Do the (Chinese) math: A review of Minqi Li’s “The Rise of China”

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This will be a book review of Minqi Li’s “The Rise of China and the Demise of the Capitalist World Economy,” a book which is important for its calculation of the rising contradiction between capitalist growth and ecological sustainability, and for its perspective on Chinese history.  

Li’s prose is clear and understandable, and his use of graphs and charts really drives his points home rather than (as is the case with some economic writing) confusing the reader.  In this review, I will look at Li’s book with one eye upon a conference I have volunteered with Focus the Nation to help organize.  Li will be the keynote speaker at the FtN conference at USC.

(crossposted at Big Orange)

Book review: Li, Minqi.  The Rise of China and the Demise of the Capitalist World Economy.  New York: Monthly Review Press, 2008.

On April 18th of this year (i.e. just before Earth Day), Focus the Nation, a nonprofit organization dedicated to alternative energy sources, will be holding “Town Hall forums” across America to discuss abrupt climate change.  The “Town Hall forum” that will be held at the University of Southern California plans to have its keynote speech delivered by Minqi Li, Professor of Economics at the University of Utah.  The Focus the Nation events promise to be really interesting, as many of them should offer an opportunity for popular forces to interact with elected officials about what will probably be the most significant environmental problem of our era (unless the human race can cook up something worse).

Minqi Li’s presence at the USC event on April 18th, however, promises to be especially interesting.  To give you an idea of what Minqi Li is like, here’s a video interview of him from “The Real News” from last September —

Li also put out a book last year, titled The Rise of China and the Demise of the Capitalist System.  This text is interesting not merely because it suggests a “Rise of China” narrative that starts not from the liberalization of China after Mao’s death in 1976, but from the beginnings of the People’s Republic of China.  The Rise of China also offers a narrative of the capitalist world economy which today teeters on the verge of disintegration.  So there are two threads going on in Li’s book, and he brings them together to suggest that, as the rise of the global capitalist system in the 19th century (and here Li places especial emphasis upon the rise of British imperialism) coincided with the decline and fall of the Chinese Empire, so also the phenomenal growth of the Chinese economy will coincide with the demise of the capitalist world economy.

The reference to the “demise of the capitalist world economy,” first off, is not a reference to Marx, but rather to Immanuel Wallerstein, the world-systems theorist, who suggested in 2002 that the “beginning of the end” of the capitalist system was nigh.  Li writes very much in the tradition of world-systems theory; his version of history is patterned, for instance, upon Giovanni Arrighi’s The Long Twentieth Century.

The first part of Li’s book, comprising the first three chapters, is about China’s story.  Here Li tells China’s story, its decline and rise under the People’s Republic, and Li’s version of this story differs in important respects from the anti-Mao story told in certain Western texts.  In this narrative, Li suggests that socialism is better able to meet the needs of the people than capitalism.  The 1911 revolution, it argues, was a bourgeois revolution in a country with a relatively small bourgeois class, and so it was incapable of uniting China effectively.  China thus fell into the rule of warlords.  Only the 1947 revolution could bring China forward, given that there was some socialist content to it.  And, after 1992, China was obliged to impose “shock therapy” in order to turn the country into a profit-making sector under neoliberal conditions.  

Yet one can read some interesting caveats in Li’s endorsement.  He suggests, first off, that Chinese “communism” offered what Wallerstein called a “mercantalist semi-withdrawal” from the economic world system.  So mercantilism is hardly socialism.  And then, of course, Li’s suggestion for why Chinese “communism” became an authoritarian class society:

Chinese socialism was the historical product of a great revolution, which was based on the broad mobilization and support of the workers and peasants comprising the great majority of the population.  As a result, it would necessarily reflect the interests and aspirations of ordinary working people.  On the other hand, China remained a part of the capitalist world-economy, and was under constant and intense pressure of military and economic competition against other big powers.  To mobilize resources for capital accumulation, surplus product had to be extracted from the workers and peasants and concentrated in the hands of the state. (50)

Thus it remains an open question whether China, or any country operating in the climate of international competition of the 20th century, could really have become socialism.  Li in fact dramatizes this open question with an even broader question:

While the struggle for accumulation conforms fully to the laws of motion of the capitalist world economy, the pursuit of basic needs raises fundamental questions regarding the rationality of the existing world-system.  (31)

As Hamlet said, “ay, there’s the rub.”  If the capitalist world economy has “laws of motion” that oblige nations and corporations to engage a struggle for accumulation, what is to become of world society when its ecological life-blood has been “accumulated” after the capitalist system’s time is up?  Are we just to wait for the disasters to happen?  This, indeed, is the dilemma that faces Li at the end of the book.

Where the first half of this book is about the rise of China, the second half of the book attempts to place said rise in the context of an analysis of the world system as viewed through the linguistic lens of world system theory.  Chapters 4 and 5 are where Li situates China as a nation in the economic “semi-periphery” — it benefits from the nations of the true periphery, which is merely a resource base for the capitalists, yet it still supports the accumulation at the capitalist core.  Here, Li does some calculation as to the class composition of American and of Chinese society before answering the question, “can the capitalist world economy survive China’s rise?”  The author presents four scenarios.  1) China may fail, and sink back into the periphery.  This is the least devastating of the scenarios.  2)  China may force wages down in the rest of the semi-periphery by virtue of its enormous labor force.  3) is that China will simply squeeze into the worldwide competition for the surplus, reducing everyone else’s share.  And, lastly, 4) China may force the rest of the semi-periphery back into the periphery.  Generally, the idea is that the cost to the rest of the working class of having another huge capitalist nation to support will cause other nations to lose out in the accumulation sweepstakes.

Li’s analysis leads him to conclude that China’s growth will eventually lead it to be a further burden upon the resources of the rest of the world.  This becomes important in Chapter 6, in which Li delivers a rather pessimistic assessment of the ability of planet Earth to support further capitalist exploitation.  Li goes down the line and offers pessimistic assessments of the world’s energy future, its future in mining, and its future in agriculture.  Meanwhile, China’s current spurt of economic growth, we are told, has already thrust it into environmental crisis in which “seven of the ten most polluted cities in the world are located in China” (167), most of China’s water is polluted, and its agricultural land is degraded and getting worse.  

Where these trends frighten him the most, however, is in abrupt climate change.  Li suggests that “realistically, stabilization of the global climate would require drastic cuts in the global use of fossil fuels.  Given the limitations of renewable and nuclear energies, this will have to translate into dramatic declines of the world economic output.  (171)

In short, the economy will actually have to shrink in order to survive.  This is consistent with Li’s thesis, in which “the capitalist world-economy rests upon the ceaseless expansion of material production and consumption, which is fundamentally incompatible with the requirements of ecological sustainability.”  (177)  His political solution, consistent with economic retreat and concern for the well-being of the people, is that of a “planned economy” (181) in which the working class will be able to limit the privileges of the ruling elites while at the same time “mobiliz(ing) all of our best potentials to survive the coming catastrophes while preserving the best, the most important accomplishments of human civilization.” (182)

*****

Now, the folks at Focus the Nation (for whom I volunteer) are going to want me to transmute all of this into some direct, achievable, plans of action, since, after all, this will be the goal of the conference.

Let’s start with the matter of perspective here.  This guy Minqi Li might be some kind of Maoist.  After all, that’s what he said he had become when he was put in prison by the Chinese regime (a year after the 1989 protests) for speaking his mind.  But what Li is proposing is not quite what Maoism was in China before 1976.  Li’s proposed socialism (his word) is really a lot like “conserver society” as proposed by, among others, Ted Trainer, who is Li’s primary source for a good deal of the “limits to growth” material which appears in this book.  The shift in emphasis here is Li’s advocacy of a “planned economy,” which will be quite necessary to deal with abrupt climate change.  There is also a resemblance here to Saral Sarkar’s thinking.

Thus everything Li says is quite reasonable, and there is no rhetoric of what counts in the US as “Maoism” about it.  There are plenty of YouTube interviews with him — anyone can see this.  He typically assumes that people will do what they want, and that this will vary with individual opinions and with group circumstances.

Li does not really go into specifics as to what ordinary Americans should do.  We can, nevertheless, use Li’s analysis to reflect upon this idea of the “American dream.”  

The “American dream” would seem to need a good deal of revision in light of coming ecosystem dangers.  If the “American dream” means leading a lifestyle with a really high ecological footprint, and taking advantage of economic growth while saying nothing about economic exploitation, then perhaps the “American dream” is in need of serious revision.  If the “American dream,” however, is about living well, then perhaps what needs revision is merely the means we might employ in living the “American dream.”  Perhaps a new “American dream” can be invented: more focused upon sustainability, and upon group rather than individual or family well-being.

We should perhaps be conscious of the extent to which the rest of the world looks up to the United States as a model to be imitated.  If China feels obliged today to grow economically at a breakneck pace today, perhaps this is because its leaders wish for it to do what the US (and indeed Japan and much of Europe) did in the 1950s and 1960s.  We cannot underestimate our effect upon the rest of the world as a role model, and must attempt to model ethical behavior with this in mind.

There are a few gaps in Li’s analysis, notably that 1) the discussion of alternative energy sources could be more comprehensive than it was, 2) that the discussion of dollar hegemony seems to require more detail than Li gives it, and 3) that Li could address Leslie Sklair’s and William I. Robinson‘s concept of a “transnational capitalist class” in the book.  Nevertheless, none of these gaps would, if filled in, seriously challenge the main thread of Li’s argument.  In sum, this is a phenomenal book for its daring attempt to explain past, present, and future from a Chinese perspective in less than 200 pages.  Its author should be able to persuade the audiences at USC of his conclusions.