Between 1949 and 1953 the economy was restored. The government then began a programme of planned expansion, at the core of which – so far as workers were concerned – were sustained efforts to increase labour productivity. Accordingly a new set of regulations was introduced, the draconian Model Outline of Intra-Enterprise Discipline Rules.  The All-China Federation of Trade Unions (ACFTU) was required to publicize and assist in the enforcement of the new regulations. Article 17 of the rules reads “Late arrival or early departure without good reason, or playing around or sitting idle during working hours shall be subject to proper punishment or dismissal as the case may require.” Article 21 stipulates that: “If due to non-observance of working procedures or irresponsibility, rejects are turned out or the equipment is damaged, the worker or staff member shall be held responsible for part or whole payment of compensation for the material loss as conditions may require, whether he is punished or not. The amount of compensation shall be decided by the management and deducted from his wages until it is completely paid up, but the maximum amount to be deducted each time must not exceed 30 per cent of his actual monthly wages.”
As if this foreman’s charter (prosecution, judgement and jury were all in the same hands) were not enough, penalties were stipulated for managers who failed to punish the workers concerned. 
To ensure that workers with poor records could not escape particular managers by changing jobs, the Ministry of Labour introduced a labour book containing the worker s record; the worker could not obtain legal employment without presenting the book to his employer for inspection. Special tribunals were created in 1953 to enforce the disciplinary code, with the court of final appeal being the Supreme People’s Court. Under supervision by local courts, factory managements were required to set up internal courts with the power to make public criticism of the performance of particular workers, to warn them and to penalize them by cutting pay, demoting, suspending or dismissing them. For more serious charges, labour correctional camps were created; the ordinary courts took over after that, with the power to imprison or in extreme cases to impose the death penalty. 
The combined effects of poor machinery, poor health and the general speed-up in production created both high accident and sickness rates as well as forms of worker resistance. In response, the ACFTU undertook regular campaigns, not to protect workers by securing a slackening of the pace, but by intensifying discipline and setting up Union commissions to try offenders. The press complained regularly of labour “indiscipline”. One newspaper maintained that: “Workers in general are late for work and early to go home, and always absent without leave; they break working regulations, disobey transfer orders and technical instructions and resist the authorities negatively, causing. a fall in the quality of their work; sometimes they purposely go slow in their work or even stage a strike.”  The trade union newspaper explained: “Since a large number of the new workers who have been recruited by various enterprises come from the petty bourgeoisie or even from the exploiting classes, they brought many backward ideas such as selfishness, irresponsibility, and laziness.”  As so often, resisting the régime s purposes was attributed to hostile classes. In fact, by 1953 the rapid expansion in employment had not gone beyond taking up the existing unemployed.
The press also attacked go-slows and strikes. The People’s Daily summarized the irritation of the new government: “The phenomenon of idle strikes, insubordination and violation of labour discipline, are still prevalent among staff and workers in various enterprises, causing tremendous damage to our national economy.” 
The cadres were also guilty of not appiying the proper sanctions: “The leadership cadres in some of our departments and enterprises have cherished an erroneous conception of the problem of labour discipline, considering that strict implementation of discipline is a ‘capitalist way of management’, a ‘warlord style of work’, or ‘commandism’. Therefore they consciously or unconsciously adopt a compromising attitude towards acts of breach of discipline, nor do they take any drastic action against them.” 
The work performances criticized might have been tolerable had they not been measured against the spectacular output achieved by model workers, the “Stakhanovites”. “Stakhanovism” was a feature in the organization of labour in Stalin’s Russia. A miner, Alexander Stakhanov, claimed to have produced 102 tons of coal in five hours, fourteen times the normal output. This “model” was then employed to force all miners to compete to achieve the new – and clearly ludicrous – target, raising the norm progressively so that the average miner could never reach it but productivity went up by leaps and bounds. In China, the “model worker” concept was used from the beginning with the same aim. By the end of 1950, there were some 200 publicized national and several thousand provincial models as well as model enterprises; by 1958, there were five and a half million model workers. The Wang-chia-yuan colliery in Kiangsi province, for example, claimed to have broken the national record six times running (though the claims were subsequently said to be forged). 
In Western countries, “rate-busting” by individual workers is a notorious method of raising output, setting workers against each other, and ruining their health through exhaustion and accidents (it penalizes all except the most robust, especially women and older workers). But in China, Stalin’s formula was described as “socialist emulation”: “it transforms labour from a degrading and painful burden, into a matter of honour, glory, valour and heroism. 
Pay was geared to reward the rate-buster. There were numerous other privileges for model workers – titles, opportunities for promotion, attending conferences, being introduced to national leaders, opportunities to join the party or be elected to political or governmental bodies, special holidays in trade union rest homes, travel privileges, gifts in kind, and – perhaps the most important of all – special treatment in the provision of housing. Sometimes the rewards were not to individuals but to a gang or team. In the early 1960s, there was even a “family emulation drive” in which members of a family working in the same factory were supposed to check each other s shortcomings in order to keep up the family output.  There were also interplant contests, and the mass meeting was used to expose the laggards.
The model workers system proved a mixed blessing for the regime. Apart from the problem of forged credentials – workers and management colluding to win prestige – stable production was often wrecked by individual blitzkrieg tactics. Wang Jung-lun of the Anshan iron and steel complex was so far ahead in his work, he would have been halfway through the Fourth Plan while the rest of the work force was only completing the First, something of a problem if production is collaborative.  For different reasons, managers and workers had cause to be hostile to the scheme. Furthermore, model workers had an exceptionally high casualty rate, not a good advertisement for other workers; of 192 model workers discussed in one source, seventy-six later collapsed from overwork, and ninety others subsequently failed to make the political or moral grade. 
Efforts were made to lengthen the working day. However, the cost to men and machines was high. As a result, the original eight to ten hour day was revived, with, where possible, three-shift working. However, plant targets remained, often forcing managers to extend working hours well beyond the official period. In 1952 the government reproved the practice: “Under the slogan of ‘accomplishing the production mission’ and ‘implementing the economic accounting system’, the leadership personnel in certain factories demand an unlimited stretch of labour of the workers, extend their working hours, and encourage them to ‘throw themselves into the boiling water and burning flame’. For instance, the brick factory of Ma Chia Kou, Kailan, failing to keep up its production previously, mobilized workers to pull bricks out of the hot kiln heated to 130 degrees centigrade in order to fulfil its contract in time to avoid a fine ... The result was that forty-one of the forty-three workers sustained injury through burns, some proving fatal.” 
Despite the reproof, the pressure of targets – and the sanction of fines or worse – continued to force the pace. The press carried accounts of people working twenty-four hours or more at a stretch; one railway “hero” worked for thirty-nine hours continuously. At the Anshan steel works in 1955, it was reported that: “During a week in April, some workers in this enterprise worked as long as thirty-five hours at a stretch; others, seventeen hours.”  Even the head of the ACFTU, Lai Jo-yü, was prevailed upon to complain: “There has been no limit to the prolongation of working hours; individual workers have worked continuously for seventy-two hours through additional shifts and working hours. in order to fulfil their tasks, individual factories have required their workers to work Sundays for a period of ten months ... As a result of exhaustion, sickness and casualties have been serious ... in individual factories, increased shifts and working hours reached 260,000 hours, but the number of hours lost due to sick-leave amounted to 220,000.” 
The government also made continuing efforts to economize on manpower. In his 1958 Sixty Points on Working Methods Mao praised the amalgamation of Kwangsi commercial enterprises which cut their workforce from “2,400 to 350”. In the 1950s, jobs expanded rapidly enough to conceal the simultaneous decline in the volume of labour per unit of output. In the 1960s, output increased less rapidly, but there was no relaxation in the efforts to reduce the labour force. For example, at the Hsiao Ch’i-pa Iron and Steel Works (Chieng-yu county, Szechuan), the 1960 production plan was fulfilled one month ahead of schedule while the workforce was cut by a fifth; the management aimed to cut the workforce by another fifth in 1961, but then decided to raise the targets and drop a third of the workers. 
With tight curbs on labour costs, the appropriation by the State from current production was enormous. The Chairman of the ACFTU in 1954 reported that: “In 1952, the workers of State-operated enterprises produced a yearly average value of iMP 100 million per capita. Of this, except for iMP 500,000 as the average monthly wage for workers, ninety-four per cent represented capital created for the State.” 
The Great Leap Forward accelerated the drive to increase output and lower labour costs. The rules governing hours and conditions were swept away in the frenetic drive for expansion. Now even increased pay for increased output was denounced as capitalist “material incentives”. Military and guerilla imagery came to dominate production – model teams and Red Banner Bearers led “surprise attacks” in competition with other teams and factories; “combat corps” were mobilized for assaults under the slogan, “no respite without victory”. Tales of triumphs poured in – the cadres of Ku-hsien steel works, Shansi, claimed to have increased daily steel output from 714 to over 2,000 tons.
According to theory, under capitalism, wages induce people to work; they must work to secure the means of their survival. Differences in wages induce workers with different skills to take different jobs; the labour force is distributed between jobs. Differences in the profit margins between competing firms permit, in theory, different levels of wages, which induce workers to move from less to more profitable firms. The role of wages in distributing workers would be unnecessary if skills and abilities were universal or the nature of production required no skills. In a State-owned economy, subject to a central plan rather than different profit rates, if differences in wages are not used to distribute workers between jobs, it can only be done by decree, by instructing workers to do particular jobs, a task which requires a large directing bureaucracy. The discussion of wages in China must, therefore, include an account of how the Chinese government secures such a distribution of workers.
Both the Soviet Union and the United States had, during the main stages of capital accumulation, a relative shortage of labour, especially skilled workers, and in both countries, there was a sustained drive to the most intensive exploitation of labour with sharp differences in wages between workers. In China, like Japan and India, the supply of labour appears in the early stages of accumulation to be unlimited, although there is a grave scarcity of skilled labour. In Japan, this situation produced not the high and finely graded wage differences of the United States, but a small core of permanent workers alongside a very large workforce of temporary and contract workers; it was not so much the wage differences that were the mechanism for distributing workers, but differences in the security of employment. On coming to power the new Chinese régime made some efforts to copy a Russian style of wage payments (although it was never so extreme), but already by the mid-1950s was moving towards what we could call the “Japanese” model.
The subject of wages is much confused by the distinction between “material” and “non-material” incentives. It is said, in China, that working for money is “selfish”, and people should work for patriotism or a similar purpose. Employers in the West have not been at all averse to urging workers to “work for Britain”, and capitalism has always employed “non-material” incentives – usually negative (a fear of unemployment) but sometimes positive (patriotism, loyalty to a particular employer); there are other “non-material” incentives, of course, like the use of the law, police and troops to intimidate workers into working. There must therefore be some care about praising “non-material” incentives as if they were somehow superior, and confusing a situation where material scarcity has been abolished so that the basic drive – to secure material survival – is no longer paramount with one of great scarcity, where workers are not even paid in relationship to their work. In the second case, we are closer to forms of serfdom or military service (the second existing under capitalism) than communism.
We will look at incomes in China as a whole in the next section, but what was the picture of the wage system before the Cultural Revolution? Initially, the régime organized an eight grade wage point system, with fixed wage points related to skill, industry, area and job (the wage points were related to five staple items of consumption: grain, oil, salt, cloth and coal). The national range was not wide (3:1), but between industries and areas much wider. With the beginning of the First Plan, new priorities – of area and industry – were added; for example, a special bonus was given for metal working in Shanghai and Taiyuan (nine to ten per cent) and for Kansu petroleum workers (ten to thirty per cent). The government made consistent efforts to increase the proportion of pay made under piece-rate systems (at their maximum extension, piece rates were officially said to cover forty-two per cent of workers) and to widen differences in pay. Inequality of income was a deliberate act of policy – as Chou En-lai, quoting Mao (and Stalin), explained: “some confusion still exists, and, in many places, egalitarianism has not been overcome. Egalitarianism is a type of petty-bourgeois outlook which encourages backwardness and hinders progress. It has nothing in common with Marxism and a socialist system. It damps down enthusiasm of workers and employees in acquiring technical skill and raising productivity; it harms the growth of our economic construction. We must therefore oppose egalitarianism.”  The justification for inequality is not, here, seen as a temporary matter; equality is incompatible with a socialist system!
If the government strove to increase differentials, it was also concerned to minimize labour costs, particularly by eliminating payments which were not related to work performance. For example, from 1951, efforts were made to reduce the bonus customarily paid at the New Year. Drastic limits were laid down on the size of the bonus, and employees of the government and banks were forbidden to receive it. 
Despite inflation the expansion in jobs and increase in stability of employment after 1949 must have seemed to most workers a dramatic improvement. Wages did not rise much – one estimate suggests that the average wage in the early 1950s, about JMP 40-50, was not in real terms very different from the average in the early 1930s.  But there was now greater stability and, because more family members could expect to secure work, a higher level of household income, despite the increased level of deductions – for example, for State Bonds, Aid Korea Bonds, savings and fines. The beginning of the Plan imposed rigorous targets on managers and made the scarcity of skilled labour severe. Managers began to compete to secure skilled workers, bidding up top wage rates. In 1953, as a result the government seems to have lost control of the wage system, and only re-established some measure of guidance through a general tightening up of financial controls over managers.
In 1956 the government introduced the only major reform of the wage system under the People’s Republic. The aim was to restore incentives and differentials. “This revision”, an authoritative commentator argued, “will effectively eradicate egalitarianism and the state of unreasonableness and confusion obtaining in the current wage system [and] serve as a powerful material factor setting in motion the extensive masses of workers and office employees to strive for fulfilment of the First Five Year Plan ahead of schedule.” 
However, a straight rationalization would have had to include substantial wage cuts for many workers. Given the rash of industrial disputes mentioned earlier, and the resistance of party cadres in the factories to pay cuts, the government permitted wages to rise to secure the rationalization – by some twenty per cent on the former total wage bill. On the basis of the minimum wage needed to maintain two adults in an urban area – an innocent implementation of Marx’s “socially necessary wage” – eight new grades of pay were established, varying between different industries and eleven geographical areas (the variation was about thirty per cent). Piece rates and incentive bonuses were expanded at the same time. The lowest manual workers’ rates were kept down (and reduced even further in November 1957) to narrow the gap between rural and urban pay and so discourage peasant migration to the cities.
The State retained strict control over the total wage bill of the enterprise and the size of its workforce (controls weakened during the Great Leap Forward, were restored from 1961, and tightened during the Cultural Revolution). The eight grade system has governed the structure of wages up to the present, although there were minor adjustments in 1963 and 1971.
In the heyday of the system piece rates covered some forty-two per cent of the workforce, compared to a maximum of seventy-two per cent in Russia. During the Great Leap, the party attempted to lower labour costs at the same time as accelerating production; instead of raising the piece-rate norms, it began to move away from piece rates altogether. As one newspaper described it: “during the Great Leap Forward movement, workers voluntarily abolished the piecework system and extra pay for extra work system. People now work not eight hours, but ten hours, or even twelve hours. If work requires, they work throughout the night.” 
Nonetheless, in 1959 piece-rate payment systems still covered thirty-five per cent of the workforce. In 1960 the effort to substitute party discipline for cash payments was then reversed and efforts were made to restore cash incentives (although not necessarily through piece rates). A commentator described the problem in the mines: “some workers began to think that how much they worked made no real difference and relaxed their effort gradually.” It was found that the restoration of incentives radically reduced absenteeism and increased “work enthusiasm”.  However, there was no relaxation of the tight controls over the hiring and direction of labour as employment contracted in the disaster years of the early 1960s.
What about the living standards of urban workers and their families? Wages are not the only factor in assessing this. The price of goods determines the real value of wages. Since 1949, official food prices have been held stable, and in some cases slightly reduced. Of course, official prices do not indicate whether foodstuffs are available at that price. Speculation in commodities and the smuggling of foodstuffs in the cities have been a periodic preoccupation of the newspapers, indicating that the black market has been important in the supply of goods not available through legal channels. Except in years of exceptionally poor harvest this applies less to the most tightly controlled agricultural product, grain, and more to horticultural foodstuffs (tomatoes, fruit) and meat, much of which is raised on private plots by the peasants and traded through rural free markets.
The official grain ration – varying with the type of work and age of the consumer – was in the 1950s relatively small, varying between twenty-five and fifty-five catties per month (12.5 to 27.5 kilograms). In 1953 it was estimated that the average adult required seventy-one catties per month, with an actual average consumption in 1954 of forty-nine catties.  Since the mid-1950s, the State procurement of grain has increased substantially, but at a rate not much faster than the increase in population, so that it is unlikely the grain ration has significantly increased. However, the supply of other foodstuffs – meat, eggs, milk, sugar and even edible oils – has improved, as has the stability of supply, so that the long queues from four or five in the morning seen in the big cities in the 1950s are less common today.
Housing has remained a problem. The housing stock was disastrously depreciated in the twelve years before 1949, and the new régime directed most of its investment into industrial production. In the 1950s, efforts were made to clear the slums in the largest cities and rebuild at standards which, however, were not met in subsequent years. Since the government has no national housing programme there is little information but it seems the addition to the housing stock was very small outside a few favoured areas. Standards were generally low – four or five persons per room – and some brand-new residential areas, lower.  In Taiyuan, for example: “Housing conditions of workers are deplorable. It is rather a common phenomenon that over twenty workers are crowded into one small room. One room, formerly a toilet, is now accommodating six workers. In a coal mine outside Taiyuan, 250 worker families are housed in 123 rooms. In one room (ten by ten feet) are housed three worker families. Most of the houses are leaking.” 
In the 1960s, with strict controls on the increase in the city population and on marriage (so controlling the rate of creation of new households and the demand for separate living quarters), housing policy was concentrated on building factory dormitories for single workers, six to eight persons to a room. In the new industrial areas, little provision was made for housing at all. Workers in the Taching oilfield started work living in tents or holes dug in the ground to escape exposure to frost; in the early 1960s mud huts were built by the workers in their spare time; now, with half a million people living there, “Even new houses have no running water, only outside toilets shared by a dozen or more families and communal bath-houses.”  This is “self-reliance” with a vengeance! No wonder the State is so proud of the surpluses which Taching has provided.
In the 1950s more was done to improve basic services in the big cities – electrification, water and sewage facilities, the provision of public latrines, bath houses, clinics and schools. Prices were kept low for those with the right to utilize them, primarily permanent employees in large-scale industry. Rents were held at four to five per cent of the worker’s income. It is not clear what the situation was for those outside this group – temporary workers not housed in dormitories, small plant workers, casual labour, or even those without jobs (widows, pensioners, etc.). In the 1950s, there is evidence of at least some rents varying, not with the wage packet, but with the quality of accommodation. In 1955, the Minister of Finance, Li Hsien-nien, complained about one housing project in the following terms: “The dormitories newly built for workers of the Tsitsihar Locomotive and Wagon Factory were beyond the means of workers because the rental on each flat ranged from JMP 18 to 41 per month, or two to six times higher than the old dormitories.” 
State and municipal expenditure on housing is so slight in relationship to need that enterprises and offices have generally built housing for their own staff. This system of “tied cottages” gives great power to management and party cadres, and the allocation of housing can become one of the rewards for good behaviour. It also means that loss of job can entail, if not exile to a rural area, loss of the worker’s home. However, the system affects only the minority employed in enterprises employing 100 or more workers (possibly a quarter of the sixty million or so employed outside agriculture). For the rural majority, there is no central housing provision; traditional “self-reliance” must make up the gap.
The same minority is the recipient of the welfare services provided by the trade unions – canteens, clubs, housing, medical facilities, sanatoria, nurseries, and pensions. Half the cost of medical care for dependents of permanent workers is also met. Some factories provide schools for workers’ children, as well as “spare-time universities” for their parents. Social insurance benefits are graded according to wages, with special rights for model workers, combat heroes and others. Sickness benefit varies between sixty and 100 per cent of the wages received, provided the sickness or accident can be attributed to the worker’s employment. Retirement pensions are some fifty to seventy per cent of the average wage received at retirement (seventy per cent for those who have worked at the same place for more than fifteen years). By 1960 some nine million workers were covered by the scheme. Trade union activities are financed by management deducting three per cent from the total wage bill; cases are mentioned in the press of a much higher proportion being deducted by the cadres and distributed as and to whom they think fit. 
For permanent workers in larger enterprises conditions are adequate without being lavish. The standard of living depends very much on the seniority of the head of the household and the number of household members who are working. For example, in 1972 the Chinese press quoted with approval the case of the family of an elderly chemical worker (working, incidentally, three years after the official retirement age): Chang Tien-cheng, aged sixty-three, of Hsiku district, Lanchow. Formerly, he had been an odd-job man, “and no matter how hard he toiled at that time, he could not feed his family of five”. Presumably, the children were not of working age. “They had to eat wild plants from time to time ... Now, having five workers, the family income has risen while the cost of food grain, fuel and utilities and rent is stable or lowered. The family now has a flat in an apartment building. Rent and utilities cost less than one-eighteenth of the father’s wage. They had a gas stove installed that costs one yuan per month ... everyone who is working in a factory has a watch. The family possessions include two radio sets, three bicycles, a sewing machine, wool blankets, fur-lined coats and furniture.” 
After an extensive visit to China, Richman calculated the number of labour days required at present Chinese wages to purchase some of the items Chang Tien-cheng’s family owns. We can compare them with how long it takes a British worker to earn enough to make the same purchases (the figures in brackets): five to six days for a watch (half to one day); between twenty-five and fifty days for a wireless (one day); between thirty and fifty days for a two-piece woollen suit (two to three days); between sixty and ninety days for a bicycle (three and a half days); 165 to 425 days for a television set (seven days); 12,000 days for a car, if permitted (155 days). 
The condition of the permanent workers has improved considerably since the period of Kuomintang rule (and more dramatically by comparison with the years of civil war). But the improvement is mainly from stability of employment and the increased number of jobs available, rather than changes in pay or prices or government investment in public services. For the majority of workers conditions remain austere.
The rapid economic expansion of the first half of the 1 950s brought into employment much of the reserve army of urban labour. But the increased labour productivity of these years meant also that, as output soared, the number of new jobs tended to decline. In the first eight years of the People’s Republic, the number of industrial workers increased by fifty-one per cent; but in the period of the First Five Year Plan (1953-7), the number increased by only five per cent. Simultaneously, bureaucratic jobs grew more rapidly than those in industry, the result of extending State control. In China, the movement of peasants to the city also remained a problem, and put increasing pressure on State procurements of grain from the countryside.
By 1955, initial optimism that industrial growth would quickly eliminate unemployment was waning. The Chairman of the State Planning Council postponed a remedy for several years: “The phenomenon of unemployment left over from the old China cannot be completely eliminated yet, and the surplus labour force still cannot be fully utilized. These problems will have to be solved by our continued efforts in the Second or even the Third Five Year Plan.” 
The policies designed to remedy this situation – from banning rural immigration, rationing and passed, to increasing rural work – have already been discussed. However, rural disaster still produced a flight to the cities – for example, the Minister of the Interior complained that over half a million peasants had fled from famine areas to the cities in six months in l957.  Every slackening in the industrial economy, as in 196 1-6, threatened to re-create the old pool of urban unemployment unless hsia fang (sending down) worked with great speed and efficiency.
Despite the physical removal of the unemployed, the panoply of controls and propaganda, the attraction of the cities remained strong. The Minister of Agriculture remarked to a cadre audience in 1966 that: “Everyone wants to go to the towns. There a man can earn thirty to forty yuan a month just by sweeping the streets, whereas in the country he can earn no more than twenty yuan a month. Among those present here, who would voluntarily become peasants?”  The pressure was not simply from the peasants. Those “sent down” were frequently eager to return, whether with a job or not, and the weakening of police controls in 1966 led to a large influx of people to the cities.
Officially, the problem of unemployment in China is at an end, and in the cities, depending on the efficiency of the police and administrative controls, this is broadly true. It does not, of course, mean that the permanent city worker is relieved of the worry of redundancy; redundancy now can mean exile from the city to the countryside, with a sharp drop in the standard of living. However, isolating the urban economy in this way creates, when industry expands, a different problem: an artificial scarcity of labour. Managers, under the pressure of sanctions if they fail to meet the plan targets, are obliged to defy the regulations and pay their skilled workers above the going rate to prevent them moving to other enterprises for higher pay (a movement which is illegal, but which would require a vast police and administrative structure to prevent); and by hiring workers illegally either from the casual labour force in the city or from adjacent rural areas. In such circumstances, the government has been once again in danger of losing control. It has needed a method of making temporary cheap labour available if it is to safeguard its authority and sustain State accumulation. This has been achieved, as we shall see in the next chapter, by the system of temporary and contract labour.
In the rural areas, constant efforts are needed to keep up the level of employment, particularly when the State concentrates its attention on modern industry and urges the rural areas to be “self-reliant”. The problem is severe. The working-age population of China has increased by about twenty to twenty-five million people per year on average since the early 1960s. Not all of them are looking for jobs – some continue in education, some marry and leave the labour force to raise children, some go into the armed forces; and so on. If we assume, fairly generously, that ten to fifteen million new jobs are needed every year to keep up the present level of employment, we get some idea of the problem. If the industrial economy is expanding, there may be half a million new urban jobs created each year. For the rest, the rural areas have to feed them and find things for them to do without permitting them to strengthen the forces of petty capitalism. There is little room to manoeuvre.
What should be the role of trade unions – organizations supposedly designed to defend the interests of workers – in a State embodying the interests of the working class, “led by the proletariat”? In Russia, there was no definitive answer in the early years. The exigencies of the period of War Communism led to the subordination of the unions to military imperatives. But in the retreat of the New Economic Policy, there was considerable debate over the question. One group, whose most prominent spokesman was Leon Trotsky, continued to defend the position of the party during the phase of War Communism; workers needed no defence against their own State, and therefore the trade unions should be instruments to achieve the production targets of the proletarian State. At the other extreme, the “Workers’ Opposition” argued that, since the trade unions embodied directly the essential interests of workers, the unions should take over the control of production and, indeed, the State itself. 
The two arguments ignored the complexities of the new régime – in a backward country with a minority working class, they were, in Lenin’s term, “abstract”. The Soviet Government, in fact, directed not a “Workers’ State”, but a “Workers’ State with bureaucratic distortions”.  The distortions’ entailed that the unions had a definite role, independent of the aims of the State: “Our present State is such that the entirely organized proletariat must protect itself, and we must utilize these workers’ organizations for the purpose of protecting the workers from their own State and in order that the workers’ organizations may protect our State.” Lenin’s formulation implied the right of the unions to use what strength they had against the State, to strike, in order to defend their members. Up to 1928, this was indeed the case, although bureaucratization led in practice to the suppression of many strikes. 
In the first years of the People’s Republic, there was no debate on the role of the trade unions. Their role had been defined in the preceding period in the Liberated Areas; they were instructed to assist in meeting the production targets of the State; Mao, like Stalin, apparently adhered unquestioningly to the position advanced by Trotsky in 1920. The ACFTU whose claimed membership rose from 800,000 in 1945 to thirteen million in 1955 and sixteen million in 1958, had the role of its affiliated unions specified by law: “To educate and organize the masses of workers and staff members to support the law and regulations of the People’s Government ... to adopt a new attitude to labour, to observe labour discipline, to organize labour emulation campaigns and other production movements in order to ensure the fulfilment of the production plans ... to protect public property ... to promote in privately owned enterprises the policy of developing production and of benefiting both capital and labour.” 
There was nothing about defending the interests of workers, nor about any rights the unions might have in this pursuit. Li Li-san, concurrently vice-president of the ACFTU and Minister of Labour, left no ambiguity: “the central task of the trade union organizations is to increase production. Only in this way will the trade unions be able to take fully into consideration the interests of the working class.”  Contrary to Lenin’s view, there was no difference between the interests of workers and the production targets of the State (a view usually espoused by employers in capitalist countries); only later was the halfway house of a “non-antagonistic contradiction” constructed to shelter strikes. Those entrusted with the achievement of production targets were the managers, and it followed that there was no difference between the interests of workers and managers. Indeed, since managers worked, they too ought to be members of trade unions; managers were frequently prominent in the unions as delegates at the annual conferences. It was the party which encompassed all, workers, managers and unions. In like fashion, the party appointed the trade union leadership from its own ranks, not from those with experience of workers or trade unions (let alone permitting the election of trade union leaders by union members).
In such circumstances, it was difficult for workers to distinguish trade union officials from management. From time to time senior party leaders complained of the resulting isolation of union officials; in 1950, for example, one military authority observed that: “Many of the factory trade unions have recently adopted the position of the capitalists, issuing the same slogans, speaking the same language, acting like them. The unions defend management ... In certain factories the capitalists could have accepted the demands of the workers, but the union proceeded to convince them to withdraw these demands ... in the coal mines of Ta Hae, the workers, when they learned of the dismissal of the union chairman, were as joyful as if they had learned of the liberation of Taiwan or a rise in wages.”  The reproach was unkind, since the luckless cadres were doing no more than carrying out the instructions of the party leadership.
Party cadres working in the unions had the unenviable task of trying to retain the confidence of workers (important for their political duties), while ensuring that production targets were met. If too much was conceded, the cadres were liable to be dismissed for “economism”, giving in to the “sectional and one-sided interests” of the working class. Li Li-san and his associates (a third of the ACFTU’s executive) were criticized and removed from union leadership for holding the view that “management should represent the long-term interests of the whole, while the trade union side should represent individual and immediate interests; management should represent production, while the trade union side should represent distribution.” 
Li Li-san had had no recent experience of trade union work (he spent the years of war and civil war in Moscow), and his replacement, Lai Jo-yü was even less experienced (he was a provincial party leader). A comparable sequence of events overtook Lai in 1957, although he was preserved from disgrace by his death the following year. In the unsettled conditions of 1956-7, Lai advanced the idea that local trade union branches should be responsible to the national trade union leadership rather than to factory or district party leaderships. 
The ACFTU despatched study teams to examine relations between union branches and local party committees; in the final report, it was concluded that nowhere were the two separate. The report of the deputy director of the ACFTU General Office went further, saying the workers had “cast aside” the unions because their sole function was to co-operate with management; the trade union officials were known to the workers as “the tongues of the bureaucracy, and the tails of the administration and the Workers’ Control Department”.  The local official, it was said, did nothing about bad working conditions or excessive hours; he was afraid to raise the complaints of workers lest the administration attack him as a trouble-maker. One cadre complained: “I am told that I should study the problems with the leadership and not with the masses, and that to talk with the masses means ‘becoming the tail of the masses’ ... I am regarded as a trouble-making Party member.”  The trade union party cadre was the lowest in the party hierarchy, and few above him would listen to complaints. If he mobilized workers against the management, he would be sacked and expelled from the party. The party members among the workers – between ten and twenty per cent of workers and staff in 1956 – were hostile to the trade union cadre and sometimes were not even members of the union; those that were, did not attend union meetings, report or pay dues. 
The party centre again intervened to settle the question: the local union branch was to be directed by the local party committee, a position which left no role for the national union leadership except as a propaganda arm of the party centre.  When Lai Jo-yü fell ill in 1958, Liu Ning-yi who worked in the foreign affairs department of the party Central Committe was appointed to replace him and undertook a purge of Lai’s associates lest they harbour secret ambitions to create autonomous unions.
No one questioned the idea that the role of the unions was to maintain production and implement the directives of the State. The unions played no role at all in the labour agitation in the mid-1950s. In general Mao displayed no interest in the unions, but when he did, it was to repeat that “the principal task of a trade union is to develop production.”  His constitution for the Anshan Iron and Steel Company makes no mention of unions.
The unions – like management, of which the local union leadership was part – retreated into the background during the Great Leap. The party committee assumed the leading position. In the retreat, the unions were resuscitated as part of the effort to save production and stabilize activities. There was no question of this role involving an independent defence of workers. The trade union newspaper repeated the official line: the local union must strengthen its unity with management for its “basic task is the same – to run socialist enterprises successfully by relying on the masses for fulfilling the tasks assigned by the Party and the State”.
However, in the first year of the Cultural Revolution, the trade unions were unilaterally abolished, along with the trade union newspaper and the Ministry of Labour. None of the claimed millions of union members protested (the main functions of the local unions in welfare and education continued to be fulfilled). The party explained that the unions were dominated by “revisionists’” who concentrated solely on production and the “economist” demands of workers, instead of “production, livelihood and education in one with production as the centre”, a formula notable for its obscurity.  The old unions were not resuscitated.
Yet the labour force required organizing for particular purposes. From 1967 the revolutionary committees began to sponsor local worker congresses for political education and “combating self-interest”. By 1973, these had moved into district or provincial congresses in major centres, the preparation for a reconstructed ACFTU.
In the early days of the régime, unions had been involved in wage negotiations with private employers, and on occasions were even able to claim that they had “corrected the mistaken activities of management”. But the elimination of the private sector ended this. From 1957 the government tightened its control of jobs and the wage bill, removing as much discretion as possible from local management, let alone union officials. Today, the national government determines the wage bill, and the unions have no role even in distributing wages within the plant. The trade union function is restricted to educational and welfare activities, and only where unions exist – in the large plants of advanced industry. Thus, Chinese unions are not “trade unions” at all in the ordinary sense, but rather the welfare departments of management (the role of factory committees will be discussed later).
1. Kuang-ming JP, 28 August 1953
2. JMJP, 14 July 1954, SCMP 859, cited Gluckstein, op. cit., p.216
3. For details and Chinese sources, cf. Martin King Whyte, Corrective Labour Camps in China, Asian Survey, March 1973, pp.255-6
4. Hsin-hua JP, 22 July 1953
5. Kung-jen JP, 3 June 1953
6. JMJP, 12 December 1954. See also JMJP, 3O March, 6 June, 20 August 1954
7. JMJP, 22 October 1954, SCMP 922
8. Chang-chiang JP, Hangkow 11 August 1952
9. Quoted, Seventh Congress ACFTU, ACFTU, Peking 1953, p.56
10. See, for example, four family members in Tientsin No.1 Dyeing and Weaving Mill, cited by Liu Pang-chieh, Family Emulation Drive, China Reconstructs, October 1961, pp.17-18
11. JMJP, 1 January 1954, cited Howe, Wage patterns, op. cit., p.131
12. Kung-jen JP, 19 April 1951
13. GAC (Committee for People’s Supervision), Circular on labour accidents, 18 September 1952, NCNA Peking, 17 September 1952, SCMP 446
14. Kung-jen JP, 27 May 1955, SCMP 1076
15. Kung-jen JP, 20 February 1955, SCMP 1024
16. JMJP, 12 March 1961
17. JMJP, 13 December 1954, SCMP 709
18. Report on the work of the government, First National People’s Congress, first session, 23 September 1954, p.27; cf. also The incompatability of socialism and egalitarianism, JMJP, 14 September 1952, SCMP 472
19. GAC, Directive on the year-end double pay and bonus in public and private enterprises, 8 December 1951, NCNA Peking, 8 December 1951
20. Gluckstein, op. cit., p.253
21. Chin Lin, Lao-tung, No. 3, 6 March 1956, cited by Charles Hoffman, Work incentive practices and policies in the People’s Republic of China, 1953-1965, New York 1967, p.85
22. Hu Shang, Speaking of the Government Issue System, JMJP, 13 November 1958, cited Hoffman, Work Incentives, op. cit., pp. 96-7; cf. also Li Fu-chun, Report on the draft economic plan for 1960, JMJP, 31 March 1960
23. Wang Yu-ch’ang, Attend to the livelihood of workers, JMJP, May 1960, cited Hoffman, op. cit., p.105
24. JMJP, 3 November 1955
25. Po I-po: “217,500 rooms were built to accommodate about one million people” in 1952 – NCNA Peking, 20 February 1953
26. Hsin-hua JP, 12 January 1952, cited Far Eastern Economic Review, 30 October 1952
27. Report of a visitor to Taching, Forming Maoist Man, Financial Times, London, 2 December 1976
28. NCNA Peking, 23 October 1954
29. For examples and Chinese sources, cf. Howe, Wage Patterns, op. cit., p.126
30. Living standards of Chinese workers rise, NCNA Lanchow, 11 May 1972
31. Calculations for China by Barry M. Richman after an extensive visit to China, average wage assumed, 60 yuan per month; cf. Industrial Society in Communist China, New York 1969, pp. 808-9; British wage assumed, £65.00 per week.
32. Li Fu-ch’un, cited by Wang Ya-nan, Ko hsueh ch’u pan-she, Peking 1956, cited Hoffman, The Chinese Worker, Albany (New York) 1974 p.50.
33. Takung Pao, Peking, 3 June 1957, SCMP, 24 June 1957, p.23
34. Tan Chen-lin, cited in Red Flag of Science and Technology, 6 March 1967, and by Deleyne, op. cit., p.58
35. This is a much simplified account of the debate; for a description, cf. R.V. Daniels, The Conscience of the Revolution, Cambridge, Mass. 1960, Ch.5, pp.119-36
36. The trade unions, the present situation and the mistakes of comrade Trotsky, December 1920, speech to 8th Congress of Soviet Trade Unions, SW 9 (1937), p.9
37. Strikes in the State sector affected 192,000 workers (1922); 165,000 (1923) when 1,592,800 were in dispute; 43,000 (1924); 34,000 (1925); 32,900 (1926); 8,900 (first half of 1928) – from Wage Labour in Russia, Moscow (in Russian), 1924, p.160, and Trade Unions in the USSR, 1926-28, Moscow (in Russian), 1928, p.358, cited by T. Cliff, Russia. A Marxist Analysis, London, n.d., pp.20-21
38. Trade Union law of the PRC, Peking, 1950, p.5
39. Speech, 8th meeting, Central People’s Council, 28 June 1950, included ibid, p.22
40. Teng Tzu-hui, vice-chairman, Southern-Central Military and Administrative Committee, Chung Kuo Kung Jen, Peking, 4 August 1950
41. Resolution on ACFTU work, summarized in Kung-jen JP, 11 February 1953
42. Kung-jen JP, 9 May 1957, SCMP 1535, p.12
43. Li Hsiu-jen, in JMJP, 4 August 1957, SCMP 1551, pp.10-13
44. Lo Yü-wen, Distressing contradictions, JMJP, 21 May 1957, SCMP 1551, pp.21-22
45. Report on the railways in T’ieh-lu Kung-jen, Canton, 4 May 1957, p.2, cited by Paul Harper, The party and the unions in Communist China, CQ 37, January-March 1969, p.111
46. Trade Unions open debate on two lines, NCNA Peking, 28 November 1957, SCMP 1665, pp.40-42
47. In the course of criticizing Soviet trade unions for paying too much attention to the welfare problems of workers – in Miscellany II, p.274
48. Ta-lien-wei, JMJP, 27 May 1968, SCMP 10 July 1968, p.5
Last updated on 26.7.2001