They’re trying to save us, but they need help
Two things the 20th and 21st Centuries have taught us. Socialist planned economies don’t work, and corporate capitalism doesn’t work either. Societies without the motivation and guidance provided by markets have difficulty meeting their needs, while societies run by corporations actively destroy nature, oppress billions of people and drag humanity into war after devastating war.
Harnessing market forces within a system based on stability, balance and long-term focus can create humane modern societies. That is what China is trying to do, and that is why corporate capitalism wants to destroy them. We need to take their side in the strongest way we can.
Why corporate capitalism doesn’t work
I will give brief explanations of why capitalism and communism have failed, based on the work of economists Michael Hudson, Radhika Desai, and Herman Daly. I will use the definition given by Adam Smith in 1776 of capitalism as a system in which private citizens employ workers and compete with each other in free markets to create profitable businesses.
Capitalism turned out a wealth-producing machine like no other in history. It has led to growing human populations, many of them living at higher material standards of living than ever before. The system motivates people to work by threat of poverty and motivates those with money to invest it, with the prospect of greater riches. Competition drives companies to innovate and reduce prices, bring natural resources and find new markets around the world. Market results give instant feedback on what works and what doesn’t, allowing for better economic decisions, in terms of wealth creation.
As it turns out, though, people competing for wealth without limits leads to massive destruction. Nature, the working class, and the victims of war have suffered ever-increasing costs, until the world stands at the brink of total ecological collapse on one hand and catastrophic world war on the other.
Though rich landowners and businessmen exercised inordinate power from the beginning, the big cliff that capitalism went over was the creation of corporations. Corporations are legal fictions, in which a group of investors own a business and profit from it, but have little legal liability for its losses or the damage it causes.
Corporations, by law, by their founding structure and by long practice, have as their main or only goal the maximization of profit. Other values, such as the lives of workers, the welfare of the community, and the natural environment, can only be afterthoughts, taking third place in decision-making behind profit margins and share prices.
Seeking profit above all sounds problematic, but it would be only a local issue for the people directly involved, had corporations not taken over democratic governments. To have fair markets, someone has to set them up and regulate them. To ensure that industrial or agricultural processes are sustainable, healthy, and profitable in the long run, limits have to be set on profit gouging, pollution, and labor exploitation. Corporations can’t limit their own behavior, because their prime directive is maximizing profit. An outside force has to set those limits, which is why we need governments. Markets don’t regulate themselves, no matter what libertarians say.
Unfortunately, in the last 150 years or so, corporations figured out that if they could control or manipulate governments, they could get away with unsustainable, unfair, or extremely shortsighted practices. Railroad industry influence is why we average three train derailments every day in the USA.
Agricultural industry influence on government is why food is raised on factory farms that inflict horrible cruelty on animals, pollute surrounding water and land, and produce unhealthy food. Drug company control of the FDA and the Institutes of Health explain why Americans spend far more on drugs and medical treatment than anyone else in the world but have worse health. Military corporations’ control of Departments of Defense and State is why America’s wars never stop, and billions of dollars in weapons flow freely to Ukraine, Israel, and everywhere a war can be created.
Notice how the very same factors that make capitalism a wealth machine — individualism, creativity, and greed — also turn it in a destruction machine if it is not carefully controlled.
Corporations have worked steadily for a hundred years to gain control of governments, using ever-more sophisticated strategies I described in a piece called How Capitalism Killed Democracy, and which others have described better. Funding politicians, bribing them (called “lobbying,”) and shaping public opinion through their corporate-owned media have gradually led to greater, by now near-absolute control of government by corporations.
Their lobbyists literally write most of the laws legislatures pass, and most of the people charged with enforcing the laws actually represent the companies they are supposed to regulate. Lobbyists even write international treaties like their so-called free trade agreements and Energy Charter agreements that allow corporations to sue any government that limits their profits in an attempt protect environment or people.
With no effective controls, capitalist economies become like powerful cars without steering systems or brakes. They go fast and look good, but they keep crashing.
Why communism hasn’t worked
It’s not hard to see how governments controlled by powerful, multinational profit-seeking corporations could cause trouble. Unfortunately, government control without markets doesn’t work either. Communism couldn’t compete with capitalism’s bringing together of resources, labor, science, and markets. People weren’t as motivated to work if not faced with the threat of poverty or lured by the promise of riches. People with ideas weren’t encouraged to work them up if they couldn’t profit from them.
The absence of market feedback led to bad processes and products going on until bureaucrats decided to stop them. It was inefficient and led to low material standards of living along with environmental destruction on a capitalist scale. (Think the Chernobyl nuclear plant.) Eventually, leaders like Gorbachev in the USSR and Deng Xiao Peng in China realized that human creativity and energy were needed to lift people out of poverty. Totally planned economies don’t work.
The fact that Russian socialism was attacked at its founding and constantly thereafter by the capitalist world didn’t help their system develop. They had to devote scarce resources to weapons to defend themselves. One could truthfully say that neither communism nor capitalism has been fairly tried, only the corrupted versions we have seen. But it is not possible to go back to the beginning of the industrial age and try again. Fortunately, there is a better way, and China is working on it.
How China’s system works
After communist leader Mao Tse-Tung’s death in 1976, Chinese leaders Deng Xiao Peng and Zhou En-Lai promoted private enterprise in China.. Deng said, “There are no fundamental contradictions between a socialist system and a market economy.” His idea was that private companies could benefit all of society, if the owners of them were kept under tight control.
Chinese Communist Party (CCP) leader Chen Yun advocated for a “bird cage” economy in which the market economy should be allowed to play a role but kept contained like a bird in a cage. Capitalists in the West think this idea a horrible infringement on their rights, but economically it seems to work extraordinarily well. There are capitalists in China; there are rich people in China. There are markets for consumer products. There are millions of corporations, both state-owned and privately owned. China has gone from one of the poorest countries to being the world’s #1 economy in a generation or two. Their system works.
In China, corporations don’t control the government. The companies that make their weapons don’t steer them into wars, because they don’t have that kind of influence in the CCP. According to economist and China expert Radhika Desai, the CCP is guided by Chinese philosophy, including Confucianism and Taoism, not only by their Marxist-Leninist roots. The CCP considers profit a good thing, but they prioritize other factors such as balance, shared prosperity, social stability, and sustainability. Their Belt and Road Initiative has the stated purpose of creating balance in the world, helping poor countries rise to where they contribute to global wealth, while restraining rich countries’ consumption and growth.
In the Chinese system, war is not a profit maker. It is something to be avoided as long as possible. Chinese culture has been around for thousands of years and takes an extremely long view of things, a perspective no capitalist system can even imagine. Quarterly profits are not a big thing for China.
Of course the capitalists in China, according to economist Michael Hudson, author of Super-Imperialism and a dozen other books, try to manipulate society the way they do here, but the CCP hasn’t yet let them. They don’t have our sham democracy that allows corporations to elect the very people who are supposed to control them. Billionaires regularly get taken down if they overstep their limits. As Hudson puts it, “In China the state controls capital, and in America it’s the other way around.”
Problems China has not solved
● A system like China’s works as long as the leaders stay honest, but what happens if the Party is corrupted? Or if they make mistakes? Who will push back on the corruption or change a harmful decision? So far, both honesty and flexibility have depended on elevating top quality leaders. We’ll see how that goes in future, but in the present, it seems corruption in China is nothing like what our system accepts as routine functioning (i.e. government by lobbyists.)
● China is ramping up its military production and army to levels that would be highest in the world if not dwarfed by the USA. Because of American threats, they may have no choice, but the military is not good for Nature, and it drains resources they need to restore environments.
On the other hand, China has taken leadership and brought peace to conflicts the US has exacerbated for their own ends. They brought Iran and Saudi Arabia into diplomatic relation after years of proxy war in Yemen, Syria, and Iraq. But they have not taken action for Palestine beyond condemning the Gaza genocide in words. They have not made peace with India, although perhaps that is not their fault.
● Worst of all from Earth’s perspective, they still seem to prioritize economic growth over protecting Nature. While their distribution of wealth is much fairer than one sees in the capitalist world, they haven’t embraced what Herman Daly called a steady state economy that puts Earth first.
The infrastructure they finance to lift the global South — like highways, ports, and dams — inevitably leads to environmental loss, as development does all over the world.They have, however, done environmental remediation on a scale the West could only imagine. They have created hundreds of “sponge cities” that conserve water and prevent floods with wetlands in urban centers. They have rehabilitated desertified areas like the Loess Plateau with trees and terraced farms. Analyst Lena Petrova reports the Chinese are focusing development on renewable energy technology such as lithium batteries, solar, and wind, becoming world leaders in moving away from fossil fuels.
US empire vs. China
The US has been surrounding China with military bases, promoting fear of China in neighboring countries such as Australia, and supporting separatist movements in Xinjiang province, Hong Kong, Tibet, and Taiwan. Our corporate capitalist rulers know they can’t compete with them, so they want to go to war. China gives the entire global South, of which they are part, an alternative to massive exploitation by the corporate West. Their leadership of the BRICS alliance and the Shanghai Cooperation Organization give the colonized countries alternative paths to development.
They stand against constant wars and have the economic power to persuade countries toward peace. Their policies are not driven by military industries or fossil fuel corporations. They think about things other than money, and our corporate government can’t compete with that.
US military leaders like Air Force General Mike Minihan, military think tanks and neoconservative media like Foreign Policy openly proclaim war with China is coming, perhaps as soon as 2025. They do everything they can to whip up anti-China hysteria with made-up stories like Uyghur genocide and “China created COVID,” as they lied about Russia for six years before the proxy war in Ukraine.
We have to stop the war machine’s attack on China. While no system is perfect or close to it, the Chinese system may be the best humanity can do at current levels of technology. Conceivably, if the CCP decided that long-term prosperity depended on lower levels of industry and more protection for Earth, they could lead the world in that direction. I don’t see any other power on Earth that has that capability. Stand with China!
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Alive in this place and time to help Make Earth Sacred Again. Write about Nature, economics, health, politics, and spirit from Earths point of view.
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