Selected Works of Mao Tse-tung
August 12, 1953
[Speech at the National Conference on Financial and Economic Work held in the summer of 1953.]
Our conference has been a success, and Premier Chou has made a fine summing-up.
It is now clear that since the movements against the "three evils" and the "five evils" two kinds of mistake which are different in nature have been found in the Party. One kind is of an ordinary nature, for instance, the "five excesses", mistakes which anyone can make and which may crop up at any time; the "five excesses" may also turn into the "five deficiencies". The other kind is mistakes of principle, such as the tendency towards capitalism. This kind is a reflection of bourgeois ideas within the Party and a matter of stand that is contrary to Marxism-Leninism.
The movements against the "three evils" and the "five evils" dealt heavy blows to bourgeois ideas inside the Party. But at the time only bourgeois ideas related to corruption and waste got a good thrashing, while those manifesting themselves in questions concerning the Party line were not dealt with. The latter are to be found not only in our financial and economic work but also in political and judicial, cultural and educational and other fields, and among comrades in the localities as well as at the national level.
Mistakes in our financial and economic work have been severely criticized ever since last December when Comrade Po I-po came out with his new tax system entailing "equality between public and private enterprises"  and also at the present conference. That system, if allowed to develop, would have led inevitably to capitalism, in contravention of Marxism-Leninism and the Party's general line for the transition period.
What will the transition period lead to, socialism or capitalism? The Party's general line prescribes transition to socialism. This requires a period of struggle of considerable length. Unlike that of Chang Tzu-shan,  the mistake made in the new tax system involves a question of ideology and a departure from the Party's general line. We must unfold a struggle in the Party against bourgeois ideas. Ideologically, the Party membership falls into three categories: some comrades are firm and unwavering and are Marxist-Leninist in their thinking; quite a number are essentially Marxist-Leninist but infected with non-Marxist-Leninist ideas; and a small number are no good, their thinking is non-Marxist-Leninist. In criticizing Po I-po's erroneous ideas, some say his mistake stems from petty-bourgeois individualism; that's not quite right. He should be criticized mainly for his bourgeois ideas, which are favourable to capitalism and harmful to socialism. Only such criticism is correct. "Left" opportunist mistakes, as we said before, are a reflection of petty-bourgeois fanaticism within the Party; they occurred in times when we broke with the bourgeoisie. On the three occasions when we have co-operated with the bourgeoisie, namely, in the first period of co-operation between the Kuomintang and the Communist Party, in the period of the War of Resistance Against Japan and in the present period, it has been bourgeois ideology that has influenced a number of people in the Party, and they have vacillated. That was how Po I-po came to make his mistake.
Po I-po's mistake is not an isolated case. Such mistakes are found not only at the national level but also at those of the greater administrative areas and the provinces and municipalities. Each greater administrative area, each province and municipality, should call a meeting to review its work in the light of the resolution of the Second Plenary Session of the Seventh Central Committee and of the summing-up of the present conference, so as to educate the cadres.
Recently I made a trip to Wuhan and Nanking and learned a lot, which was very helpful. Practically nothing comes to my ear in Peking, and therefore I shall go on tour from time to time. The central leading organ is a factory which turns out ideas as its products. If it does not know what is going on at the lower levels, gets no raw material or has no semi-processed products to work on, how can it turn out any products? Sometimes finished products are turned out by the localities, and the central leading organ need only popularize them throughout the country. For instance, take the movements against the old and new "three evils".  Both were initiated in the localities. The departments under the central authorities issue directives arbitrarily. The products from these departments ought to be top grade, but actually they are inferior in quality and there are large numbers of completely worthless rejects. Leading organs in the greater administrative areas and the provinces and municipalities are local factories for turning out ideas, and their products should be top grade too.
Po I-po's mistake is a manifestation of bourgeois ideas. It benefits capitalism and harms socialism and semi-socialism and runs counter to the resolution of the Second Plenary Session of the Seventh Central Committee.
On whom should we rely? On the working class, or on the bourgeoisie? The resolution of the Second Plenary Session of the Seventh Central Committee made it clear long ago: "We must wholeheartedly rely on the working class." The resolution also says that in the rehabilitation and development of production the following must be the rule: the production of state industry comes first, that of private industry second and handicraft production third. The emphasis is on industry, and first of all on heavy industry, which is owned by the state. Of the five sectors of our present-day economy, the state-owned economy is the leading sector. Capitalist industry and commerce must be gradually guided towards state capitalism.
The resolution of the Second Plenary Session says that the livelihood of the workers and other working people is to improve on the basis of increased production. People with bourgeois ideas pay no attention to this point, and Po I-po is typical in this respect. We must lay emphasis on the development of production, but consideration must be given to both the development of production and the improvement of the people's livelihood. Something must be done for their material well-being, but neither too much nor nothing at all. At present there are quite a few cadres who ignore the people's livelihood and couldn't care less about their sufferings. There was a regiment in Kweichow Province which occupied large tracts of peasant farmland. That was a serious encroachment on the people's interests. It is wrong to ignore the people's livelihood, but the emphasis must be laid on production and construction.
The question of utilizing, restricting and transforming the capitalist sector of the economy was also made quite clear at the Second Plenary Session. The resolution it adopted says that the private capitalist economy must not be allowed to expand uncurbed but should be restricted from several directions -- in the scope of its operations, by tax policy and by market prices and working conditions. The relationship of the socialist economy to the capitalist economy is that of the leader to the led. Restriction versus opposition to restriction is the main form of class struggle in the new-democratic state. Now the new tax system talks about "equality between public and private enterprises"; that is at variance with the line which makes the state-owned economy the leading sector.
As for the co-operative transformation of individual farming and handicrafts, the resolution of the Second Plenary Session puts it clearly:
Such co-operatives are collective economic organizations of the working people, based on private ownership and under the direction of the state power led by the proletariat. The fact that the Chinese people are culturally backward and have no tradition in organizing co-operatives makes it quite difficult for us to promote and develop the co-operative movement, but co-operatives can and must be organized and they must be promoted and developed. If we had only a state-owned economy and no co-operative economy, it would be impossible for us to lead the individual economy of the working people step by step towards collectivization, impossible to develop from the new-democratic state to the socialist state of the future and impossible to consolidate the leadership of the proletariat in the state power.
This resolution was adopted in March 1949, but quite a few comrades have failed to take note of it and what is no longer news strikes them as novel. In his article "Strengthen the Party's Political Work in the Rural Areas", Po I-po said that the individual peasants' road to collectivization through mutual aid and co-operation "is sheer fantasy, because the present mutual-aid teams, based as they are on the individual economy, cannot develop gradually into collective farms, still less can such a road lead to the collectivization of agriculture as a whole". This runs counter to the Party's resolution.
There are now two united fronts, two alliances. One is the alliance of the working class and the peasants; this is the foundation. The other is the alliance of the working class and the national bourgeoisie. As the peasants are labourers and not exploiters, the alliance of the working class and the peasants is a long-term one. Nevertheless, there are contradictions between the working class and the peasants. We should guide the peasants step by step from individual ownership to collective ownership in accordance with the voluntary principle. In the future there will also be contradictions, between state ownership and collective ownership. These contradictions are all non-antagonistic. On the other hand, the contradictions between the working class and the bourgeoisie are antagonistic.
The bourgeoisie is sure to corrode people and aim its sugar-coated bullets at them. Its sugar-coated bullets are of two kinds, material and spiritual. A spiritual one hit its target, Po I-po. He made his mistake because he succumbed to the influence of bourgeois ideas. The editorial preaching the new tax system was applauded by the bourgeoisie, and Po I-po was pleased. Before the new tax system was initiated, he solicited suggestions from the bourgeoisie and reached a gentleman's agreement with them, but he failed to report to the Central Committee. The Ministry of Commerce and the Federation of Supply and Marketing Co-operatives objected at the time, and the Ministry of Light Industry was dissatisfied too. Of the 1,100,000 cadres and employees working in the financial, economic and trade fields, the overwhelming majority are good and only a small number are not. Those who are not fall into two categories: counter-revolutionaries, who should be weeded out; and revolutionaries, including Party members and non-Party personnel, who have made mistakes and who should therefore be remoulded through criticism and education.
To ensure the triumph of the cause of socialism, we must combat erroneous Right opportunist tendencies, that is, bourgeois ideas, throughout the Party, and first of all in the leading bodies of the Party, government, army and mass organizations at the national level and at those of the greater administrative areas and the provinces and municipalities. The greater administrative areas and the provinces and municipalities should call meetings in due time with the participation of secretaries of prefectural Party committees and commissioners of prefectures  to unfold criticism and discussion and to clarify the question of the socialist road versus the capitalist road.
To ensure the triumph of the cause of socialism, we must exercise collective leadership and oppose decentralism and subjectivism.
At present we must combat subjectivism, not only in the form of rash advance but also in the form of conservatism. In the days of the new-democratic revolution both Right and "Left" subjectivist mistakes occurred. Chen Tu-hsiu and Chang Kuo-tao made Right mistakes and Wang Ming first "Left" mistakes and then Right ones. The rectification movement in Yenan concentrated its efforts on combating dogmatism and opposed empiricism in passing. Both dogmatism and empiricism are forms of subjectivism. No revolution can triumph unless theory is integrated with practice. The problem was solved in that rectification movement. We were right in adopting the policy of learning from past mistakes to avoid future ones and curing the sickness to save the patient. This time the unrelenting and thoroughgoing criticism of Po I-po is designed to help those who have erred correct their mistakes and to ensure the victorious advance of socialism. In the present period of the socialist revolution subjectivism is still in evidence. Rash advance and conservatism both disregard the actual state of affairs, both are subjectivist. The revolution and construction cannot succeed unless subjectivism is overcome. In the days of the democratic revolution rectification served to correct the error of subjectivism and in consequence the whole Party was united, including both the comrades who had adhered to the correct line and those who had made mistakes. From Yenan they set out for different war theatres, and the whole Party, pulling its weight as one man, went on to win nation-wide victory. Today, the cadres are more mature and their political level is higher, and it is hoped that it will not take long for them basically to overcome subjectivism in their task of leadership and bring the subjective into correspondence with the objective through their efforts.
The solution of all these problems hinges on strengthening collective leadership and opposing decentralism. We have all along opposed decentralism. The directive issued by the Central Committee to its bureaus and the army commanders on February 2, 1941 stipulated that all circular telegrams, declarations and inner-Party directives bearing on the country as a whole must have the prior approval of the Central Committee. In May, the Central Committee issued a directive calling for unified external propaganda by the various base areas. On July 1 of the same year, on the twentieth anniversary of the founding of the Party, the Central Committee issued its decision on strengthening Party spirit with the emphasis on combating decentralism. In 1948 the Central Committee issued more directives to the same effect. It issued a directive on setting up a system of reports on January 7 and a supplementary directive in March. The Political Bureau met in September and adopted a resolution on rules governing reports to and requests for instructions from the Central Committee. On September 20, the Central Committee made a decision on strengthening the Party committee system. On March 10, 1953 the Central Committee adopted a decision on strengthening its leadership over the work of the government in order to avert the danger of government departments drifting away from its leadership.
Centralization and decentralization are in constant contradiction with each other. Decentralism has grown since we moved into the cities. To resolve this contradiction all the principal and important issues must first be discussed and decided on by the Party committee before its decisions are referred to the government for implementation. For instance, such important decisions as the erection of the Monument to the Heroes of the People in Tien An Men Square and the demolition of Peking's city walls were made by the Central Committee and carried out by the government. Matters of secondary importance can be left to the leading Party groups in government departments. It just won't do for the Central Committee to monopolize everything. Combating decentralism will win maximum popular approval because most comrades in the Party care about collective leadership. Party members fall into three categories in their attitude towards collective leadership. Those in the first category care about collective leadership. Those in the second do not care so much, maintaining that the Party committees had better leave them alone, but they don't mind being supervised. "Better leave me alone" reveals a lack of Party spirit, while "don't mind being supervised" shows some measure of Party spirit. We must seize on this "don't mind being supervised" and help such comrades by education and persuasion to overcome their lack of Party spirit. Otherwise, each ministry would go its own way and the Central Committee could not supervise the ministries, the ministers could not supervise the department and bureau heads, and the division heads could not supervise the section chiefs -- no one, in short, could supervise anyone. In consequence, independent kingdoms would proliferate and hundreds of feudal princes would emerge. Those in the third category are only a handful. They flatly reject collective leadership and always prefer to be left alone. The decision on strengthening Party spirit puts the stress on the strict observance of discipline under democratic centralism, in other words, the minority is subordinate to the majority, the individual to the organization, the lower level to the higher level and the entire Party to the Central Committee (a case of subordinating the majority to the minority, as this minority represents the majority). Opinions are welcome, but to undermine Party unity would be a most shameful thing. It is reliance on the political experience and wisdom of the collective that can guarantee the correct leadership of the Party and the state and the unshakable unity of the ranks of the Party.
At this conference Liu Shao-chi said he had made mistakes of a sort, and Comrade Teng Hsiao-ping said he too had made some mistakes. Whoever makes a mistake must make a self-criticism, and everybody without exception must put himself under the Party's supervision and the leadership of Party committees at various levels. This is a prime requirement for fulfilling the Party's tasks. Throughout the country there are quite a number of people who thrive on anarchy, and Po I-po is one such person. To some extent he has been corrupted both politically and ideologically and it is absolutely necessary to criticize him.
One final point. We must foster modesty, willingness to learn and perseverance.
We must have perseverance. In the war to resist U.S. aggression and aid Korea, for instance, we hit U.S. imperialism where it hurt and struck fear into its heart. This was an asset, an important factor, in our country's construction. What was of the utmost importance was that our armed forces were thus steeled, the fighters displaying velour and the commanders resourcefulness. True, we suffered casualties and incurred a cost; we paid a price. But we had absolutely no fear of sacrifice; once we set our mind on doing something, we saw it through. When Hu Tsung-nan attacked the Shensi-Kansu-Ningsia Border Region, we did not pull out although we had only one county seat left, and we thought nothing of it when we had to live on the leaves of the trees. This is the kind of fortitude we must have.
We must study and must not become conceited or look down on others. Goose eggs don't think much of chicken eggs and the ferrous metals don't think much of rare metals -- such a disdainful attitude is not scientific. Although China is a big country and ours is a big Party, there is no reason to look down on small countries or small parties. We must always be ready to learn from the people of fraternal countries and maintain a genuine internationalist spirit. In our foreign trade some people are arrogant and overweening, and this is wrong. Education must be conducted in the whole Party, and particularly among people working abroad. We must study hard and work hard so as basically to accomplish socialist industrialization and socialist transformation in fifteen years or a little longer. By then our country will have become strong, yet wee should still be modest and should always be ready to learn.
There are several regulations which were adopted at the Second Plenary Session of the Seventh Central Committee but not written into its resolution. The first is a ban on birthday celebrations. Birthday celebrations don't beget longevity. The important thing is to do our work well. The second is a ban on gifts, at least in the Party. The third is to keep toasts to a minimum. Toasts may be allowed on certain occasions. The fourth is to keep applause to a minimum. There should be no ban and no pouring of cold water on the masses who applaud out of enthusiasm. The fifth is a ban on naming places after persons. The sixth is a ban on placing Chinese comrades on a par with Marx, Engels, Lenin or Stalin. Our relationship to them is one of pupils to teachers and that is how it should be. Observance of these regulations is true modesty.
In short, we must remain modest, be willing to learn, retain our perseverance and adhere to the system of collective leadership so as to achieve socialist transformation and attain victory for socialism.
1. This new tax system was introduced in December 1952 and put into effect in January 1953. Though nominally entailing "equality between public and private enterprises", in reality it lightened the tax burdens on private industrial and commercial enterprises and increased those on state and co-operative enterprises, thus serving the interests of the capitalists at the expense of the latter. Soon after Comrade Mao Tsetung made his criticism, this error was corrected.
2. Chang Tzu-shan was at one time secretary of the Tientsin Prefectural Committee of the Chinese Communist Party. Corroded by the bourgeoisie, he degenerated and became a big embezzler and was sentenced to death during the movement against the "three evils".
3. The movement against the old "three evils" was the struggle launched in 1951 against corruption, waste and bureaucracy. The movement against the new "three evils" was the struggle launched in 1953 against bureaucracy, commandism and violations of the law and of discipline.
4. These commissioners were the administrative heads of the commissioners' offices which were agencies of the provincial and autonomous region people's councils and had jurisdiction over several counties.
Selected Works of Mao Tse-tung