Palestinian movement was fracturing internally around the same time, between the West Bank and Gaza, which created a crisis of representation and leadership. Popular forces across the Arab world remain in solidarity with Palestine of course, however this solidarity cannot actualise in a context marked by the extreme counter-revolutionary forces and dynamics that have been unleashed to crush these revolutionary tendencies.

The major counter-revolutionary waves that have been unleashed have understandably preoccupied Arab revolutionary actors, further isolating the Palestinian theatre from its natural periphery. Political actors should be aware however that this is temporary, and will not last indefinitely. Eventually revolutionary dynamics will re-ignite across the region for years if not decades to come, as the old regimes have no answers to the questions the revolutions posed, and the genie will not be able to be put back in the bottle.

In the meantime, we are witnessing instead unprecedented Arab state collusion with Israel – represented most vividly in Saudi-Israel rapprochement, but also unprecedented Egyptian-Israeli collusion. Egypt has even invited Israel to bomb the Sinai with its fleet of drones to squelch the local opposition movements there. The Arab states seek to team up with Israel and the Trump administration to counter “Iran” – but really any perceived local opposition to their rule. These dynamics are debilitating for the Arab revolutionary currents, particularly in the absence of a larger progressive movement and network to be able to sustain it, and which must be built through struggle. At the end of the day, the Middle East and Palestine features within a central axis of world trade, energy and political conflicts. This means that any genuine democratic forces in the area must counter a substantial number of reactionary elements of the world order, together with their local manifestation. The stakes in this respect couldn’t be higher.

What role do you see for solidarity activists in countries like Australia?

In order for the Gaza protests to be successful, we need to have regular, determined demonstrations and solidarity activity going on in the West. We have to use the protests in Gaza to educate around Palestine and build a new generation of activists, and a movement at large, that can expose the cruel apartheid regime Israel has established there, with active Western donor state abetment.

We have to plan for a long term struggle, because currently there are no prospects at this time that the situation in Gaza is resolvable. Donors and Israel vacillate between “technical humanitarian” and “military” solutions, but both have been tried, and both have miserably failed. In fact these approaches are deeply implicated in creating the situation today, because they have attempted to hive political issues from economic and humanitarian ones.

Not one of these actors however is talking seriously about resolving the political problem of Gaza, which in fact is the strongest instantiation of the political problem of Palestine. We can be assured that these actors will fail, as the situation has long passed any “technical” solution, and Western governments know very well what they do in Palestine. While pretending to sponsor peace, by supporting the Oslo process, Western states have actually been cementing apartheid – sometimes quite literally. USAID funds to the Palestinians have gone to pave an alternative road system, separate from that used by Jewish colonists. It’s not just the US though. UK arms sales to Israel have reached historic heights, while Germany is selling Israel nuclear submarines. Meanwhile, these actors feign impartiality, subvert Palestinian democratic processes, and bankroll neopatrimonial Palestinian governance structures in an effort to displace the main contradiction between Zionism and Palestinian nationalism, into intra-Palestinian political and class conflicts. They also protect and abet Israel from sanctioning, with these powers never failing to declare that Israel is their ally. In this respect, donor aid to the Palestinians pales in comparison to the funding and benefits given to Israel by Western states, while these actors also argue that the former is given because it helps Israel solve/manage its Palestinian “problem”.

Western solidarity movements can thus play a key role in the struggle to expose this political farce, and the time is long overdue for this. Western state support of a brutal apartheid regime in Israel/Palestine is certainly not representative of the interests of the average Western taxpayer. Solidarity actors in the West are uniquely positioned to do this, and the more they organise, the less bloody the conflict will be. Western states ultimately form the strategic, diplomatic, economic and military conditions which allow Israel to operate, and without this, the project is unsustainable.

Here a historic opportunity has arisen for the Palestinian movement to be wedded to new social and political struggles in the West, which can make the connection between what happens to Palestinians in Gaza, to the scourge of racism, policing, surveillance, immigration policies, austerity and neoliberalism at home. The connection is both moral and inspirational, as well as very practical: Israeli policies and doctrines are widely implicated in everything from wall construction on the Mexico-US border to the impunity of Western urban policing squads, sent on training missions to Israel. In this regard, Palestine and Gaza in particular, is an example of how people with very little can challenge and change history. We must learn from this example and bring this inspiration and ethos into our own lives in the West, where everywhere you scratch the surface – sometimes not even that – injustice lurks at every corner.
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Feminisms of the Left-Nancy Holmstrom

Posted by admin On October - 24 - 2018 Comments Off on Feminisms of the Left-Nancy Holmstrom

This essay was originally a talk at the conference held at the New School for Social Research on April 21-22, 2016.

I like our panel’s title: “Feminisms of the Left.” There is a long and confusing collection of names for those who are both leftists and feminists: Marxist feminist, socialist feminist, materialist feminist, black feminist, feminist socialist, anarcho-feminist, and so on. And straddling the line between socialist and liberal feminists would be social-welfare feminists. In the 1960s and 1970s, in the heyday of the women’s liberation movement, when “feminism” was too tame a word, the mainstream feminists were social-welfare feminists. They supported abortion rights of course, and equal pay for equal work, as do all feminists, but they also supported public child care and welfare. Gloria Steinem and Ms. magazine are examples. But the movement declined just as so many activists were moving into careers and families; American politics was moving rightward, into neoliberalism, and this general trend took mainstream feminism with it. So instead of collective social provision, we heard about individual responsibility and self-sufficiency. The Clintons’ welfare “reform” exemplifies this change—and Gloria Steinem’s support for Hillary Clinton, despite all that Clinton has done against the interests of the majority of women in the world, is a sad example of the rightward evolution of mainstream feminists.

There are still social-welfare feminists, of course, who should be included on the continuum of “feminists of the left,” though they are less explicitly anti-capitalist than the rest. Personally, though I am a Marxist, I usually choose the label “socialist feminist” to describe myself just because it is the most inclusive and is less likely to be misunderstood. As I define the term, all socialist feminists (whether they would identify with the label or not) see class as central to women’s lives, yet at the same time none would reduce sex or race oppression to economic exploitation. All socialist-feminist politics have an anti-capitalist edge, not merely anti-neoliberal capitalism. Parenthetically, as with any continuum, it is not always clear how to draw the lines. For example, Iris Young, whom I knew for decades, saw herself as a socialist feminist, as do I, but is included as a liberal feminist in an encyclopedia entry

Which word we choose to identify ourselves largely depends I think on the political context we’re in, and the debates in which we’re involved, as well as how we understand these categories. So the same label may not mean the same analysis, and different labels may not mean different analyses. For example, Margaret Benston was one of the first Marxists to analyze women’s domestic labor, back in 1969. She considered herself a Marxist, used Marxist categories, wrote in Monthly Review, and is described as a Marxist feminist, but in fact her analysis was more like that of feminists who were calling themselves “socialist feminist” in order to distinguish themselves from Marxists. Hilary Wainwright calls herself a feminist socialist rather than a socialist feminist to signal her interest in bringing insights from feminism into the socialist movement and into visions of socialism. She’s been arguing this since the 1970s and recently expressed her frustration that she still has to make the same argument.

Sometimes these different labels do signal different theoretical analyses of women’s oppression and capitalism—in particular, whether you believe that capitalism and patriarchy are two distinct, though intersecting, systems—or three, to accommodate racism as well. Or, alternatively, if  you believe that we live in one system, capitalism, that has various kinds of oppression, including sexism and racism, as constituent aspects of that system. But I have found over the years that these abstract differences don’t necessarily entail political differences, which are most important for social transformation.

Feminists of the left are involved in all kinds of struggles, not only those that are explicitly gendered. In some contexts one sort of issue may predominate, and rightly so, in others a different one. For example, women involved in Black Lives Matter organized Black Women’s Lives Matter because women had been left out of the picture. Given the realities of black women’s lives, black feminist theory is less likely to omit class issues than white feminist theory.

What defines socialist feminists is both the politics they articulate and the way they organize themselves and articulate those politics. It goes without saying that we support all struggles for women’s legal rights, but that is far from enough. Gender inequalities today are significantly less than class inequalities, as two recent sex-discrimination lawsuits reveal. In one, a woman who sold bonds at Morgan Stanley sued because her salary of over a million dollars a year was much lower than her male colleagues’; women at Walmart sued because their annual salary was $1,100 lower than the men’s, but the average pay for all Walmart employees is only $10 an hour. So the men’s salaries are pretty damned low too! And non-union Walmart is now the largest private employer in the United States—versus unionized General Motors not so long ago. It’s the struggles of working class women that socialist feminists focus on, whether the struggles are on the job, in the community, or wherever. Working class women’s struggles around the world exemplify certain core principles of socialist feminism, as Johanna Brenner and I discussed in the Socialist Register of 2012.

A core principle of socialist feminism is self-organization, the idea that, in Eleanor Marx’s words, women’s emancipation must come from themselves. But at the same time, they can’t do it alone, but only in coalition with others, so socialist feminists work to build inclusive movements, connecting workplace and community, waged and unwaged work, and caring labor recognized as labor. An excellent model of labor-community organizing is the Chicago Teachers Union work uniting the interests of teachers and parents. Public employees combining with those they serve is a huge step forward, something we’ve never heard from New York teachers. Similarly, I would like to see the transit workers unions reaching out to riders about common interests, like better staffing. Hilary Wainwright has several examples like this in her book Reclaim the State (Verso, 2003).

The paradigmatic gendered struggle for legal abortion was won in 1973 with Roe v. Wade, but socialist feminists pressed to go beyond an individual right to choose to include the material and social conditions necessary for women to have a genuine choice as to whether or not to have children. The concept of reproductive rights was developed in the late 1970s by socialist feminists with prodding from women of color who wanted protection against sterilization abuse along with the social changes that would support their decision to have children: child care, maternity leave, welfare, decent medical care, housing, and education. Reproductive rights pushes toward an anti-capitalist politics because unlike legal abortion, these challenge capitalist profits. We never won these in the United States, and where they were won, neoliberalism has brought continual attacks on these benefits.

In contrast, environmental struggles do not seem gendered. What could be more universal than the need for clean air and water? But this does not mean it is not a women’s issue. Just as women’s rights are human rights, as feminists have argued, so are human rights women’s rights. Feminists should not confine themselves to issues uniquely or primarily affecting women. Moreover, there is often some gender dimension even if it’s not explicit. The UN Population Fund says that women in developing countries are particularly impacted by climate change, directly because of the difficulty of meeting their families’ needs and indirectly by the wars engendered by scarce resources. Women are often the leaders of grassroots environmental movements, which socialist feminists strongly support, as they stress that the roots of the environmental crisis lie in capitalism’s inherent drive to expand production.

Sometimes it’s important to work with others who do not share all our left feminist values. La Via Campesina—the worldwide peasants movement—took a strong position opposing violence against women, which they defined in both interpersonal and structural terms. So that is very progressive and quite different from the conservative “law and order” approach of much anti-gender-violence work. But La Via Campesina at the outset was not comfortable with issues of sexual freedom, abortion, and LGBT rights. Working together, however, with the World March of Women, their position has evolved.

The same conflict can arise in the United States when we are involved in economic struggles with people who are more conservative socially. In Chicago the movement against school closings brought together a diverse group, including gay socialist feminists and black community activists, not all of whom supported gay rights. Rather than tackle their differences directly, they worked in solidarity, recognizing that the parents should be in the leadership of the struggle. Over time, that kind of solidarity is the best way to overcome distrust and change minds.

Another way one can advance struggles from a feminist point of view is to pay attention to the structure and process of the groups in which one works. Differences of power and privilege along sex or gender lines are particularly intimate and subtle. So transforming this power requires the transformation of ourselves and our relationships—an insight associated with the women’s liberation movement. One way to address this problem is to allow—or better yet, to encourage—women’s caucuses, whether in unions, social movements, or left groups. In Occupy, despite their focus on horizontal process, the idea of separate spaces for women and people of color met some resistance, which is sad. Leftists should note that more than one hundred years ago, Marx and Luxemburg supported organizing men and women both together and separately. After the Russian Revolution when Alexandra Kollontai was in the government and women were organized independently within the Communist Party, women won all kinds of gains and prevented women’s jobs from being given automatically to returning soldiers rather than allocated according to need.

In the United States today, there is a new openness to socialism. From Occupy to Black Lives Matter to the Sanders campaign, to new labor organizing, we begin to see the possibility of a new radical left. A key strategic question for that emerging movement is whether the insights of socialist feminism will be brought into the center of its politics.


What Is the Secret to the Success of India’s Bharatiya Janata Party (BJP)-MILAN VAISHNAV

Posted by admin On October - 14 - 2018 Comments Off on What Is the Secret to the Success of India’s Bharatiya Janata Party (BJP)-MILAN VAISHNAV

One political party dominates the world’s largest democracy. Why has India’s BJP has become so powerful?


The BJP is a Hindu nationalist political party in India that believes that Hinduism and Indian national identity are more or less synonymous.

For many in the party, Indian culture is quite simply Hindu culture. Given that Hindus make up 80 percent of the country’s population, BJP members believe India is fundamentally a Hindu rashtra (nation). Although there is a great variety of opinion within the party, its core philosophy of Hindutva (Hindu-ness) has often been criticized for being anti-minority in nature.

The party’s current incarnation dates back to 1980, but it was the natural successor to an earlier political party known as the Bharatiya Jana Sangh, which was formed after independence. The Jan Sangh, as it was known, in turn built on an earlier tradition of Hindu revivalist movements, whose roots date back to the British Raj.
The BJP, of course, represents more than just Hindu nationalism. It also espouses a muscular foreign policy and national security posture. It is generally more pro-business than most of India’s political parties, which tend to be left of center.

Like any big-tent party, it is hardly a monolith. You will find internationalists, isolationists, libertarians, and nationalists all residing under the general umbrella of the BJP.


The BJP came to power in the 2014 general election, when India was in the midst of an economic downturn. The ruling Indian National Congress, or Congress Party, was beleaguered by massive corruption allegations, slowing economic growth, rampant inflation, and a pervasive sense of “policy paralysis.”

The BJP’s leader, Narendra Modi, cast himself as the right man in the right place at the right time. For more than a dozen years, Modi had served as chief minister of the state of Gujarat, which had enjoyed high growth and a reputation as an investment-friendly destination under his tenure.

Modi’s pitch to the electorate was quite simple: make him prime minister and he would do to India what he did to Gujarat. It did not hurt that he was a gifted public speaker with a compelling life story, having been born into a backward caste family of modest means.

Since 2014, Modi has been able to reshape the party in his own mold. He has drawn on his aspirational agenda to expand the party’s electoral footprint at the state level as well.

Today, the BJP and its allies control twenty of India’s twenty-nine states. That is more than double the number it ran four years ago. For comparison’s sake, its archrival, the Congress Party, runs just three states today.

But the party’s success cannot be reduced to Modi’s popularity alone. Under his watch, the BJP has also strengthened its electoral operations, engineered broad-based social coalitions, and struck useful alliances with smaller regional parties. All of this has improved its stature across India.


The BJP is distinct from other political parties in India in at least two ways.

First, there is the issue of Hindutva. Most Indian political parties are avowedly secular, in that they believe no one religion should be advantaged over any another.

In India, secularism means that the government maintains an equal embrace of, and equal distance from, all religious traditions. It does not mean a strict separation of church and state, as it does in the United States and Europe.

Recently, the appeal of secular parties has dimmed, as there is a perception that they have cynically used minority groups like Muslims as “vote banks,” rather than treating them as genuine political constituencies. Some on the right have also accused secular parties of catering to minorities, at the expense of the majority Hindu population.

The BJP makes no bones about its belief that it principally serves the interest of India’s Hindus. Within the party, there is a great deal of variation in terms of what this means in practice. There are those who are fundamentally anti-minority; those who want to see a more level playing field among faith communities (when it comes to things like subsidies and welfare); and those who are somewhere in between.

The second perceived difference is on economics. The BJP has traditionally espoused more pro-business policies than its competitors, who prefer a more center-left, social democratic posture. When in opposition, it criticized many of the Congress Party’s key social welfare schemes as being too costly and socialist.

However, since it came to power, the party has doubled down on nearly every such scheme.

In practice, the economic differences between the BJP and the Congress are probably overstated. Most political parties in India share what Indian economist Montek Singh Ahluwalia once called a “strong consensus for weak reforms.”


The BJP’s current single-party majority in the lower house of parliament actually represents a break with the past— or, at least, the previous twenty-five years before it came to power in 2014.

It is true that between 1952 and 1989, India was a one-party dominant system led by the hegemonic Congress Party. The Congress Party benefited from the reservoir of goodwill it inherited as the party that helped India achieve independence from Great Britain. It was a catchall party that prided itself on its pan-Indian footprint and multi-ethnic, cross-class composition.
With the exception of the period between 1977 and 1979—when a coalition of opposition parties briefly displaced the Congress in the wake of anti-democratic Emergency Rule imposed by the Congress Party under former prime minister Indira Gandhi—the Congress Party reliably formed the government in New Delhi.

But between 1989 and 2014, no single party was strong enough to form a government on its own, without the help of myriad coalition allies. Most analysts believed that coalition politics was here to stay—until the BJP’s electoral victory in 2014.

The 2014 result, in many ways, marked a break with the patterns of electoral competition that had prevailed for at least a quarter century.


What is unusual about the BJP is that it is not simply a political party. It is the political expression of a family of Hindu nationalist organizations, collectively known as the Sangh Parivar.

The ideological guiding force of the Sangh is the Rashtriya Swayamsevak Sangh (RSS). The RSS is a volunteer service organization made up of individuals driven by a common desire to unite Hindus under the aegis of a Hindu rashtra.

The Sangh’s constituent units range from a farmers’ union, to a women’s wing, to a nonprofit charged with bringing education to India’s most disadvantaged groups living in rural areas.

The RSS is arguably India’s largest nongovernmental organization, and it serves as a mentor to the BJP cadres.


One has to separate the BJP government’s record into at least three categories: economics, foreign policy, and social issues.

In terms of economics, I would say the government gets credit for instituting a number of reforms that have modernized the Indian economy. For instance, the government ushered in the Goods and Services Tax (GST), which helps to unify India’s fragmented network of indirect taxes. It has also put in place a new bankruptcy and insolvency code, which for the first time has established an orderly process for firms to exit the marketplace if they go belly up.

In my view, however, the government could and should have done more to fundamentally reset the balance between the state and private capital, which for too long has been tilted in favor of the former.
For instance, India is home to hundreds of state-owned enterprises, many of which lose money and are a severe drain on the treasury. When it comes to core sectors of the economy—from agriculture to banking—there is far too much red tape. Modi had a once-in-a-generation mandate to tackle these problems plaguing India’s political economy, but his government has preferred (in their own words) a strategy of “persistent and creative incrementalism.”

I think foreign policy has been one of the relative bright spots for the BJP government. It has broadened and deepened India’s relations with the United States in very productive ways, especially when it comes to defense cooperation. The Modi government has also spent a fair amount of political capital building diplomatic and economic bridges to the country’s east, in order to forge closer ties with the economically dynamic countries of Southeast and East Asia.

But it is on the social side that I have the greatest concern. In several instances, Hindu majoritarianism has whipped up social tensions in India. This has detracted from an agenda of inclusive growth and development. The BJP’s 2014 election slogan was “Sab ka Saath, Sab ka Vikas” (together with all, development for all). Creating new social divisions is fundamentally at odds with that mantra.
—–Milan Vaishnav

Vaishnav’s primary research focus is the political economy of India, and he examines issues such as corruption and governance, state capacity, distributive politics, and electoral behavior
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We believe this constitutes a ‘fair use’ of any such copyrighted material as provided for in section 107 of the US Copyright Law. In accordance with Title 17 U.S.C. Section 107, the material on this site is only for reading purposes that included information for research and educational purposes. For the original source we are providing “url” of that article which is a ‘fair use’ of anything you find on this web site. However, if you wish to use copyrighted material from this site for purposes of your own that go beyond ‘fair use’, you must obtain permission from the copyright owner.

For a ‘Dalitariat’ revolution-M.P. RAJU

Posted by admin On October - 6 - 2018 Comments Off on For a ‘Dalitariat’ revolution-M.P. RAJU

The book provides an overarching analysis of almost all the important problems faced by India today and is a must read for all those interested in caste-class issues.
MANY writers have attempted to study the manifold fault lines underlying the Indian republic that cause perpetual tremors debilitating the polity continually despite the socio-economic revolution famously promised by the Constitution of India. In Anand Teltumbde’s, Republic of Caste: Thinking Equality in the Time of Neoliberal Hindutva, we have a system-centric and unique attempt at understanding these fault lines.

Are not almost all the ailments of this country attributable directly or indirectly to the fact of India being a republic of castes? This is the thread that runs through almost all the premises of the book, such as demolishing the icon of Dr B.R. Ambedkar, critiquing the reservation imbroglio, identifying the class-caste bias inbuilt in the Constitution, exposing the game plan of the ruling classes representing neoliberal forces and Hindutva protagonists, pointing out the strategies involved in branding Dalits and Adivasis as Maoists followed by their targeted lynching or pointing fingers at the wayward political experiments of the Bahujan Samaj Party (BSP), the Congress and the Aam Aadmi Party.

The recent spurt in mob lynchings has made many wonder how such diabolic and horrendous happenings are possible in the land of Krishna, Buddha, Asoka and Mahatma Gandhi. Teltumbde has dealt with the issue with reference to the instances of lynching of Dalits. Analysing the facts of anti-Dalit lynchings in the recent past, especially the ones that occurred in Khairlanji, Kawlewada, Dulina and Bhagana, the author draws important lessons from the recent lynching incidents, including those against members of minority communities. He brings out the police-bureaucracy-politicians nexus at the ground level. The last hope of the people—in the judiciary—was also disappearing. “Barring some honourable exceptions, the courts have always been biased against the poor, tribals, Dalits and Muslims” (page 173).

The author believes that the characteristics of a lynch mob—its easy assumption of moral righteousness and confidence about its impunity—are not generated spontaneously. They are honed expressions of a strategy perfected over many years of experiment and observation, mainly through precedents involving Dalits.

There is an attempt to re-baptise Marx into an Ambedkarite and Ambedkar into a Marxist. This is born out of the author’s conviction that the only plausible solution lies in merging Dalits and the proletariat. He urges Dalits to foreground the need to annihilate caste and to reorient themselves to see society in class terms. He is unambiguous in his view that annihilation of castes will necessitate a thoroughgoing democratic revolution, which can happen only through a class struggle, which presupposes a meeting point between Ambedkar and Marx. However, Teltumbde sees Ambedkar as reactive and thus purely pragmatic, and Marx as scientific and as having a theoretical foundation, which has objective rigour and correctly explains the past. Ambedkar is pictured as having only a short-term approach, whereas Marx is praised as one who has given a scientific framework for revolution and a theory to bring it about. So, the author is harshly and uncharitably critical of Ambedkar in comparison to Marx.

Ambedkar had identified Brahmanism and capitalism as the two enemies of workers and Dalits. So Teltumbde may be right when he concludes that Ambedkar never saw any contradiction between class struggle and anti-caste struggle.

Reservation as a ‘conspiracy’
The author offers a detailed conceptual analysis of the policy of reservation. It was not the British who introduced reservation but native rulers such as Shahu Maharaj (1874-1922), the king of Kolhapur; the Justice Party in Madras Presidency; and the princely states of Mysore, Baroda and Travancore.

It was Ambedkar who proposed separate electorates for Dalits with reserved seats during the Round Table Conferences (1931-32). After the Poona Pact in September 1932, reservation as a policy of giving preference for Dalits was incorporated into the Government of India Act, 1935. In 1943, Ambedkar, as a member of the Viceroy’s Executive Council, got this preferment policy transformed into a quota system reserving 8.5 per cent seats for Dalits in educational institutions and public employment.

Teltumbde smells a conspiracy by members of the Constituent Assembly in incorporating the policy of reservation in the Constitution. Thus, the policy of reservation was a “cynical game of the ruling classes” and Ambedkar was fooled into it. According to the author, the cost of reservation far exceeds its benefits. Moreover, it is a stumbling block to the realisation of the dream of paving “the way for the consolidation of all the sub-castes of Dalits into a class”. He is dismissive of the demand for instituting quotas in the private sector as a game plan called manipulation of expectations.

But the author’s ambivalence is evident. In the first chapter, he attempts to demonstrate that reservation became a weapon in the hands of the ruling classes, but he states in the introduction that it does not automatically mean that it is inherently bad and should be discarded. According to him, extending reservation to the Scheduled Tribes (S.Ts) diluted the concept of reservation, and even if it was permitted, the S.Ts ought to have been combined with Dalits. He is also against reservation for Backward Classes (B.Cs). He pities the “myopia” of the Left and the way all Left parties vied with one another to support the Other Backward Classes’ (OBCs) demand for reservation. According to him, this was bound to lead to “casteisation of society, which would eventually prove detrimental not only to Dalits, but also and most particularly to the idea of class unity”.

His grievance is that no one paused to question the Constitution that enabled it. But he forgets that non-implementation of the constitutional provisions in favour of the B.Cs by the Jawaharlal Nehru government was one of the reasons cited by Ambedkar for his resignation as Law Minister.

Teltumbde holds that reservation became the pretext to conserve caste in the Constitution. His analysis of the system of reservation appears to have left out a number of recent studies and his arguments do not appear to have considered the constitutional principles, including those stressed by Ambedkar.

His strong suggestion to improve reservation by excluding all Dalit families, who happened to avail themselves of reservation even once, is an argument in false fatigue to exclude the so-called creamy layer even in the case of the Schedules Castes/S.Ts. There may be many takers for the solution proposed by Teltumbde to the problem of reservation. See who is speaking through the modern messiah of Dalits.

A question may be pertinent: If India remains a republic of caste would the burden of blame not rest on Ambedkar and the Constitution that he was instrumental in drafting? In answering this, Teltumbde raises a serious allegation that Ambedkar had disowned the Constitution and had declared in Parliament that he was used by the ruling class, represented through the Congress, as a “hack” and that he should be the first person to burn it. This is one of the basic premises on which the author builds his conclusions. He repeats this charge against Ambedkar at several places in the book (pages 25, 51, 126, and 261).

The author also doubts the sincerity of the subsequent explanation given by Ambedkar himself.

To understand the correctness of this accusation, we may have to view the statement in its context and the changes, if any, in Ambedkar’s attitude towards the Constitution. The statements of Ambedkar are found in his speech dated September 2, 1953, in the Rajya Sabha during the discussion on the Andhra State Bill, 1953. The object of the Bill was to create a new State for Andhras on linguistic lines.

Ambedkar had already resigned as the Law Minister on the issues of the Hindu Code Bill and the failure of the government to implement constitutional provisions, especially those seeking to benefit the B.Cs and S.Cs. He continued to be a bitter critic of the government and its disregard for the Constitution.

In his speech, Ambedkar initially made a few comments attacking the government for its delay in forming Andhra as a separate linguistic State and for a few drawbacks in the Constitution such as the non-inclusion of Andhra in the schedule, which Ambedkar had to omit due to non-response from the Prime Minister and the Home Minister during the drafting of the Constitution. Then, he dwelt on a few specific suggestions for amending the Constitution providing for the protection of minorities and S.Cs in the new Andhra State as also in other States.

Referring to the fact that in the Andhra area, a few high-caste communities possessed almost all the land, resources, trade and even the smallest jobs and S.Cs were landless labourers, Ambedkar wanted to know “whether the reservation, which was blissfully granted to us by the Congress party for 10 years, is going to disappear”.

To this, one member intervened, “You accepted it.”

Ambedkar retorted: “Yes, what else can one do; if you can’t get puri you must get roti.”

Minorities & Governor’s role
Continuing his argument, he suggested two amendments to the Constitution to protect the minority communities against the community in office practising communalism: one, to give the power to the Governor to override the government in such matters, and two, appoint small committees of these minorities who can make representations either to the Ministry or to the Governor.

Ambedkar knew that the absence of these provisions in the Constitution would be seen as his failure as the maker of the Constitution, a charge that has already been made against him. He explained this absence by stating that not giving such powers to the Governor was not his idea but was the result of the tradition India had inherited as part of its hatred for the British. Ambedkar went on:

“People always keep on saying to me: ‘Oh, you are the maker of the Constitution’. My answer is I was a hack. What I was asked to do, I did much against my will.”

A member, P. Sundarayya, retorted: “Why did you serve your masters then like that?”

This led to a lot of commotion and the Chairman had to call for order repeatedly.

Thereafter, Ambedkar explained that we had inherited certain ideas of democracy on account of our hatred for the British, and one such idea was that the Governor should merely be a rubber stamp. He said: “If a Minister, however scoundrel he may be, however corrupt he may be, if he puts up a proposal before the Governor, he has to ditto it. That is the kind of conception about democracy which we have developed in this country.”

Immediately came the objection that Ambedkar had apprehended. M.S. Ranawat, representing Rajasthan, challenged him: “But you defended it.”

Ambedkar’s explanation
Ambedkar replied: “We lawyers defend many things. [Interruption] You should listen seriously to what I am saying, because this is an important problem.”

He further explained the need to give some powers to Governors for the protection of minorities and quoted the example of similar provisions in the Constitution of Canada. Then he posed a question to Home Minister Dr K.N. Katju, whether such a provision had made the Canadian Constitution undemocratic.

To this Dr Katju replied: “My answer is that you had drafted this Constitution.”

Ambedkar replied: “You want to accuse me for your blemishes?”

The Chairman had to intervene: “He has said that he defended the present Constitution because it was the majority decision. Get along.”

Ambedkar continued arguing for amending the Constitution to incorporate provisions similar to the ones in the Canadian and English Constitutions that seek to protect minority communities and take into consideration the sentiments of smaller communities. Pointing to the lack of similar provisions in the Indian Constitution, Ambedkar went on:

“Sir, my friends tell me that I have made the Constitution. But I am quite prepared to say that I shall be the first person to burn it out. I do not want it. It does not suit anybody. But whatever that may be, if our people want to carry on, they must not forget that there are majorities and there are minorities, and they simply cannot ignore the minorities by saying, ‘Oh, no. To recognise you is to harm democracy.’ I should say that the greatest harm will come by injuring the minorities.”

This was the context of Ambedkar’s observations, on the basis of which he is accused of denouncing the Constitution. His was a rhetorical plea to amend the Constitution and an expression of pain at its misuse and must not be treated as disowning the Constitution.

After this speech, Ambedkar again spoke in the Council of States on September 18, 1953, during the discussion on the Estate Duty Bill. Although he supported the Bill, he expressed his pain at not getting the Hindu Code Bill passed. He lamented that the Hindu Code was hanging fire for four years and nobody knew if it would hang fire perpetually. “And no one is sorry for that except myself” (Book & Writings of Ambedkar, Vol 15, page 871)

Attitude to the Constitution
On March 19, 1955, Ambedkar was confronted with his so-called denouncement of the Constitution. He was speaking in the Rajya Sabha on the Constitution (Fourth Amendment) Bill, 1954, which had sought to amend Article 31 regarding the provision for compensation when the government acquires any property. He said: “… Article 31, with which we are dealing now in this amending Bill, is an article for which I, and the Drafting Committee, can take no responsibility whatsoever. We do not take any responsibility for that. That is not our draft.”

He went on to explain that in view of the substantial differences of views, Article 31 was allowed to be there, which was an ugly thing and was an exception to the other parts of the Constitution, which was otherwise excellent. He went on: “If I may say so, and I say it with a certain amount of pride: the Constitution which has been given to this country is a wonderful document. It has been said so not by myself, but by many people, many other students of the Constitution….” (Book & Writings of Ambedkar, Vol 15, page 948).

Dr Anup Singh (Punjab) interrupted him: “Last time when you spoke, you said that you would burn the Constitution.”

Ambedkar: “Do you want a reply to that? I would give it to you right here. My friend says that the last time when I spoke, I said that I wanted to burn the Constitution. Well, in a hurry I did not explain the reason. Now that my friend has given me the opportunity, I think I shall give the reason. The reason is this: We built a temple for a god to come in and reside, but before the god could be installed, if the devil had taken possession of it, what else could we do except destroy the temple? We did not intend that it should be occupied by the Asuras. We intended it to be occupied by the devas. That is the reason why I said I would rather like to burn it.”

B.K.P. Sinha (Bihar) intervened: “Destroy the devil rather than the temple.”

Ambedkar: “You cannot do it. We have not got the strength…” (Book & Writings of Ambedkar, Vol 15, pages 948-949).

Thus, it would be unfair to conclude that Ambedkar was withdrawing his statement to please somebody. There was no change in his views. The rhetorical statement he had made earlier was properly understood by the listeneres, except a few like Katju, as reflected in the comment made by the Chairman then and there itself.

It is relevant to take note of the fact that the First amendment to the Constitution was made by the provisional Parliament when Ambedkar was the Law Minister. By this amendment, many Articles, including Articles 15 and 19, were amended. Although the Bill was introduced by Prime Minister Jawaharlal Nehru, it was passed only after Ambedkar intervened and explained the reasons behind the amendments and clarified the doubts of members. He made the speech on May 18, 1951 (Book & Writings of Ambedkar, Vol 15, pages 332-342). During the speech, Kamath interrupted, saying, “You yourself made it.”

Concluding the discussions on the final draft of the Constitution on November 25, 1949, Ambedkar had this to say on the merits of the Constitution: “However good a Constitution may be, it is sure to turn out bad because those who are called to work it happen to be a bad lot” (Constituent Assembly of India Debates, Vol XI, page 975).

Ambedkar was aware of the possible condemnation of the Constitution especially by communists since they wanted a Constitution based on the principle of the dictatorship of the proletariat. According to him, “They condemn the Constitution because it is based upon parliamentary democracy” (Constituent Assembly of India Debates, Vol XI, page 975).

“What I do say is that the principles embodied in the Constitution are the views of the present generation or if you think this to be an overstatement, I say they are the views of the members of the Constituent Assembly. Why blame the Drafting Committee for embodying them in the Constitution? I say why blame even the Members of the Constituent Assembly?” (Constituent Assembly of India Debates, Vol XI, page 975) Then Ambedkar pointed out the provisions to amend the Constitution and welcomed the critiques to amend the Constitution. He went on: “If those who are dissatisfied with the Constitution have only to obtain a 2/3 majority and if they cannot obtain even a two-thirds majority in the Parliament elected on adult franchise in their favour, their dissatisfaction with the Constitution cannot be deemed to be shared by the general public” (Constituent Assembly of India Debates, Vol XI, page 976).

Socio-economic revolution
While playing a singular role in making the Constitution, Ambedkar might not have succeeded in drawing up a Dalit manifesto as imagined by today’s Marxian Dalit intellectuals, but he was clear about what he was doing, and the ordinary Dalits, Adivasis, B.Cs, women and minorities have not doubted his wisdom, consistency and unparalleled contribution to the poor masses and their future generations. He might not have gifted them any magic wand like class struggle or a prescription like historical materialism, but he has initiated the process of ushering in a socio-economic revolution by promoting fraternity among all by assuring the dignity of the individual (Preamble of the Constitution). This unique role has not been dampened in any manner by his cultural experiment of converting to Buddhism or his rejection of Marxism (while sympathising with it) on two grounds: its reliance on violence and dictatorship.

Spread over 13 chapters, with an Introduction encapsulating them, the book provides an in-depth analysis of almost all the important problems faced by India today. The absence of a concluding chapter may be because of the fact that the author’s conclusions are spread across all the chapters. It can be seen as 13 separate but inter-related booklets put together in the form of a book. The Foreword by Sunil Khilnani highlights the achievements of the work in glowing terms.

The author offers a mine of information and analysis, disclosing interesting intersections between events and movements, which often go unnoticed by experts in the respective fields of research. In this work, the author shares with readers his dream of witnessing a revolution that marches on through the struggle by the “dalitariat”, an amalgamated class consisting of Dalits and the proletariat. The book is a must read for all those who are interested in caste-class issues.

M.P. Raju is an advocate practising in the Supreme Court. He is the author of several books, including Minority Rights: Myth or Reality (2002) and India’s Constitution: Roots, Values & Wrongs (2017).

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This web site may contain copyrighted material the use of which we are making only for educational purposes. This is a non -profit web site and does not accept any type of advertisement, paid or otherwise. We are making such material available in our efforts to advance the understanding of humanity’s problems and hopefully to help find solutions for those problems.

We believe this constitutes a ‘fair use’ of any such copyrighted material as provided for in section 107 of the US Copyright Law. In accordance with Title 17 U.S.C. Section 107, the material on this site is only for reading purposes that included information for research and educational purposes. For the original source we are providing “url” of that article which is a ‘fair use’ of anything you find on this web site. However, if you wish to use copyrighted material from this site for purposes of your own that go beyond ‘fair use’, you must obtain permission from the copyright owner.

US Switching to Ukraine as Location to Start World War III Against Russia-

Posted by admin On October - 6 - 2018 Comments Off on US Switching to Ukraine as Location to Start World War III Against Russia-

The United States Government is now treating Ukraine as if it were a NATO member, and on September 27th donated to Ukraine two warships for use against Russia. This is the latest indication that the US is switching to Ukraine as the locale to start World War III, and from which the nuclear war is to be sparked against Russia, which borders Ukraine.

Here is why Syria is no longer the US alliance’s preferred choice as a place to start WW III:

On September 4th, US President Donald Trump publicly threatened Syria, Iran and Russia that if they exterminated the jihadists in Syria’s only remaining jihadist-controlled province, Idlib, then the US might launch a full-scale invasion against Syria, Iran and Russia in Syria. Either the US or Russia would then quickly escalate to nuclear war so as not to lose in Syria — that would be the conventional-war start to World War III.

The leaders of Russia, Iran, Turkey, and Syria (Putin, Rouhani, Erdogan, and Assad), agreed in two meetings, one on September 7th and the other on September 17th, to (as I had recommended on September 10th) transfer control of Syria’s only remaining jihadist-controlled province, Idlib, to NATO-member Turkey. This action effectively prevents the US alliance from going to war against Russia if Russia’s alliance (which includes Syria) obliterates all the jihadist groups in the Al-Qaeda-led Syrian province Idlib. For the US to war against Russia there would also be war against fellow-NATO-member Turkey — out of the question.

The US has been using Al Qaeda in Syria to train and lead the jihadist groups which have been trying to overthrow Syria’s Government and to replace it with a government that has been selected by the Saud family who own Saudi Arabia. Ever since 1949 the US Government has been trying to do this (to place the Saud family in charge of Syria). That plan is now being placed on-hold if not blocked altogether, because of the Russia, Turkey, Iran, Syria, agreement. As I reported on September 25th, “Turkey Now Controls Syria’s Jihadists”. The US would no longer be able to save them, but Turkey would, if Erdogan wants to. “Turkey is thus now balanced on a knife’s edge, between the US and its allies (representing the Saud family) on the one side, versus Russia and its allies (representing the anti-Saud alliance) on the other.”

During the same period in which the US Government was setting Syria up as the place to start WW III, it was also setting up Ukraine as an alternative possibility to do that. US President Obama, in a very bloody February 2014 coup which he had started planning by no later than 2011, overthrew Ukraine’s democratically elected President, and replaced him by a rabidly anti-Russian racist-fascist regime whose Ukrainian tradition went back to ideologically nazi Ukrainian organizations that had supported Hitler during World War II. Though communism is gone from Russia ever since 1991, the US aristocracy never ended its goal of conquering Russia; the Cold War was secretly continued on the US-NATO side. Ukraine’s nazis (meaning its racist-fascists) are now the US and UK aristocracies’ chief hope to achieve this ambition of a US-and-allied global conquest. Here are the recent steps toward WW III regarding the US alliance’s new (since 2014) prize, Ukraine:

On September 28th, John Siciliano at the Washington Examiner bannered “Ryan Zinke: Naval blockade is an option for dealing with Russia” and he reported that Trump’s Interior Secretary Zinke had said “There is the military option, which I would rather not. And there is the economic option. … The economic option on Iran and Russia is, more or less, leveraging and replacing fuels.” He was saying that in order for the US to get its and its allies’ (mainly the Sauds’) oil and gas into Europe replacing some of Russia’s dominant market-share in that — the world’s largest energy-consuming — market (and also shrink Iran’s market-share there), a military blockade against Russia and Iran would be an option. Currently, most of Russia’s oil and gas into Europe goes via pipelines through Ukraine, which the US already controls. Siciliano’s news-break received a follow-up on September 30th from Zero Hedge.

On October 1st, George Eliason, the great investigative journalist who happens to live in Donbass, the southeastern part of Ukraine that broke off from Ukraine when Obama’s coup overthrew the democratically elected Ukrainian President who had received over 90% of the votes in Donbass, reported at The Saker’s site, that Ukraine’s war against Donbass was now returning in full force. Headlining “War Crimes in LNR and DNR [Donbass] —The Unannounced War”, he opened:

On September 28th, Lugansk Peoples Republic (LNR)Deputy Foreign Minister Anna Soroka and Andrey Chernov gave a presentation unveiling a photo album entitled Unannounced war. This collection of 150 images details the war crimes by the Ukrainian government during the war from 2014-2018.

Over the last 4 years, many journalists including myself reported on the war crimes committed by Ukrainian punisher battalions and sometimes the Ukrainian army. These war crimes are privately funded by Ukrainian Diaspora groups led primarily by US and Canadian citizens.

The Ukrainian punisher battalions and Ukrainian volunteer battalions take pride in the fact there is no need to hide any of Ukraine’s crimes from the West’s prying eyes.

Even now, when there is supposed to be a ceasefire so the children can go to school, Kiev is shelling cities and towns across Donbass. On September 29th, in just 24 hours Ukrainian army units shelled DNR (Donetsk Peoples Republic) over 300 times violating the ceasefire.

The US Government is trying to bully Russia and its allies, and now is overtly threatening to go to a naval blockade against Russia. Those two warships that the US just donated to Ukraine could be helpful in such a blockade. Alternatively, Ukraine’s re-invasion of Donbass might become Trump’s opportunity to ‘aid a NATO ally’ and precipitate WW III from a conventional war in Donbass. Either way would likely produce from Russia a nuclear blitz-attack to eliminate as many of America’s retaliatory weapons as possible, so as to beat the US to the punch. In military terms, the side that suffers the less damage ‘wins’, even if it’s a nuclear war that destroys the planet. The side that would strike first in a nuclear war would almost certainly suffer the less damage, because most of the opponent’s retaliatory weaponry would be destroyed in that attack. Trump is playing nuclear “chicken” against Putin. He is sorely trying Putin’s patience.

If the US regime uses any of these entry-points to a conventional war, Russia would simply be waiting for the US to nuclear blitz-attack Russia, which the US regime has long been intending to do. Regardless which side goes nuclear first, the blockade and/or re-invasion of Donbass (repeating there such things as this and this) will have started WWIII. And, clearly, any survivors would likely view the US in the way that most of today’s world views the fascist powers in WWII: as having been the aggressors. Consequently, if the American people cannot first overthrow the US regime and establish an authentic democracy here, then WWIII seems likely to result, which would be an outcome far worse, for the entire world, than an overthrow of the government that the entire world considers to be by far the most dangerous on Earth.
Fair Use Notice
This web site may contain copyrighted material the use of which we are making only for educational purposes. This is a non -profit web site and does not accept any type of advertisement, paid or otherwise. We are making such material available in our efforts to advance the understanding of humanity’s problems and hopefully to help find solutions for those problems.

We believe this constitutes a ‘fair use’ of any such copyrighted material as provided for in section 107 of the US Copyright Law. In accordance with Title 17 U.S.C. Section 107, the material on this site is only for reading purposes that included information for research and educational purposes. For the original source we are providing “url” of that article which is a ‘fair use’ of anything you find on this web site. However, if you wish to use copyrighted material from this site for purposes of your own that go beyond ‘fair use’, you must obtain permission from the copyright owner.

Major Arms Deal Gets Green Light Ahead of Russia-India Summit-ALEX GORKA

Posted by admin On October - 6 - 2018 Comments Off on Major Arms Deal Gets Green Light Ahead of Russia-India Summit-ALEX GORKA

26.11.2015 Выгрузка зенитных ракетных комплексов С-300 (авиабаза «Хмеймим», Сирийская Арабская Республика)

The Russian-Indian time-tested partnership has experienced an upward trend in all areas of cooperation in recent years. Last year, the two great powers marked the 70th anniversary of diplomatic relations. The leaders meet regularly and hold phone conversations to discuss acute problems. A very important event has just taken place to bring the two nations even closer.

The Indian Cabinet Committee on Security, chaired by PM Narendra Modi, approved the $6.2 billion S-400 Triumf deal with Russia on Sept.26. It’s rather symbolic that the final decision to purchase the five cutting-edge air defense systems to protect Indian critical infrastructure sites was taken just a few days before the Russian President Vladimir Putin’s visit to India scheduled on Oct.4-5. The Indian government defied the US threats to impose sanctions for buying Russian weapons in accordance with the 2017 “Countering America’s Adversaries Through Sanctions Act” (CAATSA) the way it did to “punish” China for buying the same systems and Su-35 combat planes.

The law allows making a waiver for India but US officials do not guarantee New Delhi will be exempt. It takes a risk by dealing with Russia. India has signed multiple multi-billion deals with US weapons producers. Defense Secretary James Mattis and State Secretary Mike Pompeo tried to talk India out of the S-400 deal during the 2+2 talks in September. Randall G. Schriver, Assistant Secretary of Defense for Asian and Pacific Security Affairs, has warned that a waiver is not a slam dunk decision. Indeed, if an exemption is made, others will demand waivers too, but with no sanctions imposed, the CAATSA will be deprived of any purpose. The US has put itself into an awkward situation and has to make a hard choice.

Russia and India are in talks on the way to make non-dollar payments. They could resort to clearing options, another currency, such as the Singapore dollar, or a go-between based in a third country. The US uses go-betweens to sell arms to the Syrian Kurds.

The two nations have a 60-year history of military cooperation, with Russia being the single largest supplier of hardware. The sides joined together to develop the BrahMos supersonic anti-ship and land-attack cruise missile. India also fields Russia’s S-300 air-defense system, and its INS Vikramaditya aircraft carrier is made in Russia and uses Russian aircraft.

The list of Russian weapons used by the Indian military is really long. India is finalizing negotiations with Russia to purchase 48 additional Mi-17-V5 utility helicopters. The agreement on the purchase of four frigates may be signed during the upcoming Russian-Indian October summit. New Delhi also wants to lease a Russian nuclear submarine

Moscow accounts for 62 per cent of New Delhi’s arms imports. The Russian weapons and equipment in the Indian inventory have to be maintained, modernized, and spare parts have to be supplied. India just couldn’t all of a sudden suspend the military cooperation with Russia even if it wanted to. But it doesn’t. It’s widely believed that the S-400s are the best in the world. Nobody else could offer India a system with comparable specifications. And no American sanctions can prevent the great power, such as India, from buying what serves better its national security interests.

The Indian government has been already criticized by opposition for getting too close to the United States. The general elections are in April-May 2019. Signing the deal during President Putin’s upcoming visit will be the right step to win voters’ support. India defies the US sanctions anyway by buying Iran’s oil. New Delhi continued to trade with Tehran during previous rounds of restrictions. The EU, Russia, China, and Iran have recently agreed to create a special purpose vehicle (SPV) to bypass US sanctions against Iran. Russia and India could do the same.

The two great powers are expected to conclude an ‘action plan’ for expanding civil nuclear energy partnership during the upcoming top-level meeting. It will focus on a second site for Russian nuclear plant in the country. Russia’s Rosatom is currently the only foreign investor in India’s civilian nuclear energy sector, with the first two 1,000W units of the Kudankulam power plant already commissioned. The site is scheduled to have six VVER-1000 reactors with an installed capacity of 1,000 MW each. In March, the trilateral agreement was signed by India, Russia and Bangladesh on nuclear energy-related cooperation in personnel training, experience sharing and consulting support.

Russia played a key role in facilitating India’s entry into the Shanghai Cooperation Organization (SCO), or Shanghai Pact, last year. It strongly supports India’s bid for a permanent seat in the United Nations Security Council and the Nuclear Suppliers Group (NSG).

No doubt, the October summit will re-affirm the fact that the traditionally close relationship has been upgraded to a “special privileged strategic partnership” as the world is shifting from a unipolar order to a possible multipolar structure. The decision to purchase the S-400 and defy the US exerting outright pressure proves the Indian government is adamant in its desire to boost cooperation with the old partner and friend.
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The Indian economy in a tailspin-Prabhat Patnaik

Posted by admin On October - 5 - 2018 Comments Off on The Indian economy in a tailspin-Prabhat Patnaik

shiva trishul

Originally published: Peoples Democracy (September 30, 2018)   |
THE Indian economy is in a tailspin. This cannot be attributed only to innocence in economic matters of the command-centre of the NDA government. While that is indubitably a contributing factor, the current travails of the economy point to something deeper, namely the dead-end to which neo-liberalism has brought the economy. Without moving away from the neo-liberal trajectory, the economy cannot come out of its current difficulties.

India’s success in raising the GDP growth rate, the main selling point for the neo-liberal regime, was, unlike China’s, built upon the quicksand of a persistent trade and current account deficit on the external front. This was covered all this time by financial inflows, which were large enough even to add to the foreign exchange reserves. A major factor contributing to such inflows in recent years was the much lower interest rates in metropolitan economies, especially in the U.S. where they were virtually pushed down to zero to revive the economy after 2008, compared to India.

But now the U.S. itself has started raising the interest rates; and uncertainty over the future of neo-liberalism in the wake of Trump’s protectionist measures is making globalised finance flow massively to the U.S. as its safe “home base”. The dollar, for both these reasons, is rising relative to other currencies, especially relative to the rupee. This state of affairs is not going to be reversed in the foreseeable future, which is why the rupee continues to slide vis-à-vis the dollar, even after Arun Jaitley announced a slew of measures on the 14th to attract finance into the economy to stem the rupee’s slide.

The sliding rupee is raising import costs, especially of crude oil; and the latter get passed on in the form of higher petro-product prices.This fact together with the rise of crude prices in the world market, following an agreement within the OPEC itself, has now raised petrol and diesel prices in India to dizzying heights; and the rise continues daily. Here again there is no question of any respite within the neo-liberal regime from the relentless impact of this exchange-rate-depreciation-cum-inflation syndrome. The only thing Arun Jaitley can think of doing is to attract sufficient financial inflow to stabilise the rupee, but that as suggested above is now more difficult; and even if there is some temporary reprieve through such inflows, it cannot but be temporary.

Manmohan Singh and Chidambaram attack the NDA for its economic incompetence, which is undeniable, but they have hardly any better ideas. At the most they may jack up interest rates a bit more, but that, while its effects on financial inflows would be dubious for reasons already mentioned, would amount at best to merely papering over the cracks (since the basic problem of the current account deficit would still remain unaddressed); besides it will worsen unemployment, and damage further the economy of the small producers.

One way of providing relief to the people against the skyrocketing petrol and diesel prices, whose effects are felt even by the poorest persons because they increase the transport costs of all goods, is to lower the taxes on these goods which make up the bulk of their prices. Some state governments, of whom Kerala was an early example and Karnataka the latest, have indeed reduced their taxes on petro-products to provide relief to the people. But there are limits to the extent to which such relief would be forthcoming, for two obvious reasons, both related to the neo-liberal regime.

One is our overwhelming reliance on indirect taxation, and the eschewing of direct taxation, because of the compulsion to retain so-called “investors’ confidence”, so that finance flows in adequate quantities to keep the balance of payments on an even keel. The second is the disastrous move towards a Goods and Services Tax, again in conformity with the demands of a neo-liberal economy, which has affected government tax revenues adversely.

In the face of this already adverse effect, the need to maintain government revenues becomes even more pressing, and puts a limit to the degree to which taxes on petro-products can be lowered (unless greater direct taxation is resorted to). Indeed the only reason that some states have been able to reduce taxes, for lowering petrol and diesel prices, is because these goods fall outside the GST ambit; but naturally they cannot keep doing so beyond a point without raising revenue in other ways. (And such ways are no longer available to state governments even to the limited extent they were earlier).

The way out of the current economic predicament however is obvious, though invisible to eyes blinkered by neo-liberalism. Since the inflow of finance will no longer cover the current account deficit, the slide in the rupee would require controlling this deficit; and this can be effected only by directly controlling inessential imports. Even in 2013 when the rupee was sliding, the government had controlled gold imports as a means of stemming this slide.Wealth-holders then were moving from rupees to gold. This had boosted gold imports, and direct controls over such imports played a significant role in reducing the trade deficit and halting the rupee’s slide. The ambit of import controls now will of course have to be wider, but there is no escape from such controls. The rupee will have to be stabilised immediately with a combination of import controls and use of foreign exchange reserves.

But this may not be enough to stabilise petro-product prices in view of world market trends. These prices will have to be not just stabilised, but actually lowered to prevent down-the-line cost-push inflationary effects on commodities in general. This can be done by significantly lowering taxes upon them, and making up for the revenue shortfall caused by such lowering through larger direct taxation, in particular wealth taxation.

Wealth taxation in any case is the best way to finance public expenditure as it has no adverse effects upon any investment “incentives”: since all forms of wealth are taxed without discrimination, there is no special disincentive for holding wealth in the form of productive assets. In addition it has the effect of keeping wealth inequality in society in check, which, as is commonly accepted now, is an essential prerequisite for democracy.

It is shocking that in India, where wealth inequalities have been rising so sharply of late, there is hardly any wealth taxation. Using direct taxation on wealth as a substitute for indirect taxation on petro-products will thus kill several birds with one stone: it will prevent the inflationary squeeze on the people that rising petro-product price are imposing, and at the same time bring greater wealth equality in society which is desirable per se.

Lower petro-product prices, it may be argued, would encourage larger consumption of such products, which, in the current context of rising world crude prices, would raise the country’s import-bill, bringing pressure on the rupee once again. Alongside controlling, and lowering petro-product prices therefore, the government has to take steps to control petro-product consumption directly. Since much of this consumption occurs within the government itself , with the defence sector in particular being a major consumer, controlling consumption can be effected through a set of directives within the government. As for consumption outside the government sector, several measures can be taken which effectively ration the use of petro-products.

Many of these measures are advocated and even implemented on environmental grounds. The “odd-even” scheme for instance that was implemented in Delhi, was also a means of petro-product rationing. In many countries, to avoid congestion in peak hours, a minimum number of occupants per car is insisted upon; this also acts as a measure of directly controlling petro-product consumption. In other words, measures of petro-product rationing would also kill several birds with one stone: they would reduce road congestion; they would reduce environmental pollution; and they would also reduce the consumption of petro-products with beneficial effects for our balance of payments.

A combination of direct import controls on inessential items, reduction of petro-product prices, measures for reducing the consumption of such products, and direct taxation, especially on wealth, is the obvious way of getting out of the tailspin in which the Indian economy is currently caught. But this combination of measures which is desirable, not just for getting out of the current travails, but on other, more long-term considerations as well, runs contrary to the direction of neo-liberalism. There is however no alternative to them if we are to avoid the fate of countries that eventually run to the IMF and get caught in the vice-like grip of “austerity”.

About Prabhat Patnaik
Prabhat Patnaik is Professor Emeritus at the Centre for Economic Studies and Planning, Jawaharlal Nehru University, New Delhi. His books include Accumulation and Stability Under Capitalism (1997), The Value of Money (2009), and Re-envisioning Socialism (2011).


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