Other online works by S. J. Gabriel:

Ambiguous Capital: The Success of China's New Capitalists in the Township and Village Enterprises and Their Impact on the State Sector (part of the China essay series)

Fiscal & Monetary Policy in 1998 China: Riding the Crisis Tiger (part of the China essay series)

Class Analysis of the Iranian Revolution of 1979 (web essay)

For more web essays Online Papers.


China: The Ancient Road to Communism?

Satyananda Gabriel and Michael F. Martin

This paper was originally published in Rethinking Marxism.

Since the late 1970s the Chinese Communist Party, under the leadership of a group that we will describe as the "pragmatists," has embarked on a course of economic reform designed to decentralize economic decision -making, liberalize market relationships, induce technological innovation, change the mix of class processes in the economy, and raise the level of the aggregate social surplus. For the pragmatist leaders, the most prominent of whom has been Deng Xiao-Pin g, socialist notions of building a more egalitarian, less oppressive society were given lower priority than the nationalistic goal of making China economically competitive with the nations of Western Europe and Japan, and ultimately with the United States . This nationalistic goal is one of the determinants of the economic reforms.

The political crisis that led to the massacre at Tiananmen Square, although certainly not intended to be one of the outcomes of the reforms, was directly shaped by these reforms and the consequent loosening of central government control over China's economic institutions. The particular manner in which the political crisis was "resolved" was in turn shaped by the new class dynamics that arose out of the reforms.

Stephen Resnick and Richard Wolff (1990) have already examined in this journal the class and political dynamics that led to the widespread urban support for the student-led movement in Tiananmen. However, few have discussed the lack of moral support for the prodemocracy movement. In this paper we intend to address this very issue by analyzing the post-Mao era's effect on rural China in explicitly class terms.

In particular, we argue that the reforms have contributed to a significant growth in the ancient fundamental and subsumed class processes in China and that this growth in self-exploitation (Gabriel 1989, 1990) provides a necessary, thou gh not sufficient condition for the Chinese government 5 crackdown on urban dissent, and that the economic and political importance of the growing ancient class, coupled with the alienation of large portions of the urban intelligentsia from the party, has created the context for a unique, ancient-centered strategy for building socialism in China.'

For the most part, the political movement represented by the students who occupied Tiananmen Square did not include rural activists nor were the political slogans and proposals sensitive to the needs and desires of the rural population, in particular the large and increasingly powerful force of ancient direct producers. The so-called Democracy Movement demanded the adoption of a multiparty, liberal-democratic political environment, an end to high-level corruption, and a return to more e galitarian "iron rice bowl" economic policies.

Ancient producers, in both the rural and urban areas, may have supported the call for an end to high-level corruption but were not so keen on returning to the iron rice bowl policies of Mao, particularly since such policies were associa ted with the communes and centralized economic control. As for the call for political reforms, these ancient producers were probably more indifferent than anything else. After all, under the current system they had been successful at getting a large part of what they wanted from the central and provincial governments. Ancient producers had not only acquired rights to land and other means of production and the right to first receipt of their own surplus product, but owing to reduced social demands upon the ir surplus in the form of taxes (particularly given the dismantling of the communes), they enjoyed control over a relatively large surplus product with the attendant increase in their individual social influence. Thus, the existing political system was, f rom the standpoint of many ancient producers, doing just fine.

Having seen their standard of living rise rapidly over the period of the reforms, ancient producers had found themselves in the enviable position of simultaneously controlling a larger surplus product and enjoying an increasing necessar y product. Indeed, the growth of relative wealth among many ancient producers, both rural and urban, had intensified the concern of the "liberals" that economic reform was fostering economic inequality. This concern was often expressed in comparisons of t he growth in incomes for ancient producers with the falling relative standard of living for college professors, professionals, and managers in state enterprises. Such comparisons, fuel for the Democracy Movement's call for a return to iron rice bowl redis tributionary economic policies, only pushed ancient producers more to the side of the pragmatist leadership in the government.

Thus, it should not be surprising to find that large numbers of rural residents and urban ancient producers have accepted the official government account of the political crisis, including the government's description of the students as "hooligans" engaging in counter-revolutionary agitation and propaganda. One should not, therefore, assume that reports of support for the government's policy are simply the outcome of fear and coercion, as the Western press likes to imply.

In the wake of Tiananmen, it has been implied in the Western press that the current pragmatist leadership of the Chinese government will eventually have to give way to more political reform-minded leaders. This belief is consistent with the notion that economic reforms leading to more decentralized decision-making must necessarily lead to decentralized political mechanisms, and that the Tiananmen incident will simply speed up this "natural" process of political liberalization.

Insofar as the reforms implemented after 1978 have simultaneously resulted in the growth in ancient producers and support by such ancient producers of the central government, it is not so clear that the recent political crisis and the r esultant Tiananmen massacre should necessarily result in the downfall of the current Chinese leadership. So long as the government maintains support among the ancient class, it may be able to successfully weather this political storm and continue on its c urrent ancient-led path of economic development. It may do this without reforming the political process, in the sense of decentralizing political decision-making. In other words, the decentralized economy, with self-exploitation prevailing, may be fostere d by a centralized political structure. Indeed, there may be a symbiotic relationship between the reproduction of a highly centralized bureaucracy led by the pragmatists in the Communist party and the reproduction and expansion in self-exploitation.

However, this situation of needing the ancient producers more than ever may be a two-edged sword for the politicians. It is not clear that the leaders of the Communist party ever intended to promote ancient production for any sustained period, but rather that they wanted to foster a means of increasing the social surplus available for investment in industrial expansion and modernization. But for the central government to tap this ancient surplus, they must implement means for drawing it out of the hands of ancient producers and of other secondary (ancient subsumed class) claimants into government coffers. The government might do this through increased taxes, higher prices for inputs purchased by ancient producers from industrial enterpr ises and/or the state, or other similar economic mechanisms. If these measures are tried, however, the government risks alienating an increasingly crucial group of supporters. Given the recent unrest and continued disenchantment on the part of large segme nts of the urban population, including industrial workers who have seen their relative income lag behind that of rural ancient producers. The current leadership may not be in a position to alienate what has become its strongest base of support.

Thus, the Communist party may be forced to choose between abandoning its communist goal of a gradual shift of class processes towards communal production and appropriation or devising a new strategy for moving towards communism, a strat egy that is based upon self-exploitation as the bridge between the old society and the new. In this paper, we examine the possibility that the ancient fundamental and subsumed class processes might be the basis for a unique path to a communist China.

The structure of the paper is as follows: First, we explore the class and nonclass processes that have historically contributed to the development of the pro-ancient reforms and the similarities of these reforms to the New Economic Policy carried out i n the early years of the Soviet Union. Further, we explore the ways in which these reforms and the growth in self-exploitation affect the politics of the Tiananmen massacre and its aftermath. Second, we examine how the Chinese reforms have led to the dimi nution in communal forms of surplus appropriation and the rapid expansion in self-exploitation, including the ways in which self-exploitation has persisted over time, even during the period when the communes predominated in rural China. Third, we examine the specific policy measures embodied in the da bao gan or "big contract system," a subset of the overall nongye shengchan zeren zhi or "agricultural production responsibility system" reforms, which have provided conditions for the expansion of self-exploitation as the prevalent form of exploitation in rural China. Fourth, we discuss recent modifications in the economic reforms that have strengthened self-exploitation, as well as economic policies that attempt to solve problems generated by the earlier reforms. Finally, we argue that it is possible for the pro-ancient economic reforms to be compatible with socialism and the construction of a unique ancient road to communism.

China's Reforms and the Soviet Union's NEP

In making sense of the rural reforms, it is important to establish the connection between them and historic struggles in the postrevolutionary Chinese countryside over issues of class. It is common in both the Marxian and non-Marxia n literatures on postrevolutionary China to either ignore the issue of class (for example, Hsiung and Putterman 1989) or to assume that struggle occurs only in certain sites, such as within the Chinese Communist Party or within the state bureaucracy (for example, McFarlane 1984). Our argument is that direct producers in the countryside have played a significant and decisive role in the struggles over class in China, and that these struggles have shaped and continue to shape Chinese economic and political development.

In particular, it is our contention that support for self-exploitation has been and continues to be very strong among the rural population. As a result, the rural population's support for self-exploitation has led to its rapid growth an d stability since 1978. In making this argument, it must be recognized that we do not intend to make any normative statement about the relative social worth of ancient, capitalist, or communist class processes, but merely seek to make sense of the interna l dynamic of struggles over class within China.

The subset of the overall economic reforms that is most relevant to our analysis of the growth in self-exploitation are those referred to as the nongye shengchan zeren zhi, or the "agricultural production responsibility system" ( Hama 1982). The nongye shengchan zeren zhi reforms are particularly relevant to understanding the rapid expansion of self-exploitation in the post-Mao period.

The nongye shengchan zeren zhi reforms bear a close resemblance to certain aspects of the New Economic Policy (NEP) in the early years of the Soviet Union. In particular, both the Chinese reforms and the NEP were designed in part , to promote the creation of an increased social surplus from agriculture and other related rural production processes to finance the rapid "modernization" of the industrial sector. These expectations were based on a set of assumptions concerning the resp onse of the rural population to the reforms.

Among the assumptions shared by the Chinese and Soviet officials was the belief that rural direct producers allowed to engage in self-exploitation would work more intensively and extensively to create a larger relative and absolute surp lus product. It should be understood that this anticipated increased productivity was not based upon "technical" changes in production but upon changes in class processes. Both the Chinese and Soviet leaders understood the interaction of class and product ivity. They understood that the particular manner in which surplus labor was performed and appropriated would affect the aggregate magnitude of new wealth created in the society. By manipulating the form of exploitation in their respective societies, they hoped to create the conditions for economic growth. Further, it was assumed that economic growth was a precondition for achieving other goals, including the socialist goal of creating a communist society.

In both the NEP and the Chinese responsibility system, the respective national governments reduced their percentage claims on agriculturally produced surplus products to further encourage newly self-exploiting producers to expand output . By reducing the in-kind tax rate on agricultural production, both governments reduced their percentage share of surplus output and yet reaped the benefits of increased total supplies of food and other agricultural products. Indeed, the gro wth in total output made it feasible for both governments to receive larger absolute tax receipts with a smaller percentage tax rate. Thus, although the Laffer curve has been for the most part discredited as a theoretical tool for explaining the interacti on of tax receipts and output growth in advanced capitalist societies such as the United States, it may be of some analytical use in explaining such an interaction in the case of self-exploitation.

Both governments assumed that an increase in output would bring down food and other consumer product prices for both rural and urban consumers, eliminate shortages, and presumably increase popular support for the national leadership. On 25 April 1921, Lenin put it this way:

The tax in kind amounts to only about one-half of the surplus-grain appropriation rate…Every peasant will know the exact amount of tax he has to pay beforehand, that is, in the spring. This will reduce the abuses of tax collection. It will be an incentive for the peasant to cultivate a larger area, to improve his farm, and to to raise yields (1960, vol.32, 366; emphasis added).

For the Chinese, the effects of the shengchan zeren zhi were described as follows:

It gave full pay to peasants' enthusiasm. Our agricultural production, long stagnant, was able to thrive in a sudden change and develop at a pace rarely witnessed in history (Nongmin Ribao Editorial Board 1989 , 47).

Not only would this larger aggregate output increase products available for consumption, but it was assumed by both Soviet and Chinese officials that more intermediate inputs for industrial production and products av ailable for exports would also be generated. Relatively low-cost consumption goods for direct producers, increased quantities of intermediate products, and more foreign exchange for the purchase of foreign technology and machinery were all considered prec onditions for economic growth and development, and ultimately for the survival of socialism. Thus, encouraging self-exploitation satisfied many of the objectives of both the Communist Party of the Soviet Union, in the case of the NEP and the Chinese Commu nist party, in the case of the nongye shengchan zeren zhi, although in both countries there were and are intellectuals and officials who have argued against the compatibility of such policies with socialism. In the Soviet case, the pivotal figure i n opposing the "ancient road" was Stalin, whose leadership was characterized by the brutal destruction of millions of ancient producers. forced collectivization, and the inauguration of a long-term agricultural stagnation.

Lenin, although he did not favor self-exploitation or believe in an "ancient road" to communism, at least understood and emphasized the economic and political benefits of granting direct producers the right to engage in self-exploitatio n. Lenin viewed this as a policy that would foster support for the Communist party among the rural population and potentially provide more abundant consumer products that might improve conditions for the urban working class. Both of these outcomes would s trengthen popular support for the communist party:

The most urgent thing at the present time is to take measures that will immediately increase the productive forces of peasant farming. Only in this way [i.e., the agricultural reforms of the NEP] will it be po ssible to improve the conditions of the workers. strengthen the alliance between the workers and the peasants, and consolidate the dictatorship of the proletariat (Lenin 1960, vol.32, 341).

The Chinese saw their reforms in a similar light, emphasizing the economic benefits arising out of the economic reforms:

Facts show that the rapid development of agriculture in the several ensuing years after the third plenary session brought about an upsurge in the whole national economy…A more plentiful supply of staple and nonstaple food was provided for urban residents. The ever-growing raw material needs of light and textile industries were basically satisfied. Of foreign exchange earnings from exports, agricultural products or commodities made with agricultural products as raw ma terials accounted for a very large percentage (Nongmin Ribao Editorial Board 1989, 47).

Finally, both groups of officials assumed that granting rural direct producers the right to engage in self-exploitation would allow the State to shift the economic burden for certain social costs from the government onto the rural direct producers themselves. Self-exploiting direct producers, it was assumed, would play a more independent role (voluntarism) in providing their own infrastructure, social services, and social insurance, thereby reducing demands upon gove rnmental resources.

At the same time that the State reduced its commitment of resources to rural public investments, it was assumed that hard-working ancient producers would boost total social output sufficiently to generate higher State revenues. Direct p roducers would produce a larger absolute surplus and thus provide substantially increased aggregate taxes and other subsumed class payments to the State. It was assumed that direct producers granted the right to self-exploit and faced with a smaller pe rcentage tax would work more intensively and, perhaps, extensively and invest a portion of the increased surplus in expanding and improving their means of production. The benefits from these private efforts would be shared by the whole society. Lenin stated this succinctly in a speech on 15 March 1921:

From the standpoint of the small proprietor, the small farmer, the tax, which is to be smaller than surplus appropriation, will be more definite and will enable him to sow more. and assure him of the opportunity of u sing his surplus to improve his farm (1960, vol. 32, 235).

In 1983, the Chinese leadership also saw the returned surplus of the self-exploiting producers as a source of social accumulation and technical innovation:

It is necessary to tap new sources of funds in order to speed up rural construction…However, limited state investment can only be made in important construction projects The building of small farmland capital constru ction projects and service facilities should primarily rely on the funds accumulated from agricultural income and on rural labor (Xinhua 1983. K10).

Just as important as the similarities of the assumptions that went into the policies are the similarities in the histories of the evolution of the policies. In both the Soviet Union and in China, the government faced widespread disapproval of the agricultural policies preceding the reforms. War Communism in the Soviet Union and the commune system in China were both identified with low agricultural growth, low rural standards of living, and low agricultural productivi ty. In both countries, the rural population frequently went against official policy and implemented unsanctioned self-exploitation in production. Officials in both countries were faced with either trying to enforce generally unpopular and unsuccessful pol icies or officially validating the "experiments" implemented by rural direct producers.2

In the Soviet Union, Lenin described the attitudes of the rural producers concerning pre-NEP conditions thusly:

Under no circumstances must we try to hide anything; we must plainly state that the peasantry is dissatisfied with the forms of our relations, that it does not want relations of this type and will not continue to liv e as it has hitherto . . The state of affairs that has prevailed so far cannot be continued any longer (1960, vol. 32, 215).

Despite some concerns about the possibility that self-exploitation could provide an opening for capitalist exploitation to re-emerge, Lenin opted for the "pragmatic" approach of giving "peasants" what they wanted, the right to engage in self-exploitation. Stalin's rise to power put to rest the possibility that these pragmatic efforts might have become a Soviet experiment in an ancient road to communism. The rise of Stalinism brought forth a period of reversing the NEP reforms. forced co llectivization of rural production, and rapid decline in the role of self-exploitation in the Soviet economy. The recent attempt at "perestroika" or "restructuring" in the Soviet Union was an effort to return, at least in part, to the NEP reforms. includi ng the promotion of self-exploitation.

In China, the 1949 revolution opened the possibility for a rise in self-exploitation. Faced with a militant rural population anticipating significant improvements in social conditions and a power vacuum left by the flight of many landlo rds from rural areas, the Communist party implemented the Land Reform Act of 1950. Using a system to categorize the rural population that was explicitly based on class analysis, land was taken from feudal "landlords" (without compensation) and give n to their feudal "tenants" and to landless capitalist agricultural workers. Land owned by capitalist "rich peasants" was not redistributed in the land reform but capitalist exploitation was made illegal. Thus, the Communist party promoted self-exploitati on while simultaneously banning certain forms of capitalist exploitation.

The result was the creation of a large number of ancient "middle and poor peasants" engaging in self-exploitation on their newly won land. It was not, however, the goal of the party to foster the long-term growth of self-exploitation. C onsequently, the party leadership developed a long-term plan, starting in 1952, for a transition from self-exploitation to communal appropriation in the countryside. This policy ultimately resulted in the rise to prominence of the rural communes.

The procommune policy was not completely successful. By all indications, large numbers of rural producers resisted the transition to communal appropriation and, although the transition was not as violent as under Stalin, there was coerc ion. Rural producers forced to engage in communal appropriation turned from explicit resistance to a de facto work slowdown form of resistance. The process of communalization thus signified a growing political gap between the party and the "peasantry" and the inauguration of a period of productivity problems. These problems were directly related to popular opposition to communal appropriation and a desire by the rural producers to return to self-exploitation.

As in the pre-NEP period in the USSR, there were instances of "experimentation" by rural producers who took it upon themselves to make the transition from communal appropriation back to self-exploitation. Thus, while the party leadershi p held its third plenum in 1978, unsanctioned experiments with agricultural reforms arose in Anhui (Hama 1982, 6; Watson 1984, 90). According to Watson, "the pressures (for change) came from below and proceeded to force the pace of change thereafter" (198 4, 90). Official approval of the shengchan zeren zhi reforms came in stages, starting with Documents #75 in September 1980, continuing with Documents #1 in 1984 and 1985, and more recently appearing with Presidential Decree #12 in 1988. Several aut hors (Ash 1988; Hama 1982; Watson 1984) have described this process in detail, noting that official policy usually lagged behind already existing, regionally enacted changes. Support for self-exploitation and opposition to communal appropriation was not, however, unanimous. Some writers (Hartford 1985; Perry 1985; Zweig 1983) have indicated that the Chinese government may have forced some areas to enact the proancient reforms despite local opposition. But, overall, we see that struggles for self-exploitat ion by rural direct producers and affiliated local officials were decisive in the formulation of the economic reforms.

Does the Soviet experiment with self-exploitation provide us with any lessons for the possible future of the Chinese reforms? Why did the Soviet Communist party abandon the NEP and self-exploitation? NEP was rather short-lived for a num ber of complex reasons. While reliance on self-exploitation did result in increased agricultural production (Nove 1969, 110), the amount of marketed agricultural output did not increase fast enough to satisfy some elements in the Party (Dobb 1966, 161f., 214; Nove 1969, III). Further, owing to such factors as State monopsonies in agricultural purchases and monopolies in industrial product sales, rising agricultural supply, and deliberate policy measures to support State industrial "capital1st" enterprises , the terms of trade between agricultural and industrial commodities moved against agriculture (Dobb 1966, 162; Nove 1969, 95), threatening future growth.

No less important was the development of rural capitalism during the NEP, a result that Lenin and others had feared might arise out of the reforms:

Freedom of turnover and freedom to trade means commodity exchange between individual, small proprietors. All of us who have learnt at least the ABCs of Marxism know that this turnover and freedom of trade inevitably leads to the division of the commodity producers into owners of capital and owners of labour power, a division into capitalists and wage workers, i.e., the restoration of capitalist wage slavery (Rochester 1942, 131).

Lenin made an elaborate argument along these lines in The Development of capitalism in Russia (1960) where be argued that the re-emergence and growth of capitalism were an inevitable result of self-exploitatio n.3 In this logic, Lenin and Stalin were probably not far apart. It is, therefore, not surprising that this theoretical position came to dominate the debate over the role of the peasantry in the new society.

But didn't the party's own procapitalist sentiments and policies create the space for the re-emergence of rural capitalism? After all, the Communist party had the power to ban capitalist exploitation without ending self-exploitation, bu t instead the party-instituted State industrial "capitalist" enterprises copied the industrial practices of capitalist enterprises in other countries, and continued to laud the "technical" achievements of capitalism (something that remains common among Ma rxists).

The possibility that the growth of capitalism within these rural areas might not have been a simple consequence of self-exploitation, but might have been fostered by a whole array of political policies, cultural processes, and other soc ial conditions was, with only a few exceptions (such as Bukharin) not considered by the dominant intellectual and political leaders in the Soviet Union. It was Stalin who took this "party line" on self-exploitation to its most brutal conclusion. In the St alinist logic of the post-NEP period, self-exploitation had to be crushed in order to consolidate socialism. Ancient producers and many other rural citizens in the Soviet Union were violently forced into new economic relationships, with many losing their lives in the process.

The book is still being written on the Chinese reforms, but one can see certain similarities between China of the 1980s and the Soviet Union of the '20s. Agricultural production in China rose quickly after implementation of the reforms, only to level off later (Zhongguo Tongji Nianjian 1988, 216). Just as in the NEP period in the Soviet Union, the early reform period in China saw the terms of trade move in favor of agriculture as the "free market" was allowed to flourish, only to switch and move against agricultural commodities as government intervention was reasserted in an effort to stem inflation (Zhongguo Tongji Nianjian 1988, 792).

At the same time, the Chinese government has relaxed anticapitalist laws restricting wage-labor employment in the countryside. This and other factors have intensified the class contradictions in China, encouraging the growth in capitali st exploitation and reinforcing the old notions that self-exploitation inevitably leads to capitalist exploitation. This has contributed to anti-ancient ideas among Chinese intellectuals, including some who participated in the social movement quelled by t he Tiananmen massacre. Economist Han Bo (1988) reported: "The individual producers in the countryside now make, on average, more than college professors and most government officials. Many cadres in the countryside find it necessary to take guangxi (bribes) to supplement their State salaries. This is why many people would prefer to go back to the 'iron rice bowl system. "but many ancient producers view a return to the iron rice bowl system as a code word for the commune system, as well as general i ncome redistribution to achieve more income equality. Thus, many of these ancient producers have become even stronger supporters of the current pragmatist leadership that has promised no rollbacks in the reform process.

The Contradictory Class Dynamics of the Chinese Communes

What ancient producers fear most is a return to the days of the old commune. The necessary product in the communes was distributed to the members of the teams according to a workpoint system (Hartford 1985, 32; Howard 1988, 41f.; Le eming 1985, 34; Nolan and White 1979, 2~30; Oi 1985, 244). Mao Zedong and other radical communists advocated allowing the production teams a great deal of latitude in allocating work points. As Perkins points out, "left to their own devices

· . . production teams tended to favor more egalitarian forms of distribution" (1988, 609). Thus, the communes tended towards the communist principle of distribution where indivi duals received a portion of the necessary product according to need more than to work effort.

Planning and management of production were handled by nonproducers outside of the commune (Nolan and White 1979, 18f.). The allocation of work within the commune was determined by local cadres and members of the production team (Oi 1985 , 243, 246). One method of work allocation was to assign members of the same household to complete a particular task: "the allocation of certain amount of land to an individual or household on a long-term basis with this individual or household receiving all income after meeting certain obligations to the collective and the state" (Perkins 1988, 609). This particular arrangement presents interesting possibilities in terms of class. On one hand, household contracts may have provided conditions of existence for any number of class processes, including feudal, communal, and ancient, within the household site.4 On the other hand, direct producers who contracted with the collective to produce on a plot of land were typically the producers and first receivers of individually produced surplus product. A portion of the surplus product may have been transferred to the collective as a subsumed class payment in return for temporary use rights to the land, political protection for self-exploitation, and ot her conditions of existence of self-exploitation.

In this case, self-exploitation may have continued within the communes throughout the period when communal appropriation prevailed. If this was the case, then it may have been all the easier to make a transition from the prevalen ce of communal appropriation to self-exploitation with the later reforms.

The continued existence of "private plots" was another mechanism for the continuation of self-exploitation under the commune system. While the percentage varied between 1958 and 1978, each household was allocated a small parcel of land to cultivate privately. The output of these "private plots" could either be consumed by the household or, in some cases, sold in the local markets. As mentioned previously, this household-based production presents a variety of possibilities in class terms , only one of which is self-exploitation. In other words, the existence of "private plots" added to the contradictory class dynamic within the communes.

We believe that some portion-a significant portion of the output produced on these "private plots" was the result of ancient necessary and surplus labor. We further presume that the presence of this potentially ancient alternative for r ural labor lowered direct labor in communal production and undercut productivity on production teams. Simultaneously, self-exploitation may have supplemented communal income, potentially reducing communist necessary labor and increasing the relative surpl us product in the communist class process. The continued presence of an ancient alternative in rural China provided both the basis for transformation of the commune system and a model for the development of an ancient alternative throughout China.

During the late 1970s, a number of critiques of the commune system began to appear in the official Chinese journals. The workpoint remuneration system was viewed by many State officials and pragmatists within the Party as unsatisfactory as an incentive to productivity growth because of its tendency to displace the "socialist" principle of "to each according to his/her contribution" with the "communist" principle of "to each according to his/her need":

In practice it was difficult to tie income to performance under this work point system. Self-assessment of the quantity and quality of work done was not likely to produce an accurate measure of actual effort. But, mu tual assessment by all members of the team was also difficult. It could take up enourmous amounts of time and lead to great tension among village families because some would inevitably feel they were unfairly treated (Perkins 1988, 609).

The prevalence of this communist principle of distribution, coupled with a revealed preference by rural direct producers for self-exploitation over communal appropriation, dampened the productivity of communal direct producers. The result was a lower total product than might otherwise have been obtained; and communist production that was more susceptible to so-called external shocks, such as bad weather, rising input costs, sudden infrastructural bottlenecks, and so on. From the standpoint of many government officials and Communist party leaders, the reforms represented a way to bring about an increase in the social surplus, regardless of its class context, to eliminate some of the serious imbalances in the economy, particularly in terms of agricultural outputs and inputs, and to gain more long-term support for Party and State economic policies.

Nevertheless, it would be overly simplistic to assume that the changes embodied in the economic reforms were universally supported either by the Communist party or the rural population. Early in the reform period, the notion that only a portion of the communes needed to be reformed was promoted. Hinton (1983, 4) cites a young economist who concludes "a whole 30 percent had been doing badly, while the middle 40 percent had been holding their own."5 And resistance among the rur al cadre and rural producers to the implementation of the shengchan zeren zhi reforms has been well-documented (Perry 1985; Zweig 1983).

However, it must be assumed that many cadres and government officials understood that there was insufficient support for communal production and appropriation to motivate direct producers to make this system work and that support for se lf-exploitation remained strong among the vast majority of such producers. When the pragmatists called for reform in the rural incentive structures and the institution of a "responsibility system" (shengchan zhiren zhi) for agriculture in 1978, few analysts or, for that matter, Chinese officials could have predicted the outcome of those changes, but it was certainly believed that the new policy would be more popular among rural direct producers than the communal approach had been. The belief was th at the shift to self-exploitation would legitimate Communist party authority by granting rural producers something they wanted and, assuming these rural producers would become more productive if given the right to engage in self-exploitation, increase agg regate social wealth.

After Mao's death in 1976, the relative strength of the procommune radicals and proancient pragmatists within the Communist party appears to have shifted decisively in favor of the conservatives and their preferred policy of decentraliz ed markets and reversal of communalization in rural production. In particular, support for self-exploitation seems to have strengthened both within and outside the Party and resulted in the adoption of the reforms called da bao gan or "big contract " system.

Meanwhile, the process of dismantling the communal structures and abandoning communal production and appropriation was pervasive. By 1983, the ancient fundamental class process had largely displaced communal production and appropriation as the prevalent class process in rural China. The vast majority of rural producers had independently adopted the da bao gan system, which Hinton described as "render unto Caesar that which is Caesar's while I take the rest for myself' (Hinton 198 3, 6).

Da Bao Gan and Expansion in Self-Exploitation

We recognize that although rural direct producers rejoiced at the ending of feudal exploitation, they do not seem to have supported the growth of communal appropriation. Indeed, the fact that for the first few years following "liber ation" in 1949 self-exploitation was allowed to flourish is generally understood as contributing to popular support for the Communist party and the new postrevolutionary government.

Party officials, on the other hand, disagreed over what to do about the class nature of rural production. One faction, which we have defined as the pragmatists, advocated the gradual transformation of the ancient producers into communis t producers by using political, economic, and cultural mechanisms to entice rural producers into forming voluntary collectives that would facilitate modernization and take advantage of returns to scale. Another faction, which we have defined as the procommune radicals, argued that such an approach would not lead to voluntary collectivization but, rather, to a return of capitalist relations in the countryside. As an alternative, the radicals proposed a mass education campaign to alter the ancient pr oducers' class-consciousness in favor of the formation of collective farms, while simultaneously implementing policies that would establish such collectives by State fiat.

Communist party policies have sometimes favored the pragmatists. including policies supported by perhaps the most famous party pragmatist, Chou En Lai, and at other times favored the radicals. Thus what we see in postrevolutionary Chine se history is a policy towards self-exploitation that has been inconsistent. Self-exploitation has at times been supported by the central government and the Party and at other times has been out of favor.

In the 1960s self-exploitation was out of favor as radicals, led by Mao. successfully promoted the notion that self-exploitation represented "seeds of capitalism." Ancient producers were physically and verbally attacked by their neighbo rs: local cadres confiscated their property. It was believed that self-exploitation inevitably led to the increased polarity of rural incomes, the marginalization of many rural producers, and their eventual proletarianization. This view of self-exploitati on as a precursor to capitalist exploitation was based upon a teleological view of history and ignored the distinctive dynamic potential of self-exploitation.

Nevertheless, in spite of the recent social tensions and increasing income inequality, for many rural producers self-exploitation remains enormously popular. In addition, the pragmatists can point to the successful increase in social ou tput consequent upon adoption of their proancient economic reforms. For instance, the 1984 value of agricultural output grew by 15.6 percent over the 1983 level, even though net investment in agriculture fell (Zhongguo Tongji Nianjian: 1988, 214). This increase is even more dramatic when one considers the expansion in the variety of agricultural goods available. The increased aggregate output resulted in both a more varied and larger bundle of goods.

The shift to self-exploitation has allowed ancient producers to improve their standard of living: with a larger necessary and surplus product, ancient producers have been able to buy more consumer goods. The national average nominal per capita income for China's rural population more than trebled between 1978 and 1987 (Zhongguo Yongji Nianjian: 1988, 823). Per capita consumption of grain almost doubled, pork consumption more than doubled, and poultry consumption more than quadrup led between 1978 and 1987 (Zhongguo Yongji Nianjian: 1988, 825). And as ancient producers enjoyed greater material prosperity, sentiment in favor of self-exploitation, and of the pragmatist leadership that had promoted self-exploitation, was reinfo rced.

What are some of the specific reforms that were instituted by the pragmatist leadership and how have these reforms supported the growth in self-exploitation? One set of reforms is embodied in the da bao gan or "big contract" syst em.6 Under the da bao gan rural direct producers were granted individual use rights to the land and other means of production, acquired allocative control of their surplus product, gained the right to engage in market exchanges, and were allowed to negotiate futures contracts with the government for delivery of specific products at negotiated prices.7

At the same time, the government continued to purchase a relatively limited share of output by requiring ancient producers to sell a fixed amount of their output at negotiated prices to the government. Thus, ancient producers sold their output in what has been described as a "dual-market" system of circulation: one portion of ancient output was sold on the "free" market and the other portion was sold to the State. The portion of ancient output that was sold to the State, although sold at lower than "free" market prices, provided ancient producers with a guaranteed income, no matter what future market conditions might be. As it has turned out, this arrangement has benefited many ancient producers by reducing market risk, as is gene rally the case in futures contracts.

The total output received by the government initially increased after implementation of the reforms. By 1986, the State greatly reduced its contractual purchases of agricultural output from rural direct producers. This output included p roducts that were resold at subsidized retail prices. The government did this in order to lower government expenditures and balance the budget. On one hand, this increased the market risk faced by ancient producers, placing them more at the mercy of priva te demand. On the other hand, some ancient producers benefited due to the rise in retail prices as government-subsidized products became less available.

At the same time, the total public outlay for infrastructure and social services declined with institution of the reforms. For example, Hinton (1988, 42f.) reported the deterioration of basic infrastructure in the famous Dazhai village. The ancient producers did not engage in social investment to anywhere near the extent that had been carried out by the communes. In part, some have argued, this was owing to insecurity among the ancient producers about the long-term survival of the da bao gan policy. Fearing yet another policy reversal that might turn against self-exploitation, many ancient producers chose not to invest in agricultural infrastructure or to fund social services out of their privately appropriated surplus. The long- term consequences of this reduction in social investment may include an increase in income inequalities, a lower quality and quantity of many social services (such as health care and education), and reduced social insurance funds to protect direct produce rs and other citizens from natural disasters or other catastrophes.

Reforming Da Bao Gan

The initial material success of the da bao gan system contributed to even greater approval of the reform process among the party leadership. Between 1984 and 1988, a series of policy changes were initiated by the State to consolidate and reinforce the da bao gan system and to encourage greater confidence among the ancient producers in the State's long-term commitment to self-exploitation. In 1984, the "Circular for the Central Committee of the CCP on Rural Work Dur ing

1984," also known as 1984 Document #1, called upon the Party to "stabilize and improve the output-related system of contracted responsibilities" (Xinhua 1984. 133-38). More specifically, it extended the length of land contracts t o at least 15 years, allowed for the transferal (but not sale) of land use rights, permitted the free exchange of nonland means of production, and provided for the compensation of ancient producers for any investments they may have made on their contracte d land. And further, Document #1 permitted market exchange of noncontracted agricultural output, recommended that purchase quotas remain unchanged for several years, and ordered an end to "irrational assignment of expenses to peasants" (Xinhua 1985 a, 138). These "expenses" were subsumed class payments to the State for use of State-owned means of production.

In 1985, the CCP issued another circular on rural reforms, commonly known as the 1985 Document #1 (Xinhua 1985a, kI-7). In the 1985 Document #1 ten specific policy changes were made, which included the following:

1. The end of mandatory quotas, except for "certain strategic products," such as grain and cotton, and the creation of free markets for the exchange of most agricultural commodities.

2. Greater State investment in road construction and maritime transportation in rural areas.

3. More liberal lending policies for rural borrowers, primarily ancient producers.

4. The declaration that the "policies of the contracted responsibility system with remuneration linked to output and the individual economy will remain untouched for a long time to come.

5. A call for the expansion of rural-urban trade.

6. The permission for certain rural direct producers to enter into foreign trade contracts.

Thus, by 1985, with only a few exceptions, the State openly endorsed free exchange of agricultural output under the direct control of ancient producers. Then, in 1988, President Yang Shangkun issued a decree further relaxing restriction s on land use transfers, officially permitting the direct sale of land use rights among rural direct producers for the first time (Xinhua 1988, 35).

On the other hand, the expansion in rural free markets where ancient producers could sell their products has contributed to inflation and intensified income inequalities. According to Xiong Xing Mei, deputy director of the Institute of International Economics at Nankai University, inflation rates in the 1980s have averaged over 20 percent per annum, although the officially published rates put out by the central government continue to understate this rate. While ancient producers have, i n general, benefited from the reforms, price instability and increasing inequality may foster opposition to these reforms and to self-exploitation. As has been previously indicated, such sentiments were expressed by many of those who participated in the p ro-democracy movement demonstrations in Tiananmen Square.

As part of its anti-inflation policy implemented in 1985, the Chinese government, recognizing the destabilizing potential of inflation, has moved to slow price increases for agricultural products. In addition, as previously stated, the State has greatly reduced public investment, including the planned increase in agricultural investment. This has negatively affected many ancient producers who, for the first time since the reforms were started, may be caught in "price scissors" where the ir output prices are held down by government price controls even as their input prices continue to rise.

In addition, tensions between those who support self-exploitation and those who oppose it continue, although the opponents have become somewhat quieter in the aftermath of the Tiananmen massacre. In an odd twist of fate, the political c risis created by the Tiananmen protest and subsequent massacre may have strengthened the hand of the proancient pragmatists. This is due to the increased importance of ancient producers as a core support group for the Communist party. The Party is hardly in a position to alienate another segment of the population, particularly a segment that is so important to rural China where 80 percent of the population resides.

We have argued that from 1978 to the present, conditions for the existence and expansion of self-exploitation have been created throughout rural China, and to a lesser extent in urban China (where self-exploitation remains largely perip heral to State "capitalist" enterprises). In part, this was caused by the active and passive resistance of the rural direct producers to communal production and appropriation-and their support for self-exploitation. The Party's need for legitimization and the sentiments of these rural direct producers formed an important basis for establishing the proancient reform policies. The conditions that fostered the reforms have no doubt been reinforced by the Tiananmen massacre, and there is no reason to believe that the Communist party will turn against self-exploitation anytime soon.

Thus, the case of China provides an excellent counterexample to the belief that self-exploitation is a relatively insignificant and inherently unstable way of life existing in the interstices of feudal or capitalist societies. In the ne xt section of the paper, we challenge the claim that the growth of self-exploitation inevitably signals the rise of capitalist exploitation and is therefore incompatible with the building of a communist society. In making this argument, we hope to send a warning to Marxist theorists about the dangers of operating out of a prejudiced notion of the path to a society without exploitation. Whether a social formation begins as primarily capitalist. feudal, ancient, or something else, it is necessary to do the work of theorizing how such a society might be reproduced or transformed. The theorist cannot be freed from the necessity of exploring the unique political, cultural, and economic changes that might move such a society towards communism.

Shengchan Zhiren Zhi and Socialism

It is our belief that the pro-ancient pragmatists were not being disingenuous when they argued that self-exploitation or "individual economy was not incompatible with socialism. We assume that these pragmatists within the Party, the int elligentsia, and other spheres of social life genuinely believe that by promoting expansion in self-exploitation. they are simultaneously promoting the kinds of social changes necessary for an eventual transition to a communist China. In other words, we d o not believe that our theoretical claim that there can be an ancient road to communism is unique.

We argue, rather, that unlike most of the theoretical and political arguments prevalent in Marxism and still popular among many Chinese radicals and some of the pragmatists, the adoption of self-exploitation need not be viewed as a "sho rt-term" mechanism for stimulating greater social output in order to modernize and expand the State "capitalist" sector-which is viewed as the more direct route to communism-and a mechanism that many believe is only a backdoor way of promoting capitalism. We do not accept the notion that the State-owned and

-operated enterprises prevalent in urban China, enterprises within which wage-laborers produce surplus-value that is appropriated by a set of nonlaborers selected by the State (and/or Party), are necessarily more consistent with communi st transformation than are enterprises within which self-exploitation prevails.

Although the details of this argument are presented elsewhere (see Gabriel 1989), let us present at least the basics. In order to bring about a transformation to a society within which communal production and appropriation prevails, one might assume that it is necessary for direct producers to become accustomed to working together, to cooperating with one another. Marx believed that such cooperation might be fostered within capitalist enterprises. However, this need not be the case. Cap italism does not necessarily foster cooperation. On the other hand, it is also not out of the question that ancient producers might learn to cooperate with one another.

For example, ancient producers in China might form different types of partnership arrangements, within which they would continue to individually produce and appropriate surplus products but collectively provide for certain conditions th at are necessary to such self-exploitation. Ancient producers in a partnership might collectively lease land and/or other means of production from the State (or combine their already individually leased land and/or other means of production). By doing so, these ancient producers might take advantage of returns to scale, utilizing technology that might be too costly for individual ancient producers to afford. A number of Chinese commentators (Kong 1985, k3-7; Lin 1984, 91-93. Xinhua 1985b, k23; Yong , Xiao, and Xu, 1984, k5) have focused on the recent formations of "new economic combinations" or xinjingji lianhe as examples of such a process.

If self-exploitation promotes such cooperation, or results in other changes that could create conditions of existence for communal production and appropriation-such as the build-up of a social infrastructure, changes in attitudes toward private and communal forms of appropriation wherein "bipolar" forms of private exploitation are considered unethical and forms of appropriation within which the direct producers appropriate the surplus fruit of their individual and/or collective labor ar e ethical, or greater direct producer control over the invention and innovation of productive technology-then self-exploitation may very well serve as a catalyst in advancing an eventual transition to communism. However, this is only a possibility and cer tainly not inevitability. There is no a priori reason to presume that direct producers granted the right to engage in self-exploitation should desire a transition to communism anymore than it should be presumed that such direct producers would desire to e ngage in capitalist, feudal, or any other nonancient form of private appropriation.

It is clear that some members of the Communist party believe that ancient producers will learn to cooperate more with each other on a voluntary basis (Lin 1984, 91-93; Xinhua 1985a, k5). This has been quite explicitly stated by c ertain supporters of the da bao gan reforms. It is hoped that such voluntary cooperation and voluntary social investment will promote socialism and a socialist consciousness in a way that the imposition of communal production and appropriation did not. This remains to be seen. However, it is important to consider the possibility that such could be the case.

The form of communist development that might arise out of these experiments in self-exploitation, market reforms, and changes in incentives would likely be very different from what is typically envisioned by Marxian and non-Marxian theo rists, particularly since the vision most theorists have of advanced capitalism is considered by them to be a precondition for communism. On the contrary, the ancient road that Chinese leaders have chosen (or been forced to choose) may be a healthy approa ch to the issue of transition-an approach that is based upon experimentation and nonessentialism.


1 We define socialism as a transition between the existing class processes to a time where communist class processes predominate in production (see Resnick and Wolff 1988).

2Gabriel interviewed direct producers in the Xishuangbanna Prefecture, Yunnan Province, November 1983. after the start of the nongye shengchan zeren zhi reforms but prior to the dismantling of the

communes. A number of producers admitted that there was some shirking under the communal form of production.. Work slowdowns under the communal system appeared to be relatively frequent and

motivated by discontent with the system in general as well as specific gripes with local officials.

3Fraad. Resnick, and Wolff (1990) have contributed an interesting and provocative intervention into this debate on the class dynamics within households. They have clearly demonstrated the necessity of doing a class analysis o f households in order to make sense of the complex forms of exploitation that may occur within the household site, rather than presuming that households and particular types of exploitation are linked in a one-to-one form of correspondence or that househo lds are necessarily devoid of exploitative relations.

4An editor of the Chinese journal, Social Sciences in China, set comparable figures at 25.50 to 60, and 20 percent respectively in 1981 (Zhang 1982, 129). Watson (1984,597) cites Du Rensheng for dividing the communes i nto equal thirds.

5The da bao gao is also known as the bao gan dao hu or "contract responsibility down to the household" system. We have chosen to use da bao gan as it captures the comprehensive nature of the transf eral of production responsibility to the rural producers.

6Given the scope of this paper, we will not describe the details of the da bao gan system. For those interested in such a discussion, we suggest Lin (1982, 1983, and 1984), Rartford (1985), and Watson (1984).