India and China

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India and China
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I would like to follow up my contributions on Luxemburg and pre capitalist markets. Stimulated particularly by the recent article on China which suggested that it is only now that Chinese pre capitalist markets are being exhausted.

I have done some reading on China and India to follow up the idea that because of their large populations and their large apparently peasant economies they are important drivers in the growth of capitalist economies in recent years. I am by no means an expert on these countries but I would like to discuss my preliminary ideas on the topic and look forward to any comments, negative and positive, that would improve the analysis I’ve come to.

* * * *

We talk about peasants and widespread poverty across Asia and ChIna and assume this means a pre-capitalist economy is in existence, but is it?

As per Luxemburg’s theory, is there an economy in these areas that can provide a market for the purchase of constant capital from capitalism as per Luxemburg’s theory and therefore contribute in its conversion to capitalism?

Nowadays all countries in the world function as a national capitalist economy and are now part of the capitalist world market. All that can exist in these areas is an internal pre-capitalist market (pcm) and the large growth of the Chinese and Indian economy is attributed by Luxemburgists to this phenomenon as per the example of the article entitled China The New Silk Road.

We must recognise first that all the feudal wealth that capital was able to tap into up till the 19th century has now gone, capitalism dominates the wealth and the production in these countries now. Additionally, it is far too frequent that poverty is conflated with the idea of a feudal structure but this is not necessary so and we must investigate in more depth the actual situation in these regions.

 

China

 

China and India have seen major levels of growth since the 1970s both in terms of population and GDP but despite the large populations and high levels of poverty there are very different internal structures.

China’s industrial base has grown particularly strongly and this process has been based on the investment of foreign and Chinese capital in industrial enterprises.

Many millions of workers have been drawn into urban life from the agricultural communities but this does not appear to have as a result been a process of dismantling of feudal agriculture but a strategic decision by the Chinese state to implement measures to improve efficiency in agriculture and support the expansion of industry..

The Chinese agricultural sector was taken over by the state during Mao’s revolution in the early 1950s and production collectives were established throughout the country. In that the larger landowners were thrown off the land, the collectives established in the early days of Mao were dominated by the party and the state and the whole process was in fact a form of enclosure and nationalisation by the state

Mao began a process of collectivisation in 1950 with the Agrarian Reform Law which gave the land to peasant farmers and threw out the large landowners. By 1953 this was further developed and with an extended programme of collectivisation and more state control of the farms. By the time of the Great Leap Forward (1958-60) however the slow progress of collectivisation was causing problems and inefficiencies. Mao needed to force the process in order to fulfil the objective of enabling China catch up the more developed countries in the world and indeed become more efficient than them.

The following is a summary1 of how the forced communisation of the late 50s functioned.

25,000 communes

China’s farmland were amalgamated into 25,000 huge communes, each with about 5,000 families, organised into ‘brigades’ of about 200 families

Central control

All decisions – farming methods, sale of crops, prices – was decided by the government; its orders were often stupid/inappropriate, and it merely set impossibly high targets

Self-sufficiency

The commune was supposed to provide its families with all they needed, including hospitals and schools; in some places people handed over all their possessions and went to live in ‘habitation centres’

Lack of initiative

Farmers lost their independence, and worked for a wage; this damaged incentive because it seemed to guarantee food

Internal passports

Peasants needed a passport to travel from one commune to another

Whilst the collectives had been primarily agricultural enterprises, the communes of the Great Leap Forward had several functions, not only with specialist overseeing different aspects of agricultural development but they also became effectively local governments managing all economic and social activities.

During the Great Leap Forward (1958–60), individuals forfeited their private plots to common ownership and wages were equalized. After the economic difficulties of 1959–61, however, the communes were reorganized. Their average size was reduced, more autonomy was granted the local production teams, private plots were returned to farmers, and wages were paid according to the work performed. 2

These structures were clearly not part of a pre capitalist economy. This was a state capitalist organisation with workers being paid wages even if they were self organised structures. The state controlled wages and directed the products and their prices.

Most of self employed and most of these have wages work outside the farm. Most small farms produce cash crops and are not self sufficient in a feudal sense. The first five-year plan’s goal was to maximize agricultural production to pay for increased industrialization and Soviet aid. The way they did this was through collective farming and government ownership of all transportation and most industries, causing all private industries to be socialized by 1955 and having 98% of the farming populations participating in communes by 19573

The agricultural sector remains predominantly small producers with a proportion of large scale farms but there are no bastions of feudal wealth. No major purchasers of capitalist technology to exchange hi-technology for gold and silver.

China’s agriculture is dominated by about 200 million small farms responsible for the majority of national crop production. Although large-scale livestock production has increased, small farms still play an important role in swine and dairy production (NSBC, 2011b). In the crop sector, average farm size is small and land is fragmented. When China completed its Household Responsibility reform, allocating village land equally to all households in each village in 1985 (discussed further in Section 3), average farm size was only 0.7 hectares (Table 2.6). Because land quality can differ widely within villages, in consideration of equity in distribution, each household normally has, on average, three or four plots, and some have more than 10 plots. Around 60 per cent of the plots are less than 0.1ha, and close to a quarter of them are larger than 0.15ha, while the rest are in between. Despite the small average farm size of 0.7 hectares in 1985, this fell gradually to 0.55 hectares in 2000, mainly because of the rising number of rural households and subdivision of land holdings …. Interestingly, the falling trend in farm size reversed after 2000. Average farm size has started to rise moderately in the past 10 years (Table 2.6), driven by the emerging land-rental market and the rapid growth of migration due to urbanisation and industrialisation4

From the 1980s onwards in post Mao China, the communal farms were broken up in the 1980s in favour of a mix of leased and state owned farms with the state remaining highly involved in the setting or production targets, product sales and credit facilities. This led to the establishment of large scale farms producing cash crops but also an increasing number of small family run farms. However there followed a large scale movement of rural workers to the towns and farms again began to increase in size and many set up other business or found work outside the farm5.

Whilst significant numbers of Chinese rural workers have moved to the town for employment they are not feudal serfs converting to capitalism. Neither was the rural economy in general comprised of nobility and serfs. Agriculture employed 81 per cent of labour in 1970. By 2010, however, as the industrial and service sectors grew in importance, the share of employment in agriculture fell to 37 per cent,

46% of workers are self employed 40% of population is rural

This is a very brief summary of the complicated history of Chinese agriculture but is clear that at no point was capitalism realising capital from sales to a feudal economy. Nationalisation and denationalisation ensured that state played a major role in managing the agricultural economy and that any of the small scale farmers that only used themselves and their families as workers were poor and not entirely self sufficient producers either.

The expansion of the Chinese economy can hardly be said to be the result of accumulation enabled by the small and poor peasant farmers whether self sufficient or not.

 

India

 

India’s growth however has been more evident in service industries and wealth appears to be restricted to a smaller percentage of the population

It is less clear with regards to India to say that feudal systems have disappeared in that the caste system retains a major influence and poverty remains widespread appears to have more of a peasant population living in poverty

Changes in land ownership were followed by the commercialization of agriculture, which started to emerge around the 1860s. This brought a shift from cultivation for home consumption to cultivation for the market. Cash transaction became the basis of exchange and largely replaced the barter system. The exported items in the first half of the nineteenth century included cash crops like indigo, opium, cotton, and silk. Gradually, raw jute, food grains, oil seeds, and tea replaced indigo and opium. Raw cotton remained in demand throughout. There was phenomenal growth in the export of agricultural commodities from India: the value of India’s exports is estimated to have risen by more than five hundred percent from 1859–60 to 1906–1907.6

So whilst cash cropping and commodity production emerged early in India, and agriculture still remains the largest element of the economy as around 70% of India's population live in rural areas and their major activity is agriculture, it does not appear possible to say that feudal structures have disappeared. Indeed the Forest Rights Act of 2006 appears to allow tribal communities to obtain rights to protect their traditional areas of forest land7. However this would not appear to apply to anywhere near the majority of agricultural land. For example the following quote is from a project studying rural poverty in India:

Large portions of cultivated land belong to a minority upper social class, which includes rich farmers and landlords, and results in a severely uneven distribution of land. In other words, the majority of people own very little land and as such may have to maintain a feudal relationship with rich landlords. Those not in feudal relationships struggle with a low annual income and often with debt, since the harvests from their lands seldom bring a profit8

In fact most landowners still belong to the upper castes, cultivators to the middle castes and agricultural labourers to the dalit and adivasi (tribal) socially excluded groups.9

Agriculture, dairy, horticulture and related occupations alone employ 52 percent of labour in India and something like a third of the population live in urban areas.

Agricultural production in India can be broadly classified into food crops and commercial crops. In India the major food crops include rice, wheat, pulses, coarse cereals etc. Similarly, the commercial crops or non-food crops include raw cotton, tea, coffee, raw jute, sugarcane, oil seeds etc.  Agricultural Production and Productivity in India https://www.yourarticlelibrary.com/agriculture/agricultural-production-and-productivity-in-india/62867 accessed on 19.10.20

A further aspect of the economy to consider is the artisanal industries. Millions are employed in this area and a substantial portion of India exports come from this sector. Whilst a significant portion of this sector will be by independent artisans and hence non capitalist production that does not generate surplus value. This is therefore commodity production for markets at home and abroad and not subsistence production which is the core of pre capitalist markets.

Finally one important aspect of Indian society to consider is the level of poverty.

About 60% of India's nearly 1.3 billion people live on less than $3.10 a day, the World Bank's median poverty line. And 21%, or more than 250 million people, survive on less than $2 a day. … Today, the richest 10% in India controls 80% of the nation's wealth, according to a 2017 report published by Oxfam, an international confederation of agencies fighting poverty. And the top 1% owns 58% of India's wealth. (By comparison, the richest 1% in the United States owns 37% of the wealth.) 10,

Also:

More than a third of all those living in poverty globally live in India. It has more poor people than any other country, with one-third of its population –some 400million people –living on less than US$1.25 a day. India has more than double the number of poor people living in China, the country with the second largest population living in poverty, and a comparable number to the whole of sub-Saharan Africa combined.11

It is clear that the levels of poverty and inequality are extremely high. The wealthiest belong to the new technological and service industries and that in the country the wealthy landowners are cash croppers. From this it is also evident that the feudal sectors that do remain are to be found at the poorer end of Indian society. India is no longer a country provided wealth to capitalism from pre capitalist markets, there is no wealth left in this sector of society.

* * * *

 

My conclusion is therefore that it is wrong to see the poor peasant economies in India and China as pre capitalist. These countries have been capitalist countries for a significant period of time and any small pre cap structures that might remain have been stripped of their wealth long since. In no respects can it be seen as sufficient to perform the entirety of capital accumulation as Luxemburg thesis would want to suggest

 

All comments and corrections are welcome.

1 China under Mao – Agriculture 1950-1962 http://johndclare.net/China6.htm accessed on 20.10.20

2Encylcopedia Brittannica Chinese Agricultural Communes https://www.britannica.com/topic/commune-Chinese-agriculture accessed on 20.10.20

3 https://departments.kings.edu/history/20c/china.html

4 https://pubs.iied.org/pdfs/16515IIED.pdf

5 https://apjjf.org/2016/13/Sargeson.html

6 Environment & Society Portal. Changing land ownership, agricultural, and economic systems accessed ln 19.10.20

7 http://www.pacsindia.org/projects/land-rights/indian-land-rights-a-history

8 Borgen Project Poverty in Rural India: Causes and Measures https://borgenproject.org/poverty-in-rural-india-causes-and-measures/ accessed on 20.10.20

9 http://www.pacsindia.org/projects/land-rights/indian-land-rights-a-history

10 Moni Basu, CNN Seeing the new india through the eyes of an invisible woman https://edition.cnn.com/interactive/2017/10/world/i-on-india-income-gap/

11 India Poverty and Aid. 2012 Age Uk https://www.ageuk.org.uk/Documents/EN-GB/For-professionals/Research/India%20and%20Aid%20Devinit.pdf?dtrk=true

d-man
Btw, if there already exists

Btw, if there already exists a thread on a topic, then creating new ones is unnecessary (I signaled this as a problem detracting from the forum quality). But specifically on the last thread on Luxemburg, I also posed some questions that haven't been answered.

Anyway, I will just pick on one thing Link here writes:

Quote:
A further aspect of the economy to consider is the artisanal industries. Millions are employed in this area and a substantial portion of India exports come from this sector. Whilst a significant portion of this sector will be by independent artisans and hence non capitalist production that does not generate surplus value. This is therefore commodity production for markets at home and abroad and not subsistence production which is the core of pre capitalist markets.

From this counter-position (and also his focus on feudalism), it would seem that Link thinks non-capitalist production does not entail even simple commodity production (but purely subsistence produciton). IIRC though the ICC classifies eg peasants in the post-WWII era even in France as non-capitalist. And Rosa in her chapter on Struve mentions that in his view the "third-person" existed even in modern England, in the form of "Civil Servants, liberal professions, and the like".

Link
peasants.

DMan.  I dont know what you mean by IIRC but could you also explain why peasants are non-capitalist for me please and why is simple commodity production non capitalist?.  

Pre capitalist systems would be feudal and slavery societies, but while capitalis has modified these i would hesitate to label any system as newly formed non capitalist production system.  Subsistence farming still exists to some extent and individual craftworkers do not create surplus value (unitl they employ workers that is). Thats why i keep talking about feudalism, altho i agree its just remnants left rather than full structures. 

I had doubts about using the term peasant ie are they just small farmers , but decided to stick with the term. Im not sure if this is a just a matter of terminology Is is just a matter of terminology or do you have a specific analysis in mind?

If think i am correct in saying that Luxemburg argued against civil servants and professionals being extra capitalists or producers of value in any way but saw them as dependants on surplus value produced by the working class..  She did have the idea though that arms production created new value but i think its agreed by everybody that that was wrong.

d-man
(IIRC = if I remember

(IIRC = if I remember correctly).

Peasantry (or independent artisanry) is not capitalist, ie simple commodity production is not capitalist, given that it doesn't involve the purchase of labour power and mostly just breaks-even (no extendend reproduction). This is not just a matter of terminology but was Rosa's (and I think most people's) understanding. For example in ch. 29 she writes:

Quote:
Natural economy, the production for personal needs and the close connection between industry and agriculture must be ousted and a simple commodity economy substituted for them. Capitalism needs the medium of commodity production for its development, as a market for its surplus value. But as soon as simple commodity production has superseded natural economy, capital must turn against it. No sooner has capital called it to life, than the two must compete for means of production, labour power, and markets. The first aim of capitalism is to isolate the producer, to sever the community ties which protect him, and the next task is to take the means of production away from the small manufacturer.

...

The ruin of independent craftsmanship by capitalist competition, no less painful for being soft-pedalled, deserves by rights a chapter to itself. The most sinister part of such a chapter would be out-work under capitalism; – but we need not dwell on these phenomena here.

The general result of the struggle between capitalism and simple commodity production is this: after substituting commodity economy for natural economy, capital takes the place of simple commodity economy. Non-capitalist organisations provide a fertile soil for capitalism; more strictly: capital feeds on the ruins of such organisations, and, although this non-capitalist milieu is indispensable for accumulation, the latter proceeds, at the cost of this medium nevertheless, by eating it up. Historically, the accumulation of capital is a kind of metabolism between capitalist economy and those pre-capitalist methods of production without which it cannot go on and which, in this light, it corrodes and assimilates. Thus capital cannot accumulate without the aid of non-capitalist organisations, nor, on the other hand, can it tolerate their continued existence side by side with itself. Only the continuous and progressive disintegration of non-capitalist organisations makes accumulation of capital possible.

As to your claim that "Luxemburg argued against civil servants and professionals being extra capitalists or producers of value in any way but saw them as dependants on surplus value produced by the working class" – that might be true, but I specified this was Struve's view, and we would need to evaluate the correctness of Rosa's objection to him (that these petty-bourgeois aren't a source of demand), moreover especially given that nowadays the independents/self-employed are a growing size in Western economies.

Link
Thanks dman for your

Thanks dman for your definitions. 

Peasantry (or independent artisanry) is not capitalist, ie simple commodity production is not capitalist, given that it doesn't involve the purchase of labour power and mostly just breaks-even (no extendend reproduction)

i do think we are on the same page here but i can also see how i have confused things a bit eg in the quote you used in yr first contribution on this thread.  My interpretation of this definition though is that is supports my view that the peasantry and artisan workers are just not able to act as markets for capitalism's production of new constant capital and higher technological production equipment.  Its just not possible

So what do you think of what i was trying to express about the indian and chinese economies generally.  Would you say there are other non-capitalist sectors there (besides the peasantry and the independant craftworkers) that are capable of purchasing capitals latest produciton equipment?

 

d-man
Why is according to you an

Why is according to you an artisan cloth-producer not able to buy constant capital machinery (requiring numerous workers) that produces cloth en masse? Is it because if he could, then the artisan is no longer a non-capitalist by definition? Or is it because he is only able to buy capitalist-produced consumer articles, given that these are cheaper than machinery? If so, where does the maxiumum demand for consumer articles lie (ie does it differ much from the minimum size/cheapest machinery)?

Link
Because as  you said, non

Because as  you said, non capitalist producers are most likely only going to break even.  She or he cant afford the new machinery that is available in developed countries pretty much by definition. The 'sector' of production is very much living at the poor end of society if not actually at poverty levels and can only live at subsistence levels. 

Also as you say buying manufacturing equipment tends to signify growth in the business capacities so would lead to the need to employ workers which makes the firm capitalist. 

Remember that what Luxemburg says enables accumulation to take place is the sale of new or higher technology manufacturing equipment to non capitalist markets.  I cant see that peasant and craft businesses can do this  so as i asked previously do you see another others element of pre or non capitalist society in the likes of India or China that has the wealth to do this?

d-man
In case of the simple

In case of the simple commodity producer who breaks even, it doesn't mean he has no "surplus" demand to spend at all, but that he doesn't invest it in extended production. Or, by contrast, if you point out that the simple commodity producer in fact has no surplus consituting demand at all, then why do you need specify constant capital/machinery: after all, in such a case he couldn't even buy capitalist consumer goods either. The moment you admit he can buy some consumer goods, then my question to you is, what is the maximum he can spend on consumption (and how far does it differ from the cheapest machinery). For example, if he can buy a motercylce as a consumption article, why not some minor technical device for his artisnal production at a similar price?

Link
My point is that someone

My point is that someone living on subsistence wont be buying high technology.  Certainly there can be purchases of consumer goods and as you say minor technical devices for use in production eg shovels, rakes, ploughs, building materials, desks.  These though are minor purchases that will not cost much nor enable generally a move into mass production with labourers.  Such purchases do not provide a demand/outlet for enhanced capital assets and luxemburg says this demand is essential for accumulation.  Can i ask you again then if you can see other wealthier non capitalist sources of demand for such goods in INdia or China?

d-man
Can you help find me the

Can you help find me the place where Rosa splits constant capital into enhanced technology and minor technical devices? At least I suggested, that high technology would require numerous workers to operate, so if any simple commodity producer (SCP) were able to buy such technology, by definition he would no longer be a non-capitalist. The premise here includes though, that he (or say 5 co-partners, each a SCP, or say the State which taxes them) was indeed able to buy such high technology once in the first place, although not repeatedly for he will be classified as a capitalist buyer henceforth.

Your point about specifically the part of constant capital that includes big machinery/high technology, I would preliminary  answer in an equally specific way. Most very big machinery is sold only to a few big capitalist firms (ie on the individual level most capitalists can't buy big machinery either, which doesn't mean that they're not capitalists). Very big machinery is produced not on a mass uniform scale (like consumer goods are), but is highly tailored to the buyer/order's specifications (a big-machinery producing company waits on individual orders, and adjusts its production-process of them accordingly in a unique way for each order).

Link
Hi Dman, try the Anti

Hi Dman, try the Anti Critique.  I find it a clearer and more focussed explanation by her of her theory of accumulation.  I put 2 quotes from Chapter 1 below which explains how she treats new capital assets differently to variable capital and capitalist subsistence itself.  I think minor technical devises would come under the heading of components and raw materials rather than capital investment

 

“In our assumed total stock of commodities in capitalist society we must accordingly find a third portion, which is destined neither for the renewal of used means of production nor for the maintenance of workers and capitalists. It will be a portion of commodities which contains that invaluable part of the surplus value that forms capital’s real purpose of existence: the profit destined for capitalization and accumulation. What sort of commodities are they, and who in society needs them? “  .......

“Could the capitalists themselves perhaps be the customers for that latter portion of commodities by extending their own private consumption? That might be possible, although. there is enough for the ruling class in any case, even with its luxurious whims. But if the capitalists themselves were to spend the total surplus value like water there would be no accumulation…. Who then could be the buyer and consumer of that portion of commodities whose sale is only the beginning of accumulation? So far as we have seen, it can be neither the workers nor the capitalists. “ (both from Chapter 1 of The Anti-Critique)

Her answer is that it is this portion of surplus value destined for capitalising new production machinery that must be bought by non-capitalist markets in order for accumulation of capital to take place

d-man
Quote: I think minor

Quote:
I think minor technical devises would come under the heading of components and raw materials rather than capital investment

You are willing to discard minor/cheap means of production as part of constant capital, in order to uphold the claim that simple commodity producers can't buy "high technology" by definition (ie can't help producers of "big" means of production realise their output). I have raised two points on this, which you haven't addressed. Anyway, given our focus now on "big/expensive machinery", I wonder, can you estimate what percentage of the total value of capitalist output do they constitute? Given that big machinery lasts many years, i imagine new purchases of such machinery don't happen that often.

Link
Dman I am disappointed that

Dman I am disappointed that you have ignored the main part of my response to your question and instead are focussing on the difference between markets for handtools and capital assets. I admit however i thought about this as I was posting and the figures ive found show that the global market size for hand tools is 22billion dollars and the global market size for manufacturing equipment if 485 billion dollars. In terms of firm size, even in Britain, firms with no employees account for 75% of all private sector firms (it is increasing apparently too) and yet produce only about 5% of turnover and will look to see what I can find shortly. For India I am struggling to find reliable data, the only bit Ive found said just over 50% of Indian working population are self employed and that there are 80 million businesses in India of which 10% are large and produce 70% of GDP

Another interesting global statistic I came across suggests that ‘Industrial agriculture uses 75% of farm land but delivers only 30% of the world’s food.  Peasant farmers feed 70% of the world’s people using just 25% of the land’ This initially suggests to me that a lot of peasant farmers must be actually be cash croppers with employees not subsistence farmers.

So whilst these stats are spot on what you asked it seems to me that you cant be comparing the value of minor handtools, bags, bicycles horses etc that peasants on or near subsistence incomes are purchasing to maintain themselves to the size of the markets for manufacturing machinery, CAM equipment, satellites and communication systems, computers and networks, computer software, lorries, cars, trains, ships, transport equipment, office equipment storage equipment, factories that the large businesses purchase? Its true there maybe more peasants in the world and there are fewer large businesses but their turnover and costs are far far greater.

d-man
Thanks, though I don't know

Thanks, though I don't know exactly what such figures prove. What was the main part of your response that I apparently ignored? Btw, a quick google teaches the global luxury market in 2018 was an estimated €1.2 trillion (more than double the figure you gave of the market for machinery), while the global market for clothing and apparel reached a value of nearly $758.4 billion.

Link
Dman i put some figures

Dman i put some figures forward that you asked for.  Not definitive perhaps but i thought you were asking a serious question.  Also the main point of my previous response was an answer to your request for ' the place where Rosa splits constant capital into enhanced technology and minor technical devices' .  Agreed what she actually splits is enhanced technology from worker and capitalist subsistence but my quotes were relevant to the core idea of hers that i am criticising ie that only non-capitalist markets can realise enhanced technology.

d-man
There is nothing in the

There is nothing in the quotes from Rosa that shows she splits constant capital into 2 different categories (handtools and big machinery) to defend your claim (which you conceded just now), so I didn't feel the need to pursue it further, except that, for the sake of discussion (really a matter of politiness, to give you a chance to recover your ground), I asked to put some figures on. Figures cannot be serious by themselves; it's their interpretation that matters (hence my cue to you: "I don't know exactly what such figures prove" - is where you come in and specify what the exact claim is that they prove). Of course the figures are not definitve, eg just to name one issue, it doesn't show what percentage of that global billion market size goes to mere replacement of existing constant capital and what is actual additional/expansion.

Kamerling
The inherently violent nature of capitalist expansion

 

“Sweating blood and filth with every pore from head to toe” characterizes not only the birth of capital but also its progress in the world at every step.” (Accumulation of Capital)

The penetration into the pre-capitalist environment by capitalism is not an exclusively economic question. The real background of capitalist expansion is the need for new markets, to sell the commodities, to exploit new raw materials and to recruit cheap labour power. But the means that were used by capitalism to achieve this economic expansion into the extra-capitalist conditions could not be done without and went hand in and with the use of organized violence on a massive scale.

In Accumulation of Capital Rosa Luxemburg explains this as follows:

“Thus capitalist accumulation as a whole, as an actual historical process, has two dierent aspects.

One concerns the commodity market and the place where surplus value is produced - the factory, the mine, the agricultural estate. Regarded in this light, accumulation is a purely economic process, with its most important phase a transaction between the capitalist and wage labourer.

“The other aspect of the accumulation of capital concerns the relations between capitalism and the non-capitalist modes of production. (…) Its predominant methods are colonial policy, an international loan system - a policy of spheres of interest - and war. Force, fraud, oppression, looting are openly displayed without any attempt at concealment.” (Ibid)

“Bourgeois liberal theory takes into account only (…) the realm of ‘peaceful competition’, the marvels of technology and pure commodity exchange; it separates it strictly from the other aspect: the realm of capital’s blustering violence which is regarded as more or less incidental to foreign policy and quite independent of the economic sphere of capital. (….) The historical career of capitalism can only be appreciated by taking them together.” (Ibid) What Rosa Luxemburg wants to show here is that imperialist war without economic ambitions is unthinkable, at the other hand the accumulation of capital without military and organised state violence isn’t possible either, the latter even putting the first into the shadow.

In the 19th century economically developing areas became targets for foreign loans which “are the surest ties by which the old capitalist states maintain their influence, exercise financial control and exert pressure on the customs, foreign and commercial policy of the young capitalist states”. (Ibid)

The example of Egypt in the 19th century, which Rosa Luxemburg develops in the chapter 30 “International Loans”, shows very clearly how the economy in this country had been transformed from a natural economy into a commodity economy and thereafter was made ever more dependent on foreign loans and finally fell like a ripe fruit into the hands of the British Empire.

The investment of European capital was mainly done by loans to the government, by financing cotton cultivation, and by the construction of a transportation network. These modernization schemes, such as railroad construction, irrigation projects, etc., “almost exclusively served the purposes of an imperialist policy, of economic monopolization and economic subjugation of the backward communities”. (Ibid)

The Suez Canal, opened in 1869, was the crowning achievement of foreign capital in Egypt. This resulted in the development of the export sector of the economy and the infrastructure necessitated for this export, devastating the pre-capitalist economic and traditional cultural patterns and relationships, and drawing increasing numbers of people into the embrace of the capitalist market.

In 1863, when the Khedive Ismail came into power the Egyptian debt was £ 3 million. In 1875, it was increased to £ 68.5 million. In less than 15 years, external debts increased 23 times, while revenues increased 5 times only. The debt service absorbed two-thirds of state revenues and half of export earnings. In 1875 Ismail sold his remaining shares in the Suez Canal Company to the UK for £ 4 million. But the debts kept on rising and in 1879 Egypt’s national debt had raised to almost £ 100 million.

“In 1879, the finances of Egypt were brought under permanent control of European capital. (…) To cover the cost of occupation, England requisitioned ecclesiastical lands of the mosques and schools. An opportune pretext for the final blow was provided by a mutiny in the Egyptian army, starved under European financial control. (…) The British military occupied Egypt in 1882, as a result of twenty years’ operations of Big Business, never to leave again. This was the ultimate and final step in the process of liquidating peasant economy in Egypt by and for European capital.” (Ibid)

“Under the influence of capitalist economy, the screws were put on the fellaheen (rural population) by taxation. The tax on peasant holdings was persistently increased. (…) The greater the debt to European capital became, the more had to be extorted from the peasants.” (Ibid)

The Egyptian fellaheen had to bear the excessive burden of the Egyptian debt.  In the years1865-1868 Khedive Ismail of Egypt resorted to a 70 per cent increase in land taxes. In the end the fellah’s paid four times more tax than before and in order to pay the tax collectors they had to sell their crops, even before they were harvested, to the money-lenders at a half or a third of their actual worth. During the tax-gathering operations, the fellaheen were humiliated, beaten and tortured. While they starved, scores of millions of francs, extorted with the help of the kurbash (a whip or strap about a yard in length, made of the hide of the hippopotamus or rhinoceros), poured into the coffers of the foreign banks.” (Modern History of the Arab Countries. Chapter XVI: The National Liberation Movement in Egypt (1879–81); Growth of the Spirit of Opposition; Vladimir Borisovich Lutsky; 1969)

“All over Upper Egypt people were leaving the villages, demolished their dwellings and no longer tilled their land – only to avoid payment of taxes.” (Accumulation of Capital) Deprived from his land the fellah “as forced labour, provided the labour power and, what is more, he was exploited without payment and even had to provide his own means of subsistence while he was at work. (Ibid) Capital had “unrestricted power of command over the pool of labour power, how long and under what conditions men were to work, live and be exploited. (…) Now the fellah had been drained of his last drop of blood.” (Ibid)

“Used as a leech by European capital, the Egyptian state had accomplished its function and was no longer needed. Ismail, the Khedive, was given his congé; capital could begin winding up operations. (…) Thanks to this development of commodity economy (…) Egypt herself had fallen prey to the latter. (Ibid)

With the capitalisation of Egyptian society, a new class also emerged in the country, a class with its own national identity. Radical and democratic officers like Said Ahmed Arabi appeared in the vanguard of the national movement. This nationalism was expressed in a protest movement against the foreign intervention in Egypt, and stood for the liquidation of the Khedivate and the establishment of independent forms of government. Its slogan was “Egypt for the Egyptians”. In 1882 this nationalist army officer took control of Egypt, overthrowing the pro-British Khedive Tewfik, who had succeeded Ismail in 1879.

This provoked a reaction from the side of Great Britain, which occupied Egypt. From 1882 the British ruled over Egypt by doing the least they possibly could.  Why drain the reserves of British administrators when you can manipulate natives into doing the dirty work?  Britain never annexed Egypt; the British ruled Egypt indirectly as a protectorate. “The case of Egypt (…) shows militarism as the executor of the accumulation of capital, lurking behind international loans, railroad building, irrigation systems, and similar works of civilisation.” (Ibid)

Link
Thats a really interesting

Thats a really interesting history Kamerling. I clearly havent read the whole of the chapter on international loans having focused on the previous 3 chapters on peasant and natural economies. Another task to do thanks

However what you have written, just like Luxemburg's chapters on peasant and natural economies', really support my arguments against her theory of accumulation.  At no point in the above do you suggest that it was pre capitalist markets themselves that were providing a demand to purchasing capital assets from UK and Europe.  It was European capital that was being invested in Egypt that was providing the demand and it remained under the control of Europe.

d-man
Lenin's comment on this Egypt

Lenin's comment on this Egypt passage is known:

Quote:
Precisely! Rosa Luxemburg flogs herself. Not for the sake of «the realisation of surplus-value» but for the sake of convenience of exploitation («whips», unpaid labour etc.) capital emigrates to backward countries. High returns! And that's all. Theft of land (without payment), loans at 12-13% etc.etc. - that's at the root.

I'll let Kamerling respond in his own manner, but I'll attempt a response in a concrete manner:

If, as the quoted passage indicates, English loans were to the Egyptian government, then, they are at the least not simply the transfer of English machinery into Egypt, which, by itself, would be a mere transfer to a different location, requiring no indebtedness on the part of the Egyptians (neither government, nor private persons). Why did the fact of a simple capital transfer to Egypt, lead its government to become indebted?

If, as the quoted passage indicates, the Egyptian government could not repay its loans, then this seems to indicate to me, that the lenders did not achieve "high profits" (/interest rates), or at least not so easily/quickly/regularly (but rather had to deal with defaults).

Repayment, in one example cited above, involved the Egyptian sale of its own remaining Suez Canal shares, meaning, this was a "payment" in kind. Taxes are often payments in kind. The fact that no money was involved, wouldn't lead us to say, that the peasants/Egyptian goverment did not fulfil its obligations. It paid in kind. Realisation of English surplus-value does not necessarily require actual money, given the fact that, for accumulation purposes, this money anyway will be immeditately spend on buying new raw materials (cotton), etc. It's just a formal difference. I'd say a direct payment in kind is much more a realisation of value, then the reception of a mere bill-of-exchange (a mere promise to pay) is.

If the Egyptian workers were not (or poorly) paid, this means little to no English capital was even actually transferred/invested into Egypt (as variable capital).

KT
More on China

In some continuity with that of Kamerling -  this post suggests that RL’s understanding of the role of ‘pre’ or ‘extra-capitalist’ markets aids an examination of the actual evolution of history under capitalism in general, and China in particular. It aims to shine a different light on facts and a narrative previously presented regarding the supposed absence of large masses ‘outside’ capitalism’s productive apparatus there.

As D-Man has remarked (Post #2), it’s a pity that there are now two discussions fundamentally dealing with the same issue – pre (or ‘extra’) capitalist markets - stimulated by the same article (New Silk Road) (1). It has meant that the actual article itself has received little attention. That’s unfortunate because in my estimation it’s a very valuable piece of work, whether or not one accepts all aspects in their entirety. It’s now been restored to the front page of this site so comrades can easily refer to it themselves.

Meanwhile: this thread has included a large element discussing the existence or otherwise of extra-capitalist markets in China these past 75 years.

Correctly postulating a planet dominated by capitalist social relations, Link gives a useful though necessarily partial chronology of stages reached and strategies pursued by Chinese state capitalism from 1950 to more recent times.

Link (Post #1) says: “Many millions of workers have been drawn into urban life from the agricultural communities but this does not appear to have as a result been a process of dismantling of feudal agriculture but a strategic decision by the Chinese state to implement measures to improve efficiency in agriculture and support the expansion of industry…

“…The Chinese agricultural sector was taken over by the state during Mao’s revolution in the early 1950s and production collectives were established throughout the country.

“…but [it] is clear that at no point was capitalism realising capital from sales to a feudal economy. Nationalisation and denationalisation ensured that state played a major role in managing the agricultural economy and that any of the small scale farmers that only used themselves and their families as workers were poor and not entirely self sufficient producers either… My conclusion is therefore that it is wrong to see the poor peasant economies in India and China as pre capitalist.

“Whilst significant numbers of Chinese rural workers have moved to the town for employment they are not feudal serfs converting to capitalism. Neither was the rural economy in general comprised of nobility and serfs. Agriculture employed 81 per cent of labour in 1970. By 2010, however, as the industrial and service sectors grew in importance, the share of employment in agriculture fell to 37 per cent.” 

However this narrative requires a ‘prequel’ – the utter decimation of the Chinese economy and the impoverishment of its vast population through the domination and dissection by European forces before and after the turn of the 20th century (‘colonialism’), through the ruinous, long-running civil war (1927-1949); the murderous invasion by Japan and subsequent entanglement in WW2, followed by the resumption (if it ever stopped) of the civil war.

So yes: in 1949 when the CCP finally took power, the most populous country in the world, reduced largely to rubble, was globally governed by – was precisely a product of - decadent capitalist social relations.  It’s true there were no serfs and fewer Lords (apart from war lords). But millions upon millions of unfortunate humans eating grass and bark were no more integrated into specifically capitalist production than are the millions upon millions of refugees living in terror and squalor today. They were an ‘extra-capitalist’ formation, ripe at this stage not for absorbing a glut of commodities ... but for the privilege, eventually, of being exploited as wage slaves (cheap labour to lower the cost of world production)  courtesy of the over-production of crystalised surplus value in a different form – namely, investment capital requiring an outlet to aid the cycle (or rather, spiral) of accumulation.

Capital: China’s Stalinist ally, The Soviet Union, could barely supply it. All Mao’s organisation and reorganisations couldn’t produce it, even if it should be acknowledged that steel production grew from 1.3 million tonnes in 1952 to 5.7million tonnes in 1957. By contrast, West Germany’s bombed-out steel industry went from 3 million tonnes of steel in 1947, to 12 million in 1950 and 34 million in 1960 – as a result of ‘outside’ capital investment via The Marshall Plan.

No: the CCP ‘by itself’ could neither fire-up industrial production on any serious scale nor even organize the population to feed itself. Link’s chronology quotes Encyclopedia Britannica, citing “the economic difficulties of 1959–61”. He himself says: “By the time of the Great Leap Forward (1958-60) however the slow progress of collectivisation was causing problems and inefficiencies.” These euphemisms are more generally known as 三年大饥荒 or The Great Famine which resulted in an estimated 45-50 million deaths, largely through starvation, and marked the failure of ‘The Great Leap Forward’. The attempted relaunch through the ‘Cultural Revolution’ suffered a similar fate producing economic and social turmoil, but no serious uptick in production. No masses being smoothly ‘proletarianised’ by Stalinism as the chronology seems to me to imply: just a pool of surplus, starving population.

In the informative chapter on ‘International Loans’ in ‘Accumulation’, RL explains how: “The general result of the struggle between capitalism and simple commodity production is this: after substituting commodity economy for natural economy capital takes the place of simple commodity economy. Non capitalist organisations provide a fertile soil for capitalism; more strictly: capital feeds on the ruins of such organisations, and although this non-capitalist milieu is indispensable for accumulation the latter proceeds at the cost of this medium nevertheless by eating it up.”

With militarism having destroyed China’s simple commodity production, international capital fed off its ruins after the US (via ‘Ping-Pong diplomacy’, Henry Kissinger and Richard Nixon) offered the Stalinists in Beijing a lifeline in the early 1970s (in turn opening up a lifeline for capitalist production at the end of the reconstruction period).

There’s a chart, “Foreign Direct Investment] inflows into China, 1979–2017" that’s accessible in Chapter 29 of China’s 40 Years of Reform and Development: 1978–2018, from Australia National University Press (2) that won’t, unfortunately, reproduce here. It illustrates the dramatic influx of capital into China, with inflows hardly registering from 1979-1989, then taking off to reach $40 billion in 1999 rising to over $120billion just after 2009. From almost zero to $120b in two decades.

The chart is accompanied by the following commentary: “Foreign direct investment (FDI) has been one of the most significant features of China’s economic reform and opening up to the outside world. By the end of 2016, China had attracted a total of US$1.35 trillion in FDI stock (UNCTAD various issues), making it the largest FDI recipient in the developing world. The large volumes of FDI inflows have contributed greatly to China’s economy in terms of capital formation, employment creation, export expansion and technology transfer, and have exerted significant impacts on its economic growth and structural changes (2).

An aside: in post #58 of the New Silk Road thread, MH says: …I can’t resist asking, tongue in cheek – is it really credible to conclude that in all four volumes of Capital, not to mention the Grundrisse, Marx would not at some point have said the equivalent of, “oh and by the way, none of this works without non-capitalist buyers”…?  In the chapter quoted above, RL makes a similar though obverse comment about ‘the schemas’: The part played by lending abroad as well as by capital investments in foreign railway and mining shares is a fine sample of the deficiencies in Marx's diagram of accumulation .”

Back to China: If we look at GDP over the same period, we see its take-off and acceleration is in step with DFI.  Another chart that won’t reproduce shows a rising curve in growth of GDP per Capita in China almost identical to and simultaneous with inflows of Foreign investment. (Data from Maddison Project Database January 2013, source Wiki). It’s not serfs who bought surplus commodities but the Chinese State which utilised surplus capital to generate production.

To conclude, the transformation of China between 1950 and 2015, involving one of the largest countries on the planet and certainly the most populous, is to my mind the most obvious example supporting RL’s theories of how, in practice, capital attempts to envelop and exploit masses and markets at a higher level than hitherto in order to stimulate production and, it hopes, accumulation. The article on ‘The New Silk Road’ is perfectly correct in this regard. Despite the fetters implied and imposed by decadence, world production from 1990 to 2015 was sustained and even increased largely due to the better exploitation of the ‘extra capitalist’ conditions existing specifically in China. Does this ‘prove’ capital can’t accumulate without external buyers or markets? Nope. That’s not the purpose and not my meshugaas. Does the article, (hopefully in part supported by this and other contributions) demonstrate the veracity of RL’s method? Most certainly, in my opinion.

  1. https://en.internationalism.org/content/16841/new-silk-road-chinas-challenge-existing-world-order
  2. https://pressfiles.anu.edu.au/downloads/press/n4267/html/cover.xhtml?referer=&page=0#

 

Alf
Question to Link

 

Where does Rosa Luxemburg argue that capitalism had to sell constant capital to peasants in order to accumulate? She certainly says that global capital needs to find a market outside itself to realise that part of global surplus value which will go towards expanded reproduction, which obviously includes the development of constant capital, but this process of realisation could include consumer goods as well as, say, tractors. In fact it's the consumer goods that tend to lead the way, as we see today in Africa where mobile phones are being sold in numbers to people on the very edge of capitalism.  

I think that Marx already shows that capitalist exchange with precapitalist formations can take various forms:

"Within its process of circulation, in which industrial capital functions either as money or as commodities, the circuit of industrial capital, whether as money capital or as commodity capital, crosses the commodity circ­ulation of the most diverse modes of social production. No matter whether commodities are the output of product­ion based on slavery, of peasants (Chinese, Indian ryots), of communes (Dutch East Indies), of state enter­prises (such as existed in former ep­ochs of Russian history on the basis of serfdom) or of half-savage hunting tribes, etc -- as commodities and money they come face-to-face with the money and commodities in which the industrial capital presents itself and enter as much into its circuit as into that of the surplus value borne in the commod­ity capital, provided the surplus value is spent as revenue; hence they enter into both branches of circulat­ion of commodity capital. The char­acter of the process from which they originate is immaterial." (Capital, Volume II, p.113)

But once again: as Luxemburg argues so forcefully, this trade with non-capitalist social formations (some of which, right up until the 20th century, had amassed vast amounts of wealth) was never a stable and peaceful process. Both d-man and KT have referred to Luxemburg’s Anti-Critique in this sense: “Thus capital cannot accumulate without the aid of non-capitalist organisations, nor, on the other hand, can it tolerate their continued existence side by side with itself. Only the continuous and progressive disintegration of non-capitalist organisations makes accumulation of capital possible”.  The article on the Silk Road emphasises that the benefits to capital accumulation accrued either from realising surplus value in these extra-capitalist zones or converting previous forms of labour into wage labour tend to be a “one off event”, because once they are drawn into the capitalist social relation they cease to function as an “external” outlet or source for capital. Needless to say, this process always involved the use of capital’s military might and the economic ruin of whole swathes of the precapitalist social strata – the main “local” beneficiaries being of course sectors of the old ruling classes who could more easily assimilate into the new capitalist order.

Link
KT and dman may well be

KT and dman may well be correct in questioning why there are 2 threads running at the moment and if the forumteam want to combine the 2 threads I have no problems with that. My intention in this thread however was not to focus on a the theory but on the issue of accumulation in the current period where all states are capitalist and the only possible existence of extra-capitalist markets must be as internal to a capitalist economy. RL does discuss the distinction between a non-capitalist economy and an internal non capitalist market. However whilst this thread has drawn some interesting contributions on internal peasant markets, it does seem to lead back to theoretical issues quite quickly.

KT adds some interesting history to my comments and he is correct to point out about the Great Famine that trashed China in the early 60s. I had seen this and added comments to something else I am writing on the topic – and his response suggests I need to add more.

In terms of the development of the Chinese economy in the 50s and 60s, its quite clear there was no rapid growth in the economy as a whole (and esp during the famine) but the point to be made surely is that agriculture was nationalised, land was owned by the state, peasant farmers were collectivised, received targets, supplied the state and received wages. What does it mean to call these these farmers peasants? KT agrees they are not serfs nor feudal lords so they are just poor farmers and not necessarily engaged in self subsistence.

I am not so convinced by the information of FDI that KT provides and im not sure how much I agree with the interpretation from the Australian NUP. The figures he quotes are indeed large amounts of investment so must be seen as a stimulant to the economy but this poses the question of how big relatively does such a stimulant have to be to be as important as the quote suggests. In relative terms, FDI amounted in 1990 to 0.97 % of the total economy and in 1993 it amounted to 6.1% and then continued to drop every year until 2010 when it fell significantly. Clearly a large increase but not large relative to the size of the economy. I would admit that perhaps the greatest significance of FDI is in the cumulative total. (Like KT I couldnt access his source info - I dont use Office anymore - so my source is My source is https://ourworldindata.org/ and search for FDI )

I can see the argument that Chinese growth has been stimulated by FDI but not that it depends upon it, that idea does not appear to hold water.

In the end though where did this FDI go, it was BMW etc building factories or capitalists investing in Chinese capitalism. This FDI was not being given to the peasants that were eating bark and grass that KT graphically mentions, it was being provided to capitalist firms. (just as dman’s quote from Lenin says)

The Chinese economy began to grow significantly from the 80s/90s onwards its true and this was when China opened up its economy to the world market and following national policies aimed at improved agricultural efficiency and developing its industrial base. So yes the CCP was able to develop the national economy from this point on, with the help of FDI certainly, but I cant see it was dependant or facilitated by FDI or by selling things to peasants

My fundamental problem with the whole scenario and why I was looking at China and India is that if all that exists outside the developed capitalist markets within these countries is a) poverty, b) poor farmers struggling for subsistence and c) poor farmers struggling to meet the needs of the national economy, then how can capital use these sectors to accumulate?

KT implies that poverty creates an extra capitalist market but then argues that these poverty stricken millions enable capitalism to accumulate! Even homeless migrants living in poverty can do this apparently. How does that work, please explain, what sort of markets do these millions of poor create for capitalism?

Some subsistence products clearly do get sold to subsistence farmers I agree eg handtools, means of transport, clothing, packaging, basic household goods. This doesnt amount to all the accumulation that takes place however.

No, all that these sectors can do is be integrated into the workforce when capitalist firms are developing. This obviously facilitates the growth of firms because it provides labour and presumably cheap labour at that, it provides a market for subsistence commodities. So we have the capacity for firms to expand into larger markets but thats all. These sectors do not provide a market for enhanced production which is what RL said they needed to do.

KT ends with the following points:

To conclude, the transformation of China between 1950 and 2015, involving one of the largest countries on the planet and certainly the most populous, is to my mind the most obvious example supporting RL’s theories of how, in practice, capital attempts to envelop and exploit masses and markets at a higher level than hitherto in order to stimulate production and, it hopes, accumulation. The article on ‘The New Silk Road’ is perfectly correct in this regard. Despite the fetters implied and imposed by decadence, world production from 1990 to 2015 was sustained and even increased largely due to the better exploitation of the ‘extra capitalist’ conditions existing specifically in China.

Firstly RLs theory is not that capital ‘attempts to envelop and exploit masses and markets at a higher level than hitherto in order to stimulate production and, it hopes, accumulation’ It is far more specific than that.

Secondly, KT is almost correct to suggest that RLs theory implies that ‘world production .. was sustained and even increased largely due to the better exploitation of the ‘extra capitalist’ conditions existing specifically in China’. Its not just China, we could also add India and Africa as additional regions that RLs theory would say enable all accumulation to take place. But I would be interested to know what largely due means? What other sources of accumulation are suggested?

Thirdly He saysDoes this ‘prove’ capital can’t accumulate without external buyers or markets? Nope. That’s not the purpose and not my meshugaas.’ But this was precisely the core of RLs theory ie that capital can’t accumulate without external buyers or markets. To support Luxemburg that should be your purpose. And even I wouldn’t talk of Luxemburg’s theory as madness - its just wrong!

This brings me back to the theoretical bit because Alf asks where RL says constant capital must be sold to peasants. I can point to where she says constant capital must be sold to extra capitalist markets. My point about peasants is as per the above, if we accept that peasants are extra capitalist (and I am questioning this) then they are all that actually remains of extra capitalist markets today. Therefore these poor peasants must purchase all the constant capital that enables capital accumulation to take place.

 

These quotes come from Chapter 1 of The Anti Critique

So far we have dealt with two big portions of the aggregate quantity of commodities in society: means of production to repeat the work process and means of subsistence to maintain the population, i.e. the working class and the capitalists.

and

In our assumed total stock of commodities in capitalist society we must accordingly find a third portion, which is destined neither for the renewal of used means of production nor for the maintenance of workers and capitalists. It will be a portion of commodities which contains that invaluable part of the surplus value that forms capital’s real purpose of existence: the profit destined for capitalization and accumulation.

This 3rd portion is the commodities that comprise enhanced production ie additional production equipment and production equipment that uses new/enhanced technologies ie this is constant capital.

Could the capitalists themselves perhaps be the customers for that latter portion of commodities by extending their own private consumption? That might be possible, although. there is enough for the ruling class in any case, even with its luxurious whims. But if the capitalists themselves were to spend the total surplus value like water there would be no accumulation…. Who then could be the buyer and consumer of that portion of commodities whose sale is only the beginning of accumulation? So far as we have seen, it can be neither the workers nor the capitalists.

Her conclusion is that it must be extra capitalist buyers!!!

My argument is that this element is the essential part of her theory. If you dont accept that accumulation can only happen because of sales to extra capitalist markets, then you are rejecting Luxemburg’s theory. If you do accept this argument, then please explain how these poverty ridden sections of society that exist today can buy all the constant capital needed to enhance accumulation at the level of total social capital (ie the world economy) and especially regarding the mass of growth that capitalism has been able to achieve in the recent period.

d-man
In online debates on Rosa's

In online debates on Rosa's theory (and 'silk roads'), I often point to Kautsky's 1886 article on Chinese railways (relevant excerpts translated here), which was recommended also by Parvus in his own articles on China (in Die neue Zeit of course). Browsing through Parvus' piece again, I notice he incidentally remarked, that a mostly subsistence economy can bring forth a monetary demand, by way of a tax extraction in monetary-form, which in China was namely the tax on salt (existed also in Russia in the past, see the 1648 Moscow "salt riot"). China's foreign loans were repaid, in a significant part, by revenue from the tax on salt.

Earlier, in 1858, Marx had noted that, disregarding the opium trade, China even had a trade surplus with Britain:

Quote:
since its opening by the treaty of 1842, the export to Great Britain of tea and silk, of Chinese produce, has continually been expanding, while the import trade into China of British manufactures has, on the whole, remained stationary.

Marx notes there, that China had a trade surplus also with the US.

Marx (in vol. 3) incidentally noted that India normally too should have a trade surplus with Britain, if it were not for the tribute levied:

Quote:
This preponderance of English exports to India over imports from India is actually brought about by imports from India for which England does not pay any equivalent. The drafts of the East India Company (now the East India government) reserve themselves into a tribute levied on India. For instance, in 1855, imports from India to England amounted to £12,670,000; English exports to India amounted to £10,350,000; balance in India's favour .. £2,320,000.

"If that was the whole state of the case, that (sum) would have to be remitted in some form to India. But then come in the advertisements from the India House. The India House advertise to this effect that they are prepared to grant drafts on the various presidencies in India to the extent of £3,250,000."....

Mr. Newmarch explains this by saying that the British import "good government" into India

...

 

Since England exports a good deal "in this way" for "good government" and as capital investment in foreign countries — thus obtaining imports which are completely independent of the ordinary run of business, tribute partly for exported "good government" and partly in the form of revenues from capital invested in the colonies or elsewhere, i.e., tribute for which it does not have to pay any equivalent

How does a mostly non-monetary (natural) economy like India then manage to pay this tribnute to Britain? Marx seems to indicate that it is payment in kind:

Quote:
India alone has to pay 5 million in tribute for "good government," interest and dividends on British capital, etc.,  ... Every British colony continually has to make large remittances for the same reason. ... In addition to this it has interests in foreign railways, canals, mines, etc., with corresponding dividends. Remittance on all these items is made almost exclusively in products over and above the amount of English exports.

The fact that in normal circumstances China and India would have a trade surplus with Britain, means, that these mostly subsistence economies did manage to earn some money (and hence, also can spend it in return on buying capitalist goods). And even if they had no money, at least India paid a tribute to Britain in products (not exclusively in money), so, despite its poverty, it had disposable/"surplus" products that served as "payments" (though not exactly for English products, but rather for "good government" etc. – but at least potentially it could have also been as payment for English products).

In another passage (from vol.3), quoted by Rosa (in Anti-Critique), Marx writes:

Quote:
To say that there is no general over-production, but rather a disproportion within the various branches of production, is no more than to say that .... that countries in which capitalist production is not developed, should consume and produce at a rate which suits the countries with capitalist production.

This is proof for Rosa, that in Marx's view the normal operation of capitalism is effected by its relation to, or depends on, the rate of the consumption/production of non-capitalist countries. Even if non-capitalist countries exists in huge numbers, this doesn't mean that capitalism functions without crisis (pre-1914 there were obviously also crises).

-

On the other thread, Link orignally pointed out, that due to high money velocity, in capitalism there isn't actually that much money required (to circulate all commodities). I suggest this same principle in relation to non-capitalists, ie the total capitalist surplus-value need not be paid by non-capitalists in the full amount. If just 5% money is required to circulate value to the amount of C+V, then also for the S this amount of money can be just 5%. So if only 1/20 of the surplus of capitalists is realised on non-capitalist markets, then this 1/20 would be already enough to realise the remaining 19/20 (ie capitalist A, with his realised surplus, in turn buys teh surplus from capitalist B etc.).

 

Marin Jensen
Expansion through destruction

A few points to contribute to this interesting and important, but very difficult, discussion. I agree with many of KT's points, though in enumerating China's many woes, he misses out the Taiping rebellion which lasted from 1850 to 1864, established its capital in Nanjing (the old southern capital of the Song dynasty), and was only suppressed at the cost of 20 million dead. Taiping is important in part because the inability of the Imperial government to suppress the revolt left much of the task to regional grandees, laying the basis for the warlordism of the early 20th century.

In discussing China's rise, it seems to me that there are four major mistakes to avoid:

The first of these mistakes, is to think that in Luxemburg's arguments, the only "external market" that she envisages is selling goods (presumably this would imply consumer goods) to peasants. This is a static view of things which doesn't really explain why the expansion into non-capitalist economies can only happen by integrating them into the capitalist economy, destroying the pre-capitalist economy and enlarging the global capitalist economy in the process. I refer in particular to her "Introduction to political economy", where RL discusses (amongst others) the case of Egypt. British capital switched to Egypt as a supplier of cotton when the American Civil War cut off supplies to the textile industry around Manchester. But for Egypt to supply cotton on an industrial scale, it first had to industrialise its agriculture and primary processing. This meant the construction of railways, cotton gins, port facilities, and so on, all of which had to be imported. Consequently, the biggest sales to Egypt were not sales to peasants, but sales to the state and to newly formed capitalist companies of capital goods. In the process, the peasants had to be forced off the land and transformed into agricultural labourers. This was made easier by the fact that the Egyptian state, to pay for the imports, contracted loans paid back by money taxation of the peasantry. Earning money to pay taxes forced peasants into wage labour. The same process occurred elsewhere, notably in Latin America, and above all in the USA where the expansion of the railway network across the country essentially "created" the capitalist economy as it went - the existing tribal societies were exterminated, not integrated (obviously I'm over-simplifying here, RL wrote an entire chapter on the subject after all).

d-man is right to point out that both China and India at first had trade surpluses with Britain (I know very little about India so won't comment on that). But the Chinese trade surplus is a problem not so much for RL's thesis, as for that of Marx as expressed in the Manifesto "The cheap prices of commodities are the heavy artillery with which [the bourgeoisie] batters down all Chinese walls, with which it forces the barbarians’ intensely obstinate hatred of foreigners to capitulate". Ironically, this was not the case at all with China. The problem with China for the British was that China (late-18th/early-19th century) produced vast quantities of tea for export, but imported nothing of consequence. The only British product the Chinese could be persuaded to buy was opium, hence the opium wars. The "heavy artillery with which [the bourgeoisie] battered down Chinese walls" was... heavy artillery.

This points to a much more general problem, the second big mistake: the assumption of mono-causality. Any conceptual model, whether from Marx or Luxemburg, or anyone else, is necessarily an incomplete, schematic representation of reality, not reality itself. Reality is far too complex to fit any one schema, and it is reality we are concerned with (Marx would surely not have disagreed, he spent a large part of his life struggling with the raw data in the British Museum). It would be far too complex to argue here, but for me the importance of Luxemburg's analysis not that it explains everything, but that it gives us a powerful insight into why capitalism must expand, and can only do so by absorbing and destroying the pre-capitalist economies that surround it. Adopting a mono-causal analysis means that we end up trying to squeeze reality into a one-size-fits-all schema, and arguing about metaphysics (which concept is best) not reality. And it is reality that counts: we aim, after all, to be historical materialists.

The third mistake is to forget the military factor. China's development under Mao was dominated by a Stalinist model of driving for the expansion of heavy industry necessary for military production. This is notably true of the "Third Front", which involved locating industrial infrastructure in the inaccessible interior of the country to protect it from invasion - completely outside the logic of capitalist development. Compare this with South Korea's industrialisation from the 1970s onwards, which began with light industry (and a largely female proletariat, incidentally).

This is already a long post, so I'll put the fourth mistake in a separate one.

Marin Jensen
Coincidence is not causality

This is the fourth mistake...

I think KT's figures for FDI into China in the 90s and later are basically correct, since they correspond to what I get from Barry Naughton's book "The Chinese Economy". However, just because the graph shows a spectacular take-off beginning in the 1990s does not necessarily imply, as the ICC resolution on the international situation thinks, that "decomposition" post-1989 is the "cause" of the take-off.

According to the Resolution, “The stages of China’s rise are inseparable from the history of the imperialist blocs and their disappearance in 1989 (…) China’s rise began with American aid rewarding its imperialist shift to the United States in 1972. It continued decisively after the disappearance of the blocs in 1989”. What is suggested here, rather obliquely, is that China changed blocs after Nixon’s visit in 1972, abandoning the Soviet bloc for the American for which it received the “reward” of American aid. The point is to suggest that China was constrained by “the straitjacket of the organisation of the world into two opposing imperialist blocs (permanent between 1945 and 1989) in preparation for the world war that prevented any major disruption of the hierarchy between powers”. The reason for this, is that the ICC's analysis of decadence quite clearly asserted that it made the rise of any new industrial power (much less the world's second industrial power) was impossible. The case of China therefore poses a serious problem for the "decadence narrative", hence the attempt to attribute it entirely to the "disappearance of the blocs" in 1989.

Leaving aside the fact that the impossiblity of new industrial powers was supposedly determined by decadence, not the post-1945 order of imperialsit blocs, this new narrative can only achieve a semblance of coherence by ignoring certain historical realities. The Sino-Soviet rift had already become evident in the summer of 1960 when the USSR withdrew all its technical advisors from China, and Mao Zedong refused to attend the Moscow meeting of CPs in November of the same year. In 1969, small-scale fighting on China’s border with Russia went on for seven months. Following Nixon’s visit in 1972, relations with the USA began to be normalised, and China even purchased weapons from the Americans, but to suggest that China entered the American bloc and was "rewarded" for doing so with American aid is a gross exaggeration to say the least. It should also be said that FDI was substantially dominated by capital from Hong Kong, Taiwan, and Macao, in other words by the Chinese diaspora which had certainly maintained ties to the Chinese mainland.

The really decisive events in China’s rise followed Mao’s death: the arrest of the Gang of Four (ie the hardline Maoists, including Mao’s wife Jiang Qing), the 1978 CCP Plenum which launched the economic reforms that were to open China to the outside world, and the power struggle between Mao’s successor Hua Guofeng, and Deng Xiaoping which led to Deng taking effective power in 1980.

Special Economic Zones open to FDI (Foreign Direct Investment) were opened in 1979 and 1980 (one of the SEZs was the newly created town of Shenzhen which grew at a rate of more than 25% every year throughout the 1980s); by the end of the 1980s, FDI stood at 1% of GDP, which may seem very low compared to its high point of 6% in 1994, but is higher than FDI in Japan or South Korea at comparable stages of their development. China’s rise begins from here, not from the collapse of the USSR.

1989 was a critical event in Chinese history, not because of the disappearance of the blocs but because of the awful warning to the CCP leadership of the consequences of glasnost: the disintegration of Soviet power externally, and the collapse of state authority internally. Gorbachev, let us remember, visited China in 1989 in the middle of the Tiananmen Square demonstrations. The CCP leadership undoubtedly drew a lesson from the chaos in the USSR and the pro-democracy demonstrations in China: it was absolutely necessary to avoid going down the Russian road. Hence the repression of the demonstration, the sidelining of Zhao Ziyang (put under house arrest until his death), and the return to power of the conservative factions. The policy of economic opening was brought to a halt, and only renewed after Deng's "Southern Inspection" to Shenzhen, Guangzhou, Zhuhai and other cities, to renew his support among the powerful regional Part barons.

In short, China's economic rise began in the 1980s, not in the 1990s.

Link
Dman is absolutely correct

Dman is absolutely correct about the trade surpluses that the UK had with India and China but i think this is a problem for Luxemburg's thesis precisely because her thesis is that capitalism needs to sell capital commodities to extra cap markets in order to accumulation.  What was happening therefore was exactly the opposite of what should have been happening according to her theory.  MJs summary of the trade with Eqypt again demonstrates that the significant part of the trade was not with feudal markets or institutions themselves but with capitalist enterprises.  What interesting about the trade with China is that all China wanted from the UK etc was gold and silver becuase its economy was having problems, so effectively money was being transferred to the extra cap market not being taken from it.

d-man
Quote: Dman is absolutely

Quote:
Dman is absolutely correct about the trade surpluses that the UK had with India and China but i think this is a problem for Luxemburg's thesis

My point about Chinese trade surplus (in that particular period) is, that a non-capitalist/"poor"/subsistence economy could obtain money. because it does sell products, that is, these non-capitalists are "rich enough" to be able to sell a surplus product. I had to establish this point, because you were suggesting that the production of non-capitalists is so insignificant (merely for their own susbsitence) as to represent almost nothing.

My hunch is that the interaction/trade between capitalist and non-capitalist areas does not necessarily need to lead to permanant, one-directional surpluses or deficits either way. Again (as quored by Rosa), Marx noted that a disturbance of this interaction (with non-capitalist areas) leads to crises:

Quote:
To say that there is no general over-production, but rather a disproportion within the various branches of production, is no more than to say .... that countries in which capitalist production is not developed, should consume and produce at a rate which suits the countries with capitalist production.

The general gist here is to try to disprove the ICC's 1980 statement about the impossibility of new industrial powers (since WW1) rising, by example of China. But do we include among the old established powers (around WW1) Japan? I think so (a sign of its rise was eg its victory in 1905 over Russia).

In 1994 Japan's share of world GDP was apparently at its highest, 17,86%.

In 2019, China's share was about 17.39%.

So China has not yet reached Japan's peak, even though it's population is many times larger than Japan's.

 

Link
Dman you have confused China

Dman you have confused China up to the 19th century with the China of 20th Century.  China was a major economic power, probably the largest int he world, up to the 19th century but it was still not capitalist and the trade in 18th and early 19th century was between capitalist Europe and feudal China.  Whereas in the late 20th Century, China is clearly a capitalist state and poverty is widespread.  China and India were both very powerful and wealthy feudal powers up to 19th Century when as far as i can see  internal problems weakened them and allowed capitalis to take over.

d-man
Poverty of modern peasants

Poverty of modern peasants doesn't preclude that products/money are still extracted from them. The process of tax-farming that Rosa described on the poor peasants in eg the feudal Ottman empire, to me seems to still exist in post-Mao era China.

A 1993 NYT article on taxes of Chinese peasants gives a sense ot it:

Quote:
Taxes in the village almost always exceed 5 percent, he said, and if a family does not pay the tax, they are fined an additional 8 percent. This could come in the form of grain seized from the peasants after the harvest.

A 2002 paper provides more context (I quote):

One aspect of the responsibility system was to shift the basic unit of  rural taxation from the collective to the individual household. With this shift,  households became individually liable for various taxes and most fees. For  example, by having the right to cultivate a given plot of land, the household  became responsible for taxes and fees on the land itself as well as the  production from the land. At the same time, the government gradually  liberalized the prices for agricultural products, but still kept some regulations  on grain production and procurements requiring peasants sell part of their  grain to government. With the shift of taxation units from collectives to  households, gradual liberalization of agricultural pricing and regulations on  some major agricultural products, rural taxation became more explicit.

...

In recent years, the township pooling funds and village levies have increased  significantly. The central government has mandated that these levies cannot  be more than 5% of peasants’ net income. However, the situation is not  under control in some regions. Some local governments deliberately  exaggerate peasants’ net income and levy the funds and fees according to the  falsely reported income. According to a report (State Planning Commission,  2000), from 1993 to 1998, the national township pooling funds and village  levies increased from RMB 39 billion to RMB 73 billion, with an annual  growth rate of 13.9%. The amount per capita increased from RMB 44.6  Yuan to RMB 84 Yuan, with annual growth rate of 13.8%.

...

peasants also need to take the  following implicit burdens:  

Monetary equivalent: this is the corvee labor services, primarily provided  by male labors--e.g. labors for flood prevention, maintaining and expanding  irrigation systems, road and school construction, water conservation and  afforestation projects. In recent years, these corvee labor services have  increased rapidly. In 1994, the average labor in rural regions contributed 16.4  working days and in 1999, the number increased to 18.2 working days, in  some years it even reached 23 working days. The cash equivalent per capita in  1998 reached 89.3 Yuan, 130% higher than 1994 level. In addition to that,  some local governments take advantage of the national corvee labor policy,  requiring peasants to contribute corvee labor services, with the real intention to  ask rural households to substitute cash for labor-the so called “Cash for labor”  (State Planning Commission, Internal Report, 2000). In 1999, the total amount  reached 6.4 billion, with 6.9 Yuan per capita and 13.46 Yuan per labor      

...

7) Hidden burdens. This includes compulsory sale of grain to the government  at below market prices. Depending on the region, the grain may be in the form  of rice, maize or wheat. There are also various user fees charged at above  market level such as water, electricity fees.   

The uniqueness of the rural taxation system lies in the fact that a large part  of the village and township government expenditure comes from direct  taxation, especially the informal rural fee charges on peasants that do not  enter into formal government budget.

Marin Jensen
"Subsistence" China?

d-man wrote:

My point about Chinese trade surplus (in that particular period) is, that a non-capitalist/"poor"/subsistence economy could obtain money. because it does sell products, that is, these non-capitalists are "rich enough" to be able to sell a surplus product.

I think it would be a mistake to call pre-capitalist China a "subsistence economy". The French historian Fernand Braudel, discussing the extensive trade between China, the Philippines, and Spain's American empire in the 16/17th century, considers that the Chinese economy was already a "fledgling capitalist" economy - and one fascinating question is what exactly were the factors, economic, geographical, and ideological, that caused capitalism to blossom (if one can use such a word) from mercantilism, in Europe, rather than in China or India.

d-man wrote:

The general gist here is to try to disprove the ICC's 1980 statement about the impossibility of new industrial powers (since WW1) rising, by example of China. But do we include among the old established powers (around WW1) Japan?

I don't think the ICC's statement needs "disproving": historical reality has taken care of that. The question is what implications this has for the overall analysis of decadence.

If we're discussing "new" industrial powers since 1914, Japan was certainly a major power by then (as you say, 1905...). Since the 1980s we have seen the rise of China, India (which never even existed as a country prior to 1947), but also Brazil, Indonesia, South Korea. All that needs explaining.

d-man
Quote: If we're discussing

Quote:
If we're discussing "new" industrial powers since 1914, Japan was certainly a major power by then (as you say, 1905...). Since the 1980s we have seen the rise of China, India (which never even existed as a country prior to 1947), but also Brazil, Indonesia, South Korea. All that needs explaining.

If you take GDP per capita as an indicator of industrial prosperity or whatever, of the countries you mention that need explaining, South Korea comes closest to reaching the position on the world rank/list of one of the "old" industrial powers, namely Japan (US, Canada, Germany, UK and France are listed above Japan). China is climbing the rank (this year apparently surpassing Russia), as is Indonesia, while India seems stationary, and Brazil fell back a couple of ranks.

If we take the ICC's "disputed" statement, pronounced in 1980, a bit more broadly, not as a statement of an absolute condemnaiton to stagnate of these under-developed countries, but of the increased difficulty for them to catch-up, and their condemnation to stay relatively under-developed as compared to the old industrial power, then it still holds true. The text explicitly also mentions this option of a merely a relative backwardness, though still a "chronic" one (ou à conserver une arriération chronique par rapport aux pays qui "tiennent le haut du pavé"). The pre-1914 rise of Germany and the US, catching up to Britain in a few decades, remains I think an impressive climb, that we haven't seen yet made since, at least not to a similar degree.

Btw, given that China this year overtakes Russia in rank on the list of GDP per capita, one could perhaps also argue, that if we regarded Russia (or the former-USSR) as being one of the industrial powers (though not as high as the Western ones) in 1980 (when the ICC was writing), then there merely occured (as of yet) a sort of equalisation between Russia and China.

 

Marin Jensen
A problem of definition

Isn't this rather a problem of definition? It's true, and perhaps unfortunate, that the original ICC text (I've linked to the English version) doesn't give any quantifiable criteria. However it nonetheless seems to me pretty clear when it says that "The period of capitalist decadence is characterised by the impossibility of any new industrialised nations emerging", and that "The impossibility of any new big capitalist units arising in this period is also expressed by the fact that the six biggest industrial powers today (USA, Japan, Russia, Germany, France, Britain) were already at the top of the tree (even though in a different order) on the eve of the first world war", and that "The inability of the under—developed nations to lift themselves up to the level of the most ad­vanced countries can be explained by the follow­ing facts..." (some of the facts in question being precisely the points under dispute).

It seems to me that GDP per capita is hardly a reliable indicator for defining a "big capitalist unit", or even an "industrialised nation". If you look at the list of top countries by GDP per capita, then the USA is 8th, behind such industrial heavy-weights as Ireland, Luxembourg, Qatar, and even Macao. If, on the other hand you simply look at GDP then the picture is clearer, with the top ten being: United States, China, Japan, Germany, India, United Kingdom, France, Italy, Brazil, Canada.

Even then one would have to be careful as to the usefulness of GDP as an indicator, since the ICC text is concerned with the conditions of proletarian struggle and in particular the growth of the proletariat (or not). GDP includes all sorts of things which are outside the domain of industrialisation, such as financial services (Macao's GDP is derived essentially from gambling). Then there is the fact that these are nominal figures which are not necessarily indicative of the real state of affairs: living costs are far lower in China than in the USA or Europe, so nominal dollar figures are distorted reflections of reality.

One could choose an indicator such as industrial capacity. For example, the world's top ten steel manufacturers are:

  1. ArcelorMittal (HQ in Luxembourg but originally an Indian company that took over the French Arcelor)
  2. Nippon Steel & Sumitomo Metal Corporation (NSSMC) (Japan)
  3. Hebei Iron and Steel Group (China)
  4. Baosteel (China)
  5. Wuhan Iron and Steel Group (China)
  6. POSCO (South Korea)
  7. Jiangsu Shagang (China)
  8. Tata Steel Group (India)
  9. HYUNDAI Steel Company (South Korea)
  10. JFE Steel Corporation (Japan)

One might object that although steel is important from the development standpoint, it is a "backward" industry (I don't think this is true actually but never mind). Let's look at some more hi-tech stuff. Here are the world's top ten manufacturers of telecommunication equipment:

  1. Ericsson (Sweden)
  2. Nokia Networks (Finland)
  3. Huawei Technologies (China)
  4. Cisco Networks (USA)
  5. ZTE (China)
  6. Juniper Networks (USA)
  7. Samsung Telecommunications (South Korea)
  8. Alcatel-Lucent (was Franco-American, now controlled by Nokia)
  9. Qualcomm (USA)
  10. Fujitsu (Japan)

And of course you probably don't need me to tell you that the world's top smartphone manufacturers are, in order:

  1. Samsung
  2. Huawei
  3. Apple (whose phones are manufactured by Taiwanese companies in Chinese factories, let me add)
  4. Xiaomi
  5. BBK Electronics (Oppo and Vivo), based in China

Consider, finally, that in the last 20 years China has built 20,000km of high-speed rail track and 80,000km of motorway.

That seems pretty conclusive to me. It also highlights a major difference between the USSR during the Cold War and China now. The USSR was once described as "Burkina Faso with missiles". That's exaggerating a bit, but the fact is that the USSR's high technology was almost exclusively concentrated in the military sector and it was notoriously incapable of producing good consumer products, or other high-tech equipment. This is not the case with China.

d-man
Quote: It seems to me that

Quote:
It seems to me that GDP per capita is hardly a reliable indicator for defining a "big capitalist unit" ... If, on the other hand you simply look at GDP then the picture is clearer,

By your indicator (GDP size) eg Nigeria would be more advanced than Denmark, while by the indicator I used (GDP per capita) Denmark is seen as among the highest industrialised/wealthiest.

Quote:
Even then one would have to be careful as to the usefulness of GDP as an indicator, since the ICC text is concerned with the conditions of proletarian struggle and in particular the growth of the proletariat (or not).

I too have urged caution wrt GDP in general as an indicator. It's widely used in the ICC polemics, perhaps unfortunately.

As to sheer industrial output capacity, or more sensitvely, the development of special hi-tech industries, these are technical indicators that are more insighful in some regards than mere prices (GDP), but perhaps still not so in other regards (ie as to pace/"health" of accumulation of value). Even so, in special hi-tech innovations, it seems we will only know in the coming time, whether China can really make the technical leap (like US or Germany did wrt to Britain).

Marin Jensen
What is the question?

Point taken re: GDP.

But it seems to me that we are drifting away from the main question (or at least what I thought was the main question in this bit of the discussion): was the ICC right to say that the emergence of "new industrialised nations" and "new big capitalist units" was impossible in decadence (ie post-1914)? Although my examples are very broad brush they seem to me conclusive. There can surely be no doubt that China and India are both newly industrialised nations, and big capitalist units, and that the ICC was simply wrong.

d-man wrote:

Even so, in special hi-tech innovations, it seems we will only know in the coming time, whether China can really make the technical leap (like US or Germany did wrt to Britain).

It is true that China is not yet in the same league as the United States or even the EU in some critical high-tech technologies: chip manufacture, commercial aircraft, vehicles, to name but three. However, it is also true that China is ahead of any other industrialised nation in telecommunications, hence all the fuss over integrating Huawei's 5G kit. Nokia and Ericsson are the only other potential competition (although OpenRAN may turn out to be a game-changer there) - pretty shocking to find the USA's manufacturers like Cisco so far behind.

China's first high-speed train pulled out of Beijing in 2008. There was a certain schadenfreude in the Western press in 2011 at the time of the serious crash in Zhejiang, suggesting that China was not really capable of handling this kind of sophisticated technology. Since then, China has proved its critics wrong. Different sources give different figures, but it seems that I may have been mistaken: not 20,000km in 20 years, more like 30,000km in 10 years. Millions of Chinese use these trains, all the time.

You may have noticed that China has just launched a moon shot intended to bring back rock samples. This comes after a sophisticated and unprecedented shot which landed a rover on the dark side of the moon for the first time, prompting Fortune magazine to write: "China is only the third country, alongside the U.S. and Russia, to send its own astronauts into space aboard its own rockets, and only the U.S. and China have the fiscal and technical wherewithal to mount significant long-term programs for exploring space. China last year launched more rockets into space than any other nation and plans another moon landing, the Chang-e 5, later this year. The country hopes to begin operating its third space station by 2022, and put astronauts on a lunar base sometime in the next decade. Beijing also has plans to send probes to Mars and return samples of the Martian surface back to earth".

It seems to me that the point is proven, and I don't intend to pursue this specific question any further for fear of it becoming an unfruitful rabbit-hole.

The ICC's narrative of decadence has clearly got some major holes in it. The important discussion is what they imply for the analysis of decadence as a whole, including the political positions which are based on decadence, and for the perspectives one can develop today.