Deng Xiaoping and Free Market 'Communism'

After the death of Mao Zedong and the subsequent arrest of China’s ‘Gang of Four’, the person who had the most influence on China’s policies was none other than Deng Xiaoping. As Mao described him in 1957, he was “a little man with a great future ahead of him”. Little did Mao know that this future would largely consist of dismantling Mao’s own vision of China and instituting one that could hardly be called communist in the true sense of the term. Debates are wide regarding Deng and his legacy. He has been called a revisionist by some, a murderer by others while on the other hand, he has also been hailed as the reason for China becoming a superpower in the 21st century. What is certain about him is that he changed the course of China’s development in an extremely significant and sudden way.

As the current Premier Xi Jinping has himself proclaimed, there were three historical phases in 20th century China which allowed it to break the deep consciousness of feudal subservience and to end hunger: the May Fourth Movement of 1911, the Revolution of 1949 and the Reform Era that began in 1978. Deng lived through two of these phases and spearheaded the last. During the May 4th Movement, an anti-imperialist student-led protest, Deng participated in anti-Japanese boycotts held in Chongqing. Despite being only 14 at that time, Deng’s actions shaped the course of his life. Ezra Vogel in Deng Xiaoping and the Transformation of China wrote, “From this moment on, Deng’s personal identity was inseparable from the national effort to rid China of the humiliation it had suffered… and to restore it to a position of greatness.” This desire to ‘save’ China led him to join the Chinese Communist Party (CCP) in 1924.

Deng was devoted to the Party, but the Party did not give him as much respect. He was very often blamed for being a revisionist and not believing strongly enough in the party’s goals. He was first demoted in 1931 during the Chinese Civil War when he was accused of not being ‘aggressive enough’ in attacking enemy troops. After the 1949 Revolution, Deng’s faith in Mao was firm until the disaster of the Great Leap Forward (1958-61), when an estimated 16-45 million died. His doubts grew during the Cultural Revolution (1966-76) when Deng was purged from the Party for being a ‘capitalist roader’ and forced to work in the countryside as a tractor repairman.

Once the initial turmoil of the Cultural Revolution subsided, Deng was called back to Beijing in 1974, only to be purged again in spring 1976 for allegedly organising protests that occurred following the death of Zhou Enlai, the Premier. Only after Mao’s death that September and the subsequent arrest of the radical ‘Gang of Four’ while jostling for power with Hua Guofeng (Mao’s successor) did Deng finally gain traction in the Party.

Hua led a group that became known by their critics as the ‘Whatever.’ Hua declared, “We will resolutely uphold whatever policy decisions Chairman Mao made, and unswervingly follow whatever instructions Chairman Mao gave.” This was mocked by Deng and his supporters, who found a useful quotation from Mao Zedong from a time when Mao had been stressing that policy should be based on reality rather than dogma: “Seek Truth from Facts.” Deng said that the ‘Two Whatevers’ took Mao’s statements out of context and ignored the fact that even Mao recognised that some of his ideas had been wrong. Mao’s own slogan foreshadowed the impending ideological shift, away from strict Maoism and towards a philosophy based more on the shifting realities of China’s people.

Deng quickly asserted his dominance in the race for post-Mao leadership. However, he did not achieve this through an outright attack on Mao because, as he rightly observed, “discrediting Comrade Mao Zedong . . . would mean discrediting our Party and state.” The whole history of the Chinese Communist state was inextricably connected with the name and activities of Mao. However, Deng eventually became the person who did most to dismantle his legacy. Unlike Mao, who was a romantic idealist, Deng was a pragmatic realist. Under Deng, ‘reform’ and ‘opening up’, not just blind idealistic faith, were the key to China’s modernisation.

The first attack was on the collectives. Collectivisation was essentially reversed in the early 1980’s. Peasant households became the basic farming unit. The farmers had to agree to sell a certain quantity of grain to the state but could earn more above that quota. They were also now free to develop other occupations.

There was also a new focus on monetary rewards, and also on the production of consumer goods, for material incentives would have little effect if there was virtually nothing to buy, as it often was during Mao’s time. In 1980, four Special Economic Zones (SEZs) were set up in China’s coastal areas. In what the West began to call the ‘Open Door Policy’, Japanese, American, European and multinational companies were encouraged to participate in the expansion of the rapidly globalising Chinese economy. The economy eventually rose from the ravages of the Cultural Revolution. At the same time, it began to shed its communist skin.

Deng and his supporters often used the phrase, “It doesn’t matter if a cat is black or white; if it can catch mice, it’s a good cat.” However, there comes a point after which this distinction becomes important. The reforms boosted the economy on one hand but reversed some of the achievements of the Mao regime on the other. Gender equality achieved in the communes saw considerable damage, and with the market economy, it became less profitable to teach in the countryside, lowering the levels of primary education. The ‘iron rice bowl’ no longer existed which meant job security and subsidised food was no longer a promise.

Deng’s vigour for change was exemplified by three lines, quoted everywhere: “If we don’t change, we are at a dead end! Whoever does not reform will have to step down! Let some people get rich first!” The proclamation proved slightly unclear. Who were these people who were going to get rich first? Deng might have meant those the Communist Party supposedly represented: the ‘worker-peasant alliance.’ He might even have been talking about intellectuals with their knowledge and technological skills. But those who got rich first turned out to be Party members and their families and close associates.

Despite his belief in a market economy, Deng remained a committed Communist until his death. He agreed with some aspects of Marxist Leninism. “If anything was sacred for Deng,” Ezra Vogel wrote, “it was the Chinese Communist Party.” Following the Leninist idea of democratic centralism, Deng believed that only an authoritarian organisation such as the CCP could implement the policies necessary for China’s development. It was Deng’s faith in the centrality of the Party that propelled him to end the Democracy Wall in March 1979 and, later, to violently clamp down on the Tiananmen Square protests. Deng’s family reported that “despite all the criticism he received, he never once doubted that he had made the right decision.” He believed in a free economy, but as could be seen, not so much in a free people.

Interestingly, many Chinese agree that Deng’s harsh response saved China from experiencing a similar fate to the socialist states of Eastern Europe. Even today, they are willing to accept the corruption and authoritarianism of the Party given the stability and economic growth it provides. Such a perspective may not sit well with the West, but it did provide much-needed stability at a turbulent time.

In most sectors of China’s economy today, the state no longer dictates what to produce and how to produce it. Almost all prices are now set according to demand and supply, as in a capitalist economy, rather than by administrative decree. Most government monopolies have given way to fierce competition between state-owned and nonstate-owned firms. But there are still many thousands of state-owned enterprises (SOEs) with tens of millions of employees in China. But even SOEs must now respond to market forces.

The results of the People’s Republic of China’s (PRC) move from a planned towards a market economy have been phenomenal. China has been one of the fastest-growing economies in the world for more than twenty years. GDP grew at an average rate of 10.3% per year from 1992 to 2012. China weathered the global recession of 2008-2009 far better than any other major economy.

However, while allowing a considerable degree of capitalism, national and local bureaucrats continue to exercise a great deal of control over the production and distribution of goods, resources, and services. Market reforms have gained substantial momentum that would be nearly impossible to reverse. But the CCP still ultimately determines the direction of China’s economy.

It is normal to be confused about the nature of China’s political and economic structure. What is harmful, however, is confusing the true meaning of communism with the functioning of a state that claims to practice it. The political repression and human rights abuses that have gripped China has come to be associated with the term communism more than any of its other actions. Moreover, although socialistic tendencies in its economy remain to a great extent, it is not enough to practice centralised democracy to qualify as a communist state. The road that China was led upon by Deng Xiaoping took it far away from the Maoist model. Like all market economies, development has come at the cost of widening inequalities. This can be defended in many ways, but it would be best not to defend it in the name of communism. The very term that is often used to describe Deng’s policies - ‘market socialism’- is an oxymoron. It seems almost like the term existed solely to soften the blow from the sharp break from Maoist policies while simultaneously to justify the state repression of dissent.


Ritisha Gupta

A Political Science student from Delhi University. Hoping to make a difference, one step at a time.

The Pangean does not condemn or condone any of the views of its contributors. It only gives them the space to think and write without hindrance.