“Socialism Betrayed” revisited

It is nearly twenty years since the publication of Socialism Betrayed by Keeran and Kenny.¹ They offered an interpretation of the USSR’s collapse that was influential within the communist movement and the CPI.

The book highlighted the disintegration of the Communist Party of the Soviet Union as derived from the economic structure. Experimentation in markets, alongside a black economy, not only produced a degenerating effect on socialist consciousness but also provided a material base for those seeking the dismantling of the USSR.

As a position regarding effects of the economic base on political consciousness, is it relevant to the Communist Party of China?

Estimates on the Chinese informal economy suggest it is relatively small: 13 per cent of GDP. But, unlike the USSR, there is an extensive private sector, contributing 60 per cent of GDP, with market provision in housing, health, education, and water. There is elitism and inequality in life chances, not unknown in the USSR but of a much different magnitude in China, for example linking graduation from the global top 200 universities to access to residential hukou permits to live in desirable urban areas.

Might market exchanges of the above magnitude, alongside wider inequalities, produce degenerating effects in the Communist Party of China similar to those in the CPSU?

Some evidence: membership of the CPC is associated with private economic returns for individuals.² A revolving door exists between the party and industry.³ Zhang shows that career advantages accrue to “Red princelings.”⁴ Wei et al. show a decline in Marxism in party education relative to nationalist topics.⁵

There is journalistic evidence about self-aggrandisement by relatives of party officials⁶ and among high-ranking party members.⁷

Yet the CPSU disintegrated, in part, because the private economic interests of “apparatchiks” could not be realised under Soviet socialism. In contrast, some CPC elites can secure their economic self-interest—although constraints exist on excesses, such as glaring corruption—that weaken the state’s legitimacy. And, unlike the CPSU circa 1991, the CPC has domestic support, as one Harvard University study shows.⁸

Despite marketisation, the CPC’s steering of the economy will probably continue. While helpful in demonstrating alternative modes of co-ordination outside capitalism, leftists should not get over-excited. State ownership and intervention are widespread in the United Arab Emirates, but it is difficult to see the UAE as socialist.

Yet, in China’s defence, markets do not necessarily rule out socialist forms, for example “goulash communism,” workers’ self-managed firms.

A further complexity is that state-steered development is common to the “East Asian Developmental model” generally: using the state for rapid industrialisation because indigenous capitalists cannot do it independently. Broad similarities, on a different scale, exist between the CPC’s economic strategy and the post-war Japanese keiretsu and South Korean chaebol. One should not be doctrinaire, but much depends on the state’s character and in whose interests it rules. It is not implausible that CPC ideology is nominally Marxist, but in real terms it is nationalist-collectivist, evolving from domestic experiences.

Yet the party’s character may be less important than its effects. The CPC uses growth to make social gains, eliminating absolute poverty. However, Denmark claims close to nil on this same measure; a distributional magnitude, even if statistically reliable, is insufficient to cause communists to convert to the Danish social model.

Caveats about developing economies to one side, Marxists are less interested in absolute cut-off points within income distribution hierarchies: what matters is the relative distribution of value within the economy and the control of that value, a trend less auspicious to Chinese workers. Of course Soviet workers suffered in the push for industrialisation too, but in a different way, with fewer resources at their disposal and with greater egalitarianism.

To return to Socialism Betrayed: marketisation probably encourages degenerating-style effects within the CPC in much the same way that Keeran and Kenny show for the CPSU—but not at the point where the collapse of the CPC is likely.

1. Roger Keeran and Thomas Kenny, Socialism Betrayed: Behind the Collapse of the Soviet Union, New York: International Publishers, 2004.

2. Joanne Song McLaughlin, “Does communist party membership pay? Estimating the economic returns to party membership in the labor market in China,” Journal of Comparative Economics, vol. 45, issue 4 (2017).

3. Shenghua Lu and Hui Wang, “How revolving-door recruitment makes firms stand out in land market: Evidence from China,” China Economic Review, vol. 78 (C), 2023.

4. Tony Huiquan Zhang, “The rise of the princelings in China: Career advantages and collective elite reproduction,” Journal of East Asian Studies, vol. 19, issue 2 (July 2019).

5. Shan Wei et al., “Layering ideologies from Deng Xiaoping to Xi Jinping,” China: An International Journal, vol. 21, no. 2 (May 2023).

6. “Xi Jinping millionaire relations reveal elite Chinese fortunes,” Bloomberg News, 29 June 2012.

7. Mariko Oi, “Evergrande: The rise and fall of the property giant’s billionaire founder,” BBC News, 29 September 2023; Derek Cai, “Former Bank of China boss arrested on bribery charges,” BBC News, 16 October 2023.

8. Harvard University “Long-term survey reveals Chinese government satisfaction” (https://tinyurl.com/42mk6czb)