It’s possible that I shall make an ass of myself. But in that case one can always get out of it with a little dialectic. I have, of course, so worded my proposition as to be right either way (K.Marx, Letter to F.Engels on the Indian Mutiny)
Sunday, May 19, 2019
The International Political Economy of Actually Existing Capitalism:
Rethinking Globalisation and the Retreat of the State
ABSTRACT
This thesis presents an alternative tradition of classical Marxism capable of understanding what appears to be a shift in power from states to markets over the last two decades. It provides a theory of international political economy which explains both state ownership and control of the economy and its relinquishment, as aspects of ‘actually existing capitalism’ on a global scale. It is argued that this approach is superior to both Weberian-influenced International Political Economy (IPE), and the current tradition of classical Marxism in International Relations (IR), in that it has the potential to provide a deeper understanding of the apparent ‘retreat of the state’ as an aspect of so-called ‘globalization’. The core contribution of the thesis is a critique of the current classical Marxist approach in International Relations and the proposal of an alternative which differs in its analysis of the space, time and motion of capitalism. It is argued, through a rereading of Capital volumes 1 to 3, that this alternative is truer to Marx’s intentions. It is further argued that this more nuanced understanding of capitalism is well-represented through the writings of Hilferding, Bukharin, and Lenin, and is identifiable, though underdeveloped, in the work of contemporary Marxists influenced by these theorists. This alternative tradition of classical Marxism provides an understanding of capitalism in phases of both ‘nationalization’ and ‘privatization’, deepening our understanding of capitalism as it ‘actually exists’. The thesis has two main tasks. The first is to show that both Weberian-influenced IPE and classical Marxism in IR have an inadequate model of capitalism, a theoretical limitation that has become evident in the globalization debate over ‘the retreat of the state’. The second is to suggest an alternative theory of capitalism based on a rereading of Capital volumes 1-3. This theory of ‘actually existing capitalism’ is better able to capture the complexity of changing state market-relations including what is superficially described as the ‘retreat of the state’.
Introduction The Privatisation Revolution as the ‘Retreat of the State’ 1
Chapter 1 The Globalisation Paradox 13
1.1 Introduction 13
1.2 The Globalisation Thesis 15
1.2.1 The Nation State 17
1.2.2 The World Market 22
1.2.3 State-Market Relations 28
1.2.4 Paradox Within 35
1.3 The Internationalisation Counter-thesi s 37
1.3.1 Paradox Retained 40
1.4 An Attempt at Transcendence 41
1.4.1 Paradox Lost? 44
1.4.2 Paradox Postponed 47
1.5 Conclusion 50
PART ONE: STATES AND MARKETS: A QUESTION OF METHOD 52
Chapter 2 Weberian Pluralism: The Separation of State and Market in IPE 55
2.1 Introduction 55
2.2 Why IPE? 57
2.2.1 IPE on Interdependence 58
2.2.2 The IR Counter-thesis 60
2.2.3 Third Wave Interdependence Theory 62
2.2.4 IPE Beyond Interdependence 66
2.3 The IPE Method 70
2.3.1 Weberian Pluralism 1 1
2.3.2 The Spectre o f Weber in IPE 75
2.4 A Classical Marxist Critique 83
2.4.1 A Marxist Critique o f Weberian pluralism 83
2.4.2 A Marxist Critique o f IPE 86
2.5 Conclusion 94
Chapter 3 Classical Marxism: The ‘Apparent’ Separation of State and Market in IR 96
3.1 Introduction 96
3.2 The Empire o f Civil Society 98
3.3 Rethinking Empire o f Civil Society 108
3.3.1 The Poverty o f Analogy 109
3.4 Rethinking the ‘Apparent’ Separation of State and Market 117
3.4.1 The Purely Political State 117
3.4.2 The State Debate and the Relative Autonomy Trap 122
3.4.3 A Tale o f Two Sovereignties 125
3.5 Conclusion 130
PART TWO: ACTUALLY EXISTING CAPITALISM: AN ALTERNATIVE TRADITION 134
Chapter 4 Rereading Capital: From Volume One to Volume Three 137
4.1 Introduction 137
4.2 The Dialectical Method in Capital 139
4.3 The Geographical Scope of Capital 147
4.3.1 The Country Model o f Capitalism 148
4.3.2 Reading Capital 152
4.3.3 The Society o f Capital 156
4.4 The Historical Trajectory of Capital 161
4.4.1 Arrested Development 162
4.4.2 Reading Capital 165
4.4.3 The History o f Capital 169
4.5 The Core Dynamic of Capital 172
4.5.1 The Pristine Law o f Value 173
4.5.2 Reading Capital 177
4.5.3 The Dynamic o f Capital 183
4.6 Conclusion 186
Chapter 5 Imperialism and World War: Competing State Monopoly Trusts 188
5.1 Introduction 188
5.2 Hilferding 192
5.2.1 Historical Trajectory 192
5.2.2 Hilferding Revisited 202
5.3 Bukharin 209
5.3.1 Geographic Scope 209
5.3.2 Historical Trajectory Extended 214
5.3.3 Bukharin Revisited 222
5.4 Lenin 226
5.4.1 Core Dynamic 227
5.4.2 Lenin Revisited 234
5.5 Conclusion 239
Chapter 6 Cold War: State Capitalism and Beyond 241
6.1 Introduction 241
6.2 The Russia Question 247
6.2.1 Orthodox Trotskyist Position 247
6.2.2 New Class Theories 249
6.2.3 Internal Theories o f State Capitalism 251
6.2.4 International Theories o f State Capitalism 254
6.3 The State Capitalist Answer 258
6.3.1 Geographic Scope 259
6.3.2 Historical Trajectory 260
6.3.3 Core Dynamic 261
6.4 Beyond Russia 267
6.4.1 State Capitalism and Free Wage Labour 268
6.4.2 The Nationalisation Revolution on a Global Scale 275
6.5 Beyond State Capitalism 283
6.5.1 Geographic Scope 284
6.5.2 Historical Trajectory 287
6.5.3 Core Dynamic 293
6.6 Conclusion 297
PART THREE: RETHINKING GLOBALISATION AND THE RETREAT OF THE STATE 299
Chapter 7 Actually Existing Globalisation 303
7.1 Introduction 302
7.2 Globalisation in Practice 303
7.2.1 The 1970s 305
7.2.2 The 1990s and Beyond 313
7.3 Globalisation in Theory 323
7.3.1 Geographic Scope 323
7.3.2 Historical Trajectory 326
7.3.3 Core Dynamic 332
7.4 Rethinking States and Markets 338
7.4.1 A Riposte to Volume One Marxism 338
7.4.2 A Rejoinder to IPE 341
7.5 Rethinking the Retreat of the State 343
7.5.1 The Globalisation Paradox Resolved 343
7.6 Conclusion 346
Conclusion The Privatisation Revolution as Post Cold-War Reconstruction 348
References 366
Tuesday, October 05, 2021
Press Release
ChinaEconomy & Business
Container barge passing by in Shanghai, China. Increasingly, the center of gravity of the global trade and financial system is shifting East, toward China, and South.
Multi-year partnership to produce unique insights on China’s economy and implications for Biden Administration policymaking; Rhodium partner Daniel Rosen to be named as Atlantic Council Senior Fellow
WASHINGTON, DC – March 9, 2021
The flagship project of the partnership will be a data visualization toolset for analyzing China’s economic trajectory. Building on Rhodium Group’s extensive past work tracking China’s policy choices, the first release is scheduled for June 2021, followed by quarterly updates. The project – titled Pathfinder: Anticipating China’s Economic Future – will examine China’s economic direction in six key areas: three external (trade, direct investment, and portfolio investment) and three internal (market competition, financial system, and innovation).
This regularly updated compendium of novel indicators will anchor a new publication series that helps inform the Biden Administration’s economic approach to China, complementing the GeoEconomics Center’s current China Economic Spotlight.
Josh Lipsky, Director of the Atlantic Council’s GeoEconomics Center said, “We are proud to partner with Rhodium Group to shed light on the defining economic challenge of this generation – how to grapple with China’s power. The Atlantic Council’s growing body of work on China is designed to inform smart policymaking, and the crucial missing link in Washington and beyond is a full understanding of how China’s economy truly operates.”
We are proud to partner with Rhodium Group to shed light on the defining economic challenge of this generation – how to grapple with China’s power.
Josh Lipsky, Director of the Atlantic Council’s GeoEconomics Center
Launched in 2020, the Atlantic Council’s GeoEconomics Center is organized around three pillars: the Future of Capitalism, the Future of Money, and the Economic Statecraft Initiative. The Center prides itself on impactful data visualization projects and has a proven track record of internationally recognized work. In the past several months, the Center produced major reports on the rise of central bank digital currencies, the dramatic changes in global monetary policy, and the shifting use of sanctions worldwide.
Addressing the goals of the project, Rhodium Group Founding Partner Daniel Rosen asks,
Rhodium Group is recognized for pathbreaking, objective analyses of what makes China’s economy tick and its implications for the United States and other market economy nations, businesses, and workers.
To integrate the work of the two organizations, Rosen will also serve as a Senior Fellow within the Atlantic Council’s GeoEconomics Center. He brings three decades of experience tracking China’s economic evolution.
For media inquiries, please contact press@atlanticcouncil.org
China ‘is clearly not what was envisioned’ when it was admitted into the World Trade Organization in 2001, Atlantic Council and Rhodium Group find
The nation has back-pedalled from its stated economic objectives, and the US and other market economies must protect themselves when dealing with it
Jodi Xu Klein
Published: 12:01pm, 5 Oct, 2021
Shipping containers from China are unloaded at the Port of Los Angeles in California. A new report concludes that the country is not on a track to becoming a market economy. Photo: AFP
China has fallen short of meeting its stated reform goals and is not on track to become a market economy, a report assessing China’s development has concluded.
As a result, the United States and other market economies must develop commercial rules to protect their systems better when they deal with China until it becomes a more open economy, according to the report, China Pathfinder, published by the Atlantic Council and Rhodium Group on Tuesday.
The report found that while the last decade saw some progress, China’s back-pedalling from a more open economy, which began in 2016, was particularly prominent in the past year when Beijing began to crack down on private firms in the technology and education sectors and pursued a growth strategy intended to make China less reliant on the outside world.
Lenin and State Capitalism: Debunking a Persistent Myth
Something I have run up against repeatedly over years of discussing Marxist politics in person and online is the myth that Lenin mistakenly believed socialism to be a form of capitalism. One piece of “evidence” for this claim is a quote drawn from Lenin’s “The Impending Catastrophe and How to Combat It.” In the section titled “Can We Go Forward If We Fear to Advance Toward Socialism?” Lenin argued, “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” (emphasis in original).
To critics of Bolshevism, this snippet represents a damning indictment of how far Lenin departed from Marx’s understanding of socialism. The social-democratic SPGB, one the groups who frequently employ the quote to dismiss Lenin’s politics, has claimed that “Lenin knew that he was introducing a new definition of socialism here which was not to be found in Marx.” Alongside the SPGB are a large number of anarchist or “libertarian communist” websites that have latched onto the quote as indicative of Lenin’s purportedly nefarious political designs. “Lenin was clear what kind of economy he was aiming for,” claims one anarchist brochure, “a state capitalist one.” Another anarchist site buries the quote deep within a pile of other quotes supposedly revealing a direct line of development from Lenin to Stalin.
The problem with such claims is that they fail to understand what Lenin meant by “state capitalism,” and how it differed from the “state capitalism” that they claim existed under the planning framework that was constructed during the First Five Year Plan. For Lenin, state capitalism still had profit-making capitalists (and some firms under joint ownership). It operated primarily through lease concessions to foreign industrialists, made by the proletarian state, to improve or generate investment in a particular industry. It tried to encourage bourgeois co-operatives among petty producers, and was geared toward checking the worst excesses of capitalist management and enterprise by enforcing “controls” in the interests of the working class. The system was quite different than the one that prevailed from the early 1930s onward in the Soviet Union.
Even if we set aside all outside knowledge of what Lenin did or did not mean by the term, the quote in question does not say anything even remotely similar to what its cherry-pickers have claimed it does. A close textual reading makes it clear that Lenin definitely saw a link between state-capitalist monopoly and socialism (otherwise, why even bring them up in the same sentence?). But the relationship is not one of strict equation between the two, for if it were, Lenin would not have identified socialism as “the next step forward from” capitalism. Instead, Lenin thought that the relationship was one of sharing a specific feature: the existence of “monopoly.” In contrast to “state-capitalist monopoly,” though, socialist monopoly would be “made to serve the interests of the whole people” and would no longer be “capitalist monopoly.” Far from being a revision of Marxism, Lenin’s remarks are consistent with what any Marxist would support. After all, if a governing body under socialism did not have a “monopoly” or ultimate authority over all the means of production, that by definition would point to the continued existence of private property in the means of production. And what Marxist would argue for that?
But we honestly do not need to delve into this rather monastic kind of exegesis, because Lenin, in his aptly named pamphlet “‘Left-wing’ Childishness,” discussed at length how he envisioned state capitalism functioning in the process of transitioning to socialism. Conveniently, it even contains a clear explanation of what he meant in the aforementioned quote:
“No one, I think, in studying the question of the economic system of Russia, has denied its transitional character. Nor, I think, has any Communist denied that the term Socialist Soviet Republic implies the determination of Soviet power to achieve the transition to socialism, and not that the new economic system is recognised as a socialist order.
But what does the word ‘transition’ mean? Does it not mean, as applied to an economy, that the present system contains elements, particles, fragments of both capitalism and socialism? Everyone will admit that it does. But not all who admit this take the trouble to consider what elements actually constitute the various socio-economic structures that exist in Russia at the present time. And this is the crux of the question.
Let us enumerate these elements:
1) patriarchal, i.e., to a considerable extent natural, peasant farming;
2) small commodity production (this includes the majority of those peasants who sell their grain);
3) private capitalism;
4) state capitalism;
5) socialism.
Russia is so vast and so varied that all these different types of socio-economic structures are intermingled. This is what constitutes the specific features of the situation.
…
At present, petty-bourgeois capitalism prevails in Russia, and it is one and the same road that leads from it to both large-scale state capitalism and to socialism, through one and the same intermediary station called ‘national accounting and control of production and distribution.’ Those who fail to understand this are committing an unpardonable mistake in economics. Either they do not know the facts of life, do not see what actually exists and are unable to look the truth in the face, or they confine themselves to abstractly comparing ‘capitalism’ with ‘socialism’ and fail to study the concrete forms and stages of the transition that is taking place in our country. Let it be said in parenthesis that this is the very theoretical mistake which misled the best people in the Novaya Zhizn and Vperyod camp. The worst and the mediocre of these, owing to their stupidity and spinelessness, tag along behind the bourgeoisie, of whom they stand in awe. The best of them have failed to understand that it was not without reason that the teachers of socialism spoke of a whole period of transition from capitalism to socialism and emphasised the ‘prolonged birth pangs’ of the new society. And this new society is again an abstraction which can come into being only by passing through a series of varied, imperfect concrete attempts to create this or that socialist state.
It is because Russia cannot advance from the economic situation now existing here without traversing the ground which is common to state capitalism and to socialism (national accounting and control) that the attempt to frighten others as well as themselves with ‘evolution towards state capitalism’ (Kommunist No. 1, p. 8, col. 1) is utter theoretical nonsense. This is letting one’s thoughts wander away from the true road of ‘evolution,’ and failing to understand what this road is. In practice, it is equivalent to pulling us back to small proprietary capitalism.
In order to convince the reader that this is not the first time I have given this ‘high’ appreciation of state capitalism and that I gave it before the Bolsheviks seized power I take the liberty of quoting the following passage from my pamphlet The Impending Catastrophe and How to Combat It, written in September 1917.
‘. . . 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 socialism is merely the next step forward from state-capitalist monopoly.
‘. . . State-monopoly 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 intermediate rungs’ (pages 27 and 28).”
Lenin himself, then, is clear regarding what he meant by the quote. In a country where what Lenin called “patriarchal” production and “small commodity production” were pervasive, he envisioned “state capitalism” as a means of integrating small, isolated producers into a larger system of “national accounting and control of production and distribution.” It is in that sense, not in the sense of state bureaucrats operating as a new capitalist class, that Lenin understood state capitalism to be an important economic advance in the transition to socialism, which was viewed as something quite distinct (see numbers 4 and 5 in the quote). The idea that this stage could be skipped over, with petty producers being directly integrated into a smoothly operating planning apparatus, is utopian. Admittedly not any more utopian than the idea that workers have no need for their own state in the aftermath of a socialist revolution, or the idea that one can understand Lenin’s highly specific, contextually bound programmatic statements without having done any significant investigation into his political biography or even the history of the Russia circa 1918-1928. So, if nothing else, at least Lenin’s critics are consistent.
Certainly there are debatable criticisms that can be made of Lenin’s politics at various junctures of his life. But whatever the criticism, it should be an informed one, not the kind of dishonest distortions that have accumulated around out-of-context quotes. Such tactics do no credit to those deploying them, and short-circuit the process of intellectual and political development that must occur if socialist revolution is ever to be anything more than utopian moralizing.
Sunday, January 07, 2007
State Capitalism in the USSR
There are varying conflicting debates on the left as to when the Soviet Union became State Capitalist.
Of course amongst the Trotskyists it was always a Degenerated Workers State, even under Stalin.
The theory of Bureaucratic Collectivism, State Capitalism, etc. all evolved out of the debates with Trotsky in the Fourth International during the 1940's by various factions.
Outside of the Trotskyists, Council Communists or Left Communists, as Lenin called them, already defined Bolshevism as State Capitalism and in some cases Nationalist Socialism, as Otto Ruhle did.
Anarchists point out that Lenin himself described the Soviet Union as State Capitalism;"socialism is nothing but state capitalist monopoly made to benefit the whole people,"
Rosa Luxemburg herself a contemporary in the Social Democratic Movement with Lenin, accused the Bolsheviks of creating State Capitalism in the Soviet Union.
This new type of capitalism--properly called state-capitalism--persists to the present day in the ideological dress of 'socialism."
Well here is an interesting historical flashback from Time Magazine, I found on the web. We can officially date State Capitalism as being fully implemented under Stalin in the summer of 1931. Though it was already evolving from earlier decisions the Bolsheviks made.
TIME.com: Stalin Shifts the Helm -- Jul 13, 1931
Captain Lenin, Captain Trotsky and today Captain Stalin have never been afraid to alter Russia's course—the course of over one-seventh of the world—by a sudden titan's tug at the helm. Last week Captain Stalin tugged.
He issued no decree. He permitted the Press of Russia to disclose a speech he had made June 23 to a group of Soviet industrial executives. So awful is Comrade Stalin's power that not one of his many hearers had publicly breathed a syllable. His words, according to Moscow correspondents, will soon be law:
¶ "We have not yet reached our Communist goal," said Stalin with devastating simplicity. "Meanwhile emergency measures are necessary. ... It is unbearable to see a locomotive driver receiving the same wages as a bookkeeper!"
The wages of Soviet locomotive drivers and other skilled proletarians will be raised, Stalin indicated, above the wage level of unskilled proletarians and despised white collar yes-men. Up to last week the theory of Soviet wage scales (varied some-what in practice) was approximate wage equality between the skilled and the unskilled. With a mighty tug Stalin seemed to shift the whole Soviet wage structure —in a direction seemingly opposite to Communism.
¶"Break up the family!" was one of Russia's bywords when she went on the Five-Day Week (TIME, Oct. 7,1929). Factories began to run every day of the week with four-fifths of their personnel, the other one-fifth resting. Thus each man or woman has, under the present Five-Day week, one day of rest after each four of work; but the "rest day" of husband and wife may not be the same, thus tending to disrupt the family.
J. Stalin, happy family man, now said that factories in which the Five-Day Week does not seem to work well should return to the old system of five days' work and the same rest day for everyone at once.
¶. Still more striking was the Dictator's word that management of factories a la Soviet by voting councils of the workers must in some degree give way to management by a manager with power to manage and responsibility to show a profit. Obviously this is "State Capitalism." The State being the owner for whom the manager must earn a profit.
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Monday, September 25, 2006
Neo-Liberal State Capitalism In Asia
Free Trade Zones are the newest formation of state capitalism. Of course the contradiction here is that they pose as a form of free trade. When in fact the difference between them and state enterprizes is simply a matter of ownership. Name change really. Of course there are concrete structural differences to. But for all intents and purposes both are forms of state capitalism.
Whether they are called new economic zones; in Canada's Maritimes (dominated by call centres rather than the traditional use of these zones for manufacturing), Maquiadoras in the Caribean, Latin and South America, or Special Enterprize Zones zones in Asia and Aftica or economic reconstruction Zones in American inner cities, they remain a market distortion.
In India they are finding that the creation of these Special Enterprize Zones (SEZ) distort the market place. And since they are implemented as one of the tools of neo-liberalism to free the market of state control it is another contradiction of real existing captialism, rather than the text book capitalism of the Austrian or Chicago schools. Such text book capitalism showed its failure in the melt down of the Russian economy after its failed attempts to privatize with the collapse of the Soviet Union in 1989.
Attack on Indias economic zone plan
Since the passing of the Special Economic Zones Act in February, hundreds of businesses have rushed to take advantage of generous tax breaks, causing consternation in the finance ministry, the central bank and even the International Monetary Fund.
Special economic zones have been established in several countries, most notably in China, where they attracted the foreign investment and know-how that were central to the modernisation programme launched in 1978. However, critics claim SEZs attract investment only by offering distortionary incentives rather than by building underlying competitiveness and can delay real economy-wide reformBut economists believe the proposed SEZs are unlikely to help Indian manufacturers achieve scale efficiencies, since 133 of the 267 are less than 1 square kilometre in area. The average size is just 4.2 sq km.
“Mega-sized SEZs are the ideal solution,” said Chetan Ahya of Morgan Stanley. “We believe that in today’s highly competitive globalised world, the concept of small-sized SEZs is completely outdated.”
In a continuation of a long-running turf war with the commerce ministry, finance ministry officials said the scheme was providing unnecessary tax breaks to real estate development that would have taken place regardless of whether there was a SEZ scheme in place.It remains the function of the state to create these zones, through cheap land, tax and regulation breaks, in particular labour laws, health and safety regulations, etc. In other words it is not about trade or even production but cheap manufacturing of goods, which can only be brought about by an attack on labours wages and benefits, which eat into surplus value (profit). When the neo-liberals call for de-regulation, ending red tape, etc. it is always the labour laws they focus on or laws that impact on workers. A couple examples from the Financial Times online should suffice to make the point.
UK in secret deal with Italy on China trade
Britain has just enough EU member states ready to support its exemption from the working time directive – seen as a vital part of Britain’s flexible labour market – but the coalition is flaky.But the proposed deal has hit a hitch: Italy has so far refused to give Britain the written assurances it wants on working hours. Communists and socialists in Mr Prodi’s coalition believe the UK’s working time “opt out” exploits workers and gives Britain an unfair advantage over countries where the 48-hour limit applies.
Another shift in ownership from an autarkic form of state capitalism to a monopoly state capitalism like India's (their so called Democratic State Capitalism) is currently occuring in China as part of its economic reforms. That is the creation of capitalist law, specifically bankruptcy law.
China state firms win stay of execution
The move, aimed at cushioning the social impact on employees of financially strained state companies, will slow the disposal of bad loans held by state banks and distressed debt companies and perhaps also reduce buyout opportunities for foreigners.
The bankrupcty law, passed in August after more than a decade of debate, is seen as crucial stage in China’s reforms as it enables creditors and investors to weed out underperforming companies by filing for bankruptcy to recover at least part of their funds.
However, the law, which is due to come into effect in June 2007, will not apply to 2,116 state-owned enterprises considered at financial risk by the Chinese authorities until at least the end of 2008.
In an interview with the Financial Times, Professor Li Shuguang, one of the authors of the new law, said that for those companies, employees’ health and wage claims would still take precedence over creditors’ claims, an arrangement that had so far slowed restructuring in some sectors.
Estimates of the claims by state employees range from hundreds to thousands of billions of renminbi, China’s currency.
In other words before the capitalist risks their investment, the public has alread invested more than the private capitalist ever would. Any change in the regulations of the state, do not minimize the state, they simply make it more open to the influence of monopoly capital for its own interest.
Private equity firms’ and foreign multinationals’ efforts to buy and restructure state companies would also suffer a setback.
Professor Li, who hosted a seminar for Wall Street analysts and investors at New York’s China Institute in September, said it was “the most important law in China’s development of a market economy”.
“It shows the central government’s commitment to introducing a market economy and to use the legal system to deal with the issues arising from a market economy. That would have been unthinkable 10 or even five years ago.”
Actually the most important development of the Chinese economy in its transition to monopoly corporate state capitalism from the autarkic variety was the opening up of the banking system to foreign investment and the development of a stock exchange.The later was further enhanced by China's take over of Hong Kong one of the biggest market exchanges in the world. While the PR was that this was the end of British colonial rule over the island and the end of the age old battle between China and Britain which began during the opium wars, Hong Kong's value was its investment and banking window onto the monopoly capitalist world.