The years since Mao’s death have seen everything that was distinctive about “Maoism” junked by his successors. Mao himself is still revered as the founder of the state – but every important decision he made in the last twenty years of his life has been overturned. His present status was best summed up by one of Deng Xiaoping’s followers in 1981: “[Mao’s] mistakes are opposed to scientific Mao Zedong Thought and therefore Comrade Mao Zedong’s thinking in his late years should not be confused with Mao Zedong Thought. Mao Zedong Thought is a scientific theory which does not embrace Comrade Mao Zedong’s mistakes.”  In other words, “scientific Mao Zedong Thought” is whatever they want it to be!
In the 1960s tens of thousands of revolutionaries across the world looked to China as an inspirational model of socialism, and as a source of practical aid for liberation movements. Deng Xiaoping’s rise to power has destroyed both. China today is held up as a model only by right-wingers who want to show the inevitable superiority of “market forces”. This has led many on the left to talk of the rise of “revisionism” and of a “new capitalist class”.
But there is nothing new about this capitalist class. Many of the elements of the “modernisation” strategy were used in Mao’s day, when they served his purposes. More fundamentally, Mao and Deng shared the same fundamental aim – the construction of a strong national economy capable of competing with the rest of the world. The argument between them was always one about the means to this end.
Since 1949, it has been that need to compete, and not the basic needs of Chinese workers and peasants, which has always guided the pace and direction of the Chinese economy.
In the 1950s and 1960s, that competition was expressed primarily in military terms, and economic strategy centred on the need to build a military capability equal to the threats from the outside world. Hence the siege economy, the absolute primacy of heavy industry, the squandering of vast resources to build a Chinese atom bomb – and the constant “mass campaigns” to squeeze more production out of workers and peasants. The sheer poverty and backwardness of China made the strategy unworkable. Mao’s answer was to overcome those material constraints by using sheer willpower and hard labour to replace non-existent capital and technology. Far from working, this approach led the economy from crisis to crisis. China did develop industrially – but the economy fell further and further behind the competition.
The new rulers have ditched Mao’s approach because it failed to work. As they see it, the realities of international competition dictate that China must be integrated into the world economy if the country is to develop. If they are to improve profitability and productivity in Chinese industry, then bureaucratic command of the economy from the very top has to go as well. “Socialism in one country” is dead.
This does not mean that they are abandoning state capitalism in favour of private capitalism. Private capitalism has returned to China, most notably in the new rural industries – but it is a tiny fraction of the economy as a whole. What they are rather doing is devolving direct control over the running of the economy from a few hundred top officials in Beijing to a mass of lower-level officials and managers. The state remains in command – but it is those members of the ruling class at the sharp end, the factory managers, who have the authority to decide exactly how productivity is to be improved in each factory or mine. For the economy as a whole to become more competitive it is a precondition that every unit of the economy becomes more competitive.
Yet while the economy has grown far more rapidly since 1978 than before, the ruling class as a whole have increasingly lost their control over that growth. In devolving power to local officials, they have created tens of thousands of localised and sectional decision- making centres, whose adherence to the wishes of the ruling class as a whole cannot be relied on. This has a dynamic of its own, which leads to even greater sectionalism, unevenness, and consequently independence.
And the more they are successful in integrating China into the world economy, the more the rhythms of development and crisis of the world economy will come to dominate the Chinese economy. The ruling class cannot plan in advance which markets Chinese exports will be most successful in, nor can they plan the prices they receive for their exports. The plans will have to be constantly adjusted to fit around those realities.
Yet the power of the ruling class is based precisely on their ability to control and direct the economy, and the “modernisation” strategy demands that ability no less than Mao’s strategy did. If any sector of Chinese industry is to become truly competitive on a world scale, the amount of capital that will be needed is so huge that no single enterprise or group of enterprises can possibly accumulate it. The money will have to come from the central state. Yet their direct control over the core sections of the economy will be constantly undermined by their lack of control over the rest of the economy.
The contradiction between planning and “market forces” means that the state has constantly to intervene to limit the power and scope of the market and reassert the power of the centralised ruling class. Yet each time this is done, it makes the pace of economic growth even more irregular and unpredictable. It is a vicious circle, from which there is no escape inside the nation-state, even a nation-state as big as China.
None of the fundamental problems facing the ruling class are unique to China – they are the problems that face every capitalist ruling class attempting to guide a national economy in an uncontrollable world economy. In China the problems are worse because of the backwardness of the economy and Mao’s disastrous attempts to overcome this. Yet the new strategy is no more capable of solving those fundamental problems than was the old one. The roots of that failure lie not in mistakes or inadequacies of the Chinese ruling class, but in the nature of capitalism as a world system of production, in which the nation-state has become a brake on real economic development.
Indeed, as the imperatives of a world system in crisis come to be felt increasingly in China, the “modernisation” strategy may well come to be worse for the mass of the population than was Maoism.
In a major survey of the Chinese economy in the early 1980s, the World Bank concluded that: “An enlarged role for markets and competition, though it will undoubtedly improve efficiency and accelerate technological progress, could potentially also have undesirable social and economic consequences, including unemployment, unacceptably low (and high) wages, bankruptcy of enterprises and dismissal of workers, and the poor and backward being left further behind in the development process ... Very few countries have combined state and market regulation in such a way as to produce rapid and efficient growth, and fewer still have also managed to avoid intolerable poverty among substantial segments of their population. On the contrary, there are far more countries in which unhappy combinations of plan, market and social institutions have produced neither rapid growth, nor efficiency, nor poverty reduction.” 
Two generations after the brave promises of Liberation, it is a sobering conclusion. Yet there is an alternative for China, as was briefly revealed in the first revolution of 1925-27: the working class does not have to remain passive in the face of either state bureaucracy or “market forces”; the Chinese workers have the power to take on all sections of the ruling class and draw into struggle behind them the mass of the peasantry. It was the crushing of that alternative that ultimately made Mao’s victory possible.
The possibility of workers’ power is now much greater than it was in 1927. Then there were only some three million industrial workers in the whole of China, overwhelmingly concentrated in the south-east. Now there are more than 150 million workers, and the spread of industry into the rural areas would make it much easier to unite workers’ and peasants’ struggles. The Chinese working class has the power to overcome once and for all the poverty and the misery that have been their lot this century; the precondition for this is the smashing of the state founded by those who claimed to be their liberators.
23. Beijing Review, 15 June 1981, p.17.
24. World Bank, China: Long-term development issues and options, p.181-2.
Last updated on 25.3.2001