|
1. Re-examine the Concepts of State Ownership and Economic Planning
A. State Ownership of the Means of Production Does Not Equate With Socialist Relations of Production
State ownership exists both in a capitalist system and in the transition period toward communism. State ownership simply means that the state has effective control over the means of production. During the transition state ownership does not in any way imply a change in the relations of production. Under capitalism, the state apparatus may take effective control over the means of production of some enterprises and made them state owned. There are many reasons for the state to take ownership of the means of production of some enterprises in a capitalist country. As we explained earlier, state ownership exists in both capitalist system and during the period of transition, thus state ownership does not in any way indicate or express the relations of production.
B. State Participation in Planning Does Not Mean a Socialist Economy
Planning versus market is another measurement used by conventional analysis to distinguish capitalist transition and socialist transition. Like state ownership, the state in the capitalist system also uses planning as an instrument to steer the direction of the economy. In many capitalist countries, the state participates in planning which can take place with or without the legal transfer of ownership to the state. Although it varies among capitalist countries, the state apparatus in capitalist countries has played an important role in both direct production (through ownership) and planning. In other advanced capitalist countries, state participation in planning is even more extensive. In developing countries, state planning also plays an important role. Capitalist transition, i.e. revisionism, begins when the state machine reverses the direction of transition from socialism/communism to capitalism. We introduce some new concepts -- capitalist project and socialist project -- as tools for our analysis.
The goal of capitalist projects is toward capitalism. The purpose of production in capitalist projects is value valorization. By expanding the capitalist projects, the state (or private capital) is in a position to speed up its capital accumulation by extracting more and more surplus value from workers. Socialist projects are designed to restrain, contain, and interrupt the accumulation of state and/or private capital.
The same is true for a capitalist project. In the following analysis of China's transition, we will use concrete examples to show why it was necessary for capitalist projects and socialist project to coexist during the socialist transition, and at the same time socialist projects competed with and replaced capitalist projects to move the society forward.
II. CHINA'S CONCRETE EXPERIENCES DURING THE SOCIALIST TRANSITION
Deng's reform in 1979 abruptly ended the socialist transition and reversed the direction toward capitalism. Policies of different periods are examined to see whether these policies were to institute capitalist projects or to institute socialist projects.
1. The Implementation of Socialist and/or Capitalist Projects
A. From Land Reform to People's Commune in the Collective Sector [3]
During the period of transition toward socialsm, both socialist projects and capitalist projects coexist. For example, during the socialist transition in China (1949-1978), land reform, viewed by itself, was a capitalist project. However, land reform was a necessary part of the long-term socialist strategy. Both mutual aid teams and elementary co-ops were also capitalist projects. Otherwise, capitalist, instead of socialist, development would occur. The commune system, a socialist project, benefited the majority of the peasants. The state attempted to moderate the income gaps by state aid, but state aid to poorer areas was limited.
B. Socialist Projects In the State Sector [7]
Based on concrete policies, the state-owned enterprises between 1956 and 1978 were socialist projects. During this period, the state had effective control of these enterprises. The state prohibited individual enterprises from buying or selling in the market. In the economic plan, the state determined the "prices" of the products "sold" by the enterprise to the state, as well as the "prices" of raw materials and machinery that the enterprises "bought" from the state. The state subsidized the enterprises that incurred "losses." The state enterprises are socialist projects and the direction of the state enterprises is toward phasing out commodity production and wage labor. The state took away from the enterprises (production units) the responsibility for its "profit" or "loss." Workers in state enterprises had permanent employment status, an eight-hour day, and an eight-grade wage scale. The Chinese workers got them overnight through the political power of the state.
However, there existed a contradiction between the workers and the state and party bureaucrats. More importantly, those higher level state and party bureaucrats who were supposed to control the managers of state enterprises were also in a position to use their power to benefit themselves. In China during the socialist transition, this contradiction was resolved from time to time by the mass movements. A socialist project like the state enterprise instituted in 1956 in China had the danger of becoming an established institution, if continuing changes were not made in the production process (including many work rules) within the state enterprise.
2. The Dual Characteristics of Capitalist Projects and Socialist Projects During the Socialist Transition
During the socialist transition, it may be necessary to institute more capitalist projects under certain circumstances. During the socialist transition, it may be necessary to institute some capitalist projects. There were other capitalist projects with dual characteristics. Mao made a comment on state capitalism in July 1953. The period between the very beginning of the People's Republic and 1978 was a period of socialist transition during which socialist projects competed with capitalist projects. Like capitalist projects, socialist projects also have their dual characteristics. The socialist project contains both capitalist elements and communist elements. Differences also existed among peasants of different communes. There were also eight different grades of wages for state workers. Mao de-emphasized the material incentive of work. For that reason, there are both capitalist elements and communist elements during the socialist transition. Mao believed that both capitalist projects and socialist projects had dual characteristics.
3. Competition Between Socialist Projects and Capitalist Projects
Land reform, as we explain earlier, was a capitalist project but from the perspective of Mao and those who supported the transition toward communism, land reform was also part of the overall socialist strategy. However, for Liu and Deng land reform was part of their overall capitalist strategy. Although land reform was a capitalist project, the way land reform was carried out made a difference on the development afterwards. Rather, it was a mass movement sponsored by the Chinese Communist Party for economic, political and ideological changes. In the land reform mass movement, as was in any other mass movement, the masses needed to be clear what was the opposite. The opposite in the land reform movement set up by the Chinese Communist Party was the landlords and some rich peasants. Throughout the land reform, a new ideology was appropriated among the peasants. After the land reform there were rich, upper-middle, middle, lower-middle and poor peasants. Under Mao's leadership, the class line of the Chinese Communist Party was clearly revealed.
The mass movements led by Mao and those in favor of socialist development promoted the socialist projects. When socialist projects were carried out through mass movements, the interests of opposing class forces were revealed and articulated. Through the implementation of socialist or capitalist projects, certain class forces were strengthened and other classes forces were weakened. Like the 1949-52 land reform, Deng's land redistribution was a capitalist project. Deng's land redistribution carried out with other capitalist projects he and his supporters instituted, such as the phasing out the unified purchase system, the privatization of rural industry, the reduction of state support for the production of agricultural machinery and other agricultural inputs, and eventually the privatization of state enterprises and the replacement of permanent state workers with contract workers, are all capitalist projects in an overall capitalist strategy. Deng's capitalist strategy reveals the class line of his reform. First, in the very poor communes, peasants encountered many difficulties to increase production. (The poorest communes often had to rely on state aid.)
B. Competition in the State Sector
Within the state sector, the most important socialise project is the state enterprise. The wage system in state enterprises should reflect the amount of labor contributed, not the size of the capital. On the other hand, state ownership does not necessarily mean socialist relations of production. Under state ownership, capitalist projects can be instituted to promote capitalist relations of production. The capitalist project would expand commodity production and thus reinforce the dominating and the dominated relations in production. China's concrete experiences showed that within the state enterprise there was continuing struggle between the socialist projects and capitalist projects. The socialist projects and the capitalist projects competed on issues such as the autonomy of the enterprises, the employment status of state workers, the wage system and other issues concerning workers' control. These issues reflect the capitalist or socialist nature of the state enterprise.
During the transition period, the capitalist projects compete with the socialist projects within the state sector. From early on, the bourgeoisie had its own plan to institute capitalist projects in the state sector. The goal of capitalist projects is the opposite of that of the socialist projects and the method of implementation of capitalist projects is also drastically different from that of the socialist projects. During each period of the reform, from the decollectivization of agriculture to the reform of state enterprise and the labor reform, legislation was passed at the top and then pushed onto the production unit to implement these capitalist projects. Mass movements in the past created new ideology owned by the masses. On May 10, 1984, the state council issued a temporary regulation on the expansion of autonomy to individual state enterprises. This legislation further stated that the state would no longer intervene directly in the affairs of individual enterprises. Under Deng's leadership the current reformers first began their labor reform by introducing direct material incentives into the wage system of state employees. As we stated earlier, from 1966 to 1979, workers in state enterprises were paid on an eight-grade wage system. This new law strengthens the legal power of the management in state enterprises. [16] With the passage of the new law, the once state-owned enterprises legally separated from the state and became independent entities.
4. Commodity Production and the Law of Value During the Socialist Transition
This exemplifies what we stated earlier that communist elements exist during the socialist transition. During the socialist transition, there were other contradictions within the state sector. With the proceeds received from their sales, the teams/brigades/communes bought from state enterprises industrial products they needed for production and consumption. Contradictions existed within both the collective and the state sectors, and they also existed between the collective and state sectors. This transformation aided Deng in the implementation of his capitalist projects.
Other major policies during China's socialist transition included the policy that emphasized self-reliance and long-term development goals.
5. The Chinese Communist Party
During the socialist transition before 1978, the class forces that favored capitalist transition never ceased in their attempts to push forward the capitalist projects. As it happened in China, the pro-capitalist elements within the Chinese Communist Party eventually took control of the party and the state machinery. It was the pro-capitalist elements within the Chinese Communist Party that pushed forward the capitalist projects. In the first place, China's revolution led by the Chinese Communist Party included both the democratic revolution and the socialist revolution. The state machinery had the political, economic and military power. The economic power of the state in a planned economy means an almost total control of the economic resources by state administrators. Linked to economic power were political power and military power.
The CCP used the cadre system to select cadre to fill positions in the state apparatus.
D. The Mass Movement -- Mao's Strategy for Change
Earlier, we explained the mass movement during the land reform and how that movement changed China's peasant population. Participation in mass movements raised the consciousness of workers and peasants and generated new ideology. Deng's reform created many new contradictions in Chinese society. Deng's reform gave these power holders the green light. His reform legislation legitimized the conversion of state property into bureaucratic capital. The majority of rank-and-file party members trusted Mao's leadership and followed the CCP's policies in the land reform and in the collectivization movement that followed.
During the socialist transition, the socialist projects benefited the workers and the majority of peasants and were implemented with their support. The CCP under Mao's leadership sponsored mass movements to solicit supports from the workers and peasants. The majority of workers and peasants and the rank-and-file party members had just begun to understand the difference between the socialist projects put forward by Mao through mass movements and the capitalist projects push forward by Liu and Deng in the top-down fashion.
_________________________________________________________________________________________