Obstacles to the China Path in Latin America: a talk that fails to address the elephant north of Latin America

Paul Cockshott, “Obstacles to the China Path in Latin America” (19 December 2021)

This video is a recording of a brief talk that UK economics academic Paul Cockshott gave to a panel at the World Association of Political Economy in Shanghai, in December 2021. The talk is accompanied by a small series of slides which essentially illustrate significant points in Cockshott’s talk. The main thrust of this brief lecture is that without significant land reform in Latin America, the continent will be unable to replicate China’s path from poverty in the 1970s to global success with the world’s largest economy and largest middle class – and the political clout that goes with that economic success – in the space of roughly 45 years.

In his talk, Cockshott quotes from 18th-century British classical economists Adam Smith and David Richardo, both of whom noted that in a society where the bulk of national income or the income from production goes to a landlord class that spends the income on unproductive uses (such as gambling, property speculation or spending on luxury goods), there is little capital accumulation that can be directed into investing in production. Production cannot expand and new jobs cannot be created for workers. In a later century, Karl Marx in The Communist Manifesto wrote that the unproductive landlord class had to be abolished through heavy progressive taxation, the abolition of inheritance rights and the abolition of property in land, with rent income from land to be used for public purposes. These principles were followed by the Communist Party of China after 1949, with rent income going to communes for local investment purposes or, in the form of taxes, to the government for national public projects; the result has been that China has been able to accumulate large amounts of capital necessary for investment in major economic projects and enterprises, both public and private. In turn, labour productivity rises, new jobs are created, the demand for labour rises rapidly, and real wages (what people are able to buy with the money they earn) rise quickly as well.

There are other principles that Marx noted in The Communist Manifesto – the centralisation of credit in the form of a national bank controlled by the State; State centralisation of the means of communication and transport; extending factories and State-owned instruments of production by improving soils and bringing waste-lands into productive use – which the CPC has also followed, with the State controlling or regulating China’s financial industry and transport networks, investing in or controlling essential industries, and carrying large-scale conservation projects that have turned huge areas of desert into forest and land that can be cultivated.

For Cockshott, the path that Latin American nations need to follow is clear: these nations must do what China did and get rid of their unproductive, parasitic and corrupt landowning classes (who may also dominate politics and the media, financial and transport industries) and establish governments under the leadership of workers and peasants.

Unfortunately in his brief talk, Cockshott does not say how the power of the landowners in nations like Brazil, Chile or Ecuador can be broken and transferred to the working classes; neither does he note that all Latin American nations may have distinctive characteristics that mean that following China’s path precisely may either be difficult or need to follow a different path. The failure of Venezuelan leader Hugo Chavez to revive agriculture in his country and make it more self-sufficient in staple foodstuffs because, among other things, the oil industry offered more money and easier working conditions to labourers illustrates that Venezuela’s particular path must take a direction that acknowledges the country’s particular characteristics and economic context in which dependence on energy resources will hamper efforts towards economic autarky. Above all, in carrying out revolutionary economic reforms aiming at redistributing wealth, especially land, among the working classes and being able to control credit and capital accumulation for investment purposes, Latin American nations risk the ire of a huge and jealous power to their north, one that will not hesitate to overthrow their governments either directly or indirectly and replace them with governments that maintain corrupt elites whom that jealous power the United States can control.