Socialism has now proven its superiority in all industrial production fronts i.e, infrastructure building, heavy infrastructural industries, Research & Development, Light Consumer Industries, Innovative Industries.
USSR proved socialism's superiority in infrastructure building, heavy infrastructural industries and Research & Development. USSR growth rate was record highest from 1930s to 1960s. This is mainly because USSR was tremendously successful in building the above mentioned industries. But USSR failed miserably in Light Consumer Industries and Innovative Industries. This is primarily because infrastructure, Heavy Capital Goods Industries and Research & Development work best when invested without profit motive over a long gestation period. But in Light Consumer Goods Industries profit work as the prime indicator of use value. If a consumer good is profitable then we can say that consumers have found good use value in it. But if it is not profitable we can say that consumers have found little use value in it. If use value is high, demand will be high which will raise prices. So to check prices competitive must be there among suppliers. So profit criteria, market based pricing and competition become most important for Light Consumer Goods Industries. Infrastructure and Heavy Capital Goods & Infrastructural Industries operate with high economies of scale and usually helps economy indirectly by boosting Light Consumer Goods & Services and efficiency of laborer. So one or few state owned enterprises with non profitable investment over long gestation work best.
USSR though was number one in Research & Development failed to create any
Innovation. This is partly due to it's small domestic market. And also due to the fact that topmost innovation can be done when many companies are financed. In capital market venture capitalists finance innovations in the hope that even if 99% innovative investments failed the 1% success stories will generate enough profit that will cover loss of 99% failed makung innovation financing. USSR failed to generate any such model of venture funding.
Western sanctions on USSR further weakened the latter's access to best innovative technologies of West which further crippled its innovation capacity. Though USSR was generating largest number of patents it was failing to produce physical goods using those patents. After 1974 detente, USSR started selling patents to West in exchange for high tech capital goods often produced by using USSR patents. USSR was selling patent at fraction of the price of high tech capital goods created by West using same USSR patents. Moreover, sale of patents started eroding USSR edge in Research & Development as by buying USSR patents West could generate similar or higher value patents by adding extra sheds on them. This is one of the reasons USSR broke detente of 1974 by invading Afghanistan in 1979.
China has not only successfully adapted profit criteria, market based pricing and competition in Light Consumer Industries but has also sharpened the competition factor by not allowing growth of oligopoly or monopoly. Thus China has many companies in smartphone, EV etc. markets while USA and other capitalist countries have one. Similarly, China has state directed venture funding where new innovative companies are financed on the condition of non profit goals and state directed objectives to fulfill. In fact Chinese government started Made In China 2025 after they found capital market based profit seeking innovation financing is not leading China towards high tech innovation. So Chinese government started giving non profit goals and objectives to innovate high tech. So Made In China 2025 is mainly about state directed non profitable investment for innovation. Its success is now clearly visible. World has seen most number of millionaires leaving China and crumbling asset value of Chinese billionaires. Yet Chinese innovation has no match. Surely rich capitalists are no longer obvious factor for innovation.
China has preserved USSR model in infrastructure, heavy infrastructural industries and R&D. Moreover, China has sharpened the factor of competition after adapting the Western model of Light Consumer Industries. China has pioneered state directed non profit investment led innovation model too. This is how China has proved the superiority of Socialism over Oligopoly (or more popularly called Monopoly) Capitalism.
Socialist stage is mainly about keeping capital's interest subdued before the interest of common working people. China is most successful in doing it.
Author: Saikat Bhattacharya
