China is marking the 200th anniversary of Karl Marx’s birth not only by sending a statue to his hometown of Trier in Germany but also by reminding the people of the economist’s work. However, over the past 40 years China has deviated from some of his guiding principles. The country has gone very far down the capitalist road, creating one of the highest levels of income and wealth inequality.
President Xi Jinping and his Communist party have stressed China’s particular application of Marxism. But while the banner of Marxism flies high over China, it is perhaps flying too high for ordinary people to read the details. This is why the Communist party is organising study sessions of Marxist principles not only for party cadres, but also for university students and the population at large.
On these occasions, such as the National Financial Work Conference in July 2017, President Xi himself has spelt out Marxist principles in detail. He reminded attendees that finance should serve the real economy rather than itself. This is pure Marxist theory, which states that capitalist economies have subverted the relationship between money and the real economy. Money should function as a servant of the real economy, leading to higher growth. In capitalist economies this relationship is the other way around: growth serves to generate profits.
Emphasising the Communist manifesto, which is rather long on ambition (overthrowing the capitalist mode of production) and rather short on what a communist society is supposed to look like, serves the purposes of the Chinese Communist party. It focuses on the rejection of western ideas, such as pluralism, liberalism and democracy, in favour of guidance by the party, now that party and state have been welded together.
In Chinese philosophy, the School of Names warns that one should not judge a phenomenon by its name but focus on its contents. So it’s more appropriate to see the country’s guiding principle as the continuity of Chinese civilisation rather than the relatively recent (and foreign) ideology of Marxism. Chinese leaders select those elements of Marxism that echo traditional values and oppose western influence. They offer the Chinese a way to development characterised by subordination to the strategy mapped out by enlightened leaders, carried forward through social harmony. Putting a president in charge of this long-term goal by removing the term limit of the office serves this purpose.
According to this doctrine, a harmonious society, once it has overcome the struggle between competing interests, can advance material well-being for all. This contrasts with western experience and those emerging market economies where never-ending class struggle is supposed to generate progress.
This approach has important implications for China’s economic development. Individual interests will be subordinated to guiding principles mapped out by the Communist party. The party decides how to interpret Marx regarding ownership of the means of production, the distribution of income, the power of the trade unions and the role of finance. Foreigners will be allowed to participate, subordinated to the will of the people.
The revival of Marxism with Chinese characteristics entrenches the leading role of the present ‘Marxist dynasty’ and signals clear rejection of western values. This is crucial for the survival of the party, as well as the stability of Chinese leadership. And it underpins, too, China’s increasingly assertive role on the world stage.
Herbert Poenisch is a Member of the International Committee of the International Monetary Institute at Renmin University of China, and former Senior Economist at the Bank for International Settlements.