A friend at Red Room, where the first two of my article series are also posted, commented on my "Dirty, Pretty Things: Apple, Inc. and China" series that the conditions of the Chinese workers at Apple suppliers such as Foxconn and Wintek are preferable to the conditions that Chinese peasants face in the countryside and that this is an outlet of urban jobs and job training that if taken away, would produce great unrest in China. He goes on to say:
“Would we not have far more to fear from a China on the verge of collapse, due to isolation, than a China on [the] verge of its own economic take-off due to its interdependence with the west?”
The question of the Chinese countryside’s conditions and that of the urban areas are inter-connected, but not in the way that my Red Room friend has characterized them. The paradigm of “economic take-off” is a popular but very flawed reading of the situation that Third World nations face.
I appreciate this dialogue and it raises some very important questions. But to get into this I have to lay some groundwork. Fair warning: It’s going to take me more than one essay here to get into these questions because there’s a lot of complexity to them and there are a lot of misconceptions that need to be untangled.
We need to step back a moment here first to consider the nature of the shift from feudal and semi-feudal relations to the development of capitalism both within the First World and within Third World countries.
Capitalism developed in the West first, and in England first and foremost. This period of the rise of capitalism in the 1800s was memorialized in fiction by Charles Dickens and in non-fiction by Marx and Engels.
When capitalism breaches its national boundaries and goes abroad, this represents a distinct stage in capitalism’s life course. This stage is called imperialism (although its proponents or apologists like to refer to it euphemistically as “saving the benighted natives/savages” or the “spread of democracy and freedom”). This stage is characterized by, among other things, monopoly in which the major players in business are few, gigantic in size, and exercise oligarchical control over the economy and correspondingly, the political arena. If you’re an industrial/financial giant, how could we expect you to not to wield a huge amount of political power? If you didn’t, you wouldn’t long remain a monopoly/oligopoly.
The course of capitalism’s development in Europe can be briefly described this way: in the mid-1800s capitalism was in its free enterprise stage but by the end of the 1800s, that is, within fifty years, free enterprise capitalism had given way to monopoly capitalism. This transition to monopoly capitalism/imperialism happens for two very simple reasons that are an outgrowth of the very dynamics of “free enterprise.” They come about because capitalism’s purpose is to make as much profit as possible and this drive to make more profit means that capitalists seek to control the market by eliminating their competitors through buying them out, taking them over, or driving them out of business. This drive for profit also leads companies to seek to vertically integrate their operations because they can make more money at each step in the process. By doing these things you can better dictate prices and make more money.
As a corollary to this, economies of scale come into play: the bigger you are, the less it costs you per unit to make your product or service, and therefore you make more money as well. Naturally, because human labor is both the source of value and because labor costs are the largest item in your cost structure, to make more money means seeking to drive the costs of labor down to the lowest that you can.
The essence of capitalism is the drive for profits (“expand or die”) and this drive ironically means that you seek to reduce and hope to eliminate competition. If you can severely limit competition, you can dictate your prices and the quality of what you make and therefore make beaucoup profits. Like rock bands that frequently change their membership's make up, combining and recombining, capital also aggregates and disaggregates and so the process moves forward.
Because of the uneven development of capitalism, those that developed capitalism first such as England possessed both technological advantages and the driving incentive/compulsion to go elsewhere and exploit the resources (labor, resources and markets) outside of their national boundaries. It is to the advantage of those first in line capitalist/imperialist countries to use the Third World countries as appendages for their development, parasitically sucking the labor and resources from this induced, distorted, dependency relationship. Thus you see the pattern of infrastructure, for example, in Third World countries of train tracks and shipping facilities that are/were designed to bring goods out of the country rather than to evenly develop the national economies on a balanced basis in the interests of that nation's people. The extremely lopsided power relationships between the imperialist countries and the later developing Third World countries produce a situation not unlike baby birds that are born in the nest. The first born ones can and do destroy the chances of the later developing eggs from hatching.
Anyone who has played the Parker Brothers’ best-selling board game Monopoly is familiar with this dynamic. After a few hours of play at most, one player emerges as the big winner and everyone else has either been bankrupted or is soon to be bankrupted. This happens in Monopoly despite the fact that all of the players start out with exactly the same amount of money, unlike the real world where resources are distributed extremely unevenly (one does not choose one’s parents, after all).
It is in the nature of free markets to cease being free markets. Libertarians’ belief that free markets are the solution to all ills, therefore, cannot be realized and implemented any more than a butterfly can go back to being a caterpillar. Small may be beautiful, but big is cheaper and more powerful. Small businesses can, and always will, emerge just as small saplings spring up amongst the towering pines, but the economy’s key players will continue to be big businesses. Some of the big businesses will be supplanted—witness General Motors’ bankruptcy plight even though for a long time it had been the world’s largest corporation—but the companies that supersede their previous competitors will then assume the monopolist position themselves. The players may change, in other words, but the disparities of position between big and small remain structurally and fundamentally the same.
Second, capital seeks profit-making opportunities everywhere. This ceaseless drive for profits leads—indeed, compels—the largest companies to burst past national boundaries and roam the globe in search of still cheaper labor and resources. Sam Walton, Walmart’s founder, believed that his company should sell only American-made products. His insistence on this, however, has obviously passed away like eight-track stereo. Walmart would be non-competitive today if it did not seek the cheapest labor it could find. This fact, put very briefly, is what imperialism is in the economic sense. Imperialism is a compelling and inevitable consequence of capitalism itself within the more advanced capitalist countries. It represents capitalism’s underlying logic carried forward into monopoly capitalism and expressed and active on an international scale. Imperialism is, therefore, not a choice; it is not something that could be dispensed with by corporations and their governments any more than a vampire could choose to be a vegetarian. (Globalization and the Demolition of Society, Pp. 77-78)
In the world as a whole, this gross unevenness is not the result of the relative backwardness of the Third World countries. Indeed, China in particular was extremely advanced, being the first inventor of many things including gunpowder, the compass, and movable type (invented by Bi Sheng four centuries before Gutenberg). But because capitalism developed in the West first and because China did not have a desire or need in its feudal stage to go elsewhere and exploit foreign resources in the way that the Western powers did, it did not use its inventiveness for the purposes of conquest far across the seas as the West did.
This is apparent, for example, when the British sought to engage in trade with China. The English had nothing that the Chinese wanted, whereas China had silk, porcelain (china), and tea that the English dearly wanted. The unevenness of demand created a severe problem for the English until they latched onto the idea of creating a mass drug dependency in China for opium. The Brits didn’t start the opium trade; Indians did. But they recognized what it meant if they were able to expand it themselves.
When Chinese authorities attempted to stop this drug trade the Brits declared war on China and after defeating China in the Opium Wars (1839-42 and 1856-60), demanded Hong Kong and various other major concessions in the Treaty of Nanking (fixing Chinese tariffs at a low rate, granted extraterritorial rights to foreigners not given to the Chinese abroad, etc.) so that they could continue their “trade” with China - i.e., continue to turn Chinese into opium addicts. Before the Columbian drug cartels there was the British East India Company.
As Johnny Come Lately to the scene, the U.S. declared an Open Door policy so that they could get their piece of the carving up of China that the various European powers were feasting upon. This initiated the beginning of China’s “Century of Humiliation” and China’s widely named status as the “Sick Man of Asia.” This was also the period in which foreign owned and run industrial enterprises were first introduced to China, long before Steve Jobs and the iPod and iPad were born. But like the Foxconns and Wintek’s of today, those enterprises were not set up in the interests of the Chinese people but to enrich foreign corporations and a tiny fraction of those Chinese who were happy to sell out their own people in return for personal privileges and family fortune. The situation was so bad that every morning people would pick up and load onto carts the dead bodies of Chinese that littered the streets of Shanghai and other major cities who had died the previous night.
This century of humiliation was finally brought to an end with the 1949 Chinese Communist Revolution when, as Mao Zedong declared from Beijing, “the Chinese people have stood up.”
As a result of the revolution, China was able to end the despicable conditions that the Chinese people were living in and set about developing the economy and society in ways that did not subject workers and peasants to the degrading and killing conditions that they had previously faced. Women and girls, some of whom had been sold by their families into prostitution, were liberated from sexual slavery and prostitution was eliminated by providing women alternatives and by, in a more general sense, freeing women as equal partners to men in the society as whole.
China was and is a very populous and poor nation, the result of more than a century of foreign domination and the fact that it was not yet an industrially developed country, but one that had been only piecemeal and in a fragmented way developed along industrial lines. The challenge the country faced then was immense and natural disasters and enforced backwardness were not something that could be either ended, in the case of truly natural disasters such as pestilence and floods, or ended overnight, in the case of the legacy of backwardness.
The struggle over how best to develop China and along what lines that I referred to in part one of this series raged within the Chinese Communist Party: should China become another capitalist country or should it develop, but develop along socialist/communist lines where equity and fairness and bridging of the historic differences between town and country, between mental and manual labor, between men and women, and so on? For the genuine revolutions, the slogan that embodied their position was “Grasp Revolution, Promote Production.” For the “capitalist roaders” like Deng Xiaoping, their slogan was “It doesn’t matter whether the cat’s white or black as long as it catches the mice,” by which he meant that revolutionary politics are really a hindrance to the development of the economy and should take a backseat. One of the slogans of the capitalist roaders (aka revisionists) is and was “Some must get rich first.” (See my lengthy article on the 1989 Spring Uprising for background on this.) In other words, they were the Chinese equivalent of our very own neoliberals here in the U.S. who preach the gospel of “trickle down economics.” Give tax breaks to the very rich so that they will in turn give people jobs and stimulate the economy. Except, of course, that they don’t. The very rich like Mitt Romney aren’t job creators. They’re job destroyers. That is exactly how many of them have made their multimillions and billions – by laying off workers and combining and merging and cutting the payrolls for everyone except those on the very top who have been paying themselves extraordinary sums even during the times when they have driven their companies to the brink of bankruptcy.
After Mao’s death the leaders who had fought tooth and nail during Mao’s life to convert China into a great capitalist power - while pretending that they were only trying to carry forward socialism - seized power. They had to pretend that they were revolutionary communists while Mao was alive and for a number of years after his death maintained the fiction that they were Mao’s true inheritors and The Four who were arrested secret plotters against Mao and against socialism because socialism and communist norms were extremely popular and the social standard. You could not pursue a capitalist agenda openly because if you did the public would have roundly denounced you and think that you were crazy. The memory of what capitalism and imperialism had done to China was all too fresh and clear and the benefits of socialism were exceptionally well understood and deeply appreciated.
There is more to say about the specific conditions in China, but that is going to have to wait for my next article. Let me end this piece by returning to the question of the U.S. and its relationship to the Third World in light of the current elections hoopla:
Imperialism produces dramatic inequalities in the world—in essence, the economic plunder of other countries. The American people benefit economically from these savage inequalities; one cannot help but benefit from them merely by living in the US. This means that absent a conscious decision to try to redress these gross inequalities, the spontaneous tendency among many Americans, particularly those who are more materially privileged by these inequities, is going to be to support policies that, at the very least, maintain these inequities, and at worse, exacerbate them. You do not have to be an evil, conscienceless person. You merely have to do what comes naturally. You just have to follow the path of least resistance.
Thus the inherent wisdom or goodness of the American people—to whatever degree it exists—is subject to this ineluctable material fact. Relying on the people’s wisdom/goodness means relying on a population that is vulnerable in substantial degree to political leaders who play upon Americans’ fears of terrorism, promote ethnocentrism, and expand and intensify the tendencies of a populace to spontaneously favor what benefits them personally in the narrowest sense. The social base for the politics of plunder and domination of other countries exists in the US for material reasons. The social base is not itself the source of such politics (elites are the source), but the social base constitutes the fraction of the population for whom such politics resonate most strongly. (Globalization and the Demolition of Society, Pp. 253-254)
The Republican Party is the most open, aggressive, and unapologetic proponent of plundering other countries for profit. Their differences with the Democrats are overwhelmingly differences over which segments of the domestic population they are trying to rope into their ranks and bring along as willing co-conspirators, not differences over policies. Who they are trying to appeal to, in other words, is where their primary differences lie, not in what they do when they’re in office. When you look at what they actually do in terms of policies while in office, the distinctions between Republicans and Democrats (or even the occasional Green Party or other third party person) become as difficult to tell as detecting the physical differences between identical twins. When Newt Gingrich and Mitt Romney spoke in the aftermath of the Florida primary on January 31st, they both claimed that they were going to reverse America's decline. They can do this, however, no more than Obama can. In both Republican and Democratic rhetoric we see authorities attempting mightily to conceal the crisis of capital and the rending of the historic social compact. In Steve Jobs' memorable words, "Those jobs aren't coming back [to the U.S.]." The Republicans are more exclusive in their appeal ("White (and honorary white) Americans only") while the Democrats are more inclusive ("Not black America, not white Americans, we are the United States of America") but the mission that they both preach rests upon the systematic suppression, exploitation, and killing of the Other in countries like China (and Iraq, Pakistan, Haiti, Mexico, Saudi Arabia...) and savage inequalities here at home.
Do we have an alternative to this? Yes, we do. Is there real hope? Yes, there is. But it cannot rest upon a foundation of others' broken lives.
To be continued.
This was first posted at DennisLoo.com.