Socialist Countries & the World Economic Crisis



welcome rates and the topic I was asked to prepare on whether or not I've done so you can judge at the end tops I was asked to prepare on was can the socialist countries survive the crisis now the clearest and best example and the most advanced experience of how socialist countries can advance uninterruptedly in the midst of the general and catastrophic imperialist economic crisis is provided by the USSR in the 1930s here it is a vindication of the superiority of a centrally planned socialist economy I will just rest this case by quoting from the opening of comrade Stalin's report to the 16th Congress of the CPSU B in June 1930 noting that he had been just two and a half years since the previous Congress Comrade Stalin explained as follows and at least in his description of the situation in the capitalist world just as with the angles quotes that some poeple gave us this morning his words I believe resonate incredibly with his situation that we find ourselves in today Comrade Stalin said in the opening of this report as follows if one were to characterize the past period in two words it could be called a turning point period it marked a turning point not only for us for the USSR but also for the capitalist countries all over the world between these two turning points however there is a fundamental difference whereas for the USSR this turning point meant a turn in the direction of a new and bigger economic upswing for the capitalist countries it meant a turn towards economic decline here in the USSR there is a growing upswing of socialist development both in industry and agriculture there am the capitalists there is growing economic crisis both in industry and in agriculture such is the picture of the present situation in a few words recall the state of affairs in the capitalist countries two and a half years ago and this sort of a day it reminds me very much of how things were being presented to us two and a half years ago growth of industrial production and trade in nearly all the capitalist countries growth of production of raw materials and food in nearly all the agrarian countries a halo around the United States as the land of the most full-blooded capitalism triumphant hymns of prosperity groveling to the dollar panegyrics in honor of the new technology in honor of capitalist rationalization proclamation of an era of the recovery of capitalism and of the unshakable firmness of capitalist stabilization Universal noise and clamor about the inevitable doom of the land of Soviets about the inevitable collapse of the USSR that was the state of affairs yesterday and what is the picture today today there is an economic crisis nearly all the industrial countries of capitalism today there is an agricultural crisis in all the agrarian countries instead of prosperity there is mass poverty and a colossal growth of unemployment instead of an upswing in agriculture there is the ruin of the vast masses of the peasants the illusions about the on limits of capitalism in general and about the omnipotence of North American capitalism in particular are collapsing the triumphant hymns in honor of the dollar and of capitalist rationalization are becoming fainter and fainter pessimistic wailing about the mistakes of capitalism is growing louder and louder and the universal clamor about the inevitable doom of the USSR is giving way to Universal venomous hissing about the necessity of punishing that country that dares to develop its echo economy when crisis is raining around such is the picture today comrades doesn't it sound familiar it was this contrast between the two systems so articulately presented by Comrade Stalin that was the key to the developments throughout the 1930s and comrade papel this morning gave us some figures which in that ensuing decade that followed from that Congress whereas the USSR's economy proved by nearly 500 percent the United States economy actually declined and the other modestly largely the result of preparations but that development in the USS after of the 1930s pre-staged in those remarks of Comrade Stalin was what in turn enabled the USSR which at the start of that decade Stalin had noted was 50 to 100 years behind the advanced countries to be able to shoulder the main burden in ridding the world of fascism in the ensuing war and comrades we need to continue to popularize and explain this historical experience at every opportunity is especially in the light of the situation we find ourselves in today now the present reality of the socialist countries that exists today is more nuanced and more complex although we may want to refer to other countries in discussion for now I will confine my remarks to China as China is the most economically important and significant of the socialist countries certainly looking at a copy of the Financial Times any day of the week will show that the future prospects and direction of the Chinese economy is of great concern not only to us as friends of China but to the class enemy as well and whereas China's economic choices and prospects are a major factor in the global economy no but the socialist country today has more than a marginal impact in this sphere besides Vietnam which is the most significant or the next most significant socialist economy after China has essentially adopted an almost identical economic model and whilst there are certainly some differences in the cases of Cuba and the Democratic People's Republic of Korea these are actually much much less than is fondly imagined by some of their more partisan admirers and are also to a great extent more a result of imperialist economic sanctions than of any present desire on the part of their parties or governments so turning to China particularly since the third plenum of the 11th Central Committee of the Chinese party held in December 1978 just a little over 30 years ago China has followed what is in many respects a radically different Road of economic development from that taken by the USSR in Stalin's day as a result china now has essentially a mixed economy combining various forms of ownership over state ownership and certainly state regulation and direction remain predominant and china is considerably dependent on foreign investment and trade with the inevitable result that china today is not insulated from the capitalist crisis in the way that the USSR was in the 1930s at the same time as the Communist Party of China exercises unified political leadership over the country and the state maintains both directly and indirectly control over all the commanding heights of the economy is able to exercise macroeconomic control and still retains and still retains as we saw as we saw in the magnificent response to last year's to an earthquake or indeed in the organization of the best ever Olympic Games an ability in an emergency or an exceptional situation to mobilize and coordinate all the resources of society and in a planned and unified way and therefore the impact of the crisis on China is ameliorated compared to the situation in both the imperialist and oppressed nations hence while whilst others fall into recession negative growth and even sovereign default chapter China is confidently predicting that it will achieve eight percent growth this year modest when it has been mostly in double figures for the last 30 years but enviable from the point of view of many others the IMF and the World Bank are less optimistic positing that China's growth rate for 2009 will be 6.5 percent and these were the figures again the tupple gave this morning when he said that Chinese growth this year would be between 6 to 8 percent but even if we take the lower figure that offered by the IMF and World Bank no other major economy can look forward to such a level of broken in the present period many of them of course are looking forward to talk back to the opposite so viewed from that perspective China's position looked pretty good but viewed from China's perspective with for example millions of people coming on to the labor market each year it's a problem the fact that 20 million migrant workers lost their jobs last month speaks for herself again a figure that her pal gave us this morning in recent months China's exports have gone into a sharp decline but the slump in China's imports has been far more pronounced now this might appear to be relatively speaking to China's advantage but it is more complicated than that if China's imports have fallen then its exports will slump further a few months later this is because much of China's exports consist of simply processing into finished articles materials imported from more developed Asian economies such as those of Japan Taiwan South Korea and Singapore hence the figures that poeple gave you about Japan this morning are very relevant to the prospects for the Chinese economy and in these cases the the processing of art of imported materials into finished goods in these cases there is actually very little although added value in or for China moreover many of the factories where such work takes place a lot in China record wolfies which south stands for wholly foreign-owned enterprises China's only real benefit from these ventures is the provision of low paid low skilled employment if we now turn to why China has followed a different road from the USSR first it must be appreciated that China is a very different country from the USSR Czarist Russia may have been the weakest and most backward but it was one of the great imperialist powers China by contrast was a semi colonial semi-feudal country such that Mao once remarked in the 1940s that China's problem was not that it had too much capitalism but that it had too little today China may be considered may be considered as the fourth or even the third largest economy in the world in absolute terms but when one looks at the figures based on GDP per capita then it falls below one hundredth place such is the context in which China's leaders have long argued that the main overriding tasks in their country was to develop the productive forces Lenin it should be noted was by no means opposed in principle to concessions to foreign capitalism in order to build and safeguard the workers state under certain conditions the clearest example of this of course was his new economic policy or NEP in his letter to American workers dated 23rd September 1919 Lenin wrote as follows I'm often asked whether those American opponents of the war against Russia not only workers but mainly bourgeois are right who expect from us after peace is concluded not only resumption of trade relations but also the possibility of receiving concessions in Russia I repeat once more that they are right a durable peace would be such a relief to the working people of Russia that they would undoubtedly agree to certain concessions being granted the branching of concessions under reasonable terms is desirable also for us as one of the means of attracting into Russia during the period of the coexistence side-by-side of socialist and capitalist states the technical health of the countries which are more advanced in this respect on 12th of February 1921 Lenin sent a letter to Stalin and the other members of the political bureau on the subject of oil concessions in which he wrote in part quote it is up to us to make every effort to find such concessionaires if we don't so much the worse for us if we fail to make an all-out effort to find a concessionaire we shall find ourselves bankrupt the working out of the terms must be speeded up an immediate start must be made in fighting a highly dangerous prejudice which could easily carry a section of the workers and which must be debunked at any cost it is this idea we don't want to work for the capitalists or as variant we don't want to work for the capitalists when workers nearby among doing it the harm of it refuted by the Russian Communist Party's program and Marxism in June is evident from this rough calculation which impetu Mises the conclusion given in the experts reports we are extracting 100 a of oil output is dropping flooding threatens disaster if we get a concessionaire who will help to extract 100 a + 100 B of oil and if we pare and if we have to pay him 98 be for this our output will rise instead of dropping even if ever so slowly' 100 a plus 2b here is the question all the workers who give the concessionaire 98 be out of the hundred be working for the capitalists off on the soviet power there is no difficulty about the answer please go over the enclosed material one reports urgently to allow us to take a decision as soon as possible there is extreme danger in any delay end of quote now when Lenin's Russia implemented the NEP it was a force on the basis of a ruined nation when China started what had caused the reform an open-door policy at the end of the 1970s the situation was more complicated even if Chinese propaganda sometimes suggests otherwise on the one hand very nearly three decades after the founding of the People's Republic remarkable achievements have been made in providing food clothing and shelter to a quarter of the world's population in contrast pre liberation days where millions died from famine and natural disasters every year education had spread to the most remote areas and hundreds of millions of people have been freed from the scourge of illiteracy a system of barefoot doctors provided at least rudimentary medical care to the entire country a system that criminally was dismantled in for materials 1959 262 have been difficult years in China as one natural disaster followed another and the Soviet revisionists withdrew all their support but after this although there were difficult years there was no famine in China in stark contrast to India through the 1960s despite that countries much wanted Green Revolution however by the late 1970s China still had in many respects a subsistence economy meeting just necessities of life material status symbols in those days were a fountain pen a bicycle a wristwatch and a sewing machine China had been under a u.s. imperialist blockade which was only just lifting since 1950 joined by a Soviet revisionist blockade from around 1960 years of political upheaval in the Cultural Revolution have taken their toll on economic development yet despite all these factors there were of course great very great achievements in those years China detonated its nuclear weapons sent a satellite into space beaming back the East is red and there were monumental engineering and irrigation things such as the Nanjing River bridge and the red flag canal then see up thinking his comrades in launch in reform did so on the basis that the conditions existed to leverage in their view the conditions existed to leverage various factors for a dramatic skirt in economic advance in particular through playing the United States and the Soviet Union off against each other largely through an opening to the United States symbolized by the Nixon visit in 1972 a policy in fact initiated by Mao and Joanne lie when Dan was still enduring one of his periods of political disgrace China's external security situation are greatly improved the heroic struggle of the Vietnamese people of course so contributed to this by handling the US imperialism so then concluded that a major war involving China could be delayed for a long period of time thereby enabling the country to focus on economic construction and a synergy was identified between China's almost boundless labor supply and the possibility of acquiring capital technology and expertise from the outside world particularly from and via Southeast Asia now it is a misnomer to think that all foreign capital invested into China represents imperialist interests actually in the first period it came overwhelmingly and still does to a huge extent from the overseas Chinese especially from Hong Kong Taiwan and the countries of Southeast Asia of course all capitalists have in common that they exploit the proletariat but what also has to be borne in mind is that although there are some comparables in their ranks the overseas Chinese bourgeoisie is a national not an imperialist bourgeoisie they too have been oppressed and humiliated by imperialism particularly before China's liberation the Chinese Revolution was from it's very inception a revolution both for the class liberation of the proletariat and for the liberation of the entire Chinese people and for the rejuvenation of the Chinese nation some although of course by no means all overseas Chinese capitalists had supported the revolution from the very beginning from the days of dr. Samian sense preparations for the democratic revolution at the dawn of the 20th century and consistently thereafter businessmen in Hong Kong and Southeast Asia said funds and medicine to the Communists led guerrilla armies in the 1930s and 1940s at least one leading Hong Kong tycoon the late Henry fog smuggled weapons to China during the Korean War when China under an almost total imperialist blockade so the overseas Chinese have always been prepared to invest in China for a variety of reasons of course to make profit but for other reasons as well moreover they now have to do so under the leadership guidance supervision and control of the Communist Party and the Socialists state anyway this path embarked upon from the end of the 1970s essentially set the stage for the developments that we have seen in China over the last period a remarkable transformation that has catapulted the country to the very heart of the global economy and lifted hundreds of millions of people out of poverty constituting the overwhelming majority of human beings who have been lifted out of poverty in the last generation at the same time the negative consequences are of course equally well known some of them were itemized in the resolution on China past about parties Comte last Congress and they include a huge gap between rich and poor regional disparities environmental degradation decline of education and health care provision in rural areas discrimination against and lack of social provision for migrant workers who have moved from the countryside to the cities and in so doing have made the economic boom possible often gross levels of corruption a weakening of the party's ideological and political work and perhaps above all the recreation of a domestic bourgeoisie able to a certain extent to exercise influence within and upon the Communist Party and to maintain and then to develop and maintain ties with its class brethren in Hong Kong Taiwan and nationally ultimately therefore China has to face a choice to continually expand the realm of reform and opening-up unchecked quantitatively and qualitatively would mean that inevitably at some point the socialist foundations of the economy and society would be eliminated and the nature of the state would change this is what are referred to us in this morning we used to phrase in the final analysis or at some point the Chinese comrades will have to conclude that it is time to move on from what they have defined as the primary stage of socialism to a higher stage just as the Soviet Union knew when it was time to call a halt to any peace as China practiced with impact of the present capitalist crisis it is a good time for our comrades to start to revisit these fundamental considerations




Comments
  1. Sit in clamor as you call it. About American economy. If we didn't have to clean up your mess left undone wars .and send $10 trillion a year in humanitarian aid to the European continent. Maybe if your economy is doing so well you can pitch in a bit. We are tired of being the police of the world and yes in your backyard. Perhaps you could contribute to that $10 trillion a year in humanitarian aid. American economy will be just fine. We always bounce back. Why do you think we are the police of the world and we give so much humanitarian aid. BECAUSE WE CAN!

  2. Its crazy that anyone after 1978 could consider China's revisionists "socialist". Come on, you guys have better analytical skills than this.

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