With an understanding influenced by world-systems theory, Li has arrived to understand important facts with respect to the capitalist world-economy. First, he understands that the capitalist world-economy historically has expanded economically through the conquest of new lands and peoples. In the development of the capitalist world-economy, workers (converted peasants, artisans, and serfs) acquired the capacity to organize themselves in defense of their interests. As a result, labor costs and taxes rose over time, thus reducing the rate of profit. Capitalists responded to this problem by acquiring new territories and attaining control over cheaper labor resources. However, this process of economic expansion through successive geographical expansions ended during the twentieth century, as the capitalist world-economy reached the geographical limits of the earth. In addition, Li correctly understands that the superexploitation of labor, in which the laborers are paid less than what they need to live, limits the capacity of the global consumer market to expand (Li, 2008:12, 15).
Clearly, the world-system needs to reform, inasmuch as the world-economy can no longer expand through territorial expansion, and given that the global dual-wage structure limits economic expansion. Indeed, the popular movements of the world demand such reform. In the core states, the movements call for a return to the pre-1980 protection of wages, worker’s rights, health care, and education. In the Third World, the popular movements seek true sovereignty, so that states can act to protect the social and economic rights and needs of the people. However, as Li discerns, the system is not able to reform. Financially, it cannot afford to concede to the demands of the popular movements without reducing the rate of profit for capitalists. A global new deal is not politically possible, given the power of global interests that would stand opposed to such a reformist project (Li, 2008:17, 121).
Inasmuch the system cannot reform itself, Li concludes that that a global socialist transformation is necessary. He projects that by the year 2050 there will be various socialist governments, brought to power by the growing proletarianization of labor and by increasing working-class consciousness. The future socialist governments will confront various serious problems that are the legacy of a world-system dedicated to the endless accumulation of profit rather than to providing human needs and conserving the ecological balance of the earth. The socialist governments, accordingly, will have an interest in an alliance that creates a socialist world-government, thus creating an alternative socialist world-system that would replace the present capitalist world-economy, already showing clear signs of disintegration (Li, 2008:23, 139-73, 179-82, & 187-88).
Li believes, however, that the socialist states that emerged during the twentieth century and that exist today have confronted a basic contradiction that results from the fact that they have had to survive in the context of a capitalist world-economy. In order to protect themselves, the socialist states have had to compete militarily and economically with the global powers. This requires them to adopt capitalist structures for the organization of labor, thereby giving greater political space and legitimacy to privileged bureaucrats and technicians that defend particular interests. A new bureaucratic-technocratic elite forms that is able to take control of the socialist revolution, directing it to the defense of its particular interests and ignoring the needs of the workers. Accordingly, in the context of the capitalist world-economy, socialist states have a tendency to fall to a bureaucratic counterrevolution, which subsequently invokes intellectuals to defend policy changes with justifications that are framed as an evolution of revolutionary socialist ideology in light of new conditions (Li, 2008:50-65).
I concur with Li on basic points. The capitalist world-economy has contradictions that the global elite is unable to resolve. There are various possible scenarios, including neofascism, various regional world-systems, or chaos. And possibly, there could emerge an alternative socialist world-system, which would be based on cooperation, solidarity, universal human values, and harmony with the earth; and which is the best hope for humanity.
However, I am not convinced by Li’s claim that the current socialist states generally fall to bureaucratic counterrevolutions. To be sure, I have been inclined to believe, since my reading of Trotsky and the British Trotskyite Ted Grant, that the Russian Revolution fell to a bureaucratic counterrevolution with the death of Lenin (see various posts in the category Russian Revolution). However, if it is true that something similar has occurred in China, we should not conclude that the triumph of a bureaucratic counterrevolution is a pattern for the Third World. We should keep in mind that Russia and China were both empires, and both were only partially peripheralized by the European powers during the rise of the European-centered world-economy. In these fallen empires, the remnant industrial and agricultural bourgeoisie, petit bourgeoisie, and bureaucracy would constitute a powerful force, able to unify as a bureaucratic counterrevolution. But the Third World has had a different historical experience. The most advanced of the Third World kingdoms and empires were far more limited in territory and in structures of domination and exploitation than were the Russian and Chinese empires. And the Third World peoples and societies were conquered, colonized, and peripheralized in a form more penetrating than the partial peripheralizations of Russia and China. As a result, in the Third World colonial situation, the national bourgeoisie possessed interests in common with the majority of workers and peasants, and it often played a key role in the most radical struggles for national and social liberation. In the context of the Third World revolution for national and social liberation, a counterrevolution by the petit bourgeoisie, the technocrats, and the bureaucrats is a phenomenon, but it has limitations, and it can be contained by the formulation and dissemination among the people of a socialist ideology. In the Third World, when triumphant popular and socialist revolutions fell, it principally was a consequence of imperialist interventions.
Moreover, in the case of China, I am not yet convinced that the revolution fell to a bureaucratic counterrevolution following the death of Mao. I note, for example, that Li is persistently unclear in his description and definition of the “bureaucratic capitalists” who supposedly now rule China (see 2008:27, 106). Moreover, he maintains that the transition to capitalism involved the opening of cheap Chinese labor as peripheral labor in the world-economy, thus generating new profits and facilitating the rise of China (2008:70-72, 109). However, in the peripheral and semi-peripheral regions of the world-economy, low-wage export manufacturing does not facilitate the rise of a nation. Thus, questions emerge. Did China’s incorporation in the world-economy in the 1980s and 1990s have characteristics different from the general phenomenon of peripheral low-wage export manufacturing? If so, were these unique characteristics conceived by the Chinese Communist Party as part of a strategy for the long-term economic development of the nation? Would not such a strategy be consistent with a project of national and social liberation?
I will keep these questions in mind as I continue to study the Chinese Revolution, which stands as an important historic example in the current historic moment. The peoples of the world, experiencing the negative effects of a world-system in terminal crisis, are increasingly arriving to consciousness of the need to construct socialist nations and a more just, democratic, and sustainable world-system. Therefore, it is important for us to understand the gains and limitations of the historic socialist projects. Moreover, China is especially important, because the renewed Third World popular movements tend to view China as playing a cooperative role in the emerging alternative project for a more just world. They view China’s foreign policy as fundamentally different from that of the imperialist powers of the European-centered world-system.
Li, Minqi. 2008. The Rise of China and the Demise of the Capitalist World-Economy. New York: Monthly Review Press.