The Waste Makers, by Vance Packard

[p026] The Waste Makers. Packard. Longmans, 21s. By Vance Superabundance of goods might be thought the pleasant state of some future Utopia. In fact, according to LABOUR REVIEW—Summer 1961 Vance Packard, it is the major problem of contemporary American society. Rapidly rising productivity means that unless an ever-increasing quantity of goods is consumed, pro- duction will be reduced and many workers unemployed. But people’s most urgent needs are already fulfilled. So new wants and desires have to be created to persuade them to consume. A major part of the book is devoted to the techniques used in doing this. The consumer is induced to buy more of an article and to throw it away sooner. A minor and extreme, but illuminating example, is the potato peeler deliberately coloured like the peelings so that it will be thrown away with them by mistake. Some goods are planned to wear out after a short period. and others restyled annually so that older goods are discounted as unfashionable. Better- quality products are priced lower than poor quality ones and some are never sold at their ‘regular’ price. In the resulting state of chaos the bewildered consumer buys more than if he were allowed a rational choice. Credit is made easier and prejudice against it overcome, self-indulgence and buying on impulse encouraged. This all leads to America’s resources being used up at a tre- mendous rate. It means that adver- tising pursues the American citizen everywhere. Emphasis on consump- tion makes him self-centred and materialistic. The weakness of the whole book is seen in Packard’s solution to the problems. He suggests that the indi- vidual consumer can combat the sales technique by insisting on being treated on a rational basis, by sending criti- cisms to manufacturers, buying pro- ducts that concentrate on function, and by other such measures. He thinks that consumer-testing organiza- tions can play a large part. His main idea, however, is that the priorities of American society are wrong. More economic energies should be spend on improving metropolitan areas, education, old age, rainmaking and helping friendly nations, and less on producing consumer goods. The emphasis on continually improving technology must be altered and people shown that happiness does not depend on material goods. He sees signs of this attitude appearing in America. But Packard hhas really got the whole problem out of proportion. Although overabundance of goods is a problem to some people in America, to the majority of the world’s population there are still far too few goods. A few people with too much and the vast majority with too little is part of the irrationality of the capitalist mode of production. The only solution to both problems is a planned economy based on the common ownership of the means of production. Consumer goods rather than a better environment are pro- duced under capitalism, not just because a few people have not, as yet, the right values, but because the most profitable goods are produced. This, not improved tech- pology, is the cause of the problem. With a planned economy the world’s resources could be used rationally, and not wasted as they are now. The solution needed, therefore, is a political one and not just individual protests and changes in values. The book shows strikingly, though, that as Marx said, under capitalism goods control man rather than man_ the goods. It also quashes the myth that production depends on the consumers’ demands by showing that these demands are, in fact, created by the producers. How much they can persuade the consumer to spend must, however, depend on their consumers’ incomes, a problem Packard doesn’t discuss. The idea that technology may be improving too fast is a dangerous one. It is only by a vast increase in productivitv that man can be released from drudgery and have time to develop himself as an individual. But technology must be used rationally. With the abolition of capitalism, and sufficient goods for everyone, ideas of individual competition and constant striving for unimportant consumer goods, will also vanish. But without a high material standard of living, madrigal singing and high ideals are not a sufficient foundation for human happiness D. A.

[p027] COURSE OF CAPITALIST DEVELOPMENT . 65 under varied conditions mainly dependent upon whether the country concerned had been on the winning side or not, the extent of wartime destruc- tion, preferred policies and so on. The overall picture of world capitalism was dominated by its continued decline relative to the non-capitalist states with the breaking away of Eastern Europe and the Chinese Revolution of 1949 and by the spreading national revolutions in the colonies. Equally, the disproportionate development of American capitalism had produced an even more glaring imbalance than that which appeared between the wars, reflected notably in the dollar problem. In face of the former threat, the United States had to shoulder the ‘burden’ of restoring world capitalism with loans and aid of various kinds, merging into the military aid pro- grammes and Point Four-type aid with the subse- quent development of the Cold War. These factors, together with the even more disrupted state of the capitalist world economy after 1945 as compared with the twenties, had the paradoxical result of ‘contributing to a much more rapid recovery of world trade in the later period. Thus, although post-war capitalism emerged on a geographically narrower basis, and in a globally more precarious position— since it had to face the challenge from the Sino- Soviet states—within its own sphere it was more closely knit, its different sectors were more harmon- iously related than before 1939. Trade barriers though still high were more rational and attempts were made to reduce them. Though currency con- vertibility and flexible exchange rates remained the dreams of theorists, the establishment of the Inter- national Monetary Fund contributed to placing the monetary system on a sounder basis than before 1939. The fundamental disequilibrium of the immediate post-war years—which appeared as the ‘dollar problem ’"—did not prevent development and, more recently, has changed its aspect. It is not necessary to decide whether the restoration of the international market was cause or result of the general expansion of the post-war period: the two were inseparably related. The renewed growth of world trade and a more effective international division-of labour—shown by the increased volume of trade between the advanceé countries themselves —have facilitated expansion within the participating countries. Behind such organizations as the European Common Market has been a clear grasp of the fact that modern productive powers cannot be developed within the confines of national states. 8* The twentieth century, with its technical potential, has developed a dynamic which was bound, sooner or later, to burst the constricting historic framework of European national economies. In the age of rationalized mass production only investments in large economic areas can result in the optimum use of resources and the highest possible level of production. Besides this, the Within larger market areas the possibilities of expansion are, given the necessary conditions, greater than within national states or the kind of inter- national disintegration which prevailed between the wars in the capitalist economy. World capitalism is still divided into national states and _ rivalries between them continue to be prominent. The significant fact is that the world market is a more unified whole than before the war and that develop- ment within the national states can go further than would otherwise be possible. What, then, are the ‘ necessary conditions’ which have at once given some semblance of harmony to international relations between the capitalist economies and been permitted to work themselves out more fully because of this? The question can be posed in another way: why has there been no general crisis of overproduction in the capitalist countries? True, the cyclical pattern has been renewed, most markedly in the USA, but, especially since the recession of 1957, throughout the capitalist world. But there has been no deep and prolonged depression, industrial production and world trade have continued to increase and the long-term trend over this period can correctly be spoken of as one of expansion or prosperity. There is nothing in Marx to say that such a process of expansion is impossible; it does not, therefore, disprove Marxism. In fact, providing that continually greater amounts of surplus value can be realized in a process of extended reproduction the system can expand. How this has been happening can be demonstrated, at least in outline. EXPANSION AFTER 1945 The reasons for the boom of the early post-war years are not far to seek. The long period of relative stagnation of the thirties, followed by the wartime running down of much basic equipment, opened up favourable conditions for increased investment. The needs of reconstruction and recon- version, the backlog of civilian demand and the cash balances in the hands of business provided further investment opportunities and means to finance expansion. In a sense the war had accelerated, and done more fully, what the depression had begun; the way had been prepared for a new long-term West can only meet the attack on our social structure from the East by the concentration and optimum utiliza- tion of productive forces. Dr. Wilhelm Beutler, Executive Member of the Federation of German Industry, ‘ The Financial Times’, West German supple- ment, 28/3/60. However, the capitalist ruling classes are by no means able to harmonize their economic policies or check the competitive forces bound up with the national states even under pressure from Washing- ton, as well as Moscow. Economic imperatives are stronger than formulas.

[p028] 66 up-turn, not merely a post-war boom of a few years duration. However, a succession of new and unexpected factors came along to make this possi- bility a reality. A notable feature of the new period was techno- logical innovation. The post-war investment took place on a new technical base and on a higher level than before. War had stimulated technical advance; some wartime discoveries could be put to peace-time use; techniques which had previously been bottled up could be developed. New investment, embodying new techniques, was qualitatively different from old plant; new products entered the general run of con- sumption, often spreading from the US A to Europe and other countries and providing continuing bases for new industrial investment. This technological factor did not act alone, but it was clearly a vital component of the whole upsurge. How much drive it could impart to the system without the powerful stimulus of re-armament is an unknown. In any event, the new expansion of world capitalism took place against a background of unpre- cedented outlays on armaments from the time of the Korean War. In the early fifties the rising level of arms expenditure within capitalism as a world system was undoubtedly the major factor making for expansion, and even for the elimination of some of the disproportions which earlier threatened to limit the expansibility of the system. By offering an ideal means for the realization of surplus value, arms- contracts kept up the profit rate in the whole economy and offered the non-arms industries markets which they might not otherwise have had. However, taking off from the level reached in the arms boom, the expansion continued mainly in response to market forces. That is, there was an ordinary capitalist expansion, surplus value being realized in the increased build up of the producer goods industries and the growing civilian market. Note that this was an international process, but the actual rates of growth achieved by the individual capitalist countries varied a good deal according to a host of specific conditions into which it is not possible to go. The more autonomous character of the expansion in the latter part of the fifties meant that it was also more susceptible to fluctuations, as the US recessions of 1957-58 and 1960-61 showed. Outside the USA, however, these recessions remained comparatively mild in their effects, largely because in the other capitalist countries opportunities for the extraction and realization of surplus value exist to a greater extent (this attracts American investment into those countries and actually helps to keep up the rate of profit there). If we consider world capitalism as a whole—and as has been seen it is now more closely integrated as a world system than before—it has been in a phase LABOUR REVIEW—Summer 1961 of expansion, supported successively or together by a number of factors enabling the realization of surplus value to be successfully carried through. It is important to emphasize the international aspects. For example, not all capitalist countries have had heavy arms programmes, but these programmes have nonetheless contributed to the (favourable) economic environment through its effects on world market demand and primary producers and, e.g., Western Germany in the fifties benefited from these. The high level of activity in the advanced countries has also been related to development in the less developed countries through the demand for primary products. and the new forms of investment being undertaken in the latter. The export of capital from the advanced countries, whether as private investment or development ‘aid’ (to strengthen capitalism as a world system and counter Soviet influence in these areas), has continued to offer possibilities for . the realization of surplus value by capitalist enterprises.” Moreover, the role of the less developed countries as fields for exploitation by capitalist enterprises from the advanced countries continues, despite ‘ decoloni- zation ’, i.e., the political adaptation to rising national feeling in the colonies. CRISIS AND PROSPERITY Those for whom the depression of the 1930s was a consequence of underconsumption are prone to see the post-war expansion of capitalism as wholly or partly a direct consequence of rising consumption levels. This, in brief, is the position of the followers of Keynes. Orthodox Soviet political economy, as well as Communist Party economists in other countries, continue to maintain that there has been continued ‘pauperization’ of the working people in the capitalist world since the war. On the one hand the contradiction between production and 9The works in question are Contemporary Capita- lism and The End of Empire. The quotations are from the latter work, which merits a fuller discussion than can be attempted. here. Many of Strachey’s arguments are, perhaps unwit- tingly, a plagiarism of those used by the revisionists earlier in the century. Thus, the central idea of a peaceful, non-imperialist capitalism had been put forward by Kautsky. In refuting this idea Bukharin sketches out the formal answer—and thus the basis for an answer to Strachey—in the following passage: ‘It is known that capitalism implies the acquisition of surplus value by the capitalists; all the new value n is divided into two parts n = v + s;* this distribution, looked upon from its quantitative side, depends upon the interrelation of social forces (the antagonism of interests was early formulated by Ricardo—to be abandoned by Strachey, T.K.). With the growth of resistance on the part of the working class it is perfectly thinkable that v will increase at the expense of s and

[p029] COURSE OF CAPITALIST DEVELOPMENT 67 consumption is held to have disappeared, or to have been brought under control, for the others it has become more acute than ever. Let us examine some representative arguments on both sides. Prominent among those who have taken the former point of view is the erstwhile Marxist, John Strachey. Assuming (by a careful selection of quotations) that the theory of ‘immiseration ’, as he calls it, is central to Marx’s political economy, he claims that this has been disproved by actual developments. Indeed he goes further: in a recent book he sees in the rising standard of living of wage earners and farmers in the capitalist countries, made possible by ‘an all- pervasive democratic political environment ’, a reason making imperialist expansion no longer necessary. Instead of imperialist expansion being necessary for capitalist reproduction, this has now been possible through ‘a redistribution of the national income making possible much increased home investment at a lower rate of return.’ Hobson’s alternative to imperialism — rising domestic consumption — which Lenin stated was impossible of achievement under capitalism, has now become, according to Strachey, a reality. In fact Strachey not only does not provide factual backing for his assertions, he does not try to demonstrate seriously that the reproduction problem of capitalism has been solved in the way he suggests. He does not enquire at all closely into the reasons for the increased home investment in countries like that n will be distributed in a proportion more favour- able for the workers. Since, however, the gradual increase of the proletariat’s share is determined by the interrelationship of forces, and since there is no limit set for the increase, the working class, having reduced the share of the capitalist to the size of mere salaries, peacefully “drains” capitalism in turning the capitalists ino mere employees or—at worst—into pensioners of the collective social body. This idyllic picture is obviously a reformist Utopia.’} And such, no less, is the false picture of contemporary capitalism given by Strachey, Crosland and others. The possibilities for the growth of v—provided not by all-pervading demo- cratic forces but by the conditions of class struggle and the relationship of forces—are strictly limited within the framework of capitalism. Thus, though Marx saw the most favourable situation for wage increases as one in which capital is growing rapidly (see Wage-Labour and Capital) he stressed that ‘the rise in wages... is confined within limits that not only leave intact the foundations of the capitalist system, but also secure its reproduction on a progressive scale’ (Capital, vol. 1, p. 634). And Marx goes on to state that ‘the very nature of accumulation excludes every diminution in the degree of exploitation of labour, and every rise in the price of labour which could seriously imperil the continual reproduction, on an ever enlarging scale, of the capitalist relation’ (ibid). *i.e., Vv = variable capital, or wages. s = surplus value. +Bukharin: Imperialism and World Economy, p. 134— first published in 1917 with an introduction by Lenin. whose own Imperialism it supplements on a number of points. Britain in recent years; he omits to bring into the same discussion the role of armaments; he omits, too, the fact that foreign investment has resumed an important role in the major ‘capitalist countries despite the relaxation of political control over colonies. Strachey’s argument has the cunning and deceit of a debater who wishes to score points; it has nothing in common with scientific method. For example, having assumed that capitalism has an alternative to the export of capital in one period (post-1945) he is quite ready to use arguments which imply that it might have had such an alternative at a previous time. Thus he says, that British workers would have been much better off if more capital had been invested at home and less abroad before 1919, but this means that he has assumed there were profitable outlets for capital at home, indeed that the same amount of capital would have been available for investment if there had been no foreign invest- ment going on. His view that British workers made no gains out of imperialism before 1914 has also not been established by argument. The really essential point of Strachey’s argument is the assumption that the realization problem of capitalism can be solved through a raising of living standards and the acceptance of a lower rate of profit. As he does not use Marxist categories to reach such a conclusion there is in one sense no common ground for argument. As he thinks along Keynesian lines of a deficiency of demand and the appropriate State measures to prevent it appearance, his whole view of capitalism is in fact entirely different from that presented here. However, he is largely right about the raising of living standards, and also that in the latest period the capitalist countries have had less, but not no, need for external outlets in which to realize surplus value. The outlets which have been conserved are no less indispensable and provide _ Support for the whole expansion which has made possible such increase in living standards as has taken place. Actually the problem of capitalism has not been solved by raising of living standards, which in itself does not contradict Marx. One has only to consider why, when the expansion has flagged, it has been not less, but more, difficult to increase living standards by winning wage increases. The much- vaunted redistribution of income in favour of wage earners is slight or non-existent. Proof of a lower profit rate in contemporary capitalism is not offered. When extended reproduction takes place the real wage rises, as Marx expected that it would. Wage earners have reacted to the tendency of capitalism to lower their wages by trade union action, as Marx expected they would. But precisely the same limits to further improvements exist as Marx had theoretic- ally shown.

[p030] 68 . As for Strachey’s discussion of Lenin’s [mperia- lism it can be admitted that there are weaknesses in Lenin’s exposition without surrendering the central point, It is true that the standard of living of the masses in the advanced countries is higher than in Lenin’s day; but surplus capital was not used deliberately to bring about this improvement. One would have to ask about the ‘ surplus capital’ which has been absorbed in arms production and enquire whether the continued export of capital is not a result of the failure of this capital to find profitable outlets at home. No capitalist class has yet been found able and willing to devote surplus capital, at a philan- thropic rate of profit, purely to the raising of living standards. States, it is true, are now obliged to do this in order to preserve the system itself, though not without complaint and criticism from those members of the capitalist class who take a narrow and short- term view of their interests. Moreover, such state action is more likely to sustain than to lower the profit rate in the system as a whole. In contrast with Strachey’s views we may examine those of a Soviet economist whose work, entitled The General Crisis of Capitalism, was published in French translation in 1960.10 This economist, Draguilev, devotes a chapter to the aggravation of the contradictions of capitalism in the present phase. In the section of this chapter devoted to peculiarities of capitalist reproduction in the present period, while making some valid points he is unable to square these peculiarities with the other supposed attributes of capitalist crisis in a satisfactory way. Thus, though admitting that capitalism has been able to embark upon a renewed process of extended repro- duction and that there has been no general crisis of overproduction, he insists repeatedly that this has been accompanied by increased exploitation of the working class and by the lowering of its standard of living. According to him both ‘ militarization’, ie., the arms economy, and the renewal of fixed capital— the two main components of the expansion—have _ been made possible by an intense pauperization of the workers. He leaves no doubt that he means by *pauperization’ a lowering of consumption standards and a deterioration in the quality of the commodities consumed—both being below the pre-war standard on his showing. At the same time, he states, the working class has received a smaller proportion of the total sociai product. Far from rising consump- tion having made possible the realization of capitalist surplus, as Strachey asserts, extended reproduction has been accompanied, according to Draguilev, by an actual reduction in the absolute consumption of the working class. Here we have, in fact, diametric- ally opposed positions, both of which are distortions 10 Draguilev, M., La Crise Générale du Capitalisme, Moscow, 1960. LABOUR REVIEW—Summer 1961 based on bias and special pleading. ; We will not attempt here to provide factual verifi- cation for the main points at issue. It will, in fact, be taken that as regards working-class living standards Strachey is nearer the truth than . Draguilev. However, the defect of the latter arises from the fact that he dare not admit that the other phenomena which he describes are not only perfectly compatible with a rising working-class standard of living but, under modern conditions, are inseparable from it. Indeed we find in his pages a kind of dialogue which his scientific self carries on with the necessities of dogma. Side-by-side with statements about the ‘intense pauperization of the workers’ go others which show a recognition that this has not been entirely borne out by facts. Thus he says, ‘if in one or another capitalist country, in one period or another a certain increase in the real wage is observed (so there have been such cases!—T.K.), that does not signify that the pauperization of the working class has ceased. The tactics of the capitalists consist of acting in-such a way that if they are obliged to give way in certain circumstances, they ~ re-enforce exploitation elsewhere.’!! The treatment of unemployment is equally disingenuous. There is no attempt to compare the post-war with the pre-war situation of the working class as a whole in this respect. If Strachey is plainly wrong in assuming that a large part of post-war capitalist expansion can be explained by rising consumption, this has undoubt- edly been an accompaniment of extended reproduc- tion to an extent which Draguilev fails to recognize. In fact on the latter’s showing the increased volume of surplus value resulting from extended reproduction and increased production has been realized entirely in militarization and new means of production. It would be extremely difficult for this to take place without an increase in the amount of variable capital, and therefore in money available for spending by the working class, even allowing for depreciation of the money unit. It would involve the smashing of trade unions and the virtual elimination of wage 11 op. cit., p. 294. He goes on to say, ‘even when the real wage goes up, it remains below the value of the labour-power and is not enough for the normal repro- duction of labour power’! (p. 295). On the following page he states ‘ Far from increasing, the consumption of the workers has, on the contrary, diminished.’ He gives figures to ‘ prove’ it for the period 1938 to 1953 for Germany, Holland, Denmark and Britain! According to Draguilev the calorific intake of the American worker is less than in the Depression, and margarine has taken the place of butter. In the capitalist countries, he insists (p. 297), ‘ even the averages leave no doubt about the fact that the consumption of the worker in the capitalist countries has noticeably diminished by com- parison with the pre-war level’. American workers, no longer able to afford clothes of wool or silk, have taken to wearing overalls and sports suits (same page).

[p031] COURSE OF CAPITALIST DEVELOPMENT 69 incentives. Even German fascism did not bring about such a reduction in real wages in the period 1933 to 1939. Although surplus value in the system as a whole cannot be realized through the consump- tion of wage earners béing raised, there is no doubt that in the course of extended reproduction industries producing means of consumption (Dept. IJ) are enabled to expand because of the increase in wages being paid out as a consequence of the (more rapid) expansion of Dept. I. Likewise, ‘ militarization’ raises the same problem and plunges Draguilev into the same dilemma. At one point he concludes that militarization ‘brings about a diminution of the volume of production’ and ‘ provokes on an enlarged scale the pauperization of the working population.’ At the same time he sees that ‘ militarization brings about a certain increase in the production of means of production. As that leads to the employment of additional workers, a certain increase in the demand for consumption goods is observed.’ But, he says, that is temporary (how long?) and pauperization soon re-asserts itself. Part of the problem for Draguilev lies in a funda- mental misunderstanding of capitalism. According to him extended reproduction can only take place where there is ‘in value and in kind’ ‘a permanent reconstitution of the means of production used up plus a certain increase in these means.’ He argues that since. ‘ militarization’ involves the using up of part of the social product by their withdrawal from the process of circulation, this ‘denatures’ the process . of extended reproduction. That is true as far as it goes, but it does not prevent the process from going on; indeed it may favour it. While for a socialist economy arms production is a complete loss, under capitalism, with its chronic realization problem, this outlet for the surplus can be a boon. Draguilev quotes Marx as saying that ‘war in the economic sense is as though the nation threw in the sea a part of its capital.” Precisely; so much embarrassing capital is cleared away thus enabling the production of more to go on. It is true, as Draguilev points out, that this—like other government spending not entirely covered by taxation—multiplies the quantity of fictitious capital in the form of titles to debt. The staving off of crisis is bought at a price which stores up future problems, which contains the risk of runaway inflation or exchange depreciation. How- ever, it is clearly possible to underestimate the length of time over which such problems can be bottled up, and this Draguilev seems to have done. The outcome is a distorted picture of the ‘ general crisis of capita- lism’. The system is made to appear nearer to imminent breakdown than it is in reality and a false picture is given of the process of extended repro- 12 op. cit., p. 296, quoting the Marx-Engels Archives, duction and especially of its effects on the working class. The course of this crisis is more involved than Draguilev allows for. Its symptoms are no longer the straightforward ones of mass unemployment and impoverishment as in the 1930s. The absence of these symptoms has misled Strachey into thinking that it no longer exists; Draguilev has simply pro- jected into the fifties the conditions of the thirties and exaggerated or distorted even those facts which do run in his direction. SEEDS OF NEW CRISIS In the post-war upswing the crisis of capitalism takes on new forms. The obvious manifestations of overproduction disappear from view. Unemployment falls and indeed in some countries long periods of relative labour-scarcity occur. State spending, especially on armaments, but partly on other projects, acts as an artificial stimulant to the economy, which, nevertheless, remains geared to the market. The widening state sphere, the prevailing “prosperity” and low levels of unemployment main- tained over a relatively long period lead to various deductions being made about changes in the nature of capitalism, or even of its transformation into something else. If, for the period since 1945, capita- lism has been able to find a renewed vigour, why should it not be able to go on more or less indefinitely upon its present track, at the most with gradual reforms and steered by the State to avoid a repetition of the depression of the dimensions of the 1930s? It is pertinent, but by no means a complete answer, to point to the actual experience of the American economy since 1957. There we can discern the symptoms of crisis, but not, as yet, the crisis manifest and irrevocable. In diagnosing a deep-seated com- plaint which as yet has not reached the killer stage it is necessary to study the symptoms, however small they may as yet be, and to make hypotheses on the basis of the life history of the sufferer. The appearance of health may itself be deceptive. A closer look at the main features of the expansion will show that there is no inherent reason why they should continue: indefinitely in a way favourable to the solution of the realization problem of capitalist economy; rather the contrary, since they tend to work themselves out and to offer scope for the operation of other laws of capitalism which make for crisis. Since these factors operate in a close and mutually reinforcing combination, to separate out one at a time is clearly an abstract, if necessary, procedure. Let us take, first of all, the technological question. The development of new products and processes, the renovation of equipment at a higher technical level, in short the further development of the productive

[p032] 70 forces, have been major sustaining forces in post-war capitalism. This key role of technique has, of course, been clearly recognized inside industry, as well as among specialists outside. Given the favourable market conditions, continuous research with a view to innovation has been a condition for the grasping of investment opportunities; indeed research and innovation have, in a sense, become more fully industrialized and themselves direct fields for invest- ment. However, the result of such activity, especi- ally in the field covered by the term ‘automation’, has been overall to substitute constant for variable capital. As long as the mass of capital has been growing and the whole proportionate expansion of the capitalist system has permitted, this has not brought about either a fall in the demand for labour or a fall in the rate of profit. Over a great part of the capitalist world such conditions still persist: technical change has been absorbed without the appearance of unemployment and even with partial labour scarcities. However, the same amount of labour puts into operation a larger mass of constant capital than in the past, production has increased considerably more than employment. But these countries are in the favourable position of still having an expanding market, at home, for each other’s pro- duction, and elsewhere in the world market. Where these conditions have not been fulfilled, e.g., in the motor car industry in the latter part of 1960, serious problems of redundancy have emerged. United States, however, the number of production workers has actually been falling and the problem of technological unemployment has once again become chronic. At the same time industrial production as a whole tends towards stagnation despite the con- tinued high level of armament production. The shot in the arm from the technological revolution seems to have worked itself out; revivals are shorter and more difficult to get going, recessions become more frequent and leave a higher unemployment percen- © tage in the next revival. However, it should be remembered that this takes place in the richest and most productive economy in the world in which the momentum of the expansion is far from having been spent. The expansion has been bound up with a high and ‘rising volume of trade in the capitalist world market. Even comparatively slight checks to this expansion now produce wide-reaching tremors in the main trading countries and especially in the primary pro- ducing countries. Continuous expansion is really a fundamental condition for balanced economic growth in the individual countries and the only guarantee against a reversion to those monetary and tariff policies which dislocated the world market in the inter-war years. At the same time the growth of the world market depends upon continued growth within In the. ~ LABOUR REVIEW—Summer 1961 the component countries; the two are bound together and neither can be counted upon. Slackening in the home market leads capitalist enterprises to redoubled efforts abroad, often backed by direct or indirect government aid, to press into the foreign markets. Likewise a falling off in exports, even a failure of exports to expand in line with anticipations upon which preceding investment has been based, can react calamitously upon the internal situation. The international economic relations of the trading countries are rendered even more delicate by capital movements, speculation and the desire to defend exchange rates. For one thing, as the recent experience of the United States shows, the external situation—in this case the pressure on the dollar— can greatly restrict the possibility of taking action against incipient depression at home. Similar dilemmas have faced, and will continue to face, other major countries. Both an intensive struggle for a contracting, or only slowly increasing, volume of world trade, and a crisis of international liquidity are inherent in the present position. The results of either would precipitate internal crises of a serious nature. Let us return to that major segment of world capitalism, the United States economy, with which the ultimate fate of the system is inseparably bound up. While capable of high absolute levels of pro- duction and of productivity—is not this the ‘ affluent society ’?—its recent state can hardly be described as healthy. For example, for some years now it has not had a ‘full employment’ economy and its rate of growth compares most unfavourably with most other capitalist countries, not to speak of those in the Sino- Soviet bloc. As the stronghold of world capitalism it had, in the immediate post-war years, to shoulder the task of restoring the war-shattered economies of the capitalist world and shoring up regimes threatened by the spreading tide of revolution. This task, ac- companied by a high level of arms spending, onerous as it may have appeared, constituted, in reality a rare and necessary opportunity for the realization of surplus value and the maintenance of the rate of profit which, in turn, opened the way for others. Post-war prosperity, as in the twenties, produced illusions of indefinite expansion as well as a real increase in material standards for the main sections of American labour. The kind of technological - progress discussed above went on apace and many encomiums to its virtues and potentialities are to be found in the writings of American economists. From the latter half of the fifties, however, it has become apparent that the American economy is in the grip of a deep malaise. The reserve army of labour has become a permanent reality. Technical change does not advance sufficiently to relieve pressure on the profit rate. Investment opportunities at home are contracting, while a steadily increasing volume of

[p033] COURSE OF CAPITALIST DEVELOPMENT nN capital seeks profits abroad. The economic counsellors of American capitalism no longer speak with the optimistic tones of a decade ago. If they have not lost faith in the system— which, after all, still yields a massive output of goods and a high standard of living for the majority— though they do not employ the language of Marxism it is clear that they increasingly have to admit the existence of a chronic ‘realization problem’. Their hopes for the future are based less upon the essential dynamism of the system than upon secondary aids. For example, a favourite hope is that (middle-class) consumers will spend more of their income and save less. The irrationality of the conspicuous waste economy had become an irrevocable necessity if surplus value is to be realised and accumulation to proceed. Another is that there will be continuous increase in public expenditures; but such expenditures spell debt and there is a reluctance, especially at the local level, to play the deficit finance game to the point of insolvency. The change in the world posi- tion of the dollar, but also these internal economic difficulties, lead to more emphasis being placed on exports—where the competition of the other capitalist countries has to be encountered. No one expects that the large increases recorded in 1960 will be maintained, so yet another possible avenue for the realization of surplus value is bound to be narrowed. The relative stagnation of the United States economy means that the full potentialities of the increase in productive forces made possible by the techniques of the twentieth century cannot be realized owing to the nature of capitalist relations. The President’s Council of Economic Advisers in a Report made to Congress in March, 1961 reported a widening gap between actual and potential output equal to $500 of lost production for each American household, or twice the amount spent on education The waste of resources under capitalist conditions is considerably less than the increase which could be obtained by planning under socialist relations of production. But the President’s advisers naturally do not advise socialism: in fact they advise precious little when it comes to ways and means of overcoming the chronic under-capacity working of the American economy. When all the schemes for cheaper credit, tax cuts, stimulus to business investment, support to consumer incomes, higher unemployment relief, etc., are added up they only amount to palliatives— and even these palliatives have not yet been brought ‘into action despite all Kennedy’s big talk. American capitalism remains rich and powerful, it continues to grow, if at a rate which disappoints its friends, its vast working class is not politically con- scious or organized. At the same time, despite its high level of arms spending, it is increasingly difficult for new outlets to be found for the capitalization oi surplus value upon which the health and buoyancy of the system depends. It suffers, in fact, from the classic contradictions of capitalist economy. The permanent challenge from the Sino-Soviet bloc and the threat of an unmanageable extension of the colonial revolution mean that world capitalism, despite its present ‘prosperity’, faces a highly uncertain future. Capitalist development itself now takes place under conditions where it is confronted by a rival system which imposes a cracking pace,~ probes inevitably into its weak points on the globe and necessitates the continuance of inordinately high arms expenditures. It is true that for the present this world division has had the paradoxical effect of contributing to the expansion—U S aid to Europe and other areas, military outlays and aid to under- developed countries—and to changes in capitalism itself in the direction of greater state intervention and control. This alters the conditions under which the crisis of capitalism ripens, but, in the hydrogen bomb age it also sharpens the dangers of this crisis. The geographical extent of capitalism on the globe is now narrowly circumscribed. There can hardly be any question of extending the market area; but it will also be increasingly difficult to accept any further reduc- tion in the area open to world capitalism without intervention bringing the risk of limited or even general war. It is this danger which makes the socialist task especially urgent today.

[p034] 72 China’s Communes FOR all the spoken and written comment on the ~ Chinese Communes, few politically informed people *.can answer the simple question: What is a ‘ People’s Commune’? The woolly fantasies of the capitalist press.are only to be expected. Official Peking sources give us no clearer a picture of the lives of 500 million people despite the glossiness of the pictorials. The present ideological dispute between Moscow and Peking makes it all the more important that socialists be clear on the significance of the * People’s Communes’ and the Chinese Communist Party’s agrarian policy. What is the attitude of Marxists to the communes; what are the general principles of Socialist agrarian policy? TWO TRADITIONS Engels wrote towards the end of the nineteenth century: *. . . the peasant question has now suddenly been placed on the order of the day."! This was because ‘the peasant is a very essential factor of the population, production and political power.’ If that was true for France and Germany 70 years ago it is certainly true for Asia and Africa today where 70 per cent and 74 per cent respectively of the population is engaged in agriculture.2 The predominant features of the peasantry (using the term in a very general sense) are deep-rooted associations with individual property in land, limited political and social horizons, and consequent diffi- culty in achieving lasting class consciousness. The objectives of the Socialist revolution seem to be totally incompatible with the immediate interests of the peasantry, even of the poor and landless sections. Communism is the abolition of private property. Engels makes the pojnt that ‘no lasting revolu- tionary transformation is possible in France against the will of the small peasant.’ Surely ‘no lasting revolutionary transformation’ is possible in any 1 Engels, F. The Peasant Question in France and Germany, Foreign Languages Publishing House, p. 5. 2 Hugh Seton-Watson, Neither War nor Peace, Methuen & Co., 1960. He quotes the proportion on a world scale as 1,285 million out of 2,177 million engaged in agriculture (from a report of the UN Department of Economic Affairs, New York, 1951). LABOUR REVIEW—Summer 1961 George Kane country predominantly populated by peasants if the regime rides roughshod over the interests of the small peasants? Must the revolutionary power give guarantees which it will not and cannot keep? Must the workers’ parties forcibly impose their will upon the peasant masses and risk an explosion? The platform presented by Engels in his article for the European Social Democratic Parties is highly relevant for a socialist approach to modern agrarian problems. His pamphlet should be read by all socialists; meanwhile a few lengthy quotations are in order for our immediate purposes. Engels says: € . . we foresee the inevitable doom of the small peasant but that it is not, our mission to hasten it by any interference on our part. ... When we are in possession of state power we shall not even think of forcibly expropriating the small peasants (regardless of whether with or without compensation), as we shall have to do in the case of the big landowners. Our task relative to the small peasant consists in the first place in effecting a transition of his private enterprise and private possessions to co-operative ones, not forcibly but by dint of example, and the proffer of social assistance for this purpose. And then of course we shall have ample means of showing to the small peasant prospective advantages that must be obvious to him even today.’3 (my emphasis, G.K.) “The main point is and will be to make the peasants understand that we can save, preserve their houses and fields for them only by transforming them into co-operative property operated co-operatively. It is precisely the individual farming conditioned by individual ownership that drives the peasants to their doom. If they insist on individual operation they will inevitably be driven from house and home and their antiquated rnode of production superseded by capita- list large-scale production.’4 ‘Neither now or at any time in the future can we ~ promise the small-holding peasants to preserve their individual property and individual enterprise against the overwhelming power of CAPITALIST PRO- DUCTION. We can only promise them that we shall not interfere in their property relations by force, against their will: . . . We of course are decidedly on the side of the small peasant; we shall do everything at all permissible to make his lot more bearable, to facilitate his transition to the co- operative should he decide to do so, and even make it possible for him to remain on his small holding for a protracted length of time to think the matter over, should he still be unable to bring himself TO THIS DECISION.’5 (my emphasis, G.K.) 3 Engels, F. op. cit. p. 28. 4 Engels, F. op. cit. p. 30. 5 Engels, F. op. cit. pp. 31-2.

[p035] CHINA’S COMMUNES The peasant economy is ‘doomed’ under ‘the overwhelming power of capitalist production.’ The socialist revolution will not seek to ‘hasten’ this process ‘by force against the will’ of the peasant but will try ‘ by dint of example and the proffer of assistance” to persuade the peasant of the benefits of co-operation, making concessions to those not convinced. Thus Engels underlines the general principles of marxism towards this surviving mode of production. ‘Voluntary co-operation’ is as much a part of socialist production relations as is co- operative large-scale farming. It would of course be a mistake for us to mechanically regard China as if it was a European- style medieval feudalism emerging into the capitalist world in the nineteenth and twentieth centuries. To use the words ‘feudal’ and ‘semi-feudal’ carelessly is as incorrect as to elevate China’s historical peculiarities to the level of an absolute exception in historical development. In analysing China’s development it must be con- stantly borne in mind that the major conflict in China was not that of ‘feudal’ or ‘semi-feudal’ forces against ‘democracy’ and a ‘national capitalist development’ but between imperialism and _ the socialist revolution. The only ‘ national capitalist’ development possible in China was that experienced from the abortive 1911 revolution to the fall of Chiang Kai-shek in 1949. But the problem remains for the Chinese Republic—having ‘leapt’ over a capitalist course of development how can _ the property relations and productive forces be brought into line with the political relations without endangering the basis of the revolution? The ‘leap’ to the socialist revolution does not mean that what is done is automatically socialist in character; it means that the historical tasks of capitalism (industrialization, distribution, etc.) have to be carried out by the régime of the workers and peasants. The history of the political relations of the village in the epoch of socialist revolution shows that the peasantry either marches with the reaction or under the banner of the proletariat. A victory for the reaction means a strangling of the revolution and the perpetuation of the very conditions driving the poor and middle peasants to their doom (e.g. ,China after the victory of Chiang Kai-shek in 1927). The alliance of the workers and peasants was a major theoretical preoccupation of Russian Marxists up to 1917. The revolution itself settled the discussion heavily on the side of the theory of the permanent revolution advanced by Trotsky and confirmed the correctness of the formulation of these relations between the two classes as expressed in the slogan, the dictator- ship of the proletariat supported by the peasantry. When the revolutionary wave receded in Europe 73 following the German defeat of 1918-23, Trotsky and the Left Opposition advanced a programme of industrialization of Russia and the beginning of co-operation in agriculture. At the end of the decades, with the heavy defeat in China and the great internal difficulties flowing from the bureaucracy’s course towards the rich peasants, Stalin rushed through collectivization, ramming down the throats of the peasantry the ‘benefits’ of ‘large scale farming ’. Trotsky opposed these methods on the grounds that, far from cementing the alliance of the workers and the peasants, they only assisted the counter- revolution and led to either violent resistance or silent sabotage. Trotsky based his earlier demand for industriali- zation combined with collectivization upon the need to strengthen the base of the workers’ state. He opposed the direct attack of Stalin upon the peasantry in 1929 because this weakened and endangered the isolated Soviet Union, consolidating the bureau- cracy’s break from the international strategy of Bolshevism. He wrote in 1930: “The collectivization of peasant holdings is, it is understood, the most necessary and fundamental part of the socialist transformation of society. The volume and tempo of collectivization, however, are not determined by the government’s will (my emphasis, G.K.) but, in the final analysis, by the economic factors: by the height of the country’s economic level, the relationship between industry and agriculture and consequently the technical resources of agriculture itself... ‘Industrialization is the motive force of the whole new culture, and by that, the only conceivable basis of socialism. In the conditions of the Soviet Union, industrialization means first of all the strengthening of the base of the proletariat as a ruling class. Simultaneously it creates the material and technical premises for the collectivization of agriculture. The tempos of both these processes are interdependent. The proletariat is interested in the highest tempos for these processes in so far as the new society that is to be created is thus best protected from external danger, and at the same time creates a source for systematically improving the material level of the toiling masses. . ‘However the tempo that can be accomplished is limited by the whole material and cultural position of the country, by the mutual relationship between city and village and by the most urgent needs of the masses, who can sacrifice their today for the sake of tomorrow only up to a certain point.’ (emphasis in original)§ Trotsky concludes from the above, two variants are possible for the party and state leadership to follow: ‘a) the course described above towards the economic entrenchment of the proletarian dictatorship in one country until further victories of the international proletarian revolution (the viewpoint of the Left Opposition); b) the course towards the construction 6 Trotsky, L. D. The Permanent Revolution, Preface to the American edition, 1930.

[p036] 74 of an isolated national socialist society and “in the shortest historical time ” (the official viewpoint).”’ If Stalin was judged in this light, how does Mao stand up? ‘Socialism in one country’ was the seal of Soviet Stalinism; ‘Ownership by all the people’ (i.e., communism) is the declared aim of the Chinese Stalinists, and in ‘a few decades’. Stalin’s non- Marxist attitude to the peasantry was demonstrated tragically in China in 1926-27, when in the upsurge of the revolution, soviets were banned in the country- side (this becoming a feature of the campaign against Trotskyism); when the high tide had passed and the summer reaction was in full swing, the calls for insurrection and soviets were advanced simultane- ously (this again becoming a weapon against the ‘over-cautious’ Trotskyists). These ‘ mistakes’ meant a long and twisted road to power for the Chinese Communist Party; a continuation of the Stalinist method can again bring serious reversals for the revolution in China and Asia generally. THE COMMUNES ‘In 1958, a new social organization appeared fresh as the morning sun above the broad horizon of Asia.8 The mass movement to form ‘People’s Communes’ out of the Agricultural Producer Co- operatives began and was completed in a few months. Peking claimed that the People’s Communes represented ‘the desire of hundreds of millions of peasants ’, and that they were ‘an inevitable product of historical development.’ The CCP agreed to them because ‘the peasants demanded a more rational and efficient organization of labour.”? The truth or otherwise of these claims will be examined in a moment. First, we should see briefly what the CCP considered to be the role of agriculture only a few months before the rise of ‘the morning sun’. Tan Chen-lin reported, on behalf of the Central Committee to the Eighth National Congress of the CCP in May 1958, on the National Programme for Agricultural Development. He disclosed that ‘certain persons’ (this category is almost a national figure in modern Chinese politics!) in the winter of 1956-57 had opposed the official line for agriculture as a ‘reckless advance’; consequently the ‘labour enthusiasm’ of the masses was dampened and in 1957 progress on the production and construction fronts, and on the agricultural front in particular, 7 Tbid. 8‘ Resolution on Some Questions Concerning the People’s Communes’. Adopted by the Eighth Central Committee of the CCP, Sixth Plenary Session, December 10, 1958. In English in The Agrarian Policy of the CCP, appendix. 9 Editorial in People’s Daily (Renmin Ribao) ‘ Long Live the People’s Communes!’ August 29, 1959. LABOUR REVIEW—Summer 1961 were retarded.”!0 Whether it was the lack of enthusiasm on the part of the peasants that inspired the ‘ certain persons’ or the reverse, as Tan Chen-lin insists, is open to question. The Chinese Communist Party, however, undeterred by ‘lack of enthusiasm ’, campaigned against ‘rightism’ in the masses up to its third plenary session in September 1957, where it combined a reaffirmation of the line of achieving ‘greater, faster, better and more economic results ’ with a retreat on the National Programme for Agricultural Development. Apparently this retreat did not convince everybody for ‘some of them’ were waiting to see the Autumn harvest first (i.e., Autumn 1958).14 The revised Draft Plan published in October 1957 and submitted for discussion to the Agricultural Co-operatives (A P Cs) was presented as the plan in May. Over 1,891 suggestions had been submitted from ‘ various areas, circles, units and individuals ’ which were composited into 337 items.!2 Party Committees from the ‘ provinces, municipalities and autonomous regions’ submitted 293 items. Out of all these suggestions coming from the countryside there is no mention of even ote which calls for the merging of the co-operatives to form Communes! Yet we know that the Central Committee was dis- cussing the idea with local Party chiefs as early as March 1958, i.e., two months before Tan Chen-lin, on behalf of the CC, submitted the National Programme for Agricultural Development, which called for the ‘consolidation of the APCs in the period of the second Five Year Plan or a longer period ’,!5 i.e., to at least 1967. The Party gave no outward sign that it was considering an amalgamation of the APCs into Communes in the early months of 1958. In Tan Chen-lin’s report in May, ‘consolidation’ of the A PCs was all that was envisaged for the next 10 years. While his report was being made, the first experiments in Commune-type organization were already a month old. Thus there is no foundation for the claim that the Communes were the logical outcome of the agrarian reform, or that the Party was forced ‘under pressure from the peasants’ to agree to them. Taking into account the state of agriculture and the failings of the APCs to keep up with the industrialization requirements (capital 10‘ Explanation on the Second Revised Draft of the National Programme for Agricultural Development (1956-67) ’ Tan Chen-lin, May 17, 1958. Published in English in Second Session of the 8th National Congress of the CCP, FLPH 1958, pp. 80-94. 11 Tbid, p. 82. 12 Tbid, p. 90. 13“ Revised Draft Programme on _ Agricultural Development of the Nation, 1956-67’, October 25, 1957. Published as an appendix to Agrarian Policy of the CCP, Chai Kuo-chun.

[p037] CHINA’S COMMUNES construction is paid for by the agricultural surplus) once the order was given for amalgamation in a desperate bid to balance the economy, the Commune movement can be seen for what it was—a movement of tremendous convulsion in the countryside, a forced march against economic backwardness on a scale hitherto unknown in any society. It is now known that the first experiments in large- scale co-operative farming were made in April 1958. In Suiping County, Honan Province, 27 A P Cs were merged into what was called a Joint Co-operative.14 Several other experiments were made in other areas. No such amalgamation could have taken place except on the highest authority, i., that of the Central Committee . The early experiments were very large, containing some 10,000 households each, with populations of about 44,000 people.!5 At Peitaiho in August 1958, the Central Committee discussed the continued struggle against ‘right deviationism’. In May, Tan Chen-lin had warned of the possibilities of ‘unfavourable factors in the objective conditions’ and consequent failures in agriculture. By the autumn it was obvious that the harvest was going to be a good one. The resolutions from the Peitaiho meeting called for the merging of the APCs and the doubling of steel output over 1957. It was decided to take advantage of the bumper harvest to push through the merging of the APCs (in much the same way as the A P Cs them- selves had been formed in 1955). It was easy to claim that the harvest was a result of the ‘ correct line of the Central Committee guided by Mao.’ The ‘rightist deviation ’ would be most isolated in a good harvest year and opportunities to strengthen the CCP over the masses could not be missed. There is no doubt that the motive was ‘a more rational, efficient organization of labour’; whether in fact peasants ‘warmly applauded’ this move is another matter. The need to reorganize the APCs which were not responding to the National Programme for Agricultural Development is an indication of the increasing difficulties that the government’s agrarian policy was encountering. Further agricultural short- comings (as experienced in 1957) could become the focal point for increased resistance among the masses. Impressive successes were desperately needed by the régime. The all-out drive to ‘catch up with Britain in 15 years’ is China’s ‘socialism in one country ’. The evidence does not point to 500 million peasants demanding Communes and threatening to revolt if they did not get them. Nor does it mean that the peasants were opposed to the Communes, at least at first. Enterprising cadres could paint a 14Chao Kuo-chun, op. cit. p. 161 (Red Flag-Honggi No. 8, 1958). ” 15 Hughes. The Chinese Communes, 1960. Bodley Head, p. 77. Chao Kuo-chun, op. cit. a 75 picture of paradise under the Communes, as they did for the APCs in 1955. The promise of ‘free’ medical service, other ‘free benefits’, as much to eat as they wanted in the community dining halls, real money wages, freedom from household drudgery, proper schooling for everybody, care for the sick and the aged, etc., amounted to a very attractive prospect. The merged communes did not make much difference to the relationship between the individual peasant and his implements of production. The APC already owned the means of production,!® which the peasants donated on joining. The ‘level of ownership’ in the communes is at ‘ production brigade level’, which roughly corresponds to the same level as the old APC. STRUCTURE OF THE COMMUNES The average commune has’about 5,000 households, but with total populations varying from 25,000 to 50,000 persons.17_ The original structure of the APCs was that several APCs would be formed in a Hsiang (village committee) and the Hsiang would be formed into a Hsien (county committee). The state machinery (Hsiang and Hsien). would be separate from and above the APCs. The People’s Communes were formed by merging all the A PCs in each Hsiang. (In the first case comprising 27 APCs.) The previous A PCs would be designated ‘Administrative Districts’ or ‘Production Brigades’, under which would be the ‘production teams ’.!8 The Commune is run by an Administrative Com- mittee, elected in the usual Stalinist fashion, i.e., ‘from nominations from the local Party organs, ‘endorsed’ by the peasants. The Commune ‘combines industry, agriculture, trade, education and military affairs in which the government administration and commune manage- ment are integrated.!9 This last is the most significant feature of the communes and is, of course, completely absent from the reactionary fantasies of ‘barrack slavery’ and the rest. The Administrative Committee replaced the Hsiang District Committee and the county committees (Hsien) are composed of federations of communes. The communes then take on the functions of both producer, buyer and deliverer to the state of agricultural products. The various departments of the commune (welfare, militia, finance, etc.) function under the control of 16 See ‘Model Regulation for Advanced Agricultural Producers’ Co-operatives’, June 30, 1956. Article 2. Published as an appendix in Chao Kuo-chun, op. cit. © 17 Chou En-lai, A Great Decade, 1960, FL PH, p. 23. 18 Chao Kuo-chun, op. cit. p. 165. 19‘ Resolution on Some Questions Concerning the People’s Communes ’.

[p038] 76 the Administrative Committee. Each Production Brigade is responsible for the departments under its jurisdiction (i.e, each Production Brigade has its own welfare, finance and militia departments). The accounting is calculated individually for the Pro- duction Brigades so that they can be classified into ‘inferior’, ‘ordinary’ and ‘better’ production brigades. The Administrative Committee levies a percentage from each production brigade calculated on the basis of their results (at first as APCs). The division of function between the committee and the brigade varies considerably, but little detailed information is available. An analysis given in Ta Kung Bao20 gives the following information: Type of Donation to Kept by Kept by Production Communal Reserve Production Production Brigade Fund Brigade Team Ordinary 14% 3% 1% Better 17% 3% 1% Poor 11% 3% 1% A Communal Welfare Fund covers the costs of the commune’s hospitals, schools, ‘care of the aged and sick’ services, etc. The production brigade has to provide the local ‘free’ services: kindergartens, communal kitchens, etc. The process of making the commune more and more important in its role towards the production brigades, in making decisions for the whole commune, and in gradually developing resources from its funds (thereby owning them), is recognized by the regime as the best way to make the ownership at production brigade level less and less important and state ownership more important (by virtue of the fact that the Administrative Com- mittee is identical with the state organs). The wilder claims of the regime on the varied functions of the communes disguise the fact that these are as yet mere improvizations. For instance, the New China News Agency declared that the Liupu Commune in Shantung had ‘nine small factories (which can mean virtually anything from a corner of a yard to a tin shack—G.K.) for making farm implements (hoes, trowels, spades, spikes, etc.), cement, pottery and for processing food.”2!_ Another report boasted a commune with a ‘tractor station and a network of workshops.’22 The tractor station here cannot mean much more than a parking area with simple garage facilities (the first tractor plant went into operation in China in 1959). NCNA claims for the Chanshih 20Ta Kung Bao, Peking daily. appendix to Hughes, op. cit. p. 84. 21 New China News Agency (issued daily in London) August 1, 1960. ' 22Hsinhua People’s Commune, NCNA, August 28, 960. In English, as an LABOUR REVIEW—Summer 1961. Commune ‘24 workshops’ that have ‘ produced several thousand harvesting and threshing imple- ments ’,?3 which again can mean anything or nothing. Mechanized implements are outside the scope of present-day agricultural resources in China (they require technicians, heavy equipment, welding, drilling, machining apparatus, electricity plants, designing skill and so on). This does not of course belittle the tremendous improvement over capitalist China. THE CENTRAL COMMITTEE DIRECTS THE PEOPLE’S COMMUNES Following on the August Central Committee meeting at Peitaiho came the first Chengchow conference in November. The People’s Communes were definitely on the agenda of the Central Com- mittee meeting but no indication is yet available of what was decided in that respect. The situation in the countryside and the differences within the Party leadership, called for a top level meeting and, judging from what came out of the meetings, the situation must have been alarming, more so than the crisis that called for the retreat in 1957. The December Wuchang meeting of the Central Committee was attended by the full Central Com- mittee and 166 delegates. This meeting was the most important of the series called to discuss the communes. The famous resolution of the meeting: “Some Questions Concerning the People’s Com- munes ’, is worth some study.24 The opposition to the communes extended right into the Central Committee itself. It was by no means a solid opposition current. The city delegates opposed an extension of the commune system into the urban - districts, the principle of which was conceded to them. A section of the army was undermined by > permanent ‘ manual work’ and the formation of the multi-millioned militia. (The response to this was the establishment of a post above Lin Pao, marshal of the Army, a post which was staffed by head of security.)?> Other leading figures opposed the communes because the extent of unrest in the countryside was dangerous. Mao Tse-tung, Liu Shao-chi and Teng Hsiao-ping are known as the foremost advocates of ‘ People’s Communes’. In fact, Mao is credited with 23NCNA, August 1960. 24* Resolution on Some Questions Concerning the People’s Communes ’. 25 The extent of the differences between the army and the Party leaders on the communes and the ‘ great Jeap forward ’ (it should be remembered that the army con- sists of peasants) can be measured by the sacking of Peng Teh-huai, People’s Liberation Army Marshal and Defence Minister up to 1959, and his replacement by

[p039] originating the idea.26 CHINA’S COMMUNES It is interesting to note that Liu Shao-chi and Teng Hsiao-ping were the heads of the Chinese delegation to the recent Stalinist “summit ’ in Moscow and launched the CC P attack on the Soviet Party. .Chou En-lai, called the ‘ elastic bolshevik ’ because. of his capacity to survive all purges although he has frequently been on the ‘wrong’ side, made the speech in August 1958 which revised the planned targets and criticized the earlier estimates as resulting from ‘lack of experience’. The Wuchang conference met to ‘clear up mis- understandings ’ on the communes among the Party and the masses. The ‘socialist principle of to each according to his work’ was upheld as the banner of the communes and the ‘communist principle of to each according to his need’ was held up as the object of the distant future. The picture of paradise that local cadres had painted—with strong emphasis on the ‘free’ services—thad obviously led to many excesses and waste of resources. The resolution was a blow at those in the Central Committee who ‘saw the communes as institutions of the immediate transition to Communism. Ownership at brigade level was confirmed and ownership by the whole people was delayed until the future. Local cadres who were forcing the pace were reprimanded. The peasants were obviously resisting the hectic march. The whole emphasis of the resolution is on time. A ‘certain time’ must elapse before ‘communism is established’. The resolution says that this ‘ certain time’ is “15 to 20 years’, ‘ gradually’ worked towards by consolidating the Federations of Com- munes (at Hsien level) and the transference of ownership of the means of production from the production brigades to the communes and thence Lin Pao. In the latest Party history books, Peng Teh-huai is castigated for ‘ sectarianism’ in 1933, when he is alleged to have persuaded the Red Army to fight a ‘ positional warfare’ against Chiang Kai-shek, which resulted in big losses. In former Party histories Peng was not mentioned in this connection. Mao has previously blamed anonymous ‘sectarians’ and ‘lefts’ (usually Wang Ming, one of Stalin’s personal nominees in the CC P at the time). It is also noticeable that Peng was in charge of the North West Military area of China, which covers the most backward part of China and a large number ef national minorities, who would be the most difficult to assimilate into communes. Their resistance may have prompted Peng to stand up and advise caution on the Big Leap Forward. This ‘resistance’ of a veteran Red Army leader must have more than encouraged the Party to place General Lo Tui-ching of the security department over the new Defence Minister, Lin Pao (a close friend and colleague of Peng since the late 1920s). See Thirty Years of the C P A, by Hu Chiao-mu, and Red Star Over China, by E. Snow, for previous accounts of the ‘ mistakes’ of 1933. A quotation from the new official history is in Red Barbarians—The Life and Times of Mao Tse-tung, by R. Macgregor-Hastie, p. ‘123 (Boardman, 1961). 26 People’s Daily (Renmin Ribao) August 29, 1959. 77 eventually to the Federations and the ‘whole people’. The speed of this transformation ‘depends upon the level of development of production and the level of people’s understanding ’,27 a recognition of the low level of economic development of China and the consequent political level of the masses. The economic level of China is not yet sufficient for an ‘abundance of social products’, the only possible basis of ‘ownership by the whole people’. The previous emphasis on ‘free’ services was reversed in favour of more emphasis on money wages. This emphasis would ‘occupy a major position for a certain period of time’ and a ‘ long time to come ’.28 For instance in the Ch’ayashan Commune?? the relationship between ‘free’ services and money before the Wuchang meeting was 70 per cent and 30 per cent respectively. After Wuchang it became 38 per cent and 62 per cent. The Peitaiho resolution forming the communes “set the pace in this way: ‘the transition from collective ownership to ownership by the whole people is a process, the completion of which may take less time—three to four years—in some places, and longer—five to six years or even longer—else- where.’30 In December the C C P decided that even if this did happen it would not yet be socialism, and the principle of ‘to each according to his work’ must prevail The question of ownership is then really artificial, The state owning all means of production but unable to produce an abundance of the social product still must distribute according ; to a system that is not advanced beyond that of capitalism. The myth of the establishment of ‘socialism in one country’ or the Communist principle of ‘to each according to his needs’ is a reactionary utopia within the national boundaries, and is only realistic on a world scale. But does this slacken the pace? Decidedly not, for ‘three years of hard battle plus several years of energetic work are needed to change the economic face of the country.”3! The CCP tries to solve the economic backwardness of the country by edict and the regimentation of production. ‘Thrift’ in the use of resources becomes the watchword of the Party, and this is to be repeated constantly to the peasants. The resolution adds: ‘ Extravagance and waste among some functionaries of the com- munes following a bumper harvest should be pre- vented and opposed.’ This may be more of a blind attack on ‘some people’ while the real ‘ extrava- gance and waste’ is on a grand scale due to silent 27“ Some Questions .. .’ 28 Hughes. Appendix, p. 86. 29 Ibid, p. 86. 30 ‘ Some Questions...” 3! Ibid. ‘Some Questions...’

[p040] 78 sabotage or low political consciousness. To organize production ‘along military lines, working as if fighting in a battle and living the collective way’ is advanced as a method of organization of labour in an economy that is at a very low level of development, where methods are primitive and basic necessities are scarce. The material prerequisites for communal living do not exist, and the Party has had to constantly retreat and revise its methods, on meeting the opposition of the masses. Wuchang relaxed many of the early irritations and conceded to the peasants ‘rights’ denied them by zealous local cadres. Food could be cooked in the homes and the dining halls had to be improved. On paper the working hours were eased, with 12 hours per day being guaranteed to everyone for rest and recreation, but with the saving clause that ‘during the busy farm season, or when other work in the rural areas is particularly heavy, working hours may be appropriately extended.”32 As the local cadre and not the peasants decide working hours, inefficiency, bad planning, natural calamities or impossible norms will be made up for by extending the working hours ‘ appropriately ’. From December to August the Party conducted another vigorous dog-fight with the ‘right oppor- tunists’. Five months were allotted to the Party organizations to carry out the ‘tidying up’ of the communes (from December to April) and at the second Chenchow Central Committee meeting the Wuchang declarations were confirmed and the results reviewed. The new handful of ‘right opportunists’ were active, it seems, in the Party itself. They were accused of ‘exaggerating shortcomings’, of ‘dubbing the vigorous mass movements petit-bourgeois fanaticism’, and the big leap forward ‘left adventurism’. They claimed that the People’s Communes were ‘founded too early’ and were ‘in a mess’, that the making of iron and steel in a big way had resulted in ‘more loss than gain’; panic-stricken and nonplussed in the face of certain local and temporary imbalances which could hardly be avoided in the big leap forward, they labelled such im- balances ‘ disproportions’ in the national economy as a whole.?3 The Lushan meeting of the Central Committee in August 1959 ‘utterly smashed’ the right oppor- tunists, we are informed. Another struggle against ‘right opportunism’ was launched throughout the party and another ‘mass movement’ was launched to assist this. The struggle against ‘right oppor- 32 Ibid. 33 Li Fu-chun, ‘ Raise High the Red Flag General Line and Continue FLPH, 1960, p. 4. of the to March Forward’, LABOUR REVIEW—Summer 1961 tunism’ has been an almost permanent feature of Chinese Party life since 1955 (i.e., since the formation of the APCs). And still the struggle goes on in 1961! The Central Committee meeting in Peking, January 1961, announced that ‘90 per cent’ of the Party work ‘faithfully and conscienti- ously ’, leaving 10 per cent as ‘ bad elements’ who ‘break laws and violate discipline in the -villages and the cities to the detriment of the interests of the people.’34 Marxists must differentiate between the remnants of the old regime who exist in substantial numbers (the revolution is only just over a decade old) and the resistance of the workers and peasants to bureaucracy, inefficiency, and ‘irrational and inefficient’ methods of production arising out of the empiricism of the regime. ¥ THE ADJUSTMENTS Chou En-lai, on behalf of the Central Committee, announced big cuts in the targets of the 1959 economic plan in August of the same year.*5 The inevitable strains produced in the economy (on Peking’s own admission) by the all-out effort caused serious dislocation of distribution and production. Most industrial units suffered from shortage of raw materials, indeed there is some evidence that China’s’ transport system almost broke down towards the end of 1959. The ‘ repeated check-ups’ showed that assessments of agricultural produce were too high. This was blamed on ‘lack of experience’ and the natural calamities that affected 510 million mou of farmland, or nearly ‘one third of the total cultivated area’. The Central Committee ordered a ‘re-adjustment ’, which Chou obligingly delivered. In industry, steel was cut back from a target of 18 million tons (‘including steel produced by indigenous methods ’) to 12 million tons (‘not including steel produced by indigenous methods, which will be produced and used locally’). This local steel was obviously of very low quality. Coal was cut from a target of 380 million tons to 335 million. The ‘total value of industrial output was adjusted from the original 165,000 million yuan to 147,000 million yuan.’36 The most startling adjustment came in agriculture 34* Communique of the Ninth Plenary Session of the Eighth Central Committee’, NC N A, January, 1961. 35 Chou En-lai, ‘Report on Adjusting the Major Targets of the National Economic Plan and Further Development of the Campaign for Increasing Production and Practising Economy’, delivered at the fifth meeting of the Standing Committee of the National People’s Congress, August 26, 1959. 36 Tbid.

[p041] CHINA’S COMMUNES where the target of 1,050,000 million catties3? was slashed by half to 550,000 million catties. The ‘rising sun’ was in danger of setting! In order to supply raw materials to existing capital construction, ‘above norm’ projects, Le., those in excess of plan, were slashed from 1,092 to 788. Capital investment was cut by 2,200 million yuan.38 * When there are still very few farm machines and very little chemical fertilizer’ an increase in pro- duction of 10-20 per cent is a ‘leap forward’ says Chou. With only 55,000 tractors in China in 1959 (when it is estimated that 400,000 are needed) it is obvious that what increases in production are gained will in the main have to come from greater efforts by the peasants and more efficient means of utilizing existing techniques. Chou endorses this: ‘As we all know, the bigger the base figure, the bigger is the increase required for every 1 per cent rise, and the greater are the efforts needed to achieve this.’>? But the natural calamities of 1959 were followed by the ‘ worst ones of the century’ in 1960. 1961 is the last year of the ‘three years’ hard effort to ‘ change the economic face of the country’... CONCLUSIONS It is of course possible to consider the People’s Communes in pure isolation and from the point of view of abstract principle: e.g., whether one supports .* large-scale ’ farming and the ‘ liberation of women’ or whether one is a ‘right opportunist’, etc. ‘Support’ for the People’s Communes by socialists on such isolated criteria is questionable. The real issue is not ‘communes or no communes’. It is a question rather of the whole historical course of the Chinese revolution. Either the internationalist course of Lenin and Trotsky or the national-socialist course of Stalin. The problem of China (its economic and therefore cultural backwardness) cannot be solved within the boundaries of China by the efforts of China alone, except at tremendous and unprecedented sacrifices by the masses over a prolonged period of many decades. The risks of this policy involve the survival of the Chinese Republic itself. This is based on the assumption that the status quo with world imperia- lism can be maintained over this period, that the colonial revolution with all its problems will pause for decades, that the working class of the metropolitan countries will prove unable to take power and overthrow capitalism, and, most important, that the Chinese masses themselves will not.become totally exhausted, demoralized and reach. 37 Ibid (one catty equals 1.1 ib.). 38 Ibid. 39 Ibid. in tendency! 79 ‘that certain point’ where ‘the sacrifices of today’ seem too great for the socialist tomorrow. Surely these conditions are unlikely to be fulfilled? Is this one of the reasons for the present ideological dispute between Peking and Moscow? ‘ Peaceful co-existence’ is the policy of the Soviet bureaucracy, which is more than ready to sacrifice the world revolution for an understanding with world imperialism. The pressures of economic develop- ment in China, felt acutely by the Chinese leaders (the perennial struggle against ‘right opportunism’), make the prospect of continued isolation of great importance to China. China, a poor and backward country, feels that her more prosperous and developed neighbour, the Soviet Union, might do its deal with imperialism at China’s expense (they demand to be in on any summit between K and K). China’s connections with the rapidly developing colonial revolution in face of the direct threat from imperialism, make a ‘ left Stalinist ’ course inevitable for the moment. The call for a more truly communist struggle against imperialism and the offer of material aid to the colonial struggle are weapons ’ against the ‘right opportunists ’. The agrarian policy of the Stalinists is not based upon the interests of the peasantry or of the workers’ state, but upon the interests and conceptions of the bureaucracy. Marxists oppose the agrarian policy of the Stalinists and fight to eradicate the influence of Stalinism in the Labour movement. Marxists also support the principle of collectivization. The problem facing the Marxists in the nineteenth century was how to overcome the contradiction between the peasantry and the interests of the revolution. This was solved theoretically by Engels and practically in the October Revolution of 1917. To justify Stalinist agrarian measures with the slogan, ‘large-scale farming is the basis of socialism’, is to justify Stalinism on the vague principle of necessity. The liberation of the Chinese women from household drudgery is another claim of the advocates of the communes. But to liberate women from the sink and chain them to a plough is a peculiar form of liberty. The Stalinist measures against the patriarchal family system of old China are supported by Marxists. Bourgeois protests about the liquidation of the family in China are sheer nonsense and hypocritical into the bargain. In explaining their agrarian reform programme, the Chinese Stalinists often use the phrase ‘ uninter- rupted revolution’. This of course is a phrase derived from. Marx and used often by Trotsky; it has been pointed out by some as an indication of how the CCP, in their opinion, is almost ‘ Trotskyist ’ Fortunately, Trotskyism is more than a propensity to use phrases associated with Trotsky. The ‘uninterrupted revolution’ in the Chinese

[p042] 80 countryside is unfortunately being interrupted con- stantly by one thing—the technical backwardness of the countryside. Each paper advance from indi- vidual plots to ‘ higher ’ forms of ownership—mutual, collective, commune and ‘ by all the people’ is done on the same technological basis. Therefore there is no real advance, no ‘uninterrupted revolution’. The nationalization of a factory represents a genuine change by bringing the mode of ownership into line with the socialized mode of production. In an economy of small peasant farms, socialization of primitive farm implements and human labour does not represent such a new stage, since there does not exist the same contradiction between the forces and relations of production. To leave the peasant holdings as they are would mean the eventual death of individual ownership by the process of the strangulation of individual peasant economy by the capitalist market.40 As a capitalist line of development is not possible in China, what is the historical alternative? The task for the Chinese government is to raise the technical basis of agriculture (fertilizer, machinery, seeding, buildings, transport, increased living standards, etc.) to prepare for a genuine transformation into socialized property. There is all the difference in the world between a large-scale farm in the USA, a banana plantation in Jamaica, or a sugar cane plantation in Cuba, and several hundred plots of land each just one-sixth of an acre, with mainly wooden imple- ments, primitive dykes and:a low level of culture. This in no way belittles the revolutionary nature of the Chinese peasantry—it only indicates the immense problems they face, problems which are not helped by the acceptance of illusory gains and imaginary “ stages’. Has there been any advance then in the countryside since Liberation? The answer must be yes. The fact is that the landlords, usurers and all petty exploiters were cleared out. This clearing away of the reactionary village classes was a tremendous step forward. But it did not clear away these classes to prepare the countryside for socialist or communist relations. Mao himself said it ‘requires a long time ‘and careful work to attain the socialization of 40 For a detailed Marxist study of the process of the disintegration of the peasantry by the capitalist market, see Lenin, The Development of Capitalism in Russia FLPH. LABOUR REVIEW—Summer 1961 ; agriculture’ and that for this to be done in China “a powerful industry with state-owned enterprises as the main component must be developed.’ This problem, he went on, must be solved ‘ step by step ’.4! Marxists support in principle the collectivization of agriculture; they also insist on the principle of voluntary participation in a collective by the peasants. People’s Communes or APCs _ based upon force can become points of support for the counter-revolution. China has a great need to develop economically if working-class rule is to be strengthened. This can be done in the ‘shortest possible’ time with the least risk of internal exhaustion by the full and free participation of the masses in all decisions and in the drawing-up of plans. The establishment of socialist democracy in the countryside and the cities is of great importance to the revolution. The peasants should be given the right to withdraw from the communes if they so desire. The state should set up collective farms as models for the peasants who remain unconvinced, even after 11 years of liberation. . Objections to this can only come from those Stalinists who are fearful of the free decision of the masses. If a secret ballot is likely to result in a mass exodus of the peasantry from the communes then the revolution is in great danger. Another bad year for agriculture, for whatever reason, can bring a crisis of the most serious dimensions for the regime. To ensure the solidarity of the workers’ state requires that the obstacles to a real development of the _ economy are removed. The national-socialist policy of the Stalinists must be defeated by a working-class party with an internationalist strategy. For socialists in the capitalist countries our internationalism must not be confined to giving advice to the Chinese masses (they have, after all, overthrown capitalism) but consists in overthrowing capitalism in the advanced countries, ‘in the shortest possible time’, and so coming to the material and political assistance of the Chinese masses. Our obligations in this respect must never be lost sight of, otherwise the alternative for the Chinese worker and peasant is the 12-hour day and the ‘ big leap’. 41 Mao Tse-tung, ‘On the Peoples’ Democratic Dicta- torship ’, 1949 (quoted in China and Her Shadow, p .45 by Tibor Mende, Thames and Hudson, 1961).

[p043] LEON TROTSKY writes on the British labour movement THE LIBRARY of no student or active member of the working-class movement can be considered anywhere near complete if it lacks a copy of Trotsky’s classic work. When it first appeared, in 1925, it was the subject of sharp controversy, in which Bert- rand Russell, George Lansbury, H. N. Brailsford, R. Palme Dutt and others took part. Norman Angell wrote a whole book—‘Must Britain Travel The Mos- cow Road?’—in reply to it. After 35 years, an increasing number of socialists think that Trotsky’s book stands up a lot firmer than the ideas of his opponents. Among the questions discussed in ‘Where Is Britain Going?’ are: the basis of reformism and opportunism in Britain, and its undermining by 20th-century changes in the world; the role of Fabianism and other bourgeois influences in the shaping of the British labour movement; the revolutionary tradition in our history; the prob- lem of force in British politics (a ‘British road to socialism’?); the part played by religion in the life of the workers of Britain (‘Methodism, not Marxism’?); and the crucial significance for the British Labour Party of changes within the trade unions. Even those who disagree with his conclusions have paid tribute to the acuteness of Trotsky’s ob- servation, his exceptional grasp of the peculiarities of the British movement and the (sometimes cruelly accurate) pointedness of his characterizations of certain trends and types in our political life. Where Is Britain Going? Price: Seven Shillings and Sixpence (or 7s. 11d. post free). Obtainable from— SOCIALIST LABOUR LEAGUE, 186 CLAPHAM HIGH STREET, LONDON S.W.4 Printed by PLOUGH PRESS LTD. (TU), ro. 180 Clapham High St, London SW4

[p044] LEON TROTSKY writes on the British labour movement THE LIBRARY of no student or active member of the working-class movement can be considered anywhere near complete if it lacks a copy of Trotsky’s classic work. When it first appeared, in 1925, it was the subject of sharp controversy, in which Bert- rand Russell, George Lansbury, H. N. Brailsford, R. Palme Dutt and others took part. Norman Angell wrote a whole book—‘Must Britain Travel The Mos- cow Road?’—in reply to it. After 35 years, an increasing number of socialists think that Trotsky’s book stands up a lot firmer than the ideas of his opponents. Among the questions discussed in ‘Where Is Britain Going?’ are: the basis of reformism and opportunism in Britain, and its undermining by 20th-century changes in the world; the role of Fabianism and other bourgeois influences in the shaping of the British labour movement; the revolutionary tradition in our history; the prob- lem of force in British politics (a ‘British road to socialism’?); the part played by religion in the life of the workers of Britain (‘Methodism, not Marxism’?); and the crucial significance for the British Labour Party of changes within the trade unions. Even those who disagree with his conclusions have paid tribute to the acuteness of Trotsky’s ob- servation, his exceptional grasp of the peculiarities of the British movement and the (sometimes cruelly accurate) pointedness of his characterizations of certain trends and types in our political life Where is Britain Going? Price: Seven Shillings and Sixpence (or 7s. Ild. post free). Obtainable from SOCIALIST LABOUR LEAGUE, 186 CLAPHAM HIGH STREET, LONDON S.W.4 Printed by PLOUGH PRESS LTD. (TU), ro. 180 Clapham High St, London SW4