THE CHINESE DICTATORSHIP AND THE DUAL STATE
It
is abundantly clear that the Chinese economy is not, strictly speaking, a
capitalist economy, if for no other reason at least for the universally
accepted fact that it is not a market economy but is better described as a
command economy. The notion of “command” implies a level of administrative and
bureaucratic co-ordination of the Chinese economy emanating from the highest
echelons of the Chinese Dictatorship whereby the operation of the economy is
subjected first and foremost to overriding or “prerogative” goals that, again, over-ride
or take precedence over the investment and productive choices of other
economies, such as those of the industrial capitalist West, that are run to a
far greater degree according to the requirements of “market competition”.
But
what are these over-riding or “prerogative” goals that make us characterise the
Chinese economy not as a model capitalist market economy but rather as a
capitalist command economy? We can list a few of these goals at least
preliminarily here:
The
first goal, surely, has to be that of internal political stability so as to
ensure the legitimacy and continued support of the Dictatorship on the part of a
strategically important section of Chinese society – and most specifically the
membership, numbering up to 100 million people, of the Chinese Communist Party.
The
second goal is the provision for the industrial-military complex with the
People’s Liberation Army as its essential mainstay. The aim of this goal is to
prepare the Chinese Dictatorship for readiness to wage war and ensure vital
supplies to the Chinese Empire in case of war, both domestically and from other
countries. It is clear that in normal times the expenses associated with the
pursuit of this goal would not and could not be justified in terms of the enormous
burden they pose to Chinese capitalist enterprise and to the rest of what
remains an extremely poor, indigent population, except as the promise of future
returns on investment from foreign direct or indirect empire – in other words,
either through formal empire or by means of the extraction of
economic value from other nation-states through the violent imposition of terms
and conditions of trade advantageous to the profitability of Chinese capitalist
industry.
Whether or not the Chinese Dictatorship will be able to ensure the sufficient
profitability of these industrial-military investments, the fact remains that,
given its totalitarian autarkic (“command”) economy which is already subject to
“prerogative” rather than “market” or normative productive and investment
choices, the Dictatorship must be prepared to sacrifice resources to this goal
at least temporarily until in a foreseeable future it is ready to
unleash its military might to arrogate and appropriate for itself and its “capitalist”
class of businesses and entrepreneurs resources that are at present not under
its direct control for exploitation. In this sense, the expenses associated
with the diversion of current social and productive resources toward the
military-industrial complex of the People’s Liberation Army – which are known
widely as “State-Owned Enterprises” – must be seen as “long-term investments”
that will not yield a direct profitable return in the near term but rather in
the medium term (say, ten to twenty years). Of course, a concomitant benefit of
this investment “goal” is that the reinforcement of the Chinese Dictatorship’s industrial-military
apparatus and Army allows it to maintain and strengthen the loyalty of a
significant portion of the Chinese population and to assure the maintenance of
social order through the direct and indirect threat posed by the PLA on the
rest of the Chinese population.
Given
the dictatorial totalitarian nature of the Chinese regime, it is entirely
obvious that its economy cannot be allowed to run along lines characteristic of
Western industrial capitalist societies. The paramount prerogative nature of
Chinese industrial activity must therefore answer to the overriding aims of
political stability of the regime (the first goal) and its preparedness to wage
wars of conquest to appropriate and secure external resources once the
exploitation of its own working population has reached the ultimate limits
imposed, first, by the availability of labour force and other natural resources
and, second, by the limits if realizing profits through foreign trade made
possible by the exploitation of its domestic labour force. This second limit is
posed by the inevitable resistance of other nation-states to the
continuous under-pricing and dumping of goods in their markets to the detriment
of their own national bourgeois elites and working classes. Another limit is
posed by the realisation among Chinese elites themselves that such imperialist
investments quickly become unproductive because the recipient countries are
unable to repay them (e.g. Venezuela, $65 billion, Pakistan, $65 billion,
Africa, $160 billion, and so forth) – and therefore they represent bad debts
that result in a catastrophic loss of hard currency for the Chinese people
(already very poor) and for the Dictatorship itself which is fast running out
of hard currency in its desperate attempt to rescue the sinking renminbi!
Once
the Chinese Dictatorship has reached this internal limit, which we call,
following Paul Krugman, “the mobilization of resources”, and then the external
limit, which we may call “mercatilist exhaustion” – once these two limits are
reached, the only option left to the Chinese Dictatorship to preserve these two goals is that of imperialistic
expansion either through predatory direct investment or else through actual
military occupation of foreign countries.
But
before this final limit is reached, last but not least, the other over-riding
or “prerogative” goal of the Chinese Dictatorship must be to maintain the
competitivity of its existing industries in international capitalist markets.
This goal is absolutely fundamental because it is essential for the
Dictatorship to be able to accumulate the economic value or “surplus” in terms
of its current and capital account to be able to earn “hard currency” – US
dollars, Euro, Yen, gold – that will enable it to finance its
military-industrial complex, especially any supplies, equipment, resources and
military materiel that is not domestically available given the vast
deficiencies and backwardness with respect to the West of Chinese technology especially
in the military sphere.
The Prerogative and the Normative State, or The Dual State of
the Chinese Dictatorship
We may hypothesize now, in accordance with our
characterization of the overall policy goals of the Chinese Dictatorship, that
the Chinese state and economy are administered in accordance with a “Dual State”
divided into a “Prerogative State” that sets out the paramount or prerogative
goals of the Dictatorship in terms of the eventual strategic and military
domination over as much of the globe as it can in order to extract the surplus
economic value needed to maintain and hopefully expand its rule and command
over the Chinese Empire itself; and then, subordinate to this State, is a “Normative
State” that runs and is allowed to function along market-capitalist lines. As
the terminology implies, the Normative State is subordinate to the Prerogative
State for the essential reason that the Normative State administers the part of
the Chinese economy that deals with external global capitalist markets
where it is bound to follow the legal normative rules of competition laid
down by the capitalist West to regulate the capitalist world market. Because,
as we have explained time and again, capitalist markets must operate with a
minimum of democratic rule in that workers as “consumers” are “free” to set the “price” of their labour-power
and also have to play a role in the decision as to what goods are produced
(guns or butter?) and how (polluting or clean industries?) – because of this
essential “democratic” component of the world market, the Chinese Dictatorship
has to run a State that is parallel yet subordinate to the
Prerogative State and that is “Normative” because, to repeat, unlike the domestic
autarkic totalitarian Prerogative State, it has to follow the rules of the external
quasi-democratic capitalist world market!
Quite obviously, the two States will almost always run in
opposition to each other for the simple reason that the “prerogative” strategic
goals of the one will be opposed, sometimes be even contradictory, to the goals
of the “normative” or legal State. The question then arises as to why the
Chinese Dictatorship would allow such a Normative State to function in
opposition to its totalitarian Prerogative State. The answer is simple. First
of all, the Chinese Dictatorship knows and is bitterly determined for its own
survival to ensure that the Prerogative State will always take precedence to
the Normative to ensure the internal domestic stability of the
regime and of the Chinese Empire. Secondly, and this is the important point, to
the extent that the Chinese Dictatorship is still by far much less powerful and
dominant than the capitalist West in all kinds of domains – from the economic
to the financial to the technological and the military – the Dictatorship knows
full well that it has no other option than to accept the “rules of the world
market” set by Western powers.
Furthermore, thirdly, the Chinese Dictatorship knows full
well that for its domestic economy to function efficiently so as to maintain
internal stability and to enhance its military-industrial complex (the SOEs and
the PLA), then this domestic economy has to subject itself to the international
“bench-marks” of competitive capitalist productive standards set in the
Western-dominated world market! This is a point of the utmost, cardinal
importance that must be fully digested for a proper understanding of how the
Chinese Dictatorship works. The Chinese Dictatorship is wisely unwilling to
follow the catastrophic example of the Soviet Union and cut itself off from the
capitalist world market because such isolation of the Chinese
military-industrial complex would simply spell the rapid and cataclysmic decline
of the Chinese war machine! Such isolation would sound the death-knell of the
Chinese Dictatorship’s “China Dream” to dominate the entire world! Not only! But
the Dictatorship knows that even from a purely financial standpoint, its “China
Dream” of world domination necessitates the constant accumulation of “hard
currency” (again, US dollars, euros, yen and gold) to enable it to acquire the
raw materials and technologies and military materiel needed to fuel and
sustain the growth of its military-industrial complex (SOEs run by the PLA).
Thus, it becomes quite clear now why the Chinese
Dictatorship needs its totalitarian state apparatus to run and function along
dual or binary lines – the Prerogative and the Normative. It is because
excessive concentration on the autarkic totalitarian Prerogative State would
condemn it to economic isolation and inevitable rapid decline, whilst excessive
emphasis on the Normative State (trade, opening of capital markets) would render
it entirely dependent on the Western capitalist world market and, consequently,
induce the liberalisation of its internal markets which, in turn, especially
for what regards the labour market and worker participation in wage
determination and consumer choice, would force it to expand democratic
parliamentary representation, in clear contradiction with the world-domineering
ultimate goals of the Chinese Dictatorship and eventual abandonment of the autarkic
totalitarian model altogether! As many have put it, the dilemma of the Chinese
Dictatorship is “Save the Communist Party and lose the country (Empire) or save
the country (the Chinese Empire) and lose the Communist Party”!
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