Pauperism is not socialism, still less communism
When Tocqueville discovered the apocalyptic spectacle of the working-class neighborhoods of Manchester on a visit to England, he was immediately struck by the paradox with which he was abruptly confronted. Although the Industrial Revolution had increased the ways in which money could be made and distributed around the world, it did so through a veritable exploitation of the poorest classes, who found themselves in ever-deepening poverty.
"The progress of modern society is more of less rapidly increasing the number of those who are forced to live on charity": this was the initial picture painted by Tocqueville in his Mémoire sur le paupérisme [Report on Poverty] that he wrote for the La Manche Departmental Council. In it, he sought to precisely determine the solutions that should be applied to "ills of this nature". He said « I am deeply convinced that any regular, permanent, administrative system whose purpose is to provide for the needs of the poor will give rise to far more misery than it can cure and will deprave the population that it seeks to aid and console. »
(Memoir on Pauperism)
Mao’s 'The Great Leap Forward 'was the name given to the Second Five Year Plan which was scheduled to run from 1958-1963. The Great Leap Forward is now widely seen, both within China and outside, as a major economic disaster, being more of a Great Leap Backward that would affect China in the years to come. As inflated statistics reached planning authorities, orders were given to divert human resources into industry rather than agriculture. According to various sources, the death toll due to famine was most likely 20 to 40 million. The three years between 1959 and 1962 were known as the "Three Bitter Years" and the Three Years of Natural Disasters.
Industrial progress is meaningless without freedom of reward, choice, equity and justice. Economic prosperity is based on reward, choice, freedom and trust. Intolerance and bigoted collective decision making inevitably lead to disasters, famine, hunger and poverty. Marxism stands opposed to all these basic human traits. The nations in the 20th century who adopted this system paid a huge massive price. China is one nation that transformed from a wretched state of medievalism to a rising state of prosperity, although the distribution of income remains lopsided, but phenomenal increase in wealth of nation leaves a question in minds of curious that why and what propelled China to this path of great move forward.
Than came the 'Great Proletarian Cultural Revolution.' It was launched by Communist Party of China Chairman Mao Zedong on May 16, 1966 to regain control of the party after the disasters of the Great Leap Forward led to a significant loss of his power to rivals such as Liu Shaoqi and Deng Xiaoping. Though Mao himself officially declared the Cultural Revolution to have ended in 1969, the term is today widely used to also include the period between 1969 and the arrest of the Gang of Four in 1976. After the death of Mao and the start of Chinese economic reform under Deng Xiaoping, the tendency within the Chinese government was to see the Great Leap Forward as a major economic disaster and to attribute it to the cult of personality under Mao Zedong, and to regard it as one of the serious errors he made after the founding of the People's Republic of China.
In the background of all these communist upheavels in 1975 China GDP (gross domestic product of China at market prices estimated by the International Monetary Fund with figures in millions of Chinese Yuan) was equal to 225,300. In 2005 China GDP it increased to 18,232,100 (For purchasing power parity comparisons, the US Dollar is exchanged at 2.05 Yuan only.)
What triggered the onset of China economy into a new stratosphere from 1975 to 2005?
China ditched 'Socialism and Marxism' model of economy and joined the comity of nations that promote productivity and incentive.
Chinese paramount leader Deng Xiaoping on June 30, 1984 declared:
"What is socialism and what is Marxism? We were not quite clear about this in the past. Marxism attaches utmost importance to developing the productive forces. We have said that socialism is the primary stage of communism and that at the advanced stage the principle of from each according to his ability and to each according to his needs will be applied. This calls for highly developed productive forces and an overwhelming abundance of material wealth. Therefore, the fundamental task for the socialist stage is to develop the productive forces. The superiority of the socialist system is demonstrated, in the final analysis, by faster and greater development of those forces than under the capitalist system. As they develop, the people's material and cultural life will constantly improve. One of our shortcomings after the founding of the People's Republic was that we didn't pay enough attention to developing the productive forces. Socialism means eliminating poverty. Pauperism is not socialism, still less communism."
The result was a China GDP graph e took off like a hockey stick. In 1952, gross industrial output of China was estimated at 34,900 million yuan in current prices. That works out to almost 3% world share then and 1.5 times that of the output of Japan or India then.
Current GDP per capita grew a paltry 17% in the Sixties, rising to 70% in the Seventies, and China surged ahead of India registering a remarkable growth of 63% in the turbulent Eighties and finally reaching a peak growth of 175% in the Nineties.
In a full turn of events in less than 25 years the risk now lies in the fact that America depends on China to help finance its budget and current-account deficits. China's purchases of American Treasury bonds, along with purchases by Japan, have helped to hold down yields and hence American mortgage rates.
The pauper state of yester years is one of the greatest stabiliser of the global economy not lagging far behind Japan.
Today if China's economy slows sharply, commodity prices will fall everywhere, especially hurting producers in countries such as Russia, Brazil and Australia, which have gained so handsomely from China's boom. China has helped create a new wealth in commodity rich countries.
China huge foreign exchange reserves have helped in lowering the global interest rates. Foreign investors like china have been extraordinarily willing to put their money into the U.S. But let's suppose, just for the sake of argument that a recession here makes other countries look like a better bet.
Then foreign investors pull out their money, pushing interest rates way up and the dollar way down. The higher rates slow the economy, and the lower dollar makes imports more expensive, triggering higher inflation. Stagflation ensues and what's worse, Bernanke and the Fed will be forced to keep interest rates high to fight inflation.
To most U.S. consumers, of course, this is a blessing. Made-in-China products have helped keep inflation at bay in the U.S. And China's rise as a manufacturing power has cemented its relationship with the rest of the world. Chinese export global price stability. "China's prices are becoming global prices." Chinese exports have rocketed by 20% so far this year, while its economy is expanding by nearly 9%. In China itself, overproduction has helped push industrial prices down by 8% over the past five years and retail prices by 10%.
However the present generation is reaping the fruit of Nixon's political pragmatism, strategic realignment and formulation of a new China policy. Those were the key events between 1970 to 75 that laid the foundation of the emergence of a great new economic power in the world today!!
In December 2005, China's National Bureau of Statistics revised its 2004 nominal GDP upwards by 16.8% or Rmb2,336.3 billion (US$281.9 billion), making China the 6th largest economy in the world. (overtaking Italy, with a GDP of almost $2 trillion USD.) At the start of 2006, the PRC officially announced itself as the 4th largest economy, measured by USD-exchange rate overtaking France and the United Kingdom. By 2009, China is predicted to overtake Germany as the third largest economy.
Today’s multiple oasis of economic stability within the global economy are the result of forward looking inclusive foresight that had very modest beginning but significant impact on the generations of today, many of us do not realise that.
October 5, 1970 In a Time magazine interview, President Nixon states, "If there is anything I want to do before I die, it is to go to China."
October 25, 1970 President Nixon asks Pakistani President Yahya Khan to pass on a secret proposal to China: the U.S. wants to conduct high-level talks in Beijing, and promises it won't enter into any anti-China alliance with the U.S.S.R..
November 10, 1970 Yahya Khan passes on Nixon's proposal to Chou En-lai. After conferring with Mao Tse-tung, Chou tells Yahya Khan: "We welcome the proposal from Washington for face-to-face discussions.We would be glad to receive a high-level person for this purpose, to discuss the withdrawal of American forces from Taiwan." A few weeks later Yahya Khan tells his foreign secretary Sultan Muhammed Khan of Chou's reply, and hands off planning to Sultan Khan.
April 6, 1971 The U.S. Ping-Pong team, in Japan for the 31st World Table Tennis Championship, receives a surprise invitation from their Chinese colleagues for an all-expense paid visit to the P.R.C.. Time magazine calls the overture "the ping heard round the world."
April 30, 1971 Life magazine publishes a December 18, 1970 interview with Mao Tse-tung, in which the Chairman welcomes Nixon to come to China for talks, "either as a tourist or as President."
July 9, 1971 Feigning illness during a trip to Pakistan for talks with President Yahya Khan, Henry Kissinger takes a secret 4 a.m. flight to China.
February 21-27, 1972 President and Mrs. Nixon arrive in Beijing for a eight-day visit filled with official meetings, sightseeing and cultural events. On the first day, Nixon and Kissinger meet with Chou En-lai and Mao Tse-tung. That evening, the entire presidential party attends an official welcome banquet hosted by Chou En-lai in the Great Hall of the People.
February 27, 1972 Shanghai Communiqué, issued jointly by U.S. and China, pledges both countries to work for "normalization" of relations. In it, the U.S. acknowledges that there is only one China and that Taiwan is part of China, and agrees to withdraw its military forces from the island.
January 27, 1973 Peace Accords signed in Paris, calling for cease-fire in Vietnam War.
February 22, 1973 Following Kissinger's five-day visit to Beijing, the U.S. and China announce their agreement to establish "liaison offices" in each other's capitals.
April 10, 1974 In a major address to the U.N. General Assembly, Chinese Vice Premier Deng Xiaoping outlines a new, more moderate Chinese foreign policy.
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