China's Stock Market Plummets

This Is What CAPITALISM Looks Like

August 31, 2015 | Revolution Newspaper |


On August 24 and 25, the stock market in China took a huge plunge, recording the biggest drop in eight years. This sent shockwaves around the world, with stock markets in the U.S. and across Europe and Asia also recording major drops. And beyond the stock market crisis, there are signs of major slowdowns and other problems in China’s economy, which had been growing faster than any other major economy for the past decade and is now the world’s second largest, after the United States.

What you hear on the news from the ruling class media is that what’s happening in China is a result of “socialism”—that the problem is that in China the government plays too big a role in the economy and this interferes with the “natural” workings of the market.

What Is Capitalism?

by Bob Avakian

3-part excerpt from Revolution: Why It's Necessary, Why It's Possible, What It's All About.

But China is a capitalist country. Government intervention in the economy and state ownership of factories and other big parts of the economy does not make a society socialist. This system takes on different forms—in China the economy is more organized around government bureaus, agencies, and state-owned banks, while in the U.S. the economy is more in private corporate hands. But these are just differences in form. The economy in China is based on a system driven by the command to maximize profit—with each capitalist or group of capitalists (in whatever form) competing against others to continually increase profits through ever more ruthlessly exploiting people, or face being brought down. Under this anarchic expand-or-die dynamic, the needs of the people count for nothing, and Earth’s environment is simply a resource to be blindly exploited without regard for the future of the planet and life on it. It’s a system repeatedly wracked by crisis, causing even more intense misery and suffering for the masses of people.

China’s stock market is in crisis. But what is a stock market? In the clip “What Is Capitalism?” from his Revolution talk, Bob Avakian speaks to this: “What are they trading on the stock market? Where does the wealth come from that they’re trading when they buy shares and stocks in different companies and bonds? They’re trading in human flesh. They’re trading in human suffering. They’re trading in what’s drained out of those children and their bones literally broken and their skin literally going into the things produced. That’s where that wealth is created before the capitalist takes it and says ‘It’s mine.’ That’s what they’re trading in on the stock market. They’re trading in exploitation and degradation of people all over the world, including tens of millions or hundreds of millions of children.”

The wealth that’s traded in China’s stock market comes from profits from exploitation by the capitalist rulers there, who have attracted a flood of foreign investments by offering low costs and low wages. What this means in human terms is millions of people slaving away in huge factories, working 60-, 70- or even 80-hour weeks under horrific conditions—youth being driven to suicide in factories churning out cell phones for the world market, women inhaling toxic fumes or losing limbs as they work on toy factory assembly lines, and millions of other wage slaves whose lives are crushed under the profit-above-all drive of capitalism.

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Breakneck, chaotic capitalist development in China has meant an ecological and environmental nightmare. Some of the most polluted cities in the world are in China—more than 1.6 million people die prematurely every year due to air, water, and other forms of pollution.

Capitalism and the outlook it gives rise to and promotes mean horrors for women in today’s China. One ugly manifestation of this: China now has millions of women, many coming from the rural areas, forced into prostitution in the “sex industry” in the sprawling industrial and commercial centers.

And the dog-eat-dog nature of capitalism leads to breakdowns in the economy, which cannot be planned rationally or in a way based on human need when profit is in command.

It wasn’t always this way in China. From 1949 to 1976, China was a revolutionary socialist society. The “wretched of the earth,” led by Mao Zedong and the Communist Party, seized power from the imperialists and reactionaries. The revolutionary society set up an economy based not on the dictates of capitalist profit but on the needs of the formerly oppressed and society overall, as part of the revolutionary struggle worldwide.

Mao Zedong identified and insisted that state ownership of the main enterprises in the economy in itself did not make society socialist—and that new bourgeois forces rising up from remaining contradictions within socialist society, concentrated in the communist party itself, could seize power and restore capitalism within that formal framework. The years of the Great Proletarian Cultural Revolution, 1966 to 1976, saw hundreds of millions of people taking part in political debate and struggle to oppose turning China back into a capitalist country. There was liberating and radical transformation of every sphere of society, from the economy to education to culture and the arts—something never seen before in the world. But after the death of Mao in 1976, leading representatives of the new capitalists in China carried out a military coup to arrest the revolutionary leadership and violently suppress opposition. They proceeded to overthrow the socialist state and bring back capitalism. And so there is a new capitalist class that now rules China. To maintain their credibility, they keep the name “communist”—but everything in today’s Chinese society is driven by the insane logic of capitalism.

There is much more to analyze and understand about the stock market crash in China, the overall economic situation in that country, and all the repercussions globally—and how all this will develop is not determined. But one thing can be said clearly and definitively: What we are seeing in China now is not a crisis of socialism. It is a crisis of capitalism.


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