After listing some of the accomplishments of the Wu Fan campaign (1952) and conceding that it was “unquestionably a step forward”, JW argues that “its effectiveness was restricted by the CPC’s conception of alliance with the national bourgeoisie in building socialism” and actually that “the overall direction of the campaign in Shanghai was not put in the hands of the mass working class organizations” but rather in large part in the hands of the national bourgeoisie! He cites as “proof” that the Shanghai Increase Production and Practice Economy Committee which led the Wu Fan campaign in Shanghai had several so-called “progressive capitalists” in its membership, and that a national All-China Federation of Industry and Commerce was organized at the end of the Wu Fan campaign, whose role JW claims was to “oversee” the transformation of private to state enterprises in the years to follow.
While the Wu Fan campaign was a united front effort with the national bourgeoisie, the campaign was under the leadership and direction of the CPC throughout, a fact JW conveniently fails to mention. The direction of the campaign was not put into the hands of the national bourgeoisie. The national bourgeoisie was, however, used very effectively by the CPC to help expose those members of the class guilty of graft, bribery, and tax evasion. In Shanghai it was obligatory for all heads of private business firms to be members of the Shanghai Federation of Industry and Commerce; the organization was responsible for communicating the CPC’s wishes to the business community and for supervising the business community’s implementation of government policy (Gardner, p 505).
The Wu Fan campaign dealt devastating blows to the national capitalists and sections of the petty-bourgeoisie. JW’s contention that this campaign was a masquerade designed to consolidate the power of the national bourgeoisie does not conform to the facts. Heavy fines and the collection of back taxes drained the savings of the national capitalists and small merchants (Hughes and Luard, p 90; Meisner, p 96), and as Cohen (p 113) says, they were forced to “liquidate all concealed assets under conditions of persecution and terror.” Over 450,000 enterprises were investigated by the state during 1952-1953 and many national capitalists were imprisoned in “special concentration camps”, as Prybyla terms them (p 78 and Meisner, p 96). Strangely enough for a “masquerade”, these movements took on a quite serious tone as suicide among the national bourgeoisie and petty-bourgeoisie, who were the object of the campaigns, became a daily occurrence (Prybyla, p. 78). As summarized by Barnett in Communist China: the Early Years, p. 143:
The campaign undermined the position of the urban bourgeoisie in China, greatly reduced its wealth and assets, ostracized it as being dangerous and subversive, and probably eliminated any possibility of significant political influence on its part.
It intensified class conflicts in the cities, isolated the business class, separated businessmen from their employees, and encouraged conflicts among businessmen themselves.
It produced large revenues for the government, which was important to state finance, and removed most of the remaining fluid capital in China from private hands.
It resulted in the collection of considerable amounts of much-needed foreign exchange that had previously been successfully concealed from the government, thereby increasing state control over China’s limited foreign-exchange resources . . .
The campaign greatly increased governmental control over, and direction of, the remaining private sector of the Chinese urban economy. This was one of its most important results. Many private enterprises are now private in name only, and all private enterprises are subject to innumerable controls. In fact, now the government probably has effective enough control over private industry and trade as a whole to apply state planning in various degrees and forms to the entire economy. This has been accomplished on the eve of a great campaign of national construction to increase production, a campaign initiated in June, immediately after the Five-Anti (that is, Wu Fan–ed.) campaign.
After the Wu Fan campaign, a nationwide Federation was established which was used by the CPC to play a role similar to that described above for the Shanghai Federation in the nationalization of the private sector. The CPC, however, directed the nationalization, not the All-China Federation. The Wu Fan campaign itself wasn’t brought to an end because the All-China Federation had been formed, as JW implies, but because the goals of the campaign had been reached. Wu Fan was extremely successful as a mass campaign, both by breaking the political and economic strength of the national bourgeoisie and by mobilizing and organizing the Chinese working class.
Wu Fan had a tremendous impact on the working class. Many new proletarian activists emerged; in Shanghai 60,000 workers were trained in Wu Fan work brigades, constituting 10% of the labor force in the private firms; membership in unions, the Youth League and propaganda networks increased dramatically, providing a base for eventual recruitment into the CPC. Many workers were recruited into the CPC during this period, both as a result of Wu Fan and the earlier San Fan (three anti’s) campaign. Corrupt elements in the trade unions were eliminated, and many Wu Fan activists became trade union leaders. Educational work by the CPC among the workers greatly increased through newspaper reading teams, workers’ political forums and political schools (Gardner, pp 529-34). The working class exercised control over the national bourgeoisie through participation in the trade unions and other mass organizations, and most importantly through the generally correct policies of the CPC during this period in regard to the leading role of the state sector of the economy and the gradual expropriation of the private sector.