China's Socialist Market Economy and the 1978 economic reforms

[RP150]

I was trying to consider a topic/question to pose on this thread so I shall try to ask a few questions. My first question is what is this forums view on Socialist Market Economy's? I would argue that SMEs are necessary for economic growth in a country.My next question is what does the forum think on the economic reforms established in 1978 under Deng Xiaoping? And finally what does the forum think on small private enterprise and free trade in a Socialist economy?

[Tim Cornelis]

A socialist economy, if we're talking about a post-capitalist economy, is a socially planned, classless, moneyless, stateless, marketless economy. This is the general consensus on this forum, and it is the only one consistent with a Marxist understanding of capitalism and socialism. A socialist market economy is simply a variation of capitalism, and economic growth a measure, although perhaps indirectly, of the rate of capital accumulation.

[RP150]

A socialist economy, if we're talking about a post-capitalist economy, is a socially planned, classless, moneyless, stateless, marketless economy. This is the general consensus on this forum, and it is the only one consistent with a Marxist understanding of capitalism and socialism. A socialist market economy is simply a variation of capitalism, and economic growth a measure, although perhaps indirectly, of the rate of capital accumulation.

The major problem with a non market socialist economy is the problem with price calculation of a commodity without supply and demand.

[Comrade Jacob]

Simply revisionism. A market in some sense may have been necessary in the early stages but Mao already brought China to socialism and any market reforms after that achievement is revisionism.

[Sewer Socialist]

Can someone explain how a "socialist market economy" works?

[Rafiq]

The major problem with a non market socialist economy is the problem with price calculation of a commodity without supply and demand.

The major problem of proponents of a 'socialist market' economy is that they can't fathom the reality that commodities in present day society serve to reproduce present day society, and that it is tautological to say that an economy cannot exist without the means by which they do this.

But congratulations for solving the eternal mystery of why a Socialist society couldn't be more efficient in being a capitalist society.

[Tim Cornelis]

The major problem with a non market socialist economy is the problem with price calculation of a commodity without supply and demand.

We're not trying to calculate prices for commodities. Socialism is the abolition of commodity production. In essence what you're really saying is "the problem with socialism is economic calculation, socialism doesn't work, we should have a capitalist system" -- by Marxist standards.


Can someone explain how a "socialist market economy" works?

"Market socialism" would generally be cooperatives operating in a market. "Socialist market economy" would be state owned, non-cooperative enterprises dominating the economy, and a sort of dirigism or indicative planning by the government.

[ckaihatsu]

The major problem with a non market socialist economy is the problem with price calculation of a commodity without supply and demand.


There's a current thread where this has been discussed at length:


Why I gave up on traditional communism

http://www.revleft.com/vb/why-gave-up-t193405/index.html


I developed a model framework that addresses the 'supply' and 'demand' issue as it pertains to materials and labor in a communistic gift-economy context:


communist supply & demand -- Model of Material Factors

http://www.revleft.com/vb/blog.php?b=1174


Here's an introduction:





A post-capitalist political economy using labor credits

To clarify and simplify, the labor credits system is like a cash-only economy that only works for *services* (labor), while the world of material implements, resources, and products is open-access and non-abstractable. (No financial valuations.) Given the world's current capacity for an abundance of productivity for the most essential items, there should be no doubt about producing a ready surplus of anything that's important, to satisfy every single person's basic humane needs.




[I] have developed a model that [...] uses a system of *circulating* labor credits that are *not* exchangeable for material items of any kind. In accordance with communism being synonymous with 'free-access', all material implements, resources, and products would be freely available and *not* quantifiable according to any abstract valuations. The labor credits would represent past labor hours completed, multiplied by the difficulty or hazard of the work role performed. The difficulty/hazard multiplier would be determined by a mass survey of all work roles, compiled into an index.

In this way all concerns for labor, large and small, could be reduced to the ready transfer of labor-hour credits. The fulfillment of work roles would bring labor credits into the liberated-laborer's possession, and would empower them with a labor-organizing and labor-utilizing ability directly proportionate to the labor credits from past work completed.




http://www.revleft.com/vb/blog.php?bt=14673


And here's an illustration:


labor credits framework for 'communist supply & demand'



http://s6.postimg.org/jjc7b5nch/150221_labor_credits_framework_for_communist_su.jp g (http://postimg.org/image/p7ii21rot/full/)

[Hatshepsut]

The major problem with a non market socialist economy is the problem with price calculation of a commodity without supply and demand.

The “price” (Marx prefers the word “value”) of a commodity unit is how many labor hours it took to make it. Therefore, the “price” signal comes from glut or shortage of the product when it’s distributed. Yeah, it’s less “efficient” than capitalism. But far more humane.

The inefficiency problems aren’t as bad as we think. Information about supply and demand is available from prior production and consumption figures. This helps avoid extreme gluts or shortages. The socialist economy works best if it is relatively steady-state, without the large and abrupt year-to-year changes in outputs and inputs common in capitalism. In this case, it should work well enough to satisfy the needs and wants of the population.

[Црвена]

"Socialist market economy," in the sense in which Deng Xiaoping used it was just a word to describe slowly returning China to regular corporate capitalism from the state capitalist system that existed under Mao (i.e. a system in which party bureaucrats effectively became a new bourgeois). There's no way that post-liberalisation China was/is anything other than corporate capitalist; it had and still has private ownership of the means of production, wage labour and commodity production. But the Chinese Communist Party wasn't about to admit that. Keeping up the façade of socialism was necessary for it to keep control.

Market socialism is an oxymoron in my opinion. Socialism entails the end of commodity production and thus the end of an "economy," as such (obviously there will still be production and distribution, but they will be planned directly according to human need as opposed to being determined by market mechanisms).

[Anglo-Saxon Philistine]

The major problem with a non market socialist economy is the problem with price calculation of a commodity without supply and demand.

Rather, the problem with a market "socialist" economy is that it has no problem with price calculation, meaning that, as a form of commodity production, it is not socialism at all. To talk of socialism in such terms shows a gross misunderstanding of what socialism is, popular among social-democrats and Euro"communists".

It is also misleading to talk about "market reforms", as the law of value, commodity production and consequently the market existed both before and after these reforms.

Any sort of private enterprise is impossible in socialism, even if you dress it up with "socialist" rhetoric. As for economic growth, why should socialists care about how well the bourgeoisie has it? That is the only thing economic growth meaningfully measures.

[Red Guardian]

Socialism would be concerned strictly with the provision of use values - that is, the utility of things in and of themselves. The exchange value or price of something not only has no place but becomes a meaningless concept.

Just as Dukes and Barons and the corvée are now not only not issues worth considering but are positively meaningless and irrelevant to the capitalist economy.

When members of indigenous tribes in the Amazonian jungle secure food and shelter, do they worry about the problem of economic calculation? Do they deal with prices? No, not really. They have an organic relationship to the land and the means of production they employ - that is, they simply produce and consume.

Granted, "modern" society is alot more complex but the general idea holds true.

[John Nada]

I was trying to consider a topic/question to pose on this thread so I shall try to ask a few questions. My first question is what is this forums view on Socialist Market Economy's? I would argue that SMEs are necessary for economic growth in a country.I views "socialist" market economies negatively and as an oxymoron. Growth in a state-capitalist market economy means more exploitation of the workers and peasantry, both inside and outside the supposedly "socialist" country(another oxymoron), and more wealth stolen from the proletariat and peasantry by the bourgeoisie. The goal of socialists is to eventually eliminate countries, not strengthen a new bourgeoisie.
My next question is what does the forum think on the economic reforms established in 1978 under Deng Xiaoping? And finally what does the forum think on small private enterprise and free trade in a Socialist economy?The mental gymnastics to justify the counterrevolution was that the PRC was too primitive to go on towards socialist construction. Supposedly Marxism requires an advance capitalist stage before even considering a dictatorship of the proletariat. Attempting socialist construction and the dictatorship of the proletariat was called an "ultra-leftist error". Therefor, China needed to stop trying socialist construction, and instead concentrate on "productive forces". To build the "productive forces" up meant market "reforms" and siding with US imperialism(which IIRC Deng denied imperialism is still around). Then a century later China might be ready, according to Deng.

It's not Marxism but Menshevism. China or damn near every country on the planet is far more advance than the most advance countries in Marx and Engels's day. Phones, electricity, vaccines, anti-biotic, synthetic fertilizer, cars, and nuclear power, any third-world country would look like science fiction to Marx and Engels. They thought socialism was possible in their lifetimes, with no century long waiting stage in between.

Deng's "reforms" were basically austerity. Banning strikes, massive lay-offs, slashing the safety net, driving peasants off the collectivized farms, forcing women to only have one child, destroying the environment, siding with reactionary regimes for imperialist exploitation abroad, and completely abandoning Marxism for revisionism, all so a new bourgeoisie can get super-rich. This is not socialism at all. It's capitalism to the max, and the proletariat of the PRC will have to have another revolution to remove the counterrevolutionaries. You might as well as ask,"What do you all think of Ronald Reagan?"

[Red Guardian]

I views "socialist" market economies negatively and as an oxymoron. Growth in a state-capitalist market economy means more exploitation of the workers and peasantry, both inside and outside the supposedly "socialist" country(another oxymoron), and more wealth stolen from the proletariat and peasantry by the bourgeoisie. The goal of socialists is to eventually eliminate countries, not strengthen a new bourgeoisie.The mental gymnastics to justify the counterrevolution was that the PRC was too primitive to go on towards socialist construction. Supposedly Marxism requires an advance capitalist stage before even considering a dictatorship of the proletariat. Attempting socialist construction and the dictatorship of the proletariat was called an "ultra-leftist error". Therefor, China needed to stop trying socialist construction, and instead concentrate on "productive forces". To build the "productive forces" up meant market "reforms" and siding with US imperialism(which IIRC Deng denied imperialism is still around). Then a century later China might be ready, according to Deng.

It's not Marxism but Menshevism. China or damn near every country on the planet is far more advance than the most advance countries in Marx and Engels's day. Phones, electricity, vaccines, anti-biotic, synthetic fertilizer, cars, and nuclear power, any third-world country would look like science fiction to Marx and Engels. They thought socialism was possible in their lifetimes, with no century long waiting stage in between.

Deng's "reforms" were basically austerity. Banning strikes, massive lay-offs, slashing the safety net, driving peasants off the collectivized farms, forcing women to only have one child, destroying the environment, siding with reactionary regimes for imperialist exploitation abroad, and completely abandoning Marxism for revisionism, all so a new bourgeoisie can get super-rich. This is not socialism at all. It's capitalism to the max, and the proletariat of the PRC will have to have another revolution to remove the counterrevolutionaries. You might as well as ask,"What do you all think of Ronald Reagan?"

What are the chances that, even as China has become one of the strongest and most prolific capitalist economies in the world, the Party leadership still has it in the back of their minds that the ultimate "goal" is constructing socialism and will recommence that task?

I can hope.