Class Struggle No 109, April-June 2014

   Class Struggle 109

China: Socialists at odds over the Yue Yuen strike

Striking Yue Yuen workers mass rally

It’s one thing to say socialists all agree that the self-activity of the working class is the true basis of the march for socialism, but what is the road map? Disagreements over the character of Chinese society as socialist, capitalist, or imperialist, make all the difference to whether the road map leads the marchers to socialism or not. This question was raised specifically during the Yue Yuen strike. We reprint here an edited version of an exchange which took place on the facebook page ‘Trotskyism is Alive and Kicking’.

First, there are that ‘state caps’ or ‘third camp’ like the Cliffites (SWP-Britain) who claim that China since 1919 has been capitalist if not imperialist, so what is new? Tell that to striking Yue Yuen workers who see themselves locked in a struggle to defend their ‘socialist’ pension  rights against the return of capitalism.  The fact is that while the ‘third camp’ judged the Chinese revolution from afar was a bourgeois revolution where the bourgeoisie were expropriated, the Chinese masses knew they had been in a social revolution and the bourgeoisie had disappeared off the stage of history. The Chinese bureaucracy of the CCP has cleverly staged a capitalist counter-revolution by posing as the defenders of the revolution in the apparent absence of a new Chinese bourgeoisie. It is necessary to explain to workers who struggle against the return of wage labour, to see the need to overthrow the CCP as the bourgeois defenders of capitalism and not its destruction.

Then there are the dogmatic Trots like the Sparts and the CWI who say China became a bureaucratically Deformed Workers State after 1949 and remains one today.  They reverse the ‘third camp’ position and insist that the bourgeoisie who were cast off the stage of history by the revolution, cannot re-enter that stage except in the guise of individual capitalists. Incredibly they explain China’s rise to No 1 world economy as the responsibility of the CCP bureaucracy thereby crediting a degenerate workers state with the capacity to develop the forces of production ahead of the imperialist powers.  Tell that to the striking Yue Yuen workers who see the CCP in bed with capitalist corporations, super-exploiting them and getting superrich in the name of ‘market socialism’. 

Then there are the ‘Trotskyists” like the FLTI who claim China has restored capitalism but is not or cannot become imperialist since it is oppressed by the existing imperialist powers. For them, China serves the interests of imperialism as a capitalist semi-colony which allows super-profits to be extracted from cheap Chinese labor and raw materials. Tell that to striking Yue Yuen workers who see their labor and lives pay for China’s rise to the No 1 world economy which is super-exploiting workers in Asia, Africa and Latin America.  

The FLTI is wrong on China. China is not a ‘maquiladora’ of the US. Today China and the US are rapidly shaping up as the major imperialist rivals. China has moved very fast since it opened up its SEZs to FDI 20 years ago. Even 10 years ago it was hard to see it emerging as a new imperialist power. 

All three positions on China have been debated at length by the LCC in a number or articles. Most recently we have taken up a critique of the roots of these different positions in our article: "Why are Russia and China Imperialist Powers and not Capitalist Semi-Colonies?” 

Yet today the US and China are competing to be the No 1 largest economy and invest in each other where the costs of production are nearly equal. We are facing escalating trade, political and military rivalry between the two. Not to acknowledge this fact means, for example, you lack the clinching argument against the Bolivarian's popular front with China for 'market socialism' in Latin America. 

Worse it is a call for the defence of China in wars with other imperialist powers. Here is recent data on comparative costs of production of 25 countries including China and the US:

"The country with the lowest manufacturing costs, we found, is not China. It’s Indonesia, then India, Mexico, and Thailand. China comes next—with Taiwan’s costs just a tad higher and the U.S.’s a bit more than that, ranking America No. 7 in our study. As Chinese labor costs rise, American productivity improves, and U.S. energy expenses fall, the difference in manufacturing costs between China and the U.S. has narrowed to such a degree that it’s almost negligible. For every dollar required to manufacture in the U.S., it now costs 96¢ to manufacture in China, before considering the cost of transportation to the U.S. and other factors. For many companies, that’s hardly worth it when product quality, intellectual property rights, and long-distance supply chain issues are added to the equation."

The response of David Walters on facebook to the above is typical of the FLTI and others trapped in a dogmatic time-warp:

“China plays both roles, as a developing national state capitalist country and as a HUGE repository of maquiladora...basically all of the maquiladora industries have departed Mexico for China. This occurred almost 10 years ago. It is still going on. It's a great sucking hole for low wage 'repetitive injury' jobs and capital.”

CWG replies: “That China plays both roles is not in dispute. Their relative weight and role in the direction of China's capitalist development is. Since restoring capitalism China has re-entered the global capitalist economy without subordinating itself as a semi-colony.

Unlike normal capitalist semi-colonies, China's maquiladora role was not a means of sucking out all of China's surplus into the imperialist countries, but a means of getting a trade surplus and R&D transfer. Thus as the Businessweek article above shows China has gone up the value chain and is no longer the world's cheap labour factory. As the most recent OECD survey shows, China has taken off so it is no longer so dependent on manufactured exports of Foreign Investor Enterprises to maintain its dynamism. "Total FDI peaked at 17.1% of fixed capital formation in China in 1993 and has declined since then to 2.8% in 2010, even though it has risen markedly in absolute terms." 

And consider that North America has a tiny share of the FDI stock compared with other Asian countries. It is China's emergence as a new imperialist power that explains the rising competition between the US and China that we are seeing in every continent. 

Walters replies: “All you are saying is that regular monopoly capital equals state monopoly capital. I'm not disagreeing for the sake of this discussion. I'm saying that for a state to be imperialist, that finance capital has to be THE dominant form of economy within the mode of production. I see zero evidence for this. I see the domination of manufacturing capital, both SOEs and IO/private forms, dominant. That such export of capital from either private sources or, SOE is a small percentage of the overall GDP. China looks essentially like a state capitalist form of the U.S. circa 1898. BTW...I have zero political stake in this discussion. I'm really here to learn and discuss. For China to really be Imperialist, it would have to do its investments, first, in terms of quick return of the dollar (they do use dollars, not their own currency, another issue in terms of being Imperialist but not decisive) and secondly with a rising tendency for speculative investment in finance. China is doing neither. None of its foreign investments, at least not significantly, are designed to return a thing except raw materials which would be more profitable to use domestic resources in many instances. Instead they are building up huge stockpiles in raw materials for further use down the road. This is totally unheard if investments were actually based on profit.”

CWG replies: You make a fundamental and unfortunately common mistake. Lenin defined finance capital as the fusion of banking and productive capital. Productive capital means productive of commodities. “State monopoly capital” was used by Lenin to characterise the form of finance capital at the more concrete level of international relations and the global market where finance capital was fused also with the state. Unlike the prevailing use of the term, capital that quits the productive circuit to speculate in non-productive existing assets is not finance capital but money capital. “Manufacturing capital” is a meaningless term unless you are using it as a non-Marxist proxy for productive capital. If you use Lenin’s conception of finance capital it is immediately obvious that the Chinese state is fused with finance capital devoted entirely to its reproduction.

As for "quick return"? Since when has that been a criterion for imperialism? Super-profits will obviously increase as turnover time increases. But super-profits do not derive from turnover time. And your "Speculative investment"? No.  Export of capital is driven by the need to counter the TRPF with cheap raw materials and labour power. When this fails due to rival state monopoly capitals, surplus capital is driven into speculation. So speculation is a symptom of finance capital being diverted from the production of value to speculation in existing values as money capital. 

As yet China's capital export is countering the TRPF but the increasing organic composition as China develops will bring this to an end before long. This is part of the law of capitalist accumulation. Your argument rests upon voluntarist policies of the CCP able somehow to override the determination of the LOV where China is forced by its need to accumulate capital to enter into a growing rivalry with the US-led imperialist bloc. Not only that, you have to explain the US encirclement of China as a voluntarist response to China's voluntarist expansion. The result is a position like Kautsky's ultra imperialism where the fate of nations hinges not on the law of accumulation but the respective policies of imperialist elites. Ergo imperialist war is an aberration and parliamentary socialism can correct for it by ensuring that capital is invested productively so it continues its historic mission to prepare the conditions for socialism in the never-never.

The Chinese revolution which created a degenerate workers state has not survived capitalist restoration by the CCP. Yet many of the workers still believe they are fighting to defend socialism (albeit with 'Chinese characteristics) . But in truth the only way they can do that is to fight for a socialist revolution against the new capitalist ruling class that is today responsible for China’s emergence as a new imperialist power.

A Marxist review of Capitalism and Drug Use

In New Zealand recent news coverage has been a typical example of journalistic activism promoting a moral panic about an issue.. in this case psychoactive drugs. Headlines about psychoactive substances, (synthetic cannabinoids) raise the issue of the legal status of new drugs, and call into question the legal status of old drugs. Dramatic case studies have made headlines, while the huge numbers of people lining up outside one of the limited (to 250) stores was repeated, as if this showed a problem. Various local newspapers gave plenty of space for anti-synthetic drug campaigners, amounting to free support for the anti-drug campaign. These were frequently parents distressed by their son/daughters loss of potential as a consequence of getting into synthetic cannabinoids (“legal highs”). Moral anti-drug fundamentalism, often comes from people whose addiction is something else (religion, work, alcohol, sport, etc). NZ law makers had given up on the war on drugs approach. Legal highs were a step ahead of the banning laws. New psychoactive substances were always in the pipeline, chemically different – not banned as yet. So the lawmakers tried regulations.

War on Drugs vs Regulation

For decades the approach to drug use by the ruling class was to ban some drugs and regulate others. The current conventional approach to drugs: is the US led “war on drugs” or “narcotics”. This is contrasted with the right to sell other equally or more damaging drugs such as alcohol and tobacco. The lessons of prohibition of alcohol in many countries led to organised crime, and the same is true of the prohibition on narcotics.  

There is a growing recognition that the social costs of prohibition of cannabis vastly outweigh its benefits.  This has seen a swing away from prohibition towards the introduction of legalised and regulated synthetic cannabis. After years of playing catch up with organised crime in drugs, NZ Governments took the step to allow the sale of ‘legal highs’ that have been tested for safety and under strict controls.  

From being sold in thousands of dairies & convenience stores and little control over the distribution the Interim Agreement allowed no more than50 chemicals to be sold from no more than 200 stores with R18 rules. (While they were being tested).

A new frontier of capitalism was opened with this new set of commodities: production, packaging and marketing companies for these chemicals taking home super-profits. The newly synthesised psychoactive substances were capitalised – taxable, profitable, cowboy capitalism. They fitted a market segment – cheaper than cannabis, and thought to be a way to avoid workplace drug screening (and legal anyway).

 ‘Legal highs’ were not tested on animals or humans: It was a grand scale experiment with the NZ population. A few chemicals failed the safety test by causing direct harm that was reported to the ministry of health, and were removed from the ‘legal’ (regulated) regime. There are many other things we don’t know about the impact of the availability of legal highs. E.g. if alcohol sales were reduced by the intro of ‘legal highs’, or if cannabis consumption reduced: if the corresponding legal or illegal markets were under profit squeeze? We don’t know if drug (& alcohol) related traffic crashes were reduced during the period of legality.

Capitalism has failed to measure the damage or risk of drugs. Instead drugs like alcohol & tobacco which are profitable and taxed hugely and create massive damage; cancers, etc, are legal. An illegal drug like cannabis creates less damage on an active component comparison. When a technical expert such as (UK) Professor David Nutt said this, the conservative government did not like his advice. He was dumped from his role on an “independent” government advisory panel. He went on to found an “independent scientific committee on drugs”. He complains that illegal drugs are much more difficult to conduct research on since the bureaucracy required to obtain the drug for research purposes creates a barrier to research.

NZ Drug classifications have followed the worldwide trend – US driven “war on drugs”. While other addictive problems such as gambling was legalised (regulated and taxed), alcohol remains legalised (loosely regulated), but those regulations are clearly unable to stop the social problems related to alcohol. Tobacco regulation has followed the Australian trend and introduced stricter controls on advertising and marketing. Warning signs on packaging have grown from small to bigger and more graphic.

Cannabis being illegal left the door open to the new technology of synthetic cannabinoids – chemicals not yet identified and banned by the governments, and not yet detectable in standard drug screens.

Workplace Drug Testing

In the name of “health & safety” the employers banned detectable psychoactive substances.  Workplace “health & safety” has been an excuse for drug testing. So a drug testing industry has developed in the last 15years. “Health & Safety” avoids addressing the real risk issues and labels occasional substance users as risks in the workplace.

Workers (& soldiers) have been trying the new chemicals “synthetic cannabis”, because it cannot be detected in workplace drug testing. The ranks of the US military have been high users of synthetic cannabis – exactly because they are not detectable in standard tests. Synthetic Cannabinoids became another product to market to avoid detection by those tests. Synthetics were a good option if workers wish to avoid being sacked or dumped into unemployment.

But for what reason – if cannabis detected in drug testing it may have been used a month ago and not affect the worker at work. So the Capitalist reaction was an over–reaction, and made some workers unemployed for no good reason.

Drug testing makes a mockery of real concern for the health and safety of workers. The greater threat to the health and safety of the working class is worker fatigue due to extreme long hours of work – where a 6 day 10hr days (60hr) working week has now become common in many NZ industries. Coal mines with malfunctioning gas testing equipment and extreme long working hours are the failures of capitalism.

Only a united working class can fight these employers and these employment practices. For fighting democratic unions that campaign for a living wage is set by workers committees and achievable in a 40hrs working week!

Capitalism puts profits before people and this is true in drug law. Short term profits for the alcohol, tobacco and gambling “industries” (capitalists) have been more important than the damage done to people, their families and communities. The tax the government takes from these commodities is more important to the government than the long term human and health costs.

Government funding for treatment is pitiful, and so treatment resources are pathetic, not at all near the level of need. Really treatment consists of individual assessment and if you are really motivated to change maybe some treatment. Talking therapy is a poor substitute for lack of community; family/friends workmates – involvement in what you really need.

A public health or education model treats the population like farm animals: Keep enough people alive enough to work, reproducing capitalist class relations.

The “illegal” drugs provide excuses for police to criminalise the working class, with poor, Maori and Pacific Islanders most likely to end up with drug convictions and rich and white most likely to be let off with a slap on the wrist.

The NZ state now taxes illegal drug profits through seizing assets under “proceeds of crime” laws. A family caught with illegal drugs could lose their family home, i.e. be made homeless, while the state auctions off this and pockets the money.

Regulate/ criminalise - decriminalise

Radical youth may call for the legalisation of all psychoactive substances – perhaps in a reaction to police state control. The “war on drugs” turns possession and use of some drugs into criminal activities.  Drug related oppression across racial and class lines, is state oppression.

In a previous statement on drugs Class Struggle called to support legalisation, however this was mistaken. Marxists have no confidence in any of capitalisms laws. The whole system is biased in favour of the rich while the working class are controlled by the state forces = police, courts, prison system, etc.   
It is sowing illusions in the capitalist state to believe that legalisation would lessen the adverse effects of drug use. That is, the legalisation of drug use can lead to a wider misuse of drugs as the legal high experiment in NZ proves. There is no guarantee that the state can or would regulate drugs to make them harmless. Would legalisation really assist the strength and organisation of working class? No!

Calls to regulate, decriminalise or to legalise drugs all rely on parliament to change laws. This fails to increase the power of the working class. Instead diverts the struggle for freedom from police oppression (the state) back into the capitalist state at another level: - parliament and law making.  It limits the debate to legal status. 

Many states have legalised (e.g. Portugal) or decriminalised drugs.  Cannabis is available in cafes in the Netherlands. Now the UK and several states of Australia have decriminalised possession of small amounts of cannabis. Western Australia runs a “Cannabis infringement notice” system, which hits people caught with small amounts with $100 fines. Several states of the US have decriminalised medicinal use of cannabis. So legalising drugs is possible within capitalism. And does not necessarily increase the power of the working class

Even a decriminalised drug regime is unfair; the poor would clock up fines, that the rich could avoid or easily pay off. The poor are more likely to fail to pay their fines and end up under increased court pressure over this.

The Legal status of a drug does not address the real driving forces behind consumption of drugs. Nor does it necessarily allow the working class more organising potential like democratic freedoms and union rights do.

A useful historic and psychological perspective from Bruce Alexander identifies a dislocation or “poverty of spirit” as the underlying cause of addiction. He particularly blames the “free-market economy”. 

Alexander’s definition of free-market economy is one and the same as capitalism. He locates all addiction problems as driven by individual doing their best to cope in this “dislocating” society. Effectively his definition of dislocation is the same as Marx’s alienation. But Alexander does not locate alienation at the point of production, instead at the surface appearance of our relationship to things (culture, place, people, etc). In spite of his limitations, Bruce Alexander gets further down to the roots of the problems than others from the field of psychology. 

Alienation

Drawing the Marxist lesson from Bruce Alexander’s research; capitalism is alienating and alienation drives drug consumption and dangerous addictions more generally. “Religion is the sigh of the oppressed creature, the heart of a heartless world, and the soul of soulless conditions. It is the opium of the people.”  Marx put drug addiction on the same level as devotion to religion, and most significant this is all in the context of experience of alienation (oppression, heartlessness and soulless conditions).  Marx was commenting about addictive devotion and alienation.

To legalise drugs disregards the alienating processes of work under capitalist production and other harms of social abuse and exploitation within capitalist society all that need to be changed. So legalising does not develop unity of working class in common consciousness of the experience of alienation. Instead it distracts the working class by offering more “legal” options for “self-medicating” (drug use) to cope with life under capitalism. The drug regulation debate ignores the need for revolutionary change.

Many societies have used music (drumming chants), dance, and rituals to alter states of consciousness and transition members or whole communities from child to adult, from season to season, and in many societies psychoactive substances were used in these ceremonies. Prior to capitalism there is little evidence from history of problem drug use – except the final years of the Greek and Roman civilisations (see Bruce Alexander).

Freedom from enslavement by drugs will be more possible when alienation through capitalism is overthrown.

Workers’ Control

We support working class control over all drugs! Instead of a ‘no control’ situation of full legalisation there needs to be some level of social control – but the power should be held by the working class, not capitalist forces.

Working class control is not possible under capitalism: the current example of alcohol regulation shows this. In theory NZ “communities” have a say about alcohol premises / outlets, however the capitalist alcohol lobby has alcohol wholesale outlets spread like corner dairies in poor areas, and less wholesalers, more “on licence” premises (restaurant / café / bars) in rich areas. The distribution of alcohol outlets follows the typical pattern of most profitable to the capitalist; and most dangerous or harmful to the poor.

When the working class is in control of assessment of safety / damage of each drug then we may decide the level of control needed. Medicinal use should be allowed – and production could control quality (dose) and find safer ways to take some drugs (such as cannabis). Legalising does not address harm related to substances, we know that from tobacco and lung cancer, alcohol and liver cancer, caffeine and kidney cancer. 

The Russian revolution was an important example of workers’ social control of drugs: The Bolsheviks needed to throw out alcohol. In 1917–1918 the revolution was under attack from the White army. Counter-revolutionaries had been supplying alcohol to soldiers to create problems for the Bolsheviks. John Reed “Ten Days That Shook The World” p244, on “Wine Pogroms”; counter-revolutionaries were promoting drunkenness and rioting through raiding wine cellars to give freely to the soldiers. The revolutionary council of people’s commissars appointed a “commissar for the fight against drunkenness”. They blew up cellars and destroyed thousands of bottles of wine.

Trotsky commented on alcohol and drug problems after the revolution, in “the problems of everyday life”. The theme following the revolution being the social control sitting with the (workers) state, and as the state withers away, a corresponding increase in more local - community control. While more meaningful activities replace those alienating coping mechanisms. 

For workers’ control over all drugs!

For workers’ control of health & safety in the workplace!

Reduce the hours of the “fulltime” working week until there is employment for all!

For workers committees to set living wages in a “fulltime” (40hrs) week!

We make these calls in the knowledge that true workers control will only be possible with the overthrow of capitalism. This shows that the solution to capitalisms problems cannot be found within capitalism.