John Ross on China
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Ken Livingstone's mate, and economic adviser to the likes of John MacDonald (i.e. the Labour left faction now around Corbyn) on China:
Quote:The majority of China’s economy is not state owned, and China’s five-year plan sets only a few key macro-economic targets – overall growth rate, guidance on investment and consumption, industrial priorities etc. Within these parameters market mechanisms operate and are used to guide the economy. This is the precise sense in which Deng Xiaoping could state: ‘there is no fundamental contradiction between socialism and a market economy’ and ‘if we combine a planned economy with a market economy, we shall … speed up economic growth.’China, basically, isd a Keynsian wet dream:
Quote:In contrast, if required, China’s state owned sector can be instructed to raise or lower investment. As the Wall Street Journal noted: ‘Most economies can pull two levers to bolster growth: fiscal and monetary. China has a third option. The National Development and Reform Commission can accelerate the flow of investment.’ China therefore possesses far stronger anti-crisis mechanisms than the West.But, unless the state has some mechanism for enforcing administrative bankruptcy, it is still going to run up against accumulation problems and the need to keep expanding the value of capital. The chinese state may have an additional lever to pull, but that may not necessarilly save it.
What Ross is forgetting that China is growing because it is playing catch up, as with the Soviet Union, the extensive growth of capitalism is rapid, but now it must find some way of dealing with the intensive growth, liberalism uses the market for this, and that includes crashes. If China wants to grow without slumps, it must deal with clearing dead capital out of its path. I predict it can't.
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