Revisiting Paul Baran’s The Political Economy of Growth for Today

And this brings me to what I referred to earlier as a reaffirmation of my views on the basic problem confronting the underdeveloped countries. The principal insights, which must not be obscured by matters of secondary or tertiary importance, are two. The first is that, if what is sought is rapid economic development, comprehensive economic planning is indispensable… if the increase in a country’s aggregate output is to attain the magnitude, of, say, 8 to 10 per cent per annum; if in order to achieve it, the mode of utilization of a nation’s human and material resources is to be radically changed, with certain less productive lines of economic activity abandoned and other more rewarding ones taken up; then only a deliberate, long range planning effort can assure the attainment of the goal…

The second insight of crucial importance is that no planning worth the name is possible in a society in which the means of production remain under the control of private interests which administer them with a view to their owners’ maximum profits (or security or other private advantage). For it is of the very essence of comprehensive planning for economic development - what renders it, indeed, indispensable - that the pattern of allocation and utilization of resources which it must impose if it is to accomplish its purpose, is necessarily different from-the pattern prevailing under the status quo… (xxviii-xxix, Foreword to 1962 printing) The Political Economy of Growth, Paul A. Baran [emphasis added]

It is surely of some interest that the late Professor Baran-- reassessing his important, insightful, and extremely influential 1957 book, The Political Economy of Growth-- grounds his contribution to the liberation of the post-colonial world in two “insights”: 1. The necessity of “comprehensive” economic planning over the irrational decision-making of the market, and 2. The impossibility of having effective planning with the major productive forces in the hands of private entities operating for profits. 

Put simply, Baran is arguing that the most promising humane and rational escape from the legacy of colonialism is for the developing countries to choose the socialist path going forward and adopt planning as a necessary, rational condition for achieving that goal.

It is of equal interest that many who consider Baran to be one of the fathers of dependency theory-- the theory that development is most significantly hindered by the state-to-state structural barriers imposed by the “core” on the “periphery” or the “North” on the “South” -- have abandoned Baran’s key “insights” for an approach that argues for open, unhindered “fair” exchange and the rationality of markets. 

For many of today’s Western left, the locus of international inequalities is found in the economic relations between states. Exploitation-- in the form of taking advantage of uneven development or resource differences-- undoubtedly occurs in the relations between states, systematically in the colonial era, more indirectly today. That is just to say that competition between capitalist states within a global imperialist system will produce and reproduce various inequalities. It is popular to capture this as conflict between an advantaged North and a disadvantaged South-- while the geographical reference is most inexact, it is widely understood. From Wallerstein, Arrighi, and Gunder Frank, through Amin, and an important consensus today, the central feature of imperialism is thought to be the vast differences in wealth between the rich and poor countries. Moreover, they share the belief that existing structures maintain those differences, structures established and protected by the richest countries.

Of course, they are right to object to these inequalities and the practices and institutions that preserve them. And Paul Baran was acutely aware of these structures, but also attendant to the specific historical conditions influencing the individual countries-- their differences and similarities. He understands the trajectory of the post-colonial states:

Thus, the peoples who came into the orbit of Western capitalist expansion found themselves in the twilight of feudalism and capitalism enduring the worst features of both worlds, and the entire impact of imperialist subjugation to boot. To oppression by their feudal lords, ruthless but tempered by tradition, was added domination by foreign and domestic capitalists, callous and limited only by what the traffic would bear. The obscurantism and arbitrary violence inherited from their feudal past was combined with the rationality and sharply calculating rapacity of their capitalist present. Their exploitation was multiplied, yet its fruits were not to increase their productive wealth; these went abroad or served to support a parasitic bourgeoisie at home. They lived in abysmal misery, yet they had no prospect of a better tomorrow. They existed under capitalism, yet there was no accumulation of capital. They lost their time-honored means of livelihood, their arts and crafts, yet there was no modern industry to provide new ones in their place. They were thrust into extensive contact with the advanced science of the West, yet remained in a state of the darkest backwardness (p. 144). 

At the same time, Baran is fully aware of the predatory nature of foreign capital, denying its “usefulness” and affirming its sole domestic benefit to the merchant class.

Perhaps his clearest statement of the logic of imperialism appears on pages 196-197: 

To be sure, neither imperialism itself nor its modus operandi and ideological trimmings are today what they were fifty or a hundred years ago. Just as outright looting of the outside world has yielded to organized trade with the underdeveloped countries, in which plunder has been rationalized and routinized by a mechanism of impeccably ‘correct’ contractual relations, so has the rationality of smoothly functioning commerce grown into the modern, still more advanced, still more rational system of imperialist exploitation. Like all other historically changing phenomena, the contemporary form of imperialism contains and preserves all its earlier modalities, but raises them to a new level. Its central feature is that it is now directed not solely towards the rapid extraction of large sporadic gains from the objects of its domination, it is no longer content with merely assuring a more or less steady flow of these gains over a somewhat extended period. Propelled by well-organized, rationally conducted monopolistic enterprise, it seeks today to rationalize the flow of these receipts so as to be able to count on it in perpetuity. And this points to the main task of imperialism in our time: to prevent, or, if that is impossible, to slow down and to control the economic development of underdeveloped countries.

Notice that Baran acknowledges, along with today’s fashionable dependency theory, that imperialism’s “main task” is to impose underdevelopment. But imperialism’s agent is identified as the “monopolistic enterprise” and not specifically an antagonistic state or its government. Of course, the state hosting monopoly corporations does all it can to promote and protect their interests, but it should not be confused with either the exploiter or the beneficiary of exploitation: it is “the well-organized, rationally conducted monopolistic enterprise” that bleeds the workers of the developing countries. With monopoly capitalism dominating the state, the state plays a critical, essential role as an enabler for the most powerful monopolies in the global economy.  

For Baran, the key to liberating the former colonies from the stranglehold of rapacious monopolies is not a reordering of international relations, not a campaign for a level international playing field, not alternative market institutions, nor a coalition of dissenters from the status quo, but a radical change in the social and economic structure of the oppressed country.

In this regard, Baran differs from many contemporary dependency theorists who pose multipolarity as an answer to the North-South inequalities and welcome the BRICS development as constituting an anti-imperialist stage. They believe that breaking the stranglehold of the dominant great power-- the US-- will somehow eliminate the logic of contemporary imperialism, that it will disable the “mechanism of impeccably ‘correct’ contractual relations” at the heart of “core” / “periphery” relations. 

But this is not Baran’s thinking. He opts instead for an active engagement of the workers, peasants, and intellectuals on the periphery. His is a class approach. For Baran, working people are not dried leaves, blown this way and that by the powerful winds of great powers. Rather, they are the agents of their own liberation.

Baran draws out the potential of the post-colonial masses through his innovative concept of “surplus.”1 Baran asks revolutionaries in the emerging countries to realize the potential surplus that they may access for development provided that they engage in a “reorganization of the production and distribution of social output” and accept “far reaching changes to the structure of society.” (p. 24). Baran emphasizes four available sources for the surplus:

One is society’s excess consumption (predominantly on the part of the upper income groups…), the second is the output lost to society through the existence of unproductive workers, the third is the output lost because of the irrational and wasteful organization of the existing productive apparatus, and the fourth is the output foregone owing to the existence of unemployment caused primarily by the anarchy of capitalist production and the deficiency of effective demand. (p. 24)

By recovering this surplus, Baran contends that the post-colonial world can begin “the steep ascent” -- the escape from the legacy of colonialism and the stranglehold of capitalism. At the same time, Baran concedes that a resource-poor country, an economy violently distorted by a close neighbor-- a country like Cuba-- will need assistance from the socialist community, an assistance that has been less forthcoming since the demise of the Soviet Union.

The Multipolaristas and the BRICS advocates do not share Baran’s confidence in working people. They cannot conceive a revolutionary answer to the problem of development. They relegate socialism to the far, far-off future, and argue for a more humane capitalism. Their vision ends with establishing a new regime of “structural adjustments” that will blunt the economic power of the US to make way for a plurality of powers competing for global markets, but in a “friendly” way. This is the social-democratic vision taken to the global level. But this is not Baran’s vision.

Like their national counterparts, these global social democrats envision a world in which reforming capitalist social relations-- taming the worst monopoly scoundrels-- will result in the proverbial arc bending toward justice. BRICS, they believe, will give us a level playing field for the monopoly corporations to roam more fairly.

*****

Is Baran’s 1957 (1962) recipe for development relevant to today’s world? Could the so-called global South escape the clutches of the imperialist system by applying the “insights” offered by The Political Economy of Growth?

A recent Oxfam report on inequality in Africa suggests that there is plenty of potential surplus available for building a developmental program based on a class-based approach of appropriation and surplus recovery:

● Africa’s four most affluent billionaires have $57.4 billion in wealth, which is greater than ~50% of the continent’s 1.5 billion people.

● While Africa had no billionaires in 2000, today, there are 23 with a combined wealth of $112.6 billion. The wealth of these 23 ultra-rich Africans has grown by 56% in the last 5 years.

● The richest 5% on the continent have accumulated almost $4 trillion in wealth, more than twice the wealth of the rest of the people in Africa (by comparison, the richest 10% of US households hold two-thirds of US wealth).

● Almost half of the world’s most unequal countries are in Africa.

● The bottom 50% of Africans own less than 1% of the wealth of the continent (by comparison, the bottom 50% of US households own 3% of US wealth).

Presumably, the report does not include the billionaires like Elon Musk, Patrick Soon-Shiong, Rodney Sacks, and many others who relocated and invested outside of Africa. Eight of the top foreign-born US billionaires are from Africa.

Clearly, class, and not state-to-state relations, is at the center of Africa’s human development problem. The “potential surplus” accumulated in the hands of so few would well serve a peoples’ development program that could reverse the concentration of wealth now starving the continent’s poor. Appropriated wealth could well serve an industrial drive and the rationalization of agriculture. More than enough wealth is available in Africa to implement Paul Baran’s twin insights that open this article. 

The BRICS movement-- a coalition of partners aligning to create a different international exchange network that would be less one-sided, less privileging wealthy nations-- is not itself a bad thing. The proverbial level playing field-- the fair and free marketplace-- is a proper goal for capitalist participants competing internationally. But it is not a Left project. It moves the goal no closer in the struggle for justice for working people. It is not class-partisan, and thus ultimately will likely benefit those who gain from the proper functioning of capitalist economic relations in the various countries disadvantaged by existing relations. And we know from the Oxfam report who they are.

One can see the limitations of multipolarity from the recent Rio de Janeiro meeting of BRICS leaders. There is much talk of a “more equitable global order,” of state-to-state “cooperation,” of broader “participation,” even a pledge to fight disease and extreme poverty. The foreign ministers and heads of state dutifully denounce war and aggression. The current President, Luiz Inácio Lula da Silva “called BRICS a successor of the Non-Aligned Movement (NAM).” What he didn’t say was that NAM broke up when Cuba transcended toothless resolutions and declarations and actually defended Angola against apartheid South African aggression in a bloody war that brought the criminal regime to its knees. The BRICS response to the attack on Iran brings “toothlessness” back to mind.

Baran’s revolutionary path is not an easy one. Others have tried and failed. From Nkrumah and Lumumba to Thomas Sankara, revolutionaries in Africa have taken steps in this direction, only to be thwarted by powerful forces determined to snuff out even a beginning. That alone should tell the EuroAmerican left that it is the path worth following. 

We should not pretend that reforming global market relations—any more than reforming national market relations-- will secure justice for working people. That will come when the workers, peasants, and intellectuals of the global South decide that justice is impossible while “the means of production remain under the control of private interests which administer them with a view to their owners’ maximum profits.”

1  While useful in this context, the concept of surplus is less successful as developed in Baran and Sweezy's 1966 work, Monopoly Capital.

Greg Godels

zzsblogml@gmail.com

Mamdani and Beyond

It should not surprise that many US leftists are excited by the victory of Zohran Mamdani in last Wednesday’s New York City primary election. They should be buoyed by a rare victory in a bleak political landscape.

Mamdani defeated an establishment candidate showered with money and endorsed by Democratic Party royalty. His chief opponent, Andrew Cuomo, enjoyed the support and the forecasts of all the major media, locally and nationally. Cuomo fell back on every cheap, spineless trick: redbaiting (Mamdani is a member of Democratic Socialist of America), ethnic and religious baiting (Mamdani is a foreign-born Muslim), and “unfriendliness” to business (Mamdani advocates taxing the rich, freezing rents, and fare-less transit). And still Mamdani won.

Admittedly, Cuomo is ethically challenged and tarnished by his prior resignation from New York’s Governorship. One supposes that Democratic bigwigs could easily have seen an advantage in masculine sliminess after witnessing the king of vulgarity-- Donald Trump-- enjoy great electoral success.  

But for the left, the important fact was that Cuomo represented the strategy and tactics, the program (such as it is), and the machinery of the Democratic Party leadership. The left needed a victory against the Clintons, Obamas, and Carvilles to demonstrate that another way was possible. And more pointedly, the left needed to see that a program embracing a class-war skirmish against developers, financial titans, and a motley assortment of other capitalists can win in the largest city in the US. Nearly every major policy domestically and internationally that the Democratic Party considers toxic was embraced by Mamdani’s campaign. And still Mamdani won.

And why shouldn’t he? 

Democratic Party consultants methodically ignore the views of voters-- views expressing economic hardship, a broken health care system, mounting debt, a housing crisis, etc.-- delivered by opinion polls. Mamdani listened. And he won.

Clearly, the seats of wealth and power were shaken, reacting violently and crudely to Mamdani’s victory. A major Cuomo backer, hedge fund exec, Dan Loeb, captured the moment: “It’s officially hot commie summer.” 

We wish!

Wall Street quickly panicked, according to the Wall Street Journal: 

Corporate leaders held a flurry of private phone calls to plot how to fight back against Mamdani and discussed backing an outside group with the goal of raising around $20 million to oppose him, according to people familiar with the matter.

The WSJ quotes Anthony Pompliano, a skittish CEO of a bitcoin-focused financial company: “I can’t believe I even need to say this, but socialism doesn’t work… It has failed in every American city it was tried.”

Others, including hedge-fund manager, Ricky Sandler, threaten to take their business outside New York City.

The Washington Post editorial board scolds readers with this ominous headline warning: Zohran Mamdani’s victory is bad for New York and the Democratic Party.

It gets even wackier in the right wing's outer limits. My favorite libertarian site posted a near hysterical call for the application of the infamous 1954 Communist Control Act to remove him from office, even put Mamdani in prison. The never-disappointing, notorious thug, Erik D Prince, calls for Kristi Noem to initiate deportation proceedings.

Yet not so shockingly, many fellow Democrats nearly matched the scorn and contempt heaped on Mamdani by Wealth, Power, and Trumpers. Senate and House minority leaders-- Schumer and Jeffries-- refused to endorse the primary winner. New York Representative Laura Gillen declared that Mamdani is the "absolute wrong choice for New York." Her colleague, Tom Suozzi, had “serious concerns,” as reported by Axios under the banner: Democratic establishment melts down over Mamdani's win in New York. Other Democrats ran away from discussing the victory and, of course, the overworked, overwrought, and abused charge of “antisemitism” was tossed about promiscuously.

Where there is no fear and alarm, there is euphoria. Nearly every writer for The Nation enthused over the primary victory, with the capable Jeet Heer gleefully proclaiming that “Zohran Mamdani Defeated a Corrupt, Weak Democratic Party Establishment”.

Similarly, David Sirota, former advisor and speechwriter for Bernie Sanders, wrote-- with understandable gloating-- on The Lever and in Rolling Stone:

Democratic Assemblyman Zohran Mamdani’s mayoral primary victory in New York City has prompted an elite panic, the likes of which we’ve rarely seen: Billionaires are desperately seeking a general-election candidate to stop him, former Barack Obama aides are publicly melting down, corporate moguls are threatening a capital strike, and CNBC has become a television forum for nervous breakdowns. Meanwhile, Democratic elites who’ve spent a decade punching left are suddenly trying to align themselves with and take credit for Mamdani’s brand (though not necessarily his agenda).

This breakthrough-- he surmises-- could lead to a “Democratic Party reckoning.”

But wait a minute.

We can’t let euphoria blind us to the track record of other Democratic Party insurgencies. We cannot forget how deeply opposed the Democratic Party’s bosses, consultants, and wealthy benefactors are to popular reforms and even modestly visionary candidates. Party intellectuals fully understand-- as hotshot consultant James Carville bluntly reminds us-- that in a two-party system all the oppositional party has to do is wait for the other party to stumble and then take its turn. Why would the Democrats bother to construct a voter-friendly program leaning towards social justice?

A glance at the crude sabotage of two Bernie Sanders Presidential campaigns by the Democratic Party Godfathers should dispel even the most gullible from any delusion that the party will change course.

Should Mamdani actually win the mayoral race-- and we must work hard to see that he does-- there is absolutely no reason to believe that the Party of Bill Clinton and Barack Obama will draw even the most modest conclusion about the way forward. They are not interested in going forward, only in returning to power. Of course, they will-- as they have in the past-- welcome idealistic foot soldiers who want to believe that the Democratic Party is the path to social justice. Generations of well-meaning, change-seeking youth have been ground up by this cynical process of bait-and-switch.

Though the Party’s leadership will not acknowledge it, the Democrat brand is widely discredited. As Jarod Abbott and Les Leopold conclude: “Polling shows Americans are ready to support independent populists running on economic platforms. But what they don’t want is anything associated with the Democratic Party’s brand.” 

Stopping short of calling for a new party, Abbott and Leopold asked poll respondents in key rust-belt states if they would support a worker-oriented association independent of both parties to support independent candidates. Fifty-seven percent of respondents would support or strongly support such an association. 

This squares with recent polls that show strong disapproval of elected Democrats and the Democratic Party. The recent late-May Financial Times/YouGov poll shows that 57 percent of respondents have an unfavorable view of Democrats in Congress. And a similar 57 percent have an unfavorable view of the Democratic Party. Only 11 percent have a very favorable view of the Democratic Party. 

Whether an “association” or a party is necessary, Abbott and Leopold are correct in recognizing that it must have a strong working-class base in order to break away from the corporate ownership of the Democratic Party.

As Charles Derber has perceptively noted on a recent podcast, the worse outcome of the current multi-faceted crisis is to revert to the earlier times that spawned the Trump phenomena. And that is exactly what the Democrats are offering.

With the Republican Party leadership facing a schism over Iran between war hawks and non-interventionists (Greene, Bannon, and Carlson) and with the growing split between cultural warriors and Silicon Valley libertarians (Musk’s threat to launch a third party), the Democrats may well slip back into power by default.  

Surely, we can do better.

Greg Godels

zzsblogml@gmail.com

Does China have an Internationalist Foreign Policy?

A number of observant commentators have raised questions about Peoples’ China’s Belt and Road Initiative and more broadly, the foreign policy of the PRC. 

Reliable left observers like Ann Garrison, writing in Black Agenda Report, have voiced concerns about Chinese investments in the Democratic Republic of the Congo, based on Siddharth Kara’s book, Cobalt Red, How the Blood of the Congo Powers Our Lives. Kara contends that Chinese are engaged in a brutal competition to acquire a raw material essential to battery manufacturing, participating in the highly exploitative practice of artisanal cobalt mining. 

More recently, Razan Shawamreh has challenged the PRC’s economic engagement with Israel. Writing in Middle East Eye. Shawamreh cites three different Chinese state-owned companies heavily invested in Israeli firms servicing or operating in illegal settlements-- ChemChina, Bright Foods, Fosum Group-- that own or have a majority stake in an Israeli corporation. She charges Peoples’ China of hypocritically publicly denouncing Israeli policies while quietly aiding the cause of Israeli settlers.

On May 22, Kim Petersen posted a thoughtful, well reasoned piece on Dissident Voice, entitled Palestine and the Conscience of China. Petersen persuasively lauds the many achievements of Peoples’ China. It is easy to forget the century of humiliation that this once proud, advanced society suffered at the hands of European imperialism. After 12 years of fighting Japanese invaders and enduring a bloody civil war costing tens of millions of casualties, China’s advance since-- under the leadership of the Communist Party of China-- has been truly remarkable. 

As Peoples’ China celebrates meeting its goal of becoming a “moderately prosperous” society, it is important to see how far it has come from 1949. When Western apologists for the market economy brag of the aggregate economic gains that global markets have brought to the developing world, they are largely talking about China (and, more recently, Vietnam and India). 

By any measure of citizen satisfaction with their government by international surveys, the PRC consistently ranks at or near the top.

At the same time, Petersen raises questions about the seeming inconsistency of the Chinese government’s vocal criticism of Israel’s genocidal policies in Gaza and Peoples’ China’s continuing economic engagement with Israel. The PRC accounts for over 20% of Israeli imports. 

Petersen quotes Professor T. P. Wilkinson: “Non-interference is China’s top principle — business comes first. If there is any morality it only applies in China.” And it is precisely China’s moral conscience that Petersen finds wanting.

Nick Corbishley, writing on June 6 in Naked Capitalism adds:

However, not everyone is trying — or even pretending — to distance themselves from Tel Aviv right now. The People’s Republic of China, for example, is actually seeking to strengthen its ties with Israel.

After initially siding with Palestine (and Hamas) following October 7, Beijing is now looking to rebuild ties with Israel. Just four days ago, as Israel’s Defence Forces were unleashing coordinated attacks on aid depots, China’s ambassador to Israel Xiao Junzheng discussed “deepening China-Israel economic and trade cooperation” with Israel’s Minister of Economy and Industry, Nir Barkat.

Still others ask why Peoples’ China, a self-described socialist country, has failed to replace the Soviet Union in guaranteeing the economic vitality of tiny socialist Cuba-- a country starved by a US blockade and harsh sanctions upon anyone defying that blockade. It is difficult to reconcile the PRC’s modest economic aid to Cuba with China’s $19 billion dollars of annual exports to proscribed Israel. 

China’s Foreign Policy in Retrospect

China’s foreign policy is a direct reflection of the political line of the Communist Party of China, a line changing often in the Party’s history. At the 10th National Congress (August, 1973) -- the last before Mao’s death -- Zhou Enlai delivered the main report. He affirmed that:

In the last fifty years our Party has gone through ten major struggles between the two lines… In the future, even after classes have disappeared… there will still be two-line struggles between the advanced and the backward and between the correct and the erroneous… there is the struggle between the socialist road and the capitalist road, there is the danger of capitalist restoration… The Tenth National Congress of the Communist Party of China (Documents), p. 16 [my emphasis]

Zhou explains that the opposition in the last two Congresses-- led by Liu Shaoqi and Lin Biao-- advocated that the main contradiction facing the party was “not the contradiction between the proletariat and the bourgeoisie, but that ‘between the advanced socialist system and the backward productive forces of society’”. In short, the two lines continually challenging the Party, as explained at the tenth congress, were that of the “productionists” --those giving priority to the development of the productive forces-- and that of the class warriors-- those giving priority to political struggle. 

The CPC’s failure to simultaneously advance the productive forces and, at the same time, carry out a consistent, comprehensive class line accounts for its often inconsistent foreign policy.

Since the “opening” -- the Deng reforms, beginning in 1978-- the productionist line has held sway in the Communist Party of China.

From the time of the rebuilding of the Party based on the rural peasantry after the destruction of its urban working-class base in 1927, Mao had sided with the class warriors. 

Even in the era of the united front against Japanese aggression, Mao wrote in On New Democracy (1940) of the necessity of a cultural revolution, a focus on political and cultural struggle over other forms:

A cultural revolution is the ideological reflection of the political and economic revolution and is in their service. In China there is a united front in the cultural as in the political revolution… and the cultural campaign resulted in the outbreak of the December 8th Movement of the revolutionary youth in 1935. And the common result of both was the awakening of the people of the whole country… The most amazing thing of all was that the Kuomintang's cultural "encirclement and suppression" campaign failed completely in the Kuomintang areas as well, although the Communist Party was in an utterly defenceless position in all the cultural and educational institutions there. Why did this happen? Does it not give food for prolonged and deep thought? It was in the very midst of such campaigns of "encirclement and suppression" that Lu Hsun, who believed in communism, became the giant of China's cultural revolution… New-democratic culture is national. It opposes imperialist oppression and upholds the dignity and independence of the Chinese nation. It belongs to our own nation and bears our own national characteristics… [my emphasis]

The centrality of cultural revolution likely comes from the class base shaping the trajectory of Chinese Communism. Because the Kuomintang wiped out the CPC’s urban working-class centers in 1927, the Party became based in the rural peasantry, as Mao freely concedes in On New Democracy: 

This means that the Chinese revolution is essentially a peasant revolution.... Essentially, mass culture means raising the cultural level of the peasants… And essentially it is the peasants who provide everything that sustains the resistance to Japan and keeps us going. By "essentially" we mean basically, not ignoring the other sections of the people, as Stalin himself has explained. As every schoolboy knows, 80 per cent of China's population are peasants. So the peasant problem becomes the basic problem of the Chinese revolution and the strength of the peasants is the main strength of the Chinese revolution. In the Chinese population the workers rank second to the peasants in number…

On New Democracy suggests that Mao places primacy of place in the struggle for the support of the peasantry, a struggle that is cultural in form and national in scope. While Mao locates the Party’s battles within the world revolutionary process, he doesn’t see it as an immediate fight for socialism, but apart from it, for China’s national liberation:

This is a time … when the proletariat of the capitalist countries is preparing to overthrow capitalism and establish socialism, and when the proletariat, the peasantry, the intelligentsia and other sections of the petty bourgeoisie in China have become a mighty independent political force under the leadership of the Chinese Communist Party. Situated as we are in this day and age, should we not make the appraisal that the Chinese revolution has taken on still greater world significance? I think we should. The Chinese revolution has become a very important part of the world revolution… [my emphasis]

The separation between the proletariat's role in the capitalist countries and the Party’s “independent” role in shaping a multi-class force could not be clearer.

Absent from the 1940 statement of Mao’s vision is any endorsement of the Communist International’s broad principles of solidarity. Instead, the Party operated under the Three Principles of the People, the CPC’s revision of Sun-Yat Sen’s original Three Principles. On New Democracy defines them as:

Three Great Policies of alliance with Russia, co-operation with the Communist Party and assistance to the peasants and workers. Without each and every one of these Three Great Policies, the Three People's Principles become either false or incomplete in the new period…

Thus, “alliance with Russia” (USSR) became central to China’s foreign policy and expanded to alliance with other socialist countries. After liberation in 1949, the PRC practiced that line by aiding the Democratic Peoples’ Republic of Korea, especially in repelling the US and its allies as they invaded DPRK territory. The PRC military fought in the DPRK until the armistice of 1953. Over 183,000 Chinese died resisting the invasion of the North.

The CPC established ties with various liberation movements after the Korean War, with Peoples’ China offering military aid and training to many movements in Asia and Africa. At the same time, the PRC adopted Five Principles of Peaceful Coexistence to lead foreign relations: respect for territory and sovereignty, non-aggression, non-interference in internal affairs, equality and cooperation for common benefit, and peaceful coexistence.

The Five Principles were strikingly similar to the natural-law doctrines adopted by the early mercantilist theorists of bourgeois international relations; they constituted an even less robust version of the eight points of the 1941 Atlantic Charter crafted by Roosevelt and Churchill. Nonetheless, they were enshrined in the constitution of Peoples’ China:

China pursues an independent foreign policy, observes the five principles of mutual respect for sovereignty and territorial integrity, mutual nonaggression, mutual noninterference in internal affairs, equality and mutual benefit, and peaceful coexistence, keeps to a path of peaceful development, follows a mutually beneficial strategy of opening up, works to develop diplomatic relations and economic and cultural exchanges with other countries, and promotes the building of a human community with a shared future. [my emphasis]

By the end of the 1950s, The CPC had rejected the first of the “three great policies”: the “alliance with Russia”. The PRC had embarked on a period of bitter conflict with the USSR, culminating with a split in the unity of the World Communist Movement. It is source of great irony that many of the charges the CPC made against the Soviets in the Mao era were and are features of China today that have drawn the same charges from some on the left: The Chinese attacked the Soviet policy of peaceful coexistence with the US, taunting the US as a paper tiger; they accused the Soviets of being “social-imperialist” intent on global hegemony; they claimed a restoration of capitalism in the Soviet Union; they accused the Soviet Party of revising Marxism-Leninism. All charges that resonate for some in current policies of Peoples’ China. 

It is difficult to reconcile the Five Principles with the PRC support for the US proxies in the former Portuguese African colonies. For over a decade, the PRC sided with South Africa, Israel, the US, and bogus liberation movements in Angola, Mozambique, and Guinea-Bissau, delivering weapons, training, and material support to surrogates fighting the internationally recognized freedom fighters. It was left for thousands of Cuban internationalists to give their lives to finally close the door on this ugly chapter and open the door to the fall of Apartheid.

It is difficult to reconcile the Five Principles with the PRC 1979 invasion of Vietnam, ostensibly in response to Democratic Vietnam’s overthrow of the Khmer Rouge-- an intervention, if principally motivated, that cannot be squared with the PRC’s vocal denunciation of the Warsaw alliance’s engagement in Czechoslovakia in 1968.  

It is difficult to reconcile the twists and turns of Peoples’ China’s foreign policies with its once radical denouncement of Soviet foreign policy as “social-imperialist.” The late, estimable Al Szymanski-- a scrupulous researcher-- met those charges in great detail (Soviet Socialism and Proletarian Internationalism, in The Soviet Union: Socialist or Social-Imperialist?, 1983), showing that Soviet “export of capital” outside of the socialist community was minimal, largely limited to establishing enterprises that expedited trade. Soviet assistance was limited almost entirely to countries outside of or escaping the tyranny of global markets. Soviet trade was minimal-- Szymanski argued that it was the world’s most self-sufficient system (no doubt often through forced isolation). Its importing of raw material was minimal: “In short the Soviet economy, unlike those of all Western imperialist countries… has no… need to subordinate less developed countries to obtain raw materials.”

Also, the Soviet Union frequently paid higher prices for imported goods than market prices. Citing Asha Datar, “[O]f the 12 leading export commodities studied…, six were consistently purchased by the USSR at higher than their world prices, three usually purchased at prices higher than those paid by the capitalist countries, and two purchased on a year to year basis sometimes above and sometimes below the world market price.”

Suffice it to say, the Soviet Union substantially subsidized trade with fraternal countries, especially within the socialist community (CMEA), Cuba receiving especially generous terms of exchange.

It would be interesting to compare the PRC’s current foreign policy with the internationalist standards set by the former Soviet Union.

Nonetheless, Peoples’ China-- since the victory of the productionist line under Deng’s leadership-- has largely been a force for stability in international relations. Over the last thirty or so years, the PRC has sought to maintain a peaceful stage for its trade-based economic expansion while the US and its capitalist allies have engaged in one bloody, imperialist adventure after another. Entry into the global market and acceptance into its market-based institutions has been well served by its Five Principles foreign policy.

But it has been naive to expect capitalist great powers to respect the high-minded, Enlightenment values of the Five Principles and simply stand by while the PRC rises to challenge their dominance of the world economy. Since Engels’ early writings, Marxists have understood that competition is the motor of the commodity-based economy. And since Lenin, Marxists have understood that competition between monopoly capitals and their hosts have spawned aggression and war. 

It is equally naive-- or disingenuous-- to equate the Five Principles with the proletarian internationalism, class solidarity that has been embraced by the international Communist movement throughout the twentieth century. From Comintern activity, to the internationalist sacrifices made for democratic Spain, to the generous support for liberation movements, and the aid to the people of Vietnam, militant, principled internationalism differs fundamentally from the neutrality embodied in the Five Principles. The Five Principles serve a world with no injustice, a world without class struggle, a world without aggression and war.

Indeed, the solidarity advocated in the PRC constitution-- “China consistently opposes imperialism, hegemonism and colonialism, works to strengthen its solidarity with the people of all other countries, supports oppressed peoples and other developing countries in their just struggles to win and safeguard their independence and develop their economies, and strives to safeguard world peace and promote the cause of human progress”-- is inconsistent with the neutrality and non-intervention of the Five Principles, in any realistic sense.

Where neutrality may have borne few negative consequences during the PRC’s isolation from global markets, China’s profound economic relations with virtually every country in the twenty-first century, do have consequences, consequences of enormous moral impact. 

Like other countries that engage economically or refrain from engaging economically (sanctions, tariffs, boycotts, blockades, etc.), the PRC must be judged by that engagement. 

With the daily slaughter of Gazan civilians, the brutal actions of Israel cannot be separated from its trading partners: China, the US, Germany, Italy, Turkiye, Russia, France, South Korea, India, and Spain, in descending order of dollar volume of exports to Israel.

And now with the brazen, unprovoked Israeli attack on its putative “friend” Iran, the neutrality of the Five Principles is even less defensible. The “win-win” strategy of many CPC leaders and their allies is a utopian dream that social justice cannot afford.

Greg Godels 

zzsblogml@gmail.com

Obscene Wealth

Gabriel Zucman is a French-born economist who teaches at California, Berkeley and the Paris School of Economics. Zucman’s academic specialization is in wealth inequality, using tax data to track the stratification in wealth in the US and the rest of the world. A student of famed inequality expert, Thomas Piketty, he is an important figure in the World Inequality Database.

His most recent findings expose a gross obscenity, a level of wealth inequality in the US that should shame every politician, every mainstream-media commentator, and every cultural influencer who fails to make recognition of this travesty central to his or her message. 

Discussed in some detail in an article by Juliet Chung, appearing in the Thursday, April 24 Wall Street Journal, Zucman’s most recent findings draw little attention from the other corporate media. 

Zucman claims that the wealth of 19 households in the US grew by one trillion dollars in 2024, more than the GDP of Switzerland. That top 0.00001% of households accounted in 2024 for 1.81% of all the wealth accumulated in the US-- nearly 2% of all US wealth is held by those 19 households.

Other conclusions drawn from the WSJ article:

● Total US wealth in 2024 was $148 trillion.

● The share of total US wealth held by the 0.00001% of households was, by far, the greatest since 1913, when the US income tax system originated.

● JP Morgan Chase estimates that there were 2,000 billionaires in the US in 2024; 975 in 2021.

● The top 0.1% of households constitute approximately 133,000 households and each holds an average of $46.3 million in wealth, accumulating $3.4 million a year since 1990 (Steven Frazzari, Washington University, St. Louis).

● The next 0.9% of households-- approximately 1.2 million households-- were each worth $11.2 million and grew by $450,000 per year in the same period (Frazzari).

● The cumulative 1% of households account for 34.8% of total US wealth in 2023.

● In capitalist counterpart countries, the 1% account for 21.3% of the total wealth in the British Isles, 27.2% in France, and 27.6% in Germany (2023).

● The top 10% of US households hold 67% of all the wealth in the US.

● The top half of US households have secured 97% of all US wealth.

● CONSEQUENTLY, THE OTHER HALF OF US HOUSEHOLDS (~ 66 MILLION HOUSEHOLDS, ~166 MILLION CITIZENS) SHARED ONLY 3% OF ALL THE WEALTH ACCUMULATED IN THE US.

These data underscore the fact that the US is a radically unequal society, with wealth concentration increasing dramatically as one ascends the class ladder.

What conclusions can we draw from the Zucman/Wall Street Journal report?

First, it is important to distinguish wealth inequality from income inequality. 

Income inequality is a snapshot of the remuneration that an individual or household might receive in a given period. For example, a sports figure or a celebrity might receive a huge compensation package for two or three years of success, but otherwise fall dramatically in income and end with modest wealth.

Wealth on the other hand, is inheritable and cumulative. In a capitalist society, it is possible to have income without accumulating wealth, but it is almost impossible to have wealth without effortlessly gaining income. 

Among the employed, income is always contingent. Wealth, to the contrary, is owned and can only be alienated by legal action.

While income is empowering, accumulated wealth imbues its owner with both security and degrees of power and influence proportionate to its quantity.

Thus, wealth is a better measure of personal or household economic status than income.

For those academics and media pundits who prattle on about “our democracy,” it must be pointed out that over half of the US population is effectively economically disenfranchised from the political system. With so little accumulated wealth (3% of the total wealth), they cannot participate meaningfully in an electoral system driven by money. They lack the means to contend for office, as well as to affect the choice of candidates or the outcomes. 

Even if the bottom half of households were to pool their resources, they could not match the financial assets readily available to the top 1% in order to dominate political power. 

Cold War intellectuals constantly heralded the formal democracy-- the rights to participate in electoral politics-- enjoyed by citizens in the advanced capitalist countries. They assiduously avoided mentioning citizens’ actual means to participate in any meaningful way, influenced by the vast and telling inequalities in those means. Clearly, the bottom half of all US households have little means of engagement with politics, apart from casting an occasional vote for limited options, for which they have little say in determining. 

Further, the next 40% of households have between them, in diminishing amounts as they approach the bottom half, just 30% of US wealth to express their political prerogatives. No doubt that provides the false sense of political empowerment that the two bourgeois parties prey upon.

The victory of form-over-substance in the legitimation of US social and political institutions is surely threatened by the reality of wealth inequality-- a reality that empowers the wealthy over the rest.

The fact that the top 10% of US households have a grip on 67% of the wealth makes a mockery of “our democracy.” 

Talk of “oligarchs” or “the 1%” -- so popular with slippery politicians or internet naïfs -- actually masks the rot behind our grossly unequal society. Neither “evil” nor “greedy” people can explain the travesty recorded by the Zucman data. 

Instead, it is a system that produces and reproduces wealth inequality. While wars, economic crises, or the militant action of workers and their allies may temporarily slow or set back the march of wealth inequality under capitalism, the system continues to regenerate wealth inequality. That system is called “capitalism.”

As Paul Sweezy explained most clearly:

The essence of capitalism is the self-expansion of capital, which takes place through the production and capitalization of surplus value. Production of surplus value in turn is the function of the proletariat, i.e., the class of wage earners who own no means of production and can live only by the sale of their labor power. Since the proletariat produces for capital and not for the satisfaction of its own needs, it follows that capitalism, in Marx’s words, “establishes an accumulation of misery corresponding with accumulation of capital.” The Transition to Socialism, lecture, 1971

Economic historians like Piketty and Zucman who carefully track the trajectory of capitalism demonstrate empirically, again and again, that capitalist socio-economic relations give rise to economic inequality. 

While the distribution of wealth in advanced capitalist countries is not captured perfectly by the Marxist class distinctions, class-as-ownership-of-capital goes far to explain how wealth is distributed. 

With two-thirds of all wealth concentrated in the top 10% of households and an estimated 89% of all capital-as-stocks held by that same 10%, it seems reasonable to conclude that the capitalist class resides within the top 10% of wealthy households.

It should be just as clear that the bottom 50%-- with 3% of the wealth, and nearly all of that in personal real estate and other personal property-- survives on income from some form of compensation; its members work for a living. 

Thus, as one might anticipate from reading the 1848 Communist Manifesto, capitalist society today-- 177 years later-- remains substantially divided between those who create the wealth by working for a living and those who own the means of wealth creation and, therefore, gain most of their wealth from that ownership. Capital-- whether it coalesces as factories, banks, or other enterprises-- concentrates wealth at the top.

Between the bottom 50% and the top 10% of households is a contested field of largely income earners-- workers-- as well as professional, self-employed, and small business owners. While most are, strictly speaking, working class, many have illusions about their class status (“middle class”) or harbor the illusion that their class status will improve.

Some have been characterized as “aristocrats of labor” because of their relatively elevated possession of income or wealth among workers. Others are even better characterized-- to follow Marx-- as “petty-bourgeois”: small, insignificant capitalists.

From the classical texts through Louis Althusser and Nicos Poulantzas to Soviet analyst S. N. Nadel, Marxism has yet to produce a robust and rigorous theory of the upper-middle strata, though their members often prove to be the pivotal factor in denying social change. Accordingly, it is the segment most intensely courted by the centrist political parties.

If we are to remove the stain of wealth inequality, it must be its sufferers-- the working class-- who assume that task. And that task will only be decisively accomplished with the replacement of capitalism with socialism.

Greg Godels

zzsblogml@gmail.com