Socialism’s Specter Revives in China’s Belt and Road Initiative

The Chinese are coming! The Chinese are coming! This time they’re here to spread socialism not by war and invasion, but by good example, economic development and cultural exchange. And in the process, they are eating our lunch. They are demonstrating that it is possible for poor and troubled economies to develop as quickly as China’s by following the latter’s example of mixing the best elements of capitalism and socialism to benefit working class people rather than primarily the rich and elite.  Their efforts are showing every sign of success.

Progressives should take heart. Socialism’s specter is once again on the prowl.  

Specifically, I’m referring to the Belt and Road Initiative (BRI) that actually looks like a Chinese version of a new Marshall Plan for countries representing 65% of the world’s population. Many of the countries involved would otherwise be unable to afford such development.

Particulars of the BRI include Chinese export of construction materials, especially iron and steel and their use to erect a huge power grid with wind and solar focus. The materials are being used to construct highways, rail facilities and sea ports to the benefit of Europe, Asia, the Middle East, and Latin America. The BRI will also include cultural exchanges and educational assistance. It will eventually account for 40% of the world’s domestic product.

That’s the impressive swath China’s trillion-dollar infrastructure-based development strategy that has been in place for the past six years – since it was announced by the country’s president, Xi Jinping in 2013. In his words, the Belt and Road Initiative is “a bid to enhance regional connectivity and embrace a brighter future.”

However, many in the west are not buying that rosy description. To them the BRI seems like a new form of colonialism. Since much of it is based on loans, critics have even described it as a “debt trap” intended to create dependency in order to reduce participating countries to the status of vassals of an imperial Chinese state.

Ironically, such criticisms actually reflect the patterns of western colonialism and neocolonialism whose “foreign aid” has in fact intentionally continued the traditional underdevelopment of the former colonies in Latin America, Africa, and South Asia. The critique also overlooks the fact that the Chinese plan is based on Marxist principles which are inherently anti-colonial and international rather than imperial and national.

In practice, all of this has yielded a system often described as state capitalism. That is, the Chinese state (like every other economy in the world!) has a mixed economy that (as I mentioned earlier) incorporates the best elements of capitalism and socialism. This gives the Chinese a huge publicly- owned sector along with a smaller, but still large private sector strictly regulated by the state. Crucially, however, and unlike our own mixed economy, the Chinese version aims at mixing its economy not in favor of the elite, but in favor of the working classes.

This is in strict accord with Marxist theory, which recognizes that capitalism is a necessary stage in the history of economic development. It cannot be skipped, because capitalism is required for the development of productive forces that are sine qua non preconditions for the transition to full-blown socialism.

Moreover, the whole world has been watching. We’ve seen China’s implementation of a worker-friendly state-capitalist form of economy as responsible for 80% of the poverty-reduction the world has experienced over the past two or three generations. That is, China has been more successful in reducing poverty than capitalism or any country subscribing to neoliberalism’s trickle-down model. The latter, of course, favors the 1% and expects 95% of the world’s population to endure austerity measures in order to pay the social costs for capitalism’s dysfunctions. None of that is lost on denizens of poor countries.

And now through the Belt and Road Initiative, those same less developed former colonies as well as the poorer countries of the EU are given opportunity to follow China’s example economically and even politically.

Regarding politics, the Chinese example and initiative are demonstrating that a one-party state like China’s might work better at least in some contexts than what we in the west understand by “democracy.” Surprisingly, for the west (where there appears to be a tacit agreement never to allow us to hear anything positive about competing systems) the Chinese version of political organization has proven to yield governance far more meritocratic, flexible and legitimate than our own.

Its meritocracy insures that no one will rise to national leadership in China who has not come through the ranks and demonstrated outstanding leadership capabilities at each step along the way. The whole process takes about 30 years. This means that by Chinese standards, someone like George W. Bush or Barrack Obama (much less Donald Trump) would not qualify to govern even a small province in China. They simply lack the experience and resulting knowledge that in China are prerequisite for assuming greater responsibilities.

Such leadership has made the Chinese system far more flexible in terms of reform than our own. Thus, in China the revolution began with the country following the Soviet model of development. That changed with the Cultural Revolution (1966-1976) which extended the revolution’s benefits to rural populations. This in turn was followed by Deng Xiaoping’s opening to the west around 1977, by entrance into the World Trade Organization years later, and now by Xi Jinping’s Belt and Road Initiative. Every one of those changes was profound and quickly made. Western capitalism has proven incapable of similar flexibility even in the face of climate chaos that threatens planetary life as we know it.

Moreover, in terms of public approval the Chinese system is proving much more legitimate than western models based on periodic elections. Increasingly, those latter models are corrupted by money. As in the United States, often inexperienced politicians (even comedians and reality show personalities) are elected by pluralities below 50%. A month or so after elections, their approval ratings can sink below 40%. This is because those elected prioritize the needs of their corporate donors rather than those of the people they’ve theoretically been elected to serve. As a result, we’ve increasingly lost faith in democracy-as-we’ve-experienced-it. In many elections, only a minority of Americans even bother to vote.

Meanwhile in China, Pew polling has nearly 80% of the population satisfied with the country’s direction. An even greater majority expects their lives to get better in the near future. Those numbers are testimony to government legitimacy far beyond what we experience in the United States.

So, while western governments and their economies lionize the past and strive to implement 18th century free-market policies, China’s Belt and Road Initiative is offering a different option.

And it’s doing so under the principles of internationalism and anti-colonialism based on sound Marxist theory. That theory has not only taken huge strides towards lessening world poverty; it has provided the world with an example of unprecedented economic dynamism. It’s no wonder that socialism these days is getting a new lease on life. It’s no wonder that its’ specter is once again haunting the world.

France’s Yellow Vests: Their Program Should Be Our Program

As I reported recently, I spent my Christmas vacation tracking down and studying France’s “Yellow Vest” movement. In December, New York Times columnist Thomas Friedman did something similar. However, as expressed in his piece, “The End of Europe,” his conclusions mirror old threadbare thinking about social transformation. Most tellingly, while honoring the voices of the Yellow Vests as grassroots activists, Friedman’s responses exclude the very democratic input the Yellow Vests demand. Instead, he looks to government and business leaders to save what he termed “the idea of Europe.”    

My own conclusions are the reverse. I see the Yellow Vests as advocating a democratically radical, comprehensive and bottom-up approach to what distresses our world. In fact, the issues and demands of the Yellow Vests suggest proven reforms that are clearly feasible, since they’ve worked in the past. The economic and political restructurings implicit in their working-class demands could save our planet and create the other world that all progressives sense is possible. Consciously or unconsciously, the Yellow vests propose a program worthy of support by us all.    

Friedman & the Yellow Vests

According to Friedman, France represents the last barrier against the disintegration of Europe itself. Across the European Union (EU), England is committing collective suicide (because of Brexit), Germany is turning inward, and Italy (along with Greece) is in full rebellion against EU austerity measures. Meanwhile, the United States incipient withdrawal from the world increasingly leaves the continent without its traditional life insurance policy against “predatory threats from the East.” That insurance is needed now more than ever in a world where Russia is again asserting its power, and where China promises to become the center of the world.

However, Friedman says, the Yellow Vest Movement reveals that France itself is in danger of disintegration. The movement has arisen because the country’s working poor and anxious middle class have not benefitted from the liberal order of political-economy characterized by globalization, technological development, and mass migration of workers from the former Soviet Union and from France’s colonial empire. In the face of such developments, the poor have been completely marginalized, while robotics, artificial intelligence, outsourcing and competition from Chinese imports have made it increasingly difficult for middle class wage-earners to sustain accustomed life styles.

For France, all of this has been complicated by the ineptitude of its president Emmanuel Macron. On Friedman’s analysis, Macron has done the right things, but in an arrogant top-down, “let them eat cake” manner. The right things have included giving tax breaks to the rich, while imposing austerity (and job re-training programs) on workers. Austerity has meant raising taxes on diesel fuel, reducing pensions, and making it easier for employers to fire their workers.

In other words, Friedman approves of the very policies that have given rise to the “Yellow Vests” in the first place. For him, it’s just that austerity’s necessarily bitter pill wasn’t administered with the proper bedside manner.

And, according to the New York Times columnist, there is no apparent alternative. In the face of globalization, he holds that old solutions (simply cutting or raising taxes) cannot work. Instead, he vaguely calls for cities and local leaders to become “more nimble.” In his words, that means forming coalitions of business leaders, educators, and small entrepreneurs who can compete locally, regionally, nationally and globally.

That’s it. That’s Friedman’s analysis and solution.

Entirely absent from his considerations is any mention of “Yellow Vests” (i.e. working class) involvement in the solutions he finds so elusive.  That is, Friedman’s own approach, like that of Macron is entirely top-down. Like Macron he seems tone deaf to the “Yellow Vest” demand for inclusion in decision-making processes.

Necessary Changes in Consciousness

But what would such inclusion entail?

It would first of all necessitate changes in the very consciousness exhibited in the Friedman piece. These changes would include recognition of:

  • The Fundamental Failure of Capitalism: Friedman begins his article by celebrating capitalism. He writes “Ever since World War II, the liberal global order. . . has spread more freedom and prosperity around the world than at any other time in history. . .” Granted, such triumphalism might have been defensible (for those ignoring, for example, U.S. interventions in the Global South) before the dawn of the climate and immigration crises. However, today its uncritical hubris is embarrassing as the system’s train of destruction stretching back to capitalism’s dawning are seen as threatening the very continuation of human life as we know it. We can now see that capitalism has not really been successful. Quite the opposite. Persisting in lionizing the system while ignoring its run-away destruction prevents serious analysts from imagining the fundamental changes necessary to address the system’s basic failure. Apparently, it prevented Friedman from doing so.
  • Yellow Vest Criticism of Neo-liberalism: What consciously or unconsciously irks the international working class about neo-liberal globalization is the fact that the reigning economic model accords rights to capital that it steadfastly denies or severely restricts in the case of labor. It grants capital the right to cross borders wherever it will in pursuit of low wages and high profits. Meanwhile, it insists that labor, an equally important element of the capitalist equation, respect borders and/or severe restrictions on its mobility. Evidently, this is because the authors of the system (politicians, corporate boards, and lawyers) realize that freer movement of labor especially from the East or Global South would outrage constituents and consumers within industrialized countries in the developed world. The “Yellow Vests” prove that such outrage has taken hold in France and threatens to spread across the continent as workers from Europe’s former colonies extend and appropriate for themselves the logic of “free trade” heretofore acted upon only by capitalists and denied to labor. The immigration crisis is the result.

Necessary Reforms

As noted earlier, the Friedman article throws up its hands in surrender before the changes he describes as perhaps signaling the end of Europe. He writes, “Here is what’s really scary, though. I don’t think there are national solutions to this problem — simply cut taxes or raise taxes — in the way there were in the past.” So (to repeat) our author is left with the standard neo-liberal policies earlier described – trickle-down tax cuts for corporations and austerity for workers – implemented by the usual suspects with no mention of worker input.

None of that will work for the Yellow Vests. They want their voices heard. They want democracy at all levels. Such democratic ideal suggests changes far beyond the tired nostrums offered by Friedman – or perhaps even imagined by the French protestors themselves. These might include:

  • Democratized International Trade Agreements: Trade agreements like the European Union or NAFTA for that matter need to be negotiated with workers taking part. That means that the real EU question isn’t whether or not Great Britain should renegotiate its Brexit. The real issue is the reformulation of the EU Charter itself. The whole thing has to be rethought with the circle of negotiators widened to include all stakeholders. This means going beyond politicians, corporate heads, and lawyers to include trade unionists, environmentalists, indigenous peoples, educators, social workers, women, and representatives of children. In the process, each stake-holding group must have equal votes to complement their intellectual input. The same holds true for NAFTA.
  • Democracy at Work: Workers like the Yellow Vests spend most of their lives at work. Hence, their demands for democracy suggest, that any concept of self-governance must be broadened from the exercise of voting franchise every few years to include democracy at work. In its most effective form, democracy there takes the form of worker-owned cooperatives, where workers decide what to produce, where to produce it, and what to do with the profits. Enterprises of this type would never elect to pollute their neighborhoods, to pay outlandish salaries to administrators, to move their firm to a foreign country, or to lay off workers because of technological advance (all Yellow Vest complaints). Introducing such change is entirely possible. For instance, since 1985 Italy has taken steps to favor cooperative ownership. According to the country’s Marcora Law any company going out of business must extend to workers the right of first refusal in the case of a firm’s transfer of ownership.
  • Democratization of the New Technology: Democratic movements like the Yellow Vests need not be Luddite vis a vis the introduction of new technology. Instead, they might welcome any “labor saving” technologies. However, the point of such introduction would not be to down-size the labor force, but to shrink time spent on-the-job. For too long computers and artificial intelligence have been used by employers to cut labor costs and increase profits rather than to expand worker free time. By contrast, worker-friendly technological policies could make widespread job-sharing possible to eliminate unemployment. Four-hour workdays could replace present overwork. It could become possible to work only 6 months per year, or to take sabbaticals every few years without any reduction in pay.
  • A Green New Deal: Part of eliminating unemployment entails implementation of a Green New Deal (GND) to address climate chaos in ways that mirror Roosevelt’s original New Deal to combat the disastrous effects of the Great Depression. Prominent among the GND’s provisions must be the contemporary equivalent of the old Civilian Conservation Corps – this time to accomplish the environmental ends that the economy’s private sector is unwilling or unable to achieve.  
  • A Marshall Plan for the Former Colonies: To reverse the influx of immigrant workers, the former colonial powers must stop the wars and environmental policies that end up creating refugees and migrants in the first place. This means, first of all, ending their resource-wars and the failed war-on-terrorism. Secondly, however, the old colonists need to implement a New Marshall Plan in Latin America, Africa, and South Asia, where centuries-long resource-extraction policies have created the very poverty, hunger, and unemployment that has transformed the Global South from a natural paradise to a cauldron of social inequities. Besides being a remedy for the migration crisis, a grand Marshal Plan for the Global South is a matter of reparations.
  • Implementation of the NIEO: Specifically, reparations should entail something like the implementation of the New International Economic Order (NIEO) demanded by the Group of 77 within the United Nations in 1974. The New Order would grant Global South countries the power to control multinational investments within their borders. Recognizing that no country has ever achieved “development” as a mere supplier of raw materials to already industrialized countries, the order would require the latter to make large transfers of capital to the former colonies in the form of money and technology. It would also guarantee stable prices for raw materials from previously colonized nations in exchange for finished products (like tractors and computers), with the prices for the latter indexed to the established value of the raw materials.
  • Implementation of A New World Information and Communication Order (NWICO): As recognized by the UNESCO McBride Report in 1980, the former colonies need not only a new economic order, but one in which special attention is given to the international flow of information. The Global South needs a world information system that gives its inhabitants themselves the ability to portray and understand their own reality rather than being dependent on their former keepers for information about their lives, cultures and politics.     
  • Deep Cuts in Military Spending: All of this would be financed by higher taxes on the world’s 1% and by developed world cuts in military spending. Such increases and cuts would (1) recognize that the present war on terror is an utter failure, and (2) divert money now spent on attacking countries in the less developed world to constructive projects there such as rebuilding homes, schools, hospitals, power plants and water purification systems. Arguably, this would do more to combat terrorism than wars and bombing campaigns which many see as aggravating the problem of global terror. Again, this is a question of reparations.  

Conclusion

The elegance of the just-listed responses to France’s Yellow Vests and to the crisis of the neo-liberal order the protestors are rebelling against is that they are not new. In the cases of the New Deal and Marshall Plan, they enjoy a proven track record. At the same time, the prescriptions are much more detailed than the abstract cliches reflected in Thomas Friedman’s endorsements of neo-liberal austerity and “more nimble” decision-makers drawn from the professional classes.

Instead, the suggestions just listed have been with us since the 1930s (in the case of the New Deal), since the 1940s with the Marshall Plan, and since the mid’70s and early ‘80s with the proposed NIEO and NWICO. For their part, as Richard Wolff points out, worker co-ops have been hugely successful, for instance in the Mondragon Corporation in Spain and throughout the world, including France and the United States. Across the globe, worker cooperatives already employ 250 million people and in 2013 represented $3 trillion in revenue. Meanwhile, a huge body of literature from the 1960s and early ‘70s described a world in which computers and robotics would be used not to one-sidedly increase corporate profits, but to provide lives of leisure and enjoyment for ordinary people.

None of this is unrealistic, dreamy or impractical. In other words, we have the Yellow Vests to thank for helping us recall that another world is not only possible, but that we’ve already experienced it!