The Rise of China and the Demise of the Capitalist World Economy attempts to fit the rise of China into the world-systems approach of Immanuel Wallerstein. Luckily Li is much more critical of the contemporary Chinese model of development for creating a post-capitalist world than Giovanni Arrighi’s Adam Smith in Beijing. For all the talk about the rise of China and China’s relationship to the US-centered world economy, this is not something that has been well-theorized to date. The book, however, focuses more on introducing the world-systems approach than on contemporary China. The strongest chapter on China shows well the contradictions of socialist accumulation during the Maoist period. I wish there was an equally strong chapter on the political economy of the reform period, for such a chapter would surely support Li’s argument about China’s place in contemporary global capitalism. His section of China’s macroeconomic imbalances could benefit from a discussion of present attempts by the state to generate expanded internal demand, such as the New Socialist Countryside policy.
The basic thesis of the book has two aspects: first, with China (and especially its working class) joining with global capitalism there is no more outside for capitalism to incorporate, and this drives up the cost of continued accumulation. The theory of capitalist crisis embedded, here, is that of Wallerstein: class struggle causes wages and taxes to rise, cutting into profits and continued accumulation. In the past this would lead to a crisis in the core of capitalism, and resolution would come from the rise of a new hegemony, a spatial and institutional fix. I have my doubts about this crisis theory. If, as Li claims, capitalist crisis originates in class struggle by the proletariat that pushes up wages and taxes, then how do we explain the contemporary crisis of capitalism, considering that wages have largely stagnated in much of the world including the US and taxes have not really been rising either? Turning to China, proletarianization has not been leading to a strengthened working class struggle—this is where more attention to the dynamics of contemporary China would be useful.
The second aspect of Li’s theory of the demise of the capitalist world economy is more convincing. Again following Wallerstein, Li points out that core states in the capitalist world-system rely upon, and in turn buy-off, semi-peripheral states in order to divide the potential anti-systemic alliance of non-core states and maintain structural stability. But with the rise of China and India [and we could note the recent BRIC (Brazil, Russia, India, and China) meeting, here] semi-peripheral states are now too numerous and large to buy off. With the rise of so many semi-peripheral powers and the lack of a large outside labor force that can be incorporated, capitalism is reaching its terminal crisis, and the rise of China exacerbates both of these problems.
The book also integrates a critique of the capitalist response to the environmental and climate crisis, arguing that it constitutes a fundamental contradiction of the contemporary world, and one that capitalism cannot resolve. A critique of the myths of capitalist “sustainable development” is always welcome. Whether states like China will be able to contribute to a solution, however, seems unlikely. This book was written before the present economic crisis was fully underway, and is prescient in outlining the unsustainability of the present US-China economic relation. Its conclusion opens the question of what will replace the capitalist world-system, basically arguing that the future will be socialism or barbarism; the choice is up to the working class.
Tags: Add new tag, Capitalism, Chinese Left, Rise of China, World-system
Good critical review of an important book - looking forward to more commentaries like this from you.