The New Economy of Design

Image: Luiz Armando Bagolin, Café Laurent, Havana.


Questions and new developments

I have always warned anyone who asks me about this that I am not bringing anything new to the debate on development economics. Rangel had already laid the conceptual foundations in 1956 and 1959 by proposing a new conceptual framework that history was demanding given the novelties intrinsic to the Sputinik project and European reconstruction. The theory and practice of “design” were abandoned with the transformation of capitalism into “financialized capitalism” and the end of the Soviet experiment. China today is a gigantic repetition of what has gone before and which many development economists have studied. But history, in this case, does not repeat itself in such a way that China just does better what others have already done. The debate we propose is conceptual, yes. But mostly historical and political.

Analyzing only the instruments that China has used to achieve its goals is not difficult. Coordination, planning, demand generation via government spending, industrial policies, institutional changes, etc. None of this is new. For us, what is new boils down, initially to two points already established in our research agenda: 1) this “New Economy” emerges at the same historical time in which a new socio-economic formation is consolidated, “market socialism” and 2 ) The core of this new socio-economic formation, the socialist mode of production, has been the scene of new contributions in terms of technological platforms, which has raised planning to higher levels in the country.

Social scientists in general, and economists in particular, do not work with the concept of socio-economic formation. This is a serious methodological limit, as this “new economy”, its scale, the institutional innovations that gave rise to its emergence and the direct impact on the lives of 1,3 billion people are impossible to occur in an economic-social formation of another type or in another “variant of capitalism”. The property regime itself – which underpins a new type of political regime that operates in China – dominant in capitalist countries prevents certain phenomena attached to the “New Design Economy” from occurring, starting with the possibility of overcoming Keynesian uncertainty, something that no capitalist country has achieved it and that Chinese socialism has shown it to be possible.

The separation between economics and politics is fatal in this type of analysis. Large production and finance under state control completely change the face of the economic system: a standby economy is formed. Germany, the US, South Korea or any other Developmental State does not have the capacity to do, even within its limits, what China is doing. The difference is political. The answer is not in the economy, stricto sensu.

The role of the project

Evidently, every “regulated” capitalist country also operates on a project basis. But reality changes when Chinese national tasks are quite different from some Western countries. New institutional, productive and financial developments are necessary when at least two questions must be answered: 1) technological catching-up and 2) need to generate 13 million urban jobs per year. An economy with this dual need operates with the support of other tools. Hence the project becomes a fundamental, central element – ​​despite being operational in planning – in relation to planning itself.

The issue then becomes one of planning, on a gigantic scale, Keynesian uncertainty. As far as we know, no major capitalist country in the world has faced a task of this magnitude. Therefore, they did not need to develop new government instruments and tools. Theory and history are a unique element. One element cannot be separated from the other. As Marcio Henrique Monteiro de Castro reminds us, in this sense, design is a theory and a practice that feeds itself with solutions to questions historically posed to Chinese planners and designers. It would be impossible for this approach to be being conceived in the US or Brazil. Theory only emerges where burning contradictions demand new solutions, new syntheses. And China is that place

Here comes another element that we highlight: the project in China becomes an instrument of government at the service of overcoming the immense contradictions accumulated in the country over the last few decades. Two million men and women work on a daily basis in that reality, seeking simultaneous solutions for catching-up and full employment. It is evident that China is inaugurating a superior dynamic in terms of development. China not only masterfully applies what other experiences have already done. The “project” can be seen as both a continuation and an overcoming of all scientific equipment employed in other successful developmental cases. The new? The project not as an accounting operation, but as a synthesis of the transformation of reason into an instrument of government by a certain historical block willing to demonstrate the superiority of socialism in overcoming the great dramas that afflict humanity. The very scale with which everything takes place in China allows this social formation alone to be able to show and demonstrate new regularities in terms of economic development.

The debate must go beyond the field of development economics. My partner in the scientific endeavor, Alexis Dantas, explains in a simple and ingenious way what the “New Design Economy” really is: a new and superior form of political and social organization. Rangel, in his technicality, defined the process nucleated by the utility-inducing project. Therefore, “utility” in the Aristotelian sense of the term would replace value as the core of the society that Rangel intended to be socialist. China is only at the beginning of this gigantic historical process. It is already an economy based on large projects aimed at building large public goods.

*Elias Jabbour Professor of International Relations and Economics at the State University of Rio de Janeiro (UERJ). Author, among other books, of China: socialism and development (Anita Garibaldi).

Originally published on GGN newspaper.


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