After the revolution of 1949, the Chinese Communists resorted to state capitalism to force the country’s industrialisation. The consequences were disastrous, writes Neil Faulkner

In the summer of 1949, the Chinese Communist Party (CCP), at the head of the People’s Liberation Army (PLA) it had created, entered Beijing and took power. The Nationalist leader Chiang Kai-shek had fled to Taiwan as his armies disintegrated at the end of a four-year civil war.

Mao Zedong, the CCP leader, proclaimed a ‘socialist revolution’ and the foundation of a ‘people’s republic’. Many across the world accepted these claims, and Maoism would become the ideological inspiration for a generation of activists in the 1960s and 70s.

That the events of 1949 were a genuine revolution is beyond question. A millions-strong peasant army had overthrown the old ruling classes, broken the power of Western imperialism, and created the basis for a new social order.

Chiang Kai-shek had represented landlords and capitalists. His army had been riddled with corruption. Many of his soldiers had ruthlessly plundered the peasantry in areas they controlled. And the Nationalists had failed in the primary task of any state: the defence of national territory against foreign enemies.

At the end of the Second World War, the Nationalists appeared stronger than the Communists: they controlled more territory and their army was equipped and supplied by the US. But Nationalist authority was a like a film laid across the top of Chinese society.

The Communists, on the other hand, were socially embedded in their ‘Liberated Zones’. The PLA was highly disciplined and did not plunder the peasantry. The CCP limited the rents charged by landlords. The Communists were powerful in fighting warlords, Nationalists, and Japanese alike.

Mao’s appeal was that he was both an effective nationalist and a social reformer. The Communists attracted middle-class support for their fight against imperialism. They attracted peasant support because they protected the villages from predatory soldiers, landlords, and officials. The result was that hundreds of thousands of Nationalist troops simply deserted to the Communists during the Civil War.

But this did not mean that 1949 was a socialist revolution. It did not even mean it was a revolution from below. It did not involve a mass movement of workers democratically organised and acting for themselves to bring about their own emancipation.

On the contrary, the CCP had virtually no working-class members at all. At the end of 1926, two-thirds of party members had been workers. But this had collapsed to 10% in 1928, 2% in 1930, and almost zero thereafter. By 1949, the CCP was a party of middle-class leaders and peasant followers.

How had this situation arisen? In 1927, the First Chinese Revolution had been drowned in blood when Chiang Kai-shek’s Nationalists butchered 50,000 Shanghai workers and destroyed the embryonic Chinese labour movement (see MHW 78).

Mao and a group of about 1,000 Communists survived only by retreating into a remote mountain area. They operated as a guerrilla army and slowly expanded the size of their ‘Chinese Soviet Republic’. But they then came under sustained Nationalist military attack.

Threatened with extinction, in October 1934 Mao’s group set out on its famous ‘Long March’, taking it deep into China’s rural interior. It was an epic of human endurance. Between 80 and 90,000 people set out; a majority died en route, some left to set up new ‘red bases’ on the way, and only around 4,000 completed the journey a year later.

By now, Mao was undisputed leader, and the CCP had ceased to be a working-class party. Re-established in one of the most backward parts of China, cut off from all the major cities, the CCP’s character as a movement of middle-class leaders and peasant guerrillas became fossilised as a permanent change.

The CCP leaders were not self-serving politicians. They were revolutionaries who made huge sacrifices for a cause they believed in. But, in the absence of a revolutionary working-class movement able to hold them to account, they were not socialist revolutionaries.

Unlike revolutionary workers, who think and act collectively, revolutionary peasants remain essentially individualists focused on their own household and farm. They will follow the lead of urban revolutionaries if it means a chance to cut the rent or seize the land.

But they cannot organise themselves into a national force able to lead a struggle for wider social transformation. So the CCP and the PLA were dominated by their leaders. The level of consent and enthusiasm was high; but it was not democracy.

As the PLA advanced on major cities, it issued proclamations saying: ‘It is hoped that workers and employees in all trades will continue to work and that business will operate as usual.’ It also instructed government officials and police to remain at their posts. There was to be no urban revolution that might challenge the CCP leadership.

China in 1949 was one of the poorest countries in the world. It was much more backward compared with the advanced industrial countries than Russia had been in 1928, when Stalin assumed full control.

China was also threatened by imperialism. The US had backed the Nationalists. The Cold War had just begun. Mao’s victory had been a huge shock to America’s leaders. The Korean War broke out just a year after the PLA entered Beijing.

To safeguard their national independence, therefore, China’s leaders had to industrialise and militarise as quickly as possible. Starting from a low economic base meant high levels of exploitation to generate the surpluses needed.

Private capitalism was too weak to accomplish this. Foreign capitalism was hostile. Only state capitalism could provide a mechanism for rapid capital accumulation in the new China.

This meant the transformation of the CCP leadership from nationalist revolutionaries into a bureaucratic ruling class. They had to become political embodiments of capital accumulation.

During the 1950s, about 25% of national output was invested in heavy industry and armaments, whereas living standards barely increased at all.

To build well means to build on solid foundations. But China’s backwardness made this very slow. China’s leaders wanted a short-cut to industrial and military power.

They lacked technology and infrastructure, but they had labour in abundance. Perhaps they could substitute the latter for the former? This was the genesis of the disastrous ‘Great Leap Forward’ (1958-1961).

Grossly inflated targets were set for agriculture and industry. Land was forcibly collectivised and up to 25,000 peasants were grouped together in ‘people’s communes’ – essentially, state-run agribusinesses. ‘Back-yard steel furnaces’ were set up. Mass campaigns were launched to increase hours and tighten work discipline

But factory managers lied about output and caused chaos. Maintenance was neglected and machinery broke down. The backyard furnaces simply wasted raw material. Workers were exhausted by long shifts. Peasant productivity slumped.

By 1961, famine again stalked northern China, desperate peasants were fleeing their villages, and armed rebellions had broken out in at least two provinces. It is estimated that the Great Leap Forward set China back a decade.

Mao was marginalised within the Chinese leadership for his role in promoting the policy. In 1966, he attempted a come-back by launching the ‘Cultural Revolution’.

This involved mobilising popular forces – especially young Chinese enrolled as ‘Red Guards’ – to attack Mao’s enemies in the bureaucracy.

Local officials and intellectuals were denounced as ‘capitalist-roaders’ and ‘counter-revolutionaries’, and tried for their ‘crimes’ at mass kangaroo courts. The personality cult around Mao became fanatical. His Little Red Book was brandished like holy text.

When dictators attack one another in public, they risk unleashing forces they cannot control. Within a year, China was in ferment. The educational system had effectively shut down. Many towns were divided between armed factions supporting rival officials. Workers were taking strike action. The party-state apparatus was increasingly paralysed.

The PLA was brought in to suppress the growing disorder. The old officials returned to their posts. Millions – around 10% of the urban population – were deported to the countryside. Sometimes the repression was bloody. In the southern province of Guangxi, an estimated 100,000 were killed and most of the town of Wuzhou was destroyed.

The CCP did not re-establish full control over China until 1971. By then, Mao was ailing. When he finally died in 1976, a full-scale struggle for power erupted inside the leadership.

The hard-line Maoists – led by the ‘Gang of Four’ – found themselves unpopular, isolated, and rapidly outmanoeuvred. They were purged and control passed into the hands ‘modernisers’ led by Deng Xiaoping.

In 1978, the modernisers launched an ambitious programme to transform the Chinese economy. It had two main features: opening up China to foreign investment and technology; and reducing state control of the economy in favour of ‘market forces’.

Chinese backwardness had hamstrung Maoist state capitalism. The great experiment in capital accumulation through propaganda, will-power, and ‘socialist labour’ had failed. China’s rulers now turned to neoliberalism as an alternative.