China has just delivered JY-26 "Skywatch-U" 3-D long-range air surveillance radar to Venezuela. This radar can detect US F35 and together with Anti Ship missiles, US losses edge in threatening Venezuela.

China signal is clear, we are now in US backyard and has found a long term partner for mutual benefit development. Without saying openly: “if you keep using Philippines and other lackeys to cause chaos in China doorstep, China is more than capable to cause you suffer much much more.”

To other countries in  Caribbean Sea and South America, this is a strong signal that they finally have an alternate choice other than the exploitive US.

From Facebook Page of Technology Innovation

At the 2025 AI Day in Guangzhou, Chinese company XPeng unveiled its second-generation humanoid robot, IRON.

The robot went viral after people mistook it for a human because of its lifelike walk. To prove it was real, XPeng’s CEO He Xiaopeng posted an unedited video showing its robotic leg, then cut it open live on stage.

Standing 5 feet 10 inches (178 cm) tall and weighing 154 pounds (70 kg), IRON can walk, talk, and interact with people in real time.

IRON uses synthetic muscle fibers that stretch and contract naturally. With 62 active joints, it can shrug, twist, and balance even on uneven ground.

The robot uses a lightweight solid-state battery that’s safe and long-lasting. With power to handle 2,250 trillion operations per second, it can instantly process sights and sounds, answer questions, fold laundry, or assist customers.

IRON can walk at 2 meters per second, smoothly avoiding obstacles. It learned to walk by studying thousands of hours of real human movement rather than using preset rules.

XPeng plans to first deploy IRON in retail spaces, where it will greet customers and display products before expanding into reception and sales roles.

Taken from Regional Rapport Website: https://regionalrapport.com/marx-200-communist-belt-manifesto-part-ii/

Stalin & Mao

The Soviet Union under Joseph Stalin industrialized itself in just two five year plans under Gosplan (Planning Committee). The Soviet Union became second largest economy only after the US by 1938 and could defeat German military-industrial might in World War II. The victory in the war brought entire East Europe under communism. Soviet planning proved itself to be much more effective in allocating resources in basic infrastructural heavy industries, education and health.

Thus, the Soviet Union emerged as the supreme power in technology and armament industries. After the end of World War II, the Soviet Union under Stalin became one of the two superpowers in the cold war with the US. The success of the planned economy under the Soviet Union attracted many backward countries and communist movement flourished throughout the world. Following Leninist, theory movement flourished mainly in backward societies. Communist movements broke the backbone of colonialism.

After the death of Stalin, Kruschev became Soviet Head and began to criticize Stalinist policies. This was the beginning of problems. The growth began to slow down. Though the Communist Party replaced Kruschev many questions began to be raised against the Soviet Union policies. Kruschev called for more roles of market and incentives in the Soviet Union economy. This helped Mao Ze Dong to emerge as the number one leader of international communism after Kruschev criticized Stalin.

Mao upheld Stain’s legacies in communist movement while at the same time criticized Stalin for being too much dependent on bureaucracy for economic development. Mao criticized USSR leadership as revisionist and claimed that money motivation can be crushed even at the much lower level of economic development than what the Soviet Union has achieved. For that Mao ushered in the Cultural Revolution and Great Leap Forward which failed to give desired results. Mao proved himself the genius in conducting the communist revolution in China and in destroying feudalism and building educational and health foundation. But his direct march to communism by culturally defeating money motivation proved to be disastrous for the Chinese economy.

Where Stalin went Wong

Actually, Stalin’s period saw rapid industrialization because of the communist policy of annihilation of feudal relations, state-led planned investment in non-profit motivated sectors like basic infrastructure industries, education and health. But after reaching this level the Soviet Union should have given more space for private entrepreneurship and profit motivation while keeping key industries under state planning. The Soviet Union created an educated and healthy society who could have been most ideal for further qualitative growth through private entrepreneurship guided by state planning. Though Kruschev raised these questions, his anti-Stalin rhetoric destabilized the Soviet Union leadership which prevented them to take these bold policies.

Moreover, capitalist world was following Keynesian state-led demand creation mechanism to counter overaccumulation crisis. Stalin ignored Keynes as somebody who wanted to reform capitalism and save it. Instead, Stalin should have paid more attention to the fact that capitalist class was not liking Keynes prescribed state-led non-profit making demand creating investments. The capitalist class was continuously attacking Keynesian policies since more state role is bringing with it many obstacles to capitalist profit-making like the job security breeding disincentive to work hard, etc. If the communist movement could integrate Keynesian policies successfully, they could have given market better role in the socialist economy.

Stalin failed to notice that global capitalism was already learning from the success of the Soviet Union economy. In the 1950s, the US helped Japan, South Korea and Taiwan to go for the abolition of feudal relations and heavy state-led non-profitable investments in education, health and basic industries.

The rise of Financial Capitalism: Deng and Gorbachev

By 1970s West underwent tremendous change and started to use debt to create demand and started negating the role of the state. State’s involvement often said to be inefficient and end up as the disincentive to work hard. Based on the petrodollar credit channel, the US  assured itself of unlimited credit and with this inflated its asset prices and then made the profit by trading in assets. Thus capitalists could find profit in asset trading and overproduction crisis was temporarily solved. Gradually West mainly the US started exporting its manufacturing base to Third World countries for making more profit by using the later’s cheap labour.

And West and the US itself started to profit by asset trading. Deng Xiaoping, the chairman of communist China since 1978, understood the opportunity of getting Western technology and capital to industrialize China quickly. Deng took the opportunity. Many people across the globe thought that Deng was moving towards capitalism. They failed to get that Deng has reacted to the changed material condition. Capitalism has transformed itself from production capitalism to financial capitalism. Debt to create demand has become more important than production to supply. Consumers became more important than labourers. This simply assures the fact capitalism is transforming itself in reaction to the overproduction crisis. And this transformation presented China a historical opportunity clearly noted by Deng in his thesis.

Another dimension of the rise of financial capitalism, Saudi led OPEC cartel was allowed to hike oil price much above production cost by the USA and part of this high rental income was raising consumption of oil-rich countries while another part was funding US profit from asset trading. Thus global capitalism started watching the renewed growth. Between 1920 and 1970 the Soviet Union registered second highest growth rate after Japan. But after 1970 the Soviet Union completely stagnated since its fertility rate fell below the replacement rate.

The Soviet Union was growing due to exceptionally high educated and healthy population who could go on inventing new technologies and add to new types of machinery while keeping average productivity per individual stagnant due to lack of incentives and profit motivation. Once population growth fell, growth began falling as well. Thus higher growth in the capitalist world on one hand and slowing down of the Soviet Union, on the other hand, forced the later to move towards market-oriented reforms to improve productivity. Gorbachev led the economic reforms.

Noticing failures of previous the Soviet Union leaders in making economic reforms, Gorbachev went for political reforms first. He destroyed political monopoly of the communist party. Then he started economic reforms. With market forces allowed to play, the Soviet Union being oil-rich caught Dutch Disease due to high global oil prices. That made entire manufacturing base of the Soviet Union completely uncompetitive in the global market. The open economy resulted in deindustrialization of the Soviet Union economy as a result.

Similarly, China had huge educated and healthy cheap labour that attracted huge investments from Western capitalists. Since the Soviet Union had already lost the demographic edge its labour was educated but expensive. Hence, it failed to attract enough Western capital. Everyone in the Soviet Union was blaming the communist government for economic woes while lack of monopoly in decision-making power gave communist party little chance to change the track. As a result, the Soviet Union collapsed by 1991. That was a great ideological defeat for the communist movement.

 Soviet Collapse  and Demographic Crisis

The Soviet Union collapsed because it was ideal for Leninist monopoly capitalist age not for post-Leninist financial capitalist age. The Soviet Union was lost due to twin effects: temporary solution of overaccumulation crisis by global capitalism and the fall of fertility rate of the Soviet Union below replacement rate. The Soviet Union had little to offer to global capitalists, unlike China which had cheap productive labour. In fact, the Soviet Union could have claimed higher growth rates with lower productivity as the socialist success of giving working class more leisure time, unlike the capitalist world.

This claim can be made only if the fertility rate is kept constant at some level. The Soviet Union failed to take any policies that would keep fertility rate constant. In fact, Lenin could never solve the dilemma between women working as part of the working class and motherhood. Lenin failed to see that women once joined working class cannot perform motherhood with equal determination as before. Women participation in outdoor jobs definitely helped USSR to grow in the short run. But it reduced birth rate and resulted in demographic crisis resulting in a lower growth rate in the long run.

Belt Road Age: Xi Jinping

China began to industrialize itself using capital and technology from the US and West and Japan while the US continues to take debt from China and other countries and generate demand for Chinese made products. The process started in the 1980s but after the 2007-08 global financial crisis, this process came under severe doubts. China’s economy has grown to more than US’s in purchasing power parity. China’s economy becoming too big to rely on debt created demand for the US economy.

The US also found itself indebted to a lot of countries and as its asset trading business in crisis, people started to question the deindustrialization process that went side by side with the growth of asset trading in the US. China in 2013 was the largest trading nation. China’s potential GDP is at least three times that of US and by Nobelist Robert Fogel predicting that, by 2040, Chinese GDP would be twice of America’s and Europe’s combined GDP. So Wall Street players know China is their future financial centre as well.

In 2013, under Xi Jinping’s leadership, China came up with the different idea to counter the overproduction crisis. China came up with the Belt Road Initiative which is about investing in infrastructure like ports, railways, roads across the globe and help different poor regions to develop and share the prosperity of China. China can endure long gestation period and long-term losses while the Western system cannot. This is because in Chinese economy surplus value appropriation of wage labour goes on. But while in West how to use surplus value is decided by private capitalist and banker class, in China the same is decided by the working class leadership.

Thus working class may enforce investment with long gestation period which is highly avoided by private capitalist and banker class. Thus while the Western system is more prone to go for short-term profit-making asset trading, China can go for real investment with a long gestation period. This simply proves Chinese system can deal with overproduction crisis without external indebtedness and remaining self-sufficient and keeping industrial base more or less intact. This also shows China will keep resource allocation power more in the hands of State than in hands of private capitalists.

The recent crackdown on top executives of Alabang, Wanda, etc. clearly showed that Chinese leadership will go for long-term non-profitable productive investments and not for short-term profitable non-productive investments in asset trading or entertainment. This is the new dimension of the struggle between communism and capitalism in the new Belt Road age. Thus most of Belt Road project to be developed by state-owned banks and infrastructural corporations.

China has also launched gold-yuan-oil scheme for all oil selling countries, and it has got 12% of global oil futures market in just first 50 days. Thus soon BRI will start to get financed by the yuan itself. Hence, China is already the production centre of the world and soon emerging as the global financial centre as well. The strongest economy in the world under the working-class dictatorship is definitely the most important event of history. Chinese communist leadership has already turned Chinese capitalist class as the mere appendage of socialism. Once China becomes the financial centre as well, it will turn global capitalist class as the tool to serve goals set by communist leadership.

Conclusion

This is our brief analysis of the march of Communism from Communist Manifesto by philosopher Marx to Belt Road Age under Xi Jinping leading the world’s largest economy. The rise and fall of the Soviet Union and the rise of China clearly show Marxism when applied correctly give spectacular results while if fail to change with changed material conditions can lead to disaster. The world communist movement now possesses the world’s largest economy and can have world’s best technology in next 10-15 years.

China is already celebrating Marx’s 200^th birthday with renewed vigour. The Soviet Union proved how to abolish feudalism in backward economies and industrialize rapidly by investing non-profitably through state planning in education, health and basic infrastructure industries. Chinese reforms have proved that market works best under the working-class dictatorship where surplus value appropriation of wage labour goes on but the use of surplus is determined by working class leadership, not capitalist leaders. This is the best way to solve overaccumulation crisis at the aggregate level and money motivation at the individual level. So China is already a role model for the developing world.

The capitalist world is currently witnessing two crises: debt crisis (which is a transformed version of overaccumulation crisis in the age of financial capitalism) and demographic crisis. China has already started stated state-led demand creating investments under BRI to counter debt crisis emanating from financial capitalism. But China has to find a way to solve the demographic crisis as well. China still has 400 million rural populations who will help China to grow in the next 20-30 years. China has to raise fertility rate above replacement rate in this time period. China is now demand constrained economy and so additional population will add extra demand in its economy which will help it to grow. That will make China a model for the industrialized nations too since the entire industrial world is suffering from the demographic crisis.

The 21st-century communist movement must not only intend to develop third world countries on lines of Chinese market socialism but must also intend to solve the demographic crisis among industrialized nations. If world communist movement is able to move with these two objectives, developing the world and the developed world both will become ripe for communist movement in the Belt Road age.

Taken from Regional Rapport Website: https://regionalrapport.com/marx-200-communist-belt-manifesto-part/

The rise of Communism since the birth of Marx is the most influential event in industrial civilization. Communist movement shaped not only political discourse but also had its influence upon many major social and academic developments.

The article discusses how Marx and Engels saw the dynamics of society and how close reality was from his prediction. The also shed light on how Lenin tried to narrow the difference between Marx’s prediction and reality and gave rise to a new dimension in the communist movement. Achievements and problems of Stalin and Mao policies while policies of Deng and Gorbachev in the post-Leninist reality will also be in the discussion. Finally, The may discuss the rise of Xi Jinping as the leader of world’s largest economy and its implications. We will also discuss the debt crisis and demographic crisis in the industrial civilization and how communism may triumph the global politics in the near future.

Karl Marx

Marx has written most of his important thoughts in books like “Communist Manifesto”, “Wage Labour and Capital” and three volumes of “Capital”. His thoughts can be summarized as capitalism is a process of money for making more money. Capitalist class invests money in the production process to make profits and then channelize the profits for even more profit. In this process, the capitalist class owns the means of production i.e. machines, buildings, land, etc. They buy labour power of the labour class at market-determined wage rate and labour class use of means of production to produce output. Marx called machines as stored-up labour which exhausts with gradual depreciation.

Thus the profit that the capitalist class obtains is actually produced by labour class. Hence, profit signifies the exploitation of labour class. Moreover, in pursuit of profit the capitalist class competes with each another for the market. Thus the capitalist class has to use economies of scale and automation in their production process to make cheap but quality output by which they try to outcompete each other. Due to economies of scale, big capitalists tend to out-compete small capitalists and the later joins the rank of the labour class. The capitalist class also goes on automating the production process and thus wage rate does not grow as much as profit rate. Now capitalist class uses most of its income for investing in production process while labour class use most of its income for consuming output derived from the production process.

Thus, production capacity grows much more than purchasing capacity. Hence, over-accumulation crisis starts. Marx further thought that small capitalists will be totally eradicated and society will become a class struggle between the capitalist class and labour class. The overaccumulation crisis will force the labour class to rise in revolt against not only capitalist class but also capitalist system. The labour class will strip the capitalist class of their right to private ownership and will gradually go for social ownership of all means of production. The period between seizure of state power by the labour class and complete establishment of social ownership will be the dictatorship of working class.

Engels in his book “Anti Duhring” further explained that working class after seizing power of the state must declare state ownership of means of production and must fight the overaccumulation crisis. They must go on improving technology and automation till the money motivation in the society completely fades out. When that is done state will wither away and social ownership will be complete. Marx and Engels further predicted that the most industrialized countries will see working class revolution and thus the revolutionary working class state will have the best of the world’s technology at its disposal.

Where Marx Stood Wrong

Firstly, technological progress does not mean automation only it implies invention of new goods and services too. Thus while automation reduces the growth of wage rate new products can raise earning an opportunity and hence wage rate growth. Similarly, while economies of scale results in the destruction of small business the invention of new products give small business new opportunities to survive.

Secondly, in face of continuous automation and use of economies of scale working class can reduce family size and its population growth rate. This fall clearly counters the fall in wage rate growth and also minimize the effects of the crisis on individual lives and families.

Thirdly, Marx used political economy and the Ricardian labour theory of value to understand dynamics of capitalism. This theory views price as the supply-side phenomenon. Neo-classical economists to counter Marx developed marginal utility theory to understand demand side of price. Thus Marx failed to use the much more effective tool of neoclassical economics which sees the price as an equilibrium emanating from the supply side and demand side conditions.

Where Marx Proved Correct

Economies of scale resulted in the destruction of small business and by 1890s most of the production became dominated by few large companies and cartels in all capitalist countries. Moreover, despite new technological inventions were coming in they were weak enough to counter the effects of automation and economies of scale. Thus effects of the over-accumulation crisis were visible by late 19^th century.

Age of Monopoly Capitalism: Lenin

Lenin by the first decade of the 20^th century began to analyse the problems of the then communist movement. He first identified that centralisation of production process and overaccumulation crisis were Marx’s successful predictions. He also identified despite the crisis, the working class of industrially advanced capitalist countries was not showing revolutionary tendencies. Lenin pointed out few important characteristics of the new monopoly capitalist or imperialist age.

The industrially developed capitalist countries are exporting capital to backward economies including their colonies and semi-colonies in Asia, Africa and Latin America to counter over-accumulation crisis at home as well as to make more profits by exploiting their cheap labour and raw materials. Thus the capitalist countries were colonizing more and more lands. The part of this profit derived from exploiting resources of colonies and semi-colonies are distributed among working class of the industrially advanced capitalist countries. Thus working class in advanced countries no longer feel the urge for revolution. Similarly, capital, industries and technology being exported to backward economies including colonies and semi-colonies create working class there. This backward society’s working class are most exploited among all and they will the main agents of revolution in the imperialist age.

But a new problem arises from it. This working class of colony and semi-colony are the minority in the society and these economies are not yet industrially developed. Feudal relations were still strong in these countries. Theoretically, Marxists believed that capitalist class uniting peasant class revolts against feudalism and abolishes feudal relations after capturing state power. Actually, feudal class nobility and clergy use too much resource in living luxurious lives and wars. Once these classes are removed from power capitalist class can start using resources with profit maximizing motive. This starts in agriculture and finally ushers in the industrialization of the entire society.

This is what that happened in Europe. So how can working class go for socialist revolution when feudal relations were still intact? Lenin answered those feudal relations could be annihilated by capitalist class only when it was still small ownership based on competitive capitalism. Thus there were numerous middle-class capitalists who could challenge the then relatively few rich feudal rulers. Since capitalism has reached the monopoly stage only a few big rich capitalists dominate the production process and small capitalists are no longer viable to survive the competition.

Thus in monopoly capitalist era rise of numerous middle-class capitalists is no longer possible in any nation. Thus in 20^th century backward societies including colonies and semi-colonies, there will never be the capitalist class revolt against the feudal relations. Hence it becomes the duty of the working class in the colonies and semi-colonies not only to dethrone the ruling class but also to abolish the feudal relations there and usher in industrialization.

Since the working class are revolting against the rulers of colonies and semi-colonies they directly come into contradiction with the advanced capitalist countries which are allied with these rulers as colonial masters. Thus working class has to revolt against the colonialism too. Thus working class has to make the alliance with peasant class and a section of anti-colonial capitalists against feudal class, pro-colonial capitalists and colonial master advanced countries.

Similarly, another problem of Leninist revolution is that the working class in the backward countries after the revolution would not have the best technology at their disposal. So these countries have to invest a lot in education, health and basic infrastructural industries. This must have resource allocation power to invest in sectors that will lead to rapid industrialization.

Where Lenin Went Wrong

The investments in education, health and basic infrastructures do not give profit immediately and so capitalists fail to invest there. The 19th-century neo-classical pro-market economists also accepted this reality and they advocated state investments there. In fact, Germany and USA in the late 19^th century could challenge British industrial might much quickly and successfully simply because they gave state more roles in determining where to invest. Lenin tried to relate Engels prescribed state ownership of developed industrial base under the dictatorship of working class to working class state-led industrialization process. Lenin actually advocated the state-led industrialization while Marx-Engels advocated for state ownership of existing developed industries. Lenin’s primary concern was industrial development and technological progress while Marx-Engels advocated state-led planning to check overaccumulation crisis and gradually wither away money motivation. Lenin never made the distinction between these two working-class state-led planning.

Another problem of Lenin was about women emancipation. Lenin declared world women’s day which is still observed today. Lenin praised motherhood but also sought women participation in outdoor jobs. A woman performing outdoor jobs fails to perform as the mother. This is proved by falling of fertility rate below replacement rate (2.1) throughout the industrialized nations. One of the causes of the collapse of USSR was this falling fertility which we will deal later.

Where Lenin Proved to be Correct

Thus Lenin successfully transformed the communist movement from advanced industrial civilization’s working-class movement to backward feudal civilization’s anti-feudal and anti-colonial movement. So clearly Lenin understood advanced civilization can no longer place for the communist revolution. Moreover, capitalism under the then conditions cannot challenge the feudal relations in backward societies. Hence, communist revolutions can be sold to these societies. The rapid industrialization of Soviet Union under Stalin transformed it from backward feudal society to world’s second largest economy in just twelve years. Moreover, communists must take part in anti-colonial movement too.

This really ushered in many communist movements across the globe especially in industrially backward countries including colonies and semi-colonies. Russia saw the first communist revolution in the world only to be followed by China, Indo-China, Korea, Cuba and many more. From 1917 to 1971 (the triumph of communists in Vietnam), Leninist understanding seemed to be theoretically invincible. In fact, communist bandwagon ushered by Lenin was the most important tool that destroyed colonialism.

Taken from Regional Rapport Website: https://regionalrapport.com/private-state-and-social-ownership/

In primitive communism, there is individual property. It means a bow used by one specific hunter only. But the hunt that is paid off by the bow is distributed according to need with the entire tribe. So the service of the individual property bow remains social. So this individual property is social ownership and not private ownership.

Rise of Private Ownership

But when the tribe collapsed and the hunt from the bow went to the bow owner only and he is to determine how much to be given to whom. It is then that the service of the same bow i.e. individual property becomes private. So then the same individual property becomes the private property and lost its social ownership character. So only when you begin to see service from a means of production from the perspective of equivalent exchange (payment according to the ability to work), a means of production become private ownership. When service from a means of production is distributed according to the needs of society and not according to the ability of one who is controlling the means of production it is social ownership.

Historically rise of land and animal husbandry based on agriculture and the growth of the division of labor due to the rise of trade and various industries (artisan, craftsmen, etc) gave the option for the controller of means of production to exchange his product or service with what he needs or wants. This was impossible before when the range of products was quite less. Hence we can say with rising of agriculture, trade, and industries private property grew stronger and stronger. If society has the right to service of means of production (payment according to needs) we call it social ownership. If only means of production user/controller has right on service from it (payment according to the ability to work) we call it private ownership. Social property became private property when the concept of commodity exchange i.e. equivalent exchange (payment according to the ability to work) started to grow. It mainly grew when productive forces develop to the level that agriculture/animal husbandry became the main livelihood and hunting-gathering became marginal.

Rise of Class along with Private Property

Along with private property, a class distinction emerged in society. By Marxian literature, class appears when few people can force the greater population to work involuntarily for their own purpose. Those few people who are forcing others to work involuntarily either by threat/punishment or by lust/reward are called ruling class and those being forced to work are called ruled class. The ruling class creates the institution called the state to control and suppress the ruled class. So commodity exchange (private property) and class (state) are two offshoots of growth of productive forces when hunting-gathering society became marginal. Thus state and private property both are children of a definite historical epoch which Marxists believe will wither away over time.

Communism is classless and private property less society

Communism is a stage where humans engage in voluntary activities only and so there is neither any equivalent exchange (when humans are enjoying an activity, he or she will not want to get paid for doing it, especially if seeking payment reduces the chance of making such activity) nor there will be any class (as automation do all necessary but disliked activities and so no humans will have any need for any other human to do those activities). Since there will not be any equivalent exchange, there will not be any private property and since there is no class there will not be any state. The basic point is both private property and state will be withered away over time as productive forces will raise the level of automation to a certain level.

So transforming private ownership to state ownership is not a way to achieve communism because both are equal problems for Marxists which have to be withered away by developing productive forces and nourishing class struggle, national struggle, and gender struggle in the right directions.

Role of State and Private Property in Socialism

Socialism is the intermediate stage between capitalism and communism. In socialism, the state becomes one tool (not only a tool) of the advanced working class which can be used against the capitalist class, feudal, speculators, imperialists, and petty capitalists. So state ownership of industries and other means of production can be used by communists after seizing state power. But similarly advanced working class can entitle their own men on the board of directors of private ownership to control capitalists.

Similarly, keeping private ownership alive but controlling it by state owning financial institutions may be another way. Controlling private innovating companies by controlling patents held by the state. Controlling private by using doctors, academicians, religion can be there too. The last 170 years of economic development have taught us that state ownership works excellently in long gestation investment projects (infrastructure, school, universities, R&D, finance) while private ownership works best in consumer goods and services where consumers reveal their preference for those products by offering price. Profit in the later case acts as an indicator of sustainability. This is why rampant privatization has de-industrialized Russia. But keeping state ownership in core sectors and allowing private consumer products made China/Vietnam prosperous.

Conclusion

Socialist states must keep raising productive forces. This will result in over-accumulation of capital when demand will fall short of supply in the economy. This creates the material condition which will make profitable investments dependent on nonprofitable demand creating investments.  Socialism must struggle to reduce class and gender differences within the country and differences in the development of productive forces between different countries and must take care of the environment. In the next step, the socialist state must also make room for more and more people to work by loving the job rather than work for money. Thus more people must be encouraged and empowered to become researchers, innovators, entertainers.

The more disliked but necessary activities can be automated, the more room for enjoyable activities can be provided for humanity. Automation can be raised by not only inventing new things but also applying those inventions into consumable goods and services, marketing those consumable goods and services into social needs, and letting inventions, goods, services, and humans flow into a socialist state to and from outside. Thus socialism has to depend on twin pillars of private and state ownership for a long time till productive forces become high enough to end private property and state. Turning all private property into state property is never going to work. The Chinese approach is almost perfect.

Taken from Regional Rapport Website: https://regionalrapport.com/socialist-perspective-globalization/

The story of globalization is told by Western scholars as globalization is the result of capitalist West’s victory over the communist Soviet Union. In this article, I construct my argument by rejecting this Western perspective, looking globalization from the perspective of the Communist Party of China which is the most successful socio-economic and political institution in the era of globalization. We can summarize our position as Globalization is the outcome of victory of communist-led anti-imperialist movement over the Western colonialism in the 1970s.

The victory of the Anti Imperialist Movement against West

From 1917 Communist Party of the Soviet Union led the anti-imperialist movement against West. After World War II, Soviet emerged victorious in East Europe and China. West failed to maintain the colonial government in the face of the communist-led anti-imperialist movement. Communists were emerging successful by raising demand for independence and urge for rapid industrialization. Soviet state-led industrialization model was land reformation, state-led investment in education, health, infrastructures and heavy industries. These investments give no direct profits but raise all-round productivity of the society. So state-led planned resource allocation was necessary instead of the private-led market. As more countries of Latin America, Africa, Asia were following this Soviet model, West itself adopted this model in Taiwan, South Korea and Malaysia to check the growth of communism. In the 1970s, West started to relent into the pressure of anti-imperialist mass. West led by the USA recognized communist China and communist East Germany and allowed Saudi led OPEC cartel to raise oil price much above production cost.

Rise and Fall of Brettonwoods Agreement

Post World War II boom of the 1950s and 1960s ended in 1970s. The post-war boom was led by the fact that the USA was acting as an export market for Western Europe and Japan. In 1944, USA share of global GDP was as much as 45% while Western Europe and Japan have 30% (measured in PPP). So the USA started to act as the export destination of West Europe and Japan and the US Dollar was made most accepted global currency to suit the purpose. This is recognized as Brettonwoods Agreement where US Dollar value was also fixed with the price of gold. But by 1970, it fell down to approximately 33% for each of the USA as well as Western Europe and Japan took together. So the USA economy became too small to serve as the export destination of the later. This forced US Dollar depreciation and its fixed relation with gold price finally collapsed in 1971. This is the collapse of Brettonwoods Agreement.

Financial Capitalism

Anti-imperialist movement and economic crisis of the 1970s pushed the USA to financial capitalism. Financial capitalism means more investment in unproductive asset trading. Capitalism did this to get rid of the overproduction crisis. But to keep asset trading profitable you need to constantly inflate asset prices. This can be done only by channelling debt into an asset market. USA settles this fact by using its geopolitical strength which it inherited after World War II from Anglo-French-Dutch colonial empires. USA asked oil-rich gulf Arab states to sell oil in US Dollar only and save the earned income in the US asset market by buying US Treasury bills. Oil is needed by all countries and so US Dollar got a huge global demand both as a medium of exchange as well as a store of value. Thus the whole world started to deposit their earnings and liabilities in US asset market. US Federal reserve then distributes these deposits throughout the US asset market as debt. Thus the US asset market got a steady flow of debt which kept inflating its asset prices and hence profits from asset trading kept soaring. West Europe and Japan also tried to follow the US model of financial capitalism. But they failed because they did not have any geopolitical influence as the US had. So they gradually became stagnant by 1990s.

Globalization

As the USA began to concentrate on asset trading, it began to export its manufacturing base to cheap yet productive labour endowed Third World countries. Here an important point often overlooked is the fact that for making profit only cheap labour is not enough, labour needs to be productive as well. Profit seeks to maximize the difference between average productivity and average cost. All Third World countries labour is cheap but not all are productive enough. To increase productivity a country needs to have an independent nation-state, land reforms, investment in education, health, and infrastructure and base industries. Initially West and Japan tried to export its manufacturing base to Taiwan, South Korea and Malaysia where this model was followed to stem in the tide of communism. But by 1970s, it was communist China with a huge pool of productive cheap labour that attracted US attention. So the USA started to export its manufacturing base to China and it relied on asset trading. Gradually the globalization model emerged in the 1990s where the US acted as the main source of global demand and China as the ultimate source of global supply.

Soviet failed to adapt to New Reality

The Soviet Union failed to prosper in this new material condition due to many reasons. The Soviet Union was designed to counter imperialism of first half of 20th century. By 1970s old imperialist model was defeated and a new financial capitalist model emerged. This new model was luring erstwhile colonies with the promise of a higher price for oil, greater access to the US market and more sharing of technology and liquidity. So naturally, Third World countries liberated by the Soviet Union began to drift away towards West in the 1980s. Soviet leaders tried to reform the old model but in the wrong way. Soviet leaders dethroned the communist party and brought multi-party democracy and launched indiscriminate privatization. The result was breakdown of economy and dissolution of the Soviet Union. West thought it was the victory of capitalism. We clearly say: No. It’s not. It could have been a capitalist victory if Russia emerged economically prosperous after embracing capitalism. Instead, Russia and most of the erstwhile socialist countries lost human capital and faced de-industrialization.

West’s Wrong Understanding of Globalization led its Downfall

West thought it had defeated communism with the fall of Soviet Union. So West can return to the pre-Soviet days of colonialism. This belief led the USA to invade Afghanistan and Iraq. False belief naturally resulted in disaster for the USA and West. The USA lost money, time and its military were exposed to be weak in Afghanistan and Iraq. Words like democracy and freedom became synonymous with colonialism.

Correct Understanding of Globalization by Chinese Communist Party

But what Chinese leadership did? They uphold the communist party rule and allowed private to operate in consumer goods industries while keeping key sectors mostly under state ownership. So the Chinese did not destroy the base created during the 1950s and 1960s but added the elements like competition, private ownership to attract Western technology and liquidity and get more access to the Western market. But Taiwan, South Korea, Malaysia also did the same. We can say China and these countries operated similarly up to the 2008 crisis. But after that China again took a decisive new course which only a socialist country can.

China took Center Stage of Globalization

2008 crisis happened mainly due to the fact that the US economy has become too small to act as the source of global demand. Its share in global GDP fell to 18% (in PPP). While the Chinese economy has become so big that it cannot rely on the Western market alone. Its global GDP share rose to 11% (in PPP). So China began to invest in infrastructure in a big way. This is impossible for a capitalist country because investment in infrastructure in most cases have a long gestation period and hence capital in search of quick profit avoids them. Chinese state-owned enterprises undertook most of such non-profitable yet productive, employment-generating and hence demand generating investment.

Firstly between 2008 and 2013, they did it inside China. By 2013, China under Xi Jinping offered this model to be applied throughout the globe. This is epitomized as Belt Road Initiative. Thus, China now started to lead globalization by creating demand through non-profitable infrastructure investment. China is now establishing itself not only as of the main supply source of globalization but also as its main demand source. The USA is gradually being pushed out of its chief role in the global economy. This is clearly reflected in Trump’s anti-globalization policies against WTO, Paris Accord, WHO. US share in global GDP in 2019 is just 15.11% while for China its 19.25% (in PPP).

Socialist Destiny of Globalization

In the last 40 years of Globalization, emerging economies’ share in global GDP (in PPP) rose from 30% to 60% while of developed economies fell from 68% to 33% (Word Bank, 2019  Data). But China’s share rose from 2% to 19%. So China accounting for more than half of the rise in the share of emerging economies. If we take into account the higher commodity price due to rise of China catering to higher-income among Emerging economies, we can say that China is only a success story of Globalization. Hence we can conclude that if the rest of the Third World follows the Chinese model, the rest of the World will develop too.

Globalization has two opposing effects. Negative Effect: Globalization results in the movement of capital from countries of higher wages to countries of lower wages which reduce the bargaining power of working-class in different nations. Positive Effect: Globalization helps Third World to gain access to richer market, over accumulated capital and higher technology of First World. Thus the gap of productive forces between the two worlds got reduced. As Globalization will proceed, the development gap between First World and Third World will be reduced further which will reduce the wage gap between two worlds as well. As the wage gap will fall, capital cannot bargain much by moving from one country to another country. Globalization will not be able to give capital any edge over the working class. It is then that working-class will gain superior bargaining position globally.

Conclusion

The Soviet Union defeated the old Western imperialist model. This forced West to adapt financial capitalist model which resulted in globalization. Endowed with cheap and productive labour, Socialist China was better placed to take the benefits of globalization compared to capitalist ruled Third World countries. So globalization is not resulting of the capitalist victory, rather it is the result of communist victory over imperialism. And now communist China is in position to lead globalization. Gradually gap between developed and developing countries will be reduced and the global working class will take centre stage. Like defeating European Colonialism and US hegemony, this will be another milestone step towards Communism.

Taken from Regional Rapport Website: https://regionalrapport.com/gradual-progress-stalin-xi/

Socialist economy progressed gradually from Stalin to Xi Jinping, Stalin’s rapid industrialization model was criticized by Mao and Deng learnt from Mao’s theory and practices, but Xi is building a new stage of the socialist economy where capital becomes dependent on non-profit-making investment flow.

Stalin’s Progression

Stalin in his book, “Economic Problems of Socialism in USSR” claimed that planning is base of socialist economy and law of value (or money motivation in commoners’ words) worked partly in the socialist planned economy. Mao

Stalin achieved the rapid building of heavy industries, education and health. This created a productive labour and infrastructure base very quickly. But after that, the Soviet economy began to struggle in consumer goods or light industry production. Post Stalin era saw the return to money-motivated incentives in a big way. These problems challenged Stalin’s understanding of the socialist economy in a big way.

Mao’s Critique of Stalinism

Mao criticized Stalin’s position in his book “Critique of Economic Problems of Socialism in USSR” and said planning is the superstructure, the base of a socialist planned economy is commodity production and the law of value works fully under panned socialist economy. Mao further said that socialist economy produces by looking at use-value while capitalist economy produces by looking at exchange value. Another way of saying the same is in the socialist economy, the investment must be social need-oriented while in a capitalist economy, the investment must be profit-oriented.

So Mao’s primary proposition was planning does not change the mode of production i.e. commodity production and the law of value remains intact. It only replaces profit from the prior objective of investment. Thus investment money under socialism is no longer M-C-(M+dM) and this change has been done from the superstructure of the planning commission. So while individuals are still working for money, the superstructure of the planning commission is preventing capital to be activated by investing in giving priority to social needs and not profit. Stalin was wrong to think this change in the nature of investment money has been done from the base.

Thus while Stalin thought that private property is in the moribund stage, Mao stressed that private property remains and takes birth in reaction to every action taken under the socialist planned economy. Now, Mao wanted to counter this by culturally attacking commodity production, money motivation, private property. His Cultural Revolution failed to produce desired results. Instead, the attack on money motivation seriously reduced the growth of productive forces.

Mao on Light Industries

Mao pointed out another important drawback of Stalin’s planned economy. It gives too much stress on heavy industries while cares little about light industries. Mao pointed out that the use-value of heavy industries and infrastructure can be determined by planners and economists and bureaucrats. But use value of light industries is determined by people only. So people must be involved in what to produce, how to produce and for whom to produce. The decision must be made democratically in economic planning. It should not be left upon bureaucrats. People’s involvement in planning also did not give the desired results. Professionals were often not listened to and that often led to disaster because people did not understand production.

Deng and Cultural Reveloution

Deng emerged when China was enduring the bad effects of the Cultural Revolution. He did not reject Mao completely. Not only Deng accepted Mao’s contribution in fighting imperialism, eradicating feudalism and building strong education-health-physical infrastructure-military industries, but also accepted Mao’s critique of Stalin. Deng accepted that base of a socialist planned economy is still a commodity production where the law of value acts fully and private property emerges every day.

Deng also accepted that light industry or consumer good industry use-value cannot be determined by planners. People have to decide that. People have failed to produce consumer goods through democratic planning as they could not understand production. Only professionals can produce them. But people can decide use-value by revealing their preference in the market. The market is needed in light industries and consumer goods and services.

But Deng also cherished socialist economy’s power to invest for use-value production. He understood that socialism can have the advantage of it only if it fully utilizes the base of commodity production. So Deng allowed private property to operate, allow competitive market and take advantage of the global market and global technology both of which are superior to Chinese counterparts. So Deng fully activated a base of commodity production while continue to pursue investment priority for use-value (social needs) over exchange-value (profit).

Thus Deng refused to go for rampant privatization and electoral politics unlike Gorbachev of USSR. Deng continued to keep state ownership in key sectors and infrastructural industries and services, while allowed private ownership in the consumer goods sector. The private desire for exchange value (money motivation) is allowed to identify the area with a competitive advantage while state-led use-value (infrastructure) creation goes on to create new areas of competitive advantage without taking into consideration of exchange value (profit).

President Xi and Value Creation

President Xi recommended demand creating infrastructure investment which not only create areas of new competitive advantage but create demand for existing industries and services. Thus a new advantage of a socialist economy is proved. Socialism not only invests in use value creation better than capitalism but also can create demand in the process and thus make profit-motivated investment dependent on-demand creation through planned use-value. So exchange value creation becomes permanently dependent on use value creation which gives no exchange value return. So Xi has is leading the most advanced stage of socialism attained by mankind yet.

Conclusion

Hence we conclude that Deng’s policy recommendations were created taking into account the advantages and disadvantages of Stalin’s policies, analysing critiques of Stalin by Mao and identifying the areas of failure of Mao’s policies. Xi’s policies are based on the success of Deng. This is the reason Deng policy is proving to be the best development policy ever created in mankind. Deng policies will be a great source of inspiration for developing productive forces of the Third World and reducing the gap in productive forces and wages between Third World and First World. Similarly, Xi’s policies are inspiring First World people to go for use-value prioritized investment over exchange value (profit) prioritized investment.