This is a response to a reddit post by /u/Hot_Introduction9918 supposedly “debunking” my article on the socialist success of China. Reddit is by no means academic so there really is not much use in addressing this as the arguments are incredibly poor, but I was asked to so I will do it.
This is already setting up a false metaphysical dichotomy of “private” vs “public” or “planning” vs “market” rather than understanding the important dialectical relationship between the two and how the private market sector plays an important role in China’s growth just as much as it being lead by the public planning sector.
This is why you should study philosophy before you attempt to study science, because bad thinking inevitably leads to bad science. I constantly see these black-and-white thinkers who are convinced the only two options are full state planning or full private markets, and then focus on showing evidence of markets leading to growth as proof we need to abandon state planning. This kind of thinking is abundant throughout this post as this person consistently will point to examples of the private sector leading to growth as “evidence” against socialism contributing to China’s growth.
Again, this is why these non-academic articles are a huge waste of time. The whole article is a straw man, pretending that I am claiming the private sector has not contributed to China’s growth, when this is by no means what I have argued at any point.
The vast majority of theologians also believe a god is real, and they’re also wrong. This is the problem with “economists,” their field is pseudoscience and they purely rely on “orthodoxy” to come off as legitimate. Why is there no such thing as “orthodox chemistry” or “orthodox physics”? No one uses these terms because in real sciences, chemistry is just chemistry, and physics is just physics. Pseudoscience western economists don’t have real hard evidence supporting their field so they purely rely on consensus and saying “everyone else agrees with me” as if this gives it any sort of legitimacy, since institutional legitimacy (and not actual scientific legitimacy) is all they have.
When these people constantly throw around “consensus,” saying “economists agree with me” or “economists believe this,” etc, they also conveniently love to brush under the rug that their “consensus” is only western consensus. They want to convince you that every economist on earth thinks the same thing they do, so how could you possibly question it??? Yet, it is just a cover for their lack of real scientific evidence. What I am stating is academic consensus in China. I could easily just appeal to Chinese consensus as you could western consensus, but you would not take it seriously.
It is ultimately a circular argument. You have to already agree with the western consensus to be convinced that an appeal to western consensus is valid. It’s preaching to the choir, something people can post on Reddit and get a lot of nice upvotes in their circle jerk, but ultimately convinces no one.
And, quite literally, even in the comments of this post, people are circle jerking over western consensus, pretending it is the universal consensus.
Notice how they are acting like I’m disagreeing with the current narrative, as if there’s just one. Yet, what I am repeating is the current narrative of Chinese academia. But these people have no science, they have no data, they have no empirical evidence, so all they can do is constantly rely on a perceived consensus, constantly pretend nobody disagrees with them and that I’m some rogue actor going against “the narrative.”
The fact that there are two narratives currently competing on the world stage is something they desperately do not want anyone to even think about, because then they have to take it seriously and not just dismiss it as quackery.
Not only does he outright lie about my definition of socialism (I wrote a whole bloody article on the definition here, and you will see later this person unironically uses the “socialism is when the government does stuff” definition), but he again appeals to this vague notion of “consensus” ignoring the fact that he is the one disagreeing with the academic consensus of China on its own economy.
When you see people doing this, it is an immediate red flag that they are pushing pseudoscience. Theologians do it all the time as well, constantly insisting you’re not allowed to question theology because there are many academics who “agree” with them. They can’t actually substantiate their position with empirical evidence, so they constantly refer to a “consensus.”
A proper scientific consensus is not a consensus in “how many people agree with me,” but a consensus of peer-reviewed academic publications. Pseudoscientists love to constantly appeal to people, and not to empirical evidence. Because there is no consensus in the actual academic literature, even if you ignore China and only take into account western economics.
Yes, I agree. This is a weird red herring argument tactic of throwing out random facts that we’d both agree on, but with the implication I do not agree with it, and pretending that is a “gotcha.” It is not. This is discussed in detail in pretty much every book on socialism with Chinese characteristics.
SOEs are performing well because of governments support… so? The outcome is what is important, not the means to get there. The ability of public firms to easily mobilize capital is a positive, not a negative thing.
…government interventions in the market can benefit the economy by maximizing resource mobility to create capital-intensive industries. These industries are essential for the economy, but investing in them requires long gestation, imported equipment, and large lump-sum investments that cannot be achieved by the market alone…In other words, government interventions make functional operations possible in these capital-intensive industries and move the economy by providing infrastructure construction.
— State-owned enterprises in China: A review of 40 years of research and practice, China Journal of Accounting Research
Again, another example of a pointless black-and-white argument. Criticisms of Mao’s collectivization policy is again something I already agree on, but this person thinks this is an argument against my position. Criticism of the rapid farm collectivization policy is literally in my original article.
Yet, this person cannot help but think in black-and-white terms. This entire article is “private” vs “collective.” It’s a dishonest representation of the entire debate being had. Marxists hold that private property and public property are optimal under different conditions, not that one is universally good or bad. The world doesn’t exist in simplistic universally “this or that” distinctions.
The “shifted away from collectivization” point is also a this-or-that distinction, as half of rural families in China are part of cooperatives today, and the public sector still plays a leading role in the economy. China shifted away from dogmatic collectivization, they did not abandon collectivization.
Again… so? My original article admits GDP growth increased and that this can partially be contributed to market reforms.
My point was not that market reforms contributed nothing to growth. Again, this person is stuck in a universal “this or that” mindset, and they think by explaining the importance of the socialist nature of China’s economy towards its growth is claiming that the market sector has contributed nothing. The point is that market reforms are only part of China’s growth, and not the totality of it.
This is important to understand for the reasons I discuss in the article below.
The “this or that” mindset of bad philosophers leads these people to conclude that if markets contributed to China’s growth, therefore markets are universally good and planning is universally bad, and therefore if we just mass privatize everything, then China will benefit and have even more growth!
Yet, the entire point I have been trying to stress in many of my articles is that this is not how the world works. Markets and planning have their place under their particular conditions, and that the growth brought about through marketization in China could not have been achieved without the leading public and planning sector. There is a dialectical relationship between the two that is necessary and neither can be dismantled.
In the article above, I give real-world examples of how free market mass privatization has historically destroyed economies and not lead to growth, and in fact there is no correlation at all between public sector size and economic growth. This is a myth, a tenet of religious faith held by “economists” and not backed up by any real-world data.
The exact proportions of public to private in China are less important than the actual on-the-ground relationships between the two in practice.
This person unironically linked an article to a Xinhua article saying the private sector contributes to China’s growth as if this is a “gotcha” against anything I have argued.
Again, you can see this bad philosophy on full display here. This person cannot get black-and-white thinking out of their head. They unironically think me saying socialism has been good for China is me saying the private/market sector has contributed nothing to China’s growth or that I am saying the market sector is a bad thing.
This is themselves projecting their bad philosophy onto me. They are convinced all public ownership and state planning is universally bad and has only hampered China’s growth and assume I must think the same about the private sector.
Also, note that when these people use “economists” they specifically mean “western economists.” They never include in their “consensus” data from Chinese journals.
A country is not “more or less” capitalist or socialist. Whatever aspect of society has the dominant position will shape all subordinated positions accordingly.
If a kid in a fully public economy opens a lemonade stand, is that lemonade stand “capitalist?” The kid will have to get the land, the lemons, the cups, everything, from the public sector. The stand will hardly even be “private” but merely an extension of the public sector since the public sector will have largely planned out its entire existence and it only can continue to exist at the whims of the public sector.
This is partly the inspiration for the concept of the “commanding heights of the economy.” Not all ownership is equal in determining the overall nature of an economy. 51% to 49% private to public ownership is not sufficient evidence that a country is capitalist, nor is 51% to 49% public ownership sufficient evidence that a country is socialist.
Again, the nature of how these two sectors interact with each other on the ground is more important. Ownership over parts of the economy that other parts heavily rely on play a significantly greater determining factor in the overall nature of the system than parts of the economy that fit into a niche market that is not heavily relied on. Control over the production of steel, for example, would play a significantly large determining role than control over the production of widescreen televisions. Pretty much every industry relies on the former, not so much the latter.
In a similar sense, the public sector in a capitalist economy does not make a capitalist economy socialist. The private sector holds the dominant of economic, and thereby political power. The state exists at the behest of their interests. Public property is merely an extension of private in a capitalist society because the state is subordinated to the private sector.
This person is unironically making a “socialist is when the government does stuff” argument and trying to act like marketization in China makes it no longer socialist and throws out irrelevant percentages without an analysis of how these actually play out in practice.
The proportion of planning to market forces is not the essential difference between socialism and capitalism. A planned economy is not equivalent to socialism, because there is planning under capitalism too; a market economy is not capitalism, because there are markets under socialism too. Planning and market forces are both means of controlling economic activity. The essence of socialism is liberation and development of the productive forces, elimination of exploitation and polarization, and the ultimate achievement of prosperity for all. This concept must be made clear to the people. Are securities and the stock market good or bad? Do they entail any dangers? Are they peculiar to capitalism? Can socialism make use of them? We allow people to reserve their judgement, but we must try these things out. If, after one or two years of experimentation, they prove feasible, we can expand them. Otherwise, we can put a stop to them and be done with it. We can stop them all at once or gradually, totally or partially. What is there to be afraid of? So long as we keep this attitude, everything will be all right, and we shall not make any major mistakes. In short, if we want socialism to achieve superiority over capitalism, we should not hesitate to draw on the achievements of all cultures and to learn from other countries, including the developed capitalist countries, all advanced methods of operation and techniques of management that reflect the laws governing modern socialized production.
— Deng Xiaoping, Excepts from Talks Given in Wuchang, Shenzheng, Zhuhai, and Shanghai, 1992
Did this person unironically write that the economic system has nothing to do with the GDP growth? If that’s the case, the discussion is over. Capitalism or socialism, neither matter.
Or, does this person mean to imply that catch-up growth magically ended after Mao and then only the private sector became important when markets were reintroduced? Completely incoherent.
Obviously the economic system matters because you need an economic system in the first place for catch-up growth to happen at all. While I may be critical of some of Mao’s economic policies, the biggest thing Mao succeeded in was getting China out of the boot of foreign powers and establishing an independent economy which was able to foster growth. Doesn’t matter if this growth is public, private, or “catch-up” growth, the system Mao established was necessary for any of these systems to foster. Pretty good discussion on this below.
Getting out of the boot of foreign powers, however, required a strong state, which required a material basis for that strong state that could override foreign intervention to make sure economic factors in the economy — private, public, and cooperative — contributed to China’s growth rather than detracted from it. Such a thing inherently required a high level of public ownership. While you may criticize the degree which Mao collectivized, some was necessary to even establish a system for Deng to reform in the first place.
Interesting how you did not cite a study for this one. This is a common claim used by liberals to insist that the complete economic stagnation of western countries just “inevitable” and therefore we shouldn’t complain or do anything about it.
There is no absolute linear law of diminishing returns on capital. Whether or not increasing capital leads to diminishing returns is heavily influenced by the nature of the capital itself and the nature of the society that the capital is being produced for. Increasing steel production can have no diminishing but even better returns the more is produced since it can contribute to the spawning of new industries entirely, significantly adding to a country’s total economic output.
Indeed, if you invested way more than could be made use of into steel production, much of it would go to waste and you would see hugely diminishing returns. But these diminishing returns could be offset either by (1) the economy expanding in size in other areas, thus increasing the demand for steel, or (2) investing in something different from steel.
There is no empirical evidence that capital as a whole has diminishing returns towards overall economic growth. This is a conflation of correlation with causation, that because western capitalist countries have stagnated while having more capital than developing countries, therefore these people are convinced economic slowdown is inevitable due to diminishing capital returns.
No, the issue is not diminishing capital return, it’s an issue of diminishing capital invested into new capital that actually contributes towards productivity growth. Developed countries have a tendency to shift capital investments away from producing new capital that would increase productivity and instead shift it towards the service sector, speculation, the entertainment industry, etc, and quite a bit of capital is exported to other countries where it remains profitable while being underdeveloped rather than developing it further at home.
There are many factors that cause this, but three primary ones are (1) increased monopolization, which reduces market competition and allows big corporations to continue making high profits without investing into productivity growth, (2) the ease of being able to export capital to developed countries and make superprofits without having to increase productivity growth, and (3) the difficulty of private corporations to mobilize extensive amounts of capital which are sometimes necessary to make the productivity gains to overcome these hurdles.
A prime example would be China’s high speed rail, which is something that the US, despite being the wealthiest country on the planet, has failed to produce, yet transportation infrastructure contributes heavily to China’s economy through facilitating labor and capital mobility throughout the country.
If we go back to our three reasons, (1) a private monopoly would lack any motivation to introduce such an extensive and efficient high speed rail system, (2) again, the public sector does not have a profit motive so exporting manufacturing to keep profits high and productivity low is not a motivation factor in China’s public sector, and (3) as shown with the study cited prior, the public sector has significantly greater ability to mobilize the kind of capital which private businesses cannot. Some private businesses may want to create an extensive high-speed rail in the US but simply lack the ability to mobilize the capital to achieve it.
The slowdown in economic growth in the west is not some inherent thing built into the fabric of the universe, despite what all your liberal economist buddies constantly tell you.
The four Asian tigers which reject free market absolutism? ROK similarly to China had an initial period of fast growth encouraged through heavy state intervention and Five-Year planning, and Singapore still has a Master Plan, controlling the allocation of land to guarantee land is being used efficiently towards growth. I cited a paper in the original article showing just how important this level of land planning is towards China’s economic growth.
Eh, I’m not sure how this is confusing. If you want people to understand something, you make comparisons to things they can actually experience. Talking about China in 1952 is far away and abstract, while modern day Haiti is something tangible in the real world today, you can go visit it yourself. Giving people a modern example to express just how poor China used to be is an incredibly reasonable and logical thing to do to help people understand.
This post is getting into desperate nitpick territory.
We will never know exact growth rates, and an discussion about what they actually were might be interesting, but given the author already admits they were high, it is not that important to the overall point in the article, since I already admitted in my original article and agreed that growth rates increased after market reforms and were positive contributors to it. The point is the Maoist era laid the foundations of a society that could be reformed in the first place to achieve such high growth rates. If you change 7% to 4.4% in my original article, some minor things will change but the vast majority of the article would remain unaltered. I do not care to argue over exact GDP growth rates as it is uninteresting to my thesis. For the sake of argument, 4.4% can be conceded from here on out, and it will not make a difference to the rest of my response.
This is laughable.
Why are some of the biggest and wealthiest cities in the US all on the coasts? This is a simple principle that goes all the way back to Adam Smith.
As it is the power of exchanging that gives occasion to the division of labour, so the extent of this division must always be limited by the extent of that power, or, in other words, by the extent of the market. When the market is very small, no person can have any encouragement to dedicate himself entirely to one employment, for want of the power to exchange all that surplus part of the produce of his own labour, which is over and above his own consumption, for such parts of the produce of other men’s labour as he has occasion for.
— Adam Smith, The Wealth of Nations
Wealthy cities have the greatest potential to develop alongside the coasts because that has the greatest access to immediate global trade and extensive markets. It’s not surprising then that places like Taiwan, which are basically all coastal, would have significantly easier time urbanizing the whole country.
This is a basic principle of economics which I’ve surprisingly even personally encountered PhD economists (or at least, self-described) who seem oblivious to this fact, but something China had to face in its real development in the real world. I mentioned before that Chinese books discussing socialism with Chinese characteristics often discuss the increased wealth inequality up until recently, and part of this is because this was deliberately planned. Deng Xiaoping had argued that the cities will inevitably develop alongside eastern China first and that it would require extensive capital to build the infrastructure to connect the landlocked west into the global markets, and thus they adopted a two-phase development strategy of intentionally developing the east as rapidly as possible to eventually produce the capital necessary to connect up the eastern economies, and only at the turn of the 21st century did the policy change from rapid eastern development to balanced development, and hence the rapid increase in wealth inequality which has in the past decade begun to decline.
The rural areas are harder to increase overall GDP per capita due to the enormous size of the mainland, and these complete differences between Taiwan and mainland China’s material conditions make it obvious that China’s GDP per capita would be more difficult to grow at the same rate.
Taiwan and South Korea also had investments and financial resources heavily pumped into them by the USA, the wealthiest country on earth, giving it far greater access to technology and markets. The US only eased up relations with China after Kissinger’s visit in 1971.
Of course, I know how many liberal readers think. They will claim that the US sanctioning China and hurting China’s growth was Mao’s fault because of Mao’s policies. Same argument all the time, they are less interested in actual concrete economic realities but are more concerned about purely ideological moral judgements. They want to put the blame (a moral judgement) onto Mao rather than actually discussing concrete realities involved. Sanctions hurting a country is a concrete reality as it limits their access to the global market and thus limits both the ability to acquire new technology as well as limits the ability to increase the division of labor and thus increase productivity. Saying the country that is sanctioned “deserved” it for their policies is a moral judgement and not a concrete reality.
Your paper cited is a joke that ignores the historical and material realities. It is not even an academic paper but a publication from a US-based private research organization.
Did South Korea average 735,000 people dying of famine per year on average before the creation of the South Korean government? Was South Korea heavily sanctioned by the largest economy on earth? Absolutely absurd comparison and shows a complete ignorance of the topic at hand. South Korea was nowhere near as impoverished and received direct support in its construction from the wealthiest country on earth.
And, again, let us not forget that South Korea was also operating under state-driven Five-Year Plans during this same time period, so South Korea is a horrible example to debunk my thesis that the socialist nature of China is essential towards it development, since the only capitalist countries you can posit to have similar success also had to heavily borrow similar ideas.
Difference between China and South Korea is that the socialist nature of China’s government means that while China and South Korea both adopted state-driven plans, South Korea’s capitalists class pushed the country towards getting rid of them, while China does not have this issue and they remain, because one country is controlled by capitalists while the other one is not.
South Korea in the long run will end up stagnating like all western countries, but of course, you will say that is “inevitable” as liberal economists always do because they are unable to cope with the late-stage stagnation Marxists predicted of capitalist economies over a century ago, and so they just declare it is “inevitable” and all developed countries “inevitably” stagnate.
You are using the existence of a famine to prove socialism was bad for causing a famine. Complete circular reasoning, you have not established mass privatization would have avoided the famine.
And if your policies were implemented, it would have been far worse 70% human error still means 30% natural causes, because China was already on the brink of famine and hit by various natural disasters.
Indeed, Mao’s system was unable to adjust rapidly enough to fully address the problems brought about by these natural disasters. But take a look at the COVID-19 pandemic and how it has caused so much economic devastation in the US while has been completely contained in China. China adopting a US-style system, ceteris paribus, would have mostly definitely lead to an even worse famine.
This “response” to my article is coming directly from a free market fundamentalist. My article is not arguing against the market sector’s contributions to China, which in the original article I argue were theoretically correct, and conveniently you say that is “not appropriate to cover here”. The article is clearly arguing in favor of China’s overall structure, that the socialist aspects of China are necessary to even sustain the market aspects.
Why would you even write a response arguing in favor of privatization? Because you are a free market fundamentalist who thinks because China’s economy benefited from marketization, therefore if they privatized even further they would develop even more.
You are concretely a free market fundamentalist, even if you pretend to ideologically not be one. If someone writes an entire article arguing that some parts of the Christian Bible are meant to be taken literally and some parts metaphorically, and then someone else goes on reddit and write paragraphs upon paragraphs arguing that this article is ridiculous and tries to “debunk” every instance of something being a metaphor, then that person would be a Christian fundamentalist, no matter if they randomly throw in insults to other Christian fundamentalists in their article.
You can cry all you want that I am “straw manning” you for calling you a free market fundamentalist, but this will remain concretely true as long as you argue like one. You refused to admit in any instance, even when studies are cited, that the socialist aspects of China contributed anything to its growth, and constantly try to insist in every instance privatization would be better. This is the mindset of a free market fundamentalist, the mindset of hyperreligious nature of the pseudoscience that is liberal economics.
In summary, this “rebuttal” is incredibly boring and uninteresting. It is just someone using bad metaphysical philosophy who can’t help but think in black-and-white terms about everything to the point that they are convinced pointing to the fact the private sector has grown or has contributed to China’s growth is somehow a “gotcha” even though this was admitted in the same article and admitted several times in other articles, and the ability of markets to produce growth is pretty basic Marxism. As Engels said, big industry can only be established by markets.
I do not think the failure of this horrible “rebuttal” is even due to bad economics, since most the economics mentioned are irrelevant to the discussion. They cite data regarding irrelevant proportions, or articles saying the private sector contributed to China’s growth as if that’s a “gotcha,” neither of which are relevant to their thesis as they were already admitted in the original article.
This person is not arguing “economics,” but they are on a purely ideological crusade against my original article. They want to “debunk socialism” and show how amazing the private sector is and evil bad man Mao was. They are approaching this “rebuttal” from a purely ideological angle and thus the rebuttal is incredibly boring as it lacks any useful economic critique and is mostly irrelevant.
Do not pretend you can speak anything on topics of science if you never read anything on the topic of philosophy, or else you make yourself into a clown.
This is why reddit posts are typically uninteresting to respond to. There is a huge Dunning-Kruger effect here, as these people who respond to my articles are always convinced they have an expertise on this subject while demonstrating themselves to know nothing.
Let’s say I were to give /u/Hot_Introduction9918 the benefit of the doubt, I could assume he is not deliberately lying to push a pseudoscientific agenda, but is just so genuinely uneducated and ignorant that he has absolutely no conception of what is written and taught in Chinese academia and has only been exposed to western academia and therefore does not know there is anything outside of it.
This would explain why he constantly asserts that all “economists” agree with him, that he is the one agreeing with “the” narrative and I’m the one going against “the” consensus. He may be intentionally misrepresenting the reality to push an ideological position (it is already pretty clear as I have demonstrated his post is merely an ideological crusade against my article and deals very little in actual economics), but he also could just be genuinely ignorant that anything outside of western academia exists because he has not actually bothered to research this topic thoroughly and has no well-rounded education on the subject matter.
You can see in one of his other responses to another user, he unironically asks “why did China turn away from collectivization?” Again, China didn’t, but what he means is why did China adopt a level of marketization.
Why even ask such a question? He genuinely does not know the answer to this question as has never once in his life done any serious research on this subject. Hell, he could have even read my articles to understand the reason, yet he refuses to, as he wants to convince himself that the only reason China adopted the current policies it has is because markets are perfect and state planning is always bad. In reality, China broke out of that black-and-white dichotomy, which these free market absolutists are still stuck in.
In that same post, he also makes this claim.
You can again see the boring black-and-white thinking here. All this person does is present evidence the private sector produced growth, and then concludes that means the private sector is better. Neither is the case. Both are necessary to China’s development and have their own place and their own roles.
Hilariously, I cited a peer-reviewed publication in my original argument backing this up. But, you know, that was from a Chinese journal, it doesn’t fit “The Consensus™”️ and so he just casually ignored it. Not only that, but I already have shown in another article that the insistence that if China just “privatized more” then its economy would grow more is an article of faith not backed up by any empirical evidence. The dichotomy between privatization and nationalization in relation to economic growth is an objectively false one but one pseudointellectuals love to cling onto. There is simply no general relationship between level of privatization or nationalization and economic growth.
From this person’s perspective, privatization is always good and government is always inefficient. They would have a lot of trouble explaining the graph above. From a Marxist perspective, markets and planning both have their roles under specific sets of material conditions, and some societies at certain times benefit from or less of it, some sectors of the economy benefit from more or less of it. There is no universal. Markets are not inherently better than planning nor is the reverse true.
As always, if you want real interesting counterarguments and rebuttals and not this boring black-and-white false dichotomy nonsense, you’re going to have to go the library and checkout a book. You will not get anything interesting from reddit. I will not respond waste my time responding to another know-it-all armchair “economist” in the future, as some of us actually work for a living.
