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Rethinking ‘Capitalist Restoration’ in China

Yiching Wu was born and educated in the People’s Republic of China. He is currently completing a dissertation on Chinese intellectual politics and social movements, at the Department of Anthropology, University of Chicago. For comments and criticisms, please contact him at yw16 [at]
The author wishes to thank Judith Farquhar, Saul Thomas, Matthew Hale, Mingyu Zheng, Hairong Yan, and Yiwen Li for very helpful discussions and suggestions.

Over a quarter century after China ventured onto the market path, it is high time to take a hard look and ask some very tough questions. That is what Martin Hart-Landsberg and Paul Burkett did in “China and Socialism: Market Reforms and Class Struggle” (Monthly Review, July–August 2004) and they concluded that “market reforms” have fundamentally subverted Chinese socialism. The considerable costs of economic liberalization, they argued, reflect the inherent antagonisms of the capitalist system that is in the midst of being imposed. “Market socialism” is at best a contradiction in terms, an unstable formation that only awaits progressive degeneration: “the Chinese government’s program of ‘market reforms,’ which was allegedly to reinvigorate socialism, has instead led the country down a slippery slope toward an increasingly capitalist, foreign-dominated development path.”1 They also showed how market reforms generate their own dynamic—how each stage “generated new tensions and contradictions that were solved only through a further expansion of market power, leading to the growing consolidation of a capitalist political economy.”2 Moreover, they insisted on a class-based critique, an admirable position in an ideological milieu that deems such emphasis unfashionable. Chinese reforms have produced such consequences as income polarization, increased poverty, and intensified exploitation, which are integral to processes of capitalist marketization. The vital issue of class antagonism is thus not to be glossed over by the neoliberal myth of “transition.”

Hart-Landsberg and Burkett have made an important and timely contribution to our understanding. However, the issues involved—history, class, and socialism—are of such magnitude and importance that they merit further discussion and development.

Market Socialism: Utopian or Historical?

The idea of market socialism has become a major field of interest among political theorists, sociologists, and economists on the left. Even as proponents have devised many ways in which socialist values may be combined with market mechanisms, critics have expressed doubts whether such models can be coherent, or whether they are desirable or even feasible after all. In a well-known exchange between Ernest Mandel and Alec Nove, Mandel—a key critic of market socialism—insisted that the debate was concerned neither with reform strategies in given societies nor with the malfunctions which the market is meant to fix, not even with analyzing the possible directions of change; rather, in Mandel’s words:

Our controversy turns only around two questions: whether socialism as conceived by Marx—i.e. a society ruled by freely associated producers, in which commodity production (market economy), social classes, and the state have withered away—is feasible, and whether it is desirable.3

But processes of history surely should matter much more, and that is where we should focus our attention.

It is not at all uncommon on the left to view the market negatively. Even for those who might sympathize with the promise of market socialism, the market is often viewed with ambivalence as at best a necessary evil, only to be tolerated if accompanied by very vigilant regulation. Market relations are viewed as contradicting and undermining the ideal of socialism. Once embraced, the Fall may be initially gradual, but the slippery slope will eventually lead all the way down. An unbridgeable gulf exists between socialism and the market—the system of commodity relations upon which capitalism has historically and structurally rested. That brings us back to the question: for reinvigorating socialism, why the market road after all?

In these pages, Harry Magdoff and John Bellamy Foster pointed out that the post-Mao “U-turn in the ruling ideology” originated in the class-ideological divergence in the earlier phase of Chinese socialism:

What is clear from the Chinese experience is that the basis of the class struggle continues even after nationalization of business institutions. The mentality of the old society does not evaporate into thin air after a revolutionary change. It remains and conflicts with the socialist road. Other strains arise from the potential and actual entrenchment of a bureaucratic elite, the persistence of hierarchy, and the complexity of building a people’s democracy….In this way the class struggle persists, though in different forms from the past. At heart, as Mao pointed out, even some in high Communist Party positions wanted to take the “capitalist road.”4

In this view, shortly after Mao’s abortive victory over such regressive tendencies during the Cultural Revolution, a small clique of capitalist roaders holed up inside the party succeeded in reversing the achievements of the revolution and imposing the capitalist road simply by governmental fiat, and the restoration of capitalism is now almost complete.

Often associated with Monthly Review, these views have formed the kernel of a long-standing tradition of radical analysis and criticism in relationship to the historical vicissitudes of Chinese socialism and its post-Mao transformations.5 But in today’s highly constricted ideological atmosphere, this fruitful tradition is being largely marginalized even in left-wing circles. However, admirable efforts to stress the class perspective notwithstanding, some of the basic historical premises of this tradition with respect to the social and political nature of Chinese socialism need to be scrutinized in order for the critical potential to be realized.

Clearly, there is a methodological orientation at stake here. Eric Hobsbawm once noted that the evident importance of the actors in the drama does not necessarily mean that they are also serving as dramatist, producer, or stage-designer. To follow Hobsbawm’s spirit, I argue that we may approach the problem of post-socialist market reforms somewhat differently, in a way that is more historically situated and less conceptually dichotomous. I think that the debate over market socialism—whether it can be a coherent model or whether it can really lead toward socialism—may be fully rational and important, in theory at least. However, we must also examine the historical side of the coin, unless our job is merely to design blueprints for institutional utopia in some pristine political laboratory. Market measures are adopted usually to tackle socialism’s difficulties, and they derive their political significance from the specific historical setting in which they are deployed. Therefore, in what way is such an ideological line conditioned by determinate class and political relations? Are market reforms principally a policy matter as designed by the leadership? Should we focus on the class conditions of such reforms as well as their class consequences? Or, what is really behind the market line?

Class Relations in Chinese Socialism

A critical assessment of Chinese socialism is much needed in order to understand its contemporary mutations. Yet instead of merely heaping up the list of failings, which has been done by many, we should also consider a stance that may bring the class dimension into sharper focus.

How do we characterize the basic class relationships characteristic of the post-1949 Chinese society? Where do we begin? There is no doubt that class in Chinese socialism is a thorny issue. This is first and foremost a more general political and theoretical problem. Richard Kraus, the author of perhaps the best book on the subject, wrote that “there still exists no adequate theory of socialist class relationships,”6 and his remark is probably no less true today than it was two decades ago. Ever since the 1930s, Marxists of various strands have been engaged in intense arguments about the class nature of state socialism of the Soviet-type, and enormous political and theoretical energy has been expended on these debates. Briefly, the controversies have centered on three closely interrelated issues: first, whether there exists a ruling class in state socialism; second, how its class character might be defined, or whether it constitutes a bourgeois or state-capitalist class; third, how the nature of such societies and polities may be characterized in class-analytic terms. In spite of the frequent fissures and convolutions that these debates have spawned, they have nonetheless produced valuable lessons and insights. There is no good reason why our present inquiry into Chinese socialism and its permutations should not benefit from the accumulated insights from generations of Marxian debate.

Yet for our purpose of understanding China’s market path, I think a somewhat weaker or more flexible approach may suffice for the moment, and may even be more productive in the long run. Our task here is not to slap on labels, i.e., to categorize whether China was less or more socialist, or even capitalist. Such an approach only smacks of political pedantry. Rather, I think our present inquiry can go a long way simply by beginning with certain minimal facts—i.e., to recognize the fundamentally class-divided character of Chinese socialism, yet without having to rush to definitive closure with regard to the state’s class nature. The real point of a class perspective is how to draw out its implications for understanding China’s current transformations.

Any critical assessment of contemporary Chinese socialism should begin with the premise that the socialist objectives of the Chinese Revolution were unmistakable, and its social and political accomplishments historically significant. Led by a Marxist-Leninist party with a vast popular base, the protracted revolutionary struggle shattered a decomposing semi-traditional and semi-colonial order in which economic exploitation and social oppression were rampant, and fashioned the fragments of the decaying former empire into a modern nation state. After its founding in 1949 the new state moved quickly to abolish private ownership of the social means of production by expropriating the property-owning classes. However, despite the broad socialist accomplishments, we should acknowledge—and I do not think this is too controversial—that as far as the social relations of production are concerned, there was an actual separation of the popular working classes from the means of production and distribution. Productive social property was controlled in effect by an immensely powerful state bureaucracy, an apparatus that was not under effective popular-democratic control. These facts should constitute the basic point of departure for understanding Chinese socialism and its historical permutations.

The key point is that the political form of the new state largely reproduced and maintained the expropriated status of the working classes—both rural and urban, even though their new enjoyment of certain socioeconomic benefits was historically significant. Proletarianization was not necessarily the historical condition of the revolution, which was brought about more by severe social dislocation and economic exploitation based mostly on precapitalist social relations. More a post-revolutionary phenomenon, proletarianization developed rapidly after 1949, and was accomplished for the most part with the completion of agrarian collectivization and the nationalization of urban trades and industries in the mid and late 1950s. Generalized proletarianization was thus the direct result of state control over productive resources, yet without the state itself being socialized—that is, without a political framework being constituted wherein the controlling apparatus itself could be effectively supervised and controlled by the citizenry.7 In this context, juridical forms of property ownership must not be confused with actual class relations—they were only a derivative fact, expressive of the underlying production relations. Social, collective, or public ownership existed largely as schoolbook theory—indeed, a legal fiction. And despite the highly visible role of mass activity, democratic participation in the life of the state by the popular classes enjoyed little institutional guarantee, and its political significance was severely limited.

As a result, the revolutionary state was estranged from its social basis even at its early beginning, when there existed much closer ties between the popular classes and the governing stratum, when the sacred events of revolution were still fresh, and the tradition of mass struggle was presumably quite robust. The political apparatus that was used to destroy old inequalities had itself given rise to a new set of inequalities. The power of the state was supposed to be wielded in the interests of the working people, to be sure. But in fact, the subordinate working classes were at best to be the dependent beneficiaries of a paternalistic bureaucracy—not to mention that such hard-won benefits can be easily taken away as political circumstances may change, as recent developments in China have so clearly demonstrated.

The historical reasons for the political estrangement of the state were no doubt extremely complex. The new state was founded under difficult circumstances of revolutionary struggle and counter-revolutionary violence, debilitating conditions that understandably limited its transformative potentials. But this is a separate issue and should merit its own independent inquiry. Rather, the point here is that any earnest attempts critically to examine China’s contemporary transformation from a class perspective must begin with the sober recognition of this historical limitation, and moreover, with taking its political implications into very serious consideration.

Marketization and Ruling-Class Formation

If the market road to socialism has utterly failed in China, how are we to interpret this failure? Market reforms generally do not occur in a social or political vacuum. “Men make their own history,” wrote Marx in the Eighteenth Brumaire, “but they do not make it just as they please.”

The new market society was not some historical clay that either Beijing’s grand architect or Washington’s neoliberal designers could mold at will. Rather, market reforms are necessarily mediated by existing social-class relations. As a result we must keep in mind the historical conditions under which market measures are being employed, and try to grasp the full political import of such conditions. Granted capitalist market relations conflict with socialist values, but they must also pass through the Chinese polity and its underlying class structure. In doing so, marketization tends to extend or amplify deeply entrenched class privileges and inequalities. In the making of the new historical bloc—the unholy alliance between capital and state power—market-generated disparities are compounded by bureaucratic prerogatives, which are not as commonly believed antagonistic to the market, but rather can coexist with the latter in a mutually reinforcing way. Hence, if the market leads to capitalist restoration, it is in part that it supplies fresh opportunities for certain continuous—and yet previously amorphous—processes of class formation to differentiate, accelerate, or even break out. That is, the governing elites are now able to employ their monopolized political power for direct economic gains and to convert the state-controlled public assets to their own private capital. Marketization does not necessarily bring about fundamental changes in the basic structure and organization of class power, but it unquestionably transforms and displaces its field of application, by multiplying the points and circuits where ruling-class power can be deployed.

Such processes of ruling-class development are indeed structurally conditioned, yet they may also exhibit a certain amorphous or uneven character. This may warrant some additional clarification. The alienation of the state does not necessarily mean that the bureaucracy and bureaucrats have already formed a fully developed ruling class or bourgeois class. We need to keep in mind that class structure and class formation are two different levels of analysis, and a useful distinction can be made between structural positions and developmental potentials, with the latter being structurally conditioned but not fully determined. I argued earlier that critique of China’s post-socialist transformations should make use of the Marxist discussions on statist socialism or state capitalism. But I don’t think that should amount to a simplistic adoption of ready-made concepts. The problem of capitalist restoration would have been much more easily resolvable if we could simply claim, as Chris Harman has famously argued in the Eastern European context, that the current changes represent neither a historical slide backwards nor a leap forward, but only a step “sideways”—a self-restructuring of capitalism, or in the words of Mike Haynes, “an internal transformation within a mode of production, in this instance a shift in the form of capitalism from one of strong state capitalism to more mixed state and market forms.”8 But that, I think, is too easy a solution for the particular problem of Chinese socialism and its capitalist transformation.

Instead, I would argue that our present inquiry will benefit more if we can in some way re-map the main arguments in these debates—which have been hitherto based primarily on a synchronic mode of analysis—along a more historical line and moreover, rework them into a more flexible or extended temporal frame. The point is rather simple: the ruling stratum (even with its long-standing monopoly of politico-economic powers) may or may not already form a fully developed ruling class or bourgeois class at any given point in time (for example, China in 1964). However, that does not mean that they will not be capable of evolving into such class positions when objective conditions ripen or become more hospitable, as new institutional mechanisms or ideological resources (e.g., market relations, neoliberal doctrines) become available to encourage certain developmental tendencies that have previously been held in check, and thus have remained only in latency.

Some sense of ambiguity or indeterminacy may indeed benefit us. The problem of class formation in post-revolutionary China, with regard to the ruling class in particular, may be messier than what the neat formulations of state-capitalist theories can easily accommodate, at least for some of the stronger versions.9 Yet class is conventionally defined as a relationship between collectivities whose structurally defined positions and interests in the social division of labor are necessarily antagonistic. Given such a view, I understand I may encounter some serious theoretical difficulties: for example, can there be dominated and exploited classes without a well-developed ruling class? Would it be totally absurd in conceptual terms to talk about a state but not a fully constituted dominant class? Or, can there be the fulfillment of certain class or class-like functions—e.g., control of means of production, surplus extraction, domination, etc.—yet with no unambiguously constituted groups for their “support,” i.e. without fully-fledged formation of the class subjects that perform such functions?

Such difficulties of unevenness or “one-leggedness” will be less troubling if we are less constrained by our conventional historical scheme and employ a more expansive temporal framework. It should not come as a surprise to us that real history is quite often more complicated than our elegant conceptual scheme may wish. In the long waves of history, class subjects and positions form, re-form, and may even de-form, yet it is highly improbable that all the jigsaw pieces will fall into their proper places magically all at once.

Indeed, what we have witnessed in China during the past decade or so is precisely the blossoming—the phase of acceleration and differentiation—of the continuous and yet uneven process of ruling-class formation. A cadre-capitalist class has been in the construction with astonishingly swift speed, striving to expropriate public assets by any means possible. “Gangster capitalism,” indeed. But denouncing these illicit practices as mere corruption grossly trivializes their political and historical significance.10 It is really under the broader rubric of state (re)-formation and capital accumulation that such matters should be discussed. What is happening in China is nothing short of a societal great transformation—the brutal processes of primitive capital accumulation.11 But it is occurring with a twist; and this is what is most important for us to keep in mind. Specifically, privatization and capital accumulation have been spearheaded often by a specific class of agents—the bureaucratic power-holders and their networks of well-placed cronies. Such systematic conversion of public assets into private capital constitutes part of the more general process of privatization of political power. The bureaucratic monopoly of economic and political power is therefore a key to our understanding of the course of China’s restoration.

The issue here is not how this might account for the apparent primitiveness of capitalism with Chinese characteristics. Rather, what I am trying to get at is a sense of the pivotal role played by the bureaucratic class in China’s march toward capitalism. A bureaucratically-dominated socialist society cannot be revitalized simply by embellishing or mixing it with the market. A fundamental political transformation is imperative, lest its existing class structure and inequalities inevitably constrain and distort whatever liberalizing effects such measures may bring about, and channel them in a direction that can only further aggravate existing social and political contradictions.

The Sweezy–Bettelheim Debate Revisited

There may be another angle from which to approach socialism’s market path from a class standpoint, namely, marketization as ruling-class strategy. Here it may be instructive to begin with some of the ideas from the Sweezy–Bettelheim exchange from thirty years ago. Suffice it to say that their decade-long discussions revolved around two major issues: first, how to interpret the trend toward bourgeois restoration, and second, the class nature of socialism.12 These issues are hardly irrelevant to our concerns today. Again, I think our present endeavor may be greatly enhanced if we can tap more into the critical insights of past Marxian discussions (particularly those within the Monthly Review tradition itself), or else we might risk reinventing the wheel.

Paul Sweezy was a vocal critic of market socialism long before the idea became intellectually fashionable. The market, for Sweezy, constitutes “a standing danger to the system and unless strictly hedged in and controlled will lead to degeneration and retrogression.”13 Charles Bettelheim’s sympathetic criticism of Sweezy rests on his state-capitalism thesis, which was developed in his seminal study of early Soviet history.14 According to Bettelheim, market relations are only the secondary fact, or the “indices or results,” that express an anterior political relationship. The decisive factor here is the underlying structure of class power, wherein the “the proletariat…has lost its power to a new bourgeoisie, with the result that the revisionist leadership…is today the instrument of this new bourgeoisie.”15 This, for Bettelheim, is the class origin of market liberalization—“If…the restoration of bourgeois domination is accompanied by an extension of the role of the market, this is evidently because this domination cannot be complete except through the full restoration of market relationships.”16

Sweezy’s important formulation of the “post-revolutionary society” reflects his substantive agreement with Bettelheim with respect to the class-stratified character of actually existing socialism (as it was then called), despite their sharp disagreements over its specific class nature.17 Sweezy argues in no less strong terms that a post-revolutionary society is class-divided, and this is worth quoting at some length:

The most important difference between capitalism and post-revolutionary society is that this overwhelming dominance of capital has been broken and replaced by the direct rule of a new ruling class which derives its power…from the unmediated control of the state and its multiform apparatuses of coercion. This means that the utilization of society’s surplus product—which…is produced by a propertyless working class—is no longer governed by the laws of value and capital accumulation but instead becomes the central focus of a political process and of course of political struggles, including (but not exclusively) class struggles.18

But in contrast to Bettelheim’s strong “state-capitalism” argument, Sweezy also asserts that such societies are neither socialist nor capitalist. For Sweezy the post-revolutionary society, in spite of its fundamental reality of class division and domination, is still more or less indeterminate, a transitional “two-way street”:

Post-revolutionary society contains not only contradictions inherited from millennia of class-riven society, but it produces and reproduces its own contradictions. This revolution provides no final solutions. It only opens the possibility of moving forward in the direction of eliminating classes. But the existence of this as possibility implies its opposite, the possibility of moving backward toward the re-entrenchment of an exploiting class based not on private property in the means of production but on control of an all-encompassing repressive state apparatus.19

The forward movement toward socialism would require a progressive state power and economic policy—“the leadership and guidance of a party deeply rooted in the working class and dedicated to its emancipation.”20 In Sweezy’s view, China and the Soviet Union exemplify the two possible courses of response to socialism’s socioeconomic woes, in fact two divergent political and ideological lines. Whereas Maoist China was more successful in revitalizing socialism and carrying out a cultural revolution, the Soviet Union failed utterly in this task and had to rely on capitalist measures of market discipline and incentives.

While my own intuition tilts somewhat toward Bettelheim’s view, I think he was a bit premature or too easy in closing off the arguments. He posited too direct—and, as a result too deterministic—a link between class structure and class formation. In this regard, Sweezy’s concept of post-revolutionary society has great heuristic value. Sweezy begins with a postulate that appears to be deceptively minimal—that is, its unambiguous recognition of the fundamental fact of class rule. However, in allowing a greater scope for historical possibility, Sweezy’s approach is more elastic and potentially more productive in the end if we are willing to pursue its implications further.

Still, with the benefit of historical hindsight, it can be seen that Sweezy’s argument is not without its own difficulties. There seems to be some ambiguity or a lack of theorized connection between his class diagnosis and his view of historicity. Despite Sweezy’s bleak view of the class-dominated character of the post-revolutionary society, his take on its positive evolutionary potentials (in the Chinese case in particular) seems too sanguine—the “two-way street” formula implies that the central issue is more a matter of having the correct political and ideological leadership. Instead of exploring the ambiguity, Sweezy falls back on an oddly quantitative conception of historical determination, postulating that “the ratio of determinism to voluntarism in historical explanation necessarily varies greatly from one period to another,” and “it is precisely in the transitional societies, or at least in a particular phase…that the ‘determinist’ elements in historical causation are weakest and the ‘voluntarist’ elements most significant.”21 Such a notion, however, merely banishes the original ambiguity, only to repackage it. Circumventing the issue only after raising it, Sweezy seems to have underestimated the gravity of the problem of ruling-class power, thereby falling short of making use of the full critical implications of his own class analysis.

Market Reforms, A Passive Strategy of the Ruling Class?

I would contend that the key point here is not only about the evolutionary or self-reform possibilities among such transitional societies—Maoist or post-Mao China can serve as a clear example of how vibrant such self-critical energies can be—but also about their political limits. What are the possibilities and limits of re-revolutionizing post-revolutionary societies through a process of radical reforms? What is the likelihood that radical changes in pursuit of genuine democratic and egalitarian aims can proceed within the existing framework of class relations? These are difficult questions, but also very important ones.

I submit that Marxists should have the least difficulty acknowledging this key proposition—that under no ordinary circumstances should the ruling classes be expected to abdicate their ruling power and prerogatives, unless they are compelled by extraordinary forces. Applying this to a post-revolutionary society wherein the bureaucracy monopolizes political and economic power, the question arises: What is the likelihood that internally generated reforms might promote unity between direct producers and the social means of production through democratic self-management? In other words, what likelihood is there that such reforms can be used to implement the central premise of the socialist project?

Instead of democratically mobilizing and reorganizing society, a depoliticizing, reformist program is much more likely to emerge as the political necessity of the existing class structure and relation of political forces. Such a program becomes necessary precisely because the ruling elite will not voluntarily adopt a course of fundamental reforms that would undermine its own power. A passive strategy of gradual and partial adjustments that aims at preserving the ruling-class position is also likely to succeed, due to the fundamental political weakness of the subordinated classes. A social form, Antonio Gramsci wrote in his Prison Notebooks, “‘always’ has marginal possibilities for further development and organizational improvement, and in particular can count on the relative weakness of the rival progressive force as a result of its specific character and way of life. It is necessary for the dominant social form to preserve this weakness.”22 The popular working classes, whose political mobilization was vital to the success of the Chinese Revolution, were indeed severely weakened and disorganized as an outcome of decades of repression and control.23 Fragmented, dependent, and demoralized, the Chinese working people were left with few alternative ideological and organizational resources for active resistance and self-development, thereby unable to press for more deep-seated changes with respect to the reorganization of state power. “In the absence of effective counter-forces,” noted Sweezy, “conditions favoring the development of a class system…will bear their natural fruit. And by effective counter-forces we do not mean ideological doctrines or statements of good intentions but organized political struggle.”24

Relying largely on market discipline, profit incentive, and private consumption, a market-based reform program has a discernible political logic: first, it poses much less of a threat to the ruling class; second, it preempts popular upheavals that threaten from below. This is the line of least resistance, so to speak.25 Thus in the absence of vigorous popular pressure from below, a typical ruling-class strategy for addressing society’s woes is first of all firmly to consolidate its monopoly on power (e.g., national integration, political stability, governing capacity).26 Market mechanisms are introduced to bring about some controlled (and controllable) openings in social life, to shield the ruling elite from the popular dissatisfaction by depoliticizing socioeconomic decision-making through commodification of large areas of social life, and to buy time in relation to both global capitalist competition and growing domestic discontent.

Such a path of “revolution from above” offers favorable prospects insofar as the ruling-class position is concerned. As noted earlier, market liberalization gives rise to massive opportunities for the ruling elite to convert the public power they are entrusted with into private economic gains. The creation of such a milieu, I shall add, tends to be the unintended consequence of initial reforms, when this particular abuse of power arises more from individual opportunism. However, the expansion of the money-power nexus and entrenchment of the bureaucratic-capitalist class have emboldened the ruling elite, enabling them to employ the expedient instrument of state policy to facilitate their ends more efficiently and systematically—i.e., to alter existing institutional arrangements or simply create new regulatory apparatuses and the like ex nihilo for the sake of enhancing their particularistic interests and positions. As Wang Hui—the leading critic of the emerging Chinese intellectual left—has observed, what is referred to as “neoliberalism” in the Chinese context in fact enjoys a special relationship “with the proliferation of interest groups within the state itself”:

The ideology of…“neoliberalism” had already begun to germinate [in the late 1980s], with its core content being the intensification of reforms calling for greater devolution of political and economic power…the furtherance of a comprehensive course of spontaneous privatization under the guiding premise of a lack of democratic guarantees, and the legitimization through legislative means of the polarization of classes and interests created by these individual efforts. Because of this, the principal embodiment of neoliberalism lay in the benefits accruing to social groups [formed] through the process of the creation of interest groups within the state structure.27

Therefore it has become clear, as Hart-Landsberg and Burkett argued perceptively in China and Socialism, that market imperatives “generated new tensions…that were resolved only through a further expansion of market power.”28 But this is only part of the story. Market reforms are in a fundamental way mediated by political-structural factors, and marketization derives its significance from historically existing class relations. Market expansion is unquestionably driven by the structural logic of capitalist relations of production, yet it also has its distinct political momentum. Market mechanisms, initially introduced by the ruling stratum for its defensive self-preservation, have since been seized upon by the ruling elite as an instrument that not only changes the basic contours of society, but also actively transforms and expands itself into a more self-conscious, full-blown ruling class, in the processes of which money and the power to rule are inseparably amalgamated, and society’s class antagonisms are ever more sharply felt. This is no small leap forward, to say the very least.

Maoism, An Incomplete Project

Up until now I have deliberately avoided the issue of Maoism. The historical complexity of Chinese socialism is more than ever relevant to our present concerns. However, I think that any serious inquiry into the general problem of the possibilities and limits of socialist reforms must examine the Chinese experience, especially the role of Maoism as it culminated in the political practices of the Cultural Revolution.

There is little doubt that late Maoism and the Cultural Revolution are an aberration in the history of world socialism. But let me begin by saying that it would be politically shortsighted if we limited our view of reforms only to the post-Mao era. What is unique about the historical experience of Chinese socialism is precisely its incessant dynamism and energy for self-reformation. Instead of moving down the market path, which would have been much easier insofar as preserving ruling-class positions was concerned, Maoist China took an uncharted course of reform that was far more challenging and could rely on no blueprints whatsoever.

Late Maoism developed a highly dynamic view of the process of post-revolutionary class formation and bourgeois restoration, integrating the reciprocal interactions among ideological, political, and economic levels in a single analytical framework. It is Maoism’s distinctive emphasis that class struggle persists even after the exploiting classes have been overthrown. Thus the degeneration of socialism, in Mao’s view, does not necessarily occur through the violent overthrow of the socialist state, but more probably through peaceful evolution from both inside the ruling party and its surrounding environment, under the corrosive influence of the still existing overthrown classes. The restorative process begins with the acceptance of bourgeois ideas by a degenerate clique of leaders. The usurped party leadership then sets about the transformation of the class character of state power, dismantling the socialist economy and creating a new dominant, exploiting class. This, in turn, demands the development of a more thoroughly bourgeois political system so as to consolidate the ruling-class position.

As an active attempt to revitalize socialism, the Cultural Revolution was deeply rooted in the collective history and popular traditions of the revolution. But despite its high aspirations, I would like to argue that late Maoism was seriously flawed, and in the end ineffectual. Very briefly, I would argue that Maoism lacked a clear class focus as defined in structural terms. The Maoist politics of class was simultaneously too broad and too narrow, a contradiction merely in appearance. Its political targets were often personalized and therefore too diffuse. In the most fiercely iconoclastic days of the Cultural Revolution, it struggled against everything and anything—from tradition, inner consciousness, remnants of former propertied classes, capitalist roaders, and bureaucratic privilege to arts and literature, sexual behavior, dress styles, shoe heels, and so on. The notion of “class” was spectacularly vulgarized and stretched to the point of near-lunacy, where it became a confused hodgepodge that was totally pointless and toothless.29

Yet the political myopia of late Maoism is equally striking. This is most visible in its inherent inability to be self-critical—that is, to face up to its own historical situatedness, as well as to acknowledge the prevalent class relations and the corresponding institutional structures in which it was entrapped. This rather paradoxical appearance of Maoism may be understood, at least in part, as the ideological effect of the aforementioned unevenness of post-revolutionary class structure, particularly with respect to the greater or lesser amorphousness of the ruling class. Yet on a more fundamental level this myopia about the most basic structure of class rule is also suggestive of Maoism’s essential political limits.

In spite of its extreme vigilance against regressive tendencies, late Maoism thus failed successfully to address the fundamental structure of class domination in the post-revolutionary state. By focusing on bureaucratism, revisionist line, and distributional privileges, the Cultural Revolution attacked the bureaucrats, their ideological affiliations, and the remnant classes much more than the system of bureaucratic domination. Maoist politics was indeed successful in temporarily interrupting the closure and consolidation of the incipient ruling class—a major achievement by itself—by attempting to revolutionize culture, to promote a proletarian consciousness, to combat bourgeois selfishness, and to exhort the cadre-bureaucrats (and everyone else) to serve the people rather than serving themselves. Hence it was no accident that the Cultural Revolution was cultural, and that such “revolution through culture” ipso facto represents Maoism’s highest development, and its political limit as well.

The more radical political implications of Maoism, I should briefly note, were pressed further by a number of young critics, who audaciously questioned the official Cultural Revolution’s inherently conservative, reformist proclivity for attacking individual power-holders and remnant ideologies instead of searching for the class-structural roots of China’s social and political problems. Their radically anti-bureaucratic and democratic impulses were accompanied by a general concern with the nature and organization of state power in the post-revolutionary era and a deep anxiety that a new bureaucratic class could rise to dominate society.30 Invoking the historical example of the Paris Commune, they claimed that China’s “new bureaucratic bourgeoisie” and their monopoly of the state machine would have to be destroyed in order to establish a genuine egalitarian and socialist society, in which people could truly participate and self-govern.

During the later months of the Cultural Revolution in the late 1960s, in the midst of mass movements from below, a different political logic and a different ideological trend—however primitive—began to emerge and became operative, with the potential of breaking out of the dogmatic constraints of official Maoism. Not surprisingly, the political views of these young activists, whose usefulness for Maoist mass mobilization was very short-lived, were nonetheless denounced as too radical, as ultrademocratic, bourgeois-anarchic, anti-Party, or simply counterrevolutionary. Their theoretical and political activities were without exception suppressed ruthlessly, very often under direct instructions from the “established left” of the Maoist Cultural Revolution leadership, and all of them vanished in the demobilization of mass movements and purges of the so-called ultra-left that began as early as 1967.31

Cannibalizing its own rebellious children, Maoism quickly exhausted its political energy and was in the end unable to transcend its essential historical limits by fundamentally transforming state power. Thus despite its appearance of extreme vibrancy and radicalism, the Cultural Revolution was a rather predictable, if dramatic, mass mobilization that was ostensibly participatory but nevertheless hierarchically divided, wherein the intermediary governing structures were weakened, and the bureaucratic staff were ritualistically humiliated. Here lies the fundamental contradiction in which Mao was caught during the Cultural Revolution. As critic Richard Kraus aptly characterized it: he was the “chief cadre” of the bureaucratic regime which he personally embodied, and simultaneously its “leading rebel.”32 As a result, the Cultural Revolution failed as a bold experiment in post-revolutionary and socialist reforms. It left virtually untouched the basic structural and functional distinction between rulers and ruled. If the social reforms that resulted from the Cultural Revolution mitigated some of the more glaring manifestations of bureaucratic elitism, they did not fundamentally alter the relationships between the political elite and subordinated popular classes.

Bourgeois Restoration: The Cunning of History?

The Cultural Revolution was conceived as an active attempt to deter regressive tendencies in a post-revolutionary society. With some trepidation, I would posit that “capitalist restoration” was mainly a myth, serving an important ideological function. The Maoist claim that without further revolutionary agitation China would inevitably gravitate back toward capitalism was a misleading one at best. Revolution in permanence is indeed the essence of socialism. However, China’s post-socialist history has shown that the perils of subversion should have been thought of as part of a broader, more complex historical problematic—backward or forward, or even sideways. Yet the origin of the greatest peril was stubbornly beclouded by all the thunder and fury on the “bourgeois restoration.”

Invoking the historical experience of the Chinese Revolution, William Hinton conveyed the Maoist thesis of “bourgeois restoration” in the vivid metaphor of revolutionary prairie fire:

A single spark can start a prairie fire. And so it…ignited a prairie fire that carried all before it, bringing more change to China in a few decades than two millennia had previously brought forth. But now the fire has burned itself out, and, as the flames die down, it becomes apparent that change has not been deep. Fire burned the foliage off, but the roots of the old civilization survived and are now sending up vigorous sprouts that push aside and overwhelm, in one sphere after another, all revolutionary innovations.33

Hinton’s colorful metaphor, however, is premised on a problematic conception of historical determination, namely, the determination of the present by the residual forces of the past. Revolutions certainly do not eliminate the past, they write on top of it. Yet the revolution also produces its own contradictions. Socialism is not just built on top of the surviving deposits of capitalism, feudalism, or whatever. The remnants of the past enter into the new society and are necessarily conditioned by its newly created antagonisms and contradictions. The dead weight of past history cannot be easily restored backwards. Or it will perhaps take much longer—certainly longer than the two or so decades taken by the very speedy “restoration” in China. The extraordinary development of capitalism in China today is fueled by a more powerful logic of social recomposition—it has been aided by far more efficient and expeditious means, driven by class forces that operate more from above than from below, more within than without. The ideological significance of bourgeois restoration—and the Maoist theory of class struggle that formed its nucleus—lay in their function of diversion and mystification. By concentrating on remnants from past traditions, spontaneous petty tendencies from below, and insidious capitalist roaders and their line from within, the Maoist discourse of capitalist restoration distorted and obscured the central contradiction of post-revolutionary Chinese society.

What are the important historical lessons to be learned from China’s transition toward capitalism? Setting aside the theoretical question whether socialism without market mechanisms is viable or desirable, at least one lesson seems particularly compelling: socialism without meaningful democracy is unfeasible. The problem of socialism and democracy is not at all merely a philosophical task of defining utopia, but pertains more fundamentally to the ineluctable logic of history and politics. A genuine democracy is not just what defines the ethical telos of socialism, it also serves as its effective safeguard.

Revolutions to accomplish socialist aims, as Rosa Luxemburg admonished shortly after the success of the Russian Revolution, cannot rely on some ready-made formula that “lies completely in the pocket of the revolutionary party.” Rather, socialism can only prosper through a mass political process in which genuine democracy holds the key. In her simple words:

The negative, the tearing down, can be decreed; the building up, the positive, cannot. New Territory. A thousand problems. Only experience is capable of correcting and opening up new ways. Only unobstructed, effervescing life falls into a thousand new forms and improvisations, brings to light creative force, itself corrects all mistaken attempts. The public life of countries with limited freedom is so poverty-stricken, so miserable, so rigid, so unfruitful, precisely because, through the exclusion of democracy, it cuts off the living sources of all spiritual riches and progress.34

Far from the ultimate solution, the conquest of state power can poison or even destroy a socialist movement, unless alternative forms of democratic organization can be developed to replace the alienated form of state power. The central political problem is therefore how to ensure that revolutions do not transmute into their opposite and become the basis for a new kind of oppression and exploitation. In the ultimate sense, socialism and democracy must be envisioned as one and the same project. Genuine revolutions should not, and must not, become merely half-way houses.

In China and elsewhere in the world, post-socialist transformations offer a valuable opportunity for reflecting on these important issues. The Chinese Revolution has produced historic achievements to its credit as well as failures. My main purpose to stress the lack of democracy is not just to lament the revolution’s past disappointments, but rather to seek a point of view from which the long-term historical effects of such limitations can be comprehended. It is the aim of this essay to demonstrate that a coherent dual criticism—a critique of both capital and state, of economic accumulation and bureaucratic power, and a fuller understanding of their structural and historical connections—is not only imperative but also possible. Our critique of neoliberal-capitalist development in post-socialist contexts calls for a much more developed criticism of actually existing socialism—a relentless self-critique so to speak—for the sole purpose of advancing egalitarian and democratic objectives.

Socialism emerged as a political and ethical ideal that offered a potent alternative to capitalism. Yet actually existing socialism produced very powerful states which, while non-capitalist or even decisively anti-capitalist, concentrated and monopolized social and political resources, all in the name of socialism. Nationalized means of production and distribution without the concurrent socialization of political power only creates a legal fiction. For Marx, the abolition of private property was not the end in itself, but only a means toward the ultimate abolition of relations of alienated labor.

However, the continued predominance of alienated labor and its political form was to have fateful consequences. With the benefits of hindsight, it can be demonstrated that actually existing socialism ironically prepared some of the key ingredients responsible for its own eventual mutation into capitalism. That is to say, it achieved certain crucial yet incomplete functions of original or primitive accumulation needed for the later “restoration” of capitalism: first by reproducing the dominated and appropriated status of the working population, and second, by vesting a powerful state that was not democratically accountable with control of the social means of production. The final flowering of this evolutionary process has to await some specific conjuncture of auspicious global and domestic social conditions. With the systematic enclosure of public assets and their conversion en masse into private capital by those who control political power, the immense wealth appropriated and accumulated during the previous decades is being drawn into the circuit of capitalist production and distribution. The path of marketization begins as the passive strategy of the ruling class for self-preservation and political appeasement, yet eventually it turns into their end-game or exit strategy—their massive self-transformation from power-holders to capital owners.

History, Lenin once wrote, knows all sorts of metamorphoses. In light of the transformations now under way, was “actually existing socialism” ever a stop on the shining road to genuine socialism? Would it be entirely preposterous to suggest that socialism as such might indeed have been something else—i.e., a detour or a transitional phase in capitalism’s long history through all its variety and metamorphoses? Should we not ask whether instead of being the heroic gravedigger, actually existing socialism might not have served as the midwife of capitalism, or even of an especially unruly kind of capitalism? That would be a huge historical irony, and a colossal tragedy. But history is very cunning indeed in suggesting such questions. And its cunning lies in the fact that nothing is ever finally determinant or determined—precisely because of the possibility of human action.


  1. Martin Hart-Landsberg & Paul Burkett, China and Socialism: Market Reforms and Class Struggle (New York: Monthly Review Press, 2005), 13.
  2. Hart-Landsberg & Burkett, China, 40.
  3. Ernest Mandel, “The Myth of Market Socialism,” New Left Review, no. 169 (1988), 108, italics added; also see Alec Nove, “Markets and Socialism,” New Left Review, no. 161 (1987), 98–104.
  4. Harry Magdoff & John Bellamy Foster, “Foreword,” China, 9.
  5. William Hinton’s writings are probably the most outspoken expression of such a view, for example, see The Great Reversal (New York: Monthly Review Press, 1990).
  6. Richard Kraus, Class Conflict in Chinese Socialism (New York: Columbia University Press, 1981), 190.
  7. In this sense, I would argue that a “commune member” in the 1960s was probably not much less “proletarian” than a rural migrant laborer today, if only in a different form. In this respect, I disagree with William Hinton’s argument that rural China underwent the “most massive class transfer in world history” during the post-Mao years, wherein millions were transformed from “community shareholder” to capitalist “wage-laborer” (Hinton, The Great Reversal, 19–20). It would be more accurate to argue that a “massive class transfer” occurred long before the decollectivization of the early 1980s, in the mid-1950s actually—when hundreds of millions petty producers were transformed nearly overnight into quasi-wage-laborers under a statist regime.
  8. Mike Haynes, “Class and Crisis: The Transition in Eastern Europe,” International Socialism 54 (Spring 1992), 47, italics added; Chris Harman, “The Storm Breaks,” International Socialism 46 (1990), 3–94.
  9. For classic examples, see Tony Cliff, State Capitalism in Russia (London: Pluto Press, 1974); Charles Bettelheim, Class Struggles in the USSR: The First Period, 1917–1923 (New York: Monthly Review Press, 1976).
  10. See Nancy Holmstrom & Richard Smith, “The Necessity of Gangster Capitalism: Primitive Accumulation in Russia and China,” Monthly Review 52, no. 2 (February 2000), 1–15.
  11. Two contemporary Chinese critics, He Qinglian and Qin Hui, have spearheaded criticisms of the plundering of public assets by the ruling elite. He, a journalist and economist, is the author of Pitfalls of Modernization: Economic and Social Problems in Contemporary China (Beijing, 1998), a path-breaking critique of bureaucratic corruption. The book, which became enormously popular in China, was quickly banned. Qin, a prominent historian in Beijing, has penned many highly influential essays harshly critical of “cadre privatization.” See He’s “A Listing Social Structure,” and Qin’s “Dividing the Big Family Assets,” both appeared first in New Left Review and were later collected in Wang Chaohua, ed. One China, Many Paths (London: Verso, 2003), 128–159, 163–188.
  12. Paul Sweezy & Charles Bettelheim, On the Transition to Socialism (New York: Monthly Review Press, 1972).
  13. Sweezy & Bettelheim, Transition, 26–7.
  14. See Charles Bettelheim, Class Struggles in the USSR: The First Period, 1917–1923.
  15. Sweezy & Bettelheim, On the Transition to Socialism, 16, 29, emphasis original.
  16. Sweezy & Bettelheim, Transition, 20, emphasis original.
  17. Paul Sweezy, Post-Revolutionary Society (New York: Monthly Review Press, 1980).
  18. Sweezy, Post-Revolutionary, 147, italics added. Largely siding with Bettelheim, Sweezy also polemicized in a series of essays against Ernest Mandel and Isaac Deutscher for their underestimation of the formation of a bureaucratic ruling class and overestimation of working-class power in the Soviet Union. For Mandel’s response, see his “Why the Soviet Bureaucracy Is Not A Ruling Class,” Monthly Review 31, no. 3 (March 1979), 63–68.
  19. Sweezy, Post-Revolutionary, 95, emphasis original.
  20. Sweezy & Bettelheim, On the Transition to Socialism, 28; Sweezy, Post-Revolutionary Society, 150.
  21. Sweezy & Bettelheim, On the Transition to Socialism, 89, 31–32.
  22. Antonio Gramsci, Selections from the Prison Notebooks (New York: International Publishers, 1971), Quentin Hoare & Geoffrey Nowell Smith, eds. and trans., 222.
  23. For an excellent study that chronicles the post-revolutionary remaking and “unmaking” of the urban working class, see Andrew Walder, “The Remaking of the Chinese Working Class, 1949–1981,” Modern China 10, no. 1 (January 1984), 3–48; also see Walder’s Communist Neo-Traditionalism: Work and Authority in Chinese Industry (Berkeley: University of California Press, 1988) for a well-documented study of the socioeconomic dependence of the Chinese working class.
  24. Sweezy, On the Transition to Socialism, 88, italics added.
  25. This political logic is certainly not lost on the advocates of market liberalization. In the not-so-subtle words of Wu Jinglian (nicknamed “Mr. Market Wu”), a senior advisor to the State Council and one of the chief strategists of China’s market reforms, “the political will of the leadership for economic reform is based on the following central proposition: economic reform is good for economic development, which in turn is good for maintaining the Party’s power.” See Qian Yingyi and Wu Jinglian, “China’s Transition to a Market Economy: How Far across the River?” Working Paper, Center for Research on Economic Development and Policy Reform, Stanford University, 2000, 8.
  26. “Governing capacity” (zhizheng nengli) is China’s new political buzz phrase. First written into the CCP Constitution in 2002, the issue of “strengthening the Party’s ‘governing capacity’” was elevated to “the most important task among all tasks” in the most recent Party Central Plenum in September 2004.
  27. Wang Hui, China’s New Order (Cambridge, Mass.: Harvard University Press, 2003), Theodore Huters, ed. and trans., 58–59, italics added. The rise of a Chinese intellectual left (xin zuopai, or the “new left”) in the late 1990s is a very important development, which would warrant a separate study. For two collections that provide useful information on the Chinese “new left,” see Wang Chaohua, One China, Many Paths; Zhang Xudong, Whither China (Durham, N.C.: Duke University Press, 2002).
  28. Hart-Landsberg & Burkett, China, 40.
  29. This “hyper-politicization” of social life, which generated much wanton violence and targeted mostly people in relatively subordinate positions, also contributed to the pervasive demoralization with the socialist project in general, and to at least the early popular receptiveness to the Dengist “reforms.”
  30. Understandably, such a “heterodox” strand to radicalize Maoism has received little attention in the political milieu of post-Mao China, and in the Western sinological academy as well. The best-known example—the Sheng-wu-lian pamphlet Whither China? was collected in Klaus Mehnert, Peking and the New Left (Berkeley: Center for Chinese Studies, China Research Monograph No. 4, 1969). For the few surviving cases, see Gregor Benton & Alan Hunter, eds. Wild Lily, Prairie Fire (Princeton, N.J.: Princeton University Press, 1995), 104–156; Jonathan Unger, “Whither China—Yang Xiguang, Red Capitalists, and the Social Turmoil of the Cultural Revolution,” Modern China 17, no. 1 (January 1991), 3–37; Anita Chan, Stanley Rosen, & Jonathan Unger, eds. On Socialist Democracy and the Chinese Legal System (Armond, N.Y.: M. E. Sharpe, 1985). Written in the mid-1970s, Chen Erjin’s extraordinary manuscript “On the Proletarian Democratic Revolution” is probably the most articulate and best developed statement within this critical tradition. The English translation appeared as China: Crossroads Socialism, An Unofficial Manifesto for Proletarian Democracy (London: Verso, 1984).
  31. For a perceptive study of such radical, anti-bureaucratic currents during the Cultural Revolution, see Wang Shaoguang, “‘New Trends of Thought’ during the Cultural Revolution,” Journal of Contemporary China 8, no. 21 (1999), 197–217.
  32. Kraus, Class Conflict in Chinese Socialism, 181.
  33. William Hinton, “What Went Wrong?,” Monthly Review 43 (May 1991), 16, italics added. The metaphor itself was derived from Mao’s early writings during the 1930s.
  34. Peter Hudis & Kevin A. Anderson, eds. The Rosa Luxemburg Reader (New York: Monthly Review Press, 2004), 305–6.
2005, Volume 57, Issue 06 (November)
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