China: How Much Success?

The communist transformation of China is certainly the largest, and arguably the most ambitious, of the many state-administered “social experiments” which have characterized our century. The “experiment” on the mainland has been in progress nearly thirty years; it is not premature to ask whether it seems to have been successful.

In this series of essays, which began two issues ago, we have been examining one aspect of the overall Maoist strategy: the struggle to eliminate desperate poverty and to raise material standards of living, in China. In the first part (NYR, April 3) we saw that highly idealized accounts of China’s progress, such as Father Imfeld’s China as a Model of Development or Professor Gurley’s China’s Economy and the Maoist Strategy, do not provide us with the sort of information we would need to trace improvements in health and nutrition, the two most important aspects of a people’s material well being. The late Professor Eckstein’s China’s Economic Revolution is more useful and informative. While facts are hard to come by, it seems clear that accounts partial to the Maoist regime have over-estimated the improvements in health, and underestimated the extent of hunger.

In the second part (NYR, April 19) we looked at literacy and the status of women. Here again it seemed that, while China’s problems were exceptional, its achievements had been exaggerated. In this issue, we shall look at the extent to which economic inequalities have persisted in communist China, and speculate on how relevant the “Chinese model” is for other poor countries.

I

Inequality

The People’s Republic is widely regarded as the world’s most egalitarian society; is this reputation justified? Imfeld certainly believes it is; after all, he reasons, “The whole aim of socialism or communism can be summed up as creating a state of equality between peasants, workers, and intellectuals.” But what sort of equality? The word “equality” can be conveniently redefined to suit the needs of its users. No one even slightly familiar with contemporary China could seriously argue that equality before the law, equality of access to decision making, or equality of diverging ideals—the right to dissent—are cherished goals of the communist government. Quite the opposite: these, and many other sorts of equality, have been dismissed as “bourgeois rights.” The equality which Mao recognized, and seemed to push for with a sincerity unmatched by any other modern leader, was equality of standards of living.

How successful was Mao’s campaign to narrow the economic differences among the people of China? His strategies for eliminating material inequalities are well known, and Gurley does them justice in a skillful and sensitive survey. What Gurley does not make clear, however, is the world of difference between a strategy and its successful implementation. If we are willing to judge China by what it delivers to its people, not by what it wishes for them, we can find plenty of evidence that China is materially a less egalitarian society than the rhetoric of The Peking Review suggests.

Overall economic inequality in any nation can be broken down into two components: inequalities within groups, and inequalities between groups. In China today, inequality between groups is still highly pronounced. One obvious center of inequality has already been touched upon several times: this is between the privileged lives of urban folk, and the harsh, monotonous, often miserable lives of the five-sixths of China’s people who live in the countryside. Material comforts in Peking might not impress Americans, but for the Chinese they are so alluring that officials do not bother controlling the movements of the capital’s residents with travel credentials: it is simply inconceivable that anyone fortunate enough to live in Peking would choose to move anywhere else.¹ Subsidized services—housing, education, health care, and the like—are both better and easier to come by in the cities. Rations are larger for city people, and the goods rationed are often of higher quality. Pork may be produced in the countryside, but consumption of this prized delicacy is about twice as great for city people. On top of these sorts of perquisites, whose value cannot really be measured properly, there is the difference in average incomes between urban and rural areas: on a per capita basis, this is currently about 2:1.²

Such differences, of course, put a significant premium on city life, and in the 1950s, before comprehensive clamp-downs on travel were enforced, the cities swelled with both the desperate and the ambitious from the hinterlands. Many of them were willing to wait months, even years, to earn the “fortunes” they could not hope to amass at home. By 1957 unemployment in Shanghai, the city where living standards for employed workers were then highest, was over 20 percent.³ By sending millions of people down to the countryside, finding jobs for millions more, and seeing to it that upward mobility from farm to city was nearly impossible, Shanghai and China’s other cities solved the political problem of urban unemployment. But the social differences which had generated the problem in the first place persisted.

China’s urban-rural differences, it is true, are not as extreme as those in most of Africa and Latin America. Yet they are greater than those in a number of societies which we do not immediately associate with equality: Greece, for instance, or Guyana, or South Korea and Taiwan.⁴ Anyone who has traveled extensively within the United States will appreciate the magnitude of a difference of 2:1 between the average per capita incomes in city and countryside when he considers the economic distance between our predominantly poor rural areas and the rich ring of suburbs which surround our major cities: there the difference is only 50 percent.

The most surprising fact about the inequality between city and countryside in China is that there are no clear signs it is diminishing. It was about 2:1 not only in the 1950s but also in the 1930s, the era of impoverished peasants and grasping urban capitalists. Income inequality within cities or rural regions may have declined, but there is no evidence that nearly three decades of socialism have brought Mr. Imfeld’s “equality” between rural “peasants” and urban “workers.”

Even greater than the difference between city and country, however, is the difference between rich and poor provinces. Partly by historical accident and partly by design, China’s wealth lies along a coastal rim which extends up into Manchuria. As one travels inland, agriculture becomes less stable and less productive, industry disappears, and the standard of living plummets. In 1957, the last year for which there are reliable and comprehensive figures, the ratio of per capita agricultural and industrial income between Honan, the poorest province, and Shanghai, the richest, was well over 7:1.⁵ If we exclude the city-states from our reckoning, and instead compare Honan with the rich Manchurian province of Liaoning, the difference was almost 3:1. (By contrast, the apparent income difference between Mississippi and Connecticut, our poorest and richest states, is only about 2:1, and this overstates actual differences in consumption. Prices are about 20 percent lower in Mississippi, and a progressive income tax siphons off a higher proportion of the average family’s earnings in Connecticut.)

Indeed, it could be shown that the inequality between rich and poor regions in China was more acute in 1957 than in any of the large nations of the world except perhaps Brazil.⁶ Anyone familiar with the dazzling wealth to be found in southern Brazil and the appalling poverty of the Brazilian northeast will understand the sorts of differences we may be discussing within China.

Over the past two decades a sort of revenue sharing program has been in effect, the clear intention of which has been to subsidize and develop the depressed provinces.⁷ Industry in backward areas, it seems, has grown faster than the national average, although of course from a far smaller base; in some sense, then, differences in the level of industrialization among the provinces have probably therefore diminished.

But agricultural differences between regions may be just as great today as they were twenty years ago. In the early 1960s, when the countryside was still recovering from the Great Leap Forward, modern techniques and equipment were specially earmarked for the advanced provinces, where production was already strong and extra investment could be assured a reasonably safe return. The weak areas, on the other hand, were encouraged to be “self-reliant.” Whether the surge of egalitarian policy in the 1970s has compensated for the gap that doubtless developed in the 1960s will be known only if and when comprehensive regional figures come out. But even if the past twenty years have brought an appreciable narrowing of regional differences—and it is not certain that they have—China could still be a nation against which Mexico might compare its glaring regional inequalities quite favorably.

Differences between areas, of course, are the result of investment decisions and historical developments over the centuries; it would be unfair to expect these to be evened out in a single generation. But what about the differences within areas: did the Maoist regime bring economic equality to the people within a given locality? Information here is incomplete; yet it would be impossible not to bring down the top of the income pyramid and raise up the base in the course of comprehensive land reform and a program to confiscate property income. On the other hand, it is easy to exaggerate the narrowness of current gradations. Take industrial workers, who probably make up the bulk of workers in the cities. When he visited factories in Canton, Eckstein made notes on the ratio of the highest wages to the lowest that are instructive here:

Interestingly enough, this range of wage differentials [from 3:1 to 5:1] is quite typical for industries in many other countries, both developed and underdeveloped. For instance, in Guatemala the ratio of average hourly earnings of electrical fitters to laborers was 7:1 in the early 1960s. The ratio of carpenters’ wages to unskilled laborers’ in construction was 5:1. In Singapore, the ratio between government skilled and unskilled rates was 2.5:1. In Egypt, average weekly earnings of semi-skilled workers in all industries were more than three times as high as unskilled earnings in 1960. In the US and Europe the wage spread within industry seems to be typically about 3:1. All these examples suggest that the Chinese industrial wage structure is not significantly more egalitarian than that of other countries. Yet this conclusion must be treated with caution since many of these wage data are not fully comparable. [Page 299]

What about the differences within agriculture? Martin K. Whyte, a sociologist now at the University of Michigan, has examined income inequality in contemporary China, and has this to say about income distribution:

The ratio of incomes from collective labor of the top 20 percent [of the village studied] to those of the bottom 20 percent is about 4.6:1…. This is at the lower end of the scale, but not “off the scale,” when compared with figures for other Asian developing countries, where this ratio of the upper 20 percent to the lower 20 percent varies from 4-5:1 up to 10:1.⁸

Whyte goes on to point out that among the villages that make up a commune the richest commonly have twice the income per person of the poorest; within provinces, moreover, the average incomes in the poorest known commune can be as little as a quarter of the average income of the most prosperous.⁹

We can conclude that in China there are low, but not exceptionally low, levels of inequality within groups, and exceptionally high levels of inequality between groups. But how evenly distributed would China’s income be today? Certainly it would not be as even as Taiwan’s or South Korea’s, where regional, urban-rural, and intragroup differences are all low by any sort of international comparison.¹⁰ In these two countries the ratio between the richest and the poorest fifths is about 5:1. In Sri Lanka, the ratio of top to bottom is about the same; its overall income distribution, too, is probably more even than China’s. On the other hand, income distribution in China is obviously more even than in Brazil or South Africa, where regional and urban-rural differences and differences within groups are all extreme, and where the top fifth take in more than twenty-five times as much as the bottom fifth. Like most countries in the world, China is somewhere between these two extremes, probably nearer Taiwan than South Africa. My guess (and it’s only a guess) is that the ratio between the top fifth and the bottom fifth for the People’s Republic would not be far from 9:1.¹¹ What would this mean?

This difference would be smaller than Mexico’s (15:1) or the Philippines’ (14:1), but these are known to be societies with high levels of inequality. Income distribution would not necessarily be more nearly even than in Indonesia, where the ratio is about 8:1. If income distribution were more even than in India (11:1), it might not be all that much more so. Perhaps this is less of a reflection on the Maoist strategy than on the intractability of deep-seated inequalities or the meaninglessness of statistics which quantify material differences. But we must conclude that China is far from being a society of complete economic equality. In fact, income differences in China may be quite a bit greater than in a number of countries commonly associated with “fascist” elites and exploited masses.

II

Poverty

How should we evaluate the Maoist battle against poverty? Clearly it was not as successful as China’s most enthusiastic Western supporters had hoped and claimed. Chinese society is materially less egalitarian than is generally supposed, while hunger and illiteracy are probably more prevalent than is generally believed. But our assumptions have been unrealistic; China is in the unenviable position of having to live up to expectations set by the superficial and idealized reports and accounts since Nixon’s visit in 1972.¹² The public has a way of turning against oversold products. It will be a shame if this happens to China, for in an angry and disappointed reaction against what China has not done, we might forget just what it is that China has done.

Americans have trouble evaluating a struggle against poverty because they have a very hazy idea of what real poverty is. Few of us have ever seen real poverty; it does not exist in the United States, not even in the depths of Appalachia or in the wastes of the South Bronx. Real poverty leads parents to cripple children they love in the hope that they will be able to stay alive through charity. Real poverty is destitution, pauperism. Life becomes a war to survive, and like war it consists of terrifying stretches of boredom, punctuated unexpectedly by tragedy. Mao did not eliminate what we might think of as poverty in China: even if income were distributed virtually evenly, China’s people would be comparatively poor by international standards. But Mao did try to set a floor below which no Chinese would sink, and to his eternal credit, within a generation he dramatically reduced the incidence of destitution in a land where wretched poverty had been the accepted lot of the lower classes for three thousand years.

Some kinds of destitution are chronic: the people afflicted simply cannot earn enough money to keep body together, and if they pull through, it is either by borrowing, begging, or stealing. Other kinds are temporary: an unexpected misfortune or a sudden disaster may play havoc with finances and pull a family below the subsistence level. In pre-Liberation China, both temporary and chronic poverty dogged an enormous proportion of the population. In bad years, the majority in entire provinces occasionally ended up as begging drifters, and these provinces are the size of Western nations.¹³

If destitution were to be eradicated, Mao saw that it would first be necessary to stabilize prices. Wild and unpredictable price movements were a dreaded fact of life before Liberation. When prices shot up, the marginal classes in the cities and the landless laborers in the countryside perished; when prices slumped, tenant farmers sold their children into slavery. As the Kuomintang government went into its death throes, prices started doing things which even the Chinese had never seen before. For the nation as a whole, according to Gurley, the cost of living rose by a factor of 2,500 between 1946 and 1948; between 1946 and 1949, Eckstein writes, wholesale prices in Shanghai were up by a factor of over seven million. Inflation always punishes those who can least resist it; its fury during those years, however, can scarcely be imagined.

After driving Chiang Kai-shek off the mainland, Mao turned his attention toward controlling hyperinflation. Gurley, whose field is the economics of banking, gives a readable account of how quickly and effectively price stability was enforced. When mainland China was declared a communist state, entire regions were held by anticommunists, and remained so through the next year. Yet by 1951 wholesale prices were rising by less than 2 percent a month. Since 1952 they have risen less than 2 percent a year. For necessities, like rice and cooking oil, prices have risen even more slowly.¹⁴

Secure prices were only one facet of the new stability; the “universal guarantee” system (better described as rationing) and the policy of building grain reserves were two others. Rationing may undercut incentives for production, for it keeps prices artificially low, but it also keeps the rich from bidding food out of the mouths of the poor. A dose of economic inefficiency did not seem a terribly steep price to pay for checking this age-old injustice of Chinese life. Grain reserves, for their part, were indispensable for keeping consumption up when harvests failed. On the average, harvests failed in one province a year in Imperial China. In communist China they have failed too, sometimes, because of government policy, in big ways. Chinese leaders refer to the period following the Great Leap Forward scheme as the “Three Lean Years,” and they do not make a practice of exaggerating China’s shortcomings. But thanks to a decade of foodgrain stock-piling, tens of millions of Chinese did not have to pay for their leaders’ foolishness with their lives.¹⁵

It would take more than ration tickets, grain reserves, and stable, or even subsidized, prices, of course, to raise millions of Chinese out of wretched poverty. Quite simply, they needed money; this Mao tried to bring them through “Socialist Transformation.” Land reform doubled the average holding of the poorest half of China’s farmers. Most poor households still tilled less than a hectare of land, but for millions of people a few extra square meters of land meant the difference between desperation and a modest sort of comfort. Credit systems sprang up; now farmers could borrow money instead of selling their land, or starving, during bad years. Industrial expansion and agricultural development generated jobs, and hence incomes, for the previously indigent. Paid work outside the home opened up for women; the poorest families now had a chance to scrape a little more together. Property income and land rent were abolished; much of this money, which represented a sizable proportion of the GNP, found its way into the pockets of the poor.

Reducing unemployment, redistributing land, and expropriating capital all served to reduce income inequalities, but in a sense this effect was secondary. These policies cut at the base of a far greater inequality: the one between families who knew where their next meal was coming from, and those who did not. The distance between a sick and hungry peasant and a healthy peasant is greater than the distance between a healthy peasant and the ruler of the land, but people who have always eaten well may not be able to understand this. It is not a fact that can be proved by arithmetic.

All this is not to say that destitution has been eliminated in modern China: probably it has not. Serious hunger and illiteracy, as we have seen, probably persist. If we are to believe certain accounts, vagrancy, begging, and theft, the telltale signs of destitution in the old China, are not unknown in the People’s Republic.¹⁶ To be sure, China may not have eliminated pauperism to the degree that its two capitalist neighbors, South Korea and Taiwan, have. What seems certain, however, is that the number of people at the margins of society fell dramatically in Maoist China. No other large country in the poor world—not India, not Indonesia, Bangladesh, or Pakistan, not even oil-rich Nigeria or industrialized Brazil—can say the same.

III

Mao’s Legacy

There has never been an age in recorded history when a few people did not live very well; our age is different from all others in that there are now countries where the majority of the population does not live in poverty. Is China one of these? Perhaps not yet. But suppose one had to live in a poor country; where would one’s material prospects be better? If we were assigned our job and our sex completely by chance, where would we rather be? Most of us would shy away from India: of course there would be a chance we might end up as government administrators, nuclear physicists, or industrial managers, but the odds against being so fortunate are well over 500 to 1, while there would be about a 50 percent chance that we would land below the “poverty line,” which the Indian government defines as the level at which one is no longer able to purchase “adequate” food and clothing.¹⁷

In no poor country would our chances—and these are the chances of the common man or woman—seem terribly good; in China, however, they would seem better than most. To my mind, only a few countries—Israel, a few of the Emirates, Singapore, Argentina, Taiwan, South Korea, Sri Lanka, and Cuba—would definitely offer material opportunities distinctly superior to those in China. But the total population of these countries is less than one hundred million. This is only about three percent of the poor world. From this perspective, China’s struggle against poverty looks very impressive, especially considering the headstarts which many poor countries, especially those in Latin America, had over China in 1949.

But is the “Chinese model” relevant for other poor countries? If it is, this is not because prerevolutionary China and the problems it faced bore any particular resemblance to the less developed countries of today and their respective problems. True, China was poor and the less developed countries of today are poor, but this similarity is obviously superficial. The differences run deeper. The greater number of today’s poor countries are essentially makeshift nation-states, bits and pieces of peoples and economies slapped together in the recent past by foreign bureaucrats to make colonial administration a little easier.

By contrast, China is the oldest continuously self-governing nation in the world. This basic difference implies others. China’s ethnic homogeneity, for example, was strong; though poor, China’s people were highly skilled and unusually literate; for most of recorded history, their civil service was the most sophisticated in the world.¹⁸ Prerevolutionary China’s economic problems did have something to do with the declining terms of foreign trade, plantation systems, and penetration of foreign capital which trouble so many LDCs today, but really not that much. Its social problems were only marginally linguistic, ethnic, or religious; its political problems centered more around the repair of a crumbling bureaucracy than the creation from scratch of a national elite. And unlike other poor countries, China had a long tradition of peasant insurrection and revolutionary leaders.

As for transferring the Chinese experience to less developed countries, the heart of the “Maoist model,” administratively if not conceptually, is the relation between party and populace, and that relationship is very unusual. Even if it is not unique, there would seem to be little that organizations such as the Janata or even the MPLA could copy from it. The Chinese Communist Party came to power on its own terms, unassisted by foreign powers. It developed its structure, and its strength, in a twenty-year struggle against armies which were larger and better equipped, and which almost succeeded in wiping it out twice. The attitudes and policies which it later carried nationwide crystallized as its leaders hid in the hills of North China, governing impoverished peasants.¹⁹ And the Chinese Communist Party had Mao Tse-tung, a man of political genius, guiding its progress. It is not clear that any of these components of the overall strategy can be readily “replicated.”²⁰

The allure of a “model” is that it is a quick answer. If there are quick answers to age-old problems, then somewhere there must also be great, undiscovered secrets. Both Father Imfeld and Professor Gurley seem to believe that there is one special secret, which, once discovered by great leaders of men like Mao, will eradicate poverty wherever it lies. If only this were so. The sad fact is that there are no “models of development”: there are only lessons to be learned, both through success and failure, for in the final analysis the solution to each country’s problems is unique.

Mao’s “social experiment” was a limited, though I believe an important, success, but it was not a solution. Mao did not bequeath the world a faultless “model” for the eradication of poverty; what he left behind was a wealth of clever policies and embarrassing mistakes from which his nation and others can learn, if they choose to.

Will China choose to learn? Among Western China watchers, the current wisdom is that it already has. Teng Hsiao-p’ing is seen as a “realistic” social reformer, a leader who will carry forward the Maoist concern with the plight of the poor while steering the Maoist system away from the sorts of excesses which prevented it from raising the standard of living of the poor as much as it might have. Let us hope they are right. Unfortunately, their analysis seems touched by at least an element of wishful thinking. To date Teng has not proven himself overwhelmingly concerned with mass poverty or rural conditions, except to the extent that these conditions constrain his objectives in other realms. It is clear that Teng is dissatisfied with the Maoist legacy. Does his dissatisfaction derive, however, from the fact that millions of Chinese were still living in desperate poverty after a full generation of Maoism, or the fact that Teng and his cadre of technocrats have inherited a state apparatus which is weaker and more backward than they would like?

To be sure, it may be impossible to relieve poverty in China today without a powerful and effective government superstructure. On the other hand, it is not immediately apparent that the poor stand to gain from Teng’s eagerness to acquire the most modern military and industrial technology from Japan, Western Europe, and the US, from his deals for Coca-Cola factories or Cardin clothes, or his expensive warmaking ventures in Indochina. It would be reassuring to say that these actions are unrepresentative of Teng’s long-term strategy, but at this point we cannot do so. What will happen to the vast number of poor people in China remains an open question.

(This is the last part of a three-part article.)