Unfinished Business: Socialist Market Economy

http://www.politicalaffairs.net/article/view/26/

By Al L. Sargis

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click here for related stories: Socialism

In Marxism-Leninism the question of state and economy, plan and market has been often intertwined with the transition period between capitalism (sometimes pre-capitalism) and socialism, and between capitalism and communism. Marx and Engels developed the concept of the transition period and dealt chiefly with its political aspects. They gave comparatively little analysis of the economic tasks of the proletariat after it seized political power. Lenin, on the other hand, devoted much attention to both political and economic aspects of the transition period, discussing this issue in some detail. From even before the October Revolution until his death, the issue is analyzed in such works as "The April Theses," "The Impending Catastrophe and How to Combat It," "The Tasks of the Proletariat in Our Revolution," and "'Left-Wing' Childishness and the Petty-Bourgeois Mentality." He concluded that in a predominantly peasant country, with a multi-sectoral economy and low levels of productive forces and education, there could be no "leap to socialism" (unless, of course, there was a revolution in a developed capitalist country which could then aid them). Instead there had to be a series of transitional steps with appropriate economic and political tasks for each one. These measures constructed the material-technical and democratic foundations for socialism that had, in other cases, been developed by capitalism in advanced industrial societies. As such, they could include state capitalism, the law of value, money-commodity relations and other market mechanisms. However, there were two political conditions under which this must occur: (1) a workers state to promote a trajectory towards socialism and (2) a worker-peasant alliance to assure that the majority petty-bourgeois population could be won to the socialist goal. Reflecting on this situation Lenin formulated a series of propositions and practices leading to a socialist market economy in embryonic form, most explicitly exemplified in the New Economic Policy (NEP). For example, state capitalism was realized in the following forms: (1) foreign joint ventures and even foreign ownership of enterprises ("concessions"); (2) cooperatives based on market principles; (3) the use of capitalist merchants, as well as economic administrators and technical specialists trained in capitalist methods of management and organization; (4) the leasing of state-owned enterprises and natural resources to both foreign and domestic capitalists. State owned enterprises, which controlled the "commanding heights," were self-sufficient and operated on profit-and-loss principles, supplying themselves out of their own circulating assets. The law of value was recognized in the state economic sphere as an objective category and extended to cover the economy as a whole; market links existed not only between the socialist and non-socialist sectors but within the socialist sector itself. Economic competition was to be the norm both within and between sectors. State plans were materialized through market, not primarily administrative, mechanisms. If competition was conducted properly the socialist sector would demonstrate its superiority thereby ousting or marginalizing the capitalist sector. Lenin referred numerous times to this process as "paying our (capitalist) tuition for an undeveloped capitalism," "learning to trade like European businessmen," "advancing towards socialism...by capitalist management methods" and "test(ing) through competition between state and capitalist enterprises." Among the rural and urban petty-bourgeois majority - against which state capitalism was to counter their spontaneous development into capitalism - individual farms and shops were allowed, but the goal was to have them voluntarily join cooperatives of various types and levels of socialization as pathways of transition to socialism. This history indicates that the socialist market economy has its roots in the Marxist-Leninist experience, specifically in the early attempts to create socialism in multi-sectoral Soviet Russia. These origins are one of the sources drawn upon for contemporary China, Vietnam, Laos and, most recently, Cuba, as well as for the current concept of the socialist market economy. It's important to note that the idea of socialist market economy is somewhat different from market socialism, although in practice itís sometimes difficult to distinguish. The socialist market economy presumes a multi-sectoral socioeconomic formation that has a transitional character. The immediate goal is economic and social development, and the long-range goal is achieving entry into the first rung of socialism proper; the means is to use the advantages of all sectors to develop the productive forces, while attempting to minimize their disadvantages. This leads to a second presumption: that the level of economic, social and political development is inadequate to the task of entering socialism immediately, or after a brief transition period. In other words, the socialist market economy is designed for transition from an early capitalist or even pre-capitalist society, and the focus is to create the prerequisites for socialism that were put in place in the societies of developed industrial capitalism. Chinese and Vietnamese theorists of socialist market economy see underdeveloped forces of production leading to an underdeveloped form of socialism, and as the former become more robust, so does the latter. These theorists view market socialism, on the other hand, as a mechanism for negotiating all the steps of socialism through to the communist phase of development. Market socialism is not employed to "get to" socialism, but to ìget throughî socialism. While many similar economic and political tools may be used by both the socialist market economy and market socialism, the types of social formations and their final objectives differ. So, briefly, what does a contemporary socialist market economy look like? Economically, it is a mixed economy with a public sector of state, cooperative and mass organization-owned enterprises; a private sector of petty bourgeois, domestic capitalist and foreign capitalist owned enterprises; an intermediate state capitalist sector with various combinations of the public-private sectors (e.g., joint private-public stock enterprises). The public sector controls the "commanding heights" with the state macro-managing the overall economy, mostly through economic but also administrative means. State functions include the accumulation and protection of state assets, ownership of infra-structural and other strategic industries, maintaining sectoral proportions and overall balance, regulating income distribution, coordinating regional economic and social development and providing human services and public commodities, among others. Enterprises within each socioeconomic sector operate on the basis of market regulation. It may be summed up by saying that the state macro-manages the market and the market regulates the enterprises. Politically, the state is the instrument of working class rule. Hence, one of its main functions is to keep society on the path to socialism and maintain the dominance of the working class. While the state must accommodate the interests of all classes and strata represented by each socioeconomic sector, it must gear those interests to the goal of proletarian socialism. Although the working-class party has its economic base primarily among state enterprises in the public sector - since that sector is the foundation for socialism - it represents workers in every sector. Petty bourgeois, capitalist and other non-working-class people voice their interests in associations, parties and legislative bodies. The task of the working class is to prevent the capitalist class shifting from a class-in-itself to becoming a class-for-itself. These economic and political aspects raise certain questions that need to be addressed. A few of the crucial ones are: (1) How does the public sector remain strong enough to be competitive with the capitalist sector in the market? (2) While state enterprises control the "commanding heights" do these "heights" vary in accordance with historical conditions? (3) How does the state deal with the negative phenomena produced by the market economy? (4) How does the working class maintain the path towards socialism over several generations of transition? (5) Does the scope of the state and market alter as the socialist market economy reaches the threshold of socialism proper and what role, if any, does the market play after this plateau has been reached? Issues of this sort are not only grist for theoretical analysis, but urgent problems facing the concrete test of political practice in the countries currently constructing socialism via a socialist market economy. --Al L. Sargis is the Director of the Center for Marxist Education.

Experts suspect U.S. military involvement in Ecuador

http://www.granma.cu/ingles/2008/marzo/mar4/Experts.html

Experts from the respected United States research center COHA indicated in a dispatch issued Monday that there was "a strong possibility" of U.S. involvement in the Colombian military incursion into Ecuador.

Ecuadorian troops evacuate a woman wounded during the attack

The operation led to the death of Colombian Revolutionary Armed Forces (FARC) Commander Raúl Reyes.

Analysts from the Council on Hemispheric Affairs are examining in particular the role possibly played by Southcom, the so-called U.S. Southern Command, based in Miami that manages U.S. operations in the region, "the planning, supply and implementation" of the Colombian intervention into Ecuadorian territory.

"There are good grounds to speculate that the entire game plan seems to have been carried out at too sophisticated a level by a Colombian military which normally is dismissed as incompetent, corrupt, drug sodden and ill-deposed to risk dangers."

Founded in 1975, COHA is a think tank described as a group of U.S. academics, experts in hemispheric affairs.

"The U.S. role could have involved the supply of intelligence based on satellites and heat sensors, a supply of smart bombs and the seconding of some of the scores of U.S. trainers in the country," the COHA report states and continues, "In addition, there could have been possible authorization of the use of Black Hawk helicopters provided under the auspices of Plan Colombia." (JGA)

Translated by Granma International

Defense budget to rise by 17.6%

http://english.peopledaily.com.cn/90001/90776/6366182.html

The government plans to increase the defense budget by 17.6 percent this year to increase benefits for military personnel, a senior official said yesterday.

The planned allocation for the People's Liberation Army this year is 417.77 billion yuan ($58.79 billion), a rise of 62.379 billion yuan ($8.23 billion) from actual military spending last year, Jiang Enzhu, spokesman for the annual session of the National People's Congress (NPC), told a press conference.

Jiang said the increased amount would be used to raise the pay of service personnel and offset the impact of price hikes. More money will also be spent on education and training.

Military equipment will be "moderately" upgraded to enhance the troops' capability to fight a defensive war based on information technologies, he said.

Jiang called the budget growth a "compensatory" rise, given the low base and the rapid and steady growth of the country's economy and fiscal revenues in recent years.

From 1979 to 1989, defense expenditure registered an average annual decrease of 5.83 percent, and its growth in recent years is still far below the increase in fiscal revenues, he said.

Official figures show China saw an average annual rise of 15.8 percent in military spending from 2003 to 2007, while fiscal revenues grew 22.1 percent on average per year during the same period.

Jiang also noted that China's military spending remains low compared with some other countries, especially the big powers.

Last year, for example, he said, China's military expenditure accounted for only 1.4 percent of GDP, the lowest compared with 4.6 percent in the United States, 3 percent in Britain, 2 percent in France, 2.63 percent in Russia and 2.5 percent in India.

Jiang reiterated that China's national defense policy is defensive in nature.

"China's limited military capability is solely for the purpose of safeguarding independence, sovereignty and territorial integrity, and will not pose a threat to any country," he said.

But Jiang made it clear that Chen Shui-bian and Taiwan authorities are destined to pay a "dear price" if they stubbornly take the dangerous path of "Taiwan independence" in a desperate throw of the dice.

He said the so-called "referendum on UN membership" pursued by Chen is a grave step toward seeking "de jure independence" and will seriously harm peace and stability in the Taiwan Straits and the Asia-Pacific region.

But he stressed that conflicts and disputes could be resolved by equal consultations in the process of peaceful development of cross-Straits relations.

Commenting on the country's defense budget, Luo Yuan, a researcher with the PLA Academy of Military Sciences, said the Chinese army, now in a critical "transitional" period, will naturally need more money for high-tech upgrades.

China still lags behind developed countries by "one or two generations" in major military equipment, he said.

"To narrow the gap, we have to increase input," Luo, who attended the annual session of the country's top political advisory body yesterday, was quoted by the Xinhua News Agency as saying.

He added that in recent years, Chinese troops have also undertaken new tasks such as disaster relief works, and so need more funding.

Source: China Daily

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This is the only good type of Military budget increase, one that increases soldier benefits.

Hu Jintao: "Taiwan independence" activities doomed to fail

http://english.peopledaily.com.cn/90001/90776/90785/6366049.html

Chinese President Hu Jintao said in Beijing on Tuesday that secessionist activities in Taiwan have become the greatest menace to China's national sovereignty and territorial integrity, but such activities are doomed to fail.

"The 'Taiwan independence' activities have run counter to the Chinese nation's strong will to safeguard national unity. Such activities will get nowhere and are doomed to fail," Hu told political advisors attending the first annual full session of the 11th National Committee of the Chinese People's Political Consultative Conference in Beijing.


Top Communist Party of China (CPC) and state leaders Hu Jintao (C front), Wu Bangguo (4th R front), Wen Jiabao ( 4th L front), Zeng Qinghong (3rd R front), Li Changchun (3rd R front), Xi Jinping (2nd R front), Li Keqiang (2nd L front), He Guoqiang (1st R front) and Zhou Yongkang (1st L front) are seen present during the First Session of the 11th CPPCC National Committee at the Great Hall of the People in Beijing, capital of China, March 3, 2008.(Xinhua Photo)
Hu, also general secretary of the Central Committee of the Communist Party of China and chairman of the Central Military Commission, observed that the "Taiwan independence" activities have become "the biggest menace to national sovereignty and territorial integrity, the biggest obstacle to the development of cross-Strait relations, and the biggest threat to peace and stability in the Taiwan Straits."

Meanwhile, he pledged that the mainland will make utmost effort to do a good job in anything that is good to the Taiwan compatriots and conducive to safeguarding peace in the Taiwan Straits and promoting the peaceful reunification of the motherland.


Chinese President Hu Jintao on Tuesday meets with political advisors attending the first annual full session of the 11th National Committee of the Chinese People's Political Consultative Conference in Beijing.(Xinhua Photo)
"We are always committed to our pledges to the Taiwan compatriots. We will never sway upon temporary fluctuations of the situation, or change upon a few individuals' deliberate disturbances," said the president.

As for the realization of peaceful development of cross-Strait relations, Hu said, "we take adherence to the one-China principle as the foundation, with the seeking of benefits for compatriots on both sides of the Straits as the objective, and the deepening of mutually-beneficial, win-win exchange and cooperation as the approach."

"We are ready to have exchange, dialogue, consultation and negotiation with any political parties in Taiwan, as long as they recognize that both sides of the Taiwan Straits belong to one China," Hu stated.

"The negotiation will be conducted on an equal footing with completely open topics -- there is nothing we can't talk about," he added.

"We look forward to the formal end of the state of hostility across the Straits through joint efforts by both sides and consultations based on the one-China principle, and hope to reach a peace agreement and build up a framework for the peaceful development of cross-Strait relations," he told the advisors.


Source:Xinhua

CPC session ends, vows to deepen political reform

http://www.idcpc.org.cn/english/events/080227.htm

BEIJING, Feb. 27 (Xinhua) -- The Second Plenary Session of the 17th Central Committee of the Communist Party of China (CPC) closed on Wednesday with a pledge to deepen political reform.

Hu Jintao, general secretary of the CPC Central Committee, delivered an important speech at the session, which was held from Feb. 25 to 27 in Beijing. Participants included 204 members of the CPC Central Committee and 167 alternate members.

Chinese President and CPC General Secretary Hu Jintao delivers an important speech at the Second Plenary Session of the 17th Central Committee of the CPC in Beijing, Feb. 27, 2008. The Second Plenary Session of the 17th Central Committee of the Communist Party of China (CPC) closed on Wednesday with a pledge to deepen political reform. (Xinhua Photo)


China's political system needed improvements to keep pace with the requirements of the country's economic and social development, the protection of democratic rights and social fairness and justice, said a communique issued after the session.

It said that the CPC must hold higher the banner of democracy, stressing, "It is a constant goal for the Party to advance socialist democracy."

To adhere to and improve the people's congress system and the multiparty cooperation and political consultation system under the leadership of the CPC is in line with the requirement of consolidating the socialist regime and patriotic united front, and is a key task of developing socialist democracy, it said.

According to the communique, the session approved two lists of candidates for state leaders and leading members of the country's top political advisory body. The lists will be recommended to the presidiums of the upcoming first annual sessions of the 11th National People's Congress (NPC) and the 11th National Committee of the Chinese People's Political Consultative Conference, respectively in March.

The CPC session also approved two documents on deepening the country's administrative system reform and the institutional restructuring of the State Council, the Cabinet. The latter will be submitted to the first session of the 11th NPC for deliberation.

The general goal of administrative reform was to establish a simplified and efficient socialist administrative system with Chinese characteristics by 2020, the communique said.

The Second Plenary Session of the 17th Central Committee of the Communist Party of China (CPC) closed on Wednesday with a pledge to deepen political reform. (Xinhua Photo)


The CPC Central Committee also hailed the efforts and major victories in fighting the severe winter weather in parts of the country since mid-January, calling it an evidence of China's political advantages.

All Party leaders and governments at all levels fought hard against the disaster according to the deployment of the central government. The whole country had been united together in overcoming difficulties.

The session also expressed concerns over social issues in education, social welfare and health care, and pledged to try hard to promote social harmony and ensure social stability. It called for substantial efforts to ensure the success of the forthcoming Beijing Olympic Games and Paralympics.

Plan Colombia: The Real Destabilizing Force in South America

http://www.venezuelanalysis.com/analysis/3231

March 4th 2008, by Carlos Martinez - Global Exchange Venezuela Program

In surveying US press coverage of the recent tensions between Colombia, Ecuador, and Venezuela one might come to the conclusion that Colombia has become the victim of the wrath of its' evil next door neighbor, Hugo Chavez. Once again, the media spin machine has been turned against Venezuela, bypassing a contextual analysis of the situation for a simplistic story line. With headlines such as, "Chavez Picks a New Fight" (Business Week March 4, 2008) the story perpetuates the US government's claims that Venezuela is a destabilizing force in the region while ignoring the alarming actions perpetrated by the Colombian government.

While Chavez has certainly made it easy for international attention to be focused on his actions, the lack of coverage on the response of other South American presidents is disconcerting. The most egregious example of this blind spot is with Ecuador itself, the country whose territory was trespassed in Colombia's attacks. The protests raised by Ecuadoran President Rafael Correa have been sorely under reported in comparison to Chavez's response, potentially leaving one with the impression that Ecuador does not consider Colombia's actions to be of major concern.

Nor is it being acknowledged that this is not the first time Ecuador has suffered the negative consequences of Colombia's war on "narco-terrorism" as articulated through Plan Colombia. For years the northern region of Ecuador has been subject to tremendous contamination of legal crops, animals, and whole communities as a result of aerial herbicide spraying of coca crops in Colombia.

A statement published by White House spokesperson Gordon Johndroe maintains that Venezuela is simply over reacting to a legitimate operation. "This is an odd reaction by Venezuela to Colombia's efforts against the FARC, a terrorist organization that continues to hold Colombians, Americans and others hostage."

A quick review of responses from other countries would in fact show that the US government's assessment is deeply flawed and out of step with international opinion. President of Chile, Michelle Bachelet, proclaimed, "A situation of this nature undoubtedly warrants an explanation from Colombia to the people of Ecuador, the President of Ecuador and the rest of the region". The governments of Paraguay, Peru, and Argentina have all released similar statements of disapproval with Colombia's actions.

Meanwhile, French Foreign Minister Bernard Kouchner expressed despair at the killing of his government's primary contact in negotiating the release of former Colombian presidential candidate Ingrid Betancourt, who also holds French nationality. Referring to the killing of FARC second-in-command Raul Reyes, he asserted, "It is bad news that the man we were talking to, with whom we had contacts, has been killed."

While some press in the United States question whether Chavez is using this situation as an opportunity to distract Venezuelans from their social problems, this excessive focus on him is in fact distracting people in the US from having a much needed dialogue on their own governments' role in fomenting this so-called "Andean Crisis". As a result, the tough realities and repercussions from the US government's support for a military solution in Colombia are being overlooked.

Emboldened and armed with the multibillion dollar support of Plan Colombia, the Uribe government has decided to violate international law rather than attempting mediated discussions with the FARC. This is simply the latest controversy to discredit Colombia, already renowned for having the greatest number of human rights violations and politically motivated murders per year in the Western Hemisphere.

This is an important time to consider the consequences of the United States' blanket support for the Colombian government's militarism and the destabilizing effect this is clearly creating, not simply to talk about Chavez.

[Carlos Martinez is the Caracas based coordinator of the Global Exchange Venezuela Program.]

Comrade Homer Simpson?

read the article here

Could it be that one of our favorite childhood shows was filling our minds with Red propaganda? A short, funny, and possibly correct paper.