The triumph of Dengism

The real hard-line supporters of Deng Xiaoping Theory are economics professionals in the United $tates, not in the sense of “seek truth from facts” but the “theory of productive forces” Mao derided in his last years. According to the theory of productive forces, wealth springs forward magically from capital goods that are dead with the exception of animals like donkeys, which also count as “productive forces.”

So in the late 1990s, we had the tech bubble and Alan Greenspan attributed lower long-term interest rates to the productive forces — in a way that Deng Xiaoping probably would not have. We heard that lower interest rates, higher growth rates and budget surpluses were possible because of technological revolution. Meanwhile, MIM explained the same phenomenon as a ramped up injection of surplus-value from China and the rest of East Asia to the United $tates. The spread into white collar work was the effect, not the cause of economic adjustments seen at that time.

Now on January 1, 2010, Keynesian Krugman publishes another variant of the theory of the productive forces to attack China. With Krugman we hear paeans to the Amerikan “working-class”‘s ingenuity, that it can increase living standards through autarkic development. Krugman’s January 1 2010 column is a nice encapsulation of where he was going to end up all along.

The difference between Krugman and earlier Greenspan (because Greenspan’s views have developed) is that Krugman acknowledges the Ponzi scheme that produced a destructive bubble. Krugman blames it on the exploited countries, especially China. Krugman maintains nationalist illusions about “productivity” as the underlying core view of the “fundamentals” of the Amerikan economy known as the “hard-working American people” so often referred to in presidential campaigns.

It turns out that economists and finance ministers were reading those polemics of MIM against Avakianites on the theory of productive forces and productive labor. The most oblivious Dengists were the Avakianites. They consciously opposed the MIM line but without anything to say. To see a real struggle of lines for our times, one would be better off reading Greenspan as a counterpoint to MIM.

Greenspan for his part would not countenance Krugman’s willingness to bash trade. However, both earlier Greenspan and current Krugman rest their lines on delusions about the Amerikan economy. Krugman will destroy it via trade protectionism while Greenspan gets the blame for the housing bubble. It’s only natural that the Greenspans had their chance and now the Krugmans of the world want a chance at the helm.

Ironically, China itself has a greater interest in rejecting Deng Xiaoping on the theory of productive forces than Amerikans trying to throw sand in the eyes of the Third World. Like it or not, the leaders hand-picked by Deng represent exploited laborers in China. Meanwhile, in the United $tates, books and magazines say that all good things in China started in 1978 or 1979, because our bourgeois academics can relate to departing from Mao on the theory of productive forces.

Deng quoted Mao on “seek truth from facts.” In this way, the followers of Deng in China and the Third World are more likely to depart from anti-labor views than our Dengists in the United $tates.

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