Economic Update: Worker Co-ops, Socialism's Future

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[S9 E39]

In the first half of Economic Update this week, Professor Wolff discusses how and why socialism changed from what it meant in the 19th and 20th centuries (public enterprises + state planning vs capitalism's private enterprises + markets).

During the second half of this week's episode, Prof. Wolff leads us on an exploration of why 21st century socialism aims to democratize capitalist workplaces, replacing their top-down undemocratic organization with worker cooperatives.

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Prof. Wolff's latest book "Understanding Marxism"

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Transcript has been edited for clarity.

Welcome friends to another edition of Economic Update, a weekly program devoted to the economic dimensions of our lives—jobs, debts, incomes, our own, those of our children coming down the pike to face us. I’m your host Richard Wolff.

In today’s program we’re going to be dealing with socialism. Partly because that’s what’s on the minds of an awful lot of people these days, there’s a new resurgence, if you like, of the socialist movement. Various kinds of socialism are being discussed. Some are being advocated. The Presidency of the United States is included among the targets of a socialist change, if you like.

So it seems to me important to talk about this. But to do so in a way you may not have had the opportunity to hear before. Namely the relationship between socialism, on the one hand, and the whole idea and movement for worker coops on the other.

Those two topics are very closely connected, and I want to spend today explaining how and why that connection exists and is important. We can begin this way. Socialism, like everything else in the world, changes. Socialism 200 years ago is not what it was then, something different from what it is now.

And that’s true for socialism 50 years ago compared to today. And that’s not just true of socialism of course. It’s true of capitalism and indeed of virtually anything you can think about. But socialism having been a taboo in this country for 75 years until recently, people are not aware of the changes that have gone on in socialism, at least Americans are particularly unaware through no fault of their own. It has been a kind of agreement by the academic circles in this country, by the mass media, and by the political leadership not to talk about it, to act as if it either doesn’t exist or it’s some awful bad thing far away.

We now know better, I don’t need to explain that part to you, but I do want to talk about a fundamental change in socialism that will help us situate its relationship to worker coops.

In the 19th and 20th century as socialism emerged and became a global movement—lots of different parts—but a global movement. It basically had to do with the following idea that capitalism was fundamentally unfair, produced a small number of people with all the wealth and power, and the vast number of people who had very little of either, and that this situation was intolerable and needed to be changed. That situation was called capitalism and the change that was needed was called socialism.

And here’s how socialist understood what they were doing. The solution to the unfairness, the inequality of capitalism, they said, had to do with ending this situation that the means of production—the land, the factories, the tools, the buildings, the equipment, the cash—was concentrated in a very few hands.

A few of our fellow citizens had those things, most of us didn’t and as a result the economy served to the few who had, the political system served to the few who had, and deprived the many who didn’t. And that socialism would fix that. And it would fix it in two ways. Number one, it would take the means of production, stop them being the private property of a few and make it the shared collective property of everybody. And the agency that would get that done was the government.

The mass of people using universal suffrage, their right to vote, would vote in governments who would take the means of production away from the private owners, make them the shared property of everybody—the people who had been workers—but also the people who had been employers—capitalists, if you like.

Take it away from them, make it everybody’s and that way make sure that the economy was good for everybody, served everybody, the gap between rich and poor would be dramatically narrowed, the injustices that go with that would be reduced. And they took it one step further. To make sure things were less unequal and less unfair the distribution of what we produced as a society would be planed, would be made to be fair and not left to the market, which is an institution that favors those who have the money to spend and militates against those who don’t.

So public ownership of the means of production and government planning would substitute for private enterprise and markets that’s what socialism advocated.

And let’s be fair to that socialism. It spread like wildfire from the first formulations of these ideas at the beginning of the 19th century, it’s spread across that century all over Europe, North America and beyond. And in the 20th century it spread to every other corner of the world. Today there is no country that doesn’t have socialist parties or socialist magazines or socialist schools and so forth and so on. It’s a global movement. It is understood in different ways in different parts of the world, but it has spread in such a way that you have to acknowledge there must be something about it that effects an awful lot of people in a positive way. There’s no other way to explain its growth. Okay.

Has that socialism that was so successful that took the forms I just announced? Did it also run itself into some difficulties the kinds of difficulties that might mean that socialist would change what they understood all wanted from socialism? And the basic answer to that question is yes. Socialism hit all kinds of bumps and those bumps have led the socialists (both themselves but even their critics) to change the ideas a little bit and I want to focus on that.

First problem. If you change who the employer is—instead of a private capitalist, it becomes a state official—it turns out that you’re not changing a good part of what the problem is. Or to say the same thing a different way, the socialist criticism of capitalism has to go far beyond changing who the capitalist is. Because it really means if you understand the idea, that nobody should be the capitalist. It isn’t that we should exchange this employer for that one. It’s that we shouldn’t have the gap between employers and employees.

The way socialists discovered this was simple. When they took the means of production say in Russia or China or many of the other societies it tried this, when they took the property away from the private and gave it to the state—socialized it or nationalized it—they discovered that the state as an employer could be as burdensome on the mass of people as the private ones had been.

In other words, the means—the idea that the state was the means—to go beyond capitalism might have value, but not the state as the end of the process because that just simply changes who is in the position of capitalist, who controls all the decisions, who keeps the well for themselves. State officials are not a preferable minority to private capitalists.

Then socialist thinking about this took another step. There’s a certain irony they said the capitalists who denounce the state for being a dictatorship of a relatively small bureaucracy, ripping off the society are in a kind of way the kettle calling the fire black. The kettle blaming something else that looks a lot like a kettle. What do I mean?

Inside a corporation, which is the major way capitalism functions today, a tiny group of people—the major shareholders and the board of directors that they select—make all the decisions, have all the power. Not only do they decide what the enterprise produces and how it does so, what is done with the profits that everybody helped to produce, this tiny group of people has additional power. It can say that any worker: “You’re fired. You’re out of here” depriving a worker of a job and of income, which is a power even the government doesn’t have. Wow!

So who are these people who run the dictatorship inside every corporation, denouncing government bureaucrats who are basically doing something rather similar?

So socialist began to recognize that the notion of changing who the employer is simply isn’t enough. Likewise, if the distribution is done by a government planner rather than by the market—yes, you no longer have the market which favors the rich—but it’s possible that the government given the power to control distribution might also serve itself at the expense of society.

Socialist thinking about these topics have changed socialism. They don’t mean what they once did. And that’s really important because they’ve come more and more to focus on this idea. In the past we socialists thought that by capturing the state—hopefully peacefully through using the ballot, but if not, in a revolutionary way, in either way grabbing the state—we could use the state to go from capitalism to something in the future called socialism, where we would be free and we would be equal and there wouldn’t be employers and employees.

What has actually happened is that the ends kind of fell away and the means took over. We went the first step, the socialist way—we grabbed the state by revolution in one country, by votes in another country—but either way when we gave all that power to the state it didn’t go with the next step.

Something was missing and we ended up with very strong states being the employer in place of the privates. Something was wrong. And the answer that socialists came to was we changed the top of society, we changed who owns the means of production, we changed from market to planning, but you know what we never changed, the socialists figured out—we never changed the workplace. The place, where people who are adults spend most of their lives, five out of seven days, the best hours of the day are in the workplace.

And that was left pretty much unchanged. It was still a small group of people who ran the business telling everybody else, the vast majority, what to do, how to do it, where to do it, when to do it and deciding what to do with the fruits of the brain work and muscle work of all those workers.

And that was a problem. We hadn’t, the socialists admitted, we hadn’t transformed the workplace. And if you don’t, that unchanged workplace will undo the changes you were able to achieve in the realm of property or the realm of markets versus planning.

Socialism changed as it became more important to recognize and focus on transforming the workplace than it had been before.

Priority has come to be given to the unfinished task of socialism to transform the workplace. And I’m going to argue in the second half of today’s show that that transformation involves leaving the realm of the capitalist workplace with those few people at the top: the owner, the capitalist, the employer, the board of directors—one of you call them—making all the decisions, having all the power and grabbing most of the wealth for themselves, to get rid of that you have to make the workplace democratic.

Everybody who works there has an equal voice and not only do they all decide these questions, but they have to do it in coordination with the customers they serve and the communities where they function. So that all the stakeholders have equal shares of making the big decisions.

The democracy of the workplace is the unfinished business of socialism and has become the focus of what socialism will mean in the 21st century which is quite different from what it meant in the 19th and the 20th.

We’ll look back on those centuries as the time when socialism became global and will look on the 21st century as the time when it changed itself into a different movement with a different set of goals.

Stay with me. We’ve come to the end of the first half. Come back and we will show how worker coops solve this problem.

Welcome back friends to the second half of today’s Economic Update devoted to how socialism is changing from the original focus on the state—the state ownership of means of production and planning—over to a focus on revolutionizing the workplace.

But before I jump back in, I want to remind you please to subscribe to our YouTube channel. It is an enormous source of support and help to us and simply requires a click on the bell for you at that website to follow us. I want to remind you as well to make use of our websites democracyatwork.info and rdwolff.com. Both of those websites allow you to follow us on Facebook, Twitter, and Instagram and likewise to communicate directly to us with thoughts questions comments and criticisms. We read them all. And finally, I want to thank a special thanks to our Patreon community whose continuing support and encouragement and in some cases genuine shared excitement is an enormous help to all of us and much, much appreciated.

Okay. I want to talk now about worker coops and explain why socialism is coming to focus and embrace that concept as the new form the socialism of the 21st century.

First, I want to take a step into the realm of politics. You know some centuries ago we got rid of dictatorships in our political life or at least we try to. We said we don’t want kings anymore. We don’t want a family or an individual to have some kind of total power over all of us without being accountable. The king [had] has to follow up to kingly rule that his son would be the king or if there wasn’t a son his daughter it would be the queen. In other words, it had nothing to do with us, it was some kind of process that was under their control. They not only controlled us now, they controlled us into the future. Human beings across the world either got rid of the king, that was the majority decision, or sometimes reduced the king to a kind of figure head, to a ceremonial event. You can see that in the Netherlands, you can see that in England, we still have kings, but they have no real power, the power has become democratized. At least to the extent that the people governing us are subject to our voting them in or out of power and in that way there’s some—sure not enough—but there’s some accountability.

We never did that in the workplace. We never did the same thing in the workplace. What do I mean? In the workplace we allow a tiny group of people—the major shareholders who own the bulk of the shares, and let’s remember in most companies that’s a tiny number of people—to elect the board of directors, usually 15 individuals or so, and they make all the decisions and they are not accountable to the workers. Workers are the vast majority in every workplace.

Just like the majority of people in every community of your average residence. But that tiny number of residents if they occupy the position of president or senator or mayor are elected by the people over whom they rule. But the people who rule us in the workplace are not elected by us. We have no power over them. They are unaccountable. We have left in a capitalist world, we have left the absence of democracy in the workplace that we wouldn’t tolerate in our communities with our politics.

We got rid of the kings in politics, but we give them a regular coronation inside of the workplace where we allow them to function that way unaccountable. And socialism as the critique of capitalism has to be at the forefront of saying “No, no, no, no, no, no, no. If democracy is good for us politically, it’s, if anything, more important for us economically. If we want democracy where we live and reside and raise our families, why in the world did we ever allow it not to be the rule the government of our workplaces?”

Well, some people say: “How could that work? You can’t have some people making the decision, you can’t have everybody, some people have that normal…” Stop. Is everybody equal in the communities where we live? No. Equality of everybody was never a condition of democracy. The commitment to democracy was a commitment to a way of interacting among people who are of course different.

And the workplace is the same. Are some people skilled in some things? Yes. But let me remind everyone. A) Every person has both genius and idiocy in varying combinations. You’re good at this, I’m good at the next thing. You’re not very good at that, I’m not very good at the next thing. Let’s be careful here.

The way we relate to one another on the workplace, like the way we relate to one another in the community, has got to be built on a recognition of our differences, a recognition of our inequalities, and the respect for that in all of us. We want to be respected, even though there are areas where we are not very good at, and that can be demanded of us as well.

The democratization of the workplace achieves that. Do we want someone to have a lot of skill? Absolutely. A brain surgeon is the one we want to help us with a brain problem, a skilled pianist is the person we want playing the concert. Do we respect their differences? Yes. Does that require that because they have this or that skill this or that education, they have the right there for to dominate us? Not at all, doesn’t follow.

You know, if the skilled surgeon has all the power and domination—and though some of you work in hospitals will know exactly what I’m talking about—they will make decisions that they’re not competent on. Decisions about how you care for human being require a lot more than the surgeon. They require the nurse, they require the aide who can make all the difference—physically, mentally—to anyone’s going through an illness. If you ever had that problem, you’ll know that.

And if you want all the people to be part of caring for you, not just a specialist in this or that detail, you need a different work situation. You need a democracy of the decision making, so all the different people with their specialties of how to care for you, effectively can have a voice.

Worker coop revolutionizes the workplace. It recognizes the different skills we bring. It recognizes our individuality, which is not recognized in a capitalist workplace as most of you know. Because it institutionalizes it. The respect for our different skills and the commitment to have us all participate, makes the total work that we do—both the skilled in the unskilled—very different and equally important which is what they should be.

Don’t let the excuse of some difference in this or that detail be the basis for an inequality of power, respect, and standing. Let’s remember how that has been misused in the past. Sometimes people thought they ought to be masters and other people ought to be slaves because of a difference in this case skin color, which, if you think about it, ought to explain anything and doesn’t.

If you study slavery, you’ll know it existed as often among people with the same skin color as it did with people who had different skin color. The using the skin color was an excuse, a way to make it seem reasonable that some people had all the power and others didn’t.

Some of you have seen that with folks who have an education. They went to school for more years than the next person. Okay, that’s interesting. That may have given you some extra skill, that should be respected. But that you should dominate other people because of the eight million factors that led to you being able to finish your education and the next person not? Oh, no. That’s not necessary. That’s not justified. None of it.

Let me turn to another question of worker coops. Does everybody get paid the same? That’s part of what a democratic worker coop will have to determine. I did decide to say, well, you spent more money and time developing a skill, we’re going to give you all some of that money back because it’s good for us that you have that skill, so will pay you a bit more than we pay other people. Perfectly okay, just a question of working that out.

Here’s another thing. You have 2 children that you’re maintaining, you have 4 children that you’re maintaining. Okay, maybe we’ll adjust pay a little bit to take that into account. You live far farther away from the job than she does. Okay, will take… In other words, you think about all the variables and you think about having everybody understand how and why they’re getting paid individually what they are. That’s what a worker coop would do. That’s what a socialized or socialist workplace would be around.

And guess what, if we were all together democratically work out the distribution of income and wealth, we will not need to have huge divisive fights amongst us after we distribute and, as the cry goes up, we want a redistribution of wealth because too many people have very little and too few have very much.

So that those with the little want to take from the rich, and then we fight, and we bitterly contest. We divide and destroy our community. If we hadn’t distributed it unequally, in the first place, if we hadn’t excluded people from the participation in deciding who gets what—so we understand the rationale for why somebody will get a bit more than the next person—if we all participated in that we won’t have to fight about redistribution. We will understand and have had our equal say in making those decisions.

Yes, going from what we have now to a socialist workplace, a socialist workplace of equal voices of all working people, will take some time and will take some adjusting. It’s like the difference from people going from agriculture to industry, from the rural area to the urban area etc., etc. We’ve managed those transitions in the past there’s no reason to believe we can’t manage them in the future.

And here’s a final thought about socialism that gives priority to their revolutionizing of the workplace, making it a democratic equal decision. Going that way gives socialism an enormous political advantage. Here is that advantage.

For the first hundred and fifty years of socialism, when it focused on the state, state taking over the means of production and state planning replacing markets, in all that time the enemies of socialism—the people who want capitalism to stay, who want the inequality because they’re sitting at the top—those people developed a vast army of arguments against, propaganda against, denunciations of powerful state. And socialism is the powerful state that’s going to take over.

They’re not ready for these enemies of socialism. They’re not ready for socialism that doesn’t celebrate the state, that actually celebrates something completely different, much closer to everybody—the workplace and making it a more equal, a more democratic institution, which is something the vast majority of workers will and do already love and want.

That gives us an enormous advantage. Their arguments have been developed against this. This is a way to advance the concept often the attractions of socialism which is another reason. Excuse me, why socialists are going in that way and in that direction?

Socialism is changing. That shouldn’t frighten anybody. It shouldn’t upset anybody. It’s normal. Change happens to everything. And the critique of capitalism, which is more and more on people’s minds, and they’re searching for a kind of socialism that can be a popular successful movement, has now within its sights a way to do that by focusing on a new target, a new priority—whatever we say about the role of the state— revolutionizing the workplace makes sure that the people have control of the wealthy produce. And in the end, that will give them control over any state in a way that capitalists now have, but that a cooperative workplace will transfer to the mass of the average people.

Thank you very much for your attention. I hope this has been of interest and I look forward to speaking with you again next week.

 

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Showing 6 comments

  • Maria Carnemolla
    commented 2019-10-23 12:48:02 -0400
    Germany is China’s most important trading partner in Europe, China is Germany’s most important trading partner in Asia. In short, theye are each of major importance to the other and have maintained a much better relationship that either country has with the US since Trump especially. Evenbtually, however, as China’s steady and rapid advance shows, its role as a competitor of Germany may tempt German politicians to follow Trump into a more protectionist stance vis-a-vis China, unless a formula for mutual relations among old capitalists (US, Germany, UK etc.) and new ones (China, India, Brazil etc.) can be fashioned by other politicians.
  • Maria Carnemolla
    commented 2019-10-17 14:24:21 -0400
    Dear Arthur,

    Thank you for your comment. Prof. Wolff responds: “I am quite in agreement with Arthurs Pena’s views on what Marx wrote in the passage he quotes and in some others he might have also quoted had he more time. But I was talking about socialists, not Marx. As happens with all great breakthroughs in thought (Plato, Aristote, Aquinas, Marx, Freud, et al.), their followers focus on some arguments relative to others (for all sorts of conjunctural reasons). As circumstances (conjunctural reasons) shift and change, so too do the foci of followers on the different aspects, themes, arguments of the breakthrough they follow). My point now is to emphasize and underscore the parts of Marx that an earlier generation of socialists did not. Nor am I some sort of Monday morning quarterback here: the earlier generation of socialists with their focus on the state helped make socialism a global phenomenon introducing the people of the planet to many crucial ideas new to them. That socialism can now shift and has an audience for its shifts entails a respect for what went earlier as much as a determination to return to other neglected aspects of Marx’s contributions.”

    Stay tuned for a video response from Prof. Wolff on our YouTube channel.
  • Arthur Peña
    commented 2019-10-15 20:48:23 -0400
    I also find Prof Wolff’s emphasis on “equality” to be problematic. I think Marx’s views on that subject are better. After all, we are aiming for a society in which people’s varying “needs” are met by people’s varying “abilities”.

    As Marx observed:

    “Right by its very nature can consist only in the application of an equal standard; but unequal individuals (and they would not be different individuals if they were not unequal) are measurable by an equal standard only insofar as they are brought under an equal point of view, are taken from one definite side only, for instance, in the present case, are regarded only as workers and nothing else is seen in them, everything else being ignored. Further, one worker is married, another is not; one has more children than another, and so on and so forth. Thus with an equal performance of labor, and hence an equal share in the social consumption fund, one will receive more than another. To avoid all these defects, right instead of being equal would have to be unequal. But these defects are inevitable in the first phase of communist society”

    “equality” is not really possible. Yes, we may have to aim at it in some way, but let us not forget that it will, inevitably, be “defective”….and it is not at all what we are ultimately aiming at.
  • Arthur Peña
    commented 2019-10-15 20:40:39 -0400
    I find it odd that Prof. Wolff makes it sound like socialists “discovered” the problem with putting the State in the role of the employer. After all, Marx already was quite clear about that, decades before (“The role of worker is not abolished but is extended to all men…..The community is only a community of work and of equality of wages paid out by the communal capital, by the community as universal capitalist.”

    Eric Fromm explains (as he introduces Marx’s own words):

    “For Marx the aim of socialism was the emancipation of man, and the emancipation of man was the same as his self-realization in the process of productive relatedness and oneness with man and nature. The aim of socialism was the development of the individual personality.

    What Marx would have thought of a system such as Soviet communism he expressed very clearly in a statement of what he called “crude communism,” and which referred to certain communist ideas and practices of his time.

    This crude communism [WRITES MARX} "appears in a double form; the domination of material property looms so large that it aims to destroy everything which is incapable of being possessed by everyone as private property.

    It wishes to eliminate talent, etc., by force. Immediate physical possession seems to it the unique goal of life and existence.

    The role of worker is not abolished but is extended to all men.

    The relation of private property remains the relation of the community to the world of things.

    Finally, this tendency to oppose general private property to private property is expressed in an animal form; marriage (which is incontestably a form of exclusive private property) is contrasted with the community of women, 54 in which women become communal and common property. One may say that this idea of the community of women is the open secret of this entirely crude and unreflective communism. Just as women are to pass from marriage to universal prostitution, so the whole world of wealth (i.e., the objective being of man) is to pass to the relation of universal prostitution with the community.

    This communism, which negates the personality of man in every sphere, is only the logical expression of private property, which is this negation. Universal envy setting itself up as a power is only a camouflaged form of cupidity which reestablishes itself and satisfies itself in a different way. The thoughts of every individual private property are at least directed against any wealthier private property, in the form of envy and the desire to reduce everything to a common level; so that this envy and levelling in fact constitute the essence of competition. Crude communism is only the culmination of such envy and levelling-down on the basis of a preconceived minimum.

    How little this abolition of private property represents a genuine appropriation is shown by the abstract negation of the whole world of culture and civilization, and the regression to the unnatural simplicity of the poor and wantless individual who has not only not surpassed private property but has not yet even attained to it.

    The community is only a community of work and of equality of wages paid out by the communal capital, by the community as universal capitalist. The two sides of the relation are raised to a supposed universality; labor as a condition in which everyone is placed, and capital as the acknowledged universality and power of the community."

    https://www.marxists.org/…/fromm/works/1961/man/ch04.htm
  • Arthur Peña
    commented 2019-10-15 20:28:06 -0400
    I find it odd that Prof. Wolff makes it sound like socialists “discovered” the problem with putting the State in the role of the employer. After all, Marx already was quite clear about that, decades before (“The role of worker is not abolished but is extended to all men…..The community is only a community of work and of equality of wages paid out by the communal capital, by the community as universal capitalist.”

    Eric Fromm explains (as he introduces Marx’s own words):

    “For Marx the aim of socialism was the emancipation of man, and the emancipation of man was the same as his self-realization in the process of productive relatedness and oneness with man and nature. The aim of socialism was the development of the individual personality.

    What Marx would have thought of a system such as Soviet communism he expressed very clearly in a statement of what he called “crude communism,” and which referred to certain communist ideas and practices of his time.

    This crude communism [WRITES MARX} "appears in a double form; the domination of material property looms so large that it aims to destroy everything which is incapable of being possessed by everyone as private property.

    It wishes to eliminate talent, etc., by force. Immediate physical possession seems to it the unique goal of life and existence.

    The role of worker is not abolished but is extended to all men.

    The relation of private property remains the relation of the community to the world of things.

    Finally, this tendency to oppose general private property to private property is expressed in an animal form; marriage (which is incontestably a form of exclusive private property) is contrasted with the community of women, 54 in which women become communal and common property. One may say that this idea of the community of women is the open secret of this entirely crude and unreflective communism. Just as women are to pass from marriage to universal prostitution, so the whole world of wealth (i.e., the objective being of man) is to pass to the relation of universal prostitution with the community.

    This communism, which negates the personality of man in every sphere, is only the logical expression of private property, which is this negation. Universal envy setting itself up as a power is only a camouflaged form of cupidity which reestablishes itself and satisfies itself in a different way. The thoughts of every individual private property are at least directed against any wealthier private property, in the form of envy and the desire to reduce everything to a common level; so that this envy and levelling in fact constitute the essence of competition. Crude communism is only the culmination of such envy and levelling-down on the basis of a preconceived minimum.

    How little this abolition of private property represents a genuine appropriation is shown by the abstract negation of the whole world of culture and civilization, and the regression to the unnatural simplicity of the poor and wantless individual who has not only not surpassed private property but has not yet even attained to it.

    The community is only a community of work and of equality of wages paid out by the communal capital, by the community as universal capitalist. The two sides of the relation are raised to a supposed universality; labor as a condition in which everyone is placed, and capital as the acknowledged universality and power of the community."

    https://www.marxists.org/…/fromm/works/1961/man/ch04.htm
  • Carole Oleniuk
    commented 2019-10-15 04:50:01 -0400
    Question: What are the economic relations between Germany and the People’s Republic of China?
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