Library:Has China turned to capitalism? — Reflections on the transition from capitalism to socialism

Type	Author	Date	Pages
Essay	Domenico Losurdo	March 20, 2017	18

Abstract

If we analyse the first 15 years of Soviet Russia, we see three social experiments. The first experiment, based on the equal distribution of poverty, suggests the “universal asceticism” and “rough egalitarianism” criticised by the Communist Manifesto. We can now understand the decision to move to Lenin’s New Economic Policy, which was often interpreted as a return to capitalism. The increasing threat of war pushed Stalin into sweeping economic collectivisation. The third experiment produced a very advanced welfare state but ended in failure: in the last years of the Soviet Union, it was characterised by mass absenteeism and disengagement in the workplace; this stalled productivity, and it became hard to find any application of the principle that Marx said should preside over socialism—remuneration according to the quantity and quality of work delivered. The history of China is different: Mao believed that, unlike “political capital,” the economic capital of the bourgeoisie should not be subject to total expropriation, at least until it can serve the development of the national economy. After the tragedy of the Great Leap Forward and the Cultural Revolution, it took Deng Xiaoping to emphasise that socialism implies the development of the productive forces. Chinese market socialism has achieved extraordinary success.

1. Soviet Russia and Various Experiments in Post-Capitalism

Nowadays it is common to talk about the restoration of capitalism in China as resulting from the reforms of Deng Xiaoping. But what is the basis for this judgment? Is there a more or less coherent vision of socialism that can be contrasted with the reality of the current socio-economic relations in China today? Let’s take a quick look at the history of attempts to build a post-capitalist society. If we analyse the first 15 years of Soviet Russia, we see war communism, then the New Economic Policy (NEP), and finally the complete collectivisation of the economy (including agriculture) in quick succession. These were three totally different experiments, but all of them were an attempt to build a post-capitalist society. Why should we be shocked that, in the course of the more than 80 years that followed these experiments, other variations like market socialism and Chinese socialism appeared?

Let’s concentrate for now on Soviet Russia: which of the three experiments mentioned is closest to the socialism espoused by Marx and Engels? War communism was greeted by a devout French Catholic, Pierre Pascal, then in Moscow, as a “unique and intoxicating performance [. . .] The rich are gone: only the poor and the very poor [. . .] high and low salaries draw closer. The right to property is reduced to personal effects” (cf. Losurdo 2013, 185). This author read the widespread poverty and privation not as wretchedness caused by the war, to be overcome as quickly as possible; in his eyes, as long as they are distributed more or less equally, poverty and want are a condition of purity and moral excellence; on the contrary, affluence and wealth are sins. It is a vision that we can call populist, one that was criticised with great precision by the Communist Manifesto: there is “nothing easier than to give Christian asceticism a Socialist coat of paint”; the “first movements of the proletariat” often feature claims in the name of “universal asceticism and a rough egalitarianism” (Marx and Engels 1955–89, vol. 4, 484, 489; translated from Italian). Lenin’s orientation was the opposite of Pascal’s, as he was far from the view that socialism would be the collectivisation of poverty, a more or less egalitarian distribution of privation. In October 1920 (“The Tasks of the Youth Associations”) Lenin declared, “We want to transform Russia from a poor and needy country to a rich country” (Lenin 1955–70, vol. 31, 283–84; translated from Italian). First, the country needed to be modernised and wired with electricity; therefore, it required “organised work” and “con-scious and disciplined work,” overcoming anarchy in the workplace, with a methodical assimilation of the “latest technical achievements,” if necessary, by importing them from the most advanced capitalist countries (Lenin 1955–70, vol. 31, 283–84; translated from Italian).

A few years later, the NEP took over from war communism. It was essential to overcome the desperate mass poverty and starvation that followed the catastrophe of World War I and the civil war, and to restart the economy and develop the productive forces. This was necessary not only to improve the living conditions of the people and to broaden the social basis of consensus on revolutionary power; it was also about avoiding an increase in Russia’s lag in development compared to the more advanced capitalist countries, which could affect the national security of the country emerging from the October Revolution, not to mention it being surrounded and besieged by the capitalist powers. To achieve these objectives, the Soviet government also made use of private initiative and a (limited) part of the capitalist economy; it used “bourgeois” specialists who were rewarded generously, and it sought to take advanced technology and capital, which were guaranteed attractive returns, from the West. The NEP had positive results: production started up again, and a certain development of the productive forces began to take place. Overall, the situation in Soviet Russia improved noticeably: on the international level it did not worsen; rather, Russia’s delay in development started to decrease compared to the successful capitalist countries. Domestically, the living conditions of the masses improved significantly. Precisely because social wealth increased, there were more than just “the poor and the very poor,” as in the war communism celebrated by Pierre Pascal; desperate hunger and starvation disappeared, but social inequalities increased.

These inequalities in Soviet Russia provoked a widespread and intense feeling of betrayal of the original ideals. Pierre Pascal was not the only one wanting to abandon the Communist Party of the Soviet Union; there were literally tens of thousands of Bolshevik workers who tore up their party cards in disgust at the NEP, which they re-named the “New Extortion from the Proletariat.” In the 1940s, a rank-and-file militant very effectively described the spiritual atmosphere prevailing in the immediate aftermath of the October Revolution—the atmosphere arose from the horror of war caused by imperialist competition in plundering the colonies in order to conquer markets and acquire raw materials, as well as by capitalists searching for profit and super-profit:

We young Communists had all grown up in the belief that money was done away with once and for all. [. . .] If money was reappearing, wouldn’t rich people reappear too? Weren’t we on the slippery slope that led back to capitalism? (Figes 1996, 771)

Therefore, one can understand the scandal and a persistent feeling of repugnance for the market and the commodity economy at the introduction of the NEP; it was above all the growing danger of war that caused the abandonment of the NEP and the removal of every trace of the private economy. The wholesale collectivisation of the country’s agriculture provoked a civil war that was fought ruthlessly by both sides. And yet, after this horrible tragedy, the Soviet economy seemed to proceed marvellously: the rapid development of modern industry was interwoven with the construction of a welfare state that guaranteed the economic and social rights of citizens in a way that was unprecedented. This, however, was a model that fell into crisis after a couple of decades. With the transition from great historical crisis to a more “normal” period (“peaceful coexistence”), the masses’ enthusiasm and commitment to production and work weakened and then disappeared. In the last years of its existence, the Soviet Union was characterised by massive absenteeism and disengagement in the workplace: not only did production development stagnate, but there was no longer any application of the principle that Marx said drove socialism—remuneration according to the quantity and quality of work delivered. You could say that during the final stage of Soviet society, the dialectic of capitalist society that Marx described in The Poverty of Philosophy had been overturned:

While inside the modern factory the division of labour is meticulously regulated by the authority of the entrepreneur, modern society has no other rule or authority to distribute the work, except for free competition. [. . .] One can also determine, as a general principle, that the less the authority presides over the division of labour inside the society, the more the division of labour develops inside of the factory, and it is placed under the authority of just one person. Thus the authorities in the factory and in society, in relation to the division of labour, are inversely related to each other. (Marx and Engels 1955–89, vol. 4, 151; translated from Italian)

In the last years of the Soviet Union, the tight control exercised by the political powers over civil society coincided with a substantial amount of anarchy in workplaces. It was the reversal of the dialectic of capitalist society, but the overthrow of the capitalist society’s dialectic was not socialism and, therefore, it produced a weak economic order unable to resist the ideological and political offensives of the capitalist-imperialist world.

2. The Peculiarity of the Chinese Experience

China’s history is different. Although the Communist Party of China seized power at the national level in 1949, 20 years earlier it had already started to exercise its power in one region or another, regions whose size and population were comparable to those of a small or medium-sized European country. For much of these 85 years in power, China, partly or totally ruled by the communists, was characterised by the coexistence of different forms of economy and property. This was how Edgar Snow described the situation in the late 1930s in the “liberated” areas:

To guarantee success at these tasks it was necessary for the Reds, even from the earliest days, to begin some kind of economic construction. [. . .] Soviet economy in the Northwest was a curious mixture of private capitalism, state capitalism, and primitive socialism. Private enterprise and industry were permitted and encouraged, and private transactions dealing in the land and its products were allowed with restrictions. At the same time the state owned and exploited enterprises such as oil wells, salt wells, and coal mines, and it traded in cattle, hides, salt, wool, cotton, paper, and other raw materials. But it did not establish a monopoly in these articles and in all of them private enterprises could, and to some extent did, compete. A third kind of economy was created by the establishment of cooperatives, in which the government and the masses participated as partners, competing not only with private capitalism but also with state capitalism! (Snow [1937] 1972, 262)

This picture is confirmed by a modern historian: in Yan’an, the city where Mao Zedong directed the struggle against Japanese imperialism and promoted the construction of a new China, the Communist Party of China did not pretend “to control the whole of the base area’s economy.” It rather supervised a “significant private economy,” which also included “large private landholdings” (Mitter 2014, 192).

In an essay in January 1940 (“On the New Democracy”), Mao Zedong clarified the meaning of the revolution taking place at that time:

Although such a revolution in a colonial and semi-colonial country is still fundamentally bourgeois-democratic in its social character during its first stage or first step, and although its objective mission is to clear the path for the development of capitalism, it is no longer a revolution of the old type led by the bourgeoisie with the aim of establishing a capitalist society and a state under bourgeois dictatorship. It belongs to the new type of revolution led by the proletariat with the aim, in the first stage, of establishing a new-democratic society and a state under the joint dictatorship of all the revolutionary classes. Thus this revolution actually serves the purpose of clearing a still wider path for the development of socialism. (Mao 1965–77, vol. 2, 344)

This was a model characterised, at the economic level, by the coexistence of different forms of ownership; at the level of political power, by a dictatorship exercised by the “revolutionary classes” as well as the leadership of the Communist Party of China. It is a pattern confirmed 17 years later, although in the meantime the People’s Republic of China was founded, in a speech on January 18, 1957 (“Talks at a Conference of Secretaries of Provin-cial, Municipal and Autonomous Regions Party Committees”):

As for the charge that our urban policy has deviated to the Right, this seems to be the case, as we have undertaken to provide for the capitalists and pay them a fixed rate of interest for a period of seven years. What is to be done after the seven years? That is to be decided according to the circumstances prevailing then. It is better to leave the matter open, that is, to go on giving them a certain amount in fixed interest. At this small cost we are buying over this class. [. . .] By buying over this class, we have deprived them of their political capital and kept their mouths shut. [. . .] Thus political capital will not be in their hands but in ours. We must deprive them of every bit of their political capital and continue to do so until not one jot is left to them. Therefore, neither can our urban policy be said to have deviated to the Right. (Mao 1965–77, vol. 5, 357)

It is, therefore, a matter of distinguishing between the economic expropriation and the political expropriation of the bourgeoisie. Only the latter should be carried out to the end, while the former, if not contained within clear limits, risks undermining the development of the productive forces. Unlike “political capital,” the bourgeoisie’s economic capital should not be subject to total expropriation, at least as long as it serves the development of the national economy and thus, indirectly, the cause of socialism.

After taking off in the second half of the 1920s, this model revealed a remarkable continuity and offered great economic vitality before 1949 to the “liberated” areas governed by the communists and then the People’s Republic of China as a whole. The dra-matic moment of breakthrough came with the Great Leap Forward of 1958–59 and with the Cultural Revolution unleashed in 1966. The coexistence of different forms of ownership and the use of material incentives were radically thrown on the table. There was an illusion of accelerating economic development through calls for mass mobilisation and mass enthusiasm, but this approach and these attempts failed miserably. Moreover, the struggle of everyone against everyone heightened the anarchy in factories and production sites.

The anarchy was so widespread and deep-rooted that it did not disappear immediately with the reforms introduced by Deng Xiaoping. For some time, customs continued in the public sector as described by a witness and Western scholar, “even the last attendant [. . .], if he wants to, can decide to do nothing, stay home for a year or two and still receive his salary at the end of the month.” The “culture of laziness” also infected the expanding private sector of the economy. “The former employees of the State [. . .] arrive late, then they read the newspaper, go to the canteen a half-hour early, leave the office an hour early,” and they were often absent for family reasons, for example, “because my wife is sick.” And the executives and technicians who tried to introduce discipline and efficiency into the workplace were forced to face not only resistance and the moral outrage of the employees (who considered it infamy to impose a fine on an absent worker caring for his wife), but sometimes even threats and violence from below (Sisci 1994, 86, 89, 102).

Thus, there was a paradox. After distinguishing itself for decades for its peculiar history and its commitment to stimulating production through competition not only between individuals but also between different forms of ownership, the China that arose from the Cultural Revolution resembled the Soviet Union to an extraordinary degree in its last years of existence: the socialist principle of compensation based on the amount and quality of work delivered was substantially liquidated, and disaffection, disengagement, absenteeism and anarchy reigned in the workplace. Before being ousted from power, the “Gang of Four” attempted to justify the economic stagnation, debating the populist reason for a socialism that is poor but beautiful, the populist “socialism” that in the early years of Soviet Russia was dear to Pierre Pascal, the fervent Catholic whom we already know.

Then populism became the target of Deng Xiaoping’s criticism. He called on the Marxists to realise “that poverty is not socialism, that socialism means eliminating poverty.” He wanted one thing to be absolutely clear: “Unless you are developing the productive forces and raising people’s living standards, you cannot say you are building socialism.” No, “there can be no communism with pauperism, or socialism with pauperism. So to get rich is no sin” (Deng 1992–95, vol. 3, 122, 174). Deng Xiaoping had the historic merit of understanding that socialism had nothing to do with the more or less egalitarian distribution of poverty and privation. In the eyes of Marx and Engels, socialism was superior to capitalism not only because it ensured a more equitable distribution of resources but also, and especially, because it ensured a faster and more equal development of social wealth, and to achieve this goal, socialism stimulated competition by affirming and putting into practice the principle of remuneration according to the quantity and quality of work delivered.

Deng Xiaoping’s reforms reintroduced in China the model that we already know, although giving it new coherence and radicalism. The fact remains that the coexistence of different forms of ownership was counterbalanced by strict state control directed by the Communist Party of China. If we analyse the history of China, not beginning with the founding of the People’s Republic, but as early as the first “liberated” areas being set up and governed by communists, we will find out that it was not China of the reforms of Deng Xiaoping, but China in the years of the Great Leap Forward and of the Cultural Revolution that was the exception or the anomaly.