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VPDF representative on rethinking development models

The current global crisis has provided humanity with an opportunity to rethink development models and search for people-centered alternatives to the present domineering profit-driven model. Rescue measures and stimulus packages could solve immediate economic-financial problems, but cannot save this inhuman model from a recurrence of crisis in the medium and long term.
So said Mr. Trần Đắc Lợi, Vice-President of VPDF, in a contribution to an international seminar themed “Rethinking Models of Development in the Context of the Global Crises” co-organized in Hanoi on October 26th-27th by VPDF and the Hanoi Office of the German Rosa Luxemburg Stiftung.
His paper reads in full:

Rethinking Development Models –
Lessons from the Global Crisis

1. Nature and causes of the crisis

There have been numerous studies and seminars on this subject. Allow me, therefore, not to cover all its developments but, instead, to focus on its nature and causes.
In the first place, as has been pointed out by François Houtart and other progressive scholars, this should be perceived as a general crisis where several crises converge, and wherein lie not only a cyclical crisis but qualitatively new others never seen in human history, namely:
- An economic-financial crisis resulting from overproduction, market liberalization, financialization, and financial speculation. The implementation of neo-liberal policies and especially financial speculative activities are the immediate and fundamental causes of the current crisis . In terms of nature, this remains a typical cyclical, law-determined, and unavoidable crisis of capitalism, but occurring in new conditions and containing new elements. These include mainly the scope, strength and domineering power of financial capital, the vigorous development of sciences, technologies and the globalization process, and the rise of newly emerging economies, all of which have impacted the developments of the current crisis as well as remedial processes.
- An energy crisis resulting from consumption of fossil energy beyond nature’s regenerative capacity  or, in other words, from the model of energy-based production and consumption, such as development of energy-intensive industries, promotion of trade liberalization , encouragement of the use of individual transportation means (motor-cars, private aircraft, private boats, etc.).
- Ecological crisis and climate change resulting from excessive exploitation and consumption of natural resources, and environment pollution, leading to natural imbalances. Natural resources have been gradually depleted, the living environment increasingly polluted, and dangerous epidemics newly emerged . Deforestation, development of monoculture, and abuse of chemicals in agriculture have also contributed considerably to destroying the environment and biodiversity. Increasing exhaust gas emissions combined with decreasing absorptive capacity of vegetation and oceans have led to the “green house effect” and global warming. According to forecasts, from 150 to 200 million people will have been displaced by 2050 due to rising sea water levels.
- A food crisis resulting from food speculation (a direct and conjunctural cause) and the capitalization and commercialization of agriculture (a deep-rooted and structural cause). According to the FAO, in 2007 and 2008 alone, 150 million farmers were driven into poverty because speculation had led to skyrocketing prices.
- A social and human crisis resulting from unprecedentedly unequal distribution of resources, wealth, and welfare. According to the UNDP, the richest 20% of the world population now controls 84% of the world’s wealth and resources, while the poorest 20% holds merely 1.6%. As the purchasing power balance definitely tips in favor of the rich, most activities in trade and services have focused on this minority. Social, ethnic and religious contradictions have grown increasingly acute, and cultural and ethical degradation ever more serious.
As a whole, this is in fact a crisis of development models, one of contemporary civilization.
Therefore, in order to overcome the challenges, what is needed is not simply rescue measures benefiting banks and enterprises, or stimulus packages, or increased regulation, but a whollistic approach conducive to a clear understanding of the nature and deep-rooted causes of the crises with a view to compatible and appropriate solutions.
The above-mentioned crises are inter-related, especially with regard to their deep-rooted causes, the most encompassing of which is the overexpansion of the development model driven by profit instead of human development.
The main and substantial motive force of capitalism is reproduction of capital in pursuit of maximal profit and maximal capital accumulation. All the development logic of capitalism is focused on a profit-seeking space. According to François Houtart, the main development criteria formulated and universalized over the recent past, such as GDP, competitive index, cost-effectiveness, etc., are focused on the market space and calculated on the basis of spendings directly linked to the capitalist’s profit while ignoring externalities, especially eco-environmental and social losses. The costs incurred for recuperating the environment, coping with the climate change, and  seeking technologies for new and alternative energy sources, etc., which are immense, have not been incorporated in the processes of pursuit of development objectives so far . Besides, such social costs as epidemics, unemployment, crime, social vices, migration, etc., have also been ignored. It could be said, therefore, that the aforesaid development model has been driven by an “economic growth” objective for the immediate benefit of investors while dumping losses and externalities on the contemporary society and future generations. It could be added that the present wealthiness of Western countries largely results from the hundreds of years of application of such a logic – from slavery, colonialism, appropriation of natural resources and destruction of the environment in the past industrialization processes, to the current unjust international economic order with monopolistic and manupulative operations of transnational corporations  – with tremendous harm to humanity, especially Third World countries.
An underlying philosophy of the development of capitalism over the past centuries runs through encouragement of increased material consumption. Considered as the main measure to ensure growth is demand stimulus, which in essence means increased sale of goods leading to increased profit. Consumer price indexes, retail sale indexes, purchasing power, etc. become indispensable indications in determining conditions for economic growth. The universal application of such a philosophy has led to the dominance of consumerism and the limitless squandering of natural resources. According to scientists, to lift the living standards of mankind as a whole to those of the Finns at present, four more planets the size of the Earth are needed, while natural resources, such as fossil fuel, minerals, wood and water sources, have become increasingly exhausted. This has imposed an upper limit on material consumption levels, thus putting an end to the future of the above-mentioned mode of development.
The overexpansion of the market space coupled with uncontrolled commercialization have also led to disorders in the natural and social environments. For profit-seeking space expansion, the essential needs for human existence and development, including education, health care, public services, and even daily use water, have been commercialized to the maximum. With the commoditification of all needs, enjoyment capacity becomes increasingly dependent on income, and social inequalities are growing. With the prioritization of exchange value over use value, everybody is compelled to make money with a view to subsistence, thus refraining from no unlawful acts of deforestation or rare animal hunting. Such policies have robbed large sections of the population, especially farmers and indigenous people, of their economic autonomy capacity, turning them into objects of both input and output exploitation, impoverishing them, and making them vulnerable to adverse market fluctuations. With the commercialization of cultural and information activities, most products of this sector have been turned into commodities to meet mainly vulgar demands, and used for recreative rather than educative purposes with a view to perfecting human personality.
Market liberalization and deregulation are in substance regulative policies facilitating major capitalist groups’ manipulation of and dominance over the market, and their speculative operations for maximal profit. Policies on widespread privatization under the signboards of “cost-effectiveness” or “competitiveness” have not only narrowed down the space for equal access to services essential to everybody, but also placed both economic operations and all aspects of social life into the hands of subjects for whom profit ranks above everything else. The establishment and development of public joint-stock companies over recent years has helped mobilize capital from society as a whole but failed to overcome inequalities in ownership and distribution relations. Besides, it has fostered a “social consensus” regarding “profit above all” as a basis for increasing exploitation of workers and destruction of the environment, promoting speculation, facilitating rapid capital accumulation by a minority, and widening the gap between the rich and the poor. The “free and equal competition” formula, absolutized and applied to subjects that are unequal in capacity, has inevitably resulted in inequalities in performance and distribution. Financialization targeting rapid profit-making through a money-money relationship has distorted economic relations and formed huge financial bubbles many times larger than the real economy and, when broken, have robbed millions of people the world over of the fruits of their labor.
The globalization process that has expanded the scope of such serious illnesses, prolonged their duration, and facilitated their aggravation had been unleashed in Western countries. And it is via globalization that Western countries have imposed the above-described model upon developing countries, by means of direct or indirect intervention, international financial, monetary and trade institutions, or free trade agreements, thus “globalizing” the losses of the metropolis and harming heavily the economy and social security of Third World nations. Trade and investment liberalization and unequal international competition have undermined the economic autonomy of developing countries, weakened their economies, and quickened their “race to the bottom”.
In short, the deep-rooted causes of the current crises include the following:
- A development model running after economic growth and driven by profit while ignoring environmental and social costs, based on ecouragement of limitless increase of consumption while ignoring the limits of natural resources.
- A social life model prioritizing money-making instead of creating material wealth and services meeting human needs. Vulgar pragmatism, individual interests, and the absolutized role of money in the system of social values have gotten the upper hands over ethical and human values. Money has now a manipulative power over various aspects of social life, including political life.
- An operational model with free competition as normative in people-to-people relations resulting in winners (usually a minority of the rich or influential) and losers (usually the poor and the working masses).
- A model absolutizing private ownership of the means of production, concentrating even natural and intellectual resources into the hands of a minority as instruments for exploiting the remaining majority, leading to increasing social inequalities.
And, corresponding to those development models is a model of money-manipulated social life functioning first in the interests of the bourgeoisie and the rich . Such is the capitalist system, and such a model, as Samir Amin has rightly put it, is going through a general crisis resulting not from class struggles but from a prolonged accumulation of contradictions inherent of capitalism itself.
The question that poses itself is whether or not capitalism has come to the end ot its historical mission. From most of progressive scholars the answer is that the ongoing crises remain unable to bring down the capitalist system, for it still benefits from enormous financial potentials, experience in solving previous crises, and the roles played by knowledge economy, the prevailing financial-economic order, and newly emerging economies. Besides, as V.I. Lenin has put it, “capitalism will not collapse unless there is a social force causing it to collapse”. Such a social force is currently non-existent, in the capitalist metropolis and its periphery alike. However, by their nature, the present crises represent symptoms of a metastatic cancer that requires not merely tranquilizers but a major visceral surgery. The existing capitalist system could solve the immediate economic-financial problems but cannot escape a recurrence of crisis in the medium and long term; still less is it able to overcome the energy and ecological crises, for really effective measures would run counter to the ambitions and development logic of capital. That is why, although there could be certain modifications, the above-mentioned fundamental contradictions will persist and plunge humanity into future disasters. The search for proper solutions as alternatives to the existing unsustainable and inhuman development model remains, therefore, an urgent and at the same time longterm requirement.

2. Issues related to an alternative development model

In the search for an alternative development model, humanity should find solutions to the following contradictions:
- Contradiction between the constantly increasing needs of human beings for material consumption on the one hand and the definite limits of increasingly depleted natural resources on the other, between humanity’s needs for subsistence and continuous development on the one hand and the contraction and destruction of the living environment on the other. This is a question of relations between humanity and nature.
- Contradiction between the application of market economy for the liberation and development of productive forces and the regulation of demand- supply relations on the one hand and requirements for sustainable development and social progress and justice on the other. This is a question of the mode of production organization.
- Contradiction between the ever higher human capacity in the production of material wealth on the one hand and the ever wider gap between the rich and the poor and ever deeper injustices in society on the other. This is a question of ownership and distribution relations in society.
- Contradiction between the requirements for human emancipation and democratization on the one hand and the concentration of power into the hands of a minority and in the interests of a minority on the other. Money influences the political life, and the exercise of human rights depends largely on individuals’ unequal conditions, economic conditions in the first place. This is a political question.
- Contradiction between material, pragmatic values on the one hand and ethical, spiritual and humanistic values on the other; between egoistic, individualistic and departmentalist interests on the one hand and common interests on the other. This is a cultural, ethical and spiritual question.
The most idealistic and thorough solutions could include the following:
- In the economic field, substitution of a sustainable development model targeting human interests for development models running after economic growth; substitution of production and services targeting people’s reasonable needs for production and services driven by profit; substitution of use value meeting social demands for exchange value serving commercial purposes; substitution of respect for and harmony with nature for treatment of nature as an object of limitless exploitation.
- In productive forces, development of advanced productive forces chiefly on the basis of science, technology and quality human resources, combined with a rational use of natural resources.
- In distribution relations, elimination of exploitation; exercise of the principle “from each according to his ability, to each according to his work”; equal access and enjoyment by all people of basic means of subsistence and development; society’s care to people in difficulty.
- In the cultural and social fields, equal rights of all people, regardless of sex, ethnicity, religion, historical backgrounds, economic status, etc., and equal conditions for the realization of those rights; solidarity, mutual assistance, cooperation and win-win relations instead of competition and win-lose relations; predominance of progressive and humanistic ethical and spiritual values in social life and relations; enjoyment by all of equal conditions for comprehensive development.
- In the political field, development of a democratic political system where power is really of the people, by the people, and for the people; through a mechanism of social consensus founded on a system of common values and interests; with at the center a nucleus having adequate wisdom, capacity and absolute loyalty to those common values and interests; with mechanisms to best promote participatory democracy in political processes among the different strata of the people; effective prevention of interference and manipulation by money power and departmentalist and individualistic interests in the political life; development of individual freedoms in conformity with the interests of society and humanity. Establishment of an honest and objective mass media system operating in the common interests of society, not influenced by departmentalist and individualistic interests, nor commercialized and privatized.
The above could be certain objectives of the new society – a socialist one – for which we are striving together.
However, such idealistic objectives require a continuous, persistent, consistent and very long process of struggle. While a common understanding of objectives is attainable, the path leading to such objectives depends on specific conditions and circumstances of individual countries, internally and externally alike. There could be, therefore, no all-purpose model or formula, and no common roadmap. This in fact leaves an immense creativeness space for people willing to contribute to the search and promotion of alternatives to the present development models which are in crisis and deadlock.
The socio-economic model of real socialism in the Soviet Union and other socialist countries in the past did try to solve the contradictions of capitalism, including the following solutions:
- Substitution of the production organization targeting social needs for commodity production, of central planning for the market mechanism, with a view to the rational use of natural and social resources and restriction of their squandering. In fact, while promoting positive aspects in mobilizing resources for key public utility programs and projects, and implementing progressive social policies, central planning not only failed to ensure rational distribution and use of resources but also alienated production from the diverse and changing needs of social life, restricted grassroots proactiveness and creativeness, and led the economy to stagnation and inefficiency. Central and total planning betrayed its unfeasibility in conditions of the production organization and management of human society at the present phase of development. Planning through a bureaucratic system became a subjective and voluntaristic performance of a beg-and-grant mechanism and, therefore, not only failed to implement properly its initial function and objective but also contributed to the degeneration of related administrative apparatuses at different levels.
- Use of state and collective ownership of the means of production as the foundation for economic development to meet society’s objectives and interests, and to abolish exploitation of men by men. This policy succeeded to abolish exploitation of men by men, facilitate the mobilization of resources for the implementation of key programs and public utility plans, and ensure social equity. However, the over-socialization of relations of production, in many cases beyond the development level of productive forces, and the disproportionate socialization of ownership relations without adequate attention paid to the establishment and improvement of an appropriate management mechanism and distribution system, blocked the development of production, eliminated production and business motive forces, and brought down labor productivity and economic efficiency. The liquidation of non-State and non-collective economic sectors restricted possibilities to mobilize resources and liberate potential productive forces in society. As a result, the wealth and commodities thus produced could not meet society’s needs, in quantity and quality alike.
- Egalitarian distribution with state subsidization with a view to ensuring equality in social welfare to all citizens; substitution of cooperation and emulation for competition in human activity. This policy led to numerous achievements in guaranteeing equality in social relations, and ensuring the population of certain basic, essential needs. However, the formula “from each according to his ability, to each according to his work” was not properly implemented, while egalitarian distribution helped eliminate motive forces for creation and higher productivity. In order to maintain the social welfare system and ensure everybody of employment, housing, education, health care, and other free allowances, the socialist countries had to spend a huge proportion of their available budgets, even beyond the capacity of their economies (if spendings on national defense and other essential needs in cold war conditions were also included). Therefore, sources for investment on economic development and people’s life improvement were limited, making the people’s living standards equal but low, with slow or even no betterment for a long time.
In short, the model of real socialism in the 20th century obtained initial economic achievements as well as successes in ensuring social security, social equality and certain social advancements. However, due to the above-mentioned prolonged defects and certain other reasons, it failed to fulfil the proposed objectives, stagnated, fell into crisis, and collapsed. Against such backgrounds, with a declaration on “the end of history”, capitalism has launched on a world scale a comprehensive general expansion, the nature of which has found a clearest expression in neo-liberalism, leading to the present global general crisis.
Judging the history of development of the two social systems in the 20th century, a researcher has noted: “Capitalism is a society without any ideal but with a mechanism, while socialism is a society with an ideal but without any mechanism”. Another has argued: “Development of capitalism is an objective law. Capitalism will by itself be capable of transformation, adaptation, and development toward becoming more progressive, more humanistic. There is no question, therefore, of searching for an alternative model.” And the concept of a “conscious capitalism” has been put forth as a substitute to the present inhuman and anti-nature capitalism. Perhaps such a pattern of argument had been used at the times of slavery, feudalism or colonialism. But the undeniable fact remains that, even if capitalism were capable of self-adjustment so as to continue its existence with a more human face, the mode of profit-driven production through exploitation of labor power inherent of its nature, would never be able to solve the contradictions characterizing its relations with nature and society. As Karl Marx once pointed out, capitalism has gradually annihilated the bases of its wealth that are nature and labor. That is why, searching for alternatives capable of overcoming the obvious defects of the existing model is necessary to the common interests of humanity. This represents the continuation of the processes of human emancipation and human society perfection, and also the overarching law on the development of human history. It has always been an aspiration of humanity to build a better society, one imbued with an ideal based on progressive and humanistic values. Thus, the objectives and ideal of a socialist society still retain their full validity, and remain a goal for our endeavors. What is more, the issue of socialism has been raised ever more pressingly in the current conditions of crisis and impasse of the capitalist development model. The problem to be solved is to find effective and feasible mechanisms and measures for the building of a real socialist society capable of utilizing the positive experience of capitalism and solving its deadlocks, promoting the achievements of the past socialist model and overcoming its defects, and creating fundamental conditions and clear orientations for the attainment of the afore-mentioned objectives and ideal.

3. Reflections on a socialist-oriented market economy

So far, humanity has not found any more effective instrument applicable to economic operations than the market mechanism. Market economy facilitates the liberation of productive forces, encourages investment in production and business, regulates demand-supply relations, etc. and, therefore, plays an important role in promoting economic development. However, the main driving force being profit, the overarching relations being buying-selling and competition, and the domineering power being money, market operations are in many respects incompatible with society’s common interests, especially in ensuring social equity and an environmentally harmonious development. That is why, the market should be organized, managed and administered in such a way as to promote what is positive while limiting what is negative with a view to promoting equitable and sustainable development.
A socialist-oriented market economy may have the following main characteristics:
- A market with a reasonable space, and with harmony between the market space and the public (non-market) space.
The market should be put at an appropriate position and within a reasonable space proper to it, mainly in the field of economic activity, with a view to developing production and business, raising labor productivity and efficiency, and producing material wealth and services meeting society’s development needs. Since the market has inherent negative aspects, it is necessary to avoid absolutization of the market, overexpansion of commoditification, and commercialization of other domains of social life. At the same time, the public (non-market) space should be constantly expanded so as to ensure to all citizens access, provision and enjoyment of essentialities through different ownership forms and free public services. The market and non-market spaces could co-exist intertwiningly in different fields, with ratios depending on the development levels of society at given times.
An example is issues related to labor. At the stage of market economy, we have to accept the existence of a labor market where labor is a commodity and a profit-making labor. But labor is valuable not only as a commodity. The unemployed lack neither working abilities nor needs for work; the existence of an army of unemployed constitutes a huge social squandering and alienates part of the population from the development process. Besides, the society needs not only profit-making labor but also many other categories of labor, which produce no profit but are useful to society, such as for environment protection, sanitation, maintenance of public order and security, combat against epidemics and natural calamities, building and management of public facilities, care for the elderly and the handicapped, etc. That is why, instead of relying exclusively on the labor market, we should proactively organize public-interest labor in order to meet employment needs, avoid labor force squandering, and respond to the legitimate demands of the community and society which remain beyond the reach of the market. Public-interest workhands can join the labor market when the latter has demands. By so doing, we not only meet more adequately citizens’ needs for employment and income, but also offer them a positive place in the development process and limit negative practices and social vices. Doesn’t this make a fundamental difference between capitalism and socialism in their approaches to labor in the period of transition?
Similarly, the development and constant expansion of the non-market space and improvement of public-interest services in non-economic fields of social life constitute a criterion and measurement of social progress.
- A market administered by the socialist state in the common interests of society with a view to the realization of the objectives of equitable and sustainable development and gradual advancement to socialism.
The market is a non-neutral instrument. The concept of a “perfect” or “modern” market only deals with its “technical quality”, while the orientation of its operations depends on the question of who is wielding it and for what purposes. The socialist state has the tasks of developing a legal system, promulgating policies, and exercising its administrative and regulative functions over the market so that its operations are oriented toward the attainment of the objectives of socialism. The market has its own laws which should be respected, but “respect for market laws” should not be placed above society’s interests. The series of government interventions in developed capitalist countries over the recent past have confirmed that principle. A socialist-oriented market should be more healthy than a capitalist market in ensuring a proper demand-supply relation, restricting virtual demand-stimuluses or speculative activities, and guaranteeing a competition based mainly on productivity and quality instead of the practice of “a larger fish devouring smaller ones”, or unhealthy measures.
The socialist state should have a system of policies and measures targeting harmony between economic growth and development on the one hand and environment protection and rational use of natural resources on the other, thereby ensuring sustainable development. Environmental and social costs should be adequately calculated in all investment and development programs and plans. Land, water sources and other natural resources are special instruments of production coming from nature, and cannot be multiplied. They should, therefore, serve the interests of the present and future communities and societies alike, and cannot be concentrated in the hands of individuals. There should be measures to restrict the wasteful use of natural resources and resolutely prevent all actions conducive to the destruction of the environment and biodiversity.
The socialist state should elaborate and uphold a system of criteria reflecting the quality of life as compared with growth criteria. Perhaps, when certain appropriate standards of living have been reached, we should gradually subsitute “demand restraint” for “demand stimulus” and the quality of life for the collection of wealth, shift the objective of production, business and services from profit-making to meeting the legitimate and reasonable needs of the people, and prioritize the use value of commodities and services over their exchange value.
The socialist state should harmonize relations between industrialization and urbanization on the one hand and agricultural and rural development on the other. For developing countries, agricultural development involves not only the production of commodities, but also the safety, employment and life of large masses of farmers, as well as their culture and environment. A large enough agricultural area should be preserved to ensure food security and the livelihood of people working in agriculture. Industrialization and urbanization should be linked with the prioritized development of infrastructure, shift of trades, and heightening of the living standard and education level in the countryside, in order to limit to the minimum the development gap between urban and rural areas.
The socialist state is to invest in and facilitate the development of advanced productive forces, by developing and applying scientific-technological achievements, constantly raising the quality of human resources, and promoting knowledge economy.
The socialist state is to expand international economic cooperation on the basis of maximalizing internal synergy, ensuring national economic autonomy, and prioritizing mutually beneficial, complementary and supportive relations.
- A mixed economy where the state economic sector plays a leading role, and the development of production relations corresponds to the level of development of productive forces.
The state economic sector, including state enterprises, constitutes the economic instrument with which the state takes a direct part in market activity with a view to attaining state objectives in the interests of the entire society. It may hold a monopoly in domains related to national security, play a predominant role in essential macro-economic realms, such as natural resources, energy, finances, information, public communications, etc., or participate (possibly without a dominant role) in activities related to the interests of large masses of the population, such as production and supply of fertilizers, agro-matériel and construction materials, or trading in food products. It pioneers in the development of infrastructures and cutting-edge industries essential to economic development but beyond the capacity of the private sector. It invests in the development of production and business in rural, mountain, hinterland and remote areas, as well as in fields indispensable to social needs but shied away by the private sector due to low rates of return. It invests in the research and application of new, advanced technologies with a view to promoting productive forces development.
State enterprises are multi-purpose economic entities neither operating only for profit nor placing profit above everything else. They are usually considered less efficient economically than private enterprises. But, even economically, not all state enterprises are unproductive. This has been proven by practice in many countries, including ours. Today, managerial science allows owners and investors to ensure efficient performance of their enterprises without having to take a direct part in management and administration. And the state is a major investor, if not the largest. Inefficiency, negative practices and corruption in state enterprises have in most cases resulted from unscientific and non-transparent management mechanisms and inappropriate personnel and distribution policies. Their continuous existence has been due to our exclusive focus on handling ownership relations while paying inadequate attention to improving management mechanisms and patterns, and policies on human resources and distribution. Delays in solving such problems have not only bound state enterprises to inefficient performance and inadequate exercise of their functions and role, but also in many cases turned state enterprises into money-making instruments of a handful of individuals to the detriment of society’s interests. This has eroded the credibility of state enterprises, leading even to such erroneous demands as for their abolition instead of reforms conducive to their efficiency and the promotion of their active role.
Attention should also be paid to the development and expansion of the cooperative economic sector on the basis of voluntariness and in compliance with the needs for linkages targeting the development of production and services.
The state as a public-interest capitalist could proactively invest in non-state enterprises with a view to developing production and services, improving performance, and promoting the state’s role in major, cutting-edge economic activities.
Along with the development of productive forces, the socialist state is to constantly develop and improve relations of production accordingly, in order to raise labor productivity and efficiency, while shaping and consolidating a system of economic instruments at the service of objectives of socialism.
- Proactive exercise of social progress and equity along with every advance in economic development.
During the period of transition, social progress and equity are not practicably available as yet, and gaps between the rich and the poor remain. The process of transition to socialism is one of making society gradually more equal and equitable, and finally abolishing exploitation of men by men. A capitalist society could also register advances toward social progress, but passively and defensively in the face of pressure from social struggles; such advances are, therefore, slow-coming, discontinuous and unsustainable. As the capitalist system is targeted, in the first place, at serving the interests of the bourgeoisie, the rich-poor gap becomes ever larger. In the logic of the capitalist market, human beings are treated mainly as customers, profit-making resources, and tax payers.
Meanwhile, the Vietnamese socialist society regards human beings as the center, creative subjects, and beneficiaries of the development process. It considers advancement of social progress and equity as an objective of economic development, and proactively promotes social welfare along with economic development. While recognizing and encouraging legitimate collection of wealth by citizens, we should mobilize efforts from the entire society for hunger eradication and poverty reduction, assistance to the underprivileged, and constant heightening of mimimum living standards for all people.
Due to economic constraints, countries building socialism may not as yet ensure free education and health care to all citizens, but only to priority groups first, usually children and people in difficulty. But, along with economic development, free education, health care and other social welfare should benefit more and more people and eventually the whole society. The income gaps between different segments of the population, and different geographical areas, should narrow down gradually. Public service entities facilitating the physical, cultural and spiritual development of the people should be expanded and improved day after day. At similar levels of economic development, a socialist country should inevitably outrank by far a capitalist country in terms of social achievements.

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In the period of transition, we do not have full-fledged socialism as yet; capitalist and socialist elements are coexisting intertwiningly, complementing each other while competing and struggling with each other in all aspects of social life, including people’s thinking and perception. The process of building socialism is one of ceaseless development, expansion and consolidation of socialist elements to ensure them of an increasingly dominant role in social life. This is a clearly oriented and long-term process of struggle that may last hundreds of years, and necessitates the continuity and consistency of policies for the attainment of the objectives of socialism. This represents an enormous undertaking that requires the support and active participation of broad strata of the population, under the creative leadership of a political force endowed with sufficient capacity, wisdom, willpower, and absolute loyalty to the socialist ideals. The path leading to socialism is still laden with tremendous difficulties and challenges, especially at a time when capitalism is monopolizing the main resources and influencing the world situation. But only socialism can ensure humanity of a better future. A society with ideals is necessary and possible, and is certainly better than one without ideals and influenced by ambitions. As Rosa Luxemburg once said, our final choice is “between socialism and barbarism”./.





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