The man Obama needs to fix America is - Karl Marx

At the moment, China's Communist Party is proving a more effective "executive committee" for its capitalist system than the US government is for the American one.

There is something almost tragi-comic in Hillary Clinton's use of the Berlin Wall as an analogy for China's internet censorship. The Chinese Communist Party hardly shares the American view of Cold War history; the implication that unrestrained Googling will bring down authoritarian regimes is unlikely to persuade Beijing that internet censorship is a bad thing. But while Winston Churchill's metaphorical "iron curtain" separated western capitalism from the sclerotic planned economies of the socialist world, what lies behind the US secretary of state's "information curtain" is the world's most dynamic capitalist economy, providing credit on which the US's own economy now depends. While the West endures anaemic growth rates and massive unemployment, China's double-digit stimulus-based recovery is the envy of all.

The transition from third-world agrarian basket case to the world's second largest economy in just three decades has been overseen by a Communist Party with a monopoly on power and complete dedication to the pursuit of wealth through capitalism. Its response to the recession was to inject hundreds of billions of dollars into infrastructure projects, consumer subsidies and measures to ensure that banks kept on lending.

Despite (indeed, perhaps because of) that programme's evident success, doom-mongers abound in the western media. China will overheat; its property bubble will burst; it will be dragged down by over-capacity; the absence of democracy will strangle its entrepreneurs. And so on. But these prophecies are not new, and Chinese capitalism has proven remarkably resilient, nurtured by a government that is authoritarian but not unresponsive.

The authorities in Beijing have a keen awareness of the potentially disruptive power of an angry populace amid a social transformation every bit as profound and traumatic as the industrial revolution in 19th century Europe. Censorship notwithstanding, there are more internet users in China than there are people in America - a reminder of the scale of the modernisation under way there. The Marxism on which China's leaders were reared would have taught them that there is no contingent relationship between capitalism and democracy. Indeed, China has to look only as far as neighbouring Taiwan, South Korea and Singapore for capitalist success stories under authoritarian rule. Karl Marx believed that the corporate profit motive could never provide the health care, education, standard of living and infrastructure for the working class that were necessary for the survival and growth of the system as a whole.

Capitalism, according to Marx, required social stability, an expanding market and a workforce with levels of health, education and remuneration that made them viable producers and consumers. Thus the need for an "executive committee" to enforce policies based on the aggregate needs of the system as a whole, even when at odds with the needs of individual private corporations. And you would have to say that, at the moment, China's Communist Party is proving a more effective "executive committee" for its capitalist system than the US government is for the American one.

Sure, China put the brakes on a climate-change agreement at Copenhagen, but nobody should doubt that once China's leaders are convinced of the cost-benefit advantage, Beijing will act. The political system in Washington, on the other hand, is so dominated by the interests of corporations, and so anarchic, that no matter what Barack Obama agrees to, there is little chance of it being approved by a legislature in which the corporations with most to lose from emissions curbs are free to buy influence (Bill Clinton signed up to Kyoto, remember, but could never get it ratified by the Senate).

America's economy desperately needs a fundamental overhaul of a healthcare system that leaves much of its population uninsured and eats up 17 per cent of GDP, seriously reducing the ability of American industry to remain competitive. But while healthcare reform is essential to the aggregated needs of American capitalism, it threatens the profits of a handful of insurance and pharmaceutical corporations.

And in Washington, those corporations are able to make their own interests prevail over those of the system as a whole. Just last week the Supreme Court struck down legislation that limited the right of corporations to spend on political campaigns: so any candidate who backs policies deemed inimical to the interests of a major corporation risks being consigned to oblivion by a relentless barrage of demagogic TV ads.

Despite commanding a Democrat majority in both houses of Congress, Mr Obama was forced to make compromises to win the vote of Senator Joe Lieberman, a legislator with strong ties to the health insurance industry. Now, with the loss of the Massachusetts seat formerly held by Senator Edward Kennedy, and with it the Democrat "supermajority" in the Senate, Republicans can talk any health reform initiative out of existence.

Mr Obama, a technocrat by instinct, can only envy the freedom of action his Chinese counterparts have when it comes to fixing pressing problems. His own stimulus package, in contrast to the Chinese one, was a mishmash of measures cobbled together to satisfy the demands of a variety of interest groups putting their own requirements above the greater good of the American economy, and its failure to generate jobs will eventually pose a threat to Mr Obama's prospects for re-election.

While both the US and China face massive economic, demographic and environmental challenges that will require painful choices in the years ahead, the authoritarian dimension of Chinese capitalism may yet prove to make its system, in Darwinian terms, more adaptable than the one in the Land of the Free. www.tonykaron.com

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