A Discussion on Aspects of the Economic Relations of People’s China

This exchange took place recently on the Facebook ‘In Defense of Stalin'. It is reproduced here as a number of questions which relate to the political economy of People’s China have not been discussed elsewhere.

B.R.: The USSR under Stalin had indeed economically advanced socialism the farthest. However, in terms of politics, Chinese socialism was more developed. In the late 60s, the process of expropriating and demoting capitalists from managerial posts had been started. Collectivisation and building of communes too had been initiated. For the first time in history, the masses rose up in class struggle inside a socialist society and identified capitalist roaders inside the party. Ultimately the revolution was defeated, but the decade before defeat marks the highest political development in any socialist regime in history.

VS: I must disagree. Stalin created socialism which was *qualitatively higher* than what was there in the Soviet Union at the death of Lenin. I stress that the Soviet Union under Stalin was the only major country which actually built socialism. Socialism requires the dictatorship of the proletariat and the socialisation of all the means of production. Was this done in the PRC? As is known the PRC was a people’s democratic state in 1949. It correctly established an anti-imperialist and anti-feudal state and correctly formed an alliance with the middle bourgeoisie which was part and parcel of the state structure. Stalin, it seems, convinced the CPC of this approach. The PRC between 1949 and 1952 carried out the anti-imperialist and anti-feudal revolution and began to embark upon a programme of socialism. This would have required the establishment of a state which carried out the functions of the dictatorship of the proletariat, implying that the national bourgeoisie required to be removed from the National People’s Congress. This was never done. The state structure remains frozen at the level of the democratic revolution. After 1949 the CPC initiated collectivisation in northern China on the model of Marx and Engels. Collective farms were formed of the poor and middle peasantry and Machine Tractor Stations were established which owned the means of production in agriculture.

But after 1953 a radical change took place. The rich peasantry was now included in the collective farms. And after 1958 the Machine Tractor Stations were dissolved and handed over to the people’s communes. This was a rejection of the principles of Marx and Engels. Now it must be said that communes were *never* constructed in China they were ‘people’s communes’ which included in town and country the national bourgeoisie, the former landlords, the kulaks and from the working people the working class, and the poor and middle peasantry. Were the means of production ever completely socialised in the PRC as had been done in the USSR? No. Big industry was to some extent nationalised in 1949. But the national bourgeoisie was never expropriated. Under what was called ‘socialism’, restrictions were placed on the national bourgeoisie through the establishment of joint state-private enterprises. In the cultural revolution the guaranteed interest payments paid to the national bourgeoisie were frozen, and resumed at its closure. The people’s communes owned the means of production, not just the agrarian means of production, but also the industry created in the people’s communes (steel works, steamship companies etc). It meant that the means of production were not entirely socialised as had been the case in the Soviet Union. The sector under commodity production in People’s China was proportionally greater than in the Soviet Union.

Under the CPC the economy after great advances remained frozen at the level of a very advanced democratic economy but which never actually completed the transition to socialism. It must be bluntly said that while the Soviet Union under Stalin was a socialist country in the main this was not the case in People’s China. Despite all restrictions on the national bourgeoisie in the PRC it cannot be said that: ‘In the late 60s, the process of expropriating and demoting capitalists from managerial posts had been started.’ These classes remain to this day. Despite great struggles in the PRC in the absence of the state carrying out the functions of the dictatorship of the proletariat and completing the construction of socialism it is incorrect to claim that the PRC ever was a socialist state. Necessarily it cannot be said that there was a ‘highest level of political development’ in a ‘socialist society’ in the absence of the dictatorship of the proletariat or a completed socialism. No section of the CPC it appears ever posed the question before the working masses of the conversion of the people’s democratic dictatorship into the dictatorship of the proletariat or the complete socialisation of the means of production in the PRC. The CPC’s non-Marxist views on these questions became a source of inspiration in the German Democratic Republic, Democratic Vietnam and Democratic Korea.

B.R.: I think you are going wrong on some points. Many factories were taken from the national bourgeoisie, and kept under state control. They were paid interest, but these interests were stopped in the late 60s. This amounts to expropriation. Also, in 1958 the collectives associated with the communes (and also those not associated with communes) practiced collective instead of private ownership of land. This means any rich peasant joining those would have to surrender his lands to the collective. This means they didn’t remain rich peasants at least as far as land ownership was concerned.

In fact, one of the first things that Deng did was to functionally break the collectives and restore private ownership of land.

VS.: No factories were taken from the national bourgeoisie (see the book by Kuan Ta Tung). The national bourgeoisie established with the democratic state the joint state private enterprises where 5 percent interest was guaranteed. The national bourgeoisie continued to run factory management. This new economic structure corresponded to the state structure where there was no dictatorship of the proletariat under a situation in which the PRC was declared to be a socialist state. Yes, as already said the interest was suspended in the cultural revolution. This does not amount to expropriation though it could be step towards expropriation. The CPC went back on its commitment to nationalise national capital under socialism. Of course the rich peasants or landlords surrendered their land before entering the collective farms or people’s communes but then these institutions had a different class basis than the Soviet collective farms which were constructed in strict adherence to the views of Marx and Engels. It would mean that from the CPC point of view it was wrong to eject the last capitalist class (and the landlords ) from the collective farms in the Soviet Union and that Marx and Engels were wrong in saying that the class basis of communes were (only) the poor and middle peasantry. It would also mean that Marx, Engels, Lenin and Stalin were wrong to say that the collective farms/communes should not own the means of production.

Yes from 1958 the people’s communes as they were called by the CPC (*not,* repeat *not* communes as you say) practised ‘collective’ ownership of land. Please note the multi-class character of the ‘collective’ urban and rural communes. But the people’s communes were also owning the means of production in agriculture, running industries on these people’s communes which represented a massive practicing of commodity production compared to the USSR. You have to decide whether you are with Marx, Engels, Lenin and Stalin on political economy or with the CPC. Whatever you decide the fact will remain that means of production were never socialised in large sections of the economy of the PRC and so they never were able to go beyond a democratic economy to a socialist economy. Of course all communists must defend the democratic achievements of the PRC just as they must defend the socialist achievement of the Soviet Union under Lenin and Stalin. After the coming to power of Deng there was a second stage of the expansion of commodity-money relations in the PRC which was contested by the ‘Four’. But all the major groups of the CPC, it appears, gave their support to the introduction of Titoite-Khrushchevite economic practices in expanding commodity-money relations in the period between 1953 and 1958.

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