If PRC was Communist, how come it still traded with other countries?

[82riceballs]

I always thought that when Mao established a Communist state, he no longer maintained trade relations with other countries. However, I read a review of the book, "Economic Cold War: America's Embargo Against China and the Sino-Soviet Alliance," which stated that:

Also, despite a slump in Sino-Soviet trade, China's trade with other countries, especially Western countries, increased enough by 1965 to lift the country's total trade volume back to its earlier high point.

Doesn't 'communist' mean that you don't trade with anyone, since you're against capitalism? So how do place an embargo against a communist country?

*confused*

[gato]

Doesn't 'communist' mean that you don't trade with anyone, since you're against capitalism?

What about Cuban cigars? Are they only given away then instead of sold?

Wikipedia seems to say something else:

http://en.wikipedia.org/wiki/Communist#Capitalization_of_.22Communism.22

Terminology

Communism is the idea of a free society with no division or alienation, where humanity is free from oppression and scarcity. A communist society would have no governments, countries, or class divisions. In Marxism-Leninism, Socialism is the intermediate system between capitalism and communism, when the government is in the process of changing the means of ownership from privatism, to collective ownership.

The usage of the terms "communism" and "socialism" shifted after 1917, when the Bolsheviks changed their name to the Communist Party and installed a single party regime devoted to the implementation of socialist policies under Leninism.

Here is some more on Lenism/Mao Zedongism:

http://en.wikipedia.org/wiki/Leninism

In the People's Republic of China, the Communist Party of China described its organizational structure as Leninist. Later, the Chinese Communists developed Marxism-Leninism into the theory of Mao Zedong Thought or Maoism, which remains popular in many third world revolutionary movements.

In his pamphlet What is to be Done? (1902), Lenin argued that the proletariat can only achieve a successful revolutionary consciousness through the efforts of a vanguard party composed of full-time professional revolutionaries. Lenin further believed that such a party could only achieve its aims through a form of disciplined organization known as democratic centralism, wherein tactical and ideological decisions are made with internal democracy, but once a decision has been made, all party members must externally support and actively promote that decision.

The goal of a Leninist party is to orchestrate the overthrow of the existing government by force and seize power on behalf of the proletariat (although in the October Revolution of 1917, the Soviets seized power, not the Bolshevik Party), and then implement a dictatorship of the proletariat. The party must then use the powers of government to educate the proletariat, so as to remove the various modes of false consciousness the bourgeois have instilled in them in order to make them more docile and easier to exploit economically, such as religion and nationalism.

The dictatorship of the proletariat is theoretically to be governed by a decentralized system of proletarian direct democracy, in which workers hold political power through local councils known as soviets (see soviet democracy). The extent to which the dictatorship of the proletariat is democratic is disputed.

[renzhe]

Like gato pointed out, China was never communist, nothing was ever communist on a large scale other than small family and tribal structures. Communism is the goal, not the political system that Lenin and co. believed would take them there. That's why China, the Soviet Union, etc. were all called socialist countries.

Furthermore, trading doesn't mean you're capitalist. Capitalism is defined through private ownership of means of production, a market economy and contract law. There are many socialist models of all sorts of denominations which involved a market economy of sorts (even Marxist-Leninist states). The defining difference between socialism and capitalism is in who owns the factories and companies.

[82riceballs]

Ah, I see. Thanks for the clarification!

[atitarev]

Lenin's last methods even included elements of capitalism and private property (so called New Economic Policy, also called "Socialism with a human face"), this was scrapped when Stalin took over.

The socialist Jugoslavia had a lot of private segments, which was one point of disagreement between Jugoslavia and the Soviet Union.

[82riceballs]

Hi everybody! I'm once again deeply confused...

Here's my question: But didn't Mao transform China into a communist country by collectivizing everything and bringing factories, etc. under state control?

[yonglin]

But didn't Mao transform China into a communist country by collectivizing everything and bringing factories, etc. under state control?

According to Marx, communism doesn't need, and more importantly - shouldn't have - a state. Under communism, production is done collectively by the people. It's supposedly super-democratic and requires no involvement of a state whatsover (think communism in the sense of "commune" or "community").

Some Russians (Lenin, I believe? ) figured that the great proleratarian revolution would not come about as naturally and smoothly as Marx had predicted, and that a state (socio- means "state") was required to initiate the change. Thus, socialism - when privately owned resources are collectivized by a frequently quite draconian state - was introduced, and was perceived as being one step in the right direction towards communism (which was still held as the ultimate goal, at least in rhetoric). On further reflection, it thus turns out that a communist "state" is almost a contradiction in terms.

You may want to read up something on "historical materialism" or "mode of production" (in the Marxist sense). Although I'm not quite a Marxist, one must admit the quite stunning (internal) logic of Marxian historiography.

[self-taught-mba]

Interesting side note to this discussion is that I meet highly educated people including recently an accountant who otherwise is extraordinarily brilliant - who don't think China is a capitalist country.

In many ways China is more capitalist than the US.

[82riceballs]

Thanks for your explanation, yonglin! Much appreciated!

@ self-taught-mba:

I've heard that China is more capitalist than the US in some ways too, but how so?

[imron]

China is capitalist in almost all but name. Don't be fooled by the fact that China calls itself communist. It's authoritarian, but authoritarian does not equal communist, and if you look at the reality, it's pretty easy to realise that China has been capitalist for a long time. This is the greatest ruse pulled by Deng Xiaoping et al. He knew very well that economic reforms were necessary, but after decades of criticising and deriding capitalism, you can't just tell the people, that actually you know what - capitalism is good for you. And so socialism with Chinese characteristics was born, and apart from the name it just so happens to be almost identical to capitalism (market economy, user pays education, healthcare etc).

[self-taught-mba]

Laissez-faire capitalism everywhere. I'm not the first person to say so either. I've heard it from many American businessmen.

They feel that there are fewer restrictions and less government interference in many sectors of the market.

"Environmental impact studies? Who needs those! Just build it! Ha."

[renzhe]

Some Russians (Lenin, I believe? ) figured that the great proleratarian revolution would not come about as naturally and smoothly as Marx had predicted, and that a state (socio- means "state") was required to initiate the change.

Good summary, but the problem is actually deeper.

Marx had predicted that communism would only be possible after capitalism had reached its ultimate stage of development, which would mean that one could produce basically anything, with a very small cost. What Marx called for then, is something called "dictatorship of the proleteriat", in the shape of a socialist country. The workers take these modern, productive factories from the owners, and take over the state control and redistribute the goods. With time, the economic differences and power structures resulting from them would fade away, and the state itself would lose any meaning and wither away and everyone would have what they need without having to labour for a boss or be oppressed by the state apparatus. Sounds great, in fact.

But it's important to note that the control of the state by the proletariat is an essential ingredient of traditional Marxism. Marx, through his theory of dialectic materialism, postulated that capitalism is a historical inevitability, and that it must happen, and take its course.

Now what happened when Lenin took power after the October Revolution? It was soon obvious that not only was Russia nowhere near the "ultimate stage of development of capitalism", but that it was, in fact, a rather backward, undeveloped, pre-industrial country, so there wasn't going to be any "final stage of capitalism" coming soon either. Lenin's (Bolshevist) approach to this was to seize control and "help" a bit by introducing capitalism (which he describes in great detail in his works). So he started a huge, large-scale industrialisation of the country (similar to the industrial revolution England and Germany and France and the US had already undergone). This, of course, met with a terrible reception by the regular factory workers and farmers, so they were soon brought in line, as Bolshevist party officials were brought in to control every aspect of production and distribution. This was Lenin's implementation of the "vanguard party" concept, of the great leaders who will lead the masses into a better tomorrow.

When I say "capitalism" here (as Lenin did), I'm not referring to the capitalism as we today know it, as the market trading was absent. It did, however, reintroduce many other aspects that Marx criticised -- extreme accumulation of capital, exploitation of the workers, brutal state control in order to protect property rights (in this case owned by the state), and total lack of worker self-management. The result of this was that the Soviet Union very quickly became a strong, industrialised country, but had in the process lost much of the support from the base, which required strong authoritarian measures to keep the vanguard party in control. Oddly enough, the point where the state withers away never really came.

The Chinese story is slightly different from this. Many Communist leaders who seized control in the 20th century were intellectuals (like Marx and Engels before them). China was even less industrialised, with a very rural population which, as I understand it, was fed up with emperors and officials telling them what to do. Mao (unlike Deng Xiaoping and some other revolutionaries of his time) was the exact opposite of an intellectual, and was accepted by the masses as one of the regular people. Due to these objective circumstances, Mao pushed for a different model than the Soviet Union did -- he pushed for an agrarian-based society, not huge factories and industry. The problem is that, despite all the charm and revolutionary zeal, he was basically incompetent, and after closing the country off, and even losing the Soviet Union support, and when left to lead the country through the necessary reforms, he essentially failed.

Deng Xiaoping, another guy who basically started the revolution with Mao, went down a line more akin to that of Tito, Nasser, and some other third-world Communist leaders, and introduced a state-controlled market system which also allowed for (limited) investment from abroad, and then the positive changes started happening.

Somewhere along the line, though, the line was crossed between something that could still be understood as a socialist system, and basically state-controlled authoritarian capitalism, which is the direction China is headed in now. The total collapse of all Marxist systems worldwide accelerated this greatly. Perhaps there are heads inside the Communist party who expect that this growth right now will sow seeds for future transition into a pure communist society, but it really seems like that ship has sailed.

So much for politics, I don't like mixing my love for the Chinese language and culture with political discussions, because they tend to go all sorts of ugly places. I'll just say that I'm very much in line with Chomsky when it comes to these things. Enough bla bla from me.

[82riceballs]

Thanks for the explanations!

I have a few more questions:

So he started a huge, large-scale industrialisation of the country. This, of course, met with a terrible reception by the regular factory workers and farmers, so they were soon brought in line, as Bolshevist party officials were brought in to control every aspect of production and distribution. This was Lenin's implementation of the "vanguard party" concept, of the great leaders who will lead the masses into a better tomorrow.

Why wouldn't the people like industrialization?

Wouldn't they prefer a change in lifestyle over their old & poverty-stricken lifestyle?

When I say "capitalism" here (as Lenin did), I'm not referring to the capitalism as we today know it, as the market trading was absent.

Does this mean that the stuff that was produced in factories in newly-industrialized Russia was not sold for money?

Also, I'm still confused as to why a completely Communist country doesn't require a govt/state? Is it to ensure that people don't get oppressed?

*confused*

[renzhe]

Why wouldn't the people like industrialization?

People like being in an advanced society, but the process of industrialisation is usually brutal.

16-18 hour shifts, dozens of people in a small room, huge migrations to the cities, disease, near slave-like working conditions, and basically starvation for those not able to secure a job (which covers many people). This all took place in Europe in the 19th century, and is one of the main reasons why Marxism was born in the first place. Lenin introduced all this, but even worse.

You had a bunch of people fed up with the Tzar and the landowners thinking that better times were coming, then they were hit by even worse factory conditions, even worse bosses, and even worse repression. Of course they weren't exactly thrilled.

One can argue that the Soviet Union had to go through this stage, but this doesn't mean it was enjoyable. Nor the way it was carried out (the workers' councils were quickly put under control of the Party, so the workers had virtually no say in the production process -- which is exactly why they had started the revolution in the first place).

Does this mean that the stuff that was produced in factories in newly-industrialized Russia was not sold for money?

It was, but there was exactly one producer: the state. It was a system similar to what happens when a monopolist takes over the market in a market-based capitalist economy. This is why all market-based economies have very stringent anti-monopoly laws.

Of course, a communist economy would give everything away for free, but this was not communism, but state-socialism, an intermediate stage required by the Marxist theory.

Also, I'm still confused as to why a completely Communist country doesn't require a govt/state? Is it to ensure that people don't get oppressed?a

According to Marxists, a large part of what a government does is keeping the economic system going, and keeping people in power.

If noone's in power, and there's no property, what would you need a ruler for?

[82riceballs]

Thanks!

It was, but there was exactly one producer: the state. It was a system similar to what happens when a monopolist takes over the market in a market-based capitalist economy. This is why all market-based economies have very stringent anti-monopoly laws.

But what would be so bad about the state controlling the market?

[yonglin]

But what would be so bad about the state controlling the market?

The state having some sort of control over the market, e.g., enforcing anti-monopoly laws, etc. isn't bad at all. In fact, almost everyone believes such control is the key to the functioning of markets in the first place.

The problem sets in when the state wishes to replace the market. The basic problem about planned economies is that of information. Imagine you are the state planner: how could you possibly know what everyone in your country wants? For instance, how many pairs of shoes I want, which style of shoes I want, which colour of shoes I want, what ratio of cream custard to chocholate chip cookies I want. Now consider what renzhe wants, and what imron wants, what everyone else in the entire country wants. Then you try to add up all of these wants for say, a five-year period. This would just . For most goods, markets solve these issues very smoothly, so that we basically can buy whatever we want whenever we feel like it.

Of course, you may want to argue that we only need to produce one kind of shoes, one type of cookie, etc., because those aren't really "real" needs. However, some people believe that there is some intrinsic value in that we can wear the type of shoes we want to wear, eat the kind of cookies we want to eat, etc. and that society will be happier overall if we can do that.

Another problem is how you're going to organize production. Unless you believe that people are angels and work towards the common good all the time, most people hold that it's somewhere in human nature to get the maximum pay-off for the least effort. Therefore, if you direct your factory to produce "10,000 pairs of walking boots" you will also have to impose very extensive quality controls to make sure they aren't being lazy stitching them together, resulting in inferior quality.

In a market economy, people buy the shoes which they believe keeps the best balance between fashion, quality and price. If you're not happy with your shoes, you just won't buy any shoes made by that company again. In a planned economy, there might only be one or two kinds of shoes to buy (if you're resorting to the fact that planning for a "multitude of shoes" would be informationally impossible). Even if the quality is crap, everyone will still have to buy them because they have no choice.

It must said, however, that planned economies have been beneficial for some very primitive economies. If a country is very, very poor, and most people are living at subsistence, then savings will usually be very low, and there will be little capital available to invest in projects and technology which would be beneficial in the long-term. In this case, a planner can just "decide" to gear resources towards investment, essentially creating an industry from scratch. However, as the economy gets more developed, it also gets extremely complex, and the information/incentive problems described above will set in.

[82riceballs]

Thanks! I understand now!

[outcast]

Wouldn't they prefer a change in lifestyle over their old & poverty-stricken lifestyle?

If people ethnocentric and xenophobic enough (assuming they didn't invent industrial processes/machines), they would prefer their "traditional way of life" over "foreign" methods. Just look at the Qing dynasty's response to being defeated over and over again, to paraphrase: "We got our a$$es handed to us by a small group of ships and a few thousand barbarians from tiny countries thousands of miles away, but that's ok because we are civilized Chinese and therefore are the best in the universe. Spiritual victories FTW!"

Marx had predicted that communism would only be possible after capitalism had reached its ultimate stage of development, which would mean that one could produce basically anything, with a very small cost.

Didn't Star Trek have something like this? Since they had virtually unlimited amounts of energy (each starship could put out several terawatts of power) and machines that can make almost anything you could possibly want out of thin air, I guess it could work in that kind of setting.

Anyway, communist countries have always traded, especially with eachother. The Soviet Union often traded oil to finance the rest of their economy, and so when the oil prices collapsed in the 80's, it collapsed the economy and eventually the country as well.

[82riceballs]

Thanks, your explanation was helpful.

Anyway, communist countries have always traded, especially with eachother. The Soviet Union often traded oil to finance the rest of their economy, and so when the oil prices collapsed in the 80's, it collapsed the economy and eventually the country as well.

Why did the oil prices collapse?

Wish that was happening now instead...

[outcast]

Why did the oil prices collapse?

Wish that was happening now instead...

OPEC ended its embargo and flooded the market. It seems ironic to me that "the wests" (especially the US) addiction to oil was actually helping the Soviet Union and kept it going.

Even though this is a bit off topic, I'll say it anyway: Oil prices are not going to collapse like before. Even though speculation does have a hand in the high prices, there are more fundemental reasons for the high price as well. Supply is flattening out, and demand is rising rapidly.