By John Ross, Praxis Press, 2021
Reviewed by Dr Jenny Clegg
Updated 09 April 2022: John Ross contacted us to note that the review incorrectly quoted him as describing Deng Xiaoping as “the greatest Marxist of all time”. This should have been “the world’s greatest economist.”
John Ross has, for some years now, been one of the most forceful advocates of the present Chinese road to socialism on the Western left. His ‘China’s Great Road’ (for which we held an online launch) presents his key arguments. In this detailed review, Dr Jenny Clegg, writer, China specialist, peace campaigner and Friends of Socialist China advisory group member, acknowledges Ross’s useful contribution to the debate, but also draws attention to what she considers its flaws, regarding both the complexities of China’s recent trajectory and the historical record of socialism under Stalin and Mao.
Literature on China’s supposed ‘reversion to capitalism’, whether of the neoliberal or state-led kind, abounds. It has been argued over again that China’s success over the last four decades came as a result of its abandoning ideology for pragmatism so as to follow policies of ‘reform and opening up’. Either that or the wholesale embrace of markets unleashing the creativity of its individual capitalist entrepreneurs. John Ross, a Senior Fellow at the Chongyang Institute for Financial Studies at Beijing’s Renmin University, swims hard against this tide in his book, China’s Great Road, arguing the exact opposite:that China’s remarkable achievements are the result, not of a reversal of Marxism, but in fact a return to basic Marxist tenets.
The book comprises a collection of recent articles, some originally published in Chinese, others in English, which makes for some repetition, but leaves no doubt as to the arguments. Ross’s aim is to persuade others on the international left to look seriously at China’s socialism and see what can be learnt from its success.
The book presents two key propositions.
The first, that China has achieved far more than any other country in history in improving the well-being of its people, is set out with the help of easy-to-read graphs. The evidence, as Ross shows, is all there in World Bank figures: China has lifted over 900 million people out of poverty, raising livelihoods and life expectancy at unprecedented rates, whilst exceeding every other economy in output, wage growth and household consumption over the last 30 years.
Ross’s second proposition, that these unparalleled achievements have been the result of policies inspired by and entirely in line with Marxism, is couched in theoretical discussion, engaging with the key economic ideas of not only of Marx and the Communist Party of China (CPC) but also of Adam Smith and John Maynard Keynes. It is Ross’s contention that China’s development can be explained using familiar Western economic theories to make its success more accessible to wider audiences.
The target readership comprises two quite different but key constituencies of the left: progressives in Latin America, with whom Ross has had a long-term connection, whose perspectives are often shaped by a radical political economy influenced by Keynesian ideas; and the anti-globalisation left and workers’ movements, which have been sceptical of the apparent Dengist embrace of world capitalism. If he has some sympathy with the former, Ross reserves his most pointed criticism for the latter, whose view of socialism, seemingly based on the closed door national economic model as pursued by Stalin post-1929 and by China under Mao, he dismisses as ultra-leftism.
Marx, Smith and Keynes: state and market
For Ross, China’s support for globalisation is one of the most fundamental features of its Marxist economic policy. The world market, from China’s perspective, promotes interdependence among all countries towards a shared future.
Against the anti-globalisers, Ross explains the correlation between the openness of an economy to trade and its speed of economic development with the international division of labour serving as a key to prosperity for each country.
This involves a rather lengthy discourse on Marx and Smith to drive home the point that breaking down of the work process into smaller tasks increases the productive powers of labour. This division – or socialisation – of labour, intrinsically connected to expansion of the market, brings greater capital intensity and improvements in skills and technological development.
That labour division is the most powerful force of production and of human progress is the fundamental point Ross claims Deng Xiaoping was to grasp, in contrast with the ‘Soviet deviation’, by making support for globalisation a central feature of China’s Marxist economic policy. By joining global markets and entering the international process of the division of labour, Deng’s open door policy created new opportunities for China’s economic and technological development.
However, absent from Ross’s argument is any distinction between Smith and Marx on the matter of the market. As Michael Roberts points out in a recent blog, whilst Smith saw the accumulation of commodities produced for sale and profit as a measure of the wealth of nations, Marx was to contrast the accumulation of commodities in the private hands of the capitalist class with the accumulation of products as use values meeting human needs.
It is surely more with the needs of humanity in mind than the profits of global conglomerates that the CPC argues for the promotion of interdependence between countries through trade as the path to a common future.
Of course, market expansion in China took place on the basis of the state retaining ownership of a large-scale economic sector, as Ross goes on to make clear in the second aspect of his theoretical deliberations, focussing on the state’s ability to regulate the investment level.
Here he provides useful quotes from Xi Jinping, who explains that in China:
“The market plays a decisive role in allocating resources but is not the sole actor…. [the] role of the government is to maintain the stability of the macroeconomy, strengthen and improve public services, ensure fair competition, strengthen market oversight, maintain market order, promote sustainable development and common prosperity, and intervene in situations where market failure occurs.”
Xi goes on: “We must unswervingly consolidate and develop the public economy, persist in the leading role of public ownership, give full play to the leading role of state-owned economy and incessantly increase its vitality, leveraging power and impact.”
Ross highlights the superiority of China’s system over the crisis-ridden, slow-growth economies of the West as resting on its ability to control the level of fixed investment. His discussion at this point is directed to progressives in the developing world, whose economies have suffered from the worst of the West’s neoliberal instability.
His claim is that China’s success can be understood not only through a Marxist but also a Keynesian lens, since as he sees it the fact that China regulates its economy not via administrative means but by general macro-economic control of investments is just as Keynes advocated.
Like Marx, Ross argues, Keynes was concerned with the destabilising consequences of the growing proportion of economy going to investment as an economy develops. Much is made then of Keynes’ view that macro-economic instability in an advanced economy had ultimately to be addressed through “a somewhat comprehensive socialisation of investment”. This notion, Ross sees as having equivalence with China’s use of its state sector and state-owned banks to invest against business cycle shortfalls.
However, whilst the Chinese government certainly uses state investment counter-cyclically, there is far more to its management of the Chinese economy, not least the formulation of a plan directing investment to shape the course of the country’s future development
For Keynes, of course, the socialisation of investment was at most a short-term measure to kick start an economy falling into recession, not at all a first step towards the ultimate abolition of the law of value altogether. Keynes viewed the market as a neutral tool, a separate entity in which the government intervenes. However, from the Marxist perspective, the nature of the market is determined by the nature of the overall system of production: it is an economic mechanism interconnected with other social relations and institutions. The state-market relationship differs under different social systems: the socialist state puts the market supply and demand mechanism to use to help improve peoples’ livelihoods whereas for Keynes the purpose of state intervention was to fend off any major change to capitalism and to maintain high profits and the monopoly system.
Were Stalin and Mao ultra-Leftists?
Whilst Ross acknowledges China’s achievements post-1949 under Mao as ‘sensational’ – in the 31 years from 1949 to 1976, the year of Mao’s death, China’s life expectancy rose from 35 to 66 years – he reserves the greatest superlatives for Deng: the “world’s greatest economist”: “no one in history has ever combined such deep economic thinking with such successful economic policy”.
The largely nationally self-administered enclosed economies of the USSR post-1929 under Stalin and China under Mao, in their drive to socialise all productive capacity – ‘nationalising everything all at once’ – and then replacing market distribution with material balance planning, are seen by Ross as ultra-leftist deviations from Marxism. In the Communist Manifesto, he points out, Marx and Engels were to say that once the proletariat were in the ruling position they “will use its political supremacy to wrest, by degree, all capital from the bourgeoisie…”
Deng’s policies, he maintains, were “far more correct in Marxist terms”, noting in particular how his conception of the primary stage of socialism drew closely on Marx’s Critique of the Gotha Programme, with its prescription on bourgeois right – from each according to his ability; to each according to his work.
However, to suggest that Stalin and Mao did not have a proper grasp of Marxism is, to put it mildly, a bit of a stretch.
In a paper delivered at the recent conference of the World Association for Political Economy (WAPE), Pateman shows that both Stalin and Mao were quite clear on Marx’s point that socialism, in its early stages, would inherit the commodity form from capitalism. In Economic Problems of Socialism in the USSR, Stalin states that the law of value not only played a regulatory role in consumer goods markets but also had an influence on Soviet socialist production. Considerations of accounting and profitability, production costs and prices were all evidently important in the Soviet economy.
And Mao indeed was more than familiar with the operation of a market economy: he was to rise to leadership of the party in a struggle against the leftist suppression of private business in the Soviet base areas in the 1930s. Subsequently, between 1937 and1956, the CPC managed a market economy in a united front which included the national capitalists under the framework of New Democracy.
After 1956, Mao was to develop distinctive approaches under the five-year plan system, seeing the Soviet-style economic planning as over-centralised and bureaucratic, in danger of ‘squeezing the peasants too hard’.
But was his emphasis on moral over material incentives itself ultra-leftist? Again, Pateman sheds light here. Throughout his Critique of Soviet Economics, Mao reiterated his view of Stalin’s shortcomings in failing to take sufficient account of politics and ideology.
In his comments on the principle of ‘bourgeois right’, Mao stressed that whilst the second half of the formulation – payment according to work – addressed the question of economic incentives, the first half meant that workers had to contribute as much as they could in production ‘according to their ability’. By focussing only on economic incentives, Mao thought ‘socialist workers would not work as hard as their abilities permitted’.
From the abstract to the concrete
China after 1949 was presented with a completely different set of conditions from that of Stalin’s Soviet Union: even more isolated by the West, it was one of the poorest economies in the world. This left no choice other than self-reliance, particularly after the break with the Soviet Union. What the new government did have, however, was the support of the peasantry, the predominant part of the Chinese population, and Mao’s main concern was to maintain this support so as to transition as quickly as possible from New Democracy to socialism, bringing the national bourgeoisie who were liable to vacillation under control.
Mao was to take the route of ‘cooperation before mechanisation’, emphasising the CPC’s most important task was the education of peasants. Pateman points out Mao’s frustration with the Soviet emphasis on the role of machinery in promoting socialist development in the agricultural sphere. “Again and again”, Mao notes, the Soviet text “emphasises how important machinery is for the transformation. But if the consciousness of the peasantry is not raised, if ideology is not transformed, and you are depending on nothing but machinery — what good will it be?”
For Mao it was essential to imbue the peasants with a communist ideology in order to develop a socialist agriculture: without this, they would lack a positive, socialist, attitude to work and show little interest in making the most effective use of the technologies placed at their disposal.
Mao’s stance on ‘bourgeois right’ under socialism rose to the challenge of the seeming insurmountable difficulties China faced at that time. Self-reliance was made possible through a mass consciousness-raising to inspire the utmost from each individual according to their ability.
Critical to harnessing the energies of the workers and peasants in this way were practical policies to narrow the ‘three great divides’ between town and countryside, agriculture and industry, and mental and manual labour. Here in particular the introduction of industrial skills into the countryside so the peasant could see the benefits helped to counter the alienating effects of the accumulation of resources for rapid industrialisation, alleviating the ‘price scissors squeeze’ by raising the productivity of rural labour.
However, in 1979, the external circumstances changed fundamentally when the US announced its formal recognition of the PRC: it was this that made the open door policy possible. And China too was now ready for reform.
By this time the country was able to feed its population; it had a reasonably comprehensive industrial base in public hands which would benefit from gradual exposure to market competition; and its land system of collective village ownership would permit market expansion without peasant dispossession.
True, Mao made serious mistakes of political judgement in the Great Leap Forward and the Cultural Revolution, particularly through overestimating the class struggle. But had he not succeeded by putting ‘politics in command’ to lay this basis for future growth, Deng would not have been able to continue along the socialist road. China’s post 1979 success cannot be attributed, in Ross’s words, to Deng’s ‘profound theoretical understanding’ and ‘systematic application’ of Marxist principles alone.
Handling the contradictions
Whilst making tremendous progress since 1979, it has to be said that the reform and opening up process was by no means straightforward. Certainly the kind of ‘big bang’ that was so catastrophic for the post-Soviet Russian economy was avoided, but there were a series of ‘mini bangs’. At the end of the 1980s, dissatisfaction following a market deregulation which saw prices of meat and vegetables soar by over 30 percent, undoubtedly helped to fuel the huge demonstrations that occurred in the major cities, culminating in the tragedy of June 4 1989.
Then in the 1990s, the policy of ‘let go the small’, which Ross cites as a particular example of the ‘correct application of Marxism’, actually saw millions thrown out of work as large numbers of smaller state-owned enterprises closed down.
For Ross it seems China’s socialist economy has achieved the absolute standard of balance of public and private: in fact, the CPC has never taken the primary stage of socialism as the ideal and has never abandoned the long-term goal of the socialisation of the productive forces. At the same time, its embrace of globalisation is hardly as ‘unambiguous’ as Ross claims: a closer look shows that the Party has rather recognised economic globalisation as it exists under world capitalism as a ‘double-edged sword’, a route to growing social productivity, but also a mechanism for unequal exchange between the less and the more productive economies of the world.
Whilst Ross’s discussion tends to lack a critical edge, mentioning only in passing China’s continuing problems, the CPC itself has been far more discerning in identifying serious risks and challenges. In 2007, the then premier, Wen Jiabao, called the Chinese economy ‘unstable, unbalanced, uncoordinated and unsustainable’; and now Xi Jinping has set about reducing the power of the capitalists so as to address growing inequality. Criticising previous laxity, he has begun to rein in the tech giants, curb real estate speculation, and re-emphasise the role of the state sector in the interests of working towards common prosperity.
Meanwhile a new ‘dual circulation’ policy seeks a better balance between the internal and external markets, stemming the drain of millions of hours of unpaid labour out to the centres of world capitalism.
Ross’s failure to weigh the costs of this progress, balancing the advances in living standards to the growing inequalities, long working hours and exploitative and substandard working conditions, may well fall short in winning over those on the left he sets out to convince.
As Ross shows, China’s reform and opening up was not an NEP-style step back in adverse circumstances, but rather the basis for a new advance towards developed socialism. Expressed in a bold and straightforward fashion, Ross’s arguments make key lessons from China’s socialist experience easily accessible. But here there is also a tendency to oversimplify. By treating market and state as abstractions separate from historical conditions, he cannot grasp at the real contradictory dynamics that have shaped this development.
What explains the Chinese success is the path of its revolution. Materialism demands an understanding of theory in practice, but this is a book engaged in left conceptual debate rather than China’s concrete experience of socialist development. As to how exactly the CPC managed the transition from plan to market, how China integrated into the global economy without losing its own direction, and how it handled the new challenges and contradictions which arose, the reader must look elsewhere.
* This is an extended version of a review to be published in Theory and Struggle, the journal of the Marx Memorial Library published by Liverpool University Press, Vol. 123, 2022.