6. On how the question of the two systems of ownership and the two systems of distribution are compared
According to Mr Xie Tao, the public ownership system is not as good as the private ownership system, distribution according to work is not as good as distribution according to wealth, and he also cites several “typical cases” like Sweden and others to support his arguments. He says: “Although Sweden is a small country, and although the Swedish Social Democratic Party is a small party, it is however, a model of democratic socialism and its experience has universal worth, and is an outstanding contribution to human civilization. Within the framework of democratic constitutional government, the Swedish SDP relies on the correctness of its own policies, and, representing the interests of the vast majority, continues to be re-elected and has long experience of holding political power; in economic development it upholds efficiency and equality, and implements fairness and common prosperity; it correctly handles labour relations and mobilizes the enthusiasm of the workers and the entrepreneurs to achieve a win-win labour experience; it has effectively prevented the emergence of a privileged class and has stopped official abuses of power, bribery and corruption, has maintained honest government experience over the long term, adhered to the socialist direction in reform and opening up, and provided a successful model in taking the road of democratic socialism.”
Relatively speaking, whether it is the per capita GDP or the economy as a whole, a small minority of the western developed capitalist countries must all be higher than the Third World countries. However, this does not lead us to conclude that capitalism is superior to socialism.
Firsly, we should note that in the world today, there are more than 210 countries and regions (of which 192 are countries), and that apart from a few countries that are still within the socialist system of public ownership, more than 200 other countries and regions are engaged in private ownership and belong to the capitalist system. Within this huge number of capitalist countries, apart from some 20 that are developing or quite developed, the majority are still at a relatively backward stage of economic development. The American economist Sero (not sure how this surname translates –Trans.) in his book “21st Century Rivalry” quoted these statistics: During the 118 years from 1870-1988, taking the average per person income as the basis, there was little change in the ranking of the richest countries, with only the two small-population, oil-rich petroleum exporting countries of the United Arab Emirates and Kuwait entering the ranks, whilst countries that are low export price resource-rich countries, like New Zealand, Argentina and Chile have disappeared from the ranks of the rich countries. From this he concludes: it is virtually impossible for poor countries to
push their way into the ranks of the rich. That is to say, in this 118 year period, no economically backward capitalist country has been able to enter the “rich countries club”. Many of them are getting poorer and poorer, they have fiscal deficits, are debt-ridden, have capital outflow, inflation, unemployment, there is a grain panic, ecological deterioration, political instability and their people live in squalor, and some of these countries are on the verge of economic collapse. This phenomenon, in the final analysis, is the product of the system of capitalist private ownership and imperialist plunder. When we compare the merits of the two different systems, we should not overlook this point.Secondly, we should note that the developed capitalist countries and the socialist countries have different foundations and starting points. When we compare them, we should not only look at the present, but also at their history; we should not just look at how wealthy they are, but at the differences in their foundation and their starting points; we should not only look at economics, but also at politics, society, culture and other aspects; only such an analysis can result in practical conclusions. Otherwise, we will move into errors.
For instance, take our country. Prior to the founding of New China, calculated from 1840, China had experienced over 100 years of invasion and plunder by imperialism, lost several hundred million square kilometres, paid the equivalent of 1300 million taels of silver, suffered the War of Aggression started by Japanese militarism in the 1930s causing the loss of more than 20 million Chinese lives and property damage of more than 100 billion US dollars. Long-term imperialist aggression and oppression not only caused and aggravated China’s poverty and backwardness, but also widened the gap between China and the Western powers. By the time of the founding of New China, the major countries in which capitalism originated had already built up a modern industrial system with a greater per capita GDP than that in China today, and had already started to take electronic technology as the symbol of the prologue to modernization at a time when China was still a poor agricultural country whose industry only accounted for about 10% of the gross output value of industry and agriculture. On such a backward foundation, our country rapidly achieved a high level of development, a fact acknowledged as a success for socialism in China by unbiased observers throughout the world. In addition, the process of capitalist industrialisation was accompanied internally by cruel exploitation and externally by barbaric
aggression and plunder, together with intense social conflict and turbulence. In China the process of industrialisation has relied totally on China’s own strength, has relied on public ownership and the superiority of a planned economy, has depended on maintaining independence and self-reliance, has relied on the entrepreneurial spirit and on the whole nation in building socialism with tremendous enthusiasm and daring. Generally speaking, the economic development of our country has been accompanied by national unification, national unity, improvements in people’s living standards and socio-economic, political, cultural and moral progress.Thirdly, as for Mr Xie Tao’s high praise in the “Preface” for the welfare system of the small country of Sweden and the little French town of Bordeaux, and his claims that the “working class has already been liberated” there, and that they have achieved a “win-win for labour and capital” and “common prosperity”, I beg to differ in relation to this. There are three important points that Mr Xie Tao cannot evade. (1) From his words, it is not hard to see that although the standard of living of the working class in these two places may be a bit better than elsewhere, the capitalist system is still carried out and so is capitalist exploitation. This type of situation is just like that talked about by Marx in Vol 1 of Capital on the general rule of capitalism: “But just as little as better clothing, food, and treatment, and a larger peculium, do away with the exploitation of the slave, so little do they set aside that of the wage-worker. A rise in the price of labour, as a consequence of accumulation of capital, only means, in fact, that the length and weight of the golden chain the wage-worker has already forged for himself, allows of a relaxation of the tension of it.” (“Complete Works of Marx and Engels” Chinese ed. Vol 23 p. 678; see Capital Vol 1. Ch. 25 – Trans.). (2) As a result of the existence of capitalist exploitation, there is in it still distribution according to capital rather than distribution according to work, and there is still the problem of the existence of a polarisation of unfair distribution. Data show that from 1980 to 1995, Swedish inequality grew at an annual rate of 1.5%, on a par with Denmark, Holland and Australia, and slightly lower than in the United States and the United Kingdom (“Social Sciences in China Digest” 2007, Vol 1. p. 53). (3) As for Mr Xie Tao’s extreme praise for the “typical” experience of “common prosperity” in the small French town of Bordeaux, Mr Xie Tao presumably does not know of the typical cases of more than 8000 villages in our country like Nanjie and Huaxi where there is genuine common prosperity? How many times better than the welfare systems of Sweden and France are these new socialist rural areas that persisted in the good of the public ownership system! In particular, these new socialist rural areas, unlike the City of Bordeaux, have no “manorial lords” or “major shareholders”, and as they don’t have these exploiters, naturally there is no exploitation and no oppression, nor is there any kind of decadent capitalist malpractice. Sweden and the French city of Bordeaux are unable to compare with any of this. Only these places have the qualifications to truly say that they have “common prosperity”!
Fourthly, in refuting these fallacies of the Preamble, we have no alternative but to carefully examine the situation we face. After the 11th Session of the Third Plenary Conference of the Chinese Communist Party, Mr Xie Tao said “Please bring back the capitalists”, “Please bring back the advanced productive forces”, “Please write the important articles protecting the system of private ownership into the Constitution”, “This symbolizes that China has embarked on the road of democratic socialism” and so on. These words of his are negative reminders of the need for vigilance on our part. Since the policy of reform and opening up, our country has undergone tremendous changes. A great many public enterprises have in fact already changed into private enterprises and the newspapers use the formulaic term of the “non-public economy”. According to a report in the “People’s Daily” of 28 February 2005, of 40 main industrial sectors, the non-public sector in 27 industries (or 67.5%) had surpassed 50%, and in some sectors accounted for 70%. Vice-Premier Wu Yi, in a conversation with foreign guests, revealed that foreign capital and the non-public sector already comprised 65% of our GDP whilst the public sector of the economy had fallen to 35%. There are also some other economists who believe that the publicly owned sector contributes less than 20% of GDP. That is to say, public ownership is no longer the mainstay of the economy, and the economy as a whole is already privatized.
Owing to these massive changes in the system of ownership, the distribution system inevitably evolved along with it, and in many factories and enterprises distribution according to work has already become distribution according to capital. Arising from the strange phenomenon that since the founding of the PRC we have never had “income disparity” and “unfair distribution”, a new bourgeoisie (also referred to by some people as “a new stratum”, “the rich” or “middle class”) has been brought forth, and a millionaires, multi-millionaires, a even billionaires have emerged. Polarisation is developing without let-up and the Gini coefficient is getting higher and higher and moving towards the forefront of those countries with the largest gaps in the world! According to Qinghua University professor Sun Liping, China’s Gini coefficient is only measures the urban population, and is above 0.5, at around 0.54; it does not include farmers and would be much higher if rural inhabitants were included. The international community generally recognizes a Gini coefficient of 0.4 or more as an indication that the income gap is too wide; higher than 0.6 indicates that society is entering a crisis and that social turmoil could erupt at any time. Therefore the international community takes 0.6 as the cut-off point. Regardless of the above, both the common people and internationally, there is recognition that China’s Gini coefficient is extremely serious. Moreover, in contemporary China, the 20% of the community who are rich account for 60% or more of the nation’s wealth. For the other 80%, education, health and housing are the “three new mountains” that they cannot escape in everyday life.This serious social injustice has caused social instability. According to Outlook (Liaowang) Weekly, various places in China experienced 58,000 instances of public protest in 2004, six times the number ten years ago. (The quote above is from the July 13, 2006 China Economic Times article “On the validity of ‘China’s Gini coefficient is not serious’”). You cannot say that the emergence of these new situations and new problems has nothing to do with changes to the systems of ownership and distribution in our country. Realistically speaking, this runs completely counter to the original intention of the “reform is the self-improvement of the socialist system” put forward in the early stage of the reforms in our country. Remember in those years our leaders saying on many occasions to foreign guests things like: Our reform and opening up adheres to socialism, we will not take the capitalist road, and will avoid polarization. The wealth we create will firstly be returned to the country, and secondly to the people; it will not produce another capitalist class and will not produce millionaires. If it creates millionaires it will create polarization and produce a new capitalist class, and that will show that our reform and opening up has taken the capitalist road. (The main point) twenty years have passed and the leaders that spoke these words passed away years ago, so what is the result now? It is not just millionaires, but multi-millionaires and billionaires that have appeared. In particular, in recent years what the people reflect on most intensely is how, in the process of “transferring” the publicly-owned enterprises, collusion has occurred between bureaucrats and business people to create all sorts of excuses to incorporate the public property belonging to the people under their own names, massively draining state assets. Some business leaders do not use a cent of their own money to buy and sell, but use only bank loans, and put a price on the original value of the “purchase” that is several times, ten times and even a hundred times greater than the factory or the enterprise that they have grabbed for themselves. Oh! – this we know – this is the wealth that the Chinese workers, peasants and the people of the whole nation have sweated and shed blood to produce! In such a way has it been so easy for this minority to take (we should say “loot”) this wealth! Nowadays, these “overnight men of power and wealth” number in the thousands, tens of thousands, tens of millions and even more. So quietly, calmly and imperceptibly generated was the new Chinese
bourgeoisie! Some media reports have stated that Communist Party members comprise more than 35% of this nascent bourgeoisie. Recently, a report of the National Association of Commerce and Industry stated that, amongst the owners of private enterprises, the proportion of those who had served as cadres at all levels of party and government organs and institutions was: 56.4% were general cadres, 30.7% were section level cadres, 11.6% were county level cadres, 1.4% were cadres above the county level, and that all four added together showed that state cadres comprised 99.1% of enterprise owners! (“Publication Digest” March 7, 2007). According to information released by the Chinese Academy of Social Sciences, the authorizing for capital reached an alarming level, where, of 3,220 people with wealth in excess of 100 million yuan, 2,932 were relatives of party and government officials at all levels. No wonder the foreign media commented that such a process of quick riches is the approach of “predatory capitalism” and “gangster capitalism”!Why has such a result appeared under the policy of reform and opening to the West? It is necessary to sum up and reflect on this. Recently, however, the “finest specimens” of the reform, with the officials and businessmen who belong to the group of such people who collude together have all sprung up to unscrupulously publish articles and speeches. On the one hand, they deny that a serious polarization has appeared in China; on the other hand, they have shaped public opinion against probing into the “original sin” of the “first bucket of gold”, and have even guaranteed under law that the “first bucket of gold” is “sacred and inviolable”. Many academic legal experts pointedly noted: the real role of the “Property Law” is to protect private property. In May 1990, the Central Propaganda Department issued a “Summary of certain Questions on the Study of Socialism” that pointed out: “Although very few adhere to the standpoint of bourgeois liberalization or are strongly opposed to us exposing and resolving the problems of unfair social distribution, or even advocated increased social polarization, looking forward to the emergence of even more millionaires and billionaires, nurturing the new bourgeoisie, their so-called “middle class”, and think that this is where China’s hopes lie. They claim: ‘The establishment of a democratic system and a democratic society in China depends on the formation of a middle class. Without a middle class there will be no real democracy’. In fact, taking the so-called ‘middle class’ as the foundation of ‘democracy’ and a ‘democratic society’ is only possible in capitalism and a capitalist society. The purpose of the handful who adhere to the stand of bourgeois liberalization is the cultivation of the social infrastructure and the reliance on force for the subversion of the socialist system and the establishment of a capitalist republic.” How wonderful are these words! This is really profound; this really hits the nail on the head! However, this line of thought of the Central Propaganda Department (under then Minister Wang Renzhi) was not accepted by certain people and has not become the ideological mainstream of Chinese society, and those political forces conspiring to subvert the socialist system and to establish a bourgeois republic in China, are persisting in their old ways and getting stronger and fiercer! Against this background, is the splendid appearance of Mr Xie Tao’s “Preface” in a public national publication an isolated act? Is this not worthy of deep reflection?
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