Part 04: Equality, Democracy and National Independence

Submitted by Reddebrek on April 22, 2016

Chapter 11: Equality

Submitted by Reddebrek on April 22, 2016

The French revolution of 1789 – for Marx the most spectacular example of the bourgeois revolutions – was fought under the banner, “Liberty, Equality and Fraternity” (a device still borne on the coat of arms of the French Republic). The same themes echo through the nineteenth-century revolutions of national independence. But in the twentieth century there is a different slogan. Equality remains, but liberty and fraternity have been replaced by national independence and democracy. The terms have changed but some of the content persists – for example; “democracy” often means much the same today as “fraternity” meant to the French revolutionaries. If the “nation” is embodied in the State, then “national independence” secures the liberty of the State in relationship to other States.

However, none of these aims is achieved by a single act of national emancipation. National independence is not simply an abstraction, it requires a basis in economic power, and the capacity to defend national interests and frontiers. In short, “national independence” requires “economic development”. It is not a matter of a country choosing to develop; it is obliged to do so in so far as it wishes to sustain its national independence. The necessity flows from a world order dominated by competing capitalist States. This imposes the need for continuous armed preparedness, which in turn demands industrialization.

It was the growing sense of vulnerability in the Soviet Union, the fear of what was called “capitalist encirclement”, which drove the Russian leadership to undertake the first Five Year Plan, to lurch into the collectivization of agriculture, and to pursue blitzkrieg industrialization in the ensuing years, with all the toll of social deprivation involved. When, as early as 1931, there were calls for a slackening in the pace, Stalin replied: “No, comrades ... the pace must not be slackened. On the contrary, we must quicken it as much as is within our power and possibilities. We are fifty or one hundred years behind the advanced countries. We must make good this lag in ten years. Either we do it, or they will crush us.” [1]

The rivalries which dominate the world system exercise a compulsion over all the national participants. The compulsion is extreme for States that have started in the race late, are “economically backward’, and particularly so, the more dedicated they are to national independence. But if the quest for independence compels a nation to industrialize, industrialization, if successful, transforms the material basis of the national State, and so, all the components of social life. The aims of equality and democracy cannot but be affected. In the Soviet Union, the history of events since the first Five Year Plan illustrates some effects of this transformation.

(i) Equality

What for Marx is the cause of the inequality of incomes? In early capitalism, it is rooted in inequality in the production process, an unequal access to the means of production and the social division of labour. In the process of “primitive accumulation”, great inequalities in the return from work are required to sustain accumulation – capitalists in expanding sectors of production get higher profits than those in declining sectors; industrial profits are higher than the returns to agriculture; skilled workers receive more than unskilled; and so on. The differentials are supposed to distribute capital and labour so that accumulation is maximized. It is accumulation in conditions of material scarcity – scarcity of investable resources, of the educated and skilled – which sustains the main lines of inequality.

Marx contrasts this situation with that in advanced capitalism where accumulation is well established and skills are more abundant: society already has within its grasp the conquest of scarcity. Here inequality persists, because of the domination of a ruling class, using its social and political power to sustain a privileged position; the capitalists, once the precondition for social progress, have become now a “fetter on production”, a parasitic formation no longer required to maintain production. Resources are now available, skills spread throughout the labour force (or capable of easy acquisition) or rendered unnecessary by the refinement of technology: the foundations of scarcity that made capitalism objectively necessary have disappeared.

On Marx’s analysis, then, one would expect that in a backward economy, starting the process of rapid capital accumulation would increase the differences of income as the social division of labour was established. The gaps -between the controllers or owners of capital and those with nothing to sell but their labour, between the contradictions Mao identifies as the “Three Great Differences” (between town and country, mental and manual labour, managers and workers) – would all widen. A government which tried to prevent an increase in inequality at the same time as it pushed forward accumulation would be caught in a contradiction: either accumulation would be sacrificed to preventing inequality, or vice versa. Of course, it would be difficult to check which had occurred, for those controlling the means of production would conceal what was morally reprehensible, the increase in their returns; skilled workers, in demand because of the pace of industrialization, would change jobs to defeat controlled wages, or receive an expanding range of non-cash “perks” to make up their income to a higher level, and so on. Furthermore, to control incomes would require a massive bureaucracy, intervening in detail to prevent evasion and ensure an efficient distribution of capital and labour; but then the bureaucracy becomes a separate social formation, consuming an increasing share of the surplus and so defeating the whole purpose.

In the twentieth century, matters are complicated by the fact that technology is now so refined that industrial output can be increased more rapidly than the number of jobs. This produces in backward countries a common picture of “dualism” – a highly productive but tiny industrial workforce alongside a vast mass of low productivity workers in town and country, an ever more stark “division of labour”. It becomes possible to secure industrial power without a general social transformation. In such circumstances, differences within the industrial workforce become less important than the differences between the mass and the minority.

(ii) The Soviet Union

In Russia, we can see the effect on income differentials of the State undertaking rapid capital accumulation, beginning in the first Five Year Plan (1928-33). In 1917, the new régime laid down clear guidelines; the State should move towards equality of incomes so that “all citizens are transformed into salaried employees of the State, which consists of armed workers ... All that is required is that they should work equally – do their proper share of work-and get paid equally.” [2] So far as the State itself was concerned: “the salaries of all officials, who are to be elected and subject to recall at any time, (should) not exceed the average wage of a competent worker”. [3] A few months after the October revolution, the aim was reaffirmed as the “gradual equalization of all wages and salaries in all professions and categories”. [4]

The Bolsheviks recognized the problem. In conditions of material scarcity, war and civil war, “socialism” was out of the question. Scarce skills would have to be paid more, even if less than under the old régime. A Tsarist expert, it was said, received twenty times the average worker’s wage, but in the early years of the Soviet Union, an expert received no more than five times the average.

The retreat of the New Economic Policy – a partial revival of private capitalism and trade – produced more marked inequality, particularly between the now uncontrolled private sector and the public. But still, the absence of any sustained drive towards capital accumulation rendered the pressures controllable. The new unified seventeen grade scale of wages introduced in 1921-2 to cover the entire workforce envisaged a basic span between top and bottom of 1:3.5 (but some specialists could earn up to eight times the lowest paid worker). Party members were forbidden to receive salaries at the level awarded non-party specialists; the general rule up to the time of the first Plan was that party members could earn no more than the average wage of skilled workers (so that the two-thirds of directors of enterprises who were party members could legally earn no more than their leading workers). By March 1926, one study reports, the average wage for all workers was between fifty-eight and sixty-four chervonet roubles, and for factory directors who were also party members, 187.8 (a span of roughly 1:3.5), and non-party directors, 309.5 (a span of roughly 1:5). [5] Officially, the average annual income of manual workers was 465 pre-war roubles; the maximum salary permitted to specialists was 1,811 (a span of 1:4); some 114,000 people received this maximum salary, or 0.3 per cent of all earners. [6]

The impact of the first Plan and the continuing efforts to increase output transformed both the aims of the régime and actual differentials. Now equality of income became, not a key target, but a serious obstacle to what was called “building socialism”. Stalin attacked uravnilovka (“crude levelling”, an abusive term for egalitarianism) as “the peasant outlook, the psychology of equal division of all goods, the psychology of primitive peasant ‘communism’. Uravnilovka has nothing in common with Marxian socialism.” [7] Molotov went further and demanded that egalitarians be rooted out as class enemies: “Bolshevik policy demands a resolute struggle against egalitarians as accomplices of the class enemy, as hostile to socialism.” [8]

The restraints on income differences and on the earnings of party members were dropped, and the practice of publishing income figures – other than averages for all workers and employees – ended. However, fragmentary information still appeared, indicating that income differentials (as opposed to the distribution of owned wealth) now became even more extreme than in the private capitalist countries. In 1937, for example, plant engineers were said to be receiving 1,500 roubles per month, directors 2,000, skilled workers 200-300; the minimum wage for piece workers at that time was 110 roubles, and for time workers, 115. [9] Managers also had access to special bonuses for fulfilling or exceeding plan targets.

This distribution of income was only within the factory. For the social distribution, we must add, at one end, those employed outside the factory sectors (in services and in agriculture), at the other, the ranked hierarchies of the State. Again the information is fragmentary. For example, in 1938, it was announced that the President and vice- President of the Council of Union and the Council of Nationalities were to be paid salaries of 25,000 roubles per month each, and deputies of the Supreme Soviet, 1,000 roubles per month, with an additional 150 roubles per day when the Soviet was in session. [10] To take another example, during the Second World War, it was reported that privates in the Soviet army received ten roubles per month; lieutenants 1,000; and colonels, 2,400, a range of 1:240. By comparison, in the United States army, rates for the same ranks were $50, $150 and $333, or a span of about 1:6.7. [11]

These extreme differences were the result both of deliberate government policy and the process of rapid capital accumulation in conditions of national isolation to which that policy was a response. Once the process was basically achieved, the supply of educated and skilled manpower became relatively abundant; differentials began to narrow, just as they had done in the industrialized countries of the West. But the narrowing was obstructed by the politically privileged order. Nonetheless the wage reforms of 1956-60 acknowledged the narrowing process but endeavoured to restrict it to wages alone. In industry the variations now are not wide. One study of engineering, for example, shows the differential between average wage earnings and the salaries of technical and office staff between the early l930s and the 1960s as follows:
Technical staff Office staff
(average manual wage earnings: 1) [12]

1932 1:2.6 1:1.5
1945 1:2.3 1:1.0
1966 1:1.4 1:0.8

Another study gives the rate for skill grades as a ratio of the basic rate for different industries as follows: 1:3.75 (underground coal mining); 1:3.2 (ferrous ore mining); 1:3.2 (ferrous metallurgy); 1:2.85 (non-ferrous metals mining); 1:2.4 (cement); 1:2.3 (chemicals); 1:2.0 (construction); 1:2.0 (oil refining): 1:1.8 (food preparation). [13]

The figures tell us nothing about the variation between industries, between industry and agriculture, between workers and all other occupations. For example, unskilled Leningrad engineering workers in the late 1960s were said to receive an average monthly wage of 97.5 roubles; skilled workers up to 120; foremen 173. But a government minister received about 1,050 roubles per month, or nine times the average wage. Furthermore, the top income figures contain no allowance for extra provisions like cars, holidays, houses, special shops and schools, all of which widens the gap between workers and top government officials to possibly 1:25-30.

(iii) Policy In China

Unlike the Soviet Union, China had no introductory phase in which official policy was dedicated to the achievement of equality. Officially, the régime always adhered to Stalin’s proposition that egalitarianism is, in Chou En-lai’s words, “a type of petty bourgeois outlook which encourages backwardness and hinders progress. It has nothing in common with Marxism and a socialist system.” [14] On the other hand, in contrast to Stalin, the régime always expressed anxiety lest income differentials, particularly among workers, grew too wide; for example, in 1958, Mao argued that wage differentials were too wide and should be narrowed, although not eliminated. [15] Yet Mao also tolerated with equanimity – as we have seen – the high rewards given to capitalists, and when their properties were purchased or absorbed by the State, the continued payment to them of a rate of interest of five per cent on the capital.

In sum, this position has remained reasonably constant, although different elements have been stressed at different times. For example, we find Mao in 1964 arguing: “The system of high salaries for a small number of people should never be applied. The gap between the incomes of working personnel of the Party, the Government, the enterprises and the people’s communes, on the one hand, and the incomes of the mass of the people on the other, should be rationally and gradually narrowed and not widened.” [16] During the Cultural Revolution and afterwards, similar statements were regularly made by party leaders, although no one raised the question of changing the existing income structure. That structure, laid down in 1956, appeared to have been retained intact throughout all the different emphases of policy.

The approach to pay straddled a contradiction. On the one hand, capital accumulation in conditions of backwardness necessitated income differences – hence the opposition to egalitarianism. On the other, industrial jobs did not expand fast enough to make available to an increasing proportion of people some access to higher incomes. As a jesuit, the potential for resentment at the income results of accumulation could become extreme (unlike the situation in the Soviet Union in the 1930s). The government stressed three different aims (which were often confused with each other) – narrowing income differences, not permitting income differences to become more extreme, and not allowing income differences to be expressed in marked differences in living standards and life style. The third received most attention, the second slightly less, and the first, in practice (that is, the wage structure) the least.

The official justification for the policies was curiously un-Marxist. It was argued that a relatively high living standard was the basis for the foundation of a bourgeoisie, a constant threat despite the achievement of “socialism”. Thus, different levels of consumption are not the result of the existence of classes, they are the cause of the existence of classes. This turns Marx on his head.

However, in China, Marx and Lenin are cited in support of the case that permitting “bourgeois right” (the temporary expedient of paying people according to their work, made necessary in an immediate post- revolutionary situation) can of itself re-create capitalism. The moral and the economic seem to coincide: “If a Communist party member has no sober understanding of bourgeois right, and if he lets the concept of bourgeois right clog up his mind, thinks about narrow personal gains and losses, refuses to work half an hour more than the others or to receive less remuneration than the others, seeks fame, gain, enjoyment and privileges, and operates his own comfortable quarters.., he would mark time on the road of continued revolution.” [17] The basis for increasing consumption is not, then, related to the ordering of the production process, but to the psychology of the individual concerned. Curbing the tendency of the cadre to indulge his appetite does not take the form of control of his income (nor the rationing of all consumer goods) but strengthening his self-discipline. Higher incomes are associated with lower work efforts: “The kind of style of work that should be maintained and fostered is a major aspect of the struggle between the proletariat and the bourgeoisie.” [18] But if the proletarian is defined as no more than abstemious and hard-working, and the bourgeoisie as greedy /or lazy, nothing ties such terms to any objective social structure. I may be proletarian today, bourgeois tomorrow and proletarian the day afterwards; the “class struggle” comes to mean no more than the effort to prevent someone having phases of bourgeois tiredness between the times of proletarian hard work!

How does this conception of “bourgeois right” compare with Marx’s? For Marx, “abolition of the wages system” is “the revolutionary watchword”. [19] It is the most important mark of the post-revolutionary order, let alone of socialism. Workers now control production and the State, and have thus abolished the need to sell their labour as the sole means of material survival. However, all cannot immediately be paid equally since skills are still in short supply. Only over a longer period of time can the resistance of the old ruling class and the problems of immediate scarcity be overcome. Only then can the distinction between skilled and unskilled, between mental and manual labour, between town and country, finally be dissolved. It is material abundance – and what flows from this, high incomes for all – which dissolves the yoke of the social division of labour and “bourgeois right”, not an effort of will or a moral striving for abstemiousness, or government edict. Marx puts it in this form: “In a higher phase of Communist society, after the enslaving subordination of individuals under the division of labour, and therefore also the antithesis between mental and physical labour, has vanished; after labour has become not merely a means to live but has become itself the primary necessity of life; after the productive forces have also increased with the all-round development of the individual, and all the springs of co-operative wealth flow more abundantly – only then can the narrow horizon of bourgeois right be fully left behind and society inscribe on its banners: From each according to his ability, to each according to his needs.” [20]

Is China on the threshold of such a situation? At the 1975 Fourth National People’s Congress, Chou En-lai set as the national aim the “comprehensive modernization of agriculture, industry, national defence and science and technology before the end of the century”. In Marx’s terms, this means, not the abolition of the existing division of labour, but its establishment: not the ending of “bourgeois right”, but on the contrary, its most rigorous enforcement. The level of consumption is very low, reflecting great material scarcity. If a moral campaign by the State can achieve what Marx called communism, then Marx and his materialism are nonsense; in which case, the concept of communism as he presented it is equally false.

Does the reality of income differentials in China demonstrate the absurdity of Marx’s materialism?

(iv) Income differentials in China

The basic income structure that governs China today was established in the late 1950s. The overwhelming majority of people – possibly 300-350 million earners – are governed by the wage point system in agriculture. The minority outside agriculture – some fifty to seventy million earners – can be divided into four groups:

1. Workers and staff in State administration, welfare and educational organizations, covered by a thirty grade pay system. In 1955-6, the rates (as opposed to earnings) were said to cover a range of 1:31 (and 1:19 in local government). This is said to have been reduced to a span of 1:20 (another estimate says 1:25.2) in 1958, but thereafter may have widened again to reach roughly the same span in 1972. [21] The PLA, whose pay structure is not known, ought also to be included in this category.

2. Technicians and technical staff governed by an eighteen to twenty-four grade pay system with a rate span said to be of 1:10 in the late 1950s.

3. Workers and staff in public sector economic undertakings (employing 100 workers or more), governed by an eight grade wage system, at various times said to span a range of rates, 1:2-3.

4. Workers and staff in enterprises with less than 100 workers, contract and temporary workers, rural non-agricultural workers etc. The size of this group is not clear, but its pay seems to be the same as in agriculture, on a work-point basis rather than a grading system.

Having several overlapping scales makes it difficult to assess the overall span of incomes. The individual Chinese tends to assess income differentials solely in his workplace, rather than on a national scale. Furthermore, the government publishes no estimates of the numbers in each group or grade, so it becomes impossible to compare income inequality in China with that in other countries. Nonetheless, let us examine the fragmentary information on each of the five groups:

1. The State administration. The thirty grade pay structure had, in 1975, a top rate of RMB 400 which, according to Teng Hsiao-p’ing, was being received by some 100 people in the whole of China. The figure is misleading, for it includes no estimate of other privileges attached to high office. For example, Red Guard newspapers in January 1968 alleged that senior ministers received special allowances of up to fifty per cent of their pay for working away from home; there is no evidence that this practice has been discontinued. It is also misleading because it does not include all the top earners of China. Thus, in 1975, Tan Fu-ying, head of the Peking Opera troupe in Shanghai, and Chou Hsin-kao, one of the principal singers, were reported to have volunteered to cut their monthly salary from RMB 1,000 to RMB 300. [22] How many people, receiving incomes above RMB 400 in China, did not volunteer for a cut is not known. Nor is it clear whether interest payments to capitalists are still made; this produced enormous incomes in the early 1960s (the end of such payments is assumed, but has not been officially announced). Presumably, the cumulative wealth of the capitalists was disposed of in some way, whether by buying State bonds or financing petty activities, and now produces an income outside the grading system. Writers presumably also continue to draw royalties on their works; Red Guard publications documented some of these payments, one of which brought an income of RMB 200,000 to the novelist, Pa Chin. [23] Foreign specialists employed by the government of China were said, in 1972, to receive incomes between RMB 300 and 800. [24]

Below the RMB 400 mark, there are a scatter of incomes, accruing to high State officials: for example, the Chief Astronomer of the Nanking Observatory is said to receive RMB 330 per month. Older professors in the universities are said to get between RMB 300 and 360, as opposed to the starting rate for university teachers which is close to the average industrial wage, RMB 50-60, a range of 1:6 which is wider than the official salary scales in, for example, British universities (roughly 1 :4). [25] Particular ministers may get higher figures; a 1966 study reports a minister receiving nearly RMB 400; his bureau chiefs 200 to 250; divisional chiefs, 150 to 200; section chiefs 45; a span in this one ministry at the national level of roughly 1:10. [26] The editor of the People’s Daily is said to receive RMB 200, and ordinary journalists, RMB 80 (a span of 1:2.5).

Edgar Snow reported in the late 1960s that in the PLA “the present scale of pay ranges from US $2.50 per month for a private to US $ 192-236 for a full general”, a span of 1:77-94. [27] In the excitable climate of the Cultural Revolution, such enormous pay differentials must have provoked much resentment. However, Mao’s complaint was not against the differential itself, but against the resentful. “There are people instigating the soldiers to oppose their superiors”, he said in 1967, “and saying that while you are making only six yuan a month, the officers are making much more and enjoying the luxury of riding in cars.” [28] Perhaps the differentials were narrowed as a result of the Cultural Revolution, but they remain extreme if Snow’s figures are correct. Possibly such resentments lay behind the 1965 abolition of marks of rank in the PLA; rank itself was not abolished, but expressed in new forms (the number of pens in the top pocket or the number of pockets has been mentioned) and through social privileges (for example, gaberdine rather than cotton uniforms; first-class travel on the railways, air or car travel, as opposed to the hard class’ on trains, or truck and bicycle transport). Mao showed no concern with income differentials in the PLA, only with the need to have a common style regardless of income. A national newspaper expressed it in 1975: “The officers and soldiers are all equal politically. They only differ in the division of work and official duties, and there is no distinction between high and low.” [29] This is as disingenuous as the phrase “all equal before the law”, or its ancestor, “all equal in the eyes of God”.

The additional privileges of upper income groups are not included in the income figures, nor can they be easily quantified. They include the use of cars with chauffeurs, rail and air travel, servants, places in sanatoria, housing, access to special services and goods, banquets and so on. In the 1950s and 1960s, there were – as in Russia – special shops for high ranking cadres, denounced as “little treasure pagodas” by the Red Guards (whether or not they have been ended is unclear). Housing is an important index of status for these holding high rank. The 1966 report on a Peking ministry mentions that about sixty per cent of the staff lived in State-run housing; the minister and his vice-ministers received individual houses; the assistants to the minister and bureau chiefs lived in apartments in a special modern block; and the rest of the staff in three dormitory blocks. Party members appeared to be consistently favoured in the allocation. In the PLA, senior officers have similar access to special services – for example, special military hospitals.

With such differentials, the children of the high ranking are inevitably favoured. After the Cultural Revolution, the press continued to complain that senior cadres used their influence to ensure their children gained access to university, avoided manual labour, and received the best jobs after graduation. [30] As we have seen, in 1971 Lin Piao’s son had the remarkable distinction of being a senior officer in the Air Force at \the age of twenty-four. In 1973, the press reported a scandal when a son refused to allow his father, a Long March veteran and senior PLA officer, to get him transferred from a rural area to enter university. The press cannot tell us of the cases where sons or daughters did not refuse such parental assistance.

Lower down the hierarchy, the administrative grade system becomes more complicated, with some eleven regional variations (with a forty per cent range between them) and graded living expense subsidies. Before the Cultural Revolution, the maximum addition to the basic pay was ninety-three to ninety-seven per cent. A grade I driver in Mangya, Tsaidam Basin, received RMB 196 per month, and in Shansi, RMB 70. [31]

Although the overall picture is not clear, the differences in official incomes appear so marked (even if their effect is curbed by the rationing system, shortages and the stigma attached to conspicuous consumption) that a few voluntary pay cuts do not affect the situation. In the absence of a new wage and salary structure on one scale, published so that all the people of China can see it, one must assume that the basic structure of 1956 has remained intact.

2. Technicians and engineers are on a national scale that covers a wide variety of plants and enterprises. Visitors to Chinese factories since the Cultural Revolution report a range between a maximum comparable to the administrative top grade, and a minimum below the average industrial wage (RMB 50-60). Meisner reported from one plant a range between RMB 230 and RMB 34, or a span of 1 :6-7. [32] Other reports confirm top rates of between RMB 200 and RMB 250. Little seems to have happened to the structure since before the Cultural Revolution. However, in 1977 it was reported that senior technicians were to receive pay increases from 1 October (whether achieved by an increase in the pay received in a particular grade or promotion between grades was not clear).

3. Industrial workers have a narrower span of wage grades than the two preceding groups, include more people, and are markedly in advance of the rest of the working class and much of the rural population. The span depends upon the skills involved and the priority attached to the plant and industry concerned. The average wage is RMB 50 to 60, and the span covers a range of 1:3, or RMB 36 to 108. Dockers’ wages in Shanghai average RMB 70. [33] Apprentices do not figure on this wage scale. In some factories they receive RMB 18-20; in another in Peking, RMB 30.

In 1977, the government announced pay increases affecting some forty-six per cent of workers employed in the organized sector of industry. This was achieved, not by changing the grading structure, but by the promotion of workers in the two bottom grades to higher grades, the average increase being between RMB 7 and 18. Other workers also received increases, although no workers paid over RMB 100 were affected. The change excluded apprentices, workers in agriculture and workers paid on a work point system. At the time of writing, economists – stimulated by Hua’s statement at the 11th Party Congress that wages should be linked to productivity – are debating the best form for productivity bonuses.

In the past, industrial workers have also received incentive bonuses and overtime pay, as well as welfare benefits, housing, recreation facilities, and pensions (financed out of the wage fund).

4. Other non-agricultural employment. There is a vast range of labour outside the grading system, from petty services and handicrafts to small-scale factories. There seems to be a trend towards expanding this sector at the expense of modern “organized” industry, but there is little evidence of the numbers involved. From the reports of visitors to a small selection of plants – presumably among the very best, since otherwise foreigners would be unlikely to receive permission to inspect them – it appears pay levels are strictly related to output, and are roughly half the average in the modern sector (or RMB 20-30 per month). Small-scale industry seems to draw heavily on the labour of housewives organized by neighbourhood committees. One visitor to the Yun Chun Lane Residents’ Committee in Shanghai found that unemployed women were organized in factory piece work, in work at home for outside buyers (a “putting-out” system) or in small neighbourhood workshops. They were paid RMB 26 per month, or slightly less than an apprentice in the organized sector, a level of pay which would be tolerable only in a household where there were other earners. [34]

5. The majority of the Chinese labour force is not paid on a grading system at all, but in relationship to the collective profits made annually by an agricultural team or brigade after meeting certain set obligations (taxes, accumulation and welfare fund costs). This income may be supplemented by “sideline” activities (handicrafts, peddling, petty trade, cobbling, cutting grass for heating and fodder, as well as small industrial enterprises); by the sale of private agricultural output (including the raising of livestock); and remittances from household members working elsewhere (in the city or abroad, important for Kwantung villagers). The picture is therefore extremely varied – between brigades or teams working in intensive farming, horticulture or export crops, in well-watered fertile areas on the outskirts of a big city (with a large market), with outside work easily available for some family members or for cultivators in the off season; and villages in the barren hill areas, remote from the cities, with little trade and no important local markets. The range is between incomes well above those received by the mass of the city population and pay on the verge of, or below, subsistence level.

The majority of Chinese cultivators receive incomes well below the average for the cities, and this makes for the sizeable gap between town and country. There are no recent figures available on the size of the gap, but in the 1950s estimates were made of the difference in real consumption per head in comparison with the 1930s:

Workers and employees Peasants Peasants as percentage of
(RMB) (RMB) workers and employees [35]
1936 130 61 46.9
1956 179.6 81 45.1

The figures show a surprising stability. However, the “workers and employees” figure is raised by the high income of top urban wage earners; otherwise the gap between the mass of the urban and rural population would be less extreme. In the 1950s, the ratio was about 1:2. In terms of official income (as opposed to consumption; it costs less to live in rural areas), the gap between the average permanent employed worker in the city and the agricultural worker is wider – in 1960, RMB 560 as opposed to RMB 140 (or 1:4). [36] For rough comparison, the ratio between all city incomes and the rural average in two Latin American countries in the 1960s was: 1:2.5 in Venezuela, and 1:2.3 in Mexico. [37]

The figures are misleading because the variation in rural incomes is great. For example, the Westlake Commune, growing tea near Hangchow, claimed that its top teams received average monthly earnings of RMB 86, which does not include the proceeds from private cultivation; while a Hopei Commune, reported by NCNA in 1972, claimed that its annual product per head was 99.45 yuan which, if the income of its members took all the product, would have produced monthly earnings of only RMB 8.3. [38] Without employing the entire rural labour force on a standard wage grading system which in the main ignored the enormous regional differences in productivity, there is little possibility of doing much about such differences. Such a task is beyond the resources of the Chinese State, whether this means the resources to meet the wage bill or the administrative structure to supervise it.

Numerous visitors over the past ten years have been able to visit communes, but inevitably it is a small selection. What are the differences noted? Burki in a 1964 study of thirteen communes estimated the variation in annual family incomes as covering a range from RMB 405 to RMB 1,392 (or RMB 34 to RMB 116 per month), and for individual workers, from RMB 166 to RMB 568 (or RMB 14 to RMB 48 per month). The variation in agricultural wages per month was between RMB 17 in a Chekiang commune and RMB 47.22 in an Inner Mongolian commune, with an average in monthly wages from collective agricultural work of RMB 30.1. [39] Buchanan in a study of eighteen communes two years later calculated the average agricultural pay per month as RMB 23.9. The incomes of the communes he visited varied over a range of 1:4; of the teams in the communes, by 1:2; and of the members of the team, by 1:3. [40]

To the income received from agricultural labour on public land must be added the income from “sideline” activities. Here the variation between households is extreme, depending upon the availability of a market. Burki estimates such work adds another twenty per cent to rural incomes; Deleyne argues that private agricultural activity adds on average fifteen per cent with a maximum of thirty per cent. [41] In sum, a reasonable guess would be that the span of rural incomes covers a range of about 1:12.

There is little guide as to the condition of the poor. Some things are cheaper in the countryside, and foodstuffs from private plots safeguard rural families to a greater degree than urban; the income figures perhaps thus exaggerate the gap. The Hopei commune claimed that its richest families consumed 305 kilograms of grain per head per year, and the poor, 207 kilograms, a figure well above the urban ration of 175 kilograms. Nonetheless, families in the commune presumably had to borrow to make up their food and clothing. There is no information on the extent of rural borrowing apart from the fact of occasional campaigns to recover outstanding debts. [42]

Other inequalities persist. Women apparently can earn no more than seven to eight points per day, no matter how hard they work, whereas men can reach nine to ten. This entrenches a “division of labour” that is not counted among Mao’s Three Great Differences. There seems to be more equality between men and women in urban areas but, as in so many countries, women tend to be concentrated in the low-paying jobs – down to the notorious example once raised in the Chinese press (and then forgotten), the old women night soil cleaners of Peking. The differential work point system is justified on the grounds that women are physically less strong than men, a stock rationalization in most societies, and one contradicted in China by the use of women in heavy manual occupations.

While the vast rural sector remains outside a standard national pay structure, any aspiration to greater income equality is clearly utopian. The government does not raise the question. Its concern at most is with the urban minority, and even then it is with preventing people expressing their different incomes in different consumption standards rather than changing the differentials themselves. Nevertheless, the differences are expressed – between the cadre with leather shoes and tailored clothes, living in an apartment with a private kitchen, bathroom and running water, and those with cloth shoes, crammed in dormitories; between the city technician with a steel bicycle, a radio, a fountain pen, smoking Red Lantern cigarettes, and the worker who owns none of these things and smokes “10,000 Li” cigarettes. [43] Prices are low, but incomes are very low. A visitor reports, for example, that in one factory, monthly wages ranged between RMB 36 and RMB 53; a twenty-five-year-old could expect to earn about RMB 40, of which RMB 6 would go on rent and electricity, the remainder being divided between food (two meals a day in the factory canteen cost RMB 10 a month), clothing and cigarettes; almost everyone smoked, and an average-priced packet of cigarettes would take more than a quarter of the monthly wage. [44]

In the countryside, some families can afford new and better housing, can spend open-handedly on festivals, weddings and durables (bicycles, watches, radios, sewing machines); they eat white rice at all meals and, quite often, meat; their sons are able to continue in education, and easily find brides. Yet other families do not earn enough work points to buy their grain ration, persistently fall into debt (which, over a year, can accumulate to several hundred yuan); they eat congee, not white rice and, in some villages, depend on public relief grain. [45] The policy of local “self-reliance”, meeting local needs from local resources, exaggerates such problems; the rich areas no doubt would be happy to be left alone to be “self-reliant” while devil take the poor.

Given the surprising degree of inequality evident in the official income figures, how is it that the general impression is of such relative equality? The secret lies partly in the stigma attached to conspicuous consumption, partly in the lack of typical Western signs of inequality and in the insensitivity of foreign visitors to the language of social status in China, but above all in the rationing system and the limited supply of goods available for purchase. Rationing imposes a certain equality of basic consumption – as it did in Russia in the 1930s and in Britain during the Second World War – and the limited supply of consumer durables resulting from the State’s concentration on heavy industry makes it difficult for the better-off to express higher incomes fully.

There are many other components in consumption which cannot be quantified. Services and housing – where available – are relatively cheap, and so raise the real value of urban incomes. But on the other hand, there is no income tax, and the State’s tax revenue comes entirqly from indirect taxation, particularly on consumer durables. The availability of services must be a continuing problem, despite the great improvements made since 1949. For example, the number of hospital beds has increased dramatically since that year and may now have reached one million – or roughly one bed to every 800-900 people, compared to average figures in Europe of one bed to every 46-180 people.

There are reports in recent years of a narrowing of differentials, of pay cuts at the top, and of a bunching of workers in the middle grades of the eight grade system. But, as should now be clear, such changes – even if there were firm and comprehensive information – would barely change the national picture of differentials, and might indeed only increase the gap between top pay and the middle wage grades, or between the elite and the mass of urban and rural poor. China has to go a long way to reach the degree of equality in the Russia of the New Economic Policy, let alone anything the 1917 Bolshevik leadership would have regarded as “socialism”. The overall picture is of great stability and considerable differences.


1. Speech to managers, February 1931, cited by Isaac Deutscher, Stalin, London (Penguin edition), 1966, p.328

2. Lenin, State and Revolution, SW7, p.92.

3. Lenin, Tasks of the Proletariat in the Present Revolution (“April Theses”), SW6, p.23.

4. Lenin, CW27 (Russian), p.132, cited Tony Cliff, Stalinist Russia, London, 1955, p.53.

5. S. Zagorsky, Wages and regulation of conditions of labour in the USSR, Geneva, 1930, pp. 176-8, cited ibid., p.55.

6. Statistical Handbook of the USSR, Moscow, 1926, cited ibid., p.56.

7. Cited by Z. M. Chernilovsky, History of State and Law, Moscow, 1949, cited ibid., p.56.

8. Cited by D. I. Chernomordik, The economic policies of the USSR, Moscow, 1936, p.240, cited ibid., p.56.

9. Cited Cliff, Stalinist Russia, op. cit., p.57.

10. Annual figures given in Stenographic Report, First Session, Supreme Soviet of the USSR, Moscow, 1948, pp.124, 205, cited ibid., p.60.

11. New York Times, 23 August 1943.

12. Extracted from Janet Chapman, Wage variations in Soviet industry: the impact of the 1956-60 wage reform, Santa Monica, 1970, p.26.

13. From figures supplied by Alastair McAuley, Essex University, cited by Malcolm Crawford, Pay: has Russia a better answer?, Sunday Times, London, 3 October 1976.

14. Report on the work of the government, First session, First National People’s Congress, 23 September 1954, Peking 1954, p.11.

15. Talks with directors of various co-operative areas, November-December 1958, in Miscellany I, p.134.

16. JMJP, 14 July 1964.

17. Kuang-ming JP, 22 April 1975, SCMP 75-22, 27-30 May 1975.

18. JMJP, 28 March 1975, SCMP 5846, 6 May 1975.

19. Value, Price and Profit, in SWI, p.337.

20. Critique of the Gotha Programme, in SWII, p.566.

21. Estimates by Howe, Wage patterns, op. cit., pp.40-41, for whom see official Chinese sources. Another estimate states a span of 1:28, cited from Chung-yang Ts’ai-cheng fakui hui-pen, in Collection of the 1956 Central Financial Regulations, Peking, 1957, pp.228-9, by M.K. Whyte, Inequality and Stratification in China, CQ 64, December 1975, p.684.

22. SWB 4949/BII/8 May 1975.

23. Cited by Whyte, op. cit., p.732.

24. Report, New York Times, 17 Mar. 1972, p.10.

25. Report of a visit, Jules Nadeau, Far Eastern Economic Review, 21 November 1975, p.47; see also Ross Terrill, 800,000: the Real China, Boston, 1972, pp.127, 130.

26. Reported by A. Doak Barnett, CQ 28, October-December 1966, p.8.

27. The other side of the river, op. cit., p.289.

28. July-September 1967, in Miscellany II, p.465.

29. Kuang-ming JP, 5 January 1975, SCMP 5771, 21 January 1975.

30. JMJP, 14 September 1973, and Hung-ch’i 4, 1974, pp.35-42.

31. Cited Hoffman, The Chinese Worker, op. cit., p.101 (for which, see Chinese sources).

32. Maurice Meisner, The Shenyang Transformer Factory, CQ 52, 1972, p.731.

33. Nadeau, op. cit.

34. William Shawcross, Far Eastern Economic Review, 12 December 1975, pp.30-31.

35. At 1952 prices: State Statistical Bureau, 1957; T’ien Lin, in Hsin-hua pan-yüeh-kán, 1957, p.158, cited Whyte, op. cit., p.686.

36. JMJP, 3 May 1962, cited Hoffman, Work incentives, op. cit., p.13.

37. Table 8, Income distribution in Latin America, United Nations (ECLA), New York, 1971, p.105.

38. Report Far Eastern Economic Review, 19 February 1973.

39. Table 11, Shahid Javed Burki, A Study of Chinese Communes, in Kuan-I Chen and Joginder S. Uppal, India and China, Studies in Comparative Development, New York, 1971, p.181. (Extract from A study of China’s Communes, 1965, Cambridge [Mass.], 1969, pp. 8-32.)

40. The Transformation of the Chinese Earth, London, 1970, p.136.

41. Deleyne, op. cit., p.73.

42. Document of the Central Committee, Chung-fa 1971, 82, translated in Studies on Chinese Communism, 6/6, September 1972.

43. The example comes from Nadeau, op. cit.

44. See letter from Shanghai, Far Eastern Economic Review, 18 March 1977, p.110.

45. The example comes from Whyte, op. cit.

Chapter 12: Democracy

Submitted by Reddebrek on April 22, 2016

The subject of “democracy” is more confused than any so far discussed. There are few régimes in the world which do not call themselves “democratic”, regardless of local institutions. As a result, it is tempting to make a clean sweep and argue that “democratic” means nothing of any importance. Yet to do that is to abandon what Marx saw as the essence of the struggle for socialism: freedom, the self-emancipation of the majority.

The Marxists indicted the form of “democracy” practised in the representative institutions of capitalism as parliamentarianism. Parliament was a “talking shop”, a decorative façade for the “dictatorship of the bourgeoisie”. Real power was exercised behind the scenes in the offices of the State and the boardrooms of great companies. Here, the decisions were made which determined the material conditions of the majority; they were not exposed to public debate, which was restricted to the superficial questions of what bourgeois democracy called “politics”.

The critique of parliament, however, was not a rejection of democracy itself Lenin wrote: “The way out of parliamentarianism is not, of course, the abolition of representative institutions and the electoral principle, but the conversion of the representative institutions from mere ‘talking shops’ into working bodies.” [46] For, Lenin continues: “We cannot imagine democracy, not even proletarian democracy, without representative institutions, but we can and must think of democracy without parliamentarianism.” [47] The task was two-fold: to fuse real power with the assembly so that it became an executive, so that the execution of policy was directly related to those who elected the members of the assembly; and to establish open elections to the assembly on a free debate of the real issues. Such a procedure would indeed be rejected both by the bourgeoisie and by those on the Left who believed socialism was incapable of winning majority support in an open contest and must therefore be imposed by a minority.

But what was the “real power” the assembly must direct?

(i) The State

The State is the instrument of power of a ruling class. Its existence, according to Engels, “is the admission that this society has become entangled in an insoluble contradiction with itself, that it is cleft into irreconcilable antagonism which it is powerless to dispel”.

How does it subordinate society? Through its legal monopoly of the use of physical power, what Lenin calls “armed bodies of men” – the army, the police, the secret police, the prisons, backed by the law and the courts. This is the ultimate line of defence of the ruling class and its answer to the “irreconcilable class antagonisms”.

Many socialists agreed with this argument in the late nineteenth century. One group then went on to propose that, where open elections and the right to form a government existed, socialists should contest in order to capture power within the existing institutions. Once in control of the “armed bodies of men”, they could be used to advance the purposes of the working class as easily as they had previously been used to defend the ruling class. Gradually, the balance of class power could be shifted by successive waves of reforms without open violence of civil war, because now the worken controlled the State’s army and police.

It would have been an excellent course of action if practicable. But it was absurd to suppose the State, constructed and designed to achieve one set of purposes, could be transformed into its opposite just by the addition of a group of different directors. The State was not a machine, depending for its direction on whoever sat in the driving seat. It was a set of men and women, themselves dedicated to the purposes for which the State had been created. Adding a few socialists to the existing State was not a method of changing its direction; it was a method by which the existing State colonized the socialists.

The only possibility of a real revolution came, not through endeavouring to redirect the existing State, but, in the words of Marx, Engels and Lenin, smashing it. It followed that, in the struggle for power, the socialists could not make themselves dependent upon the existing State for their power without entirely losing their purpose. They must base themselves upon the working class, keeping working-class institutions firmly independent of the existing State and rooted, not in the existing army and police, but in the workers’ control of production, control of the very surplus upon which the existing State depended.

That was not the end of the question. Destroying the old State machine did not destroy its social foundations, the bourgeoisie. They would endeavour to mobilize armed force to reconquer power. To prevent such a reconquest, the workers would need a new apparatus of State power, itself the product of the “irreconcilable class antagonisms”. On this question, Engels’ logic was implacable: “As before, the State is only a transitional institution which is used in the struggle, in the revolution, in order to hold down one’s adversaries by force. it is pure nonsense to speak of a free people’s State: so long as the proletariat needs the State, it does not need it in the interests of freedom but in order to hold down its adversaries, and as soon as it becomes possible to speak of freedom, the State as such ceases to exist.” [48]

But to create a new State, whether described as “workers” or not, would surely be to perpetutate the oppression that the revolution was supposedly designed to end? Would not the new State simply degenerate once more into a force oppressing the majority? Such a state of affairs could not be prevented if the State became independent of its social basis, the working class. The bourgeoisie had succeeded in keeping its State subordinate to its purposes. How could the working class achieve the same alignment of the State and its own interests?

Marx used the Paris Commune – in his view, the first historical example of the “dictatorship of the proletariat” – as the model for this relationship. Having suppressed the standing army of the old régime (the first decree of the Commune), workers’ militia became the armed forces defending the Commune; all officials in the militia were to be elected, and subject to recall by their electors; all workers were at some stage to participate in the militia. The Commune itself was composed of delegates, a majority of them working men and women, elected on universal suffrage, subject to recall and replacement by the electors at any time, and remunerated by pay no higher than that received by an ordinary worker (with no special or additional privileges). Furthermore, the officials of the Commune were also to be elected, subject,to recall and replacement by the electors, and to be supervised by the majority; all were expected in due course to serve as officials of the Commune. Finally, the Commune delegates were not elected to comment on policy (or such aspects of policy as the government was pleased to divulge to them), but to formulate and implement it, to be responsible’ directly for carrying out the wishes of the majority.

There was one necessary precondition for such a system to work. All the main items of Commune policy, practice and finance must be public, accessible to majority consideration and discussion. Otherwise, knowledge itself became the secret power of the bureaucracy, and the majority could no longer make a responsible decision on what its State should do. The exercise of power had to be dragged into the light of public discussion, so that the officials were distinguished solely by temporary task, not by knowledge, privilege or power.

Whatever else the Commune achieved, it laid down a set of criteria by which “democracy” can be judged in any country. Such a system offered the promise of something else, the dissolution of the State itself – as Lenin put it: “Democracy, introduced as fully and consistently as is generally conceivable, is transformed from bourgeois democracy into proletarian democracy; from the State [i.e. a special force for the suppression of a particular class] into something which is no longer really a State.” [49]

(ii) The Soviet Republic

The Bolsheviks refused to seize power until they had won a majority in the elected institutions of the working class, the Soviets. Their slogan was not, “Replace the Provisional Government” (that is, taking over the existing State machine), but “All power to the Soviets”. The Soviets already consisted of working men and women, elected and subject to recall, and around it there already existed workers’ militia, an alternative to the established army. Once in power, the new government laid it down that all army commanders were to be elected; all ranks, titles, decorations and special privileges in the officer corps were to be abolished.

The moment was brief. The tight hold of civil war closed in on the infant republic, threatening to strangle Moscow. The struggle of the new government to survive imposed a different logic. For example, too few men volunteered for the armed forces to fight the White armies; either the régime reconciled itself to defeat and destruction, or it had to introduce conscription. Again, there was a shortage of military experience and competence; the White armies left no time for the new worker soldiers to learn how to fight. With great reluctance, the new government began to recruit former Tsarist officers. But such recruits were not elected by the troops in their units; they had to be appointed from above, with a special commissar attached to watch their every move, lest, in the exercise of power, they betray the purpose of the revolution. Yet the régime did not pretend that this was “socialism”; it was a temporary expedient, made necessary only by the most urgent threat to the survival of Soviet power; a popular militia in which all participated remained the aim.

Given the backwardness of Russia and the failure of the revolution in industrialized Europe, the temporary slowly became the permanent, the “retreat” became rationalized as an advance. The spirit of the régime’s “armed bodies of men” changed, and whether the commanders were former workers or Tsarist officers, their minds were slowly reshaped to accord to their real social life, that of an elite. One old Bolshevik recalls: “They [the Red Army commanders] became members of the new officers’ group, and no agitation whatsoever, nor beautiful speeches about the necessity of contact with the masses, would be of any avail. The conditions of existence are stronger than kind wishes.” [50] The political cornmissars appointed to represent the supervision of the working class over the commanders in due course succumbed, and were colonized by the commanders. The real changes were faster than those in the symbols; distinctive and pretentious uniforms, medals, epaulettes, gold braid, the elaborate hierarchy of rank, these came later. By the Second World War, the process was fully accomplished; commanders now, far from being elected, were vested with virtually absolute power over the troops. Indeed, even friendliness between men and officers was frowned upon. As one general put it: “The hail-fellow-well-met spirit in the relationships between a commander and a subordinate can have no place in the Red Army. Discussion of any kind is absolutely prohibited among subordinates.” [51]

The transformation of the “armed bodies of men” was only one symptom of social change in Russia. It could not take place in isolation; the changes were impelled by factors which had similar effects on the most important index of democracy, the Soviets, the assemblies of worker, soldier and peasant delegates.

The congress of Soviets met five times in 1918 and, thereafter, once a year until 1922. The USSR was formally declared in 1923, and the Congress met in 1924 and 1925, then every two years up to 1931. By then it was already clear that all the major decisions of the government were taken independently of the sessions of the Soviet. The members were no longer subject to recall; nor were they bound to receive no more than the average pay of working men; nor did they implement policy. The Central Executive Committee, which was supposedly the “supreme organ of the Soviet Republic”, met for only about ten days a year, a period quite insufficient even to appraise government policy, let alone initiate it. After Stalin’s purges, its decisions were invariably unanimous. None of the major changes of policy were discussed before they were implemented, and usually the government’s budget was ratified only long after it had come into effect.

Whether through the Soviet or the party, it was impossible for the majority of the citizens of the Soviet Union to exercise power. The sheer information needed to decide the main issues of policy – investment, defence, welfare, wages – was not publicly available, even supposing the institutions to express majority opinion had existed. There was – and is today – no way of removing or changing the Russian leadership except through a purge or a coup, an operation which can only be carried out within the bureaucracy.

Such a system does not prevent the national leadership from criticizing its subordinates, indeed blaming them for actions which prompt more than usual popular resentment. Stalin often attacked “commandism”, “arrogance” by the cadres, bureaucratism, and occasionally purged large numbers of the party. His criticism was of a bad style of leadership, not of the structure of power. When he anathematized “bureaucracy” he was not attacking the State of which he stood at the apex. Nor was he attacking the central decisions that compelled the cadres to behave in the way they did.

The changes in the Soviet Union muddled the key concepts, just as the evolution of representative institutions in Western capitalist countries had done. Now “democracy” became, not the rule of the majority, but a government that, whatever its policy, “represented” the people. In practice, at best it consulted them. Criticism of the style of the officials of the State was substituted for the critique of the existence of the State itself The existence of “armed bodies of men” came to be not the expression of “irreconcilable class antagonisms” but the democratic’ instrument of – what for Marx and Lenin was a contradiction in terms – a “classless State” of the “People”.

(iii) The Chinese Communist leadership and democracy

The Chinese Communist party’s view of democracy was taken from the Russia of the 1930s. Democracy is a style of relationship between cadres and non-cadres, between party leaders and cadres, not the subordination of power to the majority. In this sense democracy’ is not directly about power at all.

Mao, for example, argues: “All leading members within the Party must promote democracy and let people speak out. What are the limits? One is that we must observe Party discipline, the minority must obey the majority, and the whole Party should obey the Centre.” [52] The majority here is ambiguous. In practice, it means the leadership’s decision, since there is no mechanism available to identify what the majority of party members want. In the PLA Mao also calls for democracy, and explains what he means: [the leadership] “must have a democratic style of work when something comes up, they must consult the comrades, give full deliberation to matters, and absolutely listen to the various views. Opposition views must be presented. Do not practise, ‘what I say counts’.” [53]

The same applies to the relationship between cadres and non-cadres: “An overwhelming majority of these people must be made to attend meetings and air their views. Only thus can opposition views be established, contradictions exposed, the truth uncovered and the movement unfolded.” [54] Of course, in the original conception of democracy, it did not depend upon the leadership “practising” it: majority control ensured that the leadership had no alternative.

At no stage has it been suggested that the officials of the State should be elected, subject to recall, paid no more than average wages. The bureaucracy of the Chinese State is appointed, works in secrecy, and is privileged by income and status. Mao objects not to the existence of such a bureaucracy, but to the style inevitably engendered by its monopoly of power: “The overlord style, the three bad styles of work, the five undesirable airs, and the contempt for the common labourer.” The theme recurred throughout the history of the People’s Republic. Yet at no stage did Mao propose the classical solution, manifested in the Paris Commune – elections. The most he offered was “consultation”, which in no way bound the leadership: “We consult the people, the workers, the peasants, the capitalists, the petty bourgeoisie and the democratic parties, on whatever we plan to do. You can call us the consulting government. We do not put on a stern face and lecture the people. We do not give anyone a stunning blow if his opinions are not sound.” [55] It was disingenuous, since those who received “stunning blows” were classified as “counter-revolutionaries”, not part of the “people”. For example, in the Hundred Flowers campaign, Mao recalled later: “After the events in Hungary, we allowed scattered free expression of opinion and tens of thousands of little Hungaries appeared ... over 400,000 rightists had to be purged.” [56]

Because Mao regarded the preservation of the State and its bureaucracy as an absolute priority he could not urge the building of an alternative basis of popular power with which to supervise the bureaucracy. For the Chairman, the aim was always: “We should get rid of the enemy. Rigid bureaucrats should be reformed into creative bureaucrats. If after a long time they can’t be creative then we should get rid of them.” [57] Leaders are required to change, not their objective position of superior power and income, but simply their subjective attitude – they must adopt an attitude of genuine equality towards the cadres and masses, and make people feel that relationships among men are truly equal ... No matter how high one’s position, one must appear among people as an ordinary worker. One must not assume airs; one must get rid of bureaucratism. [58]

As in the West, it is all a matter of projecting the right image. if democratic control actually existed, it would be unnecessary to deliver such homilies, for mass power would establish both equality of income (so that there would be no trouble about curbing conspicuous consumption) and a style of leadership appropriate to the task.

Mao has rarely shown any interest in establishing elections as a mechanism of control. Perhaps, in the heady days of 1966, he was persuaded to adopt the electoral principle, for clause 9 of his famous Sixteen Points did argue that “it is necessary to introduce a system of general elections like that of the Paris Commune, for electing members to the Cultural Revolution Committees and Groups and delegates to the Cultural Revolution Congresses”. Red Flag went further: “All leaders must be elected by the people; the elected must be servants of the people and be submitted to their supervision; the electors have the right to recall at any time.”

The moment was brief More characteristically, Mao says, “As far as I am concerned, election is merely a fancy word, and I do not feel that there is any genuine election.” [59] The press duly supports the Chairman in one of his characteristically misleading tags: “Blind faith in elections is also a form of conservative thinking.” [60] Indeed it is, but that is not an argument against having elections, any more than the critique of parliamentarianism is an argument against any form of democracy! That however is the conclusion Mao draws – for example, in his discussion with President Pompidou over the instability of government under the Fourth Republic: “Napoleon’s methods were best. He dissolved all the assemblies, and he himself chose the people to govern with.” [61] How can he praise the method of counter-revolution independently of its purpose?

The confusion of “participation” with “majority control” affects each issue. For example, on occasions Mao has espoused the decentralization of power. At other times, he cites an aphorism from Lenin: “Absolute centralization and the strictest discipline of the proletariat constitutes one of the fundamental conditions for victory over the bourgeoisie.” The contradiction is only resolved when we examine Mao’s definition of “decentralization”: “Concentrate important powers in one hand;/Diffuse less important ones.” [62]

The relationship between cadres and mass “is comparable to that between fish and water”. It is clearly absurd to suggest that the water should control, direct or supervise the fish. Its role is merely to supply a medium for the fish, to support the qualitatively different élite; no matter how hard the water tries, it can never become a fish. If any are so misguided as to try, they promptly become “rightists” and “counter-revolutionaries”. Indeed, the masses are dangerous in such circumstances – “Once the masses are aroused, they become blind” – and being blind, no longer supply that passive water which supports the fish, which swims in it to power. As always, embedded in the Populism is élitism.

But perhaps Mao’s conception of democracy is not borne out in practice? Perhaps the actual institutional structure of modern China goes much further than the Chairman was prepared to put into words. What is the record?

(iv) Democracy in China

When the Communist party came to power, as we have seen, it did not “smash” the old State, nor dissolve the Kuomintang’s “armed bodies of men” . The new government took over the existing State machine and absorbed the Kuomintang armies into the PLA. There were no workers or peasant delegate bodies which played other than a purely supporting role in the conquest of power. In most of China, the PLA administered without supervision.

However, four years after coming to power, the government set about creating some basis for its own legitimacy by setting up the National People’s Congress (NPC). So far as Mao was concerned, “the Soviet of the Soviet Union and the People’s Congress are both representative assemblies. Only in name are they different.” [63] In origin, however, the institutions were completely different. The NPC did not exist in 1949. It played no role as an independent power contesting with the Kuomintang government for national authority. It was invented by the new government under the electoral law of March 1953, and invested with no more than a puppet’s life. The Soviet had to be emasculated by the party leadership. No such problem arose in China.

The membership of the Congress was to be elected by a series of electoral colleges at different administrative levels, based finally upon the universal suffrage of all adults over eighteen. There was no provision for the recall of the elected (indeed, the system of intervening electoral colleges made it impossible to establish any relationship between a representative and a section of the voters), nor for them to be paid an average working man’s wage. The Congress was to be elected every four years, and to meet in annual session. One of its tasks was to elect the Head of State and his deputy, the Prime Minister and the State Council, the ministers of the government.

The first round of elections created some five million representatives at the lowest levels, who then proceeded to vote for 16,806 deputies to meet at the provincial and city level. These then elected 1,141 deputies to attend the first NPC, which was held between 15 and 28 September 1954. The Congress created a Standing Committee to meet twice a month when the Congress was not in session, to supervise the government, protect the constitution and decide on the sacking and appointment of ministers.

In practice, however, the first NPC did not meet annually; it met only twice (in 1954 and 1956). Elections were held for the Second NPC and it met six months behind the constitutional schedule, in April 1959. The second, like the first, managed only one other session (in 1960). However, the Third Congress was nearly two years late (meeting from 21 December 1964 to 4 January 1965), and was not preceded by any lower level elections. The number of deputies had been increased to about 3,000 (with 1,000 observers). So far as can be seen, the Third NPC had no subsequent sessions. The Fourth NPC did not meet for another eleven years. When it did meet, in January 1975, the 2,864 deputies were required to ratify, seven years after the event, the removal of the Head of State (Liu Shao-ch’i) and the Defence Minister (Lin Piao), and the decimation of much of the government. The Fifth NPC – scheduled for 1978 – was to be composed, according to Hua, of “outstanding people from various fields of work, and representative personages ... elected deputies ... through full discussion and democratic consultations”.

Since the NPC meets for a fortnight at most even when it is summoned, there is no question of it supervising the government or changing the leadership. Its position is, if possible, even more insignificant than that of the Supreme Soviet in Russia (which has, however, a slightly better record in meeting). The NPC is part of the decorative façade of the State; indeed, it is more an empty “talking shop” than those parliaments in Western countries criticized by Lenin. The major items of policy – the Korean War, the agrarian reform, the first Five Year Plan, the Great Leap Forward, the break with the Soviet Union, the Cultural Revolution, the détente with the United States, all took place without the participation of the NPC.

Perhaps the party Congress provides an alternative mechanism for popular control? Under the 1945 party constitution (passed at the Seventh Congress), the Congress was to meet annually, the delegates being elected by lower party congresses every five years. But the Eighth party Congress did not meet for eleven years, until 1956, and there was only one other session, in 1958. The Congress sessions lasted less than two weeks, so that it could scarcely do more than react, after the event, to a fraction of the work of its instrument, the Central Committee. The Eighth Congress ended its official term of life in 1961, but the Ninth Congress did not meet until 1969, again eleven years after its predecessor. At the Ninth Congress, it was acknowledged that the “delegates” were not elected by lower party congresses, but, in the euphemism of the text, “through democratic consultation”. The Ninth Congress had long been rumoured but, given the turmoil of the Cultural Revolution, apparently could not be called with a secure majority for the leadership. When General Hsueh Fu-chih, head of the Peking Municipal Revolutionary Committee, announced the Ninth Congress to the Red Guards in October 1968, he promised it would be reorganized from the top so that the party old guard would not dominate it, and that the “delegates” would be increased from 1,000 to 10,000. By the time of the Ninth Congress, however, the Red Guards had been defeated, and there was no need for such a concession.

The Ninth Congress was required to ratify the removal of the party Chairman’s deputy, Liu Shao-ch’i, the general secretary, Teng Hsiao-p’ing, and a majority of the Central Committee. It was also required to ratify a new second-in-command to Mao, Lin Piao, whose elevation had occurred two years earlier. It was only four years to the Tenth Congress (the first time a Congress had been held on time since 1945) and the removal of Lin Piao and his associates in August 1973.

The Congress had the official task of electing a Central Committee to represent the Congress between sessions. The Central Committee numbered about seventy-seven members and alternates in 1945, 170 in 1956 (twenty-five more alternates were added at the second session in 1958) and 279 in 1969. The Central Committee was required to meet at least twice per year under the 1956 constitution. In fact, it met only twelve times in the thirteen years (1956-69) between the Eighth and Ninth Congresses. Furthermore, its Eleventh Plenum (August 1966) permitted the attendance of an unknown number of unelected Red Guards, responsible to no one except the party Chairman. At the Twelfth Plenum in October 1968, when Liu Shao-ch’i was officially denounced, non-members are said to have been granted voting rights, thus disenfranchising the supposed electors, the delegates to the party Congress.

Power was no more vested in the party Congress than it was in the NPC. Nor was it located in the Central Committee. Central Committee membership, like membership of the Standing Committee of the NPC, was merely a high honour. It was the Political Bureau of the Central Committee which came closer to power. Within the Politburo, its Standing Committee was, at various times, the key institution. However, in the Cultural Revolution, even that was not enough, and an entirely new body, the Cultural Revolution Group, was created, without a semblance of democratic legitimacy, to transmit “Mao Tse-tung thought”. In the final analysis, only Mao himself represented the majority; what he thought was, by definition, the will of the majority, and no actual majority at any level of Chinese society was summoned to give a real verdict. In the unions, as we have seen, there was no mechanism for electing a representative leadership. On the revolutionary committees set up during the Cultural Revolution, “established”, as the party said, “not by elections but by relying upon action by the broad revolutionary masses”, mediated by the “leadership of the PLA” at all levels, there was similarly no method for even formulating, let alone expressing, a majority will. [64] All such bodies were “transmission belts”, not for the controlling power of the majority over the leadership of China, but for the party centre over the majority. All the machinery of mass assemblies, criticism and self-criticism, cadre participation in manual labour, big character posters, popular education, are necessary precisely because democracy in any serious sense does not exist.

Even if the institutions existed, the basic information upon which the majority could make a responsible decision is not available. The Chinese State adopted from Russia the machinery of censorship and information control. No continuous sets of figures on the major sectors of the economy, on the course of popular consumption or any other matter of importance have been published since 1959. Finding out what has happened requires full-time specialized work for anyone not in the inner circle of leadership, a task certainly beyond the majority of Chinese. Mao has supported that control of information. Not only has he not raised the question, on some occasions he has positively increased the controls. For example, in 1956 he instructed the party centre to circulate Khrushchev’s secret speech criticizing Stalin at the Twentieth Congress of the Soviet Communist party only to local and county party committee secretaries; it must not be discussed in the press or “among the masses” [65] Again, he urged the cadres to unite to protect “the secrets of the State” in the turmoil of the Cultural Revolution. Neither the budget figures nor the Five Year Plans are publicly available. As one sympathetic observer remarked of the Second Plan: “For the first time in a socialist régime, a whole people was ordered to embark on a Five Year Plan without being informed of the targets.” [66]

The cadres of the party have a better chance of being informed. For example, at some levels they have access to a daily reference bulletin, Tsan Kao Hsiao Hsi, and to reprints of foreign newspaper articles, while senior PLA officers have a confidential internal publication. But such privileged information in no way represents democracy in China, even if it is a precondition for the party leadership carrying the support of its immediate followers. Nor does it mean the cadres do not get confused by the shifts and changes of policy. One of the official commentators on the Tenth Party Congress reproved those cadres who believed the leadership struggle was too complicated to understand. “In fact”, he pronounced, “this involves the long-standing question of whether or not the two-line struggle can be known ... Those who believe in the incomprehensibility of the two-line struggle are completely wrong.” [67] After all the newspaper words and radio diatribes, still it was a “longstanding question”, even for party cadres! How much more “incomprehensible” was it to those many millions who did not have access to the privileged information of the cadre?

The key institutions of the Chinese State, its “armed bodies of men”, its police force, its bureaucracy with its privileges and secrets, all survived the Cultural Revolution intact. It had been no part of Mao’s intention that they should not survive even if particular individuals were removed (and many of those, only temporarily). Whether before the Cultural Revolution or afterwards, none of China’s institutions accorded with the basic criteria of “proletarian democracy” as outlined by Marx and Lenin. They do not even accord with the weak criteria of “bourgeois democracy”. Nor can they, when the régime is dedicated to capital accumulation as the condition of its national survival. The few who did take Lenin’s criteria seriously, like Sheng-wu-lien and Li Yi-che, were hounded as “counter-revolutionaries” just as they would have been in the Soviet Union for that matter.

Neither in terms of “equality”, let alone “democracy”, it seems, is China distinguished qualitatively from many of the other States of the world. What of the central purpose of the party’s leadership since 1949, the strengthening of China’s national independence?


46. State and Revolution, SW7, p.44.

47. Ibid., p.46.

48. Letter to Bebel, 18-28 Mar. 1875, in Selected Correspondence, Moscow, 1955, p.294; stress added.

49. State and Revolution, op. cit., p.41.

50. Petrovskii, cited by D.H. White, The growth of the Red Army, Princeton, 1944, pp. 63-4.

51. V. Ulrich, in Soviet Army Daily (Krasnaya Zvezda), 22 April 1940, cited Cliff, Stalinist Russia, op. cit., pp.89-90.

52. In Mao Unrehearsed, p.183.

53. January 1964, in Miscellany II, p.364.

54. Letter to cadres, March 1959, in Miscellany I, p.172.

55. December 1956, in Miscellany I, p.41.

56. January 1961, in Miscellany II, p.238.

57. January 1961, ibid. II, p.240.

58. In Mao Papers, p.68; stress added.

59. May 1967, in Miscellany II, p.460.

60. Hung-ch’i 4, 1968.

61. Conversation with Mao by the President of France, Georges Pompidou, 1973, published extract in English, Sunday Times, London, 24 October 1976, p.56

62. Rule 28, from Sixty Points on Working Methods, 1958, in Mao Papers, p.68.

63. December 1964, in Miscellany II, p.417.

64. PR 43, 1968, p.7.

65. April 1956, in Miscellany I, p.35.

66. Deleyne, op. cit., p.29.

67. Su Hsi, JMJP, 11 January 1974, SCMP 5547, 6 February 1974.

Chapter 13: National Independence

Submitted by Reddebrek on April 22, 2016

National independence – the ability of a State to secure and defend its territory, to deter potential threats and safeguard its future in conditions of competition between the world’s dominant powers – requires a level of military preparedness commensurate with the nature of the threat. But the conditions of warfare are laid down by the existing level of development of the world defence industries. Even in the late nineteenth century, the development of defence industries required the transformation of economies. Engels noted this in the 1890s: “From the moment warfare became a branch of the grande industrie (iron clad ships, rifled artillery, quickfiring and repeating cannons, repeating rifles, steel covered bullets, smokeless powder, etc.), la grande industrie, without which all these things cannot be made, became a political necessity. All these things cannot be had without a highly developed metal manufacture. And that manufacture cannot be had without a corresponding development in all other branches of manufacture, especially textiles.” [68] In sum, national independence requires “economic development”.

The Chinese leadership were fully aware of this. Indeed, the justification of the 1949 revolution was that it “set free the productive forces” to provide the basis for “national independence”. Mao was even prepared to put a figure on the required target: “During the transition period, it is necessary ‘to enable the productive forces to obtain a guarantee of the development required by a socialist victory’. In so far as China is concerned, we require at least about 100 million to 200 million tons of steel [production annually]. Prior to this year [1959?], what we did was principally to clear the way for the development of our productive forces. The development of the socialist productive forces of our country actually has just begun.” [69] Steel alone was not enough; the whole range of modern output was required as soon as possible, all the components of contemporary national power, including the most advanced weapons: “Yes, we must have them ... no matter what country, no matter what missiles, atomic bombs, hydrogen bombs, we must surpass them. I have said before, when the atomic bomb is exploded, even if one half of mankind perishes, there will still be one half left.” [70]
(i) Economic development

In Marx’s terms, “economic development” is a long process whereby capital is accumulated in the competition between capitalists – the productivity of labour is continuously raised and a mainly low-productivity, agricultural society transformed into an urban industrial one. The capital is derived from the surplus of unpaid labour appropriated by the employers from those “with nothing to sell but their labour power”, and from the ransacking of agriculture and colonies. In the process, production, population, power, ownership and control are centralized on an unprecedented scale.

The accumulation of capital imposes upon society a division of labour which is quite new – between those who personify capital, whose social function is to accumulate and to organize society in order that accumulation should take place, and those whose surplus is the basis for accumulation. The two social roles cannot exist without each other – on the one hand, “an independent social power, i.e. as the power of a part of society, it maintains itself and increases by exchange for direct living labour power. The existence of a class which possesses nothing but its capacity for labour is a necessary prerequisite of capital.” [71] The whole of society is, then, organized around this central division. All other divisions – among them, Mao’s Three Great Differences – are subsidiary to this core in so far as the capitalists are successful in establishing their discipline over society as a whole.

(ii) The State

However, what happens where the dynamic of domestic competition between private capitalists does not exist, where the driving force – the struggle of each individual capital to secure its survival – does not operate? If a society could completely isolate itself, State ownership of the means of production would end the dynamic of competition and so the drive to accumulate. What would this mean in a backward economy? A return to pre-industrial stagnation in which the consumption needs of the ruling class would determine the level of output, not the drive for supremacy of the capitalists. The same situation would occur if the whole world economic system were directed from one centre: it would spell the end of what Marx calls “capitalism” in so far as competition ceased.

However, neither state of affairs is a practical possibility in the contemporary world without a major political transformation. The competition of private capitals within one country is replaced, where the State owns the entire national economy, by the competition between the world’s national capitals, States. The “capitalist economy” today does not refer to a national, but to a global, system, subordinating each national capital as formerly the national market subordinated each private firm. It is for this reason that each economically backward State is compelled, as the condition of its survival, to industrialize, to accumulate capital.

Can a different “ideology” defeat this logic? Only in the sense that a private employer can defeat the logic of the market. Very large capitalists can to some extent attain greater autonomy, provided they are protected by the local State. The richest world powers can, when the system booms, similarly afford greater leeway. The poorer an economy – the smaller and more dependent a firm – the more its reactions become predetermined by external forces. Of course, every ruling class justifies its existence on the grounds that it can control events, it can master its environment. Its power, it says, is not dependent upon the surplus it can extract from the people but on its capacity to embody the wishes of the people. If it were possible, simply by willing, for a régime to transform objective circumstances, then the axioms of Marx’s materialism would become false – ideas, not the material basis of society, would determine events. But surely, it might be argued, this means there are no alternatives to capitalism, regardless of local fashions? That is the case if we restrict ourselves to national power, just as it would have been the case if someone in the nineteenth century had talked of “organizing socialism” in a single firm, as if it could escape the discipline of the market in which it operated. We will return to the question in Part VI.

Competition between States differs from that between firms. Each State must be capable of defending itself but military competition is not the sole influence on a domestic State-owned economy. The need to finance imports, whether of foodstuffs – as in the case of the Soviet Union’s massive imports of grain in 1974 – or industrial equipment and Components of advanced technical quality is another form of discipline imposed by the world system upon all its parts. The 1974-8 slump illustrates this. Soviet borrowing from advanced capitalist countries to finance its imports has become in recent years, with rising interest rates and a growing trade deficit, an important factor in Russian domestic planning. [72]World market prices govern its external trade even with its Eastern Bloc partners. The trade agreements utilize world prices, and transactions are increasingly settled in Western currencies in order to help the Soviet Union overcome its difficulties with the West.

The more backward an economy, the less it depends on external forces for immediate economic survival, but the more it depends upon them to overcome domestic backwardness, to promote modernization. Since all the State-owned economies are devoted to industrialization, [73] the dependence of the smaller and more backward countries on external assistance to achieve domestic transformation is great. [1*]

Involvement in world trade, in capitalism itself, assists domestic growth and development when the system booms. But in slump, it imposes contraction on the national economy, whether the means of production are owned by the State or not. National planning can offset some of the effects of the crisis, but basically it must also transmit the external disciplines of the “law of value”, rather than frustrate them.

Despite the difficulties, the Societ Union did accomplish the process of domestic transformation in the 1930s and 1940s, and did so despite, for much of the time, a world slump of unprecedented severity. Can every country repeat that process? The conditions have changed. The advanced capitalist powers dominate the world market more than ever before. In all fields, the production of the advanced concentrations of capital defeat smaller rivals in any open contest. The early stages of industrializaton are jeopardized unless a backward State can exclude competition; but excluding competition shuts off the sources of technology and advanced inputs, so that the process becomes more costly, inefficient and long-drawn-out.

Furthermore, the technology has changed. Not only does it cost more, it produces relatively few jobs. It also produces a faster stream of output. This is the source of the contemporary paradox: the mass of backward countries have increased their industrial output more rapidly than did the European powers in the nineteenth century, but with decreasing success in employing the existing labour force. Enclaves of high productivity industry, colonies of advanced production, coexist in a sea of urban and rural poor. The ruling class certainly secures an industrial basis for its power, but without being able to implement the “historic task of the bourgeoisie”: the tranformation of society or what Marx called the “socialization of the labour force”.

Some of the statistics illustrate the nature of the problem. For example, between 1925 and 1960, the countries of Latin America experienced a decline in employment in manufacturing industry (as a proportion of the non-agricultural labour force) – from 35.4 to 27.1 per cent. In the period of most rapid industrial growth, from 1950 to 1965, employment in manufacturing industry (as a proportion of the total labour force) declined, albeit at a slower rate, from 14.2 to 13.8 per cent. Latin America is the most advanced of the backward continents. Nonetheless, the overall picture is not impressive. Between 1920 and 1950, the proportion of the total labour force employed in manufacturing in all the backward countries together showed a slight decline, from 8.5 to 7.6 per cent, and then a slight increase up to 1960 (to 8.9 per cent). [77] Yet this has been the period of the most rapid growth in history. The next quarter of a century looks unlikely to repeat the performance of the last. World capitalism falters long before it has touched the lives of the majority of the world’s population.

Thus, if China – one of the poorest countries of the world – can provide a different model of economic development, can steadily narrow the gap between backward and advanced, and transform the real material conditions of the majority of Chinese, it would be a staggering achievement. The Chinese Communist party would have shown itself to be a totally new force, capable of defeating the imperatives of backwardness in the peculiarly obdurate circumstances of the second half of the twentieth century. To do so on an isolated national basis, denied access to the accumulated resources of the world economy held by the advanced powers, would be a triumph indeed.

(iii) A different “model”?

There is little evidence for the existence of a different model of development in the statements of China’s leadership. Consistently they have measured their success by Stalin’s central criterion – the growth of heavy industry, and in particular of steel. Such a policy imposes the maximum rate of accumulation, but, on the theory, promises the most rapid process of transformation. What distinguishes China from Russia is not so much the chosen strategy of development, but the different conditions imposed on that strategy by the greater backwardness of China – the growth of heavy industry is continually restrained by the incapacity of intensive agriculture to feed the population without receiving a greater share of investment. Within heavy industry, the régime, like Stalin, has been single-mindedly dedicated to raising labour productivity and the profit rate, at the expense of employment and consumption.

Mao has been one of the chief architects of this approach, and his writings and speeches give no indication of a “different model”, only of the necessity to make greater tactical concessions. During the first plan, Mao made steel the key to China’s performance: “Our country is poor, very poor. This year, steel production amounts to only 4.5 million tons ... Japan’s production is seven million tons.” [78] By 1975, China’s steel output had reached around twenty-five million tons, a very creditable achievement in view of the difficulties, but far below Japan’s 102 million tons (let alone the United States’ 106 million and the Soviet Union’s 141 million tons).

Steel and heavy industry could only expand if the population was being fed. Mao continued to stress the need to ensure an adequate harvest – then there would be food for the people, raw materials for light industry, a market for heavy industry, exports to earn foreign exchange with which to purchase imports for heavy industry, and funds for accumulation [79]: “While developing industry, especially heavy industry, we must at the same time give agriculture a certain status by adopting correct policies for agricultural taxation and for pricing industrial and agricultural products.” [80] The emphasis is the same in the first plan and in the Great Leap Forward – the two key targets were for steel (Mao hoped for 100-120 million tons by 1962) and grain.

The setbacks of 1960-62 led to a temporary shift of emphasis towards agriculture and light industry. But the change was justified, for Mao, as a method of assisting heavy industry. Thus: “The experience of the Soviet Union and our country show that if agriculture and light industry are not developed, it will be harmful to the development of heavy industry.” [81] There was no question, despite the disasters, of giving up the struggle for accumulation and increased production: “The accumulated capital of the Soviet Union constitutes approximately one-fourth of the national income [per annum]. The ratio of our country’s accumulated capital to national income was twenty-seven per cent in 1957, thirty-six per cent in 1958, and forty-two per cent in 1959. It appears likely that the ratio of our accumulated capital to national income henceforth can be maintained at over thirty-nine per cent or higher. The most important question is the rapid development of production.” [82] This was a staggering scale of accumulation for a poor country, particularly at a time when there was evidence of famine.

Quite a number of people in China and outside interpreted the retreat to a greater stress on agriculture as an agriculturally based strategy of development, whereby industry was subordinated to the demands of agriculture. If this had been the case, the régime would indeed have sacrificed the growth of the material foundation of its power to the immediate welfare of the majority. Two writers in 1962 made this mistake (or were covertly arguing for a different policy): “As the foundation of the national economy, agriculture demands that all production departments, including those of industry, all construction departments and all cultural and educational undertakings develop themselves with the actual conditions of agricultural production as the starting point and give due consideration to the quantities of commodity grain and industrial raw materials and to the sizes of the market and the labour force which agriculture can supply ... National economic plans should be formulated in the order of agriculture, light industry and heavy industry.” [83] Another urged that investment in agriculture should be higher than that in industry: “the accumulation used for agriculture will increase at a faster rate than that used for industry ... The State must plan the emphasis of its economic work on agriculture and invest heavily in agriculture and give it massive material support.” [84]

The national leadership was not so easily seduced from its self-appointed historic task. The most it would concede to these demands was the singularly obscure phrase, “agriculture as the foundation and industry as the leading sector”. It did not publish its investment figures to indicate what the phrase meant, and, so far as can be seen, there seems to have been no sudden increase in investment in agriculture, although pricing policies left a little more income in the hands of those peasants with a marketable surplus. What it did was seek to cut urban consumption by reducing the urban population, consigning these extra mouths to the countryside to be fed by the peasants instead of from State procurements; this required a further increase in labour productivity in industry so that output did not fall with the smaller workforce.

Despite the verbal concession, heavy industry expanded at a faster rate than any other sector through the 1960s and into the 1970s. The régime avoided publicizing any strategy as to what it was doing, beyond repeating old phrases, until 1969. Then an authoritative article re-stated the strategy of the 1950s anew. Quoting Mao of 1957: “It must be affirmed that heavy industry is the core of China’s economic construction. At the same time, full attention must be paid to the development of agriculture and light industry”, the writers elaborated: “The realization of socialist industrialization requires priority development of heavy industry. With heavy industry developed and the growth of the means of production enjoying priority, we shall be able to realize socially expanded reproduction, provide advanced techniques and equipment for the technical reform of agriculture and for the development of light and heavy industry and bring into play the leading role of industry in the national economy.” [85]

The thread throughout the years remains the same. But agriculture’s capacity to support the main priority changes. Mao expressed it in the early 1960s in this way: “How do we plan for our annual harvest? It will be determined by the assumption that in five years, there will be one year of good harvest, two years of ordinary harvest, and two years of poor harvest.” [86] Only massive investment by the State, diverting the surplus from industrial investment to agriculture, would have slowly flattened this variation and provided some measure of security in the supply of foodstuffs. Yet this the State would not do since it would jeopardize its national power and, thus, China’s national independence. Given the drive to build heavy industry – and, as we shall see, the results have been impressive – all other items became negotiable.

(iv) The Chinese economy in the 1970s

Accumulation can only take place if there is a surplus, and it can be appropriated. How is this done in China? Primarily through the State’s control of wages and prices, exercised through State-owned enterprises (including trading monopolies in agricultural commodities). The central government determines the level of pay, the numbers employed, the allocation of raw materials and equipment for the larger units in modern industry which produce the largest share of national industrial output. Other things being equal, these controls determine the level of enterprise profits which the State appropriates. The State controls the supply of bank credit and the interest charged to borrowing enterprises. The control mechanism is the party, its cadres in factory management, banks and local administration. In addition, the State procures compulsorily a certain proportion of agricultural goods from the communes at relatively low fixed prices and sells it at higher prices, as well as taxing the movement of goods between provinces through its control of trade. Finally, it levies indirect taxes on a number of goods – cigarettes, liquor, and a fifty to sixty per cent rate on goods such as bicycles, sewing machines, radios, etc.

The government claims that the taxation of industry is high and of agriculture low, but it does not divulge any figures. Its revenue, it says (and it is not clear whether this applies to only the central government, or includes provincial and lower authorities), takes about six per cent of farm incomes in comparison to thirteen per cent in the early 1950s. About ninety per cent of State revenue comes from State-owned enterprises.

If the government’s view is accepted, it appears that in the 1960s the bulk of State revenue was derived from the surplus product of industrial workers. Even then, however, the régime was dissatisfied with the size of urban consumption (which reduced the available surplus). Hence the dilution of the urban labour force with temporary and contract workers and the expansion of enterprises outside the large-scale modern sector. Hence also the consistent efforts made to reduce labour costs. In the model project of Taching, for example, there was apparently no provision made for housing and other services when the new township was begun in the bare plains (with winter temperatures reaching –30°C). Workers were required to build their own dwellings after work, with “pounded earthen walls” (kan-ta-lei). Foodstuffs were similarly to be grown locally by workers in their spare time, a practice which the authorities have attempted to generalize to all enterprises. A hundred years ago in Germany, Engels identified the economic meaning of obliging workers to grow their own food: “Since, for the most part, the worker in domestic industry carries on his little bit of agriculture, it becomes possible to depress wages in a fashion unequalled elsewhere. What formerly constituted the happiness of the small man, the combination of agriculture and industry, now becomes the most powerful means of capitalist exploitation. The potato patch, the cow, the little bit of agriculture make it possible for labour power to be sold below its price: they oblige this to be so by tying the worker to his piece of land, which yet only partially supports him.” [87] In Taching, in the 1950s, workers were initially given higher than average pay to compensate for the lack of social investment, but it seems this was removed in the 1960s (although one visitor reports the average monthly wage of under RMB 60 is still supplemented by an RMB 5 allowance). Workers are expected to complete all work outstanding without overtime pay. No wonder this oilfield was held up as the régime’s proudest achievement; its output is reported to have increased by thirty per cent per year, yielding a ten-fold return to the State’s investment; labour productivity and the surplus appropriated by the State has increased two and a half times over. [88]

The campaign for everyone to grow their own foodstuffs can similarly be seen as a method of relieving the pressure on State procurements, even though it must be expensive in terms of the labour time of workers. The policy of self-reliance in the villages protects the State’s industrial sector from peasant demand and forces the villagers to use their own savings or go without.

The result of this overall strategy is, in productivity terms, a more marked dualism than in most countries – between a carefully segregated high productivity, capital-intensive enclave and a sea of low productivity, labour-intensive agriculture. The “socially necessary labour-time” in the industrial sector has been reduced to the barest minimum, so that the rate of exploitation must be extraordinarily high. As a result, the State has apparently been able to maintain a very high level of accumulation. It may not be as high as Mao suggested in the early 1960s – thirty-nine per cent of national income – but it still must be exceptional.

In terms of national power, the first call on the government’s revenue must be defence. In turn, heavy industry provides backing for defence as well as inputs to all other sectors. Expenditure must be considerable, given the size of the defence sector – three and a half million men and women under arms (supported by possibly ten million in ancillary production and construction brigades, and many millions more, most of them in the part-time militia), as well as the hugely expensive nuclear and missile establishment. Since the first nuclear test in 1964, there have been over twenty by 1977, and Western estimates suggest China now possesses a growing stock of medium-range missiles, some experimentally based in submarines. If we compare China’s resources and the size of the nuclear programme with other countries undertaking such an exercise, we can guess that possibly one-half of modern national investment goes in part or whole to defence (officially, a quarter of the national budget’s current – as opposed to capital – expenditure was devoted to defence in 1956), and possibly a fifth of total industrial output. The proportions change relative to the government’s estimate of the threat – US sources provide evidence, for example, of a sharp increase in defence spending following the armed clashes with Russia in 1969, and then a falling-off in 1973-5 as the threat receded. [89] By 1976, China’s defence spending was equivalent to some eight to ten per cent of the gross national product, a much higher level than, for example, the United States, with a gross national product some ten times larger than China’s (China’s GNP is estimated as US $300 billion; the United States as US $1.8 trillion). Whatever the exact figures, China’s defence spending represents a substantial diversion of resources from accumulation.

There are other leakages from accumulation, of which the most important must be the consumption of the bureaucracy. There are no estimates of this component. The régime has shown itself aware of the problem – it must maintain a bureaucracy to supervise the extraction of the surplus, yet the bureaucracy itself absorbs a large share. The campaigns to cut bureaucracy, to transfer “non-productive” labour and administrative cadres to the “production front”, show the efforts made to reduce consumption, yet the drive is constrained by the need to maintain control and supervision. If the bureaucracy is too much reduced, the régime could be threatened by a loss of control, even a major revolt.

What has been the performance of the two main sectors, industry and agriculture, as a result of these policies?

(v) Industry

The growth rate of China’s industrial output has been very rapid, if inconsistent. In the period of the first Plan (1952-7), output grew by a fifth on average every year, a remarkable performance. Growth in the 1960s was slower – in the first half, about six to seven per year, and in the second half, between eleven and fourteen per cent [90]; in the first half of the 1970s, the average rate was about eight per cent per year, fluctuating between twelve per cent (1972 and 1973) and four to five per cent (1974).

Heavy industry has grown much more rapidly. The share of “producer goods” industries in terms of value of output increased from twenty-eight per cent in 1949 to fifty-two per cent in 1957, and an estimated seventy-nine to eighty-three per cent in l971. [91] Manufactured consumer goods – for example, bicycles, radios, sewing machines – represented about seven per cent of machinery output in 1956, and declined to three per cent by 1971 (of course, the absolute increase in the output of these goods would be large).

What of Mao’s key link industry, steel? Output was 4.5 million tons in 1955, and rose to thirteen million tons during the Great Leap Forward and the following year. This fell back to eight million tons in 1961, before reaching twelve million tons in 1968, twenty-one million tons in 1970, and the record figure of 25.5 million tons in 1974; it fell by about three million tons in 1975-6. In the main the output comes from large and very large plants – a quarter of it from Anshan, seventeen per cent from Shanghai and about thirty-four per cent from other one to two million ton plants. The rapid expansion of output in the late 1960s led to technical difficulties as well as the labour problems mentioned earlier. The rest of industry has expanded, and as a result there is a continuing shortage of steel despite the increase in output. This obliged the régime to make large steel imports in 1974 and 1975 – over 3 million tons in 1975, equivalent to fifteen per cent of steel consumption. About a fifth of the imports were seamless pipes, probably for the oil industry; other imports included steel scrap, pig iron, iron ore, showing that domestic supplies of these items were inadequate. The steel shortage has also been a factor in prompting the government to make major purchases of steel plant abroad – for example, the US $550 million rolling and treatment complex at Wuhan, built and supplied by a West German consortium under Demag, and a sixteen-company Japanese consortium. led by Nippon Steel (the plant is expected to begin production in 1978).

Industrial expansion makes heavy demands on energy supplies. Although the oil industry has experienced a remarkable expansion in recent years – officially, 680 per cent between 1965 and 1975 – it is severely restricted by the lack of pipes and refinery capacity. As a result, the coal industry still supplies about four-fifths of industry’s energy consumption. Like steel, coal output has expanded rapidly – from 290 million tons in 1959 (with an estimated 210 million tons in 1968) to 430 million tons in 1975. Coal output fell in 1974 because of labour troubles, say foreign observers. Like steel, coal is a bottleneck, partly because of wasteful methods of preparing coal for use. Coal depends on the railways for movement, and occasional labour difficulties in the 1970s impeded its use. The government again turned to imports of coal machinery to expand production quickly.

Other heavy industries have performed well. For example, the machine building industry has officially expanded in the 1960s by fifteen per cent per year. The railway network, limited in 1949, has been considerably expanded. The 50,000 miles of highway that existed in 1949 had, by 1976, become half a million miles, and the NCNA claimed that by then eighty-three per cent of all communes could be reached by road. With the considerable imports of motor vehicles and China’s own trucking capacity, this is an important advance.

The expansion has come in the main from modern large-scale industry through increases in the use of capacity and labour productivity rather than increasing jobs. Western estimates of, for example, the producer goods industries put the value of output in 1952 at 10.7 billion yuan, and in 1971 at 246.5 billion yuan, or a twenty-four times increase; whereas employment in the same industries increased between fifty- nine and 182 per cent, or by a half to one and three-quarters. [92] The government has deliberately invested heavily in machinery while trying to curb or reduce the size of the labour force. As part of this process, the electronics industry has received strong official support, and some visitors report that Chinese industry is relatively advanced in the use of automated techniques. For example, a 1974 visitor reported that over half the horizontal knitting looms in Shanghai’s textile mills are electronically controlled; and a major part of the woollen knitwear mills are in part or whole automated, as is part of the mining industry. [93] Combined with the use of low-paid temporary and contract labour, this makes for spectacular increases in labour productivity and the surplus accruing to the State.

(vi) Agriculture

Agriculture is at the opposite extreme. With half as much cultivated acreage as the Soviet Union or the United States but four times the number of mouths to feed, with a preceding century of neglect, it would have been extraordinary if agricultural output had been capable of rapid expansion.

It is the relative stagnation of agriculture which pulls down all the national statistics. Thus, despite the rapid increase in industrial output in the 1950s, the gross domestic product per head in 1957 was still only twenty per cent above the 1933 level [94], and consumption per head about the same. [95]

The major part of China’s agricultural output is grain, and the long- term increase in production has been fairly consistent – about two to three per cent per year. [96] There are disagreements in detail, but this rate of growth has brought total output from about 110 million tonnes in 1949 to 286 million tonnes in the 1970s, a one and a half times increase in twenty-seven years. It is not clear how reliable these figures are, but they give a picture of the trend. The increases must have stemmed from a few provinces, since the overall picture is more patchy. Officially, only nine provinces and municipalities out of twenty-five had, by 1976, met the 1967 targets of the National Programme of Agricultural Development. six provinces (Shensi, Kansu, Chinghai, Shansi, Liaoning and Ninghsia) were only “self-sufficient in the main”; that is, they were on occasions obliged to import; presumably, the remaining ten were permanently in deficit. [97]

In the early 1970s, Chou En-lai said that China’s population was growing at “around two per cent” (the urban population, it seems, is increasing more slowly). Grain output is increasing at a similar rate on average, so that the major part of agriculture can make little or no contribution to accumulation – even if, given the difficulties in an intensively farmed country, we assume that the régime could actually appropriate the surplus. The availability of grain per head of the population has been roughly constant since the early 1950s – at most it has increased twelve to eighteen kilograms over the 295 kilograms available in 1957. [98] If the supply of other foodstuffs, livestock etc., has increased more rapidly than grain output, this relative stagnation can be accompanied by an improvement in the average diet, although that will be limited ultimately by the grain supply (for example the supply of fodder for livestock).

The grain situation has eased surprisingly little over the past quarter of a century, despite massive and sustained efforts through multiple cropping, water conservation, irrigation, improved tools, use of fertilizers, hybrid seeds and pesticides. Fertilizer availability is particularly important here since the use of new hybrid seeds and multiple cropping of the land depend on a large increase in water supplies and fertilizer application. Virtually no chemical fertilizers were manufactured in the early 1950s, but since then there has been a considerable increase, apparently in the main financed by commune savings. There is now said to be roughly seventy kilograms of fertilizer available on average per hectare, roughly two-thirds of it manufactured in small plants (compared to 300 kilograms or more in, for example, South Korea and Japan). The government has imported both fertilizer and large-scale chemical fertilizer plant, and this may raise the fertilizer availability per hectare to 100 kilograms. Not all observers agree that this will raise yields. Some agronomists have argued that the poor long-term performance is because the soil is relatively exhausted, afflicted by salination and alkalinization as the result of intensive cropping of a small cultivated area for many hundreds of years. Others have been impressed by the use of organic fertilizer which raises the total fertilizer applied per hectare closer to the South Korean figure, but also means that output is already near the maximum to be expected under present conditions.

Imports have been used to ease scarcities of grain, raw cotton, fertilizers and equipment. In the bad years of 1960-63, some sixteen million tonnes of grain were imported; and 6 to 7.5 million tonnes were imported annually in 19724 (falling to 4.4 million tonnes in 1975, and 1.7 million tonnes in 1976, the lowest level of imports since 1966). In the early 1970s, grain imports made up between thirteen and sixteen per cent of the total import bill. After two poor years for grain, 1975 and 1976, China’s imports for 1977 – 11.8 million tonnes – were at the highest level since 1961. Raw cotton has regularly been imported, and the import volume has grown by about fifty per cent since 1964 (with a rough value of US $360 million annually). To China’s domestic output of about twenty- five million tonnes of chemical fertilizer, imports have added 6 to 7 million tonnes annually. Furthermore, the régime has imported thirteen fertilizer plants (mainly from the US and Holland, but also from France and Japan), which should begin production in 1977-8.

The poor performance so far has not dissuaded the government from raising its sights. At an important agricultural conference in October 1974 and in the fifth Five Year Plan (which began in January 1976), a set of long-term targets was laid down, apparently for the first time since the 1950s. The stated aim was to achieve a total grain output of 360-400 million tonnes by 1980, to secure the mechanization of agriculture, and to follow the model of the Tachai Brigade (the agricultural equivalent of Taching). The last long-range plan, supposedly in operation from 1956 to 1967, disappeared in the Great Leap Forward and its aftermath, so that the formulation of a plan gives no assurance as to how practical it is. Perhaps at long last the government is to devote a larger share of national investment to agriculture, and it is on this basis that the targets have been drawn up. Otherwise, to achieve the stated grain target after twenty years of roughly two to three per cent annual growth would require agriculture to increase grain output by between five and seven per cent annually up to 1980. Without massive imports, it would seem an unlikely achievement. Indeed, on the past record, the government would have reason to congratulate itself if it could achieve a consistent three per cent annual increase (to reach 330 million tonnes by 1980).

(vii) Foreign Trade

Imports – whether for use in agricultural or industrial production – are an important precondition for releasing China’s capacity for economic growth. When the economy has grown rapidly, the government has permitted rapid increases in imports, curbed by the available reserves and China’s export earnings. Imports – estimated from the accounts of countries which trade with China – increased by eighteen per cent in 1970, were cut back in 1971, presumably to protect the reserves; expanded in 1973 at a rate higher than at any time in the history of the régime, and then were cut drastically in 1974, before expanding more gradually in 1975, and again falling (by ten per cent) in 1976.

What does China import? Grain, raw cotton, fertilizers have been mentioned, but there are other foodstuffs, for example, soya-beans and soya-oil. But the recent major expansion in imports has been in the industrial field, with imports either to relieve domestic bottlenecks or to gain access to advanced technology. Between 1971 and 1976, China imported or ordered a great deal of steel (US $800-I, 200 millions worth annually); 30,000 trucks; 3,000 cars and buses; 170 locomotives and seventy ships. From the United States it imported an RCA Global Communications Satellite earth ship, and ten Boeing aircraft. It contracted for ammonia plants, power shovels, car gear and axle making machines, twenty blow-out preventer stacks (to control oil-well bore pressure), magnetic recording equipment, oil-well boring pumps, photographic and optical equipment, and data processing equipment. It signed agreements for supply with many of the major multinational corporations, including Kellogg, Bucyrus-Erie, Sohio, Amoco, Ioyo Engineering, Mitsui Toatsu. Negotiations in 1975 led to an agreement with Rolls- Royce to build a Spey jet-engine plant in central Sian (at an estimated cost of US $182 million; presumably with United States approval since such a project is banned under the North Atlantic Treaty Organisation). Talks were under way for the purchase of twelve Japanese patrol aircraft, four Sanwa Group nylon fibre plants, three petroleum refineries and three large computers. In late 1975, an agreement was signed for the purchase of a 100,000-ton Japanese oil tanker.

The list illustrates both what the Chinese leadership sees as the main weaknesses in China’s economy, and the fact that in practice, regardless of domestic propaganda or the state of the leadership faction fight, China’s imports were kept high. The total trade – about US $15,200 million in 1976 – imposed a deficit on China with the advanced capitalist nations of about US $2,700 million.

How are the imports paid for? China’s exports in 1973-4 included soya-beans, oilseeds, tea, bristles, feathers, rice, wolfram, antimony, tobacco, silk, tinned pork, mutton, rabbit, cotton goods, wild cat coats, antiquities and some light industrial goods (bulbs, wigs, vacuum flasks); about a quarter of these exports go to Hong Kong. These exports, concentrated in the areas of raw materials or foodstuffs, yield a poor return, and in the mid-1970s were sorely afflicted by the world slump – prices fell while the prices of industrial imports rose under the impact of inflation in the advanced countries. Oil exports, which doubled in 1975 to US$1,000 million and mainly went to Japan, Philippines, Hong Kong, Thailand and Romania, helped balance the trade deficit. But to increase oil exports requires more imports of pipes, refinery and tanker capacity, as well as measures to improve the peculiar quality of Chinese crude oil. Trade earnings are supplemented by the profits of China’s enterprises operating in Hong Kong and cash sent from overseas Chinese families. But even so, the reserves are small in relationship to the scale of current imports (US sources estimate them at RMB 7 billion or US $3,560 million).

In the autumn of 1974, all these factors united to cause a severe and unexpected balance of payments crisis (estimated at US $1,000 million). The régime cancelled orders for grain and foodstuff imports, and to cut the deficit expanded oil exports. The government needs to keep up the level of imports for future growth, but thereby incurs a new range of burdens. In recent years, it has moved into borrowing abroad to sustain import purchases – first, using short-term commercial credit from its suppliers, then medium-terms loans from the Japanese Exim Bank (starting in 1972), reaching deferred payments agreements (twenty per cent payment down, and the rest over five to seven years at six per cent rate of interest), and accepting foreign currency deposits at competitive interest rates in the offices of its banks abroad. At the same time, it sold abroad an estimated 12 to 24 tonnes of gold in late 1975 and early 1976. In early 1977, some 80 tonnes of gold were sold (worth $206 million). For 1976, China’s cumulative foreign debt was estimated to be US $1.3 billion, or twenty-three per cent of hard currency exports.

In sum, the rate of growth of industrial output has been rapid, possibly as rapid as that of the Soviet Union in the first two Five Year Plans (1928-38) – ten to fourteen per cent per year. In the 1970s, it has been less impressive but still substantial – although below rates achieved, for example, in Taiwan, Thailand, South Korea and Malaysia. Over the whole period since 1949, the structure of China’s product has been shifted so that perhaps half or more of China’s national product (in value terms) now comes from industry. The effort has been sustained over a quarter of a century, a period comparable to that in the Soviet Union between 1928 and 1951.

But the social transformation of the Soviet Union that took place in those years has scarcely begun in China. By the criterion of employment – as opposed to value of output – matters have not changed radically since 1952. Then as now, about seventy-five per cent of the labour force was employed in agriculture, in the main at very low levels of productivity and austere living standards. The effects of the dramatic growth in industrial output has been only slight on the rural majority, even though much improvement has undoubtedly taken place.

At the Fourth NPC in January 1975, Chou En-lai revived Mao’s 1964 perspective (at the Third NPC): “to build an independent, relatively comprehensive industrial and economic system ... before the 1980s”; and “to accomplish the comprehensive modernization of agriculture, industry, national defence and science and technology before the end of the century so that our national economy will be advancing in the front ranks of the world”. [99]

Can it be done? Clearly it is within the capacity of the world economy to achieve this result. If China can continue to expand its imports and world capitalism resumes rapid and sustained expansion, so that the demand for China’s exports increases and China can borrow at relatively low interest rates (all of which assumes world peace and no serious domestic disorder in China), it is a possible target. All provided the Chinese working class continues loyally to deliver up its massive surplus to the régime. But even if the output target could be achieved, could China’s masses be incorporated in such a short time, could the “dual economy” be overcome? The assumptions are all in doubt – world expansion, the continued philanthropy of the Chinese working classes and, above all, the possibility of transforming China while it retains its national isolation.

For many people, China is a splendid triumph because its people are more equal, it is democratic, and the country has made the breakthrough to sustained economic development. Poor it may be now, but its government has the wisdom to make those continued efforts which will ensure that the people of China will in due course “close the gap” with the advanced powers and come to enjoy all that is most valuable in terms of human progress in this century.

This chapter has attempted to assess whether these claims are correct. There is, on the face of it, greater equality in China than in most other countries, but it has been achieved through the rationing system and the basic scarcity of unrationed goods rather than equality of income. In terms of the official income scales, the degree of inequality is striking, nor is there a detectable trend towards more equality in Chinese society as a whole (even if, as some argue, there are efforts to increase the equality of income solely within the eight grade wage system). The reasons for the inequality seem less to do with any government preferences, more with the basic material conditions of the society and the commitment of the régime to accumulation. By any rigorous standard of democracy, there is none in China, although the régime gives the impression of being popular and consulting widely. In terms of the economy, China has experienced a relatively high rate of industrial growth, achieved by tenacious efforts to increase labour productivity. What distinguishes China from most other backward countries is not the, material quality of life, but the structure of control which ensures that, for example, all are fed and clothed. The urban-rural gap and income differentials remain sizeable, but the rationing system – and its maintenance against the corrosive forces at work on the countryside – has ensured that the mass of the population has received tangible benefits. In terms of the productivity of labour, the gap between the permanent industrial labour force and the mass of cultivators is possibly more extreme than in most backward countries, and this – a function of China’s intensive agriculture and its resistance to central supervision – has been to the benefit of the rural population.

China’s future depends not simply on its internal resources, but on the international context in which it exists. The government and the party can secure through external activities both protection and assistance for the tasks it has undertaken. The politics it proclaims are internationalist. How far has the party been able to elicit international support? This is the theme of the following section.


1*. Take, for example, the two richest of the backward countries of the Eastern Bloc, Cuba and North Korea. Both suffered more severely in the current crisis than the Soviet Union, but for the same reasons. Despite continued Russian assistance, Cuba was obliged to reshape its programme of economic development for 1976, to slow down drastically its future growth, as a result of what Fidel Castro calls “the worst [slump] since the 1930s”; all this, despite a loan of £115 million by two hundred international banks in October 1975; for the Cubans, the subordination of their economy to the world crisis is most vividly demonstrated by a cut in the coffee ration from forty-three to thirty grammes a week. [74] In the case of North Korea, the scale of its current debts (primarily to banks in Japan and eight other Western countries) – about US $430 million – as well its severe balance of payments difficulties has forced it to default on its loan servicing payments, not to mention forcing its diplomats abroad to use their position for smuggling. [75] Vietnam, far poorer and terribly ravaged by war, is, at the time of writing, appealing for foreign private capital. [76]


68. Engels to Danielson, Sep. 1892, Selected Correspondence, ibid, p.498.

69. Commenting on a Soviet work, Political Economy, 1961-2, in Miscellany II, p.248.

70. January 1965, in Miscellany II, p.445.

71. Marx, Wage, Labour and Capital, in SWII, pp.265-6.

72. On the Russian debts in 1976, cf. Alec Nove and Dubravko Matko, USSR labours under a huge trade deficit with the West, The Times, London, 22 July 1976; Mary Campbell and David Lascelles, What eastern Europe owes the capitalists, Financial Times, 29 Juy. 1976; and Concern as East steps up borrowing, Supplement on Anglo-Soviet Trade, The Times 21 October 1976.

73. For a discussion of the theoretical basis of this section, see Chapter 8 of T. Cliff, Russia: A Marxist Analysis, London, n.d.

74. On the rescheduling of the Cuban plan, cf. Dr Castro reveals the extent of Cuba’s economic difficulties, Agence-France Press report, The Times, London, 6 October 1976

75. Far Eastern Economic Review, 6 June and 19 December 1975, and 8 October 1976, p.42.

76. On the occasion of the visit to Europe of vice-minister for foreign affairs, Nguyen Co Tach, cf. Hanoi wants foreign capital for Five Year Plan, report Sunday Times, London, 7 November 1976.

77. P. Bairoch and J.N. Limber, Changes in the industrial distribution of the world labour force by regions, 1880-1960, International Labour Review, ILO, Geneva, 98/4, 1968.

78. December 1956, Miscellany I, p.38.

79. January 1957, ibid., p.61.

80. April 1956, in Mao Unrehearsed, p.64; stress added.

81. 1961-2, in Miscellany II, p.280.

82. Ibid., p.293; the translation of Mao’s terminology is poor – the phrase, “the accumulated capital” should be “the rate of capital accumulation”.

83. Lu Hsu’n and Li Yün, On the practice of economy, JMJP, 21 August 1962, SCMP 2817, 1962.

84. Onyang Ch’eng, Concerning the question of harmony or disharmony in the proportional relationship between industry and agriculture, Ta Kung Pao, 22 October 1962, SCMP 2863, 1962.

85. Writing Group, Peking Municipal Revolutionary Committee, The road to China’s Socialist Industrialization, Hung-ch’i 10, 30 September 1969, p.11, SCMM 666, 31 October 1969.

86. 1961-2, in Miscellany II, p.353.

87. Letter to Bebel, December 1884, in Selected Correspondence, ibid., p.432.

88. Report of a visitor, Forming Maoist Man (The Taching Oilfield), Financial Times, London, 2 December 1976, p.2; see also Ta-ch’ing: A Model Industrial Community in the People’s Republic of China, David O. Buck, The China Geographer, Spring 1977.

89. Sydney H. James, The Chinese Defense Burden, 1965-74, in China: A Reassessment of the Economy, Joint Economic Committee, Congress of the United States, Washington, 10 July 1975, pp.459-66.

90. The figures span a range of foreign estimates, based on different assumptions about the official information available; for figures and sources, see Table 6, Thomas Rawski, The growth of producer industries, 1900-1971, in D.H. Perkins (ed.), China’s Modern Economy in Historical Perspective, Stanford, 1975, p.222: cf. also R.M. Field, Civilian industrial production in the PRC, 1949-74, in China: A Reassessment, op. cit.; also, ibid., Rawski, pp.175-98, and Recent trends in the Chinese economy, CQ 53, January-March 1973, p.3ff.; and Alexander Eckstein, Economic growth and change in China: a twenty year perspective, CQ 54, April-June 1973, pp.221-41, and, with Walter Galenson and Tachung Liu (eds.), Economic Trends in Communist China, Chicago, 1968, p.7 passim.

91. Table 5, Rawski, in Perkins, op. cit., p.222.

92. Rawski, in Perkins, op. cit., pp. 222-3.

93. Report, Far Eastern Economic Review, December 1974.

94. Table 3, D.H. Perkins, Growth and changing structure of China’s economy, in D.H. Perkins, op. cit., p.122.

95. “However the estimates are made, there is no way one can make them show a substantial rise in average per capita consumption expenditures between the 1930s and 1950s.” – ibid., pp.125-6.

96. For the official figures, 1952-72, cf. Table, Production of foodgrains, in The economic development of India and China, in my India-China: Underdevelopment and Revolution, Delhi, 1974, p.286; husked grain output for 1973 is put at 213.8 million tonnes (264 million unhusked); for 1974, 228 million (275 unhusked – given by Yang Li-kung, Deputy Minister of Agriculture at the UN Food Conference, Rome, November 1975); 1975, 228 million unhusked; guesses for 1976, 286-92 million unhusked. Figures for the last three years have been challenged on the grounds that soya-bean, formerly counted separately, has now been included in the figures; if this is not so, the rate of growth 1970-76 is raised to nineteen per cent, or 3.6 per cent per year; allowing for the soya-bean inclusion, the growth is thirteen per cent, or 2.4 per cent per year.

97. NCNA Peking, 29 June 1976

98. Giving an average per head per day of 2,280 calories – cf. D.H. Perkins, Supplement on China, Far Eastern Economic Review, 1 October 1976, pp 50-3.

99. Report on the work of the government, 4th NPC, JMJP, 21 January 1975, in PR 4, 24 January 1975.