Tag Archive for emerging economies


samir amin at WAPE honory member and lifetime achievement

The 11th Forum of WAPE took place from June  17. – 19, 2016 in Patiala, Punjab, India. At this event Samir Amin took part in the Forum and was a main speaker. He also became an honorary member of WAPE and received a lifetime achievement award. Below is his speech given to the event which we reprint with his kind permission.

Lenin, Mao Facing the challenges of history

Samir Amin

Lenin,   Bukharin, Stalin, and Trotsky in Russia, as well as Mao, Zhou Enlai, and Den Xiaoping in China, shaped the history of the two great revolutions of the twentieth century. As leaders of revolutionary communist parties and then later as leaders of revolutionary states, they were confronted with the problems faced by a triumphant revolution in countries of peripheral capitalism and forced to “revise” (I deliberately use this term, considered sacrilegious by many) the theses inherited from the historical Marxism of the Second International. Lenin and Bukharin went much further than Hobson and Hilferding in their analyses of monopoly capitalism and imperialism and drew this major political conclusion: the imperialist war of 1914–1918 (they were among the few, if not the only ones, to anticipate it) made necessary and possible a revolution led by the proletariat.

With the benefit of hindsight, I will indicate here the limitations of their analyses. Lenin and Bukharin considered imperialism to be a new stage (“the highest”) of capitalism associated with the development of monopolies. I question this thesis and contend that historical capitalism has always been imperialist, in the sense that it has led to a polarization between centers and peripheries since its origin (the sixteenth century), which has only increased over the course of its later globalized development. The nineteenth century pre-monopolist system was not less imperialist. Great Britain maintained its hegemony precisely because of its colonial domination of India. Lenin and Bukharin thought that the revolution, begun in Russia (“the   weak link”), would continue in the centers (Germany in particular). Their hope was based on an underestimate of the effects of imperialist polarization, which destroyed revolutionary prospects in the centers.

Nevertheless, Lenin, and even more Bukharin, quickly learned the necessary historical lesson. The revolution, made in the name of socialism (and communism), was, in fact, something else: mainly a peasant revolution. So what to do? How can the peasantry be linked with the construction of socialism? By making concessions to the market and by respecting newly acquired peasant property; hence by progressing slowly towards socialism? The NEP implemented this strategy.

Yes, but…. Lenin, Bukharin, and Stalin also understood that the imperialist powers would never accept the Revolution or even the NEP. After the hot wars of intervention, the cold war was to become permanent, from 1920 to 1990. Soviet Russia, even though it was far from being able to construct socialism, was able to free itself from the straightjacket that imperialism always strives to impose on all peripheries of the world system that it dominates. In effect, Soviet Russia delinked. So what to do now? Attempt to push for peaceful coexistence, by making concessions if necessary and refraining from intervening too actively on the international stage? But at the same time, it was necessary to be armed to face new and unavoidable attacks. And that implied rapid industrialization, which, in turn, came into conflict with the interests of the peasantry and thus threatened to break the worker- peasant alliance, the foundation of the revolutionary state.

It is possible, then, to understand the equivocations of Lenin, Bukharin, and Stalin. In theoretical terms, there were U-turns from one extreme to the other. Sometimes a determinist attitude inspired by the phased approach inherited from earlier Marxism (first the bourgeois democratic revolution, then the socialist   one) predominated, sometimes a voluntarist approach (political action would make it possible to leap over stages). Finally, from 1930–1933, Stalin chose rapid industrialization and armament (and this choice was not without some connection to the rise of fascism). Collectivization was the price of that choice. Here again we must beware of judging too quickly: all socialists of that period (and even more the capitalists) shared Kautsky’s analyses on this point and were persuaded that the future belonged to large-scale agriculture.   The break in the worker-peasant alliance that this choice implied lay behind the abandonment of revolutionary democracy and the autocratic turn.

In my opinion, Trotsky would certainly not have done better. His attitude towards the rebellion of the Kronstadt sailors and his later equivocations demonstrate that he was no different than the other Bolshevik leaders in government. But, after 1927, living in exile and no longer having responsibility for managing the Soviet state, he could delight in endlessly repeating the sacred principles of socialism. He became like many academic Marxists who have the luxury of asserting their attachment to principles without having to be concerned about effectiveness in transforming reality.

The Chinese communists appeared later on the revolutionary stage. Mao was able to learn from Bolshevik equivocations. China was confronted   with the same   problems as Soviet   Russia: revolution in a backward country, the necessity of including the peasantry in revolutionary transformation, and the hostility of the imperialist powers. But Mao was able to see more clearly than Lenin, Bukharin, and Stalin. Yes, the Chinese revolution was anti-imperialist and peasant (anti-feudal). But it was not bourgeois democratic; it was popular democratic. The difference is important: the latter type of revolution requires maintaining the worker-peasant alliance over a long period. China was thus able to avoid the fatal error of forced collectivization and invent another way: make all agricultural land state property, give the peasantry equal access to use of this land, and renovate family agriculture.

The two revolutions had difficulty in achieving stability because they were forced to reconcile support for a socialist outlook and concessions to capitalism. Which of these two tendencies would prevail? These revolutions only achieved stability after their “Thermidor,” to use Trotsky’s term. But when was the Thermidor in Russia? Was it in 1930, as Trotsky said? Or was it in the 1920s, with the NEP? Or was it the ice age of the Brezhnev period? And in China, did Mao choose Thermidor beginning in 1950? Or do we have to wait until Deng Xiaoping to speak of the Thermidor of 1980?

It is not by chance that reference is made to lessons of the French Revolution. The three great revolutions of modern times (the French, Russian, and Chinese) are great precisely because they looked forward beyond the immediate requirements of the moment. With the rise of the Mountain, led by Robespierre, in the National   Convention, the French Revolution was consolidated as both popular and bourgeois and, just like the Russian and Chinese Revolutions, which strove to go all the way to communism even if it were not on the agenda due to the necessity of averting defeat, retained the prospect of going much further later. Thermidor is not the Restoration. The latter occurred in France, not with Napoleon, but only beginning in 1815. Still it should be remembered that the Restoration could not completely do away with the gigantic social transformation caused by the Revolution. In Russia, the restoration occurred even later in its revolutionary history, with Gorbachev and Yeltsin. It should be noted that this restoration remains fragile, as can be seen in the challenges Putin must still confront. In China, there has not been (or not yet!) a restoration.

Since 1947, the United States of America, the dominating imperialist power of that epoch, proclaimed the division of the world into two spheres, that of the ‘free world’ and that of ‘communist totalitarianism’. The reality of the Third World was flagrantly ignored: it was felt privileged to belong to the ‘free world’, as it was ‘non-communist’.   ‘Freedom’ was considered as applying only to capital, with complete disregard for the realities of colonial and semi-colonial oppression.   The following year Jdanov, in his famous report (in fact, Stalin’s), which led to the setting up of the Kominform (an attenuated form of the Third International), also divided the world into two, the socialist sphere (the USSR and Eastern Europe) and the capitalist one (the rest of the world).   The report ignored the contradictions within the capitalist sphere which opposed the imperialist centres to the peoples and nations of the peripheries who were engaged in struggles for their liberation.

The Jdanov doctrine pursued one main aim: to impose peaceful coexistence and hence to calm the aggressive passions of the United States and their subaltern European and Japanese allies.   In exchange, the Soviet Union would accept a low profile, abstaining from interfering in colonial matters that the imperialist powers considered their internal affairs. The liberation movements, including the Chinese revolution, were not supported with any enthusiasm at that time and they carried on by themselves.   But their victory (particularly that of China, of course) was to bring about some changes in international power relationships. Moscow did not perceive this until after Bandung, which enabled it, through its support to the countries in conflict with imperialism, to break out of its isolation and become a major actor in world affairs. In a way, it is not wrong to say that the main change in the world system was the result of this first ‘Awakening of the South’.   Without this knowledge, the later affirmation of the new ‘emerging’ powers cannot be understood.

The Jdanov report was accepted without reservation by the European communist parties and of those of Latin America of that era.   However, almost immediately it came up against resistance from the communist parties of Asia and the Middle East.   This was concealed in the language of that period, for they continued to affirm “the unity of the socialist camp” behind the USSR, but as time went on resistance became more overt with the development of their struggles for regaining independence, particularly after the victory of the Chinese revolution in 1949.   To my knowledge, no-one has ever written the history of the formulation of the alternative theory, which gave full rein to the independent initiatives of the countries of Asia and Africa, later to crystallize at Bandung in 1955 and then in the constitution of the Non Aligned Movement (from 1960 defined as Asian-African, plus Cuba). The details are buried in the archives of some communist parties (those of China, India, Indonesia, Egypt, Iraq, Iran and perhaps a few others).

Nevertheless I can bear personal witness to what happened, having been lucky enough, since 1950, to participate in one of the groups of reflection that brought together the Egyptian, Iraqi and Iranian communists and some others.   Information about the Chinese debate, inspired by Zhou Enlai was not made known to us by Comrade Wang Hue (the link with the journal Révolution, whose editorial committee included myself) until much later, in 1963.   We heard echoes of the Indian debate and the split that it had provoked, which was confirmed afterwards by the constitution of the CPM.   We knew that debates within the Indonesian and Filipino communist parties developed along the same lines.

This history should be written as it will help people to understand that Bandung did not originate in the heads of the nationalist leaders (Nehru and Sukarno particularly, rather less, Nasser) as is implied by contemporary writers.   It was the product of a radical left wing critique which was at that time conducted within the communist parties.   The common conclusion of these groups of reflection could be summed up in one sentence: the fight against imperialism brings together, at the world level, the social and political forces whose victories are decisive in opening up to possible socialist advances in the contemporary world.

This conclusion, however, left open a crucial question: who will ‘direct’ these anti-imperialist battles?   To simplify: the bourgeoisie (then called ‘national’), whom the communists should then support, or a front of popular classes, directed by the communists and not the bourgeoisies (who were anti-national, in fact)?   The answer to this question often changed and was sometimes confused.   In 1945 the communist parties concerned were aligned, based on the conclusion that Stalin had formulated: the bourgeoisies everywhere in the world (in Europe, aligned with the United States, as in the colonial and semi-colonial countries – in the language of that era) have “thrown the national flag into the rubbish bin” (Stalin’s phrase) and the communists were therefore the only ones who could assemble a united front of the forces that refused to submit to the imperialist, capitalist American order.   The same conclusion was reached by Mao in 1942, but only made known (to us) when his New Democracy had been translated into Western languages in 1952.   This thesis held that for the majority of the peoples of the planet the long road to socialism could only be opened by a “national, popular, democratic, anti-feudal and anti-imperialist revolution [the language of the day], run by the communists.”   The underlying message was that other socialist advances were not on the agenda elsewhere, i.e., in the imperialist centres.   They could not possibly take shape until after the peoples of the peripheries had inflicted substantial damage on imperialism.

The triumph of the Chinese revolution confirmed this conclusion. The communist parties of South East Asia, in Thailand, Malaysia and Philippines in particular, started liberation struggles inspired by the Vietnamese model.   Later, in 1964, Che Guevara held similar views when he called for “one, two, three Vietnams.”

The avant-garde proposals for initiatives by the independent and anti-imperialist ‘countries of Asia and Africa’, which were formulated by the different communist groups of reflection, were precise and advanced. They are to be found in the Bandung programme and that of the Non-Aligned Movement, of which I gave a systematic presentation in my L’eveil du Sud (Awakening of the South).   The proposals focussed on the essential need to reconquering control over the accumulation process (development which is auto-centred and delinked from the world economy).

It so happens that some of these proposals were adopted, although with considerable dilutions in certain countries, as from 1955 to 1960, by the governing classes as a whole in both continents. And at the same time the revolutionary struggles waged by all the communist parties of South East Asia were defeated (except in Vietnam, of course).   The conclusion would seem to be that the ‘national bourgeoisie’ had not exhausted its capacity for anti-imperialist struggle.   The Soviet Union also came to that conclusion when it decided to support the non-aligned front, while the imperialist Triad declared open warfare against it.

The communists in the countries concerned were then divided between the two tendencies and became involved in painful conflicts that were often confused.   Some drew the lesson that it was necessary to ‘support’ the powers in place that were battling imperialism, although this support should remain ‘critical’.   Moscow gave wind to their sails by inventing the thesis of the ‘non-capitalist way’.   Others conserved the essentials of the Maoist thesis, according to which only a front of the popular classes that was independent of the bourgeoisie could lead a successful struggle against imperialism.   The conflict between the Chinese communist party and the Soviet Union, which was apparent as from 1957 but officially declared as from 1960, of course confirmed the second tendency among the Asian and African communists.

However, the potential of the Bandung movement wore out within some fifteen years, emphasizing – if it should be needed – the limits of the anti-imperialist programmes of the ‘national bourgeoisies’.   Thus the conditions were ripe for the imperialist counter-offensive, the ‘re-compradorisation’ of the Southern economies, if not – for the most vulnerable – their recolonization. Nevertheless, as if to give the lie to this return imposed by the facts to the thesis of the definitive and absolute impotence of the national bourgeoisies – Bandung having been, according to this vision, just a ‘passing episode’ in the cold war context – certain countries of the South have been able to impose themselves as ‘emerging’ in the new globalization dominated by imperialism.   But ‘emerging’ in what way?   Emerging markets open to the expansion of capital of the oligopolies belonging to the imperialist Triad? Or emerging nations capable of imposing a genuine revision of the terms of globalization and reducing the power exercised by the oligopolies, while reconducting the accumulation to their own national development?     The question of the social content of the powers in place in the emerging countries (and in the other countries of the periphery) and the prospects that this opens up or closes is once again on the agenda.   It is a debate that cannot be avoided: what will – or could – be the ‘post-crisis’ world?

Would the results be better now, when a second ‘Awakening of the South’ is on the horizon?   Above all, will it be possible this time to build convergences between the struggles in the North and in the South?   These were lamentably lacking in the Bandung epoch. The peoples of the imperialist centres then finally aligned behind their imperialist leaders.   The social-democrat project of the time would in fact have been difficult to imagine without the imperialist rent that benefited the opulent societies of the North.   Bandung and the Non Aligned Movement were thus seen as just an episode in the cold war, perhaps even manipulated by Moscow. In the North, there was little understanding of the real dimensions of this first emancipatory wave of the countries of Asia and Africa which, however, was convincing enough for Moscow to give it support.


The emerging market crisis returns

Taken from https://thenextrecession.wordpress.com/2015/08/01/the-emerging-market-crisis-returns/

By Michael Roberts

The business media is full of the meltdown of the Chinese stock market, the credit bubble and impending crash in the Chinese economy.  But less well announced is the dangerous economic slowdown and already unfolding debt crisis in ‘emerging economies’ in general.

So for the first time since the emerging market crisis of 1998, all the large so-called BRICS (Brazil, Russia, India, China and South Africa) are in trouble.  And so are the next range of ‘developing’ economies like Indonesia, Thailand, Turkey, Argentina, Venezuela etc.

Previously rising commodity prices in oil, base metals and food led to fast growth in many of these economies.  This in turn led to a flood of capital from advanced capitalist economies by banks and companies looking for higher profits than available in their economies.

But the commodity boom has collapsed.  Global commodity prices continue to plunge. Bloomberg’s commodity price index, tracking gold, crude oil and other raw materials, is down to its lowest point since 2002. It has fallen by 40% since 2011.  It’s another indicator of the long depression and deflationary pressures in the world economy (see my post: https://thenextrecession.wordpress.com/…/the-spectre-of-de…/).

That’s partly because of the Great Recession and the weak recovery afterwards has reduced demand for energy and industrial materials.  And it is partly because the biggest consumer of these goods, China, has seen its economy slow in growth from double digits to (just) 7% a year or even lower.  Inflation in many top economies has given way to deflation in prices (in Europe and Japan).

The latest ‘flash’ estimates of business activity globally, based on the so-called purchasing managers indexes, show that emerging economies are now contracting for the first time for over two years.

Unemployment across emerging markets has risen sharply this year, reversing a six-year slide, even as it has continued to fall in developed countries.  Across emerging markets, unemployment has risen to 5.7 per cent, from a cyclical low of 5.2 per cent in January, the sharpest rise since the global financial crisis, according to figures compiled by JPMorgan.

During the emerging market boom, capital flowed into the emerging economies and corporations in Asia and Latin America ran up large debts.  Now the money is flowing out, not in and profits are falling as prices for commodities and sales of even for hi-tech goods are falling.  Investors pulled a net $4.5bn from EM funds in the week through July 30, according to data from EPFR, compared with $3.3bn a week earlier. A total of $14.5bn has now been redeemed from EM funds over the past three weeks alone.

And currencies across Asia are dropping like stones.

And the US is poised to raise rates in September, so emerging markets could suffer further instability as the cost of servicing that debt rises in dollar terms.  A debt crisis is emerging.

The latest data on foreign exchange reserves show a sharp fall in dollar reserves. The reserves of emerging market governments have slumped as these governments experience declining trade surpluses and weak domestic economies, leading to a flight of money.   The IMF’s COFER figures, the measure for FX reserve data, show that emerging-market reserves have dropped for three successive quarters, from a peak of $8.06trn at end Q2 2014 to $7.5trn by end Q1 2015. These analysts reckon that emerging-market reserves have fallen $575bn since the middle of last year, the sharpest decline in 20 years.  Capital is fleeing these ’emerging economies’ as their real GDP growth slows and investment drops off.

Investment bank JP Morgan reckons that the debt of non-financial corporations in emerging economies has surged from about 73% of GDP before the financial crisis to 106% of GDP as of 4Q14. This 34%-point increase is enormous, averaging nearly 5%-points per year since 2007.  In previous research, the IMF has found that an increase in the ratio of credit to GDP of 5%-points or more in a single year signals a heightened risk of an eventual financial crisis. Many emerging market economies have registered such an increase since 2007. Hence the conclusion of the credit analysts, S&P, that “we have reached an inflexion point in the corporate credit cycle”.

Alongside rising debt are falling profitability and consumer demand in emerging markets outside China.

Falling commodity prices for emerging economy exports, rising corporate debt, falling profitability and demand, significant capital outflows and the probability that the US Fed will hike rates this autumn/fall and increase debt servicing costs. It’s a concoction for a serious crash/slump in the great ‘growth’ story of the ’emerging’ economies.