Marx, Engels, and China
Apr 4, 2013
9 minutes read

Be warned: The work here, written for a philsophy class from the past, has little to do with the thoughts/feelings/beliefs of the author. Much was written with an intentional bias or viewpoint which was given as part of the assignment. Tread lightly, and try not to take it too seriously.

Marx and Engels wrote about primarily the struggle between two classes of people, the proletariat and the bourgeoisie. They also had important theory on the reactions of economies to certain crises, the spread of wealth, and the techniques that certain classes use to exploit other classes. An article in The Economist has recently brought to light a problem that affects economies globally–The steel industry around the world is overproducing. Different aspects of the political and social climate of the world have lead to a huge surplus production capacity for steel that has no known need other than that of producing jobs in the short-term, and export revenue.

The world’s need for steel has tremendously dropped as of late, especially in Europe. Reconstruction efforts caused an overabundance of steel mills, which then coupled with various financial crises, labor union problems, and expensive energy has cut the profit margins to very minimal levels. A number of these problems are being generated by the recent industrialization and modernization of China, which now after building themselves up as an economic powerhouse for the past few years is in the lead for steel production, with over half of all steel coming from China, globally. The flooding of the market with cheap raw steel from China is causing a global depression in parts of the world that are already creating an overabundance of product, such as Europe, not to mention the hints at economic problems brewing from within China that make it seem as if such supply is not maintainable. Marx & Engels, while perhaps not being fully in touch with the problems of modern society, did extensively write about what struggles a nation may experience when they introduce themselves to industrialization and modernization, and their insights may prove invaluable when looking at the steel problem from a speculative viewpoint.

Marx & Engels saw the pervasiveness of commerce. For example, they write :

“The need of a constantly expanding market for its products chases the bourgeoisie over the entire surface of the globe. It must nestle everywhere, settle everywhere, establish connections everywhere.” (Marx & Engels).

It’s important to note that while it is obvious that the nature of commerce is spoken about in a somewhat negative fashion by the theorists, they understand it to be a necessary evil. This is a double-edged sword. It brings wealth and productivity to places in the world that may have never had the chance or a commodity of their own to barter with on the global market, but it also empowers certain classes to exploit others, and rids society of craftsmen. The steel industry, even though there is abundance of such material in nearly every nation, is still springing forth new steel mills to fill empty space and supply local economies with jobs, especially in China. The demand for supply is well met by import and export, however unskilled labor is not taken care of in that fashion, and as such it is yet another incentive for each nation to want to maintain a modicum of independence in regards to steel, counter-intuitive and wasteful as that may be.

They both , also, saw the savagely simple techniques with which the bourgeoisie lured other societies into following the same path that they did, commerce and capitalistic intent. It’s simple : Show the people what they’re missing, and they will jump on board.

The bourgeoisie, by the rapid improvement of all instruments of production, by the immensely facilitated means of communication, draws all, even the most barbarian, nations into civilization. The cheap prices of commodities are the heavy artillery with which it forces the barbarians’ intensely obstinate hatred of foreigners to capitulate.It compels all nations, on pain of extinction, to adopt the bourgeois mode of production (Marx & Engels)

Marx & Engels both knew what was needed to get a global audience to participate in the ideas and techniques espoused by a group of people ; show them how successful such techniques are. If you were to show a society of people the benefits of industrializing and trying to become a global trade entity – with the luxuries they can procure for their citizens and the amount of political clout there is to be gained by doing business globally, then they would be sure to also emulate such techniques. This has been wildly successful in modern history. Nations around the world try to emulate the actions of first-world nations as a way to become one themselves, economically and culturally. Capitalistic intent has spread from the West and the rest of the world has now seemingly caught it. Every nation now strives to be as independent as they can be – their productivity a sign of their newly gained modernity, and the excess supply going straight to export to help further fuel their modernization. This model has worked for most countries that have tried to follow it, and China is no exception. China has been expanding as fast as it can for a few years now, and their steel industry, equaling half of worldwide production, indicates that it is working at least temporarily for their economy.

The trend is to think that the current business acumen possessed by each country is new to that generation if a country is newly industrialized or recently doing well on the international stage, but Marx & Engel both knew better. They saw the development of class differentiation, and with that the development of a working class and a business class of people, actually developed over a period of time and many iterations, and that countries actually set themselves up for it far before it became a reality. They write, “We see, therefore, how the modern bourgeoisie is itself the product of a long course of development, of a series of revolutions in the modes of production and of exchange.” (Marx & Engels 25). It is important to see that the current situation that each country is in with regards to the way the people are classed, and with regards to their presence in the global economy is attained by many generations of people and negotiations, and not just the current group of people making themselves visible as if to represent the whole of a country. The class that springs up to take advantage of labor and productivity is not a miraculous happenstance, but rather the result of the methodical thinking and negotiation on the part of many people. That is not to say that the bourgeoisie are inherently bad, they too are a necessary evil, and make up one whole of society alongside the proletariat. This class distinction is inevitable with further modernization within a country, as the wealth ends up being distributed in certain fashions that lead to a separation between wealth classes; the worker and the employer essentially. The existence of such class distinction is a another typical mile-marker on the road to modern civilization.

Overproduction is one of the first ‘modern’ industrial economic problems, but it’s a huge one that if left untreated could cause the economy to be thrown into a tailspin. Marx & Engels understood this concept :

“In these crises, a great part not only of the existing products, but also of the previously created productive forces, are periodically destroyed.In these crises, there breaks out an epidemic that, in all earlier epochs,would have seemed an absurdity–the epidemic of over-production.” (Marx & Engels)

The problem itself is simple, however it is not at first entirely intuitive. In a deflation, which is what commonly follows the trend of overproduction, groups who employ citizens have less incentive to do so, as they make less money for the same product and the same effort. This causes said group to lower productivity in response to a lowered gross income, until eventually the productivity level can no longer generate an income that can support the employees, they are fired, and the local economy begins spiraling out of control due to an increase in poverty within the local sector. This can be seen now in modern China with regards specifically to the steel industry. China, widely ignoring requests to slow down production of new steel mills, is creating more and more excess steel far and above what is needed nationally. Due to the large amounts of export due to excess steel generation, global economies are becoming depressed, as the value of steel is being forced lower and lower by the volume that is being introduced by China. This strategy is not a viable strategy for long-term goal achievement or planning, as it’s driven mostly by the ebb and flow for the need of local jobs, and not necessarily within the constraints needed to be a viable global tactic. Although not a problem yet, a foreseeable future for China is the future loss of many steel related industry jobs, an increase in worker unionization (if laws permit) to see better job security for individuals, and an overall more dissatisfied proletariat class.

Marx & Engels, while perhaps not being fully in touch with the problems of modern society, did extensively write about what struggles a nation may experience when they introduce themselves to industrialization and modernization, and their insights may prove invaluable when looking at the steel problem from a speculative viewpoint. China, being the main problem-child of the global steel industry, is undergoing the growing pains that were so described by Marx & Engels back in 1848 in a predictable fashion. They will industrialize, produce, over-produce if the criterion to do so are met (and in China they definitely are), and they will do so without regard to outside societies, as during these economic growing pains a class differentiation is occurring that is yet another milestone of a modern society, and from that business savvy new class that is being born will China’s true global trading face be exposed for the rest of the world to judge on a fair scale as equals. Although the world’s societies must deal with the economic hardship that is being brought upon them by China for the moment, they , being more mature nations, are better equipped for such hardships than say China itself, and must understand that it is really just the hardships endured by any nation pulling itself up by its’ bootstraps. It’s not all perfect 2020 foresight from the theorists, though. Marx & Engels believed in a truly free market. This has proven to be not necessarily the best course of action, and that governments should strive to maintain a type of homeostasis between financial highs and lows, much like Keynes’ theories proposed.

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