Socialism in One Country + Debt

[Ghost Hound]

I am a supporter of socialism in one country. But recently, the thought struck me after hearing of the ridiculous interest rates America owes to China for their debt. I was wondering how exactly we would pay off debts if one country goes socialist. Would it mean, regardless of conditions of the country [e.g. technological advances] that the country would likely have to utilize some form of a NEP-like policy in order to rapidly acquire the wealth to pay back hungry capitalist nations? My own theory is probably that a NEP policy would be instituted, but the wealth would have to be far more accounted for, and there would be a tighter level of planning from the state to more efficiently pay debt while managing the foundations of socialism. So long as employment is not an issue, this should be reasonably done over a period of years. Diplomacy would hopefully occur with the nations so as to develop a sense of lineiency, but the likelihood of such a thing is potentially slim. Eventually, because more and more socialization would occur and the nation would begin to more efficiently manage industry and agriculture, and the people of the nation would become more self-dependent relying less on trade between foriegn countries [in the case of America, this would mean if America were to attempt socialism, then they would not buy from China so much, casuing China's own economy to become more 'equalized'].

The issue would mostly affect advanced capitalist nations that would possibly attempt socialism rather than lesser ones, but nonetheless I am curious to see some thoughts, particularly from other Marxist-Leninists moreover. The permanent revolution theory, of highly internationalized revolutionary activity, would likely involve the same problem, so it is naive for those who support it to dismiss the issue.

[Zanthorus]

Well, the Bolsheviks just cancelled the debt. Seems like the obvious solution.

[Ghost Hound]

Well, the Bolsheviks just cancelled the debt. Seems like the obvious solution.

Either you're misunderstanding my post or I am misunderstanding yours. The Bolsheviks repudiated what debt other countries owed to Russia if I'm correct at my understanding [and I don't particularly know much on this, actually], but I was saying that if a country such as America were to attempt socialism, how should their debt to say, China be paid off if China never cancels the debt? I think it may in actuality be likely that China could cancel the debt, seeing as their economy is already so strong now, but likewise seeing as they own a huge amount of American debt, they could easily threaten military action if their demands were not met.

[Zanthorus]

Well from what little I've read on the subject, Russia owed debts to countries like France at the time of the October revolution. The Bolsheviks just refused to pay up.

[Widerstand]

they could easily threaten military action if their demands were not met.

And have the whole United Nations on their asses. Good luck trying that. Not to mention that the US has immense nuke power, and China surely wouldn't fancy a nuclear war much.

I think it would be handled just like it's been handled every time a country defaults (eg.: Argentine, Greece in past, Iceland): Since a country's sovereignty can't be touched, there's absolutely nothing they can do without provoking a war. When countries default, some of the debts are cancelled, and some are restructured (later deadline, lower interest rate, etc.). Now obviously this wouldn't be the case here, as there would be no restructuring - it would just all get canceled. So what?

Now of course no, or only few, capitalist nations would support a socialist America, so we would likely have a new cold war scenario, which - as I said - would basically come down to no one daring to start a nuke war.

[DaringMehring]

Well from what little I've read on the subject, Russia owed debts to countries like France at the time of the October revolution. The Bolsheviks just refused to pay up.

Correct. They did not consider the debts accrued by the tsarist regime legitimate.

[Die Neue Zeit]

That didn't prevent the Bolsheviks from incurring new debts, though. Nowadays, unless the socialist government wished to default from the get-go, the only other option is switching currencies and "quantitative easing" (printing money) after pegging the new currency to the old one for debt repayment purposes.

[communard71]

For the sake of argument, a country like the United States becoming socialist and refusing to pay its international debt is way too complicated, but, here it goes! Only a portion of the country would become socialist while another geographic portion would remain nominally capitalist. The capitalist portion would assume the internationally recognized mantle of the “true” United States and continue its international alliances with foreign powers in order to garner their assistance in putting down the socialist rebellion. In return, the capitalist United States would receive either debt forgiveness to some extant or excessively lenient terms in regards to future debt repayment, i.e. China or the UK will supply weapons, manpower or intelligence at their own expense (or simply remain neutral, with an unofficial assistance towards the capitalist US) and demand a resumption of debt repayment or fantastic trade agreements at the end of the conflict. In other words, the Spanish Civil War would serve as a basis for how things would shake down. United Nations had it correct I think, about what would happen if it was a smaller country. In the end, the only way the Socialist US would succeed in dismissing its international debt responsibilities would be if the nation became socialist as a whole. What a wonderful world that would be!:)

[Animal Farm Pig]

The USA is lucky because the dollar is used as the currency for a lot of debt. The new socialist government could simply devalue the currency until a loaf of bread costs a billion dollars. Then, the national debt would be worth about the same as a second-hand Ford Mondeo.

This will have the added effect of essentially wiping out all consumer debt and a lot of debt owed by poor countries. I would expect it to be a popular move with the USian population and debtor countries.

Under a capitalist system, such inflation would cause serious problems in the debt speculation market and with access to credit. There would also likely be problems as, under a capitalist system, it would be unlikely for wages to rise at the same rate as inflation. There would be a number of other problems under a capitalist system. Some accounting software might break.

Most of these problems should be irrelevant under a planned socialist economy. Moving forward, a new currency should be created-- simply because dealing with such big number is hard to do. The government can peg the exchange rate and allow for a transition time.

[The Vegan Marxist]

In before robbo203's "State Capitalist" theories.

[Peter The Painter]

well, for one, socialism in one country can only work on non authoritarian, worker controlled based ideas.

Second, well, the people would be armed, the whole population, so if anyone wanted to demand debt be repaid through the rifle, you could say

"We have abolished money, and the state, so we have no paper to give you, and if you fuck with us, you will have 300 million armed revolutionaries, with rifles, who will give you so much hot lead, your invading debt collectors, will be more lethal than lead paint"

Or you could do a Mao and get cushty with the remaining superpower.

[Psy]

For the sake of argument, a country like the United States becoming socialist and refusing to pay its international debt is way too complicated, but, here it goes! Only a portion of the country would become socialist while another geographic portion would remain nominally capitalist. The capitalist portion would assume the internationally recognized mantle of the “true” United States and continue its international alliances with foreign powers in order to garner their assistance in putting down the socialist rebellion. In return, the capitalist United States would receive either debt forgiveness to some extant or excessively lenient terms in regards to future debt repayment, i.e. China or the UK will supply weapons, manpower or intelligence at their own expense (or simply remain neutral, with an unofficial assistance towards the capitalist US) and demand a resumption of debt repayment or fantastic trade agreements at the end of the conflict. In other words, the Spanish Civil War would serve as a basis for how things would shake down. United Nations had it correct I think, about what would happen if it was a smaller country. In the end, the only way the Socialist US would succeed in dismissing its international debt responsibilities would be if the nation became socialist as a whole. What a wonderful world that would be!:)

That is unless the leaders of the US state unconditional surrender to a revolutionary army because we cut them off from retreat due to wide spread mutinies within the US armed forces. But that would lead to the whole nation turning into a workers state.

[Comrade Outlaw]

I didn't read all the posts so don't know if somebody touches on this;
For socialism to succeed in one country, the economy needs to shift from a consumer based economy into a production one, so for them to pay off the debts to china they would have to produce a greater amount of goods, so that the surplus that is created is a lot greater than providing plentiful for the people of America, selling the extra surplus to pay off debt. Lenin's NEP failed because the foundations were not their for it to work, every household should be producing food, every place should be producing some sort of goods depending on their location.

What is the difference between socialism in one country and national socialism?

Viva La Revolucion, Comrades.

[L.A.P.]

Well from what little I've read on the subject, Russia owed debts to countries like France at the time of the October revolution. The Bolsheviks just refused to pay up.

Problem solved. :D