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Introduction: China's rural reforms

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The year 1988 marked the tenth year of what is known as the "reform" in China. [1].  Since the reformers first applied their policies to the countryside the changes there have been thorough and far-reaching. Furthermore, they have been in place long enough to demonstrate not only an abundance of short-term consequences but also some long-term trends. At the start, the media in both

China and the West could hardly praise rural reform enough, especially in regard to its results in crop production, but more recently a note of anxiety has crept into the news. Grain production, it seems, has stagnated. Both annual inputs and long-term investments have fallen. The agricultural infrastrucure has decayed and the environment, under fierce attack, has disintegrated. Internally, from top to bottom, an agonizing reappraisal has replaced self-congratulation.

    How deep the questioning goes in China is anybody's guess. But from the frequency and urgency of the public appeals for patience, understanding, and steadfastness, the shock waves clearly run deep. Article after article begs the reader to understand that China is undergoing a great transformation, that good results are in the making but can never be achieved without hardship and sacrifice, that difficulties and reversals are inevitable and may last a long time. The authors of these articles express few signs of contrition, few hints that there may be anything fundamentally wrong with the path that has been chosen. All the rising contradictions, all the accumulating costs are written off as "transitional," troubles that can and will be exorcized in time. They are not -- to borrow a term from political scientist John Elster -- "equilibrium features," built-in and inevitable negative consequences of the new policy, but merely transient ripples on the broad current of triumphant reform. Thus the call, as problems mount, is for more, deeper, faster change. Problems arise not from "too much, too fast," but from "too little, too slow." Worrisome inflation may require a pause, a mandatory period of consolidation, but that is only one small backward step in the grand march forward down the road to full privatization in the sphere of production and untrammeled freedom in the sphere of circulation. On the eve of the final decade of the twentieth century legions of Chinese economists, social scientists, and officials are eagerly rediscovering Adam Smith and busily engaged in reinventing the wheel -- the great myth of the "free market." For them, all the profound and bitter lessons inflicted on China during the first nine decades of this century and the last six decades of the previous one seem to have faded quietly away into the mists of time, never to plague the living again. Foreign media pundits, almost without exception, echo these Chinese voices and urge them on toward new heights of pragmatism.

    One might have expected a more sophisticated response both from within China and from without, but ever since Deng Xiaoping came to power and launched the reform in 1978 very few voices have been raised in criticism anywhere on the four seas or the six continents. In China many people, high and low, have indeed questioned and even protested, but although they have sparked continuous internal challenge and debate very little, if any, of the conflict has surfaced. Since all media are in the hands of those who support reform -- whether the state, state-sponsored organizations, or private entrepreneurs, this is not surprising. But that hardly accounts for the lack of critical voices from abroad.

    Meanwhile, in the United States, we seem to have arrived at a situation that curiously mirrors, in reverse image, the 1950s when I first returned after seven years participation in the Chinese Revolution.

Then I was one of a handful of persons speaking out in defense of what the Chinese people had wrought under Mao. Over the years the climate slowly changed. Here and there, concerned young scholars raised additional sympathetic voices. By 1972 even that diehard Nixon reversed himself, traveling to Beijing and beginning the legitimization of Mao's dominion in Western eyes. Thereafter China gained friends at an accelerating rate until by 1978, when Deng Xiaoping changed course, the whole Western establishment lined up in support. The experts quickly concluded, over Chinese protests, that the new course represented reform "capitalist style."

    As Deng's policy unfolded to all but universal applause, I found myself sliding back into "glorious isolation" once more, a lonely if not entirely lone critic of what seemed to me to be an unnecessary and probably calamitous reversal of the self-reliant, planned national reconstruction of the previous thirty years.

    I did not leap from defender to critic overnight, however. As an old friend of New China living abroad I was certainly free to speak out. But at the beginning of the reform period I consciously avoided passing hasty judgment. I decided, with uncharacteristic forbearance, to wait and see what the new regime, with most of the old heroes gone, would do. My particular concern was, of course, the countryside.

    The reorganization of collective agriculture began in 1980 with a low-key Central Committee directive recommending the introduction of the "family contract system" on an experimental basis. Under this system, each family enters into a contract with the production brigade or village, which specifies its obligations to the state and the brigade. Anything the household produces beyond this it can keep. In remote areas, where the population was so scattered that meetings, work in common, and joint accounts made little sense, the family contract, or "responsibility system" was proposed as the "method where no other method would do." It never occurred to me that Deng would escalate this relatively noncontroversial, partial retreat from collective agriculture into the mass liquidation of the whole collective system in the countryside. In the course of time it became clear, however, that universal privatization was the goal and that the regime would pursue it with little regard for community preference, local conditions, or other special circumstances. 

Noodle Land Triumphant

"after thirty years of uphill fight/we're back to the old ways overnight" (Rhyme from the Northeast)

Over the last ten years, a momentous decade of reform in China, I had a ringside seat at the edge, if not in the center, of the action. Every year but one after 1978 I spent from five to six months in China. For five years starting in 1980 I served as a consultant to the United Nations Grasslands Management Project in Wengniute Banner, Chao region, Inner Mongolia, some 600 miles northeast of Beijing. There we sought a solution to the problem of desertification. In the intervals between busy seasons at the project I also traveled, whenever possible, about an equal distance southwest to Long Bow village, Changzhi City, Shanxi province, where I helped the peasants launch an unprecedented experiment in comprehensive mechanization.

    As the so-called reform challenged collective ownership throughout the countryside it soon came into conflict with both projects I was working on. Wengniute Ranch, as we called our huge spread of swamp, alkali flat, depleted range, and desert dune, was a unique, state-collective joint enterprise where a team of local herdsmen shared ownership, expressed as shares of stock, with the provincial government. This dual cooperative arrangement (a collective of herdsmen cooperating with the state) conflicted with the privatization drive of the reformers and the ambitions of some better off herdsmen who keenly wanted a chance to "get rich first." Together they fanned up local sentiment for liquidation.

    After five years, after the investment of $4 million by the United Nations and an equal amount by the Chinese government, privatization brought the Grasslands Project to its knees. The regional government, refusing to consider any exception based on special circumstances, contracted all livestock, all hay lands, and most pastures back to individual herdsmen. In 1984, with the newly irrigated croplands also at risk and without cattle, sheep, or pastures with which to run grazing trails, the UN reluctantly withdrew, without having found the answers everyone sought to the problems posed by desertification. The machinery  the UN brought remains at the site. Work goes forward in the form of custom services for individual contractors, but the project as conceived expired.

    While this was happening on the northern frontier, down in the southeast corner of Shanxi province five years of heavy capital investment and hard work on the part of the peasants of Long Bow village also came to naught. In 1978, Long Bow villagers had begun the mechanization of almost 200 acres of corn with a collection of scrounged, tinkered, and homemade equipment that did everything from spreading manure to tilling land, planting seed, killing weeds, picking ears, drying kernels, and augering the kernels into storage. The twelve members of the machinery team multiplied labor productivity by a factor of fifteen while cutting the cost of raising grain almost in half. But when the reform, offering subsistence plots to all and contract parcels to the land hungry, broke the fields into myriad small pieces comprehensive mechanization gave way perforce to intermittent plowing and planting. This left the peasants no alternative but to abandon most of their advanced equipment and reactivate their hoes. When the bank asked for its loan money back the village head said "take the machinery." But the bank never found a buyer, so to this day the manure spreaders, the smoothing harrows, the sprayers, the sprinkle irrigation sets, the corn pickers, and the grain dryers lie rusting in the machinery yard, mute testimony to a bygone -- or is it a bypassed? -- era.

    These two experiences shook me. Not only had I personally put a lot of effort, sweat, and pain into both projects, I knew how much others had also contributed, how much store they set on success and how important that success was to China's future. But the circumstances, in both cases, were exceptional. State-collective joint enterprises were rare indeed, even more rare, it seems, than mechanized villages. One could hardly fault the whole reform because of two stillborn experiments, though one certainly could fault the mindless, dogmatic way the local functionaries applied it.

    At about that time an experience of a different sort brought home to me how far beyond the remote mountain hamlets mentioned in the original Central Committee directive the so-called reform had spread. In the summer of 1983 I flew by plane from Beijing to Shanghai.

From my comfortable seat 30,000 feet up I saw for the first time the vast extent and astonishing physical results of the "responsibility system" on the North China plain.

    I looked down in growing disbelief and I wept. Where once, under a seamless web of adobe villages and their linking roads, clear squares and oblongs of land -- green, yellow, and brown -- had stretched unbroken to the horizon, now 1,000 kilometers of miniscule strips crowding first in one direction, then in another, in haphazard, never duplicated patterns. This was not "postage stamp" land such as used to exist before land reform, but ''ribbon land," "spaghetti land," "noodle land" -- strips so narrow that often not even the right wheel of a cart could travel down one man's land without the left wheel pressing down on the land of another.

After decades of revolutionary struggle, after China's peasants had finally managed to create a scale and an institutional form for agriculture that held out some promise for the future, some promise that the tillers could at last lay down their hoes and enter the modern world more-or-less in step with their hi-tech-oriented, machine-savvy urban fellow citizens -- it had come to this! With one blip on the screen of time, scale and institution both dissolved. The latest page in the great book of history barely rustled as it turned hundreds of millions back to square one.

    A stunned peasant comrade said to me, "With this reform the Communist Party has shrugged off the burden of the peasantry. From now on, fuck your mother, if you get left behind blame yourself."

    I was aware that many millions of peasants welcomed reform, that many villages had stagnated as cooperatives, and that the privatization of use rights to the land coupled with sharp price increases for farm produce and the right to engage at will in whatever sidelines caught one's fancy had brought many independent operators a welcome measure of prosperity.

    Nevertheless, to me, the irrational fragmentation alone meant the eventual neutralization of whatever advantages the government saw in it or had served up with it to make it palatable. "Noodle land" could only lead, in the long run, to a dead end. I could not think of any place in the world where rural smallholders were faring well, certainly not smallholders with only a fraction of a hectare to their names and that in scattered fragments. The low output of peasants farming with hoes meant that on average each full-time laborer could produce about a ton of grain a year, one eight-hundredth of the amount I harvested farming with tractors in Pennsylvania. And that ton of grain, worth about $100, would determine the standard of living for countless tillers of the land far into the future. Whatever prosperity any peasant now enjoyed was bound to be ephemeral as the gap between industry and agriculture, city and country, mental and manual labor expanded and the relentless price scissors imposed by the free market opened wide.

One Step Forward, two steps back                                       

Think it, say it, do it, screw it.

Everything ends in a mess!

-- Rhyme on pragmatism from rural Shanxi


Some of the early results of the "responsibility system," however, seemed to prove my fears wrong. The income of many "noodle land" contractors increased beyond most expectations. Behind this rise lay not only the big price increases decreed for many farm products but also the bonuses paid by the state for above-quota deliveries. Peasants in previously stagnant villages found these bonuses easier to earn now that ample supplies of fertilizers and pesticides, long in the pipeline, found their way onto the market. At the same time many individuals who chose not to contract land for commodity grain or lost out in the scramble for contracts, went out to seek their fortunes elsewhere and by other means. Less than half of them found work at first, but among those that did -- artisans, peddlers, carters, construction workers, and day laborers of all sorts -- there were many whose income also increased. And so, as the reform gathered momentum, prosperity came to many in the countryside. Contrary to my expectations, yields generally held their own or even went up at first, at least on the charts (government statisticians never hesitated to make the most of what, viewed soberly, were no more than crop estimates), and on top of that the output of commercial crops -- cotton, oil seeds, tobacco, and other specialty products -- suddenly favored with incentive prices, rose even faster. Add the receipts from these sources at enhanced prices to the receipts from off-the-farm labor at enhanced wages, and one has the basis for a lively expansion of the rural economy


    In 1984, the government reported and celebrated an historic break-through in grain production -- a gross harvest of over 400 million long tons. So much commodity grain appeared for sale that the price of free market grain fell to almost the same level as that of state-controlled grain. This generated euphoria in regard to reform. Responsible officials decided that the grain problem had been solved and trade negotiators began to discuss contracts for substantial exports of feed grains. The reform, it seemed, was really working, at least on the production front. If there were serious questions they were about where the privatized new society was heading. Did the reform road lead to socialism?

    With prosperity breaking out all over (progress actually was very uneven), not too many people seemed to care about end results. Nevertheless, given the Communist Party's long-standing commitment to socialism and mindful of Mao's dictum that the only road open to China was the socialist road, the "reformers" wooed the "diehards" (or was it the waverers?) with polemics that reconfirmed socialism as the goal while fundamentally redefining what the word meant. Certain theoreticians turned to this task with a will. Since at that point they had not yet discovered the "first stage of socialism," an umbrella stage that could justify just about any economic behavior, they reduced socialism to (1) public ownership (the land still belongs to the state), and (2) payment according to work (each contracting peasant family takes responsibility for its own profits and losses).

    When no one could deny any longer that many peasants (fish pond operators, orchard magnates, and laying hen tycoons -- the new darlings of the press) were hiring their neighbours and pocketing big profits, the theorists declared managing to be legitimate work (which was never in dispute), but failed to make any distinction between return on capital invested and payment for services rendered. The lumped both these things together as the legitimate rewards of entrepreneurial effort. Thus surplus value disappeared and along with it exploitation. "How can there be exploitation," they asked, "when the employees earn more at their new jobs than they did as peasants?"

    This "fair day's pay for a fair day's work" logic laid exploitation fears to rest, at least for the uninitiated. The Central Committee decided that hiring wage labor was all right, even desirable, so long as the number of workers did not exceed eight. Establishments with up to eight workers it called "individual enterprises." It considered workers in these enterprises, most of whom were indeed often relatives, to be family members. If there was any surplus value it remained in the family, so to speak. But soon knottier problems arose, in the form of newly rich entrepreneurs who built and owned whole factories and employed hundreds, even thousands, of workers. They really did look like, talk like, earn like, and spend like capitalists. No one could maintain that their workers were all family, nor could anyone maintain that the wages they paid or the conditions they granted were fair. Since theory could not exorcize such "devils" it soon made room for them with a proposition as eclectic as the still to be invented "first stage of socialism." The new apologia went more or less like this: socialism, as everyone knows, requires an advanced level of productive forces; therefore, whatever stimulates production ipso facto advances the cause of socialism. Economic development, by definition, turns into socialist progress. Deng always put the emphasis on "catching mice," by which he meant producing goods and services by any method that worked, including that good old-fashioned method, private investment for private profit -- what my old colleague, Archie Wright, the leader of the New York State Dairy Farmer's Union, used to call "making a dollar like a dollar ought-a-be made." Based on this type of reasoning, the Central Committee then created a new category of enterprise called "private," a category that had no limits.

    When translated into social reality this pragmatism quickly produced all sorts of anomalies, contradictions, and conflicts, foremost among which was accelerated social polarization throughout a society, both urban and rural, where classes and class struggle had been declared passé. By polarization I mean class differentiation, primarily the large-scale shift from peasant smallholder (in cooperative China this meant community shareholder) to wage laborer, and at the same time, the small-scale counter shift from peasant smallholder to capitalist (mostly petty). The vast majority, it goes without saying, took part in the former transformation, dropping out of their birthright, petty bourgeois class status, and landing in the working class, probably the most massive class transfer in world history. And it took place without mechanization of crop production by drawing off some of the surplus population backed up on the land. Taking part in the transfer were some who did not want to contract land and many who were unable to do so due to age, health, gender, lack of labor power, or lack of the means to farm.

    The transfer of millions into the working class had a unique aspect, however. In the majority of cases the individuals involved and their families still retained a share of per capita grain land, a subsistence plot or plots that could provide food for survival but not enough income to live on. In so far as their main source of livelihood was concerned, these men and women became wage workers, but they did not forego all land-use rights. They simply abstained or lost out in the scramble for contract rights to land used for commodity production. Some of the implications of this for China's future development are discussed in the final essay, "Why Not the Capitalist Road?"

    Next to social polarization, the most striking consequence of reform was the far-reaching cultural regression. Privatization, by returning the rural economy to something closely resembling pre-revolutionary China (even to the generation of large contractors who subcontracted the extended land-use rights they usurped just as subletting landlords of old had done) brought with it, a revival of all the worst features of the old society -- prostitution, gambling, drug abuse, and the proliferation of underworld gangs that controlled and profited from these phenomena. In the cultural sphere, old customs, old habits, old ideology, and old superstitions, all bearing a distinctly feudal flavor, also surfaced. On their own once more, without the collective strength to tackle the challenges of the environment, families tended to fall back on the cultural props of the past, such as shrines to the earth god, the kitchen god, the fertility god, and others. The newest building in Long Bow village is a temple to the earth god. They also revived in ever more blatant form all the traditional ceremonies that mark progress through life from birth to death, paying more exorbitant brideprices, arranging more lavish weddings and more extravagant funerals, building more elaborate tombs and borrowing more money at more usurious rates to pay for all these excesses. Commitment to scientific rationalism receded along with all the emphasis on simplicity, frugality, and thrift that the revolution had tried so hard, without success, to propagate and consolidate.

    Cultural regression inside the Communist Party rivaled the regression in society as a whole. Once the party told the peasants to enrich themselves communists had, perforce, to lead the way. Otherwise nobody would believe that the party meant to stand by those who made out well at production or in the marketplace. The scramble for personal advantage undermined whatever standards of communist conduct remained. Corruption, as abuse of privilege, had long been a serious problem linked to power holding in the collective system. Transformed now by the growing cash nexus, corruption as profit taking spread far and wide, from low to high and from high to low. Graft, kickbacks, and illegal speculation multiplied, sinking the party's prestige, what was left of it, to new lows. Most alarming, the country could no longer count on cadres, high or low, to put national interest first when dealing with foreign nationals and, more to the point, multinationals. At this level cultural regression threatened China's hard-won autonomy, the fruit of more than one hundred years of bitter struggle.

    Finally the reform unleashed in its wake an unprecedented attack on the environment. By making each family responsible for its own profit and loss the new policy changed the goal of economic effort from the long-term maximization of yields and other outputs through the mobilization of all skills, talents, and resources to the short-term maximization of family income. This change sent hundreds of millions out looking for anything that might turn an instant profit or be converted to immediate benefit. Thus began a wholesale attack on an already much-abused and enervated environment, on mountain slopes, on trees, on water resources, on grasslands, on fishing grounds, on wildlife, on minerals underground, on anything that could be cut down, plowed up, pumped over, dug out, shot dead, or carried away. During the collective period the state had reserved such things as mineral and timber rights to itself, but allowed some local exploitation under controlled conditions (unfortunately often violated). The state had also regulated (not always successfully) the use of steep mountain slopes, grasslands, large bodies of water, and other fragile ecosystems. Many peasant communities, for mutual benefit, also established and enforced some controls on the exploitation of local resources. With the reform, communities lost their clout in such matters and the state not only relaxed its regulations, but could no longer enforce those that still stood.

    I concluded from the experiences of those years that what the Deng group was building in China was not socialism, but something much closer to the old mixed economy of the New Democracy period which the revolution brought into being in the early 1950s with the successful completion of land reform -- a combination of public, private, joint public-private, and cooperatively owned enterprises. While it seemed that this was working reasonably well, it also seemed that from a socialist perspective it was very unstable. The most dynamic sector of industry, transport, and trade was the private sector. While it was still small in percentage terms it boasted the most rapid rate of growth. By contracting large chunks of publicly owned industry to individual managers the government was in effect privatizing the public sector as well. When one added to this the already completed, all but universal privatization of agriculture it became clear that: (1) the vast majority of Chinese, the peasants, were already functioning in a free enterprise environment; (2) the nonfarm private sector would soon be substantial; and (3) the public sector of the economy allocated by contract and concession to individual managers was headed in the same direction. This did not seem to be a very solid formula for building socialism.

     Beginning in autumn 1985, the euphoria concerning the progress brought about by reform in China began to wane. The 1985 crop report issued by the Ministry of Agriculture showed a shocking drop of 30 million tons. Alternative figures from competing ministries showed a shortfall closer to 50 million tons. Everyone finally agreed on 25 million, though where that figure came from is obscure. Since the weather had not been particularly bad there seemed to be no rational explanation for the setback. Some authorities blamed it on price fluctuations, on price promises broken by state grain stations when confronted with the 1984 glut.

    It seems clear now that the problem lay not with the 1985 crop but with the figures on the 1984 crop. The harvest of 1984 was never a record breaker. It was only normal or near normal. Most of the great increase registered that fall came out of collective storage. It found its way onto the market after the collectives broke up and dispersed their assets to their members. The sudden flow of grain all but broke the market because the government, fearing possible shortfalls with the family contract system, had simultaneously brought in millions of tons of grain from overseas. "We were all eating Canadian wheat that winter," said a Beijing resident. 

Since China's peasants had not in fact produced 405 million tons in 1984 they could not subsequently duplicate the record "harvest "of that year. The reformers most celebrated success turned out to be a phantom. The specter of chronic grain shortages sobered the whole country. In retrospect, the year 1985 proved to be a turning point in other fields as well, for that was the year when speculators in high positions, taking advantage of the new dual price system, raised official corruption not only to new quantitative but also to new qualitative levels. At the same time decentralization, some devolution of central power downward, allowed provinces and even some municipalities to act as virtual independent kingdoms in the realm of trade. On the one hand they set up barriers to interprovincial trade when it was advantageous to them -- hoarding scarce resources or commodities, for instance -- on the other they entered into huge foreign trade deals that brought in a flood of hard consumer items, including automobiles, at exorbitant prices. Thus they quickly ran through a large part of the nation's foreign currency reserves. China ran up an adverse trade balance of $15 billion that year, the bulk of it with Japan, and the imports undercut some struggling native industries.

During the same period capital investment soared, but far too little of it went into productive enterprises and far too much into nonproductive projects such as housing (mainly urban high-rise apartments), office buildings, recreation facilities, and underbooked luxury hotels. Every division of the government tried to get in on the huge profits anticipated from the foreign tourist trade, but only a few succeeded. At the same time no unit could launch major projects to improve the agricultural infrastructure because without the cooperative system nobody could mobilize peasants for work without paying cash wages, and no unit had that kind of cash.

    All the spending without compensating production brought on inflation, particularly the inflation of food prices which hit urban residents hard. They were already spending half their incomes on food. But inflation hit industrial commodities as well, particularly the fuel, fertilizer, pesticides, and machinery needed by peasants to grow crops, which forced them to buy less and adversely affected yields.

    Thus 1985 was the year when the chickens began to come home to roost, when the impetus that the reform gave to the economy began to unravel. All the contradictions generated by direct and contracted privatization combined with the half steps taken to transfer decision-making from government offices to the marketplace sharpened. By the time October came around masses of students were marching in the streets of major cities throughout the country protesting the flood of Japanese goods, rising prices, and spreading corruption.

    Since then, the dislocations inside China have continued to escalate. While the reassertion of stricter controls from the center has reduced the trade imbalance somewhat, nonproductive capital expenditures are still out of hand. The inflation rate is higher than ever, leading in late 1988 to an epidemic of runs on banks. All other problems, crime, birth rates, population growth, epidemic diseases, environmental destruction and, last but not least, shortfalls in grain production are getting worse. In 1988, blaming bad weather, the government reported a drop of over 9 million tons in grain production and this was probably an understatement. Some city dwellers now have to take coarse grains along with the fine in their grain ration. Peasants are killing off chickens, pigs, and even slaughtering dairy cows because there are not enough coarse grains to go around.

    The question raised by all these developments is no longer: Does this road lead to socialism or capitalism? The capitalist character of the road is pretty clear. The question is: Does the road lead forward or backward?

 Reviling Models

In the 1950s we helped one another.
In the 1960s we denounced one another.
In the 1970s we doubted one another.
In the 1980s we swindled one another
-- Rhyme from rural

    It is against the background of China's rapidly unfolding transformation, beginning late in 1978, filtered through my own slowly maturing perception and understanding, that over a period of ten years I put together the essays in this book.

I have chosen to begin with my story of Long Bow village. This appeared in 1979, a few months after the Central Committee of the Chinese Communist Party met in plenary session to launch the great policy reversal. It is important to the whole thrust of this volume because it describes a thriving cooperative village which at the time was following Mao's formula for success -- "Take grain as the key link, pay attention to animal husbandry, forestry, fish raising, and sideline occupations, and develop an all-around rural economy." To this five-point charter Long Bow had added a successful program of agricultural mechanization. 

Long Bow's story, prior to the introduction of reforms there in December 1982, illustrates what peasants could do by working together, pooling brains, brawn, and resources to create an advanced community. On their own they would never have divided their fields or contracted out their industries. They yielded to orders from above. Since then, the community has prospered with the rapid industrial and commercial growth of the whole district, but while much has gone well, much has also gone wrong, particularly on the land. It would be hard to argue that this community is better off today, seven years later, than it would have been had it remained a cooperative.

    "A Trip to Fengyang County" was written after a 1983 visit to Anhui province at the invitation of Vice-Premier Wan Li. There I saw the best the reform had to offer in rural development, but I also saw a host of problems arising from the privatization and atomization of the land, the most serious being the polarization of society, the emergence of affluent entrepreneurs and shareholders on the one hand and of wage laborers on the other.

    Thereafter, with each passing season, negative trends grew and multiplied in the countryside and society at large. I tried to sum up the new situation in two pieces, one initially a lecture, and one a long letter, which are here presented as "Reform in Stride" and "Reform Unravels." While the first raised the question of whether the road taken could lead to socialism, the second raised doubts about the reformers' ability to promote sustained, stable growth under any label, and particularly about their ability to create a prosperous, independent, autonomous China in a world dominated by the United States, European, and Japanese capital.

    The other two articles from the middle 1980s, "The Situation in the Grasslands" and "Agricultural Mechanization," deal with technical problems of internal development. They do not directly challenge reform policy, but they do disclose some of the critical roadblocks these policies have placed in the way of range preservation and farm mechanization.

"Dazhai Revisited" was written in the fall of 1987 in response to several news stories in the Chinese press which revived attacks on the past history of the peasant community Mao chose as a model and went on to exaggerate and embellish the community's progress since it ceased functioning as a collective in 1983. I concluded that the Chinese media had consistently misrepresented Dazhai, disparaging collective achievements on the one hand and idolizing reform achievements on the other, with equal disregard for facts in both cases. The most salient fact was that in 1987, according to official figures, Dazhai peasants did not raise enough grain to feed themselves.

 The attack on Dazhai was in reality an attack on Mao. Since learning from Dazhai as a model in agriculture was one of the focal points of Mao's rural policy, the denunciation was part of the rejection of that policy. This conclusion, supported by a correspondence piece by Herb and Ruth Gamberg in Monthly Review in September 1988, stirred Hugh Deane, former World War II correspondent in China and a leader of the U.S.-China Friendship Association, to respond. While agreeing with our position that Dazhai had been falsely denigrated, he asserted that Dazhai's achievements notwithstanding, rural failures outweighed the rural successes achieved by Mao and some of the failures amounted to catastrophes. He called the famine that followed the Great Leap the "worst in human history" and went on to compile an indictment of Mao that can stand as a fairly comprehensive and exemplary elaboration of the reform group's objection to the man, his policies, and his deeds. "Mao's Rural Policies Revisited" was written originally in defense of Mao and in rebuttal to this one-sided evaluation of his role in the postliberation history of China. The article entitled "Why Not the Capitalist Road?" is an attempt to summarize and bring up to date Mao's thesis that the capitalist road was not and is not open to China in the twentieth century.


Patterns Shrewd and Dire

Ten hundred million alive in our fair nation.
Nine hundred million deep in speculation.
One hundred million primed to join the operation
Beijing rhyme, 1989

Looking back on the ten years covered here one can see certain patterns that were not very obvious when the decade began. One of these pertains to the method followed by the reformers. Throughout the whole course of the reform the method has been the same -- to take a small, more or less minor, and therefore not highly controversial, aspect of the socialist base or superstructure as the target for "experimentation," and then escalate the experiment into a total transformation not only of the original target but of the whole class of phenomena it represents, on the grounds that the "experiment" worked. Pursuing this piecemeal, indirect approach the reformers avoid confrontation with those formidable social forces in society that might congeal to defend the collective system if the attack came head on. By the time any would-be defenders wake up to what is actually happening they are faced with a fait accompli : the whole institution or practice under attack has already undergone radical transformation.

    Deng first used piecemeal methods to privatize agriculture, then applied them to the legitimization of the private exploitation of wage labor. A policy that had originally frowned on any and all private hiring was belatedly amended to approve "individual" enterprises that hired no more than eight workers, then relaxed to approve "private" enterprises that employed hundreds, even thousands of workers. It took only a year or two to go from no exploitation to "anything goes." State leaders justified the "private" category as essential to the recently discovered "primary stage" of socialism. The goal by the end of 1988, it seemed, was to have private individuals own 30 percent of the industrial plant outright, while professional managers contracted to run the residual state-owned sector unit by unit. Meanwhile, the state planned to sell off its equity in the industrial sphere in the form of stock to plant workers, individually managed state units, and private entrepreneurs.

    The reformers repeated this type of metaphoric sleight of hand over and over again to the point where it became clear that the reform had never been an openminded, trial-and-error search for an alternative "Chinese road to socialism." The leaders were not "feeling out the stepping stones in order to cross the river" -- as Deng maintained -- but rather conducting a disguised frontal attack on the whole socialist system, designed in advance to replace it with production relations, an ownership system, institutions, customs, and culture compatible with private enterprise and free market exchange.

    The second pattern that one sees emerging over the years creates a sense of déjà vu. What the Chinese people are confronting with the accelerating growth of privilege and corruption at the top while inflation undermines the living standards of ever-wider circles of citizenry at the bottom, looks like a reply of sad scenes from a bygone era, the late 1920s and early 1930s: the disintegration of the nationalist revolution launched by Sun Yatsen, and the degeneration of a revolutionary party that came earlier to power, the Guomindang.

    Communists suppressed corruption after their victorv in 1949, but never completely conquered it. With the reform, new forms have arisen. A qualitative leap occurred when, in 1985, the reformers created the dual price system. They applied it as a step toward replacing the much-disparaged planned economy with the assumed impartial regulation of the marketplace by the "invisible hand" of competition. But dual pricing opened the way for a vast escalation of corruption in the form of bureaucratic profiteering that observers quickly dubbed the "official turnaround." The term, as described by the dissident astro-physicist Fang Lizhi [2], refers to the "use of official power and connections to procure commodities or other resources at low prices in the state-run sector of the economy, then turning around to sell them at huge mark-ups within the private sector.[1] Proliferating official turn-around virtually annulled any benefit that the dual price system might have provided and greatly aggravated the inflation that had already reached alarming levels.

    The enrichment of high cadres by means of such speculation is now combined with the mass entry of high cadres' children into every kind of corporate activity, especially the lucrative import and export business (the law forbids officeholders themselves from engaging in business). Together the two trends threaten to recreate something similar to the bureaucratic capital that dominated China prior to 1949.

Astute observers, among them the dissident journalist Liu Binyan, have already issued warnings. "A large number of Chinese worry," Liu writes, "that on the mainland there will appear again a group that uses its official position to become a comprador class, the likes of Chiang Kaishek, T.V. Soong, Kong Xiungxi, and the Chen brothers Chen Guofu and Chen Lifu. This kind of worry is not without reason". [3]  Now that China has opened wide, virtually removing the proverbial door from its hinges, could the final result of the interaction between world finance and corrupt bureaucracy be, as Liu Binyan projects, not a national but a new comprador bourgeoisie with all the threats to independence and autonomous development that that implies?" Taking the capitalist road, it seems, has consequences which no one can either justify or control.

After Tianamen

Once the party, like the sun
Lit up the land with steadfast rays.
Now the party, like the moon
Changes every fifteen days.
-- Rhyme from southeast

    The last article in this volume is based on a public lecture on the prodemocracy movement in China. It emphasizes above all the mass participation of the citizens of Beijing in blocking the army from entering that city to disperse the students. Such overwhelming mass participation, rare in history, was duplicated in various forms all across China, both before and after the massacre, and reflected jarring dissatisfaction with the state of the nation and the direction of economic and social drift after the reform took hold.

Both the extraordinary breadth of the nationwide protest and the ruthless killing used to suppress it revealed the extent of the crisis Deng's pragmatism had brought on China. The people could not accept the consequences of the privatization wind Deng blew up, and he and his clique could not accept the consequences of any democratic concessions, token or otherwise, that might limit their power to run China as they pleased. The result was a tense, confrontational standoff between a disaffected population and a handful of autocrats stripped of any credible mandate to rule. Large numbers of Communist Party members, government functionaries, and army personnel now side with the people in demanding change. But no one, certainly not any of the students who sparked the protest, has come forward with a coherent explanation of what went wrong or a viable policy for putting things right. Appalled by the living results of the capitalist road, most people nevertheless fail to see the causal links between these results and the policies, the political line, that brought them about.

However, the lurid light cast on the regime and its works by the massacre on the road to Tiananmen is forcing everyone to analyze and reappraise the experience of the last decade. Calling for democracy, freedom, and more reform can hardly suffice as a response to wholesale killing and repression by self-styled reformers. People must confront and expose the pseudosocialist rhetoric that now, more than ever, masks the capitalist road, make some clear choices in favor of renewed self-reliant socialist transformation, and prepare for protracted struggle.

NEXT : A small town in China: Long Bow 1978

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 [1] Since the usage of the word "reforms" to refer to these reactionary measures is widely accepted, I have conformed with this usage, and have henceforth avoided inserting quotation marks around the term. It should be clear from my analysis, however, that far from being reforms, the new policies amount to a counterrevolution.

[2] Fang Lizhi, "China's Despair and Chinas Hope," New York Review of Books, February 2, 1989, pp. 3-4.


[3] . Liu Binyang "The Relationship Between Politics and Economics," The Alexander Epstein Memorial Lecture, University of Michigan, October 20, 1988, p. 5

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