While you were looking elsewhere … China now builds the best bridges in the world

While you may have been distracted by the way ‘Western’ countries (that is, a small group of former colonisers) are tearing themselves apart, China has quietly become a world leader in another area: bridge building.

You may know that the best and most advanced mobile phones are designed and contructed here (Huawei Mate 30), or that China is now the leading innovator and constructor of high-speed rail in more and more places throughout the world, or that China leads the world in re-afforestation and consistently wins awards for environmental protection, or that it offers a more stable model of governance, or that … the list could go on and on and it increases at a stunning rate.

But bridges? Given that most of China is quite mountainous, bridges are an absolute must (as are tunnels). And since a crucial feature of the poverty alleviation program, let alone the Belt and Road Initiative, is the construction of rail and road, bridges cannot be avoided. The outcome is that China is now the world leader in bridge technology and construction.

For example, China has recently constructed the world’s longest sea bridge in Fujian province connecting five islands and the mainland.

It will not be long before the island of Taiwan is connected with the mainland by such a bridge.

At the same time, the country’s bridge building is winning international awards. The showcase is Beipanjiang Bridge, on the border between the mountainous Guizhou and Yunnan provinces. More than half a kilometre above the gorge it spans, it required significant innovation to deal with complicated geographical conditions. It won the Gustav Lindenthal Medal in 2018 and the special merit award by the International Federation of Consulting Engineers (FIDIC) in 2019. Not a bad result in a country that in 1978 was one of the poorest in the world, with more than 95 percent below the poverty line. Not any more.

On State Capitalism (updated)

The following is the fourth part of the lecture on why foreign scholars are as yet unable to understand China’s socialist market economy. It deals with ‘state capitalism’, which is probably the most widely used term in both Marxist and non-Marxist traditions. As will become clear, what they mean differs considerably.

Since 2008’s Atlantic financial crisis, or what is now called ‘The Great Recession’, the neoliberal project has been in disorganised retreat. Most countries in the world have rejected the neoliberal model and its global enforcers (WTO, IMF and World Bank) have increasingly lost the ability to impose their agenda as they are transformed from within. In this context, the term ‘state capitalism’ has made a significant comeback in an effort by some to describe these developments. We initially analyse two groups, the first being non-Marxists and liberal true believers, and the second a smaller group of Marxist scholars. Both assume that under state capitalism the state is a large and influential corporation in its own right, a business enterprise and indeed core component that controls significant parts of a capitalist market economy. However, nearly all of them either avoid the most important work on state capitalism, by Lenin.

We begin with the non-Marxist scholars, who have begun deploying ‘state capitalism’ to speak of a significant number of countries – including socialist ones – that have either refused or turned away from neoliberal approaches. Apart from seeing an ‘interventionist’ state as the major controller of ‘the market’, they are also fond of using tired old categories, such as the opposition between ‘autocratic’ and bourgeois ‘democratic’, inefficient and efficient, so that state capitalism means inefficient ‘authoritarian’ capitalism and is contrasted with efficient ‘free-market’ capitalism. It should be no surprise that they see the spread of such state capitalism as a threat and hope to identify its shortcomings. Although they often focus on China (Gittings 2006, 3, 217; Haley and Haley 2013; Chen 2015; MacDonald and Lemco 2015, 43-69; Naughton and Tsai 2015; Kurlantzick 2016),[1] this type of ‘state capitalism’ in certainly not restricted to China. The number identified is relatively large, whether one offers an analysis of the current situation or takes a historical perspective. In terms of the current context, the list includes most countries in East Asia, Central Asia, more and more Latin American and African countries, Russia and some Scandinavian countries – in short, most of the world. Historical surveys like to begin with modern state forms in Europe after the Peace of Westphalia of 1648, and then identify various forms of state capitalist ‘intervention’ in mercantilism, European colonialism, the Soviet Union and Eastern Europe, the welfare state in Europe (especially Scandinavia), many post-colonial states in Africa and Asia, and the Asian economic rise in the last 30 years or so, with particular focus on Singapore and South Korea (Kurlantzick 2016, 49-63; see also MacDonald and Lemco 2015, 17-42). But what is the purpose of seeing ‘state capitalism’ at almost every point in modern history or today in most parts of the world? They clearly see that their beloved ‘free market’ approach and its attendant liberalism are under severe threat and even failing, so they uniformly attempt to find ways to respond, often with suggestions as to internal weaknesses in state capitalism.

With regard to a few Marxist scholars, the term ‘state capitalism’ has a longer history. Initially applied to the Soviet Union during Stalin’s tenure, it has since the 1980s also been applied to China (Cliff [1948] 2003; Pannekoek 1937; Norman 1955; Buick and Crump 1986; James 1986; Weil 1996, 26-27; Hooper 2017). The hypothesis: in a ‘betrayal’ or retreat from socialism, the state with its new ruling class imposed capitalist forms on a population that seems curiously to have lacked a voice. Already a number of problems arise, including the voluntarist approach to political power, an inability to account for why such a decision should be made, and the old ‘betrayal’ narrative. These problems we have found to be common to the previous hypotheses, and we will address them more fully in the conclusion.

Two problems need to be addressed in a little more detail. The first is an assumption that ‘global capitalism’ is a uniform and irrepressible force, into which aspiring socialist countries cannot avoid being drawn (Brink [2008] 2014; Buick and Crump 1986). Slightly more sophisticated is the ‘varieties of capitalism’ approach, which at least recognises significant differences but still assumes a global capitalism  (Gallagher 2005; Coffey and Thornley 2009; Hundt and Uttam 2016). Seriously missing in these proposals is a dialectical approach to modes of production, in which different modes of production – historically or indeed current – can be included within a dominant mode (Boer 2017). Thus, it is feasible for a socialist market economy to engage with capitalist market economies without being transformed into the latter.[2]

Second is a refrain among some: what about the workers? Assuming a narrow definition of socialism as concerned with the urban working class, the favoured approach is to focus on the disruptive changes of the 1990s as sluggish State-Owned Enterprises were broken up or began the long process to efficiency and innovation (they now drive innovation and remain the core of China’s economy). Workers lost their jobs, the ‘iron rice bowl’ connected with SOEs was dismantled, and new labour laws were met with frequent unrest (Whyte 1999; Li 2008, 2016; Gallagher 2005; Hart-Landsberg and Burkett 2005). Again, these developments were not a turn to a capitalist market economy, but internal contradictions arising from the Reform and Opening-Up. The Chinese answer: not a retreat from reform, but a need to solve these problems through further reform. In other words, the Reform and Opening-Up follows and is understood as a dialectical process in a Marxist framework. So, we find later that the workers dismissed were subsequently compensated, a more efficient and comprehensive welfare system – based on economic strength – is gradually being instituted, and more than 800 million workers (both rural and urban) have been lifted out of poverty (World Bank 2018). This point has a direct bearing on the voluntarism that plagues all of the hypothesis examined here: they are unable to explain why Deng Xiaoping, the CPC and the government purportedly took the ‘capitalist road’, apart perhaps from hinting at the desire for private gain. The answer is obvious: political decisions related to liberating the forces of production, with profound consequences and not a few mistakes on the way, were and are guided by Marxism – as Deng Xiaoping repeatedly made clear (Deng [1979] 1995, 239; [1980] 1995b, 261-62; [1980] 1995a, 337; [1990] 1994, 351).

Through most of the ‘state capitalist’ literature there is a glaring omission: an adequate engagement with Lenin. Not unexpectedly, the non-Marxists scholars avoid Lenin, but the Marxists who deploy ‘state capitalism’ struggle over Lenin’s material. Significantly, Chinese scholars do not refer to recent developments in such terms, since they understand ‘state capitalism’ in its specific Leninist sense. So let us consider Lenin’s contribution in a little more detail.

Lenin used ‘state capitalism’ on a number of occasions (1918 [1965]-b, 1918 [1965]-a, 1921 [1965]-a), but the fullest statement may be found in the key work, ‘The Tax in Kind’ (Lenin 1921 [1965]-b). Lenin argued that in light of the sheer devastation and economic collapse caused by the First World War and the Civil War, as well as the premature state of Russian socialism, a measure of private enterprise was necessary to get the economy moving. Peasants could sell the grain left over after paying the ‘tax in kind’, small private light-scale industry could be established, and concessions and leases would be given to foreign capitalist enterprises. All of this would entail the extraordinary dialectical point of building socialism through capitalism, or of private capital helping socialism. How? It would enable the initial impetus for the ‘development of the productive forces’ (Lenin 1921 [1965]-b, 342-43, 345-46).

Lenin had to overcome ‘left-wing’ opposition to do so, making two crucial points. First, he mapped out a transition process, since it was not possible to move from a backward, imperialist situation immediately to full-blown socialism. He envisaged a series of transitions, from petty-bourgeois capitalism (and later from ‘War Communism’), through state capitalism, to socialism, during which elements of capitalism would remain.[3] More simply: from capitalism, through state capitalism, to socialism. Thus, state capitalism for Lenin was, in that specific historical situation, a transitional form to socialism, not an end in itself. Second, it all depends on the over-arching socio-economic and political system. His two examples are Germany (after Bismarck’s reforms) and Russia after the October Revolution. In Germany, this ‘state capitalism’ was firmly in the hands of ‘Junker-bourgeois imperialism’; by contrast, in Russia the socialist system already emerging was the key, with the nature of the socialist state and the proletarian dictatorship playing the major roles. Thus, it would be highly advisable to learn from the German model and locate it within the Russian socialist system.

Apart from a few who struggle over Lenin’s legacy,[4] one occasionally finds a non-Chinese Marxist scholar who engages in detail with Lenin’s justification for the 1920s New Economic Policy, and argues that the Reform and Opening-Up is a longer Chinese version of the NEP (Kenny 2007). On this question, some Chinese scholars differ to some extent: they have pointed out that part of the inspiration for Deng Xiaoping’s breakthrough was precisely the NEP (Yang and Li 1998; Le 2000; Wang 2001; Tao 2008).[5] At the same time, these scholars also stress the specific historical conditions in Russia at the time, where such a transitional policy was necessary, but that Chinese conditions were and are quite distinct – and clearly now not state capitalist. But let us stress the second of Lenin’s insights, that everything depends on the underlying system within which a market economy works. There may be universal features of market relations, although not all are found in every market economy, but there is also a distinct particularity of each market economy since its nature is determined by the over-arching socio-economic system of which it is a component.

Clearly, ‘state capitalism’ has widely divergent uses, whether by liberalism’s true believers to speak of a world gone awry, some Marxists who dismiss the Soviet Union and China, Lenin’s own careful usage as a transitional phase in a specific historical situation, or Chinese scholars who understand the term in its Leninist sense and thus see more recent capitalist developments as Keynesian.

Bibliography

Boer, Roland. 2017. ‘Shehuizhuyi maodunlun xintan’. In Qimeng, Lishiguan yu makesi bianzhengfa, edited by Fengyu Zang, 140-56. Guizhou: Guizhou renmin chubanshe.

Brink, Tobias ben. [2008] 2014. Global Political Economy and the Modern State System. Leiden: Brill.

Buick, Adam, and John Crump. 1986. State Capitalism: The Wages System Under New Management. New York: St. Martin’s.

Chen Zongshi. 2015. The Revival, Legitimization, and Development of Private Enterprise in China: Empowering State Capitalism. New York: Palgrave Macmillan.

Cliff, Tony. [1948] 2003. ‘The Nature of Stalinist Russia’. In Marxist Theory After Trotsky, Selected Writings, Vol. 3, 1-138. London: Boomarks.

Coffey, Dan, and Carole Thornley. 2009. Globalization and Varieties of Capitalism: New Labour, Economic Policy and the Abject State. Houndmills: Palgrave Macmillan.

Deng Xiaoping. [1979] 1995. ‘We Can Develop a Market Economy Under Socialism (26 November, 1979)’. In Selected Works of Deng Xiaoping, Vol. 2, 235-39. Beijing: Foreign Languages Press.

—.      [1980-1981] 1995. ‘Remarks on Successive Drafts of the “Resolution on Certain Questions in the History of Our Party Since the Founding of the People’s Republic of China”‘. In Selected Works of Deng Xiaoping, Vol. 2, 290-309. Beijing: Foreign Languages Press.

—.     [1980] 1995a. ‘On the Reform of the System of Party and State Leadership’. In Selected Works of Deng Xiaoping, Vol. 2, 319-41. Beijing: Foreign Languages Press.

—.     [1980] 1995b. ‘The Present Situation and the Tasks Before Us’. In Selected Works of Deng Xiaoping, Vol. 2, 241-72. Beijing: Foreign Languages Press.

—.     [1985] 1994. ‘Reform is the Only Way for China to Develop Its Productive Forces (28 August, 1985)’. In Selected Works of Deng Xiaoping, Vol. 3, 140-43. Beijing: Foreign Languages Press.

—.     [1990] 1994. ‘Seize the Opportunity to Develop the Economy (24 December, 1990)’. In Selected Works of Deng Xiaoping, Vol. 3, 350-52. Beijing: Foreign Languages Press.

Gallagher, Mary. 2005. Contagious Capitalism: Globalization and the Politics of Labor in China. Princeton: Princeton University Press.

Gittings, John. 2006. The Changing Face of China: From Mao to the Market. Oxford: Oxford University Press.

Haley, Usha, and George Haley. 2013. Subsidies to Chinese Industry: State Capitalism, Business Strategy, and Trade Policy. New York: Oxford University Press.

Hart-Landsberg, Martin, and Paul Burkett. 2005. China and Socialism: Market Reforms and Class Struggle. New York: Monthly Review Press.

Hooper, Michael. 2017. ‘Opposite Directions: The NEP and China’s Opening and Reform’. Australian Marxist Review: Journal of the Communist Party of Australia 64 (April).

Hundt, David, and Jitendra Uttam. 2016. Varieties of Capitalism in Asia: Beyond the Developmental State. London: Palgrave Macmillan.

James, C.L.R. 1986. State Capitalism and World Revolution. Chicago: Charles H. Kerr.

Kenny, Thomas. 2007. ‘Lessons for the “Socialist Market Economy” of People’s China from the Soviet “New Economic Policy”‘. Nature, Society & Thought 20 (1):80-90.

Kurlantzick, Joshua. 2016. State Capitalism: How the Return of Statism is Transforming the World. New York: Oxford University Press.

Le Chengyao. 2000. ‘Deng Xiaoping lilun shi dui Liening xin jingji zhengce de jicheng he chaoyue’. Ningxia dangxiao xuebao 2000 (3):11-16.

Lenin, V.I. 1918 [1965]-a. ‘”Left-Wing” Childishness and the Petty-Bourgeois Mentality’. In Collected Works, Vol. 27, 323-54. Moscow: Progress Publishers.

—.      1918 [1965]-b. ‘Session of the All-Russia C.E.C., April 29, 1918’. In Collected Works, Vol. 27, 279-313. Moscow: Progress Publishers.

—.     1921 [1965]-a. ‘Report on the Tax in Kind Delivered at a Meeting of Secretaries and Responsible Representatives of R.C.P.(B.) Cells of Moscow and Moscow Gubernia, April 9, 1921’. In Collected Works, Vol. 32, 286-98. Moscow: Progress Publishers.

—.       1921 [1965]-b. ‘The Tax in Kind (The Significance of the New Economic Policy and Its Conditions)’. In Collected Works, Vol. 32, 329-65. Moscow: Progress Publishers.

Li, Minqi. 2008. The Rise of China and the Demise of the Capitalist World-Economy. London: Pluto.

—.     2016. China and the Twenty-First-Century Crisis. London: Pluto.

Lin Chun. 2013. China and Global Capitalism: Reflections on Marxism, History, and Contemporary Politics. New York: Palgrave Macmillan.

Lin, George. 1997. Red Capitalism in South China: Growth and Development of the Pearl River Delta. Vancouver: UBC Press.

Lüthi, Lorenz. 2010. ‘Sino-Soviet Relations during the Mao Years, 1949–1969’. In China Learns from the Soviet Union, 1949–Present, edited by Thomas Bernstein, 27-60. Lanham: Lexington.

MacDonald, Scott, and Jonathan Lemco. 2015. State Capitalism’s Uncertain Future. Santa Barbara: Praeger.

Naughton, Barry, and Kellee Tsai. 2015. State Capitalism, Institutional Adaptation, and the Chinese Miracle. Cambridge: Cambridge University Press.

Norman, David. 1955. Marx and Soviet Reality. London: Batchworth.

Pannekoek, Anton. 1937. ‘State Capitalism and Dictatorship’. International Council Correspondence 3 (1):8-16.

Tao Lin. 2008. ‘Liening de xin jingji zhengce jiqi shidai jiazhi xin tan—jian lun qi dui Deng Xiaoping lilun de yingxiang’. Ha’erbin xueyuan xuebao 2008 (4):11-18.

Walter, Carl, and Fraser Howie. 2011. Red Capitalism: The Fragile Financial Foundation of China’s Extraordinary Rise. Singapore: John Wiley & Sons.

Wang Lirong. 2001. ‘Liening de “xin jingji zhengce” he Deng Xiaoping lilun zhi bijiao’. Zhongnan caijing daxue xuebao 2001 (5):13-16.

Weil, Robert. 1996. Red Cat, White Cat. New York: Monthly Review Press.

Whyte, Martin. 1999. ‘The Changing Role of Workers’. In The Paradox of China’s Post-Mao Reforms, edited by Merle Goldman and Roderick MacFarquhar, 173-96. Cambridge: Harvard University Press.

World Bank. 2018. China Systematic Country Diagnostic: Towards a More Conclusive and Sustainable Development. Washington: World Bank Group.

Yang Chengxun, and Li Zhusi. 1998. ‘Deng Xiaoping lilun dui Liening xin jingji zhengce sixiang de jicheng he fazhan’. Makesizhuyi yu xianshi 1998 (5):12-17.

[1] A fashionable variation is to speak of ‘red capitalism’, with even more apocalyptic warnings of China’s imminent ‘collapse’ (Lin 1997; Walter and Howie 2011).

[2] Lin Chun (2013) comes close to this approach.

[3] Although Lenin assumed – mistakenly – that all types of market relations were inherently capitalist (Deng [1980-1981] 1995, 308-9), he also argued frequently that many approaches first developed under capitalism would also have a proper function under socialism: ‘Socialism is inconceivable without large-scale capitalist engineering based on the latest discoveries of modern science. It is inconceivable without planned state organisation which keeps tens of millions of people to the strictest observance of a unified standard in production and distribution. We Marxists have always spoken of this’ (Lenin 1921 [1965]-b, 334).

[4] For example, C.L.R. James (1986, 18-22) ignores the transition argument in Lenin and emphasises an intensification of crisis in state capitalism; by contrast, Buick and Crump (1986, 111-17) suggest that Lenin and the Bolsheviks were not socialist and undertook a state capitalist ‘revolution’.

[5] Deng Xiaoping hints at this influence in 1985: ‘What, after all, is socialism? The Soviet Union has been building socialism for so many years and yet is still not quite clear what it is. Perhaps Lenin had a good idea when he adopted the New Economic Policy’ (Deng [1985] 1994, 143). Apparently, Zhou Enlai had advocated learning from the NEP already in the 1950s (Lüthi 2010, 36).

On David Harvey’s Neoliberalism (‘with Chinese Characteristics’)

The is the third part of my lecture text on why foreign scholars as yet do not understand China’s socialist market economy. This part focuses on David Harvey’s influential yet deeply flawed book, A Brief History of Neoliberalism (2005).

The reaction to state monopoly capitalism was – as indicated already on a few occasions – the rise of neoliberalism at the end of the 1970s and its aggressive promotion in 1980s and 1990s. It may be defined as a ‘theory of political economic practices that proposes that human well-being can best be advanced by liberating individual entrepreneurial freedoms and skills within an institutional framework characterized by strong private property rights, free markets, and free trade’ (Harvey 2005, 2). I have taken this definition from David Harvey, since his work is the main focus of this section. The elaboration on this definition sounds very much like a reiteration of Adam Smith (1776 [2000]) as interpreted through the neoclassical economists (Alfred Marshall, William Stanley Jevons, and Leon Walras): minimal state presence, except for guaranteeing the basic institutional environment for a capitalist market economy, the inherent value of ‘self-interest’ and so the primacy of the private individual, with the addition that any state with too many possessions should ‘privatise’ them. In fact, for Harvey the process of privatisation is enough to designate a government’s project as neoliberal.

A Brief History traces the way this liberalism was rediscovered as neoliberalism (Friedrich von Hayek, Milton Friedman and others) and applied with gusto first in the UK and the United States under Thatcher and Reagan, two of the places where Western liberalism itself first arose (Losurdo 2011). In the 1980s and 1990s it was copied by like-minded countries and forced on others not so like-minded, through the standard mechanisms of United States colonial power play – known as ‘regime change’. Of course, states enacting neoliberal policies are bound to be quite ‘interventionist’, as Harvey notes, as were the international bodies such as the IMF and World Bank, which were tasked with the authoritarian imposition of such policies on less-than-willing countries.

All this is reasonably well-known, although Harvey is keen to emphasise the regular crises generated by neoliberal policies. The book was published before the major Atlantic crisis of 2008, so he was unable to realise that the crises were not merely due to internal causes, but also external ones. I mean here the cumulative effect of China’s Reform and Opening Up, which was beginning to have a global effect by the 1990s. Countries following the neoliberal agenda could not help being affected by the Chinese return to being a global power of some weight. This point, of course, brings us to Harvey’s most wayward chapter, ‘Neoliberalism with Chinese Characteristics’ (2005, 120-51).

Before I engage with this chapter, we need to pause for a moment to identify some problems that have already arisen. The key problem is that Harvey refuses to countenance both Marx’s theory of labour value and the falling rate of profit in capitalist enterprises. He has been criticised for such omissions (Harvey 2017; Roberts and Harvey 2018; Das 2017), although I do not need to engage with such debates here. More significant is the ramification: what is the cause for the move to neoliberalism? For Harvey, it is nothing more than the result of the political will of the capitalist ruling class (Harvey 2005, 19; see also here). It is a voluntary act by the ruling capitalist class that makes such decisions in order to respond to economic challenges and threats from anti-capitalist opposition. Not only is this approach focused on relations of production and determined by political rather than economic factors, but I am reminded of Marx and Engels’s criticism of Bakunin. At one point, Marx observes: ‘Willpower [Der Wille], not economic conditions, is the basis of his social revolution’ (Marx 1875 [1973], 633; 1875 [1989], 518).[1]

To be sure, Harvey likes to call his approach ‘uneven geographic development’, along with the invocation of multiple, complex and interwoven factors in the capitalist market relations. But he is unable to provide an adequate Marxist reason for the turn to neoliberalism and away from state monopoly capitalism (which he calls ‘embedded liberalism’). By contrast, had Harvey deployed the falling rate of profit (from Marx), he may have been able to account for the turn to neoliberalism. The earlier tendencies towards state monopoly capitalism  – popular in the context of two World Wars with states becoming active players in social and economic life through widespread militarisation, capitalist welfare states, and a spate of nationalisations of banks, railways and public utilities – had run to its limit in terms of the ability to extract more profit. A response was needed from the Western liberal tradition: the state had to retreat so as to enable ‘private’ capital to seek new fields to generate profit. Already I have invoked another possible reason in light of the previous section: the tension between bourgeois state control of the capitalist economy and its retreat to enable private capital to come into its own for a while.

With this point in mind we come to the China chapter. Harvey espies a neoliberal turn with the Reform and Opening Up, launched by Deng Xiaoping in 1978. Why? The only answer I can find in Harvey’s work is that it was due to the political will of the CPC, which decided for some unaccountable reason to move to private enterprises alongside state enterprises. I have said enough on the inadequacy of such a voluntarist approach and have more criticisms to make, but let us pause for a moment to see how Harvey unfolds his hypothesis. To begin with, he explicitly connects the Reform and Opening Up with the neoliberal turn elsewhere in the world, although he is careful to point out that it may also have been due to issues internal to China (he does not elaborate).

Harvey is perfectly willing to admit that the result has been stunning, with one of the fastest periods of economic growth in human history, the lifting of hundreds of millions out of poverty, and China’s re-emergence as a major international power. He also notes problems that arose, such as socio-economic inequality, exacerbation of city-country differences, environmental pollution, and labour unrest (his information is limited to the period up to the early 2000s). And he notes that the government has been adept at dealing with new problems that arose. However, Harvey is committed to the idea that this is neoliberal capitalism.

Apart from the fact that Harvey neither cites any reputable Chinese language material on the topic, nor engages in careful study of what Deng Xiaoping actually said and did (apart from some decontextualized ‘sound bites’), the key problem here is that he assumes that a market economy is the same as a capitalist market economy. This may seem like a simple point, but it is fraught with implications. It is also – and unfortunately – quite common among Western economists, social scientists and philosophers – Marxists included. But it is wrong, since a market economy is not by definition a capitalist market economy. I will return to this issue later, save to point out here the multiplicity of different types of market economy is supported by Marx’s own work in Capital, historical investigation, and Chinese research. It is perfectly feasible to have a socialist market economy, which unleashes the forces of production and which is not a capitalist market economy. But Harvey is unable to make this point.

David Harvey has been profoundly influential through his lectures – worldwide – on Marx’s Capital. His method in such talks is simple yet profound: he offers a careful reading, an exegesis, of a few pages of Capital, which he invites the audience to study once again. But the problem of influence is twofold: while Harvey may have encouraged a good number to study Capital once again, this very same influence has encouraged the perpetuation of a number of profound mistakes.

Bibliography

Das, Raju. 2017. ‘ David Harvey’s Theory of Uneven Geographical Development: A Marxist Critique’. Capital and Class 41 (3):511-36.

Harvey, David. 2007. A Brief History of Neoliberalism. Oxford: Oxford University Press.

———. 2017. Marx, Capital, and the Madness of Economic Reason.

Losurdo, Domenico. 2011. Liberalism: A Counter-History. Translated by Gregory Elliott. London: Verso.

Marx, Karl. 1875 [1973]. ‘Konspekt von Bakunins Buch “Staatlichkeit und Anarchie”‘. In Marx Engels Werke, Vol. 18, 597-642. Berlin: Dietz.

———. 1875 [1989]. ‘Notes on Bakunin’s Book Statehood and Anarchy‘. In Marx Engels Collected Works, Vol. 24, 485-526. Moscow: Progress Publishers.

Marx, Karl, and Friedrich Engels. 1845-1846 [1973]. ‘Die deutsche Ideologie. Kritik der neuesten deutschen Philosophie in ihren Repräsentanten Feuerbach, B. Bauer und Stirner und des deutschen Sozialismus in seinen verschiedenen Propheten’. In Marx Engels Werke, Vol. 3, 9-530. Berlin: Dietz.

———. 1845-1846 [1976]. ‘The German Ideology: Critique of Modern German Philosophy According to Its Representatives Feuerbach, B. Bauer and Stirner, and of German Socialism According to Its Various Prophets’. In Marx and Engels Collected Works, Vol. 5, 19-539. Moscow: Progress Publishers.

Roberts, Michael, and David Harvey. 2018. Marx’s Law of Value: A Debate between David Harvey and Michael Roberts. In The Next Recession. thenextrecession.wordpress.com/2018/04/02/marxs-law-of-value-a-debate-between-david-harvey-and-michaelroberts.

Smith, Adam. 1776 [2000]. The Wealth of Nations. London: Modern Library.

[1] See also the earlier observation on Max Stirner. who was – write Marx and Engels – committed ‘to mere change of will [eine bloße Veränderung des Willens]’ (1845-1846 [1973], 317; 1845-1846 [1976], 335). This is nothing more than the ‘domination of arbitrariness [Herrschaft der Willkür]’ (1845-1846 [1973], 317; 1845-1846 [1976], 335).

On State Monopoly Capitalism

This is the second part of a lecture I am preparing on why foreigners are still unable to understand a socialist market economy. This part examines state monopoly capitalism, which was a significant part of Soviet and European Marxist debates up to the end of the 1980. The text is as follows:

State monopoly capitalism is first and foremost a Marxist category, arising in Soviet thought (abbreviated as stamocap) and gaining widespread usage after the Second World War. Notably, in this tradition ‘state monopoly capitalism’ is used almost exclusively to speak of capitalist countries in light of the evolving stages of capitalism. With one exception: I have been able to find one example – an implicit one – where a certain type of state monopoly capitalism has been used more recently in relation to socialist countries (among others). I will deal with this exception towards the end.

State monopoly capitalism may be defined as a ‘distinct stage of capitalism characterised by the fusion of monopoly forces with the bourgeois state to form a single mechanism of economic exploitation and political domination’ (Jessop 1982, 32).[1] I have taken this definition from Bob Jessop, who provides what is arguably the most comprehensive critical overview of the theory. The date of publication is also telling, for in 1982 the theory was still relatively widespread. There were two main components: a new stage of capitalism in light of its internal crises, which entailed a closer alignment of monopoly capital and the bourgeois state; a development of communist strategy to exploit the contradictions through popular front activities.

The theory initially arose in the Soviet Union (Varga 1964, 1964 [1968], 1934) and became dominant from the 1950s to the 1980s, so much so that The Great Soviet Encyclopaedia has a major 1979 entry (Cheprakov 1979). The origins may be traced back to Marx and Engels, concerning the contradiction between competition and monopoly, and Lenin’s relatively undeveloped observation that imperialism entails the growth of state monopolies (Lenin 1916 [1964], 1917 [1964]-b),[2] so much so that – and here he quotes a resolution – ‘monopoly capitalism is developing into state monopoly capitalism’ (Lenin 1917 [1964]-a, 305; 1917 [1969]-b, 443).[3]

During its heyday, the theory of state monopoly capitalism developed in a number of directions, depending on the emphasis and context. Jessop identifies four, with copious references:

1) General crisis approach, in which the capitalist world faced yet another stage of crisis, generated by the increasing number of socialist countries, the collapse of European colonialism in light of anti-colonial liberation struggles. The response of a decaying capitalism was to find new domination through the merging of the state and monopoly capitalism.

2) Monopoly-theoretical tradition (strong in the Soviet Union and Germany), in which the contradiction of competition and monopoly leads to a permanent domination of the latter. This was seen as a new stage of capitalism, beyond imperialism – as Lenin had initially argued (Lenin 1916 [1964], 1916 [1969]). Here too we find the challenge of socialism, but now seen primarily in class terms: the international challenge of socialism leads to the fusion of monopolies and state, with resultant militarism and a focus on technological development.

3) The capital-theoretical tradition (England, but also in Germany and the Soviet Union), which focuses on the basic laws of capitalist motion. This approach emphasises that state monopoly capitalism is a crisis-driven response to the contradiction between the increasing socialisation of the forces of production and private nature of the relations of production. The state’s active role at multiple levels effectively further socialises the relations of production through the state. On the British side (Fine and Harris 1979, 120-45), this entails not a new stage of imperialism (see above), but a third stage in the capitalist mode of production, after laissez-faire and monopoly capitalism. The state’s active role – through nationalisation, taxation, and state credit – not only negates working class access to real state power through direct control, but also internationalises productive capital by working with multi-national companies and establishing international organisations such as the World Bank and the International Monetary Fund.

4) The French ‘overaccumulation’ approach, which was framed in terms of the contradiction between private monopoly capital’s overaccumulation and its revalorisation through the state. Basing its approach on the cyclical crises of capitalism, which at times reach a crescendo so that structural changes are needed, the French approach identified the increasing role of the state in ensuring that the falling rate of profit (which leads to overaccumulation) is arrested for a time by comprehensive structural changes. Thus, state monopoly capitalism becomes a necessary development to ensure, through the state’s central role, that private monopoly capital is able to produce surplus-value. And it does so through reorganising the relations of production, with the resultant increase in exploitation and polarisation of classes.

To sum up, most approaches agreed on a few basics: state monopoly capitalism was a new stage, either beyond imperialism or a third stage in capitalism (after laissez-faire and simple monopoly); this new stage was yet another systemic effort to deal with unsolvable contradictions, whether in terms of the relations of production and globalised class conflict or in terms of the means of production; it entailed new types of exploitation for workers and efforts to suppress of socialism. But they also differed in many ways, with a core difference determined by whether the focus was primarily political or economic. Thus, those who saw the development in political terms (monopoly-theoretical) were keen to find new approaches to political agitation, but they ran the risk of determining the economic analysis through such an agenda. By contrast, those who preferred to focus on the internal laws of capitalism (capital-theoretical and overaccumulation approaches) at times seemed to come close to Marxist ‘book worship’ and thus a type of economism.

I would like to close with two final questions. First, are there any abiding insights from this material? At a deeper level, it was very useful in identifying the inescapable role of the bourgeois state within a capitalist economy. Debates may continue as to the changing ways this happens, but it is a useful corrective to the neo-classical (and indeed neoliberal) approach which sees the market as a separate entity, within which the state intervenes from time to time.[4] One way of seeing the tensions within capitalist economics is in light of these two theoretical approaches: while the state is deeply and structurally involved, there are at the same time constant moves to delink the state, to privatise state assets and seek a ‘small state’. Periodically – such as during wartime or extensive economic crises – one approach dominates, but then we find a reactive move in the other direction.

This point brings me to the second question: why did state monopoly capitalism as a theory virtually disappear among foreign Marxists after 1989 and the counter-revolution in the Soviet Union and eastern Europe? One reason is that it was due to the tensions within capitalism outlined above: the drive to state monopoly capitalism produced a reaction in the 1980s, with the revival of laissez-faire economics under the label of ‘neoliberalism’. Another reason is that many of the theorists saw a major contradiction at a global level between capitalism and socialism. The latter was growing at the time, with successful revolutions in Asia, anti-colonial struggles and national liberation in Africa, Asia and elsewhere, while the capitalist world was shrinking. The counter-revolution in Eastern Europe seemed to suggest that this analysis was wrong. Instead, socialism seemed to be in retreat and capitalism was gaining momentum.

Or that is how it seemed to Western eyes in the 1990s and early 2000s. Since then, of course, much has changed. Socialist countries, especially China, are now more powerful and influential than they have been for a very long time. Many formerly colonised countries have found that the economic models borrowed from the West have not worked and they are looking for alternative models adapted to their own conditions. And these countries have also been active in international bodies, from the United Nations to the World Trade Organisation, transforming them from within to suit the conditions of a rapidly changing world.

Indeed, I suspect that ‘state monopoly capitalism’ may make a comeback as a category of analysis, albeit in a different way. Thus far, state monopoly capitalism has not been applied to socialist countries,[5] but there is a beginning of efforts to do so, albeit without any awareness of the Marxist origins and development of the term. Let me give one example, although it is implicit rather than explicit. It appears in the recent work by the neo-classical economist, Kurlantzick, who works within the framework of state capitalism but seeks to delimit its application. Realising that ‘state capitalism’ potentially applies to all states, he offers this definition: ‘countries whose government has an ownership stake in or significant influence over more than one-third of the five hundred largest companies, by revenue, in that country, a situation that gives these governments far greater control over the corporate sector than a government in a more free-market oriented nation like the United States or the United Kingdom’ (Kurlantzick 2016, 9). This definition is extremely intriguing, for Kurlantzick must work very hard to exclude a number of countries – such as France, Japan and the United States – from his list. In order to so, he adds:

  1. The ownership and control of key enterprises must be direct and not indirect (since the United States provides massive indirect subsidies to its military and automobile industries)
  2. This ownership and control must be long-term and not during economic crises, as we found after 2008 in some countries.
  3. Direct government spending on items such as welfare is also excluded.
  4. Sovereign wealth funds are excluded.

Only in this way can he focus on what are implicitly seen as state-monopoly capitalist countries. A major reason for the restrictions is that Kurlantzick is desperate to save mostly Western countries from being versions of state (monopoly) capitalism, for he sees their ‘free market’ approach and its attendant liberalism as under severe threat and failing. But even with these restrictions, the number of state monopoly capitalist countries is quite large, as the following table indicates (Kurlantzick 2016, 28):

More monopolised                    Hybrid           Less monopolised

Two socialist countries make the list, China and Vietnam, although they are by no means the most ‘monopolised’ according to Kurlantzick’s criteria. The question arises as to why this implicit state monopoly capitalism should be recurring now, albeit without awareness of the Marxist tradition. Has the effort to revive laissez-faire economics under the label of ‘neoliberalism’ run its course? I will say more on this question in the section on state capitalism.

Bibliography

Bollana, Primo. 1981. ‘Some Characteristics of State Monopoly Capitalism in the Soviet Union’. In Soviet Revisionism and the Struggle of the PLA to Unmask It, edited by Institute of Marxist-Leninist Studies at the CC of the PLA. Tirana: “8 Nëntori” Publishing House.

Cheprakov, V.A. 1979. ‘Gosudarstvenno-monopolisticheskiĭ kapitalizm’. In Bolʹshaia sovetskaia ėntsiklopediia. Moscow: Izdatel’stvo Sovetskaia Entsiklopediia.

Fine, Ben, and Laurence Harris. 1979. Rereading Capital. London: Macmillan.

Herzog, Phillippe. 1972. Politique économique et planification en regime capitaliste. Paris: Editions sociales.

Hoxha, Enver. 1978 [1985]. ‘Imperialism and the Revolution’. In Selected Works, 358-707. Tirana: “8 Nëntori” Publishing House.

Jessop, Bob. 1982. The Capitalist State: Marxist Theories and Methods. Oxford: Martin Robertson.

Kurlantzick, Joshua. 2016. State Capitalism: How the Return of Statism is Transforming the World. New York: Oxford University Press.

Lenin, V.I. 1916 [1964]. ‘Imperialism, the Highest Stage of Capitalism: A Popular Outline’. In Collected Works, Vol. 22, 185-304. Moscow: Progress Publishers.

———. 1916 [1969]. ‘Imperializm, kak vysshaia stadiia kapitalizma (Populiarnyĭ ocherk)’. In Polnoe sobranie sochinenii, Vol. 27, 299-426. Moscow: Izdatel’stvo politicheskoi literatury.

———. 1917 [1964]-a. ‘Speech in Favour of the Resolution on the Current Situation, April 29 (May 12), 1917’. In Collected Works, Vol. 24, 305-8. Moscow: Progress Publishers.

———. 1917 [1964]-b. ‘War and Revolution: A Lecture Delivered May 14 (27), 1917’. In Collected Works, Vol. 24, 398-421. Moscow: Progress Publishers.

———. 1917 [1965]. ‘The Impending Catastrophe and How to Combat It’. In Collected Works, Vol. 25, 323-69. Moscow: Progress Publishers.

———. 1917 [1969]-a. ‘Groziashchaia katastrofa i kak s nei borot’sia’. In Polnoe sobranie sochinenii, Vol. 34, 151-99. Moscow: Izdatel’stvo politicheskoi literatury.

———. 1917 [1969]-b. ‘Rech’ v zashchitu rezoliutsiia o tekushchem momente, 29 aprelia (12 maia)’. In Polnoe sobranie sochinenii, Vol. 31, 443-46. Moscow: Izdatel’stvo politicheskoi literatury.

———. 1917 [1969]-c. ‘Voina i revolutsiia: Lektsiia 14 (27) maia, 1917g’. In Polnoe sobranie sochinenii, Vol. 32, 77-102. Moscow: Izdatel’stvo politicheskoi literatury.

Varga, Evgenii. 1934. The Great Crisis and its Political Consequences: Economics and Politics, 1928-1934. London: Modem Books.

———. 1964. Ocherki po problemam politékonomii kapitalizma. Moscow: Gospolitizdat.

———. 1964 [1968]. Politico-Economic Problems of Capitalism. Moscow: Progress Publishers.

[1] Compare the definition in The Great Soviet Encyclopaedia: ‘new, more developed form of monopoly capitalism, characterized by the joining of the forces of capitalist monopolies with the power of the state to preserve and strengthen the capitalist system, enrich the monopolies, suppress the workers’ and national liberation movements, and unleash aggressive wars’ (Cheprakov 1979).

[2] Lenin speaks of ‘the beginnings of state-controlled capitalist production, combining the colossal power of capitalism with the colossal power of the state into a single mechanism and bringing tens of millions of people within the single organisation of state capitalism’ (Lenin 1917 [1964]-b, 403; 1917 [1969]-c, 83). For a comprehensive assessment of Lenin’s contribution, see Jessop (1982, 32-36).

[3] Lenin is, however, not entirely consistent in his usage and the theory remains somewhat undeveloped. Before the October revolution, he saw state monopoly capitalism as a development, especially in the context of war, to a new level of capitalism itself, although even here it was already seen as a step towards socialism (Lenin 1917 [1965], 361-63; 1917 [1969]-a, 191-93). Later, he quotes from this 1917 text – ‘The Impending Catastrophe and How to Combat It’ – in ‘The Tax in Kind’ from 1921, where he argues for the need for a muted verison of state capitalism during the New Economic Policy. In other words, he subsumed state monopoly capitalism under state capitalism (see below), which he saw as a (major) step towards socialism. This inconsistency is most likely due to different circumstances: the initial proposal was made before the October Revolution during the last phase of Russia’s engagement in the First World War, while his later development of the idea took place after the revolution and Civil War, particularly in light of the need to develop the New Economic Policy.

[4] Indeed, one of the debates over state monopoly capitalism concerned the relation between state and economy: were they fused under state monopoly capitalism, distinct, or did they function in terms of ‘contradictory separation in unity’ (Herzog 1972, 125)

[5] One does find very occasional accusations internal to the former Eastern Bloc that the Soviet Union and Yugoslavia had descended, from the time of Khrushchev, to a type of state monopoly capitalism (Bollana 1981; Hoxha 1978 [1985], 414-15).

On Bureaucratic Capitalism

I am preparing the text for an invited lecture on why foreigners are still unable to understand the socialist market economy in China. The main focus will be on a number of concepts that have been applied to China, but which are mistaken. The first of these concerns ‘bureaucratic capitalism’, which has an intriguing history. The concept arises from Max Weber, who saw it specifically in terms of the peculiar developments in Western Europe. The small number who apply ‘bureaucratic capitalism’ to socialist countries, such as China, are simply unaware of Weber’s work and indeed the realities of these countries. The text is as follows:

Let us begin with ‘bureaucratic capitalism’.[1] The term derives particularly from Max Weber, who made it a central category of his analysis of the rise of capitalism and the modern European bourgeois state (Weber 1921 [2015]; 1947, 324-40; 1968, 956-1005). Bureaucracy is the key, which Weber sees as a detailed and often hierarchical division of labour in which all follow objective and explicit rules that are applied impersonally. A bureaucracy is staffed by full-time professionals, who have developed the necessary skills but who live from a salary and do not in any way own the ‘means of administration’ or make a profit. This is, of course an ‘ideal type’ favoured by Weber, an abstract category used for analysis rather than a concrete description of a real life bureaucrat.

For our purposes, two features are important in Weber’s analysis: bureaucracy as a manifestation of rationalisation; and bureaucracy as crucial for the rise of capitalism in Europe. As for rationalisation, Weber speaks of three types of legitimate authority: rational, traditional and charismatic (Weber 1947, 328-29). Charismatic authority is derived from the Christian tradition and designates a system in which followers are devoted to a gifted or heroic leader. Traditional authority also entails being subject to an individual leader, but now because of tradition itself and its assumed duties. Whoever occupies the position of chief is regarded as legitimate due to tradition. By contrast rational authority is not personal but impersonal. It relies on a distinct set of laws that have their own moral legitimacy or are socially agreed to be legitimate. Weber calls this ‘legal authority’ and it is based on the Western approach to rule of law.

This ‘rational authority’ obviously relies on reason, but what type of reason. Weber (1947, 115) identifies two types:

  • Goal-rationality (Zweckrationalität]’, with Zweck meaning end, purpose or goal. Thus, one’s behaviour is rational if it works appropriately towards achieving a specific purpose or purposes. For Weber, this includes the careful weighing up of different purposes, considerations of the best means to achieve the purpose, and the relationships between the means and ends. Thus, if one’s purpose is the pursuit of profit, then one will – where reason is the assumed framework – seek to identify the most appropriate means to achieve this end. By contrast, if the goal is to serve the good of the community (gongtongti fuwu), then the very nature of the means will shift to enable this outcome.
  • Value-rationality [Wertrationalität]’, in which behaviour is determined by ‘some ethical, aesthetic, religious, or other form of behaviour, entirely for its own sake and independently of any prospects of external success’ (1947, 115). Contrary to one’s initial impression, this too is a rational approach, but now predicated on an absolute value that determines the appropriate action. For example, if an absolute value is Western liberal ideology and its attendant capitalist system, then one will engage in a series of actions to realise this value. By contrast, if the absolute value in question is communism, then the nature of rational actions will come out very differently.

Obviously there is an overlap between the two types of rationality, and Weber is not always clear about their relationship (with rationality often coming to mean efficiency), but I have deliberately used economic examples since they lead to the second implication: for Weber, bureaucracy was crucial to the growth of capitalism in Western Europe. The reason is that a bureaucracy based on rational authority, on the impersonal observation of a code of laws, and so it is more efficient than other forms of organisation. As Weber observes:

‘The decisive reason for the advancement of bureaucratic organizations has always been the purely technical superiority over all other administrative forms … A strictly bureaucratic administration produces an optimal efficiency for precision, speed, clarity, command of case knowledge, continuity, confidentiality, uniformity, and tight subordination. This is in addition to minimization of friction and the costs associated with materials and personnel’ (Weber 1921 [2015], 96; see also Weber 1947, 337).

He finds this new form of bureaucracy dominating across many fields, whether army, state, church, political parties, clubs, private associations, and – crucially – economic enterprises. It is nothing less than the ‘most crucial phenomenon of the modern Western state’ (Weber 1947, 337). In other words, for Weber, bureaucracy plays the foundational role in the development of the bourgeois state, bourgeois civil society and capitalism. It may be compared to Adam Smith’s focus on division of labour and Marx’s surplus value, although it also raises a number of questions.

First, Western analyses of Weber tend to focus on his influential work, The Protestant Ethic and the Spirit of Capitalism (1904-1905 [1992]), in which the vanishing mediator of capitalism was Reformed Protestantism. This focus is rather imbalanced, since for Weber the religious dimension was a means for achieving a rational bureaucratic organisation. Second, I have emphasised that Weber saw modern rational bureaucracy as the most efficient form developed thus far. He also balances this appreciation with the other side, in which rational bureaucracy dominates to the exclusion of all other, higher concerns (Adler 2012). However, critics too often stress the negative dimension and miss the balance of Weber’s analysis. Third, a more fundamental problem concerns the cause of the rise of rational bureaucracy. By now it is clear why one can speak of bureaucratic capitalism in light of Weber’s work, but it begs the crucial question: from where does such a system arise? Weber is willing to admit that ‘capitalism is the most rational economic basis for bureaucratic administration and enables it to develop in the most rational form’ (Weber 1947, 338; Stanisevski 2004). But Weber does not provide the type of systemic analysis of capitalism that we find in Marx.

Weber’s focus was strictly on Western Europe, particularly when he was analysing rationality, bureaucracy and capitalism. Thus, when he speaks of bureaucratic capitalism (to use a shorthand), he speaks of the Western European context for capitalism. And despite his misgivings over rationality and bureaucracy, he saw it as the highest form of political, social and economic organisation. As for socialism, it ‘would, in fact, require a still higher degree of formal bureaucratization than capitalism’ (Weber 1947, 339; see also Weber 1968, 224).

This final point brings us to a question I will ask on each occasion: has ‘bureaucratic capitalism’ been applied to socialist countries, including China? It has, but – crucially – without awareness of Weber’s balanced insights. One example is Cornelius Castoriadis, who follows a Trotskyite line (Trotsky 1937 [1972]) in hypothesising that the Soviet Union during Stalin’s time became a form of ‘bureaucratic capitalism’ (Castoriadis 1956 [1988]). Here ‘bureaucracy’ has only a negative sense (unlike Weber) and the use of ‘capitalism’ indicates a sneering dismissal of the Soviet project to the construct the world’s first socialist system.

We find similar, if not more extreme and unrealistic, proposals from a small group who inhabit the ‘grey zone’ of the internet. Self-described ‘activists’, they feel they are changing the world one blog post at a time. Their core approach is not merely to hypothesise that China turned towards capitalism with the Reform and Opening Up (itself a profound misinterpretation), but to deny that China has ever been socialist at all (La Botz 2012; Yu 2009; Yu et al. 2012; Lin 2017, 2019). This entails an all-out denial that the Communist Party of China is communist, a denial that the Liberation was in any sense communist, a denial that Mao Zedong was a Marxist, and a denial that China at any stage has attempted to construct socialism. How is this fanciful narrative constructed? It is based on the assumption that CPC is an evil and secretive organisation, terribly afraid of its own people and seeking world domination. ‘Bureaucracy’ thus means for them absolute control by the CPC – a position that is empirically wrong as well as being profoundly voluntarist and thus at odds with the Marxist dialectic. With this assumption – much like believing in ghosts – they can construct a narrative of bureaucratic control over the many phases of the New China of the last 70 years that is based on speculation, twisting of information and simple falsehoods.

To sum up, for Max Weber bureaucratic capitalism described the highly efficient yet ambivalent nature of capitalism in Western Europe and its attendant bourgeois state and society. He certainly did not apply the idea to other contexts, except to point out that socialism would require a whole new level of rational organisation. By contrast, a small number of ‘grey zone’ internet ‘activists’ apply the term in a purely negative way to speak of China – albeit without any sense of Weber’s work and without seeking truth from facts.

Bibliography

Adler, Paul. 2012. ‘The Sociological Ambivalence of Bureaucracy: From Weber via Gouldner to Marx’. Organization Science 23 (1):244-66.

Castoriadis, Cornelius. 1956 [1988]. ‘The Proletarian Revolution Against the Bureaucracy’. In Political and Social Writings, Vol. 2, 57-89. Minneapolis: University of Minnesota Press.

La Botz, Dan. 2012. ‘China: From Bureaucratic Communism to Bureaucratic Capitalism’. New Politics 2012 (20 November). https://newpol.org/china-bureaucratic-communism-bureaucratic-capitalism.

Lin, Kevin. 2017. ‘Remoulding the State Sector: Back to the 1990s?’. In Made in China Yearbook 2016: Disturbances in Heaven, edited by Ivan Franceschini, Kevin Lin and Nicholas Loubere, 20-23. Canberra: ANU Press.

———. 2019. ‘How Should the U.S. Think About China?’. New Politics 2019 (5 September). https://newpol.org/how-should-the-u-s-left-think-about-china.

Stanisevski, Dragan. 2004. ‘Economy and Bureaucracy: Handmaidens of Modern Capitalism’. Administrative Theory & Praxis 26 (1):119-27.

Trotsky, Leon. 1937 [1972]. The Revolution Betrayed: What Is the Soviet Union and Where is it Going? Translated by Max Eastman. New York: Pathfinder.

Weber, Max. 1904-1905 [1992]. The Protestant Ethic and the Spirit of Capitalism. Translated by Talcott Parsons. London: Routledge.

———. 1921 [2015]. ‘Bureaucracy’. In Weber’s Rationalism and Modern Society: New Translations on Politics, Bureaucracy, and Social Stratification, edited by Tony Waters and Dagmar Waters, 73-128. New York: Palgrave Macmillan.

———. 1947. The Theory of Social and Economic Organization. Translated by A.M. Henderson and Talcott Parsons. New York: Oxford University Press.

———. 1968. Economy and Society: An Outline of Interpretive Sociology. Edited by Guenther Roth and Claus Wittich. New York: Bedminster.

Yu, Ao Loong. 2009. ‘China: End of a Model … or Birth of a New One?’. New Politics 12 (3):31-56.

Yu, Ao Loong, Ruixue Bai, Bruno Jetin, and Pierre Rousset. 2012. China’s Rise: Strength and Fragility. London: Merlin.

[1] We should remember the different senses of the term ‘bureaucracy’ in English and Chinese. The English term ‘bureaucracy’ has two parts, ‘bureau’ (desk) and ‘cracy ‘from the classical Greek kratia, rule). Thus, ‘bureaucracy’ is rule conducted from a desk or office, that is, by the writing and sending or receiving of written documents – now their electronic equivalent.

An end to GPS dominance? Beidou and GLONASS begin to work together

I have begun wondering why – for example – the European Union has not developed its own type of computer chips or operating systems. Instead, they have simply ceded dominance to US-based systems, which have the explicit agenda of controlling the global internet. Thus far, it is only China that has the wisdom, brainpower and economic basis to do so.

When we come to navigation systems, the EU does have Galileo, despite the efforts by GPS to dominate. And we also have GLONASS in Russia and Beidou in China. I prefer to use Beidou navigation on my phone, since it is more stable and accurate than GPS-based maps. But now a new step has been taken, with comprehensive collaboration and synergy between Beidou and GLONASS – as the following article from the People’s Daily reports. Good move, as far as I am concerned, not least because it will eventually knock GPS off its perch.

BeiDou-GLONASS synergies will offset dominance of US GPS

China and Russia will soon put in place an agreement involving their respective satellite navigation systems, aiming to promote the compatibility and interoperability of the BeiDou and GLONASS systems.

As synergies between the two navigation systems are in full swing, industry observers said that such an alliance, which would yield more accurate positioning and have wider applications, could rival the US-based global positioning system (GPS) navigation system’s dominant positions and safeguard nations’ security in the face of US bullying practices that may extend to the navigation sector.

The agreement on cooperation in the use of the GLONASS and BeiDou Global Navigation Satellite Systems for Peaceful Purposes was confirmed by the two sides during the sixth meeting of the committee of the Russia-China Project Committee on Important Strategic Cooperation in Satellite Navigation (RCPCISCSN) over the weekend. The agreement will take effect soon, according to an official press release for the event.

Industry insiders have hailed the agreement as a major step that provides a legal framework for deeper cooperation between China and Russia, signaling a transition to real and comprehensive bilateral cooperation not only in application promotion but also within navigation systems.

The agreement, which was signed in November 2018, specifies bilateral cooperation between China and Russia in the development and manufacturing of civil navigation equipment that supports both the BeiDou and GLONASS systems, according to media reports.

Under the agreement, each country will deploy three monitoring stations within their own territories for the other country to correct navigation signals, according to Russian news site sputniknews.cn in August.

During the meeting, the two sides also considered reports by four working groups involving compatibility and interoperability, satellite-based augmentation systems, the building of stations, supervision and assessment, and combined applications. Major development in these areas has been achieved.

China and Russia also signed an inspection certificate regarding the location of monitoring stations and approved a feasibility study report on agricultural projects.

They agreed on the text of the cooperation agreement on the timing compatibility of BeiDou and GLONASS during the meeting. Multi-modal, multi-frequency radio frequency chips that support both BeiDou and GLONASS were also released during the meeting, with the two sides jointly analyzing the business prospects of more chip application and cooperation in research.

The two countries will maintain close communication on development plans and the project implementation of both systems. They will also actively explore new cooperation areas and projects to promote result sharing and cooperation for mutual benefit between BeiDou and GLONASS.

Rivaling US GPS

The deeper synergies have far-reaching implications for the US GPS navigation system amid a US crackdown on China’s technology rise, observers said. GPS has for decades claimed a monopoly in the global satellite navigation market and it now accounts for the largest market share.

“Bilateral cooperation between China and Russia will create a larger, broader, more stable and more robust satellite network, with more accurate positioning to challenge GPS,” Cao Chong, a Beijing-based industry analyst, told the Global Times on Monday.

The basic composition of navigation signals in BeiDou and GLONASS network is similar, which means users could switch seamlessly from one system to another, Li Ning, member of the Precision Application Committee under Global Navigation Satellite System and Location Based Service Association of China, told the Global Times.

While the GLONASS network mostly serves high-latitude regions, China’s BeiDou navigation system mainly focuses on providing networks for the low-latitude areas, analysts said. The combination would give birth to the optimal world navigation system.

China has launched 46 satellites in the BeiDou constellation. Russia has put 26 satellites for GLONASS into orbit. The GPS had 31 satellites operational as of April 2019.

The partnership will also give China and Russia an advantage in pushing forward the landing of massive applications to compete head-to-head with the US GPS, Cao added.

Some industry insiders also view the tie-up as a way for both China and Russia, traditional partners with mutual trust, to jointly defend national security and counter US hegemony.

“The US has been using its national power to suppress China’s technology rise. What if US suspends GPS service to rising economic powers, just like it ordered Google to cut Android supplies to Huawei? What if GPS sends wrong signals to disrupt normal economic activities?” an industry insider, who spoke on condition of anonymity, told the Global Times.

“China and Russia cannot give up their location rights to the US and they must have something in hand that can replace the GPS if needed for national security concerns.”

In 2015, China and Russia set up the committee of RCPCISCSN to establish a government-level mechanism and platform for deeper synergies between their respective navigation systems.