Errors of excessive decentralization and a temporary belittling of centralized leadership as occurred during the Great Leap must not be construed as the abandonment of socialist planning, as JW claims. JW once again reveals his profound ignorance of the Soviet experience and problems of planning which the Chinese had summed up by 1957. His contention that the decentralization of the Chinese economy was similar to that of the Soviets is another exposure of his failure to investigate the concrete conditions in China.
Mao stated in “On the Ten Great Relationships”:
The relationship between the central and the local authorities constitutes another contradiction. To resolve this contradiction, our attention should now be focussed on how to enlarge the powers of the local authorities to some extent, give them greater independence and let them do more, all on the premise that the unified leadership of the central authorities is to be strengthened. This will be advantageous to our task of building a powerful socialist country. Our territory is so vast, our population is so large and the conditions are so complex that it is far better to have the initiative come from both the central and the local authorities than from one source alone. We must not follow the example of the Soviet Union in concentrating everything in the hands of the central authorities, shackling the local authorities and denying them the right to independent action. (SW 5.292)
The relationship between the center and the local authorities in Chinese planning was later more fully elaborated in the Textbook of Political Economy (pp. 341-57). Both passages point to the obvious problems presented by China’s size, particularly given the poor transport and communication systems inherited by the revolutionary government; beyond that these passages lay out a number of universal principles of socialist planning according to which a certain amount of decentralization is necessary in developing socialist planning.
To Mao and the Left within the CPC planning was not simply a technical question, or merely the contradiction between ignorance and knowledge. Rather, planning was viewed as a political question, one of class struggle between two roads. The bourgeois forces, particularly the vacillating elements among the petty-bourgeoisie, will constantly strive to undermine the planning process. Whether to rely on a handful of ’experts’ and bureaucratic methods or on the masses and a scientific summation of their ideas, experiences, etc. is a fundamental dividing line between a proletarian and a bourgeois approach to planning. The masses of workers and peasants must be intimately involved in the collection of data to objectively assess the needs and capabilities of different sectors. The planning process must politically mobilize and educate the masses so the priorities, investment ratios, etc. are understood by all. In this way, high rates of economic development are possible, the immense waste of manpower and material resources inherent under capitalism is eliminated, and the ability of the rightist forces to sabotage the planning process can be restricted.
The Chinese came to understand how the lack of initiative from below and the development of permanent forms for the participation of the masses in the planning process distorted socialist planning and held back the development of productive forces (after the first Five Year Plan) in the USSR. While retaining centralized leadership, the Chinese attempted to unleash the initiative of the masses by placing authority in the hands of mainly the local party committees in agriculture and industry. The party in turn played an important role in coordinating planning on a nationwide basis. Decentralization also gave more authority to the triple combinations within industry and the production brigades in agriculture which were under party leadership (See Wheelwright and McFarlane, pp. 201-202; Schram, p. 163; and Andors, pp. 125-131).
The decentralization did not give greater economic decision-making power to the factory managers as occurred in the USSR in the late 1950s. This is a qualitative difference between decentralization designed to strengthen socialist planning and decentralization that reflects the dismantling of the planning apparatus in order to unshackle market forces and facilitate the rise of a new bourgeoisie. Moreover, decentralization in China affected mainly small and medium-sized industry. Jim Washington conveniently “forgets” to mention that large-scale heavy industry remained tightly centralized under the direction of the State Planning Commission. This was not the case in the Soviet Union. (Cf. Nicolaus, pp. 125-133).
The Textbook of Political Economy summed up the relationship between democracy and centralism in planning as follows:
To formulate and carry through a unified national economic plan, it is necessary to have a highly centralized and unified leadership. In national economic planning work, there can be no unified national economic plan if there is no central unified leadership and if the viewpoint of the whole situation is not promoted and excessive decentralization is not opposed so that every local unit can make its own plans. However, socialist centralized leadership is built on a wide foundation of democracy. Central unified leadership must be combined with local activism. In formulating a national economic plan, the central departments concerned must find out what the local opinion is, consult with the local units, and formulate plans with the local units. In implementing the plan, it is also necessary to allow exceptions for local conditions. These exceptions are not excuses for creating independent kingdoms, but are necessary allowances that suit the interests of the whole, permit full tapping of production potentials in accordance with local conditions, and facilitate a better fulfillment of the national economic plan. As for the system of planning work, it is necessary to implement a system with a unified plan and administration by different levels. Chairman Mao pointed out early in the establishment of the People’s Republic of China: “What should be unified must be unified. Excessive decentralization cannot be permitted. But it is necessary to combine unification with local adaptations.” Later, Chairman Mao taught us more than once to exercise local activism more often in handling the relations between the center and the local units. Under a central, unified plan, the local units should be allowed to do more. Following Chairman Mao’s teachings, the broad people of the country criticized and repudiated the “dictatorship by regulations” fostered by the Liu Shao-ch’i clique that stifled local activism, and they better exercised control and local activism in plan management work, thus promoting the rapid, planned, and proportional development of China’s socialist economy. (p. 362)
The above note sets forward some of the main principles and points to bear in mind in evaluating decentralization in China. It was written before we came across an article entitled, “Capitalism: the Inevitable Product of Mao Tse-Tung’s ’Decentralized Socialism’”, published in Workers Herald by someone in close agreement with Jim Washington. The article appeared too late for us to include a polemic against it here.