| Two Approaches To Economic Development |
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Prof. Sidney Gluck
Professor Emeritus (Specialising in Marxism)
Two Approaches To Economic Development: The world is on the cusp of a new century in which imperialist globalization is under serious challenge. The instruments of world domination, the International Monetary Fund (IMF), World Trade Organization (WTO) and World Bank (WB) are under open challenge to bend to the need of alleviating the dire economic conditions of former colonial countries seeking a road of development to bring their people out of deepening poverty and indebtedness to the dominant G7 countries. By example, at this very moment, the apparent success of the Chinese experience in development, despite its problems yet to be solved, has injected a new dimension to the struggle against poverty. As we write today, we hold a release from Montreal dated September 30th from the Inter Press Service News Agency, which reads:
Today ministers from the seven most industrialized countries (the capitalist G7) are meeting in Washington where they will also participate in deliberations with the IMF and the WB. The issue of debt cancellation long urged by non-governmental and debt-ridden, underdeveloped nations is expected to be the main topic. The specific conditions of African countries, which are drained by the cost of servicing their accumulated debts is central on the agenda since they would have to attain a 7-8% growth to halve poverty by 2015, an impossibility under present indebtedness. Ironically, China, whose representative has been invited this year as a guest of G7 has already, last December, forgiven 31 African nations their full indebtedness, wiping the slate clean to allow for the development of fair and equitable trade and investment to buttress an opportunity for the African countries to plan their development strategies with a view to caring for their people. Beyond that, China has demonstrated in this last year that it is possible for a government to intervene in economic planning to guarantee the use of capital investment for maximizing its effectiveness by avoiding disproportionate developments that ultimately create recessionary interludes that shift the burden to increase poverty. Furthermore, they established the concept of “collective” consideration of a country’s economy by its government, ministerial officials and its professional leaders in economics, finance, management and technology as the effective method and instrument for planned development. This is in contrast to centuries of experience in the growth of capitalism and imperialism where decisions on capital investment are in the private domain of particular capital formations that are but segments of the whole and tend to develop unequally, creating cycles of “relative overproduction” and “relative underconsumption,” ultimately resulting in the impoverishment of segments of the population. This is the challenge of the 21st century – “social direction” of an economy as distinct from fragmented, individualistic, privatized decision making for a country and the world as a whole. What has emerged is a demonstrated method of dealing with economic planning through consensus involving all economic groups in the society, giving consideration to the living standards of ALL. While Great Britain has indicated a willingness to pick up 10% of the African burden, there is strong opposition by all others. The US, this week, paid lip service to debt reduction but made no specific proposals. The impact of China’s change in its development approach injecting macro-planning of capital allocations and concerns for the working population is momentous. This followed an intensive study of the cause of economic cycles in Western experience that reverberates in the entire global economy. Exercising governmental capabilities, China created mechanisms and directives to correct imbalances in sectoral growth and the disregard for conditions of the labor force. In the last analysis this is an exercise of “social responsibility.” While it echoes some elements of Keynesism and a reflection of liberal and social democratic approaches, it goes significantly beyond the class nature of demand-side economics, liberalism and social democracy in Western experience. At this moment it appears relatively successful, though there is “class” division over central regulation and control with pressure to allow “free market relations” to finish the job of redirecting the economy. The government, on the other hand, has made the alleviation of income and living standard disproportions a major objective. For the first time last year, the government reported an increase in poverty in China; but this is in pockets in the Western regions, not absolute poverty but definitely a relative poverty in many villages where the income from migrant and emigrant family members engaged in other parts of the country and overseas has benefited family living. This shows up with improvements for parts of villages on an uneven basis, but clearly as a trend. A fundamental change in the entire agricultural program has been proposed by economic planners that will entail a shift from the dominance of basic grain production, which requires large tracts of land and a small number of farmers to produce high labor intensive crops, which use a minimal amount land (since China generally suffers from a 7-8 % availability of agricultural land). This will feed high value crops into new agricultural industries for domestic consumption and export. Obviously it will create jobs, relieve poverty and bring the region into a high technological level of production. The arena for achieving independence of former colonial countries has shifted from confrontation between the dominant and the exploited country to a world-wide arena of a movement that has coalesced the struggles for release from the power of wealthy industrial nations which achieved their supremacy in an era of capitalist exploitation and textbook impoverishment of colonial populations that still suffer from diminishing living standards in the penury of international debt with no way out but to pressure for a change in the privatization of the planet and the introduction of socially responsible economic relations. This is not a new struggle. It began almost a hundred years ago when the industrialized countries battling among themselves for world supremacy, in their momentary weakness suffered the loss of 1/6 of the world’s territory in the victory of the Russian Revolution. The history of the rest of the 20th century was a preoccupation with the ultimate success of the imperialist countries defeat of the Soviet system; but in doing so and in their effort to use the Chinese revolutionaries against the Soviet Union, they opened a window of opportunity to China to recreate their way of building Socialism with Chinese Characteristics, modernizing their industry and opening to the West. This allowed a period of time for China to develop a highly competitive and technologically efficient section of their country, which has become a strong player in world economic interplay. China cannot be disregarded, pushed under a rug, or decoupled from worldwide economic and political relations. It has become integral to the needs of the capitalist world, creating interdependency within world economy. The stability of China adds to the stability of the West. The instability of the West threatens the stability of China. The disproportions of income in the Western dominated world is challenged by the very existence of an independent China and especially by the new approach of the Chinese to development that has been recognizably successful and today is again reorganizing itself satisfying many of its vast population that have not benefited from its success. There is a “class struggle” in China between the new entrepreneurial class of private owners and the interests of foreign owned enterprises all following the ideology of privatization in a mixed market economy and the governmental and political decisions to follow a socially motivated economic development under the political ideology of collective decision-making as distinct from the freedom of individual capital formations to function as an unregulated segment of a planned economy.
We are witnessing a shift in planning within China to defend its modernization from economic recessions caused by private interest inputs that have invited to participate in economic development but not to direct or distort it. The “fourth generation” leadership, installed 2 years ago, has undertaken the redirection of their economic development to avoid cyclical recession cause by disproportionate development and more importantly to direct the consumption in their society for the benefit of the whole of its people. There lies the challenge and perspective of epochal changes possible in the 21st century, if through diplomacy, military conflicts can be averted as social change is achieved.
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