Neoliberalism’s Hollow Promise of Freedom

INTERVIEW WITH GRACE BLAKELEY

By Grace Blakeley, Helmer Stoel 

December 17, 2024

Source: Jacobin


Image by British Department for International Development, Creative Commons 2.0

Despite the many horrors of today’s world, there are still people telling us that capitalism means the “freedom” of the market. In her new book, Vulture Capitalism: Corporate Crimes, Backdoor Bailouts and the Death of Freedom, Grace Blakeley, journalist and staff writer for Tribune, confronts this neoliberal mythology. She shows how much capitalism owes to planning and state intervention — and combines this with engaging case studies of corporate crimes, imperialist power, and financial bailouts. These are not “excesses” of capitalism, she argues, but its very essence.

In an interview, she spoke to Jacobin’s Helmer Stoel about her new book, her politics, and the challenges for the Left.

Helmer Stoel

What drew you into politics in the first place?

Grace Blakeley

I was raised in a quite political environment. My granddad was a communist and a shop steward in the Transport and General Workers’ Union. He came from a working-class background and educated himself. At age fourteen, he ran away from home, joined the Navy, and read The Communist Manifesto. He and my grandmother had three kids, my mom, Karen, and then Karl and Keir, who were named after Karl Marx and Labour [Party] founder Keir Hardie. My parents were very involved in things like the Nicaragua solidarity campaign in the 1980s. From around age thirteen, I knew I wanted to do politics, but in a less-defined, generally progressive way.

I went to university to study PPE [Philosophy, Politics, and Economics], which probably made me more liberal. But during my African Studies course, I became a bit more radicalized. Studying PPE is like studying global capitalism from the perspective of those at the top, and African Studies is like studying it from the perspective of people at the bottom. After that, I wanted to go work in the United Nations or at an NGO, or do a PhD. But I thought that if I want to fix any of these problems I should start with the City of London, because it’s laundering all the money that’s sucked out of the Global South, much more than is going to these countries in development aid. That was also when Jeremy Corbyn was running for Labour leader.

I came to know about what Jeremy was doing through the work I was doing with the Tax Justice Network, which was combating the facilitation of tax avoidance and evasion by financial institutions located in the City, scarring the Global South. Jeremy talked about international development and the exploitation of poor countries. I thought: this guy seems pretty good, maybe I should start helping him. That drew me into the Labour Party. Like for a lot of friends, this was a decisive moment for me: things might have turned out different if this had not happened.

Helmer Stoel

Your new book addresses a misunderstanding about how contemporary capitalism works: you point to the Cold War legacy of equating capitalism with the free market and socialism with planning. You argue that we need to stop speaking about “free-market capitalism” and acknowledge that it’s a hybrid system that also involves planning.

Grace Blakeley

The neoliberals would accept the idea that they planned for the construction of markets. But they’d also say that what happened within those markets was unplanned. They’d say: they’ve set the rules of the game, now you guys go and play it. But in Vulture Capitalism, I go further to say that actually neoliberalism involves constant, extensive, and pervasive planning once the game has started. It’s basically planning to protect the interests of capital: governments intervening to bail out financial institutions, big corporations, etc., and promulgating legislation that benefits them, corporate welfare, but also — beyond government intervention — corporate planning.

The whole idea of a free market is that no corporate institution should plan because you can only do what the market is telling you to do: you develop a business plan and the market context changes, you have to change your business plan accordingly, so as an individual firm, you have no real power because of all the competitive pressure exerted.

But within a monopolistic market, i.e., where there’s a firm insulated to some degree from competitive pressure, it can plan in a similar way to a government. Just as a government can say: we’re investing in this kind of technology and that determines the future of our society, corporations can say: we’re going to invest all our time and energy in building AI [artificial intelligence]. No one else gets to decide whether that’s a good use of resources. Corporations are so powerful that they’re able to shape the development of human society.

Helmer Stoel

Just to understand its appeal, in ideological terms, neoliberalism was also a story about freedom, and especially about how all planning threatened individual freedom.

Grace Blakeley

In the introduction, I talk about how the neoliberal project was based on what [Friedrich] Hayek called a “double truth.” He basically says that we will need to present these ideas as about a return to free markets: so, it’s about delivering individual freedom. It’s about your freedom of choice as a consumer. It’s about your freedom to basically do whatever you want. But underneath that, there will be this broader and deeper project, which is to some extent really about planning. It’s about how we develop systems that encourage particular types of behavior and prevent others.

In the UK, the idea of the freedom to do whatever you like and become very wealthy was historically associated with the breaking up of the unions, and in place of that kind of collective power you have the sale of social housing, the privatization of state-owned enterprises, and the sale of those assets to individuals.

Alongside a big financial boom, that meant that those assets increased substantially in value, so people feel like they have become wealthier because of their investments as mini-capitalists. That “entrepreneurialism” is the carrot of neoliberalism: the idea that if you compete in the way that we’re telling you, you will become wealthy, you will succeed, and you will have a kind of stable, secure life, etc.

The flip side of that is the actual reason that these changes were implemented. This is what the “double truth” means. The story told to everyone is: we want to create an entrepreneurial society. So, we’re going to let you buy your home, invest in stock markets, etc. But the intention was to break up collective power and encourage people to think of themselves as individuals. This was, again, an intentional form of planning. It was about breaking the collective spirit of the 1960s and ’70s, and replacing it with isolated, atomized individuals who were just competing against one another.

So, you had attacks on the labor movement and the creation of anti-union laws but also this privatization and financialization: giving people their own homes, allowing them to invest in stock markets, piling debt on top of them to purchase all these things. This is a powerful disciplining tool to encourage people to compete with each other and to think of themselves as isolated individuals.

My parents’ generation bought their houses for £30,000 in the 1980s and they’re now worth millions. They make sense of that not in terms of social trends, but by saying, “I’m a really successful entrepreneur. I’m intelligent. I’m good at reading the market.” That really encourages this shift toward individualism. But then those who don’t own assets are disciplined by the fact that their wages are lower, they have no bargaining power, they have a lot of debt. The ideology of competitive individualism encourages you to blame yourself for those things.

Helmer Stoel

You give several case studies, including the Boeing safety scandals. Many of these companies occupy a monopolistic position. Still, they have to compete. How does Boeing compete with Airbus? And why don’t they do this through price-setting?

Grace Blakeley

Rather than competing over price — which both companies realize doesn’t work in the long term — they keep prices stable and coordinate and collude. They compete over cutting costs in the form of wages, for example by gouging suppliers. They use their market power relative to smaller companies to demand concessions. Then there are also forms of political corruption to extract wealth from different parts of the supply chain. Boeing has been embroiled in multiple corruption scandals and has close links with government, as in the deal with Southwest, for example.

Helmer Stoel

The power of asset managers such as BlackRock is also enormous. Already in Stolen you introduce the idea of a people’s asset manager [PAM].

Grace Blakeley

Asset management basically involves investing other people’s money. The big investment banks have asset management arms that invest capital that is theirs to invest. I said that the synergies that arise from this model are quite significant because an investment bank might lend money to a growing start-up, for example, and then its asset management arm might also view this as a really good investment opportunity.

My proposal is that we could set up a national investment fund that would invest in, for example, sustainable technology companies or infrastructure projects — things that we wanted to invest in. Then the people’s asset manager can take an ownership stake in those companies so that any returns that accrue from the bank’s lending come to the ultimate owners, the public.

Basically, it hinges on the distinction between borrowing where you don’t get ownership of the asset, versus investment like buying a stock or a share or taking a position in a company where you do get an ownership stake. If you have that stake, then you have a right to the future returns from that project. So, the argument was that having a national investment bank isn’t enough: you also need an institution that’s capable of taking an ownership stake in those companies.

That could be funded through a citizens’ wealth fund, like Norway’s sovereign wealth fund, which has an ownership stake in many sectors across the global economy. The difference, here, would be that a people’s asset manager would have a democratically elected board, representation for the labor movement, and there would be frequent public consultations about what people wanted to see investment in.

Helmer Stoel

You describe how corporate planning influences the daily lives of workers — and have a chapter on Fordism. You describe Jeff Bezos as “the Ford of our age.” Many have argued that we have long since entered post-Fordism. Does something about Fordism still exist in companies such as Amazon?

Grace Blakeley

I don’t think that you can say that Fordism has continued. The model isn’t the same as it was in the 1940s. The argument is, rather, that the kind of society that we get reflects the balance of class power. The reason that Fordism was Fordism is that there was a class of organized workers who were able to demand much more from their bosses within the Ford corporation, which meant that certain demands had to be conceded.

Ford also required a certain macroeconomic context, basically characterized by stability. So, the American state stepped in to create those conditions, muting the ups and downs of the business cycle and stepping in to mediate between bosses and workers when required. So, the whole setup of Fordism, isn’t just a particular regime of accumulation that comes from legislation or institutions as these new Nobel Prize winning economists would talk about. It’s about the balance of class power.

When that balance shifted during the 1970s and ’80s, as a result of various changes related to both the structure of capitalism and to particular decisions made by institutions and individuals, that’s when you see a shift from a Fordist production process to what you could call the Amazon process. In this model, labor has been decisively defeated, so you can hire exploited workers on whatever basis you like, tell them to do whatever you like, treat them like robots and they will struggle to organize.

This model also has more frequent crises. Yet a company like Amazon is so powerful that it doesn’t necessarily require macroeconomic certainty to be able to generate profits. It basically encloses an entire market and is able to generate certainty for that; it doesn’t need the state to intervene to mediate between labor and capital because labor has no power. So, all these changes in the nature of regulation and political economy come back to the balance of class power rather than being a purely intellectual or ideological shift.

Helmer Stoel

The last part of the book discusses successful cases of democratic-socialist planning, such as Salvador Allende’s government in Chile. Proposals for socialist planning often face the same objections: the problem of scale, and price as a coordinating mechanism for the market. A lot of this reverts back to the debates on socialist planning of the 1920s.

Grace Blakeley

I do get frustrated with the academization of some of these debates because you cannot abstract these questions from what is happening in practice. I’m perfectly sympathetic to the people involved in the original socialist calculation debate. This debate was grounded in a particular historical moment and also alongside particular political movements that wanted answers to these questions.

In some cases, these debates around cybernetics were being implemented in the USSR but they were shut down by central planners who didn’t want more self-organizing systems. That was all good stuff, but it was rooted in a particular political moment and movement that had the potential to make these ideas reality. Today, if we are addressing the question of democratic planning by putting a bunch of numbers into a computer model or trying to build a model that will allow us to efficiently allocate resources in a centrally planned society without money, we are not doing our jobs, because that is not the question that we need to be asking.

Right now — and this is why I start with these questions around power and planning — we need to ask how we can give people enough sense of their own power that they start challenging the system. I didn’t come to this issue of planning from an intellectual interest, like whether centralized planning is a more efficient way of allocating society’s resources. I came to it because the economy we have now is based on a pervasive and invisible form of centralized planning that is very difficult to challenge and that rests on an ideology that tells people that you live in a competitive economy and have to compete with people around you. That’s what makes the system work. Even though it’s not true, this is part of the ideology.

It’s that ideology of competitive individualism that stands in the way of any socialist transformation, regardless of how you think it might happen, because people are so convinced that they are on their own. Collectivism is the crucial condition for any socialist movement. In these competitive individualistic societies, there’s an immense amount of organized power at the top but people confront that as an isolated individual, and think, yeah, capitalism is broken. Politicians work with businesses to keep me down, but I’m on my own. There’s nothing I can do about that. That’s the big problem we have.

So, how do we break through that ideology? Well, we have to show that capitalism isn’t actually a free-market competitive system. The people at the top are cooperating with each other all the time, but they convince us that we have to compete and that we have to operate in this free-market system, because that’s the most efficient thing.

Helmer Stoel

You’re quite critical of the state of the Left. You describe cartelization: the process by which social democratic parties become intertwined with state power and the interest of capital. Can we see Blairism as the paradigmatic case?

Grace Blakeley

Yes, the political scientists who developed that idea of cartelization were studying the US Democrats and Labour. They said that the breaking of the link between labor parties and their mass spaces — both with the union movement and with the party membership — has been a decisive step toward the creation of political cartels that don’t need to pay any attention to the interests of members or the people that they’re supposed to represent. Instead, they can develop links with the state and then agreements with other political parties to neatly swap over political power when elections come without ever challenging the fundamental basis of the system.

Helmer Stoel

In the summer, Britain was shocked by far-right anti-immigration riots, starting after the terrible mass stabbing in Southport. Among left-wing commentators, there has been a heated debate on if economic factors are still relevant here, since racist and anti-immigrant rhetoric played such a major role. Do you think there is a link?

Grace Blakeley

There is a link, but it’s mediated by psychological factors. The starting point is people feeling alienated and disempowered. If you feel like you have literally no control over your own life or anything that’s happening around you, 80 percent of people will say I am just going to completely disengage from politics, whereas 20 percent will react with rage. Some will channel it into something productive, some into something reactive. How that rage is channeled will be defined by how people think about themselves and their relationships to other people.

In an individualistic society, there are no mechanisms to channel that rage into something productive. In the past, if it had made you angry, you would do something about this: join a union or a political party, go to a protest. But because today we have this pervasive individualism, you confront that powerlessness on your own. That’s what my next book will be about.

It’s not a purely economic thing: it’s not just that people’s living standards are going down. They feel powerless to change anything and they confront that powerlessness on their own, so that generates a form of individualized rage, which is kind of like Nietzschean revanchism.

You just want to take revenge on the people who are fucking you over, so you elect someone who says that they’re going to do that revenge for you. Or you get out onto the streets and you take that revenge yourself. What are you doing when you are doing that? You are taking back a sense of your own power. How? By wielding that power over people even more powerless than you are. You’re replicating the system within which you exist.

Helmer Stoel

You were also quite critical of Corbyn. Is there any way to revive a meaningful post-Corbyn left in Britain right now?

Grace Blakeley

I was very much part of it. But there are things that I’ve realized since then that matter a lot for the critique of the movement I would now have. In the book, I argue that approaching people with an offer of protection by a capitalist state is very different than approaching them with an offer of empowerment.

Today, the Left/Right divide in most advanced economies is the Left saying that the government will protect you, and the Right saying that the market will give you freedom. We played into that. We said capitalism’s failed, but don’t worry, vote for a Labour government because they’ll protect you from all the worst excesses of the capitalist market. Then they come into power and not only do they largely fail to protect people but actually end up working on behalf of the interests of big business and embroiled in all sorts of forms of corruption.

So, people look at that and they think that these people are untrustworthy; and then the Right profits from that by saying the government’s corrupt, so let’s shrink the state and give more power to the market. Then you get massive corporate scandals like Boeing planes falling out of the sky and people say: well, capitalism’s broken, so what’s the other option?

What I’m saying is that those two things aren’t separate. The foundations of political power in a capitalist society are also economic and the foundations of economic power in a capitalist society are also political. This isn’t a new argument. But it has implications for the kinds of politics that we have. If the Left says: give us power and the government will do nice things for you, people aren’t going to believe it. They’ll say: “How stupid do you think we are? We’ve had so many Labour governments and my life hasn’t gotten any better.”

That’s the problem with trying to organize an electoral political project that doesn’t have a mass base. If you want to convincingly argue how things will change when a Labour government is in power, that has to be rooted in people’s experience of a collective political project. It has to be like: we did community wealth building and all got involved and voted on how the local government spent its money and we built a cooperative and it created jobs, or we built union organization. That means collective empowerment. We didn’t have that foundation, though. All the more successful socialist movements in the world did.

Helmer Stoel

Often the word “populism” is used to mean just anything different from the established order. Should we embrace it?

Grace Blakeley

There are different kinds of populism. There is a didactic populism, where there’s a leader speaking to a bunch of different individuals, so many tiny dots connected to the leader but not to each other. That’s not going to work. There’s another type of populism which is communities, workplaces, and groups of people connected to each other in places through a movement, who are also connected to a party or an institution or a leader or a wider group. That’s the basis of a potentially successful populism. But it is built on the foundation of collective organizing.

Then there’s a technocratic anti-populism, i.e., rule by experts, which is a part of the neoliberal settlement that was aimed at depoliticizing policy. We now live in a world where because that’s become so dominant, anything that isn’t that is described as “populism,” but actually that’s just the whole of politics.

Helmer Stoel

You are involved in several left-wing media outlets, such as Tribune and Novara Media. What advice would you give to those involved in left-wing media?

Grace Blakeley

I think you have to meet people where they are. The Left is infected with the focus on the individual. I think a lot of left-wingers spend too much time focusing on how to accumulate as many ideas as possible in their own heads and in doing so they unconsciously create a huge separation between themselves and everyone else, because the vast majority of people are not going to have access to most of those ideas.

Having access to a broad range of ideas is always good for understanding the world — but unless you work really hard to avoid it, this will also make it harder for you to communicate with everyone else. You’ll be taking for granted stuff that nobody else knows about. The more deeply you become embedded in academic institutions and discourses, the harder it is to have a common language with the average person. Your world is so far from theirs that it’s difficult to build bridges.

Intellectual debates about Marxism and capitalism — at least how those arguments are expressed — have hardly any relevance for most people’s lives. So, the best thing is to go and talk to the people who we’re trying to talk to, listen to the language they’re using, listen to the stories that they’re telling, and start thinking: How can we speak that language? How can we tell our stories in those same ways? We have to confront our own egos and focus much more on talking to people who our ideas are meant to be relevant to than convincing each other we’re clever.

Expressing your ideas and your values in their language requires embedding yourself in particular communities. The best example is the Belgian Workers’ Party. Look at how they deal with anti-immigrant rhetoric in the communities they’re in. They have a network of activists and organizers who go into those communities, have barbecues where people who’ve been involved in the far right come, and they talk to them.

You’ll never convince some of them — fine — but other people are in this weird space of “I’m angry but I don’t know why.” The far right appeals to them because it makes them feel powerful. We need to be thinking about how we can speak their language.

Helmer Stoel

People often equate Marxism with equality, while in fact Marx himself was quite critical of this ideal and more interested in freedom. How do you see it?

Grace Blakeley

The idea of equality only really emerged with the development of capitalism. Any society historically is structured according to a particular hierarchy. Some people will have more power and influence than others. Equality, in an extreme sense, could mean dismantling any form of hierarchy. That’s not a realistic understanding of the way human societies work and the obsession with equality only really emerges as a preoccupation for humanity when inequality becomes so significant. Inequality obviously stems from the divergent ownership of resources, as a negative consequence of the monopolization of ownership.

But there are many other negative consequences, and another big one is that it undermines people’s freedom and autonomy. I’m thinking about what makes a good life, which is really what we’re all considering when we’re thinking about politics and socialism. You need a minimum amount of resources to survive. But if I’m thinking about what’s going to make my life better, having a sense of control and autonomy is more important than a perfect sense of equality or even accumulating a lot of resources.

I believe a more equal society in which we all had a sense of control and ownership and autonomy over society’s resources would be better for the rich as well. It would make them less narcissistic and psychologically self-obsessed. A good life also involves community and connection, and that’s something that we’re really missing today in society. We’re so individualized and isolated that we focus on this little package of stuff that we own rather than thinking about the links that tie us together in our communities, in our workplaces. And yes, I think that impoverishes our lives.


Grace Blakeley is a staff writer at Tribune, and the author of Stolen: How to Save the World from Financialisation.

Finding Communism in Katy Perry?

A new book by Toby Manning argues that the best music of the past 60 years has often reflected, foreshadowed or even embraced the turmoil and radicalism of its time.

Toby Manning mounts arguably the landmark first attempt to present an accessible and characterful Marxist overview of popular music. 

(Wiki commons)

ByAlex Niven
26.11.2024

TRIBUNE

Since at least as far back as Theodor Adorno famously denounced the ‘mechanical soullessness’ of interwar jazz, the relationship between Marxism and pop music has been rather vexed. While plenty of card-carrying Marxists have dabbled in music writing over the last few decades (see especially Perry Anderson’s exquisitely over-written Sixties critiques of the Beatles and Stones under his ‘Richard Merton’ alias), fully crossing the Rubicon into the ambiguous world of ‘cultural studies’ has often been seen as something Really Serious Marxists shouldn’t do.

Toby Manning’s Mixing Pop and Politics: A Marxist History of Popular Music is a nice corrective to this strain of leftist elitism-purism. An accessible, characterful popular history rather than a dry definitional textbook, Manning’s study is surely the first really cogent attempt to present a birdseye-view Marxist chronology of pop music from the time of Lonnie Donegan to our present tense of Olivia Rodrigo, Jason Aldean and Oliver Anthony. In Manning’s telling, pop music’s ‘dialectic of repression and refusal charts and channels the political struggles of the last three-quarters of a century’ — and it is this fundamental binary his book seeks to explore and elucidate.

What emerges from this premise is an epic story of musical innovation set against a backdrop of political turbulence. Central to the narrative is the familiar but enduringly ambiguous notion of counterculture, a term popularised by Theodor Roszak’s seminal 1969 study The Making of a Counter Culture: Reflections on the Technocratic Society and Its Youthful Opposition. For Manning, counterculture is the means by which pop music pulled away from its origins in the consumeristic, Fordist 1950s to become — from the Sixties on — a radical, utopian, often downright revolutionary mode that was at bottom ‘expressive of Fordism’s discontents’.

A useful counterblast to the revisionist ‘hippyphobic’ tendency which views the Sixties paroxysm as an ineffectual boomer decadence, Manning’s history rightly asserts that the counterculture was in fact a nexus for almost the most politically vital developments of the period (and indeed the ensuing decades). As he skillfully shows, counterculture was the glue which held together tendencies as disparate as Black Power, second-wave feminism, the burgeoning gay rights movement and anti-Vietnam protestors. For all that it has been bowdlerised and packaged as nostalgia in recent years, Manning suggests, the Sixties counterculture is ultimately the point of origin for much of the anti-capitalist radicalism of the last half-century (if not necessarily Marxist thinking and activism proper), up to and including the recent activities of what has been termed Generation Left.

The million-dollar question in all of this — and one Manning keeps returning to — is how pop music relates to the overtly political side of the so-called New Left and its offshoots. Rather than an aloof theoretical analysis of post-Fifties pop, much of Mixing Pop and Politics is an impassioned defence of the idea that the best music of the last half-century has both foreshadowed and embodied the culture (in the broadest sense) of political radicalism it developed in tandem with. Thus, psychedelia is ‘the musical manifestation of what Marcuse heralded as “a world that could be free”’, glam rock ‘the cultural logic of the era’s industrial militancy’ and Billy Bragg’s 1985 hit ‘Between the Wars’ ‘a secular hymn to the social contract between citizen and state which was concurrently being crushed in the coalfields.’

If such statements seem to see a world in a grain of sand, they do so in the best possible sense. A salient problem for anyone trying to read pop music politically is how to derive sustained analysis from the relatively fleeting glimpses of historical content we find in the radically sensuous, often consciously ephemeral form that is the three- or four-minute pop song. But throughout Mixing Pop and Politics Manning is always subtle in the claims he makes for the interplay between music and history.

Rather than falling back on the overused, mostly rather specious notion of the ‘protest song’ (as certain clumsy centrist commentators have done this century), his approach is more nuanced in showing how wider historical movements have shaped the cultural life of pop songwriters and performers — and, occasionally and momentously, found expression in their sighing lyric asides and more pointed political declarations.

Whether he is detecting the ‘utopian’ assertions of the arrangement of ELO’s ‘Livin Thing’ or finding echoes of disaster capitalism in Katy Perry’s ‘Firework’, Manning is unfailingly meticulous and imaginative in showing how pop and politics have — and have not — interacted over the last 70 years. But over and above such finer points, he is also very good on how we should and should not look back on the ‘Fordist’ period of pop from a twenty-first-century present which often struggles to free itself from apolitical nostalgia for this apparent musical golden age.

As he puts it at one point, ‘we can immerse ourselves in the past as a site of escape — as a comforter or pacifier — or we can return to the past as a resource of hope, grounded in its vision of the future. In choosing between an enervated or an energised hauntology, therefore, we can either embrace the imposition of politicised limits, or we can reject them.’ Leftists following in the trail set by this powerful, pioneering text would do well to heed this vital message.

About the Author
Alex Niven is a writer, editor, and lecturer in English at Newcastle University. His books include Folk Opposition, Definitely Maybe 33 1/3, and New Model Island.

POST-FORDISM
Automotive intelligence moves forwards with ‘Liquid AI’

By Dr. Tim Sandle
September 19, 2024

DIGITAL JOURNAL

An 'Apollo Go' autonomous taxi on a street in Beijing - Copyright AFP Jade GAO

Is a new era of automotive intelligence about to begin? This is the claim of Autobrains Technologies who are working on ‘Liquid AI’, a self-driving car technology. This approach is designed to solve some of the current autonomous driving challenges.

In addition, the technology seeks to enhance vehicle autonomy by dynamically adapting to complex driving environments. This adaptability is considered as essential to achieving smarter and safer automotive solutions.

Such challenges include:

Edge Cases

An edge case is a problem or situation that occurs only at an extreme (maximum or minimum) operating parameter.

The infinite variety of unexpected driving scenarios presents conventional AIs with practically unsolvable tasks. Attempts to address this by feeding the systems more labelled images result in a loss of trackability and controllability.

Cost

Addressing real-world driving problems by expanding existing systems with more data, labelling, layers, and computational resources leads to escalating costs and power consumption.

Achieving a substantial improvement in system accuracy by a factor of 10 requires 10,000 times more computational resources.

Perception-Decision Disconnect

The missing interplay between perception and decision functions hinders effective and precise decision-making. For the AI to make optimal driving choices, it requires specific information. However, when details are missing or overly complex, precision is compromised, leading to incorrect reactions.


Liquid AI – Human Brain-Inspired


The technology combines Autobrains’ signature-based self-learning approach with a modular and adaptive architecture of specialized, scenario-based end-to-end skills.


According to Autobrains’ Founder and CEO, Igal Raichelgauz: “While current technologies perform well in handling average conventional driving tasks, they fall short when faced with unexpected real-world driving scenarios that demand greater precision. By using or implementing our Liquid AI, automotive companies can close their AI gaps”.

Autobrains draws inspiration from the human brain. As the human brain adapts its architecture based on context – such as light/weather conditions, surroundings, and relevant road users – Liquid AI has been designed to follow the same approach.

The basis of the technology includes:

Network of Specialized Narrow AI

Liquid AI comprises hundreds of thousands of specialized narrow AIs, each designed for specific tasks, making reactions very precise and tailored to the relevant driving scenario.

This specialized AI approach enables scalability, ranging from a few tens to hundreds of AIs for ADAS systems, scaling up to thousands for higher levels of automated driving, all the way to hundreds of thousands of AIs for full self-driving.

Adaptive Architecture

Unlike fixed systems, Liquid AI’s architecture adapts dynamically to the driving context, activating only relevant modules as necessary. This significantly reduces power consumption and compute requirements, not only resulting in cost savings for the System on Chip (SoC) hardware.

Efficiency and Precision

By mimicking the brain’s flexibility, Liquid AI achieves superior performance, cost-effectiveness, and safety. This includes human-like cognitive processing, which mimics human decision-making, allowing for better handling of unpredictable real-world conditions.

Efficient Resource Utilization

Lower computational power requirements make it scalable across various vehicle models without compromising performance.

These factors lead to a potentialenhancement in situational awareness and decision-making, providing a safer and more reliable driving experience.

Read more: https://www.digitaljournal.com/tech-science/automotive-intelligence-moves-forwards-with-liquid-ai/article#ixzz8mVkwNvN4

POST-FORDISM

Saudi Arabia seeks Chinese tech as it reinvents itself as car and automation hub

South China Morning Post
Sun, Sep 1, 2024

Saudi Arabia is seeking cooperation with Chinese companies in the car sector and automation as a top industrial official kicks off a tour of East Asia this week.

Saudi industry and mineral resources minister Bandar Alkhorayef is leading a delegation to visit Guangzhou, Hong Kong and Singapore from Sunday until September 8, according to a statement from his office. The trip is aimed at improving relations and exploring joint venture opportunities.

China and Saudi Arabia have strengthened ties in recent years while their relations with the United States have soured. Riyadh is looking to diversify its economy and become an industrial hub in the Middle East, while the region is gaining appeal for Chinese companies that want to explore overseas markets in the face of growing containment by the US.

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"The visit of the delegation to China aligns with [the country's] objective to become a key automotive hub in the region and a leader in innovative [and] eco-friendly vehicle solutions," Alkhorayef's office said.

Key meetings in Guangzhou, capital of the southern Chinese province of Guangdong, will include discussions with GAC Group, a major electric vehicle (EV) maker, as well as lithium battery producer General Lithium and communication tech giant Huawei, the statement said.

Saudi Arabian industry and mineral resources minister Bandar Alkhorayef's visit to Guangzhou, Hong Kong and Singapore is aimed at improving relations and exploring joint venture opportunities. Photo: Handout alt=Saudi Arabian industry and mineral resources minister Bandar Alkhorayef's visit to Guangzhou, Hong Kong and Singapore is aimed at improving relations and exploring joint venture opportunities. Photo: Handout

Chinese EV makers are facing punitive tariffs from the European Union and the US, which have accused China of flooding their markets with subsidised EVs that pose a national security risk with their "connected" car technology.

According to Alkhorayef's office, the automotive sector is a key focus of Saudi Arabia's national industrial strategy, which emphasises developing the car industry and incorporating innovative technologies.

It added that the talks with Huawei will discuss opportunities for collaboration in "innovative smart solutions" and leveraging technologies for the "Fourth Industrial Revolution", referring to a 21st century wave of hi-tech progress aided by advancements in artificial intelligence, robotics and the Internet of Things.

"Saudi Arabia aims to attract high-quality investments in 12 promising industrial sectors, including automotive, pharmaceuticals, and food, supported by a stimulating investment environment," the statement said.

"The visit is expected to result in partnerships that [focus] on mutual growth through high-quality investments, sustainable development, and economic diversification, particularly in strategic industrial sectors."

According to figures from Saudi Arabia's Ministry of Industry and Mineral Resources, China is the Middle Eastern kingdom's biggest trading partner, with trade exceeding US$100 billion in 2023.

The data also shows that Chinese investment in Saudi Arabia last year included US$5.6 billion in original equipment manufacturing for the automotive industry and US$5.26 billion in the minerals sector, with semiconductor investment amounting to US$4.26 billion.

According to official Chinese data, the total value of goods exported to Saudi Arabia from January to July was US$27.55 billion, an increase of nearly 12 per cent compared to the same period last year. Meanwhile, the total value of goods imported from Saudi Arabia decreased by 7.3 per cent compared to the same period last year to US$34.97 billion.

In Hong Kong, the delegation will meet the city's chief executive as well as officials in charge of technology and industry development.

In Singapore, the Saudi delegation will meet the deputy prime minister and senior trade and science officials.

China's electric vehicle makers scramble for EU tariff deal, with price floor on the table

South China Morning Post
Sun, Sep 1, 2024

China's car industry was scrambling to cut a last-minute deal with the European Commission last week, with representatives offering to set a minimum price on imported electric vehicles (EVs).

Companies would in return be granted some amnesty from hefty import tariffs due to be slapped on Chinese-made EVs by the commission by October. The EU has complained that cheap, exported Chinese vehicles threaten the future of Europe's car industry.


The companies would also be willing to put a limit on the volume of EV exports to the European Union should Brussels cut the punitive tariff, according to people familiar with the meetings. Above that volume, imports would face the duties the commission proposed earlier this month of up to 36.3 per cent.

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Online hearings took place on Wednesday, with car companies including BYD, Geely and SAIC, and Friday with the China Chamber of Commerce for Import and Export of Machinery and Electronic Products (CCCME). The details of the proposals were first reported by Politico.

Such a deal would closely mirror one reached 11 years ago during a trade war over cheap Chinese solar panel imports. Under that agreement, Chinese producers agreed to set a minimum price at which their panels would be sold.

Panels sold at a higher rate or above a certain sales volume were subject to punitive import duties designed to bring the products in line with local market rates.


The commission is considering the proposals, but insiders thought it improbable that they would fly at this stage, given the fact that they were pitched as a "gentleman's agreement" that would not be watertight.

Nor does the commission have fond memories of the solar panel resolution, which ultimately fell apart when powerful member states including France and Germany withdrew their support for EU measures.

China had slapped trade tariffs on French wine and threatened the German car industry in response, and a decade later the EU solar industry has been decimated by Chinese competition.

Nonetheless, it has given Brussels pause for thought. Even last week, it was thought that a negotiated settlement would be nigh on impossible to reach, given that car companies and the Chinese government denied that there were any undisclosed subsidies in their supply chains.

Beijing has already lodged a complaint at the World Trade Organization (WTO) and launched retaliatory probes into EU brandy, pork and dairy products.


Last week, China closed its brandy investigation and is expected to impose anti-dumping duties of up to 39 per cent on French cognac brands at a later date, after declining to introduce provisional measures.

"Our sector seems to be a collateral victim of a broader trade conflict, which will limit the access of Chinese consumers to products they greatly value and appreciate, if not resolved as a matter of priority," said Adam Ulrich, director general at Spirits Europe, a lobby group.

Brussels has always been open to making a deal on EVs, but it must have the same equalising effect as the tariffs, which are designed to protect European-based companies from the market-distorting impact of subsidised Chinese competitors.

While an official consultation period expired on Friday, the offer will be analysed this week as officials continue trickling back from their extended summer holidays.

Since the deal would involve pledges from individual car companies rather than the Chinese government, it is unlikely that it would flout WTO rules that outlaw preferential treatment based on corporate nationality.

Chinese companies' willingness to make such an offer comes as its industry faces being blocked out of other major markets. Last week, Canada joined the United States in slapping a 100 per cent import duty on Chinese-made EVs.

The EU tariffs, even after punitive duties are applied, would be comparably low. BYD EVs, for example, would take a total 27 per cent total tariff hit at EU ports, while Geely would face a 31.3 per cent rate.

Even the EU's top rate of 46.3 per cent for companies such as SAIC - including the 10 per cent base rate - is less than half the North American import tax.

The deadline for introducing long-term duties is October 30. In a vote anticipated in the coming weeks, 15 of the 27 EU member states constituting 65 per cent of the bloc's population must vote against the tariffs to stop them from being imposed.


Xpeng founder and CEO He Xiaopeng says his electric vehicle company is looking for a manufacturing site in Europe. Photo: Bloomberg alt=Xpeng founder and CEO He Xiaopeng says his electric vehicle company is looking for a manufacturing site in Europe. Photo: Bloomberg>

Chinese companies are already planning for life under tariffs. This week, executives from BYD and Xpeng said that they were going to increase their European manufacturing footprints as they look to avoid paying punitive duties.

Xpeng's CEO He Xiaopeng told Bloomberg that the company was scouting Europe for sites for factories and data centres. BYD boss Stella Li told the same publication that the company wanted 50 per cent of its revenues to come from overseas markets, and that it would set up its own data centres in individual European countries to avoid sending data back to China.

The scramble for data centres comes amid mounting security concerns about the levels of data collected by electric and connected vehicles.

Earlier this week, Uber was fined €290 million (US$322 million) by Dutch authorities for transferring European driver data to the US. The ride-sharing app recently partnered with BYD in a deal that will see the Chinese carmaker provide 100,000 EVs for its fleet in Europe and Latin America.

Regardless of whether a tariff amnesty is reached, industry analysts expect Chinese EVs to remain competitive in Europe

"The Europeans are in denial. They don't want to acknowledge that European carmakers have been out-engineered and outclassed," said Tu Le, managing director of Sino Auto Insights, a consulting firm.

He added that EU countries would struggle to hit their zero-emissions goals without Chinese EVs and that governments were facing difficult choices.

"Chinese carmakers are fighting the long game. They see Western governments as changing hands, changing philosophies, changing policies every four to six years, and so these are kind of just the ebbs and flows that they kind of deal with on a regular basis," Tu said.

"There's this tension between, are we going to hit our zero-emissions goals, and if so, how do we do that without Chinese electric vehicles?"

This article originally appeared in the South China Morning Post (SCMP), the most authoritative voice reporting on China and Asia for more than a century. For more SCMP stories, please explore the SCMP app or visit the SCMP's Facebook and Twitter pages. Copyright © 2024 South China Morning Post Publishers Ltd. All rights reserved.

Copyright (c) 2024. South China Morning Post Publishers Ltd. All rights reserved.

GLOBALIZATION AND POST-FORDISM

Europe’s electric car tariffs sting China but won’t halt BYD’s advance

Analysis by Laura He, CNN
Thu, 13 June 2024 

China Daily/Reuters

After months of investigation, the European Union has announced additional tariffs on electric vehicles (EV) imported from China, because of what it sees as Beijing’s unfair support for companies that undercut European carmakers.

The decision deals a blow to the Chinese government, which had been lobbying hard against the taxes, and EV producers in the country. Most companies are facing hefty extra tariffs of between 17.4% and 38.1%, on top of the 10% duty already levied by the bloc.

The impact on China’s EV makers will vary depending on the level of tariff and each company’s cost structure. Those hardest hit may be forced to raise prices or set up factories in Europe.

And while Beijing is clearly unhappy, analysts say it’s unlikely to want to rush into a full-blown trade war with its second biggest trading partner, not least because of economic pressures at home.

For market leader BYD, which vies with Tesla as the world’s top producer of battery electric vehicles, there’s still space for it to grow in Europe, even with the additional duty, according to Gregor Sebastian, a senior analyst with the Rhodium Group.

Facing the lowest additional levy of 17.4%, BYD could emerge as a relative “winner,” he said. Duties at this level could even allow BYD to cut its already competitive prices to gain market share in Europe.

“BYD is already building a factory in Europe, is likely to still profitably export to the EU even with 17% duties, and can export plug-in hybrids without additional duties,” Sebastian said. The new tariffs only target battery EVs.

Rhodium said in April that BYD’s European profits are 45% higher than in China, meaning that market will still remain highly attractive even after the new tariffs are imposed.

China’s top market

Europe is key to Beijing’s EV ambitions. It overtook Asia as China’s largest EV export market in 2021. That helped propel China into pole position as the world’s No 1 car exporter.

“One critical issue for China is that the EU accounted for 38% of China’s EV exports in 2023,” Sebastian said. “China will not be able to reroute exports to other countries as potential alternatives like Brazil, Turkey and the US have also pulled up drawbridges.”

Last month, the United States quadrupled tariffs on EVs from China, from 25% to 100%, aiming to boost American jobs and manufacturing.

“The EU is the only market left that is both wealthy and large enough to absorb a meaningful amount of China’s excess production of EVs,” said Etienne Soula, a research analyst with Alliance for Securing Democracy at the German Marshall Fund of the United States.

The Chinese government has big dreams for the country’s EV industry, part of a broader strategy to surpass America in the global tech race.

It’s also trying to counter a property-induced economic slowdown and promote a low-carbon economy. EVs, along with photovoltaics and lithium-ion batteries, are seen by the government as the “new three” growth drivers that will play a pivotal role in shaping the country’s economic landscape.

In February, nine government agencies, including the Commerce Ministry and the central bank, vowed to provide support to accelerate Chinese EV makers’ global push.

Tesla prices to rise

In contrast to BYD, state-owned carmaker SAIC is in a “disastrous” situation facing 38.1% in additional tariffs, according to Sebastian.

EV sales in the EU accounted for 15% of the company’s total sales in 2023 and early 2024. The Shanghai-based automaker, which was China’s second largest seller of battery EVs, pug-in hybrids and fuel cell cars (NEVs) last year, will likely need to build a factory in Europe to bypass these duties.

Geely, China’s fourth largest NEV retailer and the owner of Volvo, faces 20% in additional duties, a penalty which is likely to be a “mixed bag,” Sebastian said. His analysis suggests Geely could still profitably export to the EU, but margins will narrow severely.

For Tesla (TSLA), which uses China as its base for global exports including to Europe, the situation is also tricky.

The European Commission said Wednesday that the EV giant may receive an individually calculated duty rate at a future stage following a request by the carmaker.

In a message posted to its website in several European countries Thursday, Tesla said it expected to have to raise prices for its Model 3 from July 1 because of the new tariffs.

Sebastian said additional duties above 21% would likely render Tesla’s exports from China to the EU uncompetitive.

Localization coming

The EU’s move is likely to hasten efforts by Chinese carmakers to set up factories in the region.

The “announcement is more likely to accelerate the extent to which Chinese [EV companies] and suppliers manufacture their products within Europe, something that we have already started to see,” said Andrew Bergbaum, global co-head of AlixPartners’ automotive & industrial practice.

BYD announced in December that it would build an EV factory in Hungary, becoming the first major Chinese automaker to build passenger cars in Europe.

While the tariffs would not be good news for consumers and cities with zero emission needs, “the establishment of new European-manufactured electric vehicles by Chinese companies would certainly be welcomed,” said Bergbaum.

However, it also means there will be more competition in a sector that already has too much capacity, leading to large scale disruptions of existing manufacturing sites as they “rebalance their resources”, he added.

UBS analysts, meanwhile, predicted on Wednesday that the number of Chinese manufacturers making inroads in the EU would become “more concentrated.”

Smaller players may become discouraged and give up, even as Chinese industry leaders press ahead. But they also expected Chinese companies to accelerate the location of assembly plants in the EU, a move which would be welcomed by EU member states like Hungry, Italy, and Spain.

Too much to lose

Ahead of the announcement, Beijing had dropped hints that it could retaliate.

Its ministries of commerce and foreign ministries each reiterated Wednesday that China would take “all necessary measures” to defend its interests.

Analysts, though, don’t believe there is a high chance of serious escalation.

“The situation is unlikely to develop into a full-blown trade war, both sides have too much to lose,” Sebastian said.

Soula said China could retaliate by imposing tariffs on some European goods such as luxury cars, premium brandies or airplane parts.

But given the economic pressures that China is already under, it has “limited room” for maneuver when responding to the EU.

Also, “there is still the possibility of (EU) countries who are skeptical of this investigation coming together to diminish the final level of the tariffs,” he said. “In this context, China may want to wait before going all out to avoid hardening attitudes in those member states.”

Currently provisional, the tariffs are due to be introduced on July 4 if discussions with Chinese authorities don’t lead to a mutual agreement.

CNN’s Hanna Ziady and Fred He contributed to reporting.

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Lenin's State Monopoly Capitalism

THE THEORY OF STATE MONOPOLY CAPITALISM by Paul Wenlock

Nevertheless, the research focuses on Lenin and is not specifically concerned with the theory of state monopoly capitalism. Other contributors of note who ..

Whiterose.ac.uketheses.whiterose.ac.uk/370/1/uk_bl_ethos_291477.pdf

Sunday, October 21, 2007

Lenin's State Monopoly Capitalism

"The methods of Taylorism may be applied to the work of the actor in the same way as they are to any other form of work with the aim of maximum productivity."

_{Vsevolod Emilevich Meyerhold, 1922}

In my post on Battleship Potemkin I posted about the Kronstadt sailors revolt of 1921. At the 10th Party Congress of the Bolshevik Party Lenin declared; "Enough Opposition", and the Red Army crossed the ice and attacked the revolting sailors.

At the Tenth Congress, as the Kronstadt soviet was being crushed by arms and buried under a barrage of slander, Lenin attacked the radical-left bureaucrats who had formed a “Workers’ Opposition” faction with the following ultimatum, the logic of which Stalin would later extend to an absolute division of the world: “You can stand here with us, or against us out there with a gun in your hand, but not within some opposition. . . . We’ve had enough opposition.”

Ironically their demands were then used by Lenin to create his New Economic Program.

"Our poverty and ruin are so great that we cannot at a single stroke create full socialist production" Lenin

Lenin came before the Congress in March 1921 and proposed the NEP. The NEP was in essence a capitalist free market. The NEP stated that requisitioning of food and agricultural surpluses, a doctrine of War Communism, must be ended. Instead, the government would tax the peasants on a fixed percentage of their production. Trotsky had already proposed a similar policy, but it was rejected by his fellow colleagues, including Lenin. Basically, this promoted a free agricultural market in Russia.

Lenin's N.E.P.

The Bolshevik revolutionary takeover in October 1917 was followed by over two years of civil war in Russia between the new Communist regime (with its Red Army) and its enemies--the conservative military officers commanding the so-called White armies. The struggle saw much brutality and excesses on both sides with the peasants suffering most from extortionate demands of food supplies and recruits by both sides. The repressive and dictatorial methods of the Bolshevik government had so alienated the mass of peasants and industrial working class elements that the erstwhile most loyal supporters of the regime, the sailors at the Kronstadt naval base, rebelled in March 1921 (see ob19.doc) to the great embarrassment of senior Bolsheviks. Though the rebellion was mercilessly crushed, the regime was forced to moderate its ruthless impulses. The New Economic Policy (NEP) was the result, a small concession to the capitalist and free market instincts of peasant and petty bourgeois alike. Moreover, victory in the civil war was assured by this stage, thus allowing a relaxation of the coercive methods symbolized by the War Communism of the previous two to three years.

The New Economic Policy (NEP), introduced by Lenin at the Tenth Party Congress in March 1921, represented a major departure from the party's previous approach to running the country. During the civil war, the Soviet state had assumed responsibility for acquiring and redistributing grain and other foodstuffs from the countryside, administering both small- and large-scale industry, and a myriad of other economic activities. Subsequently dubbed (by Lenin) "War Communism," this approach actually was extended in the course of 1920, even after the defeat of the last of the Whites. Many have claimed that War Communism reflected a "great leap forward" mentality among the Bolsheviks, but desperation to overcome shortages of all kinds, and particularly food, seems a more likely motive. In any case, in the context of continuing urban depopulation, strikes by disgruntled workers, peasant unrest, and open rebellion among the soldiers and sailors stationed on Kronstadt Island, Lenin resolved to reverse direction.

Lenin's economic model was like Trotsky's transitional program. It was the creation of state capitalism to create the conditions for monopoly capitalism to occur in Russia. His socialism as he liked to call it was state capitalism with electrification, and just a dash of Taylorism.

“Communism is the Power of Soviets plus the electrification of the whole country!”

In fact Lenin was a Taylorist and recognized that modern capitalism required fordist production which is what is currently occurring in China. It's failure in the Soviet Union of the seventies and eighties, was due to its use for military production rather than for consumer goods. In other words Reagan did bankrupt the Soviet Union by creating a competition between the U.S. Military Industrial Complex and its Soviet counterpart. The result was not just the collapse of the Soviet Union, but its collapse into a basket case economy. It did not have the production models required for consumer goods required for a market economy.

In terms of its impact on world politics, Lenin's State and Revolution was probably his most important work. This was derived from the theoretical analysis contained in his earlier work, Imperialism, the Highest Stage of Capitalism (1916). Lenin's theory of imperialism demonstrated to his satisfaction that the whole administrative structure of “socialism” had been developed during the epoch of finance or monopoly capitalism. Under the impact of the First World War, so the argument ran, capitalism had been transformed into state-monopoly capitalism. On that basis, Lenin claimed, the democratisation of state-monopoly capitalism was socialism. As Lenin pointed out in The Impending Catastrophe and How to Combat It (1917):

“For socialism is merely the next step forward from state-capitalist monopoly. Or, in other words, socialism is merely state-capitalist monopoly which is made to serve the interests of the whole people and has to that extent ceased to be capitalist monopoly” (original emphasis, www.marxists.org/archive/lenin/works/1917/ichtci/11.htm).

Lenin’s perspective may be briefly expressed in the following words: The belated Russian bourgeoisie is incapable of leading its own revolution to the end! The complete victory of the revolution through the medium of the “democratic dictatorship of the proletariat and the peasantry” will purge the country of medievalism, invest the development of Russian capitalism with American tempos, strengthen the proletariat in the city and country, and open up broad possibilities for the struggle for socialism. On the other hand, the victory of the Russian revolution will provide a mighty impulse for the socialist revolution in the West, and the latter will not only shield Russia from the dangers of [feudal-monarchical] restoration but also permit the Russian proletariat to reach the conquest of power in a comparatively short historical interval.

Lenin unambiguously endorsed the view that the proletariat should use markets to prepare underdeveloped countries for socialism. It is common knowledge that his New Economic Policy used market mechanisms to stimulate economic recovery after the devastation of the Russian Civil War, but some do not realize that Lenin saw markets as more than just an expedient. He actually viewed market mechanisms as necessary for moving underdeveloped countries toward socialism. Lenin recognized that the economies of underdeveloped, agrarian countries in transition to socialism combine subsistence farming, small commodity production, private capitalism, state capitalism, and socialism, with small commodity production in the dominant role (1965, 330–31). These societies contain many more peasants than proletarians, and because peasants favor the petty-bourgeois mode of production, they tend to side with the bourgeoisie against the proletariat. It is tempting to argue that this situation calls for an immediate transition to socialism, in order to force the peasantry to cooperate with the proletariat in defeating the bourgeoisie. But Lenin did not believe this. He argued that the attempt to push agrarian countries directly into socialism, that is, to eliminate markets before the build up of the productive forces had converted peasant agriculture and small commodity production into modern, large-scale industries, was a mistake that would actually hamper economic development and thwart socialist construction. The solution he proposed was for the proletarian state to use capitalism, i.e., commodity production, free markets, and concessions with foreign capitalists, to promote the growth of the productive forces, and to eliminate the conflict of interest between peasants and industrial workers by converting agriculture into a large-scale industry and the peasants into proletarians (1965, 330–33, 341–47).

LENIN'S SOCIALISM

The starting point must be Lenin's conception of 'socialism': When a big enterprise assumes gigantic proportions, and, on the basis of an exact computation of mass data, organises according to plan the supply of raw materials to the extent of two-thirds, or three fourths, of all that is necessary for tens of millions of people; when raw materials are transported in a systematic and organised manner to the most suitable places of production, sometimes situated hundreds of thousands of miles from each other; when a single centre directs all the consecutive stages of processing the materials right up to the manufacture of numerous varieties of finished articles; when the products are distributed according to a single plan among tens of millions of customers.

....then it becomes evident that we have socialisation of production, and not mere 'interlocking'; that private economic and private property relations constitute a shell which no longer fits its contents, a shell which must inevitably decay if its removal is artificially delayed, a shell which may remain in a state of decay for a fairly long period ...but which will inevitably be removed Lenin, Collected Works, Vol.22, page 303.

SOCIALISM?

This is an important passage of Lenin's. What he is describing here is the economic set-up which he thought typical of both advanced monopoly capitalism and socialism. Socialism was, for Lenin, planned capitalism with the private ownership removed.

Capitalism has created an accounting apparatus in the shape of the banks, syndicates, postal service, consumers' societies, and office employees unions. Without the big banks socialism would be impossible.

The big banks are the state apparatus which we need to bring about socialism, and which we take ready made from capitalism; our task is merely to lop off what characteristically mutilates this excellent apparatus, to make it even bigger, even more democratic, even more comprehensive. Quantity will be transformed into quality.

A single state bank, the biggest of the big, with branches in every rural district, in every factory, will constitute as much as nine-tenths of the socialist apparatus. This will be country-wide book-keeping, country-wide accounting of the production and distribution of goods, this will be, so to speak, something in the nature of the skeleton of socialist society. Lenin, Ibid, Vol.26 page 106.

HEY PRESTO!

This passage contains some amazing statements. The banks have become nine-tenths of the socialist apparatus. All we need to do is unify them, make this single bank bigger, and Hey Presto, you now have your basic socialist apparatus.

Quantity is to be transformed into quality. In other words, as the bank gets bigger and more powerful it changes from an instrument of oppression into one of liberation. We are further told that the bank will be made even more democratic. Not made democratic as we might expect but made more so. This means that the banks, as they exist under capitalism, are in some way democratic. No doubt this is something that workers in Bank of Ireland and AIB have been unaware of.

For Lenin it was not only the banks which could be transformed into a means for salvation. Socialism is merely the next step forward from state capitalist monopoly. Or, in other words, socialism is merely state capitalist monopoly which is made to serve the interests of the whole people and has to that extent ceased to be capitalist monopoly Lenin, Ibid, Vol. 25 page 358.

State capitalism is a complete material preparation for socialism, the threshold of socialism, a rung on the ladder of history between which and the rung called socialism there are no immediate rungs. Lenin, Ibid, Vol. 24 page 259.

BUILDING CAPITALISM

This too is important. History is compared to a ladder that has to be climbed. Each step is a preparation for the next one. After state capitalism there was only one way forward - socialism. But it was equally true that until capitalism had created the necessary framework, socialism was impossible. Lenin and the Bolshevik leadership saw their task as the building of a state capitalist apparatus.

...state capitalism would be a step forward as compared with the present state of affairs in our Soviet Republic. If in approximately six months time state capitalism became established in our Republic, this would be a great success and a sure guarantee that within a year socialism will have gained a permanently firm hold and will become invincible in our country Lenin, Ibid, Vol. 27 page 294.

While the revolution in Germany is still slow in coming forth, our task is to study the state capitalism of the Germans, to spare no effort in copying it and not shrink from adopting dictatorial methods to hasten the copying of it Lenin, Ibid, Vol. 27 page 340.

Socialism or State Capitalism?

So what did the Bolsheviks aim to create in Russia? Lenin was clear, state capitalism. He argued this before and after the Bolsheviks seized power. For example, in 1917, he argued that "given a really revolutionary-democratic state, state-monopoly capitalism inevitably and unavoidably implies a step, and more than one step, towards socialism!" He stressed that "socialism is merely the next step forward from state-capitalist monopoly . . . socialism is merely state-capitalist monopoly which is made to serve the interests of the whole people and has to that extent ceased to be capitalist monopoly."³

The Bolshevik road to "socialism" ran through the terrain of state capitalism and, in fact, simply built upon its institutionalised means of allocating recourses and structuring industry. As Lenin put it, "the modern state possesses an apparatus which has extremely close connections with the banks and syndicates, an apparatus which performs an enormous amount of accounting and registration work . . . This apparatus must not, and should not, be smashed. It must be wrestled from the control of the capitalists," it "must be subordinated to the proletarian Soviets" and "it must be expanded, made more comprehensive, and nation-wide." This meant that the Bolsheviks would "not invent the organisational form of work, but take it ready-made from capitalism" and "borrow the best models furnished by the advanced countries."⁴

Once in power, Lenin implemented this vision of socialism being built upon the institutions created by monopoly capitalism. This was not gone accidentally or because no alternative existed. As one historian notes: "On three occasions in the first months of Soviet power, the [factory] committees leaders sought to bring their model [of workers' self-management of the economy] into being. At each point the party leadership overruled them. The Bolshevik alternative was to vest both managerial and control powers in organs of the state which were subordinate to the central authorities, and formed by them."⁵

Rather than base socialist reconstruction on working class self-organisation from below, the Bolsheviks started "to build, from the top, its 'unified administration'" based on central bodies created by the Tsarist government in 1915 and 1916.⁶ The institutional framework of capitalism would be utilised as the principal (almost exclusive) instruments of "socialist" transformation. "Without big banks Socialism would be impossible," argued Lenin, as they "are the 'state apparatus' which we need to bring about socialism, and which we take ready made from capitalism; our task here is merely to lop off what capitalistically mutilates this excellent apparatus, to make it even bigger, even more democratic, even more comprehensive. A single State Bank, the biggest of the big . . .will constitute as much as nine-tenths of the socialist apparatus. This will be country-wide book-keeping, country-wide accounting of the production and distribution of goods." While this is "not fully a state apparatus under capitalism," it "will be so with us, under socialism." For Lenin, building socialism was easy. This "nine-tenths of the socialist apparatus" would be created "at one stroke, by a single decree." ⁷

Lenin' State Monopoly Capitalism is the model being used by the former state capitalist regimes in Asia like China and Viet Nam. They are full filing Lenin's dictum. And ironically in China's case they have become a new Imperialist power.

Lenin: 1917/ichtci: Can We Go Forward If We Fear To Advance ...

Everybody talks about imperialism. But imperialism is merely monopoly capitalism.

That capitalism in Russia has also become monopoly capitalism is sufficiently attested by the examples of the Produgol, the Prodamet, the Sugar Syndicate, etc. This Sugar Syndicate is an object-lesson in the way monopoly capitalism develops into state-monopoly capitalism.

And what is the state? It is an organisation of the ruling class — in Germany, for instance, of the Junkers and capitalists. And therefore what the German Plekhanovs (Scheidemann, Lensch, and others) call "war-time socialism" is in fact war-time state-monopoly capitalism, or, to put it more simply and clearly, war-time penal servitude for the workers and war-time protection for capitalist profits.

Now try to substitute for the Junker-capitalist state, for the landowner-capitalist state, a revolutionary-democratic state, i.e., a state which in a revolutionary way abolishes all privileges and does not fear to introduce the fullest democracy in a revolutionary way. You will find that, given a really revolutionary-democratic state, state- monopoly capitalism inevitably and unavoidably implies a step, and more than one step, towards socialism!

For if a huge capitalist undertaking becomes a monopoly, it means that it serves the whole nation. If it has become a state monopoly, it means that the state (i.e., the armed organisation of the population, the workers and peasants above all, provided there is revolutionary democracy) directs the whole undertaking. In whose interest?

Either in the interest of the landowners and capitalists, in which case we have not a revolutionary-democratic, but a reactionary-bureaucratic state, an imperialist republic.

Or in the interest of revolutionary democracy—and then it is a step towards socialism.

For socialism is merely the next step forward from state-capitalist monopoly. Or, in other words, socialism is merely state-capitalist monopoly which is made to serve the interests of the whole people and has to that extent ceased to be capitalist monopoly.

To apply the Lenin's theory on state capitalism in the renovation cause of Vietnam 10:18 28-07-2005

 Role of the State in applying the theories of State capitalism in Vietnam 16:05 09-05-2005

From a review of Lenin's ideas and concepts of State capitalism and State capitalist economy as seen from Vietnamese perspective, the paper reaffirms an indispensable role of the State in the present development of market economy.

 The new Economic Policy of V.I. Lenin with the use of state capitalism in our country nowadays 10:21 28-07-2005

 The awareness of the socialist-oriented market economy in Vietnam 12:43 04-07-2006

Realizing the market economy under socialist regulation in Vietnam is a major content in the economic model in the transitional period toward socialism. The article analyzes and elaborates the theorical and practical sides of the socialist regulated market economy, through which to make the following conclusions. 1. In the context of globalization and international economic integration today. The model of the socialist regulated market economy which has been pursued since the IX National Party Congress is a correct policy both theoretically and practically. 2. However if we regarded the model of the socialist regulated market economy as Vietnam's creative policy, it would lead us to fall into subjective thinking. 3. Through theory and practice the author of this article concludes that. a. According to Marxist doctrine the view that socialism emerged after capitalism still remains scientific b. Human elements in socialism contradicts with those in the previous societies; as a result if the criteria that were applied to solve social problems of socialist society to be imposed on the period of market economy being in existence, it would naturally stand in the way of the development of market economy. c. The key for Vietnam at present is how to solve the relations between growth and development, in other words economic growth should go along with social development d. Vietnam's economy should be broken just into two sectors, namely, state run and private run. It should not be divided into 6 sectors as presently applied. e. The role of the private owned sector i!1 the national economy should be appreciated.

Even the right wing occasionally gets it right but for the wrong reasons. In this case another red scare, red baiting, reds under the bed, commies out to get us, article reveals;

In his "Report to the Fourth Congress of the Communist International," Lenin explained the basis for NEP. He said that Russia needed capitalism before it could have socialism. The form of capitalism Lenin advocated was called "state capitalism." As early as 1918 Lenin had stated, "State capitalism would be a step forward as compared with the present state of affairs."

By 1922, when Lenin delivered his report, state capitalism was still the order of the day. "This sounds very strange," admitted Lenin, "and perhaps even absurd." Russia was unready for socialism and lacked the strength to create communism. In his report Lenin said that socialism in Russia had been adopted "perhaps too hastily."

Does this mean Lenin, like the Chinese and Russian leaders after him, had abandoned the ultimate communist goal?

"I repeat," said Lenin in his 1922 report, "it seems very strange to everyone that a nonsocialist element should be ... regarded superior to socialism in a republic which declares itself as socialist republic. But the fact will become clear if you recall that ... the economic system of Russia [is backward]."

This exact formulation could be applied to communist China. In fact, this is the line that the Chinese Communist Party has adopted for itself. And what Mr. Lee Kuan Yew of Singapore has mistaken for China's commercial objectives, are actually communist objectives. Talk of a future war with America is not simply a question of Taiwan. China's leaders look ahead to a day when a socialist civilization will be possible -- thanks to what Lenin called "state capitalism."

The purpose of state capitalism, as it exists in today's China and Lenin's Russia, is to pave the way for socialism. "The state capitalism that we have introduced in our country is of a special kind," noted Lenin. "It does not correspond to the usual conception of state capitalism. We hold all the key positions."

Lenin emphasized that all land in Russia belonged to the state. "This is very important," said Lenin, "although our opponents think it of no importance at all."

This is a revealing statement. Politicians like Lee Kuan Yew seem to be clueless. China is a communist country that practices state capitalism. China is following the Leninist path. "We have already succeeded in making the peasantry content and in reviving both industry and trade," boasted Lenin. Furthermore, the communist form of state capitalism not only owns the land which the peasants use, but "our proletarian state owns ... all the vital branches of industry."

The market economists of all political stripes fail to understand that State Monpoly Capitalism results from the fact that all capital must create monopoly. There is no free market, there is a market and it is dominated by monopolies, or oligopolies. These can be owned privately or by the state it matters little since both are forms of capitalism. The neo-con political scientists, divorcing themselves as they do from economics, decry capitalist models that are not based upon their American model.

In this they fail to understand the historical development political economy of the 20th Century which was Fordism and Capitalist Monopoly. The later requires state intervention as the American Military Industrial Complex and the development of capitalism in South Korea shows. Something that Lenin reading Marx understood.

In practical life we find not only competition, monopoly and the antagonism between them, but also the synthesis of the two, which is not a formula, but a movement. Monopoly produces competition, competition produces monopoly. Monopolists are made from competition; competitors become monopolists. If the monopolists restrict their mutual competition by means of partial associations, competition increases among the workers; and the more the mass of the proletarians grows as against the monopolists of one nation, the more desperate competition becomes between the monopolists of different nations. The synthesis is of such a character that monopoly can only maintain itself by continually entering into the struggle of competition.
Karl Marx
The Poverty of Philosophy
Chapter Two: The Metaphysics of Political Economy

See:

40 Years Later; The Society of the Spectacle

China: The Truimph of State Capitalism

State Capitalism By Any Other Name