Deng, Time magazine man of the Year 1979 and 1986. He makes the front cover 7 more times. 

This is an extract from In Defence of Trotskyism No. 1, 2009. Obviously, some statistics are now outdated, e.g. China now has more billionaires than the USA, this statement is no longer true. “China now has more millionaires than the UK, Germany or Japan, although at 450,000 it is still a long way behind the U.S.” – the USA still has far more millionaires than China. There were 1.34 million millionaires in China in 2016 and 14, 814, 453 in the  United States in that same year.  Both countries have rapidly growing inequality. And whilst we said “they are developing as an imperialist power” back then, we now say that they are not imperialist and cannot become so whilst the global hegemon, the USA dominates the world’s financial and trading markets via the dollar.Is China still a deformed workers’ state?

The LTT’s The Marxist Theory of the State [15] made just this point: According to Trotsky’s succinct definition, “the class character of the state is determined by its relation to the forms of property in the means of production” and “by the character of the forms of property and productive relations which the given state guards and defends”. [16] This implies a dialectical rather than a mechanical relationship between base and superstructure: it is not merely a question of the existing forms of property but of those which the state defends and strives to develop.

Underlining this approach, Lenin argued in early 1918 that: “No one, I think, in studying the question of the economic system of Russia, has denied its transitional character. Nor, I think, has any Communist denied that the term Socialist Soviet Republic implies the determination of Soviet power to achieve the transition to socialism, and not that the new economic system is recognised as a socialist order.” [17]

However, having correctly used this method in the USSR in 1991 the IBT are totally unable to use it in China today. In 1917 No. 31 Political Revolution or Counterrevolution—Whither China? the IBT use the totally incorrect criterion for defining a workers’ state which they rejected back in 1989, “in the final analysis the class character of a state is based on the underlying social relations of production.” They proclaim, and they write a long document based on this false assertion which they must know to be incorrect. They certainly knew it when they wrote Poland, the Acid Test in 1988 when it was the political character of the state that determined the nature and direction of the economy not the other way around as above:

“For Trotskyists, Solidarnosc can only be analyzed within the framework of our position on the “Russian question” and its programmatic implications? Marxists determine the class nature of a given state by its social content, that is, by the character of the property relations it defends—not by its political forms. Trotsky remarked in 1939:  “Although economics determines politics not directly or immediately, but only in the last analysis, nevertheless economics does determine politics. The Marxists affirm precisely this in contrast to the bourgeois professors and their disciples. While analysing and exposing the growing political independence of the bureaucracy from the proletariat, we have never lost sight of the objective social boundaries of this ‘independence’; namely, nationalized property supplemented by the monopoly of foreign trade.”

If the IBT, along with the rest of the “Family” were to ask that very empirical question, what relations of production does the Chinese state defend? then they could give only one answer – the Chinese Stalinist bureaucracy use statised property to defend and develop capitalist property relations. This is the total opposite to what Lenin did via the NEP and what all USSR bureaucrat did, even Gorbachev up to late 1990; they used a certain measures of controlled capitalist production and distribution to guard and develop collectivised property relations. The IBT theory is a reversion to the old Grantite/Militant theory that a workers’ state is defined by the degree of nationalisation. Ted Grant, in The Colonial Revolution and the Deformed Workers’ States written in July 1978 gave us the following hilarious list: “In Vietnam, Laos, Kampuchea, Burma, Syria, Angola, Mozambique, Aden, Benin, Ethiopia and as models, Cuba and China (which in their turn had the model of Eastern Europe as a beacon showing the way) there has been a transformation of social relations”.

When he made his speech to the International Committee Third Conference in 1966 James Robertson had enough “common sense” and was sufficiently aware of the importance of empirical evidence to ridicule the Healy/Lambert line on Cuba (a capitalist state with a weak or “phantom” bourgeoisie);

“While the nationalisation in Algeria now amounts to some 15 per cent of the economy, the Cuban economy is, in essence, entirely nationalized; China probably has more vestiges of its bourgeoisie. If the Cuban bourgeoisie is indeed “weak,” as the I.C. affirms, one can only observe that it must be tired from its long swim to Miami, Florida.”

Whilst wrongly relying on nationalisation alone Robertson’s empirical examination of reality proved far superior to Healy’s “dialectics” which railed against “the facts” because that was “empiricism”. But he cannot do the same for China today.

Has the CCP Bureaucracy become a capitalist class?

Well not exactly. But it does rule on behalf of the capitalist class as the following report in The Telegraph makes clear which property relations provide its privileges; China denies claim that Communist Party offspring make up 90% of multi-millionaires. By Malcolm Moore; The Telegraph Shanghai 07 Aug 2009:

“A report that relatives of senior Communist Party cadres make up nine out of ten of China’s multi-millionaires has been firmly denied by the Chinese government. The report, which first appeared last month in Time Weekly, a Chinese magazine, quickly caused a sensation on the Chinese internet. It cited a joint project between several senior government research bodies and the Publicity ministry that claimed 91 percent of the 3,220 people in China worth over 100 million yuan (£8.75 million) were “children of senior cadres”.”

This is how the LTT’s The Marxist theory of the state addressed the problem of the “peaceful overturn” of bourgeois property relations in Eastern Europe in 1947-48;

“Does this mean that we are arguing that a bourgeois state can be used as a platform to create a workers’ state, and are thereby fundamentally revising Marxism? The apparently gradual transformation of state structures was, on the face of things, closer to the “gradual” model of the transition from feudal to capitalist states which took place in most central and Eastern European countries. The semi-feudal aristocracy was forced to industrialise in much of central Europe during the 19th century under the threat of economic and political downfall. In these cases, state apparatuses were adapted to the needs of new relations of production, whilst partially maintaining the old institutional framework. These old forms finally changed their social character…The real question for Marxists is not the class origins of the functionaries but in whose interests they function. The history of bourgeois revolutions showed that it was possible for opportunist elements to navigate the choppy waters of both revolution and counter-revolution – General Monck and the Vicar of Bray in England, Fouché and Talleyrand in France. Even the Bolsheviks were obliged to retain a good part of the old civil service for a period, and subsequently re-employ the “military specialists”.

This is how it addressed the problem of state and economic form:

“History abounds with examples of contradiction between the state and economic forms, which demonstrate that the class character of the state cannot be defined in purely mechanical terms. For instance, feudal states continued to exist during the formative period of merchant capital in Europe. In this century, Marxists have recognised as bourgeois states both countries which contain many survivals from pre-capitalist economic formations and countries in which substantial sections of the means of production have been nationalised (e.g. Algeria, Angola, Burma, Ethiopia, Libya, Mozambique, Syria, etc). Among what we previously recognised as deformed workers’ states were countries with numerous pre-capitalist survivals and/or significant private sectors within their economies. Moreover, most of the countries of Eastern Europe had large state sectors prior to 1947-48 – the period most Trotskyists identify as marking the emergence of deformed workers’ states.

“The cutting edge of distinction between bourgeois states and workers’ states is not some decisive degree of nationalisation (Militant/CWI), nor the existence of “central planning” (Workers Power/LRCI), nor the alleged “commitment” of the state apparatus to defend the socialised forces of production (ICL and IBT), but which class interests the economy and the state apparatus ultimately serve.”

Tiananmen Square and Deng Xiaoping

During the Tiananmen Square protests Deng Xiaoping, the “Paramount leader of the People’s Republic of China from 1978 to the early 1990s,” strongly supported the demonstrators, as did his pro-market ally General Secretary Zhao Ziyang until the ranks of the student restorationist leaders began to be swamped by the working class who started to make their own political demands. Martial law was declared on 20 May. And surely only Deng had the authority to order the massacre on 4 June. The Chinese authorities “summarily tried and executed many of the workers they arrested in Beijing. In contrast, the students, many of whom came from relatively affluent backgrounds, were well-connected, received much lighter sentences” (Wikipedia).  The “family” have never noticed this dichotomy; why did they not call for the repression of Deng’s allies, the restorationist students, here? The CCP then began to deal “strictly with those inside the party with serious tendencies toward bourgeois liberalization”. Zhao Ziyang was put under house arrest and Deng himself was forced to make concessions to anti-reform communists. He denounced the movement; “the entire imperialist Western world plans to make all socialist countries discard the socialist road and then bring them under the monopoly of international capital and onto the capitalist road”. But it was only a tactical retreat. Resistance of all types, from the immediate restorationists as well as from bureaucratic defenders of the state and its nationalised property relations was thoroughly crushed by the 30,000 party officials charged with this grisly task. Deng was then in a position to win over the last holdout hardliners. This is how Wikipedia reported Deng’s legendary southern tour;

“To reassert his economic agenda, in the spring of 1992, Deng made his famous southern tour of China, visiting Guangzhou, Shenzhen, Zhuhai and spending the New Year in Shanghai, in reality using his travels as a method of reasserting his economic policy after his retirement from office. On his tour, Deng made various speeches and generated large local support for his reformist platform. He stressed the importance of economic construction in China, and criticized those who were against further economic and openness reforms. Although there is debate on whether or not Deng actually said it, his perceived catchphrase, “To get rich is glorious”, unleashed a wave of personal entrepreneurship that continues to drive China’s economy today. He stated that the “leftist” elements of Chinese society were much more dangerous than “rightist” ones. Deng was instrumental in the opening of Shanghai’s Pudong New Area, revitalizing the city as China’s economic hub.”

“His southern tour was initially ignored by the Beijing and national media, which were then under the control of Deng’s political rivals. President Jiang Zemin showed little support. Challenging their media control, Shanghai’s Liberation Daily newspaper published several articles supporting reforms authored by “Huangfu Ping”, which quickly gained support amongst local officials and populace. Deng’s new wave of policy rhetoric gave way to a new political storm between factions in the Politburo. President Jiang Zemin eventually sided with Deng, and the national media finally reported Deng’s southern tour several months after it occurred. Observers suggest that Jiang’s submission to Deng’s policies had solidified his position as Deng’s heir apparent. Behind the scenes, Deng’s southern tour aided his reformist allies’ climb to the apex of nation”

In our view Tiananmen Square set in motion the chain of events that enabled the CCP to purge the party and state apparatus and neuter the working class. The development of capitalist property relations was prioritised consciously by the entire bureaucracy and state in 1992 when Jiang capitulated to Deng. China then ceased being a workers’ state in any way.

Otto von Bismarck and Pyotr Stolypin

China and Vietnam are nothing like any previous or current example of a deformed or degenerated workers’ state. In fact the closest analogy to the current states in China and Vietnam is that of late 19th century Germany under Otto von Bismarck and early 20th Century Russia under Pyotr Stolypin. Vietnam is a typical semi-colony now. [18]  The Chinese state unquestionably and demonstrable guards and develops capitalist property relations on any rational criteria. So why does the “Family”, together with oddities like the WRP/News Line group (who still “support the struggle of Russian, Chinese, and East European workers to prevent the restoration of capitalism”[19] – and East Germany?) defend these as workers’ states? The Stalinophile ICL wish to relate to those semi-Stalinist like the Workers World Party and those Stalinists who regard these as “really existing” socialist states because a self-proclaimed Communist party is in power.

Many Stalinists also include Laos and the Indian states of Kerala, West Bengal and Tripura, where the CPI (M) is in government. The ICL view is merely a variety of this – they are orientated to the bureaucracy and not to the world proletariat because they have lost confidence in the world working class entirely as the source of world revolution. They are “late Pabloites”, and in some ways worse than Pablo because he capitulated to what appeared to be an opposition to the Stalinist central bureaucratic apparatus, the ICL capitulated to that apparatus itself (“Heil Red Army”, they infamously proclaimed in Afghanistan in 1980). The IBT did the same by supporting the restorationist Yanayev who was not buying time for the working class to oppose restoration because he was dedicated to smashing up the working class to facilitating restoration with his participation, as Yeltsin later did. In fact had Yanayev’s coup succeeded he would have gone on to do what Deng did, and what Jiang Zemin did when he capitulated to Deng in 1992; dismantle the deformed workers’ state, which the Tiananmen Square massacre had prepared.

“From the standpoint of the world proletariat”, was Trotsky’s outlook on Stalin’s invasion of the Baltic states and Finland in 1939, is our standpoint today and from that standpoint we must surely look to the workers of the Chinese industrial heartlands. They are brutally and murderously oppressed by the bosses and if that is not enough to keep them down they will get the All Chinese Federation of Trade Unions and if they are really troublesome a branch of CCP itself to beat them up or murder the most militant to ensure subservience to the production needs of the Chinese bourgeoisie and the imperialist world market. When China entered the World Trade Organisation in December 2001 it abandoned what was left of the monopoly of foreign trade.

Clearly, Deng’s capitalist road began to work from about 1985. These figures hide the real situation, the virtual elimination of the Chinese Rice Bowl and the terrible situation of migrant workers in the cities of the south, without any right to welfare or education, is not reflected in them at all.  And repressed by ruthless employers in collaboration with the All-China Federation of Trade Unions, an instrument of state oppression which forbids strikes. 

Let us list the features of the Chinese economy and state to see which it is;

1. The “iron rice bowl” is basically gone. Mao’s welfare state has been abolished apart from in a few places. The Gini Coefficient shows a sharply rising graph of income and wealth inequality in China since the early 1980s as in India, not yet as high as Brazil, Mexico and South Africa but getting there.
2. There is a thriving capitalist sector with its own class differentiated bourgeoisie and working class. China now has more millionaires than the UK, Germany or Japan, although at 450,000 it is still a long way behind the U.S. even though that fell by 2.5 million to 6.7 million in 2008. All deformed and degenerated workers’ states expropriated their capitalists and prevented that class arising anew.
3. There is a Stock Exchange and capitalist banks, although, a la Bismarck, Stolypin and Keynes, they are state controlled (unlike in Britain under Blair and Brown) to ensure the better development of capitalism. All deformed and degenerated workers’ states had/have no stock exchanges. This is not neo-liberal capitalism but it is capitalism nevertheless.
4. The monopoly of foreign trade is gone but the state still retains strategic control over trade as good capitalist planners. All deformed and degenerated workers’ states had/have a state monopoly of foreign trade.
5. They are developing as an imperialist power; their investments in Africa, South America and Sri Lanka, for example, are for purely commercial and strategic/military purposes. This is totally unlike the practice of the USSR where support and investment was to strengthen their hand and give them more pawns in the chess game of achieving peaceful cooperation and compromise with the world Imperialism. The USSR was prepared to sponsor, ideologically and materially, armed opposition to imperialism to this end, China arms its clients but has no ideological opposition to imperialism, however distorted, to offer. However, China still retains strong elements of a semi-colonial state in its far-flung backward regions, which are prey to US/CIA interventions to begin the breakup of a developing rival. It is still a long way from a fully-fledged imperialist power and history never proceeds in a straight line without wars and revolutions, so its uninterrupted development is far from certain.

Comrades, when we see a bird that walks like a duck and swims like a duck and quacks like a duck, we call that bird a duck. James Robertson had pragmatically seen the significance of the long swim of the capitalists from Cuba to Miami by 1966 but the International Committee of Gerry Healy and Pierre Lambert refused to look at what had happened there after 1959. In his play Galileo Bertolt Brecht’s Galileo invites the leading scholars of Florence to peer into his telescope for the ultimate proof that Aristotle was wrong; but the men refused to look, instead making evasive, dogmatic speeches about why the telescope could not possibly show any such thing. A little more pragmatism and common sense would now assist comrades, before we progress to the more complex world of the Marxist dialectic. China is capitalist, look; it waddles and paddles and quacks, it’s a duck!.

After 30 years of acting as a fraction towards an organisation without roots within the working class, you are degenerating yourselves.

Notes

[15] In Defence of Marxism Number 3 (June 1995), The Marxist Theory of the State and the Collapse of Stalinism, https://www.marxists.org/history/etol/document/ltt/ltt-idom3.htm

16] L. Trotsky, Writings of Leon Trotsky (1937-38), p.65, p.61.

[17] W. l. Lenin, Collected Works, Vol. 27, Moscow, 1965, p.335.

[18] “In a historic shift (in 1986), the reformers implemented free-market reforms known as Đổi Mới (renovation), which carefully managed the transition from a command economy to a Socialist-oriented market economy. With the authority of the state remaining unchallenged, private ownership of farms and companies engaged in commodity production, deregulation and foreign investment were encouraged while the state maintained control over strategic industry… Vietnam is now the largest producer of cashew nuts with a one-third global share, the largest producer of black pepper accounting for one-third of the world’s market and second largest rice exporter in the world after Thailand… Vietnam was accepted into the WTO on November 7, 2006.” (Wikipedia). – The deformed workers’ state was transformed into a capitalist state controlled by a CP government when they decided to promote capitalism as the source of their privileges and state planning was directed at that object.

[19] http://www.wrp.org.uk.

Appendix 1

This is the happy tale of the trade unions in China, as related by Rob Griffiths on 14 June 2018.

While the 2,663 strikes and protests recorded in 2016 by China Labour Bulletin marked a fall of 112 on the previous year, the total was still almost double that of 2014, with the spread to new sectors partly offsetting a drop in manufacturing unrest. Most strikes oin China are for unpaid wages, not a very good indication of the effectiveness of the All China Federation of Trades Unions (ACFTU).

“Nevertheless, Mr An was challenged about changes in China’s constitution which removed the explicit right to strike in 1982, although the 2001 basic law on trade unions acknowledges the reality of industrial action.

“It is not the case that striking is illegal in our country,” he shoots back. “Furthermore, the National People’s Congress and the judiciary can interpret existing laws and take decisions in the interests of the working class.”

“In any event, strikes are not an effective way of solving the problems of the working class in China,” Mr An insists. An Jianhua is head of the international department of the All China Federation of Trades Unions (ACFTU).

And this from 18 March 2018:

Chinese unions grow in numbers and strength

ROBERT GRIFFITHS reports from a recent meeting in Beijing between the Chinese trade union movement and Western communist parties