Page 2 of 3 CHINA'S REVOLUTION: 90 YEARS ON,
Part 1
In the beginning was Tiananmen
By Henry C K Liu
Before the October Revolution of 1917, many national liberation movements in
European colonies and semi-colonies around the world were influenced by List's
economic nationalism. The 1911 Xinhai Revolution led by Sun was heavily
influenced by Abraham Lincoln's political ideas of government of the people, by
the people and for the people, and the economic nationalism of List until after
the October Revolution in Russia when Sun realized that the Soviet socialist,
anti-imperialist model was the correct mode for national revival of China.
Imperialism and iron law of wages
Hobson's magnum opus, Imperialism (1902), argues that
imperialistic expansion is driven not by state hubris, known in US history as
"Manifest Destiny", but by an innate quest for new
markets and investment opportunities overseas for excess capital formed by
over-saving at home for the benefit of the home state.
Over-saving during the industrial age came from David Ricardo's theory of the
iron law of wages, according to which wages were kept perpetually at
subsistence levels as a result of uneven market power between capital and
labor. Today, job outsourcing that returns goods as low-price imports
contributes to the iron law of wages in the global economy, including the US
domestic economy. (See Organization
of Labor Exporting Countries, Asia Times Online, February 2006).
Dollar hegemony
In the 1970s, dollar hegemony emerged as a geopolitically constructed
peculiarity through which critical commodities, the most notable being oil, are
denominated in fiat US dollars, not backed by gold or other species since US
president Richard Nixon took the US dollar off gold in 1971.
The recycling of petro-dollars into other dollar assets is the price the US has
extracted from oil-producing countries for US tolerance of the oil-exporting
cartel since 1973. After that, everyone accepts dollars because dollars can buy
oil, and every economy needs oil.
Dollar hegemony separates the trade value of every currency from structural
connection to the productivity of the issuing economy to link it directly to
the size of dollar reserves held by the issuing central bank. Dollar hegemony
enables the US to own circuitously but essentially the entire global economy by
requiring its wealth to be denominated in fiat dollars that the US can print at
will with little in the way of monetary penalties.
World trade is now a game in which the US produces fiat dollars of uncertain
exchange value and zero intrinsic value, and the rest of the world produces
goods and services that fiat dollars can buy at "market prices" quoted in
dollars.
Such market prices are no longer based on mark-ups over production costs set by
socio-economic conditions in the producing countries. They are kept
artificially low to compensate for the effect of overcapacity in the global
economy created by a combination of overinvestment and weak demand due to low
wages in every economy.
Such low market prices in turn push further down already low wages to further
cut cost in an unending race to the bottom. The higher the production volume
above market demand, the lower the unit market price of a product must go in
order to increase sales volume to keep revenue from falling. Lower market
prices require lower production costs which in turn push wages lower. Lower
wages in turn further reduce demand. To prevent loss of revenue from falling
prices, producers must produce at still higher volume, thus further lowering
market prices and wages in a downward spiral.
Export economies are forced to compete for market share in the global market by
lowering both domestic wages and the exchange rate of their currencies. Lower
exchange rates push up the market price of imported commodities which must be
compensated for by even lower wages. The adverse effects of dollar hegemony on
wages apply not only to the emerging export economies but also to the importing
US economy. Workers all over the world are oppressed victims of dollar
hegemony, which turns the labor theory of value up-side-down. (See
Dollar Hegemony, Asia Times Online, April 2002.)
Lenin's theory: imperialism as
advanced stage of capitalism
Hobson's 1902 analysis of the phenology (life cycles study) of capitalism was
drawn upon by Lenin 14 years later to formulate a theory of imperialism as an
advanced stage of capitalism: "Imperialism is capitalism at that stage of
development at which the dominance of monopolies and finance capitalism is
established; in which the export of capital has acquired pronounced importance;
in which the division of the world among the international trusts has begun, in
which the division of all territories of the globe among the biggest capitalist
powers has been completed." (Vladimir Ilyich Lenin, 1870-1924, Imperialism, the
Highest Stage of Capitalism, Chapter 7-1916).
"It is characteristic of capitalism in general that the ownership of capital is
separated from the application of capital to production, that money capital is
separated from industrial or productive capital, and that the rentier who lives
entirely on income obtained from money capital is separated from the
entrepreneur and from all who are directly concerned in the management of
capital. Imperialism, or the domination of finance capital, is that highest
stage of capitalism in which this separation reaches vast proportions. The
supremacy of finance capital over all other forms of capital means the
predominance of the rentier and of the financial oligarchy; it means that a
small number of financially 'powerful' states stand out among all the rest. The
extent to which this process is going on may be judged from the statistics on
emissions, ie, the issue of all kinds of securities." (Lenin's Imperialism,
Chapter III: Finance Capital and the Financial Oligarchy.)
Lenin was also influenced by Rosa Luxemburg, who three years earlier had
written her major work: The Accumulation of Capital: A Contribution to an
Economic Explanation of Imperialism (Die Akkumulation des Kapitals: Ein
Beitrag zur akonomischen Erklarung des Imperialismus, 1913). Luxemburg,
together with Karl Liebknecht, founding leaders of the Spartacist League
(Spartakusbund), a radical Marxist revolutionary movement that later renamed
itself the Communist Party of Germany (Kommunistische Partei Deutschlands, or
KPD), was murdered on January 15, 1919, four months before the May Fourth
demonstrations in China, by members of the Freikorps, rightwing militarists who
were the forerunners of the Nazi Sturmabteilung (SA) led by Ernst Rohm.
The congenital association between capitalism and imperialism requires
practically all truly anti-imperialist movements the world over to be also
anti-capitalist. To this day, most nationalist capitalists in emerging
economies are unwitting neo-compradors for super imperialism. Neo-liberalism,
in its attempts to breakdown all national boundaries to facilitate global trade
denominated in fiat dollars, is the ideology of super imperialism. (See
Super Capitalism, Super Imperialism, Asia Times Online, October 12, 13,
2007.)
Chinese exposure to Marxism
Chinese intellectuals first became aware of Marxism around 1905, 57 years after
the 1848 publication of the Communist Manifesto and 38 years after the
first publication of Das Kapital: Kritik der politischen Okonomie in
1867, when a small Chinese newspaper named Min-Bao (People's Journal) published
a biography of Marx, 22 years after Marx's death in 1883.
Three years later, in 1908, an anarchist journal by the name of Tien-yi Bao
(Journal of Natural Justice) founded a year earlier, published a Chinese
translation from the Japanese translation of Friedrich Engels' 1888 English
edition of Introduction to the Communist Manifesto, and the first
chapter of the Manifesto itself. But only in 1916, three years before
the May Fourth Demonstrations, did Lenin make the insightful connection between
imperialism and capitalism.
Although incipient recognition of Marx and Engels as the founders of scientific
socialism had been acknowledged, the influence of Marxism on Chinese
intellectuals remained sporadic until the 1919 May Fourth Movement when the
success of the Bolshevik October Revolution dramatized the revolutionary
possibility of a socialist ideology seizing the power of the state. At
Versailles, Western democracy lost all credibility in China as a progressive
force against imperialism.
Lenin's views about imperialism being the highest stage of capitalism enabled
socialism to present itself as a promising revolutionary theory to the Chinese
intelligentsia for combating both Chinese feudalism and Western imperialism. On
a state level, the new communist government of the Soviet Union twice, in 1918
and 1919, unilaterally renounced all special rights and privileges of Tsarist
imperialism in China, notwithstanding a fragmented China nominally headed by a
central government too weak to reverse the encroachment of Western imperialism.
Lenin's insight of the linkage of capitalism and imperialism gave Chinese
intellectuals an understanding of capitalism as the pugnacious root cause of
foreign imperialistic domination of China. More importantly, Lenin's insight
inadvertently gave Chinese revolutionaries a central place in the universal
struggle towards a new world order. By 1918, Peking University had become a
vibrant center of socialist revolutionary thoughts.
Li Dazhao, head librarian at the Peking University library at the time of the
1919 May Fourth demonstrations, had learned from the October Revolution of 1917
that anti-imperialism as a political movement required the existence of a
communist party in China. But while Li was a nationalist and socialist
revolutionary who saw the peasantry as the fountainhead of socialist revolution
in China, he was temporarily distracted by Kropotkin's communist anarchism as
promoted in China by Li Shi-zeng, which denied the importance of the role of
the state in guiding socialist revolution before the stage of the "withering
away of the state".
The May Fourth Movement marked a turn by anti-imperialist Chinese intellectuals
towards revolutionary Marxism. The success of the Bolshevik Revolution in
Russia was a major factor in forming the views of Li Dazhao on the
revolutionary role of the state. Li initiated the Peking Socialist Youth Corps
in 1920 and in July 1921 co-founded the Communist Party of China (CPC) with
Chen Duxiu, who had been exposed to socialist ideas in Japan, as a political
institution with the secular program to seize power of the state to carry out
socialist revolution in China. A revolutionary state is the rationale for a
one-party government, provided that the ruling party represents the interest of
the people. Li was a mentor to Mao Zedong, who openly acknowledged having been
influenced by Li's ideas.
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