February 27, 1959
In 1958 we achieved great successes on every front. On the ideological and political front, the industrial front, the agricultural front, the communications and transport front, the commercial front, the cultural and educational front, the national defense front, as well as in other areas, no matter where, it was the same in all. Especially remarkable was the fact that there was a magnificent leap forward in the area of industrial and agricultural production. In 1958 people's communes were established everywhere throughout the rural areas of the entire nation.
The- establishment of the people's communes has enlarged the original system of collective ownership of the means of production and raised it to a higher level and, moreover, it begins to embody certain elements of the system of ownership by the whole people. The scale of the people's communes is much larger than that of the agricultural producers' cooperatives and, moreover, has put into operation the unity of workers, peasants, merchants, students and soldiers and of agriculture, forestry, animal husbandry, subsidiary productive activities and fish culture. This has given a powerful push to the development of agricultural production and the entire rural economy....
In a new and historically unprecedented social movement that involves several hundred million people and for which previous experience is lacking, like the setting up of the people's communes, both the people and their leaders can only acquire experience step by step, from their practice and step by step deepen their knowledge of the essence of things, expose the contradictors within things, solve these contradictions and affirm the achievements and overcome the shortcomings of their work. Anyone who says that a broad social movement can be completely without shortcomings is nothing but a dreamer, or a tide-watcher, or an account-settler, or simply a hostile element. As for the relationship between our achievements and defects, it is, just as we have often said, like the relationship between nine of the ten fingers and the one remaining finger. There are some people who doubt or deny the achievements of the Great Leap Forward of 1958 and doubt or deny the superiority of the people's commune. This kind of viewpoint is completely mistaken....
Now I'm going to talk a little bit about the problems of the people's communes. I think that there is a contradiction the people's communes, a contradiction that should be said to be quite serious, which has not yet been recognized by many comrades. Its nature has not been revealed and thus it has not been solved. And I think that this contradiction must be resolved quickly and that only then will the situation be favorable to mobilizing the still greater enthusiasm of the broad masses of people, only then will it be favorable to improving our relationship with basic-level cadres, which is essentially the relationship between the hsien party committee or the people's commune party committee and the basic-level cadres. In the fmal analysis what kind of contradiction is this? As every body can see, there exists at present in our relationship with the peasants a rather tense state of affairs in some matters. The outstanding phenomenon in this regard is the fact that the state's task of purchasing agricultural products, such as food grains, cotton, edible oils and so on after the bumper harvest of 1958, is to date still partly uncompleted. Furthermore, throughout the entire country (except in a small number of disaster areas) there has appeared almost everywhere the practice of the peasants' "concealing production and dividing it among themselves" and great unrest about food grains, edible oils, pork and vegetables being "insufficient." The large scale of the unrest clearly surpasses that of both the 1953 and the 1955 periods of unrest over food.... I think that we should look for the answer to the problem mainly in the area of what we know about the ownership system in the rural people's commune and the policies we have adopted.
Should the system of ownership in the rural people's commune go through a process of development? Or should the commune, as soon as it is set up, immediately have a complete system of ownership by the commune and can it immediately eliminate ownership by the production brigade... (which generally corresponds to the former higher-level agricultural producers' cooperative)? Even now there are a good many people who still don't recognize that the system of ownership by the commune must go through a process of development. Within the commune there needs to be a process of transition from ownership by a small collective, the production brigade, to ownership by a large collective, the commune and this process requires a period of several years before it can be completed. They mistakenly believe that as soon as the people's commune is set up, the means of production, the manpower and the products of each production brigade can all be directly controlled by the leadership organs of the commune. They mistake socialism for communism, they mistake distribution according to labor for distribution according to need and they mistake collective ownership for ownership by the whole people. In many places they deny the law of value and deny the necessity for exchange at equal value. Thus, within the confines of the commune they carry out the leveling of the poor and the rich and equal distribution. They have transferred the ownership of some of the property of the production team upward without compensation; in the area of banking, they have recalled all loans in a good many rural areas, too. What is known as "equalization, transferring and recalling loans" has given rise to great fear and anxiety among the broad masses of peasants. So this is a most fundamental problem in our present relationship with the peasants...
Before the system of ownership by the whole people in the countryside has been put into effect, peasants are still always peasants and on the path of socialism they still always have a definite dual character. We can only lead the peasants step by step to divorce themselves from the system of ownership by a relatively small collective and move, by way of the system of ownership by a relatively large collective, toward ownership by the whole people. We cannot demand that they complete this process all at once, just as in the past we could only lead the peasants step by step to divorce themselves from the system of ownership by individuals and move toward the system of ownership by the collective. To move from an incomplete system of ownership by the commune to a complete, unitary system of ownership by the commune is a process of raising the comparatively poor production brigades to the level of production of the comparatively rich production teams. It is also a process of expanding the commune's capital accumulation, developing the commune's industry, accomplishing agricultural mechanization and electrification and accomplishing the industrialization of the commune and the industrialization of the nation. The things owned directly by the commune at the present time are still not many, such as commune- run enterprises, commune-run undertakings, the common fund and the welfare fund controlled by the commune, etc. Although this is the case, our great, glorious and brilliant hope also lies right here. Because the commune can draw its capital accumulation from the production brigades year by year and it can increase its capital accumulation from the profits of the commune-run enterprises and add to this the state's investment, its development will not be very slow, but rather will be very rapid.
With regard to the question of state investment, I propose that within seven years the state invest in the communes between several billion and more than ten billion yuan to help the communes develop industry and help the poor production brigades develop their production. I believe that it won't be very long before the poor communes and poor brigades will be able to catch up with the rich communes and rich brigades and develop tremendously. Once the communes have acquired great economic power, we will be able to put into effect a complete system of ownership by the commune and can also proceed to put into effect the system of ownership by the whole people besides. As for time, about two five-year plans are needed. Hurrying won't do... This is also precisely what the Pei-tai-ho Resolution said, that it will take three or four years, or five or six years, or even a bit longer. After that, we will go through several more developmental stages and in fifteen or twenty years or a bit longer, the socialist commune will develop into the communist commune....
We must first investigate and correct two tendencies of our own, namely the tendency toward egalitarianism and the tendency toward excessive concentration. By the tendency toward egalitarianism I mean the tendency to deny that there should be differences in income among the various production brigades and various individuals. And to deny such differences is to deny the socialist principles of "to each according to his labor" and "the more work, the more reward." By the tendency to excessive concentration I mean the tendency to deny the system of ownership by the production brigade, and to deny the rightful authority of the production brigade, and to arbitrarily transfer the property of the production brigade upward to the commune. At the same time, a good many communes and hsien have extracted too much capital accumulation from the production brigades and, moreover, the administrative expenditures of the communes include a great deal of waste. (For example, there are some large communes that have as many as a thousand or more working personnel who eat without doing any labor and there are even cultural work teams which are divorced from production altogether.) The two above-mentioned tendencies both incorporate the kind of thinking that denies the law of value and denies exchange at equal value....
At the time of the unified decision on distribution, the commune should recognize that there are reasonable differences in income between one production brigade and another and between one commune member and another and that there should be differences in food and wages between poor production brigades and rich production brigades. When it comes to wages, we should act on the principle of "fixed grades and flexible assessment." The commune should implement a down-ward transfer of authority, a three-level system of accounting and, moreover, use the accounting of the production brigade as the basis. Between the commune and the production brigade and between production brigades we should carry out exchange at equal value ....
After the communes were set up in the autumn of 1958, for a while there blew up a "communist wind." It consisted mainly of three elements: the first was the leveling of the poor and the rich brigades, the second was that capital accumulation by the commune was too great and the commune's demand for labor without compensation was too great and the third was the "communization" of all kinds of "property." This so-called "communization" of all kinds of "property' included all kinds of different situations. Some of it was things that should have belonged to the commune, like the greater part of the private plots, some of it should simply have been borrowed by the commune, like some of the buildings, tables, chairs, benches and stools needed for the commune's public undertakings and the knives, cooking pots, bowls and chopsticks needed for the dining hall. Some were things that belonged to the commune when they should not have, like chickens, ducks and some of the pigs, which belonged to communes without being paid for.... The phenomenon of uncompensated takeover of the fruits of other people's labor is something we do not permit. Just take a look at our history. The only things we took without compensation were the means of production of Japanese, German and Italian imperialism, of feudalism and bureaucratic-capitalism and some of the landlords' houses, food and other means of livelihood....
In addition to the tendencies to egalitarianism and excessive concentration, at present there are also very irrational aspects to the allocation of the rural labor force. These are, specifically, that the labor force used in agriculture (including agriculture, forestry, animal husbandry, subsidiary production and fish culture) is generally too small, while too many personnel are used in industry, the service industries and administration. The latter three types of personnel must be reduced....
We must simultaneously take into consideration and do unified planning for, our work in making arrangements for these three areas: the livelihood of the people, the commune's accumulation of capital and satisfying the needs of the state. Only in this way can it be said that we have truly succeeded in doing things as if the affairs of the entire nation were a single game of chess. Otherwise, the so-called chess game is actually only half a chess game, or it is an incomplete chess game. Generally speaking, the accumulation of the commune in 1958 was a little in excess. Therefore each area should fix an appropriate limit, on the basis of concrete conditions, for the commune's accumulation in 1959 and should announce this to the people in order to set people's minds at ease and increase the broad masses' enthusiasm for production.