The Rise of China and the Demise of the Capitalist World Economy available in Hardcover, Paperback
The Rise of China and the Demise of the Capitalist World Economy
- ISBN-10:
- 158367182X
- ISBN-13:
- 9781583671825
- Pub. Date:
- 03/01/2009
- Publisher:
- Monthly Review Press
- ISBN-10:
- 158367182X
- ISBN-13:
- 9781583671825
- Pub. Date:
- 03/01/2009
- Publisher:
- Monthly Review Press
The Rise of China and the Demise of the Capitalist World Economy
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| ISBN-13: | 9781583671825 |
|---|---|
| Publisher: | Monthly Review Press |
| Publication date: | 03/01/2009 |
| Pages: | 240 |
| Product dimensions: | 5.30(w) x 8.40(h) x 0.70(d) |
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CHAPTER 1
An Introduction to China and the Capitalist World-Economy
Men make their own history, but they do not make it just as they please; they do not make it under circumstances chosen by themselves, but under circumstances directly found, given and transmitted from the past. [Karl Marx, The Eighteenth Brumaire of Louis Bonaparte, 1852]
China's dramatic rise as a global economic power is one of the most important developments at the current world-historical conjuncture. Many have wondered how the rise of China will shape the world-historical trajectory of the twenty-first century. Will China become the next hegemonic power? If yes, what would the new China-centered global system look like? If not, what would be the implications for the existing world-system?
In particular, will the historical phenomenon of the rise of China simply prove to be one of the successive cyclical movements of the existing world-system (as happened to the United Provinces of Holland, the United Kingdom, and the United States) through which the system has renewed and reproduced itself on increasingly larger scales, though with different appearances and under different leaderships? Or, could this time be different? Could the rise of China signal something fundamentally new in the history of the modern world-system? In other words, to what extent does the rise of China represent more or less an extension and a reproduction of the status quo? To what extent, does it suggest a turning point, a new direction?
These are not merely academic questions. Instead, these are "meaningful" and "important" questions as the answers help to decide the dimensions and parameters within which the current and future generations will make "world history." Do we live in a world where "there is no alternative"? Or, do we live in a world where "another world is possible"? Or, could it be that we actually live in a world where "change" is inevitable?
HISTORICAL CAPITALISM
The term "historical capitalism" is used in the sense that capitalism is a social system that has emerged and developed under certain historical conditions and can exist only over certain historical periods (Wallerstein 1995).
One of Marx's crucial insights is that all social systems are historical. The existence, operation, and development of a social system must rest upon a set of historical conditions (for Marx, the most important conditions have to do with the "material productive forces," or the interactions between the human race and nature to produce and reproduce material life). However, the underlying historical conditions inevitably tend to change. Sooner or later, the underlying historical conditions would have been so transformed that they are no longer compatible with the prevailing social system. The existing social system is thus no longer historically viable and must be replaced by one or several new social systems that are compatible with the new historical conditions.
How about capitalism? What are the historical conditions upon which the existence and development of capitalism has depended? How have these historical conditions changed? How will they continue to change? Is it possible to identify the turning point beyond which capitalism can no longer exist as capitalism? How will the new historical conditions, which result from the development of capitalism, constrain and condition the possible forms of future social systems?
"Development of the productive forces of social labour is the historical task and justification of capital (Marx 1967[1894]:259)." For Marx, the purpose of capitalist production is not to meet human needs (or to produce use values). Instead, it is based on production for profit or surplus value. As such, capitalism is distinguished from all previous social systems in that under capitalism, there is a systematic tendency for the capitalists to use a substantial portion of the surplus product (the portion of a society's total product after subtracting what is required to cover the population's basic consumption and to replace the means of production consumed; surplus product becomes surplus value when it appears as commodities) to pursue the expansion of material production, or accumulation of capital.
It is this tendency towards accumulation of capital that has driven the enormous expansion of the world's population and material production that have taken place in the modern times, which have in turn underpinned all modern political, social, and ideological developments. Under capitalism, this tendency towards accumulation has been so strong that it seems to be subject to no physical and quantitative limits and those who engage in accumulation activities seem to recognize no "end" but the accumulation itself as the end. For this reason, Immanuel Wallerstein sees the pursuit of "the endless accumulation of capital" as the defining feature of capitalism.
While Marx and later Marxists developed much of the theoretical basis for understanding the historical dynamics of capitalism, many questions remained unanswered. Marx had always seen "the establishment of a world market" as the "specific task of bourgeois society" (Marx to Engels, October 8, 1858). Yet, in much of traditional Marxist literature, the relationship between the capitalist world-system on the one hand and the national capitalist economies on the other was not fully elaborated.
It is an empirical fact that the capitalist world-system consists of multiple states. Is this merely a historical accident or could it be accounted for by a theoretical understanding of capitalism? Could this be related to the historical fact that capitalism did not emerge and prevail in virtually all the great pre-modern civilizations (including Chinese civilization)? What specific historical conditions were required for the opening of the Pandora's Box of endless accumulation of capital? What is the significance that there is not a world-government in the existing world-system? What could be the implications of the lack of a world-government for the future development of the system? It is the inquiry into these questions that has led to the development of world-system theories.
With the exception of some simple hunter-gatherer societies, large-scale complex human societies are built upon systems of division of labor that extend over large geographical areas. To the extent that the different parts of a system of division of labor depend upon each other for the provisioning of essential consumer goods and production inputs, the system functions as the "world" that is relevant for the material and cultural life of the people living within the system, and can be understood as a "world-system." This does not rule out long-distance trade of non-essential goods between world-systems.
In terms of the political structure of a world-system, there are two possibilities. First, there could be one single political structure (the state) that dominates the entire world-system. The second possibility would be multiple political structures (states) that co-exist within a single world-system. Wallerstein referred to the first possible world-systems as world-empires and the second kind as world-economies (Wallerstein 1979:5).
Which of the two kinds of world-systems is more favorable for capitalist profit-making and capital accumulation activities? Most of the pre-modern great civilizations — Egypt, Rome, China, Persia, the Arabic Empire, the Ottoman Empire, the Mogul Empire of India, the Russian Empire, and the Incas — were world-empires. A world-empire had a centralized political power that dominated a large geographical area. The collection, distribution, and use of the surplus product in a world-empire largely took place through politically enforced redistribution, leaving little available for profit-making and capital accumulation. Moreover, the centralization of political power under a world-empire made it highly unlikely (if not entirely impossible) for the profit-making capitalists to challenge the imperial economic and political structure. If some capitalists managed to accumulate too much wealth, their wealth could simply be confiscated.
By comparison, in a world-economy, the competition between multiple states provides opportunities for capitalists to play some states against other states, greatly reducing the ability of each state to repress the expansion of capitalist activities. Moreover, to prevail in the inter-state competition, the states in a world-economy would need to seek the financial support of profit-making capitalists. There is pressure for states to provide active support for capital accumulation in order to secure long-term financial benefits.
However, historically, world-economies tended to be unstable. They either disintegrated or were eventually conquered by a world-empire. It was somewhat fortuitous that in western Europe, a unique historical situation emerged by the sixteenth century, when several national states of approximately equal size and capability had taken shape and engaged in a constant struggle for power. Successive attempts at imperial conquest failed and the competition between European states for wealth and power had in turn led to the great geographical expansions that took "Western civilization" to global supremacy (Arrighi et al. 2003:266–8).
Thus, the competition between multiple states within a single world-system is an indispensable political condition for the expansion of profit-making and capital accumulation activities. It follows that capitalism, in term of political structure, must be an inter-state system and therefore must be a world-economy. In the rest of this book, the terms "capitalism" and "the capitalist world-economy" will be used interchangeably.
China was not a participant in the capitalist world-economy until the nineteenth century. Its incorporation led to major transformations of China's internal social structure and prepared the historical conditions for the great Chinese Revolution in the first half of the twentieth century. By the late twentieth century, China was politically, socially, and technologically prepared to actively participate in global capital accumulation. Much of this book will discuss how this participation is likely to shape the future course of global economic and political developments.
THE RISE OF THE CAPITALIST WORLD-ECONOMY AND THE DEMISE OF THE CHINESE EMPIRE
According to the statistics compiled by Angus Maddison (2003), in 1500, western Europe was already ahead of China in term of per capita Gross Domestic Product (GDP). However, in term of overall territorial size, population, aggregate wealth and surplus, and the mobilizing capacity of the state, the Chinese empire was by far unmatched by any single European state, and probably, any other contemporary political structure.
In East Asia, China had established itself as the center of a multi-state "tribute-trade" system. The Chinese emperors assigned imperial titles to the rulers of Korea, Japan, Ryukyu, Vietnam, Laos, and Burma, granting them political legitimacy as well as military protection. These peripheral states paid tributes to China, and, in return, the Chinese emperor would offer them "gifts." In addition to the official tribute-trade, private overseas trade also flourished (Arrighi et al. 2003:269).
From the sixteenth to the eighteenth century, the competitiveness of Chinese silk, porcelain, and tea production, meant that China was not only at the center of the East Asian tribute-trade system, but probably was also the core zone of an "Asian super-world-economy" that embraced East Asia, India, the Indian Ocean, the Persian Gulf, Arabia, and the Red Sea. The size and density of this Asian super-world-economy far surpassed the contemporary European world-economy. Fully three-quarters of the Americas' silver found its way to China; André Gunder Frank referred to China in this period as the "ultimate sink of world money" (Arrighi, Ahmed, and Shih 1999:220; Arrighi et al. 2003:263, 273).
As late as 1820, China remained the world's largest territorial economy under one political jurisdiction, accounting for fully one-third of the gross global product. However, by that time, Britain was well on its way to leading further geographical expansions of the capitalist world-economy to create a truly global empire. After the British victory at Plassey over the Mogul Empire in 1757, India became a major, almost inexhaustible source of labor and wealth for the British empire. The tributes from India played a crucial role in the British rise to world financial and commercial supremacy. The British colonial army, manned largely, and paid entirely, by Indians, allowed Britain to wage a series of wars that completed the incorporation of Asia and Africa into the capitalist world-economy (Arrighi, Ahmed, and Shih 1999:223–5; Arrighi et al. 2003:286–93).
With the British conquest of India, the global economy was re-centered in Western Europe. By exploiting Asian wealth and labor, Britain finally established decisive military advantages over the Chinese empire which were confirmed by two Opium Wars (1839–1842 and 1856–1860). China was forced to cede Hong Kong to Britain, opened five of its ports (including Shanghai) to trade, and granted extra-territoriality to all western merchants, politicians, and missionaries. China also lost its tariff autonomy, for example, a British official became the supervisor of Chinese Customs. The Opium Wars marked the beginning of China's incorporation into the capitalist world-economy.
China was then under the rule of the Manchu Qing Dynasty. In the 1850s, a major peasant rebellion — Taiping Tianguo (or the Heavenly Kingdom of Great Peace) — swept through all of southern China and conquered the Yangtze Valley (China's center of grain production and commerce). With the end of the second Opium War, western powers decided to help the Qing imperial government put down the Taiping Tianguo rebellion, by providing customs revenues and selling arms to the imperial government rather than the rebels, even though the Taipings claimed to be Christians. The British and American merchants in Shanghai even organized a rifle brigade, directly fighting against the Taiping army (Stavrianos 1981:320–24).
To fight the Taiping rebellion, the Manchu Qing Dynasty was forced to seek the support of the Han Chinese gentry-landlord class. Provincial landlords and officials organized their own armed forces that were later to become powerful local military cliques.
After the defeat of the Taiping rebellion, the Qing imperial government, in collaboration with some of the more powerful provincial political-military cliques, undertook a limited military modernization program, known as the Yangwu Yundong (or "Westernization Movement"). The practice of this "movement" was by no means as radical as it sounded, amounting to no more than a few attempts to develop a modern military industry and a modern navy, without changing in any important ways the basic economic and political underpinning of the traditional imperial structure (Lu 2000:18–21).
The Westernization Movement had some limited success. Significantly, in the 1870s, China was able to consolidate its control over Xinjiang, the northwestern part of China with Muslim majorities. However, in the 1884–85 Sino-French War, despite a military stalemate (China losing the battle at sea but winning on land), China gave up its traditional suzerainty over Vietnam.
The Westernization Movement was dealt a fatal blow by the 1894–95 Sino-Japanese War. The declining Chinese empire was unable to resist the rise of ambitious Japanese capitalism. The modernized Chinese navy, which looked good on paper (with some of the largest and best battleships in Asia), was completely annihilated. In the Treaty of Shimonoseki (known as Maguan Tiaoyue to the Chinese), China ceded Taiwan to Japan and recognized Korean "independence." China's traditional suzerainty over Ryukyu was also lost. China was forced to pay an enormous indemnity of 230 million taels of silver (which equaled UK£30 million at the time). The indemnity was so large that it amounted to three years of the Qing government's annual fiscal revenue or one-third of Japan's gross national product. The victory in 1895 was a key factor in Japan's ascendancy to semi-peripheral status in the capitalist world-economy (Stavrianos 1981:319; Arrighi, Ahmed, and Shih 1999:253–5).
The defeat of 1895 deepened the internal split of the Qing imperial ruling elites. The Emperor Guangxu made a short-lived and unsuccessful attempt to reform, but it was fiercely resisted by the Manchu aristocracies. The Dowager Empress Cixi then staged a coup that put the emperor under house arrest. Cixi made a desperate attempt to revive the fortune of the Qing Dynasty by allying herself with the peasant-based anti-western Boxer Rebellion.
(Continues…)
Excerpted from "The Rise of China and the Demise of the Capitalist World-Economy"
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Copyright © 2008 Minqi Li.
Excerpted by permission of Pluto Press.
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Table of Contents
List Of Tables
List Of Figures
Preface: My 1989
1. An Introduction to China and the Capitalist World-Economy
2. Accumulation, Basic Needs, And Class Struggle: The Rise Of Modern China
3. China And The Neoliberal Global Economy
4. Can the Capitalist World-Economy Survive the Rise of China?
5. Profit And Accumulation: Systemic Cycles And Secular Trends
6. The End Of The Endless Accumulation
7. Between The Realm Of Necessity And The Realm Of Freedom: Historical Possibilities for The Twenty-First Century Bibliography
Index
What People are Saying About This
"Li has accomplished something different and very important. He has placed the 'rise of China' from the Mao era to today in the context of the history of the entire world-system. He makes a persuasive case."
-—Immanuel Wallerstein,Yale University
"A thought-provoking account. Li considers the consequences of the entry of China into the global capitalist system, in light of the challenges facing human society from economic, political, and environmental constraints. This book makes a major contribution."
-—David M. Kotz,University of Massachusetts, Amherst