[Marxism] China, Henry Liu and the Heritage Foundation

Louis Proyect lnp3 at panix.com
Thu Jun 17 22:24:20 MDT 2004

David McDonald wrote:
> Louis P. has said nothing in the current exchange to bolster or develop
> the view that the Chinese CP is leading the country toward
> re-establishing capitalism. Henry Liu, on the other hand, has posted a
> lot of stuff recently that leads me to believe I will approach this
> question more cautiously.

Henry is definitely worth reading on China. His posts to the a-list 
archives are at: http://lists.econ.utah.edu/pipermail/a-list/. It is too 
bad that he insisted on posting anti-Semitic material from neo-Nazi 
websites here, which led to his expulsion.

I would also read what the rightwing thinktanks, who supply many of the 
ideological cannons for the ruling class today, have to say about 
China--and more specifically about how it compares to Cuba.

(From "Backgrounder #1010" titled "WHY THE CUBAN TRADE EMBARGO SHOULD BE 
MAINTAINED", By John P. Sweeney, November 10, 1994. It is on the 
Heritage Foundation Web Page, www.heritage.org)

Those who favor lifting the embargo often point to the examples of 
Vietnam and China to justify their position, claiming that eliminating 
the embargo will encourage the growth of a free-market economy which 
will undermine the communist regime. Such comparisons are not valid. 
Capitalism is destroying communism in China, but the driving force is 
not international trade. It is a strong domestic market economy 
tolerated by the communist government. China's market economy is 
dominated by many millions of small entrepreneurs who are devouring the 
communist command economy. Moreover, China's market economy has been 
growing in depth and diversity since the mid-1980s. Free trade is 
promoting faster market growth and expanding the personal freedom of 
millions of Chinese, encouraged by entrepreneurs and investors from 
Taiwan, Hong Kong, and elsewhere who are providing the capital, 
entrepreneurial skills, and international trade contacts which are 
compelling China to transform its economy. In the process, a vast and 
prosperous middle class is being created.

In Cuba, however, the Castro regime is not willing to liberalize the 
economy and create a free market. Cuban exile communities in the United 
States, Latin America, and Europe are not willing to work with Castro, 
and market initiatives by the Castro regime to encourage them to do so 
are very recent, dating from 1993 for the most part. The basic 
orientation of the hard-liners surrounding Castro is to contain and 
restrict all initiatives that unleash individual entrepreneurship and 
creativity. For example, the government has arrested people for earning 
"too much" money in the dollarized informal economy, the variety of 
legally permitted "family businesses" has been restricted, and tax rates 
on the income of self-employed Cubans have been increased. Moreover, 
Cuba's constitution and legislation specifically prohibit all private 
initiative, notwithstanding recent reforms allowing self-employment by 
Cubans in approximately 140 categories of economic activity from which 
all professionals (the core of any middle class) are expressly barred. 
For over three decades, the regime has operated on the basis of divide 
and rule. Castro's bitter enmity toward the Cuban exile community 
precludes the possibility of replicating in the Caribbean what China's 
exile community has accomplished in China.

None of the alleged "market reforms" undertaken to date in Cuba are true 
free-market initiatives. Free enterprise remains highly restricted. 
Foreign investors doing business in Cuba today deal mainly with Castro's 
regime. Cuban partners in joint ventures and mixed companies are 
approved by Castro as "safe." Moreover, unlike China, Cuba has barely 
started to open up its economy, and what little has been done to date 
has been permitted with great official reluctance and with the objective 
of assuring the communist government's political survival. China's 
economic transformation has been under way since 1978, when important 
agricultural reforms were introduced, including the right of peasant 
farmers to grow the crops they wished and retain some of their profit. 
Moreover, the government of China has encouraged the marketization of 
the country's coastal provinces, and since 1992 the Chinese constitution 
has incorporated the concept of the "socialist market economy." Although 
China remains a communist nation where political freedoms are sharply 
restricted, the ruling regime has permitted vigorous development of the 
private sector, thus laying the seeds for its eventual demise and 
potential replacement by a politically pluralist, more open society.

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