HOW ARE COMMUNIST COUNTRIES TRANSFORMED BY CAPITALISM?


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Some communist countries have prospered enormously in their “capitalist” ventures. During the last decades of the twentieth century, for example, the People’s Republic of China made one of the fastest climbs out of poverty achieved by any nation in the history. After disbanding agricultural communes and sending the people to work in low-wage factories, Communist China was able to build one of the biggest economies in the world. The major question facing the world’s communist countries remains: how long can a thriving free market economy exist under a totalitarian government?

The communist system was based on an academic and social theory, developed by Karl Marx in the nineteenth century, that called for a takeover of the state by the workers. This ““dictatorship of the proletariat” would, Marx thought, pave the way to true socialism where the pain and inequities of capitalism would be replaced by communism-and economic system where life would be replaced by communism-an economic system where life would be organized on the principle: “from each according to his abilities, to each according to his needs. “ Instead of letting the markets make the major economic decision, a government, in the hopes of creating a more egalitarian “communal” society.

Although communist central planning brought about rapid economic growth in some countries, such as the Soviet Union in the 1920s and 1930s, it has most often resulted in inefficiency and economic stagnation. In Eastern Europe, for example, the communist countries of the Soviet bloc saw their modest growth outstripped by the dazzling wealth and power of their neighbor to the West.

The fall of the Soviet Union in the early 1990s allowed the other communist countries to re-evaluate the benefits of communism. Most countries in Central and Eastern Europe opted to abandon Marxist philosophy and moved quickly toward western market economies. By the year 2000, only four major communist countries were left: Vietnam, Cuba, North Korea and China.

Vietnam decided to create a new form of communism-one with a distinctly capitalist aspect. Under a perestroika-like economic re-awakening, called do moi in Vietnamese, the communist government invited foreign firms to open new factories throughout the countries, in hopes of providing employment for more than one million new young people entering the workforce every year. The first stock exchange was opened in 2000, albeit with only stock trading, Saigon still officially called Ho Chi Minh City, gradually became a thriving capitalist city with private ownership of everything from apartments to motorbikes.

Cuba, faced with trade embargo imposed unilaterally by the United States, turned to Latin America and Europe for trade and investment. Unfortunately, its economy was in ruins. Tourism slowly began to grow, however, and soon foreigner from Canada, Europe, and Latin America was filling the newly built resort and hotels. Despite a desire to show its independence from its powerful neighbour at north, Cuba adopted a parallel “U.S. dollar” economy where those with access to foreigners and their dollars were allowed to eat at special “dollars” restaurants and shop in “dollar”. The poor underclass, with almost worthless pesos normales, were keep out. Paradoxically, this division of economic classes was precisely what communism was supposed to abolish.

Cuba Communist Party Propaganda in Havana

China had already set the pattern for planting capitalist seeds within a communist economy. By the end of the twentieth century, the People Republic of China had become one of the biggest capitalist economies of the world. Across the country factories, farms, and homes had returned to private hands. The economy was growing at double digits rate, lifting more than 200 million people- equivalent to the entire population of the United States-out of poverty over the course of two decades.

China’s communist leaders said that they hoped for a return to fuqiang– a Mandarin word meaning “rightful prosperity and power.” In many ways, they succeeded: Hong Kong and Macau were absorbed into their country as special economic zones with their own local governments and economic systems. In other economic growth zones, especially in the south, prosperity was easy to see. Now they are the second largest economies in the world after the United States.


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