Analysis of China’s class character

On the significance of the Chinese Question today: What is at stake for the Asian and world proletariat

Since the destinies of China and India are inseparable, the lives of one third of humanity are at stake – (World 6,800,000,000, China 1,350,000,000, India-Pakistan-Bangladesh 1,500,000,000). Since an outcome of either socialism or barbarism is becoming a clearer and clearer probability in this epoch of wars, revolutions, and the transition to socialism, not only is the future of hundreds of millions of Asian workers, peasants, rural labourers and poor people at stake, but the future of the whole of humanity.
If India and China develop into imperialist superpowers, their struggles with the current imperialist superpowers will tear the world apart. And the working classes and the poor will be sacrificed as cannon fodder.

The relationship between China and India is central to the political and economic development of Asia, and to the unfolding of the class war in Asia. And in this relationship a central factor is where the classes stand in relation to their states. Do they have the same relationship? Is the relationship qualitatively different? If so, how and why? If so, what are the consequences of this?
The answer to these questions can only be found with the help of a correct analysis of the class character of the two countries.

For the working class this characterization is not an academic question. Our epoch poses the question of the working class taking power. Leading the working class to power is the most important task of the most conscious revolutionary workers and their allies. And for Bolshevik-Leninists the central question here is what kind of revolution do we need to lead? A social revolution, or a political one? These tasks are fundamentally distinct. Spearheading the “wrong” revolution will lead to errors which might in turn lead to disaster. And one such disaster could involve the question of war between China and India.

Where do we stand on this question, as a leadership representing the deepest historical needs and potential of the working class? What will our handling of this question tell the working class in the rest of the world about our ability to see these needs and understand this potential, and lead them to power so they can begin to build socialism?
Dealing with these questions in a theoretically correct fashion and drawing useful practical conclusions from this may well be the greatest challenge facing the world working class today.

What arguments are there?

The main arguments for restoration are the percentage of GDP in private hands, and the dismantling of the monopoly of foreign trade. These need to be taken very seriously, as Trotsky used these factors as important criteria for characterizing the USSR as a workers state despite the political degeneration that gave rise to a bloody and counter-revolutionary regime. But taking them seriously requires serious demonstration that appearance and reality match, and not just one or two statistics affirming restoration as a foregone conclusion. There are hard-hitting arguments that maintain that appearance and reality don’t match here. And since the question of restoration or not, of the class character of the Chinese state, is so important, then the relationship between appearance and reality needs to be worked out in the same kind of thorough discussion as there was regarding China in 1949.
Some of the arguments against restoration follow Trotsky. These include refusing to take even the most horrifying violations of human integrity and dignity, or the setting aside of fundamental rights of expression and assembly as proof of capitalist restoration. They are proofs of degeneracy into a counter-revolutionary regime. In the case of China and other countries traditionally viewed as Deformed Workers States by Trotskyists, they are proofs of the initial deformation and its further degeneration. A counter-revolutionary regime is, as Trotsky writes, the black shadow of imperialism, and the greater the pressure from a world economy dominated by a desperate dying capitalism, the darker the shadow. Which means no Trotskyist should feel obliged to reject the scientific diagnosis of a non-capitalist mode of production by sentimental impressionistic reactions to the horrors of murderous repression and policies generating famine, extreme poverty, glaring inequality, and international political disaster. All these things are essential characteristics of political degeneration and deformity, not of a mode of production. All modes of production (types of state) can have a whole spectrum of regimes in government, from the most benign to the most repulsively tyrannical.
Further arguments raise the question of political differences in Chinese society that are suppressed and censored out of public debate. Trotsky discusses the antagonisms in Soviet society between different layers of workers, peasants (rural producers), managers, and bureaucrats, and demonstrates that these have a profound influence on political developments, even if they are “invisible”. This is especially true of concessions/privileges and repressions/purges.
These “hidden” aspects of Chinese society need much greater study, as the bureaucracy is huge and much more clearly layered than the Soviet bureaucracy was. Its various sectors – high, middle, low, national, regional, and local, with their corresponding ties to the military and the militia – need to be delineated and the consequences of antagonisms within the bureaucracy need to be analyzed. As do antagonisms within and between the layers (and now classes) of society as a whole – workers, rural producers, owners and managers of small and medium-sized enterprises, large-scale capitalists, and financial officials. In addition to all this there are the further complications of relations with Hong Kong, Taiwan, and foreign relations.
One argument that needs to be worked through thoroughly concerns the reasons for and the consequences of the marked differences in adapting the bureaucracy to the policy zigzags so typical of Stalinist regimes. Why have the Chinese managed to avoid the horrifying mass brutality of Stalin’s purges? How have they managed to renew bureaucracy, which is by its nature rigid, backward-looking, self-interested, devoid of perspective and opposed to any change?
The processes of adaptation have been studied to some extent, but the differences in bureaucratic development between the USSR, China, and India, for example, are little studied.
An important element in the economic situation mentioned above is that of real ownership and control – where is proprietorial power located. Various studies have indicated that ownership of shares and executive positions in enterprises need not reflect real power of ownership. And an abstract consideration of GDP needs to be broken down into its component parts if we are to get a clear view of state power of ownership in the Chinese economy. Infrastructure, heavy industry, fuel extraction and energy production carry much more weight than production for consumer goods. Where is the centre of gravity of large-scale manufacturing like the automotive industry? What kind of trade is controlled by who? Just what is the balance between the state and private capital in joint ventures? How much clout does foreign capital in the “free zones” have on policy in Chinese society as a whole?
And then there are the hypothetical questions that need to be formulated and answered.
Would China look and act the same today if it was capitalist?
How would the relationships between China, Hong Kong and Taiwan look if China was capitalist? What would relations between China, India, Russia, Japan and the US be like in that case?
The capitulation of the Russian bureaucracy to imperialism was marked by large-scale (if unfocused) uprisings in the whole sphere of Soviet influence, leading to such dramatic events as mass migrations from the GDR, Romania, Hungary etc, and to the summary execution of a dictator of the Old Regime such as Ceaucescu. It was followed by wars and social collapse in the ex-USSR. But the tensions in Chinese society are probably greater than those in the USSR, especially in the all-important economic sphere. Ethnic tensions are near breaking point. There is a huge “invisible” debate in progress within China, of a high quality and extremely hostile to the bureaucratic regime and its repressive policies, even if not revolutionary in a Bolshevik-Leninist sense (yet).
Since this is the case – if the Chinese bureaucracy has already capitulated to imperialism and handed over the (deformed) workers state to capitalism, where are the mass uprisings? Where are the cataclysmic social effects? Where are the mass migrations, the ethnic cleansing of Han Chinese, the internal wars?
Did this great event take place behind closed doors at a party congress? To argue that this is the case is not a Marxist way of approaching historical change, and especially not change involving a large-scale transition from one mode of production to another.

What conclusions can be drawn?


The first point is elementary from the point of view of Marxist political economy, and it’s used emphatically a number of times by Trotsky in the Revolution Betrayed. However, it is almost completely absent from our discussions on China. Trotsky repeatedly argues that the economic progress made by the Soviet Union is completely inexplicable from the standpoint of bourgeois economics. It is completely understandable from the standpoint of Marxist economics. A non-capitalist state based on socialized ownership and centralized planned management has a capacity for developing the forces of production that is unimaginable in bourgeois economies. The situation in the Soviet Union was a thousand times worse than in China, as it was isolated in a powerfully capitalist world economy, with a scattered population and under enormous political and economic pressure. The Chinese situation has been better because of the existence of the Soviet Union, because China has been better able to manage joint ventures and collaboration with capitalists at an advanced level of technique and productivity, because China has a much more highly developed administrative and commercial culture than Russia/the Soviet Union ever had and because world capitalism has continually run into debilitating crises (despite some impressive periods of boom) that have given China breathing space to grow while bourgeois countries stagnate or contract.
Further, the development of post-1949 China fits in with the characterization made by the Left Opposition and formulated theoretically by Preobrazhensky of “primitive socialist accumulation”. With the same advantages as are listed above, and the same disadvantages as in the Soviet Union – low productivity, especially in agriculture, low levels of general culture, commodity famine (exacerbated by anti-worker and anti-peasant priorities), waste, mismanagement, and ignorance of socialist economic fundamentals.
If this assumption that China, however deformed, is a workers state, should not to be the case, then it is imperative for those arguing that it is now a capitalist state to demonstrate why its economic development has been so qualitatively different from that of Brazil, India and post-1990 Russia – countries with the closest resemblance to China.
A second point fundamental to Bolshevik-Leninist theory is the character of the revolution needed to oust the counter-revolutionary ruling class/caste. Given the experience of 1990, it seems clear that the lack of a political revolution was the key factor permitting a successful handing over of the Soviet economy to imperialism. But it also seems clear that the degeneration of working class organization and leadership required a good proportion of preparatory work taking in aspects of social revolution. It is quite likely that this is even more the case in China, given the extreme extent to which capitalism has been permitted to make inroads into the Chinese economy. The body of China is being eaten away by the gangrene of bureaucratic centralism and the cancer of bourgeois relations of production.
The main perspective for revolution in China should still be a political revolution, but with a heavy dose of social revolution.
A third point is international. We have to understand how the collapse of the Soviet Union affected Chinese development – the conditions under which it was able to pursue its economic and social policies. And we also have to understand how the new world constellation post-1990 has affected India and China and their reciprocal relations. And we have to understand how the Chinese and Indian proletariats should work with each other to free their own countries both nationally and jointly from the imperialist yoke.
This leads to the issue of war, which is perhaps more of a practical policy question.
A more general point concerns the economic mechanisms behind the massive forced migrations from the countryside into the slums of vast new conurbations. Bourgeois theory refers to this phenomenon as “urbanization”, whereas we need to understand it from the perspective of a merciless proletarianization of poor peasants and rural laborers. If we can understand this theoretically it will ease our work of connecting the rural and urban revolutionary movements. 
The transitional demands of our agitation and the focus of our propaganda are completely dependent on our analysis and understanding of the class character of the societies within which we work. And the synthesis we can produce to guide the international advanced guard of the working class is completely dependent on the success with which we tackle our national tasks.
In relation to China and India the practical differences in our approach to the urban industrial proletariat and poor masses will be massive if China is demonstrated to be a deformed workers state and India a bourgeois state taking on a more and more independent and confident political and economic role in the world. In China it is a question of restoring abandoned protosocialist measures and removing a counter-revolutionary bureaucracy to make way for a state managed and planned on the principles of workers democracy. In India there is none of this – no protosocialist measures to be restored, and no “mere” change of regime standing in the way of creating a workers state run on the principles of workers democracy.
In the extreme case of war this will lead to diametrically opposed policies being adopted by the Chinese and Indian revolutionaries respectively – in China defencism, fighting to defend the workers state, however deformed, and in India defeatism, fighting to fell a bourgeois state and replace it with a workers state. And any practical collaboration between the Chinese and Indian working classes will have to take this huge difference into account – and it can only do this if we are able to show how and why to do it.
In relation to the proletarianization of the rural masses our practical policies must explain the economic forces at work, and the fundamental enemy responsible, and we must use the living links between town and countryside in our work in the way Lenin did in the late 1800s in his work on the agrarian question. The fulcrum of organizational unity between town and country was provided by the “peasant-workers” recently forced into the cities to find work, but still rooted in the countryside by culture, family ties, social relations, etc. And again we have to take into account the fundamental differences in the mechanisms at work in China and India in terms of the class character of the state.

Concluding historical reflection

   There is very important historical evidence a) for the existence of a new and qualitatively superior mode of production, and a new era of transition to socialism, and b) for the conviction we should have that history is moving irresistibly in our direction. But it is almost impossible to quantify with statistics. On the other hand, it is in front of our noses, and only needs to be pointed to. The logic of demonstration. (Hegel distinguished between formal logic – operations that affected form but not content (A=A), dialectical logic – operations that could affect the content being considered (A is sometimes equal to A, and sometimes not equal to A), and epideictic logic (the logic of demonstration, pointing, axioms) – operations that involve singling out fundamental starting points for other logical operations (this is A).     
The evidence we can point to concerns the effects of the October Revolution on the self-perception of Russia. And today it is corroborated by the inverse of October, the abolition in 1990 of the workers state set up in 1917.     
Tsarism was consigned to the cesspool of history in 1917. After 3 years of terrible invasions and civil war the Soviet Union emerged into a semblance of peace and could begin to construct society and the economy.     
What memories lingered of the Tsarist regime after these cataclysmic events? What nostalgia for the Old Regime? Absolutely NONE. And not even during the most terrifying excesses of Stalinist repression was there any call at all for Tsarism to return.    
Fast forward to 1990. Capitalism was restored and a bourgeois regime promising freedom, democracy and prosperity came to rule.     
Did it wipe out the memory of the Soviet state? Did it wipe out nostalgia for the Old Regime. NO, absolutely NOT. And this is still the case after TWENTY YEARS of the new dispensation.     
This is evidence we can point to to justify our axiom that any workers state (no matter how degenerate) is qualitatively superior to any bourgeois state (no matter how smoothly functioning).     
The winds of history – ie the development of the forces of production and the necessity of qualitatively new relations of production – are blowing WITH us, and AGAINST capitalism. And they’re blowing very very hard. 3 years, and a whole epoch is wiped out in the minds of the masses. 20 years, and a whole epoch is still alive in the minds of the masses. That’s a qualitative difference.     
In China a corresponding process has been witnessed twice. The first time in 1911, when the imperial regime was swept away, with the same effect on mass consciousness as 1917 in Russia. And in 1949, when the chaotic and murderous bourgeois regime of Chiang Kai Shek and the warlords was swept away. And the effects were the same!! Despite the existence of festering spears in China’s flanks in the shape of Taiwan and Hong Kong.     
But there has been no 1990 yet! If there had been a turning point like 1990 in China, it would have had the same historical impact in China on the consciousness of the masses as 1990 had in Russia. That is – in 1988 there was little nostalgia in the consciousness of the Soviet masses for the Soviet system. This arose after the restoration. The consciousness of the Chinese masses today resembles more 1988 than 2010.     
Further, the strength of the wind in our favour explains the extreme and desperate efforts being made by the imperialist bourgeoisie to maintain its ideological and material control of the masses worldwide – the only way it can remain in power is by an unprecedented combination of lies and repression. Unprecedented in scale and unprecedented in penetration.     
Even revolutionary forces are misled by this storm of propaganda invading our minds and fail to take into account the historical power of oppressed classes fighting for emancipation. But this is power that must be factored into our perspectives. Not in the form of voluntaristic optimism, but as sober, scientific fact.

The Labour Theory of Value and exploitation in poor countries (including the effects of “socially necessary labour time”)


– Choppam

Labour in sectors operating at around the average intern ational level of productivity is oppressed by capital, which in its turn is driven by the world rate of profit. Competition, aided by market-distorting state pro­tection, sucks surplus value to metropolitan countries from poorer countries with less advanced, more labour-intensive sectors of produc­tion, such as assembly work in China for imperialist monopolies (eg computers, mobile phones, clothes and shoes. The equalization of the rate of profit ensures that the higher surplus value produced by more labour in these sectors is siphoned off to sectors using less labour and therefore producing less surplus value, or simply hijacked by relations of ownership that allow goods produced by workers in poorer countries to be sold by capitalists in the metropolises for astronomical profits.

However competition among capitals to move into these labour-poor but profit-rich sectors imposes a long-term levelling out among sectors. Too much capital flowing into attractive sectors depresses profits there, and conversely too little capital in unattractive sectors raises their profits. But in the short and medium term (say 7-10 years) the price of labour power is depressed, and this means that a “normal” standard of living for a worker in an imperialist metropolis is out of equilibrium with the “normal” standard of living in countries without advanced sec­tors that can syphon off surplus value. In the imperialist metropolises’ advanced sectors very little labour power is needed due to state-of-the-art machinery and automation) and the unskilled labour power they do need is bought where the price is lowest. This is often in enclaves (as in China’s “free zones”), which are run like prison camps to limit the work­ers’ contact with anything but capital as much as possible – to prevent the development of demands relating to unions, labour laws, health, etc.

This situation of artificial separation between technologically intensive and labour intensive sectors can’t be maintained long-term, despite threats, sanctions, wars and compliant, servile governments, because the world economy is just that. All capital, including illicit sectors like drugs and the sex trade, goes into the crucible of world capital that de­mands complete freedom of investment, regardless of the strenuous ef­forts made by individual states to block the flow. Like lava it will flow over and bury any imperialist walls or barrages put in its way.

This all explains why the Chinese bureaucracy’s use of centralized state power to erect a wall against imperialist economicaggression has worked so well.Chinais not essentially bourgeois – as can be seen if we compare bourgeoisIndia’s feeble resistance to imperialism. This is becauseChinais a deformed workers state created by an armed revolu­tion that smashed bourgeois relations of production. This has allowed it to maintain relatively tight control of joint ventures and enclose outside capital in “walled-off” enclaves.Hong Kongand the “One Country, Two Systems” policy shows this, remarkably, at state level.

Chinese emulation of imperialist methods of production has been able to develop in a controlled and protected market – and how the imperial­ists squeal when they are scourged with their own whip!

The Chinese bureaucratic regime is counter-revolutionary to the core like the Stalinist bureaucracy in theUSSR. In exactly the same way, how­ever, it is utterly dependent on the strength of the non-capitalist state to keep its power and privileges. This means it will take an irresistible threat from the workers in the cities and on the land to force its hand in choosing between a non-capitalist state with real democracy for the working people on the one hand, and a bourgeois state with reintro­duced capitalist economic relations on the other.

This threat was looming over the Soviet bureaucracy in the 1980s. But this dilemma was clearly anticipated by Trotsky in 1938, when he wrote:

The political prognosis has an alternative character: either the bureaucracy, becoming ever more the organ of the world bour­geoisie in the workers state, will overthrown the new forms of property and plunge the country back to capitalism; or the work­ing class will crush the bureaucracy and open the way to social­ism.

(The Transitional Programme of the Fourth International)

Now we have the historical record to check this prognosis against. The Soviet bureaucracy capitulated to imperialism and plunged theUSSR, its people and its resources “back to capitalism”. A revolutionary Marxist perspective permitted Trotsky to spell out this development fifty years before the event. The Soviet bureaucracy gambled that its highest strata would be secure enough in their positions of political and economic power to survive the earthquake. It chose the historically catastrophic road of class treason rather than give up power to the workers of the USSR.

Now history is speeding this choice towards the Chinese bureaucracy towards like a tsunami. Or rather, the bureaucracy is driving full tilt to­wards the rock-face of history. The only way it can save itself from be­ing smashed to a pulp is to change its direction drastically. But such a turn could well tear its economic juggernaut to pieces. The gamble of the Chinese bureaucracy will be the same as that made by the Soviet bureaucracy, with the Chinese peoples as the stakes. But the conditions are not quite the same. The bureaucracy has made the historical blunder of revealing to the people the vicious reality of capitalism – unemployment, depopulation of the countryside, millions of uprooted workers flung into city slums, little security and less justice, wage-slavery, and the brutal contrast of all this with the enormous wealth and power of the few – revealing all this before making the final and definitive surrender to imperialism. The Soviet people, demoralized and politically and socially gagged and blindfolded for decades, were full of illusions about Western prosperity and justice for all. The Chinese, however demoralized, gagged and blindfolded they might be, can hardly have many illusions left about Western capitalism.

The above perspectives on imperialism, the capitalist world economy, and the Chinese situation point to a tenable explanation for the impres­sionistic bourgeois labels of 1) globalization, and 2) Chinese exception­alism.


Now, there is a very deep contradiction straining the world market to breaking point – capitalist forces of production push harder and harder for full global freedom of access and movement on the one hand, and on the other this push is resisted by the non-negotiable necessity of na­tional states to use military violence to defend the system and impose their own partial interests on others. But where does this leave the urb­an and rural poor outside the imperialist metropolises?

The Labour Theory of Value can help us understand this if we consider the degree of domination achieved by the capitalist mode of production in non-metropolitan countries. Where this domination is total, market relations have been fully established. Production is for money and not subsistence. In principle, all the poor in both the towns and the coun­tryside have been proletarianized. The brutal replacement of subsist­ence farming by production for profit and agribusiness has driven mil­lions off the land into the slums of megacities, from subsistence farm­ing to absolute penury.

The standard of living of the working poor again depends on the degree of integration with the world economy. In sectors operated by big capit­al they receive in exchange for their labour power what they need to survive. But it’s survival at a low level and subject to intolerable work­ing conditions. This is due to the wages imbalance caused by the cit­adels of imperialism hindering workers organization and international solidarity, and corresponding to the degree of imperialist appropriation of surplus value from dominated countries.

The situation is far worse for workers in countries subject to the world capitalist economy but lacking production using advanced methods and facilities. Their former ability to survive by subsistence farming has been destroyed by the (forcible) penetration of money and the capitalist market. They are reduced to a demeaning scramble for survival at any cost. The mechanism driving this extreme poverty is explained by the way the Labour Theory of Value operates in the capitalist mode of production.

One axis of the grid is the leveling out of the rate of profit, which drives competition and productivity, with each capital trying to get an edge over its rivals and syphon off more surplus value than them. The other is the crucially important, and often disregarded, category of so­cially necessary labour time. Socially necessary labour time is the time needed by an average worker in an average sector of production to pro­duce a given amount of product. If this time is shorter than the average, then the product can be sold above its value – it gets the difference in value incorporated in the products. The opposite goes for labour time that is longer than the average. Since more value is put into the product (more labour) it requires a higher price to break even, but competition denies it the possibility of charging this high price. To be sold at all, it needs to be sold under its value. And if the labour put into a product di­verges too much from the socially necessary labour put into an average product, then it won’t get sold at any price. Antiquated products made with antiquated machines by labour of less than average competence just don’t get sold.

So say you have a job in a sector with less than average productivity, a quarter the average, for example. Then the product of your labour will take four times as long to make (in quantitative terms) or be four times worse (in qualitative terms). Which means that to have any chance of be­ing sold at all, it will have to be sold at or under the going price for such products in the larger market. So the return for the product will be four times less than for more competitive products. This has fatal con­sequences, since you will only receive a quarter of what workers in com­petitive production facilities get to survive and work the next day. Which means you will be four times closer to starvation than they are. In other words, however close they may be to starvation, you are four times closer to death. And, incidentally, four times more vulnerable to ruthless treatment by your employer, as he sucks your blood to main­tain the standard of living he considers to be his right.

In the light of all this, it should be obvious that no amount of charitable tinkering by NGOs will solve anything. Their dismal record over the dec­ades since world war 2 speaks for itself on this. Single-issue campaigns are more useful. They have helped change the situation with regard to nuclear power, the situation of women, and the destruction of the environment. But they have made no impact whatever on the fundamental relations in society.

Partial victories in individual factories or districts or industries or even cities give partial and inspiring solutions, but they are always vulnerable to being clawed back when the bourgeoisie in question feels stronger. The same goes for social rebellion, as in the late sixties in Europe and theUS, fuelled by opposition to the Vietnam war, and on various occa­sions in the Soviet bloc andChina. And in the imperialist system as a whole, the concessions of the New Deal and the Welfare State, which have taken decades for the bourgeoisie to claw back.

It is obvious that dissatisfaction and anger led to these mobilizations and wrung the concessions out of the class enemy. But it should be equally obvious that nothing permanent will be achieved until this dis­satisfaction and anger is organized to get rid of the conditions causing it – to remove the roots of these conditions like a dentist disinfects and removes rotten teeth, roots and all – that is, until it is channelled to re­move the bourgeoisie from state power, and capitalism from social production.

Capitalist exploitation and the imperialist states protecting and enfor­cing it won’t go away of their own accord. Not peacefully, and not drag­ging their feet. They’ll go out spitting fire and spraying poison. But they can only do that as long as people operate their killing machines and the facilities that serve them, and people will only do that as long as they see no alternative, or until they are so afraid for their own skins that they come over to our side. If the Soviet bureaucracy can do it and desert the working class for the bourgeoisie, then the non-capitalist ser­vants of the imperialists can do it too and desert the bourgeoisie for the working class.

Our epoch of crises, wars and revolutions may flummox the bourgeoisie and its hired apologists, its permanently blind and uncomprehending economists, historians, journalists, and media. But the working class has the tools at hand to disperse the fog and filth and see what’s really happening. Once understood, the economic theories of Marx become weapons for the working class smarter than any imperialist smart bombs. Analytical scalpels sharper than any of the instruments wielded by Wall Street mercenaries. And the working class has the revolutionary theories of Lenin and Trotsky and the revolutionary experience of the working classes and toilers ofRussiaandChinaand others.

Capitalism must be abolished, and the bourgeoisie removed from power. This has been done before, it can be done, and it must be done.