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CHINA'S REVOLUTION, Part 3
Lessons of the Soviet experience
By Henry C K Liu

This is the third article in a multi-part series.
Part 1: In the beginning was Tiananmen
Part 2: Revolutionary lessons

Interclass oppression in pre-revolution Russia was mostly of a feudal nature. A peasant uprising without a proletariat core was merely a revolt against the established feudal order, not revolution for socialism. This peculiar incongruity between revolutionary theory and Russian actuality in the 1920s gave impetus to the internationalists to advocate carrying the revolution to where revolutionary conditions actually existed - in the advanced industrialized countries with a large working class.

Communist internationalism did not focus on underdeveloped nations of the world until after World War II when the Communist

 
Party of China under the leadership of Mao Zedong gained control of state power in China.

The operational concessions made in the USSR to the kulaks (relatively affluent peasants and independent farmers) and the petty bourgeoisie by the New Economic Plan (NEP) between 1921 and 1927 restored needed symbiotic trade between urban centers and the rural periphery as it existed under feudalism's gradual transformation toward capitalism. This concession advanced the revolution from feudalism toward capitalism but it fell well short of the ideology of socialist revolution against capitalism.

In the eyes of the radical revolutionaries who set their aim at accelerated, if not instant, socialism, the New Economic Policy proposed by Lenin, while a step forward in the struggle against feudalism, was not only a disappointing pause in revolutionary momentum; it could spell the end of revolution in the name of natural socio-economic evolution.

In the Soviet Union, Stalin's centrally planned command economy had followed Lenin's NEP of 1921-27. NEP was in essence a mixed market economy; the main part of the market was in state possession (banks, industries, foreign trade, and so forth), while the peripheral part was owned by collective or private entrepreneurs. NEP, while temporarily successful in arresting economic chaos, did not give the Soviet economy sufficient growth in the capital-goods sectors (that is, coal, steel and electricity, transportation, heavy industry), nor did it provide adequate food for the urban population even as the middle peasantry managed to feed itself through a new market system.

To overcome such structural obstacles and to combat general economic backwardness inherited from centuries of feudal czarist rule, Stalin introduced a command economy with central planning toward policy objectives and achievement targets as a strategy of national survival.

Starting from 1928, the Soviet economy was put under a system of central planning whereby all modes of production were socialized and foreign trade de-emphasized in favor of a largely autarkic system of domestic demand and supply. The success of the autarkic approach in the USSR induced the Nazi Third Reich to adopt it in 1933 for Germany.

The irony was that both Soviet and Nazi central planning adopted much of its effective techniques from successful US experience. The only difference was that in the US it was a system of planning focused solely on unit end-results while externalizing social costs to society at large. Soviet and Third Reich central planning of this period received glowing praise from US planners of the New Deal. The key distinction between the USSR, German and US approaches was that the Soviets rejected and bypassed the corporate structure and replaced shareholders with state ownership, the Third Reich imposed state control over the corporate sector, and the US instituted state support for the corporate sector. Stalin singularly brought about the principle of "revolution from above".

The main features of top-down revolution were: strengthening of political dictatorship in the name of the proletariat (a revolutionary version of enhancing management authority in the US in the name of shareholders); collectivizing kulak peasants (equivalent to large scale agri-business development in the US); emergency measure authority (equivalent to government bailouts and re-regulation in the US); introduction of a five-year plan structure (adopted from US corporate strategic planning); rapid expansion of urban labor force (equivalent to urbanization in the US that reorganized its geoeconomy into Standard Metropolitan Statistical Areas - SMSA); and state intervention and control over (i) agriculture (equivalent to farm subsidy programs in the US), (ii) heavy industry (equivalent to defense contracts in the US), and (iii) over finance (equivalent to central banking in the US).

Between 1934 and 1936, the Soviet economy achieved a spectacular economic growth rate that continued despite political purges of Trotskyites between 1936 and 1938. Economic growth was unfortunately interrupted by war in 1941. The German economy also grew spectacularly between 1933 and 1937. Under the Nazis, German decision to invade the USSR was not independent of fascist apprehension of continued Soviet socialist economic success. The US economy, with the New Deal hampered by the US Supreme Court, remained in depression until the US joined World War II after the Japanese attack on Pearl Harbor.

In reaction to the NEP, which ended in 1927, Trotsky had advanced the concept of "permanent revolution", an incessant drive for proletariat dictatorship on all fronts in all parts of the world, even in countries where the proletariat did not exist, such as China and all of what later became known as the Third World. "Permanent revolution" was a misnomer. What Trotsky advocated was in fact pre-mature revolution in countries where revolutionary conditions were lacking. Internationalism mistakenly treats the whole world as an evenly developed integrated entity, while in reality it is a loose collection of fragmented special conditions in countries in various different stages of development. Universality is only a theoretical mirage, even today after decades of globalization.

The Comintern, or Communist International, an international communist organization, was founded in Moscow in March 1919. The Fifth Congress of the Comintern was held in June 1924, five months after Lenin's death on January 21, 1924, and at a time when the capitalist system was booming worldwide, albeit in reality heading for the 1929 crash and an ensuing Great Depression that would plunge the world into World War II. By the time of the Fifth Congress, the revolutionary forces were on an ideological and operational defensive and the congress rejected Trotsky's internationalist priority of world revolution as naive adventurism.

The situation was similar to the neo-liberal market fundamentalist globalization of the two decades the spanned the 20th and 21st centuries when a global speculative boom anchored on debt after the Cold War was interpreted by conservatives as evidence of "the end of history" in a world of perpetual capitalism that would preempt a dialectical march toward world socialism. Free-market finance capitalism operating under bourgeois representative democracy controlled by the propertied class was declared as the final stage of human socio-economic-political evolution.

However, facts overrode fantasy, and in July 2007, free-market finance capitalism collapsed globally. To forestall the evolutionary emergence of socialism, the US since 2007 has been leading the world's capitalist economies in resorting to anti-socialist state capitalism, known in history as fascist capitalism because it uses the resources of the state not to help the people but to help capitalist institutions that the state deems too big to fail without threatening the survival of the capitalist system.

In China since 1978, in order to achieve rapid economic growth, revolutionary energy has been temporarily dissipated and national direction sidetracked in the face of the country's eager participation in world trade driven by global prosperity based on debt financed by currency hegemony of the part of the dollar. The price China had to pay for unsustainable economic growth through exports came as a socio-economic regime of low wages, environmental abuse and a deterioration of societal values. It did not take long for the permanent costs to out-weigh the temporary benefits in China's move toward market economy, socialist or not, based on low-wage exports primarily financed by foreign capital under dollar hegemony.

Yet the CPC leadership, even after being faced with undeniable adverse data of its policy of opening to the outside and reform, has been unable to reverse the harmful trends with effective policy readjustments because the Chinese economy has become addictive to export for fiat dollars. China for the past three decades has been shipping to the West real wealth created by low wages and high pollution, not to mention social disintegration, in exchange for paper dollars that cannot be spent inside China but have to be invested in dollar debt instruments to finance the US trade and fiscal deficits.

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