Louis Proyect: The Unrepentant Marxist

April 12, 2018

The two degrees of separation between Robert Mercer and Chinese Communism

Filed under: Africa,China,Trump — louisproyect @ 8:58 pm

For more information on the graphic above, go to https://steemit.com/news/@cryptospreads/let-me-introduce-you-to-emerdata-ltd-a-data-processing-company-directed-by-alexander-nix-and-rebekah-mercer-among-other-shady

In yesterday’s NY Times, buried within an article on the problems Robert Mercer and his daughter Rebekah were having over the Cambridge Analytica fallout, there was startling revelation:

The Facebook scandal has hit just as the Mercers appear to be expanding their business in the world of big data. Public records show that Ms. Mercer, her sister Jennifer and Mr. Nix serve as directors of Emerdata, a British data company formed in August by top executives at Cambridge Analytica and its affiliate, SCL Group, according to British corporate records.

Incorporation documents state that Emerdata specializes in “data processing, hosting and related activities.” An SCL official told Channel 4, a British television station, that Emerdata was established last year to combine SCL and Cambridge under one corporate entity.

Exactly what ambitions the Mercers, who joined the Emerdata board last month, have for the company is unclear. Another Emerdata director, Johnson Ko Chun Shun, is a Hong Kong financier and business partner of Erik Prince — the brother of the education secretary, Betsy DeVos, and founder of the private security firm formerly known as Blackwater. Mr. Ko, who declined to comment, is a substantial shareholder and deputy chairman in Mr. Prince’s Africa-focused logistics company, Frontier Services Group.

Mr. Ko and Mr. Prince have links to the Chinese government: Another major Frontier investor is Citic, a state-owned Chinese financial conglomerate that for decades has employed the sons and daughters of the Communist Party’s elite families.

So, we can assume that this new company Emerdata is just a new name for the SCL Group, a British corporation that was the mothership for its American offshoot Cambridge Analytica. The NY Times states that Emerdata’s ambitions are unclear but you have to assume that it will have the same nefarious aims as the corporations under the big umbrella it provides, namely to use powerful computer systems to analyze both public and private data in order to promote crooked reactionaries like Donald Trump. While some leftists scoff at the idea that Cambridge Analytica was anything but smoke and mirrors, the idea that this kind of operation is going on in the USA or anywhere else is a threat to democracy just as much as the ability of the Mercers, the Koch brothers and any other plutocrat to pour millions into election campaigns in the aftermath of the Supreme Court ruling on Citizens United.

If you need any other proof of Emerdata’s criminal tendencies, just consider the connections to Erik Prince. Prince’s Blackwater was a private security firm that was involved with the murder of 15 Iraqi civilians in 2007. He is also under investigation for serving as Trump’s envoy in a meeting with Putin’s representative on Seychelles island in January 2017. The Intercept reported:

The identity of the Russian individual was not disclosed, but on January 11, a Turkish-owned Bombardier Global 5000 charter plane flew Kirill Dmitriev, CEO of the Russian Direct Investment Fund, to the Seychelles, flight records obtained by The Intercept show. Dmitriev’s plane was an unscheduled charter flight and flew to the island with two other Russian individuals, both women. The RDIF is a $10 billion sovereign wealth fund created by the Russian government in 2011.

Prince is not on the Emerdata’s board but his associate Johnson Ko Chun Shun is. Ko and Prince are the prime movers in Frontier Services Group (FSG), an innocent-sounding name for a company that functions as China’s Blackwater in Africa. To keep the restless natives at bay, Prince and Ko’s firm will serve as a subcontractor lining up goons to keep Chinese mines, oil drilling, plantations, etc. safe.

The biggest Frontier Services Group shareholder is the Citic Group, an investment fund owned and controlled by the People’s Republic of China. In addition to its Africa operations, FSG has signed contracts to support China’s One Belt, One Road initiative including building a series of bases in China’s Xinjiang Province, where the restless Uighur natives have to be kept in line as Communist “development” goes full steam ahead. I guess you all know what the One Belt, One Road initiative is all about. That’s China’s bid to defeat the cruel, imperialist West. And who better to smooth the path in front of the initiative is Erik Prince who is a past master of killing restless natives.

Most of FSG’s business is in South Sudan, however. That’s where China’s new colonial aspirations reach highest. In order to protect its oil drilling sites from attacks by militias representing tribes hostile to the state’s partnership with China, the FSG can be a life-saver for superprofits.

For a comprehensive report on FSG, I recommend the 10 page report from the Oakland Institute. It states:

Prince has spent most of his post-Blackwater years building rapidly deployable logistics, intelligence, and security capacity. His new logistics company, Frontier Services Group (FSG), has outposts in Africa, the Mediterranean region, and will soon be present in Central Asia.

Before launching FSG, Prince began assembling logistics assets in Africa to back his financial investments within his equity fund FRG. The fund advertised to external investors its ability to “leverage unique relationships and experienced management, as well as existing security and logistics capabilities,”78 allegedly a competitive advantage to access untapped subsoil resources in risky and infrastructure-lacking areas of Africa.

With FRG’s first venture, Prince secured an agreement to build an oil refinery in South Sudan’s Upper Nile State, in the locality of Thiangrial. This was a project with heavy logistics and security needs, for which Prince tapped his network of private security connections. A long time colleague, John “JP” Palen, was asked to help coordinate plane transportation for surveys and oil sampling at the site. Palen, a former US Air Force pilot, worked at Prince’s Presidential Airways from 2006 to 201081 before being employed at Transerv, an aircraft company linked to Prince’s R2 and PMPF projects.

Okay, so what’s going on here?

The most reactionary elements in American politics—the Mercers and Erik Prince—are in a alliance with the Chinese Communist Party to protect its assets in Africa and anything that stands in the way of its One Belt, One Road initiative that unfortunately some have mistakenly viewed as a big step forward toward a multipolar world. Perhaps it was easier to sustain illusions in BRICS, the One Belt, One Road initiative, and Chinese “communism” at a time before China became much more of an obvious colonizing presence in Africa. And for those sitting on the fence, these ties to Robert Mercer and Erik Prince should dispel all illusions.

December 4, 2017

Trump, Russia vs China and China Industrialization

Filed under: China,Trump — louisproyect @ 2:23 pm

(I received this article from Lynn Henderson, a former member of the American SWP, yesterday. Henderson worked as a railroad brakeman/switchman for 25 years.  He was vice-president of United Transportation Union Local 1000, one of the largest UTU locals in the country.  He was editor of the Intercraft newspaper Straight Track and is currently a contributor to Socialist Viewpoint magazine.)

 

Trump, Russia vs China and China Industrialization

The following is a response to a 7/29/17 letter from Dave Gilbert who you may know is a political prisoner serving a long term in federal prison.  Over the past year Dave and I have been in a fruitful exchange of ideas, a recap of which was printed in the September/October 2017 issue of Socialist Viewpoint.   In his latest letter Dave posed a number of issues: the character of Trump’s role as leader of the America First/nationalist wing, the disputes in the U.S. ruling circles over Russia vs China, China’s industrialization, its future evolution and impact on relations with the “Global South” and William Robinson’s concept of a new transnational capitalist class (TCC).    Lynn Henderson Nov. 2017

Dear Dave,

Let me finally try to take up some of the points you raised in your 7/29/17 letter.  First, as I indicated in my short note last August, you are right in observing that Trump is hardly a “strategically coherent representative” for the emerging “nationalist” faction in the U.S. ruling class.  He is increasingly seen as erratic and unreliable, particularly lately with the growing crisis over North Korea.   Neither wing of the emerging split in the U.S. ruling class wants to stumble into another Asian war, let alone a nuclear war, over North Korea.  Steven Banning, who perhaps represents a more reality based strategy for the nationalist faction, argues that it’s now too late to prevent a nuclear North Korea.  Rather U.S. imperialism needs to concentrate on the real threat, the growing industrial power of China.

But it is Trump who got elected president proclaiming a return to an aggressive nationalist/ America First line, and successfully mobilized racist, anti-immigrant sentiment in support.  Whatever his other limitations, the coalescing nationalist wing feels stuck with him and they are falling in line behind him, at least for now.  Even more worrying for the nationalist/American First wing is their growing suspicion that Trump’s only real political commitment is to his own personal wealth and ego.  Bannon in an August interview with The Weekly Standard gives voice to this sentiment; “The Trump presidency that we fought for, and won, is over.  We still have a huge movement, and we will make something of this Trump presidency.  But that presidency is over.”

More broadly, most of the elected politicians in both capitalist parties are in confused disarray over the growing split in the U.S. ruling class.  They are not confident over how the division will play out, and what position will best serve their own political futures in the end.  As Marxists we, unlike bourgeois historians and political philosophers, adhere to the historical reality and validity of a ruling class. But this of course does not mean that any particular ruling class at any particular time is unified and in fundamental agreement.  Or even that a ruling class under all circumstances, especially under the stress of a real crisis, is capable of correctly assessing its own best interests.

China

I think the most pressing questions in your letter were those concerning China.  One — how did China, while using a market economy, become more of an economic threat than the USSR did?  And two – whether China is emerging as an imperial power and what does this say about the terms of their economic relationships with Third World countries?

To begin grappling with these questions we have to again go back to the world that emerged out of WWII, and its subsequent evolution.  As I previously wrote, U.S. imperialism was the completely dominant winner of WWII.  It won WWII not just against the Axis powers but against its own allies as well.  With the exception of the United States, the entire capitalist world came out of WWII in social, political and economic shambles.  The question then before U.S. imperialism was how should it proceed?

At the end of World War II, one option the U.S. government had was the unique opportunity to use its economic and military power to dismantle the major industrial corporations of its competitors. Under the so-called Morganthau Plan, Germany was to be forcibly de-industrialized and turned into a decentralized collection of agricultural states much like it had been in the middle of the 19th century. The U.S. also had similar plans for Japan. Indeed, why stop with Germany and Japan? Why not forcibly dismember the capitalist industry of all of the United States’ major potential competitors, including its so-called allies Britain and France? After all, the logic of capitalist competition among nation-states pointed in this direction.

If that had been done, U.S. corporations would have had the entire world market—both as buyers and sellers—for themselves. If the U.S. government had followed an “America First” policy in the years after 1945—and gotten away with it—it would have meant that the stock market value of U.S. corporations would have soared to vastly higher levels than is actually the case today. The U.S. would have been “great” indeed!  But as we know, the U.S. government didn’t dare attempt this, especially with the threat of the Soviet Union and the continued example of the 1917 Russian Revolution still before what would have been an increasingly impoverished and radicalizing European proletariat.

Instead, with the launching of the “Marshall Plan” Washington adopted a bi-partisan foreign policy, supported by leaders of the Democratic and Republican parties alike, buttressing a world empire in which the corporations of Britain; an economically resurgent Germany; and an economically resurgent Japan, France, Italy, Australia, New Zealand, and so on could actually compete with U.S. corporations, cooperatively exploit the Third World, and appropriate a portion of the surplus value for their non-American owners (what you have labeled “free market imperialism”).  Things were made easier by the fact that the world market in the wake of the Great Depression and the massive physical destruction of WWII, had entered an extended phase of rapid expansion.

A key element in organizing this “New World Order” was the 1944 Bretton Woods Conference in which 44 nations met in New Hampshire to “negotiate” a new international monetary system.  No real negotiations took place.  A completely dominant U.S. imperialism, holding all the cards, could and did dictate the terms.  The alternative other participants faced was some version of the Morganthau Plan.

The lynchpin of the Bretton Woods system was the new privileged status for the U.S. dollar.  All international accounts and trade would now be settled in dollars.  Dollars that the U.S. Treasury could just print.  It was true that dollars could be converted to gold at a fixed rate of $35 per ounce, which was redeemable by the U.S. government.  But the U.S. government held most of the world’s official gold reserves, and what the rest of the world desperately needed and wanted was not gold but dollars to spend on American manufactured goods – cars, steel, machinery, etc.

However, as manufacturing began to recover in the rest of the capitalist world, resistance to the Bretton Woods system and the privileged position of the dollar began to grow. In Europe the Bretton Woods system began to be characterized as “America’s exorbitant privilege” — an “asymmetric financial system” where non-US citizens “see themselves supporting American living standards and subsidizing American multinationals”.  In February 1965 French President Charles de Gaulle announced his intention to exchange its U.S. dollar reserves for gold at the official exchange rate.  By 1970 other nations began to demand redemption of their dollars for gold.  Underlying this shift was the broader reemergence of international capitalist competition, especially in the sphere of manufacturing.  In 1950 the U.S. share of the world’s total economic output was a whopping 35%.  By 1969 it had dropped to 27%.  The U.S. economy was faced with rising unemployment (6.1% August 1971), recession and the threat of deeper recessions.

U.S. ruling circles became convinced that a policy of massive deficit spending and monetary expansion could successfully stimulate the economy and reverse its decline.  The 1960s represented the flood tide of neo Keynesian economics in both policymaking and academic circles. If there was one time in the history of modern capitalism when the academic and political mainstream believed that they could finally beat the “business cycle” once and for all, it was then. In 1971 President Richard Nixon was reported to say, “We are all Keynesians now.”   Even many Marxists seemed foolishly willing to accept these claims.

But implementing such a policy was impossible as long as the dollar was tied to gold, which would allow nations throughout the world to flee an inflating dollar by demanding the U.S. Treasury redeem their dollars for gold. On August 13,1971 fifteen high ranking White House and Treasury advisors met secretly with Nixon at Camp David and unilaterally abandoned the Bretton Woods agreement by suspending the convertibility of the dollar into gold.  Historically this is known as the “Nixon Shock”.

While the rest of the capitalist world was certainly not happy with the unilateral ending of dollar/gold convertibility, nothing else was available to function as the world’s reserve currency and the essential vehicle for carrying out world trade.  In the final analysis, U.S. overwhelming military power enabled the U.S. to convert the dollar into a token currency with an internationally forced circulation.

Now that this “metallic majesty” had been overthrown, the U.S. government and central bank believed they could guarantee “effective demand” sufficient to buy the vast and ever-growing quantity of commodities U.S. capitalist industry was churning out.  Throughout the 1970’s these policies were now put into effect with massive deficit spending and aggressive monetary expansion.  But the results were not as expected and predicted.  Rather than stimulating the economy and returning the growth rates of the 50’s and 60’s, the result was sharply increasing inflation peaking at almost 15% by the spring of 1980.  This crisis required the coining of a new term in economic jargon – stagflation.

But stagflation was much more than a crisis for just the U.S. economy.  The rest of the world began losing confidence in the dollar as the reserve currency.  Even though the dollar was no longer officially convertible to gold, it began to be dumped for gold, whose price soared to over $800 an ounce.  Conversely the dollar’s value plummeted on the foreign exchange markets. While many capitalist countries have experienced runaway inflation or even hyper-inflation, runaway inflation has never hit the central or reserve currency. If the dollar succumbed to runaway inflation, it would drag down every other capitalist currency with it. If this were allowed to happen while the dollar remained the reserve currency, the result would certainly be by far the worst financial crisis—not excepting the super-crisis of 1929-33— in the history of capitalism.

U.S. imperialism was left with no alternative but to move aggressively to crush the dollar inflation it had inadvertently set off.  The job was assigned to Paul Volcker, a prominent investment banker who was appointed chairman of the Federal Reserve.  Over the next two years he quickly more than doubled the prime interest rate to an unheard-of level of over 20%.  This harsh medicine, known as the “Volcker Shock”, brought inflation somewhat under control but not without significant costs, precipitating the sharp 1981 recession.

U.S. imperialism and its Federal Reserve, admittedly in a pragmatic and empirical way, learned that contrary to widespread hopes in the 1960s, replacing the gold standard with paper money does not enable capitalist governments and central banks to expand demand up to the physical ability to produce and thus abolish periodic crises of general overproduction under capitalism.

But beyond the 1981 recession there was another even more important consequence of the rise of the rate of interest above the rate of profit in the wake of the dollar crisis. The period of extremely high but declining interest rates that followed the Volcker Shock led to a massive destruction of heavy industry in the U.S., Great Britain and to a lesser extent Western Europe.  This occurred in two interrelated ways, the first was called “financialization”; the second, a particularly aggressive form of “globalization”.

Soaring interest rates made capital investment in the actual production of things less and less profitable, but investment in various forms of financial manipulation extremely profitable.  Capital shifted away from manufacturing to a proliferation of new (and often risky) exotic financial instruments – hedge funds, derivative securities, credit default swaps, securitized and bundled mortgages, etc.   Between 1973 and 1985, the U.S. financial sector accounted for about 16 percent of domestic corporate profits.  In the 1990s, it increased to 21 percent to 30 percent.  In the first decade of the 21st century it soared to 41 percent of all U.S. domestic corporate profits.  General Electric, for instance, became one of the nation’s posterchildren for this development, shifting from one of the premier U.S. manufactures to more and more a financial, money lending corporation.

Then as interest rates fell, and positive net profits in manufacturing returned, capital in the form of money and loan money capital was free to invest in new areas. It chose to do this not in the old industrial areas of Britain, the United States and Western Europe but in areas where the rate of profit was far higher, leading to what has come to be known as “globalization”.  No matter how much capitalists speak about “love of country” as the highest virtue, the capitalists themselves—whether they are American, German, Japanese, Russian or Chinese—put profit first, last and everything in between.

Two political changes that occurred during the 1980s and 1990s played a crucial role in making this aggressive globalization possible.  First, the counterrevolutionary destruction of the Soviet Union and its Eastern European “socialist” allies meant that capitalists of the U.S., Britain and Western Europe became much more confident that capital invested outside the imperialist countries would be safe.  It even raised expectations among many capitalist leaders—such as George W. Bush—that something like pre-World War II colonialism could be restored.  But this time it would be the U.S. empire rather than the British empire that would be the chief jailers of the colonized peoples.  It led to the Iraq invasion and other adventures in the Middle-East and now Africa.

The second crucial development was the outcome of the great Chinese Revolution of the 20th century. With the rise of Deng Xiaoping to power in 1978, the Chinese revolution had finally run its revolutionary course. Unlike in the Soviet Union however, in China while there was political reaction—epitomized by Deng’s “it is glorious to get rich” slogan—there was no similar counterrevolution.

When the dust finally settled after decades of revolution, civil war, counterrevolution, Japanese occupation, still more civil war, the liberation of 1949 when China “stood up,” and finally the Cultural Revolution, China emerged with a strong central government independent of western imperialism. The new government was eager to attract foreign capital and willing to respect bourgeois private property rights in order to achieve rapid economic development along capitalist lines—but on its own terms.  It was determined not to allow a repeat of what had occurred in the Soviet Union – the chaotic collapse of the Communist Party apparatus and a Western influenced privatization and deindustrialization of the economy.

The defeat of U.S. imperialism in the Vietnam war had led to yet another crucial development favoring China.  In the 1970s, unable to break the resistance of the peoples of Indochina, the Nixon administration finally decided the time had come to normalize relations with the People’s Republic of China, including, most importantly, allowing China access to the world market, something they never did with Russia as long as the Soviet Union existed.  Nixon-Kissinger had their own motives in this – driving a wedge between any existing and future Russia-China alliance – increasing long existing antagonisms between China and Vietnam – and also the possibility of opening China to U.S. investment.

Handed down from the pre-revolutionary past, the new China possessed a gigantic peasantry numbering in the hundreds of millions accustomed to a very low standard of living and hard manual labor. This peasantry served as the source for an industrial proletariat willing to put up with a much higher rate of surplus value than the workers of North—and even Latin—America, Western Europe or modern Japan.  Huge amounts of foreign investment, especially U.S. investment flowed into China.  What the United States—or rather the United States capitalists—wanted most of all from China was the lion’s share of the surplus value produced by the Chinese working class. Russian workers produce very little surplus value compared to what the U.S. capitalists could appropriate from Chinese workers in the form of profit, interest and dividends.

The problem from the viewpoint of the U.S. capitalist class and its political representatives—the Party of Order of both Democrats and Republicans and the emerging Trump America First gang—is that the U.S. capitalists in squeezing huge amounts of surplus value out of the Chinese have been forced to develop China’s productive forces at the same time.

As a result of the convergence of historical forces described above, including the failed attempt of capitalist governments and central banks to solve the problem of periodic crises of general overproduction through issuance of paper money, in an amazingly short period of time China emerged as the country with the highest absolute level of industrial production—though not on a per capita basis. Meanwhile, the imperialist countries of the U.S., Britain and Western Europe have become increasingly de-industrialized as result of the operation of the same economic laws.

In order to make the empire last for even 70 years—a very short period historically—the U.S. had to give up much of its domestic industrial production. This initially was no great sacrifice for the U.S. capitalists because in exchange they have, at least up to now, vastly increased their ability to exploit the industry and workers of other nations. Herein lies the answer to the riddle of why the U.S. stock market has been able to perform so much better after the “Great Recession” than was possible after the Great Depression, despite the vastly stronger recovery of U.S. industrial production during and after the Great Depression compared to the feeble recovery of U.S. industrial production since the Great Recession. But as U.S. post WWII hegemony continues to disintegrate, this becomes harder and harder to maintain.

The Trumpists fear that sometime in the not too distant future, the U.S. capitalists will have to be content with a far smaller share of the global surplus value produced. Among the consequences when this comes to pass will be that U.S. capitalists will have much less surplus value to maintain—actually bribe—a relatively large but already shrinking middle class, which includes the “aristocracy of labor” inside the U.S.  Therefore, Trump and his gang believe, the U.S. shouldn’t let itself be distracted by an avoidable war—or even war of words—with Russia. Trumpists believes that it is not Russia but China that must be confronted and must be confronted now.  (I should say here that throughout this analysis I have drawn heavily on Sam Williams excellent blog, “A Critique of Crisis Theory” and encourage readers to avail themselves of his monthly postings, past and future.)

China’s Direction and Future Evolution

The other crucial China question you raise is whether China is emerging as an imperial power, and what does this mean for their future economic relationships with Third World countries?

After the victory of Deng Xiaoping’s grouping within the Central Committee of the ruling Communist Party of China in 1978, China has industrialized through the massive import of foreign capital, the development of capitalist industry, and a massive expansion of exports. The economic laws governing China’s rapid industrialization since 1978 have been the laws that govern the development of capitalism.

The Chinese Communist Party itself describes the current Chinese economy as a market economy and not a planned economy like was the case with the Soviet economy.  During Deng’s rule the Chinese Communist party developed the slogan “Socialism with Chinese Characteristics” to provide an ideological footing for the Party’s embrace of market remedies.  At the just completed Communist Party Congress, which meets every five years, President Xi Jinping introduced a new slogan which was incorporated into the constitution; “Thought on Socialism with Chinese Characteristics for a New Era”.

While this rather clunky new phrase could be open to many interpretations it is clarified by the dominant theme of the Congress and President Xi’s repeated central goal — “Make China Great Again”.  And further, only the Communist Party of China can guarantee this “China Dream” of national rejuvenation.  This slogan seems to be an echo of Trump’s “Make America Great Again”, but in reality, the two slogans encompass diametrically opposed world strategies.

The Trumpists believe that to “Make America Great Again” U.S. imperialism must abandon the globalizationist strategies it followed since the end of WWII, including promoting “free trade” and multinational trade agreements which are no longer in its interests.  Rather the United States needs to return to a policy of aggressive U.S. nationalism, including, when necessary, protectionist trade policies.  From now on, the U.S. government should directly use its state power to enrich U.S. corporations at the expense of the corporations of other countries, including so-called “allies” just like was done in the “good old days” before 1945.  The U.S. is still the largest economy in the world and the planet’s overwhelmingly dominant military power.  Before China becomes any stronger it should use that leverage to impose its economic will.

China on the other hand, as the world’s most rapidly expanding manufacturing power, is now its strongest proponent for globalization, “free trade”, open markets and multinational trade agreements.  Under China’s “One Belt, One Road” initiative, which is aimed at creating a modern version of the Silk Road, a network of trading routes from China to Africa and Europe, it has launched a massive economic outreach dwarfing even the Marshall Plan of U.S. imperialism following WWII.

A nervous May 18, 2017 New York Times editorial warns: “China clearly aims to dominate the international system… shaping how vast sums are spent and where, and which laws are followed or not – it could upend a system established by Washington and its allies after World War II.”

Through direct investments, loans, financial aid, construction and engineering expertise, China is penetrating the economies of numerous countries it considers among its geopolitical priorities.  One revealing example is the NATO member Greece.  China has poured money into its key Mediterranean port of Piraeus, considered the “dragon head” of China’s vast “One Belt, One Road” project.  “While the Europeans are acting towards Greece like medieval leeches, the Chinese keep bringing money,” said Costas Douzinas, the head of the Greek Parliament’s foreign affairs and defense committee and a member of the governing Syriza party.

And it is not just construction projects.  As Europe’s banks demanded the gutting of Greek pensions and sharp tax increases to guarantee repayment of their predatory loans, the Chinese offered to throw Greece a lifeline by buying toxic Greek government bonds.

Meanwhile China has transformed Piraeus into the Mediterranean’s busiest port, investing nearly half a billion euros through the Chinese state-back shipping conglomerate Cosco.  As a result, Cosco now controls the entire waterfront through its 67 percent stake in the port.  With a rueful chuckle, Mr. Douzinas comments; “It’s a kind of neocolonialism without the gunboats.”

Today the ruling Communist Party of China still proclaims its ultimate aim is to build a communist society in China, if only in a distant future.  But the party explains that to do this, China must go through a preliminary stage called –“socialism with Chinese characteristics,” or most recently — “Thought on Socialism with Chinese Characteristics for a New Era”.

While periodically the party does launch anti-corruption crack downs on individual capitalists, the size and weight of this sector continues to grow.  In his speech at the opening of the Communist Party Congress, President Xi proclaimed the party would “inspire and protect the spirit of entrepreneurship.”  China now has 647 billionaires in American dollar terms, according to The Hurun Report, which claims to track wealth in China.  Many of these billionaires began as members of the Communist Party, others later acquired party membership.  All of this poses the question, what is the probable future evolution of the China state and its economic relationship with other nations?

Any assessment of the future direction and evolution of China has to take into account the deep impact of Stalinist ideology on the Chinese Communist Party.  An impact that goes back at least as far as the slaughter of the Chinese urban proletariat in the 1927 counter-revolution lead by Chiang Kai Sheki, who had been made an honorary member of the Third International by Joseph Stalin.

The Stalinist bureaucracy and leadership that successfully displaced the original Bolshevik-Leninist revolutionaries in the Soviet Union had many reactionary characteristics – authoritarianism, opposition to worker’s democracy, oppression of national minorities, material privileges based on corruption, etc.  But the essence of Stalinism, the core of its counter-revolutionary character, was its abandonment of the Leninist commitment to international revolution, its abandonment of international class solidarity.  Under the new Stalinist rubric of “Building Socialism in One Country” the role of the world proletariat, and the task of Communist Parties outside the Soviet Union, was not socialist revolution, but reduced rather to that of border guards for the Soviet Union and its conservatized bureaucracy.

The People’s Republic of China today, with its access to the world market and its aggressive “One Belt, One Road” strategy, is penetrating and influencing the world economy in ways which were never available to the Soviet Union.  But like the Stalinized Soviet Union, in word and deed, the Chinese Communist Party makes clear its goal in this is not international class solidarity, let alone socialist revolution.  Rather its aim is restricted to developing political and economic accommodations with select capitalist and third world regimes that further its “silk road” trade expansion.

In the Soviet Union the left opposition to the consolidating bureaucracy and its developing counter-revolutionary politics originally centered on winning the party back to an internationalist revolutionary course.  But after the Stalinist role in the defeat of the 1927 Chinese revolution, followed by the victory of Nazi fascism in Germany, with no real fight from what was then the largest communist party in the world outside the Soviet Union — a Rubicon had been crossed.  Reform of the Stalinized Russian Communist Party was no longer considered a possibility.  Instead, what was required was a political revolution that would remove the Stalinist leadership and its bureaucratized base from power.  Leon Trotsky, the principal leader of the left opposition, summed up the situation in 1938 with his now famous prognosis: “There are now only two possible courses for the Stalinist bureaucracy in the Soviet Union. Either the bureaucracy, becoming ever more the organ of the world bourgeoisie in the workers’ state, will overthrow the new forms of property and plunge the country back to capitalism; or the working class will crush the bureaucracy and open the way to socialism.”

While China and its communist party has its own history, and is certainly not a carbon copy of the Soviet Union, I believe the prognosis and dichotomy laid out by Trotsky in 1938 very much applies to today’s China.  China in its amazing industrialization, even while carried out by capitalist methods, is creating a massive, modern proletariat, with tremendous revolutionary potential.  Counterposed to this is the increasing power of an internal capitalist class.  The eventual outcome of course remains an open question.  A successful socialist revolution elsewhere in the world, especially in an advanced capitalist country, would have a decisive positive impact on the outcome.

_________

 

In your 7/29/17 letter you refer to William Robinson’s concept of a new “transnational capitalist class”.  While thinking Robinson may go “too far” you believed the concept has some validity in understanding present day global capitalism.   Here I pretty much disagree.   I believe the concept of the Transnational Capitalist Class is shot through with fuzzy thinking which is only made possible by stripping the concept of the nation-state of any class character.  For Robinson, globalization is reactionary.  It is reactionary because globalization downgrades the institution of the nation-state.  Robinson believes it is only through intervention in the nation-state that the most anarchic and most destructive elements of unrestrained capitalism can be brought under some control.  Robinson explains, Neo-liberalism facilitated the rise of transnational capital, which breaking free of the confines of the nation-state, allows for unlimited concentration of wealth without any countervailing restraints.

But concentrations of wealth don’t automatically drop from the sky out of some abstract neo-liberalism – they require policies, actions, and the structure of a capitalist nation-state.  No capitalist enterprise no matter how large and globally oriented exists separate from and outside its particular nation-state in some kind of imaginary “Daddy Warbucks” universe.    Robinson’s confused view of the nation-state and TCC developed and acquire for some a seeming plausibility, only under the completely unique conditions of U.S. global hegemony following WWII.  A period (free market imperialism) in which U.S. capitalism found it was to its temporary advantage to used its overwhelming dominance to discourage aggressive inter-imperialist competition and instead organize a cooperative exploitation of the TW – which, at least initially, worked to its advantage.

A number of months ago Socialist Viewpoint was considering printing an article by Robinson entitled, “Capitalist Crisis and Trump’s War Drive”.   While in the past I have not reviewed or participate in selecting what articles appear in S.V. here they asked my opinion.  I separately include my response and recommendation.

Capitalist Crisis and Trump’s War Drive

Robinson makes the case that there is a growing world capitalist crisis fueling a Trump war drive.  He lists a series of points supporting this, many of which we would not necessarily disagree with.

  • S. rulers have often launched military adventures abroad to deflect attention from political crises and problems of legitimacy at home — Trump is facing challenges to his legitimacy and falling approval ratings.
  • Trump proposes an increase of $55 billion in the Pentagon budget and threatens military force in a number of hotspots around the world.
  • Cyclical crises, or recessions, occur about every ten years in the capitalist system and we’re due. Structural crisis occurs every 40-50 years and we’re due there also.
  • Capitalist globalization has also resulted in unprecedented social polarization worldwide. Given such extreme polarization of income and wealth, the global market cannot absorb the output of the global economy making a new crash practically inevitable.
  • The increased raiding and sacking of public budgets. Public finance has been reconfigured through austerity, bailouts, corporate subsidies, government debt and the global bond market as governments transfer wealth directly and indirectly from working people.

However, throughout his article is a confused analysis which draws heavily on the ideas of the anti-globalization movement of the past decade.  Robinson is particularly influenced by a wing of the anti-globalist movement that claims that globalization has produced a new stage of international capitalism in which the capitalist class no longer operates primarily through the institution of the nation-state but rather through huge international capitalist corporations that stand above and separate from the traditional nation-state.  He calls this new development the “transnational capitalist class (TCC)”. This leads him into all kinds of non-Marxist dead-end conclusions.

In the article Robinson claims for instance the structural crisis, of “the Great Depression of the 1930s, was resolved through a new type of redistributive capitalism, referred to as the ‘class compromise’ of Fordism-Keynesianism, social democracy, New Deal capitalism, and so on.”  And further: “Capital responded to the structural crisis of the 1970s by going global. The emerging transnational capitalist class, or TCC, promoted vast neoliberal restructuring, trade liberalization, and integration of the world economy.”

First, the structural crisis of the Great Depression, in so far as it was “resolved”, was not resolved by some “class compromise” but by the horrors of WWII.  His concept of an “emerging transnational capitalist class” represents a rejection of the Marxist concept of the nation-state as the chief instrument of a ruling class, and its government as essentially the executive committee of that ruling class. Robinson sees the nation-state and its government entirely differently.  He sees the nation state as an arena in which progressive forces have the possibility of curbing some of the worst abuses of unrestrained capitalism.  Globalization and TCC by downgrading the state is reducing that possibility.

A clearer and more detailed presentation of Robinson’s views are contained in his July 2014 interview for the publication Truthout:

How do we explain such stark inequality? Capitalism is a system that by its very internal dynamic generates wealth yet polarizes and concentrates that wealth. Historically a de-concentration of wealth through redistribution has come about by state intervention to offset the natural tendency for capital accumulation to result in such polarization. States have turned to an array of redistributive mechanisms both because they have been pressured from below to do so – whether by trade unions, social movements, socialist struggles, or so on – or because states must do so in order to retain legitimacy and preserve at least enough social peace for the reproduction of the system. A great variety of redistributive models emerged in the 20th century around the world, and went by a great many names – socialism, communism, social democracy, New Deal, welfare states, developmental states, populism, the social wage, and so on. All these models shared two things in common. One was state intervention in the economy to regulate capital accumulation and thus to bring under some control the most anarchic and most destructive elements of unrestrained capitalism. The other was redistribution through numerous policies, ranging from minimum legal wages and unemployment insurance, to public enterprises, the social wages of public health, education, transportation, and housing, welfare programs, land reform in agrarian countries, low cost credit, and so on.

But capital responded to the last major crisis of the system, that of the 1970s, by “going global,” by breaking free of nation-state constraints to accumulation and undermining models of state regulation and redistribution. Neo-liberalism is a set of policies that facilitate the rise of transnational capital. As transnational capital has broken free of the confine of the nation-state, the natural tendency for capitalism to concentrate wealth has been unleashed without any countervailing restraints. The result has been this dizzying escalation of worldwide inequalities as wealth concentrates within the transnational capitalist class and, to a much lesser extent, the better off strata of middle classes and professionals.

I don’t believe there is anything to be gained by printing Robinson’s article.  If Socialist Viewpoint did print it, we would have to devote considerable space to answering his completely wrong theories of transnational capitalism and everything that flows from it, which when raised more than a decade ago was an extremely weak argument and today has become even more irrelevant.  Capitalists today are increasingly open about the need to aggressively use their own particular nation-state in the intensifying struggle of international capitalist competition. Ironically no one is more vocal in this than “America First” Donald Trump in his belligerent call for a more aggressive economic nationalism.

October 30, 2017

China’s State-Owned Enterprises: a reply to Michael Roberts

Filed under: China,economics — louisproyect @ 7:29 pm

Michael Roberts

Although this article will be critical of British economist Michael Roberts, I strongly recommend his blog that features several well-researched and thoughtful articles a week, including one on China that I will be commenting on now. Despite my disagreement with his analysis, I can at least recommend it as a source of valuable statistics on the remarkable growth of the Chinese economy. Of course, we are at odds on how to characterize its class character. Roberts writes:

This brings us to the question of whether China is a capitalist state or not? I think the majority of Marxist political economists agree with mainstream economics in assuming or accepting that China is. However, I am not one of them. China is not capitalist. Commodity production for profit, based on spontaneous market relations, governs capitalism. The rate of profit determines its investment cycles and generates periodic economic crises. This does not apply in China. In China, public ownership of the means of production and state planning remain dominant and the Communist party’s power base is rooted in public ownership. So China’s economic rise has been achieved without the capitalist mode of production being dominant.

For Roberts, the main justification for describing China as “not capitalist” is the preponderance of state ownership. He refers to 102 key state enterprises worth about 7.5 trillion dollars. This includes oil companies, telecommunications, power utilities and weapons. Furthermore, the presence of CP officials as president of the board of directors of these companies means that the party controls a major part of the economy and will likely resist privatization, according to CP leader Xi Jinping whose speech at a 2016 conference sounded as if it was meant as a direct appeal to people like Michael Roberts, as reported by China.org:

China’s basic economic structure is at the core of its success; a position that Xi reaffirmed. “The mainstay status of public ownership and the leading role of the state-owned economy must not waver.”

Yet, it is precisely this that Western economists and advisors have identified as the main problem in China throughout the last 30 years. They maintain that free markets and private property must play the leading role. However, it is quite clear Xi is right on this, and the pro-capitalists are wrong. This holds important lessons for left-wing forces internationally.

The driving force of capitalism — the pursuit of profit — does not dominate China’s economy. Instead, it is the needs of economic development and the process of planned urbanization. However, the complexities, difficulties and advantages of an economy led by public ownership and state-owned enterprises, are rarely studied in the West from a positive standpoint.

Nevertheless, there are highly competent Marxist economists and thinkers in the West, and a large layer of critically-minded social scientists and brilliant creative minds in the humanities and arts. If they are given the chance, they will be more than happy to help to foster new forms of urban life and workplace democracy in China.

China has become a sort of laboratory of socio-economic formations. This embrace of experimentation can offer dramatic insights capable of confirming or refuting various economic theories. For example, in the 1980s, the emergence of township village enterprises with “fuzzy” and unclear property rights was interpreted by economists like Joseph Stiglitz as evidence refuting the theory that economic dynamism must be based on private ownership.

Similarly, if we can discover why China grew by 7 percent after 2008, at a time when the world economy was in crisis, then there is a very strong chance that this will reveal how socialist economics can surpass the dynamics towards capitalist economic crisis everywhere.

If you search Roberts’s blog for references to “state ownership”, you’ll note a significantly more critical stance when it is applied to a country not ruled by a Communist Party leader who urges his ranks to read Karl Marx. In a 2012 article titled “Irresponsible capitalism” that looks at developments in the British financial sector, you see Roberts disgusted with British state-owned banks that are no different than Goldman-Sachs as a means of further enriching the one percent:

It’s the same story with the large UK banks that are now state-owned. The 83% taxpayer-owned RBS is set to pay its chief executive Stephen Hester a bonus of £1m on top of his £1.2m salary, while the man who brought RBS to its knees, the former chief executive, Sir Reg Goodwin (knighted for his services to the banking community) is still set to pick up his huge pension entitlements (£700,000-plus a year).

Unfortunately, the same due diligence does not apply when it comes to looking under the cover of Chinese SOE’s.

Let’s take a look at one of them, the Anbang Insurance Group that attracted a lot of publicity this year for its bid to invest millions of dollars in a building owned by Jared Kushner. The largest shareholders are state-owned car maker Shanghai Automotive Industries Corp and Sinopec, a state-owned oil company Sinopec.

Of course, trying to figure out who exactly “owns” Anbang is not easy. Like many huge Chinese firms, they make discovery difficult as an American trade union found out when pressing charges against it for unfair labor practices as the Times reported in September 2016.

The Anbang shareholders in the Pingyang County area hold their stakes through a byzantine collection of holding companies. But according to dozens of interviews and a review of thousands of pages of Anbang filings by The New York Times, many of them have something in common: They are family members and acquaintances of Wu Xiaohui, Anbang’s chairman, a native of the county who married into the family of Deng Xiaoping, China’s paramount leader in the 1980s and ’90s.

You remember who Deng Xiaoping was, right? He was Mao Zedong’s successor who took “the capitalist road” in the first place. I guess his friends and relatives were quite happy with the NEP-type reforms since it put them in the position of buying the Waldorf Astoria and coming close to bailing out Trump’s son-in-law who will hopefully be arrested this week.

As should be obvious at this point, “state ownership” is a convenient fiction in China, especially since anybody can buy shares in such companies, including Western investors. For example, Roberts is impressed with the fact that the state-owned China General Nuclear Power Corp has begun to incorporate Western technologies, However, it is traded publicly on the Hong Kong Stock Exchange, as is the case with the largest Chinese SOE’s, and thus no different from any other capitalist firm. In the final analysis, it is the class character of those who own the means of production that determines their social role. While the number of shares available to outside investors has been relatively small, “reforms” enacted in 2015 to transform SOE’s into mixed enterprises will likely increase their numbers as indicated by the transformation of the second largest mobile carrier.

Unlike China today, Soviet Russia never had a stock exchange. The children of Soviet bureaucrats could never look forward to inheriting their daddy’s holdings like Donald Trump did from his father. That is true state ownership.

Although ownership data is difficult to come by, you can read an article co-authored by Curtis J. Milhaupt and Wentong Zheng titled “Beyond Ownership: State Capitalism and the Chinese Firm” on the Columbia University Law School website. It hones in on Ping An, another insurance company. The largest block of shares is owned by HSBC Ltd., a multinational bank that originated in Hong Kong even though most shares are owned by other SOE’s. In 2016, Mexican families sued the bank for money-laundering the drug proceeds of the Sinaloa Cartel that had killed members of their families, just the sort of outfit you’d want to help overcome the law of value, as Roberts put it.

Milhaupt and Zheng refer to the “blurred boundaries” between private and state-owned firms in China, as I have tried to establish. To get an idea of how tangled things can get, this is how they describe ZTE, China’s second-largest telecom:

According to the website of ZTE Holdings, it is one of the “national key SOEs” designated by the State Council. The third shareholder of ZTE Holdings, Zhongxing WXT (also known as Zhongxingweixiantong), is a private firm owned by a group of individuals, of whom the founder, Hou Weigui, holds the largest percentage (18%). According to the website of ZTE Holdings, it was the first firm in China to adopt a “state owned, privately managed” model in 1993. Under this so-called “ZTE model,” the majority state shareholders contractually authorize the minority private shareholders to assume sole responsibility for managing the firm, subject only to the requirement that the state shareholders be guaranteed a minimum rate of return. Under the ZTE model, therefore, a firm is an SOE from the standpoint of ownership, but a POE [privately owned] from the standpoint of management.

It is best to think of SOE’s in China as a chainlink in the transition to capitalism. Given the constant references to “building socialism” in the Chinese press and the nation’s origins in a powerful revolution led by the Chinese Communist Party that is still in the driver’s seat, it is understandable why some might still believe that Xi Jinping is a new Mao Zedong rather than a pioneer in the construction of capitalism.

If you put China in the context of the origins of capitalism in Europe in the 17th and 18th century, the role of SOE’s might be seen as analogous to the state monopolies that flourished under what Marx called mercantile capitalism. In 1773, the Crown took control of the East India Company and used it as a means of expanding the empire in East Asia, a key element of primitive accumulation.

Another tool of primitive accumulation was separating the peasant from his means of subsistence through the Enclosure Acts around the same time, thus making it possible for a reserve army of the unemployed to be transformed into wage slaves.

Hasn’t China had its own version of the Enclosure Acts? That’s the argument made by Richard Walker and Daniel Buck in a July-August 2007 NLR article titled “The Chinese Road” (behind a paywall, contact me for a copy). They refer to the hukou, a Mao-era law that established household registration. If you migrated to the city in search of work, you might be considered in violation of the hukou and as such not entitled to the same rights as other citizens, thus making you vulnerable to super-exploitation. Walker and Buck write:

The harshness of the hukou system recalls Britain’s Speenhamland laws. Rural migrants must pay for the right to move and are prevented from becoming rightful members of urban society; they ‘float’ through the cities, poorly housed and lacking social services. The hukou is a pernicious method of discriminating among classes of people and keeping the floating population marginalized. It functions to maintain a low-wage labour force, reduce the demand for urban infrastructure such as schools, and facilitate rapid capital accumulation. In Beijing, reforms since 1997 have at least allowed purchase of temporary residence, and today Chongqing is experimenting with dismantling the hukou altogether, allowing people to acquire permanent residence in the city in exchange for relinquishing land rights in the countryside.

Like Britain, China is “taking off” in its own version of the Industrial Revolution made possible by such harsh measures. In the same way that becoming a major exporter of textiles in the 19th century helped Britain’s workers begin to enjoy a standard of living that was the envy of the rest of Europe, China’s workers appear content with the status quo, at least according to a Pew Research Center Poll that Roberts takes as a barometer of Chinese opinion. “No matter how you measure it, no matter what questions you ask, the results always indicate that the vast majority of people are truly satisfied with the status quo.”

Of course, it helps when you jail anybody foolish enough to complain about the status quo, especially those who would like to use the Internet to connect with like-minded citizens. Under the Great Firewall, a system intended to police thought, there are 3,000 websites that the Chinese cannot access. Here are some of the most notable according to Wikipedia.

 

 

February 21, 2016

Rafael Correa and the Chessintern

Filed under: China,indigenous,Latin America,oil — louisproyect @ 9:55 pm

As most people probably understand, political analysis about a particular government leader is often largely driven by where they stand in the geopolitical chess game—most of all by the grandmasters who play it, namely the “anti-imperialist” left that is as single-minded ideologically as earlier generations of Kremlin apologists if not more so.

In my experience, Stansfield Smith is the Boris Spassky of this milieu. The tops at awfulness with no competition on the horizon. Back when he was on Marxmail, he never posted anything except talking points in line with the Pepe Escobar/Mike Whitney/Eric Draitser Chessintern.

To belong to the Chessintern, you have to master a few basic openings such as the need to defend every foreign policy initiative of the Kremlin or China and then to smear anybody who ends up on the other side of the chessboard as tools of the CIA or the NED.

Back in 2010, when Smith was still a Marxmail subscriber, he did everything he could to tarnish indigenous activists in Ecuador organized in CONAIE (Confederation of Indigenous Nationalities of Ecuador) as tools of imperialism. That year there was a coup attempt in Ecuador that CONAIE supported. Rather than dealing with indigenous unhappiness with Correa, as I tried to do in an article on the Miskito rebellion in Sandinista Nicaragua, Smith approached the whole thing as a conspiracy in which NED payoffs to the Indians was the key factor. You don’t need Marxism to understand such conflicts, just Hal Holbrook’s line in “All the President’s Men”: “follow the money.”

Interestingly enough, the Chessintern-friendly CounterPunch ran a number of articles that year that refused to demonize the Indians. The late Roger Burbach called attention to a law that allowed for the privatization of water and that placed “no real restraints on the ravaging of rivers and aquifers by the mining companies.” Ben Dangl stated that Correa had been marginalizing the indigenous movements of Ecuador while Laura Carlsen seemed to have offered the most balanced approach: “Although Correa has required companies to pay a larger share of profits to the government as mentioned above, he promoted the extractive model of national development that encroaches on indigenous lands and rights and has led to massive environmental destruction.”

The same divisions exist in Ecuador today with indigenous people continuing to feel vitimized, especially when it comes to the exploration for oil in their territories. If you’ve seen “Crude”, you know how much damage oil companies can do to Ecuador’s water and soil. With the film’s  focus on the attempt of peasants to sue Texaco and Chevron’s for damages, it is not difficult to imagine that Indians would have the same kind of grievances even if the government was part of the Bolivarian revolutionary movement and that oil drilling in Indian country was being done in partnership with a Chinese oil company. That is, unless you were Stansfield Smith.

With a title like “Propaganda as ‘News’: Ecuador Sells Out Indigenous Tribes and the Environment to China”, you pretty much know what to expect. Whatever the question (Syria, Ukraine, Tibet, Xinjiang), you trawl the Internet for any links between some protest movement and the NED, the CIA or some Soros-funded NGO and that’s all you need to know. Case closed.

Foolish me. I tried to transcend Chessintern thinking when I wrote about the Miskito revolt:

The best presentation of the Miskito case comes from Charles R. Hale, an American anthropologist who was a Sandinista supporter. The more time he spent with Miskito people, the more he came to realize that the government in Managua had misunderstood their legitimate demands. His book “Resistance and Contradiction: Miskito Indians and the Nicaraguan State, 1894-1987” is essential reading.

Hale explains that Miskito unrest had preceded the Sandinista victory. The same economic forces that precipitated the revolution against Somoza were shaking up the Atlantic Coast. Large-scale commercial exploitation of the land for cattle-ranching and cotton production caused displaced peasants to arrive in the cities with dim economic prospects. When the earthquake hit Managua, these prospects completely disappeared and armed struggle seemed like the only reasonable path.

These peasants also moved eastward, putting pressure on communally owned Miskito land. The UN and the Alliance for Progress sponsored some large-scale projects in partnership with Somoza that the Miskitos resented, including the construction of a deep-water port. The construction interfered with traditional fishing activities. The Miskitos faced challenges on all front.

But mostly the Miskitos felt left out of the economic development that was taking place all around them. The Somoza family had pumped millions of dollars into nearly 200 industrial fishing boats on the Atlantic Coast. Commercial fishing accounted for 4 percent of foreign currency earnings in 1977, but nothing substantial flowed into Miskito improvement. The “trickle down” theory was as false in Nicaragua as it was in Reagan’s America. Capital to finance the expansion came from Cuban exiles in Miami and North American banks. All the stepped up economic activity was of no benefit to the Miskitos, who regarded the Spanish-speaking businessmen as little more than invaders. After the commercial fishers had taken the last lobster and shrimp out of the water, they would have gone on their merry way.

Essentially this is the same kind of clash in Ecuador today.

Smith’s article is an assault on Amazon Watch, an NGO that was supposedly the source of an article titled “Ecuador to Sell a Third of Its Amazon Rainforest to Chinese Oil Companies” that has made the rounds on the Internet. In Smith’s eyes, the article was “an invention” since to this date no land has actually been sold. He also believes that even if China began buying up land for drilling, the targeted area is practically the size of a postage stamp:

And, for comparison, the Alberta tar sands oil fields are 1,500 times the size of the small area Ecuador opened up for oil exploration in the Yasuni. In comparison, too, last May Obama approved oil drilling in the Artic Sea, where 20 billion barrels of oil and 90 trillion cubic feet of natural gas are now more available due to the melting of Arctic ice sheets.

I am not exactly sure how much drilling there will be in Yasuni National Park once the extractive juggernaut gets a full head of steam but it is bigger than the state of Connecticut. This does not even speak to the damage that will be done to a priceless natural habitat that Correa pledged to preserve after becoming president.

To wrap up his case against the indigenous peoples, Smith draws a contrast between their “corporate-backed funders” such as the Charles Stewart Mott Foundation and China, which “provides loans at low interest rates, does not intervene in the internal affairs of other countries, respects other countries’ paths of economic and political development, and encourages South-South cooperation as a counter to Western hegemony.” I got a chuckle out of this since the organization I was involved with in the 1980s that trained Nicaraguans how to use high technology tried to get some donations from Mott. The executive director Michael Urmann, who died in 2012, told me about after going up to see Mott in his penthouse he was forced to listen to this knucklehead lecture him about world politics for an hour. That was bad enough but when no money came out of the visit, he was fit to be tied. Our attitude toward Mott, the Ford Foundation or any of a number of liberal charities was if they gave us money, it was their contradiction, not ours. Since both of us were sixties radicals (he was a Maoist), that is the way we looked at it. I have no idea what Smith was doing in the sixties but his inability to think in these terms suggests not very much.

But in terms of Smith’s ebullient description of Chinese beneficence, inquiring minds would naturally have to look a bit closer at the economic data to determine whether China is interested in helping the poor, especially since strikes and protests there set records in 2015. Worker militancy has led to increased wages in recent years, hence leading to a devaluation of the yuan to make Chinese exports competitive with other Asian countries that pay even lower wages.

All this has consequences for Ecuador. With a devalued yuan, which Ecuador uses, exports to China produce less revenue. When you take into account that the price of its main export—oil—has dropped precipitously in the last year or so, the consequences are drastic. Less money is available for social spending, the cornerstone of the oil-lubricated Bolivarian revolution. There is also the pain of increased prices on imported goods, including food and medicine. In other words, Ecuador is going through the same painful adjustment as other export-dependent Latin American countries and there is little that China or any other BRICS country can do to alleviate matters. We are dealing with a general crisis of capitalism, something that seems to escape the ideological framework of the Chessinturn. They have a classless notion of “development” that posits alignment with the BRICS as a kind of magic elixir that will vanquish poverty. Someone should remind these people that capitalism is a crisis-ridden system that has long outlived its usefulness even when it is practiced by someone who gave Julian Assange safe haven. We are for giving him safe haven but we are also for giving Ecuador’s Indians safe haven.

Finally, let me recommend what is probably the best left critique of Rafael Correa, an article by Marc Becker that appeared in the September-October 2009 Against the Current. Just to establish Becker’s bona fides, he is a major Mariategui scholar and considered to be a rock solid anti-imperialist. He even had the audacity to write an article putting the Shining Path in a relatively good light.

Titled “Ecuador: Left Turn?”, Becker’s article is quite even-handed. It refers to Correa as defending the idea that “socialism is both more just and efficient than capitalism” and promising to stand up for indigenous rights. However, the deeds don’t quite match the words as Becker points out:

Despite Correa’s attempts to mimic Chávez’s strategies, his policies are not nearly as radical as those of his counterpart. Of the many lefts that now rule over Latin America, Correa represents a moderate and ambiguous position closer to that of Lula in Brazil or the Concertación in Chile rather than Chávez’s radical populism in Venezuela or Morales’ Indigenous socialism in Bolivia.

The danger for popular movements is a populist threat with Correa exploiting the language of the left but fundamentally ruling from the right. It is in this context that a mobilized and engaged social movement, which historically in the Ecuadorian case means an Indigenous movement, remains important as a check on a personalistic and populist government. If Correa follows through on any of the hopeful promises of his government, it will be due to this pressure from below and to the left.

Correa continues to enjoy an unusually large amount of popular support in a region which recently has greeted its presidents with a high degree of good will only to have the populace quickly turn on its leaders who inevitably rule against their class interests. Chávez (and, to a certain extent, Evo Morales in Bolivia) have bucked this trend by retaining strong popular support despite oligarchical attempts to undermine their governments.

Correa is a charismatic leader, but in the Ecuadorian setting charisma does not secure longevity. José María Velasco Ibarra, Ecuador’s classic caudillo and populist, was president five times, but was removed from four of those when he failed to follow through on his promises to the poor. In recent history, Abdalá Bucaram was perhaps the most charismatic leader, but he lasted only seven months in power after winning the 1996 elections. Charisma alone does not assure political stability.

In the wake of Ecuador quickly running through ten chief executives in 10 years, Correa appears positioned to remain in power for 10 years if he can maintain his current coalition to win reelection in 2013. Correa has also said that it will take 80 years for his “citizens’ revolution” to change the country.

In quickly moving Ecuador from being one of Latin America’s most unstable countries to maintaining a strong hold over executive power, Correa appears to have been able to mimic Chávez’s governing style. Whose interests this power serves, and particularly whether it will be used to improve the lives of historically marginalized subalterns, remains an open question.

Needless to say, the drop in the price of oil since 2009, when this article was written, renders the question of enjoying an “unusually large amount of popular support” rather moot.

September 29, 2015

Will the Asian Infrastructure Investment Bank be any different than the World Bank?

Filed under: Argentina,China,economics,imperialism/globalization,Latin America — louisproyect @ 10:33 pm

Screen Shot 2015-09-29 at 10.53.52 AM

The day before yesterday an article appeared on the Guardian website that had the aura of a Chinese government press release:

As world leaders met quietly behind the scenes, others lined up to express support for the new development push that aimed to eliminate both poverty and hunger over the next 15 years. They replace a soon-to-expire set of development goals whose limited success was largely due to China’s surge out of poverty over the past decade and a half.

China’s president vowed to help other countries make the same transformation. Xi said China would commit an initial $2bn to establish an assistance fund to meet the post-2015 goals in areas such as education, healthcare and economic development. He said China would seek to increase the fund to $12bn by 2030.

And Xi said China would write off intergovernmental interest-free loans owed to China by the least-developed, small island nations and most heavily debt-burdened countries due this year.

He said China “will continue to increase investment in the least developed countries,” and support global institutions, including the Beijing-backed Asian Infrastructure Investment Bank that is due to launch by the end of the year and is seen as a Chinese alternative to the more western-oriented financial institutions of the World Bank.

After having read and reviewed Patrick Bond and Ana Garcia’s “BRICS: the anti-capitalist critique”, I am more skeptical than ever about Chinese altruism especially the role of the Asian Infrastructure Investment Bank referred to in the last paragraph above.

I was also puzzled by the provenance of the article since it was included with others in the category “Sustainable Global Development” that was support4ed by the Bill and Melinda Gates Foundation, which is described as follows:

This website is funded by support provided, in part, by the Bill and Melinda Gates Foundation. Content is editorially independent and its purpose is to focus on global development, with particular reference to the millennium development goals and their transition into the sustainable development goals from 2015.

All our journalism follows GNM’s published editorial code. The Guardian is committed to open journalism, recognising that the best understanding of the world is achieved when we collaborate, share knowledge, encourage debate, welcome challenge and harness the expertise of specialists and their communities.

I confess that I have as much confidence in this foundation’s commitment to sustainable development as I do in the Windows Operation System, especially for their promotion of the Green Revolution, an application of chemicals to food production that has led to all sorts of problems as I indicated here: https://louisproyect.org/2009/09/20/food-imperialism-norman-borlaug-and-the-green-revolution/

In an article for Huffington Post, Richard Javad Heydarian, the author of the forthcoming “Asia’s New Battlefield: US, China and the Struggle for Western Pacific State”, casts a skeptical gaze over the Chinese gifts to the developing world, reporting on the Philippines’s encounter with the China EximBank, an entity that the new bank will likely mimic:

Under the Arroyo administration (2001-2010), the Philippines’ National Broadband Network (NBN) signed a $329.5 million contract with China’s ZTE Corp. to upgrade its facilities and communications network. It also signed the $431 million Northrail infrastructure contract, which was awarded to China National Machinery and Industry Corp. (Sinomach) and largely financed by the China EximBank.

The NBN-ZTE venture, however, would be mired in a massive corruption scandal, after investigations revealed huge kickbacks, cost inflations, and irregularities in the contract. Failing to meet laws requiring competitive bidding, the Philippines’ Supreme Court, meanwhile, struck down the Northrail project.

The common perception in the Philippines is that the ZTE and Northrail contracts were some sort of bribe to pressure/persuade the Arroyo administration to compromise on South China Sea and sign up to the controversial and secretive Joint Maritime Seismic Undertaking (JMSU) agreement in 2005, which was deemed unconstitutional and in violation of Philippine national patrimony and requirements for transparency and consultations with other branches of the government, particularly the legislature.

During his recent visit to Tokyo, Philippine President Beningo Aquino also complained about the alleged decision of the China EximBank to prematurely demand drawdowns from its Northrail project loan at the risk of default. In short, Aquino suggested that China wanted to punish his government for standing up to China by using its loan payment card.

In a CounterPunch article dated March 6, 2015, Ecuadorian journalist Raul Zibechi considered the possibility that Chinese investments in Latin America could have a different character than what the Chase Manhattan Bank and Citibank offered. Initially China was focused on mineral extraction and agricultural commodities such as soybeans but in the more recent period, it has invested in areas that depart from the traditional colonizing relationship between the core and the periphery. They include arms manufacturing in Latin America, which offers the possibility of ancillary benefits to the non-military sector just as was the case with radar after WWII, and infrastructure. He points to the construction of two hydroelectric dams in the Santa Cruz province. One is named the Kirchner after the late President and the other is called the Cepernic after the late governor of the province. Another ostensibly worthwhile project is the upgrade of railway equipment, including cars to renovate dilapidated trains. So how can you be like the old-time Anglo-American imperialists when you are building dams and modernizing the railway system in Argentina? How dare you stand in the way of progress?

If the goal is “sustainable development”, it is doubtful that there is much difference between the World Bank when it comes to hydroelectric dams. The Dialogo Chino website that is dedicated to tracking the impact of Chinese investment in Latin America referred to these dams as “mired in environmental conflict” in a February 13, 2015 article.

Experts claim the maximum level of the Kirchner dam, at the same average level of the Argentino Lake, is unsuitable, increasing the level of the lake and causing tides that will erode the front of the Perito Moreno glacier and stop the traditional blocks of ice breaking off, a phenomenon that attracts thousands of tourists.

The controversy is not without precedent. Across the border in Chile, also in Patagonia, the HidroAysén project would have resulted in the construction of five hydroelectric power plants, two on the River Baker and three on the River Pascua. However, fierce criticism from environmental groups and indigenous communities resulted in a council of ministers rejecting the project last year.

“The dam will be fed from the lake, whose level will rise and fall to meet Buenos Aires’ energy requirements and consumption. The glacier will not be immune to variations and their erosive effects,” argues Gerardo Bartolomé, the engineer at the head of an online petition aiming to ensure the correct environmental studies are carried out for the dams.

Similarly, Juan Pablo Milana, a glaciologist and researcher at the National Scientific and Technical Research Council (CONICET), believes the dams will cause irreversible damage to the Spegazzini and Upsala glaciers.

“The glaciers are already subject to the forces of nature and introducing further changes is complicated. Increasing the level of the Argentino Lake will create a flotation effect. Lower water pressure at the base of the glacier will not only cause detachment of ice but will also change the way it breaks off,” explains Milana.

It seems that the Chinese engineers overseeing the project worked on the Three Gorges Dam so you can get an idea of how much thought has gone into the environmental impact in Argentina.

Finally on the question of Argentina’s rail system. Pardon me for sounding like an unrepentant Marxist but when I hear about improvements to a transportation system that is primarily intended to haul commodities from the interior of a country to its seaports, I reach for my revolver.

This is an article I wrote on the construction of railroads in Argentina in the 19th century as part of a series on the financial crisis in the country back in 2002. Somehow I doubt that China’s intentions are any nobler than Great Britain’s.

The Collapse of Argentina, part one: Railway Imperialism

As the Argentine economic collapse began to deepen, I decided to search for radical or Marxist literature on the country written in English to help me understand the situation better. This proved futile (although I continue to be open to recommendations). Nestor Gorojovsky, an Argentine revolutionary who I have been in touch with on the Internet or by phone for at least five years now, could recommend nothing. (His own efforts at a Marxist overview of Argentine history can be found at: http://www.marxmail.org/archives/january99/argentina.htm.) Not even after posting an inquiry to the H-LatinAmerica list, whose subscribers are exclusively academic specialists, were any recommendations forthcoming.

Taking the bull by the horns, I plan now to fill this gap beginning now with a series of posts based on scholarly material from Columbia University’s library. Although I do plan to review literature on Argentina written in Spanish, most of the source material for my posts will be in English, a language that I am more comfortable with when it comes to higher-level analysis.

My own involvement with Argentina dates back to the mid 1970s when I was drawn into a faction fight within the world Trotskyist movement over political perspectives in Argentina. The two main antagonists in the debate were the late Joe Hansen, Trotsky’s bodyguard at Coyoacan and a leader of the Socialist Workers Party, and the late Ernest Mandel, the renowned Belgian economist who was on the executive committee of the International Secretariat. The Americans and their mostly English-speaking followers (I use the word advisedly) backed a Trotskyist group in Argentina that appeared to be implementing their own orthodox approach.

Led by the late Nahuel Moreno, this group participated in trade union struggles, the student movement and opposed the ultraleftist guerrilla formations that were kidnapping North American executives or hijacking trucks in order to dispense meat and other goods in poor neighborhoods like Marxist Robin Hoods. It was one of these groups that the Mandel faction backed. Although they paid lip service to Trotsky, these Argentine guerrillas organized as the PRT/Combatiente were more interested in applying Regis Debray’s foquismo theory to the urban sector.

My role in all this was to battle the Mandel supporters in Houston, Texas who held a near majority in the branch and whose affinity for guerrilla warfare was open to question. Most were disaffected from the SWP leadership, whose alleged “petty-bourgeois” orientation to the student movement was supposedly leading the party to ruin. A couple of years later, the SWP leadership would go completely overboard in a kind of ‘workerist’ orientation to the trade unions, thus robbing the dissidents of their raison d’etre. By the time this turn had taken place, the SWP and the Fourth International had parted ways. As a local leader of the anti-Mandel faction, I had the opportunity to spend long hours in discussion with Argentine co-thinkers who visited Houston to give reports for our faction. Security was extremely tight in those days and I had to check my 1968 Dodge Dart for bombs before driving any of them to a public engagement.

During that intense struggle, I gained a deep appreciation for the Argentine people, their culture and their revolutionary will. Although I grieve to see their personal suffering today, I am inspired to see them acting collectively for a better country and world. One hopes that their heroic example can begin to erode the “TINA” mood that has affected wide sections of the left since 1990.

In this first post, I want to address the question of Argentina’s “golden age”, a notion that you can find in many left publications or on the Internet. In this version of Argentine history, the country is seen as an exception to the rest of Latin America where conventional notions of “imperialism” and “dependency” might not apply.

For example, British state capitalist theoretician Chris Harman writes:

Argentina is an industrial country, with a higher proportion of its workforce in industry than in Britain. It’s also a country where working people have, within living memory, experienced living standards close to west European levels. It was known as the ‘granary of the world’ at the beginning of the 20th century, with an economy very much like that of Australia, New Zealand or Canada, centred the massive production of foodstuffs on giant capitalist farms for the world market. Relatively high wages made it a magnet for millions of immigrants from Italy and Spain who brought traditions of industrial militancy with them.

Brad DeLong, an economist who held a post in the Clinton administration and who is a ubiquitous figure on leftwing electronic mailing lists, wrote the following on Progressive Economists Network (PEN-L):

As I said quite a while ago, Argentina was a first world country–like Canada, Australia, or New Zealand–up until the 1950s. Arguments that development possibilities were constrained by relative backwardness may work elsewhere: they don’t make *any* sense for Argentina.

If views like these are meant to support a kind of Argentine exception to the Leninist concept of imperialism or its subsequent elaborations such as the Baran-Sweezy theory of monopoly capitalism, they are mistaken. They would fail to see Argentina’s role in the world capitalist system, which–despite favorable moments–has been that of victim of imperialism. Comparisons with the USA, Canada, etc. are specious, even if in a given year income or other statistics were comparable. The *structural* questions are far more important for understanding Argentina. Despite the presence of European immigrants, industrialization, national independence, the lack of feudal-like latifundias, etc., Argentina had much more in common with direct colonies in the 19th century like India.

Specifically, one of the main factors that led to Argentine dependency was its reliance on British capital and expertise for the construction of railways in the 19th century. Just as was the case in India, these steam-driven showplaces of modernization did nothing but drain the country of capital and force it into a secondary role in the world economy.

If one is a Marx “literalist,” there can obviously be a lot of confusion about the introduction of railways into Argentina or India, especially when Marx wrote:

I know that the English millocracy intend to endow India with railways with the exclusive view of extracting at diminished expense the cotton and other raw materials for their manufactures. But when you have once introduced machinery into locomotion of a country, which possesses iron and coals, you are unable to withhold it from its fabrication. You cannot maintain a net of railways over immense country without introducing all those industrial processes necessary to meet the immediate and current wants of railway locomotion, and out of which there must grow the application of machinery to those branches of industry not immediately connected with railways. The railways system will therefore become, in India, truly the forerunner of modern industry.” (“The Future Results of British Rule in India,” NY Daily Tribune, Aug. 8, 1853)

In contrast to these early hopeful writings, before Marxism had developed an understanding of the negative role of imperialism, the historical record demonstrates that foreign owned railways did not lead dependent countries to become anything like the those of the investors, engineers and builders from the core. Rather than serving as a catalyst for Argentine industry, they did nothing except enrich British finance capital, the nefarious Barings Bank in particular. For a scholarly treatment of this subject, we can turn to Alejandro Bendaña’s 1979 PhD dissertation “British Capital and Argentine Dependence 1816-1914”. (Bendaña was a senior level Sandinista official who served as ‘responsable’ with Tecnica, the volunteer organization I was involved with in the 1980s. He continues to participate in the radical movement, nowadays with the Center for International Studies in Managua and the Jubilee Campaign against 3rd world debt.)

The most important sector of the Argentine ruling class in the 19th century was the ‘estancieros’, or ranchers. From 1820 onwards, they began to develop an alliance with British capital, which was seen as strategic for the goal of exploiting the country’s land-based riches. Arising from within its ranks, Juan Manuel de Rosas emerged as the primary spokesman for this class. British merchants played an important role in guaranteeing the Argentine rancher access to world markets. Smiling benignly on this interdependence, the British consul wrote:

the manufactures of Great Britain are becoming articles of prime necessity. The gaucho is everywhere clothed in them. Take his whole equipment – examine everything about him – and what is there not of raw hide that is not British? If his wife has a gown, ten to one that it is made at Manchester; the camp-kettle in which he cooks his food, the earthenware he eats from, the knife, his poncho, spurs, bit, all are imported from England. . . Who enables him to purchase these articles? Who buys his master’s hides, and enables that master to employ and pay him? Who but the foreign trader. Stop the trade with foreign nations, and how long would it be before the gaucho would be reduced to the state of the Indian of the Pampas, fed on his beef and horse-flesh, and clothed in the skins of wild beasts? (Bendaña, p. 34)

However, one important piece was missing from this jigsaw puzzle. Unless a modern railway system was introduced into the country, Argentine goods would be not as competitive with those of countries which could deliver beef, hides, and etc. to seaports in a much shorter time over rail rather than horse-back. Furthermore, unless workers and managers could make reasonably quick trips over rail between cities and rural points of production, the entire system would lack the kind of internal cohesion that other capitalist countries enjoyed. From the standpoint of classical economics, one would think that it would be to the mutual benefit of English and Argentine capitalist classes to develop a kind of partnership. Instead, what transpired has much more in common with the con games of the 1990s in which Wall Street banks got rich at the expense of the Argentine people. Except, in the 19th century, it was Barings Bank rather than Goldman-Sachs that was doing the robbing.

To look after its interests in this vastly ambitious railroad-building enterprise, the Argentine government named North American William Wheelwright as its agent. They were overly optimistic. After making the rounds in British banking houses, Wheelwright said in 1863 that a deal could be done only on the following basis:

–The land grant must be doubled (land adjacent to the tracks given free to the railroad company.)

–45 percent of the railroad revenue would be counted as working expenses.

–The profit ceiling would be raised to 15 percent, more than triple the norm.

–Most importantly, the expropriation clause would be eliminated.

Although the Argentine ruling class and its British partners were committed to liberalism in the economic sphere (the model for 1980s-90s neoliberalism), this loan-sharking deal had nothing to do with free market principles. Such concessions could only reflect the internal weaknesses of a bourgeoisie that relied on cattle ranching, as opposed to the British ruling class that had accumulated vast amounts of capital through manufacturing, and then finance.

When the shares for Central Rail, the new British-owned railroad, sold sluggishly, the bankers demanded further concessions. No longer would working expenses be limited to 45 percent, they would be *whatever the company accountants said they were*. So, not only do you get concessions forced down the throat of the Argentine government, you get an 1860s version of the kind of accounting that Arthur Anderson did on behalf of the Enron crooks.

To make sure that all the Central shares got sold, the British investors demanded that the Argentine government buy 2000 shares, which is a little bit like asking someone being hijacked to drive the truck. An Argentine Minister glumly commented:

We are faced with having to lower our heads for all these demands and any other ones that may be put before us given our nation’s need for the railway’s benefits and our own incapacity to secure these by any other means. (Bendaña, p. 93)

Finally, in the May of 1870, 17 years after the original conception and 7 years after work began, the first locomotive arrived in Córdoba. Over the course of the 1870s, the Argentine state provided nearly 40 percent of the guaranteed profits for the new railroad. In a nutshell, the wealth of the country was being drained to make sure that British investors enjoyed super-profits. Furthermore, the British enterprise was tax-exempt. This turned out to be a bonanza for the Central Argentine Land Company that came into existence in 1871. Unlike the railroad, commercial exploitation within land claim areas were far less risky and had no particular claim to the kind of tax-exempt status enjoyed by large-scale capital projects. Once again, the weak Argentine bourgeoisie had been given an offer that it couldn’t refuse.

With British technological superiority, one might at least hope that the new railway would provide adequate service. As it turned out, the Argentine people had ended up with a Yugo rather than a Rolls-Royce. Public complaints about service and rates grew legion.

Central was just the first in a series of white elephants. Next came the Northern, the Eastern, and the Great Western Railways, all financed by the British and all imposing larcenous penalties on the people of Argentina. A government audit revealed that the East Argentine railroad was marked by an excess of employees (exclusively English at high salaries), overly generous salaries for company directors, inadequate rolling stock, dubious accounting procedures, and bloated operating costs.

When such exploitation operates in open view, one might ask why the Argentine capitalists did not rebel. After all, if one is committed to national development, then one must allow oneself the ultimate weapon against foreign exploiters: expropriation. Unfortunately, except for the urban middle-class, such calls were not made. As is the case today, the dominant fraction of the national bourgeoisie lost its nerve. And like today, the ideological excuse for inaction was a commitment to the “free market.” The estancieros regarded their own economic well-being as synonymous with the extension of railway lines made possible by foreign investment.

When the harsh reality of British theft collided with the delusional schemas of the local bourgeoisie, voices of dissent began to be heard in parliament. Why couldn’t the nation redeem itself through seizure of properties that were based on criminality to begin with? Even the conservative “La Nación” asked in 1872:

Can and should the state build all railways itself and expropriate existing ones? We do not believe that the benefits of state railways should necessarily carry us to the latter consequence . . . Although the country cannot afford expropriation now or for many years to come, there may come a day when revenue and necessity may, possessed of means and facing a need for new lines, expropriation might become convenient. (Bendaña, p. 152)

Skilled as they were in keeping the natives at bay, the British turned to one defense after another. They bribed ministers, congressmen and railroad bureau officials to vote against nationalist legislation or to look the other way when laws were being broken. When this proved insufficient, the British were not above gunboat diplomacy. In late 1875, the British bank in Rosario suddenly demanded immediate repayment of railroad notes as part of a maneuver to destroy local financial competitors. When the nationalist-minded local governor in Santa Fe sided with his countrymen, the British sent their navy to blockade the city. Buenos Aires caved in to the show of force and the British won their demands without a shot being fired. Bendaña cites H. S. Ferns’s “Britain and Argentina in the Nineteenth Century”:

“prosperity had created a nation of boosters, and the porteños (Buenos Aires elites) looked at the Governor of Santa Fe as Pierpont Morgan might have regarded William Jennings Bryan.” (p. 258)

By 1913, Great Britain owned 95.8 percent of all private railways in Argentina. That amounted to 60.2 percent of total British investment in the country. The economic consequences on the nation were enormous. Arturo Castaño, a legislative deputy and rail expert, warned:

“the more the railways extend themselves, the greater will be the economic disruptions, and the greater will be the migration to the cities from the provinces. A third of our national production is absorbed by the railways, without the Executive being able to intervene in rate-making due to an administrative system which favors the companies.”

Indeed, when foreign capitalists absorb a THIRD of national production, the question of imperialism has to be addressed.

The railway era lasted about a century. The first 3 decades, from 1830 to 1860, were a time of rapid expansion in the imperial centers. The spread of railways into Asia, Africa and Latin America did not produce concomitant benefits. Although Cecil Rhodes characterized railroads as “philanthropy plus 5 percent,” the profits were always far higher and the progress realized in countries such as Argentina was far less than advertised.

In my next post, I will take up the question of Juan Perón and his legacy.

June 22, 2015

Is China going Green? A reply to John Bellamy Foster

Filed under: China,Ecology — louisproyect @ 7:06 pm

On June 15th an article by John Bellamy Foster titled “Marxism, Ecological Civilization, and China” appeared on MRZine. It was the fourth in a series of exchanges that date back to a February 2012 Monthly Review article by Zhihe Wang titled “Ecological Marxism in China”.

Wang, who is the director of the Center for Constructive Postmodern Studies and professor of philosophy at Harbin Institute of Technology in China, discusses the penetration of Marxist ecological theories in China including those that should be familiar to those of you who keep abreast of such matters: 1. James O’Connor’s theory of the “Second Contradiction” 2. Joel Kovel’s Frankfurt Marxist analysis 3. Foster/Paul Burkett, which Wang implies is the only one that is strictly Marxist.

For the most part, Wang is enthusiastic about the arrival of a Green-Red synthesis and gives equal credit to academicians like Foster and Chinese officials such as Yi Junqing, who Wang describes as:

the Minister of Central Bureau of Compilation and Translation (a top government institution on Marxism Studies in China), believes that “Marxism will lose its vitality” if it does not address the ecological crisis in the twenty-first century.

Wow. That’s pretty good news, ain’t it? A top government official is not only a Marxist but someone who emphatically believes that ecosocialism should become official government policy. I must have dozed off somewhere along the line not to have noticed this.

Wang admits that many Chinese Marxists are enamored of development for the sake of development, something that Kovel once likened to metastasizing tumors, but is confident that the Red-Greens will have the day because “China itself is officially a socialist country which regards Marxism as its theoretical base and guideline”.

We hear again from Zhihe Wang and three other Chinese Marxists (Meijun Fan, Hui Dong, Dezhong Sun and Lichun Li) in February 2013 when they write an MR article titled “What Does Ecological Marxism Mean For China? Questions and Challenges for John Bellamy Foster” that pays tribute to Foster.

It is interesting to note that the same complaint that Christian Parenti had about dualism in Foster’s theorizing is echoed in China:

Starting from a practical Marxist stance, Pu Xiangji argues that Foster has not eliminated dualism because he still understands “metabolism,” “production,” and “practice” in terms of the old materialism. Accordingly he is still stuck in the dichotomy of humans and nature, subject and object, which already had been subverted by Marx in The Economic and Philosophic Manuscripts of 1844 by proposing the concept of practice and practical materialism. 

Wang and his co-authors defend Foster against such charges but urge him to consider a synthesis of his own views and their own, which they define as a “postmodernism” that posits the environmental devastation in China and the USSR as a function of “modernism”. Frankly, this makes them sound much more amenable to Joel Kovel’s Frankfurt approach but I simply lack the time and the motivation to delve into anybody’s postmodernism at this point. Maybe it is a sign of the heavy weight of dogmatism in China that some scholars are ready to dust off theories that fell into disfavor in Europe and the USA long ago for the obvious reasons. In a country where vulgar Marxism is pretty much the official dogma, no wonder postmodernism has a second life.

In replying to their article immediately below it, Foster reprises his views on the metabolic rift and other mainstays of his writings while including this pithy rejoinder on the “postmodernism” question:

This raises extremely complex historical and theoretical questions. In my own view, modernity, insofar as it is separate from the distinctive development of bourgeois civilization, is too abstract a concept to carry the full burden of ecological critique. Minus historical specificity it becomes prone to Whitehead’s famous “fallacy of misplaced concreteness.”14

He ends on a Kovelian note:

China today must confront not simply capitalism as such, but the peculiar ecological and social rifts of a modern Chinese system, which, whatever its defining socioeconomic characteristics, is clearly threatened, both from within and without, by the cancerous spread of capitalist methods and mores.

This brings us to the last in the series of articles that appeared on MRZine just a week ago in an article titled “Marxism, Ecological Civilization, and China”. Written once again by Foster, it has nary a word about cancerous tumors but is practically breathless in its enthusiasm for new directions in China:

What is clear about the present Chinese emphasis on ecological civilization is that it has emerged out of a broad socialist perspective, influenced by both Marxian analysis and China’s own distinct history, culture, and vernacular.  In China, as opposed to the West, the land remains social or collective property and cannot be sold.  I believe it is wrong therefore to see China’s initiative in the construction of ecological civilization to be a direct outgrowth of Western-style ecological modernism, as some have supposed.  At the 17th National Congress of the Communist Party of China (CPC), in 2007 it was officially proposed that China should build an “ecological civilization,” creating more sustainable relations between production, consumption, distribution, and economic growth.  At the18th National Congress of the CPC in 2012, “ecological civilization construction” was written into the CPC Constitution.  These principles were built into the latest five-year plan (2011-2015).  Although many have questioned the seriousness of the CPC’s commitment to the construction of an ecological civilization, it is evident that this: (1) arose out of real needs in China, where there has been enormous ecological devastation; (2) was a response to the growth of massive environmental protests throughout China; and (3) has been followed up by massive government efforts in area of planning, production, and technological development.

Foster goes on to document many of the progressive changes taking place such as 1) targeted reductions in economic growth justified in terms of more environmentally balanced growth; (2) the massive promotion of solar and wind technology; (3) a growing share of non-fossil-fuel energy consumption; (4) creation of a red line to protect a minimum of 120 million hectares of farmland; (5) reduction of major air pollutants by 8-10 percent in the 12th Five Year Plan (2011-2015); (6) removal of six million high-pollution vehicles from the roads in 2014; (7) a 700 percent increase in the output of electric passenger cars (non-plug ins) in 2014; (8) initiation of a government campaign for frugal lifestyles and against extravagance (conspicuous consumption) by officials; (9) growing official criticism of GDP worship; and (10) a pledge to reduce the carbon intensity of GDP by 40-45 percent by 2020 from 2005 level, coupled with a pledge to reach peak carbon dioxide emissions by 2030, if not sooner; and (11) the imposition of a new resource tax on coal.

Fundamental to these changes has been China’s use of “planning” and its commitment to a “socialist perspective”. I don’t want to sound too harsh but this is the most ridiculous bullshit I have read outside of Roland Boer’s blog. In this day and age for a leading Marxist to give left cover to the gang running China is scandalous. The only explanation for this perhaps is that Foster, like Woody Allen or Saul Bellow, has become such a lauded celebrity in his own field that he cannot recognize that he has committed a gross ideological gaffe. Who would have the nerve to tell him that he was full of beans? If he ever descended from Mount Olympus and spoke at a Left Forum, some impudent member of the audience might have told him that he was being ridiculous if he ever gave a talk along these lines. That would be for his own good but I don’t expect to see him waste his time among the proles.

Not a single word in his article about the real reason why reforms are happening now: the Chinese workers and farmers have been raising hell for decades about the filthy air and water that their rulers impose on them. LexisNexis only returns 1000 articles at a time but this snippet off the top should give you an idea why the ruling class in China finally budged.

Screen Shot 2015-06-22 at 2.13.33 PM

You’ll note above that Wikileaks revealed “US hopes” for environmental activism in China. Given MRZine’s sorry state, that will surely encourage a series of tweets by Yoshie Furuhashi calling for more coal-burning plants.

Just how far China’s rulers have budged is an open question. Foster stated that a goal exists to reduce air pollution by 8-10 percent by 2015. Considering the state of China’s air, this might leave it just ahead of New Delhi on an average day. With one year left in this plan, things look decidedly Brown rather than Green according to a Greenpeace report. Things have improved in Beijing, where officialdom lives, but everywhere else is filthy:

While Beijing still ranks in the top five worst polluted provinces in China, the capital’s PM2.5 concentration improved more than 13% compared to the first quarter of 2014, and industry-heavy Hebei province, just outside of Beijing, also improved 31%.

However the overall situation in China is still dire. Data show that 90% of the cities that Greenpeace East Asia ranked are exceeding China’s own limit on yearly average level for particulates (PM2.5) in the air. The provinces of Henan, Hubei, Hunan and Sichuan, all located in either central or western China where strict pollution controls have not been enacted, were among the 10 worst polluted provinces in the first quarter of 2015.

Now this does not even address the policies adopted for those not fortunate enough to be part of the dominant nationality. The China Environment Forum reports that desertification, air and water pollution continue apace in Xinjiang province, a virtual colony of the dominant Han nationality. Will the Uighurs benefit from environmental reforms? I would not bet on it.

Nor would these reforms benefit those who live outside of China, particularly in Africa where China has arrived with some fanfare. If you read Businessweek, it is not too hard to figure out how things are picking up in Hebei:

China’s Airpocalypse, the lung-choking pollution that regularly blankets the country’s north, including Beijing and the port city of Tianjin, has an obvious source: emissions from the belching smokestacks of neighboring regions, in particular Hebei province. Now authorities say they have come up with a way to address the industrial pollution that accounts for as much as three-quarters of dangerous particulates in the air: Move polluting factories overseas.

Hebei authorities have announced plans to relocate some of the province’s steel, cement, and glass production to Africa, Latin America, Eastern Europe, and other parts of Asia. Capacity for 20 million tons of steel and 30 million tons of cement will be moved overseas by 2023, the official Xinhua News Agency reported on Nov. 19.

Hebei Iron & Steel, China’s largest producer, has already started the move. In September the company, which is based in Tangshan, 92 miles east of Beijing, said it will build a plant capable of making 5 million tons annually in South Africa. Hebei Iron plans to start operating there in 2017 and is likely to shut mills in Hebei. “The West outsourced its pollution to China, mainly light manufacturing,” says Tom Miller, senior Asia analyst at researcher Gavekal Dragonomics in Beijing. “Now China has got to the point in development where it wants to start exporting pollution, too, by building steel and other factories in poorer countries.”

Exporting pollution? That might ring a bell if you recall what Larry Summers urged in 1991. For all I know, the Chinese government might have been inspired by this:

Screen Shot 2015-06-22 at 2.37.58 PM

For an alternative to Foster’s nonsense, I urge you to look at Richard Smith’s article in today’s Truthout that appeared just by coincidence and that does not target Foster. Smith has been covering Chinese development and its consequences to the environment for decades now and I find him much more reliable than Foster who someone should wake up from his Stalinist slumber.

China’s Communist-Capitalist Ecological Apocalypse

Sunday, 21 June 2015 00:00

By Richard Smith, Truthout | News Analysis

A pedestrian wearing a protective mask in Beijing, Jan. 17, 2012. Decades of coal-powered industrialization combined with the government-promoted car craze have brought China the worst air pollution in the world. (Photo: Gilles Sabrie/The New York Times)

A pedestrian wearing a protective mask in Beijing, January 17, 2012. Decades of coal-powered industrialization combined with the government-promoted car craze have brought China the worst air pollution in the world. (Photo: Gilles Sabrie/The New York Times)

The first time Li Gengxuan saw the dump trucks from the nearby factory pull into his village, he could not believe his eyes. Stopping between the cornfields and the primary school playground, the workers dumped buckets of bubbling white liquid onto the ground. Then they turned around and drove right back through the gates of their factory compound without a word.

In March 2008, Li and other farmers in Gaolong, a village in the central plains of Henan Province near the Yellow River, told a Washington Post reporter that workers from the nearby Luoyang Zhonggui High-Technology Company had been dumping this industrial waste in fields around their village every day for nine months. The liquid, silicon tetrachloride, was the byproduct of polysilicon production and it is a highly toxic substance. When exposed to humid air, silicon tetrachloride turns into acids and poisonous hydrogen chloride gas, which can make people dizzy and cause breathing difficulties.

Ren Bingyan, a professor of material sciences at Hebei Industrial University, contacted by the Post, told the paper that “the land where you dump or bury it will be infertile. No grass or trees will grow in its place … It is … poisonous, it is polluting. Human beings can never touch it.”

When the dumping began, crops wilted from the white dust, which sometimes rose in clouds several feet off the ground and spread over the fields as the liquid dried. Village farmers began to faint and became ill. And at night, villagers said “the factory’s chimneys released a loud whoosh of acrid air that stung their eyes and made it hard to breath.”

“It’s poison air. Sometimes it gets so bad you can’t sit outside. You have to close all the doors and windows,” said Qiao Shi Peng, 28, a truck driver who worried about the health of his 1-year-old.

China’s rise has come at a horrific social and environmental cost.

Reckless dumping of industrial waste is everywhere in China. But what caught the attention of The Washington Post was that the Luoyang Zhonggui High-Technology Company was a “green energy” company producing polysilicon destined for solar energy panels sold around the world. Indeed, it was a major supplier to Suntech Power Holdings, then the world’s leading producer of solar panels, and Suntech’s founder, Shi Zhengrong, topped the Hunrun list of the richest people in China in 2008. (1)

read full article

October 2, 2014

The Hong Kong protests and the conspiracist left

Filed under: China,conspiracism — louisproyect @ 8:56 pm

As predictably as day follows night, the conspiracist left has taken the side of the Chinese government against the Hong Kong protests. As the purest expression of this sort of Mad Magazine spy-versus-spy comic strip mentality, Moon of Alabama’s Berhard told his readers:

The (NED Financed) Hong Kong Riots

Some organized “student groups” in Hong Kong tried to occupy government buildings and blocked some streets. The police did what it does everywhere when such things happen. It used anti-riot squads, pepper spray and tear gas to prevent occupations and to clear the streets.

The “western” media are making some issue about this as if “western” governments would behave any differently.

So lets look up the usual source of such exquisite fragrance. The 2012 annual report of the U.S. government financed National Endowment of Democracy, aka the CCA – Central Color-Revolution Agency, includes three grants for Hong Kong one of which is new for 2012 and not mentioned in earlier annual reports:

National Democratic Institute for International Affairs – $460,000

To foster awareness regarding Hong Kong’s political institutions and constitutional reform process and to develop the capacity of citizens – particularly university students – to more effectively participate in the public debate on political reform, NDI will work with civil society organizations on parliamentary monitoring, a survey, and development of an Internet portal, allowing students and citizens to explore possible reforms leading to universal suffrage.

Moon of Alabama is an old hand at this, virtually writing the same sort of “follow the money” methodology for a decade. If you want another example of this kind of addled conspiracism, check out Tony Cartalucci’s article on Mint Press, an online newspaper that was in the middle of a controversy over a report on East Ghouta in the name of a reporter who subsequently disavowed the article and Mint Press entirely.

Titled “US Role In Occupy Central Exposed”, treats Hong Kong protesters as puppets whose strings are pulled by Washington:

If democracy is characterized by self-rule, than an “Occupy Central” movement in which every prominent figure is the benefactor of and beholden to foreign cash, support, and a foreign-driven agenda, has nothing at all to do with democracy. It does have, however, everything to do with abusing democracy to undermine Beijing’s control over Hong Kong, and open the door to candidates that clearly serve foreign interests, not those of China, or even the people of Hong Kong.

What is more telling is the illegal referendum “Occupy Central” conducted earlier this year in an attempt to justify impending, planned chaos in Hong Kong’s streets. The referendum focused on the US State Department’s goal of implementing “universal suffrage” – however, only a fifth of Hong Kong’s electorate participated in the referendum, and of those that did participate, no alternative was given beyond US-backed organizations and their respective proposals to undermine Beijing.

Keep in mind that Cartalucci has written the same exact article on every protest movement that has taken place for a number of years, always looking for the footprints of the NED, the State Department, the CIA, or any other American government agency or NGO. It has led him not only to condemn the Occupy Central movement in Hong Kong but the Arab Spring that he applied the same idiotic litmus test to:

In January of 2011, we were told that “spontaneous,” “indigenous” uprising had begun sweeping North Africa and the Middle East, including Hosni Mubarak’s Egypt, in what was hailed as the “Arab Spring.” It would be almost four months before the corporate-media would admit that the US had been behind the uprisings and that they were anything but “spontaneous,” or “indigenous.” In an April 2011 article published by the New York Times titled, “U.S. Groups Helped Nurture Arab Uprisings,” it was stated:

“A number of the groups and individuals directly involved in the revolts and reforms sweeping the region, including the April 6 Youth Movement in Egypt, the Bahrain Center for Human Rights and grass-roots activists like Entsar Qadhi, a youth leader in Yemen, received training and financing from groups like the International Republican Institute, the National Democratic Institute and Freedom House, a nonprofit human rights organization based in Washington.”

The article would also add, regarding the US National Endowment for Democracy (NED):

“The Republican and Democratic institutes are loosely affiliated with the Republican and Democratic Parties. They were created by Congress and are financed through the National Endowment for Democracy, which was set up in 1983 to channel grants for promoting democracy in developing nations. The National Endowment receives about $100 million annually from Congress. Freedom House also gets the bulk of its money from the American government, mainly from the State Department. ”

It is really quite extraordinary that Cartalucci never wrote a single article calling attention to the $1.7 billion per year that the USA was doling out to Mubarak but only got his balls in an uproar over a couple of hundred thousand dollars channeled to young people risking their lives in Tahrir Square against his dictatorship. People like him deserve to be taken out and horsewhipped.

The problem with this analysis is obvious. There’s hardly a country in the world where the NED does not ladle out money to influence a grass roots movement. If you go to http://www.ned.org/where-we-work and click Latin America and Caribbean, you’ll see a list of nations where the NED mucks about:

Argentina
Bolivia
Colombia
Cuba
Ecuador
Guatemala
Haiti
Honduras
Mexico
Nicaragua
Paraguay
Peru
Venezuela

That’s what happens when you have a budget of $118 million per year. Spending $460,000 to influence the Hong Kong movement barely scratches the surface. For that matter, the real issue is whether or not it serves American interests to have elections in Hong Kong rather than have the Chinese appoint someone. I guess that Cartalucci and Bernhard are in favor of Chinese control, a kind of “anti-imperialism” that makes a mockery of the term.

Buried deep inside a NY Times article, you get an indication of what is driving people into the streets:

Polls conducted by academic institutions over the past year have indicated that the most disaffected and potentially volatile sector of Hong Kong society is not the students, the middle-aged or even the elderly activists who have sustained the democracy movement here for decades. Instead, the most strident calls for greater democracy — and often for greater economic populism, as well — have come from people in their 20s and early 30s who have struggled to find well-paying jobs as the local manufacturing sector has withered away, and as banks and other service industries have increasingly hired mainland Chinese instead of local college graduates.

I doubt that the NED has any interest in paying such people to go out and protest. My guess is that it has much more of an affinity with the professor that Anthony Bourdain had dinner with in the first episode of the new season of his CNN show that was shot in Shanghai. As was the case with just about everybody he dined with, I was put off by the smug attitude of the professor who was tickled pink about the dynamism of the Chinese economy, all the while smirking over the irony that it was taking place under “communism”. Here’s an exchange between the two that sheds light on the discontent in Hong Kong that China’s ruling class worries might become contagious:

BOURDAIN: If you love in Manhattan like I do and you think you live in the center of the world, this place, Shanghai, will confront you with a very different reality. Turn down a side street, it’s an ancient culture. A century’s old mix of culinary traditions, smells, flavors. A block away, this. An ultra-modern, ever clanging cash register, levels of wealth, of luxury, a sheer volume of things and services unimagined by the greediest most bushwa of capitalist imperialist.

China has a population of around 1.2 billion people, and the number of them who were joining an explosive middle class, demanding their share of all that good stuff, infrastructure, the clothes, the cars, the gas to fuel them, his wealth, it’s the engine that might well drive the whole world.

ZHOU LIN: Do you like Chinese food?

BOURDAIN: Very much, yes.

ZHOU LIN: OK. What do you want?

BOURDAIN: Of course, yes some — dumplings.

ZHOU LIN: (speaking in a foreign language)

BOURDAIN: Professor Zhou Lin is an economist and current dean of the College of Economics and Management at Shanghai Jiao Tong University. I saw many people who live here who’s Chinese but was educated in American universities. Has had taught at Yale, Duke, and Arizona State.

BOURDAIN: So you — forgive me. Economics are not my area of expertise, I wallow in ignorance but China looks different every time I come. It’s changing so, so, so quickly. How did that happen?

ZHOU LIN: China enjoy, you know, this long period of peace. No serious enemy, no major wars.

BOURDAIN: Right.

ZHOU LIN: So the manufacturing industry really took off. Internally is reformed an open door policy, every country willing to trade with China.

BOURDAIN: There’s certainly no doubt that at this point, we — our destinies are inextricably bound up. We are hopelessly — our economies are hopelessly intermingled. If one fails, the effect would be disastrous.

ZHOU LIN: Global impact.

ZHOU LIN (on camera): So I really believe that the world is converging and China will again, will be privatizing more and more.

BOURDAIN: Right.

ZHOU LIN: But the difference — nowadays, it’s just the technology is so advanced, we don’t really need that many people. So too things that many use to do in which the population, 7 billion people, there was probably, doesn’t need that many people working…

BOURDAIN: Right.

ZHOU LIN: So the question is that what should human beings doing, you know? How can you let them not doing anything and then still living a good life?

BOURDAIN: Right.

ZHOU LIN: I don’t know. It’s going to be a big issue at the face of the whole world.

* * * *

So too things that many use to do in which the population, 7 billion people, there was probably, doesn’t need that many people working…

That’s the real explanation of Chinese unrest, not NED handouts.

July 28, 2014

Fallen City

Filed under: China,television — louisproyect @ 7:57 pm

This shows tonight on WNET in NYC at 10pm. Check your local PBS station to see if it is being screened in your city. This is from the PBS website:

http://www.pbs.org/pov/fallencity/film_description.php

Even for a country historically plagued by earthquakes, the 2008 quake in the Sichuan province was devastating. Nearly 70,000 people were killed and thousands more were missing and never found, making it the deadliest quake in the country in three decades. The old town of Beichuan, home to 20,000 people, was reduced to rubble. Fallen City is a revealing account of contemporary China’s response to the disaster: Within a scant two years, the government built a new and apparently improved town close to the old Beichuan.

Fallen City is the haunting story of the survivors, whose grief over the past and anxiety about the future cannot be resolved in bricks and mortar or erased by cheerful government propaganda about “the new Beichuan.” In today’s China, even the worst disaster can be an occasion for celebrating the country’s achievements and its anticipated great future. Yet in China, as elsewhere—and as movingly captured by Fallen City—suffering in the face of death and displacement follows a path determined more by humanity’s search for meaning than by the politics of the day.

—-

The film is the first directed by Qi Zhao, whose last credit was executive producing “Last Train Home”, about which I wrote:

“Last Train Home” is the latest movie that departs from the globalization-is-wonderful ideology of Thomas Friedman, Jagdish Bhagwati, and other prophets of neoliberalism. Some are fictional, such as “Blind Shaft”, a movie about miners forced to work in virtual slavery. Others are documentaries like “Still Life” that depict the loss of livelihood and ties to the land that the Three Gorges Dam posed.

Directed by a Canadian Lixin Fan, whose last film “Up the Yangtze” explored the same issues as “Still Life”, “Last Train Home” focuses on a single family whose life has been torn apart by China’s rapid industrialization.

Changhua Zhan and his wife Suqin Chen both work on sewing machines in a typical export-oriented factory in the Guangdong province. Each New Year’s holiday, they take a train back to their rural village to see their teenaged daughter Qin Zhang and her younger brother Yang Zhang. This is not as easy as it seems since there are far more people trying to get a ticket than are available. The train station is a sea of humanity with cops and soldiers trying to keep order. Although the film does not comment on why this is the case (it sticks to a cinéma vérité format), it strikes this reviewer as the likely outcome of a society that no longer places much emphasis on public transportation as it once did. (There are signs that this is beginning to change recently, but one doubts that it will have any impact on the poorer migrant workers for a while.)

full: https://louisproyect.org/2010/11/28/last-train-home/

I expect this to be a very important film.

July 1, 2014

2014 NY Asian Film Festival: “No Man’s Land”

Filed under: China,Film — louisproyect @ 8:01 pm

In the opening scene of “No Man’s Land”, we hear voice-over as a falcon swoops down upon another bird on an arid and foreboding plateau somewhere in Northwest China surrounded by mountains. The narrator, a lawyer who is the film’s anti-hero, tells us that in ancient times two monkeys decided to cooperate with each other. One would serve as a sentry against tigers, while the other would gather up peaches that the two would share. That act of cooperation led to an increase in the monkey kingdom, to the point where they became homo sapiens.

As this is being explained to us, a man pops up from beneath a pit beneath the ground and begins reeling in the falcon that has been snared by the bird left there as bait. We eventually learn that he is a poacher bent on selling falcons to Arab oil sheiks that domesticate them for hunting other birds.

Thus is established the primary message of a Chinese film that is a perfect blend of politics and action. On one level, the “no man’s land” is a remote area far from the nearest city. On another level, it is China today—a land of criminality, corruption and greed that is a rejection of that primal pact of cooperation made between our legendary monkey ancestors.

Shortly after the poacher begins headed toward the nearest city with his caged falcon, he is intercepted by a game warden who puts him under arrest. As they are headed down the road with poacher and bird in the back seat, a massive pickup truck broadsides them, killing the cop. The driver of the pickup is a poacher himself who will use murder as a means to ill-gained profits.

After the second poacher is arrested for killing the cop, he hires a lawyer from the big city, the same man whose words we heard at the beginning of the film and who is a perfect symbol of China’s new middle-class. He is banking on the possibility that a victory in court will catapult him into the top rank of his profession. After he successfully defends his client, the lawyer—one Pan Xiao—presents him with a bill for services rendered. Duobuji, the poacher, tells him that he will pay up in 10 days. Since the lawyer probably understood that his client was a murdering scumbag to begin with and not likely to pay up, he demands immediate satisfaction or else he would go to the cops. Duobuji offers him his red sedan as collateral, which was as near to hard cash as he would get from the villain except for the pirated falcon.

As he tools down the highway in the middle of nowhere headed back to civilization, the lawyer runs into one misadventure after another, always revolving around the poacher’s attempt to get back his car or various road rage incidents that make California look like a Quaker meeting by comparison. In most cases, it was the cynical and self-serving lawyer who triggered the other driver’s rage.

This is a road movie that evokes any number of other films, starting with the Mad Max series. However, director Ning Hao, who also wrote the screenplay, was not interested in a dystopian future. He is describing the China of today, taking artistic liberties but not that far from the reality:

A scooter rider in China is lucky to be alive after being repeatedly rammed for seemingly no reason by an angry motorist.

Video of the incident shows the driver of the car speeding towards the rider on a busy road, before ramming into it.

After successfully hitting the bike, the driver then swerves his car and again aims at the rider.

The film also suggests that the Coen brothers have influenced Ning Hao since the mix of homicide and bone-dry humor is cut from the cloth of films like “Blood Simple” and “Fargo”. There are also signs that he has absorbed the Spaghetti Western genre since his scenes of the northwest China desert and the mayhem that takes place within it have more than a whiff of “The Good, the Bad, and the Ugly” as one villain after another fight over the falcon like it was a box of silver stolen from a stagecoach.

“No Man’s Land” was made in 2009 but it was not released for theatrical distribution until 2013. Even though it might appear superficially as a noirish comedy about dirt-bags, the authorities figured out that the film was really about Chinese society. The censors objected to a film with so many “depraved” individuals and “accused Ning of nihilism and forgetting his social responsibility as a film director.”  I would say that Ning Hao had social responsibility in abundance. That is why his film was suppressed for 4 years.

I have a very high regard for Ning Hao and recommend an earlier film titled “Mongolian Ping-Pong” that is available as a DVD from Netflix or streaming on Fandor, an arthouse counterpart to Netflix. Like “No Man’s Land”, it has a poetic grasp of the beauty of the desert and mountains of that part of the world.

In April 2014, Oliver Stone made a trip to China to meet with the country’s leading filmmakers, including Ning Hao. Stone berated them for not having his guts. Why didn’t they take on Mao Zedong and the Cultural Revolution? Ning Hao shot back, calling Stone “belligerent” and reminding him that steps toward free speech in China must be taken “step by step”.

One hopes that “No Man’s Land” can be distributed nationally in the USA before long. It is first-rate filmmaking. For New Yorkers, I urge you to attend tonight’s screening just to make sure that you can catch it. If you have found my film reviews reliable over the years, I can assure you that this is 4-star entertainment as well as a powerful critique of Chinese society. You can’t ask for much more than that.

October 5, 2013

A Touch of Sin

Filed under: China,Film — louisproyect @ 7:44 pm

A scene from “A Touch of Sin”

For the longest time I have believed that the greatest filmmakers produce works that are both quintessential expressions of their national idiom and universal statements about the human condition. Satyajit Ray’s India, Akira Kurosawa’s Japan, and Ousmane Sembene’s Senegal spring to mind but so does the John Ford western.

With the arrival of Jia Zhangke’s “A Touch of Sin” at the Lincoln Plaza and IFC in New York yesterday, the third film I have seen by the Chinese director who has kept a sharp focus on social inequality throughout his career, it is reassuring  that a new golden age of cinema might be returning with Jia at the helm. His work is distinctly Chinese without the slightest concession to perceived “cross-over” marketing dictates, but universal in its compassion for working people. It is both puzzling and reassuring to see that this film could have been in made in censorious China today even if it benefits to a large degree from Japanese co-production. If China’s Communist Party has succumbed to the “one percent” values that are being protested everywhere in the world, it is noteworthy that a writer/director like Jia still adheres to the egalitarian ethos that motivated hundreds of millions of peasants and workers to rise up against a heartless and unjust order in the mid-20th century.

“A Touch of Sin” is a four-part narrative based on real-life outbursts of violence in China, all touched off by bitter class resentments.

  • A middle-aged coalminer returns to a village where he once worked in order to file a complaint against the Communist Party official who used his connections to become the owner of a privatized mine. The new boss comes to work in a Maserati while the villagers have never received a penny for the benefits they were promised when the mine became private property. When the miner approaches the boss in the midst of a welcoming procession as he steps off his private jet with his complaint, a bodyguard attacks him with a shovel after the boss leaves him in the lurch. The boss’s cronies begin mocking him as Mr. Golf after he leaves the hospital, finding the idea that his head was used as a golf ball a big joke. This and other offenses lead to the miner taking his revenge.
  • A young man who makes his living as an armed robber still adheres to traditional values, sending his grandmother money on a regular basis even if it is ill-gained.
  • A young woman has been forced by rural poverty to take a job as a receptionist at a sauna that serves as a front for a brothel. When a local thug insist that she give him a “massage”, she turns him away saying that she is only a receptionist. When he begins beating her, she defends her honor in the only manner left to her—through violence.
  • Another young man is working in one of China’s typical sweatshops. When a co-worker asks to borrow his smart phone to look something up, a conversation about how to use it leads to the borrower accidentally cutting his hand on a machine. The young man is told by his boss that it his responsibility to pay for the man’s lost wages during his two-week sick leave. His response is to leave the job and search ever more desperately for a way to survive in an economy where a lack of skills and connections turn you into a virtual slave.

Unlike China’s costume dramas that are geared to the international market replete with CGI trick shots of swordsmen floating through the air, “A Touch of Sin” is brutally realistic, shot on location in some of China’s most ugly industrial centers. Despite this, Jia, the consummate visual poet, turns every shot into something that will stick with you long after the film has ended. It is as if Antonioni decided to make films in places like Buffalo or Pittsburgh in the mid 1950s.

Despite the grim character of the tales, there is a dark comedy that pervades throughout. Like many of the class-conscious directors in China today, Jia loves to orchestrate dialog between family members or co-workers that bring out their saltiness and quick wit. If you are looking for dialog that advances what the critics call character development, you won’t find it in “A Touch of Sin”. In a way, there is no need for it. The miner does not have to explain what sets him on his homicidal path.

While watching “A Touch of Sin”, I made a mental note to say something about the naturalism that is found among all directors who belong to the “Sixth Generation”, a post-90s school of filmmaking in China that is strongly influenced by Italian neo-realism. The naturalism is not just an expression of life as it is really lived but also a throwback to the philosophy embodied in the novels of Emile Zola or Theodore Dreiser, even if the “Sixth Generation” has never read widely in this genre.

In the typical naturalist fiction, the main character is like a moth trapped in a spider’s web made up of capitalist society’s economic forces of coercion. The novel ends badly (not so much tragically since there was never a fall from on high) but inevitably just as is the case for millions of workers or poor farmers in China today with its miracle economy.

In the press notes, Jia describes his intention:

This film is about four deaths, four incidents which actually happened in China in recent years: three murders and one suicide. These incidents are well-known to people throughout China. They happened in Shanxi, Chongqing, Hubei and Guangdong – that is, from the north to the south, spanning much of the country.

I wanted to use these news reports to build a comprehensive portrait of life in contemporary China. China is still changing rapidly, in a way that makes the country look more prosperous than before. But many people face personal crises because of the uneven spread of wealth across the country and the vast disparities between the rich and the poor. Individual people can be stripped of their dignity at any time. Violence is increasing. It’s clear that resorting to violence is the quickest and most direct way that the weak can try to restore their lost dignity.

“A Touch of Sin” is opening throughout the United States over the next few months. Check http://www.atouchofsin.com/see.html to see if it is showing locally. I also recommend Jia Zhangke’s 2008 narrative film “Still Life” (https://louisproyect.org/2008/01/17/still-life/) and 2009 documentary “24 City” (https://louisproyect.org/2009/05/30/24-city/), both of which are class-conscious indictments of inequality in China. I have also heard that “The World”, a 2004 indictment of consumerism, is prime Jia Zhangke. All are available as DVD’s from Netflix.

Next Page »

Blog at WordPress.com.