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Essay Number 21
July 2003 

What Do You Mean China is Socialist?

by Satya J. Gabriel

What does it mean to say that China is a socialist country? Is this some sort of “feel good about China” sort of thing? I’m not being facetious here. I hear this term “socialist” bandied about quite frequently and most of the time I have no idea what people are talking about. I don’t know why China is socialist, unless it is socialist because China’s political leaders call it socialist. I’m serious about this. If tomorrow Hu Jintao announces that China is no longer socialist, without any other fundamental change in Chinese economic processes, then I have the impression that would end a lot of people calling it socialist. But if the only reason China is socialist is because the Communist Party of China (CPC) says so, then the term has absolutely no utility as a tool for social scientific analysis.

The term certainly has nothing to do with the class processes that prevail or have prevailed in China. In the immediate past, China was dominated by class processes that were hardly “liberating” to workers. I would, in fact, argue that CPC policies have been quite reactionary, meaning that it has recreated class processes that are associated with pre-revolutionary Chinese society. I know it will not sit well with a lot of social analysts, particularly my colleagues on the Left, but I would argue that the CPC instituted feudalism in two instances: first with the creation of the communes in the late 1950s and second with the creation of a feudal employment system in the pre-reform-era state-run enterprise (SRE) sector.

Industrial feudalism’s rise in post-revolutionary China had as one of its conditions of existence a bureaucratic allocation and control labor system: workers were at the bottom of a hierarchy of feudal obligations; work assignment was not voluntary, as in capitalism, and permanent employment, and the danwei and hukou systems provided for both feudal dependence and immobility, as well as the sort of surplus labor problems common to feudalism and slavery, where the capitalist mechanism for throwing off excess labor is absent. In this Chinese variant of industrial feudalism, wages were used as a mechanism for distributing a small portion of the value of labor power to the workers, with most of the value of labor power provided in-kind, as part of the “ iron rice bowl.

Sadly, my argument that this system is feudal is likely to be met with derision, rather than debate, in a lot of circles. Some will see use of the term feudal as only appropriate when examining “Europe” (which seems to occasionally include Japan) during certain historical epochs (after which the term has no presence). But if the labor system (and related “mode” of appropriating surplus value) fits the definition of feudal, then why not call it that? We can’t understand social formations unless we can define our terms in such a way that they can be used at any given historical moment or on any geographically defined social formation without prejudice. In other words, the term “feudal” is not proprietary to studies of Europe. So why is it so unacceptable, for many Leftists, to call the communes or the post-revolutionary, pre-reform industrial system feudal? Instead, even those who do not believe this system was socialist go to great lengths to make up new terms (to ignore the underlying class process) based on political aspects of Chinese society, such as calling it a “state command” system. Now I don't have any problem with the concept of China as a "state command system," so long as we understand the term to refer to the prevalent political organization of the state bureaucracy. But this does not tell us about the prevalent class processes in China, since a wide range of class processes can be supported by a state command political structure, including both capitalism and feudalism.

One of the other reasons (in addition to Eurocentrism), that contemporary Chinese feudalism escapes the view of many social analysts is that there is a tendency to think of feudal conditions as, necessarily, less attractive to workers than capitalist conditions. For this reason, many social analysts find it difficult to recognize the pre-reform labor system as feudal, given the perception that many workers preferred the iron rice bowl and permanent employment to the insecurities of capitalist employment. In fact, most of these analysts are content to mimic the Chinese authorities in calling the system “socialist.” For many, the iron rice bowl is somehow, by definition, socialist. In this sense, many Leftists share with Rightists the view that social welfare defines socialism.[1]  

But if socialism is social welfare (or vice versa), then what country is not socialist? Do you need a certain measurable degree of social welfare to be socialist? Is it the type of social welfare that defines socialism? Is it the decline in infant mortality from 1949 onwards that defines the Chinese social structure as socialist? Is it the family planning policies? Is it the increase in caloric intake of the poor? Is it the extensive development of infrastructure during the Maoist era? Where is the recipe book for this definition of socialism? And what is to stop us from labeling every OECD country, including the U.S.A., as socialist, using similar criteria? I think the problem is that socialism means too many things and sometimes nothing at all, depending on who is using it. It certainly doesn’t seem to have anything to do with class processes for most of those who deploy the word in their arguments.

As I understand it, there have been five class processes identified: the slave, feudal, capitalist, ancient, and communal (or communist) class processes. Each of these class processes is defined on the basis of a unique form of surplus value appropriation. In the slave class process surplus value is appropriated on the basis of the chattel slavery relationship: a human being is treated as a piece of property (capital) whose laboring potential is therefore owned in total. In the feudal class process surplus value is appropriated on the basis of obligation of the worker to perform surplus labor for a specific employer. In the capitalist class process surplus value is appropriated on the basis of the voluntary wage labor contract (where the worker has choice of employment). In the ancient class process surplus value is appropriated by the individual producer who produces it. In other words, it is based on complete self-employment/self-appropriation on an individualized basis. Finally, in the communal class process surplus value is appropriated by the collective of workers who created that value.

Now some people, in particular a number of Marxists, have defined socialism as a transitional stage between capitalism and communism (a society where the communal class process prevails). I don’t know exactly how one is supposed to know that a society is in transition to communism, unless one can observe an increase in the number of workers involved in the communal class process over time. Any other criteria for arguing that such a transition is taking place seems far too open to interpretation to be of much use. When I observe China I see absolutely no evidence of any increase in the incidence of communal appropriation. Thus, I am not sympathetic to the argument that China is socialist.

Maybe this desire to make China socialist (at least in our rhetoric) is all about wishful thinking. Leftists want China to be socialist. China has one-quarter of the human population living within its borders. It would be nice to think that the government of China has high ideals for the liberation of humanity from exploitation and other oppressions. But wishing for this doesn’t make it so. In fact, there is a good deal of evidence that something else is going on. For example, in addition to the absence of any serious efforts to grow communal appropriation in China, the tossing away of the iron rice bowl in favor of dog-eat-dog certainly does not constitute a movement towards communal appropriation, China has broken contemporary speed records for growth in income inequality. Add to that leading the world in executions (Texas on steroids?), and a rising tide of corruption and you just do not come up with a nice “socialist” picture. It looks a good deal more mundane.

Okay, so I won’t win friends and influence people in the Leftist community by such arguments. I guess that’s the cost of telling it like I see it. I’d like to say “sure I think China is socialist and here’s why” but I can’t. I can’t muster up any evidence. I’m not satisfied to use the ad hoc approach that seems so popular on both the Left and the Right (lots of people on the Right called Martin Luther King, Jr. communist when he was still alive and for some time thereafter). China is, indeed, going through a transition, but it is not a transition from capitalism to communism. The evidence supports a conclusion that feudal appropriation has prevailed in both agriculture (during the commune-era) and industry (during the SRE-era) in the recent past and is now being displaced by capitalism in industry and increasingly in agriculture. In other words, China is going through a transition from feudalism to capitalism. I just don’t see calling such a transition socialism.


[1] One would expect individuals who take the social welfare = socialism approach to argue that China is abandoning socialism as the level of social welfare is drastically reduced. This is, indeed, the case for many leftists, although not quite so consistently the view of rightists who use the same definitional framework. In any event, the quantity of social welfare approach is quite problematic. It does not provide the basis for consistent categorization, nor is it clear that this approach to defining socialism has much utility in analysis.

(Next two paragraphs added 6 February 2004.)  Another popular, though usually just as ad hoc, approach to defining socialism is to view any government with substantial ownership of industrial, extractive, agricultural, and/or financial enterprises as "socialist" and the nation is given that appellation as well.  Given that it is possible to find governments with no ownership (or some equivalent) of productive or financial enterprises (exempting service enterprises), then it is possible to create a bi-polar categorization of socialist and non-socialist nation-states.  Nevertheless, most nations would be classified as socialist if a strict rule of non-socialist = no state ownership of such enterprises is applied, including the United States.  If this strict rule is not applied then we are back in the realm of trying to quantify how much ownership results in socialism.  All the same, those who hold this view, and many conservative Marxists are among those using the term socialism in this way, must view China's gradual post-1990s privatization with some dismay (or joy, depending upon how one essentializes the normative meaning of "socialism").

For those who want to see socialism as a stagnant economic system, there has been a concerted effort to argue that forms of state (or public) ownership are necessarily inefficient and growth retarding.  Jean C. Oi, in her text Rural China Takes Off (Berkeley: University of California Press, 1999), makes a point of the fact that China's rapid economic growth was initiated and carried out during a period of sustained state/collective ownership and that privatization is a more recent phenomenon.  Oi and others (including yours truly) have argued that the driving force behind much of the earlier growth has been the township-village enterprises, which are, for the most part, local government owned and, by the definition we are discussing here, socialist institutions.  This would imply that socialism can create vibrant economic growth and development.  While I don't believe the government ownership = socialism approach is any better than the social welfare = socialism approach (nor do I agree that a hybrid of the two would solve the problems inherent in these crude and typically ad hoc strategies for categorizing social formations), I do agree with the conclusion that there is no one-to-one correlation between type of ownership and economic efficiency or economic growth or economic development.  The question of whether or not a social formation transforms in the direction of greater material capability and more immediate income is more complex than these reductionist approaches imply.  China has been demonstrating this for the past twenty plus years and one can only hope that eventually the facts on the ground in China will begin to influence economic theory, rather than proponents of mainstream economic theory trying to force the facts into pre-existing reductionist fallacies (and/or ignoring facts that can't be squeezed into these "mainstream" theoretical frameworks).  We shall see.

(Added 7 February 2004) This is turning into more of a blog than a note. In any event, I wanted to add that Jean Oi has a completely different take on China (from those who see it as "socialist"). She describes China as "corporatist" and argues in Rural China Takes Off (Berkeley: University of California Press, 1999) that one can understand the dynamics of post-reform China in terms of a corporate relationship between different levels of the Chinese government and between the Chinese government and firms, both those who are government owned (including the ones described as "collectively" owned, meaning owned by local governments, rather than provincial governments or the central government) and those that are in the burgeoning private sector. Oi does, however, describe the reform period as bringing about a "new form of redistributive corporatism" that does not signify the "end of redistributive socialism." This seems to indicate that Oi sees the reform era as continuing "redistributive socialism" (which one can understand as an example of the social welfare = socialism definition). This blending of the notion of "corporatism" with "socialism" is interesting for a number of reasons, not the least of which is the way that political processes (in the one case, the idea of a corporate power hierarchy linking different levels of government and the "entrepreneurial" nature of decision-making by agents of the government, especially (for Oi) local officials, and in the other case, the use of political authority to redistribute value in a manner that increases the equality of access to resources) are placed at the essential core of defining the social formation. The way that Oi defines socialism, economic processes are epiphenomena of the political and class processes are irrelevant altogether. The fact that the mode of appropriating and distributing surplus value has changed does not seem relevant to the use of the term "socialism." If you have a different take on this, send me an e-mail at sgabriel at

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