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      Book Review: Does Asia Provide a Viable Alternative to Capitalism?

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      Journal of Global Faultlines
      Pluto Journals

            Main article text

            In this work, Italian economist Alberto Gabriele and Brazilian economist Elias Jabbour outline the emergence of a new, perhaps major alternative to the Western capitalist model which appeared triumphant at the end of the Cold War. Capitalism is by far the world’s dominant economic system, the authors acknowledge, and will be so in the foreseeable future. However, several economies, including China – which might become the world’s largest by 2030 – as well as Viet Nam and perhaps Laos, are already characterized by a distinct mixed socioeconomic system. In these countries, the capitalist and the socialist mode of production coexist, in the framework of a socialist-oriented development strategy where the state exerts a high degree of control over the economy.

            While not fully socialist, those Asian countries are “socialist-oriented”, the authors say. This means that political leaders officially maintain that the government aims at establishing and developing a socialist socioeconomic system, and that the country has advanced towards socialism along some measurable economic and social dimension.

            A socialist-oriented market economy, the authors say, is a mixed socioeconomic system in which price-based market mechanisms and the law of value constitute the prevalent form of regulation of the system, and the relative role of planning and state control of the economy – both direct, via state-owned enterprises, and indirect, via publicly owned finance and other instruments – are qualitatively and quantitatively superior to that of capitalist countries.

            The socialist-oriented model is more efficient, the authors say, in that planners have at their disposal a wider and more powerful range of tools than their counterparts in capitalist countries. They can set the share of the surplus at the macroeconomic level and capture an important part of it not only through fiscal policies but also by virtue of the state’s ownership rights with respect to industrial and financial capital. As a result, they can determine the rate of investment, its broad sectoral composition, the level and composition of social expenditure, and the level of demand. In the long run, planners can set the speed and direction of capital accumulation, innovation, and technical progress, and affect the structure of relative prices through market-compatible industrial and other policy interventions. They can therefore achieve not only economic but environmental results superior to those that would have been produced by simply following market price signals.

            According to the authors, different modes of production will continue to coexist in a global context where the capitalist mode is likely to remain the dominant one. But in the long run, “Asian model” economies might outperform capitalist economies not only with respect to efficiency but also in social terms. “The core of our argument”, the authors say, “is that the market-based constraints of the [current] mode of production … might be progressively overcome only in the very long term scenario. However, these constraints do not imply the eternity and universality of capitalism. Under a socialist-oriented strategic development framework it is possible to accelerate the progress of productive forces, to rein in the irrationalities of capital markets, to overcome to a large extent class-based exploitation in labour markets, and to gradually restrict the operation of the law of value in consumer goods markets. In turn, these achievements can be harnessed to pursue a key normative goal – advancing towards a more egalitarian, needs-based, and ecologically sustainable production and distribution system” (p. 8).

            The authors revisit and reinterpret core categories of historical materialism, such as those relating to modes of production, social-economic formations, and the law of value. As the book’s subtitle, “A Century After the Bolshevik Revolution”, indicates, the authors seek to redefine and rejuvenate Marxism itself and the very concept of socialism from the standpoint of the challenges posed by the 21st century.

            The authors conclude that “more advanced processes of socialist-oriented development are unfolding in various countries, and constitute a promising example and a reason for hope for socialists and progressives all over the world”. While still dominant worldwide, “capitalist relations of production and exchange … do not rule out altogether the practicability of socialist-oriented development paths” (p. 316). Furthermore, China may now have entered a new and superior stage of market-socialist development.

            At this point one obvious question is whether the “Asian Model” is specific to a particular culture and unable to be expanded to non-Confucian, non-Asian economies. The economic, political, social, and cultural environment of China, Viet Nam, and Laos has been shaped over millennia, and perhaps is not so easily adaptable to other contexts.

            The second question is whether the Asian Model can be imported piecemeal to other countries – not only in developing but in advanced Western countries. The model has important lessons for those countries, the authors imply. But is it possible to import certain aspects but not others – say, state control of the economy – or is a wholesale conversion necessary? That would make the adoption of the model more problematic.

            In any case, Gabriele and Jabbour outline an intriguing alternative to the Western model, stressing that another future may be possible.

            Author and article information

            Journal of Global Faultlines
            Pluto Journals
            13 February 2023
            : 9
            : 2
            : 245-246
            [1 ]Stony Brook University

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            Page count
            Pages: 2

            , Socialist Economic Development in the 21st Century: A Century After the Bolshevik Revolution, London and New York: Routledge, 2022, xviii +394 pp, ISBN 9781032212203


            Social & Behavioral Sciences


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