Arrigo Cervetto (29 June 1959)
Azione Comunista, No. 46
The «Communes» campaign has posed a fundamental problem for the Marxist interpretation of the development from a semi-feudal economy to a capitalist economy. First of all, we need to grasp clearly that in China, as in every other country with a feudal or semi-feudal economy, the historical problem is that of creating a capitalist economy, since it is impossible to skip a whole stage of economic development. Only when the material bases are created – and the creation of these bases is the task of capitalism, in this case of state capitalism – will Chinese society, and for it the new revolutionary class created by industrialisation, i.e. the proletariat, be mature enough to raise the problem of the socialist management of its economy.
Having recalled this constant of Marxist theory, every step that tends to draw closer to a modern, industrialised China is to be considered objectively progressive. Our task as revolutionaries will be that of systematically denouncing every ideological deformation of the Chinese leadership in presenting the necessary construction of a capitalist economy as «the building of socialism.» However, we also need to recognise the development of the Chinese economy as historically sound.
The only pattern for economic development in the move from a feudal to a capitalist economy regards the establishment, presence and action of such objective laws as exchange value and expanded trading and distribution reproduction. It is on the basis of the action of these laws that we measure capitalist development, a development that takes shape in the productive forces first of all, and then only in the forms assumed by these forces of production. Obviously there is an ideal pattern in production, which is proposed to us by Marxist analysis. This theorises the development trend of the capitalist laws: a huge industrial proletariat and a limited agricultural proletariat, employed respectively in big industrial and agricultural enterprises owned by a very limited capitalist class that has reduced the intermediate strata to the greatest possible extent. According to Lenin, «pure» state capitalism represents the ideal type of this pattern, «the antichamber of socialism» as he said; but it would be absurd to think of «pure» state capitalism – since even in the countries where there is a strong industrial sector of state capitalism we find it polluted by mixed forms and by private-co-operative agriculture – just as it would be absurd to think of a reality that corresponds completely to the pattern. It would be even more absurd to seek correspondence with this pattern in an economy with such a travailed gestation as the Chinese, even though there are many reasons why it could assume forms in the future that are close to it.
Capitalist reality is always a reality of lacerating economic contrasts, of struggles and crises and, of course, the struggle for the advent of socialism precedes the «complete fulfilment of capitalism. For example, the classic pattern of capitalist development is the nationalisation of the land and the abolition of ground rent, which slows down the accumulation of capital; but, in the historical course of its rise, capitalism has not seen this need for expansion through to the end and, despite penetrating all the sectors of the economic structure with its laws, has divided into various forms of agricultural production. Where, instead, in a universal sense, its typical, ideal forms correspond to the productive forces is in the industrial sector: here the pattern of concentration is clear even at a formal level. In the agricultural sector, the real financial concentration that corresponds perfectly to the typical pattern of capitalist development often evolves and operates in a differentiated series of productive forms that go from small family-owned farms to community farming, small leaseholds, sharecropping and kolkhozian co-operatives. What determines all this hotchpotch of juridical functions is a series of specific factors that characterise the process of capitalist development from one country to another and from one region to another, constituting its particularity. Hence, we should not judge a country's process of capitalist development by basing ourselves mainly on the forms of agricultural production. We need rather to establish the level of financial concentration in the countryside.
If this criterion is valid in general, it is all the more so in the case of the Chinese «Communes.» That the pre-capitalist element prevails in them may be true, but the present level of pre-capitalism needs to be related to the level of their previous form, the co-operative. Has this level increased or diminished? Everything goes to prove that it has diminished. And this needs to be seen bearing in mind that the Communes are a transitory, temporary phase – within the general framework of the Chinese economy, i.e. in the main lines of the accumulation of capital and the availability of the necessary labour power.
If we disregard the eventuality of other productive forms that are possible in theory but not in practice (practically impossible the small family-owned farm, and not yet possible the big mechanised state enterprise), to what economic need do the Communes correspond with a view to the accumulation of the capital indispensable to industrialisation?
Since the accumulation of capital does not occur in abstract but in a concrete pre-capitalist reality in which there are advanced areas (state-capitalist) and backward areas (agricultural self-consumption on the margins of commercial circulation), it is necessary to take account of these conditions and of the objective forces that slow down or step up accumulation. Among the forces that step up accumulation we can list: increased productivity in agriculture and industry, the growing availability of the workforce culled from the agricultural sector, the low cost of this workforce that is achieved quantitatively as the physical state of the workforce and its environment improve and lengthen its lifespan, investment in big concentrated centralised productive units, and ease in finding capital at home and abroad.
To achieve these conditions favourable to accumulation and industrialisation, China needed, and still needs, to make a huge effort in sanitary, hydrographic, cultural and demographic improvement. If it does not resolve its health and education problems, the regulation of its rivers, and the balance between population increase and increase in food production, it cannot resolve the problems of agricultural productivity or of the availability and education of its workforce. The state's effort to industrialise the country is slowed down by the general situation. Where can the state find the capital for industrialisation in these conditions? Mainly from increased industrial productivity (although this is not enough), and to a lesser extent from the agricultural sector, where even a «price scissors policy» with regard to both agricultural and industrial prices, carried out through credit, stockpiling and taxation, would give very limited results. The market on which this «price scissors policy» would act would be restricted, bearing in mind the huge percentage of the consumer population rooted in agriculture and tending to absorb most of the agricultural production, and hence not to raise the demand for industrial goods. Furthermore, if this situation continues, the demographic increase exacerbates the problem.
To get out of this vicious circle the state will have to make huge investments in machines and other equipment, using them to prevent flooding and for agricultural mechanisation, to raise productivity and to free up and transfer part of the workforce. The fact is that the state did not and still does not have this possibility. In fact, in 1956 and 1957 the production growth rate tended to drop: in 1956 it was still 30%, while in 1957 it was 10%. If we examine the state budgets from 1953, presented by Wang Tse-ying, we find a number of elements that can help us to understand this phenomenon. Let's look at the revenue first of all. In the five years we have a total of 66,690 million yuan from taxes 50% of the total), 55,920 million yuan from from state-owned enterprises (41.9%), 5,980 million yuan from loans and credits (4.5%), and 4,750 million yuan from various sources (3.6%).
We therefore need to highlight: 1) the low quota of domestic and foreign loans that, among other things, is falling; there therefore arises the need for China to trust only in its inner strength; 2) the revenue alone from the state-owned enterprises constitutes the most important and stable factor of the state budget, the main source of industrial investment. In 1957, this revenue, as taxes on industry and commerce, begins to stagnate; agricultural taxes even diminish in 1957 with respect to 1956, and are slightly lower than in 1953. While the revenue from the state-owned enterprises has increased faster than the rest, i.e. by 80% in four years, that from agricultural taxes has increased by a bare 9%; and 3) agricultural taxes account for a small part of the state revenue and have gradually fallen to only 10%.
In fact, if we examine the state revenue from the sectors of the economy, we find that: a) the sector of the state-owned enterprises rises from 62.9% in 1953 to 72% in 1957 (in 1954 it stood at 65.2%); and b) the agricultural sector falls from 13.4% in 1953 to 11.0% in 1957. The percentages are out of the total revenue from the economic sectors, but if we compare them with the total of state revenue, the impact of the taxes paid by the peasants is even less, i.e. 12.5% in 1953, 12.5% in 1954, 11.2% in 1955, 10.3% in 1956, and 10% in 1957.
If we examine state expenditure for the years 1953-57, we find that the low participation in the accumulation of capital on the part of agriculture slows down investment for building up the economy, braking it especially in 1956-57; it should also be borne in mind that the state bears all the expenses for education, culture and social assistance that the agricultural sector is unable to bear and that amount, in the five-year period 1953-57, to 14.7% of total state expenditure. But in this area too, and although the sums allotted are always on the increase, even when those set aside for economic investment decrease, the state effort remains modest in comparison with the huge needs, and this is also one of the reasons why attempts have been made to exploit to the full the local initiatives of the Communes. In fact, state spending for education, culture and social assistance amounted to 3,360 million yuan in 1953, 3,460 in 1954, 3,190 in 1955, 4,590 in 1956, and 4,840 in 1957.
If we exclude state spending on the armed forces and administration (which, with their 41,170 million yuan, account for 31.1% of the five-year budget), most of the state expenditure went on investment, with 64,400 million yuan in 1953-57, i.e. 48.7% (while a good 5.5% of the total was spent on repaying domestic and foreign loans).
Despite the effort made within the framework of the first Five-Year Plan, total investment has not experienced substantial increases over the years. Indeed, it fell sharply from 1956 to 1957. This is demonstrated by the official figures that we use whose exactness it would be abstract to question, since there are very few reliable sources for China. Total investment is as follows: 8,650 million yuan in 1953, 12,360 in 1954, 13,760 in 1955, 15,910 in 1956, and 13,720 in 1957.
We have therefore seen the situation and development of capital accumulation in China, a development that has turned out to be very weak due to the backwardness of its agriculture. One need only think that in 1956 the state budget was in the red because it was necessary to intervene in agriculture hit by floods, etc.
Another source of accumulation was savings that, via the issue of loans, contributed barely 400-600 million yuan per year, i.e. 2-3% of budget revenue. Even Soviet loans, despite all the loud propaganda, were not very substantial and did little to increase industrialisation. Wang Tse-ying states: «The overall amount of the loans granted by the Soviet Union in five years is less than 3 per cent of China's national revenue. At root, the Chinese people count on their own resources to provide the big sums that are invested.»
This fact casts fresh light on Russo-Chinese relations and contributes to explaining the dynamic of this alliance, the problems that are arising in it in view of its future prospects, and the ongoing differentiation in the lines of economic development, of which the Communes are an example. In essence, this body of facts has kept Chinese investment at the low rate of 20% of its national income, that is especially low for a developing country. In many respects, the organisation of the Communes tends to overcome the obstacle of the high percentage of the national income absorbed by consumption. We cannot yet know whether they will succeed, as we cannot know whether the large-scale exploitation of the labour power at every technical level will allow for a higher rate of accumulation for industry, the one and only way to be able to deal with population increase.
Alfred Sauvy calculates that, with a 15-million increase per year, it would take about 10% of the national income to cultivate new lands and build work-shops, schools, houses, etc. in order to ensure that the new generations have the same standard of living as the present generation. With the mortality rate standing at 20 per thousand – which will soon fall to 15-10 per thousand and with a birth rate at around 45 per thousand, the population is currently increasing by 25 per thousand per year, and this growth rate is expected to rise until there may well be a billion Chinese before the end of the century. Sauvy believes that, if China wants to avoid the ageing of its population, it will have to maintain its present birth rate. However, it is not this future problem that interests us, but that of the relationship between the population growth rate and the minimum investment rate needed to keep the balance or at least not to regress: it is from this point of view that we need to consider the demographic problem, and not in terms of fallacious neo-Malthusian theories. Another question directly linked to the demographic problem is that of education, i.e. of the proportionally bigger investment required for the adequate technical training of the new workforce. It is in this sphere that we meet with the greatest effort, and we believe that ever vaster and heavier tasks are in store when part of the present primary school masses go on to secondary school. From 1952 to 1958, primary school pupils rose from 51 to 86 million, those at secondary school from 3 to 12 million, and those at university from 190,000 to 600,000.
The Communes represent an attempt to concentrate all the energies present both in the workforce and at a technical level in order to guarantee the minimum amount needed for accumulation. They are therefore two steps forward and one backward. Backward because they still permit a very wide margin of pre-capitalist self-consumption, even if this occurs in a form that is only apparently communist. Forward because, by using billions of work hours that were lost in the forced inactivity that is typical of monocultures (the Chinese average was estimated at 100 working days per year per working peasant), they have led – through land reclamation and artisan-industrial work on a vast scale – to a quantitative increase in industrial and agricultural production. From 1957 to 1958 steel production rose from 5 million tons to 11 and that of cereals from 185 million tons to 350. In 1959 steel is expected to leap forward to 18 million tons and cereals to 525 million tons. Even if we subtract 10-15% from these figures, as the Italian economist Sylos Labini does, the increase remains substantial.
From this point of view, the backward forms of production that have allowed this quantitative increase are secondary with respect to the general line of economic development and do not determine its qualification. In this increase in production, the sector that is relatively and progressively favoured is the most advanced sector, i.e. the big modern state-owned industry that has found further impulse to develop. In relation to the problem of development, the concessions that have had to be made to the Communes such as that of reducing from 7 to 5.2% the agricultural production to be handed over to the state as a kind of tax are of little importance. The volume of the agricultural tax has, however, increased, even if it is not this factor that is the main cause of the increase in accumulation. Undoubtedly, the two main factors of accumulation in the Commune Movement are the progressive change from extensive to intensive production and the progressive liberation of the working peasant population from purely agricultural work. It is calculated that it may be possible for only 40% of the peasant workforce to be devoted to the production of cereals, while the other 60% will be employed in industry, the building trade, cattle rearing, fishing, forestry and the growing of industrial crops. From the intensive use of the workforce in a polytechnic sense, there is an inevitable transition to specialisation and the division of labour, and to the preparation of a workforce for industry.
The state budget for 1959 presented by the Minister of Finance Li Xian-nian already reflects a higher rate of accumulation thanks to the Commune movement. Expenses rise to 32 billion yuan, or a 27% increase with respect to 1958. 61% of this sum goes to investment, as against the previous 48.7%. All in all, the first experiences of the Communes are therefore positive.
(“Azione Comunista”, No. 46, 29 June 1959)