Both skeptical readers on both the Right and the Left may object to my previous article and charge that I simply reduced the whole history to a simplistic narrative of "state-capitalism" in order to avoid defending or to write off completely the history and actions of the CPC (either today or in Mao's time). After all, what then was the Cultural Revolution where brigades of millions of young people wandered the country holding up signs, occupying buildings, denouncing people viciously as "capitalist roaders" and getting into street-fights with each other? It's hard to deny that many people swept up in this misguided movement were driven to act fanatically by a desire for socialism; what doesn't follow though is the notion that China was a socialist country due to the existence of such a movement. The big premise of the Cultural Revolution is that China is a socialist country and in order to keep China from degenerating and heading towards capitalism (something that had become increasingly obvious in the 1960s USSR) it was necessary to mobilize a mass-movement against bourgeois elements in the party. The first and biggest problem is the assumption that China was a socialist country in the 1960s--if it is one then the Cultural Revolution makes a certain amount of sense. But that was not the case as we saw with the way the "expropriation" of the property of the national bourgeoisie was handled.
Secondly, and this was a major point made by Hoxha, even if the threat of capitalist restoration existed (again premised on the idea that it was a socialist country) it doesn't follow that the answer to the problem is to mobilize the masses against the party and to abandon party-based solutions to the problem. This is more than implicit in certain phrases like "bombard the headquarters" and proven beyond the shadow of a doubt in the whole way the Cultural Revolution campaign was handled. If the Cold War history of China does not hold then it follows that the politics and understandings stemming from the Cold War analysis of the Cultural Revolution does not hold either. What we need is a solidly reasoned investigation into the nature of the matter.
Prelude: On the Term "Social-Fascist"
The term "social-fascism" is often used by anti-revisionists who uphold Stalin to understand the nature of revisionist states. The meaning of this term is perhaps not well known outside Leninist circles but it is often posed somewhat loosely as "socialism in words, fascism in deeds". One thing that should be noted is the Marxist conception of fascism as another form of bourgeois class rule that grows out of political-economic crisis of the imperialist system. Since imperialism is theorized as the highest form of capitalism for a Leninist calling a socialist state following a genuine Leninist line "fascist" due to the fact that there are repressions that bourgeois-democrats would find unpalatable would not make much sense. Of course non-Leninists of varying shades are free to define the term however they want but that doesn't change the fact that defining everything you don't like as "fascist" is hardly thorough-going analysis or good politics. In the polarized politics of the 1920s and 30s many European (especially German) communists saw social democrats as essentially a pseudo left-wing buffer repressing the revolutionary action of the working class while putting band-aids on the capitalist system to save it from itself by pursuing the kind of reformist action best left behind in the 19th century. The term "social fascist" was used to draw a correlation to what the communists viewed as the similar politics of the new rising fascist and the social democratic movements even if they were superficially on opposite ends of the spectrum. For German communists prior to Hitler's rise to power the term "social-fascism" was not mere hyperbole--it was the social democrats who let loose right-wing death squads against communists and other revolutionary leftists during the German revolution following in the aftermath of WWI. Historians estimate that perhaps 20,000 people were killed by these death squads which to put in perspective is as much as the highest estimates of people killed under the open fascist regime of Pinochet's Chile. After the SDP had reigned in the right-wing death squads known as the Freikorps (many of whom later went on to form/join the Nazi party) they continued a repressive policy towards anyone who wasn't part of the submissive reformist Left such as ordering police to fire on striking workers. Less well-known is the fact that many SDP leaders (which was nominally a Marxist party prior to WWI) were virulent anti-Bolsheviks and advocated for warmongering policies against Russia. A policy of military aggression was already established when Germany joined its former allies in sending troops into Russia on the side of the White Army in the Russian Civil War and this was continued when the SDP came to power and the Weimar Republic was formed.
The Freikorps wasn't simply locally-based death squad but in some sense an impromptu army which made up for the fact that Germany could not legitimately deploy as anyone who knows the history of the Freikorps expeditions to Eastern Europe (especially the Baltic region) to support local anti-communist nationalist movements. By the end of this tumultuous, violent and polarizing period a significant part of Russia had been cleaved off to form a bridgehead of virulently right-wing and anti-Soviet nationalist states; the same process had been repeated in much of the rest of Eastern Europe. The Freikorps and German policy under the SDP had played a significant part in this transformation and where German politics made the law, German capital was soon to follow. Many historians, such as Paul Hehn, emphasize the fact that German capitalism was deeply invested in its Eastern European neighbors which in many ways led to its annexationist drive in that region and its aggressive anti-Soviet policy. The Nazi party did not invent Lebensbaum out of thin-air but in fact it was latent not only in formal German colonialism in Africa, the South-Pacific, China and German annexed-Poland; it was also latent in the minds of a whole generation of soldiers fought in Eastern Europe and had come to believe when it seemed that Germany would win that these would become German domains. The dream did not die with the American spring offensive as Freikorps and other paramilitary adventures into that region show. Perhaps the biggest differences between the Nazis and the violently anti-communist wing of the SPD such as Gustav "the bloodhound of the SPD" Noske was the Nazi emphasis on violent exterminatory racism and the SPD penchant for parliamentarianism. Of course, in a sense the SPD's adherence to parliament and bourgeois democracy which set them apart from their Nazi "adversaries" was only a formalism--the SPD long portrayed as the "moderate" party too had a youth paramilitary wing much like the communist KPD and the NDSAP. The obsession with adhering to bourgeois democratic rules wasn't universal but was mostly applied to workers and those parties that wanted to step outside of the prescribed limits of bourgeois respectability. Death squads against political opponents isn't exactly how bourgeois democracy is supposed to work in a legal or idealistic sense. Still, its understandable why the term "social fascist" was used by class conscious worker organizations in Germany even if there was quite a difference between the NDSAP and the SPD--even if the latter rarely assumed the role of violent armed reaction in a direct capacity. The party was more social-imperialist ("socialism in words, imperialism in deeds") then it was "social-fascist".
For bourgeois observers, historians, and most Trotskyist groups the rise of Hitler to power in 1933 was supposed to signal the bankruptcy of social-fascism as a political/theoretical term. After the carnage that followed in retrospect its easy to upbraid the communists for not running into the arms of the people that sent police and the progenitors of the Nazis after them. However, the collaboration of social-democrats with the Nazi regime and the collaboration of other degenerated social democratic groups definitely assured the communists of the terms accuracy even if the political result in Germany did not go as hoped. Tito's Yugoslavia was perhaps the first genuinely social-fascist regime in the sense that it combined armed reaction and police state terrorism with a left-ish pseudo-socialism that used enough Marxist phraseology that it could fool some workers, sympathetic bourgeois observers, and anti-colonial leaders. Although many referred to Tito's Yugoslavia as plain old fascist because it was generously bankrolled by Britain and the United States the term social-fascism came back into vogue when referring to Yugoslavia and then the USSR and many other revisionist regimes after Stalin's death.
In many ways, Mao's China can be referred to as social-fascist from the repression of certain actions of the Chinese proletariat to veiled or open support of various reactionary regimes in the Third World, to the deals made with Nixon, and to the lack of an internal Chinese nationality policy and the Chinese seizure of several Vietnamese islands in 1973 all under a "red" banner. However, this isn't really illuminating--in the first place China was not an imperialist power in a Leninist sense in the 50s and 60s and by the time Mao was dying it was only slowly becoming one. Secondly, China was not really the puppet of any imperialist power in the 50s and 60s but was in the short-lived state that a small handful of developing countries have went through of being neither a colony, nor an imperialist power. But this phase is always short-lived: capitalism naturally tends towards monopoly and it naturally tends to reach out to compete for regional and global dominance to grab the maximum amount of profit.
Hoxha was right that Mao was "a centrist and a progressive democrat who pretended to be a communist" and in this sense he was a revolutionary of great importance when it came to dealing a death blow to Chinese feudalism but he did not give power specifically to the proletariat as a class and he distorted Marxism for nationalistic purposes as the alleged achievement that he "Sinicized Marxism" implies. Necessarily, once the memory of the Japanese occupation, the Chinese civil wars, and the Korean war receded the Chinese revolution had to slide backwards if the proletariat did not seize power. Although many things about the critique that some Hoxhaists make of Mao as a "social fascist" do apply that is not considered here but instead we make an analysis on the basis of a more salient critique of the democratic liberalism of the Chinese revolution and the Cultural Revolution. We take this approach in order to shatter some well-nurtured illusions on the Left about various hobby-horses of "democratic socialism" "decentralization" "horizontalism" "the voice of the subaltern" and even "decolonization". The idealism of the Cultural Revolution was emulated by revolutionaries world-wide for reasons that are understandable but have had an almost entirely negative impact on the Left. But it should be made clear however progressive Mao and the Cultural Revolution was, the CPC was always was going to descend into either social fascism or complete capitulation based on their trajectory--even if Mao had lived to be 100. The out social-fascism of the Deng era was in fact taking shape in China in the age of Mao before Deng himself took power.
What Was The Cultural Revolution?
In the previous article we analyzed the ideology of Maoism as a politically eclectic mix of American Democracy and Soviet socialism. The attempt to mix and match these two certainly was not limited to China but China had the misfortune of developing the most serious (and terminal) case of this Third World syndrome. This was apparent in the founding of the People's Republic and it found political expression in the short-lived Hundred Flowers campaign of liberalization. Henry Park (whose work on counter-revolution I will quote from) once remarked about the Cultural Revolution that its breadth and sheer variety of ideological expressions makes American Democracy seem quite tepid by comparison. In some ways, this captures what the Cultural Revolution was about (at least on the surface) which was the project of developing a new form of popular democracy which is expressed in the fact that its dubbed a people's republic. Maoist liberalism was sincere but the problem is that liberalism doesn't build socialism. The Maoist "socialism" of the Cultural Revolution can be summed up as a kind of democratic socialism that that tries to advance socialism through a new decentralized form by mobilizing the spontaneous energy of the masses. The problem being without a solid theoretical grounding and organization that its all just a big theatrical performance of momentary elation followed by burn-out and disorganization. Another problem being that its strategic approach which is grounded in Mao's open embrace of bourgeois pluralism which means celebrating the free promulgation of any ideology no matter what it is to the detriment of proletarian education and the class-stand of the party and its organs. Here is what is essential: Mao attempted to deal with the fact that China did not really have a socialist economy, but in fact a capitalist economy and political system that had been dealt severe blows by the crisis of the Great Leap Forward, by promulgating a democratic path to socialism. The approach is very similar in tone and direction to the anarcho-liberalism that one often finds among today's "activists" in Western capitalist countries and beyond. China was enraptured in a kind of moment-to-moment politics that anachronistically enough we might compare with today's twitter cycle where there seems to be the outrage of the moment followed by the abrupt change of direction combined with never-ending in-fighting and polemic between personalities. In this sense, everyone has a say but it has ceased to mean anything; best of all modern social media allows this to occur without the masses encroaching on the physical space of the capitalists like during the Cultural Revolution. It must be said that the algorithms and unseen surveillance and moderation allows those who manage these networks to manipulate the masses and mass opinion far better then any group of conniving party bureaucrats could've done behind closed doors.
Slavoj Zizek also draws the correlation between the Cultural Revolution and late-capitalist modes of economic expansion and politics:
At this point, the Cultural Revolution miserably failed. It is difficult to miss the irony of the fact that Badiou, who adamantly opposes the notion of act as negative, locates the historical significance of the Maoist Cultural Revolution precisely in the negative gesture of signaling "the end of the party-State as the central production of revolutionary political activity" - it is here that he should have been consequent and deny the evental status of the Cultural Revolution: far from being an Event, it was rather a supreme display of what Badiou likes to refer to as the "morbid death drive." Destroying old monuments was not a true negation of the past, it was rather an impotent passage à bearing witness to the failure to get rid of the past.
So, in a way, there is a kind of poetic justice in the fact that the final result of Mao's Cultural Revolution is today's unheard-of explosion of capitalist dynamics in China. That is to say, with the full deployment of capitalism, especially today's "late capitalism," it is the predominant "normal" life itself which, in a way, gets "carnivalized," with its constant self-revolutionizing, with its reversals, crises, reinventions. Brian Massumi formulated clearly this deadlock, which is based on the fact that today's capitalism already overcame the logic of totalizing normality and adopted the logic of the erratic excess.In one lecture Zizek correctly refers to the "naive leftists" who continue to believe that the Cultural Revolution could have prevented capitalist restoration in China while ignoring the fact that it was the anarchistic and individualistic currents of the movement (e.g. rebel against your parents, rebel against tradition, rebel against the party etc.) that in fact led to Deng and the historically unprecedented explosion of private capitalism in China! In a sense the debate between Zizek and the modern Maoists is built on a false premise, which is the notion that there was a real socialist system in China when the Cultural Revolution occurred but its quite clear that Zizek is far more on point then the modern maoist movement. In many respects the Cultural Revolution bears major similarities to the global student movement of the 1960s which had a massive effect on both the West, the East, and the Third World. With China being somewhere in-between all three camps Maoist ideology had ample opportunity to weaponize and thus it spread like a virus across the global Left sharing elements of grievance typical of all three camps while being pleasing to the Old Left in the sense that it didn't completely jettison the idea of violent revolution and the Leninist ideals they had grown up with as well as with the New Left who liked its criticisms of dogma, elitism, and Stalinism. Mao admitted that his words could be used by the Right as well as the Left (this was due to his erratic politics) and it was for this reason that Hoxha said that his politics lacked a solid Marxist-Leninist spine. The first chapter of Alexander C. Cook's history of the little red book is titled "the spiritual atom bomb and its global fall out" and the last is titled "In the beginning was the word: popular democracy and Mao's little red book" these titles are apt and appropriate in describing the influence of Mao and Maoism. At a time when political regimes across the world were tottering as the political formations of the older generation were showing signs of age Maoism came along and became influential among the youth movement because it was all things to all people. And while it fulfilled the role of "spiritual atom bomb" quite well in inspiring student rebels to undertake many political revolts and cultural breaks that destroyed the political regimes and cultural norms they inherited from their parents it was fundamentally unsuited to the task of changing the system that had produced stodgy and tottering political orders that the youth of that era criticized. While many student rebellions were made in the name of Mao Zedong a phenomenon immortalized in Jean Luc-Goddard's movie Les Chinois no successful anti-capitalist movement followed it; in fact Maoism played a key role in the counter-revolution that aborted the youthful 60s era in re-cementing Western speficially US imperialism globally both politically and economically. Maoist capitulation to the West in fact made future workers movements in the Western world more insecure and politically unviable what few advances and genuine autonomy worker's movements had made in the West crumbled and that was of a little consequence to those students who wanted something innocent to believe, who wanted to believe they had changed the world.
Bulls on Parade: Cultural Revolution politics
One thing that attracts people to the Cultural Revolution even today is the wide variety of politics expressed in it and the way the movement seemingly by-passed the problems and strictures of Western parliamentary bourgeois democracy and Soviet state-socialism. This was a democracy of the bustling street corner not one practiced in parliaments and smoky rooms of capitalists, politicians, and bourgeois journalists there to report the dictates of those in power; neither was it to be a politics of stale party nomenklatura and its controlled press. It seemed like the answer to the major world-problem confronting youth movements in the 1960s which is that the youth had come to feel that they were under the thumb of a stodgy conservative generation entranced with bureaucracy and state-worship stifling the vitality, individuality, and dissent necessary for democracy to thrive, to be anything more then a mere formality. These problems were not limited to those Western youth who had grown up in the shadow and security of the prosperity provided by the expanded post-war welfare states but also among those in the revisionist East bloc which was in its heyday and certainly provided more then any previous political-economic regime ever had in the woefully under-developed regions of Eastern Europe. The Third World certainly wasn't absent in this constellation, having declared independence from the colonial masters the leaders of many of these nations announced their intention to walk a road between Western capitalism and Soviet socialism, and what this meant in practice when seriously applied was just a combination of some degree of state-capitalism/nationalization and tariff walls to protect native industries. Those nationalist regimes that attempted this eclectic witches brew like Sukarno's Indonesia were naturally authoritarian 1. in order to guard against the conservative reaction of some segments of the population 2. and this is certainly not least in importance, in order to protect the fruits of the nationalist revolution against the interventions (both overt and covert) of the former colonialist master and other imperialist powers. Naturally, these post-colonial regimes too provoked internal discontent both due to their inability to completely change the market relations inherited from colonialism and in their inability to overhaul society in a manner in-line with their grand promises. Although the youth in all three "blocs" were in quite different situations and inheritors of quite different cultural, political, and economic contexts they began to dream of something that began to coalesce into what began to startlingly coalesce into more or less the same dream. Although the kinds of desires and politics that drove the post-modern turn are dizzyingly and sometimes confusingly diverse they can largely be boiled down to the famous reply that labor opportunist leader Samuel Gompers gave when asked about what the labor movement wanted, which he put simply as "more".
Although taking form under a one-party state the politics that followed the Cultural Revolution was also startlingly diverse--for example in contradistinction to the popular image of the red guards Henry Park identifies what he dubs the "conservative" red guards:
Of course, Park starting from the false traditional Maoist premise that the National bourgeoisie was no longer a threat but in fact the true threat was the "bourgeoisie in the party" looks at these particular red guards as defenders or veiled advocates of the capitalist road. What they really were is hard to say but going by the evidence provided that the national bourgeoisie still received payments on their property and joined the state enterprises as well-paid directors the correlation between capitalism and the "old China" was hardly fallacious as Park wanted to believe. Lin Bao and Mao both stressed in opposition to those who attacked the national bourgeoisie that there is "no relation between standpoint and class origin" in the abstract this is true, many bourgeois intellectuals and even some proper capitalists have contributed to the cause of proletarian class struggle, however, expecting the bourgeoisie as a mass of people not to pursue bourgeois ideas and class stands is like stabling a group of horses and expecting them not to shit. And in the years just prior to the Cultural Revolution after the spectacular collapse of the Great Leap Forward private capitalism in the countryside had according to Park, if anything, expanded:Many students were from intellectual, bourgeois, or Guomindang family backgrounds and the initial Red Guard organizations were anxious to prevent such students from rebelling against the CCP, which had won such gains for the poor peasants and workers in liberation.
In addition, the leaders of the initial Red Guard organizations were often the sons and daughters of high-level cadres and party members. At Tsinghua University, a prestigious University and key battleground of the Cultural Revolution, Liu Shaoqi’s daughter, Ho Lung’s son and the daughter of the Chairperson of the Chinese Federation of Trade Unions led the original Red Guards. Reading the writing on the wall, these children tended to act in the interests of their parents. The key to this was to take action against any target which had some connection to the old pre-1949 society, but did not implicate higher ranks in the CCP. Hong Yung Lee has done the most to detail what kinds of things these “conservative” Red Guards did and how they differed from the more “radical” factions of the Red Guards. In examining the relationship between elites and masses in the Cultural Revolution, Lee analyzed these differences through his whole book, The Politics of the Chinese Cultural Revolution.
In Yunan, private property went up to 50% and the private harvest became larger than the collective harvest. In the fall of 1961, Anhui adopted the method of assigning output quotas to households instead of collective units. Experimentation in the same methods spread all over China amid signs of popularity. Chen Yun emerged at this time to show his true colors. Not satisfied with assigning output quotas to households, in a February, 1962 Politburo meeting Chen Yun advocated that the land simply be redistributed to the households. Deng Xiaoping seconded this idea by saying that there really was not much difference between fixing output for households and private farming. At the level of implementation, peasants fondly referred to the “four treasures”—“private plots, private reclamation, the family side-line occupation, and the free market.” In this situation, landlords and rich peasants were found to be assuming leadership in the production teams and reports of class polarization thanks to the rise of middle peasants surfaced. For example, “over 70 percent of team land in the Chengpei communes near Shanghai was held by rich and well-to-do peasants in 1963.” In one brigade, it was found that only 25% of the peasants opposed the practice of these kinds of capitalist freedoms. Ahn concludes that “probably the majority of the cadres and of the peasants (including the poor peasants) wanted temporarily even more small freedoms to help solve the food crisis.”If this looks a lot like the kind of practices that of de facto and de jure privatization that took place under Khrushchev that's because it is except on a larger scale and with communes that were hardly ever genuine collective farms. Tellingly, just three years prior to launching the Cultural Revolution, tellingly only 25% of the peasants in one region (doubtlessly the poor peasants who count for little socially in any peasant society) actually opposed the free market and other capitalist freedoms. Even though the PRC had produced exactly the thing the party had always said it wanted prior to the "transition to socialism" e.g. a popular, mass-based capitalism, the Mao Zedong and those around him insisted that the problem was really just a handful of people:
By “aiming the spear downward” at the masses and away from the elites, the conservative Red Guards hoped to divert attention from their parents and the rest of the CCP. The conservative Red Guards differed with ultraleft Red Guards only in that the ultraleft Red Guards “aimed the spear downwards” out of a genuine belief that the enemies of the Cultural Revolution were many. Both “conservative” and “ultraleft” Red Guards disagreed with “radical” Red Guards who stressed that the target was the handful of people with positions of power who were on the capitalist road. Although Lee attributes most of the activities directed against lower levels as part of the “conservative” Red Guard offensive, many of the same actions could have had ultraleft motivations. For example, many actions during the campaign to drag out the four olds gave the Cultural Revolution a bad name—such as when Red Guards raided homes to smash any vestige from old society. The conservative and ultraleft Red Guards felt they were being most correct in terrorizing bourgeois intellectuals and their children, who were told they could not even donate blood because it “lacked revolutionary character.” According to Lee, this sort of activity peaked in late August, 1966 and ended in October 1966 with a switch toward the radical line attacking capitalist-roaders. October 5th also saw the military and Mao order the party to surrender dossiers collected on Red Guard radicals by conservatives and party members. Arrests, kidnappings, photographing, fingerprinting and interrogating of radicals by conservatives resumed only briefly in the February Adverse Current of 1967. (Park pg.19)
MIM (of which Henry Park was a founder) in several papers in their defense of Mao and Jiang Qing and the Cultural Revolution quoted the latter two as warning against using violence. Of course, there is truth to this, but one wonders exactly what Mao and Jiang expected to happen when they sanctioned masses of people as attack dogs against the party and nebulously vague capitalist roaders? In this respect, Mao regressed behind the understanding of Robespierre on the use of revolutionary violence who understood very well if the state did not administer repression of enemies of the people it would not only lose popular support but the popular violence of the masses would inevitably land on the wrong targets, which occurred in the lynching of prisoners in the Bastille prison by French mobs. The American Revolution used a de-centralized form of terror and social ostracization that sent tens of thousands fleeing to Canada, repressed legitimate dissent, and took a number of lives. The practice of "lynching" that was later used by conservative forces in the deep south to terrorize black people, poor whites, and leftists was actually a practice inherited from the American Revolution. It's difficult to say whether these forces represented proper but misguided revolutionaries or veiled reactionary terrorists but undoubtedly it was the frustration with the near decade of open capitalism and later veiled state-capitalism that produced the outpouring of anger against the Chinese bourgeoisie.
Integral to the Chinese conception of socialism is re-education and Mao in many ways conceives socialism as a problem of becoming educated of attaining enlightenment. For this reason the Chinese referred to American POWs in the Korean War as shown in the movie They Chose China. In a largely illiterate peasant nation you could see how this conception could make sense but attempting to apply it to enemy classes of course had completely contradictory and counter-productive results. It was not without some accuracy that Henry Kissinger once described Mao as a "frustrated school-teacher"--and indeed it takes one to know one! Hoxha writes:
Mao Tsetung insisted that in this stage the remises for socialism would be created parallel with the development of capitalism, to which he priority. Also linked with this, is his thesis on the coexistence socialism with the bourgeoisie for a very long time, presenting this as something beneficial both to socialism and to the bourgeoisie. Replying to those who opposed such a policy and who brought up the experience of the October Socialist Revolution as an argument, Mao Tsetung says:"The bourgeoisie in Russia was a counterrevolutionary class, it rejected state capitalism at that time, organized slow-downs and sabotage and even resorted to the gun. The Russian Proletariat had no choice but to finish it off. This infuriated the bourgeoisie in other countries, and they became abusive. Here in China we have been relatively moderate with our national bourgeoisie who feel a little more comfortable and believe they can also find some advantage". (Mao) According to Mao Tsetung such a policy has allegedly improved China's reputation in the eyes of the international bourgeoisie, but in reality it has done great harm to socialism in China.And to further document Mao's position on this issue Hoxha goes on:
Mao Tsetung wrote in 1956, "most of the counterrevolutionaries will eventually change to a greater or lesser extent. Thanks to the correct policy we have adopted towards counterrevolutionaries, many have been transformed into persons no longer opposed to the revolution, and a few have even done some good to it".
Proceeding from such anti-Marxist concepts, according to which with the lapse of time the class enemies will be corrected, he advocated class conciliation with them and allowed them to continue to enrich themselves, to exploit, to speak, and to act freely against the revolution. To justify this capitulationist stand towards the class enemy, Mao Tsetung wrote: "We have a lot to do now. It is impossible to keep on hitting out at them day in day out for the next fifty years. There are people who refuse to correct their mistakes, they can take them into their coffins when they go to see the King of Hell". (Mao) Acting in practice according to these views of conciliation with the enemies, the state administration in China was left in the hands of the old officials. Chiang Kai-shek's generals even became ministers. Indeed, even Pu Yi, the emperor of Manchu-kuo, the puppet emperor of .the Japanese occupiers, was protected very carefully and turned into a museum piece so that delegations could go to meet and talk with him and see how such people were re-educated in "sociaist" China. Besides other things, the aim of the publicity given to this former puppet emperor was to dispel even the fears of kings, chieftains, and puppets of reaction in other countries, so that they would think that Mao's "socialism" is fine and have no reason to fear it.So indeed, so strong was Mao's propounded belief in education that he believed out counter-revolutionaries and Kings could be reformed. Since Mao believed this we should not be surprised that he believed the problem was just a handful of people in the party, and we should be similarly unsurprised that the many of the people who were involved in this movement did not buy that line of bullshit. While Mao was out-front encouraging people to only attack a few overtly right-economist figures in the CPC he ignored entirely the fact that the old bourgeoisie had fused with the party as we saw with the way nationalization was handled. Mao essentially was asking the masses not to attack the bourgeoisie themselves but to focus their fire on a handful of their political representatives. In fact, Mao represented this problem exactly as one of education in 1957 just after the invitation of the nationalization process:
According to one Albanian source: "In 1964, one of the revisionist chiefs of the time admitted: 'The Chinese bourgeoisie goes with the Party, makes the revolution, builds socialism. This is the most wonderful bourgeoisie of the world' (!)." This sentiment that the Chinese bourgeoisie is a loyal follower of the Communist Party of China was not just true for this time but as Kellee S. Tsai copiously documented in her 2007 book Capitalism Without Democracy: The Private Sector in Contemporary China this is still true and unlikely to change in the near-future. Liu Shao-chi gushed after the successful nationalization: “The fact that our bourgeoisie has heralded its acceptance of socialist transformation with a fanfare of gongs and drums is something of a miracle." (Washington Socialism Cannot Be Built in Alliance with the Bourgeoisie) Unsurprisingly, when the workers and peasants were let off the chain during the Cultural Revolution they did not confine themselves to targeting merely a few capitalist roaders as Park admits:
However, the contradiction between the working class and the national bourgeoisie will change into a contradiction between ourselves and the enemy if we do not handle it properly and do not follow the policy of uniting with, criticizing and educating the na- tional bourgeoisie, or if the national bourgeoisie does not accept this policy of ours. (From On The Correct Handling of Contradictions Amongst the People)
On the other hand, the ultra-left Leninist Sheng-Wu-Lien attacked the broad masses of people and demanded the overthrow of the party or at least 90% of it. With such a large target—the “red capitalist class” and the intellectuals—the Leninist ultraleft literally sought to persecute (or overthrow depending on one’s point of view) millions of people. In Hunan alone, the Sheng-Wu-Lien claimed two or three million people. Moreover, according to the Progressive Labor Party (U.S.A.), “the consensus of Red Guard sources and western scholars who have studied the question is that somewhere from 30-40 million people followed these [ultraleft] organizations.” Hence the Leninist ultraleft was in a real position to do damage to the Cultural Revolution.But the real question is that if the party was really Leninist and had such strong leadership amongst the masses as the Maoist leadership declared then how did such organizations get so much support? It's difficult to say whether these were genuine Marxist-Leninist organizations but they definitely hit a real nerve and it is not for nothing that Mao sent the army in to repress the Shanghai commune during the Cultural Revolution. This action by Mao in many ways set the precedent for the later Tiananmen massacre/repression by Deng Xaoping. It is clear that Maoists are being willfully innocent in believing that Mao would not have taken a similar stance against idealistic counter-revolutionary youth (Yes, there is a dialectic here, their experience with the regime drove them to be semi-revolutionary in demanding popular rights) when he was clearly willing to use the army against those to his left. And those "ultra-left Leninists" who according to Park openly sought to persecute "millions" of people had a better grip on reality than Mao who whipped up big campaigns to criticize the arch-revisionists Liu Shao-chi and Deng Xaoping while maintaining that not only was the majority of the party good but that the problem was only a handful of individuals as we shall see. The possibility remains open that the "ultra-left Leninists" were not any good but merely taking the anarchistic and radical-liberal ideas of the regime to their utmost regime. In a way, the opposition was poisoned from the start as Park admits:"When Red Guard organizations began to form in 1966, they started out by only allowing those children participate who had parents of good class background." This may explain the peculiar phenomenon that visitors from communist Albania to China observed where red guards actually got into fist-fights with the workers instead of organizing them. Still we can't rule out the situation with the "Leninist ultra-left" may have been much like the Gao Gang affair in industrial Manchuria where a devoted Leninist party leader was murdered (officially a suicide) for daring to challenge Chinese revisionism.
During the year 1956 alone, 635,137 intellectuals were recruited into the Party. Altogether, by 1956, one-third of the nation’s intelligentsia, the great majority of which had been inherited from pre-revolutionary days and was closely tied with the national bourgeoisie, had been recruit- ed into the CPC. Many of them had been recruited directly from the bourgeois-democratic par- ties. By 1956 there were more intellectuals in the Party than workers and the percentage was growing.69 This recruitment policy led to a situation in which nearly all managerial personnel in industry were Party members, while only a small percentage of the production workers had been recruited (10-20% of all personnel, including administrators, were party members).70 Party membership was not only disproportionately concentrated in management, but, even more important, rank assignments in the Party were determined largely by the importance of cadre in the industrialization process.71 Managers of enterprises would typically have powerful positions in the Party as well. The extent to which this became true can be seen in a 1966 survey of the party organizations in 33 major industrial enterprises in China. In the majority of these not one worker was a member of the party committees, the leading bodies of the party organizations in the plants. With the exception of three firms, the rest of the party committees had only one or two workers (out of seven to thirty members).7It's quite clear here that the Chinese communist party was not a Leninist working party whose members were to be primarily working as Lenin and Stalin taught but in fact it had absorbed much of old ruling class from the Old China of the Guomindang. Although its possible for a new bourgeoisie to develop in socialist country the idea that the problem in China was a "new" bourgeoisie was also a fiction; its also clear that the bourgeois elements around and associated with the party formed a fairly substantial mass-base and in fact was the majority of the party which had become, as Lenin famously called the Western socialist parties: "a bourgeois labor party". A skeptic may ask why Mao stirred up this chaos to allegedly avert the restoration of capitalism if he wasn't a real communist. The answer is likely that the Cultural Revolution chaos better served his interests in busting up the party to undermine his rivals it was likely a gambit to cement his Cold War detente and alliance with the United States but its hard to know if there was more to it then this. It's likely that at least some of it, was sincere and how much really was is hard to know; Mao certainly was enthralled by the ideas put forth by his hero Sun Yat-sen of a democratic socialist state that was a uniquely Chinese cross of American democracy and Soviet socialism. But the problem Mao's bourgeois conception of class struggle between the proletariat and bourgeoisie of a competitive class struggle within a new form bourgeois democratic norms, as a new form of socialism where the class struggle advances almost entirely through re-education of the bourgeoisie was fallacious to the very core and thereby avoiding the pitfalls of Soviet socialism by marshaling raucous debate and the vitality of the entire people was fallacious to the core.
And in fact, while the anti-bureaucratic spirit pervading the Cultural Revolution was influential because it matched an anti-bureaucratic, anti-authoritarian temper pervading the world in the sixties, the class power of the old bourgeoisie was still very much alive and not merely reduced to a "defunct class living off paltry pensions" as Maurice Meisner alleged by contrastWashington managed to find some interesting first-hand accounts from some of these "defunct"/"expropriated" capitalists:
Another interesting account shows one capitalist's reaction to the changes in the "transition" to socialism:A western expert on management described the life-style of the more wealthy Chi- nese capitalists when he visited there in 1966:
Liu Tsing-kee, a member of both the Shanghai Congress and the National People’s Congress, is a leading textile tycoon, whose assets have included five major mills (now jointly owned with the state), employing some 11,000 people, personal interest payments amounting to some $400,000 annually, and a monthly salary of $300. His family’s total as- sets, including broad real estate holdings, have been valued at $16 million. Mr. Liu did in- herit much of his father’s wealth several years ago, and since he is already a capitalist, there was apparently no social stigma involved.... His sumptuous home is filled with many three- hundred-year-old antiques – some as old as six-hundred years. He employs four servants and has a chauffeur-driven Humber sedan. Another Mr. Liu, who is in the match business, gets $320,000 in interest annually and has also held various key state positions.
Su Fu-ling, the owner of a large flour mill in Peking, summed up his experience in the transformation as follows:
Of course, I was very worried at that time about how the Communist Party would treat us. However the People’s Government invited me to take part in various meetings immediately after Beijing was liberated, and later, appointed me secretary-general of the preparatory body for setting up the Beijing committee of the Chinese People’s Political Consultative Conference. I realized that only by accepting socialist transformation could there be a bright future for me. When the flour mill became a joint-state-private enter- prise in 1954, I was given a leading post in the mill. Besides the fixed interest, I have re- ceived a relatively high pay. I was elected a member of the Municipal People’s govern- ment in 1957.42More research needs to be done on this matter but Washington's writing certainly suggests that the emergence of the "princelings" as the Chinese like to call the handful of descendants of the CPC inner-circle who have their fingers wrapped around billion-dollar industries may not be a post-Mao phenomenon at all:
Jung Yi-jen, China’s biggest capitalist before liberation, a “leader” in the campaign against the “Five Evils” in 1952, and a leader of the “progressive” capitalists’ movement for nationaliza-
14
tion in 1954-1956, was maintained as manager of his huge Sung-Sing Textile Corporation after it became “joint-state-private” in 1955. The next year he was appointed as well to the post of Gen- eral Director of Textiles in Shensi. Shortly after that he was appointed Deputy Mayor of Shang- hai and in 1959 Deputy Minister for the Textile Industry. His brother also served as a Deputy Mayor of Shanghai.43
Another national capitalist, the scion of a “great” Chinese industrial family, was given re- sponsibility for the operation of more than fifty factories and also served on the National Peo- ple’s Congress. In the 1960’s his brother organized a new watch industry in Shanghai which turned out 850,000 watches a year.44
In 1957, Chen Ching-yu, a national capitalist in the major industrial city of Wuhan and Chairman of the Federation of Industry and Commerce in that city, was promoted to become Deputy Governor of Hopeh province.45 These are examples of a general phenomenon that occurred in China after liberation and increased after the nationalizations in 1956.As Mobo Gao relates the Cultural Revolution is demonized by the Chinese ruling class itself because it was time when those in the upper-echelons of power came under attack from the masses, and hence it makes sense they naturally conceded to Mao to put an end to it. Judging by the fact that Mao brought Deng and Hua back into the circles of power it seems likely this was acceptable to him as well. But, Deng Xaoping whose son was disabled after falling from a rooftop while either being pursued by red guards or deliberately thrown from it was a natural enemy of freedom of speech and the concept of democracy. The 1976 constitution which was supposed to guarantee free speech, free demonstration and the freedom to strike was struck down by Deng due to his fears that the proletariat might mobilize against his turbo-capitalist reforms. Lastly, unlike the dreamers of 68, we shouldn't look for the cause of China's problems to be solely the cause of the party bureaucracy or those capitalists bought out the state but we should naturally see that the rich peasants and artisans that Mao
defended as members of "the masses" these people were naturally inclined to capitalism, especially of the private-variety and hence were a natural mass-base and constituency of the anti-bureaucratic neoliberal usually attributed solely to Deng. And indeed, the Dengist era is truly the era when it can be said that members of this truly "new" capitalist class ascended to the heights of power.
Epilogue: Continuity and Rupture; A Popular Capitalism but not a Popular Liberalism
Would Mao have introduced the same kind of open capitalist "reforms" and anti-worker policies that Hua and Deng implemented in the mid-70s and 80s? There are reasons to think so. In one of his most celebrated and widely-read speeches Talk on Questions of Philosophy (1964) Mao roclaims to those worried about those taking the capitalist road: "Let them go in for capitalism. Society is very complex. If one only goes in for socialism and not for capitalism, isn’t that too simple? Wouldn’t we then lack the unity of opposites, and be merely one-sided? Let them do it. Let them attack us madly, demonstrate in the streets, take up arms to rebel — I approve all of these things." That Mao looked at the problem of capitalist restoration in such a light and free-wheeling way shows that he was quite ambivalent about capitalism and could've easily drifted further down a rightist path. He cites the recent abolition of the Department of Rural Work which promoted the what was called the four freedoms: "freedom to lend money, to engage in commerce, to hire labour, and to buy and sell land. " A real Marxist thinker could not conclude that this meant the abolition of capitalism in the countryside or that a liberal or anarchistic approach to this problem could have solved this problem. Far from socialism in China being in such a secure position that it could tolerate the dissent or even armed rebellion of capitalists and pro-capitalist minded people Mao admits that: "In our state at present approximately one third of the power is in the hands of the enemy [the bourgeoisie or capitalist roaders--author's note] or of the enemy’s sympathizers. We have been going for fifteen years and we now control two thirds of the realm. At present, you can buy a [Party] branch secretary for a few packs of cigarettes, not to mention marrying a daughter to him. There are some localities where land reform was carried out peacefully, and the land reform teams were very weak; now you can see that there are a lot of problems there."
In fact, Mao himself presided over a startlingly pro-capitalist reform of the Chinese economy during the 1950s. Chen Yun outlined the decentralizing reforms to the Chinese economy around 1956:
First we should change the purchasing and marketing arrangements now established be- tween industrial and commercial enterprises. The system of state commercial departments giving the factories orders for processing and manufacturing goods should be replaced by a system of factories themselves purchasing raw materials and marketing product. That is to say, the practice we followed prior to the winter of 1953 should, in general, be restored on the basis of our socialist economy.
We must correct our mistake of focusing attention on centralized production and management. Otherwise, the defects already seen in production, in circulation and in ser- vice of customers will get worse.
Thirdly, we must cross out from our regulations governing market control all those provisions which were meant to restrict the speculative activities of capitalist industry and commerce... minor local products, now purchased in a unified way by local supply and marketing cooperatives, should be allowed to be freely purchased, transported and marketed by state shops, cooperative groups and supply and marketing cooperatives in different parts of the country.... Those provisions in the regulations for controlling indus- try and commerce which are out of keeping with the situation today should be revised in order to meet the needs of free purchasing, marketing and transportation. That is, in marketing, we think of stabilizing prices simply as “unifying prices” or “freezing prices.... We should not become worried if prices go up for a time within certain limits.... Factories manufacturing articles of daily use should be allowed to make their own production plans in light of market conditions without being tied down to the reference figures in the state plan. As for the profits to be handed over to the state treasury, the amount should be determined by the factory’s actual receipts at the end of the year.... Will all these measures combine to bring about the danger of re-emergence of the capitalist free market in our country? No, that will never be the case. The adoption of the above-mentioned measures will never lead to re-emergence of a capitalist market, but will further the growth of a socialist market adapted to our conditions and needs of the people.
Chen Yun’s “market socialism,” like the “market socialism” of other revisionists, is not socialism but capitalism. The development of socialist relations of production is impossible with- out centralized economic planning by a proletariat state. Without steadily increasing centralized planning there is no way the economy can be regulated except through the anarchistic methods of the “law of value” and the capitalist market. The reforms that Chen Yun outlined freed the great majority of enterprises to set their own production plans, freely purchasing raw materials, and determining when, where and at what price to market their products, etc. (Washington)One thing Washington did not make explicit is that the socialist policy under Stalin was to reduce the cost of goods so that workers wages steadily were able to buy more, the Chinese policy outlined here is the opposite except it outlines a form of price control which bourgeois regimes have been known to introduce in emergencies but the Chinese defend their price-inflationary policies by arguing that this should be allowed "within certain limits". This is nothing but the Keynesian policy prescription of inflation that is pursued in order to safeguard the profits of big industrialists, water down the burden of rent and interest payments on the economy, and to either mitigate rising labor costs or to lower them outright. During the Great Leap Forward era planning became little more then a pretense:
Bourgeois economists who have analyzed the history of economic planning in China say that the Chinese never achieved a very high degree of centralized planning during the First Five Year Plan (1953-1958). The implementation of centralized planning was not really accomplished until 1955, and before it was perfected to any extent the reforms of 1956 reversed the movement towards centralization.56 A bourgeois economist judged that the economic reforms in China in 1956 were just as sweeping as those carried out in the Soviet Union under Khrushchev and that while a few major industries were operated according to a central plan, the great majority (80%) of Chi- nese industrial enterprises were more independent than those in the Soviet Union.57 Another bourgeois “China expert” compared China’s economic planning in the early 1960’s with that of Yugo- slavia because of the degree of autonomy of the management of individual enterprises
So, here we have a serious irony that while Mao was denouncing the Soviet revisionism/social-imperialism and even going so far as to call the Soviet Union a "Hitlerite regime" the facts were that China itself had gone much further down the road of capitalist restoration then the Soviet Union. It can certainly be doubted whether it actually achieved socialism and at least the now revisionist USSR had that accomplishment under its belt. Again rather then being a stalwart defender of Stalin prior to the Soviet-Albanian split Mao was largely happy with Khrushchev in public: "Mao's statement at the Moscow Meeting of the communist and workers' parties in 1957, when he said, "in Stalin's presence I felt like the pupil before his teacher, whereas now that we meet Khrushchev, we are like comrades, we are at ease," is not fortuitous." (Hoxha Imperialism And the Revolution) Indeed, Mao and his clique rushed to re-establish contacts with Soviet Union after the fall of the Khrushchev despite Hoxha's explicit warning that Brezhnev and Kosygin were wreckers who wanted Khrushchev-ism without a bumbling and discredited idiot like Khrushchev. It wasn't just a political mistake, Mao who was revisionist enough in the 30s that he would've been kicked out of the CPUSA if he were a member retained his colors politically and that extended to economics. Mao had even admitted to Molotov that he had not read Das Kapital and it would indeed be difficult for someone without an-indepth knowledge of Marxist economics to try to build socialism. Although planning in itself would not have made China a proletarian-state Bland documents the lengths that Mao went to to actively wreck the execution of planning in China:
Before the 3rd Plenum of the 8th CC, which was held in September/October 1957, Mao Tse-tung:And the effect of what came of this action was a decision in favor of decentralization which made the plan increasingly difficult to fulfill:
Attempting, in the new situation following the 20th Congress of the CPSU. which had made revisionism , respectable' in the international communist movement, to recruit ". . travelled extensively in the provinces."
(Parris H. Chang: op. cit.; p. 39).
". . support from the provincial secretaries, many of whom had been brought into the CC since the 1956 Party Congress."
(Parris H. Chang: ibid.; p. 39). (Class Struggles in China)
In a collection of articles by Mao Tse-tung entitled 'Sixty Articles on Work Methods', dated January 1958, Article 9:What followed was not only near-complete decentralization of the economy but in fact the end of economic planning altogether in all but name:
"Contained the seeds of the undermining of the basis of careful planning, the statistical system", (Roderick MacFarquahar: 'The Origins of the Cultural Revolution: 2: The Great Leap Forward: 1958-1960'; Oxford; 1983; p. 31). on the grounds that:"Imbalance is constant and absolute, while equilibrium is temporary and relative". (Mao Tse-tung: 'Sixty Articles on Work Methods' (January 1958), in: Roderick MacFarquahar (1983): ibid.; p. 30). Not surprisingly:"Mao's enthusiasm for disequilibrium was not shared by the planners." (Stuart R.Schram: 'Mao Tse-tung and the Theory of the Permanent Revolution: 1958-69' (hereafter listed as 'Stuart R. Schram (1971)', in: 'China Quarterly', No. 46 (April/June 1971); p. 233). (Ibid.)
"As in industry, considerable authority devolved from Peking to the provinces and to the local authorities." (Parris H. Chang: ibid.; p. 57).These measures included the abolition of centralised price control:
"Provincial authorities were given the right to set some prices in their areas of jurisdiction." (Parris H. Chang: ibid.; p. 57).
"Grip on the policy-making machinery became tighter in the winter of 1957-58...gradualism and caution were discarded..Thus, some 80% of the enterprises and institutions controlled in 1957 by the . . . central government had been handed over to the provincial-level authorities by the end of June 1958, and the share of the locally controlled enterprises rose from 54% of the industrial value produced in 1957 to 73% in 1958". (Parris H. Chang: ibid.; p. 61).
"By the middle of 1958, . . . the central government controlled virtually none of the output of manufactured consumer goods". (Edward J. Wheelwright & Bruce McFarlane: op. cit.; p. 69).
The effect that of the reforms that Mao pushed for that he used the reputation that he had gained as a hero of the revolution to advocate for had such a terrible effect that planning in China had ceased to exist despite official appearances:"In the short span of 10 months, the central government had announced that it was, in effect, giving up . . . most of the major instruments at its disposal for planning and managing the economy." (Nicholas R. Lardy: 'Centralisation and Dececentralisation in China's Fiscal Management' in: 'China Quarterly', No. 61 (March 1975); p. 29). (Ibid.
"[China] Had no 2nd Five-Year Plan (1958-72), only five ad hoc annual plans during that period".(Li Choh-ming: 'China's Industrial Development: 1958-63', in: Roderick MacFarquahar (Ed.) (1972): ibid. p. 175). (Ibid.)So going off this basis it was Mao Zedong himself who was "China's Khrushchev" as Maoists worldwide took to calling Deng Xaoping; furthermore, it can be said that before there was Deng Xaoping there was Mao Zedong. It was not Deng Xaoping's idea to open China to "free trade" with the United States and give leeway to private enterprise but Mao's own idea. It is possible Mao backtracked on this stand due to pressure from the Chinese proletariat and the pressure to at least plausibly look like a socialist country in order to fit in with the rest of the East bloc. In many respects Mao was a clever guy even if he was a deplorable individual but even though he flittered around from one position to the next with the winds of politics its difficult to say that his ideas ever changed. Mao's understanding of Marxist political economy derived from its collision with 1940s liberalism and rarely did he change his views. Therefore, he took no notice of the neo-liberal revolution happening in the elite circles of political economy and on the margins of the world scene in the late 60s and 70s. The goal of the Monte-Pelerin society in 1947 to repeal the welfare state in the West that had arisen in the brutal aftermath of WWII in many ways coincided with the reasoning that had led the West to support revisionist economics in order to undermine socialism. Instead of the West giving ground and moving closer to the revisionist socialist bloc in political-economic terms it turned out that the West abruptly decided to shift further right. The economic crises of the late 60s and especially the early 70s landed a bodyblow against the establishment belief in economics that Keynesian doctrine could prevent or manage economic crises in a satisfactory way. The inflationary policies of the Keynesian era watered-down the economic power of the rich, especially the financial-rentier elite, and while it was acceptable when Western economies were booming and it seemed there would always be room for more new factories to make cars and other consumer goods at a handsome profit when the standard Keynesian measures did not result in recovery but stagflation then it started to become clear to the elite that things had to change.
Milton Friedman took the chance to offer himself up as a new Christ who would reconcile the beloved old-time religion of Keynesian state-directed economic policies with the new faith of neoliberal individualism, privatization, landlordism, and high-finance. Keynesianism itself was premised on a kind of fiscal responsibility, whether Keynes realized it or not the fact that the money supply was limited by gold was the best argument for utilizing the state to stimulate the demand by using state-finances in the most effective way. Stimulating the economy through the expansion of welfare, state-services, or the operation of state-operated industries helps prevent the far-greater cost to the state treasury, public welfare, and private enterprise of an economic downturn--thus it is is logical for a Keynesian to call for massive state-spending at the moment society seems most strapped for cash. But the Keynesian solution implied that profits would experience secular decline over the long-term or that economic growth would slow-down as capitalist economies mature and alternatively experience declining profits, problems of overcapacity, and tighter labor markets tied to slower demographic growth. The Keynesian call for "full-employment" could not deal with the fact that to the capitalist class unless wages were held down by force of arms like in Nazi Germany the prospect of full-employment was intolerable, because otherwise wages get bid up through the roof (for the capitalists) and workers refuse to act like slaves in the workplace."Full-employment" never manifested itself in American society, despite the Keynesian policies, except for possibly in the early 50s and late 60s when a capitalist boom was combined with an imperialist war that absorbed most of the nation's surplus labor-power. To be generous to the Keynesian economists here we will say say that their policies had the effect of lowering real unemployment even if it didn't end unemployment as promised. In its own way Keynesianism or what is also called "embedded liberalism" attempted to solve disequilibrium/underconsumption problem under capitalism in its own tepid half-hearted way. Not only was it unsuccessful at doing that but Keynesian theory did not even understand, or pretended not to, the other nuances of Marxist crisis theory.
One example is the post-Keynesian understanding that government spending or operation of a certain industry tends to crowd out investment in the same field. The reason being that private capitalists are often outright outcompeted by the provision of state services and products or lack the confidence to go into compete against the state which has quite a war chest and is not strictly bound by the consideration of profit. Rather then concluding that private enterprise is wasteful and inefficient capitalist economists concluded that the government should stay out of the realm of business instead! While Hoxha noted that 20-40% of the industry of the Western countries, especially in Western Europe, were state-operated in his time the competition did undercut the expansion of privately-owned business and while the economy was booming this wasn't much of a problem it even aided by helping to keep down costs. But when the economy no longer boomed and new options of lowering costs such as opening up trade and moving production to the Third World arrived then Western capitalists began to get quite hungry to go after and devour state-owned enterprises and convert them into their private property at the expense of the public. Another turn as much motivated by the increasingly bloated financial sector emergent in the late 60s as the problem of neoclassical economics that tautologically defined productivity in terms of the money made, so that bankers and landlords went from being hated and despised even in mainstream economics circles to being heroes and the most "productive" people on Earth. Keynes "euthanasia of the rentier" was not to be but instead not only should the rentier be subsidized but he should also be given complete power to run society and the state to serve as a bulwark against corrupt government bureaucratism. Ironically, the neoliberal turn came exactly at Keynesianism's (and ironically US Imperialism's) greatest triumph when the gold-dollar was scrapped in favor of an endless printing press that the rest of the world had to accept on the pain of provoking a global downturn. As Hudson beautifully surmised America held a gun to its own head and dared the world to let it pull the trigger; in a way America called the bluff of the rest of the world, they could not sit back and let the American economy crash because they were affected by it, so they kept accepting value-less dollars. With an endless money machine at its disposal there was no reason to prioritize state-spending to lower costs and there was no need to worry about the worsening trade deficit as more money could always be dumped into the economy and the banks and some sucker overseas would always exchange good money for bad. For decades, the world economy would come to be quite literally driven by a dollar bill being invented on a bank computer screen in New York and eventually spent into existence through issuing debt that later ended up in the hands of some corporation or rube that would exchange that money for Chinese stuff that could be made cheaper then anywhere else because the state-sector and party leadership helps keep costs low--either through providing valuable education to cheap workers, subsidizing their workers living arrangements, subsidizing or operating state-owned enterprises more competently then private owners, or providing facilities/land rent free or at cost.
It turned out that the Marxist "education" of the Chinese leaders did not inspire them to get serious about building socialism but it did make them much better at capitalism then their Western counterparts. The economy under Mao Zedong in a sense hit a logical Keynesian extreme nearly the entirety of its modern industry was state-owned and this aided its growth and in a sense the loose coordination aided the expansion of the industrial economy but since these industries were de facto independent and driven by profit as the motive force of their existence and thus they found it impossible to coordinate a genuine planned economy that might eliminate the capitalist equilibrium problem. The state was a better accumulator then private capital but what this policy really did was artificially create a monopoly-capitalist economy of a new type like what existed in the West and the board directors made these state-enterprises their de facto private property since they did not answer to any central authority that had the power or desire to subordinate them to the dictates of the working class. A largely rural capitalist economy of very small businesses and rich peasant operations alongside a massive state-owned capitalist could not endure forever either and it makes a great deal of sense that as these small producers started to grow in wealth and output that the ground would have to be opened to allow new big capitalists to rise up from the private sector. In this sense, as the state-sector in China became more restricted and the profit-extracted and job shedding impulses increased it was also matched by monopolies growing out of a highly-competitive private sector that often depended more on state-companies and policies that Western observers wanted to admit. It is said that Deng Xaoping looked to Singapore as the model for China as a fellow one-party state that ran a highly competitive market economy that still had a large state-role in it. But what Deng did not want was freedom of speech or civil liberty beyond the economic forms as he insisted the 1976 constitution had to be torn up and free speech had to be done away with. China moved away from Mao's pseudo-Marxist liberal idealism into an open-fascist state that had to grow as fast as possible to fulfill the Chinese dream (which was Mao's as well) of becoming another super-power. Politically, this had been enshrined when Roosevelt fought to have China recognized as the "fourth" super-power alongside Britain, America and the Soviet Union--Mao actually refused to believe that the Mao Zedong China lobby had been repressed under Roosevelt who had long-standing family ties with China and the KMT. Mao wanted to position China at the head of communist world including whatever anti-Soviet forces he could find to make China the leader of the communist movement, when China's UN seat was returned in 1972 and Nixon visited in 1972 this strategy began to change. Not only were the Soviets now suddenly worse then the United States but America suddenly went from enemy number one in rhetoric to "a declining power" which was no longer aggressive. Mao, of course, went onto support Pakistan in the Bangladeshi liberation war and to recognize the fascist coup in Chile in 1973 in addition to supporting the Khmer Rogue against Vietnam which Kissinger admitted that the US desired to do so but couldn't do it openly.
Even if Mao was stuck in another time economically he was probably smart enough to realize that China's internal market was saturated and therefore it made sense to expand China's imports and that road ran through the SEZ and pro-free trade arrangements that became popular under Deng. Could Mao had really gone so far to the right as Deng did? Well, Mao actually had an arrangement with the capitalists in Hong Kong going back to the 1930s and continuing through the Cultural Revolution during which they did a multi-billion dollar trade despite the rhetoric of the Hong Kong capitalists. In the 60s when the Hong Kong workers decided to rise up the office of every left-wing organization and paper was raided except for those the front organizations of the PRC. Those organizations often preached national reconciliation between Hong Kong workers and capitalists, and indeed Deng took Hong Kong as a model and an investment source during his reign. Mao was seemingly content for Portuguese Macao and British Hong Kong to remain unmolested and if he had deals and trade in Hong Kong, its understandable that he would have it with Macao. According to Albanian sources the Chinese government kept in contact with Chinese overseas capitalists all over Asia during Mao's time and Michel Chossudovsky and Lindsey Sterling during the Deng era these countries invested in China in a big way. There's still more that needs to be mapped out about Mao-era foreign trade and financial relations as well as its internal political economy. However, since Mao congratulated Nixon on his election and told Nixon that he approved of the right-wing electoral victories sweeping the capitalist world and even offered to send 10 million Chinese women to the United States to boost their labor force and US demographics, I'd say that the answer is yes, if Mao had been alive in the 1980s he would've been as bad as Deng Xaoping. Hoxha wrote that: " Apparently, the capitalist system which is being built and developed in China will be a hybrid of various revisionist, capitalist and traditional Chinese forms and methods." which describes Chinese capitalism today quite well, but alas, applies just as much to the Mao era as after.
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