More on Mao Economic Policy

["Henry C.K. Liu" <hliu@xxxxxxxxxxxxxx>]

Stephen Andors'  ( CHINAS INDUSTRIAL REVOLUTION : POLITICS, PLANNING,
AND MANAGEMENT, 1949 TOTHE PRESENT / BY STEPHEN ANDORS.) or John
Gurley's China's Economy and the Maoist Strategy, Monthly Review Press,
New York (c1976.) defenses of Maoist economic strategy is worth reading
for those who want a balanced view. And Michel Chossudovsky's appraisal.
Mark Selden's and Victor Nee's. From an impossible to get edition of
Root and Branch: A Libertarian Marxist Journal 8, Bill Russell argues
that Maoism was actually the Stalinist crash industrialisation programme
adapted to China in which the State confronted the problem not only of
seizing agricultural surplus but also producing it.

Other well-known Maoist economist's were Samir Amin and post 60's Joan
Robinson (she wrote paeans to the Cultural Revolution and N.Korea after
visiting in the late 60's and suffered castigation because of it.)
Maoist economics had a fair amount of prestige in the 60's and 70's even
in mainstream development circles. Some of the old undergrad development
texts have a section on the Maoist model. Prima facie at an abstract
level, Maoist economic strategy in some countries, seems to make good
sense. Self-reliance and self-sufficiency (especially in energy) could
only help poor, dependent and heavily indebted countries in the southern
hemisphere. Mao was very strongly against the accumulation of foreign
debt and withdrew China from GATT, the forerunner of WTO. To lessen the
gap, or as Maoists would say "resolve the contradictions" between the
city and the country would lessen conflict and help raise co-operation
and thus productivity. This did happen in Maoist China, though equality
had a trade-off with wealth creation. However, since the advent of the
township village enterprises, co-operation between villages has declined
even though the TVA's have been successful on a micro level. The
Chinese government has, through market reform, inadvertently
re-introduced class struggle back into the countryside. Kolko in his
latest book on Vietnam argues this is occurring in Vietnam too where the
tensions are even stronger because the gov't there has reintroduced
private ownership of land through a predictably corrupt process. No
doubt class struggle will be re-introduced into the countryside in
N.Korea too, when it finally takes the capitalist road. The Maoists
confronted economic bottlenecks with mass collective action.   The
problem was that it was enforced and not voluntary which led to low
productivity and efficiency. Mao was correct that mass collective action
could accomplish enormous goals but only when done voluntarily. The
theorists of Beijing could not motivate everyone to overcome the
free-rider problem. Think of the few examples of collective action in
Capitalist countries: the response to natural disasters. The Mexico D.F.
earthquake of 1985 was what galvanized the popular movement there.
Official stats show Maoist economic performance to be fair (given the
size of pop.) with an average GSP (Gross Social Product) growth rate of
6% through the years 1949-76. The economy was subject to great
fluctuations due to what was happening in the domestic political realm
and geopolitics. Some analysts call this a political cycle theory of the
economy. Before 1979, the growth rate of industrial output fluctuated
widely within a range of -38.2% (in 1961) to 54.8%(in 1958). That of
heavy industry ranged from -46.5% to 78.8%.

In general, China's industrial fluctuations have been triggered by
political cycles and/or by intense sectoral disproportions arising from
abrupt upsurge in the proportion of the industrial sector, especially
heavy industry at the expense of agriculture and other non-industrial
sectors, and/or by intensified inflation pressure and by the interaction
of all three, accoring to Tien-tung Hsueh and Tun-oy Woo *The Economics
of Industrial Development in the People's Republic of China* Chinese
University of Hong Kong Press,1991.

The authors go on to argue that at first the initiators of the mass
movements see the good economic performance and proceed to accelerate
reforms through the whole economy which spin of control and destroy the
gains that have been made. The system then reverts back to its original
practice. This problem was familiar in all centrally planned economies
where enterprise managers
    did not want to fulfill the plan too well or the planners would up
output and productivity expectations in the next plan. " During the
Great Leap Forward (1958-60) the annual growth rates of the industrial
sector were as high as 34% in GOV(gross output value) and 31.9% in
NOV(net output value) and those of heavy industry 50.9% in GOV and 45.7%
in NOV which resulted immediately in a great leap backward -27.4% in GOV
and -28.6% in NOV for the industrial sector as a whole and -34.6% in GOV
and -31.6% in NOV for heavy industry in 1961-2" Ibid p 11.

The real effects of the Great Leap Forward weren't felt until 1961-5...
The authors argue that the primary problem in the Maoist years was poor
efficiency and poor planning leading to, amongst other things, a very
high capital/output ratio and low growth in productivity. According to
official Chinese stats, the labor productivity growth rate was the same
in 1991 as it was in 1958. " If the quality of the plan is low, the
costs become very high. The lack of autonomy and the alienation from
direct participation in decision making impair initiatives, creativity
and the sense of self-responsobilty of enterprises and workers, all
vital to improve dynamic efficiency" Ibid. p 81

In his *excellent* books -Korea's Place in the Sun- , -War and
Television- and the  -The Origins of the Korean War- Bruce Cumings
argues that the 3rd world countries the U.S. has gone to war against are
portrayed in the mass media the same way chinatown is portrayed in
"Chinatown". Instead of  "Forget it Jake, its Chinatown" we have,
"Forget it Dick, its Vietnam" or "Forget it George, its Iraq" or "Forget
it Bill, its Yugoslavia"