Pei Changhong: The Contemporary Value of "Das Kapital" and the Theoretical Foundation of Xi Jinping's Economic Thought

The Report to the 20th National Congress of the CPC proposed: "To keep writing new chapters in the Sinicization and modernization of Marxism is the solemn historical responsibility of contemporary Chinese Communists." Das Kapital is the classic work of Marxism; what is its contemporary value? This is a question we must consider seriously. In recent years, universities have gradually placed renewed importance on the teaching and research of Marxist political economy, and Das Kapital has re-entered the economics classroom. Yet, Das Kapital was written by Marx 157 years ago; where does its value lie today? This is a topic that will be asked anew as times change, and it is a subject that Communists and all builders of socialism with Chinese characteristics must continuously answer and refine their understanding of.

I. The Standpoint of Class Nature and People-Centeredness in Das Kapital

On May 4, 2018, at the conference celebrating the 200th anniversary of Marx's birth, Xi Jinping delivered a speech stating: "Das Kapital, published in 1867, is the most profound and richest work of Marxism and is hailed as the 'Bible of the working class.'... Marxism is a theory of the people... Before Marx, the dominant social theories all served the ruling classes. Marxism, for the first time, stood on the side of the people to explore the path toward human freedom and liberation." Seeking liberation for the proletariat and seeking interests for the people of the world is the most distinct standpoint of Das Kapital. As long as class society exists and human liberation has not yet been realized, its spirit and value will never be obsolete. What is a people-centered standpoint, and how is it manifested? Using the name of the people as a pretext or holding up the banner of the people are tactics used by the bourgeoisie and its political parties. A genuine people-centered standpoint must be expressed through theoretical thought and practical action, and it must also inevitably manifest through class-conscious thoughts and feelings.

The expression of class-conscious emotion can be either simple (pǔsù) ^[1] or rational. In general, the laboring people possess simple class and populist emotions; these are authentic and precious. However, possessing only these simple emotions makes it difficult to recognize one’s own historical mission or to clearly perceive and maintain the fundamental interests of the class and the people. Therefore, on the basis of simple emotion, one must sublimate into rational emotion, which is acquired through the study and influence of scientific theory. Not only does the standpoint of the people require this rational emotion, but the standpoint of the exploiting class in maintaining its own class also requires it. The reason Adam Smith became the founder of bourgeois political economy and has been revered by the Western bourgeoisie and academia for centuries is not merely because he published The Wealth of Nations—the first work of British classical political economy—in 1776. In The Wealth of Nations, he proposed the hypothesis of the "rational economic man," asserting that human nature is self-interested and that the pursuit of individual interest is the sole driver of economic activity; thus, economic activity is a form of public matter. However, this theory was too blunt and lacked moral force. The reason Adam Smith was able to win the acclaim of the British upper class was that as early as 1759, in his capacity as a proponent of modern European philosophy, he had published The Theory of Moral Sentiments, dressing himself up as a man of high virtue. He believed that humans require a high degree of morality and a "moral self," and that virtue occupies the most central position in human life. Thus, as rational economic men, people could provide the greatest economic value for the whole of society through economic activities conducted entirely for the individual. This provided a moral anchor for the bourgeois economic theoretical system to gain a firm foothold in mainstream society. The Theory of Moral Sentiments thus became the "theory of sentiment" for bourgeois economics, expressing the rational emotional standpoint of the Western bourgeoisie. Out of the need to beautify "vulgar" matters such as economic activity, The Wealth of Nations first proposed the labor theory of value; its rational components became a source for Marxist political economy.

The internal essence of the people-centered standpoint is: whom does it serve, and whose interests does it represent? Lenin once published a famous article titled "In Whose Interest?" (Cuī Bo-lì-jí) ^[2] which is the touchstone for distinguishing between different standpoints. The standard Lenin used to judge the positions of debating parties was: "It is not very important in politics who directly defends certain views. What is important is to whom those views, those proposals, those measures are profitable." Only by insisting on maintaining the interests of the people can one hold a people-centered standpoint; this is its internal essence. Bourgeois scholars are accustomed to using various technical and instrumental methods to dress up economics as pure scholarship, impartial and seemingly without any consideration of specific interests. For example, contemporary Western economics' doctrine of "Pareto improvement" advocates that the standard for optimal resource allocation and efficiency improvement is: let a few people benefit while the interests of others remain undamaged, viewing this as a "fair standpoint" and a purely scientific one. In reality, this is a one-sided theory of capital and is deceptive. In response to this, Xi Jinping pointed out: "The question of 'for whom' is the fundamental and principled question of research in the philosophy and social sciences. For whom the philosophy and social sciences in our country write books and establish theories—whether to serve the few or the vast majority—is a question that must be clarified. There is no such thing as 'pure' philosophy and social sciences in the world. The world's great achievements in philosophy and social sciences have all been created in answering and solving major problems faced by humanity and society." Therefore, economic theory is not a pure academic pursuit; it has a distinct standpoint. Especially since economics studies the increase, acquisition, and distribution of economic interests, its research tendencies and conclusions all bear the imprint of "in whose interest." In the practice of economic construction, Xi Jinping elucidated the people-centered thought within Das Kapital, pointing out: "Adhere to the people-centered development philosophy. Development for the people is the fundamental standpoint of Marxist political economy." He also stated that this is not a "numbers game" or a "speed game," but rather involves genuinely understanding and caring about the issues the common people are concerned with and responding to them. "What are the issues the masses are concerned about? It is whether food is safe, whether the heating is warm enough, whether there can be a little less smog, whether rivers and lakes can be a bit cleaner, whether waste incineration can be done without harming health, whether elderly care services are satisfactory, and whether they can afford to rent or buy a home." It is evident that Xi Jinping's economic thought is a model of practicing the people-centered standpoint of Das Kapital and represents the innovative development of Marxist political economy in the contemporary era. Contemporary Chinese economic research and development shoulder a glorious mission: in the process of achieving Chinese-path modernization, they must ground themselves in the reality of the motherland, study Chinese problems, summarize Chinese experience, tell China's story well, and "write their papers on the soil of the motherland" ^[3]. The goal pursued by Chinese economists should primarily be to seek well-being for the people and to contribute wisdom to the construction of an autonomous Chinese system of economic knowledge. To achieve this goal, one must be filled with the sentiment of being "people-centered" and stand firm on this fundamental standpoint.

II. The Worldview and Methodology Contained in Das Kapital

Dialectical materialism and historical materialism are the worldview and methodology of Das Kapital, and these are not obsolete in today's world. Based on the principle of the primacy of matter, Marx started from the reality of economic life rather than from idealistic hypotheses regarding human desire. Within the vast world of capitalism, he found the commodity—the most ordinary and common thing—and used the principles of materialist dialectics to abstract from the commodity a series of contradictory unities of opposites, such as use-value and value, concrete labor and abstract labor, and wage labor and surplus value. He analyzed the internal contradictions of the capitalist economic system and, from these internal contradictions, discovered the law that the capitalist system must inevitably transition toward a new social system. Engels said that once Marx discovered historical materialism, he applied it to the research of Das Kapital. It scientifically demonstrated the contradictions between the productive forces and the relations of production, and between the economic base and the superstructure. It is precisely these basic contradictions that drive human society from a lower to a higher stage, and from capitalism toward communism. Applying the principles of historical materialism, Marx analyzed the transformation of labor power into a commodity and the relationship between the price of labor power and wages, discovering the law of capital's exploitation of surplus value and the internal contradiction between the private appropriation of capital and socialized mass production. He demonstrated the historical trend that the capitalist system would inevitably be replaced by a communist system.

Viewed from the history of economic development, economics is inseparable from philosophy, because philosophy provides the most fundamental worldview and methodology for economic thinking. British classical political economy was derived from modern philosophy. Even today in the West, Doctors of Economics are "Doctors of Philosophy" (Ph.D.) because philosophy is the parent discipline of economics. Modern European philosophy advocated for natural rights and human rights, believing it was human nature to seek happiness and material interests. This is so-called humanism, yet it initially looked down upon economic activity as something vulgar, reflecting the state in which the bourgeoisie in the early stages of capitalism had not yet grasped total state power and bourgeois ideology had not yet achieved a mainstream position. At that time, Adam Smith was also a philosopher; however, he believed that engaging in commercial transactions was part of human nature and that commercial transactions were a universal behavior in which everyone participated, belonging to public affairs. Managing public affairs necessarily required managing the state, and this mission naturally fell to the owners of capital. This was the theoretical basis Adam Smith provided for the British bourgeoisie to take the historical stage and grasp total state power. Simultaneously, he completed the separation of political economy from modern philosophy. Only from that point did political economy exist as an independent discipline, making him the progenitor of British classical political economy. Therefore, the economic research of Adam Smith and David Ricardo contains rich philosophical thinking, particularly Hegelian dialectics. For example, regarding the labor theory of value, they both believed that the essence of value is labor and that price is the manifestation of value; this is philosophical thinking regarding essence and phenomenon. However, the subsequent students of British classical political economy did not inherit their teachers' mantle. They abandoned dialectics and accepted the philosophical logic of metaphysics. In 1848, John Stuart Mill, a student of Ricardo, published Principles of Political Economy, which proposed the theory of international equilibrium prices. Using the doctrine of reciprocal demand, he led subsequent Western economics to study only price phenomena rather than the essence of the value entity, gradually tending toward the superficial. By the late 19th century (1890), Alfred Marshall published Principles of Economics, which primarily studied the supply curve and proposed equilibrium prices from the perspective of supply. Following the premise of the rational economic man hypothesis, Western economics developed the methodology of market supply and demand into current economic theory. Conversely, Marxist political economy remained tightly linked with historical materialism and dialectical materialism. Thus, Marxist political economy and modern Western economics parted ways in the mid-19th century, around 1840.

Mao Zedong placed great importance on the philosophical thinking within the study of political economy. While commenting on the Soviet Textbook of Political Economy, he said: "It is impossible for a writer without a philosopher's mind to write a good work of economics. Marx was able to write Das Kapital and Lenin was able to write Imperialism, the Highest Stage of Capitalism because they were simultaneously philosophers; they had philosophers' minds and the weapon of dialectics." Deng Xiaoping used the principles of the unity of opposites and the identity of contradictions to abstract the concept of a socialist market economy from the phenomena that capitalist countries also have planning and socialist countries also have markets, which became the basic theoretical guidance for China’s Reform and Opening-up. Therefore, without dialectical materialist philosophical thinking, it is difficult to understand why socialism can be combined with a market economy, why the dominant position of public ownership can coexist with an economy of diverse ownership forms, and under what conditions capital can be permitted to exist and play its active and beneficial role. Xi Jinping also attaches great importance to guiding the practice of economic work and exploring the laws of economic construction with Marxist philosophical thought; he has specifically elaborated on the basic methodology of dialectical materialism. He stated that dialectical materialism is the worldview and methodology of Chinese Communists and that successive generations of Party leaders, including Mao Zedong, Deng Xiaoping, Jiang Zemin, and Hu Jintao, have all provided classic expositions on it. We must "study and master Marxist philosophy and strive to improve our ability to explore and solve basic problems in the new period." In guiding the practice of economic construction, this is mainly manifested in the following aspects.

First, adhering to the dialectics of systematic planning and overall coordination. Das Kapital studied the capitalist economy as a complete system, starting from the commodity—

The analysis of the cycles of money-capital, the transition from productive capital—commodity-capital—money-capital, and ultimately the circulation of total social capital, all embody the systematic nature of the research and analytical methods. Xi Jinping has applied the systemic method to the practice of socialist construction, stating: "Since the 18th CPC National Congress, the Party Central Committee has persisted in systemic planning and the coordinated advancement of various undertakings of the Party and the country... In this process, the systemic concept is a fundamental ideological and working method." The 18th CPC National Congress summarized the overall layout of the cause of socialism with Chinese characteristics as the "Five-Sphere Integrated Plan"—comprising economic, political, cultural, social, and ecological organizational construction. This crystallization reflects an understanding of the integrity and coordination of the development of things. "Later, we proposed the 'Four Comprehensives' strategic layout, and so on. These all reflect the continuous deepening of our understanding of coordinated development and demonstrate the methodological significance of dialectical materialism in solving our country’s development problems." Economic structural reform cannot be separated from the coordination of reforms in other fields, and the superstructure must also adapt to the needs of changes in the economic base; therefore, it is necessary to comprehensively deepen reform and highlight the systemic, holistic, and synergistic nature of reform. Consequently, the Third Plenary Session of the 18th CPC Central Committee made arrangements to comprehensively deepen reform. At the same time, in advancing reform, it is necessary to fully consider the interest demands of different regions, industries, and groups, and accurately grasp the intersections and commonalities of all interests, so that the fruits of reform benefit all people more extensively and fairly. Regarding the concept of economic development, the "five new development concepts" of innovation, coordination, green development, openness, and sharing were proposed. These five concepts complement each other and are inseparable, constituting a complete unity; they are unified in concept and require overall coordination in practice. Therefore, they represent a higher-level development philosophy.

Second, recognizing and grasping the laws of the movement of contradictions ^[4] in things. Marx’s Capital and Mao Zedong’s On Contradiction are both exemplars of recognizing and grasping the laws of the movement of contradictions. Marx analyzed the contradictions between use-value and value in commodities, between concrete labor and abstract labor, between commodities and money, and between money and capital, pointing out the universality of contradictions and the particularity of contradictions within the capitalist economy. On the basis of grasping the universality of contradictions, Mao Zedong also analyzed the relationship between the principal contradiction and secondary contradictions, as well as between the principal and secondary aspects of a contradiction. Based on the philosophical principles of the universality and objectivity of the movement of contradictions, Xi Jinping has continuously strengthened "problem awareness," persisted in a problem-oriented approach, and treated the recognition and resolution of contradictions as the breakthrough point for opening up new prospects in work. Based on the characteristics of China's economic development ending its phase of extensive, high-speed growth and entering a new stage, he made the judgment that China's economic development has entered a "new normal," and pointed out that the characteristic guiding this new economic normal is China’s shift toward high-quality development. Xi Jinping analyzed the principal contradiction under the new normal of economic development, noting: "Under the background of the 'superposition of three periods' ^[5], the prominent problems affecting economic growth include aggregate problems, but structural problems are even more prominent. In circumstances where effective supply cannot adapt to changes in total demand and demand structure, stabilizing growth must—while moderately expanding total demand and adjusting demand structure—focus on strengthening supply-side structural reform to achieve a leap from a low-level balance of supply and demand to a high-level balance." In the new development stage and the construction of the new development pattern, Xi Jinping made the strategic plan of taking the domestic cycle as the mainstay while allowing the domestic and international dual cycles to promote each other. The domestic cycle is a general characteristic of a large-country economy; this is not only Xi Jinping’s summary and revelation of the general laws of large-country economic development but also a forward-looking guide for China’s new development stage. Therefore, China's economic construction must take expanding domestic demand as its strategic basis while not abandoning foreign demand, thereby enhancing the level of the domestic and international dual cycles. By grasping the principal contradiction, the economic cycle will undergo a qualitative leap. Grasping the principal contradiction does not mean secondary contradictions can be ignored or abandoned; while grasping the main line of supply-side structural reform, it is also necessary to cooperate through aggregate regulation on the demand side. Therefore, Xi Jinping stated that in any work, one must speak of both the "two-point theory" and the "priority theory" ^[6]; if there is no distinction between primary and secondary, and one "grabs the eyebrows and the beard all at once" ^[7], the work cannot be done well.

Third, the economic-philosophical thinking of Xi Jinping’s thought on ecological civilization originates from the theory of ground rent in Capital. In emphasizing green development, Xi Jinping proposed the famous saying: "We want both gold and silver mountains and lucid waters and lush mountains; lucid waters and lush mountains are themselves gold and silver mountains." This is to say that the natural ecology also has value and can be transformed into capital and assets. How should we understand this issue? Why does natural ecology without human labor have value? This must be explained using the theory of absolute ground rent from Capital. Like land, the ecological environment is a resource element and a condition for the development of productive forces; it has no substitute—one is unaware of it when using it, but it is hard to survive when it is lost. This nature is the same as the natural monopoly of land. We know that the factors constituting productive forces include laborers, tools of labor (means of production), and objects of labor (land, natural resources), as well as science, technology, and management. In a general sense, human labor is the most important factor among the elements of productive forces and is the source of value creation. Although the object of labor is a secondary factor in the formation of productive forces, on the basis of the development of capitalist productive forces, land and natural resources become scarce elements. The principal aspect of the contradiction is transformed, and absolute ground rent arises from scarce land as compensation for scarce elements. Marx’s theory of absolute ground rent is precisely an application of dialectics. In an environment where human society exists within a commodity market economy, the ecological environment embodied by certain natural resources acquires a claim on the distribution of human surplus labor similar to capitalist "absolute ground rent"—except the claim for ground rent belongs to private landowners, while the claim for the surplus labor of the ecological environment belongs to the public. Therefore, it is a form of natural wealth and ecological wealth. In a market economy environment, this claim on the distribution of surplus labor can also be traded. Resource users obtain the right to use resources and assume the responsibility for compensation according to the law; price is discovered through the trading of compensation differences between users, thereby giving rise to the carbon emission trading market and exchange value, which is then transformed into economic and social wealth. Protecting and improving the ecological environment requires the expenditure of human labor, which also increases the sources of new value. Therefore, "protecting the ecological environment is protecting natural value and increasing natural capital." The principles of Marxist political economy, arising from the dialectical thinking between man and nature, endow the famous saying "lucid waters and lush mountains are gold and silver mountains" with scientific theoretical meaning.

III. The Living Soul of Capital is Answering the Questions of the Times and Questions of Practice The era in which Capital was written was one in which the European working class was awakening, exploring its class destiny, and seeking a path to human liberation. This era urgently needed the enlightenment and guidance of scientific theory. Through its analysis of the internal contradictions of the capitalist mode of production, Capital exposed the secret of wage labor being exploited by capital and revealed the historical trend that the capitalist mode of production must lead to extinction while communism must inevitably flourish, inspiring the fighting spirit of the working class against old relations of production and the superstructure. Capital also analyzed the overseas expansion of capitalism, which made capitalist productive forces global and the market a world market; therefore, the contradiction between productive forces and relations of production, and between the economic base and the superstructure, is also global. The movement and destiny of the working class in one country are closely linked to the liberation movements of all nations in the world; thus, The Communist Manifesto issued the cry: "Proletarians of the world, unite!" Capital established a fundamental task for the developmental direction of Marxist political economy: to answer the questions of greatest concern to the people of different eras. The questions of greatest concern to the people in different eras are constantly changing; as Engels said, "Political economy is therefore essentially a historical science. It deals with material which is historical, that is, constantly changing." Furthermore, it "is a historical product, which at different times has a completely different form, and, equally, a completely different content." One might also say it is a living theory that answers the questions of the times and the questions of practice.

Imperialism, the Highest Stage of Capitalism is the political economy of the Leninist era, inheriting and developing the living soul of Capital. The question the Leninist era had to answer was whether the socialist revolution had to wait for the maturity of revolutionary opportunities in the major capitalist countries of Europe, and whether the socialist revolution could first succeed in one country, thereby inspiring the confidence of people worldwide in their struggle. Imperialism analyzed the main characteristics of the capitalist economy after entering the monopoly stage, analyzed the uneven development of world capitalist politics and economics and the contradictions of interest struggles among capitalist countries, and made the scientific judgment that the socialist revolution could break through and succeed first at the "weakest link" of world capitalism, becoming a scientific classic that answered the questions of the times and practice. On New Democracy is the political economy of the Communist Party of China during the era of the New Democratic Revolution. It combined the basic principles of Marxism with the practice of the Chinese revolutionary struggle and fine traditional Chinese culture. It had to answer how a semi-colonial and semi-feudal country could transition to a socialist revolution through the victory of a New Democratic Revolution, as well as the difference between the New Democratic Revolution and the Old Democratic Revolution and its connection to the world communist movement. Its political program was to realize a people’s democratic dictatorship led by the working class (through the Communist Party), based on the worker-peasant alliance, and uniting all democratic parties and people of all ethnic groups. Its three major economic programs were: "large banks, large industries, and large commerce shall be owned by the state of this republic," but without confiscating other capitalist private property or prohibiting the development of capitalist production that "cannot dominate the national economy and people's livelihood"; and the confiscation of landlords’ land to be distributed to landless and land-poor peasants, turning the land into the private property of peasants to achieve "land to the tiller." This was the creation of New Democratic political economy based on Chinese practice. As Xi Jinping said, Comrade Mao Zedong creatively proposed the New Democratic economic program during the New Democratic period... which was our Party’s creative development of Marxist political economy.

The theory of socialism with Chinese characteristics founded by Deng Xiaoping wrote a new chapter in the political economy of socialism with Chinese characteristics. It had to answer the era-defining and practical propositions of what socialism with Chinese characteristics is and how to build it. In Deng Xiaoping Theory, the "Three Represents" important thought, and the Scientific Outlook on Development, there are many major theoretical viewpoints of the political economy of socialism with Chinese characteristics. After the "Decision of the Central Committee of the Communist Party of China on Reform of the Economic Structure" was passed in October 1984, Deng Xiaoping commented: "A preliminary draft of political economy has been written, a political economy that combines the basic principles of Marxism with Chinese socialist practice." In 1992, Jiang Zemin evaluated the decision on economic structural reform passed by the Third Plenary Session of the 12th Central Committee in his report to the 14th National Congress as "a new development of Marxist political economy, providing new theoretical guidance for comprehensive economic structural reform."

After the 18th CPC National Congress, socialism with Chinese characteristics entered a New Era. Xi Jinping summarized the successful experience of China's socialist economic construction and formed Xi Jinping Economic Thought, which is the political economy of socialism with Chinese characteristics for the New Era. The questions of the times and practical propositions it must answer are how to comprehensively build a moderately prosperous society in all respects and shift toward comprehensively building a modern socialist country, advancing the great rejuvenation of the Chinese nation through a Chinese path to modernization, and achieving the Party's Second Centenary Goal. Therefore, all major economic theoretical issues concerning this theme—whether long-term or current—are propositions of political economy. Xi Jinping not only proposed at the Central Economic Work Conference that the major principles of the political economy of socialism with Chinese characteristics must be upheld, but also repeatedly emphasized the development of the political economy of socialism with Chinese characteristics during symposiums with experts. We should reflect: why, when discussing the current economic situation and practical problems, does Xi Jinping not mention the analytical logic of Western economics but instead emphasizes adhering to the political economy of socialism with Chinese characteristics? As he himself answered:

"Currently, various economic theories are flourishing, but the foundation of our political economy can only be Marxist political economy and no other economic theory." Western economics takes the assumption of the "rational economic man" ^[8] as its premise, deducing the logical structures of macroeconomics (market equilibrium) and microeconomics (cost-benefit) to satisfy the goal of maximizing capital returns. While it certainly contains some rational elements consistent with the general laws of a market economy, it cannot serve as the primary foothold for the construction of our country’s autonomous knowledge system ^[9] for economics, nor can it serve as the guiding ideology for our country’s practice of economic construction. In contrast, political economy with Chinese characteristics is a world-view centered on the people; it both integrates with and constrains the operations of capital and the market economy. Therefore, the vast majority of problems in our country’s economic practice are problems of political economy, rather than pure economic problems of satisfying capital returns.

Questions of the era and questions of practice possess concepts of time and space; they manifest specifically as national and ethnic forms in different periods. Capital is the bible of the working class throughout the world, yet the specific matters it describes clearly bear the characteristics of British economy and society. Marx stated: "The classic ground of this mode of production is England. That is why I have used it as the chief illustration in the development of my theoretical ideas." This was because England at that time was the country where capitalism had developed relatively early and matured. The commodity exchanges he analyzed—such as coats, linen, coffee, tea, wheat, and iron—were all common phenomena in the British market transactions of that time. Currency names such as gold, pounds, shillings, and pence were also phenomena of British currency circulation. Units of weight like the quarter for wheat, the hundredweight (cwt) for iron, and the ounce for gold were all British. In Chapter 24 of Capital, Marx exposed and critiqued the history of the British enclosure movement, dissecting the secrets of the primitive accumulation of capital. It can be seen that when Capital revealed universal truths, it reached them through specific national histories and their forms.

Engels also provided a classic discourse on the localization and nationalization of Marxism. He said: "The practical application of the principles will depend, as the Manifesto itself states, everywhere and at all times, on the historical conditions for the time being existing." Regarding the guidance of the American labor movement by European Socialist Workers' Parties, he masks a specific instruction: "it must fish out its foreign dress, it must become thoroughly Americanized. It cannot expect the Americans to come to it; it, the minority and the immigrant, must go to the Americans, who are the vast majority and the natives. And to do that it must above all learn English." In the process of the Sinicization of Marxism, Mao Zedong was the first to propose the task of "making Marxism concrete in China." At the Sixth Plenary Session of the Sixth CPC Central Committee in 1938, Mao Zedong proposed the theoretical proposition of "making Marxism concrete in China." Shortly thereafter, he pointed out: "Marxism must be integrated with the specific characteristics of our country and realized through a certain national form." "To make Marxism concrete in China, so that in every manifestation it bears the necessary Chinese characteristics—that is to say, to apply it according to China's characteristics—has become a problem that the whole Party urgently needs to understand and solve." This understanding laid the ideological foundation for Mao Zedong to systematically create the Theory of the New Democratic Revolution ^[10] as the Sinicization of Marxism.

The specific Chinese characteristics pointed out by Mao Zedong include China's precious historical and cultural heritage, containing the consideration of combining Marxism with Chinese history and culture. Since the 18th National Congress ^[11], Xi Jinping has conducted in-depth reflection on the issue of the Sinicization of Marxism and gradually formed the important thought of the "Two Combinations" ^[12]. In September 2014, he proposed: "The basic principles of Marxism must be closely integrated with China's specific reality, and national traditional culture should be treated scientifically." In March 2021, he proposed: "Combine the promotion of excellent traditional culture with the Marxist standpoint, viewpoint, and method, and unswervingly follow the path of socialism with Chinese characteristics." In July 2021, in his speech at the ceremony marking the 100th anniversary of the founding of the Communist Party of China, he formally proposed: "We must continue to adapt the basic tenets of Marxism to China’s specific realities and its fine traditional culture. We must use Marxism to observe, interpret, and lead the times, and continue to develop the Marxism of contemporary China and of the 21st century!" In October 2022, Xi Jinping further pointed out in the report to the 20th National Congress: "Chinese Communists have come to realize that only by integrating the basic tenets of Marxism with China’s specific realities and its fine traditional culture, and only by applying dialectical materialism and historical materialism, can we provide correct answers to the major questions presented by the times and practice, and ensure that Marxism maintains its vigorous vitality."

Xi Jinping not only solved the problem of why the basic principles of Marxism must be combined with China's fine traditional culture but also solved the problem of how to achieve this combination. This is centrally expressed in the new thoughts of "creative transformation and innovative development." Creative transformation means transforming those connotations and outdated forms of expression that still possess reference value according to the characteristics and requirements of the era, endowing them with new contemporary connotations and modern forms of expression to activate their vitality. Innovative development means supplementing, expanding, and improving the connotations of China's fine traditional culture according to the new progress and developments of the era to enhance its influence and appeal. The typical characteristics and illustrations of British economic history contained in Capital are the theoretical sources for the CPC's proposal that the theoretical innovation of Marxism must be combined with the country's own fine traditional culture.

IV. Capital Reveals the Laws of Operation of Modern Economic Systems and Socialized Large-Scale Production

Marx regarded the capitalist economic system shaped by large-scale machine industry as a modern economic system. The object of analysis in Capital is the modern economic system, using the British capitalist economic system as the classic type. However, Britain did not stand alone in the early emergence and development of European capitalism. Why did Marx take Britain as the archetype of the capitalist economic system? Looking at world history, Spain was the first to establish colonies in the Americas and Africa, monopolizing the world's gold and silver production and becoming the most powerful colonial empire in the 16th century. In contrast, Britain at this time was only the most backward and impoverished island nation in Western Europe with a population of only four million. At the end of the 16th century, 83% of the world's precious metal extraction belonged to Spain. Yet Spain failed to use these conditions to develop and improve its domestic real economy ^[13] and industry; it was even unable to achieve self-sufficiency in primary industrial products such as meat, wheat, and clothing. While Spain was satisfied with acquiring overseas wealth and consuming wantonly, the British bourgeoisie focused on developing the domestic real economy and led the first Industrial Revolution. It relied on its domestic wool production advantages to develop a complete textile industry, which became Britain’s highly profitable "national industry." Eventually, Britain completed the Industrial Revolution around 1840 and established its position as the global industrial hegemon. In 1850, Britain's metal products, iron and steel output, and textile production accounted for half of the world's total; coal output accounted for two-thirds; and shipbuilding and railway mileage also ranked first in the world. Its foreign trade volume accounted for 20% of the world's total, growing to 40% ten years later. At this time, Britain's industrial output value accounted for 55%–60% of Europe's and 40%–50% of the world's, thus making the pound sterling the world currency. While the domestic economy and industry developed rapidly, Britain's labor force also saw an unprecedented increase. Between 1541 and 1741, the population of England doubled from 2.77 million to 5.57 million, and by 1800, the population of England and Wales further increased to 8.89 million. The historical experiences and lessons of Britain and Spain illustrate the importance of a nation's real economy and domestic economic circulation.

The history of world capitalist development shows that in the stage of the primitive accumulation of capital, overseas colonial plunder played an important role, but whether the capitalist economic system can ultimately become the main socio-economic form of a country still depends on the domestic circulation of its real economy. Therefore, for the capitalist mode of production to occupy a dominant position in an economy, it must necessarily be based first on the domestic market of the nation-state and then expand to overseas markets. For any independent and mature economy, the real economy and domestic economic circulation are the foundation of its economic development and the basis for the establishment of its economic system. This is the principle behind Capital choosing Britain as the classic case for analyzing the capitalist economic system.

Xi Jinping Economic Thought combines the basic principles of Capital regarding the operation of modern economic systems with the practice of socialist construction with Chinese characteristics, developing the Marxist theory of modern economic operation. After China's economic development entered the New Normal ^[14], Xi Jinping clearly pointed out: "Revitalizing the real economy is the primary task of supply-side structural reform; supply-side structural reform must exert and concentrate its force on revitalizing the real economy. No matter how far the economy develops, the real economy is always the foundation of our country’s economic development and the basis for us to win the initiative in international economic competition. Our country's economy made its name through the real economy, and it must rely on the real economy to move toward the future." This is a profound summary of the basic experience of economic construction in New China ^[15] and a profound summary of our country's completion of the industrialization process in several decades, which took Western developed countries more than 200 years. In the process of supply-side structural reform, Xi Jinping emphasized the need to correct the three major imbalances—those within the internal structure of the real economy, between the real economy and finance, and between real estate and the real economy—and required increasing the proportion of manufacturing in the Gross Domestic Product (GDP). At the fifth National Financial Work Conference in 2017, he again required that finance must serve the real economy, stating that serving the real economy is the natural duty and purpose of finance, as well as the fundamental measure for preventing financial risks. In 2021, the proportion of the added value of China's manufacturing industry in GDP rebounded from 26.29% in 2020 to 27.4%. The "14th Five-Year Plan" and the 2035 Long-Range Objectives emphasize the need to overcome the situation where the proportion of manufacturing declines too early and too quickly, and to maintain the basic stability of the manufacturing proportion. Under the guidance of Xi Jinping Economic Thought, the report to the 20th National Congress proposed that in order to achieve the goal of building a modern socialist country in all respects, it is necessary to build a modern industrial system: "We will keep the focus of economic development on the real economy. We will promote new-type industrialization and move faster to boost China's strength in manufacturing, product quality, aerospace, transportation, cyberspace, and digital development. We will execute the project to reconstruct the industrial foundation and the research project on major technical equipment, support enterprises that use special and sophisticated technologies to produce novel and unique products, and move the manufacturing sector toward higher-end, smarter, and greener production."

Based on the basic principles of the operation of modern economic systems revealed in Capital and according to the new developments in the internal and external environment, Xi Jinping also proposed the construction of a new development pattern "with the domestic large circulation as the mainstay and the domestic and international dual circulation promoting each other." World economic history shows that all large economies have domestic circulation as their mainstay; this is an objective law of economic development. For more than 70 years since the founding of New China, our economy has always been based on domestic circulation as the mainstay. Even during the 1990s when the degree of dependence on foreign trade was high for a time, the drive for economic growth was always dominated by domestic demand. After the Reform and Opening-up, the domestic large circulation as the mainstay absorbed external resources and factors and integrated into the world market, but the passive characteristics of the domestic and international dual circulation were relatively obvious, and the dependence on external conditions was strong; thus, the level of mutual promotion between the domestic and international dual circulation was not high. The domestic large circulation in the construction of the new development pattern aims to build a high-level, self-reliant, and self-strengthening domestic large circulation through innovation-driven development. At the same time, it absorbs foreign resources and factors, with the focal point being to enhance endogenous momentum and reliability, thereby improving the quality and level of the domestic large circulation. This achieves the mutual promotion of domestic and international dual circulation on a new level and further promotes the joint construction of an open world economy.

The analysis in Capital regarding the process of socialized reproduction under market economy conditions serves both as a pathological dissection of the operations of the capitalist economic system and as a physiological analysis of the mechanisms of socialized reproduction under general market conditions. It provides the basic orientation and path for understanding the regularities of socialist economic construction. Capital depicts the operation of the capitalist economic system, at the center of which lies capital. Within Capital, capital possesses a dual nature: on one hand, capital embodies a relation of production; when combined with wage labor, it represents the antithesis between dead labor and living labor, an antithesis that forms the basis for the production of surplus value. On the other hand, throughout its operation and turnover, capital continuously transforms its own state, appearing as commodity capital, productive capital, and money capital; in this context, capital is a factor of production. Historically, capital is an indispensable factor of production for the commodity economy and the market economy. Capital profoundly delineates this dual manifestation: it reveals the internal contradictions of the capitalist mode of production while simultaneously discovering the general laws of social reproduction under a market economy, thereby bequeathing us precious theoretical insights for exploring the laws of socialist economic construction.

The duality of capital as depicted in Capital provides a theoretical guide for our understanding of the characteristics and behavioral regularities of capital under socialist conditions. In 2022, while presiding over a collective study session of the Central Committee Political Bureau, Xi Jinping emphasized that capital is an important factor of production in the socialist market economy. To regulate and guide the development of capital under socialist market economy conditions is both a major economic issue and a major political issue; it is both a major practical issue and a major theoretical issue. It concerns the persistence of the basic socialist economic system, the basic state policy of reform and opening up, high-quality development and common prosperity, as well as national security and social stability. We must deepen our understanding of various types of capital and their roles in China under the conditions of the New Era, regulate and guide the healthy development of capital, and give play to its active role as an important factor of production.

As an important factor of production, capital is a tool for market resource allocation and a mode and means of economic development; socialist states can also utilize various types of capital to promote economic and social development. At the current stage, China possesses various forms of capital, including state-owned capital, collective capital, private capital, foreign capital, and mixed-ownership capital. These forms exhibit distinct characteristics, such as a significant increase in scale, more diverse subjects, accelerated operational speeds, and the large-scale entry of international capital. We must focus on stimulating the vitality of all types of capital, including non-public capital, giving play to its positive role in promoting scientific and technological progress, flourishing the market economy, facilitating people’s lives, and participating in international competition. We must ensure it always submits to and serves the interests of the people and the state, contributing to the comprehensive building of a modern socialist country and the realization of the great rejuvenation of the Chinese nation.

At the same time, how to regulate and guide the healthy development of capital under the socialist system is a major theoretical and practical problem that New Era Marxist political economy must research and solve. Xi Jinping pointed out that we must understand and grasp the various types of capital existing in our society and their roles from a historical, developmental, and dialectical perspective. We must give play to the positive role of capital in promoting the development of social productive forces. Simultaneously, we must recognize that capital possesses a profit-seeking nature; if not regulated and constrained, it will bring immeasurable harm to economic and social development. Therefore, "traffic lights" ^[16] must be set for the operation of capital. We must correctly handle the relationships between different forms of capital, distinguishing them in terms of nature and defining them clearly in terms of positioning, to regulate and guide the healthy development of all types of capital. Furthermore, we must correctly handle the issues of capital and the distribution of interests. The socialist nature of our state dictates that we must persist in distribution according to work as the mainstay ^[17] while allowing multiple distribution modes to coexist, reflecting the principle of "people centeredness" in social distribution. We must emphasize the inclusive nature of economic development and the fairness of primary distribution, ensuring both the protection of capital’s participation in social distribution to achieve value-enhancement and development, while placing greater emphasis on maintaining the dominant position of distribution according to work. We must persist in development for the people, development relying on the people, and the fruits of development being shared by the people, unswervingly following the path of common prosperity for all people.

The process of large-scale socialized production depicted in Capital is a law of market economy operation based on commodities and value. From the perspective of the operation of productive forces, its operational mechanisms are equally applicable to observing and analyzing large-scale socialized production under the conditions of a socialist market economy. The process of economic circulation analyzed in Capital is conducted under the conditions of a unified market within an economy. The capitalist mode of production first destroys local, closed small markets domestically, and subsequently: "Large-scale industry has brought all the peoples of the earth into contact with each other, merged all local small markets into a world market." This unified large market is the basic support and vital condition for large-scale socialized production. Xi Jinping has creatively applied the basic principle from Capital that large-scale socialized production must rely on a unified large market. He pointed out: "Constructing the new development paradigm means taking the domestic macro-circulation based on a national unified large market as the mainstay; it does not mean every locality should engage in its own independent micro-circulation... it does not require every locality to engage in self-circulation within its own province, city, or county... we cannot seek to be 'small but complete' ^[18], and even less can we engage in regional blockades in the name of 'internal circulation.' Localities with the right conditions can take the lead in exploring effective paths conducive to promoting the construction of the national new development paradigm, playing a leading and driving role."

Building a national unified large market is both the foundational support and inherent requirement for constructing the new development paradigm; it is an objective necessity based on domestic demand and the smoothing of circulation. It requires creating and leading demand with high-quality supply, making the links of production, distribution, circulation, and consumption smoother, improving market operational efficiency, and further consolidating and expanding market resource advantages, so that building a hyper-scale domestic market becomes a sustainable historical process. At the same time, it is also the primary direction and a long-term process for perfecting the socialist market economy system. Therefore, the "14th Five-Year Plan" Outline and the 2035 Vision Goals take the construction of a national unified large market as an important goal and task for perfecting the socialist market economy system. The Report to the 20th National Congress of the CPC also reaffirmed: "We will build a national unified large market, deepen the market-oriented reform of factors of production, and develop a high-standard market system."

V. The Spirit of Theoretical Innovation in Capital

The three component parts of Marxism originate respectively from classical German philosophy, classical English political economy, and French utopian socialism. The principles in Capital regarding the relationship between commodity value and labor also originate from the labor theory of value of Adam Smith and David Ricardo. However, Marx’s labor theory of value was not confined to the analysis of the labor theory of value in classical political economy. Instead, on the basis of critically absorbing their rational elements, he innovated and developed the labor theory of value, thereby forming the scientific Marxist labor theory of value. Marx believed that Smith’s labor theory of value contained inherent contradictions: on one hand, it correctly expressed the internal connections of capitalist production, which Marx called the "physiology of the bourgeois system"; on the other hand, it was merely a description of the external phenomena of capitalism. The latter became the theoretical premise for vulgar economics and various types of utilitarian economics. In the 1872 Afterword to Capital, Marx profoundly pointed out: "In so far as political economy is bourgeois... in so far as it views the capitalist order as the absolute and final form of social production, instead of as a transitory stage of its historical development, it can only remain a science only so long as the class struggle is latent or manifests itself only in isolated and sporadic phenomena." "Classical political economy belongs to a period in which the class struggle was as yet undeveloped. Its last great representative, Ricardo... consciously makes the antagonism of class interests... the starting-point of his investigations... but he naively takes this antagonism for a social law of nature. With this, bourgeois economic science had reached its limits."

It is evident that the scientific nature of economics is closely linked to the era and class standpoint, and it is also closely linked to the methodology of thought. Classical English economics merely stood on a position of liberalism and individualism to provide an external description of the capitalist system, completely neglecting to reveal the internal structure and contradictions within the sphere of capitalist production. Therefore, the theoretical innovation of Capital stands on the position of the proletariat and the people, responding to the call of the times to establish a logical connection between phenomenon and essence. The core essence of establishing this logical connection is, as Marx said: "The theoretical conclusions of the Communists are in no way based on ideas or principles that have been invented, or discovered, by this or that would-be universal reformer." "They merely express, in general terms, actual relations springing from an existing class struggle, from a historical movement going on under our very eyes."

The essence of the spirit of theoretical innovation revealed by Capital is the spirit of integrating theory with practice and with a nation’s own history and culture. Mao Zedong combined the basic principles of Marxism with the practice of the Chinese revolution and construction, creatively realizing a leap in the Sinicization of Marxism through the concrete forms of Chinese culture. Deng Xiaoping, Jiang Zemin, Hu Jintao, and Xi Jinping have combined the basic principles of Marxism with China’s concrete realities and with fine traditional Chinese culture, forming new leaps in the Sinicization of Marxism. Within Xi Jinping’s economic thought, there are precious elements that inherit and carry forward the thoughts and theories of previous leaders of the Communist Party of China; there is the deepening and sublimation of previous major theoretical viewpoints and concepts through systematic integration; and, more importantly, there are original theoretical viewpoints and important ideas proposed in accordance with the targets and practices of the New Era.

In summary, those elements within Xi Jinping’s economic thought that belong to the basic economic theories of the primary stage of socialism ^[19] include: the basic contradictions of socialist society and comprehensively deepening reform; the basic economic laws of socialism and the people-centered position; the developmental stages of the principal contradiction in socialist society ^[20]; the basic socialist economic system and capital theory; the new development stage and the theory of Chinese-path modernization; the system of socialism with Chinese characteristics and the national governance system; and the Party’s centralized and unified leadership over economic work. Those elements belonging to the theory of socialist economic development and economic regulation since the 18th National Congress include: the new normal of economic development and the new development philosophy; high-quality development and supply-side structural reform; the real economy as the main focus of economic development; national strategies and the laws of economic development characterized by "the four synchronizations" ^[21]; scientific and technological innovation, making the digital economy stronger, better, and larger, and new quality productive forces; the general principle of seeking progress while maintaining stability and the regulation of economic operations; the establishment of a holistic approach to national security; and the coordination of development and security. Those elements belonging to the theory of our promotion of building an open world economy since the 18th National Congress include: the essence, characteristics, and new future directions of economic globalization; the scientific judgment of "changes unseen in a century"; the objective laws of the new stage of development for China’s open economy; the answers provided by the "dual circulation" concept to the questions of China and the world; and the values of our times regarding an open world economy and a community with a shared future for humanity.

Xi Jinping’s economic thought is permeated with the Marxist worldview and methodology. This is reflected in: persisting in materialism and proceeding from objective reality in all things; persisting in dialectics characterized by systematic planning and holistic coordination; persisting in historical materialism, which maintains that the people create history and follows the laws of social development; understanding and grasping the laws of the contradictory movement of things; persisting in "dividing one into two" ^[22] and recognizing the "duality" of things; following the laws of the reciprocal relationship between the development of human society and the movement of nature; and persisting in combining the basic principles of Marxism with China’s concrete realities and with fine traditional Chinese culture.

Conclusion

Capital is vast and profound; studying it always brings new insights. Although 157 years have passed since its publication and human society has undergone earth-shaking changes, the general principles expounded in Capital remain, on the whole, completely correct. However, we must adopt a scientific attitude toward scientific theory. Engels said: "Marx’s whole way of thinking is not so much a doctrine as a method. It provides not so much ready-made dogmas as aids to further investigation and the method for such investigation." He also said our theory "is a historical product, which at different times assumes very different forms, and therewith very different contents." Xi Jinping’s economic thought is the contemporary Marxist theory created in accordance with the teachings of Engels.