THE NEW CLASS POLARIZATION AND CLASS RELATIONS

THE OWNERSHIP COUNTERREVOLUTION IN AGRICULTURE

            “While the new team leader had good political connections with the brigade, team members began to complain that he lacked ability. By this they meant that he refused to allow team members to increase their income by selling seafood in the lucrative free market. Although peasants in other brigades were ‘becoming rich’ through these means, the income of peasants in Team No. 4 stagnated. One observer noted : ‘The new team leader was timid. The policy had changed many times. But he said that the new policies were capitalist.’ It soon became obvious that this view was out of step with the views of higher authorities, and the villagers demanded that he be replaced. In 1981, the brigade leadership (which itself had just been reorganized), called for new team elections. . . . The new team leadership then liberalized the team’s marketing policy.”

—First-hand observer John F. Burns

            “In these localities pressure from above met with support from below, squeezing the middle-level bureaucrats who may have opposed the policy. Unlike some other movements for change in the countryside where the center’s goals were anathema to peasant interests, the advocates of reform for this policy [decollectivization—ed.] developed an unofficial coalition with peasants in the poor areas. Caught in this vise, the middle-level cadres could do little but accept the changes.”

—First-hand observer David Zweig

            First-hand observers who do not describe what they see in China as social revolution have nonetheless accurately conveyed the rapidity of change in agricultural organization in China since the death of Mao and the arrest of the Gang of Four. Oddly enough, empirical knowledge of China’s decollectivization has not connected with theory.

            Indeed, according to Zweig, in decollectivizing “the movement has gone faster than anyone expected.” According to Pat Howard, “the relations of production in the countryside have occurred with a scale, speed, and significance rivaled only by the earlier land reform and cooperativization movements.” What Zweig, Howard and others have missed is the very possibility for social revolution against socialism that Mao and the Gang of Four attempted to guard against. The Maoists worried about coups, restorations of capitalism and the “ease” with which “someone like Lin Biao” “could set up the capitalist system.” In such worries, the Maoists proved to be correct. Whether or not one agrees with the Maoists that capitalism is evil, they were correct about the possibilities for a rapid change of social structure in China.

THE IMPORTANCE OF THE CENTRAL GOVERNMENT IN RURAL APPROPRIATION

        One must not forget that China is still approximately 80% peasant. Facts and figures are easier to gather for the urban areas. Some analysts—Trotskyists for example—prefer to analyze urban conditions because they identify with the urban worker more readily than with the peasant. However, a discussion of class relations in China would be grossly incomplete without an analysis of the immediate conditions in the countryside and the relationship of the rural areas to the urban areas. It is essential to understand the capitalist revolution that has occurred in the countryside.

              In China, there is no feudal class of landlords in the countryside, at least not yet. Nor is there capitalist agriculture as in the United States. There is a middle class of peasants, especially in the suburbs of Beijing and Shanghai and other major cities where nearly every peasant family owns a television set. Yet, this is not evidence of state capitalism.

            Both the Soviet and Chinese revolutions succeeded with a worker-peasant alliance and in both surplus from the countryside was collected up by the state. Of course, this in itself does not mean there is exploitation. Under both socialism and communism there will be a surplus. The question is who disposes of and who benefits from the surplus. These are two separate questions in the short run. A party may represent the laboring classes in such a way as to benefit those classes. However, in the long run, it is necessary according to the Maoist view that the laboring masses raise their own understanding of economic and governmental administration so that they come to dispose of the surplus themselves. Otherwise, government and party leaders will entrench themselves and lose touch with the masses, set up state capitalism and act in a fashion contrary to the interests of the peasants.

      Before the question of appropriation is raised, it is important to spell out the scale of the surplus. “Li Bingkun estimates that . . . between a third and a half of state financial income in 1977 was derived from the agricultural sector.” In 1976, in comparison, agriculture was responsible for 41% of total income. Thus, agricultural and industrial incomes were taxed at about the same rate despite the fact that agriculture is where three-quarters of the workforce must make its living.

      The importance of this tribute is declining only because industry’s share of income is increasingly predominant. As shall be seen later, with the new emphasis on technology and profits, industrial expansion does not mean greater employment of either urban workers or peasants.

       Agriculture has always received a smaller portion of investment than industry. In 1978, about 10% of total agricultural income was invested in agriculture through the combined efforts of the state and the agricultural localities themselves according to Nicholas Lardy. Yet, about 36.8% of total national income was invested overall. Moreover, “Liang Wensen states that between 1952 and 1979 just 12% of some Y 630,000 million accumulated investment went to agriculture.” Much of that investment comes from the localities too. In one province, only 24% of total investment in agriculture came from the state. The rest came from the collectives. In 1986, only 3.3 percent of state investment went to agriculture. It was considered a show of concern that state spending on agriculture reached 5.8% of the total in 1988. The state has always set about investing most of its funds outside of agriculture.

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                                    (Investment)                           (All expenses)

Year                            % of capital construction                    % state expenditures

                                    devoted to agriculture                         devoted to agriculture

1952                                        13.4                                                     5.1

1957                                        8.3                                                       8.1

1966                                        n.a.                                                      10.0

1970                                        n.a.                                                       7.6

1976                                        n.a.                                                      13.7

1978                                        10.6                                                     13.6

1980                                        9.3                                                       12.4

1984                                        5.0                                                       n.a.

1985                                        3.4                                                       n.a.

State Statistical Yearbook of China 1986, p. 20, 521.

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      In this light, the statement that “ideological and political line decides everything” does not sound so metaphysical. The issue of appropriation in agriculture is ultimately a political issue. The class that controls the state also controls appropriation in agriculture.

      The state may be ruled by an alliance of the workers and peasants to the benefit of the peasantry. If the state takes the surplus and invests it in rural industry, then this will raise the living standard of the peasantry. Furthermore, to ultimately assure the material interests of the worker-peasant alliance, one could argue that revolution in other countries is necessary and that therefore aid to foreign revolutions is in the interests of the worker-peasant alliance. Whatever its use, the surplus under socialism would be expected to have a use in line with the worker-peasant alliance.

      Much of the peasantry in post-Mao China has no interest in the alliance with imperialism, the anarchy of production, the coercion of labor and class polarization occurring now in China. These are issues that are indicative of the nature of the class that is collecting the agricultural surplus.

                                                                                                                              

 EVIDENCE OF THE NEW EXPLOITATION IN THE COUNTRYSIDE ITSELF

  

      There are a few points that should be made about the immediate conditions of the peasantry as they are affected by the state. One of the best arguments for the socialist nature of China is the narrowing of urban wage differentials and the argument that the peasantry’s material position is catching up to that of the urban worker. “The government has raised its purchase prices for farm products by a big margin (30.8 percent in the two years 1979-80), reduced the agricultural tax or exempted some from it, increased imports of grain and reduced state purchase quotas of grain in some regions.” Although production predominantly for exchange is a feature particular to capitalism, it is considered a sign of prosperity that 60% of the peasants’ production was for exchange in 1986, up from 50% in 1983 and 40% in 1978.

              Of course, Mao did not believe political questions were resolved by wealth and income statistics. So even if statistics show that urban equality is rising and the urban/rural gap is diminishing, that would still leave other important issues including the role of peasants and workers in production. It would be “goulash communism” and “pragmatism” to assess class relations in China simply by examining living standards.

       It would be as difficult to say that peasantry’s living standards have declined since 1979 as it would be to say that they have declined since 1949. The author does not doubt that especially in the areas of housing and disposable income available for the purchase of recently available appliances, there has been great progress. Indeed, at least in the short-run, the regime may have stimulated various kinds of initiative in the peasantry and earned the support of the vast majority for its capitalist revolution.

      Nonetheless, certain arguments in favor of the so-called reforms are easily debunked. One must be careful about statistical categories defined by the regime in power. Numerical estimates of wage differentials mask the issue of who is in what class or category—the very question to be answered. In the Soviet Union, the people with managerial or higher positions receive personal income wages in addition to the pay of their office. Also, the state capitalists cash in on the prestige of their positions in stores created just for top party and government officials. These stores have lower prices and better products than available elsewhere. In addition, there is the “Kremlin ration.” Essentially, income and consumption data can not resolve the question of who is in state power and whether or not surplus appropriation by a capitalist class is occurring or not.

             Nevertheless, the CCP cites some data that seems to show that urban /rural inequalities have declined. The ratio of non-peasant to peasant consumption supposedly fell from 2.9 to 1 in 1978 to 2.2 to 1 in 1984 before inching up to 2.5 to 1 in 1986.

            Western apologist for the coup, Victor Lippit also argues that the urban/rural inequalities have been declining in recent years. “On a broader, national scale, the evidence also points toward the maintenance of equality. In 1979 and 1980, as I have indicated, incomes and retail sales in the countryside grew more rapidly than those in the urban areas, decreasing urban-rural differentials in percentage terms.”

             Unfortunately, the peasantry’s income may be increasing as much as twice the rate of the urban workers’ income, but the urban workers start from a base that is more than twice as large. Lippit’s own figures show an expanding absolute gap between the urban workers and the peasantry. “The wages of workers and staff members in urban collectives [where wages are lower than in state enterprises—author] rose by 7.1 percent in real terms in 1980 to an average of 624 yuan.” This means that in one year urban collective workers increased their wages by about twice as much as average per capita agricultural income increased from 1977 to 1980.

             In 1980, the per capita average income for peasants in collectives was 170 yuan and that of state-owned enterprise workers and staff was 781 yuan. Here the figure for rural workers may include collective industrial enterprises in the countryside. Yet, the urban workers still make more than four times as much as their rural counterparts. For an actual narrowing of income gaps to occur, the rural workers would have to increase their incomes at a percentage rate at least five times greater than their urban counterparts.

             In the long run, Mao hoped that the development of industry would draw people out of agriculture. Between 1949 and 1970, the industrial proletariat expanded its size by three and one half times. However, recent wage increases of as much as 40% in one year for low rung urban workers only serve to attract people to the cities and increase unemployment and the necessary coercion to keep the peasants out of the cities. Under Mao, urban workers faced a real decline in income and “draconian means” were used to solve the unemployment problem—the countryside movement. Rural incomes rose, especially with the Maoist approach of implanting rural industries, and countryside movement youth from the cities lightened the work load. One might say that this resulted in underemployment, but Marxists find this preferable to unemployment for urban people and greater work burdens for peasants.

      Fox Butterfield has some things to say about income differentials. Butterfield, whose book China: Alive in the Bitter Sea is named after a saying of bitterness for the Cultural Revolution, has unwittingly aided the Maoist cause. He recognizes how difficult it is actually to equalize incomes.

          In the cities, the state provides free

          education, medical care, old-age pensions, and

          low-cost housing. By government count, its

          subsidies for these services total $351 a year

          for every urban resident, more than doubling

          city income. In the countryside the Communists

          have established a widespread network of schools and

          clinics; but unlike the cities, the local teams and

          brigades have been left largely to pay for them out of

          their own slender earnings.

  

Indeed, Chinese officials admit that as a result of decollectivization between 1979 and 1984 the portion of the rural population covered by the collective medical system was cut by one-half—from 80 or 90% to 40 or 45%. In late 1984, the regime was claiming to make efforts to eliminate state subsidies to urban areas as part of making the economy more competitive. One wonders how much welfare cuts will be translated into bonuses and salary raises for urban workers.

       Butterfield also provides the Maoists other important ammunition. For example, he assures the reader that real wages in the cities fell from 1965 until Deng took power. Thus, the urban/rural division decreased since agricultural income increased in the same period, if only very slowly. Meanwhile, the industrial base was expanding at 11 or 12% a year thus opening new industrial jobs at a rate of 10% a year from 1950 to 1966. Ultimately, industrial expansion and the eventual mechanization of agriculture was the Maoist strategy for eliminating the urban/rural division of labor.

            This aspect of the Maoist strategy of development is little understood and rarely does one find a critic of Maoist policy who will address it. When Mao said that mechanization was “the only way out” for the peasantry, he was specifically criticizing development strategies with unrealistic assumptions about land and labor productivity. Many critics of Maoist policy find it unfortunate that the Maoists restricted rural markets as a source of peasant income. Typical of this line of reasoning is Pat Howard, who cited the peasant complaint that they were “‘roped together to live a poor life.’” Howard also points to evidence that per capita agricultural production in key areas declined from 1956 to 1977 and that a majority of middle peasants never regained their precollectivization levels of income under Mao. Yet, the Maoists did not expect that there could be continual gains in agricultural productivity, unless of course one were thinking of the kind of efficiency that would increase the more landless peasants were created. Rather the Maoists assumed a certain stagnation in agriculture that could only change one of two ways—with mechanization and the obsolescence of agriculture itself with the growth of industry in the countryside or with capitalist attempts to squeeze more out of agriculture with the resulting class polarization, including landlessness and unemployment.

             Of course, the Maoists were aware that it was possible to drive a fraction of the peasants off the land to crowd the cities with slums and surplus labor. Although younger economists in China today freely advocate this classic Third World underdevelopment pattern, it was not an option before 1976.

       Now, with the trend of power to the experts, mechanization is occurring as a process alien to most peasants and Mao’s “way out” is increasingly unlikely: “‘Tractor stations will be set up by the state to serve the communes and brigades in return for reasonable expense fees.’” William Hinton reports that operators of farm tractors make large profits. Furthermore, Butterfield collected evidence that the peasants recently started to bear ever greater costs in industrial inputs.

          In Hebei province, near Peking, an American

          scholar who was permitted to live on a commune there,

          Steve Butler, found that the ratio of peasants’ costs

          to their gross income jumped from 25 to 30 percent in

          the early 1970s to 50 percent by 1980. “The cities are

          ripping off the countryside,” Butler remarked. Farming

          costs have become so high, he estimated, that the

          peasants may actually get a negative return on their

          collectively planted grain crop. The key to their

          survival is in private sideline production where they

          can plant other crops or do other jobs with a good

          return on capital.

  

Establishment journalist Butterfield almost successfully proved that the cities are exploiting the peasants and that more private agriculture is one of the results.

            Since Butler made his observations, however, things have changed dramatically. First, the effort to stimulate agriculture since 1979 has resulted in what is probably an unprecedented closing of the scissors—an increase of agricultural prices relative to prices of industrial products needed in agriculture. Nonetheless, it is true that the CCP has allowed peasants to escape into a private agriculture in order to make up for deficiencies of state and collective investment. The push of dilapidated collective production and the pull of increased market prices for agricultural produce has caused a focussing of initiative in the private sector.

             It is important to realize that private plots of land alone are not the “key” to survival, however. The return to capitalism in China has not been quite that straightforward. Private plots only expanded from 5% of the land to 15% of the land in 1979. One peasant in Taiyun farms a huge farm by Chinese standards of over 100 acres with hired labor. In some places, up to 40% of income comes from the private plots, but the average is still about 20%. Despite a growing middle class, more frequent landlessness and an occasional landlord, the private plots are not “key” to “survival,” at least not yet. Admittedly, the distinction between private plots and family farming of plots leased out for 15 years is small, but it is still of some concern to the peasants and foreign analysts.

          So-called sidelines include many business activities in the countryside that belong in the private sector and often take advantage of collective property in one way or another. For example, livestock raising by individual peasants can interfere with the collective economy to the extent that the animals are allowed to trample crops, eat food they shouldn’t etc. “Surveys show that in the poor teams (namely, 16 per cent of the nation’s production teams in 1979), where the per-capita income derived from the collective economy was less than 40 yuan a year, the peasants’ earnings from domestic sidelines surpassed their income from the collective economy almost without exception.”

            Under Mao, China stressed “grain as the key link” in agriculture and downplayed sidelines, which tended to divert peasants from grain production toward one non-grain speciality or another. Since the death of Mao, the so-called reformers have attacked this as a dogmatic formulation which suppresses the initiative of peasants and prevents the development of a diversified economy.

            Some Westerners have said that the Maoist policy is at best rational with certain military assumptions since it stresses the food self-sufficiency of each locality. In case of a land invasion, each locality will have its own grain and not have to depend on other areas, which are possibly under foreign occupation, for life-sustaining food. Particularly in the 1960s and early 1970s when the Soviet Union and China had border clashes and when U.S. troops menaced China from their positions in Vietnam, it was not unreasonable to prepare each locality for self-sufficient guerrilla warfare.

            Nonetheless, in addition to the military situation, there are other reasons why Mao’s stress on grain production was economically rational. First, grain provides the peasants with 80% of both their caloric and protein intake. Thus, when the initial move to liberate sidelines occurred in 1980, there was some famine that happened in areas of Hubei and Hebei provinces.

 

                        Although the Chinese government itself provided substantial

                        aid to both provinces totalling $140 million dollars and

                        including 150,000 tons of grain, it took the unprecedented

                        step of asking for international aid. China claimed it urgently

                        needed seven months’ supply of food for an estimated total

                        20 millions persons and United Nations observers noted that

                        about 500,000 tons of rice and 75,000 tons of soybean were

                        needed to feed 6 million persons through to the next harvest

                        in Hubei and a million tons of grain in Hebei province.

While the Maoists certainly could not deny the advantages of a diversified economy, the question was how to diversify that economy. By giving an individual peasant the right to specialize, the state generates several economic problems. One is that specialization implies trade and a need for transport. While it may appear economically rational to allow peasants to earn as much income as possible this assumption is invalid for several reasons. One is that a necessary and connected assumption is that the price structure is rational. Certain non-grain commodities may indeed have high prices as a means to discourage their consumption, not because the state intends to encourage their production.

            Secondly, if China did have a 100% free market economy, it is still a questionable use of resources to engage in time and transport-consuming long-distance trade. That is to say that the invisible hand does not know the actual needs of the peasantry.

            While it will never be possible for the Chinese economy or any other economy to become a 100% free market economy, especially in the areas of energy and transport, it has been possible to license peasants to take advantage of a price structure not intended for a free market. Hence, some peasants have become rich, basically at the expense of the state and other peasants because of their luck vis-a-vis the price structure—in aquatic products for example.

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Price structure             1950 = 100

Item                                        1978                            1985

General                                   217.4                           362.9

Grain                                      258.9                           522.2

Cotton                                     188.0                           230.3

Fresh vegetables                     172.2                           333.0

Livestock for slaughter           200.2                           328.1

Dried and fresh fruits              205.1                           384.4

Aquatic products                    182.6                           506.3

Means of agricultural

production                               100.1                           123.7

State Statistical Yearbook 1986 “Purchasing Price Indexes of Farm and Sideline Products by Category of Commodities,” p. 544, 546.

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            Butterfield gives a perfectly credible picture of income inequalities in recent China. He claims that peasant communes range in income per capita from $10 to $540 a year. The inference he draws is that “there is not one vast uniform countryside, rural China, but a wildly variant patchwork pattern of emerging prosperity and continued poverty.”

             Moreover, unconsciously Butterfield points to the compromise of China’s national independence since 1976. “Grain imports climbed upward throughout the late 1970s and in 1980 reached an all-time record of 13.7 million tons. Almost all the imported grain was funneled into the cities.” Admittedly, it is in the interest of the worker-peasant alliance that the cities bear the cost of feeding themselves so that the peasants may keep what they produce. The problem is that despite supposed emphasis on agriculture and light industry and bumper crops, the regime imports both grain and manufactured goods. The record grain imports can only be justified as an opening to foreign competition or a belief in the comparative advantage game that has seen so many developing countries become cash-crop exporters.

            Since 1980, China has become a net-grain exporter, but as the short-term gains of short-sighted material incentives run out, new trends in the Chinese economy are beginning to appear. According to the Chinese government total grain production declined after it abolished the quota and offered purchasing contracts instead to peasants in 1985. Since then officials have considered and occasionally implemented compulsory grain delivery, but seem to have preferred to increase material incentives for grain production, which has not recovered to its 1984 level yet. Furthermore, according to William Hinton, yields may also be going down. Even in model Wuxi County, grain output has declined from 615,000 tons in 1978 to 489,000 tons in 1987—only 13% more than grain production in 1970.

            One last source of problems in the countryside is regionalism. It is “increasingly difficult to effect resource transfers across administrative boundaries.” The contention involved in property relations between the cities and countryside and between the locality and the central government make state efforts for equality less likely and more difficult. For military preparation for invasion and as a spur to mass-mobilization, the Cultural Revolution saw a great measure of self-reliance in the rural localities. It is true that this probably resulted in a decrease in government appropriations across provincial borders. However, the current regime neither claims to be preparing for People’s War against the Soviet Union or American imperialists in Vietnam nor to be encouraging the mass-mobilization that went along with local self-reliance and initiative.

                                                                                                                               

 SAMIR AMIN’S STATIST MODE OF APPROPRIATION

  

      In his book the Future of Maoism, Amin outlines what he calls a statist mode of appropriation that has affinities to state capitalist appropriation. For example, he sees Cuba as a dependent statist country. In statist countries, the state turns from socialism to appropriation for the middle class. This is very interesting for several reasons. One of the first shifts after the arrest of the Gang of Four was the shift towards the technocratic elite. This elite increased its prestige, income and aloofness dramatically even before the major so-called reforms of 1979 came into place.

      Amin’s statist mode is meant to apply to the Soviet Union. By his model, the masses receive one-third of all income; private strata receive one-third of the income and the military and administration do one-third of the consumption.

      Although his economic models are interesting in their own right, Amin has turned out to be historically incorrect. He believed that the “centrist position will ultimately prevail” in China. By centrist he meant what he saw as the coherent position of Hua and Zhou. He definitely considered Deng and Liu to be on the right and he added a further category of revolutionary for Mao and the Four. Basically, Amin thought China would stake out a middle course and remain what he would consider socialist with a few Yugoslavia type reforms and other innovations drawing from the revolutionary left and the right. Consequently, Amin did not see that the “statist” economic outcomes should have been expected in China’s case.

      Having based his own legitimacy on the Four Modernizations and programs for the people’s consumption, Hua lost out to Deng. The heavy industry bourgeoisie, which supposedly backed Hua, has great power, but Deng leads the bourgeoisie with the help of the consumerist torrent unleashed by Hua.

       With no fundamental disagreements with the pragmatists and with generals forcing his hand from the beginning, Hua started “The Great Leap Backward,” which is what Charles Bettelheim was able to write on March 3rd, 1978, several months before the “whatever faction” was finally discarded by the pragmatists. Since Hua is still in the ruling coalition, he or someone like him might again come to rule China when the concentration of capital is much more the order of the day and not the dismantling of socialism to build a reform coalition. Ironically, Amin’s centrist coalition may have a future, but only in implementing Soviet style reforms.

      Perhaps Amin was overly concerned with replying to bourgeois economists and vulgar Marxists who look at the Soviet Union’s consumption levels and determine that the U.S.S.R. is socialist. The consumption-siders see no Rockefellers or Vanderbilts burning money or racing yachts, so they conclude there must be socialism in either or both China and the Soviet Union. The late Albert Szymanski, a sociologist opposed to the Maoist view of the Soviet Union asks the Maoists why the state capitalists in the Soviet Union do not consume more than they do if they really have power to appropriate the surplus of wage laborers. He then points to the consumption of the working class to show that the workers must have state power. (One might as well ask why the income of capitalists in the United States is not twice as high as it is. The capitalist class can only appropriate what it can get away with in class struggle.) Fox Butterfield dwells on the privilege of the CCP and the military elite. Amin answers these consumption-siders that the state controls production and the middle classes are doing the consuming. This of course leaves open the possibility of further development of a capitalist class and not just an occasional black market millionaire.

      Empirically, Samir Amin failed to recognize the social revolution that has happened in China since 1976, did not grasp that China too is developing a middle class and saw his predictions quickly disproved by the post-Mao regime: “The 1982 statistics show that 2.4 per cent of peasants received less than 100 yuan, 24.4 per cent earned between 100 and 200 yuan; 37 per cent between 200 and 300 yuan, 29.5 per cent between 300 and 500 yuan and 6.7 per cent over 500 yuan.” Some peasant families even make over 100,000 yuan.

            According to the State Statistics Bureau in China, inequality among Chinese farmers has been on the rise. Declining only in 1982, the gini coefficient has risen every year since 1978 from 0.2124 to 0.2636 in 1985. Howard points to an income gap between rich and poor peasants that has grown to 200:1 and up to 10 or 20:1 within villages. Of course, the CCP defends this rise in inequality as necessary to attack egalitarianism and short of class polarization which would entail the ownership of a large portion of the means of production by a small group of the rich.

      Amin was overly optimistic about China. He overestimated the spontaneous capability and desire of the peasantry to wage a class struggle for socialism and against the family farming seen today: “Proposals of this nature [proposals that are now reality in China—ed.] would meet with ferocious resistance from the peasantry, which in itself would be enough to reverse them.” Proposed and implemented in China before, today’s agricultural policies were criticized as early as 1962 and condemned “as part of ‘Liu Shaoqi’s revisionist line’” during the Cultural Revolution. No doubt Amin was remembering this history when he stated his confidence in the Chinese peasants’ desire for socialism. If Western observers ever had any doubt that Deng Xiaoping, as the number two ranking target of the Cultural Revolution, held the policy views attributed to him by the Maoists, history has afforded the rare of pleasure of seeing what “the losers would have done.”

            What has been seen is that at the very least, even a united peasantry can be repressed. More truthfully, family-farming has proved quite popular. In the words of David Zweig, who has gone to China to find out what social groups supported the agricultural reforms, “in essence we are witnessing the unbridled pursuit of peasant political and economic interest.”

      In addition to repression of radical peasants and the rewarding of peasants who work on their own plots is the new political atmosphere that the CCP gave to the peasants. “The first circular [Central Committee] showed them [peasants] the road to getting rich. The second in 1983 led them down this road and the latest will dispel their misgivings about getting rich.” The CCP has not been able to convince all the peasants to get rich, but there is certainly a section that has already tried and succeeded.

       The collective nature of agriculture has been reversed—sometimes by force, but usually with great enthusiasm by a substantial section of the peasantry that wants nothing more than a private plot. Dazhai has been repudiated. Trees are under private care. Markets have been reopened and expanded. Under the new “system of responsibility of production” in agriculture, contracts are made between team leaders and team members. Team leaders sometimes play the role of the petty- bourgeoisie in production. They are responsible for contracts to the state, where the real state capitalist appropriators reside. In 20% of China’s production teams by late 1980, quotas were simply assigned directly to the family. A conference in August 1981 found that 45% of China’s farming teams had household farming. By 1982, 90% of all production teams used the household responsibility system. In 1983, household farming received official sanction for universal implementation. 1984 saw the government promise to allow the existing division of land stand for at least 15 years. This along with leases for longer periods of time in some areas is perhaps most significant in the creation of a permanent constituency for this arrangement of production. Having official favor as a trend, the family quota method has spread into variations that include some management or tools taken from the team.

       Before family-farming became practically universal, the methods of remuneration that were supposed to be by lines other than the family method often broke down into the popular but as-yet unsanctioned family method. The method of work quotas determined by the team management was snuffed out because team managers, not being state capitalists, were too egalitarian in assigning work quotas and remuneration. The two other main forms of the responsibility system are remuneration by line of work and contracting to non-family producer units. Remuneration by line of work presumes a division of labor and agricultural diversification. The team contracts by skill or product to subunits. Needless to say, this encourages an increase in the division of labor and makes it all the more possible for class polarization to occur as some peasants go into more profitable occupations, perhaps cotton or tobacco. Furthermore, by this method the team “signs a contract with a group of team members, a family, or an individual for the accomplishment of a certain job, depending on the special skills of the group, the family, or the individual.” This method often breaks down to the family level.

       The remaining method of agricultural “responsibility” also tends to break down into the remuneration by line or family method.

          But as production teams in these areas

          gradually build up a diversified economy, it

          is highly probable that they too will begin to

          contract jobs to producers along the lines of

          specialization . . . On the other hand,

          producers are based in individual families,

          and this is still true in China’s countryside

          today. Thus contracting jobs to producers

          often means, in effect, contracting them to

          individual families or households.

All these means of twisting official policy into family farming evolved out of the genuinely popular nature of family farming. The historic Central Committee meetings of 1979 which ushered in faster reform explicitly prohibited household contracting “‘except for certain sideline occupations with special needs and single isolated households living in remote mountainous areas lacking convenient transportation links.’”

            Howard depicts what she should call a social revolutionary process this way:

                        One can only agree with two People’s Daily reporters who

                         described the communication dynamic involved in the

                        evolution of this policy as “the bottom level pushes the upper

                        level and the masses push the cadres” (July 2, 1981: 5). But one

                         would also have to conclude that the peasants got more than a

                         little help from certain leaders at the very top of the party and

                         the provinces. In general, central policy statements have

                         represented not policy initiatives so much as policy responses

                         to initiatives taken by peasants and local leaders.

            Within the eventually successful trend to family farming and remuneration, the trend towards “total responsibility” has also been victorious. It is essentially private farming except that the land can not be sold. The land is divided up and the state taxes the product and requires minimal sales to the market. The word “responsibility” is much bandied about these days as a reaction to the supposedly terrible and anarchous Cultural Revolution years.

      Collective agriculture is broken. Families and specialists are allowed to go their way with new “flexibility.” Not only does this mean a new middle class, but also, with China’s backward traditions, a reinforced patriarchy. Women who had the support of others and high visibility in collective work lose that support and atmosphere when work is returned to the family. Sexist traditions can thrive in the household free from public scrutiny. The potential for recognition of women is lost when output and income depend on the family rather than collective female or individual female efforts in the community.

            Another impact of the new quasi-private farming is in production itself. Both an economist and a doyen of China field researchers—William Hinton— have noted that family farming undercuts those aspects of production where large collective efforts are necessary—mechanization, irrigation and flood control.

            The extra-budgetary housing boom in China occasioned by the reforms is certainly overdue, but it has had a haphazard quality in that it has occurred at the expense of arable land.

                        During the period of the Sixth Five-Year Plan (1981-85),

                         available arable land shrunk by an average of about 470,000

                         hectares a year. In the past two years, it dropped further by a

                         total of 670,000 hectares. Thus it has been difficult to increase

                         the sown acreages of both grain and cash crops.

Officials were alarmed enough to pass a law in 1982 against putting graves and houses on arable land.

            With decollectivization and the division of the land, plots are smaller and take on a patch work look. Tractor ploughing becomes impractical. Since 1979, a major year for the so-called reforms, the total area of land ploughed by mechanical means has decreased from 4,221.9x10⁴ hectares to 3,444.2x10⁴ hectares in 1985. Official figures concerning the increase in energy used by mechanical tools in agriculture and the number of tractors available actually point to an irrational use of such machinery for transport, not mechanical ploughing according to William Hinton.

            In addition to evidence collected directly in the field by Hinton, there is statistical evidence on a national level that collective efforts to avert flood catastrophes have suffered, now that family farming seems to undercut the incentive of peasants to work together on large projects like irrigation and dams. Natural disasters in 1985 were nearly twice as likely to result in a production loss of 30% or more than in 1976. Out of the 17 years for which there is data offered publicly, the four years that showed the greatest resilience of the Chinese in the face of natural disaster were 1970, 1975, 1976 and 1977. That includes all three years from the Cultural Revolution for which there were data.

                                                 Proportion of disaster affected land

                                                that lost 30% or more of production (%)

1952                                                                            54.1

1957                                                                            51.4

1962                                                                            44.8

1965                                                                            53.9

1970                                                                            33.1

1975                                                                            28.9

1976—Mao dies; Gang of Four arrested                      26.9

1977                                                                            29.1

1978                                                                            42.9

1979—price increase for farm products                       38.4

1980—household sidelines double since ’76               50.1

1981—household equals collective income             47.1

1982—90% family farming                                          48.7

1983                                                                            46.7

1984—Household income 8 times collective               47.9

1985                                                                            51.2

Source: State Statistical Bureau, China 1986, Statistical Yearbook of China 1986, Hong Kong: Economic Information and Agency.

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In 1988, the natural disasters were bad enough for the China Daily to report that 20 million peasants faced the prospect of starvation.

            Partly as a result of the capitalist anarchy of production to be discussed in a later section, investment in agricultural infrastructure has actually declined despite recent sloganeering critical of the Maoist period for stressing heavy industrial development too much.

                        State investment in the agricultural infrastructure has dropped  

to 3.4 percent of the country’s total capital construction

                        investment in recent years, compared with an average of 11.9

                        percent during the 29 years from 1950 to 1979. As a result,

                        water conservancy facilities remained in disrepair and the

                        country’s total irrigated farmland shrunk by 660,000 hectares

                        between 1980 and 1986.

Pat Howard witnessed how reservoirs in Inner Mongolia had become empty from neglect and heard about peasants who fought over irrigation since there was no longer a collective effort to control irrigation. On the whole, water conservation efforts saw a 70 to 80% decline in investment in some provinces. This kind of phenomenon led Howard and William Parish to carefully credit pre-reform infrastructural development for making breakthroughs in production in the ’80s possible.

            For their part, three analysts of Chinese agriculture conclude that the 1979 reforms included a nice price lift for peasants, but still “farming does not pay” in the words of one of the analysts in William Parish’s collection on rural reform. According to Nicholas Lardy, despite the reforms, the government has yet to really do anything about unfavorable terms of trade between urban and rural areas. Perhaps the household farming system is nothing but a “cheap fix” since the proportion of government investment in agriculture has declined. For his part, Thomas B. Wiens doubts whether reforms are permanent and whether the impetus to agriculture is enough to put more food on the table. Although these three authors are encouraged by the rural reforms, they make it clear that the problems of rural agriculture are large even in comparison to the change in property relations instigated in the reform. The larger question of investment and development priorities simply can not be avoided.

            ^{In fairness, the government of China does have an answer to the problem of infrastructure development—taxes. In reform model Wuxi County of Jiangsu Province,}

                        the county government stipulates that every profitable rural

                        enterprise should hand in 120 yuan per worker each year to

                        fund agricultural construction. This brings in 30-40 million

                        yuan a year, which is used to build farmland irrigation

                        systems, promote the technological upgrading of agriculture,

                        develop mechanization and subsidize farmers engaged in

                        agricultural production.

Half of Wuxi’s income taxes go to agricultural development also. The rates are “1-2 percent from farmers; 3-5 percent from workers and 5-8 percent from private businessmen.” In addition, the county requires 10 to 15 days of voluntary labor per year from farmers turned workers. Thus, these measures in Wuxi County are apparently effective and designed with an eye toward equality, especially between the countryside and urban areas. Nonetheless, should the success of Wuxi County be as great as claimed, it would not indicate the success of capitalism but the seeds of socialist planning within capitalism.

            The success of such planning is also politically contingent. It is well-known that the development of taxes in the West has induced political resistance and the organization of powerful interests to resist and restructure taxes in a regressive or narrow-minded fashion. Already China has encountered widespread tax evasion. With the concentration of land “in the hands of skilled farmers” that is occurring in Wuxi along with the development of industry, one would do well to wonder what political coalition of forces will continue to support the implementation of taxes in Wuxi. In any case, Wuxi is still the exception, not the rule, as statistics on agriculture’s relative share of investment bear out.

             The more the division of labor is accentuated with individualist farming, the greater market pressures will become. Families will have to trade more and more for their needs. This in turn is a tremendous material basis for a greater division of labor and a return to the sale of land.

            In fact in addition to illegal sales of land, there are now legal sales of the use-rights to land. The CCP has sanctioned both the marketization of the product of the land and the potential of the land. It remains to be seen from field research what the actual difference is between family and private farming in the year 1988.

            By 1986, migratory tenant farming had already started its comeback. Over 200,000 peasants went to the Pearl River Delta in Guangdong, sometimes living in shacks with their families.

            What is the CCP’s bottom line on the emerging middle class in the peasantry, the increasing absolute gap between town and country, bonuses for production over quota, markets and patriarchy? “So long as public ownership is maintained, there can be no violation of socialist principles.”

            When peasants in one village secretly divided up the land in their enthusiasm for family farming, the commune party secretary objected. Wan Li, the provincial party secretary overruled the commune party: “No matter what methods they adopt, as long as they help the team increase agricultural production, make more contributions to the state, accumulate more funds for the collective, and gain more income for the peasants, they are good methods.”

            In other words, anything in the economy is all right if it increases production under public ownership. No wonder in Shanxi Province, the Communist Party has sanctioned the concentration of land ownership in some peasant hands and the corresponding landlessness of other peasants.

            In China, appropriation of wage labor is all right as long as it is done publicly—statist appropriation. However, to call China statist is inadequate for two reasons. One is the fact that China seems to be going beyond the statist mode with its plans for a market economy and maybe full-fledged competitive capitalism. “Statist” is a good answer to the bourgeois academics and vulgar Marxists who start their analysis in consumption and exchange. However, Amin’s analysis does not take adequate account of the anarchy of production. In other words, as shall be seen later, no one need consume the surplus if that surplus is totally wasted through needless competition for profit or desperate plans for Western-style modernization.

            Concretely, a hint of the anarchy of production under state capitalism can be seen in the example of the Baoshan steel complex. The mills, imported from Japan, West Germany and of course, the United States, were supposed to put out 6.7 million tons of steel per year with Western style levels of technology. This project was China’s largest ever. In fact, with projects like these the capitalist drive to accumulate proved so strong that this very project was temporarily suspended with budget cuts in 1980 and 1981 because investment was “out of control.”

            Maybe poor planning accounts for the swampiness of the grounds where 300,000 tons of steel were driven into the ground, sometimes out of sight. Maybe poor planning was also responsible for the fact that the Yangtze river was not big enough for the job, so that a new port 130 miles away had to be built. Nonetheless, the scale of the project and the infatuation with wholesale grafting of Western industry would have been foreign to Mao. Institutionally speaking, Mao understood the real difficulties of undertaking such projects—problems of getting experts to work, problems of applying foreign technology and the problem of taking resources away from the masses who need to raise their own level in regard to financial and technical matters.

            “Poor planning” is like the argument “incorrect prices.” Each assumes that bureaucrats can be convinced of their errors. In reality, this persuasion involves political struggle within institutional constraints. Either there is a struggle to free the market and dispense with bureaucrats—a struggle that can never completely succeed—or there is a political struggle to overthrow the vested interests that make bureaucracy necessary.

            Baoshan is a symbol of a faction of the Chinese state capitalist class. It embodies both the idea of bigger, faster and better and the attempt to compete in the international capitalist arena. The colossal anarchy of production seen in Baoshan is reminiscent of the Soviet Union. Amin should have labelled his centrists as a faction of the state capitalist class.

            In conclusion, capitalist land tenure patterns have been restored and implemented for the first time in some parts of China. Although the market predominates in agricultural production, this has not meant a rational allocation of resources. In the short run, capitalism has brought many incentives to increase production. Internally, agriculture is expanding, but counter-trends are already surfacing in the decline of mechanization, irrigation and arable land brought on by the capitalist social revolution itself. Damaged by the anarchy of production outside of agriculture, especially in energy, chemicals and transport, agriculture is also subject to the new political situation that underlies a decrease in agricultural investment. While it is possible for capitalist countries to enjoy long periods of economic growth, as the short run gains in agriculture run out, cyclical and anarchic forces will come more and more into the fore.