Encyclopedia of Anti-Revisionism On-Line

Dennis Strawn

Capitalism: the Inevitable Product of Mao Tse-Tung’s “Decentralized Socialism”

Published: Workers Herald, Vol. 1, No. 2, September 1980.
Transcription, Editing and Markup: Paul Saba
Copyright: This work is in the Public Domain under the Creative Commons Common Deed. You can freely copy, distribute and display this work; as well as make derivative and commercial works. Please credit the Encyclopedia of Anti-Revisionism On-Line as your source, include the url to this work, and note any of the transcribers, editors & proofreaders above.

Without all-sided state accounting and control of production and distribution of goods, the power of the toilers, the freedom of the toilers, cannot be maintained and a return to the yoke of capitalism is inevitable. V.I. Lenin[1]


The new leftist movement that arose in the United States in the last two decades developed under the influence of the Chinese Communist Party. The line of Mao Tse-tung and the Chinese Party was absorbed and accepted by many young groups as the “last word” in Marxism-Leninism. Today, in light of the open and complete betrayal of the Chinese revolution, many of the fundamental concepts of “Mao Tse-tung Thought” are being re-evaluated. The Party of Labor of Albania has given invaluable leadership in exposing the anti-Marxist-Leninist premises of Mao Tse-tung’s views. However, great resistance to this criticism of the line of Mao Tse-tung and the CPC has emerged and several organizations stubbornly hold onto the revisionist theses that they have learned from the CPC, continuing to promote them as the “highest development” of Marxism-Leninism.

One such thesis of Mao Tse-tung Thought is the idea of “bringing local initiative into full play” which, in his meaning, ended up denying the need for centralized socialist economic planning. According to the Chinese Party and its apostles, Mao Tse-tung summed up “the negative experience of overcentralization in the Soviet Union under Stalin” and developed a “new way” to construct socialism, a way that allegedly “brought the role of the masses into the forefront.” For instance, Bob Avakian, leader of the Revolutionary Communist Party (USA) [RCP], tells us that the first Five Year Plan in China (1953-1958) which was, in words at least, developed along the lines of Stalin’s model in the Soviet Union, “put too much emphasis on highly centralized planning at the expense of local initiative,”[2] and led to “the tendency for the central ministries to exercise tight control over the sector of the economy that they were responsible for, right down to the local level.”[3] According to Avakian, this “excessive centralization” endangered the building of socialism in China.

In opposition to the Soviet model, Mao had already begun to chart a different path for China’s socialist development, one that was suited to its own conditions and, more than that, one which would avoid the errors and shortcomings of the Soviet Union even under Stalin’s leadership.[4]

Avakian neglects to mention that Mao Tse-tung’s “discovery” of this “different path” paralleled similar “discoveries” by Khrushchev and a similar decentralization of economic power was carried out in the same years in the Soviet Union and Eastern Europe. However, according to Mao Tse-tung’s apologists, the decentralization that he promoted was “completely different” than that of the Khrushchevite-inspired revisionists because, while the latter intended to place power in the hands of a bureaucratic elite, Mao Tse-tung intended to “put power directly in the hands of the working masses.”

Despite the idealist assertions of the RCP and other apostles of Mao Tse-tung, the decentralization measures that Mao promoted ulitmately were not so different from those carried out in the Soviet Union and Eastern Europe after Stalin. In fact, the ideas and policies promoted by Mao Tse-tung on economic organization consistently aided and promoted the consolidation of capitalist relations of production in China. Mao Tse-tung’s ideas on economic organization can be compared to those of the so-called “Workers’ Opposition” (1919) in the Soviet Union, ideas that are based on an anarcho-syndicalist and not a Marxist-Leninist conception of socialism. Presented in a “left” cover, the rightist, bourgeois essence of these ideas becomes clear in the reality of so-called “workers’ self-administration” in Yugoslavia, and in the results of “bringing local initiative into full play” in China.


In April, 1956, Mao Tse-tung delivered his speech, On the Ten Major Relationships. Following on the heels of the Twentieth Congress of the Communist Party of the Soviet Union and immediately preceding the Eighth Congress of the Chinese Communist Party, the speech outlined basic directions for economic and political policy. One of its main points was to call for decentralization of economic power:

Here I would like to touch on the question of the independence of factories under centralized leadership. It’s not right, I’m afraid, to place everything in the hands of the central or the provincial and municipal authorities without leaving the factories any power of their own, any room for independent action, any benefits....[5]

...our attention should now be focused on how to enlarge the powers of the local authorities to some extent, give them greater independence and let them do more, all on the premise that the unified leadership of the central authorities is to be strengthened....We must not follow the example of the Soviet Union [under Stalin] in concentrating everything in the hands of the central authorities, shackling the local authorities and denying them the right to independent action.[6]

In short, centralization must be enforced where it is possible and necessary, otherwise it should not be imposed at all. The provinces and municipalities, prefectures and counties, districts and townships should all enjoy their proper independence and rights and should fight for them.[7]

This call by Mao Tse-tung for the local authorities to “fight for their rights” came at a time when central planning and control was only a fledgling in China. The initial collectivization of agriculture had only just been completed. The capitalist factories had only recently been brought into the state sector and the former capitalist management was still intact.[8] Although planning had had somewhat more of a chance to develop in the sector of industry that had been run by the state since 1949, the entire central planning apparatus in China was still new. The direction charted by Mao Tse-tung in this speech, and followed by the Chinese government consistently ever since then, insured that central planning never was perfected, but rather that it declined, and at times almost ceased to function.


Pursuant to Mao Tse-tung’s views, in 1956 and 1957 a series of measures were taken to decentralize economic power. These placed 80% of China’s industry under local direction, leaving only the defense sector, part of the oil industry, some mines and steel mills and other enterprises “critical to the national economy” under central control. Profits were to be divided between central and local authorities and enterprises were encouraged to use their share of the profits to make investments and develop production of their choosing. The production of these “side products and new lines” was also encouraged by the loosening of production targets. Central control of marketing diminished, commercial bureaus at the provincial, municipal and county levels took on more responsibility, with the county bureaus handling the bulk of trade. Enterprises were also at times encouraged to trade directly with each other. Except for the prices of key commodities (steel, grain, etc.) which were to be set by the center, prices were to be set by these commercial bureaus, with the county once again handling the great majority. Many commodities were free from price control altogether. The free market in many sideline products was officially expanded and encouraged.[9]

The immediate result of these measures was a drop in productive output. Factory management restricted production as much as possible to that which produced high rates of profit, taking advantage of the lax plans. Many oil refineries, for instance, preferred to produce gasoline and kerosene, which brought a higher rate of profit than diesel fuel, creating a shortage of the latter.[10] Total production dropped dramatically in 1957 as compared to 1956.

The cut-back in production was largely a spontaneous process resulting from the management of individual factories taking advantage of looser production guidelines to concentrate primarily on turning a profit. But’ it was also encouraged by those in charge of economic planning who emphasized compliance with profit targets by demanding that enterprises lay off “excess” workers and take other “cost control” measures.


At this point, it is necessary to describe the kind of men who were in charge of this economic “planning.” Chou En-lai was premier of the State Council and chief executive of the entire state apparatus. The head of the State Planning Commission was Li Fu-chun, who promoted capitalist policies and a one-sided worship of profit. Po I-po, proponent of the “synthesized economic base” (part socialist, part capitalist) was head of the State Economic Commission and the Office of Industry and Commerce. Head of the State Capital Construction Commission was Chen Yun, champion of “market socialism.” Li Hsien-nien, Nieh Jung-chen and Fang Yi, all of whom have emerged as powerful leaders of the “new historic turn” in China since the purge of 1976, headed the Office of Finance and Trade, the Scientific and Technological Commission and the Foreign Economic Relations Commission respectively. Alternating heads of the Office of Agriculture and Forestry were Teng Tsu-hui and Fan Chen-lin, both proponents of the “four freedoms” in agriculture.[13]

All of the ministries of the State Council concerned with economic affairs came under the authority of the offices and commissions that these nine men ruled over. They were unquestionably the top administrators of the Chinese economy, those who were in the position to determine the nature of economic planning and control. They were all, without exception, out and out bourgeois revisionists. So were the majority of their deputies. There was no way that any kind of socialist economic planning was going to be developed by the offices, commissions and ministries under their control. Instead, they consistently promoted capitalist economic aims, accounting and “planning,” designed in the first place to protect profits. Their policies in 1956-1957 were only the beginning of their treachery.


While Mao Tse-tung unquestionably supported and was largely responsible for the decentralization measures of 1956-1957, he was not happy with some of their results. He opposed the cut-back in production and the one-sided stress on profitability, and in late 1957 he demanded that the economy be run full throttle. In the following year, existing enterprises took on more workers, new enterprises were set up, millions of workers and peasants were mobilized to work day and night. Unemployment was reduced to nothing. Industrial production soared. In addition, the free market was restricted, handicraftsmen were brought into small industrial firms, agricultural collectives were amalgamated into communes and private plots were eliminated. This, however, was to be a short-lived affair.

The Great Leap Forward, as this mass mobilization was called, was promoted by Mao Tse-tung as a movement to take control of production out of the hands of the central economic ministries and their bureaucratic local followers and place it directly in the hands of the local party committees and the masses of workers and peasants. However, the bourgeois revisionists in the ministries and local management were not removed, even if their power was eclipsed temporarily. Their planning apparatus was not replaced. Initiative was to come directly from the local party committees and workers and peasants.

It is unquestionable that the right-wing bourgeois revisionists in the CPC did everything in their power to sabotage the Great Leap Forward, which was also hit hard by bad weather and the withdrawal of Soviet aid and advisors in 1960. But the main reason for the collapse of the Great Leap Forward was the lack of economic accounting and planning. This led to tremendous economic dislocations that played right into the hands of the bourgeois revisionists.

Capitalist economic development relies on anarchic, spontaneous regulation by the capitalist market and the profit motive, as well as, to different extents, some government intervention to assure the profitability of certain, large enterprises. Socialist economic development relies on the centralized planning of production and trade to assure rapid, all-sided and stable growth. While the Great Leap Forward ignored the role of certain of the capitalist regulators of the economy, and eclipsed the authority of the capitalist economic “planning” that was being carried out by the state economic administration, it did nothing to develop centralized, socialist economic planning. Its slogan, “control to the workers and peasants and the local party committees,” in no way provided an alternative to the anarchy of production and the spontaneity of the market. Its result was the increase of both.


Industrial production collapsed in 1960 and a severe agricultural crisis set in, exacerbated by both drought and floods. Between 1959 and 1961 production of coal dropped from 290 to 180 million tons, steel production from ten to eight million tons, production of cotton cloth from seven and a half to three billion meters.[14] The Great Leap Forward collapsed and the bourgeois revisionist administrators stepped in to reconstruct a planning system based on capitalist economic regulation. Any enterprise that did not turn a profit was shut down.[15] In 1961, thousands of smaller enterprises were closed and massive layoffs occurred in the larger enterprises. The total industrial workforce was cut in half, and a freeze was placed on new employment.[16] Already in 1959 decrees had been issued encouraging private and semi-private handicraft production. Farming on private plots once again became widespread. The products of both were sold on a re-opened free market.[17]

The fledgling central economic planning that was begun during the first Five Year Plan was shattered by the decentralization of 1956-57 and the Great Leap Forward. Steps were taken in 1961 to reinstitute some state control, but these measures cannot be called socialist economic planning because: 1) they were minimal; 2) they were of a capitalist, not a socialist, nature.

Audrey Donnithorne, a bourgeois economist who has followed developments in China’s economic organization with meticulous dedication, writes that “China’s economic planning has been restricted mainly to the setting of targets, to drawing up lists of resolutions. It does not attempt to effect close integration of different economic sectors, nor is it much concerned with the optimum allocation of resources.”[18] Although new “five year plans” were announced in 1961, 1966 and 1971, no details of these plans, or any national economic plans of any duration, have ever been published for this entire 15-year period. Donnithorne maintains that, in practice, decentralization of economic power was even greater than was officially stated in the 1957 decentralization decrees, and surpasses that which took place in Khrushchevite Russia.[20] Some planning and control took place at the provincial level, but most was done at the municipal and county levels, and many enterprises operated with a great degree of autonomy.[21]

Control of prices was further decentralized in the early 1960s, in fact, the National Price Commission ceased to function and national price conferences, which were held periodically during the 1950s no longer took place. Formal provincial price commissions were only set up irregularly, most prices were determined by county commercial bureaus. Donnithorne cites one Chinese press account that showed that local authorities could change even the procurement price of such an important commodity as rice. She also documents tendencies towards local protectionism and competition between firms and counties to sell products.[22] Even the administration of foreign trade was partially decentralized with the provincial branches of each of the various national foreign trade corporations operating largely independently and in some cases, even keeping part of the foreign exchange generated.[23]

The great majority of new investment since 1956 has been done directly by the municipalities and counties.[24] The majority of this has been financed through credits from the state bank and the finance commission (which themselves became increasingly decentralized and departmentalized) while a good part was financed directly through part of the profits that the enterprises and localities were allowed to keep. One result of this investment policy was that the construction of large scale, modern, nationally controlled enterprises, such as those built in the 1950s with Soviet aid, did not take place due to lack of central revenues. Only after 1972 when the bourgeois revisionists appealed to the Western imperialists for credits to finance imported plants did nationally controlled, large scale, modern industry grow.[25] Another result of the increasing local control of revenues and the lack of nationally planned investments was that the prosperous, industrially developed provinces and municipalities, such as Shanghai and Lidoning, developed faster while less prosperous, more backwards provinces developed at a slower rate. The same kind of increasing polarization took place between rich and poor communes, and even rich and poor production brigades.[26]

While central planning was severely restricted in the state sector of the economy, it was almost non-existent in the private sector, which was still quite large. In 1959, there were several million private undertakings in industry and commerce, and the number of these was to grow in the following years. During the 1960s, many new “joint state-private” businesses were established. In addition, production by handicrafts cooperatives, which were in many cases very loosely amalgamated family workshops, skyrocketed with government encouragement. And in 1962, there were 6 million full-time and 14 million part-time handicraft workers who produced a full 30% of the net value added by industry. Donnithorne writes that “many of the private businesses were probably subject to less state control than are their counterparts in many Western market economies.”[27]

There can be no doubt that the prime motivation of production following the Great Leap Forward was profit. Profitability was the measure used to determine whether to shut down or continue to operate factories in 1961. The need for cost control and to achieve profit targets was constantly promoted in the press while production targets fell into the background.[28] In 1956 and 1957 and again from 1962 to 1964 a series of theoretical articles appeared in the press declaring openly that “cost targets and profit targets are the main indicators for evaluating the economic effectiveness of an enterprise,” that prices should be determined on the basis of the law of value and that investment should be determined by the rate of profit.[29] These articles, emanating from the highest levels of economic administration in China, were not abstract or isolated theorizing, they were a reflection of the economic reality in China. They were part of an effort by the bourgeois revisionist economic administrators to study the workings of the Chinese economy and more effectively deal with the capitalist economic regulators of the market and the rate of profit.


Following the victory of the democratic revolution in 1949, the CPC had never called for the overthrow and suppression of the bourgeoisie as a whole, but rather had advocated “long term co-existence and mutual supervision” with the national bourgeoisie (which, by Mao Tse-tung’s definition, included most of the big bourgeoisie). Along with this, the CPC had maintained an extremely liberal policy towards the development of new bourgeois elements. It was during the Cultural Revolution in 1966 and 1967 that slogans such as “overthrow the bourgeois headquarters” and “proletarian seizure of power” were raised for the first time. In addition, reforms that favored the working class and peasantry were demanded. These slogans and demands won the support of the most advanced sections of the Chinese proletariat who took up the banner of the Cultural Revolution.

The leadership of the Cultural Revolution, the various groups that made up the “left” wing of the CPC, however, was guided by unsound, anti-Marxist-Leninist views. We can’t go into all of the aspects of these views here. The most important and most treacherous of the characteristics of this leadership, and of Mao Tse-tung in particular, was compromise with the enemy. For all of his talk about “overthrowing the bourgeois headqua

rters,” Mao Tse-tung never really wanted or intended to overthrow’ the bourgeois headquarters. He said,

We should allow Liu [Shao-chi] and Teng [Hsiao-ping] to make revolution and reform themselves. We shouldn’t condemn Liu Shao-chi out of hand. If they made mistakes they can change can’t they? When they have changed it will be alright.[30]

Mao Tse-tung and Chou En-lai united to oppose the truly revolutionary demands of the masses and defend the worst bourgeois revisionist renegades such as Chen Yi, the master of China’s bourgeois foreign policy and layer of the cornerstones of its alliance with Western imperialism; Chen Yun, theorist of “market socialism;” and countless others. While Mao Tse-tung talked about “seizing power” he and Chou intended to maintain the administrative apparatus more or less intact. Mao Tse-tung refused to arm the workers. Rather, he and Lin Piao allowed reactionary regional commanders to use the army to preserve the status quo by suppressing the workers’ movement.[31] The result was that, with a few notable exceptions, power at every level remained in the same hands. The slogan of forming “Great Alliances” was formulated by Mao Tse-tung forming “Great Alliances” was formulated by Mao Tse-tung and Chou En-lai to prevent the overthrow of the old bureaucracy and resulted in the new provincial and local revolutionary committees being dominated, in general, by the same forces that ruled before.[32]

The failure of the Cultural Revolution to bring about any kind of revolutionary change is abundantly clear in the highest levels of economic administration. Of the nine men who ruled over the central economic administration, Chou En-lai, Li Fu-chun, Chen Yun, Li Hsien-nien, Nieh Jung-chen, Teng Tzu-hui and Fang Yi all out-and-out bourgeois revisionists and all severely criticized by the workers and students, remained in their positions. The remaining two – Po I-po and Tan Chen-lin were purged.[33] We don’t know what became of Po I-po. Tan Chen-lin was rehabilitated in 1973. The economic administration in China remained bourgeois revisionist.


In 1956, an eight grade wage scale had been established for industry, raising the wages of managers and technical personnel. This scale generally provided for a wage differential of 3:1.[34] But this was only within the factory – higher level cadre were paid much more. The 18 grade wage scale for technical cadre provided for a differential of 10:1.[35] The 30 grade scale established for administrative cadre varied from a low of 30 yuan to a high of 728 yuan per month. In the army, the differential was even wider.[36] In addition, the system of individual bonuses became widespread with a tendency towards unequal distribution. In one mine in 1957, senior staff received 25-40% of their wages in extra bonuses, while production workers received only 2.5-3.5%.[37]

The average earnings of the peasantry were 45% that of the average worker, but there was also a great polarization of incomes in the countryside. The average earnings in a prosperous commune could be four times that in a poor commune. Within a commune, the average earnings in a prosperous production team could be twice that of a poor one. And within a production team earnings could vary as much as 3:1. In addition, some administrative cadre were paid according to the state wage scale, many times higher than the workpoint earnings of the vast majority of commune members.[38]

During the economic downturns of 1957 and 1961 there was downward pressure on workers’ wages. In 1957, the wages of the lowest paid industrial workers were cut to match the average peasant income in their region.[39] The massive layoffs in 1961 along with the tremendous influx of peasants from the countryside to the city, provided the bourgeois revisionists with opportunities to once again push down wages. While the eight grade wage scale remained officially unchanged, many workers were hired in temporary classifications, as “contract” workers, were paid much less than regular workers, and received no benefits. At times, workers relegated to “contract” status made up 50% of the industrial workforce.[40]

During the Cultural Revolution, workers demanded an end to the “contract” labor system, piece rates and material incentives, as well as removal of privileges enjoyed by the managers and technicians. Among other things, changes in working conditions, more power in factory administration and access to education were also demanded. Where the workers’ movement was strong, reforms were achieved. The salaries of the former capitalists were cut, their interest payments stopped and some of them were removed from their management positions. Individual bonus systems and piece rate work were done away with. Unreasonable rules and regulations were removed and cadre participation in production and various forms of worker participation in management were initiated. These reforms were not universal however; where the workers’ movement was weak, changes were not made. The basic wage scales remained unchanged and the system of contract labor continued (although wages were increased).[41] All too often the changes that were made were eroded and reversed in the following years.


The Cultural Revolution was not accompanied by a production mobilization as the Great Leap forward was. In fact, no attempt was made to set the economy on any fundamentally different economic footing. “Profits in command” was criticized theoretically. The criticism as formulated by the “left” wing of the CPC, however, did not go to the heart of the problem – the lack of centralized economic planning.

With centralized socialist economic planning it is possible to organize production based on an understanding of the goods that society needs. Factories produce goods not primarily to accumulate profit (although this is done in the process) but to fulfill state production targets. This system of planning must be continuously perfected, for without viable and competent truly socialist planning, the organization of production with the aim of fulfilling society’s needs (and not for profit) cannot be carried out. Without this planning only the spontaneity of the market is left to determine what and how much should be produced. Without strict state plans guiding and providing for production, factory and commune management and county and municipal administration (no matter how “democratic” or “proletarian”) must use other motivations for deciding what and how much to produce. The ability to sell the product, the price it brings, the cost of production, etc. – all of which add up to the rate of profit – inevitably and invariably become the motivation. One factory, one commune or one county, urged as they are in China to be “self-reliant” in terms of purchasing raw materials, and financing machinery and facilities, cannot, in the long run, make decisions on any other basis.

“Profits in command”, therefore, is inevitable in a decentralized, unplanned economy.

The “left wing” of the CPC, however, blamed “profits in command” simply on the bourgeois thinking of factory management, failing to acknowledge the material basis for this thinking that existed in China’s decentralized, unplanned economy. They could not do this because they themselves were proponents of decentralization, autonomy and “self-reliance.”


Between 1970 and 1980 an overwhelming majority of enterprises in China were “sent down” – turned over from central to provincial or from provincial to county administration. Only the defense-related industries remained centralized. Even the huge Anshan Steel complex, at one time the center ot China’s steel plan, was “sent down.” Production goals were further relaxed.[42] Planning officials at Anshan apologized for this tendency towards spontaneous production for the market by saying “in constructing the plan, the targets are now fixed so that the plan can be overfulfilled and enough room is left for the exercise of the initiative of the masses.”[43]

Trade became even more decentralized than before; the People’s Bank went through a further departmentalization.[44] In 1972, Donnithorne commented that “The extent of direct dealings between enterprises, as seen in the placing of orders, illustrates the absence, over much of the economy, of planning agencies to control production and allocation.”[45] Agricultural communes were allowed to exercise more independence than before, in cases deciding how much grain to sell the state.[46] A Yugoslav correspondent reported that “countless independent, or relatively independent, production centers are being set up throughout the country.”[47] During the 1970s, the Chinese press greatly promoted local “self-reliance.” receiving on one’s own resources rather than planned coordination or state grants, and praised localities for taking investment initiatives outside of the state plan.[48] And, of course, the result of this continued and increased decentralization: “While the concept of maximizing return on capital as a guideline for direction of investment was explicitly rejected, in practice the policy had been used before the Cultural Revolution. Now, after the Cultural Revolution, the same policy is once again frequently followed, although not officially accepted.”[49]


That the “left wing” of the CPC was in agreement with this decentralization, and in fact used every ounce of its strength to further it, becomes clear in reading the polemics of the so-called “Gang of Four” against the Teng Hsiao-ping group: Articles published in early 1976 criticized Teng for “undermining the initiative of the localities” by wanting to bring enterprises under the management of central ministries, CPC cadre aligned with the Gang of Four write,

On the pretext of exercising “centralized and unified” leadership [Teng – Ed.] wanted to “turn over to the higher authorities” what he called “key enterprises which serve the whole nation and require organized coordination on a national scale.” If this policy had been followed, most of the big enterprises and the lesser ones working in coordination with them in all parts of the country would have been “turned over”. This would inevitably have undermined the initiative of the localities and the broad masses of people and sabotage socialist construction as a whole.[50]

The article goes on to compare Teng’s “turning over enterprises to higher authorities” with the development of monopoly “combines” in the Soviet Union. In another article of the same period the “left” describes its opposition to the Soviet “combines;”

A big enterprise....which exceeds the others in capital and profit-making becomes the “sinew” of the combine and the head of the said enterprise normally serves as the combine’s general manager. As to the remaining enterprises in* the combine, some retain relative independence, except that their managerial functions, such as the supply and sale of products and financial matters, now rest at the combine enterprise level. Others lose their independence completely and become a mere subsidiary of the combine.[51]

The “Gang of Four” exposed the fact that the monopolies that the Brezhnev and Teng Hsiao-ping revisionist groups were building were in no way socialist, but capitalist, that they would compete amongst each other and have the maximization of profit at heart. But there is another element of their criticism which comes through in their complaints about “undermining the initiative of the localities” and the smaller Soviet enterprises “losing their independence completely” and becoming “mere subsidiaries”. The “left wing” of the CPC opposed any kind of centralism and preferred small, independent, autonomous enterprises. This, of course, was not only expressed in these articles but has been a consistent aspect of their line. Mao Tse-tung and the “left wing” of the CPC attacked the efforts of Teng Hsiao-ping and company to build a state capitalist society in China and establish monopoly-capitalist proletariat [text in original – EROL], from the position of advocating socialist state planning and control. Instead, they attacked it from the position of the petty bourgeoisie, from the position of wanting to maintain local autonomy, from the position of “small is beautiful.”

In criticizing the anarcho-syndicalist views of the so-called “Workers’ Opposition” in Russia which called for “direct Workers’ control of the factories and opposed “dictatorship from above,” Lenin wrote,

All the habits of the bourgeoisie, and of the petty-bourgeoisie in particular, also oppose state control, and uphold the inviolability of “sacred private property,” of “sacred” private enterprise. It is now particularly clear to us how correct is the Marxist thesis that anarchism and anarcho-syndicalism are bourgeois trends, how irreconcilably opposed they are to socialism, proletarian dictatorship and communism. The fight to instill into the people’s minds the idea of Soviet state control and accounting, and to carry out this idea in practice – is a great fight of world historic significance, a fight between socialist consciousness and bourgeois anarchist spontaneity.[52]

We have seen how quickly Liu, Teng and the representatives of the big bourgeoisie in China jumped on the Krushchevite bandwagon and championed decentralization. But we have also seen how Mao Tse-tung and his followers jumped on it too and advocated decentralization even more loudly. We have seen that during the Great Leap Forward and in the aftermath of the Cultural Revolution, under the pressure of the “left”, central planning and control were broken down on an unprecedented scale. And we have seen that the “left’s” opposition to centralism gave Liu and Teng the excuse to paint themselves as advocates of “socialist planning” and “democratic centralism” as they carried out their efforts to establish their paltry capitalist “planning” and consolidate their control of Chinese society in 1961 and 1976.


Socialist relations of production were never consolidated in China. The fundamental reason for this was the failure to establish as genuine dictatorship of the proletariat. State power in post-revolutionary China was set up as, and remained a coalition government of the proletariat, petty bourgeoisie and the national bourgeoisie. Moreover, the Communist Party itself was not a Marxist-Leninist party and was riddled with factions. The Liu Shao-chi/Teng Hsiao-ping group represented the big bourgeoisie and was determined to build a modern capitalist society. Mao Tse-tung and the leadership of the “left” wing factions of the CPC were guided by petty bourgeois liberal and anarchist views.

The state enterprises and private factories of pre-revolutionary China were officially made property of the new state, but they continued to operate under much the same management as before. While employment of the old management and even the old capitalists was unavoidable to a certain extent (but not to the extent and in the liberal way it was carried out in China), the fact that factories continued to operate largely as independent enterprises fostered the growth and prosperity of a new bourgeoisie in China composed of both old national capitalists and new bourgeois elements.

In these conditions genuine socialist economic planning could not be developed. In fact, those in charge of economic planning and administration were all bourgeois revisionists, all closely tied to the Liu-Teng group and opposed to any kind of socialist economic planning. As a result, the declarations of the Chinese press aside, production continued to revolve around the market, proceeding in an anarchic, spontaneous way. Without socialist economic planning the economy could not be guided except by capitalist economic regulators – the law of value, the market, the rate of profit, etc. The planning measures that were taken were limited and were capitalist in nature, with the desire to protect profit rates as their heart and soul.

The socialist-type reforms that were accomplished in China under the pressure of the Chinese proletariat could not flourish and develop, but inevitably perished because of the unsound economic and political foundation on which they were built. During the upsurges in the working class movement that accompanied the Great Leap Forward and the Cultural Revolution, the workers in individual factories rose up against the bourgeois revisionist managers and, in some cases, attempted to institute forms of democratic workers’ control. Proletarian control of the means of production and the development of socialist relations, however cannot be developed on the basis of “workers’ control” in an individual factory, but only on the basis of proletarian control of the means of production of society as a whole. The workers in an individual factory do not have the capability of changing the relations of production in their factory alone because it continues to function in the context of society as whole. That society is capitalist so long as it is made up of independent, individually controlled production unit producing for the market and not according to a central plan. Democratic supervision of production by the worker from below can only develop in the context of centralized socialist planning and proletarian dictatorship from above. Any other idea of “direct workers’ control” is nothing but bourgeois demagogy and reformism. To the extent that any kind of democratic workers’ control was achieved in individual factories in China, it was short-lived and inevitably replaced by corruption and class polarization under the unyielding pressure of the prevailing capitalist relations of production. Decentralization favored bourgeois, not proletarian, power because it was a potent, spontaneous impetus towards capitalist methods.

The failure of the Chinese proletariat to gain political hegemony and develop truly socialist economic planning could be ascribed to the power of the bourgeoisie in China but this explanation would only recognize the objective factor involved. In reality, it was subjective factors – ideological deviations deeply ingrained in the outlook of Mao Tse-tung and the “left” wing of the CPC and the resulting lack of truly revolutionary proletarian party – that were decisive in the defeat of the proletariat. These ideological deviation included pronounced liberal tendencies and an anarcho-syndicalist conception of socialism. These deviations weakened the struggle of the Chinese proletariat immeasurably and at every step aided the consolidation of capitalist relations in China.

The massive purge of the CPC and the repression of the revolutionary workers and students that followed the military coup d’etat in October 1976 by the most reactionary section of the CPC, the representatives of the Chinese big bourgeoisie, the Teng Hsiao-ping group, opened the door for the complete consolidation of capitalism. The counterrevolution has completely gained the upper hand and the Chinese proletariat has suffered a severe reversal in its struggle to establish the dictatorship of the proletariat and socialism in China. But the struggle is not over. The words of Enver Hoxha, leader of the Party of Labor of Albania, express the hopes and desires of proletarian revolutionaries the world over.

The revolutionaries, the Marxist-Leninists, those who carried out the Cultural Revolution in China, what are they doing? I think there must be millions of them. If the revolution bursts out in China, it will spread like a prairie fire, will not be easily quelled....because this revolution will be a bloody one, and not like that Mao Tse-tung advocated.[53] “We have been and are with the revolution and the revolutionaries, and we hope that the revolution in China will no longer be held under “the banner of Mao Tse-tung Thought” but by the ideas of Marx, Engels, Lenin and Stalin, and want it to be so. Only in this way will the revolution triumph in China.[54]

Notes on sources of economic information:

Socialist countries publish complete and precise economic statistics because the planning systems they develop demand this. For instance, bourgeois sources praise the breadth and detail of Albanian economic statistics. Since the late 1950s, however, the Chinese government has not published reports on economic planning, organization or developments on any regular basis. Because of the irregularity of the Chinese sources we were forced to draw our information about economic developments in China largely from the works of various bourgeois economists who have compiled the irregular information provided by Chinese sources.


[1] Lenin, V. I. “The Immediate Tasks of the Soviet Government,” Lenin Collected Works. Moscow: Progress Publishers, 1965, Vol. 27, p. 254.

[2] Avakian, Bob. Mao Tse-tung’s Immortal Contributions. Chicago: RCP Publications, 1979. p. 107.

[3] Ibid., p. 110.

[4] Ibid., p. 106.

[5] Mao Tse-tung. “On the Ten Major Relationships,” Selected Works of Mao Tse-tung. Peking: Foreign Languages Press, 1977, Vol. 5, p. 240.

[6] Ibid., p. 292

[7] Ibid., p. 294.

[8] Washington, Jim. Socialism Cannot Be Built in Alliance with the Bourgeoisie: The Experience of the Revolutions in Albania and China. Berkeley, CA: Southside Press, p. 10.

[9]For descriptions of the decentralization measures taken in 1956-1957 see: Perkins, Market Control and Planning in Communist China. Harvard, pp. 17-18, 114. Donnithorne, A. China’s Economic System, pp. 461-467,483. Wheelright and McFarlane. The Chinese Road to Socialism. N.Y.: Monthly Review Press, p. 201. Hughes and Luard. The Economic Development of Communist China 1949-1962. London: Oxford University Press, 1961, 3p. 62-65. The Political Economy of Communist China. International Textbook Company, 1970, p. 10. Chen Yun, “Report,” Eighth National Congress of the Communist Party of China: Volume I, Speeches. Peking: Foreign Languages Press, 1957, pp. 161-164.

[10] Donnithorne, A. China’s Economic System, p. 183.

11. Production drop in 1957.

12. ChoMing-li, Ibid., pp. 216-218, and Hughes and Luard, Ibid., pp. 56,125, 208.

[13] Donnithorne, A. China’s Economic System, pp. 517-519.

[14] Chesneaux, J. China: The People’s Republic 1949-1976. N.Y.: Random House, 1979, p. 100.

[15] Donnithorne, A. China’s Economic System, p. 159; see also Perkins, D. Ibid., p. 140 and Wu Yuan-li. The Economy of Communist China, pp. 102-103.

[16] Meisner, M. Mao’s China: History of the People’s Republic. The Free Press, 1977, p. 278, and Wu Yuan-li, Ibid., pp. 102-103.

[17] Thornton. China: The Struggle for Power 1917-1972. p. 249.

[18] Donnithorne, A. China’s Economic System, p. 457.

19. [Not marked in text]Ibid., p. 460, and Guillermaz, The Chinese Communist Party in Power 1949-1976. p. 487.

[20] Donnithorne, A. China’s Economic System, pp. 461-4%, also see Donnithorne, “China’s Cellular Economy: Some Economic Trends Since the Cultural Revolution,” China Quarterly, Oct.-Dec. 1972, p. 614; and Shurman, F. Ideology and Organization in Communist China, p. 174, and “China’s New Economic Policy,” China Under Mao: Politics Takes Command. Edited by R. McFarquhar. p. 193-228.

[21] Donnithorne, A. China’s Economic System, p. 157, and Donnithorne “Centralization and Decentralization in China’s Fiscal Management,” China Quarterly, June 1976, p. 338.

[22] Donnithorne, A. China’s Economic System, p. 157, and Donnithorne “Centralization and decentralization in China’s Fiscal Management,” China Quarterly, June 1976, p. 338.

[23] Wheelwright and McFarlane, Ibid., p. 200; see also Donnithorne, “Recent Economic Developments,” China Quarterly, Oct.-Dec. 1974, p. 773.

[24] Donnithorne, A. “China’s Cellular Economy,” p. 339-340.

[25] Ibid.

[26] Donnithorne, A. China’s Economic System, p. 463

[27] Ibid., pp. 219-222,233-235,509.

[28] Ibid., pp. 167,480-485.

[29] Ibid., pp. 480-481, 163; also see Shurman, F. “China’s New Economic Policy,” pp. 217-218.

[30] Schram, S., ed. Chairman Mao Talks to the People, pp. 267-268.

[31] The People’s Liberation Army was officially to “defend the Left, but not any particular faction.” However, in reality, most regional commanders used their forces in collusion with the “right-wing” mass organizations developed by the bourgeois revisionists. This began regionally during the rightist “February [1967] Adverse current” in Sinkiang, Kwangtung, Hupeh, Heilungkiang and other provinces and became generalized in late 1967 and early 1968. See, for example, Thornton, Ibid., p. 298-321 and the following articles in the magazine China Quarterly: “Radical Students in Kwangtung During the Cultural Revolution,” Dec. 1975, p. 655 and “The Role of the Military in the Formation of Revolutionary Committees 1967-1968.” Dec. 1970.

[32] Thornton, Ibid., pp. 315-321. and Chang, P. “Political Rehabilitation of Łg Cadres in China,” China Quarterly. April-June 1973, p. 334.

[33] Diao, R. “Impact of the Cultural Revolution on China’s Economic Elite,” China Quarterly, April-June, 1970, pp. 67-72 and Chang, P. Ibid., p. 334.

[34] Donnithorne, A. China’s Economic System, p. 206, and Hughes and Luard. Ibid., p. 126, and Hoffman, C. A Study of Work Incentives in Communist China, unpublished, p. 8-22.

[35] Whyle, M. “Inequality and Stratification in China,” China Quarterly, Dec. 1975, p. 685.

[36] China Quarterly, April-May, 1974, p. 337, and China Report, Jan.-Feb., 1979, p. 22.

[37] Donnithorne, A. China’s Economic System, p. 210-211.

[38] Whyte, M. Ibid., p. 687.

[39] Cha Jua-chun, Economic Planning and Organization in Communist China, Vol. II. Harvard, 1960, p. 108.

[40] Meisner, Ibid., p. 687.

[41] Meisner, Ibid., pp. 350-351.

[42] Dminithorne, A. “China’s Cellular Economy,” p. 605-606, and “Recent Economic Developments,” p. 773; Shinde, U. “Domestic Policies of the CPC and the Question of De-Maoization,” China Report Nov.-Dec. 1979, p. 32, also see Guillermaz, Ibid., p. 487, also see Eckstein. China’s Economic Revolution, pp. 94-95.

[43] Eckstein, China’s Economic Revolution, p. 108.

[44] Donnithorne, “Recent Economic Developments,” p. 773, and “China’ Cellular Economy,” p. 606.

[45] Donnithorne, A. “China’s Cellular Economy,” p. 614.

[46] Ibid., p. 608.

[47] Ibid., p. 606.

[48] Ibid., p. 606-608.

[49] Ibid., p. 617.

[50] Kao Lu, Chank Ko. “Comments on Teng Hsiao-ping’s Economic Ideas of tht Comprador Bourgeoisie,” Peking Review, #35, 1976, p. 7.

[51] “Combines – State Capitalist Monopolies Wearing Soviet Tag,” Peking Review, #8,1976, p. 18.

[52] Lenin, V. I. Ibid., pp. 263-264.

[53] Hoxha, E. Reflections on China, Vol. II. Tirana: “8 Nentori” Publishing House, 1979, p. 400.

[54] Ibid., p. 327.