Saturday, June 09, 2007

Marx in China

It's been a while since I posted on here folks. Anyone still watching?

Here is an article by William Pesik who contemplates how Marx would view China and it's emerging capitalist economy.

"Karl Marx is back in China, and the philosopher is arguably bigger than ever."

Karl Marx Is Back, and Punting on Chinese Stocks:

"It's interesting, then, that China's markets in some respects are looking more like the kinds envisioned by Marx than by laissez-faire champion Friedman.

Mao Zedong fancied himself an heir to Marx. Today, when investors look at China's 11 percent growth and domestic reforms, the Marxist theory China subscribed to back in the 20th century seldom comes to mind.

And were Marx to visit modern-day China, he might be distressed to see how the rich are flourishing and a sizeable portion of gross domestic product comes from private companies, while the poor need to pay for education and health care. China also hopes one day to arrive at a system where markets control the prices of goods, production and labor.

Yet something about China's spectacular stock rally has Marx written all over it.

One of the German-born philosopher's main worries about free markets was a ``reserve army of labor,'' a huge labor pool that would prevent wages from rising and benefit only corporations that exploited workers. In today's China, a reserve army of individual investors is stepping forward to boost stock prices.

Ignoring Greenspan."


Janet said...

Thanks for the information.

Anonymous said...

I'm not so keen on this article, especially with the writer somehow juxtaposing Marx's reserve army of labor to the reserve army of stock-holders. Moreso because this term carries class implications. The key areas of China are certainly benefitting from increased trade with the US, but large parts of China remain undeveloped, 'exploited' to use Marx's terminology, and thus implying the real reserve army of labor, the key element in setting of wages according to Marx.

In short, the author assumes the rationality of the American middle-class man when he speaks of new-age Chinese middle class that bloomed out of recent trade developments. Certainly all the economic implications of 'overheating' are there for China, but this is also why China is bringing their wealth (via government T-bills) to the US financial market, to diversify risks and make more money. This is money that could help the same provincial areas mentioned earlier, but the financial capital will flow back here to Wallstreet and firms' grin. I think that's what Marx would really say about the situation in China today.

Some guy with MA in economics, aka the Three-toed-sloth's BF.

Romius T. said...

I heartily agree with your analysis. I thought it strange that the author could compare stock owners to a reserve army of the poor.

I have to thank three-toed for sending me a reader!