The Experience of China

[“The Experience of China” is an excerpt from “Approaching Socialism,” published in the July-August issue of Monthly Review in print. The full text of the article will be soon avaialbe at <>. — Ed.]

When the Red Army, led by the Chinese Communist Party, entered
Beijing in 1949, the work needed to create a road to socialism far exceeded the labors of Hercules. Great hunger raged in the land. The kind of poverty existed that Gandhi no doubt had in mind when he declared, “Poverty is the worst form of violence.” There was no health care system while diseases of all types were widespread. The masses were illiterate. Education was minimal. All these abysmal conditions combined to produce an amazing fact: average life expectancy in China at that time was thirty-five years!

The new regime turned the old society upside down as meeting human needs became the main priority. A nation-wide health system was established and campaigns were initiated that greatly reduced and sometimes even eliminated widespread diseases. Educational facilities were vastly expanded and an extensive literacy drive produced literacy far and wide.

The Iron Rice Bowl was introduced — a system of guaranteed lifetime employment in state enterprises and a secure retirement pension. And in the early 1950s every peasant got a share of, to quote Bill Hinton, “that most precious and basic means of production, the land.” A striking upshot of all these efforts to improve people’s lives was that average life expectancy rose to sixty-five years by 1980!

However, the radical social achievements in the absence of meaningful democracy opened up opportunities for the growth and impact of bureaucracy. Throughout Mao Zedong’s writings of those years he railed against the new bureaucracy that not only acted as commanders over their subordinates but also obtained special privileges for themselves. Time and again Mao made clear the dangers. Here is the way Mao’s close collaborator, Zhou Enlai, described the danger:

For quite a long period, the landlord class, the bourgeoisie and other exploiting classes which have been overthrown will remain strong and powerful in our Socialist society; we must under no circumstances take them lightly. At the same time, new bourgeois elements, new bourgeois intellectuals and other new exploiters will be ceaselessly generated in society, in Party and government organs, in economic organizations and in cultural and educational departments. These new bourgeois elements and other exploiters will invariably try to find protectors and agents in the higher leading organizations. The old and new bourgeois elements and other exploiters will invariably join hands in opposing Socialism and developing capitalism. (“Report on the Work of the Government, 30 December 1964,” as cited in Maurice Meisner, Mao’s China and After [Free Press, 1986])

At heart, as Mao pointed out, even some in high Communist Party positions wanted to take the “capitalist road.” Mao’s purpose for initiating the Cultural Revolution (1966–1976) was to mobilize and engage millions and millions from all sectors of society — workers and peasants as well as students and intellectuals — in a struggle against the forces within the Party that favored the restoration of capitalism. Among most intellectuals in China and the United States, the Cultural Revolution has been viewed as an era of inhumane chaos. It is true that the Cultural Revolution was chaotic, with various Red Guard factions (some were even sham Red Guards, possibly organized by those under attack to confuse the masses) and many instances of exaggerated and inhumane treatment of people, including killings. On the other hand, in the rural areas this period is commonly viewed in a more positive light — an era when much infrastructure was built and attention paid to problems of the great mass of people living in the countryside.

A great change — in fact, a reversal — in the direction of China’s economic and social development, began in 1978, two years after Mao’s death, when top party officials undertook major reforms that departed from essential features of the revolution. (See William Hinton, The Great Reversal: The Privatization of China, 1978–1989 [Monthly Review Press, 1990].)

We are not able nor do we desire to diagnose the psychological or personal aims of the designers of the new direction nor have we tried above to outline all the twists and turns the Chinese Revolution took following 1949.

What has become clear is that for a long time sharp differences existed within the leadership of the party about the structure of the society and the strategy of its development. On one side were those who wished to (a) confront the foreign imperialists (who in effect controlled and invested in areas on the East coast), (b) escape from the old feudalist culture, (c) prioritize aid to the peasants, and (d) overcome Han chauvinism, paying extra attention to the national minorities. On the other side were those who sought to make China a great power by giving first priority to industrialization and the speed of its development.

We write not as specialists on China. The above description is the way we read recent history, notably the avowed aim to rely on what the “reform” leaders term “socialism with a Chinese face” (also sometimes referring to “socialist market economy”). More and more information is becoming available about important features of the reversal. A major aim of the revolution had been to create an egalitarian society. And indeed that was the direction in the first thirty years. “Socialism with a Chinese face,” in which Deng Xiaoping proclaimed that “to get rich is glorious,” rapidly moved toward the “capitalist road” that Mao feared — with the most negative environmental and social attributes of capitalism, discussed above (section 2), now brought into full force.

China’s new course has indeed resulted in an extremely rapid increase of production and total national income. Although many are awed at this high rate of economic growth, it should be kept in mind that much of the growth was made possible by the infrastructure developed during the revolutionary pre-“reform” period. It was also made possible by a huge increase in exports (from $0.6 trillion in 1990 to $4.3 trillion in 2003), financed by mainly foreign capital making super profits based on extremely low-wage, disciplined Chinese labor. Under a strategy of highly capital intensive investing in labor-saving machines, “over 90 percent of the average annual 11.2 percent value added growth in industry in 1993-2004 was in the form of labor productivity growth rather than employment growth” (World Bank, China Quarterly Update, April 2005). With the high rates of economic growth concentrated in automated industries producing primarily for export and workers unable to organize meaningful militant unions, the wealth created has not trickled down very far. The result is a very rich upper strata and a comfortable middle class, replacing the earlier egalitarian order, and as for the rest: poverty, insecurity, unemployment, and a decline in education and medical care. The effect of the turnaround on the large mass of poor is finally being acknowledged in official circles. The political department of China’s Ministry of Finance issued a report on the subject. People’s Daily Online (June 19, 2003) ran an article containing the substance of the document. The article started off by stating that the report had revealed among other things: (1) “A ceaseless widening of the gap in income distribution and the aggravated division of the rich and the poor is occurring”; and (2) “Amassed wealth is becoming more concentrated, with the difference of family fortunes becoming bigger and bigger.”

The rapid development of inequality has now reached the point where China’s income distribution is almost the same as that of the United States (see table 3). In addition, the inequality of income occurs from region to region (table 4), with much of the growth concentrated in coastal areas.

Table 3, Income Distribution by Quintile in China and the United States, 1998, and Table 4, Per Capita Income Index Relative to Beijing, 1995

One of the most important lessons to be learned from China’s reversal in direction, in our view, is that so-called market socialism has an inner logic. One step leads to another down a slippery slope toward capitalism. The defenders of the reversal point to the fact that the state still owns the remaining nationalized companies. However, that too is changing. In February the State Council reported that it was now permissible for “private companies legally [to] engage in oil exploration, set up banks of a certain scale, provide telecommunications services and operate airlines. Other sectors
now open include utilities, health and education, and defense” (Wall
Street Journal
, Feb 28, 2005). And as pointed out by a headline in the Financial Times (May 1, 2005) — “China gives go-ahead to sell state holdings.” This process has already begun. It is manifested in a sale of stock in four state-controlled companies, starting with “the Shanghai Zi Jiang Enterprise Group, a packaging maker; Sany Heavy Industry, which makes machinery; Tsinghua Tongfang, a computer company; and the Hebei Jinniu Energy Resources Company, a coal company” (International Herald Tribune, May 9, 2005).

Fred Magdoff is professor of plant and soil science at the University of Vermont in Burlington. He is author of numerous scientific articles; coauthor, with Harold van Es, of Building Soils for Better Crops (Sustainable Agricultural Network, 2000); and coeditor, with John Bellamy Foster and Frederick H. Buttel, of Hungry for Profit: The Agribusiness Threat to Farmers, Food, and the Environment (Monthly Review Press, 2000). Harry Magdoff has been a co-editor of Monthly Review since 1969 and is the author of Imperialism without Colonies (Monthly Review Press, 2003) as well as many other books and articles.