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CONTENTS

Vol. 13, No. 3: July-September 1981

Peter Nolan and Gordon White - Distribution and Development in

China

Victor Lippit - The Peoples Communes and Chinas New

Development Strategy

Carl Riskin - Market, Maoism, and Economic Reform in China

Edward Friedman - The Original Chinese Revolution Remains in

Power

Ralph Croizier - The Thorny Flowers of 1979: Political Cartoons

and Liberalization in China Vera Schwarcz - How Lu Hsun Became a Marxist: Conversations

with Yuan Liangjun

Barbara H. Chasin - Human Adaptation and Population Growth by

D.S. Kleinman / A Review

Miriam Lo-Lim - Five Books on World Hunger / A Review

BCAS/Critical Asian Studies

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CCAS Statement of Purpose

Critical Asian Studies continues to be inspired by the statement of purpose

formulated in 1969 by its parent organization, the Committee of ConcernedAsian Scholars (CCAS). CCAS ceased to exist as an organization in 1979,

but the BCAS board decided in 1993 that the CCAS Statement of Purpose

should be published in our journal at least once a year.

We first came together in opposition to the brutal aggression of

the United States in Vietnam and to the complicity or silence of

our profession with regard to that policy. Those in the field of

Asian studies bear responsibility for the consequences of their

research and the political posture of their profession. We are

concerned about the present unwillingness of specialists to speak

out against the implications of an Asian policy committed to en-

suring American domination of much of Asia. We reject the le-

gitimacy of this aim, and attempt to change this policy. We

recognize that the present structure of the profession has often

perverted scholarship and alienated many people in the field.

The Committee of Concerned Asian Scholars seeks to develop a

humane and knowledgeable understanding of Asian societies

and their efforts to maintain cultural integrity and to confrontsuch problems as poverty, oppression, and imperialism. We real-

ize that to be students of other peoples, we must first understand

our relations to them.

CCAS wishes to create alternatives to the prevailing trends in

scholarship on Asia, which too often spring from a parochial

cultural perspective and serve selfish interests and expansion-

ism. Our organization is designed to function as a catalyst, a

communications network for both Asian and Western scholars, aprovider of central resources for local chapters, and a commu-

nity for the development of anti-imperialist research.

Passed, 2830 March 1969

Boston, Massachusetts

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Vol. 13, No. 3/July-Sept., 1981 Contents

Peter Nolan and Gordon White 2 Distribution and Development in ChinaVictor Lippit 19 The People's Communes and China's New Development Strategy

Carl Riskin 31 Market, Maoism and Economic Reform in ChinaEdward Friedman 42 The Original Chinese Revolution Remains in Power

Ralph Croizier 50 The Thorny Flowers of 1979: Political Cartoons and Liberalization in ChinaVera Schwarcz 60 How Lu Xun Became a Marxist: Conversations with Yuan Liangjun

68 List of Books to ReviewBarbara H. Chasin 68 Review of D.S. Kleinman, Human Adaptation and Population Growth

Miriam Lo-Lim 70 Five books on world hunger!Review72 In Memory of Peggy Duff

ContributorsBarbara Chasin: Montclair State College, Upper Montclair, Miriam Lo-Lim: Department of Geography, Mankato StateNew Jersey. University, Mankato, Minnesota.Ralph Croizier: History Department, University of Victoria, Peter Nolan: Jesus College, Cambridge, England.Victoria, British Columbia, Canada. Carl Riskin: Department of Economics, Queens College, andEdward Friedman: Associate Staff Director, Subcommittee on East Asian Institute, Columbia University, New York.Asia. Committee on Foreign Affairs, U.S. House of Rep Vera Schwarcz: History Department. Wesleyan University,resentatives. Washington, D.C. Middletown, Connecticut.Victor Lippit: Department of Economics, University of Cali Gordon White: The Institute of Development Studies at thefornia, Riverside, California. University of Sussex, Brighton, Sussex, England.

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Distribution and Development in China

by Peter Nolan and Gordon WhiteThe Maoist Legacy

In this paper* we intend to examine the changes in ChineseCommunist Party (CCP) policies concerning rural distributionsince the death of Mao Zedong, with particular attention to therelationship between the pursuit of egalitarian socialist andeconomic growth objectives in the contextof a specific case ofstate socialist development. A serious consideration of the newstrategy must first give some account of policies implementedduring and after the Cultural Revolution and their impact onfarm output and rural inequality. Only then can we gain a clearidea of the degree to which policies have in fact changed and therelationship of these changes to problems experienced duringthe Cultural Revolution decade of 1966-1976.Current Chinese pUblications portray a uniformly bleakpicture of the rural situation in this "disastrous decade. " Theyargue that ultra-egalitarian policies were widely practiced withlittle regard to their detrimental consequences for peasant production incentives. We have argued elsewhere that the reality ofrural distribution policies during this period was more complexthan this retrospective condemnation would allow. I Correspondingly, we feel that present rural policies do not constitutesuch a radical break with preceding policies as is frequentlysuggested, either in their conception or still less in their impacton the grass roots. This is not surprising. Since the disastrousexperiments of the Great Leap Forward (1958-9) and the subsequent collapse of farm OUtput, 2 all sides of the Chinese politicaldebate have been more circumspect in their approach to agriculture than to other sectors. Agriculture still produces thelion's share of China' s wage goods and export earnings. Consequently, radical organisational changes which might have adverse effects on farm output have been viewed with suspicion.In contrast to the enormous institutional changes that occurredfrom 1949 to 1958, the whole period since the early 1960sappears as a time of relative stability in the rural organizationalstructure.Was the performance of farm output during the CulturalRevolution decade as poor as is now being suggested in theChinese press? It appears true that by the late 1970s farm outputper capita had risen little compared to the 1950s (see Table l)and in certain sectors (for example, cotton and oilseeds) waslower than 1957.

The main advances have come in pork and sugar-canoutput . With the exceptionof grain, average consumption levelof the main farm products are still very low 3 and it is unlikelthat this has altered significantly since the 1950s. MoreoverChinese farmers seem to have been working harder to produceroughly constant annual output per worker; earnings per laborday are reported to have fallen by one-third between 1957 an1977. 4However, some important qualifications need to be madto this negative assessment. First, China's population growtcontinued at a rapid pace until the mid-1970s. On the mosoptimistic assumption, it was not until the early 1970s that thnatural rate of population increase (apart from the exceptionainterlude of the early 1960s) fell below 2 percent per annum, anit has only fallen significantly below this in the latter part of thdecade. s Success in reducing the pace of popUlation growth isvaluable legacy bequeathed to the post-Mao regime. Simply tkeep up wi th a popUlation growth of 2 percent or more is a majo

* A slightly different version of this paper will appear in China' s New Develoment Policy. edited by Gordon White and Jack Gray, published by AcademPress.I. Peter Nolan and Gordon White, "Socialist development and rural inequalitthe Chinese countryside in the 1970's," Journal o/Peasant Studies, Vol. 7, N1 (October 1979), pp. 3-48.2. In Guangdong province , for example, the indexofoutput (physical) (I 957100) stood as follows in 1960: grain=80, sugarcane=75, peanuts=5pigs=59, draught animals = 84: written data given to the Queen ElizabeHouse, Oxford, China Study Group, June 1979 (hereafter Trip Notes).3. The average per capita daily intake of calories in the mid-1970s was etimated to be only about 2100, of which over 80% came from grain: H.J. Groand J. A. Kilpatrick, "Chinese Agricultural Policy" in Joint Economic Commtee, U.S. Congress, Chinese Economy Post-Mao (Washington, D.C.: U.Government Printing Office, 1978), p. 645. The average per capita daily calorintake in 38 low-income countries in 1977 was estimated to be 2052: WorBank. World Development Report 1980 (New York: Oxford University Pres1980), p. 152.4. Zhang Liuzheng, "Developing agricultural production; transfonning tpeasants' living standard." NYJJWT.No. I. 1980.5. 1.S. Aird, "Population growth in the People's Republic of China. " in U.2 Congress, Chinese Economy Post-Mao, p. 467.

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Table 3Distribution of Collective Income Available fo r Consumption in No. 7 Production Team,

Xintang Brigade, Tangtang Commune, Fogang County, Guangdong Province, 1978 Mean house- Mean no. of Mean ratio of

Range of income No. of No. of No. of labor hold size labor powers labor powers to(yuan p.c.) households people powers (persons) per household household size3 I-50 (lowest = 36) 3 16 451-70 14 79 2971-90 6 24 1391-110 2 7 5110 (highest = 162) 3 5 5Source: Trip Notes of the authors.

limited.The important lessons learned by all sections of the Chinese leadership from the utopian experiments of the Great LeapForward have also influenced official policies on rural distributive issues. No systematic attempt has been made to revive theradical egalitarian measures of the Leap. but it is true that atcertain times and in certain areas the Party did attempt tointroduce more radical policies on income distribution. Formost of the period since the Leap. leftist leaders had to acceptthat it was quite unrealistic to try to eliminate rural inequalityand that the most they could hope to do was to "restrict" suchinequality.9 Specific policies aside. however. ever since theestablishment of collectives and the abandonment of predominantly pri vate ownership of the means of agricultural productionin the mid 1950s. there have been important institutional factorshelping to constrain intra-village differentials in income andstandard of living. Income distribution by the collective to itsmembers has been primarily based on the number of "labordays" (or work-points) earned per worker. As labor productivity alters. so the value of the" labor day" alters for all membersalike-in the Chinese phrase, "the boat rises (or falls) with thewater level." Moreover, a portion of grain consumption hasbeen distributed "according to need" on a per capita basisusually differentiated by age. 10 It was quite common during theCultural Revolution decade for poor households to consumemore grain than they had earned in workpoints, though theextent and terms of such "overdrawing" (chaozhi) was a contentious issue.However, in spite of such constraints on differentiationwithin the village, important inequalities persisted, even withinthe smallest unit, the production team.*While the private sectorwas subject to periodic attacks, it remained through the CulturalRevolution decade. For example, Jiading county (in Shanghaimunicipality) was a focus of radical activity in the late 1960sand early 1970s, yet the free market in its main town was closedonly for 2-3 weeks at the beginning of the Cultural Revolutionin 1966. Since then, various restrictions had limited the volumeof transactions, but the market was by no means eliminated. The

*The average size of the team in a 1979 survey was 193 people and 41households':'" see footnote 10. 4

5.3 1.3 1:4.05.6 2.1 1:2.74.0 2.2 I: 1.83.5 2.5 I: 1.41.7 I.7 I: 1.0

private sector also constituted an important, if fluctuating, shareof peasant income during this period. A 1979 survey of 339brigades, for example, showed that the private sector (still in theearly stage of expansion under the new policies) already contributed 25-30 percent of total household income. I I Our studyof the 1970s suggests that those households with more labopower or greater skills were better placed to benefit from privateeconomic activity than their weaker neighbours 12-and thissuggests a hypothesis that greater scope for private economywidens inter-household inequalities.Except for cases where the value of grain distribution"according to need" exceeded a household's collective earnings, all collective income has been distributed according toworkpoints throughout the I960s and I970s . During the culturalRevolution important changes in an egalitarian direction occurred in the method of workpoint allocation. There was a pronounced tendency toward the Dazhai method, i.e. workpointsallocated to the person and recorded on a time-rate basis, ratherthan allocated according to task and recorded on a piece-ratebasis. However it should be noted that even during the CulturalRevolution it was quite common to combine these two methodsusing each for different tasks. Under the time-rate system, thegaps between workers seem generally to have been quite narrow; most adult male workers probably earned between 8-10workpoints per day's labor.While the span of collective earnings between individuafarm workers may have been narrow, the differentials in average per capita incomes between households within a given teamwere still substantial. The production team shown in Table 3 hadchanged its method of workpoint allocation little from that usedbefore 1976. The critical factor in household income differen

9. For a discussion of policies on rural distribution before the death of Mao. seNolan and White. op. cit.10. A national survey of 339 production brigades in 1979 found that in 19776.5'7r of the members' grain ration was "according to need." In 1979. thfigure had declined to 70%: People's Communes' Management Section of thDepartment of Agriculture, "A survey of income distribution in 339 brigades ithe people's communes in 1979." NYJJWT, No.9, 1980, p. 29.II . Ibid.12. Nolan and White, op. cit.. pp. 25-26.


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tials was obviously the worker-dependent ratio. The degree offluctuation in relative incomes under such a system is large ashouseholds move into different phases in the family cycle.However at any point in time differentials in per capita collective incomes are large even with relatively small differences inearnings per worker.Let us turn now to differentials between teams or brigadeswithin communes. During the Great Leap Forward, the formation of large communes amalgamating many collectives led todrastic diminution in inter-collective income differentials as theaverage value of the labor day was equalized between unitsunder centralized commune-level accounting. The dissatisfaction expressed by better-off collectives was enormous. Theearly 1960s saw a reversal first to brigade and then to team levelaccounting and income distribution-each unit retaining theextra income or "differential rent" accruing from favored location as an incentive to production. In essence, thjs policy wascontrived to govern the official approach to inter-unit differentials throughout the 1960s and 1970s.Were there any special factors that tended to constrain local(i.e., intra-county, intra-commune) differentials during 196676? In theory alI economic relations between local unitsthroughout this period were to be on the basis of "equivalentexchange" and generally it appears that this was how exchangeswere handled. Simply on account of the similarity of localgeographical and economic conditions, it might be expectedthat there would be certain limits to local inter-unit incomedifferences. Moreover, poorer units in fast growing areas haveprobably benefitted from the spin-off effects of brigade andcommune-level activities, notably in the supply of welfare facilities but also in the provision of relatively highly-paid non-farmemployment. However, even at the local level, income differences could widen cumulatively on the basis of differentialrents. There was radical pressure during the Cultural Revolutiondecade, for example, to enforce the amalgamation of units ofdifferent income levels or to directly redistribute the resourcesof richer units to their poorer neighbors. These pressures arenow condemned, but, as we shall argue later in more detail, theywere intermittent and limited in their impact-adjuncts to abasic set of policies which did not strongly interfere with localdifferentials-rather than a dominating feature of rural policyduring 1966-76.Data are meager but they suggest the following picture oflocal spatial differentials within a given county. The dimensionof inequality between average income levels of communesseems to be quite small. For example, in 1978 the average percapita distributed income (APCDI) in Jiading county (Shanghai) was 244 yuan. The county contained 19 communes ofwhich the APCDI in the highest was only 121 % and that of thelowest 88% of the average for the whole county. Fourteen of the19 were in the range of 230-260 yuan (Trip Notes). A similarpicture emerged from data on Fogang county, Guangdong, in1978. Each commune encompasses a range of conditions, sothat the range of income between the constituent units could bequite large, even at the end of the Cultural Revolution decade.For example, in 1975 in Chengdong commune in Jiading county, out of a total of 157 teams, the lowest had an APCDI of 98yuan and the highest 219 yuan. However, 83% of the teams fellbetween the relatively narrow range of 120-179 yuan (TripNotes). In Chengdong commune the range between teams within brigades generally was not large. In 1978 there were 16brigades with an average of 9.8 teams in each. In the brigade 5

.with the largest range (83 yuan) in 1978, the APCDI in thehighest team stood at 185% of the lowest. In only one otherbrigade did the income of the highest team exceed that of thelowest by more than 54 percent. Data on local differentials,however, are extremely fragmentary and should be interpretedwith much greater caution than data on broad regionaldifferentials.Turning to the latter, at the broad regional level, there islittle doubt that differentials in gross income per farmer widenedbetween the more and the less well placed areas in the I960s and1970s, as a relatively large share of new farm inputs werepurchased by units in areas which were already rich. For incentive reasons, the government avoided use of the agricultural taxto siphon off rising surpluses from the richer areas. The mainconstraints were twofold: pressure, first, to grow more grainthan they wished and, second, to control consumption growthand maximize investment growth. The latter policy furtherexacerbated gross income differentials. Certainly, by the end ofthe "Gang of Four" period, there were large regional differentials even within a single province. For example, in Guangdongin 1975,34 percent of teams had an APCDI ofless than 50yuan,54 percent had 51-100 yuan, and 12 percent more than 100yuan (2.4% had more than 150 yuan) (Trip Notes). Across thewhole of China in 1978 (i.e., before the new policies had begun

Growth and welfare objectives and Maoist "egalitarianism" were not as incompatible as current accounts would argue. In fact, many accounts publishedin the late 1970s tend to overplay the significance andimpact of "ultra-leftism" and "egalitarianism" andto underplay basic ecological, technical and institutional factors.

to bite), there were 377 counties (16.3%) with an APCDI of 50yuan or less, 1387 (60%) between 51 and 100 yuan and 548(23.7%) with more than 100 yuan. In Shanghai and Beijing,100% of counties had more than 100 yuan APCDI, in Heilongjiang 77%, Tianjin 73%, Jilin 67% and Zhejiang 44%. Therewere eleven provinces/regions with over 20% of their countieswith an APCDI of less than 50 yuan: Guizhou, Yunnan, Fujian,Gansu, Shaanxi, Ningxia, Inner Mongolia, Shanxi, Shandong,Henan and Anhui. t3To summarize this section on the background to the newpolicies on rural distribution, it is wise to regard currentaccounts of the previous situation in the Chinese media with somecaution. Their picture of the past is overly negative; this isunsurprising given the fact that such descriptions are provided tobuttress the case for policy change. On the growth side, thepicture of frustratingly slow growth and stagnation in certainareas is correct. These problems were serious enough to warrant

13. Shi Shan, "Wher e is the breakthrough point to rapid agricultural development," NYJJWT. No.2. 1980.


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However, to the extent that radical egalitarian policieswere forced upon inappropriate realities and unwilling farmers from 1966 and 1976, they did have anadverse impact on popular motivations and growth inrural living standards.

a new approach to rural policy which will bring about a morerapid improvement in rural living standards and the general paceand volume of economic activity in the countryside. But thislimited growth was in itself quite an achievement given population pressure and technical constraints, and broad sectionsof therural population did gain substantially in welfare terms betweenthe 1950s and 1970s.

To the extent that these positive judgments are true, theysuggest that growth and welfare objectives and Maoist' egalitarianism" were not as incompatible as current accounts wouldargue. In fact, many accounts published in the late I 970s tend tooverplay the significance and impact of "ultra-leftism" and"egalitarianism" and to underplay basic ecological, technicaland institutional factors. To this extent, the problem was notgrowth vs. distributive policy, but growth vs. underlying constraints. However, to the extent that radical egalitarian policieswere forced upon inappropriate realities and unwilling farmersfrom 1966 and 1976, they did have an adverse impact onpopular motivations and growth in rural living standards. At thesame time, policies such as restrictions on private economy andthe free market, overly high ratesof accumulation and excessiveredistribution were not so much a direct reflection of 'leftism' ,emanating from Beijingor Shanghai butof local institutions and"local policies," (difang zhengce), i.e., cadres at brigade andcommune levels exercising what they considered their responsibilities for accumulation and redistribution. To this extent,though there was a real clash between growth and distributive(or rather redistributive) priorities, the causes should be soughtat the structural as well as policy levels. This fact is recognizedby more recent Chinese critiques of previous rural strategy, inwhich the anti-' Gang of Four" litany is increasingly marginal;in fact, some of these critiques trace problems back to themid-1950s.

At the death of Mao in 1976, moreover, the Chinesecountryside contained substantial inequalities, notwithstandinga decade of Maois t "egalitarianism." Indeed, Maoist policiessometimes reinforced ot exacerbated inequalities, notably in theimplications of the principle of "self-reliance" for local andregional disparities. Although there was much leftist huffingand puffing about rural-urban inequalities, the leftist impact onkey indices of inequality, such as the share of state investmentdevoted to agriculture, and price ratios between agricultural andindustrial goods, was disappointing or non-existent. Whereradical measures did operate to restrain intra-rural different ials-for example, popularization of the time-rate method ofincome distribution-it was in an arena (intra-village) wheredifferentials were the least pronounced. In general, however,the most powerful restraints seem to have stemmed less fromspecific policies and more from the basic structure of rural

organization-the commune system-which organized production collectively and allowed for redistribution within andbetween units at different levels. These factors should be bornein mind in assessing the impact (or lack of impact) of the newcourse in rural policy in the late 1970s.The New Course in Agricultural Policy

The basic source of the new rural economic strategy whichemerged between 1977-79 was a realignment of political leadership at the summit of the CCP-the gradual consolidation.ofaleadership group led by Deng Xiaoping, who lay behind theanti.radical coup of late 1976 and who gradually asserted political dominance over remnant' center-leftist" leaders. The redistribution of power among the top leadership produced a clearswitch from "left" to "right" at both ideological and policylevels*-a switch so dramatic and comprehensive that it gavecredence to earlier Maoist portrayals of the "two-line struggle." The key dimensions of ideological differentiation areclear: the enthronement of modernization as the central concernof socialist development and a consequent indifference or hostility towards many of the policy initiatives previously pursuedunder the banner of "Mao Zedong Thought," most notablyMaoist approaches to questions of equality, democratization ofstate institutions, class formation, reforms in the labor processand the development role of politico-ideological consciousness.

In the sphere of rural policy, after an initial spurt of breakneck modernization-mania during 1977 and 1978, under thebanner of a new Great Leap Forward, the Dengist leadershipushered in a more restrained and systematic process of "readjustment, restructuring, consolidation and improvement," decided at the Third Plenum of the Party Central Committee inDecember 1978 and publicly ratified at a meeting of the National People's Congress in June 1979. 14

We shall focus primarily on this latter phase of policy andits implementation in 1979-1980, with the qualification that someof its general themes and specific policies were already currentbefore the Third Plenum and thus form part of our data base. **It is not our intention to provide an overview of changes inagricultural policy, IS but to focus on those elements of the new

* We think it realistic to emphasize the "left-right" nature of these changes incontrast to attempts to portray them as a clash between "rationality" and"irrationality," "dogmatism" and "pragmatism," or "radicalism" and"moderation. "** Indeed, much of the "new" policy direction is a return to the cautiousprescriptions embodied in the "60 articles" of 1962 and to the policies andpractices current in the era of advanced agricultural producer cooperatives in1956-57. For the present leadership, these were both periods when "rationality:' ~ I e d rural economic policy.14. For a report on the Third Plenum's impact on agricultural policy, see "Animportant policy decision on accelerating agriCUltural development," RenminRibao (People's Daily-hereafter RMRB) , editorial, Jan. 22, 1979, translatedin Foreign Broadcast Information Service, Daily Repon: People's Republic oChina (hereafter FB1S) Jan. 23, 1979, pp. E2-E6. Compare "Premier HuaGuofeng's report on the work of the government" (delivered at tbe secondsession of the Fifth National People 's Congress on June 18, 1979), New ChinaNews Agency (hereafter NCNA) , Beijing, June 25, 1979.15. For a comprehensive review of changes in agricultural policy since theremoval of the Shanghai group, see Benedict Stavis, Turning Point in China'sAgricultural Policy, Working Paper No.2, MSU Rural Development Series,Department of Agricultural Economics, Michigan State University, East Lansing, Michigan, May 1979; and Bill Brugger, "Rural policy," in Brugger, ed. ,China Since the 'Gang ofFour' (London: Croom Helm, 1980), pp. 135-73.

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policies which impinge upon the relationship between distribution and development. Pervading the new strategy for ruraldevelopment, one can discern two major streams of ideas *****************ationalization and material incentives-which have particularbearing on this problem.Rationalization

Current Chinese political propaganda and economic theorystress the need to rationalize the rural economy in several basicways. First, they call on policy makers and cadres at all levels to"obey objective economic laws" through a diversificiation ofthe agricultural production structure-at national, regional,local and bastc levels-to match specific variations in ecological conditions. Leftist leaders, it is argued, were blind to thediversity of ecological potential, imposing a policy of "grain asthe key link" and pressurizing collectives to grow grain wherenatural conditions were unfavorable, resulting in low yields andhigh opportunity costs. 16Second, rationalization of the production structure embodies the principle of concentration. Given the fact that thedemand for modem inputs generally exceeds supply, rationalallocation demands that the State's fiscal and other financialresources should be concentrated on certain key areas' withproven or potential comparative advantage in the production ofparticular commodities, whether they be "marketable grainbases," bases for specific industrial crops, or special "exportbases." The same principle is applied to the program of agricultural mechanization. The grandiose plans for rapid comprehensive mechanization sponsored by Hua Guofeng in themid-1970s have been shelved in favorof a policy which concentrates machines on a few chosen areas. 17 Third, the principle ofrationalization has involved a wide-ranging effort (a) to improvefactor productivity through more skilled and systematic management and cost accounting practices at the level of collectives and collective enterprises and in state enterprises providinggoods and services for agriculture; (b) to institute tighter financial disciplines to make more effective use of developmentfunds; and (c) to cut down the number of "unproductive"workers-administrative cadres, health, culture and educationpersonnel-at each level of the commune structure. 18

16. See, for example, "On so-called 'Eating the grain of guilt.' " LiaoningDaily. Feb. 3, 1979 (reported by Liaoning Provincial Radio, Shenyang, andtranslated in FBIS Feb 8, 1979); He Dongjun and He Maoji. "Voice from theland oflovage, " NCNA. Beijing.l"farch 18. 1979(translatedinFB1SMarch21.1979); NCNA (English edition), 6 Feb., 1980.17. For example, see Tung Ta-Iin and Pao Tung, "Some views on agriculturalmodernisation," RMRB 8 Dec., 1978, p. 3 (in FBIS 18 Dec., 1978) and "Acorrect policy for speeding up farm mechanisation," RMRB. editorial, 6 Feb.,1979 (in FBIS Feb. 6, 1979).18. For example, see Kirin province's directive on income distribution, (issuedby the provincialCCP Committee on 9 Nov., 1977), reported by Kirin Radio, 14Nov .. 1977 (in FBIS 22 Nov. , 1977) sections 3 and 6; People's Daily editorialon improving commune management, 14 Apr. 1980.19. Guangming Ribao, 10 Apr. 1980, translated in BBC, Summary o/WorldBroadcasts: Far East-hereafter SWB:FE. No. 6437, BII. 5.20. "Distribution policy" (one of an eight-lecture series), Beijing Radio (domestic service) 22 Apr., 1978 (translated in Joint Publications Research Serv-ice (hereafter JPRS) No. 431, 24 May 1978.

NoticeHere, in a two-part special, the Editors present essays thatfocus on China since the death of Mao Zedong. As withour continuing series of articles on Southeast Asia since1975, the contributions here and in the accompanyingissue (Vol. 13, No.2) are not definitive or final. We inviteother readers to join this dialogue by submitting essays orresearch reports (in triplicate, please) that will, both in aprogressive and critical manner, further our understanding of contemporary China. The Editors

***************** Material Incentives

Agficultural policy over the past two years has been increasingfy dominated by the idea that the crucial determinants ofincreased agricultural output-in the short run at least-areindividual and collective material incentives which are to bestrengthened by suitable distributive policies and institutions.This has been accompanied by increasing skepticism about therapid, across-the-board plans for technical transformation current in the mid-1970s. Agricultural experts have argued that theemphasis on large-scale mechanization and chemicalization offarming dating from the early 1960s has had disappointingeconomic results. For example, Zhan Wu, President of theInstitute of Agricultural Economics in the Chinese Academy ofSocial Sciences, has pointed out that while there was an increaseof 830 percent in farm machinery and 260 percent in chemicalfertilizers during 1965-1977, total production only rose by 80percent and agricultural expenses rose by 130 percent. 19 Thesame logic leads to a re-evaluation of the balance betweenaccumulation and consumption: excessive attention to theformer decreases production in the short and medium term byreducing work motivation and reduces outlets -for other processes of accumulation based on the peasants' ability to purchaseindustrial consumer goods. The problem was exacerbated, it isclaimed with considerable justification, because high rates ofaccumulation were often translated into wasteful and unproductive investment.

According to the new position, the character of economicincentives and distribution policy is described as "the core ofrural economic policies." "When pulling an ox," argued oneauthoritative article, "pull it by the nose" -wi th distributionpolicy the "nose."20 This' is the view of Wang Gengjin,vice-director of the Institute of Agricultural Economics in theChinese Academy of Social Sciences, expressed in two collaborative articles in the journal Jingji Yanjiu, (Economic Research). At the current stage of agricultural development, heargues, stimulation of peasant "enthusiasm" is the crucialmechanism for increasing output:7 BCAS. All rights reserved. For non-commercial use only. www.bcasnet.org

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In developing the rural productive forces, we mustofcoursemake use ofmodernized means ofproduction and advancedskills to arm agriculture. But modernized means ofproduction and skills must be created and utilized by people. Iftheiruse is managed properly, the role of advanced skills inspurring agricultural growth may be fully manifest; if management is inappropriate, the role of advanced techniquescannot be developed adequately. The basic expression is afast rise in agricultural labor productivity. . . The raising ofagricultural labor productivity depends partly on the level atwhich advanced scientific methods are utilized and the sociallinks of the productive process, etc., but first it includesadequate development of people's enthusiasm. Our country's agricultural production is currently still based on manual labor. From the national perspective, agriculturalmechanization and modernization are still only in their initial stages and in some areas have not even begun. Themodernization ofagriculture is not the work ofa day and anight; it requires a process of gradual development. Atpresent, in conditions ofmanual labor and backward meansof production, in order to develop agricultural productionwe must still rely directly on the experience and labor capacity of the laborers. In a certain sense, this still plays thedecisive role. Once we adequately stimulate the socialistenthusiasm of the broad peasant masses, then we can fullydevelop their labor ability and intelligence and can speed upthe development ofagricultural production. 21

The "socialist enthusiasm" of peasants must be aroused byappealing to their "material interest" (wuzhi liyi).The new course requires recognition of the necessity ofdifferentials (chengren chabie) between regions, collective units and households. Wang Gengjin et aI., argue the case asfollows:

Because the countryside at present still implements collectiveownership on the principle of "three-level ownership withthe team as the basis," there are still very big differencesbetween the level ofeconomic development between regionsand between collectives. As a result, after each productionteam carries out distribution according to labor, the level ofpayment will differ from team to team. These differences areinevitable under conditions where the production team is thebasic unit of account. Recognition of this differential isbeneficialfor encouraging each production team to strive todevelop production and increase income so as to be able toraise the level of labor remuneration. Inside a productionteam, there are differences between the individual labor ofthe members. A recognition of these differences in laborcontributes to the encouragement of each member's laboreffort, to raising their labor capacity and technical level as ameans to increase labor remuneration. The rationale isidentical. 22

Other accounts have gone further by arguing that differentials should be encouraged as a spur to production. Materialinequalities were officially granted economic value and socialvirtue through the slogan "getting rich first" (xian fuqilat). Itwas argued that "it is glorious to receive more pay for morework and become richer"; richer areas, collectives and individuals would act as "a great demonstration force to influencetheir neighbors. "Get ting rich first, " it was claimed, was in fact

egalitarian since greater inequality would eventually lead to lessinequality as the poorer units and individuals emulated the richones. Richer teams would "serve as examples to lead the poorerteams forward, encourage them and make them see that there ishope ahead. " On the "bright road to socialism," concluded aGlorious Daily article, "people advance in a column, and not'together' in a straight line. "23The obverse of this argument has been a campaign againstthe evils of "egalitarianism" (pingjunzhuyi), portrayed as amode of economic sabotage used by the former leftist leadership. The critique of "egalitarianism" is overdrawn and polemical, but rests on the following central tenets:(i) Previous "egalitarian" measures (for example, thecompression of individual workpoint differentials within collectives or the restriction of income variations between collectives)damaged productivity by failing to make clear distinctions inmaterial remuneration between better or worse, more or lesswork.

Egalitarianism is a product of petty production and is notcompatible with the socialist principle of distribution according to work. The "Gang ofFour" produced a situationin which there was no difference between working and notworking, doing more and doing less, doing good and badwork. This attacked diligent people and encouraged lazypeople and caused great harm to the development of production. 24

(ii) The leftist leadership erroneously defined "egalitarian" principles and practices as "socialist" or "communist"with the result that "some people still look upon egalitarianismas something 'socialist' or 'communist' to worship and adore."They have also been castigated, somewhat unfairly, for equating poverty with revolution and prosperity with revisionism.Because they felt that greater poverty meant greater revolutionary fervor, runs the argument, the "Gang of Four" were infavor of keeping people poor. 25(iii) Egalitarianism encouraged the idea that socialismprovided an "unbreakable rice bowl" and the practice of "eating from the common pot." As a result, "Liberation has become a symbol of the work of those people who shirk responsibility, are completely inattentive, relax vigilance and maintainneutrality"- i n other words it encouraged "free-loading" andunproductive dependence on the collective. 26

21. Wang Gengjin, Yang Zhangfu and Wang Songpei, "To speed up thedevelopment of agricultural production requires adequate concern for the peas-ants' material interests," Jingji Yanjiu (Economic Research-hereafter JJY]),No.3, 1979, pp. 23-24.22. Ibid ., p. 28.23. "I t is glorious to receive more pay for more work and to become richer,"Fujian Ribao (Fujian Daily) 13 Mar. 1979 (in FBIS 16 Mar. 1979). "Let somepeasants become well-off first, " Beijing Review. 9(2 Mar. 1979), pp. 5-6. "Weneed to encourage a part of our peasants to become well-to-do first," NCNA.Beijing, 17 Feb. 1979. Jin Wen, " 'Getting rich through labour' is in conformity with socialist principle," Guangming Ribao (Glorious Daily-hereafter GMRB) 15 Apr. 1979 (in FBIS 30 Apr. 1979).24. Wang et aI., op. cit., p. 28.25. Jin Wen, op. cit.26. Liang Wen, "Holding an unbreakable rice-bowl and eating from thecommon pot," Jilin Ribao (Jilin Daily) 20 May 1979, reported by Jilin Provincial Radio, Changchun, (FBIS 22 May 1979).


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This critique of "egalitarianism" leads to a thorough re-orientation of theory and practice. First, "egalitarian" ideasmust be uprooted and replaced by three "correct" principles ofdistribution, viz. "distribution according to work" (an laoJenpei), "more work, more pay" (duo lao duo de) and "do notwork, do not eat." Second, payment systems must be designedto match as precisely as possible the quantity and quality ofindividual effort with material return.These general priorities and caveats have been embodied inthe official policies which emerged after the Third Plenum. Inspite of the requisite lip-service paid to the primacy of" spiritualmotivation," the new strategy has hinged on appeals to peasants' immediate material interests, notably at the individual,household or small collective levels. This has resulted in areorientation of macro-economic policies to raise ruml livingstandards generally through changes in investment, financial,procurement and taxation policies. For example, grain procurement prices, which rose by 69 percent between 1949 and 1978,were increased by 20 percent in 1979, with a 50 percent premium for a set amount of surplus grain and 100% premium for anyamount beyond this. Agricultural officials have been instructednot to raise procurement quotas on the "ratchet" principle butstabilize them over several years to allow increases in production to increase peasant incomes directly. There has been aneffort to increase the ratio of agricultural investment in the statebudget (this rose to 12.8% of total investment in 1979 and 16%in 1980). The new strategy also involved policies to allowgreater freedom for individuals and collectives to dispose ofsurplus produce, to stimulate individual labor initiative throughmore highly differentiated payment systems; a reduced emphasis on models (such as Dazhai brigade) which rely heavily onnon-material incentives; positive encouragement of the household sector, provision for more autonomy for small workgroups below the production team level and a defense of the

production team against allegedly widespread depredations fromhigher units and threats of transition to larger units of account.Many of those policy changes have implications for rural inequality and we shall discuss them in more detail in the nextsection.The Distributive Implications of theNew Agricultural Strategy

The Impact of Rationaliza tion PoliciesThe third area of mtionalization-in the management andaccounting systems-is hardly new, being a frequent theme inrural policy propaganda throughout the 1970s. The explicit and

systematic formulation of the principles of diversification andconcentration, on the other hand, does mark a change of emphasis, though not a basic change in policy. Their implicationsfor rational resource use and rural welfare are compelling, butwe should bear in mind certain important qualifications. First,to a considerable extent, the principle of regional concentrationis the mtification and intensification of a pattern of unevendevelopment already evident in the preceding decade. As weargued earlier, there was a tendency during this period to concentmte a relatively large amount of modern inputs in a relatively small part of China's total farm area, leading to theemergence of a number of "high and stable yield areas" whichhave helped to stabilize China's agricultural performance in the

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face of fluctuating climatic conditions. The principle of regionalconcentration was accepted as economically necessary becausethe application ,of new technology-a process which gatheredpace from the early 1960s on-required a strategy of integmtedapplication (water control, new seed strains, chemical fertilizers, etc.). This has resulted in considerable disparities in theregional allocation of modem inputs. In Guangdong province,for example, one of the authors was informed that, as of mid1979, the counties of the fertile Pearl River Delta use 80-100 jinof chemical fertilizers per mu, compared to only 20-30 jin permu in areas outside the Delta. This pattern was replicated inmany other provinces and was evident to even the most casualvisitor during the 1970s. Judging from detailed discussions ofthis issue with local cadres, the areas in Guangdong marked outas "bases" during 1978-79 were none other than those whichalready had a high level of application of modern inputs. The 27counties of the Delta have been chosen out of the province's 107counties as the priority zone for investment.

Second, in regard to the charge that the "Gang of Four"forced peasants to grow grain at the expense of other crops,there was in fact a heavy emphasis on grain production in the1960s and 1970s, but the links between this policy and the"Gang of Four" are tenuous. This policy was forcefully pursued since the early 1960s and was a mtional response to thefollowing considemtions: the relatively rapid rate of populationincrease, the desire to maintain regional self-sufficiency infood-grain production (partly for security reasons), and theattempt to ensure that the basic food needs of the whole population were met. Hence the priority on "grain as the key link" inagricultural production. Since the rate of population growth hadslowed by the late 1970s, it was possible to diversify the structure of production while meeting basic food needs. The changeto a more differentiated production structure can be seen, therefore, as a response to a new stage in rural development, made9


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Fading mural (Photo by Peter Nolan).possible by the success of previous policies which emphasizedfood grain. 27

Third, the principle of concentration on "key areas" doesnot necessarily make economic sense in terms of maximizingoutput, particularly in the medium or long term, since they are inmost cases already high-yield areas and may respond less favorably to increased agricultural inputs than "backward" areaswhere present yields are low, potential returns greater, andinvestment requirements substantial. Yet the success of the"marketable grain bases" is central to the success of the newagricultural strategy as a whole. I f collectives throughout thecountry are to be allowed to diversify into more profitable cropsand reduce their grain acreage accordingly, then the shortfallmust be borne by the bases or increased imports. Indeed, thedecision to increase the procurement and above-procurementprices of grain reflected concern about a possible rush out ofgrain, legitimized by the principle of diversification and aidedby the principle of team autonomy. The strategy worked well in1979 when total grain production reached 332.12 million tons,the highest since liberation and 27 .37 million tons up on 1978.In 1980, however, signs of problems appeared. Total production dropped from the 1979 level by about 10-15 million tons,but was still the second highest since 1949 But diversificationinto more profitable crops had brought about a decrease of 5.3million hectares in the total area sown to grains-leading apolicy shift in early 1981 towards a renewed emphasis on grain.In 1981, priority was attached to "a good grain harvest" and ahalt was called to the diminution of grain acreage. 28 There havebeen proposals to cushion grain shortfalls by increased imports,to be paid for (on favorable terms of exchange) by increasedexports of economic crops produced by agricultural diversification. But restraints on external markets and competing importclaims make this a problematic solution.Fourth, in addition to these economic question-marks, theprinciples of diversification and concentration will probablyreinforce an already present pattern of uneven development atthe regional and local levels. For example, a revised program

was announced in early 1979 to coordinate the allocation ofinputs for agricultural mechanization with the construction of"modem production bases" in crop farming, forestry, animalhusbandry and fisheries. The distributive implications wereclearly spelled out:

We need to change our past practice of spreading factorieseverywhere, as if we were adding pepper to food. We mustmake it possible, in a planned and systematic way, for somekey areas to advance ahead of others in promoting agri-cultural modernization and raising the people's living stan-dards. This will playa significant, exemplary and encourag-ing role throughout the country by making use of the goodexperience ofone area to lead other areas. 29

Statements such as this are very hard-headed when defending the virtues of concentration and its concomitant inequalities,but are somewhat vague when it comes to defining the specificmechanisms whereby the benefits of the base-areas can bespread to the peripheries. Again, the logic of concentrating Statefunds in these islands of modernization, already well suppliedwith the financial wherewithal for expanded reproduction, andvirtually ignoring the sea of "non-major areas" may be questioned. Would not a program of providing modem inputs andinfrastructure across a much wider spread, a more egalitarianapproach which fuelled local initiative and encouraged the capitalization of low yield areas, provide a sturdier basis for increased output in the long run, as long as the current caveatsabout the need for standardization, locational planning andrational division of labor were observed?At local levels, the principle of diversification according tonatural conditions may make economic sense but its implementation may prove highly problematic. Who is to decide what is"in accordance with local natural conditions?" What is to stopproduction teams from rushing into more profitable and ignoring less profitable, but macro-economically crucial, areas ofproduction? The State plan should, of course, resolve theseproblems but the new course emphasizes the right of productionteams to ignore "blind" orders from above. Again, who decides what is "blind?" These problems aside, moreover, theprinciple of diversification is likely to increase differentialsbetween collective units. If production teams are allowed toexploit their differing factor endowments to the fullest, withoutsignificant restraint on decisions about the structure of production from above, then the gap between ecologically favorableand unfavorable collectives is likely to increase unless determined counter-measures are taken. Communes with favoredaccess to lines of communications and proximate markets, notably those in the suburbs of large and medium-sized cities, willprosper compared to their less well-situated counterparts.

In short, the principles of diversification and concentration,as presently stated, are problematic in conception, implementation and likely results, and it is far from clear that the benefitsarising from their contribution to economic growth will ade

27. For a historical review of this issue. see the article by Yu Guoyao in Hongqi(Red Flag) 5 Mar. 1980.28. For example, see the interview with the vice-minister of agriculture. ZhuRong, in NCNA (English edition). 29 Jan. 1981.29. "Correct policy for accelerating agricultural mechanisation." RMRB editoria l, 6 Feb. 1979 (in FB1S 9 Feb. 1979. p. E 18).


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quately compensate for their costs in terms of unequal development. Indeed, the current Chinese literature on agriculturaleconomics acknowledges some of these problems and measureshave been introduced to deal with them (for example, by redistributive subsidies to or financial support for profitable diversification in poorer regions and collectives).The Impact of Policies to Stimulate Material Incentives

(a) Redistribution of institutional power: the self-determination of the production team The ideas of policy makers and advisors during 1978-1980about the economic role of the production team in the ruralinstitutional system bear comparison with current views of therole of the enterprise in the state political economy. The production team is likened to a firm, an economic actor with its ownjuridical identity, administrative autonomy and scope for economic initiative, under the guidance but not direct control ofhigher collectives and state organs. For some higher levelcadres, it is alleged, "the production tearn had actually becomea purely administrative unit appended to the responsible administrative organ and they consider it tQ be a bead on an abacusthat can only move when manipulated from above. "30 In manyareas, peasants were quoted as follows: "We have only oneproduction team in the whole county and only one person who

knows about farming, i.e. , the first secretary ofthe county Partycommittee. "31 As an autonomous firm, the tean1 is capable ofcollective entrepreneurship to maximize its members' incomethrough good management and "business sense." To this end,the decision power of the team is being expanded to covermethods of labor organization, system of job responsibility, theright to determine accumulation ratios and payment systems, todispose of surplus produce after fulfilling state assignments, todefine planting plans, and defy "coercion, commandism andarbitrary orders" from above. The agricultural planning processis to be more indicative, with fewer obligatory targets and moreflexible, decentralized implementation, eventually movingfrom a system of compulsory assignments to one of negotiatedcontracts.Whereas in the earlier years of the decade, leftist propaganda had warned of the political and social implications of"collective capitalism, " the new leadership selected exemplarycases of entrepreneurial teams for public emulation. For example, a production team in Sanshui county, Guangdong province,which achieved an astonishing per-capita income of755 yuan in1978* from agriculture and a lime plant, was praised for having"gone to rich from poor because it has grasped both grain in onehand and money in the other." Such success could not merelybe attributed to good business sense, however, since ecologicalconditions were particularly favorable-plentiful limestone andfirewood in the vicinity and easy access to transport facilities. 32This kind of initiative and its egregious economic resultswere no doubt atypical, but they reflected the CCP leadership'shighest expectations about the material fruits of greater team

* Each full labor power in the team made an annual income of 2232 yuan (186yuan per month), a figure about three times larger than the average urbanindustrial worker's wage. The team was a small one, with only 12 householdsand 23 labor powers. The income spread between households, however, wasconsiderable, ranging from the lowest of 1,340 yuan to the highest (two) withover 8000 yuan.

autonomy. The team is a suitable unit for collective actionbecause it is small enough to engage individual material aspirations directly in its operations and because it fits better into arural scene characterized by considerable inequalities. WangGengjin et al. recognize the latter fact when they argue, from theresults of a detailed research program in Anhui province, thatone of the advantages of the team as the basic accounting unitlies in the fact that "it can relatively thoroughly overcomeegalitarianism among production teams. "33Given the hypothesized link between inter-team differentials and increased agricultural output, the new policies demandthat the team be protected against inappropriate and arbitraryintervention from superior collective levels on the grounds thatsuch interventions are irrationally egalitarian and thereforeharmful to the crucial "socialist enthusiasm" ofteam members.As a result, current analysts attack three types of practice whichwere allegedly widespread throughout the preceding decadeunder "pressure" (yaU) exerted by the "Gang of Four":(i) Restrictions on income levels: Previous attempts bylocal officials in some areas, motivated by a "leftist" fear of"polarization , " to establish an arbitrary limit on the per-capitaincomes of the collective units under their jurisdiction have beencondemned as irrational "egalitarianism." In Laixi county inShandong province, for example, the Party leadership hadbeen alarmed by a pattern of uneven annual per-capita incomedistribution ranging from 150 yuan in the rich brigades to 60yuan in the poor. They therefore set an upper limit of 150 yuanand ordered that the residuum be channeled into public accumulation. A simiiar system was apparently established in Beijing'ssuburban communes viz. a limit of 150 yuan per capita ingrain-growing collectives and 180 yuan in those growingvegetables. 34The new leadership has argued that limits of this kindrestrain the initiative of peasants in richer collectives whiledoing little to encourage higher income in poorer units: Theymaintain that' the only way to narrow the gap between rich andpoor production brigades is to aid the poor production brigades. "35 This reasoning is sound but we should be aware ofcertain qualifications. (a) It is not clear that the practice ofarbitrary income limitations was widespread throughout thenation and there is little evidence that it was "official" policyemanating from Beijing. It is more likely to have been a "localpolicy" adopted by officials in certain areas in response tointermittent egalitarian ideological cues from Beijing. (b) Thepractice seems to have been counter-productive in any casesince the residual income of the rich brigades was'not confiscated, but fed into their public accumulation funds. I f thesefunds were well-invested and -managed, they would in fact lay

30. Lu Chen-mao, "The production team is also an enterprise," GMRB 18Nov. 1978 (in FB1S 5 Dec. 1978, p. EI3).31. GMRB 6 Nov. 1979,inFBIS 15 Nov. 1979.32. "Sou ther n Daily hails enrichment of peasants," Guangdong provincialradio 4 Mar. 1979 (in FBIS 6 Mar. 1979).33. Wang Gengjin and He Jianzhang, "Some problems in implementing ruraleconomic policies," ffff No.8, p. 17).34. "Lin Hujia visits Beijing suburban counties," NCNA Beijing (Domesticservice), 27 Feb. 1979 (in FBIS 5 Mar. 1979), compare "One should notpostulate.... ", NCNA 6 June 1979 (in SWB 9 June 1979).35. .. Shandong county lifts limit on peasant income," Shandong provincialradio, Jinan 28 Nov. 1978 (inFB1S 30 Nov. 1978).

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Bridge between two brigades, Fogang County, quangdong (Nolan).

the basis for even higher future incomes, thus increasing the gapbetween rich and poor units. At present there is no intention totax away any of the increments to gross income resulting fromcurrent policies, thus it is likely that areas with higher per capitagross incomes will be allowed to "realize" their incomes inincreased consumption to a greater degree than in the past.(c) The new policies may seem reasonable, but their distributive impact depends on how much aid is to be directed to poorerunits, (particularly if this form of redistribution is opposed byricher and more powerful areas and units), what redistributivemechanisms are to be used, and on what terms it is to be offered.(ii) Transition in poverty" (qiong guodu). According tocurrent analysis, leftist leaders had pressured production teamsto move up to brigade level accounting where material conditions were not yet ripe. 36 Though it is certainly correct thatradical spokesmen in the 1970s did stress the importance oftransition and encouraged it where possible, the current pictureof across-the-board forced transitions, based on the idea that"insufficient (economic) conditions should not preclude transition," is clearly overdrawn. 37 There is some evidence of overhasty transition in the mid-1970s in certain areas, presumablyconnected with the Dictatorship of the Proletarian Campaign in1975. For example, it is reported that 223 production brigades inTianmen county Hubei province became accounting units prematurely and were disbanded in 1978. 38 Even in this case,however, a considerable percentage of the mid-1970s transitions (58.5%) were apparently confirmed by the post-Mao leadership. On the other hand, in Jiading county-in the radicalbase of Shanghai municipality-at the height of the "Gang ofFour's" influence, only 25 out of a total of 243 brigades practiced brigade-level accounting and 18 of these were still doingso in June 1979 (Trip Notes).There is evidence, moreover, of speeded transition afterthe removal of the "Gang of Four." In Fuping county inShaanxi province, for instance, a "wind of transition in a stateof poverty" began in the spring of 1978 and was not reverseduntil January 1979 by a resolution from the provincial Partycommittee. 39 The problems identified with this particular"wind of transition" illustrate well the costs perceived by theDengist leadership. First rich teams did nothing while poor onesawaited the 'coming of communism.' " In one production

team, for example, the value of a labor day (laodongri) in No.2team was less than half that of No.3. When the announcementof transition to brigade accounting was made, some members ofNo.2 team allegedly said that "things are done well in No.3team, so let us 'enter communism.' " Second, after brigadelevel accounting was established, heavier production quotaswere imposed on the richer teams with the result that higheroutput did not result in higher income for their members. Forexample, in the summer harvest distribution of 1978, No.3team's quota was 20,OOOjin (about 40% of the brigade's total)while No. 2's was only 9,000 jin. In consequence, the percapita grain rations in team 3 were only slightly larger than inteam 2. Third, the transition caused a drop in the amount of draftanimals and farm tools-some of which were sold off on the slywhen news of the impending transition spread. After transition,the draft animals became "orphans" with nobody to care forthem properly, and their health suffered accordingly. Fourth,the brigade leadership was not up to the new burdens of management, and therefore inefficiency increased at both brigade andteam levels.The change in policy emphasis between 1977 and 1979reflects disagreement within the post-Mao leadership, at bothnational and provincial levels, about the priority of transition tohigher collectives. The spirit of the "learn from Dazhai" andthe "Dazhai county" movement of the mid-1970s, sponsoredby Hua Guofeng and Chen Yongguei, took a more positive viewof transition comparable to the "Gang of Four's" now vilified"transition relying on the spirit of poverty " and apparently tooksteps to encourage it in certain areas. With the rise of Dengistinfluence, however, upward transition was subjected to morecriticism, and policy documents have advised caution and, atleast for the foreseeable future, stabilization* of the status quo.According to this position, transition must not be used to reduceinter-team inequalities; later transition is better than sooner;"transition in poverty" must be supplanted by "transition inwealth"; and the leftist leadership's previous emphasis on thespiritual conditions for transition is dismissed as un-Marxist.The necessary conditions for transition are "socialized means ofproduction" which produce "socialized production":

The course of transition should be one ofagricuLtural mech-anization, factory production and automation . . . The tran-sition from small collective ownership to Large collectiveownership can only be carried out when the Large coLLectivehas acquired a fairly large amount of accumuLation andbecome relatively rich and when the economiesofthe varioussmall collectives are fairly developed and the gap betweenthem has been narrowed. 40* This was advocated. for example. by Zheng Zhong. the Vice-Minister ofAgriculture. in an interview in lune 1979 (Trip Notes). According to Zheng90% of agricultural accounting units were teams, 7-8%of brigades were units ofaccount and only O. I% of accounting units were communes. The brigades, headded, were mostly relatively small with strong leadership bodies and thecommunes were mostly engaged in pastoral or fishery activity.36. For a comprehensive analysis. see Xu Dixin, "On 'Transition in poverty,' .. JJYl No.4. 1979. pp. 2-7.37. For example. see lin Wen (Chin Wenl. "On 'Transition in poverty.' .Liberation Army Daily, 5 Dec. 1978 (in FBIS 7 Dec. 1978).38. Hubei provincial radio, 14 Jan. 1979 (in FBIS. 161an. 1979).39. Shaanxi provincial radio. 10 Ian. 1979 (in FBIS, 171an. 1979).40. Jin Wen, op. cit.


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However, this theory is incompatible to some degree withthe priority of stabilization. Particularly in more prosperousareas, there are clear economic and social advantages to bereaped from transition to higher level units of accountingeconomies of scale, greater capacity to help poorer units withinthe larger collectives, opportunities for more rational allocationof labor and other factors of production, more comprehensiveand better quality welfare services. Indeed, in an interviewconducted in June 1979 (Trip Notes), the vice-chairman of theBeijing suburban commune of Lukouqiao, where brigade accounting is the norm, defended it as "superior" since it enabledbrigades to help backward teams to catch up with the advanced.* It seems reasonable, therefore, that where conditionsare favorable-with a relatively homogeneous sociological andecological context, the absence of wide disparities betweenteams and good management and accounting capacity at thebrigade (or even commune) level-transition should beencouraged.The new agricultural course is ambigu,ous on the issue.Certain policies put a damper on transition: the insistence onteam autonomy, encouragement of inter-team differentials, agenerally critical stance towards "blind" directives from superior collective levels and an emphasis on "stabilization" ofthe rural institutional system. On the other hand, as the newpolicies began to take effect during 1979-80, a three-tieredpolicy on ownership emerged (implicitly): Le. , in "advanced"areas, higher forms of ownership (including state farms) weredeemed appropriate and it was possible to move to higher levelsof accounting within the commune structure; in the majority of"average" areas, the principle of team ownership was to bestabilized; in "backward" areas, on the other hand, there havebeen moves towards "transition downwards," not de jure butde facto, through contracting production to households orindi viduals.(iii) "Equalization and transfer." Consistent with thegreater stress on production team autonomy, there has beensevere criticism of allegedly widespread depredations visited onproduction teams, notably by brigades and communes but alsoby State organs at the county level. This has involved a generalcondemnation of interference, "blind commands" and intolerably heavy demands on the labor and funds of teams. Thetendency for "over-concentration," that is, the practicewhereby higher collectives derived part of their accumulationfrom unrequited or only partially recompensed levies on teams,has also been condemned. 41 More specifically, higher collec

* The average value of the labor day in this commune's teams was 1.50 yuan.with a spread from a highest of2.5 yuan to a lowest of 1.2yuan.41. For example, "Effectively protect...." , RMRB 24 Jan. 1979, editorial(in FBIS 26 Jan. 1979, p. 12).42. J.E. Nickum, "Labour accumulation in rural China and its role since theCultural Revolution," CambridgelournalofEconomics, No.2, 1978, p. 284.43, "We should respect the right of a production team to make its owndecisions," Nanfang Ribao (Southem Daily-hereafter NFRB), Canton, 28Oct. 1978 (in FBIS 9 Nov. 1978).44, Beijing Radio (domestic service), I June 1979 (inSWB61335 June 1979);"Boldly strengthen correct leadership of the production teams," NFRB 26March 1979 (in FBIS 27 Mar. 1979).45. For discussions of these problems, see the People's Daily article on ruralcadres in NCNA (domestic service), 6 Feb. 1980; and Wen Zhu, "This isadvance, not retreat," GMRB 2 Feb. 1980.

Fogang bridge construction (Nolan).tive levels have been accused of "equalization and transfer" (yiping er diao) which involves the requisitioning of team re-sources without proper compensation according to the principleof" voluntary mutual benefit and equivalent exchange" (ziyuanhuli, dengjia jiaohuan) and the use of higher-level projects as aredistributive device to even out differentials between teams orbrigades.Data from the late 1960s and early to mid-1970s suggeststhat brigades and communes did increase pressure on teams aspart of a general strategy of encouraging industries and welfarefac ilities at higher levels, and as a reflection of the importanceattached to large-scale farmland capital construction projects,particularly in the area of water-control, based on the mobilization of idle labor in the quiet seasons-the process of "laboraccumulation." The number of such projects undertaken by thebrigade level and above increased rapidly during the 1970s.According to Nickum's study of "labor accumulation" in the1960s and 1970s, the principles for large-scale projects involving more than one level had been laid down in the "SixtyArticles" of 1962 and retained their normative power: voluntaryparticipation, mutual benefit for all participants and equivalentexchange (Le., fair compensation for transferred resources).Given the frequent financial weakness of the brigades andcommunes, however, there was considerable pressure to violatethe principle of equivalent exchange and to use "equalizationand transfer," in Nickum's words, "a 'leftist' error involvingthe unrequited transfer of resources from the haves to the havenots. "42

To summarize, given the present emphasis on redressingthe balance between accumulation and consumption and increasing production incentives, measures to protect the autonomy of the team and develop its initiative make developmental sense. The small unit allows a closer link betweencollective and household or individual incentives, more flexibleaccommodation to variations in agricultural conditions and complexities of work organization and greater scope for basic-leveldemocracy. At the same time, however, the new policies maybring practical problems. First, there has been a tendency to"absolutize" the principle of team autonomy: for example, inan authoritative statement by the Guangdong provincialnewspaper:


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(b) Individual and collective: the encouragement ofprivate economy {Leading] organs may give the production teams some sug-gestions on their production plans . . . {The] productionteams may completely accept a suggestion concerning pro-duction or management from higher authorities, they mayconsider the actual situation and accept it partially and theymay refuse to accept it if it is wrong. 43This type of policy, if implemented, creates many headaches for brigade and commune leaderships. First, it becomesmore difficult to enforce the implementation of State agricultural plans (e.g., by determining the basic product mix of eachteam); second, a strict observance of the principle of equivalentexchange results in a shortage of funds at the brigade andcommune levels, a consequent diminution of their capacity toact as a redistributive, equalizing force over teams or brigadesand to launch relatively large-scale capital construction projectswithout resort to external funding. Problems of economic ad-cumulation and distribution aside, moreover, the swing towardsteam autonomy has important political implications. It is likelyto weaken the influence of the Communist Party, whose lowestrung of organization is at the production brigade level. It alsoimplies a significant redistribution of decisional power withinthe commune structure, after a long period during which higherlevels, especially the brigade, seem to have been increasingtheir power vis avis the team.These political constraints make it unlikely that the movetoward team autonomy will be implemented in any thoroughgoing way. Indeed, complaints from brigade and communecadres were already visible in the media during 1978-I980. Forinstance, cadres in Liaoning province were reported as complaining that "the power of [the team's] decision is beingoveremphasized" and "those at lower levels are disobeyingorders and everything is in a mess." Elsewhere, there were

complaints that the new policies were weakening Party leadership in the countryside, or that commune cadres were havingdifficulties with recalcitrant teams which were only consideringtheir own interests by choosing crops to sell at a high price andreducing their grain acreage excessively.44 Given current policydirections, such "selfish" behavior is hardly surprising; nor isthe exasperation of supra-team cadres who are charged with theimplementation of state plans and the construction of localcapital projects but are being drained of the political authorityand financial strength necessary to carry out these tasks. At theideological level, these complaints and opposition werecouched in terms of "progress" and "retrogression," i.e., thenew policies were encouraging or allowing a "departure fromsocialism" by undermining collective economy and dividingpeople into competing groupS.45 Such concerns are probablyshared by members of the central leadership and they provide animportant political base for future policy changes.

46. RMRB 15 Feb. 1978 (in FBIS 17 Feb. 1978).47. Sichuan provincial radio. 22 Dec. 1977 (in FBIS 4Jan. 1978).48. For the Jilin regulations. see Jilin provincial radio. 14 Nov. 1977 (in FBIS22 Nov. 1977),

During 1977 and 1978, a great deal of official attention wasdevoted to trimming down rural collectives which, it was argued, had become over-blown during previous years. It is truethat there was considerable emphasis during the previous decade on increasing the rate of collective accumulation and therange of collective facilities at brigade and commune levels,although this appeared to command wider support among thecentral leadership than the anti-"Gang of Four" litany wouldsuggest. The Gang haveof course been blamed for the problemswhich arose when rural collectives tried to expand too fast:overspending, wasteful or unprofitable investments, proliferation of cadres and other "unproductive" personnel (such aswelfare or cultural workers) and a tendency for poor units toemulate the services offered by their rich counterparts, thusoverstretching their resources, harming agricultural productionand retarding 'income growth. A common official criticism in1977-78 was that collectives had syphoned off too large a share

of gross output and income for their own accumulation, with theresult that they "squeezed the state above and the communemembers below."46 The new emphasis, in the words of theresurgent Zhao Ziyang, was on' pressing the center (the collective) and guaranteeing the two ends" (the household and thestate).47 Quotas were established in the provinces to definepermissible rates of public accumulation (for example, in Jilin itwas fixed at a maximum of 10%)48 and the principle of increasing personal incomes along with increasing collective outputwas firmly reiterated. The policy current earlier in the decadewhereby collectives with higher rates of growth were expectedto raise their level of accumulation accordingly was now condemned for lowering peasant incentives through limits on personal income growth and hampering rural development bystunting the initiative of more dynamic units.Restrictions on collective "over-accumulation" have beenaccompanied by policies designed to encourage production andexchange in the private or household sector. During the previous decade, policies towards the private sector had been ambiguous: on the one hand, it was recognized as a necessary adjunctto the collective economy; on the other hand, it was regarded

http:///reader/full/groupS.45http:///reader/full/state).47http:///reader/full/groupS.45http:///reader/full/state).47

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with suspicion as a relic of "petty production," a potentialthreat to the collective economy, a cause of increased inequalitybetween households, and a seedbed for "capitalist" activitiesand attitudes. Official policy thus combined retention withrestriction. In practice, many local cadres found the balancehard to strike and often "deviated" in one direction or the other.Gi ven the leftist atmosphereof these years, there was a tendencyto "prefer left to right" (ning zuo wu you) and play safe byseverely restricting or even abolishing private production andexchange.Current policies have been far more favorable to privateeconomy, reaffirming its legitimacy and taking concrete measures to promote its expansion. Private possession of livestockand sideline production have been encouraged by higher procurement prices, "soft" loans, and greater provision of fodderland. The household's right to hold and manage private plotsindependently has also been reaffirmed and the scope of rural"fairs" expanded to foster rural commerce. Available datasuggests that such measures have been effective in invigoratingthe rural economy and raising household incomes in the short

Main street of Shanghai suburban commune (Nolan).

run, though they have run into problems of implementation andlocal resistance. In some areas, for example, they have led to awholesale privatization of livestock rearing and the dissolutionof collective livestock farms, even where the latter were economically viable. Moreover, the liberalization of rural commerce has encountered resistance from commune cadres whocontinue to regard local fairs as "hotbeds of capitalism andimpediments to agricultural production." Such fairs, theyclaim, encourage an over-expansion of the private sector, temptpeasants to "leave agriculture for trade" and divert agriculturaland sideline produce from the state procurement net. The present leadership has proven sensitive to these and other problems, and has attempted to institute certain restrictions: limitations on the size of private plots; minimum quotas (measured inworkdays) for collective work by team members; proscriptionof private hiring of labor; and increased incentives for peasantsto sell their sideline produce and livestock to the state evenabolishing private production and exchange.Current policies have been far more favorable to privateeconomy, reaffirming its legitimacy and taking concrete meas

ures to promote its expansion. Private possession of livestockand sideline production have been encouraged by higher procurement prices, "soft" loans, and greater provision of fodderland. The household's right to hold and manage private plotsindependently has also been reaffirmed and the scope of rural"fairs" expanded to foster rural commerce. Available datasuggests that such measures have been effective in invigoratingthe rural economy and raising household incomes in the shortrun, though they have run into problems of implementation andlocal resistance. In some areas, for example, they have led to awholesale privatization of livestock rearing and the dissolutionof collective livestock farms, even where the latter were economically viable. Moreover, the liberalization of rural commerce has encountered resistance from commune cadres whocontinue to regard local fairs as "hotbeds of capitalism andimpediments to agricultural production." Such fairs, theyclaim, encourage an over-expansion ofthe private sector, temptpeasants to " l e a ~ e agriCUlture for trade" and divert agriculturaland sideline produce from the state procurement net. The present leadership has proven sensitive to these and other problems,and has attempted to institute certain restrictions: limitations onthe size of private plots; minimum quotas (measured in workdays) for collective work by team members; proscription ofprivate hiring of labor; and increased incentives for peasants tosell their siaeline produce and livestock to the state (throughrestrictive regulations and higher prices). Practical enforcementofthese measures is another matter, however, made difficult bythe provisions for team autonomy, propaganda paeans to enterprising households and individuals and a diminution of thepower of higher levels to interfere effectively if things get out ofhand in ways which recall the chaotic days of the early 1960s.While the present political situation is not identical with that ofthe early 1960s, it should be remembered that the private sectorthen rapidly expanded beyond the letter of the law. It is notinconceivable that the same thing could happen again if localpolitical controls are insufficiently tight.Preliminary figures suggest that the private sector increased its share of total household incomes between 19781980. Moreover, the official statistics on the net income of anational sample of peasants in 1979 reported a 19.9 percentincrease over 1978; collective income increased by 14.6percentbut income from "household side-line occupations" increasedby 25.3 percent over 1978 to 27.5 percent of total net income.49Earlier experience (notably in 1957 and 1960-62) suggests that,when private sector activity increases rapidly and strongerhouseholds divert labor power from the collective to moreiucrative private production and exchange, intra-village differentials increase. There is no systematic data as yet to test sucha hypothesis, but scattered examples would seem to support it.For example, in Heze p r e f ~ t u r e in Shangdong, an export basefor grey goat and angora rabbit products, where 95 percent ofgoats and rabbits are raised by individual families, each familygained an average of 35 yuan from such activities, but somefamilies made several hundred and even 1000 yuan. so Onlyfurther research can document whether this represents a generaltrend or an atypical case.

49. NCNA (English edition), 2 Jan. 1981.50. NCNA (English edition), 15 May 1980.


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(c) Intra-collective differentials:changes in payment systemsDuring the decade preceding the death of Mao, the leftistleadership at all levels fostered a move from a task-based to atime-based system of labor remuneration. The model mode ofpayment was embodied in the Dazhai system which assigned awork-point grade to each worker on an annual basis after exten

sive discussion. Time-rate systems, whether close to the Dazhaimodel or not, were favored for their relative simplicity (andconsequent lack of divisiveness, at least in theory) and relativeequality (since they compressed differentials between differentqualities of labor-power). In many areas and units the time-ratesystem made little headway; in others it was tried for a while,then dropped; in others, it was combined with piece-rate systems of various kinds.*Where it did make headway, it probablycontributed to a narrowing of collective income differentialswithin the team or brigade. Time-rates or not, however, thepayment system in most collectives was egalitarian in the senseof providing a guaranteed floor under individual incomesthrough a system of "basic rations" (jiben kouliang), whichcombined the "commu nist" principle of distribution accordingto need with the socialist principle of distribution according towork (i.e., the rations still had to be earned through workpoints).I f an individual or household earned insufficient workpoints,they still received the ration but owed the shortfall to thecollective.The Dengist leadership has attempted to stem any tendencytowards egalitarian payment systems, arguing that poorerhouseholds benefit from a general rise in agricultural production, not from specifically egalitarian policies. One delegate to aHenan conference argued the point as follows: "Practicingegalitarianism is not a solution to the households beset withdifficulties.... Only when the collective economy has become large can the incomes of members go up. As the waterswells, the boat rises." 52 Thus the new leadership has attemptedto move rural collectives towards systems of piece-rates comparable to those current in the early 1960s.Official spokesmen have favored one type of paymentsystem in particular-a form of "collective piece-rates" basedon the ideas of "fixed quotas on the basis of work-groups andwork evaluation on the basis of individuals." This has severalcomponents. First, the accounting unit sets fixed quotas fordifferent agricultural tasks, the system of "f ixed quota management" (dinge guanli). Second, responsibilities for fulfilling

* In North China, the resurgence of piece-rate systems was officially encouraged by the North China Agricultural Conference convened in 1970. In the case of Xinxiang prefecture in Henan (Honan) province, for example, this conference led to a general return to a fixed quota and piece-rate system which continued in use throughout the 1970s regardless of the "Gang of Four. "This is but one of many areas where time-rate methods, such as the Dazhai method, made little headway in the early 1970s. 5 I. Yi Xindian, "The system of production quotas must be implemented," RMRB 22 Apr. 1978 (in JPRS 431. 24 May 1978). 52. "Henan conference urges 'More pay for more work,' " NCNA, Beijing(domestic service), 21 Jan. 1978 (in FBIS 24 Jan. 1978).53. For example, see Guo Xiusheng and Gao Xiansong, "Recording workpoints on the basis of fixed labour quotas is a good way of implementing thepolicy of pay according to work," RMRB 2 Dec. 1978 (in JPRS 487,31 Jan.1979); compare the article by Wu Xiang and Zhang Guangyou in NCNA(domestic service), 9 Apr. 1980.

"Rural fair" (Nolan).

quotas are assigned to work-groups-the system of "guaranteeing work to the work-group" (baogong dao zuoyezu). Thework-group is assigned responsibility for a fixed plot of landthroughout the farming cycle and is rewarded with a fixedamount o

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