[Marxism] WSJ column by Vietnamese ambassador to U.S

Louis Proyect lnp3 at panix.com
Fri Nov 17 12:32:33 MST 2006

Walter wrote:
>One issue here is that some people are opposed to the right of
>the Vietnamese to determine their own form of society today.

Not really. The issue is rather whether capitalism exists in Vietnam or 
not. Today's LA Times has an article that states:

"It would seem that Vietnamese communism has given way to capitalism. 
Vietnam's new ideology is simply to make money."


Now, on the question of communism versus capitalism, I do have an opinion 
on that. If I didn't, this mailing list wouldn't exist.

>Think of what's been said here: Bush says Vietnam is a model
>for Iraq. Well, Vietnam drove the United States out of Vietnam.
>Iraq hasn't yet succeeded in booting out the United States.

We have to consider, however, what Noam Chomsky argued. The US might have 
been forced out of Vietnam, but the pain inflicted on the country served as 
an example of what happens when you go too far. In any case, the US also 
got booted out of Somalia. As Peggy Lee once sang, "Is that all there is?"

>Unlike some people, I don't have a clear idea what Vietnam's
>Communist Party leadership is thinking.

I really am not interested in that at all. I am far more interested in 
objective economic data, such as the kind that Marty Hart-Landsberg turned 
up on China and that I crossposted here. For that matter, I could care less 
if there are "socialist" ideas floating around in Bernie Sanders's noggin. 
I am far more interested in his vote for bombing the Serbs into submission.

>Truth is, people who think like that say the exact same things
>about Cuba, which also invites private foreign capital to invest.

Well, that doesn't include me but I don't mind being smeared. It is the 
weekend coming up and I am feeling gay and light-hearted.

>The goal of investment by private businesses is to be able to
>MAKE A PROFIT. Any understanding of the Cuban system needs
>a careful look at the founding documents of ALBA, the Bolivarian
>Alternative for the Americas, and the close economic ties which
>are projected, and which are actually occurring between Cuba
>and Venezuela. In time they will probably also develop with

Are you trying to say something profound here? If so, I don't get it.

>The Grant group and the World Socialist Web Site, from which
>some here derive their thinking, all point to the investments by
>foreign companies as a big danger for the Cuban Revolution,
>but they don't really have any alternative to offer.

Markets in Cuba and the former Soviet Union

This [Socialist Scholars] panel was chaired by Al Campbell, an ex-SWPer who 
now teaches economics at the University of Utah which is quite an anomaly. 
The economics department here is reputed to be one of the most 
Marxist-friendly in the country, while the state of Utah is also the base 
of the notorious anticommunist and racist Mormon sect.

Dave Kotz spoke first on markets in the former Soviet Union. Kotz is the 
co-author of "Revolution from Above," with journalist Fred Weir, which is 
about the capitalist transformation taking place there. Based on the 
powerful analysis made by Kotz, I would recommend that everybody rush out 
and buy this book. And if you, like me, already own a copy, don't waste any 
time and begin reading it. Doug Henwood has a short piece in a recent 
Lingua Franca survey touting this book as the most important he'd read in 
the past year on the global economy. And if that recommendation ain't good 
enough for ya, I say nuts to ya.

Kotz made the point that a market economy is not the same thing as a 
capitalist economy. When the first term is used, the whole question of 
PRODUCTION tends to get lost in the shuffle. When Soviet economists first 
began to become recruited to neo-classical economics in the 1960s, the lost 
track of this distinction and the results were catastrophic for the Russian 
people. He added, however, that this might not have made a difference to 
them because the top Soviet officials never saw capitalism as a way of 
lifting up the Russian people, but only as something that would benefit 
them. By all objective measurements, the Soviet economy was functioning 
quite well up until the mid-70s. What this upper crust of the officialdom 
was reacting to was not poor performance, but their own class interests.

It is certainly correct that markets have "worked" in the former Soviet 
Union based on the proliferation of small banana stands in the early years 
of the Yeltsin regime. Small entrepreneurs made contact with foreign 
wholesalers and bananas flooded into the country. As the supply increased, 
the price went down. Unfortunately, the true measure of an economy is what 
is being PRODUCED and by this measure the fSU was about to collapse.

The most dramatic proof of this is that fully one-half of all households 
are self-provisioning. They grow food in their own backyard in the same 
manner that peasants did in precapitalist Europe. The problem is that one 
can simply not supply one's daily nutritional needs through a tiny cabbage 
and potato patch in the backyard and millions of Russians go to bed hungry 
each night.

Production in the fSU collapsed because Soviet enterprises were geared to 
central planning and when central planning disappeared, they lacked the 
survival mechanisms necessary to make the transition to capitalism. These 
firms were generally monopolistic. They also were the economic hubs of the 
towns and cities that they were built in. Social supports such as 
healthcare, childcare and education were intimately linked to the plant. 
When the plant died, nothing came along to replace them.

Very few of these plants were profitable or meant to be. Financing was 
automatic, as was marketing. Each had a steady supply of both raw materials 
and purchasers. By the criterion established in 1917, they were successful. 
By capitalist criteria, they were failures and shut down. Foreign companies 
have filled the gap and mass unemployment has set in. Kotz remarked that 
the Chinese have observed the fSU's troubles and are reluctant to privatize 
right now, because of the social and political costs. What this means is 
that I was probably way too negative in my assessment of the CCP's attitude 
toward capitalism and that Henry Liu was more correct.

Kotz argues that the Soviet economy was closing the gap with the west 
through the 70s until it went into a slump around 1975. That year the 
Soviet economy was rated at 50% of the west's from the standpoint of 
productivity. This slump was possible to overcome within the parameters of 
socialism, but the ruling bodies had already begun considering dumping the 
system for capitalism.

The most interesting points were made around the question of innovation. 
Kotz makes a convincing case that competition such as the kind that exists 
in the Adam Smith model is HOSTILE to technical innovation. Capitalist 
firms would under-invest normally because their competitors can easily 
mimic the new improvements without undergoing the same expenditures. In 
reality, monopolistic firms are generally the ones that promote R&D, 
especially those that receive tax subsidies or have ties to the military. 
Bell Labs was a major innovator for many decades, but as soon as the phone 
companies were broken up, Bell Labs switched to market research from pure 
science or engineering. The implication for socialists is clear. Socialism, 
rather than capitalism, is potentially a source of rapid modernization and 
progress rather than capitalism. Kotz mentioned that the most extensive 
development of these ideas is contained in Pat Devine's articles and books.

Frank Thompson spoke next on the completely opposite approach to markets 
taken in Cuba.

He described the context in which Cuba has introduced market elements, but 
not capitalism. When the USSR collapsed, 85% of Cuba's trade disappeared. 
The response of the Cuban government to this calamity was first off not to 
liberalize the economy, but to actually tighten it up. Rationing was 
introduced to make sure that everybody had equal access to food and other 
consumer necessities.

Steps were then taken to introduce elements of private enterprise, but they 
were done with great caution. State ownership of production was maintained, 
while joint ventures with foreign companies was done in a manner that was 
relatively disadvantageous to the capitalist investors. They have to deal 
with state labor contractors, who ensure that Cuban workers are not 
super-exploited as they are in places like El Salvador or the Dominican 
Republic. As far as Cuban state firms are concerned, they now have the 
right to buy freely from capitalist firms and sell on the open market.

The sugar industry has not performed well in recent years, but this is more 
a function of declining commodity prices worldwide than Cuban 
mismanagement. The pharmaceutical industry is one of the most innovative in 
the hemisphere and enjoys the kind of support that the American oligopolies 
enjoy. The produce goods for the third world market and try not to compete 
with imperialist giants such as Pfizer.

Agriculture has been privatized extensively but has taken the form of 
cooperatives rather than individually-owned farms. Furthermore, since 
tobacco and coffee production lend themselves best to smaller, more 
labor-intensive, operations, they have meshed well with the forms of 
property ownership encouraged by the Cuban government.

Cuba has recovered from the disaster that befell it when the USSR 
collapsed, but its per capita income is still only 1/3 of what it was that 
year, around $2000. Cuban economists believe that it will take another 
decade to recover and one can only hope that a successful revolution in a 
more advanced country might relieve pressure on the island.

Unfortunately, another invited speaker, Luis Aguilera of the University of 
Holguin in Cuba, had been prevented from entering the US. He would have 
spoken about his major research topic, the impact of markets on the Cuban 
working class.

The final speaker was Al Campbell, who presented some highly revealing 
statistics some from the Gallup Poll based in Miami. It reported that 69% 
of Cubans considered themselves revolutionaries. This was during the lowest 
point of the economic collapse. 58% thought the Cuban revolution had 
produced more achievements than failure, while 31% held the opposite view.

He discussed what a double-edged sword tourism is. While it has produced 
material benefits to the island in terms of employment and as a supply of 
foreign currency, it has had negative ideological effects. The message that 
tourism conveys is that other countries have money to spend in poor Cuba 
because they have capitalism.

Al made a convincing case that the market has a much narrower base in Cuba 
than is commonly perceived. Only 3 percent of firms operating in Cuba are 
joint ventures. Less than 2% of Cuban workers are employed in the tourist 
industry. Less than 5 percent of Cubans are self-employed. 300 thousand 
Cubans belong to co-ops, out of an agrarian workforce of 4.5 million. 
Furthermore, the presence of the dollar has not automatically been at the 
detriment of Cuban production. If you visit dollar stores in Cuba, you will 
discover that nearly half the goods for sale are made in Cuba.

During the discussion period, Rafael Causa from the Cuban Mission to the UN 
made the case that Cuba introduced markets because it had no choice. He 
also explained that the embargo has been tightened in recent years, despite 
the perception that trade with Cuba has been relaxed.



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