Why a Marxist Entrepreneur is not a Contradiction in China

This is the fifth of a series of articles on understanding China today. The articles cover politics, economics, culture and religion, since all of these are important for making some sense of what is happening. Each topic is approached from the Marxist tradition, for this is a key that is too often ignored. The articles provide a framework for how one might approach political theology in relation to the Chinese situation. The author teaches for a semester each year at Renmin (People’s) University in Beijing.

A committed Marxist and an energetic business entrepreneur: for many this is an impossible contradiction, much like the juxtaposition of Marxism and religion. Is not Marxism concerned with the collective ownership of the means of production and the principle of ‘from each according to ability and to each according to need’? Is not capitalist business all about the pursuit of private gain with little concern for anyone else? A Marxist entrepreneur is an oxymoron if you hold to sharp oppositions: either one or the other. But if you see oppositions as necessary to one another, mediated not so much as harmony but as productive tension, then the Marxist entrepreneur is less of a problem.

The latter is the case in China, where such a figure is rather unremarkable. For most Chinese, used as they are to a history of socialism and a distinct way of viewing oppositions, the Marxist entrepreneur is not a problem at all. So I would like to examine what a Marxist entrepreneur means in China. This task entails some dialectical legwork, but for that I make no apologies, since it gets us to the core of how Marxism is understood in China today.[1]

Let me begin with Deng Xiaoping, who unwittingly laid out the terms in which a Marxist entrepreneur may be seen in China. In 1985, Deng observed: “There is no fundamental contradiction between socialism and a market economy. The problem is how to develop the productive forces more effectively … If we are to keep to the socialist system, it is essential for us to develop the productive forces.”[2] This approach profoundly challenged some orthodox Marxist positions, for which a market economy as a part of capitalist economy should have been abandoned since China was already a socialist country, especially after the collectivisation drive from 1958 to 1976. Yet, what Deng fostered was an alternative approach to what may be called the dialectic of Marxism and capitalism. That dialectic has three forms: the need for economic and political strength; the use of capitalism to build socialism; and the need to foster the full development of capitalism under socialist guidance so that communism may emerge.

Economic and Political Strength

To begin with, the drive for economic and political strength is needed in a global situation that remains hostile to Chinese socialism. Interference by the United States and Western Europe may have taken different forms from its earlier crude efforts – such as launching sabotage raids from Taiwan in the 1950s or the embargo with the aim of stunting China’s economic recovery from years of civil war and Japanese occupation. But they remain a reality. The push for “regime change” has now been outsourced to NGOs, which, under the mantra of “human rights” and “democracy,” seek to destabilise Tibet, Xinjiang and most recently Hong Kong. In the face of this dystopian dimension of geopolitics, China has pursued the drive for economic strength. It has borne obvious fruit. China has become the second largest economy in the world and is disrupting the global status quo, even without realizing its full economic potential.[3] The increasing obsession with Chinese power in the United States and Western Europe is but a reflection of their own stumbles and declining position. Already in some respects, China is more technologically advanced than any other place on the globe. And with economic power comes military strength, which remains a necessity in the realities of geopolitics.

Using Capitalism to Build Socialism

The second form of the dialectic may be drawn from Lenin’s justification of the New Economic Program in the 1920s: using capitalism to build socialism.[4] The practice of this form of the dialectic goes back to the foundations of modern socialism, embodied in none other than Friedrich Engels. We mean not merely the fact that he opted – while a near-destitute exile in London after the 1848 revolutions in Europe – to become a partner in the family firm of Ermen and Engels in Manchester, in order to ensure that the Marx family, and indeed the growing circle of socialists, remained housed and fed. More importantly, we mean that a Marxist, more than anyone else, should know how capitalism really works. So why not use that knowledge to advance the cause of socialism? Engels continued this strategy after he sold his partnership, for he invested astutely and decisively in the stock market for the rest of his life, leaving a small fortune for the burgeoning socialist movement.[5] This model has been used since in some of the more effective socialist organisations, such as the Frankfurt School and the International Institute for Research and Education in Amsterdam. Both were founded and initially funded by the scions of big business.

To return to Lenin: he and the other Bolsheviks argued that the best way to restore a broken economy, after years of revolutions and international and civil wars, was to permit certain levels of market exchange with the countryside, granting concessions to some international mining companies and industries, and employing specialists at higher rates of pay to rebuild the economy. The result was the New Economic Program of the 1920s, brought to an end by Stalin in 1929 and the collectivisation drive. Lenin and Stalin were fully aware of the dangers of allowing some forms of market exchange, but they felt the dangers worth it for the sake of building socialism. In China and under Deng Xiaoping’s urging, the process began to go much further, for Deng argued that there was no necessary contradiction between socialism and some capitalist economic forms, assuming that the latter would be directed by the former. Indeed, Deng understood the mandate that Marxism is practice in the sense that it would make use of what would unleash productive forces. The employment of some capitalist methods was to be undertaken as a way of “accelerating the growth of the productive forces.”[6] Deng always understood this approach as part of the strengthening of socialism, not merely in terms of economic strength, as noted earlier, but also in terms of political and social strength. I would add that today this process continues, almost to the point of paradox (to an outside observer). Thus, the 2014 meetings of the Political Bureau of the Chinese Communist Party agreed to continue the process of reforming the economy, while at the same time President Xi Jinping sought to strengthen Marxism by blocking any push for bourgeois democracy, funding research and education in Marxism for the public and party cadres, and drawing heavily on Mao Zedong concerning the “mass line” campaign in its push for closer integration and sensitivity between government and people.[7]

The Simultaneity of Non-Simultaneity in Chinese Socialism

The third variation on the dialectic is perhaps the sharpest, for it argues that the full realization of the productive forces of capitalism needs to be fostered under the direction of a communist government that has already won power in a revolution. This argument has a couple of forms, one drawing on the classical argument of Marx that communism cannot appear until capitalism has flourished and realized its full potential, and the other relying on the dialectic of the synchronicity of non-synchronicity. As for the former, it relies on Marx’s observation: “A social formation never comes to an end before all the forces of production which it can accommodate are developed, and new, higher relations of production never come into place before the material conditions of their existence have gestated in the womb of the old society.”[8]Communism in this orthodox sense is not communism unless it develops from capitalism. This position led to the expectation that socialist revolutions would first happen in the “advanced” capitalist economies of Western Europe, since here the objective contradictions of capitalist development would generate the final crisis of that mode of production.[9] However, China’s situation is unique, for it missed its opportunity to develop into a full capitalist economy and thereby produce the classic pattern for socialist revolution in the context of a “mature” capitalism. Instead, the socialist revolution happened before the full fluorescence of capitalism. Thus, in order to foster its forces of production to a point where they are superior to capitalist ones, China’s socialist government has found it necessary to encourage the economic potential of capitalist forces of production so they may provide the basis of socialist forces of production. That is, China has harnessed and seeks to guide capitalist forces of production for the sake of creating a situation for the full realisation of socialism. This sharp formulation of the dialectic is both a massive experiment and produces its own intense contradictions. Not least is the contradiction that one is, in economic terms, in favor of capitalism for the sake of the development of forces of production, but that one is, in political terms, against capitalism for the sake of the development of relations of production.

This argument, however, has one catch: no successful revolution has happened in an “advanced” capitalist economy, so the model first put forward by Marx cannot be regarded as classical. Instead, socialist revolutions have taken place and consolidated themselves in places regarded as relatively “undeveloped” or “backward” – Eastern Europe and Asia. On this matter it seems that Bloch’s insight into the synchronicity of non-synchronicity is now the norm.[10] For Bloch, a mode of production always contains traces of earlier modes of production, which exist at different levels and modalities simultaneously in the present. They are like a “cultural ground water,” which lies closer or further from the surface, depending on the place. At the same time, they challenge and resist the present; they “contradict the Now; very strangely, crookedly, from behind.”[11] Bloch uses this approach to understand the rise of fascism, which constructs its resistance in terms of its false myths and hopes, of the Blond Beast, of blood and soil. But this non-contemporaneity also creates the possibility for socialist revolution, in which the unattained hopes of earlier forms, which gain “additional revolutionary force precisely from the incomplete wealth of the past,” meet the expectations of a “prevented future” and unleashed forces of production with which the present is pregnant.[12]

Bloch’s argument, with its call for a multi-temporal and multi-spatial dialectic, provides a significant philosophical reason for the success of socialist revolutions in supposedly “backward” countries rather than “advanced” capitalist ones. Thus, the significant presence of disparate older economic and social forms in the situations of Russia, China, Vietnam, Laos, or indeed the various revolutions in Africa and South America, have generated sharper awareness of the depredations of capitalism and thereby the conditions for the realization of formerly unrealized expectations of a better society, embodied in what Kautsky called “heterodox communism.”[13] Crucially, however, such non-synchronicity remains after a socialist revolution. It may well be exacerbated. What enabled the revolution in the first place now seems to hobble the construction of socialism. So we find the extraordinary non-synchronicity of socialist governments fostering the productive forces of capitalism, not as a retreat but as a necessary process of providing the conditions for the eventual and full unleashing of such forces under socialism.

A Marxist Entrepreneur?

Each of these three dialectical formulations holds some truth with regard to China. Indeed, it should clear by now that socialism cannot be understood without capitalism, albeit in ways that may well be rather unexpected. It should also be clear that they provide some indications as to why a Marxist entrepreneur is not an oxymoron in China, for entrepreneurship is part of the essence of Chinese socialism.

[1] In doing so, I deploy Marxist arguments, although one may also have recourse to Chinese traditions of the “doctrine of the mean,” the metaphysical postulates of yin-yang, and the idea of the “Great Harmony” (datong) in which oppositions are still present but work together for the greater good. Yet, even these traditions are now mediated through Marxism.

[2] Deng Xiaoping, “There Is No Fundamental Contradiction Between Socialism and a Market Economy,” in Selected Works of Deng Xiaoping, vol. 3, 99-101 (Beijing: Foreign Languages Press, 1985 [1993]), 99-100.

[3] For instance, the “pivot to Asia” and effort to “contain” China by the United States and its smaller allies seems rather futile as China develops close ties with Russia, India, Africa and South America. Here BRICS and the Shanghai Cooperation Organisation are beginning to provide a distinct alternative to the International Monetary Fund and the World Bank.

[4] Among many references, see V.I. Lenin, “Achievements and Difficulties of the Soviet Government,” in Collected Works, vol. 29, 55-88 (Moscow: Progress Publishers, 1919 [1965]), pp. 68-74.: 68-7; V.I. Lenin, “From the Destruction of the Old Social System to the Creation of the New,” in Collected Works, vol. 30, 515-18 (Moscow: Progress Publishers, 1920 [1965]); V.I. Lenin, “The Tax in Kind (The Significance of the New Policy and Its Conditions),” in Collected Works, vol. 32, 329-65 (Moscow: Progress Publishers, 1921 [1965]), p. 334-53.: 334-5; V.I. Lenin, “New Times and Old Mistakes in a New Guise,” in Collected Works, vol. 33, 21-9 (Moscow: Progress Publishers, 1921 [1966]).

[5] Tristram Hunt, Marx’s General: The Revolutionary Life of Friedrich Engels (New York: Picador, 2010).

[6] Deng, “There Is No Fundamental Contradiction Between Socialism and a Market Economy,” 100.

[7] Yang Yi, “China’s Leadership Takes ‘Big Exam’,” Xinhua News, 23 March 2014. http://news.xinhuanet.com/english/indepth/2014-03/23/c_133208015_5.htm.

[8] Karl Marx, “Preface to A Contribution to the Critique of Political Economy,” in Marx: Later Political Writings (ed. Terrell Carver; Cambridge: Cambridge University Press, 1996), 160.

[9] It also continues to generate dismissals of the revolutions and efforts to construct socialism in places regarded as economically “backward.” For instance, see Terry Eagleton, Why Marx Was Right (New Haven: Yale University Press, 2011).

[10] Ernst Bloch, Heritage of Our Times, trans. Neville Plaice and Stephen Plaice (London: Polity, 1991 [1935]), 97-116.

[11] Bloch, Heritage of Our Times, 97.

[12] Bloch, Heritage of Our Times, 115-16.

[13] Karl Kautsky, Communism in Central Europe in the Time of the Reformation, trans. J. L. Mulliken and E. G. Mulliken (London: Fisher and Unwin, 1897).