Why Xi Jinping's bold experiments with socialism are commendable

Once, during a meeting with corporate leaders at the end of the 1990s, Chinese Premier Zhu Rongji complained half-jokingly that their products were too durable such that the average consumer was not upgrading to newer iterations fast enough. This was a response to the insufficiency of market demand brought on by the Asian financial crisis.

Fast forward to recent years, and we see General Secretary Xi Jinping of the Chinese Communist Party (CCP) repeatedly emphasising the need for frugality, for spending money carefully and prudently in day-to-day living.

Clearly, Zhu's remark went by the logic of capitalist market expansion, whereas Xi's exhortations are informed by sustainable development thinking that ties in with resource and environmental awareness, society as well as traditional virtues.

In 2015, Xi Jinping also posited the Five Development Concepts (innovation, harmonisation, green, openness, sharing). Then, during the Covid-19 pandemic, he launched the drive towards "common prosperity" and curbing the "disorderly expansion of capital".

All these demonstrate a deepening understanding on the CCP's part, of the measures needed, but the execution of such ideas is fraught with difficulties. More recently, with panic spreading due to the economic downturn, the State Council of the PRC even held a pep rally with 100,000 cadres across the country to restore the momentum of China's economic growth.

Sustainable development follows the cyclical logic of harmony with nature. How this may be made compatible with capitalism's linear logic of unlimited expansion remains a world-class conundrum to which no country has a ready answer yet.

Contemporary capitalism has developed into an enormous, complete, complex, all-encompassing mega system which has swallowed up almost every facet of human life and dictates the general habits of thought and behaviour.

With the collapse of the USSR, the end of the Cold War, and the neoliberalists' declaration of the "end of history", capitalism and the "laws of the market" became the gospel truth of the day. All solutions ever put forth for the problems of the market economy tend to be bound to the framework thereof and branded with its mark. Everyone is embedded within to such an extent that few can see it for what it truly is.

All current praxes of socialism incorporate the market within them. Socialism with Chinese characteristics is market-based too. This makes sense because the market economy contains elements of socialism inherently. Neoliberalism confuses the capitalist and socialist elements therein, and hence writes off the latter in practice.

The socialist elements of the market economy are illustrated in several facts about the market.

Firstly, the market economy is about socialised mass production aimed at mass consumption, with a focus on market price instead of social status. The principle of exchange of equal value creates the preconditions for equality.

Secondly, regardless of their background, anyone can participate in socialised production through the division of labour. Life opportunities are thus greatly expanded for all.

Thirdly, regardless of their background, every person has the opportunity to start a business, become a boss and thereby change his or her own destiny.

Fourthly, innovations oriented towards the mass market bring about a dizzying array of goods and services, while small profits with quick returns make widely affordable prices possible. As a result, the standard of material life can be raised speedily, and social wealth elevated to incredible abundance. What used to be luxury goods for royalty and aristocrats become daily necessities for the common folk.

These qualities of the market have completely changed the poverty-stricken and backward outlook of China within just a few decades, creating the Chinese miracle.

As proven in praxis, when measured against the yardstick of universal benefits for the general populace, the market economy-based new socialism is actually more "socialist" than the old socialism based on a planned economy as it fully brings out the socialist nature of the market economy.

Having said that, we must note that the spontaneous forces of capitalism within the market economy are also powerful. When embracing the socialist characteristics, we must avoid the pitfalls of capitalism and not lapse into the stubborn ills of that system.

What neoliberalism does is capitalise on the socialist benefits of the market economy while laying the traps of capitalism, so that people end up indiscriminately embracing what capitalism calls the "laws of the market".

Apart from the periodic overproduction crises as analysed by Karl Marx, the stubborn ills of capitalism are showing new developments and forms of manifestation, spreading over an ever-widening scope of domains.

Issues involved include those of poverty, unemployment, debt, social fissures and unrest, extremism, terrorism, identity politics, network and industrial chain security, climate change, environmental and resource deterioration, low birth rates, demographic ageing, mental illness and so on. These may be clustered into three categories according to their interrelations.

Maintaining market demand

The first category is linked to the old stubborn problem that is insufficient market demand. Recessions aside, even a slowdown in economic growth alone would typically suffice to trigger a series of problems, such as unemployment or underemployment, slow or negative income growth, the polarisation of the rich and the poor, a debt/financial crisis, factory shutdowns, the decline of whole regions or bankruptcy of cities resulting from global capital flows.

Persistent poverty amid great wealth is the original sin of capitalism. Take, for instance, the case of the US. While the GDP per capita based on purchasing power parity in this country has gone beyond US$60,000, one in every seven Americans went to bed hungry every night even in 2016 when the American economy was at its peak, according to a CNBC report.

The unemployed or the constantly growing demographics of the unemployable are causing various social maladies and political unrest. In order to create jobs, countries around the world work frantically to stimulate the economy. However, the new technological revolution driven by capitalism is decoupling growth from employment, rendering macroeconomic policies ineffective.

Maintaining population growth

The second category of issues has to do with the population, employment, resources, environment and climate change. Consumerism severs the connections between human desires and the biosphere. Stress on our resources and environment comes mainly from the population explosion of our species. Sustainable development should therefore lessen such stress and restore the balance by reducing the human population.

Yet the capitalist mode of production forces more and more countries to either strongly encourage childbirth or take in large numbers of immigrants, or else face the decline of the economy (and consequently of national power). The efforts expended by so many countries to raise birth rates are, almost without exception, unsuccessful.

Meanwhile, the large-scale absorption of immigrants is bound to have a grave impact. Anti-immigrant sentiments are very common, especially in the developed countries of the West, because immigrants are generally pro-capital and anti-society.

Maintaining a capitalist lifestyle

The third category of issues is about the negative effects of the capitalist mode of production and lifestyle on society and the individual. Modern life is characterised by stress and a haunting sense of insecurity. The commodification of the labour force not only reduces people to mere appendages to the Great Capitalist Machine, but also causes the traditional family, clan and community to disintegrate. Drifting without roots has become the destiny of every individual.

Riding on consumerism, capital meticulously creates goods and services for every human need there is and creates more. As long as he or she has enough money, anyone could live comfortably without having to deal with other people. However, the life of such a person would hardly have any meaning apart from consumption and sensual pleasures. No wonder Qian Liqun, a professor of Chinese modern literature, has remarked that after China became affluent, its people have all but lost their souls.

Due to its essential profit-pursuing nature, capital constantly puts more pressure and stress on every employee, which culminates in the so-called 996 lifestyle (i.e., the culture of working from 9 am to 9 pm every day for six days per week).

Capitalism converts all things sacred and meaningful in life into the dollar sign. The statistical numbers of corporate performance and GDP become an ever-present, tyrannical goad. Between the unlimited pressure exerted by capital and the limited endurance of flesh-and-blood human beings, the contradiction is practically irreconcilable. The consequences have been catastrophic.

The first of note is the pandemic of mental illnesses. Figures for suicides and violent crimes keep hitting new heights. What the frequent mass shootings in the US reflect is not so much the proliferation of guns as a crisis of mental health.

The second consequence is the widespread attitude to life described by a recent catchphrase in China, "lying flat" (躺平), which is to completely stop striving in life. Young people are not marrying or are unwilling to give birth, as they fear bearing the multiple hefty burdens of family and raising children. In China, the number of people who live by themselves has reached 125 million.

As many as 30,000 die every year in Japan in the phenomenon of kodokushi (lonely death). They die alone without being discovered for a long time, with family members unwilling to take charge of disposing of the corpse and arranging the funeral, which then becomes the responsibility of professional companies engaged by the government.

A sense of security is predicated on the stability of life, work, income and one's circle of friends and relatives. This is what most people need first and foremost, but it is also what the market cannot provide, what capitalism cannot satisfy no matter how developed it is. Any system that fails to satisfy basic human needs has to be fundamentally flawed.

With regard to the problems outlined above, capitalism has a whole repertoire of fully developed albeit ineffective remedies, or remedies that do not tackle the root of the illness. They all revolve around single-minded economic growth. We know the drill: leverage the interest rates, stimulate consumption, implement easy fiscal policies, expand exports, print more money, loosen government regulation, etc.

The likes of Reaganomics of the 1980s and Abenomics of the 21st century, not to mention the Keynesianism of an earlier period, have ultimately failed to uproot the longstanding ills of capitalism. That's because all these "solutions" go by the logic of capitalism, and therefore serve only to reinforce that logic. Indeed, neoliberalism even forged the new "politically correct" for them and, under the aegis of its staunch defender Alan Greenspan, set in motion the great financial crisis of 2008.

In Japan, the younger generation have already succumbed to "lying flat" in great numbers. They have all but lost the industrious, workaholic spirit of devotion demonstrated by their post-war fathers.

Albert Einstein once said, "Not everything that can be counted counts, and not everything that counts can be counted." He also said, "Insanity is doing the same thing over and over and expecting different results." These are fitting words to describe contemporary capitalism: not everything with a price tag has value, and not everything valuable can be tagged with a price. Capitalism is fast running out of tricks.

What is socialism after all? Even Deng Xiaoping had no clear explanation. Nevertheless, he did recognise common prosperity as a key part of it. According to him, as long as the Communist Party maintains its grip on the powerful machinery of the state, it should be able to boldly experiment with all sorts of ideas.

The CCP has greatly deepened its understanding of socialism since Deng, and the strengths of the Chinese system are still there. The challenge now is to integrate the ideas of socialism into the market mechanism through innovation. How this may be done is a world-class leading-edge issue as well as the core challenge for "building socialism with Chinese characteristics".

From this perspective, Xi Jinping's explorations are commendable. They must not be casually written off in the name of the "laws of the market" just because China happens to be in economic difficulty at the moment.

Neither should China settle the issue on a single, "supreme" authority, for its explorations are still far from sufficient. The country has, by far, yet to arrive at a definitive conclusion. Open explorations and innovations must continue, but they should adhere to a few directional principles as outlined below.

Social construction taking centre stage

Firstly, social construction must take centre stage and the scope where market rules should apply must be gradually reduced. They should be banished altogether from the social and political sphere.

People derive their sense of happiness and the meaning of life primarily from society. To rely on GDP growth to raise our quality of life is ultimately to milk the bull. To build up socialism is to build a healthy society, to restore morality and character cultivation to their rightful place as the centre of social life, such that they become supreme values that no market price could measure.

The resultant lifestyle built around the fundamentality of people and of society would naturally incorporate the environment, achieving harmony between humans and nature and counteracting consumerism.

Bowing out of the GDP race

Secondly, China is to gradually bow out of the GDP race. GDP is closely linked to the hard power of a country. The pursuit of higher GDP is the means for self-strengthening against foreign powers. However, China is already a major nuclear and economic power that no one would dare to invade.

The focus of China's development should therefore be shifted more towards domains beyond the economy - those that can offer greater effectiveness in raising the people's quality of life. This requires consumerism to be cast aside so as to alleviate the stress on resources, the environment and every individual.

To keep striving for higher GDP or corporate performance is to race on the capitalist tracks, which will only lead further and further away from the goals of socialism.

Tech for socialist production

Thirdly, technological development has to be wrenched from the capitalist orbit, and made part of continuing efforts towards humanisation. It should be about promoting new socialist modes of production, rather than pursuing market profits.

The focus should be on developing technologies which are helpful for innovation and entrepreneurship among the population, and for building a society where everyone has a part to play, not technologies that facilitate monopoly and reduce the general population to the "useless class".

All in all, socialism should aim at building mechanisms that can raise and maintain a good standard of living in the absence of economic growth. It is to enable the people to gain a sense of security and belonging, live meaningfully, as well as engage in pursuits of spirituality.

Through the efforts over the last few decades towards building the socialist market economy, a market economy is already in place in some preliminary form. The same however cannot yet be said about socialism, not by a long shot. Now is the time to expand the explorations in this regard.

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