AI Is reviving Chinese Marxist economics

Chinese Marxist economists are reportedly regaining influence as artificial intelligence (AI) and robotics reshape production in China, according to an opinion piece by former Greek finance minister Yanis Varoufakis.

Varoufakis notes that two years ago a professor from one of China’s top economics departments told him that “most of my colleagues pay only lip service to Marxism” and that only a small minority took Marx seriously. He says that the AI revolution is now giving Marxist economics a “mighty boost.”

The article explains that Marxists in China have long feared that the country’s shift toward capitalism could lead it into a “rent trap,” a situation familiar from North Atlantic economies that involves asset‑price inflation, a rapid slowdown, stagnation, deindustrialization and social discord. Varoufakis cites the collapse of real‑estate developer Evergrande as a near‑miss of such a trap.

Chinese state‑capitalist policymakers, he argues, have been confident that the state can direct investment to avoid the rent trap. They point to successes in critical minerals, green energy, electric vehicles, ultra‑fast railways, microchips and, more recently, AI.

Some Marxist economists, however, remain concerned that China’s large trade surplus—estimated at about $25 trillion—could be invested in asset purchases that would push the country into a rentier economy. They worry that overseas investment could make China a “rentier extracting surpluses from developing countries,” a scenario that would not align with Marxist goals.

Varoufakis also references the standard Anglo‑Saxon recommendation that China increase domestic expenditure to avoid a rent trap. He notes that one Marxist economist has read William J. Galbraith’s The Affluent Society and believes that a consumer‑driven economy is “a special kind of hell.”

The article discusses a core Marxist principle: economic value is created only by human labor. Machines can transfer the value that humans have infused into them, but they cannot extract surplus value themselves. Marxists argue that as machines replace human labor, commodity value falls, profit margins shrink and the rent trap deepens.

Varoufakis contrasts the focus of U.S. AI firms, which he says are largely service‑oriented and do not engage in material production,

Article and image source: koreatimes.co.kr