Many bourgeois and revisionist commentators, looking narrowly at economic indicators of output and growth, pronounced the Great Leap Forward a “failure”. While it was true that problems such as agricultural shortages appeared during the Leap, the absolute decline in agricultural and industrial production has been exaggerated by these observers. But, what was most important, as Mao stressed, was the transformation of the relations of production which occurred during the Leap. This was perhaps the greatest achievement of the Leap, and not recognizable to the ideologists of capitalism.[1]
A number of factors developed during the Leap which led to a retreat and the dominance of the Right after 1960. Severe drought and flooding took a tremendous toll on agricultural production during 1959 and 1960.[2] The withdrawal of Soviet aid and technical assistance left many key industrial projects half finished and cut off an important source of capital and expertise.[3] Excessive decentralization in an attempt to encourage local initiative and involve the masses in the planning process hampered the rational allocation of resources and coordination of different sectors of the economy.[4] Voluntarist attitudes were also responsible for setting unrealistic production goals. Mao forthrightly pointed out these errors of excessive decentralization and voluntarism, but warned the party not to use these particular errors to completely discard the Leap and the general line on the transition.[5]
The Right used the economic dislocation which occurred during the Leap to push for a long-term retreat towards capitalism. In early 1962, Liu was in a strong enough position to openly attack the policies of the Great Leap Forward and attempt to reinstate P’eng Teh-Huai.[6] In 1962, seven new deputy chairmen of the State Planning Commission were announced; four had been strong critics of the Leap.[7]
The Rightists began to implement their program for capitalist restoration, even though they had not been able to consolidate their hold within the party and state apparatus. For instance, as the Rightists were attempting to introduce various capitalist “reforms”, Mao and the Left had sufficient support within the party to launch the Socialist Education Campaign. This movement was the first sustained and direct assault by the Left on bourgeois and revisionist tendencies within the superstructure – particularly art and education.[8] The movement continued the struggle to transform the relations of production, particularly in the countryside where the Left attempted to organize poor and middle peasants to check bureaucratic and corrupt practices by cadre in the Communes and rectify the relations between the party and the masses.[9] Simultaneously, the Left initiated polemics against revisionism within the international communist movement. First the Yugoslavs and then the Soviets were attacked for such revisionist theories as “peaceful transition to socialism” (denial of the need for armed struggle), “the state of the whole people” (abandonment of the dictatorship of the proletariat), and “nuclear blackmail” (which led to withdrawing support from the national liberation movements). The Left’s attack on Yugoslavia for such practices as reliance on material incentives, expanding the role of profits, and the growth of small commodity production in the countryside was part of the internal struggle against revisionists like Liu who were attempting to do these same things in China.[10]
What was the Right able to do during this period within the economic sphere?
1) The law of value was given a greater role, and profitability became the main criterion for investment and resource allocation decisions by the state. A theoretical debate on the role of profit was begun to justify these practices, a debate led by Sun Yen-Feng, Director of Economic Research at the Chinese Academy of Science, who not surprisingly had studied in the USSR with the noted Soviet architect of capitalist restoration, Liberman.[11]
2) A revival of Liu Shao-Chi’s rich peasant line was seen in the countryside. This was characterized by the restoration and growth of private plots, the re-emergence of rural trade fairs and “free” trade in the countryside, and the attempt to roll back collectivisation by vesting ownership in the lower-level production teams or even individual households instead of the production brigades.[12]
3) Greater authority was delegated to factory managers and technicians – relatively less power was exerted by the party committees, trade unions, and “triple combinations” within industry. The Right attempted to engineer a return to “one man management” which had been swept away during the Great Leap Forward.[13]
By ’63-’64 the Rightist influence on economic policy was curtailed as the Socialist Education Campaign gained momentum, particularly in the countryside, and the Left was able to direct its forces against revisionism within the economic base. A Central Intelligence Agency study entitled “A Short-Lived Economic Phase in Liberal Economic Thinking in Communist China” concluded:
In the liberal phase of 1962, proposals were made to rely more heavily than in 1957 on price and profit mechanisms and to give enterprises more autonomy. This trend was firmly halted in September 1962, when the Party held the 10th Plenum of the Eighth Party Congress, the first plenum since January 1961. The communique issued after the 10th Plenum indicated that the Party, having developed a cautiously optimistic view of the economy, intended to tighten controls and restrict what it viewed as capitalist tendencies.[14]
The role of profits was subordinated to the satisfaction of the social needs of the people once again after ’62. The continued emphasis on agriculture even during the period of ’60-’62 and the continuity of the relationship between agriculture, light industry, and heavy industry established during the Great Leap Forward is evidence of the restriction of the law of value as well as the limited ability of the Rightists to make significant changes in the general line for the transition.[15] By 1963 the role of private plots had been reduced and many communes like Tachai (which Mao had put forward as a model for socialist agriculture) refused to revert to Liu’s “four freedoms” and delivered twice the projected grain quotas to the state.[16] Similarly in industry the Right was faced with strong resistance in its attempt to dismantle the socialist production relations which developed during the Great Leap Forward. Particularly in heavy industry, where the most class-conscious workers were concentrated, many of the forms such as the triple combinations were maintained and served as an important barrier to the transfer of authority back to the factory managers.[17]
Furthermore, if we compare this period to some of the more prominent features of Soviet state monopoly capitalism after 1965, we can understand how the attempt to rig up capitalism in China during this period was ended in its initial stage. For instance, in the Soviet Union these indications of capitalist relations of production were visible after ’65 which did not appear in China during this time, or any other prior to 1976:
1) Profitability established as the guidepost of the economy, resulting in the stagnation of agriculture, the closing of many unprofitable firms and the “trustification” of industry.
2) Factory managers given the right to sell the means of production, and to buy and sell raw materials and finished goods independent of the State and the Central Plan.
3) Production norms and plans were set without regard to the State Plan and central planning bodies.
4) Soviet managers were given the authority to hire and fire workers, set wage differentials, and distribute bonuses. Income differences between managers/ technicians and workers increased.
5) Industrial enterprises were allowed to retain a large percentage of their profits instead of remitting them to the State.
6) Interest-free loans were abolished by the State Bank and the Bank no longer had control over surplus funds in the accounts of the industrial firms and the state farms.
7) The state charged a rental fee on the means of production to state enterprises.
8) Enlargement of private plots and the flourishing of rural trade fairs; managers of the state farms allowed to sell the land and trade directly with industrial enterprises; differences in income and services between town and country increased.
9) Negation of socialist self-reliance with massive borrowing from the West to finance the import of technology.[18]
Our narrative stops at ’63-’64, the eve of the Cultural Revolution. The Party was divided and the Right entrenched, particularly within the superstructure—yet the Left was still the dominant force in Chinese society. It is our firm conclusion that only those who consciously bend reality to fit their opportunist preconceptions can question that China passed from the democratic stage to the socialist stage during the period we have been examining.
[1] Two other important factors which we mentioned earlier: the collectivisation of agriculture and the creation of a larger surplus from agricultural production; the industrialization of the countryside with the construction of small and medium industry in the rural areas utilizing surplus labor and local resources. For a good account of the Leap see Wheelwright and McFarlane, The Chinese Road to Socialism, pp. 43-64.
[2] Prybyla, pp. 265-66.
[3] Ibid, pp. 317-18
[4] Guillermaz, pp. 210-11.
[5] Schram, Chairman Mao Talks to the People, pp. 143-46.
[6] Guillermaz, p. 244.
[7] Wheelwright and McFarlane, p. 74.
[8] Guillermaz, pp. 343-57. As we noted earlier, however, the Communist Party of China had previously mounted campaigns directed at the superstructure (for example, Hundred Flowers).
[9] Schurmann, p. 509.
[10] Wheelwright and McFarlane, p. 87. At the time of these polemics the Albanians stood “shoulder to shoulder” with the Chinese as the struggle against Yugoslav and Soviet revisionism unfolded. (See pamphlet by Chicago Committee for a Communist Party, entitled, “The PLA’s Treacherous Reversal”). The Party of Labor of Albania has now “discovered” that socialism never existed in China—do they repudiate these polemics? Have they done a self-critical analysis of how their unity with “bourgeois democrats” such as Mao influenced the development of the PLA’s line during this struggle? If so, they’re keeping it under their hat.
[11] Ibid, pp. 68-75, 81-86.
[12] Prybyla, pp. 354-59.
[13] Wheelwright and McFarlane, p. 67. MacFarguhar, China Under Mao, p 222.
[14] Central Intelligence Agency, “A Short-Lived Economic Phase in Liberal Economic Thinking in Communist China”, June, 1963. See also Wheelwright and McFarlane, pp. 202-03.
[15] Prybyla, pp. 302, 367. The emphasis on light industry does not necessarily indicate a lessening of the restriction of the law of value as Stalin claimed. There are circumstances when encouraging light industry corresponds to the basic law of socialism—the crucial distinction is, of course, are such measures instituted under the Dictatorship of the Proletariat or the Dictatorship of the Bourgeoisie? The Textbook of Political Economy explains:
In the development process of socialist production, the direction of the effects exerted by the law of value and the law of planned development of the national economy is sometimes identical. For example, the law of planned development of the national economy requires the acceleration of production of certain cash crops to meet the demand for raw materials due to a rapid development of same light industries. The prices of these cash crops can also guarantee a reasonable income to the agricultural collective economy. Under these conditions, the state plan’s requirements for increased production are identical to the requirements of the agricultural collective economy for increased production and increased income. The plan for increased production can generally be fulfilled or overfulfilled. However, the direction of the effects exerted by these two effects can be different. With regard to the comparative price relations between food grain crops and cash crops and among various cash crops within agricultural production, the prices of some cash crops can bring a relatively higher income to the collective economy than the prices of other cash crops. If the law of value is permitted to influence production, it will be detrimental to the requirement of the national economic plan that there be an overall increase in production of all crops but in varying degrees for different crops. Thus we can see that when the effects of the two laws are identical, the law of value plays a constructive role in fulfilling the state plan. But when the effects of the two laws are not identical, the law of value disrupts the fulfillment of the state plan and plays a negative role. The so-called conscious use of the law of value means that the role of the law of value must be comprehensively understood and that through political and ideological work, arrangement of the state plan, and price policy, the positive role of the law of value will be played and its negative role will be curtailed so that its effects on socialist production will be conducive to fulfilling the state plan.
[16] Suyin, p. 233.
[17] Andors, pp. 97-134.
[18] For documentation of these features of Soviet capitalism, see: Revolutionary Communist Party, How Capitalism was Restored in the USSR; Nicolaus, Restoration of Capitalism in the USSR; Marxist-Leninist Collective, On the Restoration of Capitalism, Part II; Communist Party of China, Textbook of Political Economy. For documentation of the development of these tendencies towards capitalist restoration after 1976, see Theoretical Review, No.16, H. Eastmarsh, ’China Since Mao’.