Alan Kohler has a subtle and dry wit not appreciated by everyone. So, in replying to his suggestion that the exchange rate of the Aussie and US dollar repudiates socialism, I will continue his joke and pretend he’s serious.
As far as I understand the argument, Kohler and Martin Wolf suggest that China is “the most capitalist country ever” because it is basing its economy on investment, export and savings, not consumption. Kohler then confusingly calls this form of alleged capitalism “economic socialism”. Four paragraphs later he says this socialism is really a form of capitalism, “in which the proceeds of production are captured by the state”, and that Australia is a socialist society, where we all own the means of production through investment by retirement and super funds.
Were this not, as I say, a subtle joke, I’d suggest its addled nature can be disentangled thusly. China is some form of “mixed/state capitalist” economy, a concept on which thousands of pages have been written over the past century. China’s Communist Party faced a variant of the problem first reflected on by Engels in the 1890s — what do you do if revolution occurs in a country where capitalism is at a very early stage? Their answer now is that you run capitalism to build up the productive forces, but keep a hold on political power — exactly what the Chinese Communist Party is doing. Kohler is confused because China, in the Maoist period, tried the other approach — a “great leap forward” and “cultural revolution” bypassing capitalism altogether. The idea, readopted after Mao’s death, that you can’t buck the stages of history, is an eminently Marxist one.
Conversly, the idea that Australia is a socialist society because there is a degree of wage/pension/super fund investment in the private sector, is to wildly overstate the case. Quite aside from such funds lacking a critical mass — the corporate private sector is still largely owned by interlocking funds that ultimately trace back to private capital — it would take more than simple ownership of the corporate sector to make it “socialist”, as that sector is still bound in a legal framework where profits must be maximised.
Anything resembling socialism would involve determination of surplus, reinvestment, wages and dividends of a large corporate entity by a board comprised not only of investors and workers, but also of consumers and general community members. This was the scenario envisaged by various European social democrats, most famously under the ‘Meidner’ plan in Sweden. It too has a longish, and well-documented history.
Why Kohler believes that Chinese is not socialist (or is economically socialist, which is really capitalist) because it has high reinvestment levels (and not, ,for example, because it has large-scale private ownership) is a mystery to me. Per se, a socialist society could set any level of wage/surplus ratio it wanted. The UK in World War II is one example — an unquestionably socialist economy, and a reasonably democratic one, in which people consented to a massive reinvestment process in pursuit of a collective goal, i.e. winning the war. (Nazi Germany, by contrast, continued to run a consumer capitalist economy — as late as 1944 its factories were still churning out fridges and other whitegoods for the private consumer market, one reason why it lost the war). The Scandinavian societies have consented to high taxation levels for decades for the purpose of collective reinvestment.
Perhaps this confusion is in the service of Kohler’s final satirical point — that dollar parity, and 50,000 jobs added in September!, means Marx was wrong. I don’t even begin to know what this means. Marx argued that capitalism was a crisis-ridden system, creating peaks and troughs of growth and stagnation over time and space. China’s continued prosperity comes from the West’s continued failure to rein in cheap credit — because to do so would be to push the global economy from stasis into depression, at which point many of those “50,000 jobs created in September!” would be revealed as people selling coffee to each other, and dispensed with, as has manifestly occurred in the US. The idea that this is somehow arising from “socialist” investment, rather than from a bog-standard capitalist one that can be yanked at any minute, I will take as the final, delicious part of the gag. I don’t know any other way to take it.
If there’s something to be mined from this, it’s three possibilities that bear thinking about. The first is that politics still rules in China, and the Party could, at any point, decide that economic inequality — especially between the city and country — has become too great for political stability. At which point we would see a third stage of post-revolutionary China. The second is that the growth of “workers’ capital” funds do provide a way in to changing control of the economy — but it would have to involve a lot more than the conveyor belt between the union movement bureaucracy and the corporate sector as currently occurs.
The third is that should China move to a new stage, once more focused, more inward than outward, that question of how it sets what goals for national Western economies will “go live” because we will all be going through the floor. At which point it might be helpful to know more about Marx than his name.