OK, it's out of sequence, but I had trouble tracking down some references cited by the author in the part of Wu Bin's reply to Xie Tao. I've added some comments to the translation where appropriate.
4. The main difference between socialism and capitalism is public ownership and private ownership.
Public ownership is the major characteristic of socialism; private ownership is the major characteristic of capitalism: without public ownership there is no socialism, whereas to implement private ownership is capitalism through and through. Marx and Engels pointed out: “The distinguishing feature of Communism is not the abolition of property generally, but the abolition of bourgeois property. But modern bourgeois private property is the final and most complete expression of the system of producing and expropriating products, that is based on class antagonism, on the exploitation of the many by the few. In this sense, the theory of the Communists may be summed up in a single sentence: Abolition of private property.” (Marx and Engels, Manifesto of the Communist Party, p 27-8). This question was originally, with the birth of the Marxist classics, and in the more than 100 years’ practice of the socialist movement, and particularly in the practice of the victory of socialism after the October Revolution, scientifically clearly and explicitly answered. In other words, the question of how to practise socialism and the basic tasks of socialism, and on the main characteristics and basic problems, with the approval of the world’s proletariat and the world’s people, is not a “question”.
However, starting with the founder of democratic socialism, Bernstein, distortions of this already clear scientific definition and connotation have been increasingly and repeatedly put forward. Not only is Bernstein the founder of democratic socialism, he is also the originator of revisionism who, before the passing away of Engels, still dressed himself up as a devoted Marxist, a loyal student of Marx and Engels; however, just after the second year of Engels’ passing, he rapidly changed his face. In 1896, in the magazine New Times, taking “Problems of Socialism” as his general topic, he published a series distorting the theory of scientific socialism and opposed the views of Marxism. In 1889 he published his representative work of revisionism, "The Prerequisites for Socialism and the Tasks of Social Democracy". Lenin said this is a “treacherous, turncoat” book. In this book, Bernstein systematically summarised all the fallacies he had been spreading since 1896. Next, those revisionist gentlemen Kautsky, Plekhanov, Bogdanov, Trotsky, Krushchov, Gorbachev, Yeltsin and so on who all once called themselves Marxists, went around asking “What is socialism?”, “Do we need socialism?”, “How do we realise socialism?”, “How do we construct and develop socialism?” etc., twisting, attacking and denying the basic theories and practice of Marxist scientific socialism. These opportunist and revisionist renegades all revealed their true colours in front of the magic mirror of Marxism and the revolutionary struggle of the proletariat, and all deserted to the camp of capitalism. Since the founding of the Communist Party of China these questions have arisen many times in the course of the struggle between the two lines and some opportunists and revisionists have gone over to the capitalist camp. Since the Reform and Opening policy, certain “outstanding” reformers have also brought out the broken flag of old and new revisionism, blatantly seeking publicity. Mr Xie Tao promotes these fallacies of democratic socialism, playing the same old revisionist tune. Mr Xie Tao’s “Preface” adopts the technique of sophistry and the perpetration of fraud to misrepresent and tamper with Marxism, and attempts to confuse the essential differences between socialism and capitalism, and in particular, makes a fuss of the distinction between the systems of public and private ownership. His many opinions are laughable.
(1) On the question of ownership, Marxism and revisionism, socialism and capitalism, there exist diametrically opposed points of view. It’s either one or the other, there’s basically no “third road” that can be taken at all. Mr Xie Tao is like all other democratic socialists with an obvious advocacy of the system of private ownership and opposition to the system of public ownership. However, he does not dare do this straightforwardly, but can only sell his ideas and his “reformist” stand by beating about the bush.
He says: “We are familiar with the developed capitalism of the Western countries which have all become the new capitalism, to varying degrees, by socialist democratization. After the twenties of the 20th Century, a nationwide coordination of labour and capital emerged, one after the other, in England, Germany, France, Sweden, Norway and the U.S., together with a substitution of class compromise for the original pledge against coexistence of the antagonistic labour and capital…leading U.S. President Roosevelt to boldly introduce democratic socialist policies after the economic crisis of 1929.
“We can take the British Labour Party Prime Minister Blair and the former US President Clinton as representing the advocacy of the ‘third road’, as a revised edition of democratic socialism…The views of the U.S. Democratic Party on the economy are rooted in the ideas of Marx and Keynes, and advocate government guidance of the market economy…nor when the Republican Party comes to power does it change the social policy of the Democrats. Democratic socialism has ‘communised’ the U.S.” “Democratic socialism is inscribed on the flag of contemporary Marxism.” “In countries where small-scale production predominates, the industrially underdeveloped former capitalist countries, building socialism by using the method of changing the relations of production to nationalise the means of production has been a basic mistake and a departure from Marxism of Communists since Lenin.”
These words of Mr Xie Tao’s are “enlightening” the people: at present the main capitalist countries are already in different degrees undergoing democratic socialisation, and democratic socialism is “legitimate” Marxism, “legitimate” socialism. According to the reasoning of this “scientific law” of his, the U.S. and the majority of the Western countries have already been “painted red” by socialism, and even the heads of British and U.S. imperialism are socialists. Talking all over the place like this, Mr Xie Tao actually turns what is called private in to what is called public, turns what is called capital into what is called social, and turns what is called revisionism into what is called Marxism! Such distortions of the facts, such deliberate misrepresentation really is extremely absurd.
We should recognise that Mr Xie Tao disseminates false logic and heresy like an “evil-minded monk”, and that in present-day China he is nothing out of the ordinary, and that there are plenty of others as well. They have already formed a political influence. For example, in the second issue of the 2007 edition of “Yan Huang Chun Qiu” magazine there was simultaneously published the transcript of an interview entitled “Li Rui Discusses Socialism in China” which is similar to Mr Xie Tao’s fallacious heresies. Mr Li Rui says: “All socialist countries have walked a twisted path, passing on problems for future generations, and there are also some problems in the theories of the classical writers, from economics and politics to ideology. For example, views on violent revolution, the dictatorship of the proletariat, the elimination of private ownership and so on have been proven to have problems by subsequent history and are not scientific enough.” The so-called “theories of classical writers” refers, naturally, to Marxism. With Li Rui and Xie Tao we have one opposing “the elimination of private ownership” and one opposing “the nationalisation of the means of production”, and their views are one and the same, openly opposing the system of public ownership, opposing violent revolution, and opposing the dictatorship of the proletariat. To boil it all down to one sentence, they oppose socialism. These gentlemen who advocate that China should walk the capitalist road on the one hand openly oppose socialism, and on the other hand, wrack their brains to distort socialism. In the transcript of this interview, when asking “What is socialism?” Mr Li Rui said “Socialism is everyone getting a bit better off”. We would like to ask, without the safeguard of public ownership, without the safeguard of a socialist economic base and superstructure, how can the working class and the working people “get a bit better off?”
Indeed, twisting the original definition of socialism has already become a fashionable pretext and technique of the old and new revisionists and certain people with political influence who oppose and deny socialism. They take “renewing socialism” as a pretext to try to package up the black goods of revisionism and reformism, to pretend that false socialism is real socialism, to deceive the masses. In order to realise this hidden political objective, they have concocted many “favourable” and “reasonable” theories for the implementation of private ownership, for example, the so-called “the property rights of public ownership are undefined, it’s everybody has nothing”, the so-called “public ownership is not as efficient as private ownership”, “socialism is just efficiency + fairness”, “the state economy can only strive for quality but not quantity”, “we need to establish a complete market economy”, “the private economy is the main basis of the market economy”, therefore we need “the state to retreat and the people to advance”, “don’t seek to have it all, just seek to have a place” (this is a literal translation. It could also mean “be happy with what you’ve got”, but I’m not clear on exactly what sentiment is meant to be expressed here – Trans.), “withdraw the public economy from all areas of competition”, realise the “system of enterprise transfer” and “social transformation”. In order to speed up this type of “transfer system”, they also put forward the so-called “icicle theory” (that state-owned enterprises will inevitably melt away like an icicle, so why not sell them off now - Trans.), the “apple theory” (that the market increases the value of the commodity – Trans.), the “pretty girl marrying first theory” (to find a “husband” for the most beautiful daughter first, as she will get ugly later on anyway, i.e. to first sell off the best state-owned enterprises to multinational corporations before they lose their value - Trans.) etc. In brief, they change ten thousand times yet always remain the same; they just want socialist China to speedily change, to thoroughly head in the direction of the capitalist abyss. The last couple of years are known for Cao Siyuan or “Bankruptcy Cao” who publicly put forward “the universal correct path to privatisation” (Cao Siyuan is a former scholar of the Central Party School and the Research Centre of the State Council who drafted China’s first Bankruptcy Law, directed primarily at state-owned enterprises. He is now the Director of the Beijing Siyuan Merger and Bankruptcy Consultancy and the Centre for International Private Enterprise - Trans.); also for the famous writer Zhang Xianliang’s declaration that we need to “’rehabilitate’ capitalism” and shouting out “Long Live Privatisation” (Zhang Xianliang is famous for his account of labour camp life in the novel “Half of Man is Woman”; he is the son of a Guomindang official and industrialist. Most recently he criticised the size and performance of the Chinese People’s Political Consultative Conference, saying both that its numbers should be reduced, and that there should be greater representation of people who could put the views of other social classes - Trans.); for Li Shenzhi being praised by the “cream” of the reformers as the “commander of liberalism”, shouting out that “China must speed-up its privatisation” and take the capitalist road of “Americanization” (Li Shenzhi 1929-2003. A CCP member who became Vice-President of the Chinese Academy of Social Sciences, and who accompanied Deng Xiaoping on his visit to the United States as an advisor - Trans.). There are a great many people like this clamouring loudly for taking the path of capitalist privatisation, for example Zhang Wuchang, Yu Jie, Jiao Guobiao, Li Zhisui, Liu Zaifu, Ma Licheng, Qian Liqun, Wang Ruoshui, Liu Xiaobo, Ren Zhongyi, Zhang Weiying and so on. All over the world, and in all walks of life, there are people like these. As for those traitors, running dogs and propagandists who go running overseas to the bosom of imperialism, there’s even less need to bring them up. These people all belong to families with the surname “Private” or “Capital”. Xie Tao however, is nothing but a newly laid bare member of the special detachment of imperialism.
(2) “The Preface” peddles the joint-stock system of capitalism and the nonsense that Western joint-stock companies have changed the nature of capitalism and “completed the transition to socialism”. Mr Xie Tao has quite a long passage on this. An excerpt follows:
“In the concluding remarks of “Mao Zedong: A Century of Merits and Faults”, Xin Ziling points out that ‘A world economic crisis erupted in 1868. After the crisis had passed, there was an amazing development in the concentration of capital. The appearance of large-scale investment banks and joint-stock companies changed the social structure of capitalist society. Along with the appearance of a new banking system, the accumulation of capital no longer depended on the thrift of the individual entrepreneur saving from his own accumulated funds, but relied on the savings of the whole society. Absorbing social funds to manage enterprises, the joint-stock company arose at an historic moment. On the continent of Europe, firstly in the iron and steel industry, then the chemical industry, the machine manufacturing industry and the textile industry, one department after another turned into joint-stock companies. Marx regarded this change as extremely important and believed that stock companies will abolish ‘capital as private property within the framework of capitalist production itself.’ ‘This is the abolition of the capitalist mode of production within the capitalist mode of production itself, and hence a self-dissolving contradiction, which prima facie represents a mere phase of transition to a new form of production.’ (Capital, Vol 3, Peoples Publishing House, 2nd ed., p 504 Chinese ed.) The capitalist is no longer in possession of a private enterprise but only possesses private property, and this private property is a part of enterprise capital that is quantified through money; the capitalists are no longer enterprise owners, but are only enterprise shareholders with a legitimate creditor’s right to part of the company profits. The stock company has created the layer of factory directors who manage the organisation and direct production, separating all the enterprise rights and the rights of management. The management level takes hold of the right to be in charge of enterprises, making the rule of the bourgeoisie illusory. This separation is a peaceful ‘revolution’, creating the possibility for a peaceful transition to a new kind of system. Marx had already pointed out in the third volume of Capital that “In stock companies the function (of management – Trans.) is divorced from capital ownership; hence also labour is also entirely divorced from ownership of means of production and surplus-labour. This result of the ultimate development is a necessary transitional phase towards the reconversion of capital into the property of producers, although no longer as the private property of the individual producers, but rather as the property of the associated producers, as outright social property” (“Capital” 3rd Volume, Peoples Publishing Agency, p. 502 Chinese ed.). Following on from this passage of Marx, Mr Xie Tao says in an extremely positive tone that “In this way, capitalism has completed the transition to socialism. The third volume of Capital has overthrown the conclusions of the first volume of Capital, and there is no longer any need to ‘blow up’ the ‘shell’ of capitalism. In Marx’s mind, Manchester capitalism (primitive capitalism) had been destroyed.”
Actually, the help that Mr Xie Tao begged from these two passages of Marx is no help at all. We open Chapter 27 of “Capital”, “The Role of Credit in Capitalist Production”. Both sections of Mr Xie Tao’s two passages stem from here. In this chapter, Marx is very explicit about determining the nature of the joint-stock system of capitalism and the stock companies. This author has also extracted three passages (Mr Xie Tao, in his, uses two passages, but leaves out the beginning and the end, so the meaning is incomplete.) (1) Marx said that in the formation of stock companies, the “capital, which in itself rests upon a social mode of production and presupposes a social concentration of means of production and labour-power, is here directly endowed with the form of social capital (capital of directly associated individuals) as distinct from private capital, and its undertakings assume the form of social undertakings as distinct from private undertakings. It is the abolition of capital as private property within the framework of capitalist production itself.” (2) Marx said that “Aside from the stock-company business, which represents the abolition of capitalist private industry on the basis of the capitalist system itself and destroys private industry as it expands and invades new spheres of production, credit offers to the individual capitalist, or to one who is regarded as a capitalist, absolute control within certain limits over the capital and property of others. The control over social capital, not the individual capital of its own, gives him control of social labour.” Marx said that “Success and failure both lead here to a centralisation of capital, and thus to expropriation on the most enormous scale. Expropriation extends here from the direct producers to the smaller and the medium-sized capitalists themselves. It is the point of departure for the capitalist mode of production; its accomplishment is the goal of this production.” (3) Marx said “this expropriation appears within the capitalist system in a contradictory form, as appropriation of social property by as few…” (“Capital” Vol 3, pp 501, 502, 504, 505 Chinese ed.)
(Above: China's biggest state-owned bank, the Industrial and Commercial Bank of China, changes into a joint stock company, Beijing, October 28, 2005.)
In here, Marx has already pointed out very clearly, that the appearance of joint-stock companies, this kind of “appropriation of social property by a few”, was still an establishment on “the basis of the capitalist system itself”, an “abolition of capital as private property within the framework of capitalist production itself.” That is to say, this is an “abolition” of a form of capitalist private property “on the basis” and “within the limits” of the capitalist system; this kind of “abolition”, however, is the appearance of a corporate capitalist form of capitalist private ownership, and it has certainly not changed the basic nature of the capitalist system of exploitation. The profit from share capital, namely the income obtained by the shareholder in the form of dividends, still stems from the surplus value created by the hired worker. Moreover, owing to the establishment and development of capitalist production’s share capital, strengthening big capital’s annexation of and rule over small and medium-sized capital, and to a certain extent at the same time giving impetus to the development of the social productive forces, leading to the “largest-scale expropriation” of capital, is just one step further in aggravating the oppression and exploitation of the hired worker, as well as impelling the further sharpening of the inherent internal contradictions of capitalism.
It should be said that in this part of Capital, in relation to the nature, the special characteristics, the function, the consequences and so on of the capitalist joint-stock system, Marx was perfectly clear. As for that which Marx said in here, “a mere phase of transition to a new form of production”, this author understands that sentence to refer to the expropriation of private property by the whole of society in the future, and to the “expropriation of the expropriators” through violent revolution as the only thorough preparation for crossing over to socialism, or “drawing near” to socialism. Under capitalism, with the appearance of joint-stock companies, there is basically no possibility for the existence of an already completed “transition from capitalism to socialism” or for “peaceful evolution to socialism” at all. The above passages from Marx, fundamentally do not have the meaning given by Mr Xie Tao’s annotations. This desire of Mr Xie Tao’s to secretly change the concept and twist the meaning of Marxism will simply get nowhere. As for Mr Xie Tao having said “The third volume of Capital has overthrown the conclusions of the first volume of Capital, and there is no longer any need to ‘blow up’ the ‘shell’ of capitalism” etc, this is just utter nonsense and rubbish. This author will refer to this question later.
(3) Mr Xie Tao declared that the capitalist countries have already put in place a planned economy and have solved the periodic economic crises. “The Preface” says: The capitalist countries have “drawn on the experience of the socialist planned economy and implemented a planned capitalism with state intervention”, “solving the crisis of malfunctions in the market economy by means of vigorous state intervention”, “President Roosevelt’s bold introduction of democratic socialist policies led the US to walk out of the 1929 world economic crisis”.
With nothing more than the desire to tell us, Mr Xie Tao offers explanations like this, that owing to the capitalist countries having “state intervention”, having “planning”, together with the introduction of “democratic socialist policies”, that the inherent contradictions between the socialisation of capitalist production and the private ownership of the means of production, has relaxed, so much so that they no longer exist. However, as shown by the historical development of capitalism and a host of facts, capitalism is not at all like the optimism of Mr Xie Tao.
Marxism tells us that so long as private ownership is practised, then it will be impossible to genuinely and thoroughly realise a planned economy and it will also be impossible to “solve” each of the periodic economic crises that occurs approximately every ten years.
In relation to the question of the so-called “planned capitalism” raised by Mr Xie Tao, Lenin, in the same year that he took aim at revisionism’s twisting of Marx and Engels on the question of the “planning” of capitalism, explained in this paragraph of The State and Revolution (right): “We shall note in passing that Engels makes an exceedingly valuable observation on questions of economics, which shows how attentively and thoughtfully he watched the various changes being undergone by modern capitalism, and how for this reason he was able to foresee to a certain extent the tasks of our present, the imperialist, epoch. Here is the passage: referring to the word “planlessness” (Planlosigkeit) used in the draft program, as characteristic of capitalism, Engels writes:
“…When we pass from joint-stock companies to trusts which assume control over, and monopolize, whole branches of industry, it is not only private production that ceases, but also planlessness.” (Neue Zeit, Vol XX, 1, 1901-02 p. 8)
Here we have what is most essential in the theoretical appraisal of the latest phase of capitalism, i.e. imperialism, viz., that capitalism becomes monopoly capitalism. The latter must be emphasized because the erroneous bourgeois reformist assertion that monopoly capitalism or state-monopoly capitalism is no longer capitalism, but can already be termed “state Socialism”, or something of that sort, is most widespread. The trusts, of course, never produced, do not now produce, and cannot produce complete planning. But however much they do plan, however much the capitalist magnates calculate in advance the volume of production on a national and even on an international scale, and however much they systematically regulate it, it will remain under capitalism – capitalism in its new stage, it is true, but still, undoubtedly, capitalism. The new “proximity” of such capitalism to Socialism should serve the genuine representatives of the proletariat as an argument proving the proximity, facility, feasibility and urgency of the socialist revolution, and not at all as an argument in favour of tolerating the repudiation of such a revolution and the efforts to make capitalism look more attractive, an occupation in which all reformists are engaged.”
Lenin had already quite clearly elaborated on this question. Under the capitalist system this type of single enterprise production planning is required by the capitalist; however, just like Lenin correctly said “The trusts, of course, never produced, do not now produce, and cannot produce complete planning.” In the whole productive activity of capitalism, it is absolutely impossible to genuinely put “planning” into practice, to overcome the “anarchy”. Engels pointed out: “only conscious organisation of social production, in which production and distribution are carried on in a planned way, can lift mankind above the rest of the animal world as regards the social aspect, in the same way that production in general has done this for mankind in the specifically biological aspect. Historical evolution makes such an organisation daily more indispensable, but also with every day more possible. From it will date a new epoch of history, in which mankind itself, and with mankind, all branches of its activity, and particularly natural science, will experience an advance that will put everything preceding it in the deepest shade.” (Engels, “Introduction to The Dialectics of Nature”, “Selected Woks of Marx and Engels”, Peoples Publishing House, 1961 ed, Vol 2 p.75 Chinese ed.) My understanding of this is that “the conscious organisation of social production” and the “From it will date a new epoch of history” raised by Engels, is socialism, and can only be socialism.
It is true, we also note, that after WW2, the various Western bourgeois governments took some measures to strengthen direct intervention in the economy and made certain adjustments to the capitalist relations of production. In the initial post-war period the major Western capitalist countries had already basically completed the pattern of change from private monopoly capitalism in general, to state monopoly capitalism combined with private monopoly capitalism. The pre-way expenditure of the major Western capitalist countries as a proportion of GDP was generally 10-20%, but after the War had already reached 25-40% or an even higher level. Without this type of adjustment, without the strength of the state, the costs of enormous atomic energy plants, of complex aeronautics technology, of widespread modernized public facilities, of investments in basic industries that are large and slow to produce results, of major organisations for scientific experiment etc that needed to be built would be extremely difficult if not impossible. But we also need to see that on the one hand, the capitalist countries used this kind of a repair job to carry out adjustments, and it is basically impossible to eliminate its inherent contradictions, impossible to end the periodic economic crises; on the other hand, this type of adjustment has not changed the essence of capitalist exploitation, and this state-dependent capitalism which carried out large-scale direct investment is in fact giving back money to the capitalist in the form of levies and direct taxation and so on from working people’s income.
On the question of the periodic economic crises of capitalism we know that, beginning in the 1930’s, the English bourgeois vulgar economist Keynes and his Keynesianism became popular, and the capitalist countries attempted to use Keynesianism in order to melt away their inherent contradictions and periodic crises, but, in the end, they failed to achieve their goals, and even the “Roosevelt New Deal” finally failed and came to an end.
After the War, each main capitalist government also adopted the issuing of bonds and running large-scale financial deficits, maintaining high inflation rates and other coercive methods, expanding social investment and stimulating economic growth. In the 1950’s, consumer prices in the major developed capitalist countries increased at an average rate of between 1.4 to 3.4 per cent, and in the sixties this rose to between 2.6 to 5.8 per cent and in the seventies the inflation rate actually rose to double digits. These methods in the short term also brought about a stimulation of economic growth, delaying the effects of impending crises. However, this is only turning an acute disease into a lingering illness, making every type of economic and social problem inherent in capitalism even more difficult to change. From the first economic crisis of overproduction in English capitalism in 1825, in two centuries, this type of periodic crisis has never been eliminated, but keeps coming around one after the other. During 1929-1933 in particular, there was an unprecedented major crisis causing industrial production throughout the entire capitalist world to drop by 44% and causing 40 million people to become unemployed. According to what the data in the 1978 edition of the “World Economics Statistical Yearbook” shows, since WW2 (1948-1974), the main Western capitalist countries have had periodic economic crises on these occasions:
Country No. of Crises Biggest % Decline Longest Period of Decline (Months)
U.S. 6 -13.8 17
Britain 6 -23.6 22
W. Germany 5 -11.4 15
France 4 -16.3 12
Japan 7 -20.8 15
We can see from the table that in 26 years these five countries have had approximately 6-7 years when a periodic crisis has occurred. According to other statistics, in the US from 1854 to 1951, a total of 31 economic cycles have appeared. Each cycle is, on average, 48 months. Regarding this, the US bourgeois economist Paul A. Samuels could not help but acknowledge that “the US economy throughout contemporary history has suffered continuous economic cycles.”
Some reports say that an economic crisis also happened in the US in the early 1990’s, and that for two years continuously the increase in private consumption was lower than the growth in investment, and overproduction had become a fact. However, owing to the pattern of major world changes including the disintegration of the Soviet Union and drastic changes in Eastern Europe, the implementation in China of the policies of reform and opening to the West etc, the US obtained favourable circumstances and its economy was sustained over the length of ten years. Whilst this author was writing this, he has just seen Comrade Li Shenming’s just published article, “Certain Questions on the Present Situation and Development of World Socialism”. The article states: In the 1990’s “one of the basic premises of the ten year prosperity of the US economy was the destruction of the Soviet Union and Eastern Europe. The gross value of industrial output for the former Soviet Union added to the eight countries of Eastern Europe was once one third of the strength of the total industrial output of the world. In the antagonism of the US and the Soviet Union during the Cold War you could never begin to take the US as the leader of the globalisation movement in the Soviet-led Warsaw Treaty bloc. But after the collapse of the Soviet Union and Eastern Europe brought about by the US-led Western countries, and the rapid decline of the former Soviet Union and Eastern Europe, massive funds, skilled personnel and inexpensive raw materials, technology, markets etc fell mainly to the US. This was an extremely important factor in the impetus for the sustained 10 year economic prosperity in the US. Nowadays, the US does not have these strategic spaces. All of these possess the possibility of speeding up and aggravating US economic recession.” The article takes its analysis a step further, pointing out that “In 2000, the US dot com stock bubble burst and the US economy entered a crisis. From 2000 to 2003 the US stalled 13 times in a sign that its economy still had not recovered. The Bush Administration started the Afghan and Iraq wars in 2001 and 2003 respectively with the result that the industrial plant equipment utilisation ratio again reached over 80% and the unemployment rate fell from 6.1% in the second and third quarters of 2003 to 4.7% in the first quarter of 2006…The US economy concealed a serious crisis, that it had been following a 40-60 year “Kondratiev Wave” (“Social Sciences in China Digest” 2007, Vol 1 p. 15) (“Krondratiev Waves” or grand supercycles or surges in the Western capitalist economies were put forward by the Russian economist Nikolai Kondratiev, 1892-1938. He identified cycles of 40-60 years in length during which business fluctuated between high growth and a decline in growth. Based on the market crash of 1870, Kondratiev claimed to have been able to predict the 1929 Crash – Trans.) . In my view, this analysis of Comrade Li Shenming’s is completely correct and also quite profound. What I would like to add is that although the US no longer has the “strategic spaces” of the Soviet Union and Eastern Europe, this does not mean that it is not looking for new “strategic spaces”. Since the US was able to destroy the Soviet Union and Eastern Europe, would it not also want to destroy our country? The answer is certain. No matter how our country may initiate “getting along harmoniously” with the US, how it constructs friendly relations of “strategic partnership” and “mutual benefit”, it kills my heart but I have not died, nor will I die in the future. We need to recognise that economic globalisation has brought China into contact with the great nations of the West, including the US, and that in truth, I am in you and you are in me. Foreign capital enterprises have already made good in China and at present foreign capital makes up half of our numerous competitive professions and industries. More than 60% of our foreign trade exports are created by foreign capital enterprises. Each of the first five cities of China that have already opened up industry is now controlled by foreign capital companies. Among China’s 28 main industries, foreign capital has the control rights in 21 of them. According to a number of announcements from China’s Commercial Affairs Department, among the worthwhile increases in contemporary Chinese industries, 37% have been brought about by foreign capital enterprises. If this type of thing continues to develop it will inevitably affect our country’s economic independence and national sovereignty. Some reports say that of our country’s current foreign exchange reserves of more than one trillion US dollars (a million millions – Trans.), two thirds, namely 6-7 billion (6-7 hundred thousand millions - Trans.) have been used to buy US dollar bonds, but the US is in fact insatiably avaricious and has time and again suppressed the revaluation of the Chinese RMB in order to seek greater advantages and benefit. In addition, the Taiwan region is under the control of the US, and the US has repeatedly secretly instigated Chen Shuibian’s clamour for “Taiwan independence”, and engaged in sales of arms and weapons to Taiwan. These are all bargaining chips used by the US to pressure China, to collapse our country’s new “strategic space”. The Chinese people, who have suffered the evils of imperialism and colonialism, must be vigilant.
As the facts above conclusively prove, the view held by Mr Xie Tao that the traditional periodic economic crises had already been solved, was superficial and shortsighted. Regardless of whether they adopt the method of state intervention, or resort to the method of war, the capitalist countries are unable to fundamentally solve the “crises of malfunctions in the market economy.”