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Financial crisis exposed capitalism's systemic problems

By Liu Jihua, Xie De | 2015-08-11 | Hits:
(Chinese Social Sciences Today)

Zhao Yao (1932- ) is a professor and doctoral supervisor of the Teaching and Research Department of Scientific Socialism at the Party School of the Central Committee of the CPC. He is the president of Chinese Association of Scientific Socialism and mainly focuses on studies of Marxism and scientific socialism. He authored and compiled many books including Essential Issues in Marxism-Leninism and Colletions of Zhao Yao.

On Sept. 11, 2011, people gathered on the streets and started the Occupy Wall Street movement, which spread all over the US later. 


The financial crisis has prompted scholars to examine the current economic situation in search of a way to reestablish confidence. Caused by the US subprime mortgage crisis, the global financial meltdown has made institutional problems of capitalism apparent. To further explore these issues, CSST reporters talked with Zhao in his office.

CSST: What significant effects has the financial crisis had on the Western world? What kinds of changes occurred in the public’s way of thinking? Confronting such difficulties, how can people find a way out of this situation?


Zhao: Western capitalism has struggled in the financial crisis for six years, and there are definitely some new sources of hope. These new hopes are represented in three “fevers.” The first is the appearance of “Marxist fever.” In this financial crisis, many Westerners are thinking about the origin and the way out of crisis. They cannot find the correct answers in neoliberalism and Keynesianism, so they have begun to reconsider Marx’s works.

However, this Marxist fever is distinguished from the previous ones. It is more about young people loving reading and studying Marx’s works. An article in the German daily Neues Deutschland wrote:“There are so many thinkers. Why are people only interested in Marx? That’s because of his works. The financial crisis in 2008 brought about a wave of reading Marx’s Das Kapital. The reason behind this phenomenon is that Marx’s analyses of capitalist operation mode and capitalist society match the reality.” In this context, Das Kapital and The Communist Manifesto have become bestsellers, and sales of Das Kapital have increased a hundredfold to 1990. In Germany, many universities organized study groups or seminars to study Marx’s Das Kapital.

CSST: So what is the second fever?


Zhao: The second refers to “occupation fever.” During the financial crisis, the earthshaking Occupy movement broke out. On Sept. 11, 2011, people in New York gathered on the streets and started the Occupy Wall Street movement. Then demonstrations spread all over the US. The Occupy Chicago, Occupy San Francisco and Occupy Seattle followed one after another. Aimed at financial oligarchies and senior executives, these protests rapidly spread to more than 1,000 cities and involved hundreds of universities. The essence is the 99 percent against the 1 percent, indicating that those protestors opposing the maldistribution of wealth in the capitalist system were striking at the fundamental weakness of the US. The number of participants and cities, and the duration of those Occupy movements broke records, amounting to a phenomenon that was unprecedented and rarely seen in the history of American social movements. Furthermore, those Occupy movements in the US also affected more than 80 countries and 900 cities all around the world.

CSST: Is the third fever related to China?


Zhao: You’re right. The third refers to “China fever.” The arrival of the financial crisis trapped the global economy in recession. But only China’s economy still sustained a sound development speed, and it attracted the world’s attention. People focused on two areas. One is China’s path. Many foreign scholars and politicians have proposed that they should combine their own countries’ reality and use the experience of China for reference. The second is Chinese culture. Now, most foreign countries hope to build and strengthen relations with China, learn from China, and benefit from China’s development, so they have to learn Chinese and Chinese culture.

CSST: Today’s international situation is complicated and changeable, and many issues cannot be predicted. But we can still predict the general trend of the evolution of the international pattern. So what do you think is the main trend of the current international pattern?


Zhao: The current international situation is characterized by significant turmoil, revolution and adjustment, and this trend is still ongoing. After the collapse of the Soviet Union, the US became the sole superpower in the world. The US has nothing to fear in the pursuit of hegemony and power politics, insists on transforming and controlling the world on the basis of American national interests and values, and shapes the world out of the peace. In addition, international terrorist forces, ethnic separatists, extreme religious forces and right-wing militarists all threaten regional security and world peace. With the US shifting its strategic emphasis, three regional hotspots have emerged in succession.

Eastern Europe comes first. It is not necessary to maintain the North Atlantic Treaty Organization (NATO) established in 1949 since the collapse of the Warsaw Pact. However, NATO was reinforced instead of being dissolved and continually expanded eastward. The number of NATO member countries has increased from 16 to 28, and it now extends to the boundaries of Russia, squeezing Russia’s strategic space and putting Russia’s back against the wall. This is the fundamental reason why the Georgian crisis and the Ukrainian crisis occurred. At present, the main strategic focus of NATO and the EU is to enable Ukraine to shed the yoke of Russia and integrate into the West. The second hotspot is the Middle East—including Western Asia and Northern Africa—which is rich in petroleum and has a convenient geographic position to connect Europe, Asia and Africa. So if the US wants to dominate the world, it has to control the Middle East.

The third one is the Asia-Pacific area. Since Barak Obama has put forward strategies of “returning to Asia” and “reorienting toward the Asia-Pacific region,” it indicates that America’s strategic emphasis has shifted eastward, from Europe and the Middle East to Asia. Its target is to maintain its dominant position in Asia, the most promising and energetic region around the world and contain China’s rise. Because American strength is in decline and human and financial resources are constrained, it is attempting to ally with the Shinzo Abe administration of Japanese right-wing militarism to reestablish the “Greater East Asia Co-Prosperity Sphere.” In addition, the US took advantage of its allied country, the Philippines, which has territorial disputes with China, to purposefully constant continuous disturbances in the South China Sea, transforming a peaceful Asia into chaos.

CSST: After the financial crisis, the world pattern has endured tremendous and profound changes. The world pattern refers to a relatively stable world structure formed on the basis of certain balance of strengths at a period of history. So do you think what factors lead to these changes?


Zhao: There are four factors causing tremendous and profound changes in the world pattern as follows. The first is that American hegemony is in decline. Its dominant position has diminished. At the moment, the US refuses to relinquish its hegemony, and Obama claims that the US will still lead the world for a century. However, the US cannot save the world alone, and it is already caught in a dilemma where it has to make a choice to be or not to be the policeman of the world alone. Certainly, the complete decline of the American hegemonic position will still be a long-term process. The second is that EU countries’ economy has suffered severe recessions. The financial crisis first occurred in the US, but the center of the crisis rapidly shifted from the US to Europe.

Currently, except Germany’s economy, the overall economic environment for EU countries is depressed, and they lack the capacity to recover. The third factor is that emerging market economies have suddenly risen. In the financial crisis, developed countries suffered heavy losses while developing countries have been relatively less affected. These emerging market economies utilized their advantages, such as lower starting base, abundant resources, large populations and lower cost of labor to absorb foreign investment, introduce advanced technology and develop very quickly. The fourth factor is socialist China’s peaceful rise.