Collapse and Militarization

Though they were enacted to save it, the policies of the Great Leap ultimately undercut the foundation of the socialist developmental regime by disrupting the production and export of surplus grain from countryside to city. By pulling large quantities of workers out of agriculture while simultaneously requisitioning more grain for industrial consumption, total grain output fell far short of requirements. Agriculture, though collectivized, was capable of producing a surplus but still incapable of the kind of productivity revolution that would have allowed such a demographic shift. Grain produced per agricultural worker had not risen substantially, especially when compared to the prototypical agricultural revolutions that initiated European nations’ transitions into capitalism. The result was famine and devastating economic collapse.

As grain production plummeted and the state requisitioned increasing portions of what was produced to be exported to urban centers (and a smaller fraction to the USSR to pay off loans for aid during the Korean war), peasants fled the countryside in growing numbers. Much of the spike in urbanization in the later GLF years was caused by these push factors, rather than by the attraction of industrial employment. Investment plummeted from 1960 to 1962 at roughly the same rate it had increased in 1958 and 1959.[1] Smaller factories were again closed and the new rural handicrafts sector collapsed entirely.

This signaled the first truly systemic crisis of the developmental regime, and it was here that the tensions visible in the strike wave of 1957 would expand into a nationwide collapse of the communist project. With the famine, the Party and its policies began to lose their popular mandate among the peasant majority. But, having absorbed much of the heterogeneity of the communist movement itself, the CCP maintained strategic hegemony. No independent opposition could form. As its popular mandate was lost, the communist project was torn up at the roots to feed the developmental regime. The opposing potentials that arose did so within the Party, becoming factional conflicts and, later, purges. If the first step in the dissolution of the communist project was its absorption into the body of the CCP, the second step was the purification of this body in the name of securing development. The desiccated remainder of what had once been one of the world’s largest and most vibrant communist movements was, by the 1970s, reduced to little more than a continuous industrialization campaign.

Emergency measures went into effect in 1961, and production was concentrated in “a smaller number of relatively efficient plants,” while “control over the economy was recentralized in an attempt to restore order.” Rationing of basic necessities became widespread as existing resources were funneled back into agriculture. Additional food was purchased on international grain markets for the first time in the socialist era in an attempt to prevent the deepening of the famine. Meanwhile, limited markets were reopened in the hopes that they would raise rural incomes and increase the supply of food to the cities. All in all, “imports of consumer goods and market liberalization gradually stabilized prices at a new, higher level.”[2]

Even while prices for consumer goods stabilized at an inflated level, the retrenchment policies entailed “a drastic reduction in budgetary transfers to state enterprises,” and “the State Council gave directives to enterprise managers to scale back welfare measures” and to “keep a tight rein on wages.” At the same time, the “Seventy Articles” adopted in 1961 limited the workday to eight hours, emphasized “leave policies for illness, childbirth and holidays,” and “restored piecework and over quota bonus systems.” [3]  Though not always popular, the abolition of piece rates and bonus systems during the GLF had meant that “workers paid through such systems suffered a decline in income of anywhere from 10 to 30 percent,” despite increases in non-wage benefits.[4] The restoration of this income, alongside the end of unpaid overtime in frenzied production drives, was a notable concession to workers in the midst of the crisis. Paired with the risk of starvation, such concessions helped to ensure that popular unrest would be suppressed for most of the early 1960s.

But another, more extensive means of social control also developed in this period. Unable to cope with the massive numbers of peasants fleeing the countryside—on top of those who had migrated earlier to staff the industrialization drive—the Seventy Articles adopted strict limits to labor recruitment. They “prohibited the unauthorized transfer of labor (including technicians) and the practice of recruiting from the countryside,” restoring the stability of the cellular danwei enterprise structure.[5] At the same time, the industrial workforce was severely scaled back. In just two and a half years, “between 1961 and mid-1963, state officials succeeded in reducing by 19.4 million workers an industrial labor force estimated at 50.4 million,” a decrease of roughly 40%.[6] The vast majority of this reduction came as “some 20 million workers were sent back to the countryside.”[7]

Such a massive reduction in urban population would never have been possible if not for the extensive system of household registration—known as the hukou system—built up piecemeal over the course of the 1950s.[8] The registration system “was first restored in 1951 to record the residence of the urban population and to track down any residual anti-government elements” in the course of the Democratic Reform Movement. It was extended from an exclusively urban system “to cover both the rural and urban populations in 1955.” The migration spike that began in the same year, despite taking place at a time when Chinese citizens legally enjoyed full freedom of migration, would see the state attempt to monitor and control population flow “by imposing travel document checks and other administrative measures at various major transportation nodes […] in 1955 through 1957.” [9] By 1958, the legal framework of freedom of movement was effectively abandoned, as a wider-ranging hukou regulation was adopted. This incarnation of the hukou system would become an integral part of labor management in the transition to capitalism, and remains a central feature of class dynamics in China today.[10]

At first this was simply the formalization of the urban-rural split already solidified by state investment strategies. After 1958, however, one’s status as an urbanite or a rural dweller was not only fixed in terms of where one could live, but would also be passed on to newborns through matrilineal inheritance. This status could only rarely be changed for the better (i.e., rural-to-urban, a process called nongzhuanfei), with “the annual quota of nongzhuanfei set by the central government at .15 to .2 percent of the population,” though, in practice, local corruption meant that “the actual rate was higher.”[11]

The hukou not only fixed population, it also facilitated the downward movement of massive segments of the urban populace in periods of crisis. Though resettlement had occurred sporadically under the guise of labor allocation or political reeducation during the 1950s, it had only resembled large-scale deportation in the case of prior GMD soldiers sent to frontier areas such as Xinjiang to staff new construction projects—effectively a continuation of the traditional tuntian system of military frontier settlement.[12] During the crisis, however, the hukou system would be used to deport 20 million new migrants from the cities back to their official place-of-registration in the countryside. Soon it would also see the deportation of much of the “lane labor” recruited during the height of the GLF and the involuntary “early retirement” of tens of thousands of old workers incapable of keeping up with production.

To take one example: Despite their seniority privileges, some 83,540 old workers, mostly women, in Shanghai were retired in the post-GLF retrenchment, losing their benefits and their urban registration. The majority retained some wages by being shifted to the “small commercial sector,” but this was hardly consolation. There were reports of deported workers even returning, en masse to their Shanghai textile mills in 1962 to attack cadres and managers, plunder their homes for food and loot rice shops.[13] Within a decade, unrest by returned rusticates would constitute a major base of support for “ultra-left” factions within the Cultural Revolution.

Alongside one’s danwei or rural collective membership and dang’an, a political portfolio that contained pre-Liberation class status (now an inheritable trait) and various records of performance and “attitude,” the hukou would become one of the most central elements in a caste-like system of social control that would later be fundamental to the construction of China’s class structure in the transition to capitalism. This caste-like division of labor was formalized over the course of the 1960s, as the hukou was not only used for deportation in times of political or economic crisis, but increasingly as a tool to further divide the privilege structure of the urban industrial workforce in a way that increasingly resembled systems of racial apartheid elsewhere, with rural versus urban locality taking the place of ethnicity.

With benefits too expensive and the cost of producing basic commodities stabilized at an inflated rate, factories that had been forced to retire or deport much of their recently expanded workforces now faced the risk of stagnating productivity. The workday was cut back and benefits decreased. The result was “the spread of edema and other illnesses among urban workers,” caused by malnutrition and overwork. [14] Rather than turn to the central state, enterprises were now encouraged to become self-reliant. In coastal cities, some factories started commercial fishing ventures, using the catch to stock their dining halls and selling excess on the newly re-opened local markets.[15]

All of this only increased the need for a source of labor that would put less strain on urban infrastructure. Under the direction of Liu Shaoqi—then apparent successor to Mao—factory managers and local officials were encouraged to solve the crisis by recruiting “temporary workers who could be returned to rural areas during the growing season. Workers hired under this policy, known as ‘working-and-farming’ (yigong yinong), were not entitled to the wages and benefits of their full-time counterparts.”[16] These workers were thus “cheaper” in the sense that they did not need to be incorporated into the danwei, and since they held rural hukou they could be returned to the countryside at any time.

This “worker-peasant” labor force became most widely used at small- and medium-sized enterprises, usually fulfilling contracts for larger enterprises, and rural recruitment was often combined with other temporary forms of labor deployment, such as the use of apprentices, student-workers and “lane” workers. Though these workers were doing much the same work as those employed in large state enterprises, they saw none of the new expansions in welfare benefits between 1962 and 1965. More importantly, “contract workers did not have the right to bring their dependents to the city with them, reducing the pressure on housing, nurseries, etc.,” not to mention discouraging them from seeking long-term residency in the city.[17] Over the course of the 1960s, then, the very segment of the workforce that had instigated much of the unrest in ’56-’57 was dramatically expanded.

The GLF is often portrayed as only a brief period of overzealous chaos, after which more rational policies approximating those of the 1950s were re-implemented. Total mobilization ends, material incentives for production are restored, the numbers of technicians and cadre again expands, the central state recentralizes planning authority—all to be repealed and then finally reinstituted in another cycle of zeal and retrenchment during the Cultural Revolution. But these trends themselves tend to disguise deeper changes initiated during the GLF that fundamentally shaped the character of the socialist era over the next two decades. The implementation of the hukou and, through it, the standardization of the worker-peasant system, was one such change. Another was the persistent decentralization of planning authority and urban production networks.

Despite language of recentralization, planning authority was never returned to the industrial ministries that had, at least in word, wielded it during the First Five-Year Plan. Instead, decentralization was merely reorganized, as “the Seventy Articles and other Central Committee measures taken in the early 1960s recentralized powers within provincial committees that had been devolved to cities, counties, districts, etc. during the GLF.” Rather than reconstituting the top-down state envisioned in the early Soviet Model, then, the 1960s instead saw the solidification of a middle-heavy structure for the state, in which “provincial Party committees remained more powerful than central government ministries.”[18] This was, again, a reproduction of trends seen in traditional forms of government in the region, though now paired with an unprecedented, cellular system of social control that extended all the way to the bottom of society.

Similarly, there was no new attempt to “modernize” many of the small- and medium-sized enterprises that had again sprung up during the GLF years by consolidating them into large state-owned danwei conglomerates. In fact, these more flexible production networks became the major employers of cheap “worker-peasant” labor, often filling contracts for the large state-enterprises and thereby providing them with another source of cheap inputs. In this way, many cities were allowed to reinvent traditional production systems under new circumstances, with a mesh of decentralized workshops, largely cut off from welfare benefits, agglomerating around cores of large-scale factories staffed by more privileged workers with permanent residence status. These large-scale factories were never further incorporated into top-down welfare structures, but instead retained and expanded the autarkies they had developed during the 1950s.

At the national level, a new uneven geography formed as investment was again directed toward certain regions at the expense of others. By 1964, conditions had improved such that a new investment push was initiated. But international conditions had changed significantly since the first industrialization campaign in the 1950s. The United States, which still had tens of thousands of soldiers stationed in Korea, intensified its proxy wars against socialist countries, staging a failed invasion of Cuba and ramping up military efforts in Vietnam. Meanwhile, Sino-Soviet ties had completely broken. Not only had China lost its primary trading partner and source of international aid, but, by 1969, border skirmishes would even bring the two countries to the brink of war. Over the course of the 1960s, then, China found itself increasingly isolated. With the loss of its major trading partner, the sum of Chinese imports and exports had dwindled to a meager 5% of GDP by 1970.[19]

Industrialization in this period followed military logic. In 1964, a new industrial expansion called the “Third Front,” was launched, focusing investment on China’s interior. The “Third Front” was a geo-military concept designating the battle front least accessible to potential aggressors (primarily the US at sea and the USSR along the northern border). The goal was “to create an entire industrial base that would provide China with strategic independence” by building factories in “remote and mountainous” inland regions within the provinces of Yunnan, Guizhou, Sichuan (the “First Phase” of the plan), as well as Hunan, Hubei, Shaanxi, (“Second Phase”), and Qinghai, Gansu and Ningxia (“Northwest” phase).[20]

Ultimately, the scale of the Third Front’s investment spike, between 1963 and 1966, would exceed that of the First Five-Year Plan, though falling short of the investment boom seen during 1958. The Third Front peaked as investment reached 30 percent of GDP in 1966, before dropping off during the Cultural Revolution. [21] These numbers are more significant considering that this new industrial expansion had to be undertaken without the Soviet aid and technical support offered in the 1950s, signaling a period in which “self-sufficiency” would become one of the most important watchwords of Chinese socialism.

Over the course of the 1960s and ‘70s, this logic of self-sufficiency and militarization would saturate even the most basic units of Chinese society. Although the Seventy Articles ostensibly advocated a return to older “Soviet Model” policies, the period actually saw the formalization, in more moderate guise, of the very Party-centric policies of industrial management that had come to the fore at the end of the First Five-Year plan and reached extremes during the GLF. In fact, the Seventy Articles themselves “explicitly endorsed the Eighth Party Congress’s doctrine of having ‘the factory director under the leadership of the Party committee,’” and while they “did attempt to reestablish and redefine certain duties and powers for enterprise workers’ congresses and enterprise unions, […] enterprise Party committees remained firmly in control of both these institutions.”[22]

Despite the increase in technicians and administrative staff in this period, power was not devolved back to engineers or managers, and hierarchies based on technical skill never developed as intended. Instead, privileges at the basic level were still distributed according to seniority, employment status and proximity to prioritized industries, while political power and day-to-day managerial functions were increasingly concentrated in the Party branches. The military logic of the time ensured that only those of the proper political persuasion were fit to manage significant industries. This incentivized those within the political power structure to gain technical skills, and those with technical skills to prove their political credentials, creating officials who were both “red” and “expert.”

First publicized during the Socialist Education Movement (1963-1966) and then expanded in the early 1970s, this policy would see both the direct militarization of production (with the PLA stepping into administrative positions following 1969) and the fusion of technical and political power, as the Party became nearly synonymous with the state. The number of cadres jumped to 11.6 million in 1965, dropped slightly in 1969 at the height of the “short” [23] Cultural Revolution, and then rose precipitously to 17 million in 1973. Though solid numbers are not available for the rest of the 1970s, by 1980 the number had grown to a high of 18 million.[24]

Corruption increased apace, as cadres horded ration coupons, embezzled enterprise funds for “lavish banquets” and ran profitable businesses on the side. Meanwhile, private enterprise was revived even among workers, who often ran small businesses in between official duties.[25] This situation of Party-state fusion, bureaucratic ossification and growing black markets would lead, ultimately, to the formation of the red capitalist class[26] and the collapse of the socialist developmental regime in favor of domestic market reforms and increasing integration with global capitalist production networks.


Rural Retrenchment

The rollback of rural GLF policies came in the early 1960s. It was clear that the problem of scarcity was not solved and that agricultural production had to be a priority: rural industries were shuttered and the remuneration and distribution systems were continually reformed in order to raise production. This meant restructuring control over production decisions and labor management, particularly through devolving the level of accounting from the massive commune to a much smaller scale. While some of the largest communes were shrunk, the most important change took place within the commune itself, which took on a three-tiered structure known as the “three level ownership” system, instituted in 1962.[27]

Villages within the commune were split into production teams (shengchan dui) of 10 to 50 households, which were given control over land and production decisions. Team members could choose their own leadership. This became the basic accounting unit in the countryside, the level at which net product was divided by member workpoints to decide remuneration.[28] The commune and the mid-level production brigade (shengchan dadui) would take care of various institutional functions like local administration, schooling, hospitals, large-scale infrastructure projects and the like. But control and accounting of production and income distribution would take place at the much smaller production team level. The production team was given the right to refuse labor to the commune and brigade levels.[29] Though often considered a “devolution” of authority, this concept doesn’t really get to the root of the changes that were occurring. In reality, commune control over labor and production disintegrated in the GLF, and the collective system in the countryside had to be almost entirely rebuilt from the bottom up. This would become a major goal of the Socialist Education Movement of 1963.[30]

In order to recover from the disaster of the GLF, rural collectives were forced to focus on agriculture and drop most sideline and handicraft activities. A crucial component of the rollback was a directive from 1960 dictating that at least 90% of rural labor had to work in agricultural production.[31] By mid-1960 commune and brigade industrial employment had dropped to 7% of rural labor.[32] But this was seen as still too much by the Party center, “which moved to close down rural industries en masse and return their workers to the agricultural front.”[33] Rural labor was no longer to be recruited for rural industrial production. This agriculturalization of the countryside wiped out the millennia-old dual nature of the rural economy, and further deepened the rural-urban divide.[34] Most importantly, this makeshift and piecemeal attempt to reconfigure rural production produced an autarkic rural structure, largely self-reliant and self-contained at the local level, though unified  at the national level as a single engine of grain output for the state.

A return to distribution according to work was a key aspect of this rebuilding. Following the GLF, however, the remuneration system underwent continual adjustments until decollectivization in the early 1980s. Despite the fact that the distribution and remuneration systems were blamed in part for the weakening of agricultural productivity during the GLF, it was hard to find a workable solution.[35] Payments remained primarily in kind. In poorer rural areas, “cash virtually disappeared, forcing people to live almost entirely on income in kind derived from collective production.”[36] In 1978, average cash payments accounted for less than a third of household remuneration, at about $15 US that year.[37]

The key problem was how to find a way to increase work incentives for agricultural labor, improve economic output and raise quality, on the one hand, while not increasing inequality leading to the breakdown of the collective system, on the other. “It proved impossible to devise payment systems that would produce the same kind of diligent, self-motivated labour for the collective as characterized peasants working for their own family.”[38] Before collectivization, of course, household labor had been disciplined within a patriarchal system to raise overall yields even if it meant adding increasingly inefficient labor—the pre-collective system, in other words, was no more natural than the collective system. Collective remuneration systems evolved over time and were often quite complex. In one 1970s brigade, for example, the list of workpoint norms contained over 200 different tasks that called for different accounting. Quality requirements in particular were difficult to set and enforce.[39] Additionally, there was a great deal of regional diversity.[40]

In 1961, the state promoted a system of household contracts, in which each year different communal land plots were contracted to households with specific quotas attached to them. The quota would be turned over to the state for workpoints, which could then be exchanged with the collective for in-kind payments and some cash. Initially households were allowed to keep anything they produced above the quota. This was probably a necessary compromise on the part of the state, which was clearly having a difficult time reconstructing the system of rural extraction. In order to gain greater control over surplus, after the first year the state began requiring above-quota grain to be turned over as well, but for a greater number of workpoints than quota grain.[41]

But the rising inequality engendered by this household contract system led to a decrease in its popularity, and a new task-rate system was tried beginning in 1963. Different tasks were assigned different numbers of workpoints depending on the perceived difficulty of the task. The system was complex to administer and supervise, and still created inequalities—especially between genders. Arguments between workers and recorders were common. Furthermore, the system paid people for the quantity, not the quality of their work, and this led to lower yields, especially compared to the household contracting system.[42]

Around 1966 in one well-studied example (and at different times elsewhere) the new “Dazhai system” was instituted. This was a mutual-appraisal system, in which workers collectively assigned workpoints based on their appraisal of each team member’s work and attitude towards work. Initially the system functioned well and production increased accordingly. But the subjective focus on attitudes caused problems between villagers over time, and the system shifted to appraise only the work accomplished. Yet many villagers still saw the system as a subjective value judgment. As acrimony spread, fewer appraisal meetings were held. Finally, leaders gave up on appraisals altogether, simply assigning the same points members had received the previous time, transforming the system in a more fixed regime and again reducing incentives.[43]

As the Dazhai system disintegrated in the early 1970s (when agriculture was in a slump throughout China), many teams reverted to task-rate systems, and eventually task-sharing devolved to smaller and smaller groups. By the late 1970s, production was contracted to small groups of households or even, in the end, to individual households, with payments in workpoints according to quota and above-quota rates.[44] This history provides a sharp contrast to the common argument that there was a sudden shift in the organization of rural production and remuneration in the late 1970s. In fact, the system was unstable and constantly shifting from 1949 up to the early 1980s, when a more stable system was arrived at.

Peasants also gained income through private markets, which returned in the early 1960s. Such markets and the private plots supplying them remained small, however, at about 5% to 7% of arable land. Yet peasants would attempt to put more energy into private plots than collective ones, a problem that constantly plagued cadre.[45] This tendency seems to have been exacerbated by peasants’ loss of faith in the collective system and rural Party leadership. The continually shifting collective remuneration system, in other words, was a symptom of the breakdown of the rural production and distribution system that always focused on extraction of agricultural surplus and national accumulation instead of local needs. Over the collective period there was only a meager growth in peasant incomes.[46]

Moreover, under the collective system, power took on a cellular structure, increasingly segmented and bordered at each level of the bureaucracy. Rural social and economic life became self-contained.[47] Within this cellular structure, workpoints showed only the in-kind value of work within the accounting unit (the commune or production team depending on the period). Surplus product not sold to the state together with state payments would then be divided by the total workpoints for the year, and individuals would be paid according to their workpoints. But workpoints gave no way of valuing or comparing labor across units, only accounting for differences within them. Here, workpoints do not allow a comparison of the “value” of products of labor, they do not communicate across the social system, and therefore labor as such was never abstracted via market exchange. Workpoints, then, did not express socially necessary labor time as a relationship that could dominate social production. There was no law of value in the Chinese countryside.

Throughout the socialist era, the rural-urban relationship became increasingly sub-divided. Even individual rural units grew disconnected from one another. The web of marketing relationships that had formed the rural-urban continuum before the 1950s was severed by the state’s takeover of all marketing. Despite Party rhetoric of abolishing the difference between rural and urban spheres, rural-urban and intra-rural inequalities rose during the collective period, from 1955 onward.[48]


Rural Production and the Collective System

Nonetheless, unlike the more-rigid GLF commune structure, the post-1962 three-tiered commune became a flexible system for organizing rural production and social reproduction and for facilitating the extraction of surplus grain. Agricultural production slowly began to grow again, and some rural industrialization returned as well in the 1970s. The collective system led to a spreading of risk across the collective, reducing the risks to individual farmers inherent in agriculture. Meanwhile, rural living standards increased in terms of health and education.[49] Basic medical care came to the countryside, and even though it was underfunded, it helped cut child death rates dramatically and raised life expectancy.[50] Rural school enrollment doubled from the 1960s into the 1970s.[51] In addition, the rural commune was efficient at accumulating collective welfare funds that ensured a minimum of survival during normal times for disadvantaged families.[52]

Despite often being taken as proof of China’s socialist nature, however, rural collectivization should be understood as a state-imposed institution designed to secure the basic rural-urban split that fueled the socialist developmental regime. Its primary role was to facilitate state extraction of absolute surplus, in the form of grain. Rather than a break from the “involutionary” growth of the imperial period, the collective organization of rural labor “was in some respects a mere enlargement of the old family farm.”[53] Like the patriarchal family farm, labor could not be laid off from the collective. Likewise, what mattered to those in charge (whether patriarch or planner), “was the absolute level of output, to which state quotas for tax and compulsory purchase were pegged. The higher the output, the larger the state’s take.”[54]

With an increase in the agricultural workforce and a slight fall in the amount of arable land, farmland per agricultural laborer declined over the course of the socialist era, from 0.58 hectares in 1957 to 0.34 hectares in 1975.[55] In other words, increased yields were derived largely from a massive increase in labor inputs, while the productivity of that labor dropped. Labor participation rates (both rural and urban) grew: more people were working and people were working more.[56] In the 1920s, peasants worked on average 160 days a year, whereas by the late 1970s, the average increased to 200 to 275 days a year.[57]

Much of this mobilization of rural “surplus labor” was used to build low-cost agricultural infrastructure, leading to some real successes, such as an increase in irrigated land from 20 million hectares in 1952 to 27 million in 1957 and 43 million in 1975.[58] Returns on these projects were often low, but that didn’t matter to the state, since it was more concerned with raising the absolute quantity of production than labor productivity. The agricultural labor force grew from 193 million in 1957 to 295 million in 1975,[59] but as the population and thus the labor supply grew, the tendency was still to mobilize as much rural surplus as possible, regardless of its productivity.

New cropping patterns also helped lead to intensified land usage.[60] An increase in grain production was brought about at the expense of diversification into other crops. Per capita production of oil seeds, for example, dropped from the 1950s to the 1970s, leading to strict rationing and a “monotonous and austere diet.”[61] The state promoted a policy of “taking grain as the key link,” meaning that the production of grain was emphasized over other crops. This was enforced by quotas for grain production, such that communes and later production teams had little to no autonomy in terms of diversification of production. The vast majority of land and labor had to be committed to the production of grain, in order to fulfill the quotas. The stress on grain was further strengthened by a policy of increased regional self-sufficiency, even for areas for which grain production was not so suitable, leading to increased regional inequality.[62]

Of course, breaking from involution was not the goal of the CCP’s strategy during the socialist period. Instead, the goal was to extract as large an absolute surplus as possible in order to develop the industrial economy. Over time this could have led to reinvestments in agricultural modernization and increased urban employment, producing transformative development. Clearly that was part of the long-term vision, although rural labor productivity probably only began to rise in the mid- to late-1970s. In fact, per capita grain output did not reach the pre-GLF peak again until the late 1970s, increasing sharply into the 1980s.[63]

Some rural industrialization did reemerge during the “New Leap Forward” of 1970, under the name of “commune and brigade enterprises,” which were supposed to “serve agriculture.”[64] In the 1970s, these industries were supposed to provide producer goods to the agricultural sphere instead of processing agricultural products for the urban market.[65] As capital-intensive industries, these collective enterprises did not employ a large amount of rural labor—90% remained in agriculture[66]—but they would become an important foundation for a broader rural industrialization process in the 1980s and 1990s, which would be integral to the capitalist transition. It did raise the “value” of collective-wide workpoints—in the sense that they were then linked to a larger quantity of product, however.[67]

Integrated by the state only at the top, the national economy was primarily shaped by rural extraction and urban industrial development. Rural residents were largely losers in this relationship. Throughout the collective period, the state focused on restricting consumption and increasing the extraction of absolute surplus, and the accumulation rate soared. Net rural accumulation doubled in the mid-1950s. The total accumulation rate rose from 22.9% in 1955 to 26.1% in 1956, and by 1959 (during the GLF) reaching a peak of around 44%.[68] While the rate dropped to a low of 15% during the following retrenchment, it rose again through the 1960s and 1970s, ranging around 35%.[69]


The Role of Ideology

Though the two decades between the end of the GLF and the advent of the reform era are often portrayed as a society-wide struggle between “two lines” held by different factions of the Party,[70] the reality is that these factional struggles were themselves largely epiphenomena of various economic and social crises that arose over the course of the socialist era. The picture of politics and policy in this era as the product of “two line struggle” is largely an illusion reinforced by state propaganda campaigns within China during and after the fact, as well as by the export of these biased sources to various political-academic factions in Western countries over the course of the 1960s and 1970s, when “Maoism” came to designate a distinct political current.

Prototypical of this problem is the example of the Shanghai Textbook. Originally published as the Fundamentals of Political Economy in Shanghai in 1974, during the peak of state influence during the “long” Cultural Revolution, the book was meant as a summary of Party ideology at the time. Ostensibly describing “socialist political economy” as theorized and practiced in China, the textbook was translated and published, with accompanying essays, by American Maoists under the name Maoist Economics and the Revolutionary Road to Socialism: The Shanghai Textbook.[71] The textbook, alongside other collections of state propaganda and reports from foreigners’ tours of model factories,[72] has been taken as a common reference point for both supporters and detractors.[73]

The problem, for either political persuasion, is that the data laid out in the Textbook is purely mythological. The text’s theoretical poverty aside, no system such as that described by the book ever existed. By the same token, the practices observed by touring model factories were often limited to those factories. Though some features were obliquely shared between reality and these Potemkin villages, all the fundamental characteristics were different. The Textbook is better understood as a sort of religious text rather than a description of the socialist era’s economy. Tours of model enterprises became a kind of pilgrimage, reinforcing the holy status of such texts for Western radicals. Scholars basing their studies on policy pronouncements are then engaged in a sort of glyphomancy, pulling apart the minute details of leaders’ speeches and rearranging them to fit whatever narrative one wants to tell.

The “two-line struggle,” then, was not the determining feature of any phase of the socialist era. Instead, many divergent practices were yoked together by the state, which borrowed and retooled forms of labor deployment, industrial coordination and social control from Russia as well as explicitly capitalist nations, while at the same time reviving and reinventing much older practices that were inherited from the Japanese, Nationalists, Qing and Ming. Meanwhile, new practices were invented, entirely unique to the Chinese socialist experience (though some would later be imitated elsewhere).

The result was a geographically uneven system that was pulled in multiple directions at once and which could be forced into any sort of coherence—as a developmental regime—only by the activity of the state, controlled by, and ultimately fused with, the CCP. But this state was not reducible to the leaders at the head of the Party. It was itself only a sort of structured chaos, fundamentally reliant on complex networks of patronage and discipline, as well as faithful support from those who had seen their lives bettered by the revolution and the policies that followed.

Because of this, the Chinese experiment at any given time could accurately be said to be sliding into capitalism, replicating the Russian system, following the Japanese into expansionary, nationalist militarism, reviving ancient forms of government common to the hydraulic regimes of imperial China or inventing some new form of extensive totalitarian system that penetrated into peoples’ everyday lives at an unprecedented level.  But none of these aspects gives the full picture, and all ultimately disguise the era’s long-term tendencies.

As crises in the basic structure of the developmental regime proliferated, the ability to enact policies faltered and the Party-state periodically had to resuscitate itself through mass mobilization. Relatively self-sufficient units of production could only be cohered through the increasingly pervasive presence of the central state, ultimately in the form of the military, as the PLA took direct control of many ministries after crushing nascent opposition movements in 1969. But, as the Party-state grew more pervasive, it also accelerated its own ossification, in the form of increasing corruption, bureaucracy and a swelling of power in its middle tiers at the expense of the center.

The core dynamic of the developmental regime was unstable. Though capable of extracting absolute surplus in the form of grain, the revolution of agricultural production envisioned by early communist leaders never materialized. In the end, the state would become capable of little more than select patronage, the (increasingly limited and decentralized) allocation of abstracted “quantities” of resources, and the doling out of various forms of punishment, quasi-military in character and varying only by degrees. The rest of the daily administration of production and social life was ceded to increasingly autarkic economic units, ostensibly part of the massive, central state apparatus, but in reality allowed significant degrees of autonomy.

This final fact meant that the project was always dependent on the retention of support among significant segments of the population. On one hand, this support was gained by delivering on promises to improve people’s basic livelihoods and carefully dividing the new benefits unevenly across the population. Equally important, however, was the creation of a wide-ranging mythological regime that served a similar function as the state—helping to cohere the developmental project through coercive and distributive measures—only here operating across a complex network of social/emotional bonds. This culture or mythos of the socialist era is reflected in everything from basic social interactions at the level of the danwei or rural collective, to cultural standards for protests against or in support of the state, such as the use of big character posters, to more top-down mass campaigns, such as the personality cults built first around Liu Shaoqi[74] and then around Mao Zedong.

But this mythological regime was not the sole product of conspiratorial leaders. Though it was heavily shaped by the decisions of the CCP, the Party was itself often simply adapting indigenous traditions to new ends. The most important actor remained contingency and, after that, the people themselves. Regular people placed at various levels in the power structure continued to shape, modify, support and oppose various cultural trends. Even seemingly extreme expressions of the socialist-era mythos, such as the cult of personality, cannot simply be understood as an episode of mass hysteria. The ruling ideology, though ultimately helping to preserve the socialist developmental regime, did so only through its ability to obtain the complicity of large swaths of the population by serving certain spiritual, emotional and social needs, especially when the distributive mechanism of the state was failing to serve material ones.

Like the state, however, this ruling ideology would itself grow more ossified over time, becoming less responsive to regular people’s needs and contributions. This also made the culture of the era more limiting, as potentials for the expressions of life under socialism (as well as imaginative frontiers for its future) were themselves foreclosed. As the state became more pervasive and militarized, so too did the ruling mythology. The rise of Mao’s cult of personality is the most salient symbol of this. Containing orthodox, heterodox and outright heretical currents, the socialist mythos would become increasingly strained and chaotic, ultimately resulting in explosive challenges to the favored orthodoxy. But these challenges themselves would, in the end, be limited by the very terms of that orthodoxy, just as all heresies are ultimately dependent upon the terms of the religion from which they intend to break.

Though the myths and propaganda of the era cannot be taken as accurate descriptions of life under socialism, they are not at all insignificant. But it is only by reading them as myths that we can perceive their true importance. In times of systemic crisis, it is precisely cultural operators that play an inflated role by determining what seems possible to actors embedded in a particular situation. Though material limits are always final, culture and consciousness condition what limits and potentials are actually perceived. An unperceived limit entails catastrophe. An unperceived potential, tragedy.


Class under Socialism

Rather than a period of mass hysteria or factional struggle, the Cultural Revolution can only be understood as a product of the internal conflicts of the socialist developmental regime. The attempt to articulate these conflicts was itself often a society-rending procedure, as is clear in the period’s debates around the definition of “class” under socialism. When called to replay the revolutionary struggles of their parents, the youth who grew up during China’s socialist era would produce competing and violently contradictory understandings of the term and where the roots of socialism’s internal antagonisms actually lay.

The process would begin among students at the encouragement of the central state. But, as in the Hundred Flowers period, the conflicts that the Cultural Revolution formalized were already present. The GLF and following retrenchment had quieted unrest, but it had also exacerbated the very divides that gave rise to the strike wave of 1957, with far higher shares of the urban population now employed as “worker peasants” or other temporaries. This meant that the “student” movement spread into the workplace even more quickly this time, as workers launched new strike waves, ousted cadres and factory officials, clashed with opposing rebel factions and, in several cities, seized arms and engaged in direct conflict with the PLA.

Class, however, cannot be understood in any simple terms. The socialist era was a period of piecemeal class formation, capped by the emergence of a unified ruling class as technical and political elites joined forces to suppress the uncontrollable energies unleashed during the Cultural Revolution. This ruling class was also tasked with ensuring that, after the suppression and redirection of popular unrest, the unbinding of the socialist project would not result in the catastrophic collapse and balkanization of the Chinese state and economy—the outcome of many previous dynastic declines. But, given the absence of capitalist accumulation imperatives and the rural-heavy demographics of the country, no truly proletarian class was produced in the socialist era. The formation of a Chinese proletariat would instead be one of the most salient features of the reform years, and the class conflict between this proletariat and the “red” bourgeoisie (with the children of top officials composing 91% of China’s millionaires as of 2008[75]) is a defining dynamic of Chinese political crises today.

Class was a deeply chaotic and inherently uneven classification, especially in the early socialist period. In these early years, no consistent class relations yet existed at a society-wide scale. Like the economic structure itself, class underwent a churning process as the previous structures of power and production were dismantled. In the course of the revolutionary war and continuing into the early 1950s, the vast majority of the Chinese population was effectively declassed relative to the previous social order. This is symbolized most strongly by the physical mobility of the population, as millions abandoned their previous social roles to join the revolutionary process. Once the revolution was won, there was no simple return to normalcy. Land was redistributed, breaking the class structure of the countryside. Factories were ultimately nationalized, with managerial functions handed over to a sequence of different institutions. Even where pre-revolutionary technicians retained their positions, the context in which they exercised power had undergone a fundamental change.

This declassing was an intentional result of the revolutionary project, which sought to prevent the rehabilitation of uprooted class structures from the early 20th century. Over the first decade of the socialist period, the revival of old power structures was a concrete possibility, as many had undergone an incomplete transformation, and many beneficiaries of the old system had since found their way into advantageous positions within the new one. The old regime and its elites were considered a major hindrance to the developmental project, bearing both archaic (and unproductive) traditions as well as active animosity to the redistributive endeavors that were the founding act of development. This situation led to the construction of a national class-designation system, used for the purposes of both monitoring those who previously held power and for redistributing resources to those who had lain at the bottom of the old system.

Class designations were most detailed for the countryside, where the CCP had years of experience studying the previous power structure and detailing how its privileges were allotted and who exploited whom. Urban designations were slightly more curtailed. At the advent of the class-designation system, the CCP had only recently begun operating again in the cities and the cities themselves were marked by economic and demographic chaos, with significant portions of workers unemployed, homeless, and often in the midst of migration. Urban designations, then, were defined by a relatively simple classification, dividing out handicraftsmen from enterprise workers, for example, but not consistently designating size of enterprise. Other catch-all designations, such as “Idler,” were invented to absorb the multitudes not easily accounted for.

Despite its clear inadequacies, this system cannot be portrayed as a totalitarian measure forced upon an unwilling population: “Although the system was imposed through the agency of state power, it enjoyed considerable support during the early years of the PRC among […] significant segments of the populace.”[76] At the time, the system was intended to be temporary, and it distinguished “class origin” (jiating chushen), or pre-revolutionary family class status, from one’s current “class status” (geren chengfen). Official policies in this early period acknowledged that even landlords “could change their class labels in five years if they took part in physical labor and obeyed the law, and rich peasants could be reclassified after three years.”[77]

But the system would have a staying power that far outlived its popular mandate. In fact, as part of the dang’an (one’s political “portfolio”), it would become one of the primary administrative measures used for social control as crises grew increasingly widespread. The consolidation of the class-designation system as a permanent feature of the developmental regime occurred “at the same time as the construction of China’s ubiquitous hukou […] system,” and class-designation, like hukou, would soon become an inheritable trait as “class origin” was emphasized over “class status,” ultimately conflating the two.[78]

Old class categories also quickly evolved new meanings as they came to designate relative positions within the privilege hierarchy. Those at the bottom of the old system found themselves in beneficial positions within the new one. Similarly, entirely new class designations were formed for noneconomic categories. These included both desirable categories, such as “revolutionary soldier,” “revolutionary cadre” or “dependent of revolutionary martyr,” as well as undesirable political designations. At first, the latter were used to designate active participants in previous repressive regimes, whether GMD, Japanese or warlord, including “military officer for illegitimate authority” and “KMT [GMD] Special Agent.” But as the class designation system was mobilized to repress domestic unrest, these were expanded to include “rightists,” “bad elements” and “capitalist roaders.”[79]

The class structure of the socialist era only began to truly take shape after the declassing effects of the revolution had settled. Over the course of the 1950s, the developmental regime produced a more or less consistent series of divisions in one’s degree of access to the absolute surplus produced in the socialist period. Access to this surplus was the core relationship that determined the classes and their relationship to one another.

The class system that finally took shape was marked by a double divide. First, there was the divide between elites and non-elites. These elites, however, were by no means unified. There was an internal conflict within the elite class between the political elites, staffing the Party and the military, and the technical elites such as engineers, scientists, administrators and intellectuals. Throughout much of this period there was also a significant, though shrinking, portion of privileged workers in heavy industries with seniority and good class background who made up the bottom portion of this elite class—making wages equivalent to or higher than low-level cadres, technicians and intellectuals—only to be thrust out of it over the course of the reform era.

Secondly, there was the divide between grain producers and grain consumers. This was the urban-rural divide, designating the class (peasants) from whom absolute surplus was extracted in its primary form (as grain), and the urban working class to whom this surplus was funneled in order to be transmuted into producers’ goods. Throughout the socialist era, the vast majority of China’s population belonged to the class of grain producers. Despite various re-organizations and catastrophes, this class would remain relatively homogenous, with differentials in livelihood largely determined by contingent factors like climate and geography. There was very little mobility from grain-producer to grain-consumer and, after the GLF, rural-urban mobility would be reversed through mass rustication. Urbanization was completely halted by 1960, with population growth in the cities stalled at a roughly 1.4 percent yearly increase for the next two decades, the majority of which was the result of natural population growth as birth rates stabilized after the famine.[80]

Meanwhile, the class of grain consumers would become increasingly stratified as the developmental regime became more unstable and inequalities between elites and non-elites skyrocketed. A growing segment of people settled at the bottom of the class of grain consumers, constituting a proto-proletariat made up of temporaries, apprentices, “worker-peasants” and returned rusticates. This segment was defined by its increasing precarity relative to the privilege of grain consumption. Beginning as a relatively small number of migrants, “lane labor” and apprentices, continuing crises put more and more of the grain-consuming class into such a position. This meant that, over the course of the socialist era, larger segments of the population were thrown into this gray zone between the production and consumption of the grain surplus.

This class was not a true proletariat in the Marxist sense, since its labor was not integrated into global capitalist circuits, and no process of capitalist value accumulation existed domestically. Their subsistence was tied more strongly to the wage than other workers, but was still ultimately autonomous from it, since they were provided for to some degree by rural collectives or smaller urban danwei. More importantly: though they were contract workers, labor markets did not exist in the socialist period. Their labor was instead allocated to enterprises by provincial (and sometimes enterprise or central-state) planning authorities in the same way as machinery or resources for the construction of new facilities. Like these producers’ goods or resource inputs, even this contract labor was allocated in “quantities,” with the wage bill converted into monetary units after the fact.

At the same time, this class can be said to have constituted a proto-proletariat. It represented the breakdown of the grain-producer/consumer divide in a way that tended toward the production of urban agglomerations of workers severed from any means of subsistence other than the wage. This class also contained within its basic structure (as migrant contract labor) a tendency toward the production of labor markets, the reliance on wages and the creation of institutions of private ownership of means of production—which could now begin to be distinguished from labor-power since enterprises began to sever the link between non-market reproductive allocations and employment. It was this proto-proletariat that would later act as the core of the new working class over the course of the reform era, and many features of the socialist proto-proletariat were carried over into post-socialist Chinese class relations.


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[1] Naughton 2007, p.63, Figure 3.2

[2] Ibid, p.73

[3] Frazier, p.215

[4] Ibid, p.214

[5] Ibid, p.215

[6] Ibid, pp.217-218

[7] Naughton 2007, p.72

[8] Though ostensibly modeled on the Russian propiska (internal passport) system, the hukou had its own domestic precedents in various incarnations of pre-1949 registration systems, which were used for tax collection and conscription.

[9] Chan 2009, p.200

[10] See “No Way Forward, No Way Back” in this issue.

[11] Chan 2009, p.201

[12] For a brief overview of the Bingtuan in Xinjiang, see: “Dispatches from Xinjiang: The Story of the Production and Construction Corps,” Beijing Cream, July 3, 2014.

[13] Frazier, pp.218-219

[14] Ibid

[15] Ibid, pp.220-221

[16] Ibid, p.217

[17] Sheehan, p.98

[18] Frazier, p.216

[19] Naughton 2007, p.379

[20] Ibid, pp.73-74.

[21] Ibid, pp.57, 63, Figures 3.1 and 3.2

[22] Frazier, p.216

[23] The Cultural Revolution is periodized in two ways. One focuses on the “Short” Cultural Revolution, covering the period of mass mobilization from 1966-69, while the other focuses on the “Long” Cultural Revolution, considered to stretch the full decade from 1966-76.

[24] Wu, p.25, Figure 1

[25] Frazier, p.255

[26] For an in-depth description of this process, see: Joel Andreas, Rise of the Red Engineers, Stanford University Press, 2009.

[27] Xin 2011, p. 143, fn 1. Riskin 1987, p. 129.

[28] Unger 2002, p. 75.

[29] Riskin 1987, p. 129.

[30] Nolan 1988, p. 50.

[31] Riskin 1987, p. 128.

[32] Ibid., p. 129.

[33] Ibid., p. 129.

[34] Eyferth 2009; Naughton 2007, p. 273.

[35] Xin 2011, pp. 130-131.

[36] Selden 1988, p. 161. See also Nolan 1988, p. 57.

[37] Naughton 2007, p. 236.

[38] Nolan 1988, p. 52.

[39] Ibid., p. 52.

[40] Jonathan Unger has outlined a general trajectory for their evolution from the early 1960s through to the end of the 1970s using data from Chen Village in Guangdong Province, on which we base this section. Unger 2002, chapter 4; see also Riskin 1987, pp. 129-130.

[41] Unger 2002, p. 75.

[42] Ibid., p. 76-78.

[43] Unger 2002, pp. 79-89; Naughton 2007, p. 236.

[44] Unger 2002, pp. 89-90.

[45] Nolan 1988, pp. 58-9. Riskin 1987, p. 129, for figures.

[46] Nolan 1988, p. 65.

[47] Vivienne Shue, The Reach of the State: Sketches of the Chinese Body Politic. Stanford University Press, 1988, pp. 132-47.

[48] Selden 1988, p. 14.

[49] Nolan 1988, p. 67.

[50] Hershatter 2011, chapter 6; see also Nolan 1988, pp. 67-8.

[51] Ibid., p. 68.

[52] Naughton 2007, pp. 236-8.

[53] Huang 1990, 199.

[54] Huang 1990, 200.

[55] Nolan 1988, 64.

[56] Selden 1988, p. 161: “between 1957 and 1980 the urban labor force participation rate rose from 30 to 55 percent of the urban population.”

[57] Naughton 2007, p. 237.

[58] Nolan 1988, 56.

[59] Nolan 1988, 64.

[60] Naughton 2007, p. 254.

[61] Ibid., p. 254.

[62] Ibid., pp. 239-40.

[63] Ibid., pp. 252-3. See also Nolan 1988, p. 63.

[64] Naughton 2007, p. 273.

[65] Ibid., p. 273.

[66] Ibid., p. 273.

[67] Ibid., p. 274.

[68] Selden 1988, p. 116; Riskin 1987, pp. 141-2.

[69] Naughton 2007, p. 57.

[70] See Sheehan, p.92 for a summary of such a “two-line” theory, also present, with variations, in Meisner, Andors, Naughton, Andreas and Lee.

[71] Raymond Lotta, ed., Maoist Economics and the Revolutionary Road to Socialism: The Shanghai Textbook. Banner Press, 1994.

[72] For the prototypical model factory tour, see: Charles Bettelheim, Cultural Revolution and Industrial Organization in China, Monthly Review Press, 1974.

[73] For supporters, see Raymond Lotta, “The Theory and Practice of Maoist Planning: In Defense of a Viable and Visionary Socialism,” afterword to the original English-Language print edition of the Shanghai Textbook; for detractors, see: Chino, “24. The Shanghai Textbook and Socialist Transition: 1975”, Bloom and Contend, 2013.

[74] For an in-depth description of the CCP’s use of indigenous folk traditions and the later cultural battles over revolutionary history, including the construction of Liu Shaoqi’s cult of personality, see: Elizabeth Perry, Anyuan: Mining China’s Revolutionary Tradition. University of California Press, 2012.

[75] See: Boston Consulting Group, Wealth Markets in China. 2008 Report. <http://www.bcg.com.cn/export/sites/default/en/files/publications/reports_pdf/Wealth_Markets_in_China_Oct_2008_Engl.pdf>

[76] Wu, p.41

[77] Ibid, p.42

[78] Ibid, p.43

[79] For a more complete list see: Richard Kraus, Class Conflict in Chinese Socialism. New York, Columbia University Press, 1981, pp.185-187.

[80] Chan 2010, p.