Revolutionary Consciousness as a Material and Motive Force
By Jim Craven
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An old aphorism says: “A conservative is a liberal who has been mugged; and a liberal is a conservative who has been downsized or outsourced.” Indeed it is amazing how when one’s material circumstances or interests change, changes in consciousness may soon follow. But the relationships between material being and interests and subjective consciousness are not one way or as one way as many vulgar materialists would have it. Indeed all of human history gives ample evidence of individuals and groups driven by transcendent causes and beliefs accomplishing heroic, often near impossible, things with very meager material resources to work with.
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At an "International Symposium on the Reform of Property Rights and Enterprise Development in Transitional Countries", held at Tsinghua University in Beijing, September 1-2, 2004, at which I was one of the invited speakers, an interesting and very revealing exchange took place during the question and answer period following one session of presentations.
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Some of the neoclassical-economics-based speakers, with the usual hubris of end-of-history triumphalism, asserted as “proved”, or “self-evident”, or “axiomatic”, backed by nothing more the mere strength or apparent certitude of their assertions, the predicate that capitalism beats socialism in all the possible ways that matter (e.g. assuring “personal liberty” of the individual, “efficiency”, “satisfying” “consumer preferences”, etc) I posed some questions.
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I posed the following question: If anyone here were sick, perhaps gravely ill, which kind of physician would you prefer to have? Would you prefer to have a capitalist-minded/driven doctor or one like Bai Qiu En (Dr. Norman Bethune)? The implication of the question--and compound metaphor--was clear:
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Would you prefer to have a capitalist-minded/driven doctor? One who:
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· sees the patient, and his/her disease, as a mere commodity and instrument of profit and capital accumulation, market share and power;
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· sees the patient in very narrow terms, doing only what it takes to avoid malpractice litigation, and just enough to get the patient (customer) to "feel" satisfied enough to return when another problem (perhaps even related and not caught in the original examination as is common) develops (sales-->customers-->sales);
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· does what it takes to minimize costs (avoid or socialize) relative to expected revenues or maximize revenues relative to expected costs; doing only what it takes to get the "customer" (not whole and precious human being) in and out in order to maximize the potential number of patients (customers or profit instruments) in and out--and revenues and profits--per day?
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· went into medicine, and chose the locations and specializations solely on the basis of the likely profit, status and power potentials with no regard to where the greatest mass needs were;
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· Subject only to the “Golden Rules of Capitalism”: a) “Those who have the Gold make the rules; b) “Do unto thine competitors as thine competitors find imperative to do unto thou, but do it first and do it worst.”
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Or, would you prefer a doctor like Bai Qiu En or Dr. Norman Bethune? A physician who, not only highly skilled as a physician in narrow technical terms, but:
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· one with the type of revolutionary consciousness and values that leads him or her to view the patient as a total and precious human being and not simply as a patient or customer--certainly never as a mere commodity;
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· one who does not view the particular pathology as a mere commodity;
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· one who views each and every "patient" as a whole and precious human being to be treated as one would want one's own loved ones--or oneself--to be treated;
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· one who sees the mind and body not as a duality but as conceptual or analytical parts of an integrated and inseparable unity;
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· one who sees "efficiency" not in terms of the narrow (capitalist) minimizing input (time and narrow costs) relative to "output" (relieving symptoms or "cure" in the narrow sense) but who sees and defines "efficiency" in broad, holistic and long-run terms, with probable true social not only private costs, and probable true social not only private benefits considered before acting;
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· one who does what he or she does not from motives of greed, selfishness, status needs or capitalist profit/competitive imperatives, but out of a sense of dedication to the transcendent cause and a genuine desire to "serve the people heart and soul."
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Which type of doctor (or system) would you prefer to have and live under?
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One of the speakers, an esteemed and rising professor from another university, not Tsinghua, obviously very "bright" and "educated" in narrow and formalistic terms, answered. With, what appeared to me to be a rather self-congratulatory and kind of "gotcha" smile, he answered:
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"Well, if I was sick, and it would take me thirty years to find a doctor like Bai Qiu En, I would prefer a capitalist doctor."
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Because of time and other constraints (there was never any censorship in any form at that conference except that which inevitably occurred as a result of time constraints, the number of people who were scheduled to speak and the need to be sensitive to others who also wanted to speak) I could not answer but my blood boiled. He was doing what the many of neoclassical/neo-liberal/ ideologues typically do. They love controlling the microphone and debate (they typically only hire and promote their own kind and allow only their own ideologically-driven curricula in academia, politics, media and in other spheres). They love summarily asserting (as axiomatic, self-evident and "proved" beyond any doubt for anyone who knows anything) the core predicates of their arguments. Their argument, which is basically a set of assumptions of/for contrived syllogisms, is that in the competition (race) between capitalism and socialism, in terms all of the ways that matter for human beings, for example in the scope of provision of physicians and in the quality/efficiency of those physicians, capitalism wins over socialism every time. This is but one of the many tautologies and predicates--asserted and even engineered--as axiomatic and "proved" of that which still remains to be "proved" even in narrow neoclassical and capitalist terms.
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Of course, tautologically, capitalism becomes accepted as the most "efficient" and "progressive" system, especially when the very definitions of "efficiency" and "progress" are as contrived as the syllogisms they serve, and, when they are then summarily asserted and accepted as the only possible "operational" and rhetorical definitions. Yet, as Marx, and so many others like Chairman Mao so aptly demonstrated, that capitalism, when viewed “holistically” and dialectically, with the highly probable true costs and "benefits" (social as well as private, long-run as well as short-run) realistically assessed and understood, becomes not only increasingly inefficient, but even increasingly anti-efficient and regressive. This is apparent even using the six main capitalist concepts of "efficiency" (technological, economic, productive, consumer, exchange and allocative) and "utilitarian" notions of "progress" (the greatest economic welfare for the greatest number).
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Let’s take some concrete examples that even the neoclassicals admit in a limited sense. Even the conventional textbooks in economics concede, finally, that, for example, the notion of technological efficiency (maximum output, minimum input) or economic efficiency (maximum Total Revenues, lowest possible Total Costs) coupled with greed and the imperatives of competition between capitals, leads to inefficiencies in terms of "exchange efficiency" (P=MSC=MSB or prices reflecting all true costs and benefits--social as well as private). A common example is when profit maximizing firms pollute the environment, or free-riding increases, in unregulated markets, less and less are true costs (marginal private costs plus marginal costs of negative externalities) assessed and paid by those who receive the true benefits. Similarly, less and less are true benefits (marginal private benefits plus marginal benefits of positive externalities) received by those who pay the true costs. Typically, when negative externalities are not recognized and/or assessed and/or paid, inefficiencies (in capitalist terms) of overproduction and under pricing result, And when positive externalities are not recognized and/or assessed and/or paid, the inefficiencies of underproduction and under pricing result.
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This is but one example out of many of the imperatives and "logic" of capitalism resulting in self-negation of "efficiency" (anti-efficiency) and "progress" (instability/regression) even in narrow and contrived capitalist terms. Instead of being a system that once produced maybe six positives for each negative, as capitalism ripens, becoming imperialism, spreading globally, it increasingly produces maybe six negatives for every one positive. The meta-contradiction governing all modes of production, between continual development of productive forces for human survival on the one hand, versus increasingly regressive and sabotaging relations of production (e.g. class/strata/interests) on the other hand, steadily intensifies and hollows out the very foundations of the system itself.. And not only does capitalism become less and less “efficient”, even in capitalist terms, as it ripens, but capitalist constructs and methods of assessment of “efficiency” themselves, in their contrived limits and ideological purposes, produce other inefficiencies not even considered or measured until they come home to roost and threaten the survival of the planet and humankind itself--like Global Warming and Nuclear War.
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So in other words, the different capitalist forms and constructs of “efficiency” are potentially—and actually—contradictory and self-negating: e.g. technological and economic efficiencies cause, via the normal imperatives and “logic” of capitalism, inefficiencies and anti-efficiencies in terms of other forms of “efficiency--say exchange efficiency. Many probable true costs (private plus social) go unmentioned, and/or not properly assessed and/or “socialized” to be paid by those who receive none of the purported benefits. Many probable true benefits (private plus social) go unmentioned and/or not properly assessed and/or not paid for by “free riders” who get benefits without paying true costs.
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In a system like Capitalism, that not only celebrates but even requires, for its expanded reproduction, greed, selfishness, ultra-individualism, narcissism, clinical psychopathy, sociopathy, competition, short-run thinking, ultra-reductionism etc: “Everybody wants to go to heaven but nobody wants to die”. Everyone appears to want, and Capitalism certainly promises through seductive social capital, the gain without the pain, the benefits without the costs, the immortality without mortality. So true costs (private plus social) typically get hidden, un-assessed, not mentioned, or socialized, while true benefits (private plus social) often get privatized, understated and concentrated.
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Take Capitalist-based commodified law. In the profit-based legal system of Capitalism, it is about winning and losing and having the money for commodified “effective representation”. The discovery of truth or administration of justice do not enter the equations and calculations of efficiency and profitability. Typically, competition and profit imperatives, along with the rewards for “winning”, cause lawyers to hide and understate the inculpatories (negatives) and hyping and magnifying the exculpatories (positives) in their own cases, while trying to do the reverse to the opposition lawyers: magnifying their negatives while minimizing their positives. The inevitable and increasing result or typical “efficiencies” of capitalist-based and commodified law is that increasingly many rich and clearly guilty can buy acquittals, while many poor and clearly innocent wind up in prison and on Death Row.
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Let’s take one more example to drive home the point. Another form of “efficiency” in neoclassical theory is called “Consumer Efficiency”. It means that the consumer has “efficiently” allocated his/her income among competing commodities such that he/she cannot reallocate that income and improve, in net terms, his/her total utility gained from the4 spending of that income. It is assumed that the consumer is driven to maximize or at least “satisfice” total utility and to do that the consumer seeks to maximize Marginal Utility gained from consuming a particular commodity X relative to what was paid (Price of X) to obtain that marginal utility (Maximizing Mux/Px or “Utility Bang for the Buck”). When the Mux/Px = Muy/Py = Muz/Pz for example, the consumer can no longer consume less of x, y or z and more of another, and improve his/her total utility gained.
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But the imperatives of capitalism (commodification, effective competition, realization of maximum possible real, after-tax, risk-adjusted surplus value, accumulation of capital, maximization of productivity, expanded market share/power etc) lead to increasingly commodified and asymmetrically-available information and fraud against consumers that compromise "consumer efficiency" (MUx/Px= MUy/Py = MUz/Pz...Consumers, among the masses who are not “connected”, increasingly have less and less access to the requisite information necessary to assess true comparative marginal utilities relative to comparative prices paid to realize those utilities so that incomes cannot be reallocated and improve net total utilities gained). As for the concept "allocative efficiency"(no "person" can be made better off without making some "person" worse off), that is the pure metaphysics of Pareto masquerading as "science".
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Back to the conference. One reason my blood boiled when I heard this flippant and rhetorical answer from this esteemed professor is that I come from a people, Blackfoot, who like Indigenous Peoples everywhere, and indeed poor people everywhere in the U.S. and elsewhere, are surrounded by technically skilled--and no so skilled--physicians that exist, in the sense of physically existing at a certain time and space, but, for the poor, do not really exist in any meaningful way. Since these doctors are driven by capitalist imperatives and associated requisite mentalities, these doctors only exist for those with sufficient incomes to pay for their services and/or who do not live on isolated Reserves/Reservations or rural areas, with no transportation, and are unable to travel to see these doctors. If I am ill, and the most highly-skilled physician in the world is practicing down the street, what good is it to me that capitalism, capitalist "values" and capitalist imperatives, produced a physician who will not see me and treat me because I am poor? Better that physician does not exist as his or her existence, in the physical sense, will only piss me off and perhaps even exacerbate my illness due to the mind-body unity. In the U.S., an estimated 44 million people have no health insurance, another 37 million have only marginal health insurance, and since the "right to life" itself (like the right to justice etc) is itself a commodity, for sale only to those that can afford it under capitalism, what does capitalism REALLY deliver and for whom?. What good is the supposed rapid development of material forces or production that capitalism allegedly produces greater than socialism when those forces produce commodities (and derivative spread effects) only for a relative few? Even in China, we find that with the spread of markets and market based "medicine", those who formerly had access to at least basic health care are now losing it.
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Dr. Bethune, a product of the capitalist systems of Canada and England in terms of his medical training, and by his own admission, in terms of his early ideas of reformism, developed his technical skills not, primarily BECAUSE of capitalist-based education and medical practice, but IN SPITE of them. Even in his own case, when he was ill with Tuberculosis, the conventional medical practice, highly risk-aversive to "guarantee success" in narrow capitalist terms, refused him the emerging and experimental technique of pneumothorax (collapsing the lung to rest the infected lung) such that he had to self-administer the technique--on himself while awake. Dr. Bethune's own inventions, of techniques and instruments still being used in thoracic surgery today, all came from his own humanitarianism and revolutionary consciousness without any regard as to the potential "profitability" or income/status-enhancing results of his inventions. It was the imperatives and "logic" of capitalist-based medicine in the days of Dr. Bethune, as is the case today in many areas, that caused the choking-off and even regression of the development of the material forces and techniques of production in medicine. Dr Bethune's innovations--in instruments and techniques--that actually reduced costs, risks to patients and increased "efficiency", even in capitalist terms, were consistently resisted by the capitalist-minded/driven medical establishment of his time; the same applies today.
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Another reason my blood boiled when I heard the answer to my question from this esteemed professor is that capitalism only develops certain productive forces more rapidly than socialism.
The basic questions for all modes of production and social formations are: What, How, For Whom, Where, When, Why (to produce and distribute). The What question is critical because it leads to and shapes the answers to the other questions. But in capitalist terms, efficiency means producing more and more of output X with less and less inputs but never gets into the actual nature of output X and implications (private and social) of that output. So if grotesque pornography is the output, and it is “legal”, then “efficiency” means producing more and more pornography using less and less inputs, focusing ONLY on present likely revenues versus costs, ignoring any other possible or probable private and social costs associated with pornography. A capitalist enterprise producing pornography at lower total costs than a socialist enterprise producing mass-affordable medicines is said to be more “efficient”…
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Because capitalism is about profits for power and power for profits (like the slogan of the Medici family: "Money to Acquire Power; Power to Protect Money), and is about "effective" demand (purchasing power or "dollar votes" to back up tastes and preferences many of which are also created and conditioned for profit, and not natural from basic subsistence needs), capitalism does a great job in developing forces of production in areas like: superficial and soul-destroying forms of "entertainment"; dope; pornography; rigging elections; allowing rich criminals to escape justice; narcissistic sports events; mansions and toys for the rich; placing clones in government; "quality education" for the few who can afford it; "quality" medicine for the few that can afford it; weapons of death and destruction; instruments of mind and soul control and manipulation (advertising); specialty foods; "high-fashion" clothing for the few; unevenly developed infrastructure; etc. But in such areas as affordable housing for the many, basic health care available to all, universal access to education, basic medicines available to all, balanced development of infrastructure, minimizing social costs of private endeavors and maximizing social benefits of private endeavors, etc socialism beats capitalism anytime.That is, when real socialism is allowed to develop without aggression and subversion--outside and inside--from imperialist machinations and the old weeds of capitalism threatening the full, free and fair development of socialism and free competition of ideas and systems--capitalism versus socialism.
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The socialist, on the other hand, looks not only at levels and productive functions of costs or inputs, or utility functions of consumers consuming, including the nature and implications of WHAT is being produced or consumed, but, also, looks at the real costs (private plus social, on the individual as well as on society, political, social, cultural, ideological, spiritual, long-run as well as short run) of WHAT it is that is being produced, and HOW it is really being produced and FOR WHOM it is really being produced.
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Extending the metaphor from medicine, if, as is quite common, and sadly is increasingly common, a person goes through an operation that is botched, requiring a second or third operation to fix what went wrong in the first operation (like leaving surgical instruments in the patient, unqualified staff, operation rushed to get more patients through a given operating room per day--capitalist "efficiency"), then the real costs of a given procedure (for purposes of assessing level of "efficiency") should include the costs of the second and third procedures necessitated by the first botched one. In the U.S., with touted as having the most “advanced” and “efficient” medicine in the world, 100,000 patients die each year from hospital-based infections. Under capitalism, each procedure would be assessed independently in terms of assessing the "costs" relative to the "benefits" and in any comparisons of capitalist versus socialist efficiency. But, if, in accordance with the old adage, "a stitch in time saves nine", we are able to conceptualize and assess all true costs and true benefits (short-run versus long-run, private plus social), the case can be made that socialism, with communist revolutionary values and practices, will beat capitalism, even in terms of "efficiency" and even in terms of capitalist constructs and calculations of "efficiency." Certainly Bai Qiu En, under the most unfavorable conditions possible, driven by communist spirit and consciousness, was able to do medically, what capitalist minded-driven physicians under the most favorable conditions would have never been able to do.
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And the imperialists understand this well. This one of the main reasons for imperialist encirclement and social systems engineering campaigns: to engineer the predicate or conditions and constraints in present or emerging socialist social formations that will never allow free competition and debate between systems and ideologies; conditions and constraints that will make socialism look like the supposed “barbarism” and “inefficiency” portrayed by bourgeois ideology.
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This leads to another reason my blood boiled when I heard this answer from this esteemed professor: Why does someone have to teach this "educated" and "bright" Chinese professor basic Chinese--and world--history as well as about some present-day realities and irrefutable facts? In the Communist Manifesto, Marx and Engels, in reference to China, and of course other places as well, noted that colonialism (and imperialism) is a force that 'batters down all Chinese walls', and is one that 'compels all nations, on pain of extinction, to adopt the bourgeois mode of production; it compels them to introduce what it calls civilization into their midst, i.e. to become bourgeois themselves. In one word, it creates a world after its own image.' ( Marx and Engels, "Manifesto of the Communist Party" (1848) in "Selected Works", Moscow, Foreign Languages Publishing House, 1950, pp. 36-37; quoted in "Mao's China and After 3rd Edition, by Maurice Meisner, The Free Press, NY. 1999, p 5)
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When has there ever been free, fair and open competition between socialist versus capitalist systems or ideas? From the very beginning of the People's Republic of China (actually long before), as was the case of Cuba, USSR, DPRK, Albania, Vietnam, etc and so many other examples of socialism, socialist societies, often inheriting horrible conditions and legacies of imperialism and colonialism, have been subject to: imperialist embargos; outright threats of nuclear annihilation; social systems engineering and destabilization campaigns; covert operations; exacerbations of historical ethnic and religious rivalries; denials of critical technologies and resources; military aggression; cultural subversion; arrogant missionaries; forced importations of drugs and soul-destroying foreign "culture"; denial of access to international organizations and the global community of nations,; coup d'etats and overthrows of sovereign and freely-elected governments; assassination campaigns, etc etc etc. All of this was designed to destabilize, overthrow and never to allow developing— and showing the superiority over capitalism of-- socialist systems, values and ideas.
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If international recognition by the imperialist powers and the international organizations they control is some kind of test of the reality, existence and legitimacy of any nation or nation state, then the People's Republic of China (portions of which still remain occupied by foreign powers--e.g. Taiwan) did not "exist" for almost thirty years after its existence in reality (and under international law). The same apples to Cuba, the Democratic People's Republic of Korea and other nation states summarily and arrogantly not "recognized" by some imperialist powers. This has caused large-scale diversions of precious resources from socialist growth and development into necessary defense against imperialist machinations. Indeed this was the object of imperial social systems engineering and aggression all along: engineering, to make "axiomatic" and self-evident, the basic tautologies, predicates and syllogisms of imperialism:
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IF, A=B; and
IF, B=C;
THEN/THEREFORE,
A=C.
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IF, Country A (say China or Cuba for example) = System B (Socialism or Communism);
IF, System B (Socialism or Communism) = C (Inefficiency, Repression…)
THEN,
A=C.....
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The answer according to neoliberals and other kinds of imperialists and their stooges? For China or Cuba or other socialist systems to become "Developing", "Efficient", "non-Repressive", "non-Terrorist" etc, the only answer is to become like the U.S. or some other imperialist power asserted to be the opposites in the above-mentioned syllogism of imperialist repression and legitimation. And the imperialists have no limits. Just imagine, for but one example: Even before World War II was over, the Class-A War Criminals of the infamous Japanese fascist Unit 731 were all shielded from prosecution by the U.S. and its allies (in return for using the fruits of their barbaric "research") and one of them even became a Prime Minister of Japan; and the same was done with shielding German Nazi war criminals before the end of World War II, while the nominal allies of the U.S., who had saved many U.S. lives (Communists in China and Soviets in Europe) were being attacked by the U.S. and its allies using wanted war criminals from the formal enemies of the U.S. and its allies. There are simply no limits to the treachery and crimes the imperialists are prepared to undertake and cover-up in what they call “World War III of Contending Systems and Ideologies—Socialism versus Capitalism—For Global Hearts and Minds”.
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These are but some of the reasons my blood boiled when I heard that answer from the esteemed professor, not from Tsinghua University, to my question when I attended the symposium at Tsinghua University. When I return, this debate, no doubt, will continue, in another venue and forum. And this response will be passed on to that professor with an invitation to debate in a forum and venue when we both have ample access and time for the microphone.
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Jim Craven (Omahkohkiaayo i'poyi)
Friday, September 7, 2007
The Evolving Concept of Social Capital, Markets, Market-Based Processes and Socialist Construction
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Paper delivered Sept 1-2, 2004 at the International Symposium on the Reform of Property Rights and Enterprise Development in Transitional Countries at Tsinghua University, Beijing, China
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By James M. Craven (Blackfoot Name: Omahkohkiaayo i’poyi)
Professor, Economics; Chairman, Business Division, Clark College, Vancouver, WA.
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“Every nation in the world has its own history and its own strengths and weaknesses. Since earliest times excellent things and rotten things have mingled together and accumulated over long periods. To sort them out and distinguish the essence from the dregs is a difficult task…Of course this does not mean that we do not need to learn from foreign countries. We must learn many things from foreign countries and master them…We learn foreign things because we want to study and develop Chinese things…We must not be like the Empress Dowager Tz’u-hsi who blindly rejected all foreign things. Blindly rejecting foreign things is like blindly worshipping them. Both are incorrect and harmful…In learning from foreign countries we must oppose both conservatism and dogmatism…To study foreign things does not mean importing everything, lock, stock and barrel…We must give our attention to the critical acceptance of foreign things, and especially to the introduction of things from the socialist world and from the progressive people of the capitalist world…”
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(Chairman Mao Zedong, “Talk to Music Workers”, pp. 85-88, in Chairman Mao Talks to the People: Talks and Letters 1956-1971, Stuart Schram ed., Pantheon Books, N.Y. 1974)
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Introduction
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The People’s Republic of China stands as one of the major political-economic powers and social formations in the world today; it ranks about sixth place in terms of most economic aggregates commonly used to rank-order different economies in size and influence in the global economy. For a nation that had been kept backward, fragmented, feudal and colonized by foreign imperial powers and internal contradictions until the People’s Revolution in 1949, and, for a nation that has been subject to imperial encirclement, threats of nuclear annihilation, destabilization campaigns and demonization and ostracization in the global economy for many years, with a large population of 1.4 billion people with myriad wants and needs awaiting fulfillment, the present level of development and standing of China is no small achievement And there is no doubt, in the opinions of many observers, that “socialist values and consciousness”, created and reinforced by the developing “social capital” of Chinese socialism, have constituted a significant and material force in those achievements—often against overwhelming odds and against technologically-sophisticated and vicious foreign forces bent on isolating, demonizing, destabilizing and sabotaging socialist construction in China.
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Yet despite the tremendous advances made by the Chinese people, much work remains to be done and many wants and needs remain unfulfilled causing China to explore, at various periods of Chinese history, diverse approaches, models, instruments, measures and paths of growth and development. According to the 16th Congress of the Communist Party of China in 2002:
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“We must be aware that China is in the primary stage of socialism and will remain so, for a long time to come. The well-off life we are leading is still at a low level; it is not all-inclusive and is very uneven. The principal contradiction in our society is still one between the ever-growing material and cultural needs of the people and the backwardness of social production. Our productive forces, science, technology and education are still relatively backward, so there is a long way to go before we achieve industrialization and modernization.” 1
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Since 1978, China has experienced the progressive widening of markets, market relationships and categories along with some changes in political, economic, cultural, legal and social institutions and superstructure necessary to facilitate widening and deepening market involvement in socialist construction. Some of these policies and initiatives have included: export-led growth; increasing reliance on long-term foreign direct investment (FDI both into and originating from China); increasing privatization; lowering of trade barriers; decentralization of planning; increased authority for (and responsibilities on) local governments; increasing integration into global networks of manufacturing, finance, trade; critical technology transfers; new forms of enterprise organization (e.g. Individual Family Contracts (IFCs) in agriculture, Township and Village Enterprises (TVEs), privatization and self-financing of state-owned enterprises(SOEs) and SBCs or share-based cooperatives); labor market reforms; currency exchange-rate stabilization; etc.
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But the debates, inside and outside of China, have continued to rage: Does this emerging market socialism model represent simply a necessary—and necessarily hybrid—model that is based upon, and is addressing, the myriad real-world legacies, constraints, conditions and forces with which China has to deal, and that will, or can possibly, result in using markets and capitalism to build socialism in China?. Or, as some would argue, does this hybrid model represent the reverse of using socialism (real or nominal) to build and extend markets, market-based processes and wholesale capitalism thus subjectively or objectively sabotaging long-run conditions and prospects for ongoing socialist construction throughout China?
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The Allure of Neo-Liberalism
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The neo-liberal narrative, and the narrative of neoclassical economics upon which it is largely based, are quite alluring and seductive. Starting with some unproved—and largely metaphysical—“axioms and postulates that form a view of eternal and immutable “human nature”, basic economic—and even non-economic—outcomes are said to be the inevitable and predictable results of the unfolding or playing-out of human nature—on both the supply and demand sides of a given market—under “given” conditions, institutional arrangements and constraints; and the macro is said to be nothing more than the sum of the aggregated micro. What could be more natural and “efficient”, the neoclassicals argue, than a system (Capitalism) that, rather than trying to deny or suppress or change eternal and immutable “human nature”, instead, harnesses, celebrates and utilizes human propensities and instincts that form human nature in order to produce optimal social outcomes not even intended by the “Economic Man”?. And this "Homo Oeconomicus, is summarily asserted to be, a priori, and without any empirical support, to be an atomistic, calculating, rational, selfish, competitive, egoistic, materialistic “agent” who is owning, buying or selling only for himself/herself in accordance with his or her own “rational self-interest.
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It of course never occurs to the proponents of neo-liberalism and neoclassical economics (who have only recently got around to the concept of social capital) that maybe what they are observing is not some eternal and immutable “human nature”, but, rather, the social capital of capitalism doing one of the things it is supposed to do: creating and reinforcing the very “human nature” (and associated human values, behaviors and proclivities) that is necessary for the functioning, imperatives (e.g. mass consumption, markets, profits, market shares etc) and expanded reproduction of capitalism itself. These proponents also deny that these supposed eternal and immutable propensities and proclivities of “human nature”, operating on the micro levels of the economy, when aggregated to the macro levels, can, rather than producing optimal macro outcomes, instead, produce social chaos, instability, mass alienation, environmental degradation, hollowing-out of industrial bases, involuntary unemployment, lack of mass access to health care, loss of mass acceptance of the system, etc.
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Here we have systems through which forces of supply and demand for various commodities interact—markets. They are often portrayed as rather technical, mechanical, impersonal and endogenously self-equilibrating (in response to “exogenous” shocks) sub-systems that are relatively value-free, requiring only supporting institutions of private property and a relatively business-friendly and non-interventionist state. Markets are said to represent the most superior (in terms of narrow and contrived definitions of “efficiency” and the greatest good for the greatest number) mechanisms (that stand opposed to the mechanisms of tradition and command) for posing and solving the classical “What”, “How” and “For Whom” questions faced by all societies at all levels.
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The neo-liberal and neoclassical narratives operate like “String Theory” (“The Theory of Everything”) in Physics. Where the narratives and visions of Quantum Mechanics at the micro or particle level (focusing on micro chaos and only probabilities and no certainties) contradict the narratives and visions of General Relativity on the macro levels (focusing on general order, equilibrium, stability, symmetry and certainty) the claim is made that String Theory bridges and reconciles the two contradictory visions and narratives. The same claim is made by the neo-liberal and neoclassical theorists. When markets are allowed to do what markets do, when they are left relatively free and unfettered by over-regulation, when they are supported by “given” and “appropriate” politico-legal-cultural-social policies and institutions (superstructure or social capital), then, out of the potential chaos of greed/selfishness/profit/utility-driven interactions at the micro level, we get stability, equilibria, efficiency, growth, development, employment, incomes, global competitiveness, comparative-advantage-based trade, invention/innovation, etc on the macro level. The macro “order”, “stability” and “certainties” will supposedly follow from the potential chaos and “probabilities” at the micro level in the long-run; that is, if short-term adjustments and “sacrifices” can be accepted and handled by the masses and the state. The greatest good for the greatest number, consumer and producer “sovereignty”, efficiency, demand and supply reflecting revealed preferences of those with the most dollar votes, political as well as economic democracy and “rising tides lifting all boats” or the so-called “trickle-down effects” are but some of the promises of neo-liberalism and the neoclassical paradigm. As Edward Luttwak, put it:
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‘At present, almost all elite Americans, with corporate chiefs and fashionable economists in the lead, are utterly convinced that they have discovered the winning formula for economic success—good for every country, rich or poor, good for all individuals willing and able to heed the message, and of course, good for elite Americans: PRIVATIZATION + DEREGULATION = TURBO-CAPITALISM = PROSPERITY’ 2
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Markets, the neo-liberal and neoclassical proponents argue, are the ultimate in democratic institutions; even more democratic than de jure institutions such as legislatures, voting, elections, government etc. Consumers, looking to maximize total utility, with given incomes, expectations, information about prices and preferences cast their dollar votes while producers, driven by the imperatives to maximize and realize total profits, with given technologies, information about prices, and given resources respond to those with the most dollar votes; they act like ongoing public referenda according to this narrative. And then, markets do what market do:1) commodification; 2) price determination; 3) act as information systems (about conditions, trends and profit/utility opportunities); 4) resource allocation; 5) rationing; 6) clearing surpluses and shortages.
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Supply and demand interact and prices are determined. Prices communicate information about market conditions, trends and possibilities and allow calculation/estimation of comparative profit or utility potentials by sellers and buyers in order for them, as “sovereign individuals”, to determine what is likely to maximize total profits or utility and thus What shall be produced or consumed. Prices of inputs and outputs, along with the imperatives to minimize total cost on the supply side, or maximize total utility on the demand side, then allow determination of “optimal” production and utility functions and thus “How” to produce or consume and the allocations of given resources. Further, prices and relative prices of commodities answer the “For Whom” question through rationing (those willing to pay the most are most likely to get the commodities being supplied) while the relative “incomes” of inputs (land, labor and capital) and supposedly based upon their relative marginal contributions to the value of total output, reflect and shape the distributions incomes and wealth among the owners and sellers of those inputs.
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It is all a nice and neat narrative. In the neoclassical theory and narrative: all exchanges are “voluntary” and mutually beneficial to the participants otherwise they would not have occurred; causality is unidirectional with “ultimate” independent variables (e.g. tastes and incomes on the demand side and technology and input costs on the supply side) acting as “exogenous variables” that trigger endogenous and self-equilibrating responses in and through markets; the economy is thus propelled from equilibrium state (harmony and balance of contending interests) to equilibrium state in response to exogenous shocks and variables.
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The determinants of those “exogenous independent variables” are not the subject of inquiry for the neoclassical/neo-liberals. They have little or nothing to say about the real-world of monopolies, oligopolies, engineered supply and demand magnitudes and elasticities (e.g. Enron), administered prices, imperialism, social systems engineering, ideologically-driven embargos, asymmetric information, asymmetric ownership, asymmetric powers in international organizations like the UN or WTO, asymmetric access to political influence and justice, etc. These real-world phenomena are never even discussed in their textbooks let alone seen as inexorable or likely outcomes of the systemic structures and survival imperatives of capitalism itself. If these phenomena are ever even recognized, they are dismissed as simple anomalies and exceptions not disturbing the overall narratives.
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When the widening and deepening of markets, market relations and market institutions result in such crises as recurring and mounting unemployment, environmental degradation, wealth and income inequality, alienation among the youth, commodification of the “sacred”, inflation, loss of mass access to health care, increasing capital and labor migration, losses of traditional societies, budget and trade deficits, exchange-rate instability, etc, such outcomes are typically characterized by the neo-liberals and neoclassicals as either “growing pains” in countries like China3, or, in market-based economies, that have been “growing” for some time and in which some of the same crises are nonetheless evident, such crises are said to be the result of excessive government intervention and regulation, lack of appropriate and supporting politico-legal institutions (the subject of this symposium), imperfect information, non-market (government) corruption, trade protectionism, etc—not letting markets freely do what markets do.
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Systemic Imperatives of Market-based Economies
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Under market-based—capitalist—economies and processes, all entities, whether individuals, firms, organizations or even whole economies in global competition, are locked into certain fundamental and interrelated imperatives that shape what might be termed the “teleological logic” of capitalism. These fundamental survival-competitive imperatives also apply—in varying degrees—to socialist social formations when operating in global markets governed by capitalist institutions as well as to entities operating in and through markets within socialist social formations. These interrelated fundamental imperatives are:
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1) Realization of Maximum Possible Surplus Value;
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2) Accumulation of Capital: Expanded Reproduction (Widening and Deepening) of the Capital Base and the Capital-Labor Relationship;
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3) Maximization of Productivity and Enhanced “Efficiency”;
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4) Effective Competition.
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These competitive entities (individuals, groups, firms and whole national economies) must attempt to produce and actually realize maximum possible profits in order to have the retained earnings and/or creditworthiness as a necessary—but not sufficient—condition for continual expanded reproduction of their productive bases. These entities must continually attempt to reproduce and expand (widening and deepening) their productive bases and relations as a necessary—but not sufficient—condition of maximization of productivity and overall efficiency. These entities must attempt to maximize productivity and enhance overall efficiency as a necessary—but not sufficient—condition of effective competition (leading to expanded market share and power, name recognition, etc). And these competitive entities must attempt to effectively compete as a necessary—but not sufficient—condition of further production and realization of maximum possible total profits. Further, these fundamental imperatives of survival and effective competition create further derivative imperatives that shape the content, parameters and effects of human behavior as well as of “human nature” itself. For example, tactics such as outsourcing, union busting, not paying true costs of profits/benefits received and/or not receiving true profits/benefits for costs paid, or environmental degradation, flow from the imperative to minimize total costs (along with the greed and selfishness celebrated by the social capital of capitalism) that itself flows from the imperative to effectively compete that flows from the imperative to realize maximize possible total profits.
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Different systems embody, create and reinforce different structures, contradictions, conditions and imperatives of survival within those structures and under conditions that in turn shape the content, frequency, effects and “permissibility” or taboos of human behavior. One of the purposes of social capital is to create, teach, reinforce, sanction, celebrate, legitimate or de-legitimate certain relationships, values, norms, customs, institutions, habits, myths, traditions, ideologies and paradigms in accordance with certain systemic imperatives among which is the imperative for expanded reproduction of the whole system itself. Sometimes, however, the types of habits, norms, values, paradigms and behaviors most necessary on the micro level, may, when aggregated, produce macro effects or contradictions opposite of those intended or predicted from behaviors on the micro levels.
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From the perspective of the “profits-for-power-and-power-for-profits” and competitive imperatives of a typical businessperson or entity in a market-based/driven economy, the type of person/customer that would be ideal would likely possess the traits and proclivities of Homo Oeconomicus incarnate. This person would typically be: narcissistic; highly subject to fads and peer pressure; unable to delay gratification—wants it all and wants it now; predatory and calculating—for the next profit or utility opportunity; unable to assess real and long-term costs and benefits—caught-up in the illusory, the superficial and in the moment; a pleasure-obsessed conspicuous consumer— acquiring and expressing identity and “individuality” through consumption and types of commodities consumed; highly competitive; materialistic; acquisitive; rational—but only in the narrow and bounded sense; self-centered and self-absorbed; unwilling to sacrifice in the short-term for long-term goals or a transcendent causes; willing to go into debt to finance current conspicuous consumption; ultra-individualistic equating individualism with “individuality.”;etc.
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This type of “Homo Oeconomicus”, celebrated by and the cornerstone of neoclassical economic theory, is, however, for most people, not the type of person one would like to have as a son or daughter-in law, friend, mother or father, husband or wife, brother or sister, member of a military unit in combat, voter, public servant, neighbor during a natural disaster or someone involved in or guiding socialist construction. Indeed, even within capitalist social formations, the requisite social capital of markets and capitalism, without which markets could not do what markets typically do—and that is necessary for the expanded reproduction of capitalism as a whole—involves potentially contradictory missions or purposes. On the one hand, the purpose of social capital in market-based societies is to teach, legitimate and reinforce those ideas, values, norms, habits, myths, traditions, behaviors, proclivities, institutions and productive and other relationships necessary for creating and expanding markets, profits, capital accumulation, etc—e.g. values and proclivities such as ultra-individualism, conspicuous consumerism, etc. On the other hand, the purpose of social capital also involves teaching, legitimating and reinforcing certain forms and levels of social awareness and concern, cohesion, cooperation, reciprocity, civic engagement, personal sacrifice for the nation, buying into the system, etc.
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When markets are introduced and expanded within socialist social formations, the requisite social capital of markets becomes potentially not only internally contradictory with respect to expanded reproduction of markets and market-based processes, but also, such requisite social capital can—and will likely—become a destructive and sabotaging force against socialist construction and the expanded reproduction of socialist relations and institutions—even allowing for some varying and diverse definitions of what socialism is about and the positive effects of markets in terms of building productive forces rapidly.
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The Evolving Concept of Social Capital
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The term social capital was first coined in 1916 by L. Judson Hanifan4 to refer to social networks and institutions/norms of reciprocity (goodwill, fellowship, sympathy and social intercourse) associated with them. Hanifan, by his own admission, employed the term “capital” (anything that has been produced and used to produce—for profitable exchange—something else) to catch the eye--and patronage--of the business community. Hanifan suggested that these social networks and institutions could, on micro as well as macro levels, enhance productivity, competitiveness, employment and income creation, etc. in some of the same ways that physical capital and human capital can, also, produce the same effects.
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Subsequent to Hanifan’s apparent coinage of the term social capital, the term and concept was reintroduced—and partly redefined—at least six times up to the present: 1) in the 1950s by sociologist John Seeley5 to refer to ‘memberships in clubs and associations’ that act just like negotiable securities in producing career advancement and tangible returns to individuals; 2) in the 1960s, by urban economist Jane Jacobs6 to refer to the collective value and effects of informal neighborhood ties and associations; 3) in the 1970s by economist Glenn Loury7 to refer to wider social ties lost by African Americans as one of the legacies of slavery; 4) in the 1980s by social theorist Pierre Bourdieu8 to refer to the actual or potential resources linked to durable networks of institutionalized relationships of mutual recognition and assistance; 5) in the mid-1980s by economist Ekkehart Schlicht9 to refer to the economic value and productivity-enhancing effects of organizations, moral order, cooperation and cohesion; 6) in the late 1980s by James Coleman10 to refer, as Hanifan had done, to the social arrangements, relationships and institutions creating and shaping the environment or social context of education.
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The above-mentioned definitions of social capital are all closely related and narrow in their focus. They focus on immediate relationships—institutionalized or informal—and the networks, and norms of reciprocity that serve as tangible assets and have economic impacts not only on the micro level (personal career advancement, obtaining employment, political influence, personal safety etc) but also on the macro level in terms of enhancing productivity, reducing information and transactions costs, enhancing competitiveness, enhancing community safety and reducing crime, encouraging cooperation, limiting destructive forms and levels of competition etc.
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A wider definition of social capital, one employed in this paper, is closely akin to the concept of Social Structures of Accumulation (SSA)11 which involves a complex of institutions (political, social and economic) and domestic and international relations supporting and legitimating the process of capital accumulation (which includes not only accumulation of wealth and physical/human capital but also expanded reproduction of fundamental and defining socio-economic-political relationships of the whole system itself. This is also close to the classical Marxist concept of “Superstructure”.
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Even allowing for the more narrow definition of social capital employed by Putnam et al., recent studies reveal the steady erosion of social capital in the U.S. in the last thirty years. They have more or less consistently documented solid trends reflecting steady declines in various indices of: political and civic engagement (voting, contributions, electoral participation, signing petitions, writing polemics, working on political campaigns, running for political office); community involvement ( charitable work and donations, blood donations, religious participation, memberships in professional associations, clubs and societies). These studies have also documented steady increases in various indices of alienation and apathy among various age cohorts of the U.S. population (dinners outside the home, incidents of road rage, polling on social trust and trust in political figures, daily television viewing and percent of population using television as central form of entertainment, percent of population disobeying traffic signs and rules, polling on greed trumping community involvement among college freshmen, suicide rates in various age cohorts, percentage of population reporting frequent malaise—headaches, insomnia, indigestion—and percentage of population reporting overwork and multiple jobs as a matter of necessity rather than choice).
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These trends in the U.S., revealing steady erosions of social capital with the ripening of U.S. capitalism, are highly correlated with other social outcomes: increases in child abuse; decreases in quality and effectiveness of educational institutions; increasing television watching and reduced effective literacy among children; increases in crime; decreases in health and perceptions of being healthy among the general population; decreases in perceptions of social-connectedness among the general population; increasing membership in dangerous cults like offering messiahs, instant gratification and easy answers to complex problems; increasing divorce rates; increasing tax evasion, anti-statism and distrust of politicians or political solutions to current problems; decreasing percentages of the population willing to trust or help fellow citizens who are strangers.
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When the work of Putnam et al was extended to the international level, exploring similar data and trends in eight major capitalist societies (Australia, France, Spain, Germany, Japan, Sweden, Great Britain and the United States), in all cases, except Sweden, the trends in social-capital-erosion in countries other than the United States strongly paralleled (in timing and patterns of change) those of the United States.12 Also paralleling these trends, and consistent with the wider definition and socializing-ideological functions of social capital, in all of these countries, the central themes of culture (television, movies, literature, games, art, music, etc) are increasingly centered on and around promoting and celebrating narcissism, ultra-individualism, competition, ruthlessness, duplicity, pleasure maximization, instant gratification, materialism, luck, returns without sacrifice, predatory calculation and manipulation and other concepts and values definitely useful from the standpoint of mass consumption and profitability but also definitely inimical to socialist construction however one may define socialism.
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Conclusion
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China has come a long way in promoting levels and forms of human progress for the broad masses of people that were simply unknown in the China before 1949. This achievement is truly remarkable when one considers the legacies that were inherited along with the extent to which China has been subject to imperial aggression, isolation, ostracization, embargos, social systems engineering campaigns, demonization and even outright threats of nuclear annihilation—causing diversions of precious and scarce resources for defense instead of directly into development. The current problems that China faces simply cannot wait and the imperative to develop the productive forces as rapidly as possible to deal with the myriad issues, constraints, inequalities and crises faced by China should be evident to all but the most insulated and callous of observers and critics. Certainly socialism cannot be built and defended without the participation and allegiance of the broad masses of Chinese people who must, first of all, simply survive in order to participate in socialist construction.
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On the other hand, socialism is not simply about building productive forces or dealing with the “What, How and For Whom” questions differently than they are dealt with under capitalism. Socialism is not an end-state but rather a long protracted process and it is also about teaching and reinforcing human values and relationships that are very different from—and stand in contradiction/opposition to—the types of values and relationships embodied in the social capital of capitalism and most conducive to the expanded reproduction of capitalism: greed, selfishness, ultra-individualism, competition, narcissism, instant-gratification, predation for profit/utility opportunities, inequalities of wealth and incomes, commodification of everything including the sacred, etc. As William Hinton summed it up:
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“Socialism is after all not something given, something fixed. It is a process, a transition from one state to another…As such it bears within it many contradictions, many inequalities that cannot be done away with overnight or even in the course of several years or several decades…Yet as long as these inequalities exist they generate privilege, individualism, careerism, and bourgeois ideology. Without a conscious and protracted effort to combat these tendencies they can grow into an important social force. They can and do create new bourgeois individuals who gather as a new privileged elite and ultimately as a new exploiting class. Thus socialism can be peacefully transformed back into capitalism.”13
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The basic values, institutions and relationships most conducive to the expanded reproduction of capitalism act as weeds in the garden of socialism threatening to choke off the new flowers in the emerging garden. That is precisely why the introduction and expansion of market and market-based institutions, values, relations and imperatives within the framework of a socialist social formation, which may be tactically necessary as was the case with the NEP in the Soviet Union, must be handled carefully and from a position of strength and willingness to sacrifice if necessary. This is especially the case when it is clear that the major capitalist power, the U.S., seeks hegemony in the global community of nations and regards itself as locked into a global war of conflicting systems and ideologies (Capitalism versus Socialism) in which it is prepared to use cultural, political, economic and military means—covertly or overtly—to ensure the victory of neo-liberal capitalism and its associated institutions, values and relationships on a global scale. As James Petras put it:
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“U.S cultural imperialism has two major goals, one economic and the other political: to capture markets for its cultural commodities and to establish hegemony by shaping popular consciousness. The export of entertainment is one of the most important sources of capital accumulation and global profits displacing manufacturing exports. In the political sphere, cultural imperialism plays a major role in dissociating people from their cultural roots and traditions of solidarity, replacing them with media created needs which change with every publicity campaign. The political effect in to alienate people from traditional class and community bonds, atomizing and separating individuals from each other.” 14
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No doubt that significant changes in institutions—political, legal, social, cultural and economic—will take place as markets and market institutions/relations/values are introduced more and more in China to help to handle domestic conditions and facilitate China’s increasing integration into a global economy organized on capitalist foundations and categories. The real challenges will be not to lose sight of the ultimate goals and necessity of socialism, to appreciate the roles and effects of social capital (along with physical and human capital—under socialism as well as under capitalism), to assess and appreciate the true costs (private plus social) and true benefits (private plus social) of markets, market relationships, values and institutions under socialist construction, and, not to wind up “bringing a tiger in through the back door to chase out the wolf at the front door.”
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Footnotes
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1.“Report of the 16th Congress of the Communist Party of China”, 2002 quoted in “Some Basics on China “(online edition) by D. Raja and He Yong, Political Affairs Net, at http://www.politicalaffairs.net/article/articleview/256/1/32, p. 1
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2.Edward Luttvak quoted in Frank, Thomas, One Market Under God: Extreme Capitalism, Market Populism and the End of Economic Democracy, Anchor Books, N.Y. 2000, p. 17
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3.“China’s Growing Pains” in The Economist, August 26, 2004
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4.Hanifan, Lyda Judson, “The Rural School Community Center”, Annals of the American Academy of Political Science, 67 (1916): pp. 130-138. Note: An excellent overview of the development of the concept of social capital, for which I am indebted, can be found in: Putnam, Robert D. Bowling Alone: The Collapse and Revival of American Community, Simon and Schuster, N.Y. 2000 and also in Putnam, Robert D (ed), Democracies in Flux: The Evolution of Social Capital in Contemporary Society, Oxford University Press, N.Y. 2002
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5.Seeley, John R, Sim, Alexander and Loosley, Elizabeth; Crestwood Heights: A Study of the Culture of Suburban Life, Basic Books, N.Y. 1956
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6.Jacobs, Jane, The Death and Life of Great American Cities, Random House, N.Y. 1961
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7.Loury, Glenn, “A Dynamic Theory of Racial Income Differences” in Women, Minorities and Employment Discrimination, Wallace, P.A. and LeMund, A (eds),
Lexington Books, Lexington Mass. 1977
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8.Bourdieu, Pierre, “Forms of Capital” in Handbook of Theory and Research for The Sociology of Education Richardson, John (Ed), Greenwood Books, N.Y. 1983
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9.Schlicht, Ekkehart, “Cognitive Dissonance in Economics” in Normengeleitetes Verhalten in den Sozialwissenschaften, Duncker and Humblot, Berlin, 1984
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10.Coleman, James, “Social Capital in the Creation of Human Capital” in American Journal of Sociology, 94 (1988)
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11.see Diebolt, Claude, “Towards a New Social Structure of Accumulation” in
Historical and Social Research, Vol 27, No. 2/3 2002; also see Gordon, David M:
“Stages of Accumulation and Long Economic Cycles” in Hopkins, T and Wallerstein, I (eds) Processes of the World System, Sage Publications, Beverly Hills, 1980; Bowles, S “Social Institutions and Technical Change” in Di Matteo, M; Goodwin, R.M. and Vercelli, A. (eds) in Technological and Social Factors in Long-Term Fluctuations, Springer Verlag, Berlin, 1989; and Kotz, D.M; McDonnoug, T; Reich, M (eds) Social Structures of Accumulation , Cambridge University Press, Cambridge, 1994
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12Putnam, Robert (ed) Democracies in Flux: The Evolution of Social Capital in
Contemporary Society, Oxford Univ. Press, N.Y. 2002
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13.Hinton, William Turning Point in China, p. 20 quoted in Monthly Review , July
-August 2004, Vol. 56, No. 3 p. 128
14. Petras, James, “Cultural Imperialism in the Late Twentieth Century”, internet Ed
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Paper delivered Sept 1-2, 2004 at the International Symposium on the Reform of Property Rights and Enterprise Development in Transitional Countries at Tsinghua University, Beijing, China
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By James M. Craven (Blackfoot Name: Omahkohkiaayo i’poyi)
Professor, Economics; Chairman, Business Division, Clark College, Vancouver, WA.
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“Every nation in the world has its own history and its own strengths and weaknesses. Since earliest times excellent things and rotten things have mingled together and accumulated over long periods. To sort them out and distinguish the essence from the dregs is a difficult task…Of course this does not mean that we do not need to learn from foreign countries. We must learn many things from foreign countries and master them…We learn foreign things because we want to study and develop Chinese things…We must not be like the Empress Dowager Tz’u-hsi who blindly rejected all foreign things. Blindly rejecting foreign things is like blindly worshipping them. Both are incorrect and harmful…In learning from foreign countries we must oppose both conservatism and dogmatism…To study foreign things does not mean importing everything, lock, stock and barrel…We must give our attention to the critical acceptance of foreign things, and especially to the introduction of things from the socialist world and from the progressive people of the capitalist world…”
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(Chairman Mao Zedong, “Talk to Music Workers”, pp. 85-88, in Chairman Mao Talks to the People: Talks and Letters 1956-1971, Stuart Schram ed., Pantheon Books, N.Y. 1974)
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Introduction
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The People’s Republic of China stands as one of the major political-economic powers and social formations in the world today; it ranks about sixth place in terms of most economic aggregates commonly used to rank-order different economies in size and influence in the global economy. For a nation that had been kept backward, fragmented, feudal and colonized by foreign imperial powers and internal contradictions until the People’s Revolution in 1949, and, for a nation that has been subject to imperial encirclement, threats of nuclear annihilation, destabilization campaigns and demonization and ostracization in the global economy for many years, with a large population of 1.4 billion people with myriad wants and needs awaiting fulfillment, the present level of development and standing of China is no small achievement And there is no doubt, in the opinions of many observers, that “socialist values and consciousness”, created and reinforced by the developing “social capital” of Chinese socialism, have constituted a significant and material force in those achievements—often against overwhelming odds and against technologically-sophisticated and vicious foreign forces bent on isolating, demonizing, destabilizing and sabotaging socialist construction in China.
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Yet despite the tremendous advances made by the Chinese people, much work remains to be done and many wants and needs remain unfulfilled causing China to explore, at various periods of Chinese history, diverse approaches, models, instruments, measures and paths of growth and development. According to the 16th Congress of the Communist Party of China in 2002:
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“We must be aware that China is in the primary stage of socialism and will remain so, for a long time to come. The well-off life we are leading is still at a low level; it is not all-inclusive and is very uneven. The principal contradiction in our society is still one between the ever-growing material and cultural needs of the people and the backwardness of social production. Our productive forces, science, technology and education are still relatively backward, so there is a long way to go before we achieve industrialization and modernization.” 1
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Since 1978, China has experienced the progressive widening of markets, market relationships and categories along with some changes in political, economic, cultural, legal and social institutions and superstructure necessary to facilitate widening and deepening market involvement in socialist construction. Some of these policies and initiatives have included: export-led growth; increasing reliance on long-term foreign direct investment (FDI both into and originating from China); increasing privatization; lowering of trade barriers; decentralization of planning; increased authority for (and responsibilities on) local governments; increasing integration into global networks of manufacturing, finance, trade; critical technology transfers; new forms of enterprise organization (e.g. Individual Family Contracts (IFCs) in agriculture, Township and Village Enterprises (TVEs), privatization and self-financing of state-owned enterprises(SOEs) and SBCs or share-based cooperatives); labor market reforms; currency exchange-rate stabilization; etc.
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But the debates, inside and outside of China, have continued to rage: Does this emerging market socialism model represent simply a necessary—and necessarily hybrid—model that is based upon, and is addressing, the myriad real-world legacies, constraints, conditions and forces with which China has to deal, and that will, or can possibly, result in using markets and capitalism to build socialism in China?. Or, as some would argue, does this hybrid model represent the reverse of using socialism (real or nominal) to build and extend markets, market-based processes and wholesale capitalism thus subjectively or objectively sabotaging long-run conditions and prospects for ongoing socialist construction throughout China?
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The Allure of Neo-Liberalism
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The neo-liberal narrative, and the narrative of neoclassical economics upon which it is largely based, are quite alluring and seductive. Starting with some unproved—and largely metaphysical—“axioms and postulates that form a view of eternal and immutable “human nature”, basic economic—and even non-economic—outcomes are said to be the inevitable and predictable results of the unfolding or playing-out of human nature—on both the supply and demand sides of a given market—under “given” conditions, institutional arrangements and constraints; and the macro is said to be nothing more than the sum of the aggregated micro. What could be more natural and “efficient”, the neoclassicals argue, than a system (Capitalism) that, rather than trying to deny or suppress or change eternal and immutable “human nature”, instead, harnesses, celebrates and utilizes human propensities and instincts that form human nature in order to produce optimal social outcomes not even intended by the “Economic Man”?. And this "Homo Oeconomicus, is summarily asserted to be, a priori, and without any empirical support, to be an atomistic, calculating, rational, selfish, competitive, egoistic, materialistic “agent” who is owning, buying or selling only for himself/herself in accordance with his or her own “rational self-interest.
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It of course never occurs to the proponents of neo-liberalism and neoclassical economics (who have only recently got around to the concept of social capital) that maybe what they are observing is not some eternal and immutable “human nature”, but, rather, the social capital of capitalism doing one of the things it is supposed to do: creating and reinforcing the very “human nature” (and associated human values, behaviors and proclivities) that is necessary for the functioning, imperatives (e.g. mass consumption, markets, profits, market shares etc) and expanded reproduction of capitalism itself. These proponents also deny that these supposed eternal and immutable propensities and proclivities of “human nature”, operating on the micro levels of the economy, when aggregated to the macro levels, can, rather than producing optimal macro outcomes, instead, produce social chaos, instability, mass alienation, environmental degradation, hollowing-out of industrial bases, involuntary unemployment, lack of mass access to health care, loss of mass acceptance of the system, etc.
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Here we have systems through which forces of supply and demand for various commodities interact—markets. They are often portrayed as rather technical, mechanical, impersonal and endogenously self-equilibrating (in response to “exogenous” shocks) sub-systems that are relatively value-free, requiring only supporting institutions of private property and a relatively business-friendly and non-interventionist state. Markets are said to represent the most superior (in terms of narrow and contrived definitions of “efficiency” and the greatest good for the greatest number) mechanisms (that stand opposed to the mechanisms of tradition and command) for posing and solving the classical “What”, “How” and “For Whom” questions faced by all societies at all levels.
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The neo-liberal and neoclassical narratives operate like “String Theory” (“The Theory of Everything”) in Physics. Where the narratives and visions of Quantum Mechanics at the micro or particle level (focusing on micro chaos and only probabilities and no certainties) contradict the narratives and visions of General Relativity on the macro levels (focusing on general order, equilibrium, stability, symmetry and certainty) the claim is made that String Theory bridges and reconciles the two contradictory visions and narratives. The same claim is made by the neo-liberal and neoclassical theorists. When markets are allowed to do what markets do, when they are left relatively free and unfettered by over-regulation, when they are supported by “given” and “appropriate” politico-legal-cultural-social policies and institutions (superstructure or social capital), then, out of the potential chaos of greed/selfishness/profit/utility-driven interactions at the micro level, we get stability, equilibria, efficiency, growth, development, employment, incomes, global competitiveness, comparative-advantage-based trade, invention/innovation, etc on the macro level. The macro “order”, “stability” and “certainties” will supposedly follow from the potential chaos and “probabilities” at the micro level in the long-run; that is, if short-term adjustments and “sacrifices” can be accepted and handled by the masses and the state. The greatest good for the greatest number, consumer and producer “sovereignty”, efficiency, demand and supply reflecting revealed preferences of those with the most dollar votes, political as well as economic democracy and “rising tides lifting all boats” or the so-called “trickle-down effects” are but some of the promises of neo-liberalism and the neoclassical paradigm. As Edward Luttwak, put it:
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‘At present, almost all elite Americans, with corporate chiefs and fashionable economists in the lead, are utterly convinced that they have discovered the winning formula for economic success—good for every country, rich or poor, good for all individuals willing and able to heed the message, and of course, good for elite Americans: PRIVATIZATION + DEREGULATION = TURBO-CAPITALISM = PROSPERITY’ 2
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Markets, the neo-liberal and neoclassical proponents argue, are the ultimate in democratic institutions; even more democratic than de jure institutions such as legislatures, voting, elections, government etc. Consumers, looking to maximize total utility, with given incomes, expectations, information about prices and preferences cast their dollar votes while producers, driven by the imperatives to maximize and realize total profits, with given technologies, information about prices, and given resources respond to those with the most dollar votes; they act like ongoing public referenda according to this narrative. And then, markets do what market do:1) commodification; 2) price determination; 3) act as information systems (about conditions, trends and profit/utility opportunities); 4) resource allocation; 5) rationing; 6) clearing surpluses and shortages.
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Supply and demand interact and prices are determined. Prices communicate information about market conditions, trends and possibilities and allow calculation/estimation of comparative profit or utility potentials by sellers and buyers in order for them, as “sovereign individuals”, to determine what is likely to maximize total profits or utility and thus What shall be produced or consumed. Prices of inputs and outputs, along with the imperatives to minimize total cost on the supply side, or maximize total utility on the demand side, then allow determination of “optimal” production and utility functions and thus “How” to produce or consume and the allocations of given resources. Further, prices and relative prices of commodities answer the “For Whom” question through rationing (those willing to pay the most are most likely to get the commodities being supplied) while the relative “incomes” of inputs (land, labor and capital) and supposedly based upon their relative marginal contributions to the value of total output, reflect and shape the distributions incomes and wealth among the owners and sellers of those inputs.
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It is all a nice and neat narrative. In the neoclassical theory and narrative: all exchanges are “voluntary” and mutually beneficial to the participants otherwise they would not have occurred; causality is unidirectional with “ultimate” independent variables (e.g. tastes and incomes on the demand side and technology and input costs on the supply side) acting as “exogenous variables” that trigger endogenous and self-equilibrating responses in and through markets; the economy is thus propelled from equilibrium state (harmony and balance of contending interests) to equilibrium state in response to exogenous shocks and variables.
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The determinants of those “exogenous independent variables” are not the subject of inquiry for the neoclassical/neo-liberals. They have little or nothing to say about the real-world of monopolies, oligopolies, engineered supply and demand magnitudes and elasticities (e.g. Enron), administered prices, imperialism, social systems engineering, ideologically-driven embargos, asymmetric information, asymmetric ownership, asymmetric powers in international organizations like the UN or WTO, asymmetric access to political influence and justice, etc. These real-world phenomena are never even discussed in their textbooks let alone seen as inexorable or likely outcomes of the systemic structures and survival imperatives of capitalism itself. If these phenomena are ever even recognized, they are dismissed as simple anomalies and exceptions not disturbing the overall narratives.
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When the widening and deepening of markets, market relations and market institutions result in such crises as recurring and mounting unemployment, environmental degradation, wealth and income inequality, alienation among the youth, commodification of the “sacred”, inflation, loss of mass access to health care, increasing capital and labor migration, losses of traditional societies, budget and trade deficits, exchange-rate instability, etc, such outcomes are typically characterized by the neo-liberals and neoclassicals as either “growing pains” in countries like China3, or, in market-based economies, that have been “growing” for some time and in which some of the same crises are nonetheless evident, such crises are said to be the result of excessive government intervention and regulation, lack of appropriate and supporting politico-legal institutions (the subject of this symposium), imperfect information, non-market (government) corruption, trade protectionism, etc—not letting markets freely do what markets do.
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Systemic Imperatives of Market-based Economies
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Under market-based—capitalist—economies and processes, all entities, whether individuals, firms, organizations or even whole economies in global competition, are locked into certain fundamental and interrelated imperatives that shape what might be termed the “teleological logic” of capitalism. These fundamental survival-competitive imperatives also apply—in varying degrees—to socialist social formations when operating in global markets governed by capitalist institutions as well as to entities operating in and through markets within socialist social formations. These interrelated fundamental imperatives are:
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1) Realization of Maximum Possible Surplus Value;
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2) Accumulation of Capital: Expanded Reproduction (Widening and Deepening) of the Capital Base and the Capital-Labor Relationship;
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3) Maximization of Productivity and Enhanced “Efficiency”;
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4) Effective Competition.
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These competitive entities (individuals, groups, firms and whole national economies) must attempt to produce and actually realize maximum possible profits in order to have the retained earnings and/or creditworthiness as a necessary—but not sufficient—condition for continual expanded reproduction of their productive bases. These entities must continually attempt to reproduce and expand (widening and deepening) their productive bases and relations as a necessary—but not sufficient—condition of maximization of productivity and overall efficiency. These entities must attempt to maximize productivity and enhance overall efficiency as a necessary—but not sufficient—condition of effective competition (leading to expanded market share and power, name recognition, etc). And these competitive entities must attempt to effectively compete as a necessary—but not sufficient—condition of further production and realization of maximum possible total profits. Further, these fundamental imperatives of survival and effective competition create further derivative imperatives that shape the content, parameters and effects of human behavior as well as of “human nature” itself. For example, tactics such as outsourcing, union busting, not paying true costs of profits/benefits received and/or not receiving true profits/benefits for costs paid, or environmental degradation, flow from the imperative to minimize total costs (along with the greed and selfishness celebrated by the social capital of capitalism) that itself flows from the imperative to effectively compete that flows from the imperative to realize maximize possible total profits.
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Different systems embody, create and reinforce different structures, contradictions, conditions and imperatives of survival within those structures and under conditions that in turn shape the content, frequency, effects and “permissibility” or taboos of human behavior. One of the purposes of social capital is to create, teach, reinforce, sanction, celebrate, legitimate or de-legitimate certain relationships, values, norms, customs, institutions, habits, myths, traditions, ideologies and paradigms in accordance with certain systemic imperatives among which is the imperative for expanded reproduction of the whole system itself. Sometimes, however, the types of habits, norms, values, paradigms and behaviors most necessary on the micro level, may, when aggregated, produce macro effects or contradictions opposite of those intended or predicted from behaviors on the micro levels.
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From the perspective of the “profits-for-power-and-power-for-profits” and competitive imperatives of a typical businessperson or entity in a market-based/driven economy, the type of person/customer that would be ideal would likely possess the traits and proclivities of Homo Oeconomicus incarnate. This person would typically be: narcissistic; highly subject to fads and peer pressure; unable to delay gratification—wants it all and wants it now; predatory and calculating—for the next profit or utility opportunity; unable to assess real and long-term costs and benefits—caught-up in the illusory, the superficial and in the moment; a pleasure-obsessed conspicuous consumer— acquiring and expressing identity and “individuality” through consumption and types of commodities consumed; highly competitive; materialistic; acquisitive; rational—but only in the narrow and bounded sense; self-centered and self-absorbed; unwilling to sacrifice in the short-term for long-term goals or a transcendent causes; willing to go into debt to finance current conspicuous consumption; ultra-individualistic equating individualism with “individuality.”;etc.
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This type of “Homo Oeconomicus”, celebrated by and the cornerstone of neoclassical economic theory, is, however, for most people, not the type of person one would like to have as a son or daughter-in law, friend, mother or father, husband or wife, brother or sister, member of a military unit in combat, voter, public servant, neighbor during a natural disaster or someone involved in or guiding socialist construction. Indeed, even within capitalist social formations, the requisite social capital of markets and capitalism, without which markets could not do what markets typically do—and that is necessary for the expanded reproduction of capitalism as a whole—involves potentially contradictory missions or purposes. On the one hand, the purpose of social capital in market-based societies is to teach, legitimate and reinforce those ideas, values, norms, habits, myths, traditions, behaviors, proclivities, institutions and productive and other relationships necessary for creating and expanding markets, profits, capital accumulation, etc—e.g. values and proclivities such as ultra-individualism, conspicuous consumerism, etc. On the other hand, the purpose of social capital also involves teaching, legitimating and reinforcing certain forms and levels of social awareness and concern, cohesion, cooperation, reciprocity, civic engagement, personal sacrifice for the nation, buying into the system, etc.
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When markets are introduced and expanded within socialist social formations, the requisite social capital of markets becomes potentially not only internally contradictory with respect to expanded reproduction of markets and market-based processes, but also, such requisite social capital can—and will likely—become a destructive and sabotaging force against socialist construction and the expanded reproduction of socialist relations and institutions—even allowing for some varying and diverse definitions of what socialism is about and the positive effects of markets in terms of building productive forces rapidly.
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The Evolving Concept of Social Capital
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The term social capital was first coined in 1916 by L. Judson Hanifan4 to refer to social networks and institutions/norms of reciprocity (goodwill, fellowship, sympathy and social intercourse) associated with them. Hanifan, by his own admission, employed the term “capital” (anything that has been produced and used to produce—for profitable exchange—something else) to catch the eye--and patronage--of the business community. Hanifan suggested that these social networks and institutions could, on micro as well as macro levels, enhance productivity, competitiveness, employment and income creation, etc. in some of the same ways that physical capital and human capital can, also, produce the same effects.
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Subsequent to Hanifan’s apparent coinage of the term social capital, the term and concept was reintroduced—and partly redefined—at least six times up to the present: 1) in the 1950s by sociologist John Seeley5 to refer to ‘memberships in clubs and associations’ that act just like negotiable securities in producing career advancement and tangible returns to individuals; 2) in the 1960s, by urban economist Jane Jacobs6 to refer to the collective value and effects of informal neighborhood ties and associations; 3) in the 1970s by economist Glenn Loury7 to refer to wider social ties lost by African Americans as one of the legacies of slavery; 4) in the 1980s by social theorist Pierre Bourdieu8 to refer to the actual or potential resources linked to durable networks of institutionalized relationships of mutual recognition and assistance; 5) in the mid-1980s by economist Ekkehart Schlicht9 to refer to the economic value and productivity-enhancing effects of organizations, moral order, cooperation and cohesion; 6) in the late 1980s by James Coleman10 to refer, as Hanifan had done, to the social arrangements, relationships and institutions creating and shaping the environment or social context of education.
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The above-mentioned definitions of social capital are all closely related and narrow in their focus. They focus on immediate relationships—institutionalized or informal—and the networks, and norms of reciprocity that serve as tangible assets and have economic impacts not only on the micro level (personal career advancement, obtaining employment, political influence, personal safety etc) but also on the macro level in terms of enhancing productivity, reducing information and transactions costs, enhancing competitiveness, enhancing community safety and reducing crime, encouraging cooperation, limiting destructive forms and levels of competition etc.
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A wider definition of social capital, one employed in this paper, is closely akin to the concept of Social Structures of Accumulation (SSA)11 which involves a complex of institutions (political, social and economic) and domestic and international relations supporting and legitimating the process of capital accumulation (which includes not only accumulation of wealth and physical/human capital but also expanded reproduction of fundamental and defining socio-economic-political relationships of the whole system itself. This is also close to the classical Marxist concept of “Superstructure”.
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Even allowing for the more narrow definition of social capital employed by Putnam et al., recent studies reveal the steady erosion of social capital in the U.S. in the last thirty years. They have more or less consistently documented solid trends reflecting steady declines in various indices of: political and civic engagement (voting, contributions, electoral participation, signing petitions, writing polemics, working on political campaigns, running for political office); community involvement ( charitable work and donations, blood donations, religious participation, memberships in professional associations, clubs and societies). These studies have also documented steady increases in various indices of alienation and apathy among various age cohorts of the U.S. population (dinners outside the home, incidents of road rage, polling on social trust and trust in political figures, daily television viewing and percent of population using television as central form of entertainment, percent of population disobeying traffic signs and rules, polling on greed trumping community involvement among college freshmen, suicide rates in various age cohorts, percentage of population reporting frequent malaise—headaches, insomnia, indigestion—and percentage of population reporting overwork and multiple jobs as a matter of necessity rather than choice).
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These trends in the U.S., revealing steady erosions of social capital with the ripening of U.S. capitalism, are highly correlated with other social outcomes: increases in child abuse; decreases in quality and effectiveness of educational institutions; increasing television watching and reduced effective literacy among children; increases in crime; decreases in health and perceptions of being healthy among the general population; decreases in perceptions of social-connectedness among the general population; increasing membership in dangerous cults like offering messiahs, instant gratification and easy answers to complex problems; increasing divorce rates; increasing tax evasion, anti-statism and distrust of politicians or political solutions to current problems; decreasing percentages of the population willing to trust or help fellow citizens who are strangers.
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When the work of Putnam et al was extended to the international level, exploring similar data and trends in eight major capitalist societies (Australia, France, Spain, Germany, Japan, Sweden, Great Britain and the United States), in all cases, except Sweden, the trends in social-capital-erosion in countries other than the United States strongly paralleled (in timing and patterns of change) those of the United States.12 Also paralleling these trends, and consistent with the wider definition and socializing-ideological functions of social capital, in all of these countries, the central themes of culture (television, movies, literature, games, art, music, etc) are increasingly centered on and around promoting and celebrating narcissism, ultra-individualism, competition, ruthlessness, duplicity, pleasure maximization, instant gratification, materialism, luck, returns without sacrifice, predatory calculation and manipulation and other concepts and values definitely useful from the standpoint of mass consumption and profitability but also definitely inimical to socialist construction however one may define socialism.
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Conclusion
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China has come a long way in promoting levels and forms of human progress for the broad masses of people that were simply unknown in the China before 1949. This achievement is truly remarkable when one considers the legacies that were inherited along with the extent to which China has been subject to imperial aggression, isolation, ostracization, embargos, social systems engineering campaigns, demonization and even outright threats of nuclear annihilation—causing diversions of precious and scarce resources for defense instead of directly into development. The current problems that China faces simply cannot wait and the imperative to develop the productive forces as rapidly as possible to deal with the myriad issues, constraints, inequalities and crises faced by China should be evident to all but the most insulated and callous of observers and critics. Certainly socialism cannot be built and defended without the participation and allegiance of the broad masses of Chinese people who must, first of all, simply survive in order to participate in socialist construction.
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On the other hand, socialism is not simply about building productive forces or dealing with the “What, How and For Whom” questions differently than they are dealt with under capitalism. Socialism is not an end-state but rather a long protracted process and it is also about teaching and reinforcing human values and relationships that are very different from—and stand in contradiction/opposition to—the types of values and relationships embodied in the social capital of capitalism and most conducive to the expanded reproduction of capitalism: greed, selfishness, ultra-individualism, competition, narcissism, instant-gratification, predation for profit/utility opportunities, inequalities of wealth and incomes, commodification of everything including the sacred, etc. As William Hinton summed it up:
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“Socialism is after all not something given, something fixed. It is a process, a transition from one state to another…As such it bears within it many contradictions, many inequalities that cannot be done away with overnight or even in the course of several years or several decades…Yet as long as these inequalities exist they generate privilege, individualism, careerism, and bourgeois ideology. Without a conscious and protracted effort to combat these tendencies they can grow into an important social force. They can and do create new bourgeois individuals who gather as a new privileged elite and ultimately as a new exploiting class. Thus socialism can be peacefully transformed back into capitalism.”13
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The basic values, institutions and relationships most conducive to the expanded reproduction of capitalism act as weeds in the garden of socialism threatening to choke off the new flowers in the emerging garden. That is precisely why the introduction and expansion of market and market-based institutions, values, relations and imperatives within the framework of a socialist social formation, which may be tactically necessary as was the case with the NEP in the Soviet Union, must be handled carefully and from a position of strength and willingness to sacrifice if necessary. This is especially the case when it is clear that the major capitalist power, the U.S., seeks hegemony in the global community of nations and regards itself as locked into a global war of conflicting systems and ideologies (Capitalism versus Socialism) in which it is prepared to use cultural, political, economic and military means—covertly or overtly—to ensure the victory of neo-liberal capitalism and its associated institutions, values and relationships on a global scale. As James Petras put it:
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“U.S cultural imperialism has two major goals, one economic and the other political: to capture markets for its cultural commodities and to establish hegemony by shaping popular consciousness. The export of entertainment is one of the most important sources of capital accumulation and global profits displacing manufacturing exports. In the political sphere, cultural imperialism plays a major role in dissociating people from their cultural roots and traditions of solidarity, replacing them with media created needs which change with every publicity campaign. The political effect in to alienate people from traditional class and community bonds, atomizing and separating individuals from each other.” 14
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No doubt that significant changes in institutions—political, legal, social, cultural and economic—will take place as markets and market institutions/relations/values are introduced more and more in China to help to handle domestic conditions and facilitate China’s increasing integration into a global economy organized on capitalist foundations and categories. The real challenges will be not to lose sight of the ultimate goals and necessity of socialism, to appreciate the roles and effects of social capital (along with physical and human capital—under socialism as well as under capitalism), to assess and appreciate the true costs (private plus social) and true benefits (private plus social) of markets, market relationships, values and institutions under socialist construction, and, not to wind up “bringing a tiger in through the back door to chase out the wolf at the front door.”
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Footnotes
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1.“Report of the 16th Congress of the Communist Party of China”, 2002 quoted in “Some Basics on China “(online edition) by D. Raja and He Yong, Political Affairs Net, at http://www.politicalaffairs.net/article/articleview/256/1/32, p. 1
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2.Edward Luttvak quoted in Frank, Thomas, One Market Under God: Extreme Capitalism, Market Populism and the End of Economic Democracy, Anchor Books, N.Y. 2000, p. 17
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3.“China’s Growing Pains” in The Economist, August 26, 2004
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4.Hanifan, Lyda Judson, “The Rural School Community Center”, Annals of the American Academy of Political Science, 67 (1916): pp. 130-138. Note: An excellent overview of the development of the concept of social capital, for which I am indebted, can be found in: Putnam, Robert D. Bowling Alone: The Collapse and Revival of American Community, Simon and Schuster, N.Y. 2000 and also in Putnam, Robert D (ed), Democracies in Flux: The Evolution of Social Capital in Contemporary Society, Oxford University Press, N.Y. 2002
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5.Seeley, John R, Sim, Alexander and Loosley, Elizabeth; Crestwood Heights: A Study of the Culture of Suburban Life, Basic Books, N.Y. 1956
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6.Jacobs, Jane, The Death and Life of Great American Cities, Random House, N.Y. 1961
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7.Loury, Glenn, “A Dynamic Theory of Racial Income Differences” in Women, Minorities and Employment Discrimination, Wallace, P.A. and LeMund, A (eds),
Lexington Books, Lexington Mass. 1977
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8.Bourdieu, Pierre, “Forms of Capital” in Handbook of Theory and Research for The Sociology of Education Richardson, John (Ed), Greenwood Books, N.Y. 1983
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9.Schlicht, Ekkehart, “Cognitive Dissonance in Economics” in Normengeleitetes Verhalten in den Sozialwissenschaften, Duncker and Humblot, Berlin, 1984
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10.Coleman, James, “Social Capital in the Creation of Human Capital” in American Journal of Sociology, 94 (1988)
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11.see Diebolt, Claude, “Towards a New Social Structure of Accumulation” in
Historical and Social Research, Vol 27, No. 2/3 2002; also see Gordon, David M:
“Stages of Accumulation and Long Economic Cycles” in Hopkins, T and Wallerstein, I (eds) Processes of the World System, Sage Publications, Beverly Hills, 1980; Bowles, S “Social Institutions and Technical Change” in Di Matteo, M; Goodwin, R.M. and Vercelli, A. (eds) in Technological and Social Factors in Long-Term Fluctuations, Springer Verlag, Berlin, 1989; and Kotz, D.M; McDonnoug, T; Reich, M (eds) Social Structures of Accumulation , Cambridge University Press, Cambridge, 1994
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12Putnam, Robert (ed) Democracies in Flux: The Evolution of Social Capital in
Contemporary Society, Oxford Univ. Press, N.Y. 2002
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13.Hinton, William Turning Point in China, p. 20 quoted in Monthly Review , July
-August 2004, Vol. 56, No. 3 p. 128
14. Petras, James, “Cultural Imperialism in the Late Twentieth Century”, internet Ed
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