CHINA AND SOCIALISM: A HISTORICAL PERSPECTIVE
Initiated by William Dere, Response by Sam Noumoff
China is approaching the US as the world’s biggest economy. While many on the left have already passed a verdict that China is capitalist, the political economy of China is more complex. Here is reflection by two scholars well versed with the internal situation in China and Marxism. William Dere is a Chinese Canadian and a Marxist. Sam Noumoff was Professor of Political Science, McGill University, Montreal, Canada.
William Dere [gwdere@hotmail.com]
I bought the book “China’s Socialist Economy” (Beijing: Foreign Languages Press, Beijing, 1981) by Xue Muqiao (1904 – 2005) when it first came out and I finally got around to reading it now, to get an appreciation of the theoretical basis for China’s present economy. May be Sam Noumoff has read it.
Xue is seen as the architect for China’s economic reform and the socialist market system that we see in full bloom today. He got the ear of Deng Xiaoping who put many of his theories into practice.
Xue was an old revolutionary who joined the Party in 1926. He was jailed for organizing railroad workers. While in jail, he studied Soviet text books on political economy and taught himself economics. He helped implement the economic system in the liberated areas during the anti-Japanese resistance and the civil war years.
After Liberation, Xue Muqiao held many key posts including Secretary General of the Finance and Economy Commission of the Government Administrative Council, Director-General of the National Bureau of Statistics and consultant of State Council Office for Restructuring the Economic Systems. His work included eliminating the serious inflation of the early years of the People’s Republic, participating in drafting and implementing the First and Second Five-year Plans, and establishing the initial statistics system and price management system. His great contribution was to the development of economic theories and practice following China’s economic reform.
Here are some notes that I wrote as I read Xue’s book:
Since there was no other model for socialist construction, Xue drew from the experience of the Soviet Union – Lenin’s New Economic Plan and Stalin’s Five Year Plans (Economic Problems of Socialism in the USSR) as guides. Soon Xue realised that the Soviet policy towards agriculture and the peasantry did not suit China and that the Soviet economic policies were too rigid and inflexible for the Chinese situation. The Chinese Communist Party had to blaze the trail to construct socialism after the destruction of the semi-feudal, semi-colonial society.
Xue adhered to the Marxist concepts of the relations of production needing to correspond with the productive forces as well as the socialist dictum of “to each according to his work” and the “law of value” to regulate prices and wages. Even though today’s economists in China do not use the Marxist terminology used by Xue, his theories continues to be applied within the state economic planning system. However, today’s system probably has far more laissez-faire and less state intervention than what Xue had envisioned. Nevertheless, China today has a strong central economic planning system that Xue had influenced to guide the economy.
Xue pointed out that land reform in China was completed in 1953 and the basic means of production were fundamentally in the hands of the state or in collectives by 1956 and under socialist central planning. The bourgeoisie and landlords were essentially eliminated as exploiting classes. He saw the primary contradiction in China to be that of the relations of production and the low level of productive forces. He quoted frequently from Mao’s “On the Correct Handling of Contradictions Among the People.”
According to Xue, socialist construction took a serious “leftist” deviation from 1958 (Great Leap Forward) to the Cultural Revolution (1966 – 1976) [GLF and CR]. The policies of “Communist winds” and “Politics in Command” seriously stagnated the development of the economy and the people’s livelihood. Xue gave statistics on the development of the Chinese economy before and after 1958 to show how for two decades, the Chinese economy did not advance. He pointed out that politics should be the concentrated expression of economics and not the other way around. Leftist deviations were as serious as rightist deviations. The superiority of the socialist system over capitalism must be shown to be able to better meet the material and cultural needs of the people.
Xue adhered to the basic principles of Marxism-Leninism and Mao Zedong Thought, but pointed out that the construction of socialism is something entirely new in human history. Neither Marx nor Lenin had the practice to develop any guiding theory for the construction of socialism. Mao was able to develop his theories on the New Democratic Revolution and initial stages of building socialism with Chinese characteristics by linking his theories with practice. Xue did not openly criticize Mao but his criticisms of the GLF and the CR pointed out the leftist deviation that was in violation of the objective laws of socialist economics.
Xue pointed out building socialism in China would take many years, up to over 100 years and every step the Chinese take must adhere to the objective economic laws of relations of production corresponding to the productive forces, principle of “to each according to his work”, the law of value and socialist market economy of supply and demand. He also developed plans on reforming the management and accounting practices of planning the national economy as well as running local enterprises. He criticized plans made by administrative decrees to be divorced from the reality of the low levels of productive forces during the GLF and the CR.
In 1981, Xue wrote, “In 1958 we began making quite a few errors because we lacked experience in socialist economic construction. … serious damages were done to industrial and agricultural production and the socialist relations of production during the ten years of the Cultural Revolution. … If we do not quickly catch up with the advanced levels in capitalist countries, we shall not be able to prove the superiority of the socialist system to the people of China and the world, nor shall we be able to win ultimate victory over capitalism. The aim of socialist construction is to satisfy the constantly rising material and cultural requirements of the nation.”
Taking a long-term historical materialist view, Xue said, “As capitalist society has not yet run its course, we cannot say that we have arrived at a complete understanding of the laws of capitalist economic growth. Socialism is a new social system with a brief history. It has only been thirty years since socialist revolution began in China and we have not accumulated sufficient experience in our social practice. … On the whole, the building of socialism remains an unknown ‘realm of necessity’ for us, using the words of Engels. Whatever we know about the ‘realm of necessity’ is far from complete or profound. We have a long way to go before we get to know the laws governing socialist economic development.”
On the question of democracy, Xue wrote, “Ours is a country lacking a democratic tradition. How to develop people’s democracy as distinguished from bourgeois democracy is a question that remains to be solved in theory and practice.”
Xue predicted China being the factory to the world, “We may produce goods from imported materials, process goods with materials supplied by clients or conduct compensatory trade. The pay in China is low, but the workmanship is good. Such processing industries can be highly competitive internationally.”
Much has changed in China since Xue developed his theories of socialist construction in 1981. However Xue’s theories are still reflected in the CPC program that was passed at its 18th Congress, November 2012.
“China is in the primary stage of socialism and will remain so for a long time to come. This is a historical stage, which cannot be skipped, in socialist modernization in China, which is backward economically and culturally. It will last for over a hundred years. In socialist construction the Party must proceed from China’s specific conditions and take the path of socialism with Chinese characteristics. At the present stage, the principal contradiction in Chinese society is one between the ever-growing material and cultural needs of the people and the low level of production. (My emphasis) Owing to both domestic circumstances and foreign influences, class struggle will continue to exist within a certain scope for a long time and may possibly grow acute under certain conditions, but it is no longer the principal contradiction. In building socialism, the basic task is to further release and develop the productive forces and achieve socialist modernization step by step by carrying out reform in those aspects and links of the production relations and the superstructure that do not conform to the development of the productive forces. The Party must uphold and improve the basic economic system, with public ownership playing a dominant role and different economic sectors developing side by side, as well as the system of distribution under which distribution according to work is dominant and a variety of modes of distribution coexist, encourage some areas and some people to become rich first, gradually eliminate poverty, achieve common prosperity, continuously meet the people’s ever-growing material and cultural needs on the basis of the growth of production and social wealth and promote people’s all-around development. Development is the Party’s top priority in governing and rejuvenating the country. The general starting point and criterion for judging all the Party’s work should be how it benefits development of the productive forces in China’s socialist society, adds to the overall strength of socialist China and improves the people’s living standards. The Party must respect work, knowledge, talent and creation and ensure that development is for the people, by the people and with the people sharing in its fruits. The beginning of the new century marks China’s entry into the new stage of development of building a moderately prosperous society in all respects and accelerating socialist modernization. The Party must promote all-around economic, political, cultural, social, and ecological progress in accordance with the overall plan for the cause of socialism with Chinese characteristics.”
I will need to further study what today’s economic theoreticians in China are saying about the development of the economy and whether advances are being made in the understanding of the theory and practice of building socialism in one country.
Sam Noumoff Replies [noumoff@gmail.com]
(May 12, 2013)
Dear William & Daya: Yes I did read Xue’s analysis when first published by FLP. It certainly had its effect.
I had & have three points of concern:
(1) While true that relations of production must conform to forces of production, it is not automatic that relations will reflect forces. Ideology (relations) at times can play the dominant role for pushing forward that dialectic A very, very long standing debate.
(2) The GLF may have had many errors contained in the policy but it was not a total catastrophe. (a) it introduced machine technology into the rural areas’ (b) the introduction of ball bearings to the cart pullers in the cities made a phenomenal difference to their labor, as pointed out by one the cart pullers.
(3) While Zue’s (Xue’s) comment on administrative edicts is apt, there is not, in my view, adequate attention paid to the transmission and execution of policy instructions. The lower down one goes the more rigid is the interpretation and cadres at the lowest level concerned not to violate the line become the most rigid out of concern for their position. The clearest example of this was the dispute over how far apart plants should be placed when multi-cropping
William Dere’s Response
Hi Sam,
1. I agree that ideological issues were not well developed in the book. However, Xue’s ideological stand was clearly to show the superiority of socialism over capitalism. He wanted to show that objective laws of socialist economics were independent of man’s will. The book was refreshingly frank and did not bog down in ideological rhetoric. Xue tried to show a different path to socialist construction since there were no models nor experience in China. It is easy to fall back on ideology and political dogma when practice was missing and the practical road forward was not known.
2. The Communes were set up to collectivize machinery and manpower in order to increase production. However, the question is whether the productive forces were ready for such a jump in the relations of production. Of course, people continued to make contributions but the question is whether the people’s consciousness were raised enough to take personal motivation and initiatives to advance the policies of the GLF. Looking back, we can see that people’s practice did not take to heart the theories of the GLF to make it succeed. The dialctical unity of theory and practice will show that without the correct theory, the practice will be incorrect and only practice will show what is true.
3. During the GLF many policies did not reflect local reality and many cadres slavishly followed central administrative decrees and applied locally without local consultation, such as planting 3 crops per year when the land is not able to yield 3 crops. This is where the “Communist Wind” was in comand to “control nature.” When people at that time questioned some central decree from Beijing because it did not reflect local conditions, they were demoted and sent to the countryside for re-education.
The insight I got from the book is that socialist construction is a new human phenomenon which will have successes and serious reverses. Countries like China and Cuba are embarking on unexplored territory. Some people may say that they’ve turned away from Marxism, but then, Marx was never challenged with building socialism. Marx gave an good basic analysis ideologically, politically and economically of the evils of capitalism, but he contributed little to what socialism could be and how to construct it. I think this is the contribution of Xue, he was able to go beyond Marx.
Now I need to know what the current economic theoreticians within the CPC are saying. Judging from the CPC program, they have not moved much beyond Xue’s position in the 1980’s.
Sam Noumoff Continues
Subject: Re: “China’s Socialist Economy” by Xue Muqiao
Dear William (c.c. to Daya Varma): I fully agree with you that Xue provided some refreshing
analysis which broke the mechanical policy of over and distorted emphasis on the relations of production. I fear he has “bent the bamboo” too far in the opposite direction.
While projecting historical development as “independent of man’s will” is rhetorically energizing, there is a tendency to overemphasize the mere development of productive forces.
When Deng placed Zhu Rongji as mayor of Shanghai, as a prelude to his promotion to Prime Minister, Zhu took the view that the way of breaking the ossified bureaucracy was to unleash the creative potential of the masses. What this meant in practice was to emphasize individual initiative and benefit as a way of reconstructing the collective. What I fear is that he underestimated was how fast and deep the roots of petty capitalism can develop.
With the enormous development of productive forces since “opening up” we must watch carefully what form of productive relations emerge.
As an aside, the largest applause I ever received anywhere after a lecture in China, was when I commented that I fully agreed with Deng’s comment that one must seek truth from facts, this principle must equally be applied to his policies.
William Dere wrote:
1. I agree that ideological issues were not well developed in the book. However, Xue’s ideological stand was clearly to show the superiority of socialism over capitalism. He wanted to show that objective laws of socialist economics were independent of man’s will. The book was refreshingly frank and did not bog down in ideological rhetoric. Xue tried to show a different path to socialist construction since there were no models nor experience in China. It is easy to fall back on ideology and political dogma when practice was missing and the practical road forward was not known.
2. The Communes were set up to collectivize machinery and manpower in order to increase production. However, the question is whether the productive forces were ready for such a jump in the relations of production. Of course, people continued to make contributions but the question is whether the people’s consciousness were raised enough to take personal motivation and initiatives to advance the policies of the GLF. Looking back, we can see that people’s practice did not take to heart the theories of the GLF to make it succeed. The dialectical unity of theory and practice will show that without the correct theory, the practice will be incorrect and only practice will show what is true.
3. During the GLF many policies did not reflect local reality and many cadres slavishly followed central administrative decrees and applied locally without local consultation, such as planting 3 crops per year when the land is not able to yield 3 crops. This is where the “Communist Wind” was in comand to “control nature.” When people at that time questioned some central decree from Beijing because it did not reflect local conditions, they were demoted and sent to the countryside for re-education.
The insight I got from the book is that socialist construction is a new human phenomenon which will have successes and serious reverses. Countries like China and Cuba are embarking on unexplored territory. Some people may say that they’ve turned away from Marxism, but then, Marx was never challenged with building socialism. Marx gave a good basic analysis ideologically, politically and economically of the evils of capitalism, but he contributed little to what socialism could be and how to construct it. I think this is the contribution of Xue, he was able to go beyond Marx.
Now I need to know what the current economic theoreticians within the CPC are saying. Judging from the CPC program, they have not moved much beyond Xue’s position in the 1980’s.
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