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Essay Number 2
September 1998 
Real Tigers and Paper Tigers: Feudalism, Self-employment, and the 1949 Chinese Revolution

thin rule
By Satya J. Gabriel

"Just as there is not a single thing in the world without a dual nature (this is the law of the unity of opposites), so imperialism and all reactionaries have a dual nature --- they are real tigers and paper tigers at the same time. In past history, before they won state power and for some time afterwards, the slave-owning class, the feudal landlord class and the bourgeoisie were vigorous, revolutionary and progressive; they were real tigers. But with the lapse of time, because their opposites --- the slave class, peasant class and the proletariat --- grew in strength step by step, struggled against them more and more fiercely, these ruling classes changed into reactionaries, changed into backward people, changed into paper tigers. And eventually they were overthrown, or will be overthrown, by the people.

"The reactionary, backward, decaying classes retained this dual nature even in their last life-and-death struggles against the people. On the one hand, they were real tigers; they devoured people by the millions and tens of millions. The cause of the people's struggle went through a period of difficulties and hardships, and along the path there were many twists and turns. To destroy the rule of imperialism, feudalism and bureaucrat-capitalism in China took the Chinese people more than a hundred years and cost them tens of millions of lives before the victory in 1949. Look! Were these not living tigers, iron tigers, real tigers? But in the end they changed into paper tigers, dead tigers, bean-curd tigers. These are historical facts. There have indeed been thousands and tens of thousands of them! Thousands and tens of thousands! Hence, imperialism and all reactionaries, looked at in essence, from a long-term point of view, must be seen for what they are ---paper tigers."

Mao Zedong, speech given in Wuhan on December 1, 1958

Marxism, as both a body of intellectual work and a decentered political movement, has always been obsessed with capitalism. This is not surprising. Marx was obsessed with understanding and criticizing capitalism and Marxism did, at least, begin with Marx (even if he rejected the idea that he was a Marxist). It may, therefore, surprise people to know that the Chinese revolution was not a revolution against capitalism. How could it have been? Prior to the 1949 revolution, rural China did not have a pervasive free labor (power) market (and most of China was and still is rural (about sixty percent at last estimate, from eighty percent prior to the post-1978 Reform Era)).   Nor were rural producers toiling for an international market (in case someone wants to make the "world capitalist system" argument for pre-revolutionary China).   Thus, the problems of rural China were not a product of capitalism, domestic or foreign.  But what of urban China?  The so-called Treaty Port areas have often been cited as having the most developed free labor markets, but these areas played relatively minor roles in the overall economic life of the nation.  As we have seen in "Capitalism, Socialism, and the 1949 Chinese Revolution" (henceforth referred to as Essay 1), one of the defining characteristics of capitalism is the existence of a wide scale free labor (power) market wherein the vast majority of workers can seek employment from a wide range of potential employers. The act of seeking, obtaining, and quitting employment is completely voluntary in free labor (power) markets.  If China was not a nation of capitalist workers (free wage laborers), then the revolution in China could not have been a revolution to overturn capitalism.

And in the China prior to the 1949 revolution, most rural direct producers were quite clearly non-capitalist.  Most of them toiled under conditions of obligation to produce goods in excess of that which would have satisfied the needs of their respective families and to turn this surplus (in product or money form) over to local landlords.  These landlords secured the surplus by means of economic processes (monopoly control over certain lands), cultural processes (unwritten customs that created expectations about the proper role, rights, and behavior of landlords and their tenants), and political processes (laws protecting the rights of the landlord to monopolize certain lands and to exclude use of such lands, including employing political agents to apply coercive force to maintain customary roles and relationships, and exercising de facto local area sovereignty under the supreme sovereignty of the Empire and later the Republic) by which direct producers were locked into a contractual relationship with the landlords.  In this contractual relationship, the direct producers could use the land to produce products necessary to their social survival if and only if they also provided the landlords an obligatory surplus product.  In other words, the social (and physical) survival of these direct producers depended upon their participation in these contracts (whether explicit or implicit).  The various demands upon the surplus producing abilities of the so-called peasantry took many forms: rents, taxes, fines, all collected and controlled by an aristocracy and those working as intermediaries for the aristocracy.  This type of social relationship is typically defined as feudal, not capitalist.  Indeed, the conflicts contributing to change in the pre-revolutionary Chinese countryside had very little, if anything, to do with capitalism, but were generated by non-capitalist social relationships (primarily, but not limited to, feudal relationships).

Prior to the 1949 Revolution, direct producers in some parts of rural China were already taking matters into their own hands by overthrowing the local feudal lords.  The Nationalist government, which was allied to these feudal lords, despite being strongly influenced by the USSR and pursuing both state and private forms of capitalism in the cities, had become largely irrelevant in the Chinese countryside. Nationalist power was largely restricted to urban areas and even in the cities Nationalist authority had been undermined, if not completely discredited, by its impotent response to the 1931 Japanese invasion of China. The Japanese invasion had brought death and destruction to large areas of China, particularly the northeastern provinces and the old imperial capital of Nanjing (where Japanese forces killed over a quarter million people and engaged in systematic torture and rape). All existing social structures would have come under stress in such an environment.

However, with over eighty percent of the Chinese population in rural areas and feudal bondage prevalent in those areas, the primary economic system under stress was the traditional feudal structure. Thus, the alliance between feudal lords in the countryside and the Nationalists in the cities may have only hastened the attack upon private feudal structures. These revolts against traditional feudal social organization were further encouraged by the growing knowledge that in the Communist Party-controlled areas of China there was some degree of land redistribution and landlord power had been destroyed or severely diminished.[1] And in still other areas productive self-employment, or the ancient class process, prevailed. Millions of Chinese farmers and artisans had the freedom to avoid being exploited by others, even before the revolution that would bring the communist party to power.

In other words, prior to the 1949 Revolution, feudal China was in a state of crisis that was deepening and spreading. The local lords response to the crisis was often to commission political agents (acting in a role not so unlike that of the "knights" of feudal Europe, whose primary mission in life was to reproduce, through political coercive force or the threat thereof, the feudal culture, political hierarchy, and economic arrangements) to take violent action against the peasantry, to attempt coercive suppression of the rebellion. These actions probably only inspired more intense "spontaneous peasant revolts." It was not easy for poorly armed and untrained farmers to defeat the forces organized in support of these lords, but there were a few victories all the same. Sometimes particularly cruel lords were captured by rebellious farmers and put to death.

The direct producers who successfully broke free from their obligation to provide a surplus to local lords were able to effect a revolutionary change in the class process within which they worked. Rather than producing a surplus for a lord (who then used this surplus both for his own relatively lavish lifestyle and to finance a social structure that would keep him in a position of control over the local farmers), these direct producers began to work for themselves as individuals. The same direct producer who produced a surplus was the recipient of that surplus. This productive self-employment has been described in the literature as the ancient (fundamental) class process (it has also been called independent production, independent commodity production, petty production, petty commodity production, and peasant production, among other terms). [2]

Even in areas dominated by feudalism, this form of productive self-employment was not uncommon. Rural direct producers who have been classified as "middle peasants" were typically those engaging in productive self-employment. At the time of the 1949 Revolution there was already a significant number of middle peasants operating throughout the Chinese countryside, although their ranks were clearly outnumbered by feudal direct producers. 

The productively self-employed direct producer is said to engage in self-exploitation. The reason this producer is said to engage in self-exploitation is that she must push herself to produce beyond what is necessary to satisfy the needs of her family in order to meet the social conditions for continued self-employment. In other words, the ancient (self-employed) direct producer must still meet social obligations in order to reproduce the social conditions for self-employment, even if she does not have to turn over her surplus to a lord. These social obligations may include taxes to governmental authorities (who, although not necessarily indifferent to who pays the taxes, are often willing to accept tax payments from direct producers in lieu of the payments they previously received from the local lords), interest payments to local creditors who have loaned the self-employed producer funds necessary to buy inputs and/or land, payment to a collective fund to finance public goods, such as the building of irrigation or other infrastructure or to pay for a militia that provides protection from a return to feudal rule or other invasions of ancient freedom, discounts to merchants who agree to market some of the goods produced by the self-employed direct producer, payments to religious or other cultural institutions for providing education for children and/or ideological justification for maintaining self-employment as a way of life, and so on. Failure to finance a supportive social structure may doom self-employed producers to lose their freedom to be self-employed. Indeed, in the specific case of Chinese farmers who broke free from feudal bonds, it may be that many of them failed (through lack of organizational skills and the knowledge of what was necessary to protect their position) to develop an adequate social structure to resist a reassertion of feudal authority, sometimes by the same lords who had been ousted and sometimes by completely new feudal lords. Thus, in order to maintain self-employment, the farmer (or other self-employed direct producer) must exploit herself, in the sense of forcing a surplus to be produced, for the purpose of paying for these social conditions. This is, of course, a strange use of the term exploitation, since we do not normally think of a person as exploiting herself. However, if we define exploitation as the forcing of an economic agent to work beyond what is necessary to meet the living conditions of that agent and her family, then this instance seems to meet that definition and we must define the activity as exploitation, albeit a form of unitary (rather than bipolar) exploitation where the exploiter and the exploited are one and the same person. We can discuss this controversial notion in more detail in class. 

In China, the rural direct producers (often called in the literature peasants) seem to have exhibited a strong preference for self-exploitation, rather than being exploited by someone else. Self-exploitation was clearly preferred to feudal exploitation and all evidence indicates that preference also held when the choice was capitalist wage labor employment, as well.[3] It is likely that there was far more self-exploitation in the Chinese countryside, prior to 1949, than is generally known. As has already been indicated, self-exploitation often co-existed alongside feudal exploitation. And in many villages the transition from feudal bondage to ancient lifestyles in which self-employed farmers and artisans paid rent, not a surplus, to local lords seem to have taken place peacefully. In these cases, the feudal lords may have come under the influence of local self-employed direct producers and voluntarily expanded the space of productive self-employment (ancientism) because it was perceived as more "lucrative" or for other reasons (including financial pressures on the feudal lords that could not be met by continuing to engage in feudal exploitation). In such environments, rebellions were not usually against the local landlords but against government authorities or bandits who tried to take too much in taxes or tribute from the hardworking, self-employed farmers and artisans. Even in the feudal areas, there is likely to have been many self-employed artisans. And at the time of the 1949 Revolution there were millions of self-employed artisans in the Chinese cities. 

The drive to self-exploit and to break free of feudal bonds is no doubt a culturally produced phenomenon. People have to learn that working for oneself is more desirable than working for someone else. Well, if that's the case, then there must be powerful cultural trends in China pushing direct producers in this direction. For Chinese history is rife with uprisings of direct producers who either overthrew their local feudal lords or died attempting to do so. And, to further reinforce the notion that Chinese farmers and artisans had a preference for self-exploitation, self-employed artisans and farmers often were willing to accept a lower standard of living, rather than take wage labor employment when it was offered. This preference for self-employment (or self-exploitation) was so strong that it took the continual application of coercive force to block farmers and artisans from breaking the bonds of feudal servitude, as it would later take dispossession from land to force many to seek wage labor employment in the cities. Much of the social dynamics of rural life in pre-1949 China was oriented around attempting to coerce direct producers to keep providing a surplus to the local lords and to block or counteract revolutionary activity (i.e. attempts to end feudal exploitation). Rural direct producers faced the constant threat of physical punishment, even execution, for violating the rules of the game of rural life. 

However, even under these conditions, many farmers and artisans managed to escape feudal exploition and to become self-employed. These self-employed/ancient direct producers sold their goods in village markets or in towns or cities and were subject to the vagaries of a market within which they were typically the least powerful economic agents. Unlike the notion of a perfectly competitive market where no economic agent has market power, these markets were places where market power was always very real and tangible, where certain big merchants could easily dictate wholesale prices to direct producers and where direct producers who decided to also act as merchants by selling their own product found themselves doubly disadvantaged (losing valuable production time to transporting, setting up, and operating their market stalls and trying to compete with more powerful, established merchants in the market places). And during natural and manmade disasters (such as the Great Global Depression of the late 1920s and 1930s), self-employed direct producers could suddenly find that the prices they received for products (when they could sell them at all) were insufficient even to meet the most basic subsistence needs. At such times, self-employed farmers and artisans found themselves in the same condition as feudal farmers and artisans---starving or nearly so. This was, indeed, the case during the global depression years of the late 1920s and 1930s. 

It is interesting to note that the productivity of farmers seems to increase merely as a result of a shift from working under feudal conditions to working as self-employed producers. This implies that productivity (output per worker hour or, alternatively, output per unit of land worked per time period) is sensitive to type of class process participated in. If this is the case, then one might ask why orthodox economic theory ignores the issue of class process. Indeed, class process is assumed away within the "classless" model of neoclassical economic theory, as presented in introductory textbooks. (In the orthodox models, it is presumed that all factors of production are fully compensated for their individual contribution to the value of output. No one gets exploited in the neoclassical paradigm. There is no "surplus" and therefore no class process in the Marxian sense.) Perhaps this is an issue worthy of some thought and discussion. Now back to China. 

The destruction of the Qing dynasty hardly caused a ripple in the feudal structure of the Chinese countryside. Nor did the rise to power of the Guomindang (KMD), who came to dominate the most populous areas of China by 1928, make much of an impact on the way millions of "peasants" lived their lives under the economic and political domination of feudal lords. The KMD showed absolutely no interest in the "liberation" of these peasants, who made up the vast majority of the Chinese population, and seemed content to receive taxes/tribute from the feudal lords in the countryside. Indeed, one could easily get the impression that tax collection (and crony capitalism) were far more important to Chiang Kai-shek and the rest of the post-Sun Yat Sen KMD leadership than the "petty concerns" of the ordinary Chinese citizen, whether in the countryside or the cities. 

The Guomindang (the Chinese Nationalist Party) was primarily an urban-based institution that focused their economic strategy around the development of the industrial and financial sectors of the Chinese economy (or that part of the Chinese economy under their effective control) with very limited interest in the agricultural sector, which remained dominated by the aforementioned feudal class process. The KMD promoted the growth of large-scale "bureaucratic" capitalism. Indeed, many KMD leaders and their relatives were principals (primarily as owners) in these large-scale capitalist ventures, often with explicit government subsidies, government contracts guaranteeing sales, and other forms of support. In the cities, under the KMD government, "crony capitalism" was the order of the day. 

On the other hand, the KMD showed no interest in fostering or even supporting self-exploitation in the Chinese countryside, even if this might have significantly expanded the productive capacity of the Chinese economy (as would be the case after the 1949 Revolution and then again after the post-Mao reforms). The countryside remained largely under the control of feudal lords, who considered any payments to the KMD government to be little more than tribute (squeezed out of the surplus that the lords extracted from their "peasants") to the latest in a long series of sovereigns. Given that about 85 percent of the Chinese people lived in the countryside in 1949, then it may be safe to say that China was a predominantly feudal country prior to the Chinese Communist Party's defeat of the KMD. 

Even when farmers had the "freedom" to engage in self-exploitation, it was often on land that was not their own, placing a rent burden on a portion of their surplus product. In pre-1949 China, less than 10 percent of the population owned and controlled over 75 percent of the land. Thus, in both class terms and in ownership terms, China was a highly unequal society prior to the 1949 Revolution. 

But even in the cities the KMD made enemies of many economic agents who might have been allies in an "anti-communist" crusade. The self-employed artisans in the cities had no innate affinity for the Communist Party of China (CPC). Self-exploitation is at odds with the idea of collectivizing labor, which is integral to communist ideology. However, these artisans did not turn to the KMD as an alternative to the communists. They generally disliked the KMD, partly because of the heavy taxes levied upon them by the nationalist regime, as well as bribes that often had to be paid to KMD officials in order to obtain licenses, to have licenses renewed, or simply to avoid harassment. Thus, in the conflict between the KMD and the communists, the ancient direct producers in the city were not, in general, of any help to either side and this was probably to the advantage of the CPC, since with great support in the countryside and no major opposition among the general population in the cities, it became much easier to organize during and after the 1949 Revolution. 

The KMD's alienation of the self-employed producers in the cities and, no doubt, of the few self-employed "middle" farmers in the countryside, left them with very little support among the masses. They had the tacit support of many of the feudal lords in the countryside, who understood that the communists were a threat to their social position and perhaps even to their lives, but this only reinforced the appearance of the KMD as just the latest members in the hated elite that had simultaneously oppressed the Chinese people and allowed foreigners to take control of large parts of the Chinese economy. The more the KMD, feudalism, and Chinese humiliation at the hands of foreigners could be linked, the stronger the support for the CPC. 

The rural-based leadership of the Chinese Communist Party (which had taken control of the party after the KMD killed most of the urban leadership) took advantage of the short-sightedness on the part of the KMD. The CPC had received critical support from rebellious rural direct producers seeking liberation from feudal exploitation (and the right to engage in self-exploitation). Mao Zedong seemed particularly aware of both the importance of the rural direct producers as a force for change and of their desire to work for themselves. Many years before the communist victory in 1949, Mao had already led the surviving leadership of the Chinese Communist Party in adopting a policy stance in favor of dispossessing the feudal lords of their land holdings and redistributing this land to the direct producers in the Chinese countryside. Land reform became a rallying cry of the Chinese communists. And, subsequently, one of the earliest acts of the new communist government in 1949 was to shift power from the feudal lords and their supporters to the rural direct producers. This was done by instituting radical land reform, confiscating the lands of the feudal lords, and then allowing the prosecution of lords and their supporters in many rural villages. The end result, in class terms, was a dramatic increase in the number of direct producers engaging in self-exploitation. Rural China was transformed from a space dominated by feudalism to one dominated by ancientism (self-employment/self-exploitation). 

One consequence of the shift in control over surplus labor in the countryside, from feudal lords to the direct producers themselves, was to stimulate an increase in agricultural output. In addition, the release of rural direct producers from obligations to feudal lords (and their retainers) meant that they could keep more of what they produced. Thus, not only was more value being created but more of a fraction of this larger value was being retained and therefore available to improve the livelihood of rural producers' families. The increase in material well-being of rural direct producers reinforced their support for the new leadership and acted as a stabilizing force in the country. Similarly, and despite economic embargoes from hostile foreign governments, the increased output from the countryside also made it possible to improve the living standards of the urban population, providing yet another factor in stabilizing the political situation in the country.  The CPC government tried to reinforce these gains by adopting policies designed to achieve self-sufficiency in staple crops. This focus on self-sufficiency and staple crops (grain and rice) would eventually provide one of the logical arguments in favor of shifting control over rural surpluses out of the hands of these ancient (productively self-employed) direct producers and directly under the control of government functionaries: a class revolution in the countryside that would take away one of the key pillars of support for the CPC among farmers.

In the post-revolution Chinese cities, the new government under the CPC expropriated the KMD controlled capitalist enterprises and placed them under the control of the new CPC dominated bureaucracy and, perhaps more importantly, at least from a public relations standpoint, improved the conditions for self-employed (ancient) entrepreneurs: the CPC relaxed taxes on ancient artisans and Party discipline was such that there was a sharp drop in the demands on private sector entrepreneurs, both ancient and capitalist, to pay bribes (whether in money form or in favors). The result was that the millions of ancient artisans and small-scale ("ancient") merchants in the cities were more likely to support the CPC or to, at least, not oppose them. This, in addition to the aforementioned material benefits of the post-revolutionary economic strategy, helped to buy the CPC time to consolidate power in the cities, where they had been largely invisible prior to the 1949 Revolution.  After consolidating power, the CPC leadership would couple the aforementioned focus on agricultural self-sufficiency with a focus on heavy industry (machine building, large-scale infrastructure, etc.), partly justified by the need for a more modern military in the face of foreign hostility. This policy foundation would serve to push the CPC away from promoting ancientism (productive self-employment) and towards a more centralized, bureaucratized control system over surplus production in both the countryside and the cities: a shift that in class terms may represent a reversal of the post-revolutionary destruction of feudal relationships, albeit by the construction of a state (rather than private) form of feudalism.

 
 

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NOTES

[1] Evidence from internal Communist Party of China (CPC) documents indicate that there were cases of landlords, capitalist farmers, and individuals dependent for their livelihood on the existence of the landlords and capitalist farmers joining the CPC and even rising to positions of power and influence. In some cases, though not all, these individuals may have been effective in sabotaging land redistribution efforts and/or in protecting local elites from attack by the "masses." For this and other reasons, the pre-1949 policies of the CPC regarding land redistribution and the status of landlords was not uniform. In some instances, the CPC did relatively little to change the social conditions in areas where they had authority. In most instances, however, the Party did make dramatic changes in the status of the "poor peasants" and created relatively powerful "peasant associations" to act in the interest of the vast majority of the rural population. Even before the 1949 Revolution, struggles over class within CPC-controlled areas was often shaped, to an extent, by the attempt of more radical elements of the CPC, the so-called leftists, to "root out" these so-called rightist elements from within the Party and the communities under Party authority. Nevertheless, after the 1949 Revolution, the Party's leftists, led by Mao Zedong himself, held enough power and influence to push forward a generalized land redistribution and to completely obliterate the private feudal landlord system. Nevertheless, the presence within the Party of former landlords, former capitalist farmers, and others who had been associated with the old rural order, even if these individuals constituted only a tiny fraction of Party membership, created a degree of distrust by the more radical members and leaders of the CPC of those within the Party who advocated what might be considered conservative political, economic, and cultural policies.

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[2] Marx described productive self-employment as ancient out of a teleological perspective on the development of class processes. Within this teleological perspective (one which Marx shared with many, if not most, of the classical political economists), self-employment was viewed as primitive or backward. In much of the social science literature this has translated into a tendency to diminish the importance of self-employment.

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[3] In the countryside, farmers who had relatively high incomes often engaged in either i) a combination of self-exploitation and the appropriation of capitalist surplus labor from hired laborers or ii) the sole practice of appropriating capitalist surplus labor. These farmers were often classified as "rich peasants." Individuals classified as "poor peasants" were mostly feudal serfs, but also included individuals who hired themselves out as wage laborers (when they could find work). All three of the peasant categories --- poor peasants, middle peasants, and rich peasants --- were also used to classify family members associated with these direct producers.

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