China and Socialism: Market Reforms and Class Struggle
Martin Hart-Landsberg and Paul Burkett, 128pp, Monthly Review Press
The US socialist magazine Monthly Review last year produced a special feature-length issue on China (July- August edition), it has recently been reprinted in book form. Starting from the point that many on the left globally have seen recent economic developments in China as being progressive, the authors seek to dispel this myth once and for all and prove that ‘market socialism’ has inevitably opened up the way for the destruction of socialism and a complete restoration of capitalism.
The authors show with crystal clarity how China has been transformed from a socialist society into what it is today. In 1976, following the death of Mao Zedong, the ‘rightists’, led by Deng Xiaoping, waged an internal struggle to become the dominant force in the Chinese Communist Party. Deng, ‘who had been criticized by Mao during the Cultural Revolution for being a ‘capitalist roader’, proved a wily strategist.’ Deng’s clique claimed ‘that Mao had left the country in a dismal economic situation’ and that the only way forward was ‘market socialism,’ ie the introduction of capitalist elements to, supposedly, forward socialism. However:
‘In reality, the Chinese economy at the end of the 1970s was far from a disaster, especially in industry. For example, between 1952 and the end of the Mao era, industrial output increased at an average annual rate of 11.2 per cent. Despite disruptions to production during the Cultural Revolution decade (1966-76), industrial production still grew with an average rate of over 10 per cent.’
In 1983 the state ordered ‘employment reforms’ – now workers could be hired by state-owned enterprises on a temporary, contractual basis with no welfare benefits or job security. The right to strike was abolished and managers could fire workers not seen to be ‘sufficiently productive.’ And although state enterprises at this time remained dominant, by 1984 the original limits on private employment had been scrapped. Decollectivisation and privatisation of agriculture were also introduced. Inflation rose, and real wages fell.
The communal system of government was undermined with its powers being handed to newly created township and village governments. ‘These governments also took possession of the communes’ industrial assets, which were restructured as township and village enterprises (TVEs)’. The TVEs are actually ‘private operations in disguise’ and ‘in many cases individual government leaders run them, appointing managers and directing the allocation of earnings. Wages are ‘dirt cheap’ and profits high. TVEs have played a big part in putting the means of production back into the hands of the few, in 1987 there were 1.5 million and by 1993 there were 25 million. Since the market reforms were introduced the situation has worsened for the vast majority of the Chinese population, with the gains of the revolution being rolled back. Healthcare and education, once universally free under socialism, became increasingly out of reach.
The view that ‘market socialism’ can lead to anything but capitalism is exposed by the authors: ‘Progressive competitiveness thinking converts socialism and revolution from instruments of human development and liberation into preconditions for capitalist development and competitiveness. Often overlooked…is the fact that foreign investors’ respect for the Chinese government, and their willingness to put up with “restrictive” terms on FDI, are largely due to the willingness of the Chinese govern-ment to deliver large supplies of cheap and productive labor power.’
And far from bringing stability: ‘Its national competitiveness should not blind us to the fact that its rapid industrialization has been part and parcel of the uneven development and overproduction of capital on a world scale… The private sector enjoys especially favorable tax rates. As a result, while the private sector accounted for roughly 40 per cent of national economic activity, it contributed only 11.4 per cent of tax payments. As a consequence, fiscal revenue as a share of GDP fell from approximately 35 per cent in 1978 to less than 11 per cent in 1996. The state thus found itself with a growing budget deficit.’
The lessons for the international socialist movement are clear: ‘Insofar as [“progressives”] continue to celebrate China as a “socialist” or even progressive development success story, they will find themselves taking an increasingly reactionary position vis-à-vis both Chinese politics and worker-community struggles.’ Landsberg and Burkett emphasise that not only are market reforms regressive in terms of socialist development, but contrary to that sphere of left opinion that says otherwise, the socialist planned economy – as the Cuban experience shows – is extremely capable of meeting the needs of the working class.
Since this book was written, several Chinese communists have been arrested and imprisoned for opposing the Communist Party’s destruction of its socialist achievements. The Zheng-zhou Four were arrested in December for distributing revolutionary leaflets on the anniversary of Mao’s death and two have been given three years in prison for the ‘offence’. It is the duty of all socialists to support these, and any other revolutionary forces that emerge inside China.
Louis Brehony
