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1994-05-02
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<text>
<title>
Article Supports Market Economy
</title>
<article>
<hdr>
Joint Publications Research Service, August 24, 1992
China: Article Supports Market Economy
</hdr>
<body>
<p>By Zhao Shibao, "Thoughts on Market Economy Theories" [Beijing
Guangming Ribao in Chinese 1 Aug 92 p 3]
</p>
<p> The market economy is an outcome of a highly developed
commodity economy. It is not a basic economic system of a
society, but an economic management system or economic operation
model; it does not have essential and necessary links with an
economic system. Therefore, a market economy cannot be equated
with capitalism, nor can it be set up as an opposite to
socialism. There is a big difference between the contemporary
actual socialism and the socialism envisaged by the founders of
Marxism, and this kind of difference is precisely the objective
basis for compatibility between market economy and socialism.
Market economy is compatible with public ownership on the one
hand, and is compatible with state planning and distribution
according to labor on the other hand.
</p>
<p> For a long time, we have seen different understandings of
the market economy problem. The traditional viewpoint has
separated market economy from commodity economy, equated it
with capitalism, and set it up as an opposite to socialism. We
should say that it is completely normal to have different
understandings of such an important problem. At present, the
development of a socialist economy and the deepening of reform
have already inevitably pushed this important problem to a place
in front of the people, and this urgently requires us to reach
a consensus. Therefore it is necessary to further understand
market economy in theory.
</p>
<p>Market Economy and Commodity Economy Cannot Be Separated
</p>
<p> The basis on which we renew our understanding of a market
economy is the way in which we understand the relations between
commodity and market economies. The traditional viewpoint holds
that we can develop a commodity economy but not a market
economy. This kind of viewpoint, which separates market economy
from commodity economy, is unjustifiable in theory.
</p>
<p> In fact, market economy and commodity market are closely
linked. A market economy is a category of commodity economy, and
commodity economy is the foundation of market economy. The
so-called commodity economy is, speaking from the most abstract
level, an exchange economy formed on the basis of social
division of labor. Human beings' understanding of commodities
and commodity economy began from the exchange of commodities.
Without exchange, there is no point in talking about commodities
or commodity economy, whereas the sum of exchange relations is
the market. Marx once said: "the divisions of productive labor
enable their products to become commodities and things of equal
value, and enable them to become markets mutually" (Das Kapital,
Vol 3, p 718). Lenin also said: "Market is a category of
commodity economy," (Selected Works of Lenin, Vol 1, p 85). Very
obviously, in Marxist economics, market has always been linked
with commodity economy. If market economy is separated from
commodity economy, then commodity economy itself must be
negated. Speaking from the angle of logic, since market is a
category of commodity economy and a manifestation of social
division of labor, then, market economy is naturally a category
of commodity economy and manifestation of social division of
labor. Therefore, market and commodity economies are
inseparable.
</p>
<p> The links between market and commodity economics are mainly
manifested in the areas of market mechanism and system. Where
the market mechanism is concerned, it is the internal mechanism
of commodity economy, as well as the internal mechanism of
market economy. Commodity economy is run by market mechanisms
such as prices, supply and demand, competition, wages, and
profit rates; while market economy means the way to arrange
resources based on the market mechanism. Obviously, commodity
and market economies have common mechanisms. As far as market
system is concerned, along with the continuous development of
a commodity economy, the domain of market will inevitably
expand. This will not only bring about goods market, but also
production factors markets such as capital, technological,
labor, and land markets, thus forming a complete market system.
The formation of a market system is an outcome of the
development of a commodity economy, and a manifestation of the
development of market economy, and both have common internal
demands. Of course, categories such as market mechanism and
market system are different from market economy. The former
belongs to the mechanism or means of economic operation, and the
latter belongs to the system or model of economic operation, and
both differ in terms of level. But we cannot deny that all these
categories are the basic contents of a market economy, and
together they embody the operation process of a market economy.
Just like a commodity economy, which must comprise production
and exchange of commodities, market economy must comprise market
mechanism and system. We cannot recognize the links between
these categories and commodity economy without recognizing their
links with market economy. In the past, we learned a lesson
when "commodity economy" acquired its "subsistence right." Have
we not been enlightened by that lesson?
</p>
<p> When we say market economy is a category of commodity
economy, we do not mean that commodity economy is identical to
market economy. Speaking theoretically, commodity economy mainly
means that the way of social production adopts the form of
production of value, and the special feature is that labor is
transformed into value, the products of labor are transformed
into commodities, and the commodities are exchanged according
to value. Whereas market economy mainly refers to the
organizational style of a society's economy, and the special
feature is that production elements and natural resources are
arranged and distributed through market. Judged from the process
of historical development, market economy was an outcome of
commodity economy when commodity economy developed to a certain
stage, or, in other words, market economy was one kind of
manifestation of developed commodity economy. The production of
commodities, which has exchange as its purpose, emerged in the
late period of the primitive society; however, before capitalist
society, due to the fact that natural economy held a dominant
position in society's economy, so a nationwide and unified
market could not be formed, and unified market prices did not
exist, while market structure was comparatively unitary.
Therefore, this kind of economy can be called a commodity
economy (or simple commodity economy), but cannot be called a
market economy. Along with the rapid development of social
production, natural economy was replaced by commodity economy,
social and economic links become more frequent, and market
domain rapidly expanded, to the extent that the market developed
into a big system with rich contents. Only the commodity economy
under this condition can be called market economy.
</p>
<p> The above-mentioned situation indicated that market and
commodity economies are concepts which have links and
differences. Market economy takes shape when commodity economy
is highly developed. Commodity economy includes simple
commodity economy, whereas market economy is a negation of
simple commodity economy. At present, although our country's
commodity economy has had a comparatively big development, it
has not yet reached the stage of developed commodity economy.
Precisely speaking in this sense, our party must propose the
development of "socialist market economy."
</p>
<p>Market Economy Cannot Be Equated With Capitalism
</p>
<p> For a long time, the dominant viewpoint in our country's
theoretical circles held that market economy is a kind of
economic system, which is linked to the essence of capitalist
society, theref