Abstract
It is often said that, in stark contrast to Deng Xiaoping, Mao Zedong lacked an understanding of economics, especially since Mao’s Great Leap Forward policy was such a massive failure, plunging the Chinese economy into a catastrophic crisis. While he had an economic goal of high growth centered on heavy industrialization, he disliked material incentives, demanded self-reliance, and even brought class struggle into the economy, which prevented him from achieving his goals. This chapter summarizes the characteristics of Mao’s “political economy,” while contrasting it with Deng Xiaoping’s “economics.” Finally, I will evaluate Mao’s political economics from my perspective.
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Notes
- 1.
This chapter is a partial revision with additions to Chap. 2 of Nakagane (ed.) (2023).
- 2.
At the time, Chen Boda was Mao’s policy secretary, Hu Qiaomu was the head of the Communist Party’s Central Propaganda Department, Hu Sheng was secretary of that Department, and Tian Jiaying was one of Mao’s secretaries.
- 3.
It means worrying about one’s rank in the cadre scale.
- 4.
Consider the class of “landlords” who were victims of China’s land reform. Most of them were small landowners, yet their assets were all confiscated according to the simple logic that “they own land and lease all or part of it to tenants. They should be overthrown because their landholdings are feudal exploitation.” Not only were their lands confiscated based on this simple logic, but many of them were killed and the remaining ones were forced into the lowest social class (caste). (See Chap. 3). In the first place, Mao’s recognition of landlordism as a feudal system is unscientific. For example, did the small and medium-sized landlords, who had no labor and no choice but to rent their little land to tenant farmers, exploit and control the peasants like “feudal lords”?
- 5.
Later, Mao Zedong came to admit that since the entire socialist stage was a transitional stage leading to communism, classes existed, and therefore class struggle would remain. In the same Notes, he referred to the Anti-Rightist Struggle of 1957 and the struggle against Peng Dehuai in 1959 as struggles against a “mad” class.
- 6.
This expression appears in the “Beidaihe Resolution” (August 1958) by the Central Committee of the Communist Party of China (CPC), and although it cannot be confirmed whether it is based on Mao’s own statement, he probably used such or similar words during this meeting. In Chinese, the word “commune” is translated as “gongshe.” Therefore, “communism” should have been originally translated as “gonghe-ism” in China.
- 7.
This law is not as generalized as Petty-Clark’s Law, which empirically rules the changes in industrial structure from agriculture to industry, then to service industry as the economy develops.
- 8.
In the 1920s, a debate on “socialist industrialization” took place in the Soviet Union. One faction, represented by Fel’dman, argued that producer goods industry (heavy industry) should be prioritized, while another faction, led by Lev Shanin, argued that consumer goods industry and agriculture should be given priority, and the debate became intense, with the inclusion of the middle faction.
- 9.
This is called the Fel’dman-Domar model, which was developed in the 1920s and theorized by Domar after War II. See Domar (1957).
- 10.
The concept of “accumulation rate” is from Marxist economics. It is the “accumulated value” of the output produced by the physical production sector minus the consumption value, divided by the value of that output. It is different from the “investment rate” in the concept of national income accounting, which China also adopted soon after the reform and opening-up era started. The investment rate, which is the amount of capital formation divided by total domestic production, was 25.4% in 1957, 33.5% in 1958, and 42.8% in 1959, almost the same as the accumulation rate. Incidentally, in 1960, when the Great Famine and mass starvation had begun, the investment rate reached as high as 38.1%, far exceeding the level of a normal year like 1957.
- 11.
Originally a saying in Sichuan Province, “Whether it’s a yellow cat or a black cat, it’s a good cat as long as it catches mice. It is unknown when the yellow cat became a white cat.
- 12.
Originally it means “look ahead” (xiang qian kan) but “ahead” and “money” have the same pronunciation (qian) in Chinese, so it was replaced with “look money” symbolizing the reality of society and people’s true intentions.
- 13.
In today’s context, a typical example is the development of semiconductors. When the United States imposed restrictions on the export of high-performance semiconductors, China embarked on the independent development of such technologically advanced products.
- 14.
Other emphasis is placed on the development of the eastern region as the “rational allocation of productive forces,” which is in keeping with the relationship between coastal industry and inland industry in the doctrine of the Ten Major Relationships.
- 15.
Włodzimierz Brus (1921–2007) is a Polish-born economist and professor at the University of Warsaw, but was expelled from Poland for political reasons in 1968 and then taught at Oxford University in England.
- 16.
Regarding investment, it was an indecisive model that mixed planning and market, following the central plan. The economic reforms implemented in Hungary in 1968 are said to have been based on this Brus model. After the transition of socialist regimes starting at the end of the 1980s, Brus finally withdrew this model.
- 17.
The law of value is a concept in Marxian economics that states that goods are exchanged with other goods of equal value as measured by labor power. Although market laws that are not based on the theory of labor value and the law of value based on that theory do not theoretically coincide, we can assume that the volume of transactions and prices determined by these two laws would trend in a similar manner if the law of value were to be established.
- 18.
Kornai Janos was a reformist economist from Hungary. He had a significant influence on Hungary’s economic reforms.
- 19.
Ota Šik was a Czechoslovak reformist economist as well as politician. He was one of the leaders who orchestrated the Prague Spring (1968), which called for democratization under the socialist regime.
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Nakagane, K. (2024). Mao Zedong’s “Political Economy”: An Anatomy of His “Economics of Contradiction”. In: Mao Zedong and Contemporary China. Springer, Singapore. https://doi.org/10.1007/978-981-97-1761-3_7
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