Socialist Industrialization and Railway Sector Development in the Early PRC
by
Zyler Zexi Wang
A thesis submitted in conformity with the requirements for the degree of Master of Arts
Department of Geography and Planning University of Toronto
© Copyright by Zyler Zexi Wang 2017
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Socialist Industrialization and Railway Sector Development in the
Early PRC
Zyler Zexi Wang
Master of Arts
Department of Geography and Planning University of Toronto
2017
Abstract
My thesis focuses on national industrialization in the early decades of the People’s Republic of
China (PRC). The industrialization project connected the following: histories and impacts of
Western imperialism, the distinctive form of Third World socialism, and the importance of
economic and technological development to the early PRC. I explore the above set of
connections in order to answer my motivating question: What is particularly socialist about the
early PRC’s industrialization project? I begin with histories and plans. Western depictions of
state planned economies rely on tropes of irrationality. I retrieve the logical content of early PRC
plans by piecing together historical data, the text of plans, and narratives from early PRC leaders
and planners. I then turn to the formulation and implementation of state plans. I trace these
processes through events in the state railway sector—a system that evolved in tandem with the
project of early PRC industrialization.
Acknowledgments The completion of this thesis owes a great deal to many people. First and foremost is my
supervisor, Prof. Alana Boland. You’re open to and knowledgeable about everything that I could
have wanted to study. I don’t think I would be here otherwise. I’ve really appreciated your
combination of openness and rigour, though I may grumble about the second. Thank you also for
how much you pushed and were there during the final weeks of writing.
Many thanks to the committee members, Prof. Alan Walks and Prof. Tong Lam. I am deeply
grateful for how closely you read the thesis, especially given the short and changing timeframe
(sorry!). Thank you for bringing your vast expertise, and for asking very crucial questions. I
should also mention Prof. Yiching Wu (the almost-committee-member). You have been both
incredibly encouraging and honest since the beginning. Your work, I think, made it possible for
me to ask the questions that I wanted to. This thesis carries the influence of all the other faculty
who have taught and mentored me, during my graduate and undergraduate studies at UofT. (I
had forgotten how much that Michael Jackson piece shaped my entire approach to research.)
Thank you also to the staff in the Department, who, in my experience, go above and beyond.
I benefited from help, advice, and encouragement from a number of higher-year students in
Geography and other departments. Thank you (multiple you) for answering lists and lists of
questions, and telling me that I wasn’t alone in my concerns and apprehensions. This process
would have been much less manageable (and dare I say fun?) without the other members of my
cohort, and other classmates. Thank you especially to Andy, Cindy, Liz, Kevin, Meghan, and
Rebecca for the chats, work sessions, driving all the way to Boston, helping me look for my iPod
at 1 am, and all the forms of commiseration (which were kind of fun…right?).
I owe profound debts of gratitude to Prof. Zhang Yuhong, Prof. Chen Xumei, Prof. Han
Baoming, and Sabrina Xu, for enabling my time at Beijing Jiaotong University. BJTU was the
perfect home base for my research. Thank you to Prof. Han for many things: being so easygoing
and welcoming, taking an interest in this project, sharing your time and knowledge, and
connecting me to others. Prof. Zhang Qikun and Prof. Gao Gao: I learned so much from you. I
really enjoyed our conversations. Thank you for making available your time and resources.
Interviews also played a crucial part in this thesis. To the interviewees: I am not naming you due
to the University’s rules around privacy and ethics in research. Your contributions are every bit
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as important as those made by everyone who is named. Thank you for sharing your time,
knowledge, and experiences; thank you also for your kindness and patience with me.
Some other great people: I am very grateful to Prof. Judith Farquhar, Ms. Beth Bader, Mr. Yuan
Ji, and the staff at the UChicago Center in Beijing. The Center gave me all that I needed badly at
the time: space, coffee, yoga, and great company. Thank you to the staff at Interlibrary Loans at
Robarts, who have been wizards at locating somewhat odd volumes. Thank you also to the
helpful and kind staff at the Universities Services Centre for China Studies at the CUHK.
Finally, I am thankful for financial support received through the Social Sciences and Humanities
Research Council of Canada (SSHRC), the Department of Geography and Planning, and the Dr.
David Chu Scholarship in Asia Pacific Studies (from UofT’s Faculty of Arts and Sciences).
I could not have done this without my friends. Each of you has always been there, and told me
that I was doing okay in ways that I needed to hear. I am excited to be there for the new chapters
in your lives. Thank you to my partner. You’ve heard me since the beginning. You have given
me both the support and space needed to grow. You are, I think, one of my favourite humans.
Thank you, from the bottom of my heart, to my family in China—uncles, aunts, grandaunts,
granduncles, cousins, and everyone else. Thank you for all the ways that you have been there for
me, and have helped me with this project. Thank you for, in these past years, listening through
my gibberish and at times atrocious mispronunciations, and hearing what I meant to say. You
make coming back feel like coming home. Thank you to my parents. There is too much to say
here, so I will keep it brief. This project comes out of an attempt to understand your lives and
mine. Finally, in the course of doing this research, I have been thinking about my grandfather—
who passed away before I had a chance to truly come back. I saw the note that you wrote me;
you wanted me to know that there are beautiful places in this country.
Table of Contents
Contents
Acknowledgments ........................................................................................................................ iii
Table of Contents ...........................................................................................................................v
Chapter I. Introduction .................................................................................................................1 1. Introduction ...................................................................................................................1 2. Topics and questions .....................................................................................................3 2.1 Socialist industrialization in the early PRC ...................................................3 2.2 Discourses on state socialist ‘failure’ ............................................................8 2.3 Chinese railways: As topic, method, and site ..............................................18 3. Methods and sources ...................................................................................................22 3.1 Reading and textual analysis ........................................................................23 3.2 Interviews .....................................................................................................26 4. Thesis structure and content ........................................................................................30 4.1 A key concept: On efficiency ......................................................................30 4.2 The main argument in three chapters ...........................................................33
Chapter II. The Red passion for economizing, part one: The erased logic of plans ..............35 1. Introduction .................................................................................................................35 2. Imperialism, the erased trace ......................................................................................36 3. Materializing history: The early PRC in context ........................................................38 4. (Five Year) Planning for the ongoing revolution ........................................................47 5. ‘Irrational’ planners—or their irrational critics? .........................................................63 6. Conclusion ..................................................................................................................67
Chapter III. The bridge: The PRC railway sector in formation .............................................70 1. Introduction .................................................................................................................70 2. Chinese railways: Early histories ................................................................................72 3. Chinese railways: The PRC system in formation .......................................................76 3.1 Tracks from the Republic .............................................................................77 3.2 In the battle for a new beginning..................................................................80 3.3 “Learn from the advanced experience of the Soviet Union” .......................88 3.4 An assemblage .............................................................................................97
4. Conclusion ................................................................................................................101
Chapter IV. The Red passion for economizing, part two: State plans and railway sector accounting in the early PRC.................................................................................................103
1. Introduction ...............................................................................................................103 2. Early PRC state planning in process .........................................................................104
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3. Critical projections: The distorted reflection of American corporations ...................110 4. The ‘central link’ of the plan: Economic accounting in the PRC railway sector ......115 5. Conclusion .................................................................................................................134
Chapter V. Conclusion ..............................................................................................................136 1. Rewind: Summary and arguments ............................................................................136 2. Stakes, part one: On knowledge 3. Stakes, part two: Between capitalism, socialism, and efficiency .............................140
3.1 The aftermath of ‘capitalist victory’ ..........................................................140 3.2 A step back: The unconcluded debate ........................................................142
4. Towards unpaused histories ......................................................................................155
Bibliography ...............................................................................................................................157
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Chapter I. Introduction
The history of mankind is one of continuous development from the realm of necessity to the realm of freedom. […] In the fields of the struggle for production and scientific experiment, mankind makes constant progress and nature undergoes constant change; they never remain at the same level. Therefore, man has constantly to sum up experience and go on discovering, inventing, creating and advancing. Ideas of stagnation, pessimism, inertia and complacency are all wrong. They are wrong because they agree neither with the historical facts of social development over the past million years, nor with the historical facts of nature so far known to us.
--Mao Zedong, December 19641
1. Introduction In the broadest telling, my thesis tracks the afterlife of what began as perhaps the most optimistic
and audacious social project seen by the world in the twentieth century. The project in question
is Chinese socialism. In 1949, the Chinese Communist Party (CCP) embarked on a quest. State
leaders in the newly-formed People’s Republic of China (PRC) sought to transform an agrarian
nation of over 600 million people—marked, at the time, by a century of colonial exploitation and
decades of warfare—into a model of socialist modernity. The CCP’s vocabulary of
‘development’ and ‘progress’ likely did not raise too many eyebrows among Western leftist and
critical circles at the time. But we live in a different time today. In the contemporary era, we—I
count myself among the critical set here—have absorbed insights produced by decades of
structuralist and post-structuralist analysis. To speak of ‘progress’ reeks of teleology and top-
down authority. Mao’s tying, in the above quote, of progress to science and technology is
perhaps even more suspicious. This thesis grew out of my initial puzzlement about why the
project of Chinese socialism would place at its center goals of economic and technological
development.
1 “Premier Zhou Enlai’s Report on the Work of the Government to the First Session of the Third National People’s Congress of the People’s Republic of China, December 1964,” in Main Documents of the First Session of the Third National People’s Congress of the People’s Republic of China (Peking: Foreign Languages Press, 1965).
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My project consequently studies economic and technological systems in the early PRC. I
examine the operations of these systems, as well as ways of narrating them within the PRC and
in the West. I am interested in how leaders in the early PRC conceived of and implemented
routes to alternative forms of modernization. I am also interested in the results and limits of these
approaches. I am moreover curious about the relationship between Third World modernization
trajectories, and how projects of economic and technological development have become narrated
in the West. Antipathy to notions of ‘progress’ is at the center of the most nuanced contemporary
Western discourses about development.2 My project was, in a sense, prompted by the different
ways that development and technology have been positioned by Chinese socialism and by
contemporary Western calls for radical redistribution and equality. I did not quite get to this topic
in my research and writing. As I proceeded with research, I found rather more fundamental
questions to address about the workings of early PRC economic and technological systems, and
how these have been conceived.
The subsequent thesis begins by discussing plans for national industrialization in the
early PRC. I approach the PRC’s industrialization project by juxtaposing two sets of narratives.
These are contemporary Western discussions of the early PRC economy, and accounts from
early PRC leaders and planners. Contemporary Western discussions largely understand state
socialist economies to be irrational and inefficient, by virtue of their reliance on state planning. I
show these discussions to operate as a set of self-reproducing discourses that exclude ‘outside’
information. The excluded information ranges from the historical and economic contexts
produced by imperialism, to early PRC planners’ narrations of their own rationales and limits, to
processes of state and local plan formulation and implementation in the PRC, as well as their
results. I use these excluded elements to build my subsequent account of industrialization in the
early PRC. I first discuss the historical contexts that gave rise to the PRC’s national development
and industrialization plans. These plans constituted an active and deliberate response to their
contexts; plans, and the processes of their implementation, were also shaped by these contexts. I
2 See for example: Jonathan Crush, Power of Development (Psychology Press, 1995); James Ferguson, The Anti-Politics Machine: ’Development’, Depoliticization and Bureaucratic Power in Lesotho (Cambridge University Press, 1990); James C. Scott, Seeing Like a State: How Certain Schemes to Improve the Human Condition Have Failed (Yale University Press, 1998); Nanda R. Shrestha, In the Name of Development: A Reflection on Nepal (University Press of America, 1997).
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then turn to examine a system that had been key to the early PRC’s industrialization project—the
state railway system. I track the interplay between historical remnants, early PRC state plans, and
their local sector implementation through the events of the early PRC railway system.
The rest of this introductory chapter is divided into three sections. In the first section, I
discuss the research topics and relevant literatures that my project engages with. I also ask a set
of research questions. In the second section, I provide information on my research methods. I
discuss sources of evidence and how I use these. The final section of the chapter acts as a segue
to the rest of the thesis. I outline the main argument that threads together Chapters 2, 3, and 4. I
also provide brief descriptions of these chapters. Lastly, I address a key preoccupation that holds
together the different elements of my thesis: this is the concept of efficiency.
2. Topics and questions
This thesis revolves around three research topics. These are: (1) socialist industrialization in the
early PRC, (2) discourses on state socialist ‘failure’, and (3) the Chinese railway system. In the
following section, I discuss each of these three topics. For each topic, I cover existing literature
on relevant subjects, how and where my approach fits in, and the set of questions that guide my
research into the specific topic. I also draw out the set of relationships that connect these topics
to each other. Finally, I briefly comment on how I pursued researching these topics. The
discussion of how continues into the next section on Methods and sources.
2.1 Socialist industrialization in the early PRC
The primary topic for my research concerns industrialization in the early PRC. After founding
the People’s Republic of China (PRC) in 1949, the Chinese Communist Party (CCP) prioritized
the project of national economic development. In the period between 1949-1958, 66% of the
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over 4,000 statutes and regulations issued by the new PRC state concerned economic matters.3 In
1965, twenty-nine of the thirty-six existing state ministries operated in areas of economic
planning, production, distribution, and exchange.4 In the first two decades of the PRC, state
leaders identified industrialization as the primary task for national economic development.5 In
1949, China had been a largely agricultural society, with over 80% of its population residing in
the countryside.6 In other words, China was largely non-industrial. China therefore stood apart
from ‘First World’ nations at the time. First World nations had mostly already undergone
processes of industrialization. These processes equipped their home nations with the
infrastructural components of modern (industrial) societies, which included energy production
and circulation systems, transportation systems, and industries for producing construction
materials and machinery.7
If projects of industrialization have historically been pursued by nations of all ideological
stripes, then is there anything particularly Marxist or socialist about the CCP’s drive to
industrialize? The CCP had been founded on the ideology of Marxist-Leninism, which remains a
guiding doctrine for the party today.8 Texts produced by the early PRC state suggest that a
connection did exist between the state ideology of socialism and practices of industrialization.
Contained within the PRC’s First Five Year Plan (FFYP), for instance, is this passage: “The
founding of the People’s Republic of China, led by the working class […] [has] made it possible
for us, in accordance with our aim of building socialism, to develop and transform our national
economy in a planned way, so as to convert China, step by step, from a backwards, agricultural
3 Gene Hsiao, “The Role of Economic Contracts in Communist China,” California Law Review 53, no. 4 (October 31, 1965): 1030. 4 Ibid., 1031. 5 PRC, First Five-Year Plan for Development of the National Economy of the People’s Republic of China in 1953-1957. (Beijing: Foreign Languages Press, 1956), 15–17. 6 Albert Feuerwerker, The Chinese Economy, 1870-1949 (Center for Chinese Studies, University of Michigan, 1995), 87–89; John Friedmann, China’s Urban Transition (University of Minnesota Press, 2005), 11. 7 Walt Whitman Rostow, The Stages of Economic Growth: A Non-Communist Manifesto (University Press, 1960), 60–67. 8 CCP, “Constitution of the Communist Party of China: Revised and Adopted at the 18th National Congress of the Communist Party of China on November 14, 2012,” ChinaToday.com: A China Information Base, November 14, 2012, http://www.chinatoday.com/org/cpc/china_communist_party_constitution.htm.
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country into an advanced, socialist, industrial state.”9 According to state planners in the early
PRC—or at least those involved in formulating the FFYP—the building of socialism paralleled
the building of national industrialization.
The knowledge gap
Many Western (or English-language) researchers of the early PRC have taken its state
ideology of socialism seriously. This description applies to works where the author considers and
finds value in, rather than dismissing, how PRC leaders and other people in China have narrated
events and processes. Both official and popular discussions in the early PRC (i.e. those taking
place in its first two decades) frequently made use of socialist analytic frameworks.10 Western
authors who have taken these narrations seriously have tended to study subjects such as political
leaders, political practices, campaigns, social moments, and cultural productions. Writings in this
genre include Esherick’s work on topics such as the Cultural Revolution and CCP base areas;
Dittmer’s on political theory and practice (e.g. ‘line struggle); Gao’s on the Cultural Revolution;
Harding’s on bureaucratization; Howard’s on the mass line and other communications practices;
Meisner’s on Li Dazhao and the early history of the PRC; Selden’s on CCP activities in the
Yan’an base area; and Wu’s on the Cultural Revolution.11
9 PRC, First Five-Year Plan for Development of the National Economy of the People’s Republic of China in 1953-1957,13. 10 State plans, as well as the writings and speeches of early PRC leaders (e.g. Mao, Zhou Enlai, Li Fuchun, Liu Shaoqi, etc.), can be taken as examples of official discourses at the time. The Hundred Flowers Campaign (1957) and the Cultural Revolution (1966-?) tend to be characterized as moments that make audible less-official conversations. Chan, Goldman, and Wu have investigated these ‘other’ (and in Wu’s case, ‘marginal’) conversations. These do not tend to challenge state socialism; they often depart from more official discourses by calling for increased redistribution, nation-building, etc. See: Sylvia Chan, “The Image of a ‘Capitalist Roader’--Some Dissident Short Stories in the Hundred Flowers Period,” The Australian Journal of Chinese Affairs, no. 2 (1979): 77–102; René Goldman, “The Rectification Campaign at Peking University: May--June 1957,” The China Quarterly, no. 12 (1962): 138–53; Yiching Wu, The Cultural Revolution at the Margins (Harvard University Press, 2014). 11 Joseph Esherick, “On The ‘Restoration of Capitalism,’” Modern China 5, no. 1 (1979): 41–77; Joseph W. Esherick, “Deconstructing the Construction of the Party-State: Gulin County in the Shaan-Gan-Ning Border Region,” The China Quarterly, no. 140 (1994): 1052–79; Mobo C. F. Gao, The Battle for China’s Past: Mao and the Cultural Revolution (Pluto Press, 2008); Harry Harding, Organizing China : The Problem of Bureaucracy, 1949-1976 (Stanford University Press, 1981); Pat Howard, Breaking the Iron Rice Bowl: Prospects for Socialism in China’s Countryside (M.E. Sharpe, 1988); Maurice J. Meisner, Li Dazhao and the Origins of Chinese Marxism (Harvard University Press, 1967); Maurice J. Meisner, Mao’s China: A History of the People’s Republic (Free Press, 1977); Mark Selden, China in Revolution: The Yenan Way Revisited (M.E. Sharpe, 1995); Wu, The Cultural Revolution at the Margins, 2014.
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In contrast, Western research on the economic aspects of the early PRC often do not
consider how the events under study had been narrated by those inside China. This orientation is
particularly true of Western research produced after the Cold War (i.e. post-1990). For instance,
Naughton, in an authoritative overview of the Chinese economy published in 2007, characterizes
economic policy changes in the early PRC as a series of erratic and sudden swings.12 Naughton
attributes these changes to political and personal whims; he explains that “Mao Zedong himself
repeatedly changed economic policies in accordance with his own revolutionary ideals or
personal wishes.”13 Naughton’s characterization here—of early PRC policy-making as individual
and particular—elides entire sets of events, processes, and discussions that had shaped
trajectories of the early PRC economy. In the upcoming chapters, I will discuss in detail the
forms of dismissal and elision that Naughton’s above description partakes in. I will also provide
an account of the events and processes that have become erased. For now, I will just say that
Naughton is far from being unique in his approach.
Naughton’s disregard for how the early PRC economy was conceived and understood by
its architects is rather axiomatic for his field. Authors who have shared Naughton’s approach in
their recent (post-1990) writing about the early PRC economy include Ash and Nolan, Lin et al.,
Rawski, Walder, and Wong.14 This list is not long: not many Western researchers today are
specifically interested in the economic operations of Mao-era China. This disinterest is at least
partly rooted in how the subject is considered understood and therefore closed to further study.
But the conclusions of Naughton and his cohort are far from marginal. Their shared
understanding of the early PRC economy as being personality-driven and otherwise shaped by
political directives (rather than economic rationality) pervades both Western academic and
popular understandings of Mao-era China. These understandings in turn shape how China’s post-
1976 reforms—and consequently its present—are understood in Western discussions.
12 Barry Naughton, The Chinese Economy: Transitions and Growth (MIT Press, 2007). 13 Ibid., 62. 14 Peter Nolan and Robert F. Ash, “China’s Economy on the Eve of Reform,” in China’s Transitional Economy, ed. Andrew George Walder (Oxford University Press, 1996), 18–36; Justin Yifu Lin, Fang Cai, and Zhou Li, The China Miracle: Development Strategy and Economic Reform (Chinese University Press, 2003); Thomas G. Rawski, “Chinese Industrial Reform: Accomplishments, Prospects, and Implications,” The American Economic Review 84, no. 2 (1994): 271–75; Christine Wong, “Rebuilding Government for the 21st Century: Can China Incrementally Reform the Public Sector?,” The China Quarterly, no. 200 (2009): 929–52.
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In the next section, I further address Western narratives about the early PRC economy.
These narratives become a research topic in and of themselves. For now, the focus is on the topic
of socialist industrialization in the early PRC. While early PRC state plans insist on the existence
of a productive relationship between socialism and industrialization, the possibility of this
connection is largely absent from English-language scholarship. There is, on the one hand,
literature that is interested in tracking the realization of state socialism. These works tend to
focus away from the early PRC economy. There is, on the other hand, literature specifically
focused on the PRC economy—these tend to dismiss the state’s ideology of socialism. In the
second set of accounts, ideology only impacted the early PRC economy insofar as to steer it
away from proper functioning.15 Consequently, one of the objectives of my research is to
understand the role of state socialist ideology in producing—rather than only disrupting—plans
and processes of industrialization in the early PRC. To this end, I ask the following questions:
What were the objectives of early PRC development and industrialization plans? How did
these objectives relate to the ideology of state socialism? What were relationships between
plans and visions, processes of implementation, and their results?
Introducing railways as method
To answer the above-posed questions, I look broadly at plans for and processes taking place in
the early PRC at large. I also zoom in on the operations of a particular—and important—
component of the early PRC economy: the state railway system. Railways have been crucial to
projects of national industrialization, both in the PRC and elsewhere.16 Anchoring my research in
the operations of one key state system has been particularly useful when investigating the third
question posed above, about the relationships between state plans, processes of implementation,
and their results. The events of the early PRC railway sector shed light on what happens when
state plans ‘hit the ground’, so to speak. While conducting my research, I discovered another
reason for centering Chinese railways in the attempt to understand early PRC industrialization.
This second reason is tied to the history of these railways. China’s railway system, with its
15 Some pre-1990 English-language research on the PRC economy do take state narrations more seriously than more contemporary works. Their engagements however stop short of my questions, which ask what is particularly socialist about early PRC industrialization. I discuss these earlier works in more detail in the next topic section. 16 Philip Sidney Bagwell, The Transport Revolution (Routledge, 1988); Rostow, The Stages of Economic Growth, 60–67; Adrian J. Smith, Privatized Infrastructure: The Role of Government (Thomas Telford, 1999), 8–42.
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enduring form, acts as a kind of repository for national history. Railway histories make visible
the processes and events that motivated Chinese socialism and its plans for national
industrialization. Chinese railways consequently feature in my thesis in two ways: (1) I discuss
aspects of early PRC railways to shed light on how PRC state plans had been formulated and
implemented; and (2) I discuss Chinese railway histories in order to establish a key set of
contexts. These include the broad contexts that gave rise to Chinese state socialism and its plans,
and the more specific contexts that shaped railway-sector implementation of state plans.
2.2 Discourses on state socialist ‘failure’
The second topic for my research concerns a set of Western discourses about development
trajectories in the early PRC. These discourses in fact extend beyond the PRC. These discourses
consider the economies of all (former) socialist states to have been, both generally and
intrinsically, dysfunctional. Economic dysfunction is then positioned as the linchpin in narratives
about the overall ‘failure’ of state socialist projects. In labelling this set of discourses as
‘Western’, I index several related aspects of their constituent discussions. These aspects include:
these discussions happen in English-language, their authors have received post-graduate training
in North Atlantic institutions, and their texts are published or otherwise circulated by North
Atlantic institutions (e.g. universities, publishing houses, etc.).
Western discourses about socialist failure are not restricted to the academic sphere or its
institutions. However, their popularization has been tied to the widespread circulation of
academic or quasi-academic works, such as those by Fukuyama and Friedman. In the next
paragraphs, I show how a shared set of narratives about socialist failure animate the works of
Fukuyama, Friedman, and those by PRC specialists. I then interpret these narratives through the
Foucauldian notion of discourse. Finally, I pose a set of questions that guide my subsequent
study and analysis of this particular set of discourses.
Narrating socialist failure
The post-Cold War era have been heralded in the West as the ‘end of history’: democracy has
triumphed over socialism as the superior form of state political organization. In these accounts,
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democracy is not merely a form of political organization—it is crucially intertwined with private
ownership and the ‘freedom’ of market exchange.17 The victory of democracy is also the victory
of capitalism. Capitalism has proven itself to be not only more efficient than the alternative; it
has also shown itself to be better at raising standards of living for the average person. Or so says
authors like Fukuyama and Friedman. Fukuyama shakes his head at the “[t]errible waste and
inefficiency that central planning had brought about.”18 Friedman meanwhile offers the pithy
nugget: “Communism was a great system for making people equally poor.”19 Here, the defeated
alternative to capitalism is of course state socialism and its centrally planned economy.
Much of post-Cold War Western academic research on Mao-era China (1949-1976)—and
its centrally planned economy—would seem to agree with Fukuyama and Friedman. In fact, ‘in-
depth’ studies on the economic operations of the PRC and the former USSR often provide the
details that substantiate Friedman-esque sound bites. Nolan and Ash, for example, find that
“China’s economic development has been uniquely, if not consistently, influenced by [Mao’s]
personal prejudices and idiosyncratic view of how to realize the country’s development
potential.”20 Nolan and Ash then expand on the ills of the PRC’s planned economy. Their
discussion captures several key elements of Western discourses on state socialist economies, so I
will quote it here in length:
“[The planned economy] had generated powerful negative economic consequences. Decisions were frequently taken by Party members, who lacked appropriate training and skills. Ideological orthodoxy constrained economic debate—for example, insisting that “planning” provided a framework in which resource allocation could take place without reference to such fundamental economic concepts as price, cost, and profit. […] [I]nstead of eliminating the shortcomings of the capitalist system, planning exhibited many of the same deficiencies in an even more acute form. Far from abolishing waste, it generated waste on a grand scale. It abolished production for profit, but failed to replace it with production for use. It eliminated the short-termism of competitive capitalism only to substitute the short-termism of current plan fulfillment.”21
17 See for instance: Thomas L. Friedman, The World Is Flat 3.0: A Brief History of the Twenty-First Century (Macmillan, 2007), 49–50. 18 Francis Fukuyama, The End of History and the Last Man (Penguin Books Limited, 1993), 41. 19 Friedman, The World Is Flat 3.0, 2007, 50. 20 Nolan and Ash, “China’s Economy on the Eve of Reform,” 1996, 18. 21 Ibid., 18–19.
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Nolan and Ash are not unique in how they understand the early PRC’s economy. Lin et
al. repeat the story about socialist irrationality and waste, using rather more economic jargon:
“Giving priority to heavy-industry development ran counter to China’s comparative advantage and distorted the economic structure so much that development was slower than it could have been.”22 “Distorted prices of production factors and products resulted in a shortage economy.”23 “In the price-distorting macro-policy environment, profits ceased to be an indicator of enterprise management and performance and no objective substitute could be found.”24 And finally, “instead of enabling China to catch up with and overtake developed countries, [the early PRC system] impeded economic growth and resulted in low living standards for the Chinese people.”25
In quoting extensive from Nolan and Ash and Lin et al., I do not mean to single these
authors out for some exceptional way in which they discuss state socialist economies. Their
research provides valuable insights and analyses on the PRC’s economy—I certainly learned
much from their discussions. These authors merely articulate more explicitly the assumptions
and frames that sometimes remain half-buried. Other recent scholars of the PRC economy
certainly agree on the deficiencies of the planned system. In Walder’s study on post-socialist
political transitions, he notes that “Few will dispute the fact that the political changes of recent
years are rooted in the long-term failure of Soviet style economic institutions.”26 Naughton, also
from his overview of the PRC economy, states that for the Chinese leaderships, “The disasters of
the GLF and the Cultural Revolution led to disillusionment with socialism as a development
strategy and to the growing conviction that the market could be a superior instrument of
development.”27 Naughton then reiterates that “the market is the superior way to organize
economic transactions.”28
22 Lin, Cai, and Li, The China Miracle, 2003, 69. 23 Ibid., 399. 24 Ibid., 340. 25 Ibid. 26 Andrew G. Walder, The Waning of the Communist State: Economic Origins of Political Decline in China and Hungary (Berkeley: University of California Press, 1995), 2. 27 Naughton, The Chinese Economy, 2007, 5. 28 Ibid., 7. I pause here to clarify the periodization of socialist ‘failure’ in the above-quoted accounts. Naughton’s last quote (footnote 27) constructed ideas of Chinese socialist failure around events of the Great Leap Forward (GLF, 1958-1960) and Cultural Revolution (CR, 1966-1976). References to these two periods often surface in discussions about ‘irrational’ Chinese socialism. It is important to note that however, for Naughton—as the current quote shows—the dysfunction of Chinese socialism was rooted in the very operations of its planned economy. The idea here is not that the Chinese socialist economy had mostly functioned, aside from aberrant events. The GLF and
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Narratives tying the failure of state socialism to the inefficient planned economy are
similarly present in works about other historically-existing socialist states. These lines of
discussion are even reproduced by authors who profess Marxist sympathies, such as Verdery.29
In her study of Romanian socialism, Verdery observes that the very logic of planned economies
is to establish and maintain paternalistic control.30 In the planned economy, transactions are
dominated by ‘clientelism’ and bargaining, thereby producing widespread shortages and
practices of hoarding.31 It is one thing to observe inefficiencies in the operations of planned
economies. It is quite another to claim that planned economies are more inefficient than capitalist
(unplanned?) economies—and that this comparative lack culminated in the demise of state
socialism. But the later is exactly what is argued. For Verdery, “socialism with its emphasis on
large-scale heroic production of means of production, its resources frozen by hoarding [,] […] its
lack of a systemic impetus towards innovation, [….] its neglect of consumption and its flat-
footed definition of “needs,” [and] its constipated and secretive flows of information” could not
complete against a capitalism that was becoming ever more flexible.32
As discourses
From the above accounts, a certain picture emerges of state socialist—or centrally planned—
economies, such as what existed in the early PRC. This picture contains three elements: (1) that
planners had been idiosyncratic and produced irrational plans; (2) that resource allocation had
been inefficient due to the absence of economic mechanisms; and (3) that economic planning
produces the waste of resources, materials, and labour. These problems may in fact have been
present in centrally planned economies. However, as Nove argues in his discussion of socialist
economics, critics of socialism tend to assume that “capitalism and optimum resource allocation
CR are rather positioned as extending ‘normal’ forms of planned economic dysfunction. The set of quotes from Nolan and Ash, Lin et al., and Walder show that they, perhaps even more so than Naughton, root their accounts in the ‘normal’ operations of the early PRC economy. When addressing Western narratives in the rest of the thesis, I often discuss events transpiring between 1949-1957. This period saw the set-up and normalization of the PRC’s planned economy; it is therefore a large part of what Western narratives draw on and construct as the period of early PRC socialist economic ‘failure’. 29 Katherine Verdery, What Was Socialism, and What Comes Next? (Princeton University Press, 1996), 9–14. 30 Ibid., 24–25. 31 Ibid., 20–23. 32 Ibid., 34.
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go together.”33 Studies on the operations of Western capitalist economies have pointed to the
immense waste generated by events and practices such as de-industrialization;34 financial crises
and bailouts;35 the industrial-military complex and war economy;36 planned obsolesces;37
processes of crop selection, transport, and retail;38 and the increasing production of garbage.39
In fact, Nolan and Ash themselves mention that the early PRC’s average growth rate had
been the highest amongst low-income countries. China’s GNP per capita had grown at an
average rate of 5% per year between 1960-1981. The PRC’s growth rates in 1950-1959 are
assumed to be even higher.40 Nolan and Ash point out that a relevant benchmark for comparison
is GNP per capita growth rates in India during the same period, which had been 1.4% per year.41
One comparison that Nolan and Ash do not make is between the PRC and the U.S.’s growth
rates in the same time period. U.S. GDP per capita had, in 1960-1981, grown at under 3% per
year.42 Perhaps it would more sense to compare the PRC’s 1960-1981 growth rates to an earlier
(‘less developed’) time in U.S. history. U.S. GDP per capita had grown at an annual rate of under
2% in 1870-1890.43 Given these comparative growth rates—and the above-discussed research on
33 Alec Nove and Domenico Mario Nuti, Socialist Economics: Selected Readings (Penguin, 1972), 7. 34 Richard D. Wolff, Capitalism Hits the Fan (Interlink Publishing, 2012); Steven High, Industrial Sunset: The Making of North America’s Rust Belt, 1969-1984 (University of Toronto Press, 2003). 35 Charles Ferguson, Inside Job, Documentary (Sony, 2010); Michael Moore, “The Rich Are Staging a Coup This Morning” Common Dreams, September 9, 2008, https://www.commondreams.org/views/2008/09/29/rich-are-staging-coup-morning-message-michael-moore. 36 Seymour Melman, The War Economy of the United States: Readings on Military Industry and Economy (St. Martin’s Press, 1971). 37 Neil Maycroft, “Consumption, Planned Obsolescence and Waste,” University of Lincoln, no. Working paper (2009); Vance Packard, The Waste Makers (D. Mckay, 1960). 38 Buzby, Jean C., Jeffrey Hyman, Hayden Stewart, and Hodan F. Wells. “The Value of Retail- and Consumer-Level Fruit and Vegetable Losses in the United States.” Journal of Consumer Affairs 45, no. 3 (September 1, 2011): 492–515; Hall, Kevin D., Juen Guo, Michael Dore, and Carson C. Chow. “The Progressive Increase of Food Waste in America and Its Environmental Impact.” PLOS ONE 4, no. 11 (November 25, 2009): e7940; Gunders, Dana. “Wasted: How America Is Losing up to 40 Percent of Its Food from Farm to Fork to Landfill.” National Resources Defense Council, 2017. 39 Heather Rogers, Gone Tomorrow: The Hidden Life of Garbage (New Press, The, 2006). 40 Peter Nolan and Robert F. Ash, “China’s Economy on the Eve of Reform,” in China’s Transitional Economy, ed. Andrew George Walder (Oxford University Press, 1996), 19. 41 Ibid. 42 Amadeo, Kimberly. “The Strange Ups and Downs of the U.S. Economy Since 1929.” The Balance. https://www.thebalance.com/us-gdp-by-year-3305543. 43 LK. “US Real Per Capita GDP from 1870–2001.” http://socialdemocracy21stcentury.blogspot.com/2012/09/us-real-per-capita-gdp-from-18702001.html.
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the operations of capitalism—it may seem somewhat surprising that tropes of irrationality and
waste play such a large role in Western understandings of planned economies.
The insistence of Western commentators—despite contradictory and complex
information—on the irrationality and inefficiency of state socialist economies suggest that what
is in operation is in fact a set of self-reproducing discourses. For Foucault, discourse shapes what
becomes visible and excludes incommensurate information.44 Said’s subsequent analysis of the
geographical operations of Western discourse is quite relevant here. Said uses the term
Orientalism to identify a set of European and North American discourses about their imagined
‘East’. It may seem odd to apply Said’s analysis to discourses about ‘irrational’ socialism. A
prime target of these discourses is of course the Soviet Union, which is only sometimes imagined
to be a part of the ‘East’ (in other words, it is not-quite-East). But Said’s discussions have
broader relevance for how Western discourses construct their ‘other’. Said says of the knowledge
produced through Orientalism that it “respond more to the culture that produced it than to its
putative object”. Moreover, this knowledge is made real “by virtue of its having excluded,
displaced, made supererogatory any such real thing as ‘the Orient.’” 45
While much of the Western scholarship under discussion emerged after the Cold War
was declared over, the ideas that they seized on—about ‘irrational’ socialism—date to an earlier
period. This was the dawning era of the Soviet project. The Austrian economist Ludwig von
Mises was the first to argue, in 1920, that the economy of a socialist society would operate
irrationally. Mises hypothesized that any short-term semblance of economic functionality under
socialism would proceed through some people making and imposing decisions onto others.46
Mises gave his account before the Soviet Union had drawn up what became the model for state
socialist economies in the twentieth century. It is then quite remarkable that when studying the
actual operations of subsequently-formed state socialist economies, contemporary Western
researchers have found realities corresponding almost exactly to what Mises had predicted.
44 Foucault, Michel. “The Order of Discourse.” In Untying the Text: A Post-Structuralist Reader, edited by Robert Young, 48–78 (Routledge, 1981), 50-56. 45 Edward W. Said, Orientalism (Vintage Books, 1979), 22. 46 Mises, Ludwig von. “Economic Calculation in the Socialist Commonwealth.” In Collectivist Economic Planning: Critical Studies on the Possibilities of Socialism, edited by Frederich Hayek, 87–130. Ludwig von Mises Institute, 1967[1920].
14
Perhaps Mises had bucked a trend that economists are somewhat known for—of making
erroneous forecasts.47 But perhaps not.
The knowledge gap: from the outside
I initially approached my research with curiosity about what constituted a (state) socialist
approach to projects of development and industrialization. My primary interest lies in
understanding the concept and practices of socialist industrialization in the early PRC, rather
than in the a priori advocacy for or critique of these practices. But my quest to learn has been
stymied by the very works that I should be learning from. The most up-to-date English-language
accounts of early PRC economic development tend to obfuscate and misrepresent the processes
under study, instead of making their contents accessible.
English-language research on aspects of the PRC economy that were published prior to
the mid-1980s tend to contain more information about actual events and processes. These include
works by Donnithorne, Howe, Hsiao, Kwang, Lardy, Lieberthal, Lippit, Perkins, and Riskin.48
These accounts are immensely useful. In my thesis, I rely on these and sources from inside the
PRC for details about its early economy. The most useful aspect of these accounts is that they
tend more towards factual than theoretical. However, I do not frame my project in explicit
relationship to these works for a couple of reasons. One is that my project is interested in
thinking through connections between state socialism and development trajectories. More recent
works (e.g. Naughton, Nolan and Ash) are more likely to make this connection, if in the
47 Barbara Kiviat, “Why Are Economists So Bad at Forecasting?,” Time, July 17, 2009, http://content.time.com/time/business/article/0,8599,1911011,00.html; Adam Shaw, “Why Economic Forecasting Has Always Been a Flawed Science,” September 2, 2017, sec. Money, http://www.theguardian.com/money/2017/sep/02/economic-forecasting-flawed-science-data; Nate Silver, The Signal and the Noise: Why So Many Predictions Fail-but Some Don’t (Penguin, 2012). 48 Audrey Donnithorne, China’s Economic System (Praeger, 1967); Christopher Howe, Wage Patterns and Wage Policy in Modern China 1919-1972 (Cambridge University Press, 1973); Hsiao, “The Role of Economic Contracts in Communist China,” October 31, 1965; Ching Wen Kwang, The Economic Accounting System of State Enterprises in Mainland China (Committee on the Economy of China, Social Science Research Council, 1966); Nicholas R. Lardy, “Economic Recovery and the 1st Five-Year Plan,” in The Cambridge History of China, ed. Roderick MacFarquhar and John K. Fairbank (Cambridge University Press, 1987), 144–83; Kenneth Lieberthal, “The Great Leap Forward and the Split in the Yenan Leadership,” in The Cambridge History of China, ed. Roderick MacFarquhar and John K. Fairbank (Cambridge: Cambridge University Press, 1987), 291–359; Victor D. Lippit, “Development of Transportation in Communist China,” The China Quarterly, no. 27 (1966): 101–19; Dwight Perkins, China’s Modern Economy in Historical Perspective (Stanford University Press, 1975); Carl Riskin, China’s Political Economy: The Quest for Development since 1949 (Oxford University Press, 1987).
15
negative. The second and more important reason is that the contemporary state of the knowledge
field— on PRC economic history—represents (or is supposed to) the synthesis of earlier research
with insights deriving from hindsight and newly-available information. It therefore makes more
sense to frame my argument around how these earlier works are made sense of and mobilized (or
not) in the contemporary field.
Due to the existing state of research on the early PRC economy, my engagement with
scholarly literatures takes a perhaps unique form. This engagement does not begin or end with
pointing out content and analytical gaps. I instead begin by understanding how contemporary
English-language literature on the early PRC economy have constructed an image of its subject. I
then juxtapose this image with other information, including what has been collected ‘in the field’
(e.g. data and narratives from texts published in the PRC). Mapping out the contours of Western
discourses on early PRC development made it possible to see the processes and events that have
been elided. Part of what becomes unmentioned are precisely the stakes of the (socialist)
industrialization project. My discussion on the first topic of this thesis—socialist
industrialization—therefore unfolds in dialogue with my discussion on the second topic, on
discourses about socialist ‘failure’.
To study the second topic, I begin with a question that was posed earlier: What were
relationships between plans and their results in the early PRC? Then: What were intervening
factors? What is meant by the ‘failure’ of state socialism? What are relationship between
discourses of socialist failure—and the actual trajectories and results of early PRC plans? The
investigative trajectories spawned by these questions would also shape the scope of possible
answers for earlier questions, such as the question about what relationship exists between early
PRC development trajectories and the state ideology of socialism. A crucial question in this
second set is what ‘intervened’ between early PRC plans and their results. The concept of this
intervention is absent from Western discourses on socialist failure, which assume the intrinsic
irrationality of state socialist economies. What is the content of this absence, and what is its
relationship to discourses of socialist failure?
Global histories and geographies on the outside
The use of absence to map out discourse is at the heart of the Derridean practice of
deconstruction. Derrida argued that a text is both held together and can be undone by finding
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what it excludes—or traces, the presence of an absence.49 What is crucially excluded from the
discourse of ‘socialist inefficiency’ are historical and persisting structures of global inequality, as
well as their material legacies. These structures are produced and maintained through the
operations of Western imperialism. Imperialism produces what Said attributed to Orientalism,
which is the “systematic discipline by which European culture was able to manage—and even
produce—the Orient politically, sociologically, militarily, ideologically, scientifically, and
imaginatively during the post-Enlightenment period.”50 Said said less however about the
economic and material productions of imperialism. These have been discussed by authors such
as Barrat-Brown, Kemp, and Wallerstein.51 A set of theorists—including Sun Yat-sen—have
also analyzed how Western imperialism unfolded specifically in China’s case. I engage with
their work in Chapter 2.
Accounting for imperialism makes visible the historical and geopolitical contexts that
defined and shaped twentieth-century projects of state socialism, including that of the PRC.
Capitalism and state socialism were not separate projects that unfolded on equal playing fields,
where the better system would ‘win’ by virtues of achieving superior economic and social
organization. In the first half of the twentieth century, China had been a largely agrarian nation
with much of its industries owned by foreign capitalists. To imagine that the new PRC could
have established an independent domestic ‘free market’ economy; that the state could have
avoided issues of shortage and achieved higher growth rates by pursuing its ‘comparative
advantage’ in the international economy—these are the exercises of an imagination freed from
historical realities. This ‘choice’ would have likely sent China further down its existing path at
the time—of becoming increasingly incorporated into the capitalist world economy as an
exporter of raw resource. I discuss the economic realities of pre-1949 China in Chapter 2.
49 Jacques Derrida, “Translator’s Preface,” in Of Grammatology, trans. Gayatri Chakravorty Spivak (JHU Press, 1998), xviii–xx. 50 Said, Orientalism, 3. 51 Michael Barratt-Brown, The Economics of Imperialism, (Harmondsworth: Penguin Books, 1975); Tom Kemp, Theories of Imperialism (Dobson, 1967); Immanuel Wallerstein, “The Rise and Future Demise of the World Capitalist System: Concepts for Comparative Analysis,” Comparative Studies in Society and History 16, no. 4 (September 1974): 387–415.
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The operations of state socialism indeed make little sense when abstracted from historical
and geopolitical contexts. It is perhaps unsurprising that it is precisely histories—particular those
connecting the West and China—that form the excluded outside of discourses on socialist
failure. These discourses champion, after all, the ‘end of history’. My approach in this thesis is
indebted crucially to the works of Foucault, Derrida, Said, and their impact on subsequent
scholarship. But if these authors have taught me to perceive and find the outside of discourses,
they were, for many reasons, not concerned about making coherent accounts from the discursive
outsides. The movement towards coherence in this thesis is very much influenced by how Wu
describes his study of the Cultural Revolution: as both an attempt to and being motivated by the
search for logical content amidst narrated irrationality.52 Wu’s work also models another aspect
of this thesis, which is the turning to PRC history as a way to rethink elements of the closer
present.
Railways as method and site
While my thesis centers the topics of socialist industrialization and Western discourses on state
socialist failure, I spend a substantial amount of time discussing aspects of China’s pre-1949
history. This historical context provides ways to look outside of dominant Western discourses on
the early PRC; it points therefore to the realities of early PRC development. My discussions of
Chinese history are often anchored in the structures and operations of the nation’s railways. In
the next and final part of this section on Topics and questions, I turn to these railways. I will
briefly discuss some aspects of these infrastructures. Chinese railways form the central object in
my study—they link together its different elements. These railways play a set of related roles in
this thesis. Chinese railways constitute a research topic, a method for studying socialist
industrialization and surrounding discourses, and finally, a site that makes visible the operations
of transnational history.
52 Wu, The Cultural Revolution at the Margins, 2014, 2–3, 8–9.
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2.3 Chinese railways: As topic, method, and site
In the beginning stages of my research, I read broadly about plans, structures, and processes
related to Chinese railways. I read both English- and Chinese-language studies of Chinese
railways. This set of Chinese-language literature proved much more bounded and manageable
than Chinese-language writing on the early PRC economy. I did not attempt to enter the broader
topic of the early PRC economy through writing in both languages.
My preliminary survey of research on Chinese railways covered the following areas: the
geographical distribution of Chinese railways;53 histories of Chinese railway construction and
operations;54 the role of imperialism in early Chinese railway development;55 Republican era
53 Some works in the following lists straddle more than one content category. I try to group works according to the aspect of their discussions that I learned the most from. Dylan Brady, “Forging the Nation through Rails: Transportation Infrastructure and the Emergence of Chinese Nationalism” (MA Thesis, University of Oregon, 2013); Chi-Keung Leung, China, Railway Patterns and National Goals (Chicago: University of Chicago Press, 1980); Cheng Lin, The Chinese Railways: A Historical Survey (China United Press, 1935); Qikun Zhang, “浅谈中国铁路发展 [An Overview of Chinese Railway Development]” (Beijing Jiaotong University, 2016). 54 Mongton Chih Hsu, Railway Problems in China (New York: AMS Press, 1968); Jin Shixuan, 铁路史话 [A brief history of Chinese railways] (中华书局, 1965); C W Kinder, “Railways and Colleries of North China,” Minutes of the Proceedings of the Institution of Civil Engineers 103, no. 1891 (January 1, 1891): 278–306; Percy Horace Braund Kent, Railway Enterprise in China: An Account of Its Origin and Development (E. Arnold, 1907); Norman Miners, “Building The Kowloon-Canton-Hankow Railway,” Journal of the Royal Asiatic Society Hong Kong Branch 46 (2006): 5–24; Edward Hulme Rigby and William Orr Leitch, “Railway Construction in North China,” Minutes of the Proceedings of the Institution of Civil Engineers 160, no. 1905 (1905): 271–314; William Barclay Parsons, An American Engineer in China (McClure, Phillips & Company, 1900); Harold Stringer, The Chinese Railway System (Shanghai, 1922); H. Stringer, “Railway Economics for China,” The Far-Eastern Review XXV, no. 7 (July 1929): 300–301; Yonggang Yang, 中国近代铁路史 [History of Chinese Railways in the Modern Period], (Shanghai: 新华书店上海发行所, 1997). 55 Clarence Baldwin Davis, “Railway Imperialism in China, 1895-1939,” in Railway Imperialism, ed. Clarence Baldwin Davis, Kenneth E. Wilburn, and Ronald Edward Robinson (Greenwood Press, 1991), 155–74; Bruce Elleman and Stephen Kotkin, Manchurian Railways and the Opening of China: An International History (M. E. Sharpe, 2015); Ralph William Huenemann, The Dragon and the Iron Horse: The Economics of Railroads in China, 1876-1937 (Council on East Asian Studies, Harvard University, 1984); En-han Lee, China’s Quest for Railway Autonomy, 1904-1911: A Study of the Chinese Railway-Rights Recovery Movement (Singapore: Singapore University Press, 1977); Arthur Rosenbaum, “Railway Enterprise and Economic Development: The Case of the Imperial Railways of North China, 1900-1911,” Modern China 2, no. 2 (1976): 227–72; Jean-François Rousseau, “An Imperial Railway Failure: The Indochina—Yunnan Railway, 1898–1941,” The Journal of Transport History 35, no. 1 (June 1, 2014): 1–17; Smith, Privatized Infrastructure; E-tu Zen Sun, “The Pattern of Railway Development in China,” The Far Eastern Quarterly (Pre-1986); Ann Arbor 14, no. 2 (February 1955): 179.
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governance and operations;56 Chinese visions and plans for national railway development;57
Chinese railways and regional development;58 relationships between socialist theories and
railway development;59 early PRC plans and processes;60 recent (post-1990) railway reforms and
56 Kia-ngau Chang, China’s Struggle for Railroad Development (The John Day Company, 1943); Jui-te Chang, 中國近代鐵路事業管理的研究--政治層面的分析 1876-1937 [Railroads in Modern China: Political Aspects of Railroad Administration (1876-1937)] (Institute of Modern History, Academia Sinica, 1991); Jui-te Chang, “Technology Transfer in Modern China: The Case of Railway Enterprise (1876-1937),” Modern Asian Studies 27, no. 2 (1993): 281–96. 57 Richard Louis Edmonds, “The Legacy of Sun Yat-Sen’s Railway Plans,” The China Quarterly 111 (September 1987): 421–443; Lippit, “Development of Transportation in Communist China”; Yat-sen Sun, The International Development of China. (New York: Putnam, 1929). 58 Elisabeth Köll, “Chinese Railroads, Local Society, and Foreign Presence: The Tianjin-Pukou Line in Pre-1949 Shandong,” in Manchurian Railways and the Opening of China: An International History: An International History, ed. Bruce Elleman and Stephen Kotkin (M. E. Sharpe, 2015), 123–48; Barry Naughton, “The Third Front: Defence Industrialization in the Chinese Interior,” The China Quarterly, no. 115 (1988): 351–86; Harold Tanner, “Railways in Communist Strategy and Operations in Manchuria, 1945-48,” in Manchurian Railways and the Opening of China: An International History, ed. Bruce Elleman and Stephen Kotkin (M. E. Sharpe, 2015), 149–70; Zhu Congbin, 铁路与社会经济: 广西铁路研究 (1885-1965) [Railways and the economics of society: Research on Guangxi Railways] (合肥工业大学出版社 [Hefei University of Technology Press], 2012). 59 Beijing Railway School, 铁路经济活动分析 [An Analysis of Railway Economic Operations] (Beijing, China: 北京铁道学院 [Beijing Railway School], 1956); 马克思恩格斯列宁斯大林论交通运输业 [Marx, Engels, Lenin and Stalin on the Transportation Industry] (人民铁道出版社 [The People’s Railway Press], 1965); Bingyuan Wu et al., eds., 毛泽东哲学思想与中国铁路建设 [Mao Zedong’s Philosophical Thought and China’s Railway Construction] (Beijing, China: 文津出版社 [Wenjin Press], 1993). 60 Yung-hsin. Chao, Railways in Communist China (Kowloon, H.K.: Union Research Institute, 1956); Tongwei Liu, ed., 铁路修建史料第三集 1949-1962 [The Third Series of Historical Materials on Railway Construction, 1949-1962], vol. 第一册 [Volume one] (Beijing, China: 中国铁道出版社 [Chinese Railway Press], 1964); Tongwei Liu, ed., 铁路修建史料第四集 1963-1980 [The Fourth Series of Historical Materials on Railway Construction, 1963-1980], vol. 第一册 [Volume one] (Beijing, China: 中国铁道出版社 [Chinese Railway Press], 1991); Covell Meyskens, “Third Front Railroads and Industrial Modernity in Late Maoist China,” Twentieth-Century China 40, no. 3 (2015): 238–60; Zenglin Xu and MOR Record Compiling Department, eds., 新中国铁路五十年 1949-1999 [50 Years of New China’s Railways 1949-1999] (Beijing: 中国铁道出版社 [Chinese Railway Press], 1999); Yun ’e Peng, 第一个五年计划中的铁路建设 [Railway Construction in the First Five Year Plan] (Beijing, China: 中华全国科学技术普及协会出版 [Nation-wide society for the popularization of science and technology], 1956); Song Yongfu, ed., 中国铁路建设史 [The construction history of Chinese railways] (中国铁道出版社 [Chinese Railway Press], 2003).
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developments;61 arguments for and against railway-sector privatization;62 and discussions that
link recent developments to questions of sustainability and access.63 One large area of Chinese
railway-related research that I initially skipped over were highly technical accounts related solely
to railway science and technology, e.g. the shape and thickness of glass used for different rolling
stock, levels of acceptable sound pollution caused by railway operations, etc.
After my preliminary survey of research on Chinese railways, I narrowed in on a set of
railway-related topics that seemed best positioned to answer my questions about early PRC
economic development and surrounding Western discourses. My questions on these topics—
asked in the preceding sections—are the following: What were the objectives of early PRC
development and industrialization plans? How did these objectives relate to the ideology of
state socialism? What were relationships between plans and visions, processes of
implementation, and their results? What were intervening factors? What is meant by the
‘failure’ of state socialism? What are relationship between discourses of socialist failure—and
the actual trajectories and results of early PRC plans?
61 Zhenhua Chen and Kingsley E. Haynes, Chinese Railways in the Era of High-Speed (Emerald Group Publishing, 2015); Michael Y. Chuang and William H. A. Johnson, “‘Hop on Board’: The Importation and Future Development of High-Speed Rail (HSR) in China,” Journal of Technology Management in China 6, no. 3 (2011): 232–41; Fengjun Jin, “Transportation Development Transition in China,” Chinese Geographical Science 22, no. 3 (June 1, 2012): 319–33; Rongfang Liu, “The Role of State: High Speed Rail Development in China,” Advances in Management 8, no. 3 (March 2015): 1–16; Katrin Luger, Chinese Railways: Reform and Efficiency Improvement Opportunities (Springer Science & Business Media, 2008); Linda Tjia Yin-nor, Explaining Railway Reform in China: A Train of Property Rights Re-Arrangements (Routledge, 2015). 62 Chong-En Bai and Yingyi Qian, “Infrastructure Development in China: The Cases of Electricity, Highways, and Railways,” Journal of Comparative Economics 38, no. 1 (2010): 34–51; Ron Kopicki and Louis Thompson, “Best Methods of Railway Restructuring and Privatization” (The World Bank, August 31, 1995); OECD, “Railway Reform in China Promoting Competition: Summary and Recommendations of an OECD/DRC Seminar on Rail Reform in Beijing 28-29 January 2002,” January 2002, http://www.oecd.org/regreform/sectors/34566769.pdf; Russell Pittman, “Chinese Railway Reform and Competition: Lessons from the Experience in Other Countries,” Journal of Transport Economics and Policy 38, no. 2 (2004): 309–32; World Bank, “Tracks from the Past, Transport for the Future: China’s Railway Industry 1990-2008 and Its Future Plans and Possibilities” (The World Bank, May 1, 2009); Hong Yu, “Railway Sector Reform in China: Controversy and Problems” 24, no. 96 (November 2, 2015): 1070–91. 63 Xueming Chen, “A Sustainability Analysis on the Wuhan-Guangzhou High-Speed Railway in China,” International Journal of Sustainable Transportation 9, no. 5 (July 4, 2015): 348–63; Jingjuan Jiao, Jiaoe Wang, and Michael Dunford, “Impacts on Accessibility of China’s Present and Future HSR Network,” Journal of Transport Geography, January 1, 2014; Shiwei Lu, “Impacts of High-Speed Rails on the Accessibility Inequality of Railway Network in China,” 2014 22nd International Conference on Geoinformatics, June 1, 2014, 1–5; Jiaoe Wang et al., “Spatiotemporal Evolution of China’s Railway Network in the 20th Century: An Accessibility Approach,” Transportation Research Part A 43, no. 8 (2009): 765–78; James Jixian Wang, Jiang Xu, and Jianfeng He, “Spatial Impacts of High-Speed Railways in China: A Total-Travel-Time Approach,” Environment and Planning A 45, no. 9 (September 1, 2013): 2261–80.
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In order to track these questions and potential answers through the operations of the
Chinese railway system, I narrowed my railway-related investigation to the following set of
topics. These were: (1) relationships between imperialism and the forms and functions of pre-
and early-PRC railways; (2) the role of railways in socialist theories and early PRC development
plans; (3) railway sector contributions to processes of early PRC development and
industrialization; and (4) plans, processes, and results of railway sector development in the early
PRC. I pursued each of the above railway-related topic through a set of smaller questions.
Examples of these smaller questions are: What railways were constructed—and where—during
the Qing, Republican, and early PRC periods? What developments were planned for the railway
sector during the first three Five Year Plans? What was transported by the railway system in the
early PRC and to and from where? What were major changes to the structures and operations of
the railway sector in the early PRC?
I do not ultimately aim to engage in a set of scholarly discussions specific to Chinese
railways. But in the course of conducting research, it was important for me to try to comprehend
the entire system as a whole, including how the different components work(ed) together.
Otherwise it may be tempting to read into and draw significance from one element of the railway
sector without placing it into how the overall system functions (e.g. the significance of military
presence in the early PRC railway sector). My approach here is informed by that of researchers
who track and linger on the internal logic and operations of technical systems; this lingering
often produces new ways of understanding larger political narratives and processes. This
approach is indebted to but also departs from dominant paradigms in Science and Technology
Studies, which tend to emphasize—and stop at—the key insight that scientific and technical
processes are socially constructed.64
Scholars such as Collier, Mukerji, and Swyngedouw have begun their work by attending
to technical aspects, in their respective studies of systems in post-Soviet Russia, early modern
France, and late modern Spain.65 An approach grounded in the exploration of technical and
64 Latour is perhaps the seminal author in this genre. See for example: Bruno Latour and Steve Woolgar, Laboratory Life: The Construction of Scientific Facts (Princeton University Press, 1979). 65 Stephen J. Collier, Post-Soviet Social: Neoliberalism, Social Modernity, Biopolitics (Princeton University Press, 2011); Chandra Mukerji, Impossible Engineering: Technology and Territoriality on the Canal Du Midi (Princeton
22
specialized systems is particularly suited to researching the early PRC, given the state’s
commitment to—and experiments in—producing systems suited to alternative (Third World)
forms of modernity. Studies of the early PRC that have employed this approach include Boland’s
on waste-water management, Ghosh’s on statistical systems, Lu’s on the spatial planning of
work units, and Schmaltzer’s on scientific farming.66
In the above paragraphs, I have positioned Chinese railways as a research topic (or a set
of topics), and as method (or a kind of approach for researching other questions). Chinese
railways take on a third function in my thesis. This system is also used as a kind of site: one that
registers, displays, and carries forward the effects of transnational history. In Chapter 3, I explore
the mutual making of Chinese history and the nation’s railway system. This chapter adds to the
discussion in Chapter 2 about Western imperialism and Chinese plans, and establishes the
context and background for Chapter 4, which concerns the co-production of state plans and
railway sector development in the early PRC.
3. Methods and sources As discussed in the Topics and questions section, a key method in my project consists of
studying aspects of the Chinese railway system in order to answer larger questions about
processes of socialist industrialization in the early PRC and surrounding Western discourses.
Consequently, I spent a large portion of my research process learning about Chinese railways.
This research process spanned over a year and a half; most of it happened in three locations:
Toronto, Beijing, and Hong Kong. I primarily learned through two sets of activities: reading
books and documents, and conducting interviews.
University Press, 2009); Erik Swyngedouw, Liquid Power: Contested Hydro-Modernities in Twentieth-Century Spain (MIT Press, 2015). 66 Alana Boland, “From Factory to Field: Waste-Water Irrigation in China’s Early Socialist Cities,” Global Environment 9, no. 1 (April 1, 2016): 219–39; Arunabh Ghosh, “Making It Count: Statistics and State-Society Relations in the Early People’s Republic of China, 1949-1959” (PhD thesis, Columbia University, 2014); Duanfang Lu, Remaking Chinese Urban Form: Modernity, Scarcity and Space, 1949-2005 (Taylor & Francis, 2006); Sigrid Schmalzer, Red Revolution, Green Revolution: Scientific Farming in Socialist China (University of Chicago Press, 2016).
23
3.1 Reading and textual analysis
In my thesis, I mainly use evidence gathered from books and other primarily textual documents
(e.g. newspaper articles, reports, lists, budgets). I used methods of reading, accompanied by
document and textual analysis, to gather information from these sources. I approached books and
documents with my overarching research questions (e.g. What were the objective of early PRC
plans? What were their results? How did early PRC development objectives relate to the state
ideology of socialism?). I was also armed with sets of more specific questions that resulted from
decomposing larger inquiries (e.g. What was planned for the railway sector in the PRC’s FFYP?
What was transported by the early PRC railway sector? What was socialist about railway sector
operations, according to early PRC accounts?).
To guide my reading and keep track of the information learned, I made Microsoft Word
documents for each topic (e.g. socialist industrialization). Each topic document had sections
corresponding to specific research questions (e.g. what were the objectives of early PRC plans?).
The section for each research question was broken down into a set of sub-sections, each
corresponding to a more specific question. I took reading notes using these documents. Finally, I
read texts for both what is said (e.g. facts, policies, explanations), and how it is said—including
what is unsaid. The later elements can point to the presence of assumptions, contexts, particular
political strategies, etc.
In this and the next paragraph, I discuss how I gained access to the books and documents
under study, and what kind of texts they are. I began my research in the beginning of 2016, with
collections in the University of Toronto library system, including its East Asian Library. I then
spent from September 2016 to February 2017 as a visiting student based in the School of Traffic
and Transportation at Beijing Jiaotong University (BJTU). BJTU was first founded in 1909, as
the Beijing Railway Management Institute (北京铁路管理传习所). While in Beijing, I accessed
collections held at China’s National Library, several university libraries, the BJTU archives, and
the Beijing Municipal Archives (BMA). Through my campus and National Library accounts, I
accessed online collections of Chinese newspapers and research articles. I also perused used
book stores and purchased several volumes. In addition, I spent over a week in fall 2016 at the
24
Chinese University of Hong Kong (CUHK). The University Services Centre for China Studies at
CUHK hosts an extensive and curated collection of books and other sources on the early PRC.
After returning to Toronto in February 2017, I made extensive use of UofT’s interlibrary loan
system, in order to access collections held in other North American university libraries.
As described earlier, I began my railway-related studies by reading English- and Chinese-
language research on Chinese railways. The majority of these scholarly publications were found
through the UofT library system, the National Library, and the USC at CUHK. Once I narrowed
my focus to specific aspects of the Chinese railway system (and had produced correspondingly
specific sets of questions), I turned to primary sources, or what came close. These included
technical and specialist manuals (e.g. on how to make accounting calculations, how to make a
procurement plan, steps involved in surveying railway routes, etc.); meeting proceedings and
records; policy directives from central and local governments; and collected volumes on railway-
sector policies, practices, and statistics (e.g. volumes on PRC railway statistics, volumes on
historical materials related to PRC railway construction, annals of the different railway bureaus).
These items were found in archives, and in collections held by the National Library, various
university libraries, and at the USC at CUHK. A couple of North American universities hold the
annals of several Chinese railway bureaus. While researching specific aspects of the Chinese
railway system, I also searched through and read newspaper articles and issues of specialist
journals published during the early PRC (e.g. Chinese Railways 中国铁路, Bulletin of Surveying
and Mapping 测绘通报).
I now turn to how I interacted with and used textual sources. My reading materials ranged
widely in their distance and relationships to early PRC events. Introductory guides to the
research process often distinguish between primary sources, which constitute direct and first-
hand record of events (e.g. statistics, memoirs, reports), and secondary sources, which
incorporate interpretation and reorganization (e.g. scholarly works, some newspaper articles).67
This simple distinction is of course complicated by how society constructs what becomes
perceived and recorded as events and information. Statistics, for instance, are generally
67 See for example: Whitney Kemble, “Research Guides: Finding Primary Sources: Primary & Secondary Sources Explained,” accessed September 27, 2017, http://guides.library.utoronto.ca/c.php?g=250552&p=1671086.
25
considered to be primary sources. Rose has however shown that Western statistical facts (e.g.
population and national income) became constructed in the very process of their collection.68
Lam has traced how statistical constructions evolved in China during the first half of the
twentieth century; Ghosh continues this study into the early PRC period.69
Awareness of the constructed nature of data is crucial to the research process; a key
theme in this thesis does, after all, revolve around the construction of knowledge. It can however
still be useful to divide sources into more direct vs. more interpreted accounts, while
acknowledging that this distinction is contingent upon certain politically-produced realities.
While researching, I read and gathered information from sources ranging from more direct
records (e.g. budgets, policy directives, reports, speeches, conference proceedings, statistics), to
intermediate accounts (e.g. technical and specialist manuals, newspaper articles, compilations of
records), to more interpreted accounts (e.g. scholarly works). The texts that I read also ranged in
languages and dates. For purposes of researching socialist industrialization and railway sector
development in the early PRC, more direct accounts would be those in Chinese and produced in
1949-1970. More interpreted accounts would be those in other languages (e.g. English, French),
and produced after 1980.
The above process of sorting has been done retroactively, in order to communicate the
scope and range of my reading. During the research process, I did not approach texts with pre-set
ideas about what order (primary or secondary) of information they contained, or how their
information was to be accordingly used. Reading widely made it possible for me to compare and
synthesize across different kinds of sources. Flick refers to this process—of using multiple forms
of data—as triangulation. Triangulation suggests verification when information from two or
more sources agree; it also calls for attention to context, especially in cases of disagreements.70
Important points in the thesis (e.g. that early PRC leaders prioritized economic efficiency; that
economic accounting systems were key to and implemented around the time of the PRC’s First
68 Nikolas Rose, “Governing by Numbers: Figuring out Democracy,” Accounting, Organizations and Society 16, no. 7 (January 1, 1991): 673–92. 69 Tong Lam, A Passion for Facts: Social Surveys and the Construction of the Chinese Nation-State, 1900–1949 (University of California Press, 2011); Ghosh, “Making It Count: Statistics and State-Society Relations in the Early People’s Republic of China, 1949-1959,” 2014. 70 Uwe Flick, Managing Quality in Qualitative Research (SAGE, 2008), 37–53.
26
Five Year Plan) were generally arrived at after reading similar information across a range of
sources (e.g. multiple books; newspaper article and specialist manual and compilation of
records; etc.). In addition to using textual sources, I also conducted a small number of interviews.
I discuss the interview process in more detail in the next section. For now, it suffices to say that I
had initially incorporated interviews in order to add another layer to the triangulation process.
The interviews served this purpose and more.
During the research and writing process, I have been quite careful around questions of
data reliability and use. Conventional distinctions drawn between primary and secondary
research suggest that the most caution should be applied to contemporary Western writing about
the early PRC. In the writing of my thesis, I have attempted to follow this convention. In the
earlier research process however, it was likely the early PRC sources that had received
disproportionate scrutiny. These texts were often in traditional characters or a mix of traditional
and simplified, which required that I pore over them for a length of time. Once deciphered, their
grammar structures and meaning were quite strange, even—foreign. It took reading across many
accounts and conversations to understand and find credibility in these texts.
3.2 Interviews
I conducted seven interviews in Beijing, involving nine people. One interview was conducted via
telephone. Interviewees were recruited and interviews conducted according to a set of procedures
that received prior approval from UofT’s Research Ethics Board. Interviewees included former
and current railway researchers, archivists, and those who had been employed in the PRC
railway sector. Interviews ranged from an hour to four hours. I took notes during the interviews.
Most interviews conducted in person were also recorded with the consent of participants, which
has allowed me to revisit what was said.
I conducted interviews in order to contextualize and complement information gained
from reading books and documents. My research relied primarily on textual sources. Documents
are generally easier to access than people, contain more information than could be stored in
memory, and are not distorted by memory. However, books and documents can contain silences,
half-explanations, and puzzling logical short-cuts that are particular to their time or context.
27
Interviews, especially with researchers and archivists, often took the form of teaching sessions (
请教). I approached the interviews with a list of question produced through my readings. These
questions were additionally specific to the expertise and experiences of each set of interviewees.
The interviews were some of the best parts of my research experience. Participants were
incredibly generous with their knowledge and time. They were also encouraging and seemed
quite willing to answer my questions, even though my project was somewhat odd. My research
fell into a bit of a crevice between different knowledge fields. Historians working in the PRC
today tend to study subjects related to politics, culture, philosophy, etc. Railway researchers, on
the other hand, are focused on solving current and practical problems.
One important exception to the above is Professor Zhu Congbin in the Department of
History at Suzhou University. In 2012, Prof. Zhu published Railways and the economics of
society—research on Guangxi railways (1885-1965) (铁路与社会经济——广西铁路研究
(1885-1965)). The focus and approach of Prof. Zhu and his students are somewhat different than
mine. But what really prevented fruitful learning from them was my location in Beijing.
Fortunately, another scholar keenly interested in Chinese railway histories was Professor Han
Baoming in the School of Traffic and Transportation at Beijing Jiaotong University. Prof. Han
was my liaison and supervising teacher at BJTU. His academic research focuses on resolving
logistical issues in the contemporary Chinese railway system (e.g. modelling optimal freight
flow, assessing station design, analyzing bottleneck issues). Prof. Han however also had an
‘extracurricular’ interest in railway histories, and was in the past the Chief Librarian for the
BJTU library system, which hosts an extensive collection of documents related to Chinese
railways. Needless to say, Prof. Han was immensely helpful.
So it was not the case that my research received no interest or understanding ‘in the
field’. But I definitely had to navigate impressions of its ‘oddness’ during chats and interviews.
Almost all interviewees asked me, directly or more subtly, why I was interested in railway
development during such a ‘backwards’ (落后) time in Chinese history. I got the sense that this
focus was disconcerting, perhaps especially so because I write in English and primarily for an
audience outside of China. One interviewee—who was among the most generous with their
knowledge and time—assumed in the beginning that the topic was assigned to me by my
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research supervisor in Canada. Interviewees and other people asked me: Why did I not instead
focus on impressive recent developments in China’s railway system? In the short period since
2002, China has constructed what has become the world’s largest high-speed rail network.71
Additionally, it was almost a non-sequitur to ask about the relationship between socialist
ideology and railway development. It is my impression that for many, if not the majority, of
people in China, socialism is fundamentally conceived as a system of development and economic
progress (社会主义发展). It therefore made no sense to ask about the relationship of socialism
to development, or how the state socialist ideology shaped development trajectories in unique
ways. The idea that state socialism is incompatible with economic progress or development—an
idea that is almost unquestioned in the contemporary West—literally makes no sense in China.
Interviews were therefore an occasion where I grappled with difference, contexts, and
incommensurability. How could I, having received the majority (post-age 7) of my education in
the West, know something about China—and in a way that does justice to how this information
is known and understood by those who are more intimately acquainted with the Chinese context?
At the same time, I cannot take their knowledge as my knowledge, and assume their positionality
and views. Growing up in the West has given me—for better or for worse—a purchase on
Western discourses. Questions and information (e.g. about the dynamics of socialist
industrialization) that might seem crucial to me might not spark the same interest for the people
that I converse with in China; these bits might be passed over as axiomatic or meaningless. This
(perhaps initial) reaction does not necessarily mean that these questions are in fact meaningless.
Awkward moments should of course not be taken out of context. Most conversations that
I had in Beijing were productive and illuminating. During interviews, I mostly felt that I and the
other party ‘got’ where each other came from, or at least as much as possible. But this process
demonstrated clearly to me that, as the interviewees knew, knowledge is not inert. Knowledge
does not merely exist ‘in the field’, awaiting its discovery and processing.72 Continuing
71 Virginia Lau, “Record Breaker: China’s Incredible North-South High-Speed Train Line Plan,” CNN Travel, January 8, 2015, http://www.cnn.com/travel/article/china-high-speed-north-south-rail/index.html. 72 Authors from a range of disciplines and theoretical perspectives have written about how power shapes the research process, especially across axes of difference. Many of these accounts also suggest or model thoughtful ways of engaging in research. Ones that I am probably the most influenced by include: Pierre Bourdieu, “Participant
29
structures of Western power means that knowledge will be taken and abstracted from Chinese
context to fit Western narratives, regardless of how complicated it is to understand what these
pieces of information actually mean. The interviewing process therefore asked me to hold my
research in ongoing tension with larger questions about what it meant to be doing English-
language research about China.
While the interviews were crucial, there are only a couple of places in my thesis where I
cite information derived from interviews. A large part of the reason is because something close
to 80% of what I learned while conducting research did not make it into this thesis. Another part
of the reason is because interviewees often helped me by explaining processes that I had read bits
about, and by pointing me to other textual sources. The people that I interviewed also sometimes
framed events and processes in a way that changed and shaped how I thought about these after.
These moments came from, for instance, interviewee discussions about the roles and functions of
different kinds of post-secondary education in the Chinese context; about how the availability of
liquid capital shaped patterns of construction stoppage and ‘waste’; and about relationships
between work, discipline, and socialism.
Sometimes these moments came from conversations that were not interviews. One that
shaped how I thought about relationships between the early PRC state apparatus and projects of
economic development came from a conversation with my father, while we were driving through
upstate New York. The conversation was in Chinese. My father worked in a factory in China’s
interior, before applying to university at the close of the Cultural Revolution. I had asked him
about the roles of ganbu (干部, usually translated as ‘cadre’) in industrial workplaces and their
relationship to party politics. My father described a set of fairly routine and useful administrative
functions. I was confused. English-language literature generally connect the presence of ganbu to
Objectivation,” The Journal of the Royal Anthropological Institute 9, no. 2 (2003): 281–94; Michael Jackson, “Whose Human Rights? Suffering and Reconstruction in Post-War Sierra Leone,” Sites: A Journal of Social Anthropology and Cultural Studies 2, no. 2 (2005): 141–59; bell hooks, “Marginality as Site of Resistance,” in Out There: Marginalization and Contemporary Cultures, ed. Russell Ferguson et al. (Cambridge, MA: MIT Press, 1990), 341–43; Laura Nader, “Up the Anthropologist: Perspectives Gained from Studying Up.,” 1972; Linda Tuhiwai Smith, Decolonizing Methodologies: Research and Indigenous Peoples (Zed Books, 1999); Kamala Visweswaran, Fictions of Feminist Ethnography (University of Minnesota Press, 1994).
30
political control and reproduction—and not the basic functioning of workplaces.73 I asked what
the English-language equivalent of ganbu was; my father paused and finally settled on
‘manager’. He knew that the usual translation gives ‘cadre’.
Most moments of these kinds of frame change are not recorded in my thesis. Some are
more applicable to arguments that I toyed with and discarded before starting to write. But
interviews and conversations shaped the very dynamics of how I approached my topics, how I
understood them, and how I came to write about them.
4. Thesis structure and content
In the following section, I outline the structure and contents of this thesis. I first define and
contextualize ‘efficiency’, a concept that links together early PRC concerns with what is
allegedly at stake for critics of state socialism economies. In the second part of this section, I set
out the main argument of this thesis. I position each of the body chapters (Chapters 2, 3, and 4)
in relation to the main argument, and briefly describe the content covered in each chapter.
4.1 A key concept: On efficiency
What is efficiency? Is it important? To whom, and why? It is instructive here to turn to the
Austrian economist Mises, the first critic of socialism’s alleged irrationality and inefficiency, for
what he meant by ‘efficiency’. In Mises’s account, the economic efficiency of capitalism rests on
private ownership. All economic interactions proceed by exchange, which gives rise to a system
of exchange values, or prices. It is prices that make possible rational calculations and thus the
73 See for example: Harry. Harding, Organizing China : The Problem of Bureaucracy, 1949-1976 (Stanford, Calif.: Stanford University Press, 1981), 28–31; Hong Yung Lee, From Revolutionary Cadres to Party Technocrats in Socialist China (University of California Press, 1991), 5–12; Maurice Meisner, Mao’s China and After: A History of the People’s Republic, Third Edition (Simon and Schuster, 1999), 245–76.
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“economic use of available resources”.74 Bracketing for the moment that Mises’s conception of
capitalism (pure exchange) can only exist in a utopia where every person has equal sociopolitical
power and ability, the end goal of the system—and what is touted as an efficiency only
achievable by capitalism—seems to be the “economic use of available resources.”
I think that if we were to further define the “economic use of available resources” as
maximizing the desired output for a given amount of input (resources, materials, labour, time,
etc.), it would not venture too far from how Mises used the phrase. This is also the definition of
economic efficiency provided by Weber, who had, shortly after Mises, also written about the
inefficiencies of socialist economic systems.75 But it is important to note that for Mises, planning
itself is socialist—and socialism entails planning.76 If a planned economic system were to
achieve the maximization of output for a given amount of input, this process would still be
irrational—because planning itself is irrational. Mises would find it absurd the attempt to define
‘efficiency’ on its own, separate from capitalism. In the rest of the thesis, there is sometimes the
conflation of ‘socialism’ and ‘planning’ (e.g. socialist economy; planned economy) in both my
writing and the quotes pulled from others. This is because this conflation has been quite common
to Western discussions of state socialism.
To foreground efficiency presumes an assumption of scarcity. Mises is concerned that
socialism “will squander the scarce factors of production both material and human”.77 Marx, on
the other hand, had been less concerned. The revolution (will) happens at a time (and place) with
the full development of the forces of production, when plenty abound.78 Lu—in her study of
post-1949 spatial planning in the PRC—points out that Marxists tend to conceive of scarcity as
74 Hayek, Frederich. “The Nature and History of the Problem.” In Collectivist Economic Planning: Critical Studies on the Possibilities of Socialism, edited by Frederich Hayek, 1–40 (Ludwig von Mises Institute, 1967), 26, 32-37 (quote on p. 32); Mises (1967[1920]), 92-101. 75 Andors discuses Weberian efficiency: Stephen Andors, China’s Industrial Revolution: Politics, Planning, and Management, 1949 to the Present (New York: Pantheon Books, 1977), 252. 76 Ludwig Von Mises, Socialism: An Economic and Sociological Analysis (Yale University Press, 1951), 296. 77 Ibid., 585. 78 Marx wrote, for instance, that “No social order is ever destroyed before all the productive forces for which it is sufficient have been developed” (A Contribution to the Critique of Political Economy (C. H. Kerr, 1904), 12–13). Here Marx is saying that the transition from capitalism to socialism will only occur after the full development of productive forces in capitalism.
32
being politically produced; the result of unequal distribution.79 Lu argues that scarcity had
mattered; it had been an important material and psychological condition that shaped post-1949
developments. Lu attributes conditions of scarcity to the legacies of imperialism, to Western
blockade and embargo against China since post-1950, and to the PRC’s programs for
industrialization and modernization.80
Scarcity had been a ‘real’ issue in the PRC precisely because both the concept and
condition had been politically produced—through the workings of the world economic system.
That national scarcity had been of crucial consideration in the PRC state’s development choices
does not figure into the accounts of most Western scholars. This silence is due in part to how
erasing colonialism erases, to an extent, China’s deprivation. Also key here is how Western ideas
about socialism tend to be tied to Marx’s vision, which presume an already industrialized society
where scarcity ‘matters’ less. But conditions of scarcity are precisely what drew PRC leaders to
the route of socialist industrialization.
State socialism suggested the possibility of a collective project: that the PRC’s population
could be united in a coordinated effort to achieve national industrialization and economic
growth. A domestic capitalist system had been rejected not only for the system’s tendency
towards inequality and domination, but also for how it was perceived to disperse and make
anarchic the exertion of effort.81 It is important to note that the PRC’s leaders were perhaps even
more concerned with efficiency than Mises, and their solution had been state socialism. A 1963
editorial in the People’s Daily puts it thus: “the running of enterprises with industry and thrift is
not a question of method but of policy. It is not a question of management, but of political
79 Lu, Remaking Chinese Urban Form, 2006, 7. 80 Ibid., 8–9. 81 Economics-related literature in the early PRC often discuss the comparative efficiency of socialism. This topic is sometimes accompanied by further discussion on how to separate economic methods and techniques (e.g. calculations) from how they become applied in capitalist systems. See for example: Beijing Railway School, 铁路经济活动分析 [An Analysis of Railway Economic Operations]; Ying Fu, “为什么苏联工业发展如此迅速? [Why has industry in the Soviet Union developed so quickly?],” 世界知识 [World Affairs], no. 47 (1952): 9–11; Jiafeng Ning, “社会主义企业中流动资金的组织和计划工作 [The organization of liquid funds and planning work in socialist enterprises],” 中国金融 [China Finance], no. 12 (1953): 1–4; Peixin Yang, “第一个五年计划的资金积累问题 [The question of capital accumulation in the First Five Year Plan],” 经济研究 [Economics Research], no. 04 (1955): 12–35; Daijie Zhu, 铁路材料技术供应计划 [Plans for Supplying Railway Materials and Technology] (Beijing, China: 人民铁道出版社 [The People’s Railway Press], 1957).
33
orientation.”82 In other words, the pursuit of economic efficiency was at the core of proper
political practice; to be efficient was at the very heart of what it meant to be socialist.
4.2 The main argument in three chapters
The subsequent chapters of this thesis take as their starting point the set of discourses about
‘socialist inefficiency’ and the consequent failure of state socialist projects. I discuss the logic
and processes of socialist industrialization in the early PRC in relation to—and after accounting
for—Western discourses about the early PRC economy. As noted previously, discourses about
the economic deficiencies of state socialist (or centrally planned) economies revolve around
three themes: (1) that planners had been idiosyncratic and produced irrational plans; (2) that
resource allocation had been inefficient due to the absence of economic mechanisms; and (3) that
economic planning produces the waste of resources, materials, and labour. Chapter 2 in this
thesis is primarily concerned with the first theme, while Chapter 4 addresses the second and
third. Chapter 3 provides context to set up the discussion in Chapter 4; it also bridges the first
and second halves of the thesis. I provide brief descriptions of each chapter in the paragraphs
below.
In Chapter 2, I argue that ideas about ‘irrational’ socialist plans and planners are
produced through and reproduce the erasure of Western imperialism. I first discuss how
contemporary Western accounts of the PRC are often predicated on the erasure (or exclusion) of
the nation’s colonized history. I then present some aspects of this excluded history—I highlight
in particular the economic operations and impacts of imperialism on China. After restoring
historical and material contexts to early PRC state decisions, I proceed to locate and explicate
forms of logic operating through the PRC’s First Five Year Plan (FFYP). I discuss the FFYP in
conversation with accounts that insist on its irrationality. In the final part of Chapter 2, I shift the
onus of rationality from early PRC planners to their critics. I scrutinize the internal logic (and
82 People's Daily Editorial, “发扬勤俭办企业的革命精神 实行严格的经济核算制度 [Develop the Revolutionary Spirit of Diligence and Thrift in Enterprise Operations, Rigorously Carry out the Economic Accounting System],” 人民日报 [People’s Daily], July 7, 1963, sec 1.
34
lack thereof) found in the works of Ludwig von Mises—an economist known to be the
progenitor of discourses on ‘irrational’ socialism.
Chapters 3 and 4 move away from discourses and towards events ‘on the ground’.
Chapter 3 traces the formation of the early PRC railway sector. The early system incorporated
infrastructures inherited from the Nationalist (GMD) government of late-Republican China,
approaches shaped by the CCP’s history of labour activism and war-time experiences, and the
results of learning from Soviet railway operations. Interactions between the USSR, GMD, and
CCP also compelled the Chinese Communists to innovate a new approach to projects of
industrialization, encapsulated in the idea of the ‘People’s Railway’. The grounds covered in
Chapter 3 provide the context and background for the events and processes later discussed in
Chapter 4.
Chapter 4 focuses on the mechanisms of early PRC state planning and their
implementation in the state railway sector. I begin with an account of the state planning process
in the early PRC. I use evidence from this process to challenge the second and third sets of ideas
about ‘irrational’ socialism, which revolve around its alleged lack of economic mechanisms,
inefficiency of resource allocation, and corresponding waste. In the last part of this chapter, I
turn to the local realizations of central state plans. I trace the implementation of the economic
accounting system in railway-sector workplaces. This system functioned as a ‘central link’ that
connected state plans to local production. The unfolding of state plans in the early PRC
highlight, once again, the kinds of realities existing outside of Western discourses on ‘irrational’
socialism. Against the backdrop of events discussed in Chapters 3 and 4, I also consider a set of
questions about what was ‘produced’ through the early PRC’s budding state socialist economy. I
am curious in particular about how the new system reshaped what it meant to be a human person
(subject) in the Chinese context. This later set of questions can only be conceived and asked—
rather than engulfed and distorted—when imperialist discourses about state socialism are first
identified and held in their place.
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Chapter II. The Red passion for economizing, part one: The erased logic of plans
1. Introduction In Chapter 1, I identified a set of discourses centered on the failure of historically-existing state
socialist projects. These discussions link the failure of socialism to the economic inefficiency (or
irrationality) of the state planned economy. As discussed previously, discourses about socialist
inefficiency include three sets of ideas: (1) that planners had been idiosyncratic and produced
irrational plans; (2) that resource allocation had been inefficient due to the absence of economic
mechanisms; and (3) that economic planning produces the waste of resources, materials, and
labour. This chapter is primarily concerned with the first set of ideas, while the next chapter
(Chapter 4) more substantially addresses the second and third sets.
In this chapter, I argue that ideas about ‘irrational’ socialist plans and planners are
produced through—and reproduce—the erasure of Western imperialism. This chapter has four
subsequent sections, followed by the conclusion. In the first section, I discuss how contemporary
Western writing on the PRC is often predicated on the erasure (or exclusion) of its colonized
history. In the second section, I present some aspects of this excluded history. Having
rehabilitated the historical and geopolitical contexts of CCP and early PRC decisions, I proceed
to, in the third section of this chapter, discuss the logic of the PRC’s First Five Year Plan
(FFYP). I explore the FFYP in conversation with what has been written by a particular set of
critics: those who view state planning and planners in the early PRC as irrational. What emerges
from this exploration is that ideas about ‘irrational’ plans—in fact, the whole set of narratives
about ‘irrational’ socialism—have little to do with actual plans or processes of planning in
socialist states.
At this point, it became clear to me that if a fair understanding of socialist state planning
is the objective, it is of little use to retrieve the logic of plans and planners. These should have
never been in question. Discourses about ‘irrational’ socialism are not particularly grounded in
logic or rationality. Therefore in the fourth section of this chapter, I turn to the logic (and lack
36
thereof) of the ‘irrational’ socialism discourse itself, found in the works of its progenitor—
Ludwig von Mises. It is perhaps unsurprising that what is excluded from contemporary
discourses on ‘irrational’ socialism—which is imperialism, or the global operations of
capitalism—is precisely what was at stake for Mises.
2. Imperialism, the erased trace In her article published in 1993, Barlow shows how Cold War-era research had constructed
China anew—by distorting and removing the nation’s history of having been colonized.1 What
has been erased is now almost gone from memory. In a recent survey of the China field,
Vukovich finds that most English-language accounts assume a China that is abstracted from its
colonial and revolutionary history.2 Peck and Esherick, writing during the Vietnam War, had
called attention to the ongoing rhetorical excision. The term ‘imperialism’ still held a certain
logic at the time. To counter its logic, Western scholars rewrote operations of imperialism as
mutual exchange—and as assistance offered to China by the West at a time when the former had
been confronted with the inevitable course of (modernizing) history.3
The erasure of China’s colonial history shapes contemporary Western accounts of
Chinese state socialism and its political and economic institutions. For Nolan and Ash, Mao and
his “idiosyncratic ideas” had determined the PRC’s early course of economic development.4
Here Ash and Nolan express a view common to China scholarship—that the PRC’s adoption of
socialist institutions was an odd—‘ideological’ rather than rational—choice. Naughton, for
instance, characterizes the PRC’s Mao-era institutions as “peculiar”. For Naughton, the early
PRC had been an “outlier” among both socialist and developing countries. Developing countries
do not have socialist institutions; socialist countries were not plagued by “the problems of a poor,
1 Tani E. Barlow, “Colonialism’s Career in Postwar China Studies,” Positions 1, no. 1 (March 20, 1993): 224–67. 2 Daniel Vukovich, China and Orientalism: Western Knowledge Production and the PRC (Routledge, 2013), 5–6. 3 Joseph Esherick, “Harvard on China: The Apologetics of Imperialism,” Bulletin of Concerned Asian Scholars 4, no. 19 (1972): 9–16; James Peck, “The Roots of Rhetoric: The Professional Ideology of America’s China Watchers,” Bulletin of Concerned Asian Scholars 2, no. 1 (1969): 59–69. 4 Nolan and Ash, “China’s Economy on the Eve of Reform,” 1996.
37
predominantly rural economy”.5 In other words, socialism was incompatible with China’s
realities. The PRC’s choice of state socialism had been motivated by something other than
‘normal’ considerations of its Third World circumstances.
But the appeal of Marxist (or perhaps more accurately, Marxist-Leninist) programs to
Chinese reformers lay precisely in how well these ideas matched common observations and
understandings of China’s ‘Third World’ realities—and the global processes producing these
realities. Geopolitical jostling during World War I led Lenin to theorize imperialism as the global
process of capitalist exploitation by the Great Powers.6 Marxism became known to Chinese
thinkers through the actions and ideas of the Russian Bolsheviks. One of the first Marxist-
influenced Chinese language texts had been published by Li Dazhao in 1918. Li wrote about the
events of the Russian Revolution and World War I, Li extolled the strength demonstrated by
Russian workers against imperialist powers.7 Li, who became one of the founding architects of
the CCP, played a crucial role in how Marxism was understood and acted upon in China. It was
Li who had first conceptualized China as a ‘proletarian nation’.8 In the milieu of early twentieth
century China, it was not only Marxists who attributed China’s ‘Third World’ status to Western
imperialism. Sun Yat-sen, known as the father of Republican China—who had co-founded
Nationalist Party (GMD) that the CCP struggled against in the Chinese civil war—wrote
extensively about imperialism’s impact on China.9 Sun had promoted Chinese nationalism as the
antidote to imperialist domination.10 The CCP had insisted instead that the economic oppression
borne by China’s population could not be resolved by mere political or cultural empowerment.
5 Barry Naughton, The Chinese Economy: Transitions and Growth (MIT Press, 2007), 8. 6 Vladimir Ilych Lenin, Imperialism: The Highest Stage of Capitalism (International Publishers, 1937). 7 Dazhao Li, “Bolshevism 的胜利 [The Victory of Bolshevism],” in 李大钊选集 [Selected Works of Li Dazhao] (Beijing: Beijing Renmin Press, 1962), 117–18. 8 Maurice J. Meisner, Li Dazhao and the Origins of Chinese Marxism (Harvard University Press, 1967), 144. 9 Yat-sen. Sun, San Min Chu I: The Three Principles of the People, ed. L. T. Chen, trans. Frank W. Price (Shanghai: Commercial Press, 1929), 33–53. 10 Ibid., 55–76.
38
3. Materializing history: The early PRC in context In the next paragraphs, I turn to the scene that the CCP and GMD had both observed. What had
been the impact of Western imperialism on China in the late nineteenth and early twentieth
century? The account of course begins with opium. When the Qing government had resisted the
special merchandise of British traders, the British government declared war on China. The
British military—equipped with the products of heavy industry—defeated China in 1842.
Military defeat opened China to a series of unequal treaties. The first—Treaty of Nanjing—had
been signed between China and Britain in 1842. The rest of the Great Powers, including the U.S.,
France, Germany, Belgium, Russia, and Japan, soon followed Britain’s lead. In these treaties,
foreign nations had claimed rights to items such as extraterritoriality, concessions and
settlements, leased territories, favourable trade terms, and controls over certain Chinese state
organs, such as the Maritimes Custom Service.11 Many treaty terms remained in force until the
1940s.12
Western domination of China had proceeded in the absence of unified political control by
a single imperialist state. The mobilizing of this absence has been crucial to projects of erasing
China’s colonial history.13 Meanwhile, as Barlow also points out, much ado has been made about
foreign presence and excesses in the areas of extraterritoriality—the treaty ports.14 To conflate
foreign domination with the spectacular treaty ports provides cover for a particular strategy of
colonial dismissal: Western scholars have often suggested that Chinese discussions of
imperialism have little to do with its actual effects—but rather stem from the population’s
(erroneous) perception of its impacts.15 That imperialism attempts to erase itself was already
11 Jonathan D. Spence, The Search for Modern China: A Documentary Collection (Norton, 1999), 158–64. 12 Dong Wang, China’s Unequal Treaties: Narrating National History (Lexington Books, 2005), 10. 13 Barlow, “Colonialism’s Career in Postwar China Studies,” 238–47. 14 Ibid.; John K. Fairbank, Trade and Diplomacy on the China Coast: The Opening of Treaty Ports, 1842-1854, 1964; John K. Fairbank, “The Early Treaty System in the Chinese World Order,” in The Chinese World Order: Traditional China’s Foreign Relations (Harvard University Press, 1968), 257–75; Rhoads Murphey, The Treaty Ports and China’s Modernization: What Went Wrong? (University of Michigan, Center for Chinese Studies, 1970). 15 Peck points out the trope of Chinese overreaction in the works of John K. Fairbank and Joseph Levenson. Peck, “The Roots of Rhetoric: The Professional Ideology of America’s China Watchers,” 60–62. ). Nathan also reproduces this trope in his response to Peck. Andrew J. Nathan, “Imperialism’s Effects on China,” Bulletin of Concerned Asian Scholars 4, no. 19 (1972): 6; Lorenz M. Lüthi, The Sino-Soviet Split: Cold War in the Communist World (Princeton
39
noted by Chinese thinkers like Sun Yat-sen. For Sun, the main form of domination exercised by
the foreign powers had not been through flashy displays—but rather through economic actions.
Sun had argued that economic oppression is more dangerous than political oppression—“[w]hile
the latter is visible and can be recognized at once, the former is not visible and as a consequence
usually is not noticed.”16
Heeding Sun’s logic, I will point out some of imperialism’s economic impacts on China.
To begin with, China had been ordered to pay large indemnities after events such as the two
Opium Wars (1839-1842; 1856-1860), the First Sino-Japanese War (1894-1895), and the Boxer
Rebellion (1899-1901). According to treaty terms, China had paid 58 million taels (silver
dollars)—50 million to Britain, and 8 million to France—after the two Opium Wars.17 Later
indemnities grew astronomically in value. The Sino-Japanese War indemnity had been 250
million taels, while the Boxer indemnity had been 900 million taels.18 The Chinese state needed
to borrow from foreign creditors in order to pay these larger amounts, which added interest to the
amount owing. China had also borrowed from foreign creditors to finance its increasing military
and defense spending. For instance, China had armed itself with the assistance of European
creditors during the First Sino-Japanese War. Feuerwerker calculates that from 1895-1911,
China paid over 476 million taels on the principle and interest of indemnities, and over 70
million in repayment of military loans.19
In the years after the Second Opium War, China’s debt to the West had rapidly grown.
China’s increasing indebtedness evolved with growing foreign control over its state finances and
financial sector. In the 1840s, the Qing state had created China’s Maritime Customs Service in
order to increase its tax revenues—for purposes of paying off indemnities from the First Opium
War.20 Control and administration of this body—including the funds that it collected—was
University Press, 2008), 33–35; Richard Curt Kraus, The Cultural Revolution: A Very Short Introduction (Oxford University Press, 2012), 82. 16 Sun, San Min Chu I;, 37, 42–43. 17 Spence, The Search for Modern China, 181–82; Zhihong Shi, Central Government Silver Treasury: Revenue, Expenditure and Inventory Statistics, Ca. 1667-1899 (BRILL, 2016), 33. 18 Sun, San Min Chu I;, 52. 19 Albert Feuerwerker, The Chinese Economy, Ca. 1870-1911 (Ann Arbor, MI: Center for Chinese Studies, University of Michigan, 1969), 70–71. 20 Ibid., 64–65.
40
turned over to Western powers after the Second Opium War.21 Starting in the 1860s, customs
levied on foreign goods were limited to 5%, while Chinese goods were taxed at higher rates.22
The Chinese salt tax system came under similar control in 1913.23 Most banks in China in the
late Qing and early Republican periods had also been foreign-owned. Foreign banks largely
sought to make profit through speculation. When these banks invested in Chinese enterprises, it
was often in the interest of taking over.24
Foreign capitalists had set up extractive and manufacturing industries in the treaty ports
and concession areas, thereby profiting from Chinese resources and labour. Chesneaux estimates
that over 40% of Chinese urban workers had been employed by foreign enterprises in 1919.25 In
the 1930s, the Chinese-owned share of capitalization in China’s manufacturing industry had been
37%.26 Prior to the 1860s, China did not have urban industrial centers per se. Cities had mainly
served the needs of state administration and trading.27 Manufactured products—such as
ceramics, tapestry, silk, preserved foods, mined minerals—had been produced by craftsmen and
peasants in their non-farming time.28 Chinese industries, often based on Western models, had
emerged during China’s Self Strengthening Movement (1861-1895). In response to repeated
military defeats, the ‘Self Strengtheners’—largely Qing state officials and members of the
Chinese gentry—had advocated for adopting Western technology and forms of political and
economic organization. Their goal was for the nation to accrue capital and strengthen its defense
capacity.29
21 Jean Chesneaux, The Chinese Labor Movement, 1919-1927, trans. H. M. Wright (Stanford: Stanford University Press, 1968), 6; Shi, Central Government Silver Treasury, 53. 22 Nathan, “Imperialism’s Effects on China,” 3–4; Sun, San Min Chu I;, 42. 23 Chesneaux, The Chinese Labor Movement, 1919-1927., 6. 24 Esherick, “Harvard on China: The Apologetics of Imperialism,” 12. 25 Chesneaux, The Chinese Labor Movement, 1919-1927., 42. 26 Feuerwerker, The Chinese Economy, Ca. 1870-1911, 116–17. 27 Terry McGee et al., “‘Seeing like a State’: The Urbanization Project in Post-1978 China,” in China’s Urban Space: Development Under Market Socialism (Routledge, 2007), 31–33. 28 Chesneaux, The Chinese Labor Movement, 1919-1927., 11–13; Feuerwerker, The Chinese Economy, Ca. 1870-1911, 110; Kenneth Pomeranz, The Great Divergence: Europe, China, and the Making of the Modern World Economy (Princeton University Press, 2000), 86–90. 29 Leung, China, Railway Patterns and National Goals, 1980, 20–25; David Scott, China and the International System, 1840-1949: Power, Presence, and Perceptions in a Century of Humiliation (SUNY Press, 2008), 52. Also see Young for a discussion of how, in several non-Western states, modernization had been pursued in order to
41
In early twentieth century China, Western-owned enterprises had enjoyed several key advantages
over their Chinese counterparts. Chinese-owned enterprises were charged higher maritime tariffs,
and were also subject to the internal circulation tax (likin) that Western enterprises had been
exempted from.30 Chinese enterprises often had trouble accruing necessary start-up and
operating capital. Foreign banks resisted investing in Chinese enterprises; investment also came
with high rates and other consequences. When the price of silver rose on the world market in
1933, Western-owned banks in China exported over 80% of their silver holding. 25% of Chinese
textile factories in Shanghai suspended their operations due to the credit crunch. Many then sold
their operations to foreign businesses.31 In addition, much of the modern transportation and
energy sector—shipping, railways, mining—had been under foreign ownership or control.32 For
instance, foreign-owned mines had extracted 99% of pig iron, 99% of the iron core, and 76% of
coal produced in China in 1920.33 Foreign domination of the transportation and energy sectors
correlated to the high capitalization needs of these industries. As a consequence, Chinese-owned
industries often encountered high tariffs and administrative difficulties in fueling their operations
and transporting their products.34
Using data from 1921, Sun had calculated China’s annual loss to foreign powers to be at
least 1.2 billion Hong Kong dollars. Sun’s calculation includes 500 million dollars from the
annual trade deficit, 100 million dollars foreign bank operations, 100 million dollars from
foreign monopoly on transportation, 500 million dollars from the foreign occupation of land, and
more than 100 million dollars from indemnities and other kinds of special business.35 Another
source of numbers for China’s trade deficit—or the aggregate value of how much China had
been importing more than exporting—comes from Hsiao’s compilation of the pre-1949 records
of the Custom Maritime Service. Hsiao’s data shows China’s trade deficit in 1921 to be just over
defend against imperialist encroachment (Crawford Young, “Ideas of Progress in the Third World,” in Progress and Its Discontents, ed. Gabriel Abraham Almond and Marvin Chodorow (University of California Press, 1985)). 30 Esherick, “Harvard on China: The Apologetics of Imperialism,” 12. 31 Ibid.; Sun, San Min Chu I;, Part III, Lecture 4. 32 Chesneaux, The Chinese Labor Movement, 1919-1927., 10–11; Albert Feuerwerker, The Chinese Economy, 1870-1949 (Center for Chinese Studies, University of Michigan, 1995), 116–17; Sun, San Min Chu I;, Part III, Lecture 4. 33 Esherick, “Harvard on China: The Apologetics of Imperialism,” 11. 34 Chesneaux, The Chinese Labor Movement, 1919-1927., 11; Sun, San Min Chu I;, Part III, Lecture 4. 35 Sun, San Min Chu I;, 43–53.
42
320 million taels, which would convert to just over 480 million Hong Kong dollars.36 To provide
some additional numerical context: Sun’s calculated annual loss of 1.2 billion HK dollars in the
early 1920s would have been the equivalent of 600 million U.S. dollars. The average annual
expenditure of the Chinese Republican government between 1928 and 1937 had been 806
million Chinese dollars (yuan), the equivalent of 274 million U.S. dollars—or under half of
Sun’s estimated annual loss.37 In may also be worthwhile to mention that in these nine years, the
Republican government had spent on average 31.9% of its total budget on payments towards
indemnities and loans, and 42.8% of its total budget on military expenses.38
While Sun’s numbers are obviously inexact, they do give a general sense of the different
kinds of Western economic extraction at play in pre-1949 China. Sun’s numbers also do not
include certain items. One is increased military spending and losses incurred during wars. War-
related economic loss became much greater in the decade after Sun’s death, when Japan invaded
mainland China (1937-1945). Another item is the profit that Western enterprises had been
making from China. Sun and Esherick both note Republican China’s trade deficit. By 1924,
China had been importing (buying) several hundred million taels’ worth of goods than it had
been exporting (selling). But a significant amount of China’s exports—considered as bringing
payment into the nation—were in fact making profit for Western capitalists. In addition to
foreign domination of China’s energy, transportation, mining and heavy industries in Republican
China, an estimated 60% of factories producing tobacco products, 35% of factories producing
cotton products, and 50% of factories producing vegetable oils had been foreign-owned.39 In
1924, exports transported on Chinese-owned ships had made up only 35% of total exports
moving through China’s ports.40
36 Liang-lin. Hsiao, China’s Foreign Trade Statistics, 1864-1949 (Cambridge, Mass.: East Asian Research Center, 1974). The trade deficit is calculated from the trade in commodities (p. 24), and in silver and gold (p. 128). Hsiao also provides data for currency conversion (p. 192). 37 Feuerwerker, The Chinese Economy, Ca. 1870-1911, 160–61. Conversion rates are from Hsiao, China’s Foreign Trade Statistics, 1864-1949, 192–93. Records for state expenditures during the Nanjing Decades (1928-1937)—when the GMD had governed Republican China—are more complete than those from 1912-1927. The earlier period is known as the Warlord Era: conflicts between different military factions often disrupted state governance. 38 Feuerwerker, The Chinese Economy, Ca. 1870-1911, 160–61. 39 Chesneaux, The Chinese Labor Movement, 1919-1927., 30–33; Esherick, “Harvard on China: The Apologetics of Imperialism,” 12. 40 Hsiao, China’s Foreign Trade Statistics, 1864-1949, 222–23.
43
Furthermore, as Chesneaux, Esherick, and Sun all point out: the economic value extracted from
China had been increasing.41 In 1937, China had owed foreign debt on the principal value of
over 4 billion taels.42 This number is over 300 times the amount—under 11 million taels—that
had been owed in 1894.43 China’s railway-related debt had grown from under 150 thousand USD
in 1894, to approx. 150 million USD in 1911.44 This amount had again increased to 420 million
USD by 1937.45 In the railway sector, the value that China had derived from foreign loans had
decreased post-1911. The 150 million USD borrowed from 1894-1911 had produced approx.
8500 km of tracks constructed with foreign funds. The additional 270 million borrowed from
1912-1937 produced just under 7100 km of foreign-funded tracks in 1912-1948.46 In other
words, the cost of foreign-assisted railway construction had increased from 17,600 USD/km to
38,000 USD/km between 1911 and 1948.
On top of accumulating loans, China was also losing an increasing amount of money
through trade. The international trade balance had changed from a slight surplus for China of 2.5
million taels in 1864, to a deficit of 94 million in 1911, to the pre-war maximum deficit of 733
million in 1933. After the Second Sino-Japanese War, China’s trade deficit had reached the
equivalent of 4.3 billion taels in 1947.47 China’s exports were also increasingly ‘low value’, in
the eyes of the global economy. Raw materials were making up an ever-rising percentage of
China’s exports. Meanwhile, the price of raw materials had decreased in the international market
in comparison to manufactured products. Esherick calculates that in 1935, China needed to
export 160% of what it exported in 1870 in order to be able to purchase the same amount of real
goods.48
41 Chesneaux, The Chinese Labor Movement, 1919-1927., 6–7; Esherick, “Harvard on China: The Apologetics of Imperialism,” 11; Sun, San Min Chu I;, 43–60. 42 Arthur Nichols Young, China’s Nation-Building Effort, 1927-1937 (Stanford, CA: Hoover Institution Press, 1971), 140. 43 En-han Lee, China’s Quest for Railway Autonomy, 1904-1911: A Study of the Chinese Railway-Rights Recovery Movement (Singapore: Singapore University Press, 1977), 19. 44 Ibid.; Leung, China, Railway Patterns and National Goals, 1980, 44. 45 Kia-ngau Chang, China’s Struggle for Railroad Development (The John Day Company, 1943), 147–49, 170–72. 46 Leung, China, Railway Patterns and National Goals, 1980, 40, 72–73; Zhang, “浅谈中国铁路发展 [An Overview of Chinese Railway Development].” 47 Hsiao, China’s Foreign Trade Statistics, 1864-1949, 24. 48 Esherick, “Harvard on China: The Apologetics of Imperialism,” 11.
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Another point of contention in Western literature is whether foreign imperialism had actually
impacted the lives of China’s population. Nathan, for instance, posits that China’s economic
losses—though they existed—had been slight and non-consequential, only “making some
incremental contributions to [the people’s] poverty.”49 One line of inquiry into the question of
imperialism’s impact on China’s population is to investigate changing tax burdens. In
Feuerwerker’s account, he finds that the Qing state’s central collection of funds had been under
50 million taels prior to 1842. Local collection had not added much in addition.50 After 1842,
both the central government and provincial governments had increased taxes and added new
forms of taxation. By 1900, China’s central and local governments together collected an annual
sum of around 300 million taels.51 State collections again rose after 1900, due to dramatic
increases in the balance that China had owed in indemnities and loan repayment. The Qing
government had been overthrown in the Xinhai Revolution of 1911. In the half-decade before
1911, the Chinese state paid over 46 million taels annually to foreign powers, and collected from
its population an estimated annual amount of 350 million taels.52
Most historians agree that the Qing government had encountered resistance when raising
taxes. Feuerwerker comments that the state’s post-1900 collections had “only [been] possible in
the extraordinary circumstance of a de facto occupation of North China by foreign armies.”53
What had been the average distributed effects of tax increase on China’s population? Studies
suggest that China’s population had decreased significantly in the late Qing period, due to events
such as the Taiping Rebellion.54 But even assuming that population numbers (estimated to be
400 million in 1840) had remained stable over the next decades, the average tax burden on each
person in China had increased by 0.75 taels between 1842 and 1911. Most of this increase can be
49 Nathan, “Imperialism’s Effects on China,” 5. 50 Feuerwerker, The Chinese Economy, Ca. 1870-1911, 64–65. 51 Ibid., 67. 52 Feuerwerker, The Chinese Economy, 1870-1949, 1995, 80–83. 53 Feuerwerker, The Chinese Economy, Ca. 1870-1911, 70. 54 Ye Ma and Herman de Jong, “Unfolding the Turbulent Century: A Reconstruction of China’s Historical National Accounts, 1840–1912,” Review of Income and Wealth, 2017; Kent Deng, “China’s Population Expansion and Its Causes during the Qing Period, 1644–1911,” 2015; H. Li, “Population Remains Top Priority for China,” Joicfp News, no. 286 (April 1998): 1–2.
45
attributed to events after 1880.55 Common estimates of China’s GDP per capita in the 1800s
hovers around 12 taels, with little increase before 1911.56 These numbers suggest that after China
had been ‘opened’ the West, each average person in the population had seen the loss of 6+% of
their small annual income.
The above calculations provide a way to start thinking about how imperialism had
impacted the ‘average person’ in China. It is worthwhile to recall Sun’s analysis here. Sun had
argued that China’s losses through payments on loans and indemnities had constituted a small
portion—under 10%—of the nation’s overall loss. Other forms of economic extraction had more
concentrated effects on certain portions of China’s population. By the late 1800s, the import of
factory-processed cotton into China had eliminated home spinning as a source of income for
peasants in areas such as Guangdong.57 The foreign demand in tea and silk—which had made up
over 90% of China’s exports in the mid-1800s—had induced large numbers of Chinese peasants
to switch from other livelihood pursuits. These peasants had lost their income after 1910, when
Chinese tea and silk could no longer compete with products from plantations and factories.58 For
China’s population, the effects of becoming integrated into the global economy had only been
growing. Japan’s invasion of China’s mainland—beginning with Manchuria in 1931—is only the
logical extension of imperialist activities that had begun one century before.
Furthermore, the impact of foreign imperialism—and need for Chinese resistance—had
been articulated in the words and actions of all sectors of Chinese society. In the words of
Wakeman: “the rural areas in which the decline of cottage industry seemed most marked were
precisely those areas which were most antiforeign. It was almost as if the peasantry rationally
blamed their plight on foreign imports.”59 Anti-foreign sentiments and organizing had been at the
55 Feuerwerker, The Chinese Economy, Ca. 1870-1911, 78–85. 56 Ma and de Jong, “Unfolding the Turbulent Century,” 4. 57 Feuerwerker, The Chinese Economy, Ca. 1870-1911, 29; Frederic Wakeman, Strangers at the Gate: Social Disorder in South China, 1839-1861 (University of California Press, 1997), 180–88. 58 Esherick, “Harvard on China: The Apologetics of Imperialism,” 11; Chi-ming. Hou, Foreign Investment and Economic Development in China, 1840-1937. (Cambridge, MA: Harvard University Press, 1965). 59 Wakeman, Strangers at the Gate, 188. Also quoted in: Esherick, “Harvard on China: The Apologetics of Imperialism,” 11.
46
root of both of the Taiping Rebellion (1850-1864) and the Boxer Rebellion.60 Both events had
then been used by foreign powers to increase their demands on China. Epstein finds that the
earliest and largest strikes in the pre-1949 period had been directed against foreign
administrators and enterprises.61 China’s railways—being almost entirely foreign-controlled—
had been a key locus of workers’ antagonism. Prior to being driven out cities by the GMD, the
CCP had focused on urban labour organizing. The Party had been the most active in three areas:
schools, mines, and railways.62 Perry calls the 1923 workers’ walkout on the Beijing-Hankou
line “[t]he largest Communist-directed strike of the period.”63
Whereas Marx had focused on how capitalism operated in Europe—a scene where
European capitalists had exploited workers residing largely within their nation-states—Lenin had
started to articulate the global operations of a capitalist system centered in Europe. Chinese
intellectuals and reformers, not to mention Chinese workers and peasants, had seen their own
realities and analyses articulated in the theories of Marx and Lenin. Western scholars often
express bemusement about the mismatch between socialism—a theory about workers’ struggles
against capitalism—and the social and economic context of the CCP’s activities. By 1949, China
was still largely agrarian, with around 10% of its population living in cities.64 But the seeming
existence of this mismatch is in fact the presence of a double erasure. Imperialism has been
erased from both its operations in China, and from Marxist-Leninist theories—about the global
operations of capitalism. What Marxism had offered Chinese reformers is a way to understand
and act on the foreign structures that were increasingly encasing China. Confucius and Mencius
likely had little to say on the subject. It is only by abstracting capitalism from its historical and
geographical logic—visible in processes of imperialism—that Chinese state socialism becomes
seen as an ‘odd’ project.
60 Ssu-yu Teng, Taiping Rebellion and the Western Powers: A Comprehensive Survey (Oxford University Press, 1971). 61 Israel Epstein, “Main Directions in Chinese Labor,” Science & Society 13, no. 4 (1949): 318. 62 Odoric Y. K. Wou, “The Chinese Communist Party and the Labor Movement: The May 30th Movement in Henan,” Chinese Studies in History 23, no. 1 (October 1, 1989): 85. 63 Elizabeth J. Perry, Patrolling the Revolution: Worker Militias, Citizenship, and the Modern Chinese State (Rowman & Littlefield, 2007), 37. 64 Kam Wing Chan and Xeuqiang Xu, “Urban Population Growth and Urbanization in China since 1949: Reconstructing a Baseline,” The China Quarterly, no. 104 (1985): 584; John Friedmann, China’s Urban Transition (U of Minnesota Press, 2005), 11.
47
Erasing the historical context of imperialism erases the logic in Chinese reformers’ turn
to Marx analysis. As perhaps is common for thinkers, Marx had been immensely more detailed
in his analysis of capitalism than in his proposed solutions.65 Marx had also been limited by a
certain Eurocentrism (and related urban-centrism) in both his analyses and hypotheses.66 In the
twentieth century, most projects with revolutionary anti-capitalist aspirations had happened in
places outside of Marx’s field of vision.67 Even Russia had been on the periphery of Europe and
relatively ‘backwards’ in 1917. Revolutionary groups took what they could—which had been an
immense amount—from Marx’s analysis. Their subsequent paths to socialism bear traces of
what Marx had hypothesized about the post-capitalist transition process and its results. But
actually-existing (state) socialist projects had been confronted with two issues outside of Marx’s
scope. These are: (1) the need to defend against (well-funded) military aggression from core
capitalist countries, and relatedly, (2) the need to industrialize without relying on funding from
the same capitalist core. These two needs fundamentally shaped the trajectory of state socialist
projects. They overshadowed the importance of most forms of anti-capitalist praxis discussed by
Marx—and Western Marxists.
4. (Five Year) Planning for the ongoing revolution Chinese reformers had not been irrational—or detached from reality—when applying the ideas
of Marx and Lenin to understand the political and economic circumstances of early twentieth
century China. But if the CCP’s understanding of China’s circumstances had not been irrational,
then what about the actual content of the PRC’s state plans and consequent trajectories of
economic development? I stated earlier that this entire section focuses on the first of three
charges against state socialist—or centrally planned—economies: that planners had been
65 Gene Hsiao, “The Role of Economic Contracts in Communist China,” California Law Review 53, no. 4 (October 31, 1965): 1029. Groups such as the Russian Bolsheviks engaged in extensive debates about how to translate Marx’s work into a revolutionary plan. See for instance: Vladimir Ilych Lenin, What Is to Be Done? (International Publishers, 1969). 66 See, for instance, Said’s discussion of Marx: Said, Orientalism, 13–16, 153–60, 323. 67 See, for instance, discussions in: Helen Desfosses and Jacques Lévesque, Socialism in the Third World (Praeger, 1975).
48
idiosyncratic and produced irrational plans. Here it may be useful to revisit the charges of
irrationality levied against the PRC’s plans and planners.
Nolan and Ash state that “China’s economic development has been uniquely, if not
consistently, influenced by [Mao’s] personal prejudices and idiosyncratic view of how to realize
the country’s development potential”.68 Party members also eschewed economic sense, instead
“insisting that “planning” provided a framework [for] resource allocation”.69 Lin et al. do not tie
the PRC’s trajectories to the alleged idiosyncratic tendencies of one person. The authors even
show that the PRC’s heavy industry-oriented development strategy had been employed by other
socialist and developing countries.70 But Lin et al. still emphasize the economic irrationality of
the PRC’s early plans, arguing that “giving priority to heavy-industry development ran counter to
China’s comparative advantage and distorted the economic structure so much that development
was slower than it could have been.”71
Based on the above descriptions, discourses about the ‘irrationality’ of the early PRC’s
planned trajectory can be broken down into three ideas. Firstly, that PRC state planning—and
consequent plans—had been tied to the “idiosyncrasies” of one person or a group of people.
Secondly, that the practice of planning itself runs counter to achieving economic efficiency. And
thirdly, that state plans in the early PRC—characterized by their focus on heavy industry—
contradicted a rational course of action. These three ideas are connected and mutually
reinforcing, though one does not—as Lin et al. show—have to partake in all three to reproduce
discourses about ‘irrational’ state planning. The first idea is easily dispelled by turning to
existing research on the CCP; I will discuss this briefly. The third idea is my main focus in the
following section: I argue for the logic of the PRC’s focus on heavy industry. The claim that it is
irrational for a developing nation to prioritize heavy industry in state economic plans seems quite
pervasive, even in research that otherwise takes seriously the development objectives of Global
South states (e.g. Lin et al.). This claim is of course produced through the bracketing of Western
68 Nolan and Ash, “China’s Economy on the Eve of Reform,” 1996, 18. 69 Ibid., 18–19. 70 Justin Yifu Lin, Fang Cai, and Zhou Li, The China Miracle: Development Strategy and Economic Reform (Chinese University Press, 2003), 60–67. 71 Ibid., 69.
49
imperialism. Arguments about the PRC’s ‘irrational’ focus on heavy industry also provides
weight for the second idea above, that planning itself contradicts economic efficiency. Ideas
about Mao’s ‘idiosyncrasy’ (though perhaps somewhat widespread in the West) do not hold
much water elsewhere. That economic planning is necessarily irrational is a capitalist axiom that
can be traced back to the work of von Mises. I discuss the operations and assumptions of this
axiom at this end of this section.
An abundance of research exists suggesting that economic development trajectories in the
early PRC cannot be attributed to the ideas of one person. It is well-known that since the Yan’an
rectification movement (整风活动) of 1942, CCP decision-making had been guided by the
principle of consensus.72 The earliest split in the PRC leadership is usually traced to
disagreements over the Great Leap Forward (GLF), manifesting in the events of the 1959 Lushan
Conference.73 But even the existence of this split—thought to have isolated the left Maoists from
the rest of the CCP’s leadership—is somewhat questionable. Takahara finds that on the eve of
the GLF, CCP leaders had generally sorted into four camps on the question of how best to
incentivize higher levels of production. The most ‘left’ camp had advocated the abolishment of
unequal (graded) wages. This group included Chen Boda. More ‘right’ had been what Takahara
calls the ‘developmental leftists’, who advocated mass mobilization without abolishing the
system of wage distribution. This group had included Mao, Liu Shaoqi, and Deng Xiaoping.
More ‘right’ of this group had been the ‘central controllers’, who favoured centralization and
planned growth. This group had included Zhou Enlai, Chen Yun, and Li Fuchun. The most
‘right’ group had the smallest numbers. They were leaders in the All-China Federal Trade Union,
who had most strongly supported increasing material incentives.74 Even the GLF had been far
from Mao’s personal (or ‘idiosyncratic’) project.
72 Pat Howard, Breaking the Iron Rice Bowl: Prospects for Socialism in China’s Countryside (M.E. Sharpe, 1988); Lieberthal, “The Great Leap Forward and the Split in the Yenan Leadership”; Selden, China in Revolution, 1995. 73 Lowell Dittmer, “‘Line Struggle’ in Theory and Practice: The Origins of the Cultural Revolution Reconsidered,” The China Quarterly, no. 72 (1977): 675–712; Lieberthal, “The Great Leap Forward and the Split in the Yenan Leadership”; Roderick MacFarquhar and Michael Schoenhals, Mao’s Last Revolution (Harvard University Press, 2006). 74 Akio Takahara, The Politics of Wage Policy in Post-Revolutionary China (Springer, 1992), 44–47.
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I turn now to the logic of the PRC’s FFYP. To give a broad overview of how the FFYP
had shaped the early PRC economy, I turn to a perhaps unexpected source. A (formerly
classified) CIA economic intelligence report produced in 1959 marvels at the success of the
PRC’s FFYP. According to the report, overall output in the PRC had grown at an annual rate of
7%—a rate equal to or higher than the USSR during its FFYP.75 The author had been especially
impressed by three aspects of the PRC’s performance. Firstly, that the state had achieved its
growth rates with a smaller amount of input than the USSR; secondly, that growth had happened
without producing significant imbalances in the economy or major disruptions for the
population; and thirdly, that all of this had transpired in less than ten years after the conclusion of
the Chinese Civil War.76 In terms of overall economic growth between 1952-1978: conservative
estimates place the PRC’s annual GDP per capita growth rate in this period at around 3.6%.77
The World Bank, on the other hand, estimates that the PRC’s annual GNP per capita growth rate
in 1960-1981 had been 5%.78 The World Bank’s interval excludes the 1950s, a decade generally
thought to have produced the fastest growth rates in Mao-era China. The early PRC’s economic
growth rates marked a significant departure from China’s earlier experiences. Researchers
generally agree that China’s GDP per capita had not grown during the Republican period.79
But the above information is a non-sequitur for critics of the early PRC’s planned
economy. Economic growth in the early PRC had been quite significant, especially when placed
within the context of China’s own history. But Lin et al., for instance, seem often to prefer
abstractions to history and context. The authors are not particularly concerned with what the
planned economy had produced (other than its ‘distortions’). They are more interested in how
economic development in the early PRC had deviated from a more rational choice—that of states
pursuing their ‘comparative advantage’. Lin et al. start from the premise that the FFYP had been
75 CIA Office of Research and Reports, “Comparison of the First Five Year Plans of Communist China and the USSR,” Economic Intelligence Report (Central Intelligence Agency, June 1959), 2–10. 76 Ibid., 3–6. 77 Anton Cheremukhin et al., “The Economy of People’s Republic of China from 1953” (National Bureau of Economic Research, 2015), 12; Xiaodong Zhu, “Understanding China’s Growth: Past, Present, and Future,” The Journal of Economic Perspectives 26, no. 4 (2012): 103–124. 78 World Bank, World Development Report 1983 (The World Bank, 1983), 148–49. 79 Feuerwerker, The Chinese Economy, 1870-1949, 1995, 98.
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dominated by its focus on heavy industry.80 The authors note that at the time of the FFYP, the
PRC had been short on funds, lacked foreign exchange, and had a low export capacity.81 The
authors also describe heavy industry, a set of processes characterized by a long construction
cycle, the need to import equipment, and the need for a large amount of initial investment.82 It
may be useful here to point out that for Lin et al., both the PRC and heavy industry have a set of
essential characteristics that are abstracted from the global and historical processes that have
produced them. According to the characteristics that the authors have ascribed, heavy industry
and the early PRC are a mismatch. PRC planners had struggled against nature, in order to
connect the incompatible: “If resources had been allocated by the market mechanism, investment
would not have flowed to heavy-industry sectors. Rather, industrialization featuring light
industry would have occurred”.83
Before proceeding further, I want to emphasize again that my disagreement is not with
Lin et al. and their work in particular. The early PRC’s ‘irrational’ focus on heavy industry is
discussed or alluded to in much of English-language writing on China.84 The work of Lin et al.
lays out—in clear and often lucid writing—several key tenets of this particular discourse. This is
an achievement that has, perhaps unfortunately, earned the authors a degree of prominence in
this chapter. Lin et al. describes how, in the struggle of early PRC planners against economic
nature, the planners had implemented a series of top-down (irrational, constraining) measures.
These included setting a fixed interest rate and exchange rate, setting low wages and prices, and
creating a nationalized system for the financial sector, industry, and agriculture.85 These
measures are by no means unique to planned economies; they also seem more correlated with the
PRC’s lack of capital rather than its investment in heavy industry per se. Regardless, for Lin et
al., these measures produced ‘distortion’ in the PRC economy, the effects of which are either
vague, do not exist aside from their presence in economic literature, or more attributable to the
early PRC’s general state of poverty. These effects included: “development was slower than it
80 Lin, Cai, and Li, The China Miracle, 2003, 30–37. 81 Ibid., 38. 82 Ibid., 36–37. 83 Ibid., 37. 84 See for instance: Naughton, The Chinese Economy, 2007; Lüthi, The Sino-Soviet Split, 2008. 85 Lin, Cai, and Li, The China Miracle, 2003, 39–59.
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could have been”, “[constrains on] the full play of comparative advantage in labour resources”,
“[fortification of] the dual structure of traditional and modern sectors”, “slow improvement in
people’s living standards”, “[suppressing of] people’s incentive to work”, and “an extremely low
economic efficiency.”86
Lin et al. argue that what the PRC should have done instead is to allow the ‘free’ and
‘rational’ circulation of capital into its light industries. This had been the economic strategy
pursued by Taiwan, Hong Kong, Singapore, and South Korea (known as the Asian Tigers or
Little Dragons), beginning in the 1960s. Taiwan and South Korea had prioritized the
development of their science and technology sectors (e.g. computers, robotics, medical
equipment, etc.), while Singapore and Hong Kong had become centers of banking and foreign
exchange.87 From 1965-1973, these economies had average annual GDP growth rates of 8-
13%.88 It is possible that the PRC could have pursued this route of economic development—
perhaps if it had been one-two hundredth of its actual geographic size, bordered a very large and
newly socialist state, and wanted to host American military forces. But I digress.
In order to in good faith engage with what Lin et al. propose—a more ‘rational’ course of
economic development in the early PRC—I take a closer look at the group of processes known
as ‘heavy industry’ and their role in the PRC’s FFYP. In his 1973 article, Teubal gave the
neoclassical economic definition of heavy vs. light industry. Heavy industry is used to describe
forms of manufacturing that are more capital intensive (e.g. ship making), while light industry
refers to forms that are more labour than capital intensive (e.g. textiles, paper-making).89
Neoclassical economics prescribes that in the course of economic development, light industry
should come before heavy industry—the former produces the accumulation of capital for the
86 Ibid., 69–70. 87 Stephan Haggard, “The Politics of Industrialization in the Republic of Korea and Taiwan,” in Achieving Industrialization in East Asia, ed. H. Hughes (Cambridge University Press, 1988), 274–75; Dariusz Wójcik, “The Dark Side of NY–LON: Financial Centres and the Global Financial Crisis,” Urban Studies 50, no. 13 (October 1, 2013): 2736–52; “Hong Kong Overtaken by Singapore as Third Leading Global Financial Centre,” South China Morning Post, April 7, 2016, http://www.scmp.com/news/hong-kong/economy/article/1934559/hong-kong-overtaken-singapore-third-leading-global-financial. 88 Lin et al. do not mention the PRC’s average annual GDP growth rate in the same period, which was higher than its average annual GDP per capita growth rate. Conservative estimates put the former around 5.6%. 89 Morris Teubal, “Heavy and Light Industry in Economic Development,” The American Economic Review 63, no. 4 (1973): 588–96.
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later.90 Historians—particularly Marxist historians—and political economists have pointed to
how large-scale European industrialization was funded by sources of surplus other than light
industry, such as accumulation by dispossession and profits from the triangular trade in sugar
and indentured labour.91
The neoclassical definition obscures how heavy and light industries function in national
and global economies. These functions become more clear when looking at how Soviet
economists—in the course of planning state industrialization—had drawn the distinction. For
Soviet planners, heavy industry produces ‘producer goods’, whereas light industry produces
consumer goods.92 In other words, the products of heavy industry form the infrastructural base
for an industrialized economy. Following Soviet conceptions, the PRC’s FFYP differentiates
between “industries manufacturing means of production” and “consumer good industries”.93
Neoclassical distinctions would encounter further challenges in the Chinese context.
Industrialization—or the development of heavy industry—in the early PRC is known to have
been particularly labour-intensive.94
The PRC’s FFYP discusses the following items in the section on heavy industry: iron and
steel, non-ferrous metals, power, coal, oil, machine-building, chemicals, building materials, and
lumber.95 In the absence of heavy industry, there would be no factories or electricity, and no
large-scale production of light industry goods. The economies of Qing and Republican China had
in fact prioritized light industry over heavy industry. What had been widespread in pre-1949
90 William Rostow, The Stages of Economic Growth: A Non-Communist Manifesto (Cambridge University Press, 1990), 17–58; Teubal, “Heavy and Light Industry in Economic Development,” 588–90. 91 Michael Barratt Brown, The Economics of Imperialism (Penguin Books, 1975); Pomeranz, The Great Divergence, 2000; Eric Eustace Williams, Capitalism & Slavery (University of North Carolina Press, 1944). 92 Harry G. Shaffer, The Soviet Economy: A Collection of Western and Soviet Views (Appleton-Century-Crofts, 1969), 201–2. 93 PRC, First Five-Year Plan for Development of the National Economy of the People’s Republic of China in 1953-1957. (Beijing, China: Foreign Languages Press, 1956), 31. 94 Early PRC industrialization projects used labour to substitute for the relative lack of machines and technology. This was discussed by interviewees, and also present in the following accounts: Covell Meyskens, “Third Front Railroads and Industrial Modernity in Late Maoist China,” Twentieth-Century China 40, no. 3 (2015): 238–60; Xining Railway Bureau, 土方工程机械化半机械化施工经验 [The Experience of Mechanizing and Half-Mechanizing Earthwork Construction] (Beijing, China: 人民铁道出版社 [The People’s Railway Press], 1960). 95 PRC, First Five-Year Plan for Development of the National Economy of the People’s Republic of China in 1953-1957., 1956, 55–86.
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China—the small-scale handicraft production of manufactured goods (e.g. tea, silk, textiles)—is
the only form of light industry that exists in the absence of heavy industry. When China began to
develop ‘modern industry’ in the late nineteenth and early twentieth century, the vast majority of
these new enterprises had operated in light industry.96 China could not develop its own heavy
industry due to a lack of funds. In turn, Chinese-owned factories in light industry had been
hampered by their relative lack of access to heavy industry goods, such as fuel, machinery, and
modern transportation. Suffice it to say, the ‘free’ operations of market forces in pre-1949 China
did not direct capital flow into its light industries. Global market forces had instead caused great
destruction to these enterprises.
The more ‘economically efficient’ course that Lin et al. have in mind for the early PRC
seems to be one that follows what Rostow outlines in The Stages of Economic Growth: A Non-
Communist Manifesto. For Rostow, non-industrialized economies should produce and export the
items for which they have a ‘comparative advantage’, in order to accrue the surplus needed to
industrialize.97 This is in fact the strategy that had been attempted by the Chinese state after
1842. This strategy had not produced national economic growth—it had instead left China
increasingly indebted and subject to the control of Western powers. Chinese reformers since the
Self-Strengtheners had understood that in order to resist increasing Western domination, China
needed to own and control its own industries—particularly industries such as mining, steel
production, and modern transportation. In other words, the ‘proletarian nation’ needed to have
ownership and control over its own means of production. The analysis of Chinese reformers is
also articulated by dependency theory. Vernengo states that common to dependency theorists is
the understanding that “at the core of the dependency relation between center and periphery lays
[lies] the inability of the periphery to develop an autonomous and dynamic process of
technological innovation. […] The Center countries controlled the technology and the systems
for generating technology.”98
96 Feuerwerker, The Chinese Economy, 1870-1949, 1995, 117. 97 Rostow, The Stages of Economic Growth: A Non-Communist Manifesto, 17–25. 98 Matias Vernengo, “Technology, Finance, and Dependency: Latin American Radical Political Economy in Retrospect,” Review of Radical Political Economics 38, no. 4 (2006): 551–68.
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Many Chinese reformers had also understood that the “inability” of the periphery to
generate its own technology lies not in some intrinsic defect common to those on the periphery.
The core rather enforces this ‘inability’ through its control and use of heavy industry. The
Chinese state had not lacked capital prior to the Opium Wars. It was instead Britain that had been
concerned about the flow of silver from Europe into China. Britain—with the assistance of other
Western powers—had then engineered China’s scarcity through the use of ‘gunboat diplomacy’
(or mostly just gunboats). Consequently, the emphasis placed by the USSR and the PRC on
heavy industry is not only because heavy industry provides the backbone for industrialized
economies.
Heavy industry also produces the items needed for national defence. Lenin had been
concerned about “the imperialist states bordering on Russia to the West and the East, which
command enormous military forces”.99 These nations had sent troops to assist anti-Bolshevik
forces in the Russian Civil War (1917-1922).100 Lenin consequently urges industrialization: “All
our efforts must be exerted to the very utmost to […] bring about an economic revival, without
which a real increase in our country’s defence potential is inconceivable.”101 Mao was also quite
clear about the functions of heavy industry, stating: “The purpose of adopting a positive policy of
industrialization, that is, a policy which gives priority to the growth of heavy industry, is to
provide a material basis on which to strengthen our national defence, meet the needs of the
people, and bring about the socialist transformation of our national economy.”102
But if state industrialization relies on the development of heavy industry, and
industrialization is key to national economic growth—rather than becoming increasingly
exploited as an exporter of raw resources and light industry goods—then what about the Asian
Tiger states? How were they able to achieve high growth rates without prioritizing heavy
industry development? First of all—as can be seen from a chart that Lin et al. include—South
99 Vladimir Ilyich Lenin, “The Immediate Tasks of the Soviet Government,” in Collected Works, vol. 27 (Progress Publishers, 1972), 237–38. 100 Michael Jabara Carley, “Allied Intervention and the Russian Civil War, 1917-1922,” ed. Michael Kettle et al., The International History Review 11, no. 4 (1989): 689–700. 101 Lenin, “The Immediate Tasks of the Soviet Government,” 237–38. 102 PRC, First Five-Year Plan for Development of the National Economy of the People’s Republic of China in 1953-1957., 1956, 16.
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Korea had prioritized building heavy industry in the 1960s and 1970s.103 Heavy industry
development in Taiwan occurred in 1895-1945, under Japanese colonial rule. Japan—intending
Taiwan to be a ‘model colony’—had developed transportation and energy infrastructures on the
island.104
Secondly, since the 1950s, South Korea, Taiwan, and Hong Kong have relied almost
exclusively on imports to meet their energy needs.105 To import rather than produce its fuel was
neither practical nor feasible for the early PRC. An industrializing (or industrialized) nation of
the early PRC’s size and population has immense energy needs. In addition, the U.S. had led and
enforced a global trade embargo against the PRC, beginning in 1952 and lasting until the early
1970s.106 The U.S. had conversely assisted the international trade activities of South Korea and
Taiwan, by providing aid and fixing favourable exchange rates.107 Hong Kong and Singapore
had likewise benefited from their historical relationship with Britain.108
Finally—unlike the USSR and the PRC—the Asian Tigers had not been under military
threat from Western imperialists. The U.S. has offered military assistance to both South Korea
and Taiwan through bilateral treaties that have existed since the 1950s.109 It is perhaps not
remiss to say that the main ‘comparative advantage’ that the Asian Tiger economies had enjoyed
had been the infusion of Western capital. But could the PRC have benefited from the same
‘comparative advantage’, instead of ‘distorting’ its economy through socialist planning? Again,
103 Lin, Cai, and Li, The China Miracle, 2003, 110. 104 Japan, in contrast to European colonial powers, was also generally not adverse to developing heavy industry in its colonies. The small presence of heavy industries in pre-1949 China can largely be attributed to Japanese construction in Manchuria. Japan had needed to accrue resources and artillery for its subsequent invasion of the rest of China. See: Feuerwerker, The Chinese Economy, 1870-1949, 1995, 116. 105 “Singapore,” U. S. Energy Information Administration, accessed August 1, 2017, https://www.eia.gov/beta/international/analysis.cfm?iso=SGP; “South Korea,” U. S. Energy Information Administration, accessed August 1, 2017, https://www.eia.gov/beta/international/country.cfm?iso=KOR; “Taiwan,” U. S. Energy Information Administration, accessed August 1, 2017, https://www.eia.gov/beta/international/country.cfm?iso=TWN. 106 Aiguo Lu, China and the Global Economy Since 1840 (London: Palgrave Macmillan UK, 2000); Duanfang Lu, Remaking Chinese Urban Form: Modernity, Scarcity and Space, 1949-2005 (Taylor & Francis, 2006), 8–9. 107 Haggard, “The Politics of Industrialization in the Republic of Korea and Taiwan,” 267–71, 275–77. 108 Wójcik, “The Dark Side of NY–LON,” 2742; “Hong Kong Overtaken by Singapore as Third Leading Global Financial Centre.” 109 William T. Tow, Assessing US Bilateral Security Alliances in the Asia Pacific’s “Southern Rim”: Why the San Francisco System Endures (Institute for International Studies, Stanford University, 1999).
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China’s pre-1949 history suggests that the answer is no. Without the existence of the socialist
PRC, the U.S. would have had little need to produce (small) models of free market success in
Asia.
Planners in the early PRC had very logical reasons for prioritizing heavy industry
development. In contrast to what Lin et al. argue., the attention given to heavy industry in early
PRC plans also does not seem disproportionately large. When introducing the role of heavy
industry in FFYP, Lin et al. cite the statistic that investment in basic construction of heavy
industry took up 85% of the total industrial investment in basic construction.110 This number is
not contextualized by two other sets of relevant information, that (1) light industry infrastructure
accounted for almost all existing industrial infrastructure in China at the time, and that (2) the
FFYP had a number of other priorities. I will quickly address (2) first, by giving a brief overview
of the PRC’s FFYP.
To first contextualize the statistic provided by Lin et al. within the FFYP: the line item
that the authors refer to is the amount specifically earmarked for industrial capital construction.
85% of this item amounts to just under 30% of the entire FFYP’s total budget of 76,640 million
RMB.111 Industrial items in total—both heavy and light industry—accounted for 40.9% of the
FFYP’s budget. Other line items include agriculture, water conservancy, and forestry
departments (8%); transport and communications (11.7%); trade, banking, and stockpiling
departments (2.8%); cultural, educational and public health departments (18.6%); urban public
utilities (2.8%); and circulating capital for economic departments (9%).112 The FFYP is divided
into 11 chapters, of which one chapter—chapter 3—discusses industry. Heavy industry is
discussed in section III of chapter 3. Other sections of chapter 3 include light industry, local
industries, and industrial production. Other chapters of the FFYP address agriculture, transport
and communications, commerce, labour, educational, and people’s welfare. The last chapter—
chapter 11—is on “Practicing strict economy and eliminating waste”. The FFYP sets out 12
general objectives that support its overall task of socialist state construction. The first is about
110 Lin, Cai, and Li, The China Miracle, 2003, 37. 111 PRC, First Five-Year Plan for Development of the National Economy of the People’s Republic of China in 1953-1957., 1956, 27–31. 112 Ibid., 28.
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heavy industry. Objectives 2 and 3 refer to both heavy and light industry. The rest of the 12
objectives address different sectors of the economy.113
It is true that the FFYP had allocated much more funding to heavy industry when
compared to light industry. But logical reasons for this are given in the FFYP itself: “The
percentage of investments allocated to the heavy industry […] is especially high. This is so
because China must rapidly expand her heavy industrial base in order to promote an all-round
development of her national economy. It is also because our light industry, operated either by the
state or private concerns, still has considerable unused capacity while the huge productive forces
represented by our handicraft industry is also able to serve as an important auxiliary to it. It can
therefore be taken that the percentages of capital investments allocated under the FFYP to heavy
and light industry are appropriate.”114 As the FFYP here alludes to, private enterprises—with
means of funding outside of state allocations—had existed in the early PRC. The vast majority of
these had operated in light industry.
The PRC’s provisional constitution—the Common Program of 1949—had divided the
economy into five sectors: the state, cooperative, private (consisting of small private enterprises,
such as handicrafts, individual farms, etc.), capitalist (large privately-owned enterprises), and
state capitalist (joint state-private enterprises) sectors.115 Light industry made up the vast
majority of the capitalist sector in the early PRC. These are enterprises that had been established
and operated by Chinese capitalists during the Qing and Republican periods. In 1933, light
industry produced over 93% of output in the Chinese-owned portion of China’s modern
industry.116 In the 1950s, the PRC proceeded to nationalize the capitalist sector of its
economy.117 But by the end of 1956, there were still over 430,000 private industrial and
113 Ibid., 21–26. 114 Ibid., 31. 115 The Common Program and Other Documents of the First Plenary Session of the Chinese People’s Political Consultative Conference. (Beijing: Foreign Languages Press, 1950); Kuo-chün. Chao, Economic Planning and Organization in Mainland China: A Documentary Study, 1949-1957. (Cambridge, MA: East Asian Research Center, 1963). 116 Feuerwerker, The Chinese Economy, 1870-1949, 1995, 99. 117 Xingyuan Feng, Christer Ljungwall, and Guangwen He, The Ecology of Chinese Private Enterprises (World Scientific, 2015), 6–7; Ching Wen Kwang, The Economic Accounting System of State Enterprises in Mainland China (Committee on the Economy of China, Social Science Research Council, 1966), 63.
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commercial enterprises in the country.118 In addition, the early PRC had also inherited a sizeable
‘non-modern’ industrial sector. In 1933, handicraft methods had produced 64% of China’s output
in 14 different product groups, including lumber and wood products, transport equipment,
ceramics, textiles, clothing, food products, and paper products.119 One could perhaps even say
that in 1949, the PRC had inherited a national economy characterized by a significant ‘distortion’
towards light industry. If early PRC state planners had ‘overinvested’ in heavy industry, it is
perhaps only to correct earlier imbalances.
But in what sense did early PRC planners ‘overinvest’ in heavy industry? First of all—
what percentage of the state budget in the FFYP had in fact gone to heavy industry? Using Lin et
al.’s earlier statistic, we can assume there was a ratio of 85:15 for basic construction investment
into heavy vs. light industry. If we apply this ratio to the total amount allocated to industry in the
FFYP—31,320 million RMB or 40.9% of the total budget—it would suggest that 34.8% of funds
in the FFYP had gone to heavy industry. Is this ‘too much’ for a state to invest into heavy
industry? This is an extremely complicated question, so it is odd that Lin et al.—and the large
body of literature making similar arguments—would unequivocally say yes. Budgets of Western
states in the 1950s would have looked fundamentally different from that of the early PRC.
Western states in this period would not have budgeted for processes of national industrial
development. But as I argued previously, heavy industry development is inextricable from
processes of national defense. We can perhaps start to approach the question of heavy industry
‘overinvestment’ by looking at the national defense budgets of other states.
While not budgeting for heavy industry per se, Western states in the 1950s—and at other
times—have allocated state funds to military expenditures (e.g. production of machinery,
artillery, transportation, etc.). U.S. spending on defense made up 40-50% of its annual federal
budget in the 1950s and 1960s, and 20-30% of its annual budget in the 1970s.120 State-owned
industries in Japan had produced mainly for the navy and army after 1880.121 One set of
118 Feng, Ljungwall, and He, The Ecology of Chinese Private Enterprises, 7. 119 Feuerwerker, The Chinese Economy, 1870-1949, 1995, 110. 120 Michael E. O’Hanlon, “U.S. Defense Strategy and the Defense Budget,” Brookings, November 18, 2015, 2, https://www.brookings.edu/research/u-s-defense-strategy-and-the-defense-budget/. 121 Henry Rosovsky, Capital Formation in Japan, 1868-1940 (New York: Free Press of Glencoe, 1961), 190.
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estimates shows that between 1919 and 1923, military expenditures accounted for, on average,
43.6% of the annual state budget in Japan.122 Outside of state spending, U.S. private sector
spending on heavy industry, when compared to spending on light industry, is likely quite high.
Heavy industry products have historically dominated—and continue to dominate—U.S.
industrial output. In recent years, the petroleum, steel, automobile, and aerospace industries have
together produced more than 70% of the U.S.’s industrial output.123 These operations all fall
under heavy industry.
The PRC’s heavy industry sector is also intertwined with its defense sector. For the
FFYP, the USSR had agreed to assist the PRC with the design and construction of 156 industrial
construction projects. These projects had been budgeted for in the FFYP.124 Of the 150 projects
completed, 44 had been in the military sector.125 It is difficult to ascertain how heavy industry
and defense spending had intersected in the early PRC, though early PRC leaders had been
adamant that no single department would receive more than 30% of overall state budget.126 It is
also difficult to ascertain, for example, what proportion of total state and private funding had
gone into America’s heavy industry and defense sectors in the 1950s. In addition, the amount of
money that the two states had been working with were substantially different. The economic
circumstances of the two nations at the time had also been quite different—though these
differences had been related by their production through particular sets of global processes. But
ultimately, it seems like it would be difficult to say that state and private sector spending on
heavy industry as a proportion of total spending had been lower in the U.S. than in the PRC in
the 1950s.
122 Ibid., 189. 123 CIA, “United States of America: Industries,” in The World Factbook (Masterlab, 2015); IHS Economics, “Aerospace and Defense Economic Impact Analysis: A Report for the Aerospace Industries Association,” April 2016; American Petroleum and Institute, “Economic Impacts of the Oil and Natural Gas Industry on the US Economy in 2011,” July 2013; Kim Hill, Adam Cooper, and Debra Menk, “Contribution of the Automotive Industry to the Economies of All Fifty State and the United States,” n.d., accessed October 2, 2017; Peter Warrian, A Profile of the Steel Industry: Global Reinvention for a New Economy (Business Expert Press, 2012). 124 PRC, First Five-Year Plan for Development of the National Economy of the People’s Republic of China in 1953-1957., 1956, 38–40. 125 Lawrence C. Reardon, The Reluctant Dragon: Crisis Cycles in Chinese Foreign Economic Policy (University of Washington Press, 2015), 56; Hong Zhou, Jun Zhang, and Min Zhang, Foreign Aid in China (Springer, 2014), 80. 126 Shambaugh, “Building the Party-State in China, 1949–1965: Bringing the Soldier,” in New Perspectives on State Socialism in China, ed. Timothy Cheek and Tony Saich (Routledge, 2016), 141.
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Discussions of the ‘distortions’ caused by the PRC’s ‘overinvestment’ in heavy industry
seem to be very much an ideological discourse. The likes of Said, Butler, and Spivak have
argued convincingly that discourses are not only insidious, self-perpetuating, and resisting of
their ‘outside’. Perhaps more importantly, discourses are ‘productive’—in the sense that they
produce and reproduce political and social realities. What is achieved through discussions of
state planners and their ‘irrational’ focus on heavy industry? My tracing of how heavy industry
products have operated in national and international economies suggests that this discourse
functions to reproduce the political and economic structures of Western imperialism. Ideas about
the ‘irrationality’ of state planners and their ‘overinvestment’ in heavy industry make it difficult
to conceive that ‘Third World’ nations could develop and control their own infrastructures for
industrialization and national defense. These discourses also legitimate the Western channeling
of resources and aid into particular kinds of non-Western economic projects. In turn, the
selective channeling of resources both hides and justifies Western ideological and material
resistance to Global South industrial development.
But despite the overwhelming emphasis that critics of socialist planned economies have
placed on heavy industry—and its ‘dominating’ aspects—the crux of their issue does not concern
heavy industry per se. In Lin et al.’s account, ‘overinvestment’ in heavy industry had occurred
due to the irrationality of early PRC plans and planners. Socialist state planners’ focus on heavy
industry had been irrational because the practice of planning is itself irrational. For authors
sharing the set of discourses with Lin et al., it is likely that any planned route of economic
development pursued by the PRC would have been dissected and interrogated for its inherent
‘irrationality’. The fundamental sin of state socialism is its basic practice of planning; the
ultimate form of irrationality is daring to plan for a different world than what exists. In closing
this chapter, I examine the discourse of ‘irrational’ planners in its Platonic form, separated from
its incoherent attachment onto the realities of the early PRC. The earliest invocation of this
discourse is in the work of Ludwig von Mises. But before proceeding to Mises, I first wrap up
my discussion of the PRC’s FFYP.
If actually judging by the rubrics of economic efficiency—maximizing output for a given
set of input—and the application of reason to plan development and implementation, the PRC’s
FFYP had done remarkably well. It is known that the leaders of the PRC had themselves
considered the FFYP to be a great success. The targets set by the plan in areas such as industry,
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agriculture, transportation, education, etc. had been considered “fulfilled or overfulfilled” by the
end of the plan.127 During the period of the FFYP, the PRC’s railway network had grown by
6439 km.128 3,284 km of trunk line expansion had been planned, while 4,861 km had been
constructed.129 This constituted overfulfillment of the trunk line expansion plan by 48%. Railway
track expansion during the FFYP reached 69% of the total distance added during China’s
Republican period.130 The 3825 km of foreign-funded railways constructed during China’s Qing
period costed the equivalent of 153,270 USD/km, while tracks constructed during the FFYP—
almost doubling the earlier length in one-third of the time—costed the equivalent of 146,880
USD/km.131
Audiences outside of the PRC had agreed that the PRC had achieved well-rounded
national economic development through the FFYP.132 It is also somewhat illuminating to
compare PRC state spending during the FFYP to U.S. state spending in the 1950s. Annual
spending during the PRC’s FFYP was equivalent to 6.1 billion USD per year, while the federal
expenditure of the U.S. government had been 444 billion USD in 1955. Again, much of
economic spending in the U.S. would have happened outside of its state budget. Conservative
estimates of average annual GDP per capita growth for the PRC during the entire Mao-era is
3.6%; the average annual GDP per capita growth in the U.S. in 1950-1960 had been 1.6%.133
127 Robert R. Bowie and John K. Fairbank, Communist China 1955-1959: Policy Documents with Analysis (Cambridge, MA: Harvard University Press, 1962), 305–8; PRC State Statistics Bureau, Ten Great Year: Statistics of the Economic and Cultural Achievements of the People’s Republic of China (Beijing: Foreign Languages Press, 1960). 128 Leung, China, Railway Patterns and National Goals, 1980, 101; Song, 中国铁路建设史 [The construction history of Chinese railways], 288–91. 129 PRC, First Five-Year Plan for Development of the National Economy of the People’s Republic of China in 1953-1957., 1956, 145; Leung, China, Railway Patterns and National Goals, 1980, 101. 130 Leung, China, Railway Patterns and National Goals, 1980, 72–73, 101. 131 Adjusted for inflation to 1955 USD value equivalents. Data on the distance and cost of Qing era railway construction are from: Lee, China’s Quest for Railway Autonomy, 1904-1911, 1977, 13, 19. Data on distance and cost of FFYP railway construction are from: Leung, China, Railway Patterns and National Goals, 1980, 91–103; PRC, First Five-Year Plan for Development of the National Economy of the People’s Republic of China in 1953-1957., 1956, 139. 132 CIA Office of Research and Reports, “Comparison of the First Five Year Plans of Communist China and the USSR,” June 1959; Lardy, “Economic Recovery and the 1st Five-Year Plan.” 133 Lars Anell and Birgitta Nygren, The Developing Countries and the World Economic Order (Bloomsbury Publishing, 2013), 47.
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This is of course not to say that mistakes—even substantial ones—had not been made in
the course of developing and implementing the FFYP. The PRC’s leaders themselves had
discussed certain mistakes in public. Zhou Enlai had reported to the Fourth Session of the
National People’s Congress in June 1957 that “in the second and third quarters of 1956 we began
to discover the tense situation in the supply of certain materials resulting from excessive
investment in capital construction. We adopted certain remedial measures and prevented
continued development of the tension in supply.”134 State planners had also acknowledged their
limitations in the FFYP itself, stating: “Since our original productive forces were so weak, it is
inevitable that we should come up against difficulties in carrying out our large-scale construction
in the FFYP period. […] Because of our technical backwards in the past, we must be ready to
cope with any difficulties arising from shortages of technical personnel or supplies of equipment
lagging behind the needs of construction. […] At the same time, our lack of experience in
planning and the incompleteness of our statistical data are bound to affect the accuracy of our
plans.”135
5. ‘Irrational’ planners—or their irrational critics? Any genuine discussion of the economic efficiency of state-planned vs. market-driven
development would need to take into consideration the historical and material contexts of
socialist state planning, as well as how such contexts shaped the trajectories of planned economic
development. But discussions of ‘irrational planning’, when subject to analysis—either against
their internal logic or against external data—show a cavalier concern with actual economic
efficiency. These accounts rather proceed from the assumption that state planning is, by its very
nature, inefficient. This line of thinking can be traced back to the work of Ludwig von Mises.
Writings on the advantages of free market capitalism (e.g. its ‘invisible hand’) pre-dated
Mises. But Mises, writing a half-century after Marx, is known to be the first to question the
134 Bowie and Fairbank, Communist China 1955-1959, 307. 135 PRC, First Five-Year Plan for Development of the National Economy of the People’s Republic of China in 1953-1957, 1956, 18–19.
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economic operations of the Marxist project. In his 1920 article—Economic Calculation in the
Socialist Commonwealth—Mises argued that socialism, the project of collective ownership, is
not economically feasible. For Mises, monetary calculation is only possible given a system of
private ownership. In this system, every man decides for himself what he values and what he is
accordingly willing to pay for each consumer good. Every man also takes stock of his
preferences, time, and the resources, and decides accordingly what to produce. The market
amalgamates individual choices, producing prices.136 For Mises, a system of collective
ownership means that people will no longer be able to make individual choices. Without
individual choice, the price system cannot exist. Without prices, there is no way of coordinating
consumption and production in society. One group of people would have to decide for the rest of
the population what they will consume and produce. But it is impossible for the decision-makers
to know and coordinate between the individual preferences of all people.137 Therefore, socialism
is economically irrational—and moreover, actually impossible.138
Mises expanded his argument in the book Socialism: An Economic and Sociological
Analysis, first published in 1922. Mises revised this book several times before the most widely
available English translation was published in 1951. One important implication of Mises’s
original article is that the fledgling project of Russian socialism would soon crumble.139 But
Russian socialism did not crumble. Socialism—or at least one form of it—was actually possible.
Between 1920 and 1951, the USSR had also proceeded to establish a new economic system
founded on collective ownership. This system is of course the centrally planned economy.
Confronted with the existence of the USSR, the rational course of action would have been for
Mises to rethink his original argument. But Mises instead doubled down on his earlier
convictions.
Before proceeding to how Mises understood Soviet socialism, it is worthwhile to pause
and revisit certain assumptions in his original argument. Mises imagined that if more than one
136 Ludwig von Mises, “Economic Calculation in the Socialist Commonwealth,” in Collectivist Economic Planning: Critical Studies on the Possibilities of Socialism, ed. Frederich Hayek (Ludwig von Mises Institute, 1967), 95–109. 137 Ibid., 116–22. 138 Ibid., 107–10, 128–30. 139 Ibid., 122–30.
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person had claims to an item—producing shared, or collective, ownership—then it would either
be impossible to determine the value of that item (and related processes), or one person would
necessarily dominate over others in determining its price. In the world outside of Mises’s
imagination, many items are shared—even in Western society—despite private ownership. A
small list includes houses, land, the air, etc. Given forms of shared ownership in the West, the
logical conclusions are (1) that Mises was wrong: items can have specific value even given
shared ownership; or (2) that specific values in the West are created through one person
dominating over others. In both cases, Mises would be wrong in his conception of capitalism—it
would not be a system of free and equal exchange between individuals. It is also quite likely that
both scenarios had—and do still—exist within the broader system of Western capitalism.140
Confronted with the continued existence of the USSR, Mises merely extended his
original argument. If collective ownership did in fact exist in the USSR, then its economy must
operate through a minority making decisions for the majority: in other words, through
domination. In 1951, Mises says of socialism: “The Socialist Community is a great authoritarian
association in which orders are issued and obeyed. This is what is implied by the words ‘planned
economy’ and ‘abolition of the anarchy of production’.” Mises adds that “It would be waste of
time to describe such conditions. They are the common knowledge of every citizen of a
bureaucratic state.”141 Mises also extended his earlier assertions about the ‘irrationality’ of
socialism. In Mises’s 1920 text, he used the concept of ‘irrationality’ to index the very
impossibility of socialism. Facing the actual-existence of state socialism, Mises, rather than
retiring the term, proceeds to paint the entire enterprise of planning as ‘irrational’. The concept
of planning had largely been absent in Mises’s original article, aside from his comment that it is
impossible to plan economic undertakings without the use of prices.142 By 1951, Mises had
evolved an entire argument about how planning contradicts nature. He says: “to seek to organize
society is just as crazy as it would be to tear a living plant to bits in order to make a new one out
140 See for instance discussions in: Catherine Gibson and Julie Graham, The End of Capitalism (as We Knew It) (Oxford: Blackwell, 1996). 141 Mises, Socialism, 1951, 185. 142 Mises, “Economic Calculation in the Socialist Commonwealth,” 107–8.
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of the dead parts. An organization of mankind can only be conceived after the living social
organism has been killed. The collectivist movements are therefore fore-doomed to failure.”143
For Mises at first, socialism had only been ‘irrational’. In his later accounts, both
socialism and planning became characterized as ‘irrational’ and moreover, despotic. Why was
Mises so attached to his ideas about ‘irrational’ socialism? Suffice it to say, Misesean
understandings of socialism and planning have little to do with the actually-existing operations
of socialist projects. Trouillot has argued that Western imaginations of the ‘other’ are in fact
Western projections of the ‘dark side’ of its self-image—or the ideas that the West has rejected
about itself.144 The making and imposing of decisions by one group onto the rest of the
population—that Mises attributes to socialism and planning—is by and large how capitalism
works. To make China into an opium market involved an immense amount of planning and
coordination. British officials and merchants had to first create a consumer base in China, then
incentivize and enforce the production of opium in India, and then engage in a complicated
system of auctions and smuggling in order to get the product into China, where it had been
banned.145 The relationships of domination and exploitation within capitalism are obfuscated by
the very discourses that Mises draws on—about the ‘natural’ operations of society. The market,
featuring prominently in Misesean narratives, is where decisions made by powerful parties
become de-personalized and abstracted. Mediation via the market makes it possible for
individuals to experience the operations of power as the aggregate force exerted by ‘equal’
individuals engaging in ‘free’ exchange.
The Misesean discourse only begins to make sense when placed within what Marx—and
others, including Chinese peasants—had understood about the operations of capitalism. Read on
their own, the texts of Mises and those who share his ideas are filled with assumptions, internal
contradictions, and ellipses. On the actual operations of state socialism, Mises largely stands by
what I quoted from him earlier: “It would be a waste of time to describe these conditions”. What
143 Mises, Socialism, 1951, 296–97. 144 Michel-Rolph Trouillot, Global Transformations: Anthropology and the Modern World (Palgrave Macmillan, 2003), 6–28. 145 Diana L. Ahmad, The Opium Debate and Chinese Exclusion Laws in the Nineteenth-Century American West (University of Nevada Press, 2007), 19–22; Amitav Ghosh, Opium financed British rule in India, June 23, 2008.
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emerges from the Misesean account is that socialist planning is ‘irrational’ and ‘despotic’
because they contravene the ‘natural’ course of the world. The natural course that Mises had in
mind is of course capitalism. But there is nothing particularly ‘natural’ about capitalism—a fact
that becomes abundantly clear when studying the course and impact of imperialism on
nineteenth and twentieth century China.
How Mises analyzes socialism and planning becomes increasingly incoherent in later
editions of Socialism. At the same time, the elements driving his analysis become increasingly
visible. In the 1951 edition, Mises offered the following: “The incomparable success of Marxism
is due to the prospect it offers of fulfilling those dream aspirations and dreams of vengeance
which have been so deeply embedded in the human soul from time immemorial.”146 For 1981
version, published posthumously, Mises added: “in Asia [socialism] is the banner around which
the antagonists of European civilization gather. If the intellectual dominance of Socialism
remains unshaken, then in a short time the whole cooperative system of culture which Europe
has built up during thousands of years will be shattered.”147 In the aftermath of all the hoopla
about superior markets, irrationality, and despotism—the stakes finally start to emerge.
6. Conclusion The Misesean discourse has persisted. The burying of imperialism continues to shape
contemporary discussions about the early PRC’s planned economy. In the first part of this
chapter, I discussed the erasure of imperialism from contemporary Western writing on China. I
proceeded to trace some elements of this excluded history. I then argued that imperialism and its
impact on China had been a key reason for why early twentieth century Chinese reformers turned
to socialism. This context also played a crucial role in shaping the early PRC’s course of planned
industrial development. It is unsurprising that when imperialism is excluded from accounts of
early PRC development, the remaining events lose their coherence. In the second part of this
chapter, I followed the logic of two sets of texts: the PRC’s early plans for state economic
146 Mises, Socialism, 1951, 17. 147 Ludwig von Mises, Socialism (Indianapolis, IN: Liberty Classics, 1981), 511.
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development (namely the FFYP), and discussions of the ‘irrationality’ of these plans. I have
been—and am still—curious about the ways in which state socialism did not work, or fell short
of what had been envisioned. This kind of research is crucial, I think, for any project of
envisioning a better world than the one that currently exists. I had thought that some answers
might be found in discussions of the drawbacks of state economic planning. But as it turns out,
most Western accounts on the subject have little to do with the actual processes and outcomes of
socialist planning. These works show little concern with actual economic efficiency. Their basic
assumptions and premises can in fact be traced back to a set of most irrational discussions—
those of Ludwig von Mises.
What is at the heart of Mises’s discussions is not a rational argument about systems of
economic (or really, social) organization and their relative efficiencies. The crux of the matter
(‘heart of darkness’) is rather his conviction that resources cannot be shared, and that planning
will lead to a reverse of existing historical trends, thereby producing others’ domination over
him. In arguing that this set of convictions is at the center of discourses about ‘irrational’
socialism, I am certainly not suggesting that all authors in the genre—or even Mises—wish to
reproduce and sustain imperialism. I am sure that if the question were asked point-blank, many
authors would say no—and mean it. However, texts in the ‘irrational’ socialism genre build on
knowledge structures that are rooted in the protection and reproduction of imperialist capitalism.
What these works consequently (re)produce is the naturalization of capitalism and the
obfuscating of any other possibilities, rather than any actual understanding of state socialist
projects.
The above state of affairs is extremely disappointing for people—like myself—who want
to learn about the operations of socialist planned economies, and learn from rational assessments
of these systems. The objective for my thesis was—and is—to learn about railway development
in the early PRC and its relationship to the operations of a planned economy. But the existing
English-language canon on socialist states and their economic development has made it
impossible for me to directly approach my subject. It has rather been necessarily to first grapple
with layers of assumptions and misdirects. Having done some of this ‘unpeeling’, I turn, in the
next chapter, to the early PRC railways. In Chapter 3 I begin by investigating the forming of the
early PRC railway system. I then bring together the railways and the planned economy in
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Chapter 4: I discuss a particular set of changes—or developments—that central planning had
brought about in the railway sector.
The currently concluding chapter revolved around questioning the first of three sets of
ideas about ‘irrational’ socialism: that (1) planners had been idiosyncratic and produced
irrational plans. The second and third set of ideas are as follows: that (2) resource allocation had
been inefficient due to the absence of economic mechanisms; and that (3) economic planning
produces the waste of resources, materials, and labour. While contesting the notion of ‘irrational’
planners, I have shown that the entire discourse about ‘irrational’ socialism have little to do with
the operations of actually-existing state socialist projects. In Chapters 3 and 4, I delve into the
actual operations of state socialism. I discuss in Chapter 4 relationships of state economic
planning to resource allocations, marks, and waste in the early PRC. Perhaps not surprisingly,
these relationships—shaped particularly by the historical and ongoing contexts of Western
imperialism—are not exactly what is assumed in discussions of ‘irrational’ socialism.
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Chapter III. The bridge: The PRC railway sector in formation
1. Introduction This chapter offers somewhat of a break from the main argument of the thesis. The main
argument addresses the Western discourse about ‘irrational’ socialism. I have previously argued
that this discourse contains three sets of ideas: that (1) planners had been idiosyncratic and
produced irrational plans; that (2) resource allocation had been inefficient due to the absence of
economic mechanisms; and that (3) economic planning produces the waste of resources,
materials, and labour. The previous chapter—Chapter 2—specifically addressed the first set of
ideas. While addressing ideas about ‘irrational’ plans, I argued that the entire discourse of
‘irrational’ socialism has little to do with actual events and processes in historically-existing
socialist states. This discourse rather revolves around the reproduction of what it rhetorically
excludes—the operations of Western imperialism.
In order to begin approaching early PRC developments on their own terms, I had to first
engage in the above-described process of discursive unpeeling. It has been important for me to
understand how early PRC developments are most often narrated in the English-language
literature and why—in order to take what is relevant from these accounts and discard the rest.
This chapter and the next move away from discourses and towards events on the ground. This
chapter traces the formation of the early PRC railway sector. I first sketch out the very
beginnings of the Chinese railway system, from its origins to what existed in the early twentieth
century. I then describe components of the early PRC railway system and their process of
coming together. The early PRC railway system incorporated infrastructures and systems
inherited from Republican China, the CCP’s history of labour activism and war-time
experiences, and a period of learning from Soviet railway operations. Interactions between the
USSR, GMD, and CCP also compelled the Chinese Communists to innovate a new approach to
projects of industrialization, encapsulated in the idea of the ‘People’s Railway’.
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I stated earlier that this chapter steps away from the main argument of my thesis. In this
chapter, I do not explicitly address ideas about ‘irrational’ socialism. Some events that I detail—
such as the CCP’s thrifty operation of railways in China’s Northeast during the Civil War—do
provide evidence against assumptions about ‘irrational’ socialism. These details will be picked
up again in Chapter 4, which discusses the mechanisms of early PRC state planning and their
implementation in the state railway sector. Chapter 4 uses ‘on the ground’ evidence from the
PRC—and especially its railway sector—to challenge the second and third sets of ideas about
‘irrational’ socialism, which revolve around its alleged lack of economic mechanisms, inefficient
resource allocation, and corresponding waste. This current chapter forms the context and
background for understanding the events discussed in Chapter 4. The context that is provided
here pertains to both China’s railway system and its immediate pre-PRC history. The two
items—railways and history—are closely intertwined, at least in the Chinese context.
While this chapter provides the backdrop for an argument about state socialist efficiency,
it also starts to set up another direction of discussion. I start to probe at the question of what
made Chinese socialism distinct from its Soviet counterpart. This discussion also required a prior
step—of establishing the context and contours of imperialist discourses. These discourses like to
conflate all projects of socialism.1 Even worse, imperialist discourses will take the comparison of
socialist projects out of context, and read discussions of differences as condemnations of this or
that project (e.g. Soviet socialism oppressed workers; Chinese socialism was erratic). The
condemnation of either the Soviet or the Chinese project is not what I have in mind. Rather, I am
interested in pointing out the Third World and populist character of Chinese socialism. These
characteristics set up Chinese socialism in a slightly different relationship to the question of
economic efficiency, when compared to Soviet socialism. These differences also have
implications for how people were incorporated into—and mattered to—projects of state
socialism.
The current chapter consequently sets up for a two-pronged argument in the next. Chapter
4 both contests imperialist discourses about ‘irrational’ socialism, and turns to the internal
1 See for instance: Thomas L. Friedman, The World Is Flat 3.0: A Brief History of the Twenty-First Century (New York: Macmillan, 2007), 47–52; Mises, Socialism, 1951, 16–24.
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dynamics of the early PRC project. One question that emerges in Chapter 4 is how the state
socialist pursuit—and achievement—of efficiency shaped the PRC’s national subjects. But first,
I trace the formation of the early PRC railway sector in the upcoming pages.
2. Chinese railways: Early histories Though Chinese inventors had experimented with steam-powered vehicles in as early as 1681, it
was the Great Power states who had begun to construct railways in China during the late Qing
period.2 Therefore, the history of railways in China begins elsewhere. The advent of the railway
is inseparable from the events of the British Industrial Revolution. In the late 1700s, the
expansion of cotton and coal industries in Britain beget the desire for a more reliable method of
transporting large volumes over long distances.3 Decades of experimentation gave rise to the
modern railway, defined as carriages pulled exclusively by steam-powered locomotives. The first
modern railway connected Liverpool and Manchester.4 Its opening on September 1830 ushered
in the Railway Age.
If the modern railway was called into existence by the Industrial Revolution, it in turn
spurred the economic developments of the times. The modern railway cemented key aspects of
the relations of production under industrial capitalism. The need for reliable long-distance
transport arose from a spatial division of labour; railway transportation in turn increased the
profits to be made through this division. In the late 1700s, merchants in the port city of Liverpool
turned to importing cotton.5 Britain’s first cotton mills sprung up concurrently, clustering around
the inland city of Manchester. The early Manchester mills made use of water wheels powered by
nearby rivers and streams. An important function of the Liverpool and Manchester Railway was
2 Burgess Wise 1974 in Smith, Privatized Infrastructure, 17; Kenneth Pomeranz, The Great Divergence: Europe, China, and the Making of the Modern World Economy (Princeton University Press, 2000), 61–62. 3 Bagwell, The Transport Revolution, 76–80; Pomeranz, The Great Divergence, 2000, 60–61. 4 Bagwell, The Transport Revolution, 80; Michael Robbins, The Railway Age (Manchester University Press, 1998), 10; Smith, Privatized Infrastructure, 20; Eric Eustace Williams, Capitalism & Slavery (University of North Carolina Press, 1944), 105. 5 Mike Williams and D. A. Farnie, Cotton Mills in Greater Manchester (Carnegie, 1992), 162.
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to haul cotton between the two cities.6 After the L&M Railway began operating, the number of
mills in Manchester peaked at 108 in the year 1853. Manchester became the world’s largest and
most profitable textile production centre and remained so for decades after.7
British merchants were no less busy outside of Britain. Much of British cotton production
in fact took place through a transnational triangular trade. British manufactured goods (e.g.
clothes) were first exchanged for slaves in Africa; slaves were then exchanged for raw goods
(e.g. cotton fibre) in British colonies of the ‘New World’.8 These raw goods were finally
transported to Britain, to be received at ports such as Liverpool. Starting in the late 1700s, British
merchants devised another triangular trade route. This new trade operated between Britain, its
colonies in Asia, and China. Nearby-grown opium flowed into China, while silver flowed out.9
In 1839, the Chinese state acted to stop the opium trade by seizing 20,000 chests (almost 3
million pounds) of opium from foreign traders.10 Britain reacted to this seizure by sending
warships. The products of British industrialization secured victory for their homeland in 1842.
Chinese defeat opened the state to the operations of Western imperialism.
The next question became how to leverage Europe’s new access for increasing profit. I
discuss the economic operations of imperialism and their impacts on China in Chapter 2. The
focus in this section is on how Chinese railways have been produced through the operations of
transnational history. Smith writes that starting in 1845, British merchants agitated for railway
development in China in order to, in his words, “change the Chinese economy and thus to enable
them to exploit the Chinese market”.11 In 1858, MacDonald Stephenson, who had recently
completed a railway in British-occupied India, presented his plan of an east-west system linking
China with India and Burma.12 Broomhall suggests that Stephenson formulated his route—and
6 W. T. Jackman, The Development of Transportation in Modern England (Cambridge University Press, 2014), 510–18. 7 Williams and Farnie, Cotton Mills in Greater Manchester, 13–15. 8 Williams, Capitalism & Slavery, 1944, 5–29; Barratt-Brown, The Economics of Imperialism, 73–126. 9 David Scott, China and the International System, 1840-1949: Power, Presence, and Perceptions in a Century of Humiliation (SUNY Press, 2008), 13–23; Ghosh, Opium financed British rule in India. 10 Spence, The Search for Modern China, 152. 11 Smith, Privatized Infrastructure, 45. 12 Leung, China, Railway Patterns and National Goals, 1980, 19; Smith, Privatized Infrastructure, 44–47.
74
received approval from the British Crown—based on a plan to capitalize and expand on the
existing opium trade.13 After railways were invented, they were often used by Western powers to
expand and secure their control over dominated territories.14 Davis, Wilburn and Robinson write
about these events in an edited volume; the authors call the process one of “railway
imperialism”.15
In the mid-1800s, Chinese officials had largely rejected the idea of railways. Railway
plans were viewed as a bid to increase foreign control.16 China experienced a series of defeats in
the decades after 1842. Starting in the 1880s, a group of Chinese reformers—known as the Self-
Strengtheners—advocated domestic construction and ownership of railways, for key purposes of
consolidating the nation and strengthening its defense.17 The reformers’ ideas gained traction
with the Qing court. Their attempts at construction were however frustrated by difficulties in
raising capital.18 Prior to the First Sino-Japanese War (1894-95), only 408 km of railways had
been built in China.19 China’s defeat in the First Sino-Japanese war sparked a period of intense
competition among the Great Powers for additional concessions, including railway rights. This
was the great colonial ‘scramble’ to partition China.
In order to build railways, the Great Powers each pressed upon the Qing government a
series of loans. The initial loan agreements gave the foreign parties a great deal of control over
railways in China. Lending bodies determined how much railway construction would cost.20 The
railways were to be built by foreign engineers; their operations supervised by foreign managers.
13 Broomhall 1988 in Smith, Privatized Infrastructure, 49–50. 14 Davis, “Railway Imperialism in China, 1895-1939”; Jamie Monson, Africa’s Freedom Railway: How a Chinese Development Project Changed Lives and Livelihoods in Tanzania (Indiana University Press, 2009), 17; Rousseau, “An Imperial Railway Failure.” 15 Clarence B. Davis, Kenneth E. Wilburn, and Ronald. Robinson, eds., Railway Imperialism (New York: Greenwood Press, 1991). 16 Hsu, Railway Problems in China, 20; Leung, China, Railway Patterns and National Goals, 1980, 22; Zhang, “浅谈中国铁路发展 [An Overview of Chinese Railway Development],” 2. 17 Leung, China, Railway Patterns and National Goals, 1980, 20–25; Spence, The Search for Modern China, 640. 18 Lee, China’s Quest for Railway Autonomy, 1904-1911, 1977, 13. 19 Ibid. 20 “Imperial Peking-Kalgan Railway,” The Far-Eastern Review VI, no. 6 (November 1909): 320–30; Miners, “Building The Kowloon-Canton-Hankow Railway,” 2006; George Bronson Rea, “Railway Loan Agreements and Their Relation to the Open Door,” The Far-Eastern Review VI, no. 6 (November 1909): 215–27; Stringer, “Railway Economics for China,” 58–68.
75
Materials and equipment were to be purchased from the lending country. Purchases were
accompanied by commission rates of at least 5%, with additional fees charged for currency
conversion and remittance.21 As for the loans themselves, Lee says that the Chinese side had
been “exploited heavily”.22 The Chinese state—the borrowing body—had generally received
90% of the loans’ face value, and had been responsible for repayment on the entire amount. The
annual interest rate was 5%. The creditors also claimed an additional 20% of the net profit of the
railways. The loans were usually for a duration between 30 to 50 years.23 By 1928, most of the
initial railway loans had been in default.24 Foreign-initiated railway lines had been built with
foreign interests in mind. Local economic needs—and the profitable use of China’s railways by
its populations—had received little consideration.25
In the early 1900s, almost all of China’s railway system was under foreign control either
directly, or via loans and their conditions.26 The Russians had been responsible for the
construction of the China Eastern Railway in China’s North and assumed control over its initial
operations. Beginning with the Russo-Japanese War (1904-1905), Russia and Japan vied over
control of railway lines in China’s North. In the area south of the Great Wall, the Germans had
control over the Qingdao-Jinan Railway in Shandong Province; the French had control over the
Yunnan-Vietnam Railway in China’s southwest; the British had control over the Kowloon-
Canton Railway in China’s south, the Shanghai-Nanjing Railway and the Shanghai-Hangzhou
Railway in China’s east; control over the Tianjin-Pukou Railway had been split between the
British and the Germans; the Americans had control over the Chaozhou-Qinzhou line in China’s
south.27
21 “Imperial Peking-Kalgan Railway,” 328; Rea, “Railway Loan Agreements and Their Relation to the Open Door,” 218. 22 Lee, China’s Quest for Railway Autonomy, 1904-1911, 1977, 24. 23 Ibid., 24–25; Rea, “Railway Loan Agreements and Their Relation to the Open Door,” 215. 24 Chang, China’s Struggle for Railroad Development, 1943, 91–95. 25 Miners, “Building The Kowloon-Canton-Hankow Railway,” 2006; Rousseau, “An Imperial Railway Failure.” 26 Leung, China, Railway Patterns and National Goals, 1980, 35. 27 Chang, China’s Struggle for Railroad Development, 1943, 170–72; Stephen Kotkin, “Preface,” in Manchurian Railways and the Opening of China: An International History, ed. Bruce Elleman and Stephen Kotkin (M. E. Sharpe, 2015), xii–xvi; Jin, 铁路史话 [A brief history of Chinese railways]; Stringer, The Chinese Railway System, 1–106; Zhang, “浅谈中国铁路发展 [An Overview of Chinese Railway Development].”
76
Foreign ownership of railways in China sparked the Railway Rights Recovery Movement
of the early 1900s. Several provinces attempted to gain rights to the railways in their territories;
some met with a degree of success.28 In the same period, provincial governments and Chinese
merchants had also funded and constructed a small number of railway lines. By 1910, some 9000
km of main line and 560 km of branch line existed in China.29 The Qing government decided to
nationalize regional railway lines in 1911, in order to centralize planning and speed up the
development of national networks. But as this process of nationalization was underway, the
Chinese state faced pressure to settle increasingly escalating amounts of foreign debt.30 The
government consequently entered into more loan agreements with foreign powers, thereby
conceding more railway rights.31 The loss of railway rights at the very moment that these lines
were being nationalized led to widespread protests in China. These protests culminated in the
Xinhai Revolution of 1911, which toppled the Qing government. With the closing of the Xinhai
Revolution, Sun Yat-sen declared—in January 1912—the founding of the Republic of China.
3. Chinese railways: The PRC system in formation The operations of earlier histories had bestowed a physical legacy. In 1949, mainland China had
over 22,000 km of railway tracks.32 Historical events had also produced other aspects of the
Chinese railway system, such as issues with capital shortage and decentralized management.
These problems first greeted the railway administrators of Republican China (1912-1948). The
PRC inherited these issues and some early solutions. The CCP first approached China’s railway
system through organizing workers in the 1920s. During the Chinese Civil War, the PLA’s
Northeast Field Army developed a close symbiotic relationship with railway lines and workers in
China’s Northeast. Histories of activism and resistance left important imprints on China’s post-
28 Lee, China’s Quest for Railway Autonomy, 1904-1911, 1977, 20–56. 29 Leung, China, Railway Patterns and National Goals, 1980, 40. 30 Spence, The Search for Modern China, 345; Wang, China’s Unequal Treaties, 65–70. 31 Lee, China’s Quest for Railway Autonomy, 1904-1911, 1977, 251–60; Wang, China’s Unequal Treaties, 65–70.
32 Leung, Chi-Keung. China, Railway Patterns and National Goals. Chicago: University of Chicago Press, 1980.; Zhang, 来仪. “论新民主主义经济核算制度.” 厦门大学学报(财经版), no. 01 (1952): 59–64.
77
1949 railway system. Finally, the Russian government had controlled a set of railways—the
China Eastern Railway (CER, or Zhongchang Railway)—in China’s Northeast since 1897. The
CER came under joint Sino-Soviet management for a period before it was handed back to the
PRC in 1952. The Zhongchang Railway became a ‘model railway’ in the early PRC system,
passing on aspects of its operations and management to other railway enterprises.
3.1 Tracks from the Republic In the 1911 Xinhai Revolution that led to the downfall of the Qing empire, the Beiyang Army led
by Yuan Shikai had emerged as the most powerful entity in China. Sun Yat-sen declared the
establishment of the Republic of China on January 1, 1912. To secure the support of the Beiyang
Army for the new state, Sun named Yuan as President of the Republic in March 1912. When
Yuan died in 1916, the Beiyang Army split into a number of cliques. Each clique subsequently
vied for control of the government. Beginning in 1926, the GMD led by Chiang Kai-shek
embarked on a series of military campaigns against the Beiyang warlords. In 1928, the GMD
emerged as the victorious governing party of the re-united Chinese Republic. Under GMD
leadership, the Chinese government brought a degree of centralization and order to the nation.
This period, known as the Nanjing Decade (1928-1937), ended with the outbreak of the Second
Sino-Japanese War in 1937. GMD governance of the Chinese state formed an important
precursor for later project of CCP central governance.
The Nationalist government established China’s first Ministry of Railways in 1928.33
Chang Kia-Ngau, who had gained prominence through his activities in China’s banking industry,
became the Minister of Railways in 1935. Chang had been forced out from his position by the
encroaching Japanese invasion in 1942. In the decade in between, Chang had focused his efforts
on reforming and consolidating the financial and administrative system of Chinese railways.
Upon taking his post, the most pressing issue that Chang had faced was one of cash flow. Much
of China’s railway debt had fallen into arrears. Foreign-initiated railway lines had been built with
33 Yang, 中国近代铁路史 [History of Chinese Railways in the Modern Period], 130–35. Railway-related matters had previously fallen under the purview of the Ministry of Communications in the Beiyang and late Qing governments.
78
foreign interests in mind. Local economic needs—and the profitable use of China’s railways by
its populations—had received little consideration.34 To resume borrowing from foreign sources,
Chang had rehabilitated over 260 million USD of railway debt in 1935.35 Chang had then
negotiated an additional 157 million USD in loans by 1937.36
Chang had also been faced with disorganization in railway management and operations.
The new Ministry had assumed supervisory powers over most railway lines in Republican China.
But due to their financial histories, each railway line had to be administered separately,
regardless of its length or volume of traffic.37 Each loan agreement had come with its own set of
conditions and restrictions, on items such as how the funded line was to be administered and how
profit was to be calculated and remitted.38 To fulfill the terms of borrowing, each railway line
had to carefully track its own income and outflow, which imposed barriers for transporting items
across more than one railway line. In addition, each railway line had been constructed and
operated according to standard procedures in its crediting nation. Nearly all aspects of railway
operations—equipment, procedures, prices, communication systems, etc.—differed from one
line to another.39
The lack of standardization in China’s railway system had added greatly to the costs of
operation and administration. Each railway had operated with its own specialized personnel,
procedures, and facilities. Rosenberg observes that in 1909, China’s railways had made use of 40
categories of cars when 6 standardized categories would have sufficed.40 Each railway line had
34 Norman Miners, “Building The Kowloon-Canton-Hankow Railway,” Journal of the Royal Asiatic Society Hong Kong Branch 46 (2006): 5–24; Rousseau, “An Imperial Railway Failure,” 10–13. 35 Chang, China’s Struggle for Railroad Development, 1943, 172. 36 Ibid., 147. 37 Chang, “Technology Transfer in Modern China,” 1993, 286–88; Chang, 中國近代鐵路事業管理的研究--政治層面的分析 1876-1937 [Railroads in Modern China: Political Aspects of Railroad Administration (1876-1937)], 78–101. 38 Rea, “Railway Loan Agreements and Their Relation to the Open Door”; Stringer, The Chinese Railway System, 1922, 37–73; “铁路部门实行经济核算制前作了一系列必需的准备工作 [A Series of Preparatory Work Is Required Before Implementing the Economic Accounting System in the Railway Sector],” 人民日报 [People’s Daily], July 19, 1951, sec 2. 39 Chang, “Technology Transfer in Modern China,” 1993, 283–88; Stringer, The Chinese Railway System, 37–73. 40 Rosenbaum, “Railway Enterprise and Economic Development,” 242.
79
its own processes of procurement, linked to its own set of factories and workshops.41 The
separate administration of railway lines also impeded economical transport. Cars belonging to
one line had to travel back to their origin upon reaching their destination, instead of being
reloaded and dispatched to where needed.42 Foreign control of China’s railways made it difficult
to plan efficient use of existing railways. Furthermore, by limiting and controlling the surplus
generated from China’s railway operations, foreign creditors also made it impossible for China to
pursue—according to its own needs—the rational and systematic development of its railway
system. Any surplus had gone to repaying foreign debts; any new loans would prioritize the
geopolitical interests of the lender.
In 1935, the MOR had invited the advice of Brigadier General F. D. Hammond, a British
railway expert. General Hammond recommended that China improve its railway system in
accordance with three basic principles. These were: (1) that the railways should be operated as
business enterprises, to pursue maximum returns with minimum expenditure; (2) that the
railways should be administered in accordance to rational standards for matters such as
personnel, engineering, supplies, operations, etc.; and (3) that railway operations should assist in
national and regional industrial and commercial development.43 Chang comments—perhaps
wryly—that while “These three broad principles serve admirably as the guiding rules in the
administration of railroads in general”, the MOR’s attempts to implement these principles often
ran into “practical difficulties” arising from the historical legacies of China’s railways.44
Chang had in fact prioritized the economically efficient operations of China’s railways;
his options were however limited. The measures that he took towards achieving economic
efficiency had been: (1) financial reform through new accounting procedures and use of
statistics, (2) procurement reform through centralizing purchase, and (3) personnel reform
through the reduction of railway staff.45 In terms of financial reforms, Chang introduced a new
41 Chang, China’s Struggle for Railroad Development, 1943. 42 Chang, “Technology Transfer in Modern China,” 1993. 43 F. D. Hammond, Report by Brigadier-General F. D. Hammond on the National Railways of the Republic of China., 1937. See also the discussion in: Chang, China’s Struggle for Railroad Development, 1943, 170–75. 44 Chang, China’s Struggle for Railroad Development, 1943, 173. 45 Ibid.
80
standardized format for railway budgets in 1937. The new format required detailed listing of
different budgets, accounts, and schedules; it facilitated calculations of items such as profit, loss,
and surplus.46 In the same year, Chang presided over the introduction of a system of statistical
measurement and reporting. The system included 69 articles and 130 forms and schedules,
covering items such as traffic, operations, engineering, stores, finance, and administration
statistics.47
The implementation of Chang’s new systems had been disrupted by the outbreak of war.
But these and similar systems had been picked up again after CCP victory in 1949. These
systems would become widely implemented in the railways of the PRC. But perhaps the
historical continuity here is not surprising: there is more than a slight trace of Lenin in Chang’s
repeated emphasis on ‘accounting and control’.48 At the root of Chang’s reforms had been his
attempt to achieve “centralization of control”. 49 Chang saw centralization as key to the
economically efficient operations of China’s railways. Of Chang’s priorities and methods, there
are perhaps only two major area where the CCP might disagree: these are the reliance on foreign
loans, and the effort to produce efficiency through cutting personnel. These can of course form
the grounds for substantial disagreements.
3.2 In the battle for a new beginning The CCP’s road to governance spanned almost three decades after its founding in 1921. In the
intervening decades, the party and its members gained experience in many sectors of China’s
economy. Early CCP experiences in China’s railway system preceded those of Chang Kia-Ngau.
The CCP came back to the nation’s railways after Chang had left, during the Chinese Civil War
of 1946-1949.
46 Ibid., 174; Ministry of Railways, ed., 鐵道年鑑 [Railway Yearbook] (Nanjing: 鐵道部秘書處 [Ministry of Railways Recording Office], 1936), 8–20. 47 Chang, China’s Struggle for Railroad Development, 1943, 175–175; Ministry of Railways, 鐵道年鑑 [Railway Yearbook]. 48 The GMD had been a Leninist party. See: Benjamin Isadore Schwartz, Chinese Communism and the Rise of Mao (Harvard University Press, 1951), 49–51. 49 Chang, China’s Struggle for Railroad Development, 1943.
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In the early and mid-1920s, the CCP—receiving tutelage from the Soviet-backed
Comintern—had prioritized labour organizing in China’s cities.50 CCP-affiliated organizing had
proliferated in China’s foreign-dominated railway system.51 Nine railway unions had existed by
May 1925, with total membership of 4,200 people.52 Offices of two railway unions—the Beijing-
Hankou General Union and All-China Railway Workers’ Union—had served as operational
bases for the CCP.53 Beginning in 1927, the GMD’s campaign of militarized violence drove the
Communists out of China’s Nationalist-controlled cities. At this time, many CCP members and
sympathizers in the railway system went underground. During the Second Sino-Japanese War
(1937-1945) and subsequent Chinese civil war, underground workers provided the party with
crucial assistance. Activities of underground railway cells included organizing anti-Japanese
resistance, organizing workers’ welfare collectives, collecting and transmitting intelligence,
shipping military and medical supplies, and sabotaging enemy transport orders and equipment.54
The CCP’s own military forces—the People’s Liberation Army—became well
acquainted with China’s railway system during the Chinese Civil War. In the closing days of the
Second Sino-Japanese War, the Soviet Union declared war on Japan in China’s Northeast. Japan
surrendered to the USSR on August 14, 1945. In the ensuing peace treaty, the Soviet Union
recognized Chinese state sovereignty in the Northeast.55 The Soviet Union had temporary
assumed political and administrative control of China’s Northeast. These were soon to be
transferred to China’s official governing party, the GMD. But the Soviet government had been
concerned about American presence and influence in area close to its territories. America had
sent troops to China during the Sino-Japanese War, ostensibly to aid in the fight against Japan.
50 Schwartz, Chinese Communism and the Rise of Mao, 64–90; Meisner, Li Dazhao and the Origins of Chinese Marxism, 1967, 90–110. 51 Epstein, “Main Directions in Chinese Labor”; Perry, Patrolling the Revolution; Schwartz, Chinese Communism and the Rise of Mao, 36. 52 Wou, “The Chinese Communist Party and the Labor Movement,” 83. 53 Ibid. 54 Chunshan Wang, ed., 北京铁路局志 1881-1987 [Records of the Beijing Railway Administration, 1881-1987] (Beijing, China: 中国铁道出版社 [Chinese Railway Press], 1995), 1220–23; Kejing Fan, ed., 成都铁路局志 1909-1988 [Annals of the Chengdu Railway Bureau, 1909-1988] (Chengdu, China: 中国铁道出版社 [Chinese Railway Press], 1995), 802–3; Yongjie Xie and Wenping Yu, eds., 兰州铁路局志 1956-1995 [Annals of the Lanzhou Railway Bureau, 1956-1995] (Lanzhou, China: 中国铁道出版社 [Chinese Railway Press], 2001), 849–53. 55 Tanner, “Manchurian Railways and the Opening of China,” 149–50.
82
But American forces had also attacked CCP troops and base areas.56 Once Japanese defeat had
been expected, American troops maintained Japanese presence in occupied areas to forestall the
advance of the CCP.57 100,000 American troops remained in China in 1946.58 The U.S. military
used its planes and ships to transport GMD forces into China’s North and Northeast.59 In
response to American backing for the GMD, retreating USSR forces had encouraged CCP
advances into the Northeast. USSR personnel made available to the CCP military equipment that
had been left behind by the Japanese; they also handed over key administration points on railway
lines.60
But initial CCP control over railways in China’s Northeast did not hold. The GMD
launched both diplomatic and military campaigns in late 1945. In November 1945, the Soviets
instructed the CCP to leave the main cities and trunk lines in China’s Northeast, so that control
could be passed to the GMD. The CCP had complied with Soviet instructions.61 CCP troops
attempted to maintain presence in the smaller cities and branch lines of Southern Manchuria. But
after a series of military defeats between fall 1945 and summer 1946, CCP troops had retreated
to Northern Manchuria by June 1946.62 In Northern Manchuria—the area around Harbin—CCP
forces set up a new base area. Railway networks and infrastructures were less developed in
Northern Manchuria than in Southern Manchuria. But it was in this new base area that the CCP
would practice the building and organizing of a railway system. Beginning in mid-1946, CCP
activities in the railways of Northern Manchuria laid the foundations for later military victories
in China’s North and Northeast.
56 William Blum, Killing Hope: US Military and CIA Interventions since World War II (Zed Books, 2003), 20–22. 57 Ibid., 22. 58 Ibid. 59 Ibid., 22–23; Tanner, “Manchurian Railways and the Opening of China,” 153–54; Steven I. Levine, Anvil of Victory: The Communist Revolution in Manchuria, 1945-1948 (Columbia University Press, 1987), 39; Xu and MOR Record Compiling Department, 新中国铁路五十年 1949-1999 [50 Years of New China’s Railways 1949-1999], 22. 60 Tanner, “Manchurian Railways and the Opening of China,” 151–52. 61 Xu and MOR Record Compiling Department, 新中国铁路五十年 1949-1999 [50 Years of New China’s Railways 1949-1999], 22–24; Tanner, “Manchurian Railways and the Opening of China,” 153–54. 62 Tanner, “Manchurian Railways and the Opening of China,” 157–58; Xu and MOR Record Compiling Department, 新中国铁路五十年 1949-1999 [50 Years of New China’s Railways 1949-1999], 22–24.
83
In July 1946, the CCP formed the Northeast Railway Central Bureau (东北铁路总局),
with Chen Yun serving as Bureau Chief.63 The Northeast Bureau took control of railways around
Harbin. These lines had been severely damaged by fighting. All sides in the post-1937
conflicts—the Soviets, Japanese, Americans, Communists and Nationalists—had destroyed
railway infrastructures when it suited their strategic needs.64 In order to restore railway service in
Northern Manchuria, the CCP had received some assistance from the USSR and North Korea.
Soviet technicians trained Chinese soldiers; North Korea had sent shipments of locomotives and
equipment.65 But most of the work had relied on local initiative. The CCP mobilized local
workers in a mass campaign to repair and restore tracks, locomotives, and cars. Cadres and
workers collected damaged and abandoned equipment and rolling stock. Dead locomotives and
cars were dismantled; their functional parts used to refurbish new models, such as the ‘Mao
Zedong’ and ‘Zhu De’ locomotives produced by the Harbin Locomotive Deport in fall 1946.66
36 locomotives had been restored to operation in 1946, and 232 in 1947.67
The Northeast Bureau had faced a severe shortage of fuel, materials, and equipment. To
restore service to the area’s railways, cadres and workers had acted resourcefully and practiced
strict economy. When coal was burning low, train crews supplemented with soybeans and scrap
wood. To clean locomotives and engineers, workers brought old clothes and rags from home.68
The CCP’s objectives in restoring railway operations gained traction due to local cooperation.
The party began to pledge “wherever the PLA reaches, [is] wherever the railways will be fixed (
解放军打到哪里，铁路修到哪里)”.69 Once the railways were back in working order, the
63 Xu and MOR Record Compiling Department, 新中国铁路五十年 1949-1999 [50 Years of New China’s Railways 1949-1999], 22–23. 64 Song, 中国铁路建设史 [The construction history of Chinese railways], 23–50; Tanner, “Manchurian Railways and the Opening of China,” 157. 65 Tanner, “Manchurian Railways and the Opening of China,” 158. 66 Shuqing Gong and Shutian Li, 哈尔滨铁路局志 1896-1994 [Annals of the Harbin Railway Bureau 1896-1994] (Beijing, China: 中国铁道出版社 [Chinese Railway Press], 1996), 1343–60; Xu and MOR Record Compiling Department, 新中国铁路五十年 1949-1999 [50 Years of New China’s Railways 1949-1999], 22–25. 67 Tanner, “Manchurian Railways and the Opening of China,” 158. 68 Xu and MOR Record Compiling Department, 新中国铁路五十年 1949-1999 [50 Years of New China’s Railways 1949-1999], 23. 69 Ibid.; “认真实行铁路军运条例 [Conscientiously Carry out the Regulations for Military Transport],” 人民日报 [People’s Daily], April 23, 1949, sec 1.
84
Northeast Bureau restructured their administration and operating structures, and promulgated a
new set of rules and regulations. These new systems had the dual purpose of supporting war-time
needs and fostering local economic development. In 1948, Chen had insisted that military
shipment be subject to regular tariffs.70 Military shipments were also to be planned in advance—
as to not interfere with goals of establishing a rational and efficient railway transportation
system.71
CCP troops in north Manchuria had also gained the support of some local militias and
former soldiers of the Japanese puppet state in Manchuria. These bodies together organized a
railway protection unit (护路军) whose main task had been recovering and protecting railway
infrastructures and equipment.72 The railway protection unit—consisting of several thousand
people in the beginning—formed the base for what became the Northeast PLA Railway Column
in early 1948. The Northeast Railway Column had four branches in 1948, consisting of over
20,000 people.73 This body was reorganized as the PLA’s Railway Corps (解放军铁道兵) in
1949. The PLA’s specialized units had performed the majority of railway recovery and repairs
during the Civil War and in its aftermath. These groups had also been sent to assist with railway
reconstruction and transport during the Korean War (1950-1953). By 1954, the PLA’s Railway
Corps contained some 80,000 people.74 The Railway Corps had operated until their
decommissioning in 1983.75 In the interim, the Railway Corps had carried out the construction
70 陈云年谱 [The Life and Times of Chen Yun], vol. 1 (Beijing: Central Literary Publishers [中央文献出版社], 2000), 533. 71 “认真实行铁路军运条例 [Conscientiously Carry out the Regulations for Military Transport]”; Fuyin Bai, ed., 铁道部第十四工程局志 1948-1995 [Annals of the Ministry of Railways Engineering Corps Fourteenth Division, 1948-1995] (Beijing, China: 中国铁道出版社 [Chinese Railway Press], 1998), 3–20. 72 Xu and MOR Record Compiling Department, 新中国铁路五十年 1949-1999 [50 Years of New China’s Railways 1949-1999], 23–25; CRSHMC, “历史沿革 [Historical Background],” 中铁上海工程局集团市政工程有限公司 [Shanghai Construction Bureau of China Railway Engineering Corporation Ltd], accessed July 9, 2017, http://www.crshmc.com/index.php?catid=13. 73 Xu and MOR Record Compiling Department, 新中国铁路五十年 1949-1999 [50 Years of New China’s Railways 1949-1999], 24–25; Pujin Wen and Zhizhong Wang, eds., 铁道部第十三工程局志 1948-1995 [Annals of the Ministry of Railways Engineering Corps Thirteenth Division, 1948-1995] (Beijing, China: 中国铁道出版社 [Chinese Railway Press], 2000), 4–25. 74 CRCC, “中国人民解放军铁道兵 [PLA Railway Corps],” 中国铁建股份有限公司 [China Railway Construction Corporation Ltd], June 7, 2017, http://www.crcc.cn/g754/s1859/t26177.aspx. 75 Ibid.
85
and repair of railway infrastructures—tracks, bridges, tunnels, etc.—in some of China’s most
challenging terrains.76
In late 1946, the tide began to turn against the GMD in China’s Northeast. Between
December 1946 and March 1948, CCP forces gained control over much of the Northeast,
including its railway lines. In Mach 1948, GMD presence in the Northeast became limited to the
cities of Changchun, Shenyang, and the Jinzhou area.77 In the meantime, the PLA’s railway units
had repaired railway lines in areas secured by the CCP. In November 1948, the Northeast
Railway Column was dispatched for the first time to areas south of Manchuria—to repair
recently gained railway lines in China’s North.78 The CCP’s newfound ability to transport
troops, artillery, and supplies with adequate speed and reliability came to play a decisive role in
two of the three major campaigns that ended the war. These were the Liaoshen campaign
(Liaoning-Shenyang; 辽沈战役) of September-November 1948, and the Pinjing campaign
(Beiping-Tianjin; 平津战役) of November 1948-January 1949.79
In early 1949, Communist victory on China’s mainland had been on the horizon. China’s
railways had also proved themselves to be indispensable to the CCP’s military and governing
objectives. On January 10, the CCP Central Committee established a department for overseeing
national railway development and operations—the Ministry of Railways under the command of
the Military Affairs Commission (中国人民革命军事委员会(军委)铁道部). Teng Daiyuan was
appointed as Minister. The MAC MOR gathered a group of cadres and specialists who had
accrued experience working in China’s railways. This group together decided on structures and
policies governing national railway operations under the new MOR.80 When the PRC was
founded on October 1, 1949, the Military Affairs Commission MOR became the MOR under the
76 Xie and Yu, 兰州铁路局志 1956-1995 [Annals of the Lanzhou Railway Bureau, 1956-1995], 30–87; Liu, 铁路修建史料第三集 1949-1962 [The Third Series of Historical Materials on Railway Construction, 1949-1962], 1964. This aspect of Railway Corps activities was also discussed by interviewees. 77 Tanner, “Manchurian Railways and the Opening of China,” 161. 78 Xu and MOR Record Compiling Department, 新中国铁路五十年 1949-1999 [50 Years of New China’s Railways 1949-1999], 24–26. 79 Ibid. 80 Ibid.; “全国铁道职工临代会上 滕部长报告任务及方针 [At the Nation-Wide Workers’ Representative Meeting, Minister Teng Reports on Tasks and Directions],” 人民日报 [People’s Daily], July 4, 1949, sec 1.
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Central People’s Government (中央人民政府铁道部). The ratification of the PRC’s first
constitution in 1954 created the State Council. At this time, the MOR came under the authority
of the State Council, becoming the MOR of the PRC (中华人民共和国铁道部). The PRC MOR
remained the governing body for the nation’s railways until 2013.81
From its beginning, the MOR emphasized the creation of a nationally unified system.
Immediately after its founding, the MOR held a series of work meetings to set national priorities
and procedures. At the end of January, persons in charge of railway operations in each of the
CCP-controlled areas of China’s Northeast, Northwest, North, East, and Central Plains had met
to discuss how to unify operations to support war-time transport and national economic
development.82 The first meeting on national transport procedures was held in April 1949. The
first meeting on national railway scheduling was held in May 1949. The first meeting on national
railway tariffs was held in May-June 1949. These meetings produced regulations and procedures
that were then acted upon by the MOR and its subordinate bodies.83 The MOR also began to
promulgate standardized systems for finances and accounting; material acquisition; the
construction, use, and maintenance of equipment; and other railway-related matters.84
Besides the unification and rationalization of the national railway system, the MOR
prioritized three sets of activities in the immediate aftermath of CCP victory, or during the post-
war recovery years (1949-1952). One set of activities was the repair and reconstruction of
81 The MOR was dissolved with components incorporated into the Ministry of Transportation (MOT) for a part of the Cultural Revolution (1966-1976). 82 Xu and MOR Record Compiling Department, 新中国铁路五十年 1949-1999 [50 Years of New China’s Railways 1949-1999]; Gong and Li, 哈尔滨铁路局志 1896-1994 [Annals of the Harbin Railway Bureau 1896-1994], 1996. 83 Gong and Li, 哈尔滨铁路局志 1896-1994 [Annals of the Harbin Railway Bureau 1896-1994], 1996; Wang, 北京铁路局志 1881-1987 [Records of the Beijing Railway Administration, 1881-1987], 110–16. 84 Xu and MOR Record Compiling Department, 新中国铁路五十年 1949-1999 [50 Years of New China’s Railways 1949-1999], 25–27, 29–31; People’s Railway News Group, “军委铁道部制定办法 搜集保护铁路交通器材 全国军民应一致协助各路局收集 [MOR Formulates Measures to Gather and Protect Railway Transport Equipment, All Mobilized Masses Asked to Help Railway Bureaus with Collection],” 人民日报 [People’s Daily], August 18, 1949, sec 1; Lin Wang, “天津铁路局财务工作显著进步 [The Tianjin Railway Bureau Has Made Significant Progress in Its Financial Work],” 人民日报 [People’s Daily], November 19, 1949, sec 2.
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railway infrastructures. This was mostly carried out by the PLA Railway Corps.85 The entire
22,800 km length of China’s railway network had been restored by 1952.86 The Railway Corps
and other military elements (e.g. decommissioned personnel assigned to railway workplaces)
continued to play a key role in the development of early PRC railways.87 Until the 2000s—and
perhaps even now—the style of management in the PRC railway system was known as ‘half
military management’ (半军事化管理).88
Another set of MOR-prioritized activities during the post-war recovery period was
finding, collecting, and systematizing records of materials and equipment.89 The importance of
this process was due to both non-systematic record keeping in the pre-PRC period, and the
PRC’s post-war state of scarcity. The third set of prioritized activities was the reform of railway
workplaces. When taking control of state-owned enterprises (and those left behind by private
owners), the new PRC government operated by a policy of keeping existing workers (包下来).90
The reform of railway workplaces in the post-war recovery period had two main objectives. One
85 Wen and Wang, 铁道部第十三工程局志 1948-1995 [Annals of the Ministry of Railways Engineering Corps Thirteenth Division, 1948-1995]; Song, 中国铁路建设史 [The construction history of Chinese railways]. 86 Chi-Keung Leung, China, Railway Patterns and National Goals (Chicago: University of Chicago Press, 1980), 80–98; Liu, 铁路修建史料第三集 1949-1962 [The Third Series of Historical Materials on Railway Construction, 1949-1962], 1964. 87 Fan, 成都铁路局志 1909-1988 [Annals of the Chengdu Railway Bureau, 1909-1988], 1995, 590–92; 中国人民解放军铁道兵司令部 [PLA Railway Corp Headquarters], ed., 铁路职工专业教材：混凝土及钢筋工 [Specialized Education Material for Railway Work: Concrete and Steel-Reinforcing Work] (Beijing, China: 人民铁道出版社 [The People’s Railway Press], 1959). 88 This was discussed by interviewees. The militarized aspect of early PRC railways is also mentioned in: Lida Junghans, “Industrial Involution: Recruitment and Development within the Railway System,” in How China Works: Perspectives on the Twentieth-Century Industrial Workplace, ed. Jacob Eyferth (London: Routledge, 2006), 74–90. 89 Wang, 北京铁路局志 1881-1987 [Records of the Beijing Railway Administration, 1881-1987]; People’s Railway News Group, “军委铁道部制定办法 搜集保护铁路交通器材 全国军民应一致协助各路局收集 [MOR Formulates Measures to Gather and Protect Railway Transport Equipment, All Mobilized Masses Asked to Help Railway Bureaus with Collection]”; MOR Materials Bureau Communications Group, “清理资材，核定资金，反对浪费！[Sort Materials, Determine Available Capital, Fight Waste!],” 人民日报 [People’s Daily], August 13, 1951, sec 2; MOR Technology Research Communications Group, “铁道部铁道技术研究所介绍 [Introducing MOR Technology Institute],” 科学通报 [Chinese Science Bulletin], May 1950. 90 Fan, 成都铁路局志 1909-1988 [Annals of the Chengdu Railway Bureau, 1909-1988], 1995, 603–5; Mark W. Frazier, The Making of the Chinese Industrial Workplace: State, Revolution, and Labor Management (Cambridge University Press, 2002), 92; Kenneth Lieberthal, Revolution and Tradition in Tientsin, 1949-1952 (Stanford University Press, 1980), 47–50; Barry M. Richman, Industrial Society in Communist China: A Firsthand Study of Chinese Economic Development and Management (Random House, 1969), 433.
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was to root out GMD agents, gang bosses, and other categories of counter-revolutionaries.91 The
other was to establish ‘people’s ownership’ (工人作主人) of the railway system through
democratic reforms. These reforms included the establishment and initial governing through
workers’ representative assemblies (职工代表会).92 During this period, the PRC’s railway
system became known as the People’s Railway (人民铁道).93 This label remained in place for
several decades. It gained particular salience during certain periods (e.g. the Great Leap
Forward).
3.3 “Learn from the advanced experience of the Soviet Union”
Key forces that contributed to the form of early PRC railways include Western imperialism, the
GMD, and the CCP. Another important party has so far only been mentioned in passing. This is
of course the USSR.94 While the existence of the USSR had, in many ways, enabled the very
91 Gong and Li, 哈尔滨铁路局志 1896-1994 [Annals of the Harbin Railway Bureau 1896-1994], 1996, 1073; Xu and MOR Record Compiling Department, 新中国铁路五十年 1949-1999 [50 Years of New China’s Railways 1949-1999], 31–33. For more general discussions on early PRC workers’ assemblies, see: Stephen Andors, China’s Industrial Revolution: Politics, Planning, and Management, 1949 to the Present (New York: Pantheon Books, 1977), 50–52; Franz Schurmann, Ideology and Organization in Communist China (University of California Press, 1971), 248–50. 92 Wang, 北京铁路局志 1881-1987 [Records of the Beijing Railway Administration, 1881-1987], 796, 1073–1073; Xu and MOR Record Compiling Department, 新中国铁路五十年 1949-1999 [50 Years of New China’s Railways 1949-1999], 29–31. 93 This was discussed by interviewees. Also see: “要办好人民铁道 须解决六个问题 [For Well-Functioning Chinese Railways, Resolve Six Problems],” 人民日报 [People’s Daily], July 4, 1949, sec 1; 全党全民办铁路 [The party and all people make the railway run] (人民铁道出版社 [The People’s Railway Press], 1959). 94 In terms of contexts and legacies for early PRC industrial and railway development, one important party that does not receive special focus in my thesis is Japan. In China’s Northeast, some railways had operated with Japanese systems and regulations for over a decade (1931-1946) (See for instance: Gong and Li, 哈尔滨铁路局志 1896-1994 [Annals of the Harbin Railway Bureau 1896-1994], 1202–6). The relationship between Japanese imperialism and Western imperialism is somewhat complicated. Japan’s industrialization and modernization, pursued during the Meji era (1868-1912), can also be considered as ‘defensive’—occurring in response to Western aggression. To consider the form and significance of Japanese imperialism is outside the scope of this thesis (in that vein, I also bracket an actual discussion of similarities and differences between Soviet international policies and imperialism). For purposes of discussions in this thesis, I consider Japan neither the same as Western imperialist powers, nor as specifically different. When I use the term ‘Western’, I generally refer to NATO states, which can include Japan and/or how these states have acted through Japan. I do not intend to conflate Western and Japanese imperialism; I am under the impression that I do not have to specifically address this issue in order to make my set of arguments.
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possibility of Chinese state socialism, Soviet presence in China had also reflected the operations
of global political and economic systems. The ensuing set of relationships between the CCP and
the Communist Party of the Soviet Union (CPSU) had been complicated and tumultuous at
times.95 This set of complicated relationships left their defining imprint on the course of early
PRC industrial development, and on the structures and operations of the early PRC railway
system.
In the aftermath of the Russian Revolution (1917), Lenin had thought that socialist
revolutions would soon spread in Europe.96 When these revolutions did not materialize, Russia
found itself isolated and sandwiched between aggressive imperialist powers.97 The Bolsheviks
spearheaded the formation of the Communist International (Comintern) in 1919—an
organization composed of the communist parties of various states. Facing dimming prospects for
revolution in Europe, the Comintern turned its attention to Asia.98 Asian revolutionary
movements had been considered one step behind their European counterparts. According to
Soviet historiography, the Russian Revolution had unfolded in a two-stage process. The first
stage had been the February Revolution, a democratic bourgeois revolution that overthrew
Tsarist rule. The second stage was the October Revolution, a socialist revolution that replaced
the capitalist-dominated Provisional Government with control by Soviets (or workers’
councils).99 Leaders in the Comintern had understood Asian anti-colonial movements to be
nationalist—and therefore bourgeois democratic—in character.100
95 See accounts in: Thomas P. Bernstein and Hua-Yu Li, China Learns from the Soviet Union, 1949-Present (Rowman & Littlefield, 2010); Austin Jersild, The Sino-Soviet Alliance: An International History (UNC Press Books, 2014); Hua-Yu Li, Mao and the Economic Stalinization of China, 1948–1953 (Rowman & Littlefield Publishers, 2006); Lorenz M. Lüthi, The Sino-Soviet Split: Cold War in the Communist World (Princeton University Press, 2008). 96 Alfred B. Evans, Soviet Marxism-Leninism: The Decline of an Ideology (ABC-CLIO, 1993), 20–21. 97 Lenin, “The Immediate Tasks of the Soviet Government.” 98 Schwartz, Chinese Communism and the Rise of Mao, 30. 99 Alexander Rabinowitch, The Bolsheviks Come to Power: The Revolution of 1917 in Petrograd (Pluto Press, 2004), 151–200; Evans, Soviet Marxism-Leninism, 20–22. 100 Schwartz, Chinese Communism and the Rise of Mao, 30. The Leninist understanding is reflected in Mao’s following speech, originally made in 1940: Zedong Mao, On New Democracy, 2d ed. (Beijing: Foreign Languages Press, 1960).
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But the Bolshevik’s need for allies had outweighed their concerns about the challenges of
working with revolutionaries in ‘backwards’ Asian countries. In the early 1920s, the Comintern
dispatched representatives to China. Comintern representatives quickly became important
advisors to the CCP.101 However, key Comintern interests lay outside of advising what had been,
in 1921, a budding study group of scholars and students. The Bolsheviks needed to develop an
alliance with states governed by socialist, or at least socialist-sympathetic, parties. The
Comintern consequently formed a close relationship with the GMD, prompting, among other
measures, the GMD’s structural reorganization into a Leninist party in 1924.102 Comintern
representatives also brokered an alliance—known as the First United Front—between the CCP
and the GMD that began in 1923.103 Under alliance terms, CCP members had joined the GMD
and carried out their activities (labour organizing, outreach, organizing welfare, etc.) as GMD
members.
The First United Front ended in 1926, when Chiang Kai-shek purged both Soviet
advisors and CCP members from the GMD.104 The purge culminated in GMD violence against
CCP members and suspected affiliates. Ryan estimates that 5,000-10,000 Communists had been
killed in the Shanghai Massacre of April 1927.105 At this time, many active Communists escaped
to China’s countryside, where the GMD had less reach.106 For many Chinese Communists, the
purge and rural exodus also created distance from the Comintern. The CCP’s post-1927
circumstances necessitated forms of experimentation that broke with Comintern directives.107
Key characteristics of Chinese Communism, such as rural mobilization and guerilla warfare,
101 Schwartz, Chinese Communism and the Rise of Mao, 28–45; Hans J. van de Ven, From Friend to Comrade: The Founding of the Chinese Communist Party, 1920-1927 (University of California Press, 1992). 102 Schwartz, Chinese Communism and the Rise of Mao, 49–51. 103 Ibid., 37–45. 104 Elizabeth J. Perry, Shanghai on Strike: The Politics of Chinese Labor (Stanford University Press, 1993); Patricia Stranahan, Underground: The Shanghai Communist Party and the Politics of Survival, 1927-1937 (Rowman & Littlefield, 1998). 105 Tom Ryan, China Rising: A Study in Revolution (Melbourne: History Teachers Association of Victoria, Limited, 2009), 77. 106 Howard, Breaking the Iron Rice Bowl, 1988, 17–19; Stranahan, Underground. 107 Schwartz, Chinese Communism and the Rise of Mao, 73–110; Howard, Breaking the Iron Rice Bowl, 1988, 17–25.
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developed during this time. These activities and strategies are often seen as crucial components
of later CCP victories.108
After defeating the GMD in 1949, the CCP returned to China’s cities—to the setting of
large-scale modern industrialization. The most pressing task for the ‘proletarian nation’ in 1949
was one that had been unaccounted for by Marx. The early PRC needed to develop its own
means of production. The nearby presence of the American military suggested that
industrialization in the PRC needed to proceed immediately and rapidly.109 Faced with the task
of rapid industrialization, the PRC turned to its more experienced neighbour—the USSR. In the
early 1950s, the relationship between the CPSU and the CCP was at a high point.110 The CPSU
had been pleased that another socialist state had joined the world system, while the CCP had
been determined to learn from the USSR. The two governments signed a series of cooperation
agreements in the early 1950s.
According to these agreements, the USSR provided the PRC with loans, in return for
Chinese exports at discounted prices.111 The USSR also dispatched a large number of specialists
knowledgeable in areas such as economic planning, financial and monetary policies, technical
design and construction, etc.112 Soviet advisers helped their Chinese counterparts set up
institutions and enterprises. The most notable among these had been the 156 projects in strategic
industrial sectors planned for construction during the PRC’s First Five Year Plan (FFYP).113 The
PRC benefited immensely from Soviet experience in state economic planning. The structure and
operations of the USSR’s planned economy had emerged through years of debate, research, and
108 Tetsuya Kataoka, Resistance and Revolution in China: The Communists and the Second United Front (University of California Press, 1974); Mark Selden, China in Revolution: The Yenan Way Revisited (M.E. Sharpe, 1995). 109 Blum, Killing Hope: US Military and CIA Interventions since World War II, 23–27; Stanley B. Weeks and Charles A. Meconis, The Armed Forces of the USA in the Asia-Pacific Region (Allen & Unwin, 1999), 6–29, 82–98. 110 Lüthi, The Sino-Soviet Split, 2008, 29–35. 111 Lawrence C. Reardon, The Reluctant Dragon: Crisis Cycles in Chinese Foreign Economic Policy (University of Washington Press, 2015), 53–56. 112 Jersild, The Sino-Soviet Alliance, 2014, 25–40; Ghosh, “Making It Count: Statistics and State-Society Relations in the Early People’s Republic of China, 1949-1959,” 2014, 61–99. 113 Takahara, The Politics of Wage Policy in Post-Revolutionary China, 1992, 10–11; Andors, China’s Industrial Revolution, 1977, 53; PRC, First Five-Year Plan for Development of the National Economy of the People’s Republic of China in 1953-1957., 1956, 15–16.
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experimentation.114 The USSR’s FFYP began in 1928, nine years after the October Revolution in
1917. In the early 1950s, the PRC had been able to set up the administrative structures of a
centrally planned economy in its state industrial departments. These structures had not been fully
present in the USSR until its Second FYP (1933-1937).115
Soviet assistance played a prominent role in the early PRC railway sector. The origins
and form of Soviet assistance in the early PRC railway sector demonstrates quite clearly how
historical development trajectories in the two states had been linked. After annexing a part of
Chinese territory in the 1850s, Russia extracted a number of unequal treaties.116 During the Great
Powers’ scramble for Chinese territory (1985-1900), the Russian government pressed for railway
concessions in China’s Northeast. Russia wanted to build a shortcut for the Trans-Siberian
Railway on Chinese territory. This shortcut would link the Siberian city of Chita in the west to
the port of Vladivostok in the east.117 The entire length of the shortcut would be in Chinese
territory, passing through Northeastern cities such as Harbin. In 1896, China granted this
concession. Work on the Russian shortcut—which was known as the China Eastern Railway
(CER)—began in 1897.118 The CER was under Russian control until 1935, when the Soviet
government sold its rights to the Japanese colonial administration in Northeast China.119
Japanese defeat in 1945 returned CER control to the USSR. At this time, the USSR agreed to
joint control of the CER with the Chinese Republican government.120 The CER was renamed to
the Chinese Changchun Railway (中国长春铁路 or 中长铁路; Zhongchang Railway).
114 Mark R. Beissinger, Scientific Management, Socialist Discipline and Soviet Power (I.B.Tauris, 1988), 19–58; Bernstein and Li, China Learns from the Soviet Union, 1949-Present; CIA Office of Research and Reports, “Comparison of the First Five Year Plans of Communist China and the USSR,” Economic Intelligence Report (Central Intelligence Agency, June 1959), 1–8. 115 CIA Office of Research and Reports, “Comparison of the First Five Year Plans of Communist China and the USSR,” June 1959, 2. 116 G. Patrick March, Eastern Destiny: Russia in Asia and the North Pacific (Westport, CT: Greenwood Publishing Group, 1996). 117 Vladivostok had been a part of Chinese territory until its annexation in the 1850s. 118 R. Edward Glatfelter, “Russia, the Soviet Union, and the Chinese Eastern Railway,” in Railway Imperialism, ed. Clarence Baldwin Davis, Kenneth E. Wilburn, and Ronald Edward Robinson (Greenwood Press, 1991), 121–36; Fisher Y. C. Yu, “The Chinese Eastern Railway,” The Far-Eastern Review XXII, no. 2 (February 1926): 55–61. 119 Nikita Sergeevich Khrushchev and Sergei Guriev, Memoirs of Nikita Khrushchev, vol. 3 (Penn State Press, 2007), 433. 120 Ibid.
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The USSR and the PRC signed several treaties in February 1950, including the important
Sino-Soviet Treaty of Friendship and Alliance. In these treaties, the Soviet government agreed
to, by September 1952, transfer to the PRC all rights and properties of the Zhongchang Railway
free of charge.121 In the thirty-two months transition period, the Zhongchang Railway would be
under joint Soviet and Chinese management. The USSR sent over 1,500 management and
technical specialists to participate in the joint project.122 Chinese staff and workers had been
dispatched from various railway management bureaus in the Northeast, including the Harbin
Railway Bureau, the Qiqihar Railway Bureau, and the Changchun Railway Bureau. The total for
Chinese participation numbered over 5,000.123 A key goal of the joint exercise was for the
Chinese side to learn Soviet systems for railway management and operations. The two groups
were also expected to work together to adapt Soviet systems to the Chinese context. Zhongchang
Railway was to become a “model railway” (模范铁路) in the early PRC system.124 The Chinese
side had aimed to—in the words of a phrase widely used during the period— “learn from the
advanced experience of the Soviet Union” (学习苏联先进经验).125
Operations of the Zhongchang Railway proceeded through a three-level structure. The
two entities involved were the Zhongchang Railway Company (ZRC), and the Zhongchang
Railway Management Bureau (ZRMB).126 Based on operating information from the management
bureau, the company set annual targets in areas such as transportation volume, turnaround time,
locomotive production and repairs, labour efficiency rates, profits, etc. These targets were then
transmitted to the management bureau. The management bureau was responsible for drafting
121 Gong and Li, 哈尔滨铁路局志 1896-1994 [Annals of the Harbin Railway Bureau 1896-1994], 1996, 1070–82; Xu and MOR Record Compiling Department, 新中国铁路五十年 1949-1999 [50 Years of New China’s Railways 1949-1999], 36–39. 122 Xu and MOR Record Compiling Department, 新中国铁路五十年 1949-1999 [50 Years of New China’s Railways 1949-1999], 38. 123 Gong and Li, 哈尔滨铁路局志 1896-1994 [Annals of the Harbin Railway Bureau 1896-1994], 1996, 1070–82, 1203–10. 124 Xu and MOR Record Compiling Department, 新中国铁路五十年 1949-1999 [50 Years of New China’s Railways 1949-1999], 38. 125 中长铁路经验介绍 [Introducing Experiences on the Zhongchang Railway] (Beijing, China: 人民铁道出版社 [The People’s Railway Press], 1953); Chongpu Lu, “怎样认识与学习苏联电焊技术 [How to Recognize and Learn Soviet Electric Welding Technique],” 机械制造 [Machinery], no. 8 (1953). 126 Gong and Li, 哈尔滨铁路局志 1896-1994 [Annals of the Harbin Railway Bureau 1896-1994], 1996, 170–83.
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quarterly and annual plans for meeting these targets. Drafted plans would also include specific
tasks and targets for the bodies under bureau management, such as stations, construction teams,
and factories. After their drafting, plans from the management bureau were submitted to and
required the approval of the company. Once approved, the management bureau—and its
subordinate bodies—were responsible for carrying out these plans.127
The Soviet production system—including its railway system—emphasized division of
labour, specialization, and centralized responsibility. One person at each level (company,
management bureau, factory) took ultimate responsibility for the completion of its assigned
tasks. This person was also invested with the corresponding authority to direct operations and
ensure task completion.128 The division of labour and assigning of responsibilities had enabled
coordination within the Soviet economy. Delineated responsibility and coordination are also the
very mechanisms that make possible projects of economic planning.129 The Soviet-based system
of centralized individual responsibility became known as the one-leader system (一长制) in the
Chinese context.130
Existing accounts suggest that the Zhongchang Railway experiment was viewed as an
unequivocal success at the time. In the two-and-a-half years of its operation, the Zhongchang
Railway fulfilled or overfulfilled its annual targets. The ratio of transport volume (km-ton) to
personnel number—a ratio used to measure productivity—increased 27.8% between 1950 and
1951, and 22.5% between 1951 and 1952. The cost per km-ton of items transported decreased
127 Ibid., 1070–83; Tongwei Liu, ed., 铁路修建史料第三集 1949-1962 [The Third Series of Historical Materials on Railway Construction, 1949-1962], vol. 第三册 [Volume three] (Beijing, China: 中国铁道出版社 [Chinese Railway Press], 1964), 1–18. 128 Andors and Schurmann discuss general structures and processes of Soviet management systems, especially what had been carried over to the early PRC: Andors, China’s Industrial Revolution, 1977, 47–55; Schurmann, Ideology and Organization in Communist China, 253–60. 129 Andors, China’s Industrial Revolution, 1977, 54. 130 Schurmann, Ideology and Organization in Communist China, 253–54; Wang, 北京铁路局志 1881-1987 [Records of the Beijing Railway Administration, 1881-1987], 791.
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13.5% between 1950 and 1951, and 27% between 1951 and 1952. The railway’s profit increased
by 110% from 1950 to 1951, and 97% from 1951 to 1952.131
Starting in 1953—the first year of the PRC’s FFYP—there was a push within the railway
system to “learn from and spread the experience of the Zhongchang Railway” (学习与推广中长
铁路经验). Chinese personnel who held leadership positions within the ZRC and ZRMB were
asked to synthesize and share their experiences. These cadres produced a document that distilled
their experiences into twelve lessons (12 条经验) for the PRC railway system. These included:
learn from the work styles (工作作风) of Stalin and Lenin; make use of new ways of organizing
labour and determining capacity; promote the use of collective contracts; integrate processes of
production and financial planning; implement the economic accounting system; establish a
method for calculating liquid capital; establish methods for organizing technology; and improve
the material livelihoods of workers and staff.132
Starting in June 1953, all enterprises that reported to the MOR (railway management
bureaus, construction teams, etc.) were asked to develop a plan and timeline for the study and
implementation of the twelve lessons from Zhongchang Railway. Railway enterprises generally
took into consideration their specific needs and circumstances, before selecting relevant lessons
and planning for their implementation.133 In 1954 and 1955, the MOR also organized
opportunities for months-long work-study sessions at the Harbin Railway Management Bureau,
which inherited much of the administrative and organizational structures of the ZRMB in
1952.134 High-level administrative and technical managers (cadres) in the PRC railway system—
131 Gong and Li, 哈尔滨铁路局志 1896-1994 [Annals of the Harbin Railway Bureau 1896-1994], 1996, 1078–80; Xu and MOR Record Compiling Department, 新中国铁路五十年 1949-1999 [50 Years of New China’s Railways 1949-1999], 38. 132 Xu and MOR Record Compiling Department, 新中国铁路五十年 1949-1999 [50 Years of New China’s Railways 1949-1999], 43–45; 中长铁路经验介绍 [Introducing Experiences on the Zhongchang Railway]. 133 Fan, 成都铁路局志 1909-1988 [Annals of the Chengdu Railway Bureau, 1909-1988], 1995, 817–18; Wang, 北京铁路局志 1881-1987 [Records of the Beijing Railway Administration, 1881-1987], 1235–36; Xie and Yu, 兰州铁路局志 1956-1995 [Annals of the Lanzhou Railway Bureau, 1956-1995], 859–61. 134 Gong and Li, 哈尔滨铁路局志 1896-1994 [Annals of the Harbin Railway Bureau 1896-1994], 1996; Xu and MOR Record Compiling Department, 新中国铁路五十年 1949-1999 [50 Years of New China’s Railways 1949-1999], 43–45.
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including MOR department heads, railway management bureau chiefs, head engineers, head
accountants, department heads, station masters—were generally required to attend these
sessions. Over 1,300 people attended in total.135
In the PRC railway system, the push to learn from Zhongchang Railway died down
towards the end of the FFYP. There is no question that, at least in the early 1950s, PRC leaders
had viewed the USSR as an indispensable ally. But even in the early post-war years, some PRC
leaders had expressed a certain unease about Soviet methods and presence in China.136 This
unease was not restricted to top leadership. Certain railway enterprises—such as the Beijing
Railway Management Bureau and the Kunming Railway Management Bureau—did not
implement the one-leader system of enterprise management, even after receiving MOR
directives.137 Earlier—and crucial—forms of CCP victory had relied on mass initiative; on, in
Mao’s words, “everybody taking a hand”.138
The centralized and specialized production system imported from USSR had been highly
efficient. I suggested this efficiency in the last chapter, and will return to this question in the
second half of this chapter. But towards the end of the FFYP period, an increasingly important
question for PRC leaders concerned the balance between—or integration of—specialized
expertise and mass initiative.139 For this new question, the PRC’s leaders could no longer turn to
the USSR for a fast answer. The CCP had to go back to the drawing board; back to (sometimes
painful) experimentation. A substantial discussion of the PRC’s subsequent experiments is
outside the scope of this thesis. But in the next section—which is the last in my discussion of the
135 Xu and MOR Record Compiling Department, 新中国铁路五十年 1949-1999 [50 Years of New China’s Railways 1949-1999], 45; Wang, 北京铁路局志 1881-1987 [Records of the Beijing Railway Administration, 1881-1987], 794–97. 136 Jersild, The Sino-Soviet Alliance, 2014, 27–53; Reardon, The Reluctant Dragon, 2015, 50. 137 Fan, 成都铁路局志 1909-1988 [Annals of the Chengdu Railway Bureau, 1909-1988], 1995, 93; Wang, 北京铁路局志 1881-1987 [Records of the Beijing Railway Administration, 1881-1987], 791. 138 Zedong Mao, A Talk to the Editorial Staff of the Shansi-Suiyuan Daily (April 2, 1948) (Beijing: Foreign Languages Press, 1968). 139 Questions about relationships between mass initiative and specialized expertise is an important theme for the early PRC. This theme was present in the discussions of state leaders and contents of plans; it has also been the focus for outside scholars. See: Andors, China’s Industrial Revolution, 1977; Joel Andreas, Rise of the Red Engineers: The Cultural Revolution and the Origins of China’s New Class (Stanford University Press, 2009); Kojima Retsu, “The Bearers of Science and Technology Have Changed,” Modern China 5, no. 2 (1979): 187–230.
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PRC railway system’s origins—I draw out some elements of the specialist vs. mass question, and
its relevant to projects of state socialism. For now, suffice it to say: though the push to learn from
Zhongchang Railway died down after 1955, Zhongchang’s lessons had been, and would continue
to be, learned.140 These lessons contributed to key aspects of early PRC railway management and
operations.
3.4 An assemblage The parties discussed in this section—the GMD, CCP, and the USSR—did not only each bring a
separate component to what would become the early PRC railway system. These groups also
interacted with each other, in ways that were often shaped by the complex dynamics of
imperialism. These interactions set particular chains of events into motion. The interactions
between the GMD, CCP, and the USSR had produced, for example, the early trajectory of the
CCP. This trajectory would have crucial implications for the course of early PRC development.
In the decade after its founding, the CCP had been defined by its urban-based activities
and learning from the Comintern. Circumstances forced the party and its members to the Chinese
countryside. While mounting revolution, other revolutionaries—including Lenin and Sun Yat-
sen—had also been exiled by establishment forces. But whereas Lenin and Sun had the options
of (and chose to) go abroad, CCP leaders retreated into China itself. The survival of the CCP
became intertwined with the lives and fates of China’s vast majority at the time—its rural
peasants. The rural exile produced fundamental changes for the CCP. In my discussion, I
highlight the changing relationship between the party (and its members) and projects of
industrialization. Industrial spaces—the sites of foreign incursion—had been both the raison
d’etre of Chinese Communist resistance and its weak spot; its unknown. What had changed for
the CCP, between 1927 and 1949? To survive persecution and war, party members acquired new
sets of embodied experiences in relation to industrialization and its products. These experiences
gave rise to new ways of understanding and acting on industrialization.
140 For instance, the setting up of economic accounting systems in all levels of railway enterprises continued into the 1960s. I discuss this in further detail in the next chapter.
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In the 1920s, the CCP’s relationship to modern industrialization had been defined by the
key task of organizing resistance. Chinese workers’ experiences of industrial projects, in places
such as the railways and the mines, were structured by relationships of top-down extraction and
exploitation. Modern industrial work had been imposed onto Chinese workers; it also took its
profits from them. Relationships between ownership, industrial projects, and work had been
structured similarly in Chinese-owned enterprises of the early twentieth century. Epstein
observes that wages were often lower and conditions more difficult in Chinese-owned factories,
precisely because Western enterprises dominated access to capital and technology.141 The CCP’s
early estrangement from modern industrialization also came from the intellectual origins of the
party. For core CCP organizers in the 1920s, their experience of industrial projects was not that
of workers, whose work simultaneously demonstrated their competence, produced their wages,
and extracted value from them. Initially, core party members’ experiences of industrial work—
much like that of most Western Marxists—had been structured by idealist ideas about
exploitation.142
But Nationalist violence, which had initially defeated the CCP in 1927, would force the
Chinese Communists to take up arms. In the two subsequent decades, Chinese Communism
would come to find its own relationship with industrialization and its products. In the 1920s, the
Comintern had instructed CCP members to stay away from the Chinese military, due to its
bourgeois composition.143 In the aftermath of GMD violence, CCP members—including Mao—
began to organize militias. In fall 1927, Mao led an armed uprising in rural Hunan, against GMD
troops and landlords.144 This event had not succeeded and caused some embarrassment for the
CCP. Mao was even removed from the Politburo.145 Mao retreated with a small army to the
Jinggang Mountains between Hunan and Jiangxi. In the next year, Zhu De—founder of the
Chinese Red Army—joined Mao, bringing the troops under his command. Under Mao and Zhu’s
leadership, Communist forces expanded and moved south from the Jinggang Mountains to the
141 Epstein, “Main Directions in Chinese Labor,” 318. Despite difficult conditions in domestic-owned factories, the vast majority of disruptive labour action by Chinese workers in 1895-1949 had targeted Western-owned enterprises. 142 I use the word idealist not in the sense of having ideals; but rather idealism vs. materialism. 143 Schwartz, Chinese Communism and the Rise of Mao, 80. 144 Perry, Patrolling the Revolution. 145 Schwartz, Chinese Communism and the Rise of Mao, 100–101.
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area around Ruijin in Jiangxi Province. Here, Mao and Zhu set up the Chinese Soviet Republic (
中华苏维埃共和国) of Jiangxi-Fuijian in 1931. By 1946, the CCP had control of over twenty
Chinese Soviets (or base areas), covering approximately one-fourth the area of China.146
Mao had been, perhaps above all else, pragmatic and experimental. His experiments
eventually proved quite successful. From these experiences, Mao arrived at his preferred
strategies. These included forging reciprocal relationships with local peoples, relying on mass
initiative and participation, and a pragmatic approach to arms.147 Mao had produced a way
forward for the CCP, when the party had little other options. The ‘correctness’ (or successful
results) of Mao’s strategies earned him a prominent place within the party.148 Starting in the
early 1930s, Mao’s ‘line’ charted the distinctive nature of the CCP’s path to victory. This line
perhaps best summed up in his concept and strategy of People’s War. People’s War is a doctrine
for how to pursue revolution when the establishment power is equipped with a large and
technologically-superior army. Mao advocated for revolutionary movements to foster and make
use of their crucial advantage: their broad based popular support. The doctrine of People’s War
was later adopted and used by revolutionary movements in places such as Vietnam, Nepal, Cuba,
and Nicaragua.149
The crucial significance of Mao’s formulation can only be understood when placed
within the context of how society is organized under Western capitalism. In capitalism, the
powerful minority—capitalists—have a monopoly over the means of production, including the
means of making war.150 The power of the capitalist elite can only be maintained if the majority
are subordinated to technology and machinery. Capitalism produces this subordination by
separating mental from physical labour, and through a process of de-skilling.151 Those who
146 Guoming Liu, 中华民国国民政府军政职官人物志 [Republic of China Military and Governance Records] (Chunqiu Press [春秋出版社], 1989). 147 Selden, China in Revolution, 1995; Howard, Breaking the Iron Rice Bowl, 1988. 148 Barbara Barnouin and Changgen Yu, Zhou Enlai: A Political Life (Hong Kong: Chinese University Press, 2006), 62; Schwartz, Chinese Communism and the Rise of Mao, 90–117. 149 Vo Nguyen Giap, People’s War, People’s Army (University Press of the Pacific, 2001). 150 Christon I. Archer, World History of Warfare (U of Nebraska Press, 2002); Randall Forsberg, The Arms Production Dilemma: Contraction and Restraint in the World Combat Aircraft Industry (MIT Press, 1994). 151 Michel Freyssenet, La division capitaliste du travail (Savelli, 1977); Karl Marx, Capital: A Critique of Political Economy, trans. David Fernbach, vol. 1 (Penguin Classics, 1992).
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understand the theory behind machines (e.g. engineers) are deemed ‘too educated’ to work with
them. Knowledge about the logic and design of machines judged as unnecessary for (or withheld
from) those who work with them. Mao’s strategy of the people’s war combines the knowledge
and mastery of the capitalist’s tools—machinery, arms—with the crucial advantage of the
masses: their numbers.
When the CCP re-approached China’s railway system in 1945, the party had been shaped
by the Maoist line. The CCP’s renewed operations in China’s railway system emphasized
reciprocity between the party and local workers. The party fostered and relied on mass initiative
and a sense of workers’ ownership. Mass participation and investment made it possible for the
CCP and its allies to repair and make use of China’s railway system during the Civil War. This
gave the CCP a crucial advantage. Emphasis on workers’ ownership continued into the post-war
recovery years. The MOR had prioritized the democratic reorganization of railway workplaces;
the railway system in the PRC was importantly conceptualized as the People’s Railway.
The implementation of the PRC’s First Five Year Plan (FFYP) brought some
complications to evolving practices of workers’ ownership. As earlier discussed, Soviet-type
planned economies achieve their efficiency and productivity through the centralization of
responsibility and division of labour. In theory, this system is not incompatible with (the actual
felt experience of) mass ownership. In practice, authority often defaulted into the hands of
specialists and managers. After the FFYP, the PRC would begin a series of experiments aimed at
reconciling mass ownership with specialized knowledge and roles. These experiments—
including the Great Leap Forward and Cultural Revolution—were not necessarily the disasters
that critics of state socialism would insist on.152 They produced some important results. It is
outside of the scope of this thesis to dwell on the PRC’s post-FFYP experiments, but suffice it to
say, their results—and the way that these results are understood—would be very different had
the PRC existed in a different world economy. It would also be inaccurate to conflate the FFYP
with efficiency and rationality, and post-FFYP experiments with inefficiency and waste. CCP
operations in China’s railway system during the Civil War had been resourceful and efficient
precisely because the party had relied on mass initiative and ownership. In the post-war years,
152 For instance, Naughton’s discussion: Naughton, The Chinese Economy, 2007, 5–20.
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the PRC government would continue to rely on mass participation and investment to reduce
waste and achieve efficient development, even during the FFYP.
4. Conclusion In this chapter, I discussed the different systems of infrastructure, knowledge, and practices that
came together to form the early PRC railway system. The operations of history had bestowed
their legacies. PRC state administrators inherited issues faced by the earlier Republican
government, and earlier forms of solutions. The CCP first approached China’s railway system
through organizing workers in the 1920s. During the Chinese Civil War, the PLA’s Northeast
Field Army developed a close symbiotic relationship with railway lines and workers in China’s
Northeast. As the Civil War proceeded, China’s railways gained increasing prominence in CCP
military strategies. Histories of activism and resistance left important imprints on China’s post-
1949 railway system. Finally, the CER or Zhongchang railways had been under Russian state
control since 1897. This set of railways came under joint Sino-Soviet management for a period
before it was handed back to the PRC in 1952. The Zhongchang Railway became a ‘model
railway’ in the early PRC system, passing on aspects of its operations and management to other
railway enterprises.
In the last section of this chapter, I turned to how the different parties referenced above
had interacted with each other. When Nationalist violence exiled CCP members to the
countryside, the party broke away from its Comintern-directed roots. Mao and his ‘line’ gained a
prominent role within the CCP. This line emphasized mass mobilization, mass ownership, and a
pragmatic approach to arms. Mao’s approach brought the CCP to its 1949 victory, and continued
to shape industrial—and particularly railway—developments in the early PRC. The currently
concluding chapter provided a set of historical and railway-specific contexts for the early PRC.
These contexts anticipate and anchor the discussion in the next chapter, which discusses the
mechanisms of early PRC state planning and their implementation in the state railway sector.
Chapter 4 picks up the thread of earlier discussions about ‘irrational’ socialism. The next chapter
also carries forward a set of ideas that began to be discussed in this current chapter. These
concern the relationship between Chinese socialism and the nation’s people. One question that
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emerges in Chapter 4 is how the state socialist pursuit—and achievement—of efficiency shaped
the PRC’s national subjects.
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Chapter IV. The Red passion for economizing, part two: State plans and railway sector accounting in the early PRC
1. Introduction In this chapter, I return to my questioning of ‘irrational’ socialism discourses. In Chapter 1, I
noted that these discourses include three sets of ideas: that (1) planners had been idiosyncratic
and produced irrational plans; that (2) resource allocation had been inefficient due to the absence
of economic mechanisms; and that (3) economic planning produces the waste of resources,
materials, and labour. While discussing the first set of ideas in Chapter 2, I argued that the entire
discourse of ‘irrational’ socialism has little to do with actual events and processes in historically-
existing socialist states. This discourse rather revolves around the reproduction of what it
rhetorically excludes—the operations of Western imperialism.
Having first contextualized and understood common Western discussions of early PRC
developments, I then turned to look at events in China itself. In Chapter 3, I discussed the
formation of the early PRC railway sector. The early system brought together elements from
Republican China, the CCP’s history of activism and war-time experiences, and management
practices from the Soviet Union. The complex interactions between these parties made space for
Mao and his innovations. The Mao-shaped concept of the People’s Railways (人民铁道) came to
characterize Chinese railway operations during the Civil War. This understanding remained in
place in the decades after.
In this chapter, I pick up temporally from where Chapter 3 left off. I discuss mechanisms
of early PRC state planning—a process that began after 1950—and their implementation in the
state railway sector. I begin with an account of the planning process in the early PRC. I then use
evidence from this process to challenge the second and third sets of ideas about ‘irrational’
socialism, which revolve around its alleged lack of economic mechanisms, inefficiency of
resource allocation, and corresponding waste. In the last part of this chapter, I turn to the
operations of state plans in the PRC railway sector. I trace the ‘landing’ of plans through the
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implementation—in the railway sector—of a particular mechanism of state planning. This
mechanism is the economic accounting system.
Tracking processes of state plan implementation makes visible a critical condition of the
early PRC: its ‘backwardness’. This ‘backwardness’ is produced by imperialism, and manifests
in the shortage of capital, technology, and particular kinds of human subjects. The condition of
‘backwardness’ had important implications for how economic efficiency was understood and
acted upon in the early PRC. This condition had also meant that the pursuit—and achievement—
of economic efficiency in the early PRC was tied crucially to the moulding of its population.
2. Early PRC state planning in process As previously discussed, state economic planning in the early PRC benefitted immensely from
the existing Soviet template. In my following account of early PRC state planning, I draw from
accounts—of either the planning or enterprise production process in the PRC—from Andors,
Donnithorne, Fan, Hsiao, Kwang, Meisner, Ren, Wang, Yang, and Zhu.1 For areas less covered
by these authors (e.g. the role of prices in the planned economy), I turned to works on Soviet-
style economic planning by Bornstein and Montias.2 Reading both sets of accounts gave me a
better sense of the overall logic of the process and how specific pieces fit in the PRC context. I
also use information gained from archives and railway-specific sources (e.g. Annals of railway
management bureaus) to fill in some ‘missing pieces’, especially when it comes to how central
processes were linked to local events (e.g. planning and production schedules, transmission of
1 Andors, China’s Industrial Revolution, 1977; Audrey Donnithorne, “China’s Economic Planning and Industry,” The China Quarterly, no. 17 (1964): 111–24; Fan, 成都铁路局志 1909-1988 [Annals of the Chengdu Railway Bureau, 1909-1988], 1995, 505–627; Kwang, The Economic Accounting System of State Enterprises in Mainland China, 1966; Mitch Meisner, “The Shenyang Transformer Factory--A Profile,” The China Quarterly, no. 52 (1972): 717–37; Jianxin Ren, “加强经济合同工作促进国民经济计划的顺利执行 [Strengthening economic contracts to create a smooth process for our economic planning],” 法学研究 [Legal Research], no. 01 (1957): 31–34; Wang, 北京铁路局志 1881-1987 [Records of the Beijing Railway Administration, 1881-1987], 777–1000; Yang, “第一个五年计划的资金积累问题 [The question of capital accumulation in the First Five Year Plan]”; Zhu, 铁路材料技术供应计划 [Plans for Supplying Railway Materials and Technology]. 2 Morris Bornstein, “The Soviet Price System,” The American Economic Review 52, no. 1 (1962): 64–103; J. M. Montias, “Planning with Material Balances in Soviet-Type Economies,” The American Economic Review 49, no. 5 (1959): 963–85.
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information). In the below account, I try as much as possible to link items of information to their
specific sources. However, some of my understanding of early PRC state planning come from an
extended process of amalgamating information and checking sources against each other.3 I do
not always document this process. I imagine readers would largely find it distracting.
Two key state bodies involved in early PRC economic planning were the State Planning
Commission (SPC; 国家计划委员会 or 国家计委) and the State Economic Commission (SEC;
国家经济委员会 or 国家经委). The SPC was established in 1952, and is responsible for long-
term (e.g. five year) planning. The SEC was established in 1956, and functions in the drafting
and implementation of annual plans. Until the SEC was formed—in the fourth year of the
FFYP—its functions had been distributed between the SPC, the various ministries, and the
Finance and Economic Committee under the State Administrative Council (政务院财政经济委
员会 or 中财委).4
The following discussion of state economic planning in the PRC presents an ‘ideal
version’ of the process, or what was supposed to happen, given requisite structures and capacity.
Certain mechanisms of the ‘ideal’ process had not been present in the PRC until after 1955, and
some much later than that.5 I describe the ideal process in order to make visible the logic and
goals of the centrally planned economy. To first present the ideal process also makes it possible
to discuss how and why certain operations did not proceed according to plan. Since James Scott,
it has been almost customary to understand projects of large-scale planning through their
unplanned-for effects.6 Scott separates the intentions of plans from their actual implementations.
3 For instance, something like: Source A says Bodies 1 and 2 are involved. Source B suggests that Body 1 functions in x way, which is similar to what Source C had documented of Body 3 in the Soviet context. Therefore the relationship between Bodies 1 and 2, and their role in the PRC planning process, should be y. 4 BMA 004-014-00008, “中财委批准并印发的 1951 年各月份全国铁路运输计划、会议记录,” January 1, 1951; BMA 004-016-00472, “市财委转发中财委关于各地铁路供应商店若干业务问题的指示及有关铁路系统的供应问题,” January 1, 1954. 5 Fan, 成都铁路局志 1909-1988 [Annals of the Chengdu Railway Bureau, 1909-1988], 1995, 510–30. 6 James C. Scott, Seeing Like a State: How Certain Schemes to Improve the Human Condition Have Failed (Yale University Press, 1998); Susan Greenhalgh, Just One Child: Science and Policy in Deng’s China (University of California Press, 2008); Tania M. Li, The Will to Improve: Governmentality, Development, and the Practice of Politics (Durham, NC: Duke University Press, 2007); Shannon May, “Ecological Urbanization: Calculating Value in an Age of Global Climate Change,” in Worlding Cities, ed. Ananya Roy and Aihwa Ong (Wiley-Blackwell, 2011), 98–126; David Mosse, Cultivating Development : An Ethnography of Aid Policy and Practice (Anthropology,
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The later is what shapes the lives of (local) people, producing the ‘reality’ of plans.7 But the
mismatch between plans—or concepts—and their realization happens in very different ways.
Scott argues that modernist state projects had failed through their exclusion of local
knowledge.8 I argued previously that a gap, also premised on exclusion, exists between Mises’s
concept of capitalism and how capitalism actually operates. The Misesean concept excludes the
operations of power. The relationships of ‘free’ and ‘equal’ exchange that Mises conceives do
not (can not) happen in practice. In the case of Misesean capitalism, what is excluded from the
concept renders its implementation impossible. The very point of the concept—capitalism as
‘free’ and ‘equal’ exchange—is not to produce its implementation, but rather to obscure and
prevent the possibilities of such practices. This was not the relationship between plans and
practices in the early PRC. Rather, the gap that existed between plans and their implementation
in the early PRC had largely been the space of ‘not yet’.
The text of the First Five Year Plan (FFYP), for instance, referred to the PRC ‘not yet’
having sufficient amounts of technical personnel or equipment, as well as planners ‘not yet’
having sufficient experience or access to statistical data.9 Most, if not all, Western accounts of
early PRC planning contain discussions of how certain aspects of state plans fell short in
practice. For accounts containing actual information—where the focus is not on the ‘distortions’
produced through plans—the issues described can also be seen as ones of ‘not yet’. Donnithorne
discusses how, during the FFYP, some local bodies had begun construction without consulting
higher-levels, therefore diverting materials from planned objectives.10 Hsiao describes how—
also during the FFYP—some supplying bodies did not deliver contracted goods in time,
delivered defective goods, and/or disputed with purchasing bodies about prices. State leaders and
Culture and Society Series) (Pluto Press, 2005); Emily T. Yeh, “Greening Western China: A Critical View,” Geoforum 40, no. 5 (2009): 884–94. 7 Scott, Seeing Like a State, 309-41. 8 Ibid. 9 PRC, First Five-Year Plan for Development of the National Economy of the People’s Republic of China in 1953-1957., 1956, 18–19. 10 Donnithorne, “China’s Economic Planning and Industry,” 113.
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planners in the early PRC were presumably aware of these issues. Donnithorne and Hsiao both
draw their knowledge from discussions in early PRC research journals.11
An awareness of China’s pre-PRC history would make it difficult to attribute the above
issues to the centrally-planned aspect of the early PRC economy. Firstly, all enterprises were
operating with a limited amount of capital and resources. In the context of scarcity—and low
technology levels—it is unsurprising that some goods would be produced behind schedule and
with lower-than-expected quality. Secondly, China had been—and still was, during the early
PRC—a largely agricultural society. In Britain, formal education did not become widespread
until the Industrial Revolution was well underway.12 The knowledge and skills for industrial
work had to be taught. Over 70% of workers in the Harbin Railway Management Bureau in 1952
had either an elementary-level of education or less.13 A certain level of reading, writing, and
arithmetic skills are required for successful contract negotiation, and being able to carry out—or
report modifications to—a plan.
A detailed elaboration of the early PRC’s ‘not yet’ state might suggest that the FFYP had
been non-operational. It is important to then contextualize the above details in what had been
discussed in Chapter 3—that the PRC’s FFYP had been quite successful. And finally, one last
item in the discussion of ‘not yet’: it is very much valid to question the direction in which PRC
leaders and planners had urged the nation and its population. Is it better to be more educated,
rather than less? Is it better to improve at self-governance—in order to fulfill plans and
contracts—rather than not? But these are not the questions asked by critics of socialist state
planning. Or at least, not asked with any degree of genuineness. These questions are much more
applicable to the operations of non-state planned economies.
11 Ibid.; Hsiao, “The Role of Economic Contracts in Communist China,” October 31, 1965, 1048–51. 12 Michael Sanderson, Education, Economic Change and Society in England 1780-1870 (Cambridge University Press, 1995), 1–24; Joyce Burnette, Gender, Work and Wages in Industrial Revolution Britain (Cambridge University Press, 2008), 114–16. 13 Gong and Li, 哈尔滨铁路局志 1896-1994 [Annals of the Harbin Railway Bureau 1896-1994], 1996, 1205–8. Also see events described in: Baohua Song, “铁路系统的考工升级工作 [The task of testing and promoting workers in the railway system],” 劳动 [Labour], no. 08 (1956): 17–19.
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Back to the process of state economic planning, then. The first step of the process begins
months prior to the beginning of the production year.14 The State Economic Commission (SEC)
determines a list of ‘control items’. In the early PRC, these included the output and balance of
major industrial products (e.g. steel, iron, coal, machines, etc.); the output and balance of major
agricultural products (e.g. grain, cotton, vegetable oil, etc.); the total volume of freight
transported on railways; the total wages and workers in each industry; and profits in each
industry.15 The SEC then makes a survey of the existing national situation, including existing
stockpiles in warehouses, latest production figures, forecasts of productive capacity, and
estimated demands for products.16 The SEC largely relies on information provided by the various
ministries (e.g. the First and Second Ministry of Machine-Building; Ministry of Agriculture,
Ministry of Railways).17 From its national survey, the SEC drafts output targets for the ‘control
items’—these are often referred to as ‘control figures’ in English-language literature on state
economic planning.
After drafting tentative output targets, the SEC transmits these targets to the production
ministries. The tentative targets that ministries (e.g. MOR) receive includes targets for
production output; labour productivity; number of employees; and estimates of receipts,
expenditures, and profits.18 Using tentative targets from the SEC as guidelines, each ministry—
taking into account its own capacity, needs, and the latest up-to-date information—calculates
their actual expected output targets, as well as the material inputs that they would require to meet
output targets.19 Based on these two sets of information, each ministry drafts its own production
and procurement plans. These plans are then submitted by the ministries to the SEC. The SEC
proceeds to ‘balance’ plans from the individual ministries.20 For state-owned enterprises
14 Montias, “Planning with Material Balances in Soviet-Type Economies,” 963–64. 15 Donnithorne, “China’s Economic Planning and Industry,” 115. 16 Hsiao, “The Role of Economic Contracts in Communist China,” October 31, 1965, 1045–46; Montias, “Planning with Material Balances in Soviet-Type Economies,” 964–66; Donnithorne, “China’s Economic Planning and Industry,” 114–15. 17 Meisner, “The Shenyang Transformer Factory--A Profile,” 1972, 720. 18 Bornstein, “The Soviet Price System,” 964–70; Fan, 成都铁路局志 1909-1988 [Annals of the Chengdu Railway Bureau, 1909-1988], 1995, 515–25. 19 Hsiao, “The Role of Economic Contracts in Communist China,” October 31, 1965, 1046. Also see: Montias, “Planning with Material Balances in Soviet-Type Economies,” 965. 20 Montias, “Planning with Material Balances in Soviet-Type Economies,” 965.
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involved in the use and production of ‘control items’ (e.g. steel, cotton), it is this process of
balancing that substitutes—in the national economy—the operations of the free market. Hence
why Soviet-type economies are sometimes known to operate through ‘material balance
planning’. For each control item, the process of its balancing ends when the SEC—working from
the plans submitted by each ministry—has matched the total expected output (supply) of the item
to total plans for its input (demand).21
When the SEC finishes all processes of balancing, it formulates the national production
and procurement plan. The national plan contains production and procurement quotas for each
ministry. This information is transmitted by the SEC to each ministry, before the beginning of
each planned production year.22 Each ministry then distributes its production and procurement
quotas among its subordinate enterprises (e.g. locomotive depots, railway management bureaus).
Using these quotas as strict guidelines, each enterprise formulates its own production and
procurement plans. These plans consist of how the individual enterprise will meet its production
targets (quota), and what inputs are required—including the variety, quantity, and other specific
characteristics of the materials needed.23 Enterprise plans are submitted to the ministry in charge
for approval. Once plans are approved, enterprises are under legal obligation to meet (or
overfulfill) the targets set out by its plan.24 However, modifications to the enterprise plan are
possible and do happen.25 Prior to the approval of its plan by the ministry, the enterprise is
expected to carry out production according to its draft plan. Final enterprise plans can look
significant different from the initial production and procurement quotas issued to each enterprise.
These initial quotas become modified in the course of realistic plan-making by each enterprise,
and through the ministry’s reconciling of plans from different enterprises.
21 Ibid. 22 Hsiao, “The Role of Economic Contracts in Communist China,” October 31, 1965, 1045–46. 23 Ibid.; Zhu, 铁路材料技术供应计划 [Plans for Supplying Railway Materials and Technology], 2–7. 24 Hsiao, “The Role of Economic Contracts in Communist China,” October 31, 1965, 1043–47; Kwang, The Economic Accounting System of State Enterprises in Mainland China, 1966, 69. 25 Kwang, The Economic Accounting System of State Enterprises in Mainland China, 1966, 69; Fan, 成都铁路局志1909-1988 [Annals of the Chengdu Railway Bureau, 1909-1988], 1995, 510–25.
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Starting during the FFYP, enterprises were considered distinct legal entities with their
own set of rights and responsibilities.26 Enterprises entered into contracts with other enterprises
for supplying and procuring products, and were expected to fulfill the terms of these contracts or
bear penalty terms.27 Each enterprise was an independent account unit, and was expected to
cover its expenses from its own revenues. As early as 1942 Mao had said of enterprises in CCP-
governed areas: “All factories should shrink or grow according to their economic prosperity. All
salaries should be paid from the factories' own profit and not from tax grant, government
clothing and government grants.”28 In the early PRC, enterprise operations were directed toward
the fulfillment (and overfulfillment) of its enterprise plan. Enterprise plans included plans for
items such as production output, lowering cost, ensuring quality, and maximizing profit.29
During this time, failing to meet planned objectives had been met with public criticisms, the
garnishing of top managers’ wages, and assistance in getting back on track.30
3. Critical projections: The distorted reflection of American corporations The above presents, in somewhat broad strokes, an overview of how state economic planning
worked in the early PRC. Even a broad overview provides grounds for questioning ideas about
‘irrational’ socialism, such as those revolving around its absence of economic mechanisms,
inefficient resource allocation, and the corresponding production of waste. I start with a
discussion of economic mechanisms. I use this term to refer to those items that Nolan and Ash
26 Ren, “加强经济合同工作促进国民经济计划的顺利执行 [Strengthening economic contracts to create a smooth process for our economic planning]”; “铁道部决定自七月一日起全国各铁路管理局实行经济核算制度 [MOR Issues Nation-Wide Directive for Railway Bureaus to Implement the Economic Accounting System, Starting on July 1],” 人民日报 [People’s Daily], June 24, 1951, sec 2. 27 Hsiao, “The Role of Economic Contracts in Communist China,” October 31, 1965, 1043–47. 28 Zedong. Mao, Economic and Financial Problems during the Anti-Japanese War, and Other Articles. (Beijing, China: Foreign Languages Press, 1955), 43. 29 Kwang, The Economic Accounting System of State Enterprises in Mainland China, 1966, 65–68; Meisner, “The Shenyang Transformer Factory--A Profile,” 1972, 720–22. 30 Meisner, “The Shenyang Transformer Factory--A Profile,” 1972; People’s Daily Editorial, “吸取铁路运输工作中的教训 [Absorbing the Lesson from Railway Transport Work],” 人民日报 [People’s Daily], February 25, 1953, sec 1; Fan, 成都铁路局志 1909-1988 [Annals of the Chengdu Railway Bureau, 1909-1988], 1995, 710–25.
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had found lacking from the early PRC economy, the—in the authors’ words—“fundamental
economic concepts [of] price, cost, and profit”.31
First is profit. As discussed above, both state and enterprise plans contained targets for
profit. These were usually expressed as a percentage of the production ministry’s or enterprise’s
operating costs.32 The fulfillment (or overfulfillment) of the enterprise profit plan was generally
considered one of the three key measures of enterprise success in the early PRC. The other two
were the fulfillment of the production plan, and the quality plan.33 The emphasis on profit in
state socialism may seem surprising to readers of Marx—or those of Mises. Marx had equated
profit to surplus value, or the value that capitalists take from workers.34 In Marx’s socialism,
workers would presumably receive back (in wages, goods, etc.) the value produced by their
labour.35 There would be no profit to speak of. But for actually-existing projects of state
socialism, a key task was to accrue capital, which facilitates the nation’s development of its own
means of production. It was consequently of crucial importance for socialist states to maximize
the aggregate value derived from labour, calculated in aggregate profit.
In order to calculate profit—as well as cost, income, and a whole set of other value
measurements—state planned economies needed a system of prices. Prices made it possible to
commensurate different input items (e.g. raw materials, labour, capital goods) and different
output items, which additionally varied from enterprise to enterprise.36 This process of
commensuration served a key goal: both state planners and enterprises could then calculate how
to maximize output given a set amount of input, and vice versa. Mises had initially argued that
socialism was irrational—impossible—due to the absence of prices, and consequently other
measurements of economic value. Mises was proven wrong by the operations of the Soviet
31 Nolan and Ash, “China’s Economy on the Eve of Reform,” 1996, 18. 32 Kwang, The Economic Accounting System of State Enterprises in Mainland China, 1966, 92–96; Meisner, “The Shenyang Transformer Factory--A Profile,” 1972, 719–21. 33 Meisner, “The Shenyang Transformer Factory--A Profile,” 1972, 719–21; Mao, Economic and Financial Problems during the Anti-Japanese War, and Other Articles. 34 Karl Marx, Value, Price and Profit: Speech to the First International Working Men’s Association, June 1865 (Socialist Labor Party, 1919). 35 Ibid. 36 Bornstein, “The Soviet Price System,” 65.
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economy. But his original misconception lives on, as evident from how Nolan and Ash
understand early PRC resource allocations to have happened in the absence of mechanisms such
as cost, profit, and prices.
For critics of ‘irrational’ socialism, the alleged lack of economic measurements in state
planned economies is linked to their inefficient resource allocation. But planned allocation—and
central to it, the process of balancing outputs and inputs—is geared precisely towards the
efficient use of resources. Everything that is produced becomes used. A similar system of
planning and matching exists in North America for scarce and valuable resources. These include
the matching system that bring together North American hospitals with graduating medical
doctors, and the system of quotas that match dairy production with demand.
Moreover, planning and coordination—including of resource use—are key operating
components of large Western corporations. In fact, American corporations (e.g. General Motors)
and Soviet-type economies have very similar operating structures. They share the three key
characteristics of centralized planning, de-centralized responsibility, and coordination between
different functional bodies.37 Accordingly to Kaplan, it is widely known that the evolution of
these organizational structures had produced the success of the DuPont Power Company in the
early 1900s. These structures were brought over to (and further developed in) General Motors,
when executives and shareholders of Dupont migrated to GM in the 1920s. The accounting and
managerial structures of GM set the template for large American corporations in the decades to
come. Kaplan, writing in 1988, remarks that since 1925, there has been little change or
innovation in the accounting and management practices of American corporations.38
The confluence of organizational structures in Soviet-type planned economies and
American corporations might seem quite surprising. What is perhaps even more surprising is the
reason behind this confluence. In the 1920s, Soviet leaders puzzled over the design of an
economic system for the newly socialist state. Bear in mind that a key objective for Soviet
socialism—also shared by subsequent projects of state socialism—had been rapid surplus
37 Robert S. Kaplan, “The Evolution of Management Accounting,” The Accounting Review 59, no. 3 (1984): 398–99. 38 Ibid., 410.
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accumulation and industrial development. In designing for both rapid and collectivist
accumulation, Lenin and his colleagues turned to an unlikely source: the work of Frederick
Winslow Taylor. In the words of Lenin: “The Taylor system, […] like all capitalist progress, is a
combination of the refined brutality of bourgeois exploitation and a number of the greatest
scientific achievements in the field of analysing mechanical motions during work, the
elimination of superfluous and awkward motions, the elaboration of correct methods of work, the
introduction of the best system of accounting and control, etc. The Soviet Republic must at all
costs adopt all that is valuable in the achievements of science and technology in this field.”39
And Soviet planners did proceed to adopt the best of American accounting and
managerial technologies. In the 1920s, managerial and technological exchanges proliferated
between the Soviet state and American corporations.40 The events of this decades have since—
especially since the Cold War—been buried by both sides. But before these memories were
erased, perhaps Stalin said it best. When discussing the USSR’s FFYP, Stalin attributed its
success to the work style of Leninism, which, according to Stalin, combined “Russian
revolutionary sweep” and “American efficiency”. Stalin continued: “American efficiency is that
indomitable force […] which with its business-like perseverance brushes aside all obstacles;
which continues at a task once started until it is finished […]. But American efficiency has every
chance of degenerating into narrow and unprincipled practicalism if it is not combined with
Russian revolutionary sweep.”41
In advocating for the adoption of American management and accounting structures for
the Soviet economy, Lenin presumably thought that it was possible to separate “bourgeois
exploitation” from American scientific achievements. The possibility of this separation is very
much questionable, especially when the branch of science in question concerns labour
management and discipline. But as the quote from Stalin reminds us, American corporate
structure had been incorporated into Soviet socialism as a tool—to be contextualized by the
39 Lenin, “The Immediate Tasks of the Soviet Government,” 259. 40 Mark R. Beissinger, Scientific Management, Socialist Discipline and Soviet Power (I.B.Tauris, 1988), 19–58; Charles E. Sorensen, My Forty Years with Ford (Wayne State University Press, 1956), 190–215. 41 Joseph Stalin, Problems of Leninism (Beijing, China: Foreign Languages Press, 1976), 115.
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revolutionary frame.42 Two key aspects separate the overall operations of Soviet-type economies
and American corporations. The first concerns the objectives of profit accumulation, and uses for
profit. In capitalism, profit-use falls within the private domain of the capitalist. Profit is
moreover most often used to maintain and reproduce class distinction—including the historical
and ongoing distinction of the Global North from the Global South.43 In state socialism, profit is
reinvested into the project of (peripheral) state industrialization.
The second key aspect separating Soviet-type economies from American corporations is
the role that people play in the process. Both the USSR and the PRC were, in theory, led by and
for the purposes of the people.44 The planning process in the early PRC involved a degree of
worker input. After the enterprise receives its production and procurement quotas from the
ministry in charge, the enterprise planning process begins. Enterprise management (e.g. railway
management bureau chief) draws up a set of preliminary plans, assisted by top-level specialists
(e.g. chief engineer, department heads). These plans are passed to subordinate and other bodies
(e.g. locomotive section, work teams within the section, workers’ assembly) for discussions and
revisions. Through ‘lower’-level discussions, sections and work teams draw up their monthly and
quarterly work plans.45 The revised plan is then passed back to enterprise management, and
circulated again as needed. The process of plan circulation incorporates workers and makes use
of their experiences and expertise. This step has important implications for the matching of plans
to capacity and resources.46
Successful—and efficient—state planning and production relies on local initiative and
practices. In the next section, I turn to local developments brought about by state planning in the
early PRC railway sector. I trace the development of the economic accounting system, known as
the ‘link’ between different operations in the railway sector, as well as what ‘links’ the railway to
42 Of course what is brought to mind is Audre Lorde’s idea of ‘master’s tools, master’s house’. 43 Vernengo, “Technology, Finance, and Dependency: Latin American Radical Political Economy in Retrospect”; Williams, Capitalism & Slavery, 1944. 44 Yiching Wu Wu, The Cultural Revolution at the Margins (Harvard University Press, 2014), 39–42. 45 Meisner, “The Shenyang Transformer Factory--A Profile,” 1972, 720–26; Fan, 成都铁路局志 1909-1988 [Annals of the Chengdu Railway Bureau, 1909-1988], 1995, 510–15; Wang, 北京铁路局志 1881-1987 [Records of the Beijing Railway Administration, 1881-1987], 813, 815–16. 46 Meisner, “The Shenyang Transformer Factory--A Profile,” 1972, 723–25.
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national production plans. The development of the economic accounting system in PRC railways
shed further light on how efficiency and resource conservation had been two key components of
the early PRC’s planned economy.
4. The ‘central link’ of the plan: Economic accounting in the PRC railway sector The last section in this chapter brings together state socialist planning and railway sector
developments in the early PRC. The system of state planning reshaped forms of economic and
social organization in China’s railway sector. In this section, I focus on how the railway sector
was changed through the adoption of one particular—and central—mechanism of state planning:
the system of economic accounting. I delve into details about this system and its relevance to the
early PRC in the below section. I want to first draw out the significance of what has already been
covered, in terms of linking railway sector developments to early PRC state plans.
I have spent some time discussing the history and origins of the PRC railway system. The
earlier discussion provides context for understanding the sector-wide implementation of the
economic accounting system after 1952. Early PRC plans, including those for its railways, were
formed in response to certain pre-existing states in Chinese industries. These pre-existing
conditions in turn shaped and constrained processes of implementing state plans and their
mechanisms, including the system of economic accounting. The enduring nature of China’s
railways makes it possible to track—through evolving railway structures and operations—the
interplay between history, state industrialization plans, and their results. Tracking state plans
through railway sector development also makes visible relationships between early PRC plans
and the project of nation-building. Plans and the processes of their implementation unfolded
differently in different parts of the PRC. This is not indicative of the ‘failure’ of state plans per
se, but rather shows that one objective of early PRC planning was to bring together—or
commensurate—the Chinese nation-state.47
47 The segmented nature of pre-1949 China can be attributed to at least two factors. These include the largely non-modern forms of governance exercised in pre-1949 China, and the nation’s partitioning by imperialist powers.
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Finally, before proceeding to the economic accounting system, I will provide a brief
overview of the railway’s role in the early PRC. China’s railways were a key component of early
PRC industrialization plans. In the PRC’s First Five Year Plan (FFYP), railways received 69% of
the total funding allocated to transport and telecommunications development.48 The Ministry of
Railways (铁道部; MOR) was founded ten months prior to the Ministry of Transportation (交通
部; MOT). The MOR existed alongside the MOT until 2013, when the former was dissembled
and partly incorporated into the later. Transportation itself had a key role in early PRC plans.
Early PRC leaders had—following Marx—considered the transportation sector to be one of four
spheres of material production (基本物资生产部门).49 The other three so-considered spheres
were agriculture, industry, and mining. Transportation enables production in the other spheres
and connects them, by moving materials to where they can be further laboured upon.50
Railways had been the primary method of transporting materials for two important
reasons. Firstly, much of what needed to be transported was bulky and heavy, such as the fuel
and machines needed for heavy industry, and crops moving from the countryside into cities.51
Secondly, a key objective of early PRC state plans was to achieve balanced development of the
entire nation.52 Industrial centers were planned in places such as Central China and the
Northwest, away from existing production centers in China’s coast and the Northeast.53 A
reliable method was therefore needed for the long-distance transport of materials and machinery
into hitherto underdeveloped areas. According to the FFYP, a study had shown that at the time,
48 PRC, First Five-Year Plan for Development of the National Economy of the People’s Republic of China in 1953-1957., 1956, 139–42. 49 Peng, 第一个五年计划中的铁路建设 [Railway Construction in the First Five Year Plan], 1–4. See also: Karl Marx, Theories of Surplus Value (Prometheus Books, 2000). 50 Peng, 第一个五年计划中的铁路建设 [Railway Construction in the First Five Year Plan], 1–2. 51 PRC, First Five-Year Plan for Development of the National Economy of the People’s Republic of China in 1953-1957., 1956, 142; MOR Planning Division [铁道部计划司], 全国铁路历史统计资料汇编 1949-1991 (Beijing, China: 中华人民共和国铁道部 [PRC MOR], 1992). 52 See discussions in: Peng, 第一个五年计划中的铁路建设 [Railway Construction in the First Five Year Plan], 2–3; Nicholas R. Lardy, Economic Growth and Distribution in China (Cambridge University Press, 1978); Lippit, “Development of Transportation in Communist China.” 53 Peng, 第一个五年计划中的铁路建设 [Railway Construction in the First Five Year Plan], 2–3.
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the railway carried over 80% of freight travelling by modern transport methods.54 In 1949, the
Minister of Railways, Teng Daiyuan, stated that the railway’s crucial contribution to national
development was to increase the ratio and speed of cargo turnover in relation to cost.
Consequently, the main goal for the PRC railway system was to raise efficiency and lower
cost.55 The stage was therefore set for the introduction of the economic accounting system.
In the Chinese context, the concept of economic accounting systems was first referenced
by Mao in 1942, while addressing a conference of cadres in Yan’an. Mao’s speech concerned the
economic development of CCP base areas. Mao stated the need to “[e]stablish the system of
economic accounting (经济核算制), [in order to] overcome the muddled situation within the
enterprises”. Mao went on to list several steps needed to establish this system, concluding that
“[o]nce we have a strict accounting system, we can examine fully whether an enterprise is
profitably operated or not.”56 Kwang surmises that in the early PRC, the economic accounting
system operated to ensure the “attainment of maximum economic results from a minimum
expenditure of labor and capital”—subject of course to the directives of state plans and
planners.57
The system of economic accounting was therefore key to the PRC’s plans for rapid and
frugal industrialization. This system is also the very tool that makes possible state planning and
local production according to plan. State plans are produced through lower levels making
calculations of maximum output (of production, profit, labour productivity, etc.) from minimum
input; higher levels can also ‘double-check’ these calculations. Once calculated and approved,
these figures provide the guiding framework for enterprises in their daily operations. For these
54 PRC, First Five-Year Plan for Development of the National Economy of the People’s Republic of China in 1953-1957., 1956, 142. 55 “要办好人民铁道 须解决六个问题 [For Well-Functioning Chinese Railways, Resolve Six Problems].” 56 Mao, Economic and Financial Problems during the Anti-Japanese War, and Other Articles., 161. 57 Kwang, The Economic Accounting System of State Enterprises in Mainland China, 1966, 80.
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reasons, the system of economic accounting was often referred to as the ‘basic mechanism’ (基
本方法) or ‘central link’ (主要环节) of the early PRC’s planned economy.58
In the early PRC, there were some discussions about the relationship of economic
accounting systems to socialism, the particular system of social and economic organization. For
instance, was the economic accounting system merely a method of economic calculation? Or did
the system enable a set of relationships—between enterprises and the state, between workers and
their workplaces—that were unique to socialism?59 Early PRC authors usually traced the
economic accounting system to the Soviet Union.60 It is very likely that the particular
combinations of calculations contained within the system—and especially its role in the state
planned economy—had been unique Soviet innovations. However, there are certainly similarities
in form and function between the economic accounting system and management and accounting
systems used by American enterprises after the 1900s. The numerical commensuration and cost-
saving aspects of the economic accounting system particularly resembles Return on Investment
(ROI) measurements pioneered by the DuPont Company and later adopted as standard American
corporate practice.61 In the Chinese context, more philosophical questions were soon replaced by
practical discussions of how to implement the system, including how to mitigate existing and
anticipated challenges.62
In the PRC, the first directive for implementing the economic accounting system came in
April 1951 from the Finance and Economic Committee of the Central People’s Government (中
央政府政务院财政经济委员会). This directive specified five methods for establishing the
system in state industrial enterprises. These were: (1) planned management involving targets for
58 Kwang, The Economic Accounting System of State Enterprises in Mainland China, 1966; Xue, “关于在国家银行推行经济核算制的意见 [Comments on the National Bank's implementing of the economic accounting system],” 中国金融 [China Finance], no. 12 (1951): 1–2. 59 Kwang, The Economic Accounting System of State Enterprises in Mainland China, 1966; Xue, “关于在国家银行推行经济核算制的意见 [Comments on the National Bank's implementing of the economic accounting system].” 60 Jiang, “经济核算 [Economic accounting],” 中国金融 [China Finance], no. 12 (1951): 3–4+13; Xue, “关于在国家银行推行经济核算制的意见”; Zhang, “论新民主主义经济核算制度 [Discussing the economic accounting system of the new democracy],” 厦门大学学报 [Xiamen University Newspaper], no. 01 (1952): 59–64. 61 Kaplan, “The Evolution of Management Accounting,” 387–98. 62 Kwang, The Economic Accounting System of State Enterprises in Mainland China, 1966, 62.
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production, labour productivity, and cost reduction; (2) determination of required amount of
working and fixed capital for each enterprise; (3) establishment of independent accounting
systems and the assuming of responsibility by enterprise managers for performance; (4) granting
enterprises the right to enter into contracts for purchases and sales; and (5) institution of factory
bonus fund for overfulfillment of profit plans.63 The content of this early directive closely
matches what Taylor had identified as necessary components of scientific management systems.
In Taylor’s account, these were: formalized planning, standardized accounting and production
processes, functional foremen with specialized expertise, and incentive wage schemes.64
One crucial aspect present in the early PRC directive but missing from Taylor’s
prescriptions is the need to determine and establish sufficient funds. Mao had listed this step first
when discussing the implementation of economic accounting systems in CCP base areas.
Sufficient funds were needed so that, according to Mao, “production is not frequently hindered
through capital problems.”65 The absence of this step from Taylor’s discussion suggests that
operational inefficiency linked to capital shortage had not been a concern for American
corporations. One other requirement of economic accounting systems appears in neither Taylor’s
account nor the 1951 directive from the Finance and Economic Committee. This is the shaping
of workers into plan- and goal-oriented subjects; those who would be properly incentivized by
incentive wage structures. Mao had initially spoken on this topic in 1942. For Mao,
implementing the economic accounting system involved “improv[ing] the work of the workers’
congress (职工会)”. Mao elaborated:
“Work done by the workers' congress which is not suitable for raising labour discipline and activism must be changed. Within a factory, the work of the administration, Party branch and workers’ congress must be united towards common ends. These common ends are to save as much as possible on costs (raw materials, tools and other expenses), to make as many and as good products as possible, and to sell them as quickly and as profitably as possible. […] Finally the factory should reward the workers and employees with the greatest achievements, and criticize or punish workers and employees who
63 Ibid., 78. 64 Daniel. Nelson, Frederick W. Taylor and the Rise of Scientific Management (Madison, Wis.: University of Wisconsin Press, 1980), 102. 65 Mao, Economic and Financial Problems during the Anti-Japanese War, and Other Articles., 43.
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commit errors. Without a suitable system of rewards and punishments, we cannot ensure the improvement of labour discipline and labour enthusiasm.”66
Mao’s candor here—about the need to shape workers—was rarely seen again from PRC state
leaders in the two decades after 1949. In the early PRC, official (and popular) discourses
advocating forms of change or improvement were usually aimed at leaders, party members, and
managers (or cadres), rather than workers.67
Here it is useful to pause and revisit some elements of ‘irrational’ socialism discourses.
For Mises and his intellectual progeny, practices of state socialism are deemed ‘irrational’
because they contravene natural processes. Part of the ‘nature’ that is in question for Mises is
human nature. For Mises, socialism imposes upon and contravenes man’s ‘natural’ tendency to
maximize his own individual pursuit of value. Socialism consequently—will—fail because
man’s essential nature cannot be converted to one that seeks shared value. Misesean predictions
about socialist failure are already untenable due to their assumptions about capitalism. Western
capitalism, characterized by its industries and corporations, is not a system where each individual
pursues the maximization of his own value. What is additionally untenable is of course the
Misesean understanding of state socialism.
State socialism arose out of the experience of capitalist exploitation and the attempt at
self-defense. When looking closely at the specific mechanisms and operations of early PRC state
plans, it becomes clear that state socialism was not aimed at the conversion of capitalist human
nature to one more suited to socialism. Early PRC state plans aimed to, first of all, create the
kind of self-conscious and calculating subject that began emerging in the West more than a
hundred and fifty years ago—at the dawn of the Industrial Revolution.68 This subject (or the
‘ought’ nature of its existence) could already be taken for granted by Taylor, writing in the U.S.
between 1890 and 1920. In the early PRC, the ‘new’ subject in formation was expected to
66 Ibid. 67 These dynamics are particularly visible in events around the Cultural Revolution (CR). See discussions of the CR in: Lowell Dittmer, Liu Shaoqi and the Chinese Cultural Revolution (M.E. Sharpe, 1998); Wu, The Cultural Revolution at the Margins, 2014. 68 See discussions in: Michel Foucault, The Government of Self and Others: Lectures at the College de France, 1982-1983 (Macmillan, 2011); Nikolas Rose, “Government, Authority and Expertise in Advanced Liberalism,” Economy and Society 22, no. 3 (1993): 283–99.
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simultaneously learn the skills for and value productivity, while re-inhabiting—or creating
anew—the forms of collectivity that more easily accompanied pre-industrial societies, with their
lesser degree of functional differentiation.69 And all of this from a starting condition of scarcity.
To compare the two sets of programs—Taylor’s and those of early PRC leaders—for
establishing enterprise management systems makes it clear that one objective of state socialist
planning had been to get to the level of, or ‘catch up’ with, Western capitalism.70 The enterprises
that early PRC plans sought to act upon lacked two important pre-existing conditions of
American corporations in the early 1900s. These were: a sufficient amount of capital, and the
taken-for-granted presence of individuated and plan-following workers. The ‘backwards’
conditions of early PRC state enterprises gave rise to two key aspects related to the efficiency of
socialist planned economies. I have earlier referenced or suggested these aspects of state socialist
economic operations elsewhere. It is however worthwhile to reiterate the two before discussing
the implementation of the economic accounting system in the early PRC railway sector. But first,
a few words on the idea of ‘backwardness’.
In much of contemporary Western academic literature, the PRC’s initial
‘backwardness’—if mentioned—is usually viewed as an intrinsic characteristic of the nation-
state.71 Thus internalized, China’s ‘backwardness’ can co-exist with the ‘irrational’ socialism of
the early PRC state. Both can be attributed to poor decision-making on the part of the Chinese.
On the other hand, if ‘backwardness’ is instead understood to be a condition imposed onto
China, then it becomes possible to see early PRC state actions as actively responding to, if
constrained by, these conditions. It is this second understanding of early PRC ‘backwardness’
that has two important implications for how to think about the efficiency of state socialist
economies. Firstly, conditions of ‘backwardness’ (or scarcity) and the need to ‘catch up’ meant
that the conservation and efficient use of resources had been the paramount concern for early
PRC leaders, planners, and managers. Secondly, what appear to Western eyes to be incidences of
69 Emile Durkheim, The Division of Labor in Society (New York: Simon and Schuster, 2014). 70 After all, an important slogan during the Great Leap Forward had been Mao’s statement that in terms of steel production, China would surpass Britain and catch up with the USA in fifteen years. 71 Lin, Cai, and Li, The China Miracle, 2003, 30–35; Zhenhua Chen and Kingsley E. Haynes, Chinese Railways in the Era of High-Speed (Emerald Group Publishing Limited, 2015), 3–5.
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inefficient resource use and waste can often be traced to the early PRC’s ‘backwardness’, or a
condition of lacking capital, technology, and the calculating and individuated subjects called
forth by capitalism. These two aspects of the early PRC’s planned economy both call into
question ideas about ‘irrational’ socialism. These ideas tie the ‘failure’ of state socialism to its
alleged lack of economic mechanisms, inefficient resource allocation, and corresponding
production of waste. Both implications of the PRC’s ‘backwardness’—the state’s concern with
conservation and the ‘in formation’ nature of its systems—can be seen from events surrounding
the implementation of the economic accounting system in the early PRC railway sector.
The PRC railway sector began its own set of discussions about implementing the
economic accounting system in 1951. The earliest publicized call for the sector-wide
implementation of the system came from Minister Teng Daiyuan in June 1951, in the form of an
editorial published in the People’s Daily (人民日报).72 Teng wrote that the issue of economic
accounting systems had been raised at the February meeting of railway bureau chiefs (管理局长
会议). The attendees had agreed that the system of economic accounting would be implemented
in all railway management bureaus across the country, starting on July 1, 1951. The
implementation process was to be completed within the next two years.73 Teng’s editorial also
discussed why, at that time, the economic accounting system had become necessary to the state
railway sector. Teng’s article was accompanied by a set of others about how to implement the
economic accounting system and its importance to the PRC railways.74 I will return to these
discussions later. I first take a look at events that prefigured Teng’s announcement.
72 Daiyuan Teng, “经济核算制是经营管理人民铁路的基本方法 [The Economic Accounting System Is the Basic Method of Operations Management for the People’s Railways],” 人民日报 [People’s Daily], June 21, 1951, sec 1. 73 Ibid.; Xu and MOR Record Compiling Department, 新中国铁路五十年 1949-1999 [50 Years of New China’s Railways 1949-1999], 30–31. 74 “铁道部决定自七月一日起全国各铁路管理局实行经济核算制度 [MOR Issues Nation-Wide Directive for Railway Bureaus to Implement the Economic Accounting System, Starting on July 1]”; Ruilin Cao, “天津铁路管理局丰台机务段 忽视了对职工进行思想教育 经济核算准备工作走了弯路 [The Fengtai Locomotive Section of the Tianjin Railway Bureau Neglected the Task of Educating Workers, Implementing the Economic Accounting System Has Gone Awry],” 人民日报 [People’s Daily], June 10, 1951, sec 2; Xinhua News Agency, “铁道部召开全国铁路管理局长会议 决定贯彻经济核算制的办法 批判了供给制思想和本位主义思想 [MOR Hosted a National Meeting of Railway Bureau Chiefs, Decided to Implement Economic Accounting System. Criticized the Supply System Way of Thinking and Narrow Pragmatism],” 人民日报 [People’s Daily], July 19, 1951, sec 2; “铁路部门实
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A July 1951 article in the People’s Daily casted railway sector activities in the previous
three years as preparatory work (准备工作) for the implementation of the economic accounting
system.75 According to the article, this preparatory work consisted of three sets of activities. The
first had been the democratic reform of railway workplaces. I referred to this set of reforms
earlier, when discussing CCP influences on the formation of the early PRC railway sector. I
provide more details here. A key part of railway workplace reform was to find and struggle
against counter-revolutionary elements. These elements were not restricted to the corporal bodies
of the enemy; they can also be present in the thoughts and habits of otherwise good people.76
Consequently, democratic reforms involved the reading of revolutionary documents (e.g. the
writings of Marx; Mao), and self- and group-study sessions.77 Through structural reform of
workplaces and thought-reform of management and workers, the early PRC state aimed to
eliminate previous forms of worker exploitation. These included the contract work (包工)
system, where contracts and wages for a group of workers were given to the gang boss in
charge.78
As a part of workplace reforms, workers were also mobilized to discuss working
conditions, structures, and wages. These discussions both informed and provided consent for the
implementation of new forms of work organization and wage structures.79 Workplaces were also
行经济核算制前作了一系列必需的准备工作 [A Series of Preparatory Work Is Required before Implementing the Economic Accounting System in the Railway Sector].” 75 “铁路部门实行经济核算制前作了一系列必需的准备工作 [A Series of Preparatory Work Is Required before Implementing the Economic Accounting System in the Railway Sector].” 76 See for instance the discussion in: Liu Shaoqi, How to be a Good Communist (Beijing: Foreign Language Press, 1949). 77 Xu and MOR Record Compiling Department, 新中国铁路五十年 1949-1999 [50 Years of New China’s Railways 1949-1999], 31–33; Gong and Li, 哈尔滨铁路局志 1896-1994 [Annals of the Harbin Railway Bureau 1896-1994], 1996, 1343–60. 78 Tongwei Liu, ed., 铁路修建史料第三集 1949-1962 [The Third Series of Historical Materials on Railway Construction, 1949-1962], vol. 第四册 [Volume four] (Beijing, China: 中国铁道出版社 [Chinese Railway Press], 1964); Xu and MOR Record Compiling Department, 新中国铁路五十年 1949-1999 [50 Years of New China’s Railways 1949-1999], 31–33; Ji Chen, “专靠包商是做不好工程建设的---记西北铁路干线工程局盲目依靠包商的恶果 [Construction Projects That Rely on Contract Labour Will Not Go Well--the Northwest Railway Bureau Reflects on Bad Results],” 人民日报 [People’s Daily], August 7, 1951, sec 2. 79 Takahara, The Politics of Wage Policy in Post-Revolutionary China, 1992, 11–18; Wang, 北京铁路局志 1881-1987 [Records of the Beijing Railway Administration, 1881-1987], 791–800.
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encouraged to establish democratic forms of management, such as governance through elected
management committees (管理委员会) and workers’ representative assemblies (职工代表会).80
Many workers who had been active in reform discussions and representative assemblies were
promoted to manager (干部) positions.81 Democratic reforms—and certainly those in the West—
are not (solely) concerned with fair governance. These reforms shape subjects, by producing and
modeling self-conscious and deliberative behaviours.82 The subject-shaping function of the
above-discussed education and struggle sessions is perhaps even more obvious. The shaping of
certain kinds of worker-subjects was therefore one form of preparatory work for implementing
the economic accounting system in the early PRC railway sector.
Another set of preparatory activities was the reforming of railway financial systems.83
The state planned economy required the railway system to operate with centralized procedures
and de-centralized responsibility. In order to implement the economic accounting system in the
PRC railway sector, each railway enterprise needed to be able to calculate its own profits and
losses, while sharing uniform methods of calculation with all other railway enterprises. In the
railway system of Republican China, each line had its own methods of determining profits and
losses. Some railway calculations at this time were still being conducted by foreign accounting
offices.84 Different railway lines also calculated these items at different time intervals.85 In
addition, while individual railway lines had been the main economic entities in the Republican
system, this spot went to railway bureaus in the early PRC’s planned economy.
80 Andors, China’s Industrial Revolution, 1977, 43–52; Wang, 北京铁路局志 1881-1987 [Records of the Beijing Railway Administration, 1881-1987], 791–800. 81 Wang, 北京铁路局志 1881-1987 [Records of the Beijing Railway Administration, 1881-1987], 960–69; Fan, 成都铁路局志 1909-1988 [Annals of the Chengdu Railway Bureau, 1909-1988], 1995, 600–616; Gong and Li, 哈尔滨铁路局志 1896-1994 [Annals of the Harbin Railway Bureau 1896-1994], 1996, 1205–7. 82 Jürgen Habermas, The Structural Transformation of the Public Sphere: An Inquiry into a Category of Bourgeois Society (MIT press, 1991); Rose, “Government, Authority and Expertise in Advanced Liberalism.” 83 “铁路部门实行经济核算制前作了一系列必需的准备工作 [A Series of Preparatory Work Is Required before Implementing the Economic Accounting System in the Railway Sector].” 84 Chang, China’s Struggle for Railroad Development, 1943, 153–72. 85 Jui-te Chang, “Technology Transfer in Modern China: The Case of Railway Enterprise (1876-1937),” Modern Asian Studies 27, no. 2 (1993): 283–88.
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The railway bureaus were standardized in their form and function, each containing the
same numbers and types of departments (e.g. transportation order, locomotive, infrastructure,
accounting, etc.). The bureaus consequently formed central hubs for supervising and directing
diverse kinds of railway work. However, in the initial transition from the Republican system,
each railway management bureau had no way of independently calculating its own profits and
losses: these were calculated in aggregate by each railway line.86 To establish independent—yet
commensurate—accounting systems for each railway enterprise was therefore another way of
preparing for the implementation of the economic accounting system. Railway sector financial
reforms proceeded via the issuing and implementation of a set of policies in January 1950, and
again in January 1951.87 In a sense, the production of independent yet commensurate enterprises
for the purposes of early PRC planning mirrored the production of independent yet
commensurate human subjects for the same purpose.
The third set of preparatory activities—as discussed in the July 1951 People’s Daily
article—involved finding, collecting, and making inventory of assets. This process was required
in order to establish the amount of working and liquid capital (in funds and assets) available to
each enterprise. The process of finding and collecting railway assets had began prior to the end
of the Civil War. After the MOR was founded in January 1949, the Ministry had faced an acute
shortage of materials.88 In September 1949, the MOR promulgated a policy of ‘collecting assets
and protecting the railways’ (搜集铁路器材及保护铁路). In order to ensure uninterrupted
military transport and railway-driven economic development, all people were asked to help
railway bureaus to collect and protect any railway materials and equipment, including those left
behind and scattered in the open, existing in public or private collections, or being sold in
markets. The MOR policy had pertained to (1) railway track materials, (2) communications
86 “铁路部门实行经济核算制前作了一系列必需的准备工作 [A Series of Preparatory Work Is Required before Implementing the Economic Accounting System in the Railway Sector]”; MOR Materials Bureau Communications Group, “清理资材，核定资金，反对浪费！[Sort Materials, Determine Available Capital, Fight Waste!].” 87 “铁路部门实行经济核算制前作了一系列必需的准备工作 [A Series of Preparatory Work Is Required before Implementing the Economic Accounting System in the Railway Sector]”; Wang, 北京铁路局志 1881-1987 [Records of the Beijing Railway Administration, 1881-1987], 777–97. 88 Xu and MOR Record Compiling Department, 新中国铁路五十年 1949-1999 [50 Years of New China’s Railways 1949-1999], 22–25; Junzheng Jiang, “节约金属是国民经济的重要任务,” 人民日报 [People’s Daily], February 27, 1949, sec 3.
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materials, (3) vehicle materials, (4) signal and lighting materials, and (5) water supply
materials.89
The practice of mobilizing the population for finding and collecting railway assets
continued into the post-war recovery period. Alongside practices of mass salvaging in the early
PRC, there was also an emphasis placed on saving and re-using railway materials. A People’s
Daily article published in May 1950 contained exhaustive instructions on how to classify waste
materials, as well as how to repair and make use of items in various states of damage. Items
addressed in the article included iron scrapings, springs, hooks, wheels, various tools, and many
others.90 Between April 1950 and July 1951, the MOR led a nation-wide process of finding and
inventorying assets in the PRC railway sector.91 In this fifteen-month period, railway workplaces
processed in total 20,000 tons of unused goods, 3,300 tons of goods existing outside of settled
accounts, and 143,700 tons of waste materials.92 In July 1951, the total value of inventoried,
donated, and collected assets in the railway sector reached over 452 billion RMB (or 45 million
in post-1955 RMB values).93 This sum—deriving from mass practices of salvaging and saving—
would provide the fixed and circulating assets needed to implement economic accounting
systems in the early PRC railway sector.
While the above forms of preparatory activities were underway, two other sets of events
in the PRC railway sector foreshadowed the coming call for sector-wide implementation of the
economic accounting system. The first is the MOR’s movement towards a more formalized
89 People’s Railway News Group, “军委铁道部制定办法 搜集保护铁路交通器材 全国军民应一致协助各路局收集 [MOR Formulates Measures to Gather and Protect Railway Transport Equipment, All Mobilized Masses Asked to Help Railway Bureaus with Collection].” 90 Wenxiang Wang, “怎样利用铁路废料 [How to Make Use of Railway Waste],” 人民日报 [People’s Daily], May 26, 1950, sec 5. 91 MOR Technology Research Communications Group, “铁道部铁道技术研究所介绍 [Introducing MOR Technology Institute]”; “天津铁路局进行工作大检查 杜绝浪费厉行节约 [Tianjin Railway Bureau Carried out a Large Inspecton, to Oppose Waste and Practice Strict Economy],” 人民日报 [People’s Daily], March 21, 1950, sec 1; Xinhua News Agency, “郑州铁路管理局大力收集遗散器材 [Zhengzhou Railway Bureau Makes a Great Effort to Collect Scattered and Left-behind Equipment],” 人民日报 [People’s Daily], March 24, 1950, sec 1. 92 “铁路部门实行经济核算制前作了一系列必需的准备工作 [A Series of Preparatory Work Is Required before Implementing the Economic Accounting System in the Railway Sector].” 93 In 1955, the PRC issued the new RMB series, which has been in use since. 1 RMB (Yuan) = 10,000 old Yuan. See: Lin, Cai, and Li, The China Miracle, 2003, 42.
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planning process for the railway sector. By late 1950, the MOR had already established and
implemented nationally-unified systems for items such as transportation order, schedule, rates,
car-loading procedures, etc. The MOR had also promulgated national policies for accounting and
financial procedures, including how to calculate cost and profit. 94 The stage was set for the
making of a detailed national plan, with inputs from and output targets for railway enterprises. In
fall 1950, when the MOR had been in the process of drafting its 1951 plan, an article appeared in
the People’s Daily about the need to implement more specific planning and accounting
procedures in the state railway sector.95
Also in fall 1950, the Qiqihar Railway Management Bureau began to implement the
system of economic accounting in its operations.96 Qiqihar, located in China’s Northeast, was a
key city traversed by the China Eastern Railway (later known as the Zhongchang Railway). The
Qiqihar Bureau had been created by the CCP during its Civil War-era dalliance with railways in
China’s Northeast.97 The bureau’s implementation of the economic accounting system had been
publicized by the political department of Northeast Railways (东北铁路政治部). This decision
was attributed to the drawbacks of the previously-existing budgetary system, referred to as the
supply system (供给制).
According to published accounts, the issue with the supply system is as follows. When a
functional body within the railway enterprise needed to complete a task (e.g. the infrastructure
section needs to fix tracks), its members would request funding from the authorizing party (e.g.
94 Xu and MOR Record Compiling Department, 新中国铁路五十年 1949-1999 [50 Years of New China’s Railways 1949-1999], 30–45; 1956 年全国铁路先进生产者代表会议选编：财务会计先进经验 [Selection from the 1956 National Conference of Advanced Railway Production Representatives: Best Practices of Financial Accounting] (Beijing, China: 人民铁道出版社 [The People’s Railway Press], 1956). 95 Yin Lin, “全国铁路工作中存在严重偏向 单纯追求数字浪费国家财富 铁道部指示各局立即加以纠正 [National Railway Work Has a Severe Problem with Only Chasing Numbers, Wasting the Nation’s Resources. MOR Instructs Each Railway Bureau to Immediately Correct Problem],” 人民日报 [People’s Daily], September 7, 1950, sec 2. 96 Northeast Railway Political Department, “齐齐哈尔铁路局 检查纠正供给思想坚决实行经济核算 [The Qiqihar Railway Bureau Inspected and Corrected Supply-System Thinking, Determined to Implement Economic Accounting System],” 人民日报 [People’s Daily], October 22, 1950, sec 2; Gong and Li, 哈尔滨铁路局志 1896-1994 [Annals of the Harbin Railway Bureau 1896-1994], 1996, 1160–93. 97 Xu and MOR Record Compiling Department, 新中国铁路五十年 1949-1999 [50 Years of New China’s Railways 1949-1999], 22–24.
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Bureau Chief, Chief Accountant, etc.). The largest concern of the requesting party was usually
having enough money to complete the task, so they would ask for more than what was needed.
The authorizing party in turn does not check or calculate the details of the request, and instead
“blindly” (盲目的) trusts the requester. The ‘supply system’ kind of thinking (供给制思想) is
criticized for solely focusing on the task at hand, not making calculations, and not seeing the
larger picture (of the national economy).98 In the Qiqihar Bureau, this type of action had wasted
money by spending more than what was needed. Consequently, for the second half of 1950, the
Bureau had incurred 300 million RMB (30,000 RMB in post-1955 values) more in expenses than
budgeted.99 To remedy the situation, the Qiqihar Bureau had adopted the system of economic
accounting. Starting in late 1950, a number of articles appearing in PRC publications made
similar points to the Qiqihar account—about the drawbacks of the supply system.100
With preparatory measures—the making of responsible subjects, independent accounting
systems, and finding sufficient assets—well underway, the early PRC railway sector was ready
to begin the formal process of planning. The supply system of budgeting had proved itself
incompatible with early PRC state goals for plan-abiding and efficient production. The railway
sector was ready for a new system. In advocating for the economic accounting system, Teng—in
his editorial—also highlighted the drawbacks of the existing supply system. Teng began his
narrative with the February meeting of Bureau Chiefs, where participants agreed to the sector-
wide implementation of the economic accounting system. Teng proceeded to state:
98 Northeast Railway Political Department, “齐齐哈尔铁路局 检查纠正供给思想坚决实行经济核算 [The Qiqihar Railway Bureau Inspected and Corrected Supply-System Thinking, Determined to Implement Economic Accounting System]”; Xu and MOR Record Compiling Department, 新中国铁路五十年 1949-1999 [50 Years of New China’s Railways 1949-1999], 30–34. 99 Northeast Railway Political Department, “齐齐哈尔铁路局 检查纠正供给思想坚决实行经济核算 [The Qiqihar Railway Bureau Inspected and Corrected Supply-System Thinking, Determined to Implement Economic Accounting System].” 100 Xinhua News Agency, “铁道部召开全国铁路管理局长会议 决定贯彻经济核算制的办法 批判了供给制思想和本位主义思想 [MOR Hosted a National Meeting of Railway Bureau Chiefs, Decided to Implement Economic Accounting System. Criticized the Supply System Way of Thinking and Narrow Pragmatism]”; Teng, “经济核算制是经营管理人民铁路的基本方法 [The Economic Accounting System Is the Basic Method of Operations Management for the People’s Railways]”; “中央人民政府铁道部 关于一九五零年工作总结与一九五一年计划的报告 [MOR Report on the Work Completed in 1950 and Plans for 1951],” 人民日报 [People’s Daily], March 29, 1951, sec 2; Shanxi Daily, “彻底批判供给制思想,树立经济核算制观点 [Thoroughly criticize supply-system thinking, establish the economic accounting system perspective],” 山西日报, no. 05 (1953): 50–51.
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“We all agreed that railway work over the last year had many achievements, but there were also many shortcomings. Only the economic accounting system can help us overcome these shortcomings. We can see this by looking at the situations of Dongbei Railway and Zhongchang Railway. Dongbei Railway in the past years have produced a great many results; the enthusiasm of the masses (群众热情) is very high. But for some leading cadres, this produced a state of complacent satisfaction. […] Their passive approach to work has become clear in the past year, with tasks going uncompleted in the past winter and this spring. On the other hand, the Sino-Soviet jointly managed Zhongchang Railway has operated with an economic accounting system from the beginning. In the past year, all aspects of work on the Zhongchang Railway has shown significant development. This example shows us that in the process of constructing our People’s Railway, the implementation of economic accounting system is not only necessary, but also possible.”101
The implementation of the economic accounting system in all railway bureaus was slated
to begin on July 1, 1951.102 To enable the operations of this new system, railway bureaus were
granted a new set of rights and responsibilities—becoming a new kind of subject in relation to
the state. After July 1, 1951, the PRC’s railway bureaus (1) had the responsibility of fulfilling the
MOR-approved transport plan (运输计划) as their most important task; (2) had independent
economic rights in implementing production and financial plans; (3) had an independent
accounting system and legal status; had the right to use fixed capital and allocate liquid capital;
had the right to borrow from banks and enter into contracts with other enterprises; (4) were
required to make all efforts to fulfill or overfulfill production plan, reduce waste, decrease cost,
increase profit, and increase fund accumulation.103
Thus began a more intensive process of shaping railway enterprises into components of
the state economic plan. Beginning in 1949, PRC railway enterprises had been organized into a
three-level structure. The body with the most authority (highest level) is the railway bureau (铁
路局). Directly subordinate to the railway bureau—in the second level—are different functional
departments (处) (e.g. departments for transport organization, rolling stock, railway
101 Teng, “经济核算制是经营管理人民铁路的基本方法 [The Economic Accounting System Is the Basic Method of Operations Management for the People’s Railways].” 102 Ibid.; Xu and MOR Record Compiling Department, 新中国铁路五十年 1949-1999 [50 Years of New China’s Railways 1949-1999], 22–26. 103 “铁道部决定自七月一日起全国各铁路管理局实行经济核算制度 [MOR Issues Nation-Wide Directive for Railway Bureaus to Implement the Economic Accounting System, Starting on July 1].”
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infrastructure, material acquisitions, accounting, finance, etc.). The railway sub-bureaus (铁路分
局) also exist on the second level. They are considered the functional department in charge of
transportation order. Each functional department then has authority over grassroots (基层) level
organizations, which include stations (subordinate to railway sub-bureaus) and work sections (段
).104 A similar structure consisting of three or two levels had also existed in the railway system of
Republican China.105
The introduction of the economic accounting system—and subsequent enrollment of
railway enterprises into state planning processes—produced a new set of relationships between
different railway entities. Functional differentiations in the PRC railway sector became much
more prominent in the initial years after implementing the economic accounting system. During
the post-war recovery period, railway enterprises had largely operated through collective
management.106 For railway bureaus, the management committee would usually consist of the
Bureau Chief and a small number of each of the following: technical specialists, party members,
and workers. Some railway enterprises, such as the Tianjin Railway Bureau, had established
governance through decision-making by the workers’ representative assembly.107 During this
period, workers had a relatively large degree of control over items such as workload, working
conditions, timeline, etc. Workers—in work sections—could also speak and bargain with the
department in charge.108
With the implementation of the economic accounting system, and especially during the
first years of its operations (or the period of the First Five Year Plan), workplace functions and
104 Wang, 北京铁路局志 1881-1987 [Records of the Beijing Railway Administration, 1881-1987], 793, 949; Gong and Li, 哈尔滨铁路局志 1896-1994 [Annals of the Harbin Railway Bureau 1896-1994], 1996, 239, 243, 279. 105 Wang, 北京铁路局志 1881-1987 [Records of the Beijing Railway Administration, 1881-1987], 793. 106 Gong and Li, 哈尔滨铁路局志 1896-1994 [Annals of the Harbin Railway Bureau 1896-1994], 1996, 1070–75; Wang, 北京铁路局志 1881-1987 [Records of the Beijing Railway Administration, 1881-1987], 791–800, 1200–1215; Akio Takahara, The Politics of Wage Policy in Post-Revolutionary China (Springer, 1992), 11–23. 107 Wang, 北京铁路局志 1881-1987 [Records of the Beijing Railway Administration, 1881-1987], 791–815. 108 Andors, China’s Industrial Revolution, 1977, 45–52.
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responsibilities in the PRC became more rigid and fixed.109 The priority placed on accurate
calculations and plan fulfillment gave key roles to the financial, accounting, and other technical
departments of railway enterprises.110 Grassroots sections became more subordinated to the
decisions and directives of these departments. Workers’ representative congresses and other
bodies fostering worker participation in management ceased to meet during the FFYP.111 Some
railway enterprises implemented the one-leader system (一长制). In this system, the leader of
each railway entity (e.g. department, section, bureau) assumes all rights and responsibilities for
that particular entity. Rights and responsibilities are also distributed hierarchically—for instance,
the Bureau Chief assumes all rights and responsibilities over all departments, including their
department heads.112 This system produced an additional degree of specialization and separation.
PRC state leaders called for an end to the one-leader system in state enterprises in 1956.113 Other
developments after the FFYP (e.g. the Great Leap Forward) were devised to address what
became seen as an overly large degree of specialization and differentiation.
The implementation of the economic accounting system and related elements—such as
the one-leader system—proceeded differently in different locations and for different enterprises.
As previous mentioned, some railway enterprises, such as the Beijing Railway Bureau and the
Kunming Railway Bureau, chose not to adopt the one-leader system.114 The implementation of
the economic accounting system in railway bureaus was scheduled to happen within two years of
July 1, 1951. But each railway bureau was granted the freedom and flexibility of implementing
109 Wang, 北京铁路局志 1881-1987 [Records of the Beijing Railway Administration, 1881-1987], 791–805; Andors, China’s Industrial Revolution, 1977, 50–75; Meisner, “The Shenyang Transformer Factory--A Profile,” 1972, 728–29. 110 Cao, “天津铁路管理局丰台机务段 忽视了对职工进行思想教育 经济核算准备工作走了弯路 [The Fengtai Locomotive Section of the Tianjin Railway Bureau Neglected the Task of Educating Workers, Implementing the Economic Accounting System Has Gone Awry]”; Andors, China’s Industrial Revolution, 1977, 50–75. 111 Wang, 北京铁路局志 1881-1987 [Records of the Beijing Railway Administration, 1881-1987], 1200–1215; Shuqing Gong and Shutian Li, 哈尔滨铁路局志 1896-1994 [Annals of the Harbin Railway Bureau 1896-1994] (Beijing, China: 中国铁道出版社 [Chinese Railway Press], 1996), 1343–80. 112 Schurmann, Ideology and Organization in Communist China, 235, 260–82. 113 Andors, China’s Industrial Revolution, 1977, 38–60; Takahara, The Politics of Wage Policy in Post-Revolutionary China, 1992, 38–44. 114 Wang, 北京铁路局志 1881-1987 [Records of the Beijing Railway Administration, 1881-1987], 791; Kejing Fan, ed., 成都铁路局志 1909-1988 [Annals of the Chengdu Railway Bureau, 1909-1988] (Chengdu, China: 中国铁道出版社 [Chinese Railway Press], 1995), 93.; Kunming ju
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the system however it saw fit, and on its own timeline.115 External events also interfered with
MOR plans, such as the Korean War and the role that Chinese railway workers came to play in
it.116 Consequently, some railway bureaus were still in the course of implementing the economic
accounting system after 1955.117
I proceed now to present a brief snapshot of the implementation process. I provide some
details about local processes; I also address sector-wide progress. The Beijing Railway Bureau
began to test out the system of economic accounting at the bureau and sub-bureau levels in July
1951. Between 1953 and 1957, the Beijing Railway Bureau established specialized departments
for planning and statistics. These departments were tasked with producing items such as
transport plans, operations plans, construction plans, operations statistics, salary statistics,
business statistics, etc. Also starting in 1953, the Beijing Bureau began implementing economic
accounting systems at all three levels of the enterprise.118 The Kunming Railway Bureau began
implementing the economic accounting system in 1953, as a part of its plan to ‘learn from
Zhongchang Railway’. The Kunming Bureau started at its grassroots level—the economic
accounting system was first implemented in its twenty-three grassroots work units.119
For both the Kunming Railway Bureau and the Chengdu Railway Bureau, their
implementation of the economic accounting system came after their incorporation into state
planning processes. In 1954, while ‘learning from Zhongchang Railway’, the Chengdu Bureau
had strengthened planned management and began to develop plans in areas such as production,
transportation, operations, worker salary, etc.120 The Chengdu Bureau first tested the economic
accounting system in 1955 at a particular locomotive work section (九龙坡机务段). By October
1956, 91% of all possible work units within the bureau had implemented economic accounting
115 Wang, 北京铁路局志 1881-1987 [Records of the Beijing Railway Administration, 1881-1987], 795. 116 Xu and MOR Record Compiling Department, 新中国铁路五十年 1949-1999 [50 Years of New China’s Railways 1949-1999], 22–27. 117 Fan, 成都铁路局志 1909-1988 [Annals of the Chengdu Railway Bureau, 1909-1988], 1995, 707–25; Xie and Yu, 兰州铁路局志 1956-1995 [Annals of the Lanzhou Railway Bureau, 1956-1995], 635–700. 118 Wang, 北京铁路局志 1881-1987 [Records of the Beijing Railway Administration, 1881-1987], 795, 842. 119 Fan, 成都铁路局志 1909-1988 [Annals of the Chengdu Railway Bureau, 1909-1988], 1995, 533. 120 Ibid., 510.
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systems.121 By the end of 1956, the economic accounting system had been implemented in all
railway bureaus and sub-bureaus across the entire nation. The system had also been implemented
in all railway-sector locomotive and rolling stock departments, and in the large majority of other
railway-sector functional departments.122
A myriad of issues emerged in the course of implementing economic accounting systems
in the early PRC railway sector. In some enterprises, these systems had been implemented
without involving or providing explanations to workers. Workers consequently found it strange
and disruptive for managers to observe and record their actions; cadres in turn lacked a practical
understanding of the task that they observed and could not assess it well.123 In late 1952, the
State Council published a report about a serious issue. Some factory leaders, under slogans such
as “complete the production plan” and “carry out the economic accounting system”, had ordered
large workloads, extended working hours, and failed to heed worker health and safety. This had
caused worker welfare issues, as well as accidents and very serious safety concerns.124 In 1953,
the entire PRC railway sector came under criticism for the practice of “blindly” soliciting
transport business in order to increase profits, without considering how such transport
contributes to national development—and thus disrupting national plans.125 It would of course be
difficult to attribute these issues to the system of state socialism (especially when juxtaposed to
capitalism). They could perhaps be linked to the early PRC’s ‘backwardness’, or inexperience in
carrying out production plans. But the above incidents would not seem out of place in ‘advanced’
capitalist states.
121 Ibid., 535. 122 Xu and MOR Record Compiling Department, 新中国铁路五十年 1949-1999 [50 Years of New China’s Railways 1949-1999], 45–46. 123 Cao, “天津铁路管理局丰台机务段 忽视了对职工进行思想教育 经济核算准备工作走了弯路 [The Fengtai Locomotive Section of the Tianjin Railway Bureau Neglected the Task of Educating Workers, Implementing the Economic Accounting System Has Gone Awry].” 124 “中央人民政府政务院人民监察委员会 关于处理某些国营、地方国营厂矿企业忽视安全生产致发生重大伤亡事故的通报 [Report from the State Council Inspection and Supervision Committee, on the Subject of How to Handle State- and Local-Run Factories and Mines That Have Neglected Safety, Causing Major Accidents],” 人民日报 [People’s Daily], September 17, 1952, sec 1. 125 “铁路系统在一九五二年中盲目运输打乱国家计划 [The Blindly Transporting Activities of the Railway Sector Have Disrupted State Plans for 1952],” 人民日报 [People’s Daily], February 25, 1953, sec 1; Yifan Geng, “对盲目招揽货源的检讨 [A Self-Criticism on Blindly Soliciting Business],” 人民日报 [People’s Daily], March 24, 1953, sec 2.
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Use of the economic accounting system did help the PRC railway sector to be much more
efficient in its operations. Again, the efficient use of resources had been a key tenet driving early
PRC plans. The economic accounting system had contributed to a large reduction in railway
production costs. In 1956, the operating expenses required to produce 1,000 ton-km of freight
travel was 7.65 RMB. This was a 10.7% decrease from operating expenses in 1952.126 The total
value of railway industry output was 980 million RMB in 1956. This amount almost doubled the
total value of 520 million RMB produced in 1952.127 Total profit for the railway sector was 1.46
billion RMB in 1956. This is a 5.8-fold increase from the 250 million RMB earned in railway-
sector profit in 1952.128 Finally, labour productivity—measured by the ratio of ton-km
production to number of employees—had increased by 160% between 1952 and 1956.129
5. Conclusion State socialism in the early PRC was tied crucially to the shaping of its population. This process
did not resemble the one imaged by Mises, where socialist planners attempted with futility to
convert the essentially capitalist nature of man. Rather, early PRC state socialism had
encouraged the formation of capitalist subjects—humans who were calculating, deliberative, and
oriented to task and plan completion. These budding capitalist subjects were additionally asked
to take into account and consider others (the ‘big picture’).
Chinese state socialism had not particularly failed in its shaping of human nature. The
early PRC largely pursued the Soviet route to economic efficiency—through state planning,
prioritizing calculations, and functional differentiation. The national quest for efficiency was
therefore inseparable from the creation of new kinds of subjects. All manners of statistics and
reports from both inside and outside of China suggests that the early PRC had succeeded in
producing economic efficiency. It follows that the state must have also met with success in
126 Xu and MOR Record Compiling Department, 新中国铁路五十年 1949-1999 [50 Years of New China’s Railways 1949-1999], 45–46. 127 MOR Planning Division [铁道部计划司], 全国铁路历史统计资料汇编 1949-1991, 182. 128 Ibid., 262. 129 Ibid., 241.
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producing the required human subjects. It is perhaps important to note that the ideal subject for
early PRC state plans had shared many similarities with those sculpted by Taylorist programs of
scientific management. To fully draw out the implications of that statement might require
another entire thesis—so I will just leave that idea for now.
In this chapter, I discussed mechanisms of early PRC state planning and their
implementation in the state railway sector. I began with an account of the planning process in the
early PRC. I then used evidence from this process to challenge the second and third sets of ideas
about ‘irrational’ socialism, which revolve around its alleged lack of economic mechanisms,
inefficiency of resource allocation, and corresponding waste. In the last part of this chapter, I
turned to the operations of state plans in the PRC railway sector. I traced the implementation of a
particular mechanism of state planning: the economic accounting system. Processes of
implementing state plans and their mechanisms in the early PRC provide further proof against
ideas about ‘irrational’ socialism.
I think that given the evidence presented by this chapter and the previous two, it is
possible to state conclusively, in the case of state socialism in the PRC at least, that (1) planners
had been rational and produced reasonable plans; (2) resource allocation had been efficient
through the use of economic mechanisms—such as those shared with American corporations;
and (3) economic planning saves resources, materials, and labour.
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Chapter V. Conclusion New things always have to experience difficulties and setbacks as they grow. It is sheer fantasy to imagine that the cause of socialism is all plain sailing and easy success, without difficulties and setbacks or the exertion of tremendous efforts.
--Mao Zedong, February 19571
1. Rewind: Summary and arguments This thesis began with my interest in three related topics. These are: socialist industrialization in
the early PRC, Western discourses about ‘irrational’ socialism, and the structures and operations
of the Chinese railway system. I first noted that Western discourses about state socialist
inefficiency and failure revolve around three themes: (1) that planners had been idiosyncratic and
produced irrational plans; (2) that resource allocation had been inefficient due to the absence of
economic mechanisms; and (3) that economic planning produces the waste of resources,
materials, and labour. My discussion of early PRC industrialization then unfolded as a kind of
double-account: I juxtaposed the above narratives with the actual plans, events, and processes of
early PRC development. I used the state railway system as a lens into plans and processes of
industrialization in the early PRC.
In the thesis, Chapter 2 addressed the first set of ideas about irrational socialism. I argued
that ideas about irrational socialist plans are produced through and reproduce the erasure of
Western imperialism. Contemporary Western accounts of the PRC often exclude the nation’s
colonized history. But imperialism had mattered, both materially and politically. In the early
1920s, Sun Yat-sen had calculated China’s annual loss to foreign powers to be around 1.2 billion
Hong Kong dollars, or the equivalent of 600 million U.S. dollars at the time. To put these
numbers into some context: the Nationalist government of the Nanjing Decade (1928-1937)
operated with an annual budget that averaged 806 million Chinese dollars, or the equivalent of
274 million U.S. dollars at the time. Sun and others, including Western historians, thought that
1 Zedong Mao, On the Correct Handling of Contradictions Among the People (Foreign Languages Press, 1957), 43.
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the impact of imperialism on China had only been growing. What Marxism, or Marxist-
Leninism, had offered Chinese reformers was precisely a way to analyze and strategize in the
imperialist global context.
Chapters 3 and 4 moved away from discourses and towards events on the ground.
Chapter 3 traced the formation of the early PRC railway sector. The early system incorporated
infrastructures inherited from the Nationalist (GMD) government of late-Republican China,
approaches shaped by the CCP’s history of labour activism and war-time experiences, and the
results of learning from Soviet railway operations. Interactions between the USSR, GMD, and
CCP also compelled the Chinese Communists to innovate new approaches to socialism and. This
new approach is encapsulated in Mao’s idea of the People’s War (人民战争), which combines
knowledge and mastery of the capitalist’s tools with mass participation. The CCP during the
Civil War had prioritized thrift and reciprocity with local populations in its railway-related
activities. The railway system in the early PRC became known as the People’s Railways (人民铁
道). The grounds covered in Chapter 3 provided the context and background for the events and
processes later discussed in Chapter 4.
Chapter 4 focused on the mechanisms of early PRC state planning and their
implementation in the state railway sector. I began by describing the state planning process in the
early PRC. I used evidence from this process to challenge the second and third sets of ideas
about ‘irrational’ socialism, which revolve around its alleged lack of economic mechanisms,
inefficiency of resource allocation, and corresponding waste. In the later part of Chapter 4, I
turned to the local realizations of central plans. I focused in particular on how the economic
accounting system was implemented in the state railway sector. This system was known to be the
mechanism that connected state plans to local production, thereby enabling centrally-planned
production. Processes of state plan implementation in the early PRC make visible a set of
realities that are quite far removed from assumptions made by ‘irrational’ socialism discourses.
Against the backdrop of events discussed in Chapters 3 and 4, I also ask a set of questions about
what was ‘produced’ through the early PRC’s budding state socialist economy. These refer in
particular to the kinds of human subjects that become shaped through the PRC’s new economic
system. These questions are only possible, I think—and not engulfed or distorted—when the
operations of imperialist discourses have been identified and pinned in their place.
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The main arguments coming from the above discussions can be summarized in three
interrelated points. One: Contemporary Western critiques of state socialist economies share in a
set of self-referential discourses. These discourses make little sense when questioned because
they exclude (make absent) what is at their logical center—the reproduction of imperialism.
Two: The system of central planning had been adopted by socialist states (e.g. the PRC) for the
very purpose of achieving efficient (and rapid) surplus accumulation. Accumulation enabled
industrialization, a process that is both made necessary and denied to ‘Third World’ states
through imperialism. Three: The operations of the early PRC’s socialist planned economy had
encountered a number of issues and setbacks. These were largely tied to China’s ‘backwardness’,
a concept that encapsulates two aspects of the early PRC. These are: its (1) conditions of
scarcity, and (2) aspirations to ‘catch-up’, or to, in some ways, become like the West. Both
aspects are inextricable from the larger global context. This last point is key for approaching
different narrations of state socialist failure.
In my discussion of the early PRC economy in this thesis, I mostly draw evidence from
events that transpired between 1949-1957. This period saw the set-up and normalization of the
PRC’s planned economy. Common Western discourses on Chinese socialist irrationality and
failure might emphasize the events of the Great Leap Forward (GLF, 1958-1960) and Cultural
Revolution (CC, 1966-1976). For the narratives that I engage the most closely in this thesis, it is
not the ‘excesses’ of the socialist planned economy that were problematic, but rather its very
basic and routine functioning. I think one would often find that, beneath mentions of the ‘crazy’
GLF and CC, lies the notion that the very structure of Chinese socialism is unworkable. It would
be rare, I think, to find someone in the English-speaking world who views the events of the early
PRC as quite reasonable aside from the GLF and CC—who then is also attached to the ideas of
state socialist irrationality and failure.
While the GLF and the CC do not feature prominently in my thesis, they are neither
consciously excluded (e.g. as radically different and therefore negating the idea of early PRC
rationality), nor are they conflated with earlier periods. Some events that I discuss began before
1957, and continued in its aftermath. These include processes of state economic planning, and
the implementation of economic accounting systems in grass-roots work units across the entire
state railway sector. I also make references to certain dynamics that were more prominent during
the post-war recovery period (1949-1952) than during the FFYP, and that resurfaced during the
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GLF. These include the idea of the ‘People’s Railway’, and democratic assemblies in
workplaces. My thesis presents Chinese socialism in the early PRC as a confluence of diverse
elements, many of which were experimental and contextual. Very few were, however, irrational
or doomed to failure. It was not the point of this thesis to construct and present one form of early
PRC rationality that challenges Western narratives about socialist ‘irrationality’. But it was the
point of this thesis to make a set of arguments. The overarching one is perhaps that the early
PRC’s trajectory cannot be understood independently from plans and processes of production—
which were in turn shaped by histories and ongoing contexts of imperialism.
2. Stakes, part one: On knowledge I draw here from Said to clarify the approaches and stakes of my project. Said argued that
Orientalism, the system of knowledge, “is more particularly valuable as a sign of European-
Atlantic power over the Orient than it is as a veridic discourse about the Orient (which is what, in
its academic or scholarly form, it claims to be).” Said therefore dissected Orientalist discourses
in order to articulate the forms and operations of a particular system of power. It was not my
original intention to trace in detail the operations of imperialist power. I arrived at the need to
untangle Western discourses on state socialism after realizing what Said had assumed from the
very start, which is the distance of these discourses from what they purport to describe. I am not
particularly interested in drawn out discussions or debates about imperialism. It happened. Its
destructive effects are well-documented. It is not particularly interesting or intellectually
productive to dismiss or trivialize its effects. But the absenting of this history has produced a set
of misleading and vacuous discourses that stand in for substantial English-language research and
analysis of the early PRC economy.
If my main goals in this research lie to the side of rehashing what are already well-
substantiated and well-explained arguments about Western power, I am also not particularly
driven by the need to ‘speak truth to power’. As Said cautioned, “One ought never to assume that
the structure of Orientalism is nothing more than a structure of lies or of myths which, were the
truth about them to be told, would simply blow away.” Instead, I was primarily looking to learn
about the logic and processes of industrialization in the early PRC. I was also interested in the
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implications that these events might have for understanding (1) the possibilities and trajectories
for state socialist projects, and (2) later developments in the PRC. But my very basic quest to
learn took a substantial detour once it became obvious that a large gap existed between
narrations of early PRC development that I encountered ‘in the field’, and those existing in
contemporary English-language accounts. My time in Beijing also reminded me that Western
knowledge about China continues to be produced through—and reproduce—a field of unequal
power. But this is not an argument about the impossibility of learning or producing non-
imperialist knowledge. It is worthwhile, I think, to at least attempt to produce knowledge that
disrupts a set of self-referencing discourses about the ‘other’, especially if the other possibility is
to perpetuate this set.
3. Stakes, part two: Between capitalism, socialism, and efficiency I had originally thought that this thesis was already long enough—to write, but also for keeping
the attention of any readers—but I guess it would be disingenuous to pretend that there is not
more at stake than my own learning. At the end of my thesis, I remain somewhat curious about
one question. Perhaps readers join me in this. This question is: What is a more economically
efficient system—capitalism or state socialism? But the point of my thesis is not to ask this
question. It is rather to make this question askable at all. The reason why this question is not
askable, at least in the West, is because the answer has been stated, repeated, and is now
assumed. Capitalism has won. My thesis then arises not out of some abstract belief in the
economic superiority of socialism, but rather from the implications of the ‘capitalist victory’
narrative.
3.1 The aftermath of ‘capitalist victory’
The first implication of ‘capitalist victory’ is that it shuts down, in the West, space and
willingness to engage seriously with other forms of social and economic organizing. This is
especially true for people who do not have the time or resources to critically analyse and find
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‘the outside’ of pervasive discourses about capitalist victory. As a result, contemporary anti-
capitalist organizing (by that I mean discussions) in the West has become the exclusive domain
of people who have time to sit around and read Marx, Laclau, and Hardt and Negri. Critiques of
capitalism are becoming increasingly estranged from experiences of work, or even experiences
with those who do work.
The increasing difficulty of critical approaches to capitalism also makes it difficult—for
people who do engage in these critiques, or in organizing—to have space for much else. The
‘else’ here refers to activities such as listening to other people, self-reflection, assessing how one
is situated in and relates to the world, and learning from the history of existing anti-capitalist
projects. These things are difficult. Mao, in the quote that opened this chapter, may have said that
mistakes and setbacks do not equate to failure. But I am not sure how much of that particular
structure of feelings exists in the West. Consequently, anti-capitalist organizing in the
contemporary West exists mostly as a hobby and way to reproduce a particularly privileged—but
also ‘radical’—position. This is a problem. Anyone who has read this far I think would agree that
there are serious problems with the capitalist system, or at least in how it currently exists in the
West (and has been imposed onto the world). If state socialist, or Third World socialist projects,
have not posed adequate solutions, then they need to be examined seriously, rather than
summarily dismissed.
Many critical Western writers would agree that the above is a problem. To make askable
questions about socialist efficiency can hold space for anti-capitalist thought in the Global North,
but it is not the only way. The summary dismissal of state socialism has perhaps a larger second
set of implications: these are for the Global South. The ‘capitalist victory’ narrative shuts down
willingness to take seriously Global South liberation projects. It also shuts down space for
Global South projects to experiment with non-capitalist, or non-Western abiding, plans for
aggregate improvement. For people living in the Global South, the ‘capitalist victory’ narrative
plays out in two ways. Firstly, if capitalism is unarguably the more efficient form of social
organization, then it makes sense to organize local, national, etc. policies around capitalist logic.
The need for economic efficiency, though taken perhaps not so seriously by Marxists or other
Western progressives, remains crucial for many places in the Global South. To organize Global
South policies and programs around capitalist logic can also make available flows of Western
funding.
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Conversely, when Global South leaders attempt to organize local and national programs
around non-capitalist logic—and experience perhaps some degree of success—they are met with
embargos and sanctions. The U.S. (and other NATO states) currently has sanctions against Cuba,
DPR Korea, Syria, Iran, and Venezuela. It is quite easy to argue that there are states with worse
‘human right abuses’. The U.S. itself has the highest prison population rate in the world; its
prison population makes up 25% of all imprisoned people in the world.2 But states that are not
governed by socialist parties seem much less susceptible to Western sanctions. The ‘capitalist
victory’ narrative produces Global South realities partly by shaping Global North perspectives
and actions. If capitalism is unarguably more efficient—and morally superior, as Fukuyama and
Friedman would say—to socialism, then people in the Global South must be irrational to have
experimented with socialism. And more irrational to perhaps still be experimenting. Irrational
people in power is of course dangerous, or despotic and authoritarian. Global South experiments
have been, and continue to be, watched closely by the West. It is the mistakes and missteps that
become overwhelmingly reported. What is produced thereafter are Western calls for sanctions
and interventions, and their implementation. This process is currently playing out for Venezuela.
3.2 A step back: The unconcluded debate The ‘capitalist victory’ narrative shuts down crucial spaces in both the Global North and Global
South. The presence of these spaces is then what is at stake, in being able to ask questions about
relationships between capitalism, state socialism, and economic efficiency. To make this
question askable, I have, in a way, set up a debate. On one side are Mises and his intellectual
progeny, who have recently written about the early PRC economy. On the other side are early
PRC planners and researchers. A number of Soviet planners and researchers would presumably
also belong on this side, but have been cut by limits imposed by language ability and research
scope. The English-language debate has already been declared over; the victors however
excluded an important context—the historical and ongoing operations of imperialism. Again, the
2 Michelle Ye Hee Lee, “Yes, U.S. Locks People up at a Higher Rate than Any Other Country,” Washington Post, July 7, 2015, sec. Fact Checker, https://www.washingtonpost.com/news/fact-checker/wp/2015/07/07/yes-u-s-locks-people-up-at-a-higher-rate-than-any-other-country/.
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point of my thesis is not to ‘win’ the debate. It is rather to argue that this debate (and others like
it) is important to have in the first place. But why this particular match-up? What about other
pro- and anti-capitalist scholars and bodies of literatures? To explain this particular set-up, I trace
a fascination set of twists and turns in post-1800 global political and intellectual histories.
Side one: Mises and the economists
I begin with Mises’s side. What about other critiques of socialism? Why is Mises particularly
important here? From a cursory search into the history of contemporary Western economic
thought, it seems like mainstream distaste for socialism became fixed only after the end of the
Cold War. Samuelson is known for his widely-used textbook, Economics. This textbook was first
published in 1948; nineteen editions have been published up to 2009. In the thirteenth edition of
Economics, published in 1989, the author had written: “the Soviet economy is proof that,
contrary to what many skeptics had earlier believed, a socialist command economy can function
and even thrive.”3 Certain events transpired to change Samuelson’s mind, between the thirteenth
and fourteenth edition, published in 1992. On the same subject, the later edition states: “the
Soviet data are questioned by many experts”.4 One edition later, Samuelson came to characterize
the Soviet economy as “the failed model” in 1995.5
It seems quite possible that until the end of the Cold War, economists had been split on
the question of whether capitalism was in fact more efficient than socialism. In what became
known as the Socialist Calculation Debate of the 1930-1940s, Mises and Hayek positioned
themselves in favour of capitalism. Their most clearly defined opponents were Lange and
Lerner. Drawing on Lerner’s work, Lange proposed a model of a planned economy where a
central planning board allocates investment and capital goods, while the market allocates labour
and consumer goods. The planning board would direct all production; the market would ensure a
functioning price mechanism. With both in place, the planning board would be able to set prices
3 Paul Anthony Samuelson and William D Nordhaus, Economics, 13th ed. (McGraw-Hill, 1989), 837. 4 Paul Anthony Samuelson and William D. Nordhaus, Economics, 14th ed. (McGraw-Hill, 1992), 389. Also see: Mark Skousen, “The Perseverance of Paul Samuelson’s Economics,” Journal of Economic Perspectives 11, no. 2 (June 1997): 148. 5 Paul A. Samuelson, William D. Nordhaus, and Michael J. Mandel, Economics, 15th ed. (Mcgraw-Hill, 1995), 714–18; Skousen, “The Perseverance of Paul Samuelson’s Economics,” 148.
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equal to marginal cost, thereby ensuring Pareto efficiency in the economy.6 Samuelson reports
that many found the Lange-Lerner model convincing, including even Schumpeter, another well-
known member of the Austrian school.7
In some ways, it is Lange, Lerner, and others on their side of the Socialist Calculation
Debate—such as Fred Taylor and Joan Robinson—that stand the closest to early PRC and Soviet
planners and researchers, in their shared disagreement with Mises et al. However, it is important
to note that the Lange-Lerner model had been hypothetical, or an abstraction of how a timeless
and placeless planned economy would work. Some aspects of what Lange proposed were close
to how Soviet-style economies did operate (e.g. planning board). But Lange did not base his
model on actually-existing socialist planned economies, with their specific contexts and
objectives (i.e. imperialism, drive to accumulate and industrialize). Dynamics simulated by
Lange therefore had little to do with actual events and processes in socialist states. When
‘realities’ surfaced in 1989, they were far from the contents of Lange’s models. This was likely
when the debate was called conclusively in favour of Mises et al. Samuelson, writing in 2009,
finds in favour of Mises’s side—though he retroactively attributes the win to Hayek’s
preliminary discussion of information economics in the 1940s.8
Samuelson came to agree with Mises’s side. But interestingly enough, Samuelson’s
verdict of socialist failure—first issued in 1995—had little to do with problems of economic
inefficiency. ‘Failure’ was instead accounted for in the following passage: “In the 1980s and
1990s, country after country threw off the shackles of communism and stifling central
planning—not because the textbooks convinced them to do so but because they used their own
eyes and saw how the market-oriented countries of the West prospered while the command
economies of the East collapsed.”9 Another clue about the content of mainstream economic
opinions on state socialism, or at least those articulated post-1990, comes from Samuelson’s
6 Paul Auerbach and Dimitris P. Sotiropoulos, “Revisiting the Socialist Calculation Debate: The Role of Markets and Finance in Hayek’s Response to Lange’s Challenge,” in Economic Crisis and Political Economy, Palgrave Studies in the History of Economic Thought Series (Palgrave Macmillan, London, 2014), 212–30. 7 Paul A. Samuelson, “A Few Remembrances of Friedrich von Hayek (1899–1992),” Journal of Economic Behavior and Organization 69, no. 1 (2009): 2. 8 Ibid. 9 Samuelson, Nordhaus, and Mandel, Economics, 737.
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remarks on Keynes. When writing in memory of Hayek, Samuelson compares his character
favorably to that of Keynes. But Keynes is redeemed in Samuelson’s account through his
hostility to Soviet socialism, which came from his “recogniz[ing] barbaric evils in Lenin’s
utopia”.10
From these accounts, I propose three tentative conclusions about the contemporary field
of economics and its orientation to socialist projects. The first is that firm attachments to ideas
about state socialist inefficiency came after the dissolution of the Soviet Union. Inefficiency was
retrospectively read into the operations of the planned economy, given the ‘fact’ of capitalist
victory. The second tentative conclusion is that mainstream economic critiques of state socialism
revolve more around its alleged despotism, rather questions of inefficiency.11 The third tentative
conclusion is that Mises’s ideas remain quite influential in discussions about, at the very least,
the inefficiency of state socialist economies.12 Mises had accomplished a feat: his prediction that
capitalism would triumph over irrational socialism came true. He and his pupil and champion,
Hayek, persisted in their ideas about inefficient (irrational) socialism, even when such ideas were
less popular. Consequently, their analysis was ready and available to be applied at the moment of
capitalist ‘victory’.
If specific approaches and points seem outdated in Mises’s work, I would argue that the
bones of his argument have remained very influential. Mises had been one of the first to link
state socialist structures with notions of failure.13 This frame emerges in even Samuelson’s 1995
characterization of the Soviet economy. Mises’s set of frames and logics also reappear in
contemporary accounts of the early PRC economy. Mises emerges as the progenitor for a
particular set of critiques against socialism—this set insists on the economic irrationality of state
10 Samuelson, “A Few Remembrances of Friedrich von Hayek (1899–1992),” 3. 11 Notions about state socialist inefficiency and despotism are of course in some ways intertwined, as I showed when discussing Mises’s work in Chapter 2. 12 More substantial discussions on this subject draw from certain accounts by former Soviet economists. The work of János Kornai is crucial here. Kornai had first published in 1980 about issues of shortage in the Soviet economy (János Kornai, Economics of Shortage (North-Holland Publishing Company, 1980)). However, to my understanding, Kornai—at least in his early work—does not connect problems in state socialism with its inevitable and ahistorical defeat by capitalism. Narratives about the rational triumph of capitalism seem very much rooted in the work of Mises. 13 Mises, Socialism, 1951, 128–45.
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socialist projects, which is keyed to their inevitable failure. Mises and his contemporary
progeny—those who write on the early PRC economy—therefore occupy one side of the debate
in question, which revolve around relationships between capitalism, state socialism, and
economic efficiency.
Side two: Early PRC planners and shared projects
What about on the other side? Who else agrees with early PRC planners and researchers (and
possibly their Soviet counterparts)? Are other sets of people (e.g. progressive Western scholars,
postcolonial scholars) not interested in defending state socialist projects against charges by Mises
et al.? The answer is complicated. Some aspects have to do with what authors like Trouillot and
Wallerstein have called attention to, which is the post-Enlightenment reproduction of specific
and bounded knowledge fields in the West.14 In earlier sections, I discussed how Western
discourses on the early PRC are constructed through the systematic exclusion and erasure of
other forms of knowledge. This is a central theme in my thesis. But Western constructions do not
only shape the body of literature that I focus on, those contemporary accounts of early PRC
economic inefficiency and ‘failure’. Related discourses also estrange potential Western allies
from the kinds of practical and intellectual projects that were pursued in the early PRC.
As a student working on this thesis, I have been encouraged to both bound and to make
further connections in its framing. These are both important pieces of guidance and advice. This
section—and really, the entire thesis—is perhaps a slightly unwieldy attempt to do both. It is
unwieldy because there seems to be little pressure on other academic works to do both, and thus
a kind of absence of a well-trodden path. But I have already made the case that the absence of
specific and detailed studies of Chinese socialism—ones that understands the project within its
historical context and significance—is a major theoretical problem, if not also a political one.
And so I persist in this section.
14 Trouillot, Global Transformations, 7–46; Immanuel Maurice Wallerstein, Unthinking Social Science: The Limits of Nineteenth-Century Paradigms (Temple University Press, 1991).
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Redux on a theme: Orientalism and its reach
In terms of the big picture (on the ‘making connections’ side), the intellectual forefather of this
work is of course Said. But this thesis likely looks very different from most other works that
claim this lineage, and would perhaps be judged as lacking if standards derived from those
conventions were applied. The stakes and content of this thesis can perhaps be the most legibly
described as an attempt to take Said’s work seriously, while studying early PRC
industrialization. This should not be such an ambitious undertaking. How can Western
researchers approach studying ‘elsewhere’ without taking into account Said’s seminal analysis?
This is akin to approaching molecular biology without understanding DNA. Or studying civil
engineering without applying Newton’s laws of motion. But Said’s insights have not achieved
their necessary impact on English-language studies of China. This thesis may appear as
ambitious or unwieldy—though perhaps the later is only in my perception—but it arises out of a
very simple objective.
It is Said’s words that provide the most useful entry into thinking about the
presence/absence of allied scholarship on questions of state socialist efficiency. I quote them
here: “[S]o authoritative a position did Orientalism have that I believe no one writing, thinking.
or acting on the Orient could do so without taking account of the limitations on thought and
action imposed by Orientalism. […] This is not to say that Orientalism unilaterally determines
what can be said about the Orient, but that it is the whole network of interests inevitably brought
to bear on (and therefore always involved in) any occasion when that peculiar entity “the Orient”
is in question.”15
In the search for allied scholarship, one might begin with the assumption that Marxists
would be invested in defending state socialist projects. But a set of researchers who work in
and/or are from the Global South—such as Lu—have written on the distance existing between
Western Marxist thought and the realities of Third World socialism.16 Marx’s writing centres the
15 Said, Orientalism, 3. 16 Lu, Remaking Chinese Urban Form, 2006, 7. See also: Walter Rodney, Marx in the Liberation of Africa (Working People’s Alliance, 1981).
148
European working class (the proletariat).17 Marxists have often continued to position white
workers as the proper revolutionary subjects.18 Many Western Marxists had taken an interest in
the project of Chinese socialism, or at least initially. This interest was often expressed as
solidarity, a kind of relationship that presumes common (and similar) circumstances and goals.19
White workers could unite with Chinese workers, if the two were basically the same.20 Or if the
later was on his way of becoming like the former (just more ‘backwards’).
The projection of sameness from Western ‘allies’ renders invisible much of the Chinese
socialist project, including its key goals for economic and technological development. These
were not concerns for contemporaneous Western Marxist projects. Herein lies, I think, a key part
of the reason why most sympathetic English-language accounts of the early PRC have focused
away from its economy or questions of production. This is not a critique of those works. There
are other important subjects to study. I am however trying to explain how my project finds itself
in a particular theoretical lacuna. There are of course important exceptions to the above. Some
sympathetic Western works on the PRC economy have studied aspects of production. Two from
the pre-‘end of history’ period include Mitchell Meisner’s article on the operations of the
17 The Communist Manifesto, for instance, states: “Of all the classes that stand face to face with the bourgeoisie to-day, the proletariat alone is a really revolutionary class. The other classes decay and finally disappear in the face of modern industry; the proletariat is its special and essential product.” (Karl Marx and Friedrich Engels, The Communist Manifesto: A Modern Edition (Verso, 1998), 44.) 18 Marxism and the privileging of white workers is discussed in works such as: Roderick Bush, The End of White World Supremacy: Black Internationalism and the Problem of the Color Line (Temple University Press, 2009), 91–92; Charles Mills, From Class to Race: Essays in White Marxism and Black Radicalism (Rowman & Littlefield Publishers, 2003), 163–70; Cary D. Wintz, African American Political Thought, 1890-1930: Washington, Du Bois, Garvey and Randolph (Routledge, 2015), 146–55. 19 Western Marxist projections of sameness onto their Chinese ‘comrades’ can be seen from the following account, which I return to at the end of this chapter: Harold Isaacs, The Tragedy of the Chinese Revolution (Haymarket Books, 2010), x. My critique of Western ideas and practices of solidarity is developed through pulling together pieces from Rutherford’s work on colonial projection and identification, and Povinelli’s work on liberalism and commensuration. See: Danilyn Rutherford, “Sympathy, State Building, and the Experience of Empire,” Cultural Anthropology 24, no. 1 (February 1, 2009): 1–32; Elizabeth A. Povinelli, Economies of Abandonment: Social Belonging and Endurance in Late Liberalism (Duke University Press, 2011); Elizabeth A. Povinelli, “Radical Worlds: The Anthropology of Incommensurability and Inconceivability,” Annual Review of Anthropology 30, no. 1 (2001): 319–34. 20 A caveat here is that of the Western Marxists who had expressed solidarity with the Chinese socialist project—especially for those who had visited China—it is unclear how many would have even self-identified as ‘workers’.
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Shenyang Transformer Factory during the Cultural Revolution, and Andors’s book on industrial
planning and management practices from 1949 to the 1970s.21
Certain contemporary works on the early PRC have also studied aspects related to
production, without dismissing how the Chinese state and its leaders understood their own plans
and projects. Authors such as Boland, Ghosh, Lu, and Schmalzer have accomplished the above
by attending closely to technical and technological logics.22 It is then possible, though perhaps
uncommon, to engage in a detailed study of the early PRC, while not partaking too much in the
discourses that Said had identified. And without engaging in an extended discussion of
discourses or political stakes. There is, I think, a certain way in which studies that begin with the
technical can avoid the kinds of assumptions that are more present in other works about the
Global South. The other works are those located closer to issues more readily identified as
political or economic. The above-listed authors, each in their own way, make visible certain
logics and strategies present in early PRC development projects. But it seems unfair to drag them
into this particular debate, since their central arguments lie quite far from questions about state
socialism, capitalism, and their relative efficiencies.
I return to discussing relationships between Marxist scholarship and questions of state
socialist efficiency. Hayek pointed out, when writing in 1935, that socialist reformers to date had
taken little interest in economic efficiency.23 This form of disinterest persisted, even for Western
Marxists who came into contact with existing state socialist projects—which were organized
around the very quest for efficiency. Some exceptions existed. One Marxist researcher who
seems to have investigated state socialist economies in some detail is Charles Bettelheim, whose
21 Mitch Meisner, “The Shenyang Transformer Factory--A Profile,” The China Quarterly, no. 52 (1972): 717–37; Andors, China’s Industrial Revolution, 1977. 22 Alana Boland, “From Factory to Field: Waste-Water Irrigation in China’s Early Socialist Cities,” Global Environment 9, no. 1 (April 1, 2016): 219–39; Arunabh Ghosh, “Making It Count: Statistics and State-Society Relations in the Early People’s Republic of China, 1949-1959” (PhD thesis, Columbia University, 2014); Lu, Remaking Chinese Urban Form, 2006; Sigrid Schmalzer, Red Revolution, Green Revolution: Scientific Farming in Socialist China (University of Chicago Press, 2016). 23 Frederich Hayek, “The Nature and History of the Problem,” in Collectivist Economic Planning: Critical Studies on the Possibilities of Socialism, ed. Frederich Hayek (Ludwig von Mises Institute, 1967), 1–3, 17–18.
150
work I have only very recently come across.24 Bettelheim is not often mentioned, especially in
post-Cold War era scholarship. His work also remains largely untranslated from the original
French. Shaffer is another scholar who studied the Soviet economy in-depth. Shaffer did not
identify as Marxist; he did aim for a fair (or balanced) account of the system’s actual
operations.25 Generally speaking, Western Marxists devoted little attention to the actual
operations of state socialist economies before the end of the Cold War. Most seem even less
interested in challenging the kinds of discourses that have resurfaced since 1989, about state
socialist inefficiency.
What about the set of Marxist and affiliated scholars who explicitly write about and
structure their works around themes of imperialism? These include Barrat-Brown, Kemp, the
dependency theorists (Baran, Sweezy, and Frank), and world-systems theorists (Wallerstein).
They should understand the emphasis that Third World (or Second World) socialist projects had
placed on production. These authors and their works are of course very important to my project.
But dependency and world-system theorists appear to have shown little interest in the actual
operations of state socialist economies. Most seem to operate from the understanding that
Samuelson came to after 1989, that state socialism had been essentially oppressive.
Baran, for instance, drew from the Soviet experience the following conclusion:
“socialism in backward and underdeveloped countries has a powerful tendency to become a
backward and underdeveloped socialism.”26 Baran went on to say: “Socialism in the West, once
firmly established, would destroy for all time the bases and the need for any reappearance of the
political and social repression that marked the early stages of socialism in the East.”27 It does
boggle my mind that in his book on the very subject of imperialism, Baran would insist that
existing state socialist projects—those “in the East”—did it wrong. There is little sense that the
events of state socialism had emerged from innovative, if flawed, attempts to navigate ongoing
24 Works that seem relevant include: Charles Bettelheim, La Planification soviétique (Rivière, 1945); Charles Bettelheim, Problèmes théoriques et pratiques de la planification (Maspero, 1970); Charles Bettelheim, Calcul Économique et Formes de Propriété (Maspero, 1971). 25 Shaffer produced works such as: Harry G. Shaffer, The Soviet Economy (Appleton-Century-Crofts, 1963); Shaffer, The Soviet Economy, 1969. 26 Paul A. Baran, Political Economy of Growth (NYU Press, 1968), 14. 27 Ibid., 15.
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pressures exerted by the capitalist world system. For Baran, state socialist projects had rather
taken their shape due to “backwardness” and tendencies towards repression in their home
countries.
The hold that imperialist ideological (and material) structures have on the very possibility
of thinking is quite impressive. The historian Maurice Meisner is known for his extensive
research on China and early support of the Chinese socialist project. Meisner published a book
on Li Dazhao, one of the co-founders of the CCP, in 1967. In this work, Meisner discussed how
Li had understood China to be a “proletariat nation”.28 Thirty-some years later, in the third and
final edition of Meisner’s Mao’s China, the author writes of the Chinese Communist Revolution
that it “almost entirely lack[ed] any internationalist dimensions either in objective historical
reality or in the mentality of its leaders.”29 Meisner makes this statement in support of the
chapter’s theme, which is that Chinese socialism had failed (and grown monstrous) due to its
deviations from the ‘true’ course of Marxism. For Meisner, the largest deviation came from the
presence of bureaucracy (i.e. production-directing apparatus) in the early PRC.30
Meisner is not known for his affiliation with dependency or world-systems theory. My
point is only that the entire set of Marxist and affiliated scholars seem, especially in the wake of
the Cold War, stubbornly resistant to what they themselves know (or once knew) about the
world. Of the set, perhaps Wallerstein comes the closest to a nuanced perspective on state
socialist projects. But Wallerstein did not write on the specifics of socialist planned economies.
But not all dependency theorists were Marxists. They can perhaps be broadly divided into
two schools: the American Marxist school, for which Baran was a representative figure, and
what is known as the Latin American Structuralist school, which included scholars such as Celso
Furtado and Aníbal Pinto Santa Cruz. The later set are perhaps less likely to characterize
historically-existing state socialist projects as backwards and repressive. The South American
dependency theorists had been the main advocates for import-substitution industrialization (ISI),
which had been quite close to the actual practices of the early PRC. Though the South American-
28 Meisner, Li Dazhao and the Origins of Chinese Marxism, 1967, 144. 29 Meisner, Mao’s China and After, 247. 30 Ibid., 243–53.
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based dependency theorists might have been sympathetic to the Chinese socialist project, they
were largely preoccupied with theories and experiments in forms of capitalism.31 South
American dependency theorists likely were, and perhaps still are, open to debates about the
comparative efficiencies of capitalism and state socialism. But their existing work has, from
what I can gather, little to do with the operations of state planned economies.
I should caution before proceeding that while I am relatively familiar with bodies of
works on political economy, my grasp on mainstream economic literatures and their intellectual
histories is more tentative. With that said, I provide a summary of above discussions. The list of
scholars— coming from an economics or political economy-influenced perspective—whose
works challenge how Mises positions relationships between capitalism, state socialism, and
efficiency include Lange, Lerner, associate authors, Bettelheim, and Shaffer.
Lange and Lerner approached the subject through modelling; they researched questions
of socialist efficiency in the abstract. It was only Bettelheim and Shaffer, and perhaps some
others like them, who studied the actual operations of Soviet and Soviet-type planned economies
with questions of efficiency in mind. My approach in this project comes, in one sense, closest to
theirs. We mutually track knowledge held by state socialist planners and researchers; knowledge
suggesting that questions about socialist inefficiency are far from settled. It is perhaps
worthwhile to mention here that Mises’s Socialism (first published in 1922) has over 1400
citations on Google Scholar, 90% of which come from the period 1990-2017. Of the works that
cite Mises, the two shown as most cited are pieces by Fukuyama. Bettelheim’s monograph,
L'économie soviétique (1945), has 31 citations; 6 are from 1990-2017. Shaffer’s book titled The
Soviet Economy (1963) has 18 citations; 3 are from the period 1990-2017.
PRC planners between Orientalism and responses
Finally, the knowledge of early PRC planners and researchers extends into a vast area largely
dismissed by economics, and even political economy, literatures. This area concerns the
operations and impacts of Western imperialism. In drafting and implementing plans, early PRC
planners acted with knowledge about imperialism—its histories, legacies, and ongoing
31 Vernengo, “Technology, Finance, and Dependency: Latin American Radical Political Economy in Retrospect.”
153
processes. Early PRC planners also applied this knowledge to their assessment of plans and their
outcomes. Who else might have had held similar forms of knowledge? Perhaps postcolonial
scholars, and others who share postcolonial approaches and sensibilities.
Several scholars active in anti-colonial and emancipatory projects, including Kosambi,
Rodney, and Du Bois, have written and spoken in nuanced ways about using Marxist
frameworks for emancipatory projects.32 Mintz and Williams, among others, have studied the
operations of colonialism and imperialism through a historical materialist lens.33 This
approach—bringing together postcolonial and historical materialist insights—is also present in
works about imperialism and its economic impacts on China. Authors who have written on this
include Chesneaux, Esherick, and Sun, whose works I featured in Chapter 2. The above set of
writers share important histories, approaches, and investments with early PRC planners and
researchers. Early PRC actors came to be in a somewhat unique position, of applying these
elements to the construction, operation, and assessment of a socialist planned economy. Not
many other Third World nations had, or have, economies based around principles of socialist
planning. It is also likely that records of historically-existing forms of economic experimentation
in Third World states have not been translated and disseminated; this is true of much of early
PRC discussions and records.
Early PRC knowledge about state socialist efficiency does not fit easily into the
postcolonial canon for another important reason. Many well-known works within this tradition
express a degree of hostility towards Marxism and socialism. This kind of hostility is certainly
justifiable; it likely also contributes to the palatability of these works for English-language
audiences. Said, for instance, wrote extensively about Orientalist discourses in the works of
Marx.34 I have already shown how Marxists tend to systematically dismiss realities and theories
from the Third World. Many Third World states, including the PRC, were also cautious about the
Soviet Union. In Chapter 3 of this thesis (covering origins of and influences on the early PRC
32 Damodar Dharmanand Kosambi, An Introduction to the Study of Indian History (Popular Prakashan, 1975); Rodney, Marx in the Liberation of Africa; Wintz, African American Political Thought, 1890-1930. 33 Sidney W. Mintz, “Was the Plantation Slave a Proletarian?,” Review (Fernand Braudel Center) 2, no. 1 (1978): 81–98; Williams, Capitalism & Slavery, 1944. 34 Said, Orientalism, e.g. 13–16, 153–60, 323.
154
railway system), I discussed how Lenin and the Bolsheviks had considered Asian revolutionary
projects to be ‘backwards’ and behind their European counterparts. Russia was an imperialist
power; Third World states were concerned about historical continuities in Soviet approaches.35
Most works in the postcolonial tradition, at least those that are readily accessible, are not
particularly interested in the economic operations of state socialist projects.
My attempt in this project, to track what early PRC planners had observed and
understood about state socialist efficiency, shares important and overlapping parts with many
other investigations. With dependency theorists, world-systems theorists, and scholars who
combine historical materialist and postcolonial approaches, I share questions about imperialism
and its production of spaces and places in the world. With Du Bois, Kosambi, Rodney, and
others, I share questions about materialist frameworks for emancipatory projects. With Lange,
Lerner, Bettelheim, Shaffer and others, I share questions about relationships between ownership
configurations and the efficient mobilization of resources, particular in terms of how they played
out in actually-existing socialist planned economies. With other researchers of the early PRC, I
share questions about the empirical details of early PRC economic and technological
development processes. And so on.
The early PRC industrialization project also shared key aspects—contexts, approaches,
investments, etc.—with other historical and contemporary social undertakings. What was
produced from this project was, however, somewhat distinctive. Early PRC knowledge about
relationships between socialist planning and economic efficiency occupy perhaps a unique
position: they challenge discourses constructed and perpetuated by Mises and his students. The
bones of Mises’s argument seem, at least in the present moment, far from marginal. These
discourses do not only shape contemporary accounts of the early PRC economy. They also
permeate non-specialist and widely-circulated works, such as those by Fukuyama and Friedman.
One could even wonder if perhaps the post-Cold War rediscovery of Mises and his framing was
motivated, at least in part, by what early PRC planners and researchers came to know—about the
very kinds of connections between socialist planning and economic efficiency.
35 See, for instance, Jersild’s discussion: Austin Jersild, The Sino-Soviet Alliance: An International History (UNC Press Books, 2014).
155
But I stop at my earlier point. I contend that the kind of debate that this thesis sets up,
between Mises et al. and early PRC planners, has not already been won. This victory should not
be assumed, especially for people in the Global North who produce knowledge about the Global
South. Global structures of power had shaped the very terrain for early PRC development plans
and processes. These structures have persisted: they produce the contemporary Western inability
to take seriously early PRC plan and processes. This project may not fit comfortably into one
existing body of literature. It veers to the side and threads across several, in order to ask
questions that are considered to already have been answered. But this does not mean, I do not
think, that questions about relationships between capitalism, state socialism, and efficiency are
unimportant. Perhaps even the opposite.
4. Towards unpaused histories In this thesis, I am interested in the early PRC’s attempt to construct alternative modernities. I
am simultaneously interested in why these attempts are largely narrated as having failed in the
West. I have thoroughly covered how Western discourses narrate the economic aspects of state
socialist ‘failure’. But projects of state socialism are also viewed as having failed in another
crucial way. I have already alluded to this second form of failure, especially when accounting for
how Western Marxists have recently narrated the events of state socialist projects. To further
draw out the contours of these narrations, I use a quote from Arnold Isaacs, the son of Harold
Isaacs. The older Isaacs—seemingly a lifelong Marxist—has since passed away. In the 1930s, he
was an early and fervent supporter of the Chinese Communist project. Isaacs became
disillusioned sometime after 1949. In the 1980s, he traveled back to China for the first time since
before 1949. Isaacs would write a book about this experience, published under the title Re-
encounters in China. In 2010, one of Isaacs’s earlier works was reissued, with an introduction
from his son. The following passage comes from Arnold Isaacs’s introduction, which quotes a
passage that his father had written in Re-encounters.
But the air was far from free enough for the men and women Isaacs met in those re-encounters to go very far beyond the approved Communist Party formulas in discussing their experiences. For the most part my father was left to guess what they really felt and what meaning they had really found in their lives and their country's life under the regime they had sacrificed to create. And eventually he heard the answer in his own voice, not
156
theirs, when he burst out to one of them: “This has not been your experience alone. Our whole generation everywhere went through it in different ways, dreaming the great socialist dream, then having it crushed, by Stalin and his murderous regime in Russia and now again here in China. We were left to find some better way to human betterment, something better than prisons and labor camps and killings and oppression worse than before, and we haven't been very successful.”36
Isaacs may not have thought of himself as agreeing with Friedman on many things. But they
shared a rather close understanding of historically-existing projects of state socialism, especially
about the essentially oppressive nature of these projects. The below passage is from Friedman.
“[The end of the Cold War] tipped the balance of power across the world toward those advocating democratic, consensual, free-market-oriented governance, and away from those advocating authoritarian rule with centrally planned economies. The Cold War had been a struggle between two economic systems-capitalism and communism-and with the fall of the wall, there was only one system left and everyone had to orient himself or herself to it one way or another. Henceforth, more and more economies would be governed from the ground up, by the interests, demands, and aspirations of the people, rather than from the top down, by the interests of some narrow ruling clique.”37
Those in the West who are (or have been) invested in progressive—and even radical—
projects seem no less susceptible to ‘end of history’ discourses. Isaacs’s understanding of the
afterlife of state socialism comes, I think, from a similar place as authors whose narratives that I
focused on in this thesis. Isaacs did not understand that the men and women that he re-
encountered in China were, and had always been, different than him. Not essentially or
biologically different, but shaped by and fighting within a very different context. Imperialism
had shaped the very terrain of the Chinese socialist project. Isaacs and CCP members did not in
any way share in the same struggle or the same “socialist dream”. What does it mean then, for
Isaacs to conceptualize the Chinese socialist project as having failed? What does it mean for
Isaacs to partake in a shared conception with Friedman, and with Mises? What kind of
possibilities—for knowledge, and for political practice—might be opened up, if narratives of
failure could be dislodged from common understandings of state socialist projects?
36 Isaacs, The Tragedy of the Chinese Revolution, x. The quote from H. Isaacs can be found in: Harold Isaacs, Re-Encounters in China: Notes of a Journey in a Time Capsule (Routledge, 1985). 37 Friedman, The World Is Flat 3.0, 2007, 49.
157
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