OCTOBER 9, 1979
At a time of rising international tensions, instigated by a new round of U.S. aggressive moves in the international arena, particularly in the Caribbean, it is most important to pay the closest attention to the complicated array of military and diplomatic moves which the Carter administration has set in motion under the pretext of responding to an alleged "Soviet combat brigade" in Cuba.
It is the overall political struggle between imperialism, together with its motley crew of allies, clients, and puppets on the one hand, and the socialist countries, the world proletariat, and the oppressed peoples on the other which will ultimately determine the fate of decadent monopoly capitalism.
Precisely because the struggle has been of such long duration and its nature is of such an all-encompassing character, it is important that certain other aspects of the struggle not be overlooked in the course of acute political, diplomatic, and military encounters.
Such, for instance, is the economic policy of world finance capital in relation to the socialist countries. It is very well known, of course, that the imperialist powers have for many decades employed economic sabotage, blockade, and attempts at strangulation against all the socialist countries. It is equally well known that the socialist countries, virtually without exception, have attempted to normalize relations with the imperialist powers and have sought out all avenues to develop trade, commerce, and general economic intercourse with a view towards strengthening socialist construction.
What is not so well known and what has not been given adequate attention are the varied methods and devices of imperialism to undermine socialist construction. Open economic warfare, of course, has been one method. Economic subversion and sabotage, another.
These have more or less been exposed over the many years of the struggle. There remains, however, the area which in contemporary economic literature goes under the name of "trade and commerce for mutual benefit based on cooperation." This is very important. It covers a multitude of processes which on the one hand have held out hope for the socialist countries and on the other hand have formed the basis for the penetration of finance capital into the more vulnerable socialist countries.
Marxists are not economic determinists. Marxists take their initial starting point from the anatomy of the class structure which governs a given society. Marxism teaches that while the basis for the exploitation of the masses lies in the search for super-profits by the ruling monopolies, economic and financial gain lie at the root of the constant chase for profits. If finance capital can penetrate the economies of the socialist countries on a more or less agreed upon basis, it will pursue its goal as feverishly as it has done throughout the history of imperialism. In underdeveloped countries.
These economic processes of finance capital, which are developed slowly, are often given less attention than they deserve, but they are nonetheless extremely deadly if permitted to run their course. Of course, at a certain stage of development in this process of capital penetration, this or that socialist country will be confronted with a formidable political development which in turn can threaten the very fabric of the nascent socialist order.
It is precisely this eventuality which must be given more attention. Thus far only the capitalist press has carried endless columns in the economic sections of its newspapers which boast of the inroads they have made in some of the socialist countries.
These inroads are not confined to Yugoslavia or Poland but reach also into other socialist countries. At this historical conjuncture when the Peoples Republic of China (PRC) has virtually become diplomatically and militarily allied with imperialism, it is important to examine its economic relations with the latter. China's immense role in the world dictates this.
While its military and diplomatic relations, such as they are with imperialism, are of course key to any political attitude to the PRC, in the long run it is the economic relationship with imperialism which may ultimately decide whether or not China will survive as a socialist country and regain its stature in the socialist community or become integrated into the capitalist orbit as the bankers and generals have long been planning.
It would be easier for the PRC leaders to break a diplomatic alliance with the Western powers and Japan than it would be to reverse long-standing economic integration with the economic structure of world finance capital.
When the Soviet Union in 1939 effectuated the Stalin-Hitler Non-Aggression Pact and made an alliance between the USSR and Germany, whatever its merits from the point of view of gaining time against Hitler (while at the same time disorienting the world working class), there was one facet of it which stood out rather clearly in spite of all the confusion it caused. There was no element of economic dependence and no aspect of economic integration on the part of the USSR with Germany. The non-aggression pact was preceded by a trade agreement, but it did not assume the dimensions of a far-flung plan for economic integration.
Similarly, Japan's agreement with Nazi Germany was purely of a military and diplomatic character and merely amounted to parallel plans to divest the Allied imperialist powers of their colonial booty in Asia and in Europe.
The situation between the PRC and Western imperialism as well as Japan at the present time is altogether different. The aim of imperialism is not merely a military and diplomatic alliance against the USSR, which they still fear that China may at any moment reverse. The more fundamental aim is of a long-range character. It is to bring China, an economically and industrially undeveloped colossus, solidly into the orbit of imperialism.
Many steps have already been taken over the years by the PRC leadership in that direction. The trade relations, in and of themselves, do not constitute the fundamental linchpin which would make for unbreakable economic links. It has been many years now since the PRC abandoned Soviet Aeroflot engines for U.S. aircraft. It was the reactionary senator from Boeing, Senator Jackson, who first saw the significance of this move.
Following this rather unheralded move, China over the years has steadily leaned in the direction of banking its future on Western trade, commerce, and technology. This was true to some extent even during the Cultural Revolution.
Rolls Royce engines from Britain or DC-10 engines from the U.S. in and of themselves may seem to be small potatoes when one considers the vastness of world capitalist trade and technology. But given their strategic significance in the framework of the contemporary period they can create considerable dependence on the West, especially if the trend continues for a number of years, as it has.
It is worthy of note that in the growing challenge from Western Europe and Japan to U.S. economic domination in other fields, the U.S. has retained overwhelming control in this strategic field, in the vital aircraft industry in the imperialist world. The recent collapse as a challenge to the U.S. of the British-French Concorde project, the largest technological undertaking in Western Europe, and the announcement that the Boeing Company and All-Nippon, Japan's largest domestic airline, have agreed on the purchase of up to 40 of Boeing's new 767 aircraft at a value of $1.5 billion, underscore the dominance of the U.S. in the aircraft industry. This leaves China little room to maneuver elsewhere for strategic aircraft.
Vital as China's shift years ago from the Soviet to the U.S. side in the aircraft field was, it is merely one instance of the shift in the economic orientation to the West. This shift is vastly overshadowed by far more significant moves which China is embarking upon in the broader economic and financial field. These foreign policy shifts are intimately related to the vast reforms in the economic structure of China which are of a wholly regressive character, notwithstanding a progressive development here and there.
For instance, on September 28, 1979, Deputy Premier Gu Mu said that the PRC is ready to join the World Bank, also known as the International Bank for Reconstruction and Development, which is technically a part of the United Nations organization.
It is in the interest of any socialist country to seek out and apply for membership in any number of international organizations where this can be useful and helpful in promoting the cause of socialist construction and the welfare of its people. There are literally dozens of world organizations which range all the way from meteorology to oceanography, world health, communications, and so on, where there are advantages not merely in exchanging information but also in acquiring know-how and technical expertise, aside from broadening contacts with the rest of the world.
The purpose of socialist construction in any country is not to hermetically seal itself within its own boundaries, but to expand economic, political, and cultural relations, always with the view of retaining sovereignty and independence from imperialism.
It is otherwise, however, with notorious organizations such as the World Bank, which is an instrument of imperialist domination and subjection. One merely has to look through the old issues of the Beijing Review for some of the most enlightened documentation on this score.
The New York Times of September 28, in its story on China's announcement that the PRC will file a formal application to join the organization, correctly headlined its story, "China set to join West's loan units." There could scarcely be any doubt that it is indeed a Western device to economically subjugate the loan applicants and tie them to the chariot wheels of Wall Street, Lombard Street, the Bourse, and the Tokyo Stock Exchange.
The Times characterized China's move as "a major step in Chinese policy toward both full Western economic citizenship and greater openness." Just what does this greater "openness" mean? It means compliance with the infamous disclosure requirements for all loan applicants. It means not only to give your life history but an unambiguous declaration of intents and purposes for which the loans are required.
Deputy Premier Gu assures us that the application shows that "so long as it does not affect China's sovereign rights and the terms are appropriate, we are ready to accept credits and loans from all friendly countries and financial groups." But this is precisely the point. It does infringe, it does affect China's sovereignty. The terms are not appropriate. And the countries are not at all friendly but as antagonistic as ever and only mean to use China as a wedge against other socialist countries and to bring it into the imperialist fold. This has been one of the causes of the bitter conflict between Mao and his followers and the Deng-Hua grouping which is now at the helm.
From its earliest days the Chinese leadership under Mao tried to avoid any sort of dependence upon imperialism, particularly in the light of the long history of China's oppression and exploitation at the hands of the colonialist imperialists. Getting loans and credits from the imperialists was not on its agenda. It had little choice, in the light of the announced policy of U.S. imperialism not only to isolate but to contain China and ultimately to virtually engage in an open war as a result of U.S. aggression in Korea and the friendly assistance that the PRC gave to the Koreans during the war.
It is also true, however, that during the course of this long struggle with imperialism, the Chinese leadership went to the other extreme in making it more or less a dogmatic article of faith not to participate in any of the economic or financial undertakings of the imperialist powers which would involve loans and credit, even if it were on terms that were truly acceptable and appropriate to a revolutionary socialist government.
The Bolsheviks, under Lenin, also had declared their intention of seeking loans and credits and even, as Lenin later said, allowing "the most powerful imperialist monopolies" — Lenin's word — concessions in the USSR under the vigilant eyes of the Bolshevik government. The imperialists turned down the terms demanded by the Soviet government.
It is not inconceivable, however, as subsequent history of the USSR shows, that loans and credits to a growing socialist country from the imperialist powers could turn out to be of considerable material assistance, if the leadership of the socialist country can hold the imperialist wolf at bay in this area of conflict, which is merely another form of the struggle between imperialism and the socialist countries.
But whereas the Chinese leadership under Mao had gone too far in eschewing any kind of broad loan or credit agreements with the imperialists, born mostly out of fears that these would impinge upon the sovereignty and independence of the country, this new reactionary grouping which is in power now has gone all the way to the other extreme and virtually opened the floodgates to imperialist penetration.
Like Beijing's attempt at accommodation with the European Economic Community (EEC) the move to gain membership in the World Bank, should it become consummated, means, in the words of the Times, "full Western economic citizenship," which is another way of saying economic integration into the imperialist orbit. When an admittedly weak, underdeveloped socialist country becomes fully integrated into the economic orbit of imperialism, what does it signify? It signifies the subordination of the nascent socialist economy — of the dictatorship of the proletariat, as the PRC would say — to the dictatorship of the imperialist bourgeoisie. Should all this happen, could the result be any different?
Such a sweeping move could not possibly be contemplated by the Chinese leadership, were it not for the reactionary reforms at home which the Beijing regime has been carrying through under the guise of eliminating excesses of the Cultural Revolution.
While one need not go to the lengths of exaggerating the sharp turn to the right, as do John Fraser of the Toronto Globe and Mail or Fox Butterfield of the New York Times in describing the virtual free rein that the government has given to the collectives in agriculture and small industry, it is nevertheless clear that what the new leadership is doing is reviving long-dormant capitalist elements in the economic life of China.
Of course, where excesses have taken place and where industry and agriculture have declined, forced concessions to private initiative may be necessary. This has long been understood ever since Lenin's New Economic Policy. But what is taking place in China is the wholesale dismantling of incipient socialist projects both in agriculture and industry in favor of bourgeois enterprises.
"Collectively owned shops and trades," says John Fraser in his article which is also syndicated in the Christian Science Monitor of September 17, 1979, "are now being given an extraordinary amount of encouragement from the government." This may be wholly necessary and effective, if it is indeed oriented towards strengthening the socialist economy and eventually converting the collectives — which are semi-bourgeois — into full-fledged socialist property wholly run by the state. Collectives are in reality a form of group ownership in which the state merely retains a certain percentage of the profit and where state control may be only nominal.
It is worth noting, however, that Fraser, who has been in China for a considerable time, sees in the bourgeois degeneration of the collectives "the emergence of free enterprise in China" and ventures to predict that such a development "may turn out to be one of the landmark events of our time." In a word, a full-scale counterrevolution.
There are many who believe that such a development has already taken place. In our view, the judgment is wholly premature and not warranted by the facts. The headlong shift to the right is most obvious in the diplomatic and military fields. That's where the greatest danger lies and the most attention must of course be given. The more ominous aspects, however, in the long run lie in the slower, quieter economic processes, both domestically as well as in the world arena.
But it is still only a process. It can be overtaken by political developments either at home or abroad.
There is still danger of falling into the abyss as well as the opportunity to reverse the process. Unquestionably the intervention of the Chinese workers and peasants on a revolutionary scale would be the most potent answer to the reactionary ruling group at home and to the imperialists abroad.
Notwithstanding the current state of affairs between China and the Soviet Union, and not for a moment forgetting the possibility of another attack by China against Viet Nam, it is important to bear in mind that in its fundamental aspects the economic policy of world finance capital in general and American finance capital in particular has in substance the same objective in China as it does in all of the socialist countries.
The form of it may differ but in essence it's the same. The multi-national corporations and giant banking combines which the U.S. government serves, have specialized approaches to each of the socialist countries.
In the very midst of the hysteria which the Carter administration fomented against the USSR over the phony issue of Soviet "combat troops" in Cuba, the U.S. government announced that it is ready to sell the USSR up to 25 million tons of grain, 10 million more than the Soviet Union bought in the crop year just ended. This is seven million tons more than the purchases in 1972 under Nixon over which such a big hullabaloo was raised, claiming that the wheat deal and not the general inflationary trend sent domestic bread prices soaring.
Presumably the wheat offering was a conciliatory move by the Carter administration. In reality it was nothing of the kind. The fact of the matter is that this year the U.S. had a surprisingly big bumper crop. Coming at a time of recession or near-recession, the bumper crop was a manifestation of capitalist over-production and the huge grain corporations would be at total loss as to how to dispose of the surplus. The USSR is one of the few customers which can be relied upon to pay promptly. In other circumstances the U.S. might be forced to dump the grain into the ocean or burn it. Making it available to the USSR at a price is a lesser evil.
By contrast, however, the hostile character of Carter's diplomacy in this period was vividly demonstrated when the U.S. government's International Trade Commission suddenly ruled that imports of anhydrous ammonia from the Soviet Union were taking away business from U.S. producers. The ITC recommended to Carter that he impose duties or some combination of penalties to stop the USSR from "dumping" its ammonia products on the U.S. market. It goes without saying that it was 13 big U.S. chemical producers and distributors who sparked the move and found a ready ear not only in the Carter administration but in Congress.
Ammonia is one of the few manufactured products for which the USSR is able to gain a market in this country, but this has continually been undermined by both economic and political pressures in the U.S. The economic and political pressures come from factional groups having a competitive interest against the USSR and from a broad bourgeois political opposition mounting a constant anti-Soviet campaign which increases during periods of high tension between the Soviet Union and the U.S.
The USSR, in spite of its more than 60 years of existence, has not been able to have its relationship with the U.S. normalized to the extent where it can be treated equally along with other countries with respect to tariffs and import and export controls. The ban against trade with the USSR still exists in the form of the so-called "most favored nations" clause, which permits discrimination against Soviet products and trade in general.
In selling grain to the USSR, the U.S. relieves itself of a renewable resource, so to speak, and in return gets hard cash which the Soviet Union has to purchase with its gold stock, which is not a renewable resource. It is not trade on an equal basis.
The sale of technology to the USSR is mostly forbidden, not on economic grounds but on political grounds, and is aimed to undermine the USSR, both economically and politically. Nevertheless, the USSR has been able to obtain large credits from Western imperialist banks. The credit, however, has been on the basis of having maintained an impeccable record of payments on time. This is unquestionably due to the economic strength and viability of the USSR as well as to its tremendous resources such as gold, oil, and others — but even more so to its ability to take credit on wholly acceptable terms for a socialist country.
Nonetheless, the economic warfare against the USSR continues as part and parcel of the overall broad political struggle. The hopes of imperialism of using trade and economic intercourse as a means of reviving bourgeois trends among the economic and technical intelligentsia in the USSR and thus cultivating a broad grouping of "liberalizers" of the economy have faltered, and if recent literature in the Western press is any indication, their hopes of such a prospect have become rather dim.
The same, however, cannot be said of the East European socialist countries. To each of these the U.S. has a specialized, particular approach.
Recently Belgrade became the site of a world conference of the International Monetary Fund and World Bank. It was deliberately chosen by the bankers to underscore that Yugoslavia can scarcely be called a socialist country. It was a symbolic gesture and even a defiant one to the USSR and other socialist countries. There was little that the Yugoslavs could do but to haul out the welcome mat.
What the Yugoslav leaders are most of all interested in is to persuade the leading bankers to refinance the staggering sum of $600 million of indebtedness that is coming due and which the Yugoslav officials are at a loss on how to meet. For the refinancing of the $600 million debt to be successful, it would mean that Yugoslavia must have renegotiated over the last four months debts of more than a billion dollars. The interest on such debts is staggering when one considers that the total indebtedness to the bankers amounts to $13 billion.
The need to renegotiate the debts signifies that the Yugoslav leaders have been unable to meet their indebtedness on time and are on the verge of defaulting unless the bankers agree to extend the terms of the debt — for a generous fee, of course. Thus Yugoslavia's debt service "will rise from $1.8 billion this year to $2.9 billion before dropping off after 1982 more than 22% of the country's projected total hard currency earnings." (New York Times, September 24, 1979, page D1.)
This aptly sums up 30 years of the Titoist way of building socialism, of the meaning and significance of the Yugoslav so-called "self-management economy" and of the real worth of the participation of the "workers' councils" in the "innovative" economic structure of Yugoslavia.
What was the indebtedness mostly for? Of course, there are many construction projects which are valid and appropriate. But in extending loans for industrial projects the bankers do so after approving what they consider the need for such projects and the potential for the Western markets. In the Yugoslav case, at least so far as current development goes, the marketable products from many of the projects in Yugoslavia are not at all salable in the light of the economic crisis in the capitalist countries.
First the bankers insist, before lending money, that the construction of a certain installation or industrial project fit in with their overall conception of its desirability in the world capitalist economy. They then proceed to lend the money, sometimes in installments, with a view toward market conditions in the capitalist West.
Of course, over a period of many years, some of the money lent and credit extended are for genuine and sorely needed industrial and agricultural improvement. But the pattern that has emerged over the years — and it is now 30 years — clearly indicates that the integration of Yugoslavia into the capitalist orbit of imperialist finance and economics has grown far more than the socialist sector.
The independence of Yugoslavia, of which Yugoslavia officialdom boasts so much, is mostly a fraud. To the extent that it is true, it is based on the fact that in moments of crisis and danger, notwithstanding all the anti-Soviet postures of Tito at the recent Non-Aligned Conference in Havana particularly, the Yugoslavs can lean back or rather fall back on Soviet aid of both an economic and, when need be, of a diplomatic and military character.
The truth about the Yugoslav "experiment" is that it has rested upon Tito's penchant for exploiting the class antagonisms between imperialism and the USSR, thus eking out an existence for his sociological innovations.
If Yugoslavia is the clearest example of precisely what a socialist country should not embark upon, Poland is the second runner-up. Its indebtedness to the imperialist banks exceeds that of the Yugoslavs by more than 3 billion. It was not long ago that the imperialist press disclosed that Western bankers were now "monitoring," to use the choice phraseology of the New York Times, the economy of Poland.
Poland in effect had reoriented a good deal of its economy toward the West following the unfortunate uprisings which began with the 1956 insurrections, then overturned the Gomulka regime in 1970, and as it turns out now pushed the Gierek regime, following the 1974 strikes, further towards the West. Poland's economic planners were faced with a choice of reshaping the economy in either a more thorough and planned socialist orientation, including collectivization of the land, which is now on an almost thoroughly bourgeois farming basis, or in an orientation towards the West. They chose the latter course. They sought and obtained huge infusions of Western capital.
But as with Yugoslavia, and as surely will happen in China with far more devastating results, they capitulated to the very same demands of the bankers which are standard for all socialist countries. These demands mean attaching strings which make the borrowers' plans self-defeating.
An illuminating example as to the approach of the bankers in Poland goes as follows: The Polish officials needed a loan to reconstruct a factory which could produce small machines of various types. The bankers had a suggestion. Poland should produce golf carts. But, said the Polish officials, golf carts are salable only in the United States, not elsewhere. Well, that is too bad. It's golf carts or nothing.
Much of Poland's $16 billion indebtedness to the Western bankers has been for projects destined for the Western capitalist market. The latter, however, has been unable to absorb the Polish products due to the erratic character of the capitalist economy. In addition, much of the indebtedness is for large-scale construction which will not be completed for perhaps years to come and which needs constant refinancing. This again brings about greater and greater reliance and dependence on the banks.
It is no wonder that some of the capitalist newspapers have begun to use the phrase "control of the Polish economy by the West." Of course this is an exaggeration. But the fundamental fact of the matter is that, were it not for its close and intimate relationship with the Soviet Union, the Polish economy would fall lock, stock, and barrel like an overripe fruit into the hands of the imperialists.
Indeed, it is not the domination of the USSR which the Polish workers have to fear. Rather it is the domination of the imperialist monopolies. If there is any solution of a fundamental character to the ailing Polish economy it lies in strengthening its relationship with the other socialist countries and disengaging itself, to the extent that it is possible and desirable, from the tentacles of imperialist finance capital.
Of all the socialist countries, it is the USSR and the German Democratic Republic which have advanced economically and industrially in a socialist direction. Indeed, when one surveys what in better days used to be called the socialist camp, and which sociologically is still the socialist camp, it is the USSR which has made greater strides and which stands as a mighty fortress of socialist construction and anti-imperialist assistance.
It is not to be wondered at, then, that the imperialist monopolies and the Pentagon war machine have made the USSR the target of the struggle. In a real sense the struggle between the USSR and the imperialist countries is a struggle between two opposing social systems — one based upon capitalist exploitation and the other based on socialist construction. In this sense Brzezinski is right, the two are competitors, not in the imperialist sense but in the sociological sense.
It is a competition not unlike that between the old feudal system and bourgeois society at its dawning. But both feudalism and capitalism were exploiting societies and both were based on the retention and strengthening of private property in the means of production. The fundamental aim of socialism is not only the abolition of private property but the liquidation of all class rule. It therefore has as its aim the liberation of all humanity.
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Last updated: 13 April 2018