Legitimizing Market Socialism: The Contortion of Marxism by G. Greenfield and Apo Leong

In the post-Mao era of market reform there remained a need for the market
socialist project to establish its theoretical and ideological legitimacy.
Central to reconciling a market economy with socialism was the question
of the commodification of labour and the social antagonisms implicit in it.

As market socialist theorists for the Chinese Communist regime have
indicated, the commodification of labour power in practice required a
rethinking of socialist theory if reforms were to continue: The development
of China's labour market is faced with an important theoretical
obstacle - the theory that under the socialist system labour is not a
commodity.This obstacle was dealt with in a vast literature on market
socialism.

Lin Zili, one of the leading theorists of Chinese economic reforms, justified the creation of a free labour market and the dismantling of egalitarian wage policies and restrictions on wage differentials (the same 'labour market rigidities' identified in Hu Zu-liu's report for the IMF) doing away with the very notion of exploitation:

"The exchange of equal amounts of labour is complex.It includes the exchange of unequal amounts of labour, with producers who have relatively advanced material production conditions still able to obtain a certain differential income, and the suppliers of capital able to obtain interest.These things are both unequal exchange of labour,involving the 'possession' of other people's labour, though they generally do not occupy an important position.

If at a certain time their role expands, then we can regulate and control them through macro-economic measures, so that polarisation and class antagonism do not result.Therefore, we consider it inappropriate to speak of unequal exchangeof labour in the socialist commodity economy as 'class exploitation'. Rather, it is more appropriately termed 'non-labour income".

As such the socialist commodity economy has 'broken through the traditional doctrine of only being able to have exchange of equal amounts of labour via the direct exchange of labour' and 'has enabled the abstract principle of exchange of equal amounts of labour to become united with reality".

In Lin's reading of Marx, 'socialism is unity among the workers,
and exchange of equal amounts of labour', and for Lenin, 'socialism meant
equal pay for equal work, which is also the meaning of exchange of equal
amounts of labour.' Having equated socialism with equal exchange, Lin
cites the shortcomings of Marx's notion of 'natural labour time' as a means
for measuring this equal exchange, arguing that with the complexity of the
quality and social division of labour in modern economic systems only
through the market can this exchange be carried out.

Therefore 'the exchange of equal amounts of labour must be characterized by the exchange of commodities of equal value, becoming a new form of equal exchange of value relationship: this is the socialist commodity economy.

Without any explanation of what compels workers to sell their labour
power and the social relations determining this, Lin achieves a link
between Marx and Lenin's conceptions of socialism (as constructed in the
official narratives of the Chinese Communist Party) and the rational
economic necessity of the market.

Thus the inequality and polarisation generated by the divergence between earners of non-labour income and sellers of labour-power reflects the fairness and equality in exchange envisaged by Marx:

The principle of exchange of equal amounts of labour involves equality in buying and selling different amounts of labour and in exchanging different average values. This causes people's economic benefits to depend on the amount and efficiency of their labour so that this kind of equality encourages efficiency.

In this market socialist mode of 'equal exchange' which claims to be different from capitalism; equality is subordinated to the imperatives of efficiency and workers are subordinated to the threat of impoverishment and unemployment.

While Marx understood the equal exchange of labour power as being complex, the solution did not lie in fostering existing inequalities, but in recognising its primary determinant - the structures and systems of power which shape the social relations of production and distribution.

Furthermore, Marx's conceptualisation of the equal exchange of labour is premised on the social working day, where the social division of labour, the length of the working day and productivity (intensity of labour power) is collectively decided and regulated by workers' councils.

The rationale of the Chinese socialist market, on the other hand, is premised on the commodification of labour power and the distribution of power in favour of managers and technicians to increase labour productivity. The social regulation of the working day gives way to the intensification of the pace of work and the extension of the working day, with only the decisions of managers and supervisors and the physical limits of human endurance to bring it to an end.

Implicit in Lin's assertion that the macro-regulation and control of a nascent capitalist class by the state will prevent polarisation and class antagonism is the assumption that the political regime will not become enmeshed in the accumulation of 'non-labour income', and that the state
itself is not the source of this emerging class of 'possessors of other people's labour'.

Yet the state apparatus which exercises policies of regulation or containment is precisely the same social power base from within which the new capitalist class and partners of global capital are emerging. Mayors of cities, city and provincial officials, military and police officers, are also managers of state-owned and private businesses,as well as being joint venture partners in the foreign-invested factories in the regions or industrial sectors in which they exercise political authority.

The legitimation of the accumulation of non-labour income (which includes interest and 'risk income') is central to Lin's conceptualisation of market socialism.

The accumulation of non-labour income (that is, profit) is merely a form of 'complex labour', a fact not understood since 'some comrades do not acknowledge that business is a form of labor."

By treating capital in the neoclassical sense of accumulated material wealth or money rather than a social relation, capital becomes income, then a form of complex labour.

Through this device, exploitation and class antagonism is dissolved in theory at the very moment at which it has become more and more a reality in state and collective enterprises.

As Apo Leong has observed elsewhere, the theoretical legitimation of exploitation coincides with the reconfiguration of the relationship between labour and capital from antagonism to partnership: 'Class struggle is no longer a byword within the ruling Communist Party and the
official trade union.

"Stability and harmonious relationship" between the employer and the employee has become the new catch phrase in the country's "historical mission of building a socialist market economy".

Given the monopoly on Marxism-Leninism and the production of official knowledge exercised by the Party elite and their entourage of officially sanctioned intellectuals, the marxist rationale of market socialism formed the basis of a new political economy of truth - the basic principles of
which would be beyond debate.

This is epitomised by Lui Guoguang's pronouncement that socialism and egalitarianism are incompatible:

'Socialism promotes the development of the productive forces, whereas egalitarianism hinders them. Therefore socialism and egalitarianism are not compatible".

This is not a new form in theory, but merely a reversal of the reversed Marxist truth.'" Whether or not this statement makes sense is less important than the power with which the proposal to abandon all state policies directed at ensuring social equality achieves immunity from criticism by claiming to embody a 'Marxist truth.'


Extract from CHINA'S COMMUNIST CAPITALISM:
THE REAL WORLD OF MARKET SOCIALISM
Gerard Greenfield and Apo Leong
Socialist Register 1997