China and the West

Mainstream economists are worried that China’s catch-up growth model seems not to be following the path of the West.

The claim, made by Daron Acemoglu and others, is that the development of capitalism in the West represented a “happy connection between prosperity and democracy.” China, however, appears to be following a different path, where “rulers have been able to deliver strong economic growth without surrendering political and social control.” Western mainstream economists are worried, in other words, that the West has failed in its mission to show the rest of the world its future.

Here’s an alternative view: China is succeeding in showing the West its own past. The secret is the process of primitive accumulation. The development of capitalism in China demonstrates how enormous numbers of people have been uprooted from the land and forced to have the freedom to migrate in order to sell their labor power in distant factories. Ryan Avent refers to it as the “largest migration in history.” According to statistics compiled by Kam Wing Chan of the University of Washington,

from 1990 to 2005—the most recent period for which reliable statistics are available—there was an overall gross migration across provinces of about 80m migrants (see map). An increasing number also migrate within their own province. All told, some 230m Chinese spend most of the year away from their home town or village. This is almost a third of all people globally estimated by the UN to be migrating within the borders of their own country. Most migrants move in search of work. The number of rural Chinese working away from home is now almost 160m, or 12% of the country’s population. The Chinese government’s population-planning commission forecasts another 100m rural residents could move to cities by 2020.

And, according to David Barboza, the New York Times’s Shanghai bureau chief, the average assembly-line worker at Foxconn makes less than $17 a day.

Ask a Foxconn worker and a typical schedule is 10 working hours a day, plus one weekend day. It is common to violate the legal limit. But assuming they work the maximum, and none of those hours occur on Saturday or Sunday (which would make them eligible for double time hourly rates) the figures are 1,700 renminbi a month in basic salary (at 10.6 renminbi an hour, or about $1.70), 36 hours at time-and-a-half (at 15.9 renminbi, or roughly $2.55) and you get a total of 1,700 + 572.40 = 2,272.40 renminbi. At 6.3 renminbi per dollar, that is about $360 for a month.

In China, factories generally calculate that there are 22 working days a month, on average. So you can see the total is 2,272 divided by 22 working days and you come up with 103.27 renminbi in pay per day, or about $16.40. . .

It is exactly this process of large-scale migration from rural to urban areas to toil long hours for low wages under working and living conditions that drive laborers to attempt to commit suicide, which reporters are now exposing in China, that originally paved the way for capitalist development in the West.

As that bearded German critic of political economy explained back in the nineteenth century,

In themselves money and commodities are no more capital than are the means of production and of subsistence. They want transforming into capital. But this transformation itself can only take place under certain circumstances that centre in this, viz., that two very different kinds of commodity-possessors must come face to face and into contact; on the one hand, the owners of money, means of production, means of subsistence, who are eager to increase the sum of values they possess, by buying other people’s labour power; on the other hand, free labourers, the sellers of their own labour power, and therefore the sellers of labour. Free labourers, in the double sense that neither they themselves form part and parcel of the means of production, as in the case of slaves, bondsmen, &c., nor do the means of production belong to them, as in the case of peasant-proprietors; they are, therefore, free from, unencumbered by, any means of production of their own. With this polarization of the market for commodities, the fundamental conditions of capitalist production are given. The capitalist system presupposes the complete separation of the labourers from all property in the means by which they can realize their labour. As soon as capitalist production is once on its own legs, it not only maintains this separation, but reproduces it on a continually extending scale. The process, therefore, that clears the way for the capitalist system, can be none other than the process which takes away from the labourer the possession of his means of production; a process that transforms, on the one hand, the social means of subsistence and of production into capital, on the other, the immediate producers into wage labourers. The so-called primitive accumulation, therefore, is nothing else than the historical process of divorcing the producer from the means of production. It appears as primitive, because it forms the prehistoric stage of capital and of the mode of production corresponding with it.