Tuesday, June 15, 2021
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Socialist market economy and rational macro controls

By Josef Gregory

Much has been written about China’s socialist market economy since October 1992, when the concept was formally endorsed. Many have debated its true nature. Is it really a socialist or a market economy? Is it an unwieldy synthesis of both, or has it through time matured into a manageable system for continued national development? And relatedly, especially since 2008 (although such policymaking is much older), what are macro controls and how do they support both the concepts and practices associated with the Chinese economy?
One question that has bedeviled socialists in particular is whether a socialist market economy is a contradiction of terms. From a Marxist perspective, markets are problematic. However, not even radical socialists should view a market as being necessarily bad or evil. This is because in its most basic form, a market functions as a type of techne, as a type of technology that facilitates economic production and exchange. Equally important, however, is the fact that it’s impossible to imagine the complete absence of a market, even in an advanced socialist or communist society.
Not a retreat: Some have argued that China’s reform and opening-up period, and further, its normalization of the socialist market economy, mark retreats from socialism. Some have compared it to the Soviet Union’s stepping back from communism with its New Economic Policy in 1921. Vladimir Lenin described it as “free market and capitalism, both subject to state control,” and said it would be a “temporary adjustment.” It was not. Rather, it started what eventually became a decades-long experience with state capitalism, where too frequently some of the worst tendencies of socialism intersected with the worst of capitalism.
For some purists on the right and left, these Soviet “retreats” represented betrayals. Similar remarks followed the reform and opening-up policy that began to emerge in China in 1978, accelerated in 1992, and furthered with China’s accession to the World Trade Organization in 2001.
For others, these developments were less about theory, and more about solving real development goals in a world where access to advanced technology and capital required integrating with the global economy. In this respect, some returned to Karl Marx’s argument that socialism can only emerge when the costs of capitalism begin to outweigh its benefits, and they agreed that China had not yet reached that phase of development. Or, perhaps a bit more darkly, workers must experience capitalism and be transformed by its positive and negative aspects, before they can develop the sort of critical consciousness necessary for advancing to a more advanced form of political economy, like socialism.
In retrospect, while these might be important theoretical considerations, they now appear overwrought. This is not because China’s socialist market economy has managed to avoid altogether serious concerns like income inequality, corruption, worker exploitation and unhealthy forms of consumerism. Nor is it because theory is always secondary to practice. Nor is it because state-owned enterprises in China are completely immune to being labeled state capitalism. Nor is it because the private sector now contributes an estimated 60 percent of China’s GDP. Rather, it’s because with the socialist market economy, China has been able to develop and implement a rational regime of macro controls in ways that have been used to better manage national development in an overall socialist way, along a path toward greater socialism.
This is best understood through specific achievements. For example, development began on the eastern seaboard, and positive returns from these efforts have been used to develop other regions.
–The Daily Mail-Beijing Review News Exchange


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