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The integration of politics and economics : China’s search for a revolutionary model of factory organization Kent, Duncan Alexander 1976

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THE INTEGRATION OF POLITICS AND ECONOMICS — CHINA'S SEARCH FOR A REVOLUTIONARY MODEL OF FACTORY ORGANIZATION DUNCAN ALEXANDER KENT B.A., University of British Columbia, 1974 A THESIS SUBMITTED IN PARTIAL FULFILLMENT OF THE REQUIREMENTS FOR THE DEGREE OF MASTER OF ARTS in THE FACULTY OF GRADUATE STUDIES (Dept. of Anthropology and Sociology, University of British Columbia) We accept this thesis as conforming to the required standard THE UNIVERSITY OF BRITISH COLUMBIA (May, 1976) ( c ) D u n c a n A l e x a n d e r K e n t , 1 9 7 6 In p r e s e n t i n g t h i s t h e s i s in p a r t i a l f u l f i l m e n t o f the r e q u i r e m e n t s f o r an advanced deg ree at the U n i v e r s i t y o f B r i t i s h C o l u m b i a , I ag r ee t ha t the L i b r a r y s h a l l make i t f r e e l y a v a i l a b l e f o r r e f e r e n c e and s t u d y . I f u r t h e r ag ree t h a t p e r m i s s i o n f o r e x t e n s i v e c o p y i n g o f t h i s t h e s i s f o r s c h o l a r l y p u r po s e s may be g r a n t e d by the Head o f my Depar tment o r by h i s r e p r e s e n t a t i v e s . I t i s u n d e r s t o o d t h a t c o p y i n g o r p u b l i c a t i o n o f t h i s t h e s i s f o r f i n a n c i a l g a i n s h a l l not be a l l o w e d w i t h o u t my w r i t t e n p e r m i s s i o n . Depar tment o f The U n i v e r s i t y o f B r i t i s h Co l umb i a 2075 Wesbrook Place . Vancouver, Canada V6T 1W5 Date ABSTRACT This thesis i s concerned with the evolution of the p o l i c i e s and practice of factory management i n the People's Republic of China. Beginning with an exam-ination of the Party's history, i t seeks to i l l u s t r a t e the development of factory management from i t s early p o l i t -i c a l context to the p a r t i c u l a r contemporary form. In so d doing i t explains contemporary po l i c y and practice as a l o g i c a l extension of the p o l i t i c a l philosophy that evolved during the pre-!L949 period. Thus, t h i s thesis attempts to analyse not just what forms and methods have e x i s t -ed and now ex i s t , but how and why they have come to exist. The scholarly study of contemporary China by western trained academics i s often based on the assump-t i o n of c a p i t a l i s t s uperiority. "JEaking," as Stephen Andors writes, "the p a r t i c u l a r h i s t o r i c a l and c u l t u r a l • patterns of European marketplace i n d u s t r i a l i z a t i o n as general universal norms, (they)... characterize as ' pre-modern' those s o c i e t i e s that have not developed the values and instit^fei"Gfn^^that evolve within the context of the c a p i t a l i s t marketplace. Hence before t r a d i t i o n a l 'pre-' modern' so c i e t i e s can develop© they must make the t r a n s i t s ion to a modern 'r a t i o n a l ' outlook characterized by 'western' c u l t u r a l values and t r a i t s , and employing models of s c i e n t i f i c , 'Kational' organization." This type of analysis has been applied to China by a number of western trained observers who claim, as Barry Richman does, that " . . . c e r t a i n major aspects of Chinese ideology are apparently i n c o n f l i c t with managerial, tech n i c a l and economic r a t i o n a l i t y - and hence economic progress. Yet i n C h ina t h e r e appears t o be emerging-a new-form of o r g a n i z i n g t h e f o r c e s o f m a t e r i a l p r o d u c t i o n t h a t o f f e r s a c h a l l e n g e t o t h e Hobbesian. n o t i o n s o f i n d i v i d u a l i n t e r e s t s and t h e Weberian n o t i o n s o f b u r e a u c r a t i c r u l e . The method o f a d m i n i s t e r i n g a modern Chinese e n t e r p r i s e i s at considerable v a r i a n c e w i t h t h e modern, w e s t e r n method. However, t h e o r g a n i z a t i o n o f contemporary -Chin-ese f a c t o r i e s cannot be t h o r o u g h l y u n d e r s t o o d w i t h o u t knowledge of its© h i s t o r i c a l framework. T h e r e f o r e H-have attemp t e d t o p r o v i d e an u n d e r s t a n d i n g of t h e e x i s t i n g s e t o f c o n d i t i o n s and c i r c u m s t a n c e s t h a t t h e movement f a c e d d u r i n g its© e a r l y f o r m a t i v e y e a r s . These t o a l a r g e e x t e n t shaped t h e p o l i t i c a l p h i b s o p h y t h a t was l a t e r t o d i r e c t changes i n f a c t o r y o r g a n i z a t i o n . The p a r t i c u l a r s e t o f p o l i c i e s w h i c h c o n s t i t u t e t h e m i c r o - l e v e l model of f a c t o r y o r g a n i z a t i o n do not e x i s t t i n i s o l a t i o n from t h e l a r g e r , more g e n e r a l body o f p o l i t i c a l p h i l o s o p h y . Thus t o a l a r g e e x t e n t t h e s u c c e s s f u l use o f C hina's r e v o l u t i o n -a r y model o f f a c t o r y o r g a n i z a t i o n was dependent upon t h e s u c c e s s f u l r e v o l u t i o n a r y t r a n s f o r m a t i o n o f a l l o f s o c i e t y . By 1949, t h e Chinese had a l r e a d y e s t a b l i s h e d a l a r g e l y complete s e t of g e n e r a l p r i n c i p l e s t h a t l a y i n d i r e c t c o n t r a d i c t i o n t o t h e s p e c i f i c p r i n c i p l e s o f w e s t e r n , c a p i t a l i s t e n t e r p r i s e o r g a n i z a t i o n . Even b e f o r e t h e Chinese began e x p e r i m e n t i n g w i t h e n t e r p r i s e o r g a n i z a t i o n i n t h e 1 1 9 5 0 's i t was o b v i o u s t h a t what was g o i n g t o d e v e l o p ^ would be r a d i c a l l y d i f f e r e n t from t h e w e s t e r n model.What e v o l v e d out o f t h e Yenan p e r i o d was an e n t i r e l y new -s t r u c t u r e o f o r g a n i z a t i o n t h a t s t r e s s e d d i s c i p l i n e t o c e n t r a l -i z e d p o l i c y g u i d a n c e , y e t a l l o w e d l a r g e degrees of i n d e p end-ent,: l o w e r - l e v e l o p e r a t i o n a l a u t h o r i t y . R e v o l u t i o n a r y a u t h o r -i t y r e l a t i o n s became e s t a b l i s h e d on t h e b a s i s o f a b i l i t y and p o l i t i c a l commitment; and were m a i n t a i n e d on t h e b a s i s o f t h e i r economic and p o l i t i c a l e f f e c t i v e n e s s . These i v p r i n c i p l e s of r e v o l u t i o n a r y o r g a n i z a t i o n are s t i l l sub-s c r i b e d t o i n China's contemporary i n d u s t r i a l economy.' In western s o c i e t y non-material i n c e n t i v e s are of l i t t l e value, and given the c a p i t a l i s t o r g a n i z a t i o n a l model t h i s i s understandable. Non-material i n c e n t i v e s f u n c t i o n when thereto e x i s t s other than m a t e r i a l reasons f o r working. In western s o c i e t y these reasons are not p r e v a l e n t . Yet China even before 1949 had begun a program to promote s o c i a l and p o l i t i c a l i n c e n t i v e s to work. Most importantly however, was the r e a l i z a t i o n of the d i r e c t a s s o c i a t i o n between the form of o r g a n i z a t i o n and the forms of i n c e n t i v e s that were needed. The Chinese r e a l i z e d t h a t s o c i a l and p o l i t i c a l i n c e n t i v e s could be j u s t as, or more important than economic i n c e n t i v e s given the r i g h t o r g a n i z a t i o n a l form. P o l i t i c a l goals could be transformed i n t o economic r e a l i t i e s . In contemporary China the o r g a n i z a t i o n of i n d u s t r i a l e n t e r p r i s e s i s guided by the p o l i c y of " two p a r t i c i p a t i o n s , one reform and t r i p l e combination.'•' F i r s t i n s t i t u t e d during the Great Leap Forward^ t h i s p o l i c y o u t l i n e s the power r e l a t i o n s w i t h i n the f a c t o r y . "Two p a r t -i c i p a t i o n s " s t i p u l a t e s t h a t f i r s t , u p p e r - l e v e l cadres must labour a set number of days on the production l i n e and secondly, workers must be i n v o l v e d i n a d m i n i s t r a t i v e d e c i s -ion-making i n a r e g u l a r and meaningful way. "One reform" means tha t a l l s t r u c t u r a l or o r g a n i z a t i o n a l blocks t o the implementation of two p a r t i c i p a t i o n s must be e l i m i n a t e d , and e s p e c i a l l y t h a t both p a r t i c i p a t i o n s are r e g u l a r i z e d i n such a way t h a t they can be both checked and enforced. The systems of i n d i v i d u a l r e s p o n s i b i l i t y and r i g i d l y defined job r o l e s have been e l i m i n a t e d because they were not compatible w i t h c o l l e c t i v e d e c i s i o n making and the e l i m i n a t i o n of s t a t u s and p r e s t i g e d i f f e r e n c e s between mental and manual work. V S i m i l a r l y , '3 i n 1' innovation committees have been established and are seen as a basic part of the new-approach to technology. Mass technical innovation i s regarded as the necessary alternative to foreign technical expertise which China l a r g e l y r e j e c t s . As during the Yenan period, the Chinese s t i l l place the highest importance on s e l f - s u f f i c i e n c y and s e l f - r e l i a n c e . Clear cut d i s t i n c t i o n s between workers and cadres and between workers and technicians no longer e x i s t , and newf,oforms of 'worker-technicians' and 'administrative- •• workers' are evident. The s i m i l a r i t i e s between the Yenan and contemporary period are s t r i k i n g . The s i m p l i f i c a t i o n of administration i s another aspect of that s i m i l a r i t y . The l e v e l s of control have been reduced and large numbers of cadres have been de-centralized. More decisions are being made on the lowest l e v e l s with increased l o c a l control. Material incentives are widely regarded as 'sugar coated b u l l e t s . ' Nowhere can anyone receive piece wages, bonus payments or even overtime pay. The wage d i f f e r -e n t i a l s of the iwage-gradeaisystem have been narrowed to a point where, even p r i o r to the Cultural Revolution, they were the smallest of any country i n the world. The Chinese do not assume that people w i l l only work i n maximizing i n d i v i d u a l monetary gain.' Thus i n d i v i d u a l monetary incentives are not seen as the only or necessarily the best form of motivational s t i m u l i . Rather they see people as capable of responding to a wide range':;6f s t i m u l i . These include moral, p o l i t i c a l and i d e o l o g i c a l incentives. Most importantly perhaps, the Chinese do not assume that economic success can only be measured i n terms of productivity and p r o f i t a b i l i t y . Rather they assume that participant s a t i s f a c t i o n i s of equal importance. The organ-i z a t i o n of i n d u s t r i a l enterprises must be both economically and p o l i t i c a l l y acceptable. v i TABLE OF CONTENTS * ABSTRACT . ' i i INTRODUCTION 1 CHAPTER ONE EVOLUTION OF POLITICAL PHILOSOPHY, 1921-1949 17 CHAPTER TWO I: INDUSTRIAL RECONSTRUCTION, 1949 - 1952 51 II: ONE-MAN MANAGEMENT, 1952 - 1956 ... .. 66 III: FACTORY-MANAGER RESPONSIBLITY UNDER THE LEADERSHIP OF THE PARTY ODMMITTEE, 1956 - 1958.. 87 IV: THE GREAT LEAP FORWARD, 1958 - 1960 95 V: AFTERMATH OF THE GREAT LEAP FORWARD, 1960 - 1963 I l l VI: PRELUDE TO REVOLUTION, 1963 - 1966 120 CHAPTER THREE THE GREAT PROLETARIAN CULTURAL REVOLUTION AND BEYOND, 1966 - 1975 129 CONCLUSION 172 BIBLIOGRAPHY 181 v i i LIST OF ILLUSTRATIONS * DIAGRAMATIC MODELS OF FACTORY ORGANIZATION CHAPTER mO I . INDUSTRIAL RECONSTRUCTION, 1 9 4 9 -1952.. 6 5 I I . ONE-MAN MANAGEMENT , 1952 - 1956 36 I I I . FACTORY-MANAGER RESPONSIBILITY UNDER THE LEADER-SHIP OF THE PARTY COMMITTEE, 1956* - 195# 9 4 I V . THE GREAT LEAP FORWARD, 1958 - i 9 6 0 1 1 0 V . AFTERMATH OF THE GREAT LEAP FORWARD, I960 - 1963.. 119 V I . PRELUDE TO REVOLUTION, 1 9 6 3 - ~ 1966 , 128 CHAPTER THREE THE GREAT PROLETARIAN CULTURAL REVOLUTION AND BEYOND,' 1966 - 1975 171 1 1 Introduction This thesis is concerned, in general, with the history of industrial management in the People's Republic of CJiina. In particular i t i s concerned with the development and evolution of the policies and practise of factory management. My goal is two-fold. Firstly, i t is to provide an understanding of contemporary Chinese industrial management. Secondly, i t is to i l -lustrate the evolutionary process of this particular contemporary practise from its earliest general origins. The organization of contemporary fact-ories cannot be thoroughly understood without knowledge of its larger and more general historical framework. Therefore, to facilitate a fuller understanding of the Chinese system, I have begun at a point far removed from contemporary society and outlined the development of the policies which I feel have been most crucial in the final determination of contemp-orary practise. Thus, this thesis attempts to analyse not just what forms and methods have existed and now exist, but how and why they have come to exist. This particular topic is of strong interest, because in many ways, the structure of Chinese industrial organizations provides us with an alternative to 'western' or 'modern' methods of organizing the forces of material production. China has not followed contemporary western practise but rather has evolved a uniquely Chinese one. If the Chinese 2 method proves to be ultimately 'successful', and I believe i t will, then we must re-examine the assumptions of western theory in this light. Western practise has evolved under specific historical conditions yet we find the application of its theory to a l l societies regardless of historical pre-conditions. Western oriented theorists judge a l l societies on western criteria; what is particularistic is assumed to be universalistic. The importance to us of the Chinese model lies in its challenge to these dominant, western theories of organization and opens the possiblity for better, more human relations of production in western enterprises. Yet in examining the Chinese model with an eye to its adaptability to a non-Chinese setting, we must understand and appreciate its historical pre-conditions. The organization of contemporary Chinese industrial enterprises stands as only the latest development in a long process of change. It has evolved slowly in response to changing social and economic conditions over a substantial period of time. It is not a system that could be transferred, unchanged, to other societies. For different societies i t will obviously have varying degrees of adaptability. It is the author's inclination that this model would be more easily adapted by non-western, particularly peasant, societies which do not have a long bureaucratic, capitalist tradition. Nevertheless, the Chinese model presents us with an alternate system, that while perhaps not immediately adaptable, may prove to be so in the future. However, before we look at the Chinese case, I think i t would be useful to briefly look at some of the theories and assumptions that l i e behind the western approach to the social organization of productive enterprises. This is useful because the Chinese organizational approach 3 by virtue of its existence, implicitly challenges those assurrptions and theories. By briefly examining the foundations of the western approach and keeping them in mind, we can gain a greater perspective on the Chinese approach and hence a greater appreciation of i t s uriiqueness. The study of 'management* emerged in the west in the early 1900's as a separate, academic discipline. Beginning with Frederick W. Taylor a new 'scientific management movement' began whose general theories have been collectively dubbed as the 'classical' or 'traditional' school. 1 Using a largely Weberian framework, they sought scientifically to discover and identify the elements and principles of administration. In 1916 Henri Fayol f i r s t set out an explicit, broad framework which he 2 termed the "five elements and 14 principles of administration." As the pioneer of the school and a man whose works s t i l l form the foundation of the classical theory, i t is useful to look at his 'elements and prin-ciples' . The five elements (duties or functions) of management were firstly: planning; secondly: organization; thirdly: coitmand; fourthly: 3 co-ordination; and fifthly: control. In carrying out these functions, Fayol set out 14 principles as guidelines for management. I will review here a number of the more important ones. The "division of work" was one such principle that stressed that increasing specialization of job functions was the best method of maximizing labour output. The need for employee discipline at a l l levels was also stressed. Fayol describes discipline as being "... in essence obedience, application, energy, behavior, and outward marks of respect observed in accordance with the standing agreements between the 4 firm and its employees..." The command structure must also be unified 4 to ensure that each employee "receive(s) orders from one superior only...In 5 no case xs there adaption of the social organism to dual command." Cor-respondingly, there must be unity of direction; "one head and one plan for a group of activities having the same objective."^ Individual interests must also be subordinated to the interests of the "concern." Remuneration of employees would be by material incentives based on a number of external forces such as the cost of living, the labour market as well as factors of "the employers will and employee worth." Non-material incentives were cited as only applicable in the realm of "govern-7 ment work" and were of l i t t l e value. Fayol also promoted a "scalar chain 8 of superiors ranging from the ultimate authority to the lowest ranks." On each level, job roles were to be carefully defined with, as Fayol says, "A place for everyone and everyone in his place." To aid management in control, organizational charts which carefully detailed the levels 9 and sections were recommended. Fayols' elements and principles of management reflect a basic attitude about the nature of man; that the needs, aspirations and moti-vation of a l l men were largely the same. Thus, organization became a matter of the "relationship of positions, not people." Like irachines, the human factor was taken as a constant, and defined "out of the problem of organizing.""'"^ In fact, classical theory incorporates a number of assumptions about man and his relationships with other men in social production. Man is assumed to act rationally in maximizing his own returns, to satisfy his economic needs. Therefore i t i s further assumed that monetary incentives are the best form of motivational stimuli. 5 Premising this is another assumption that men inherently do not like to work, that social production is not part of their 'nature'. Hence, supervision and accountability must be emphasized 1 , I t is also assumed that simpler tasks are easier to master and therefore increased productivity can be gained by the increasing specialization of tasks. Similarly i t is assumed that human beings "prefer a definite task" and "do not value the freedom of determining their own approaches to problems," and "will not co-operate" unless they are directed. If given the opportunity of self-organizing, the workers will not be able "to work out the relation-ships of their positions," so guidance must be detailed in clearly defining work posts so that no one trespasses on the domain of others. Thus, i t is assumed that co-ordination will not be achieved unless i t is 12 "planned and directed from above." It is also assumed that efficiency is only measured in productivity and profitability, that efficiency is a matter of the economic "utilization of resources without consideration of human factors." Finally, i t is assumed that the requirements of efficient organization are universal ones and do not vary regardless of time or place. It soon became apparent, however, with the development of related disciplines especially in the social sciences, that the classical school of management and the conclusions from new empirical data were at variance. Thus, a 'neoclassical' school was developed that used the "classical functions and principles as hypotheses and attempt(ed) to integrate them with results of empirical research flowing from other disciplines.""^ 6 Perhaps the basic point of departure between the two schools was the question of the 'human factors'. Beginning in the 1950's, they began to question some of the classical schools' assumptions about human nature. This lead to the opening up of whole new concerns for manage-ment. Chiefly, in the last 15 years, new concepts of "morale, partici-pation, communications, status systems, executive development, motiva-tion, perception and interaction" have evolved that deal with human behavior. 1 5 While this school of management has developed an awareness of the factor of human behavior in the enterprise, its orientation has been one of purely maximizing productivity and profitability. It has not led to a basic restructuring of power or authority relationships within the enterprise but has only identified certain factors that pre-viously had not been considered relevant, so that they might be better controlled or utilized. In other words, the goal of increased product-ivity and profitability remains unchanged, only the means towards those ends have become more sophisticated. Thus the modern, western model of organization, stemming from 'objective', 'scientific' research are promoted as the best of a l l pos-sible forms. In judging other societies invariably the 'rational' c r i -terion of the western model are used. Taken together with theories of bureaucratic convergence, they have become part of a more general world view dubbed as 'modernizing theory'. In its application this theory has been used to analyse developments in the 'third world', including China. "Taking," as Stephen Adors writes, "the particular historical and cultural patterns of European marketplace industrialization as general universal norms, this theory characterizes as 'pre-modern1 those societies 7 that have not developed the values and institutions that evolve within 16 the context of the capitalist marketplace." Hence, before traditional 'pre-modern' societies can develop they must make the transition to a modern 'rational' outlook characterized by 'western' cultural values and traits, employing models of scientific, 'rational' organization. This type of analysis has been directly applied to China by a number of western-trained observers who claim, as Barry Richman does, that "...certain major aspects of Chinese ideology are apparently in conflict with managerial, technical and economic rationality - and 17 hence, economic progress." Later, in the concluding chapter of his book, he finalizes his argument using the historical evidence of his assumptions. He writes: There is a basic assumption of self-interest and monetary incentives, as opposed to altruism and non-material stimuli. Centuries of world history and experience strong-ly indicate that the Chinese regime will not be able to eliminate self-interest and material gain as major motivat-ing forces for managers, technicians, or workers, and at the same time achieve sustained and impressive industrial progress in the long run. If by some miracle they do succeed, this would have a great philosophical and cult-ural impact on the rest of the world. But I am betting against such a miracle. I am also betting against the workability of a classless society with no noticeable distinction between managers and workers, superiors and subordinates, leaders and followers, experts and non-18 experts, mental and physical work and so forth. Yet in China there appears to be emerging a new form of organizing the forces of production that offers a challenge to the Hobbesian notions 8 of individual interests and the Weberian notions of bureaucratic rule. The form of administering a modern Chinese enterprise is at considerable vari-ance with the modern, western method. This comes about from both differ-ent historical conditions and different theoretical traditions. In the f i r s t chapter I will describe the period from 1920 to 1949. Primarily, however, I will be concerned with the latter 15 years of this period commonly termed the 'Yenan period'. The early development of the Chinese Communist Party (C.C.P.) prior to the end of revolution in 1949 was a time of organizational experimentation. Fighting a gueril-la war in rugged, isolated terrain called for organizational forms that were flexible enough to adapt to local conditions and problems, yet dis-ciplined enough to make an effectively co-ordinated army. By 1949, the general framework of applying Marxist theory to the specifics of the Chinese situation had already been developed. The form that was estab-lished during this period was characterized by a high degree of lower level automomy yet disciplined to centralized leadership. This was reflected in the form of government, 'democratic centralism', which combined both mass participation with centralized, organizational leader-ship. Many aspects of this framework have become permanent parts of the Chinese 'alternative'. Thus, a careful look at this period deserves our attention i f we are to understand the developments that took place after 1949. What an examination of this period will not t e l l us, however, is how this general framework was to be applied to the re-organization of factory management. It was only very late in the revolution that the Communists came into control of any significant amount of industry. 9 Thus, experimentation with the organization of industrial enterprises was not carried out prior to 1949.. In terms of the specifics of industrial production, the experiences of the Yenan period provided few answers for the many questions faced during the post-1949 period. Yet a general framework existed and during the periods that followed, the 'Yenan way' became the yardstick for measuring the success of organizational experi-mentation. The second chapter of this thesis deals with the period from 1949 until 1966. During the period of 'industrial reconstruction' some experimentation did take place, but this was short-lived. In 1952, the Chinese officially adopted the Soviet model of factory organization. The organization of Russian industrial enterprises closely resembles Fayol's "elements and principles of scientific management-" Written just three years prior to the October Revolution, the work of Fayol epitomized the western school of thought that Russia was later to use as it s model. Based on the theories of Hobbes, Weber and Taylor, i t incorp-orated assumptions about human nature which demanded the use of material incentive systems. The Marxian principles of the 'equal lia b i l i t y of a l l to labour' was forgotten. Managers and technicians took a commanding position in the organization of productive l i f e seemingly confirming the 19 theories of western convergence theorists. The supposition in Soviet methods was that public ownership was synonomous with the 'common interest 1 regardless of the power and authority relations within its organizations. For at least seven years after 1949 the Chinese under the influence of Russia's 'advanced methods' also seemed to make this supposition. Yet, by 1958, during the Great Leap Forward (G.L.F.), policy had come almost f u l l circle from the Soviet system of 'one-man management'. 10 The system adopted during this period was regarded by western observers as a product of ' u l t r a - l e f t i s t utopianism 1. Up u n t i l 1957, western-trained economists had given their approval imp l i c i t l y , i f not, e x p l i c i t l y , 20 to China's strategy of economic development. With the G . L . F . , however, that approval vanished. Relations within the factory had changed radica l ly . Managers were now obligated to labour and workers were encouraged to manage. Decisions were being made co l lec t ive ly and on the basis of p o l i t i c a l c r i t e r ion rather than by individuals on the basis of pro f i t . The structure of management that developed during this period proved to be of last ing importance. The G.L .F . was, however, fraught with serious imbalances and shortages. In the Party's course of revolutionizing production the importance of the functions of the tradi t ional 'middle management' were underestimated and consequently, i n the following years, a number of corrective changes had to be inst i tuted to rect i fy the existing problems. Throughout this chapter I have also attempted to outline the nature of a serious, growing debate that by 1966 had openly s p l i t the Party into two camps. This debate centered on the question of what forms modernization should take: What role should enterprise prof i t have? Should the union structure be more or less autonomous from Party control? Should the pol icy requiring a l l administrative cadres to spend a fixed amount of time on the production l ine be increased or reduced? Should workers be included i n decision-making groups? The questions asked would remain unresolved u n t i l 1966 when the Cultural Revolution erupted and flared across China. Thus, i n my th ird and f i n a l chapter, I w i l l examine the nature of the debate, the participants and the outcome of the Cultural Revolution 11 and its implications for factory l i f e . This chapter goes into greater detail than the previous two and attempts a fairly comprehensive examination of the present system. In the context of organizing contemporary industrial production Stephen Andors sets out four basic problems that the Chinese would f i r s t have to solve with the priority of a classless society kept in mind. Firstly, how can the division of labour that is inherent in complex industrialization be shaped so that inequalities in privilege and power are reduced, rather than widened. Secondly, how can the status prestige differences between mental and manual labour be reduced so that neither side is alienated from the products or the processes of production. Thirdly, what sort of incentives are best to achieve maximum performance without hindering the preceding goals. Fourthly, and finally, how can the authority necessary to co-ordinate a complex.organization be used while s t i l l adhering to questions one and two; and, as well, who should 21 exercise this authority? In organizing individual industrial enterprises, the approach to effectively solving these problems has been through eliminating the need for bureaucratic controls. The functions of the middle level control and supervisory departments have been decentralized to the sphere of workers self-management. The complex accounting that is nec-essary when employing piece wage and bonus systems has been eliminated. The Chinese view material incentives as necessary only when the aspirations of the factory and the individual are not in harmony, when the individual i s alienated from his role in the work process. So the Chinese have followed a course of integrating workers with the decision-making process 12 in the sphere of both policies and operations. Worker participation in management, in technical innovations, in quality and quantity control and in target planning are important aspects of a new management. Likewise, a l l administrative or Party functionaries ('cadres') are compelled to spend a fixed amount of time working on the production line. These two policies work not only in familiarizing groups with the roles of the others, but work towards de-specializing jobs functions and reducing the status and prestige differences that had formerly existed between them. This has been an important incentive because, as Andors states, The perception that everyone is doing a fair share of hard work, and that people in positions of authority are not usurping privileges, is a potent incentive. Without a con-crete perception of equality, a l l rhetoric about equality 22 becomes meaningless and even counterproductive. These changes represent only one aspect of an overall series of changes that are occurring both inside and outside the factory. Non-material incentives must flow from a perception of reality that is reinforced in a l l aspects of one's l i f e . For the individual the changes occur on a psychological level. When he sees the factory where he works, the village he lives in, the country around him in the same way we regard our car, our house and our property, then he has made the shift from self to group interest. He works towards the group in the same way that we might work for ourselves. By totally integrating people with society, by destroying alienation, by demanding involvement and not pacifity, by putting the control of their lives back into their 13 hands, these are the ways that the Chinese are developing a group 23 consciousness capable of responding to group interests. Mao Tse-tung has said that, "of a l l things in the world, 24 people are the most precious." Behind this lies a new attitude toward a world of people rather than a world of things. •k * A Introduction FOOTNOTES ^Joseph L. Massie, "Management Theory," Handbook of Organizations, ed. by James G. March (Chicago: Rand McNally and Co., 1965) pp. 387-422. 2 Henri Fayol, General and Industrial Management, trans, by Constance Stours (London: Pitman, 1949) 3 Massie, "Management Theory," p.388. ^Fayol, Management, pp. 22-24. 5Ibid, p. 24 ^Ibid, p. 25 7 Ibid, pp. 26, 32. Ibid, p. 34-35. 9 Ibid, pp. 36, 38. •^Massie, "Management Theory," pp. 388-389. i : LLbid, p. 405. 15 1 2 I b i d 1 3 I b i d 1 4Ibid, p. 414 1 5Tbid, p. 415 Stephen Andors, "Hobbes and Weber vs. Marx and Mao: The Political Economy of Decentralization in China," Bulletin of Concerned Asian  Scholars, vol. 6, No. 3 (Sept. - Oct., 1974), p. 22. 17 Barry Richman, Industrial Society in Communist China (New York: Random House, 1969), p. 56. 1 8Lbid, p. 915. 19 Jeremy Azrael, Managerial Power and Soviet Politics (Cambridge, Mass.: Harvard U. Press, 1966) pp. 25-26. 20 E.L. Wheelwright & Bruce McFarlane, The Chinese Road to Socialism (New York & London: Modern Reader, 1970). 21 . . Stephen Andors, "Revolution and Modernization: Man and Machine in Industrializing Societies - The Chinese Case," America's Asia, ed. by Friedman and Seldon (Pantheon Books: New York, 1969) p. 400. 22 1 Andors, "Decentralization," p. 26. 23 I use the term 'alienation' here and in the body of the text m the Marxist sense, i.e., the 'alienation' or 'estrangement' of the worker from both the products and processes of industrial production. 16 Mao Tse-tung, "The Bankruptcy of the Idealist Conception of History," Selected Works of Vol. IV, (Peking: Peking Press) p. 454 17 CHAPTER I EVOLUTION OF POLITICAL PHILOSOPHY, 1921-1949 In October of 1949 on the proclamation of the People's Republic of China, the Chinese Communist Party began the monumental task of rebuilding the country. In the process of carrying i t out the Party was by no means devoid of direction. On the contrary, by 1949 the C.C.P. had established a complete and unique political philosophy. When, in 1949, the 'Movement' gained complete control of the mainland they had behind them a wealth of experience from which they could draw. What lay before them was the application of that experience to the peaceful rebuilding of a shattered country. If we are to understand the develop-ment of the social organization of industrial enterprises which took place predominantly after 1949, we must understand the development of the political philosophy that was to shape i t . In the years from 1921 until 1949 that I will be studying, one period of three years stands out - the latter half of what has widely become known as the 'Yenan period'. From 1942 - 1945, in response to a severe crisis, the Party embarked on a multifaceted 'Rectification Move-ment' that affected massive, permanent changes, changes that have to a large extent shaped the face of China today. Therefore, in this chapter I will begin by studying, in a general and extensive way, the early development of policy and conclude with a much more intensive examination 18 of how these general policies were specifically applied during the latter half of the Yenan period. The birth of the C.C.P. was sparked by an uprising on May 4, 1919. Under the extreme pressure from the imperialists and torn by battles between the warlords competing for control of Peking, the govern-ment ceded the Shantung peninsula to the Japanese. Crushed by this latest blow to nationalist pride, thousands of students gathered in a massive demonstration, defied the police and marched on the home of China's ambassador to Japan. This demonstration inspired others, thereby beginning a process of accelerating collective action. It proved to be the begin-ning of a movement that challenged not only the legitimacy of the Imperi-alists and warlords, but of China's own Confucian heritage. 1 The C.C.P. was born in 1920 and the First Party Congress met in July of the following year in Shanghai. It was composed of 12 intel-lectuals, 2 of whom had been at the forefront of the above uprising that was later to become known as the May 4th Movement. These were Ch'en Tu-hsiu and Li Ta-chao. With them was Li's young library assistant, Mao 2 Tse-tung. Together they represented a total of only 57 Party members. This early membership was composed of a wide spectrum of left-wing 3 intellectuals who, while holding many varying political views, had l i t t l e practical experience at organizing social revolution. The task that lay ahead was enormous; many questions had to be resolved with few historical examples to guide them. The works of Marx and Lenin, while providing general answers, had not dealt with the execution of a peasant revolution. 19 Yet the Party succeeded well beyond the expectations of outside observers and largely because of the success of their organizational policies. In 1920, the body of the industrial proletariat was very small. The possibility of an urban-based, proletarian revolution was very slim and indeed the Chinese revolution was not one. China is a peasant society and logically, i t was a peasant revolution. The C.C.P. did not attempt a "coup d'etat, nor could they have; instead, they set about organizing a revolution that could be supported by broad masses of the peasantry. Perhaps more than any other aspect of the Chinese revolution, i t is the role of the 'masses' which is i t s most distinguishing feature. From Mao Tse-tung's earliest writings, his faith in the power of the masses was clearly demonstrated. After witnessing a peasant rebellion in the Province of Hunan in 1924, Mao wrote: In a very short time, in China's central, southern and northern provinces, several hundred million peasants will rise like a mighty storm, like a hurricane, a force so swift and violent that no power, however great, will be able to hold i t back. They will smash a l l the trammels that bind them and rush forward along the road to liberation. They will sweep a l l the im-perialists, warlords, corrupt officials, local tyrants 4 and evil gentry into their graves. This most basic belief in the power of the masses was dramatically re-confirmed ten years later during the Long March. Forced into retreat, the 100,000 thousand strong Red Army marched 8,000 miles across China to reach the remote safety of the Shensi-Kansu-Ninghsia Border Region. Of 20 those who embarked on the journey only 8,000 men survived what Edgar 5 Snow describes as "an odyssey unequalled in modern times.V As another writer states, "... the experience of the Long March served to reinforce Mao's already deeply ingrained, voluntaristic faith that men with the proper will, spirit and revolutionary consciousness could conquer a l l material obstacles and mold historical reality in accordance with their ideas and ideals;" While this event reinforced Mao's belief in the ability of politically motivated men to overcome a l l obstacles, i t also reinforced his more pragmatic appreciation of size and numbers. The outcome of the revolution would to a large extent be determined by the extent of active peasant participation. The wider the popular support the Movement could hold, the better their chances would be. However, this created for the Conmunists a dilemma that could never be permanently resolved. To what point should the Movement go in eliciting mass support and from what groups should they accept support? The object was to create an effective revolutionary force that could seize power from the Nationalists. Yet the inclusion of too many marginal classes or groups could dilute the revolu-tionary enthusiasm, alienating the 'core' groups. Obviously, a compromise had to be made and in making i t the Party proved itself to be both prag-matic and idealistic. Just as this question arose in the process of land redistri-bution, so i t also arose in both the government and army. In the govern-ment this revolved around the question of the urban petty bourgeoisie. 21 Especially in later periods, when so much new territory came into their hands, the Party was unable to train cadres as fast as administrative needs were growing. Therefore, the party included some of the former bureaucrats within the various levels of government. Consequently, these groups were now more favourably disposed towards co-operating or even actively supporting the Ctommunist cause instead of working against i t . Within the army this-meant the inclusion of lumpen-proletariats, former Kuominatang (K.M.T.) soldiers and mercenaries. While i t must have been a hard decision i t was nevertheless thought a necessary one. But as Mao wrote "... of course, i t is inadvisable to have too many of the latter (as above); but they are able to fight, and as fighting is going on everyday with mounting casualties, i t is already no easy matter 7 to get replacements even from among them." The appeal of the Communist Movement was based on both nation-alist and revolutionary sentiments. Yet for many groups in Chinese society, these sentiments meant very l i t t l e . To encourage the participation of marginal groups and classes and to intensify the participation of the Movement's core groups, the Party further extended democratic rights. In Mao's own words, the Party had to go through a "democratic revolution." We must go through ... a democratic revolution before we can lay a real foundation for the transition to socialism...In the country as a whole the people lack the ordinary democratic rights, the workers, the peasants, and even the bourgeois democrats do not have the freedom of speech or assembly...only by launching a political and economic struggle for democracy, which would involve the urban petty bourgeoisie, can we turn the revolution g into a seething tide that will surge through the country. 22 Within the army, the 'democratic revolution' was manifested in such changes as the equal treatment of men and officers, the freedom to hold meetings, air opinions and speak out on important issues. Coupled with these changes was an increase in their pay which for the f i r s t time allowed the soldiers to make regular savings. By the Party's own evalu-ation, the democratic changes were instrumental in creating a more ef-fective fighting force. Mao wrote that, "Apart from the role played by the Party, the reason why the Red Army has been able to carry on inspite of such poor material conditions and such frequent engagements is its practise 9 of democracy." Likewise in other areas, democratic changes were carried out. One important area was the organization of local administrative units. Whether branches of local government or Poor Peasant Corps their organiza-tion was based on democratic principles. In deciding upon important matters, mass meetings were called to discuss and criticize. Those eligible to participate were "... the workers, peasants, Red Army soldiers, and the entire toiling population" over the age of 16 (who) were entitled to elect or be elected. However "... militarists, bureaucrats, landlords, the gentry, t'u-hao (village bosses) and monks were a l l deprived of these rights." 1^ In contrast, those on the Nationalist side had no such rights. The ordinary freedoms of speech, assembly, etc., were non-existent. The participation of the majority of people was restricted to supplying the materials and personnel of warfare. While i t is difficult to assess to what degree the extension of democratic privileges was responsible for increased participation, the C.C.P. officials themselves saw i t as of primary importance. 23 However, a second criterion also had to be met, and that was that participation would be both consistent and reliable, and could be directed by the Party. This was of special importance because of the decentralized nature of the Communist organizations. There had to be some method to ensure that individuals could be relied upon when they operated outside of direct controls. To ensure this reliability and direct the nature of their participation, the Party came to rely heavily on intensive mass political education. The need for political education had been understood as early as 19257^  but now with the further extension of the class base i t became increasingly so. The Movement now placed extreme importance on forging the "... strongest possible coirndtments to 12 a common ideology and a common manner of thinking (and thus acting).V The decentralized nature of the Movement's organization compounded the necessity of a common political philosophy. To be con-structive, mass participation must be organized. Without organization, especially in a country as vast and populated as China, i t would be almost impossible to co-ordinate any activity. Consequently China, like a l l societies, has evolved social organizations but unlike most, they are decentralized, mass organizations. The unique structure of China's social organizations had, to a large degree, been established prior to 1949. Its structural form had evolved in response to the particular set of circumstances that China faced during the war years. Just as 'mass participation' had evolved from a pragmatic response of survival to become an integral part of Chinese political philosophy, so the structure of its mass organizations evolved. From the Party's origin, i t had faced serious problems of 24 survival. The revolution had shifted from an urban to a rural one very-early after the realization of the limited power of the urban proletariat as compared to the enormous potential of the rural peasantry. But fighting a rural war in the Chinese countryside presented two serious inherent difficulties. These problems were firstly, procuring the materials of war sufficient to equip a large fighting force, and secondly, doing so without the notice of the local government. Local rebellions in rural China had a long and almost honourable tradition and consequently the government, knowing their potential clanger, could be surprisingly fast in putting them down. These problems and others combined in shaping the particular form of rural warfare that the Communists would adopt. Because of the need to equip and supply a fighting force, the Movement needed to establish secure base areas and the only places they could do so were in the most remote and desolate areas. These areas were called 'Soviets' and were modelled directly after their Russian counterparts. From these bases guerilla operations were possible. Prior to 1949, many such Soviets existed but most were short lived. Of them a l l , the Yenan base area was ultimately the most important. The nature of these base areas and of the type of operations that could be carried out from them determined to a large extent the organizational forms. Most importantly, in the long run, they precluded highly centralized forms of leadership. The individual units, whether levels of government or army, had to have sufficient autonomy to take independent action. Because of the necessity of making rapid decisions in guerilla warfare and considering the extreme difficulty of communicat-ing across large expanses of desolate countryside, the forms of organization 25 that evolved were highly decentralized. Yet a l l groups had a common purpose - revolution. Whether out of nationalist or socialist sentiments i t tied them together under the leadership of the C.C.P. So while by necessity organizational structures were decentralized, they also had to be under centralized Party guidance. Thus a very distinctive organization model was struck, one that was tightly disciplined to centralized policy guidance, yet highly decentralized in terms of operational authority. While this model has varied slightly from time to time, i t s t i l l remains today as the most basic statement of the structural form of a l l social organizations - centralized political guidance with independent operational authority. In this system, given the large amount of decentralized authority, the importance of intensive political education becomes obvious. If the individual units could not rely on Party guidance at a l l times, then they must take the essence of that guidance with them. Hence the political education of a l l individuals became of paramount importance. In terms of the development of the Movement's political philosophy, one period stands out and that period is the latter half of the Yenan period. In the three years that followed the crisis of the breakdown of the 'United Front', the political philosophy that was to shape post-1949 China was firmly established. Therefore an examination of this period in particular is of special importance. Yenan, a medium-sized town situated in the Shensi-Kansu-Ninghsia (Shen-Kan-Ning) border area, became the headquarters of the C.C.P. in 1935 at the end of the Long March. Situated just south of the 26 Great Wall, the h i l l s provided a good stronghold for the Red Army. For more than a decade this weak, remote Soviet had been under the leadership of two local guerillas, Liu Chih-tan and Kao Kang. With the arrival of Mao, now the undisputed leader of the Party, i t became the K.M.T.'s focus of attention. In 1937, however, there was a dramatic shift in the Party's policies. The Party halted agrarian revolution and began an intensive national campaign for a nation-wide, united front against the Japanese invaders. With tacit recognition of the C.C.P. by the K.M.T., the status of Shen-Kan-Ning changed from a Soviet to that of a special area of the National Government. Its new political objectives and means were,"... the united front, class harmony, bureaucratic administration 13 and moderate reform." However, as Mark Selden points out, the United Front which lasted close to four years was "spectacularly successful nationally." From a small and isolated base area, those lands under Ccmmunist control 14 had expanded to include large parts of northern China; however, as the size and strength of the Coixmunists' position grew, so did the frequency of clashes with both the Japanese and the K.M.T.. The K.M.T.'s subsequent blockade of the Shen-Kan-Ning area in 1939 and its elimination of finan-cial aid in 1941 signalled the end of the United Front. As Mark Selden points out, three times during the history of the C.C.P. the Movement was on the verge of annihilation and three times each near disaster led to radical innovations in the Party's approach to its problems: First, in the anti-Ctarmtunist coup of 1927; second, in the defeat of the Kiangsi Soviet in 1934; and third, in the destruction and 27 hardship created by the combined effect of the Japanese attacks and the 15 K.M.T. blockade of the Yenan area. It is this third crisis and the ensuing search for a new order that I am concerned with here. Following the breakdown of the second United Front alliance, the C.C.P. was forced to radically change their approach to the problems of the base area. These changes were collectively embodied in the Rectification ('cheng-feng1) Movement of 1942-43, for many students of Chinese history, the most important of the Yenan years. The military defeats at the hands of the Japanese and the withdrawal of K.M.T. financial aid (secured during the United Front) created a serious crisis for the C.C.P. A high rate of inflation and greatly increased taxation were reflections of that crisis. However, the high rates of inflation and taxation also increased the inherent tensions that had existed in the United Front, tensions that stemmed from the "uneasy co-existence" of two different political approaches to 16 administration. Since 1937, both revolutionary and bureaucratic approaches to political administration had existed side by side. The upper levels of the administrative elite included intellectual students, 17 as well as the traditional bureaucratic elite. Together they staffed most of the positions on the higher regional and county bureaucracies. Conversely, most of the positions on the lower district and township levels were local, generally poor, peasants who had been educated in 18 armed struggle and land revolution. Between these two groups there was l i t t l e to unite their interests. As Selden states, the upper-level, intellectual, gentry-landlord group co-operated out of a combination of 23 altruism and self-interest. The lower-level, local revolutionaries on the other hand wanted, "... a social revolution which would eliminate 19 oppression and bring equality and hope to the poor." Ideologically, there was l i t t l e common ground between these two groups other than strong nationalism. Marxism-Leninism was s t i l l a philosophy held by only the highest level Party cadres. The lower levels had l i t t l e exposure to i t . But uncritical obedience to the Party was not the goal. The strategies of guerilla.warfare, as I have discussed, demanded ideological solidarity i f individual units were to operate autonomously outside of direct controls. The magnitude of this Movement can be appreciated by the fact that between 1937 - 1940 the membership of the Party had swelled from 20 40,000 to 800,000 persons. The 1cheng-feng1 Movement began as an intra-Party education movement. It was committed to strengthening the revolutionary ideals of the Party which had been subordinated during the period of the United Front. The fundamental supposition of the Movement was that with the proper motivation and training men could transcend class l i n e s . ^ The 'cheng-feng1 was in no sense a purge. During this Movement the Chinese were to work out a methodology of dealing with intra-Party conflicts that s t i l l remains today. As Mao was to later write: In 1942 we worked out the formula 'unity-criticism-unity' to describe this democratic method of resolving contradictions among the people. To elaborate, this means to start off with a desire for unity and resolve contradictions through c r i t i - 22 cism or struggle so as to achieve a new unity on a new basis... 29 As Selden points out, the method of intense criticism and self-criticism proved to be very effective in breaking down traditional inter-personal loyalties and forging new loyalties with the Party. The intense face-to-face confrontations by their very nature scorned the traditional concepts of 'face1 and status. Leaders who arose here were those who could persuade and motivate their peers. The leader could not solely rely on rank but was forced to explain and defend his decisions . . 23 and policies. The 'cheng-feng' Movement encompassed six interrelated • campaigns launched simultaneously by both Party and Government. Together they composed an integrated programme which Selden terms as the essence 24 of the "Yenan way." , Its characteristic features were a rejection of guidance by administrative and technocratic elites operating through a centralized bureaucratic structure in favour of a decentralized, ccrnmunity-oriented structure of administration which promoted popular participation. These features demonstrated a basic faith in the creativity of people in overcoming the obstacles that block their path, including transcending their own class and ideological backgrounds. The question of e l i t i s t and populist approaches (one stressing reliance on a rationalized, centrally-organized hierarchy and the other stressing reliance on an "aroused peasantry") which had previously existed side by side, was now 25 being resolved. A much closer look at the individual campaigns can provide us with better insight. The f i r s t campaign was the 'Movement for Crack Troops and Simple Administration'. It was precipitated by the economic hardships wrought by the Japanese and K.M.T. in 1941. Initially, i t was a campaign 30 to increase the efficiency and reduce the cost of administration by transferring large numbers of cadres from the upper-level district and regional bureaucracies down to the township and subdistrict levels. However, as the campaign proceeded, i t soon became more concerned with changing the nature of bureaucratic organization. The new aim was to "... curb independent bureaucratic power by increasing the co-ordinating functions of the Party, district magistrates and inter-departmental 26 committees over individual, branch-type (pu-men) bureaucratic organs." Since the beginning of the second United Front, the form of government administration was a hybrid of both traditional and revo-lutionary approaches. Most departments such as education, reconstruc-tion, finance, etc., were vertically structured and enjoyed broad meas-ures of bureaucratic independence and autonomy. This type of organiza-tional structure, often referred to as 'vertical rule', established a clear-cut chain of command within the department with the centralization of authority on the regional level. However, this made co-ordination between various departments on lower levels very difficult because they could not communicate directly. Inter-departmental co-ordination was being sacrificed for intra-departmental coitmunication - one of the costs 27 of bureaucratic rigidity." Consequently, a new administrative structure was implemented that substantially increased the power of the Party and government officials who held "broad, co-ordinating func-28 tions." This arrangement allowed for greater flexibility in mobilizing and co-ordinating existing resources. Its orientation was towards the populist campaign style that emphasized mass participation. This struc-ture has become known as 'dual rule' because each department on every level was now responsible to two separate bodies. On each level of administration -township, subdistrict, district and region - a cotimittee 31 composed of departmental and other local representatives under the leadership of the local magistrate was established. This committee was responsible for co-ordinating the activities of a l l the departments on that level. As well, they were responsible for relating their work more closely to the needs of their local community. This significantly altered the chain of command. No longer were orders simply passed down through the various levels of the department, but rather, a l l orders now had to be received by the co-ordinating committee on the appropriate level. Thereby in the dual rule structure each bureaucratic department was now responsible to both the co-ordinating committee and the next 29 department level. Increasingly, decisions were being made on the lower levels by the department or the inter-departmental committees. T\hile the lower levels were becoming progressively autonomous from department superiors, they were simultaneously becoming subject to increased local control. These changes also corresponded to a general increase in the power of the Party. The reduction in bureaucratic autonomy was accompanied by an increased stress on Party leadership of government."^ Thus, the 'Campaign For Crack Troops and Simple Administration1 was an attack on the rigidity of bureaucratic administration by firstly, shifting large numbers of cadres down to the lower levels, and secondly, by reducing the autonomy of bureaucratic departments through the institution of dual rule. It resulted in better co-ordination between departments, increased admini-strative efficiency and encouraged greater lower-level participation. The second of the 1cheng-feng1 campaigns was the 'To the Village 1 Movement. Just as the regional and district cpvernments were restructured 32 31 in accordance with dual rule, so were the villages and townships. The policies of the United Front had encouraged the participation of the landlord elite, many of whom served side by side with local revolutionary cadres. The emphasis on stability during the United Front allowed the social structure of the countryside to remain virtually unchanged, especially in isolated areas. But the crisis of 1941 demanded that the economic stagnation of the countryside be broken. Land revolution had successfully been carried out in many places, but l i t t l e had been done to alter the small-scale farming based on the family unit. Agricultural technology and methods remained largely unchanged. This stagnation was at least partially attributed to the bureaucratic, non-revolutionary 32 nature of the local governments. Thus, one of the Party's major goals was the reorganization of village politics. The To the Village Movement was one aspect of that reorganization. Beginning in mid-1941, students and cadres were reported helping the peasants with their grain harvest. The pragmatic aspect of the use of extra labour during peak periods was soon eclipsed by a new and more important aspect. The interaction of students, cadres, and outside intellectuals with the peasants was leading to new relationships between the leaders and the people. Beginning in 1942, students and intellectuals studied in Yenan in preparation for their village assignments. As Selden relates, "... without prior as-similation of new goals and attitudes intellectuals would remain alienated 33 from the peasants regardless of extensive contact with village l i f e . " For many intellectual cadres, the change was regarded as a demotion. In their new positions they s t i l l regarded themselves as 'above' manual 33 labour and consequently difficulties had arisen. However, with the thorough political study in Yenan the results improved. The cadres no longer felt that they were 'losing face1 and the social barriers between the groups were breaking down. The overall thrust of the campaign was to "... overcome the mutual ignorance and prejudice of intellectuals and peasants through sharing and observing a common experience and to overcome 34 the psychological barriers separating mental and manual labour." The third major campaign was an intensification of the 'Reduction of Rent and Interest' campaign of the United Front. This campaign placed its central theme, the 'production battle' on the same level as the War of Resistance Against Japan. It was a moderate campaign which stressed that the Party "should not take a one-sided stand either for the landlord or for the peasant.". Rent was to be reduced by 25% and a rent ceiling 35 was placed at 37.5% of the crop. From previous experience, the Party realized that the frequent by-product of land revolution was the disruption of production. With the breakdown of the United Front and the ensuing crisis, disruption of production could have serious consequences. Consequently, land revo-lution was curtailed and replaced with the more moderate campaign for the Reduction of Rent and Interest. In its actual implementation, how- , ever, the campaign was less moderate. Frequently, the distinction between reducing and eliminating feudal exploitation was ignored. In many places land revolution was carried out. The importance of this campaign, however, was not so much of what i t attempted to do, but rather, how i t was carried out. This was a 34 'mass campaign' in that its success did not depend on bureaucratic control, but rather, on mass participation. After the years of restraint during the United Front, peasant activists were again mobilizing the peasantry into various associations that were to enforce rent reduction. It was these organizations and not the local branches of government that took control. The experience and confidence gained in participation in these types of mass organizations would prove to be excellent prepara-tion for the co-operative programs that were yet to be initiated. The fourth major campaign was the 'Co-operative Movement' which attempted to restructure the social, economic and political l i f e of the village. While in many places land revolution had been carried out, nothing had been done to alter the single family basis of small-scale farming. Indeed, the effect of land revolution (where i t had been carried out) was to actually decrease the traditional practises of co-37 operative labour. While two forms of co-operative labour - 'labour exchange' (pien-kung) and 'gang labour' (cha-kung) - had been historically practised by the residents of Shensi, there had been no Party discussion of using co-operative labour as a long-term resolution to the above problem. Now, to increase agricultural production, the Party sought to instigate the formation of 'mutual-aid' teams as the basic unit of production. Prior to 1943, attempts at co-operative labour in other areas had failed because the peasants had seen them as only extensions of government. However, i t was soon realized and made policy that mutual-aid organizations had to be entered voluntarily and on the basis of proven efficiency. They also had to be flexible enough to adapt to 35 varying conditions and productive arrangements. The prior campaigns for rent reduction and administrative reform had prepared the ground for mass participation in mutual-aid teams, while land revolution and the campaign for reduced rent had been important in organizing mass peasant participation, by their very nature, they could not sustain continued popular support. Thus, mutual-aid teams were to provide an ongoing focus for sustained community involvement. Through the organization of the community in bringing about the new form of co-operative labour, social and political organizations could also be established. Thus, i t had two purposes; one, to increase production through co-operative labour; and two, to create an organizational basis for sustained community involvement in social and political organizations as well. However, a number of important questions and problems had to 38 be solved fi r s t . Perhaps the most important question was that of what relationship mutual-aid teams were to have with the state. Prior to 1943 they had been closely associated with government, being in effect an arm of government. The difficulties that arose led to a change in their relationship to the state. Mutual-aid organizations were to be solidly grounded in the voluntarism of the peasantry. Yet the Party also realized that the i n i t i a l stimulus for these teams had to come from above; from properly educated cadres sent down to organize the peasants. Thus they were initiated by the state, but popularly run. But the ultimate success of the mutual-aid teams was dependent on their ability to increase production and to distribute that increase in a mutually satisfactory manner; two criteria which entailed the resolution of a number of related problems. Nevertheless the organization of these 36 teams was successful, and what they represented was the very beginning of self-management within a co-operative community. The formation of mutual-aid teams, however, comprised only one aspect of the larger 'Production Movement', the f i f t h of the major campaigns of the Yenan period. The goal of this campaign was a self-sufficient economy based on mass participation in co-operative organi-zations. While the mutual-aid movement was the keystone of this cam-paign, a number of important innovations were also introduced. The two of these that I want to examine are "organizational production' and the use of non-material incentives. Organizational production meant the involvement of a l l organizations; whether party, school, government or army" - in the productive processes. While the involvement of the army in agricultural tasks had taken place previously, this new involvement went far beyond that in a l l sectors of society. The production drive of 1943 strived to realize the f u l l potential of the organizational sector. A l l cadres were to participate in both labour and management on a continuing basis. Its effect was the creation of a new concept of a cadre as a person involved in both political and economic activity, both as leader and participant. As in the To the Village Movement, mental and manual labour were being unified into a single job function. The traditional separa-tion between leaders and the people, between mental and manual labour was no longer clear. With this Movement, Party officials, local magistrates, school teachers, etc., were now required to involve themselves in pro-ductive manual labour. While the Movement began as an attempt to more 37 fully utilize the labour power of the organizational sector, i t was maintained and developed for the progressive way in which i t altered worker-leader relations. In the industrial sector of the economy new strategies to deal with the crisis were being worked out as well. Again the goal was self-sufficiency in materials. In the agricultural economy the private sector was far larger than the public sector. In the industrial economy however, the reverse was true, there was very l i t t l e private industry of any description. Most industry had to be organized by the government. Ihe new approach to industrial development was characterized by the principle of 'centralized leadership and dispersed management' which meant that the central government would unify planning and establish broad economic goals while production and economic power would be decentra-lized over the entire border region. This decentralization was influenced by a number of factors. It was flexible in taking advantage of existing but remote sources of labour. It also required less i n i t i a l capital outlay because the productive units tended to be labour rather than capital intensive. Militarily, i t was also good strategy to keep the productive units small and dispersed over the countryside. The expansion and reorganization of state-controlled industry was also accompanied by a new approach to work incentives.that was now becoming an integral part of a l l of China's 'mass' organizations. If community social, political and economic organizations were to be sustained by popular participation, new incentives to stimulate interest had to be worked out. One approach which began during this period was the use of labour heroes as models for emulation. On the village, township and 38 district levels, 'model' workers were selected, honoured, publicized and rewarded. Much attention was given to these individuals who were selected on the basis of their dedication, attitude, and productivity. The tradition of the emulation of various individuals, usually warriors or political-philosophical figures, has deep historical roots in China but this marked the f i r s t time that i t was a 'labourer' who was being honoured. This campaign marked the f i r s t step in introducing non-material rewards as incentives for work. The selection of 'labour heroes' also provided a means of identifying, selecting and training new leaders. These labour heroes, along with the peasant activists who had emerged during the course of land revolution, presented an effective counter-force to the leadership style of the professional bureaucracy. Indeed, after liberation, this avenue of leadership recruitment became increasingly important. The Chinese term for the new concept of organization that was developing during this period was 'min-pan'. Translated i t means 'run by and for the people'. The success of the various campaigns and move-ments collectively shaped this concept into an organizational model that is now universally used in a l l sectors across China. In 1944 the 'Education Movement', which comprised the sixth campaign, now adapted the 'min-pan' concept to the organization of schools. Under the leadership of local cadres, labour heroes and peasant activists, schools were to be organized to serve the particular economic, political and social needs of their community. Its emphasis was generally oriented towards basic literacy, knowledge of historical and contemporary conditions, productive skills and coirrnunity service. A number of different types of schools evolved, "night schools, half-day schools, winter schools and literacy groups." The schedules and content of these schools 39 were linked closely to the schedules and needs of the local production units. Regular participation of the students in household or productive tasks was encouraged since most of the schools were held in the village itself. In most ways the changes in the educational system reflected the same changes taking place in other areas. Responsibility for educa-tion was being decentralized to local control, and "every man, woman and 39 child was involved in forms of education." The importance of the pre-49 period, and hence the necessity of its inclusion here, is that by 1949 the C.C.P. had already estab-lished a complete political philosophy, a philosophy that remains largely unchanged. In the pre-49 period, the C.C.P. was never faced with the task of re-organizing industrial enterprises. The Chinese revolution was a rural one and the last places to be liberated were the cities where the bulk of the generally foreign sponsored industrialization had taken place. However, later when the Chinese were to begin organiza-tional experimentation, i t would be guided by the political philosophy they had previously established. The philosophy that emerged from this period was largely conditioned by the nature of the revolutionary movement and the circum-stances in which they found themselves. Peasant revolution by necessity must take place in the rural areas. This, however, presented several inherent difficulties. One was the difficulty of building an army while evading government forces. To do so the Movement was forced to establish base areas in the most remote areas. This presented a second difficulty, supplies; the remote areas were generally the poorest areas. While this was a chronic problem, i t led the Party to stress the necessity of self-sufficiency and self-reliance becoming established parts of the Party's 40 philosophy. During the Great Leap Forward and now since the Cultural Revolution these virtues have been reiterated. While materials were always in short supply people were in abundance, i t was the resource the Chinese were to organize most effect-ively. Perhaps the earliest political belief of the communist movement was in the potential power of the peasantry. Thus their organizational efforts were directed at unleashing that power, a task they would be most successful at. Support for the Movement was based on both nationalist and revolutionary sentiments. The movement had two goals, the elimination of foreign exploitation and the social transformation of society, two goals which were not unconnected. The desirability of getting as wide a base of support and participation as possible led the Movement into its 'democratic revolu-tion'. By making democratic reforms in the organization of the Party, the Government and the Army, the Movement was able to involve the partici-pation of marginal groups, as well as intensifying the participation of the core groups. To what extent democratic reform was indeed the motivation for more extensive and intensive participation is hard to determine, but the Party itself saw i t as a fundamental motivation. In-deed, democratic participation has become one of the dominant charact-eristics of a l l of China's organizations. However, the extension of the class base of the revolution necessitated making compromises. The inclusion of marginal groups, and classes could lead to a dilution of the Movement's revolutionary en-thusiasm. To counter these effects, the Party began strengthening the 41 role of political education. More and more, political education became a daily occurrence, a part of everyone's existence. What mattered was not one's class background but rather, one's class consciousness. Politically motivated men could overcome a l l obstacles, hence political education was an important means to their ends. But political education was especially important because of the decentralized nature of the Movement's organizations. Guerilla warfare, by its intrinsic demands, must be very flexibly organized i f i t is to be responsive to rapidly changing circumstances. Given also the difficulty of communicating across long distances of rough terrain, one can appreciate the need for a decentralized form of organization where the various levels have both the experience and the power to make decisions for themselves. Thus in those cases where the Party could not always guide the individual units, those units had to take the essence of that guidance with them. Thus a very distinctive organized model was struck, one that was tightly disciplined to centralized policy guidance but had lower-level independent operational authority. This remains as the simplest statement of the organization of contemporary Chinese factories. The latter half of the Yenan period has proven to be the most important of the pre-49 years because out of this short period arose a new approach to the relations and responsibilities of the leaders and the people in China's social, political and economic organizations. The most substantial changes occurred during the campaigns associated with the 'cheng-feng' Movement. One of the f i r s t changes was the restructur-ing of bureaucratic power. Beginning as a movement to increase the efficiency and reduce the cost of government, the 'Campaign for Crack 42 Troops and Simple Administration1 quickly became concerned with changing the nature of bureaucratic organization. This was attacked in two ways. Firstly, they shifted large numbers of cadres from the upper levels down to the lowest levels; in effect decentralizing the control of power. Secondly, they curbed the independent authority of the bureaucratic apparatus by the institution of 'dual rule'. That is, instead of orders being passed down a vertical chain of command, each level of the bureaucracy was now responsible to two bodies; to a new inter-department coordinating committee and to the next level of the department. So not only was the independent authority of the bureaucratic apparatus being curbed, but now bureaucracy was increasingly subject to local control. The 'To the Village 1 campaign continued in the same vein. The 'sending down' of cadres to work on the lowest levels was now extended to a l l cadres and students. From what began as the pragmatic use of extra labour during peak periods, this campaign was extended because of the new relationship between the leaders and the people that were develop-ing. The social and psychological barriers between these groups and the separation of mental and manual labour were being broken down. The 'Co-operative Movement' also developed a number of interest-ing changes at the core of which was the creation of mutual-aid teams. This was China's f i r s t attempt at organizing co-operative labour and several lessons were learned. Perhaps most importantly i t was realized that these teams had to be entered voluntarily and on the basis of proven efficiency. The relationship between these teams and the state was an early problem. However, after some experimentation that relation-ship was defined. While state cadres were sent down to the villages to 43 organize these teams, they had to be entered voluntarily and popularly run. This principle soon became the general policy in a l l organizational work. The Party also began experimenting with the use of non-material incentives for work. 'Labour heroes' were selected and honoured in much the same fashion western society honours its amateur athletic stars. Labour heroes subsequently became an important source of leadership, along with peasant activists and trained cadres. The organizational model that emerged from Yenan was a product of the new 'min-pan' concept of 'run by and for the people'. It was highly decentralized and responsive to local control. While organized and initiated by the state, they relied on the voluntarism of the masses. The cadre, now half leader, half participant, had to lead by intelligence and persuasion. Closely associated and working with the people, the leadership style of the cadre that developed here, as with the organiza-tional model, has become a permanent aspect of the Party's style of work. When we look at some of the policies that were developed during this period, we notice a close similarity between the Yenan period and two later periods; the Great Leap Forward and the period after the Cultural Revolution. While China obviously rejected the Yenan experience in the early re-organization of her industrial enterprises, the Yenan period proved to have lasting significance. In the introduction to this thesis, I outlined Fayol's 14 principles of management, principles that while not unchallenged, s t i l l 44 form the most basic statement of the structural organization of western capitalist enterprises. At this point I think i t would be useful to briefly re-examine these principles and compare them with the general principles that evolved in China prior to 1949. In doing so, i t becomes clear that by 1949, the Chinese had already established a set of general principles that lay in direct contradiction to the specific principles of western, capitalist enterprise organization. Even before the Chinese began experimenting with enterprise organization in 1949, i t was obvious that what was going to develop would be radically different from the western model. The Yenan period produced a set of general principles of organization that would ultimately shape a new model of industrial production; a set of general principles that are s t i l l valid in contemporary China. Fayol stressed that the "division of work" through increasing specialization of job functions was the best method of maximizing labour output. In China, however, this principle was never established but was rejected very early. The principle that developed emphasized the de-specialization of job functions. Indeed, we can see this clearly when we look at the example of cadres and workers and the question of mental versus manual labour. The mass-line tenet which arose out of this question called for the closer integration of cadres with the people, not their increasing separation. Mental and manual labour were likewise coming together into single job functions, they were not being further separated by increasing job specialization. In a l l aspects of social l i f e this was the case. In social, political and economic organization - the principle was the integration of job functions and the de-specialization 45 of roles. While in the pre-49 period this was only a general principle i t is now a specific principle of contemporary industrial organization. A second of Fayol's principles of management was tight employee discipline at a l l levels "... in accordance with the standing agreements between the firm and its employees, employees must be disciplined to the power relations that are set out in any centralized bureaucracy, relations II that are clearly established by closely defined rules. The Chinese on the contrary, proved themselves to be anti-bureaucratic for a number of basic reasons. Most simply i t can be stated that bureaucratic organization and rural guerilla warfare were not easily compatible. Instead, what evolved out of the conditions and situation of the pre-40 period was an entirely new structure of organization that stressed lower level disci-pline to centralized policy guidance, yet allowed large degrees of in-dependent, lower-level operational authority. Carefully defined relations-did not exist. Being revolutionary, rather than bureaucratic, authority relations became established on the basis of ability and political commitment; they were maintained on the basis of their economic and political effectiveness; and they could be broken by collective decision making. These principles of revolutionary organization are s t i l l sub-scribed to in China's contemporary industrial economy. Job roles have not been, as another of Fayol's principles of management dictates, carefully defined with "a place for everyone and everyone in his place." Large degrees of lower-level autonomy have ef-fectively precluded such unambiguously defined job functions. Autonomy by definition means freedom from bureaucratic controls, whether direct or formalized. 46 Fayol cites non-material incentives as of l i t t l e value, and given the model of bureaucratic capitalist organization that he outlines, this is understandable. Non-material incentives function when there exists other than material reasons for working. In western society these reasons are not prevalent. However, China even before 1949 had begun a program to promote social and political work incentives. As we have seen, these early attempts included the use of 'labour heroes' as models of emulation, an aspect s t i l l used in China today. Most importantly however, was the realization of the direct association between the form of organization and the forms of incentives. The Chinese realized that social and political incentives could be just as or more important than material incentives given the right organizational form. Political goals could be transformed into economic realities. From the above comparisons I think i t is obvious that while the Chinese had established a set of general principles pertaining largely to general organizational questions, these principles had already precluded western forms of industrial management. In fact, by 1949 many of the questions that the Chinese would face in this regard, had for the most part already been answered. Yet, the Chinese did not choose to develop a model of industrial enterprise organization using the established general principles as guidelines. Instead the Chinese chose to adopt almost unquestioningly the Soviet model of factory organization. There are a number of possible reasons for this. From early in the development of the C.C.P. the Russians maintained considerable influence with the Chinese. Throughout the Chinese 47 revolution the Russians had been the only existing example of a communist state. More importantly, however, in the early f i f t i e s , the Russians were most generous with their theoretical and material aid. The revolution had wrecked havoc with China's economic production, and consequently China turned to the only country that maintained friendly relations with her. Russia's generosity in material aid, however, was undoubtedly conditioned by China's acceptance of her theoretical aid as well. However, in evaluating the success of the Soviet model, the yardstick was the set of general principles established during the Yenan period, and in comparison the Soviet model had l i t t l e to commend i t . Based on the most advanced of the western theories, the Russian model was a duplicate of the type proposed by Henri Fayol and his contemporaries; and, as we have already seen, Fayol's principles and the Yenan principles were in fundamental opposition. Not surprisingly, when in 1956, the Chinese had largely rejected the Soviet model, i t was with these Yenan principles that the Chinese began their search for a new model of factory organization. 48 Chapter I Evolution of Political Philosophy, 1921 - 1949 FOOTNOTES "*"Orville Schell and Joseph Esherick, Modern China: The Making of a New Society from 1839 to the Present (New York: Random House, 1972) p. 62. 2Ibid. 3 Benjamin Schwartz, Chinese Communism and the Rise of Mao Tse-Tung. Cambridge, Mass., 1958) pp. 8-27. 4 . • Mao Tse-tung, "Report of an Investigation into the Peasant Movement in Hunan", reprinted in S.W., Vol. 1 (Peking: Peking Press, 1967) p. 23 5 Edgar Snow, Red Star Over China (New York: Random House, 1938) p. 177. Maurice Meisner, "Yenan Communism and the Chinese People's Republic", Modern East /Asia: Essays in Interpretation, ed. by James B. Crowley (New York: Harcourt, Bruce & World Inc., 1970) p. 271. 7 Mao Tse-tung, "The Struggle in the ChingKiang Mountains", S.W., Vol. I (Peking, Peking Press, 1967) p.81. 8Ibid, p. 97 9Ibid, p. 83 "^Conrad Brandt, Benjamin Schwartz, and John K. Fairbank, A Dciojmentary  History of Chinese Cornmunism (Cambridge, Mass., 1952) pp. 220-224. 49 ''""Wrtin Wilbur and Julie Lien-ying How (ed. s) Documents on Coirraunism, Nationalism and Soviet Advisors in China, 1918 - 1927 (New York, 1956) pp. 100-103. "*"2Meisner, "Yenan Communism...", p. 284 13 Mark Selden, "Yenan Legacy, the Mass Line", Chinese Communist Politics  in Action, ed. by A. Doak Barnett (1969) p. 101. Ibid 15 Mark Selden, The Yenan Way in Revolutionary China (Cambridge, Mass., Harvard A. Press, 1971) p. 177 1 6Ibid, p. 188 17 Selden, "Yenan Legacy...", p. 102 1 p Ibid, p. 103 Ibid. ''"Selden, Yenan Way, p. 190 2 1 I b i d 22 Mao Tse-tung, "On the Correct Handling of Contradictions Among the People", Communist China 1955-1959: Policy Documents with Analyses (Cambridge, Mass., 1965) p. 278 23 Selden, Yenan Way, p. 198. 2 4Tbid, p. 210 • 25 Ibid, p. 212. 2 6Ibid, p. 213 2 7Ibid, p. 218 2 8Tbid, p. 219 29 Ibid, see also diagram p. 220 3 0Ibid, p. 229. 3 1Ibid, p. 224 3 2Lbid, p. 225 33T, . , Ibid. 34 Selden, "Yenan Legacy—", p. 123 3 5Ibid, p. 128 3 6Selden, Yenan Way, pp. 229-237. 37 Ibid, p. 237 3 8Ibid, p. 241 • 3 Q Selden, "Yenan Legacy...", p. 148. 51 ' CHAPTER II ** Section I: INDUSTRIAL RECONSTRUCTION, 1949 - 1952. The period of industrial reconstruction lasted approximately three years. After close to 30 years of c i v i l , imperialist and revo-lutionary warfare, China's industrial production was severely damaged. Consequently, before China could even consider her f i r s t Five-Year-Plan, she had to reconstruct her industrial sector. It was to be a relatively short period, but one in which many of the problems of factory or-ganization were tackled for the f i r s t time. The set of experiences of the Yenan period would prove to be valuable in the general organization of production. As we have already seen, by the end of the Yenan period, many of the priorities regarding the relations between individuals and between individuals and the State had already been established. However, the specific organizational details of large scale production had not been worked out. There were two basic reasons for this. One was the small total amount of industrial production within the areas liberated before 1949. The other was that the average size of individual enterprise units was very small. What i s applicable to a production unit;pf 40 people is seldom applicable to units employing 10,000 people. Hence, while the 'Yenan experience' was useful in the general sense, i t was not as useful in the specifc sense. 52 This was especially true since China was preparing to gear up for a rate of industrial expansion that she predicted would exceed Britain's within two decades, an expansion based on large-scale industrial enterprises. Following the collapse of the K.M.T. on the mainland and their subsequent retreat to the island of Taiwan, the U.S.A. placed a naval blockage around China. Isolated and in need of aid, China understandably turned to Russia for both material support and organizational guidance. In these respects, Russia proved to be both experienced and generous. However, i t would not be long before the Chinese realized that Russia's guidance and the type of material support that she offered were based on a highly centralized model of industrial organization that was not only alien, but many times in conflict with the 'Yenan experience'. The Chinese Communist Party has two unified or inter-dependent goals. They have "economic goals of increasing production to eliminate material deprivation" and they have "revolutionary" or "political goals" of the "creation of a classless society.""1" Between 1949 and 1967 these goals seemed to come into contradiction many times. Official policy was to swing back and forth in the years to come in the search for an organiza-tional model that would satisfy both goals. During those periods when political goals prevaled over production goals, the slogan was "politics in command.," Similarly, when production 2 goals have taken precedence the slogan was "production in command." Empirically, however, these goals have proven to be inter-dependent, and the nature of this inter-dependence is one of the questions I will be examining closely. Many critics of the Chinese political system have 3 asserted that economics have been totally subordinated to politics. 53 This has not been my finding. Rather, I would suggest that the success of political goals has always been dependent on economic progress; that political distance has only been made on production's path. Stephen Andors describes what is meant by.the term, 'polities', and its use in the slogan, 'politics in command'. Politics refer to human relationships and motivations in the context outlined by policy and implemented by operation. The goals of politics are the goals of the revolution: creation of a classless society where no man exploits another, the end of human alienation in the work process, and the elimination of fear of materi-al deprivation. Thus politics is operative within the production context but in another and more important sense i t transcends that context, requiring not just production but a definite form of production relation-ship and a specific type of authority relationship. For the Chinese "politics in command" implies that production embodies human relationships which are in 4 harmony with revolutionary goals. As one Chinese writer in 1964 wrote, "... the socialist industrial enterprises must not only be modern ones. What i s more 5 important is that they must be revolutionized ones.!.1 While this writer clearly reflects the balance between the two goals prior to the Cultural Revolution the balance has vascillated a number of times. The same alternatives are implied in the question of technical reliability versus political reliability or 'expert' and 'red'. This 54 contradiction had generally not arisen prior to 1949 because the Communist Movement "... was characterized by a fusion of political and military leader-ship." The question of political versus technical (military) leadership had not been a problem because the veteran guerrilla leaders had been both. However, in the industrial economy after 1949, i t was soon realized that there was a paucity of cadres who. were both politically reliable and technically capable. This is not surprising. Due to the rapid collapse of the K.M.T. during the last periods of the war, the Movement was occupying new territory faster than their ability to train new cadres. Hence, while the party tried to develop leaders who were both 'red' and 'expert' they were forced to use two distinct groups. One technically competent, the other politically. Within the factories on the micro-level the Gommunist Party did not have sufficient personnel to immediately replace the administrative staff, so most of the enterprise personnel were allowed to keep their former positions; however, checks were made to their power by replacing key positions with Ccranunist personnel. This problem has been manifested in factory administration in the dichotomy between policy and operations, between those who make policy or political decisions and those who carry them out. Stephen Andors described what is meant by the terms, 'operation', and 'policy'. In my use of the terms I refer to these distinctions. "'Operations' refers to the actual production, administrative and technical decision making processes within the enterprise. It deals with questions of who is responsible for which jobs, how tasks are as-signed in the production process, and how authority and responsibility are distributed in order to f u l f i l l the goal set down by policy." 55 "'Policy' refers to the middle - and long - range goals of the industrial enterprise; i.e., fulfillment of plans, targets, the formulation of enterprise plans not covered in targets handed down from higher levels, relationships with other enterprises and consumption units, and over-all efficiency in using material and human resources of a whole 7 factory." In this thesis I am primarily concerned with the various relations within individual factories. However, on occasion I will also outline the relations between enterprises or between enterprise(s) and the state. It is therefore useful to clarify this distinction with the introduction of two terms. Management within a single enterprise and/or factory (a single enterprise is often composed of a number of individual factories) is termed "micro-level1 management. Management between enterprises and between enterprise(s) and the 'state' (which generally refers to any higher level of authority) is termed 'macro-management'. At the time of the founding of the People's Republic of China in 1949, there existed 126,000 industrial enterprises with a total of 3 g million employees of which 500,000 were women. These comprised many types of transport mining and manufacturing enterprises, the majority of which were very small in size, averaging only 24 employees. Yet largely the industrial system was at a standstill. The large industrial centres of Manchuria had been stripped by the Russians while they occupied i t . Likewise, the K.M.T. when faced with retreat, crippled as much industry as they could. At liberation, the Red Army took charge; workers were reorganized, the old managerial personnel were returned and new technicians were recruited. The long task of industrial reconstruction lasted until 1953 when the First Five Year Plan came into effect. 1^ 56 While the Soviets had stripped Manchuria of its industry during its occupation, i t was the Soviets who helped restore i t . In July of 1949 the Soviet Union and the People's Government of the Northeast (Manchuria) signed the f i r s t one-year trade agreement. In the following year in Moscow, Mao Tse-tung signed the Sino-Soviet Treaty of Friendship Alliance and Mutual Aid which enlisted Soviet aid in helping China develop a basic program of industrialization. In the following six years, agreements were signed that supplied China with approximately 210 industrial units.1"'" In many countries where an extra-constitutional change of government occurs, the bureaucratic organization is maintained intact and the controlling elite are merely replaced with a new elite. Though the Chinese case does not completely f i t Weber's definition of a 'rational' 12 bureaucracy, China has supported one of the longest living and most stable forms of bureaucratic administration. While the control of government passed into many different hands the bureaucratic apparatus was maintained largely intact. With liberation, however, this was not to be so. The Ccmmunists who had already developed revolutionary forms of administrative apparatus in the Party and army now began looking for new forms of industrial aclministration on both the micro and macro-levels. During this period there were three basic distinctions drawn between the various industrial enterprises. They were classified as either private, joint or state enterprises. The number of state-owned enterprises totalled 2,677, most of which had been nationalized prior to 1945. With the Soviet Union China jointly owned 109 enterprises as well as jointly owning 193 others with private partners. This last group generally 57 comprised the largest enterprises and accounted for fifty per cent of China's industrial capacity. The largest number of enterprises were 13 s t i l l privately owned; however, by 1956, most of these had been nation-alized. During the period of industrial reconstruction, the Chinese employed two basic forms of factory administration depending on the individual factory's classification. Those enterprises that were either jointly or state owned were generally run by an 'administrative cornmittee', jointly controlled by the government, Party and army. This committee in turn selected and controlled the director who was responsible for both 14 operations and workers. The administrative or management committee (kungch'ang kuanli weiyuanhui) was comprised of "military men, top Party members, leading technicians and engineers, some skilled workers and managerial people ..." It was a non-Party apparatus under the control of both the old "regional administrative districts" as well as the new "state ministries. 1 , 1 5 The enterprise Party committee, the lowest representative organ of the Chinese Communist Party was given responsibility for p o l i t i -cal thought and "insuring and supporting the production work of the administration in the factory...""^ The role of unions within the enterprise was also laid out. The constituition of the /All China Federation of Trade Unions (ACFTU) stated that unions were to be a "school of administration, a school of 17 management, and a school of Ocmmunism for the worker masses." Their actual tasks however, were only to organize workers, promote class consciousness, organize political and cultural education and to assure 18 fulfillment of quotas and norms. Thus the involvement of both the 58 Party and the unions in the administration of the factory was limited to political work, promoting production and was not involved in administration, other than their representation on the factory adnunistrative committee. It reflected a basic assumption of the Party at the time that political control could be separate from administrative control and that the goals of the revolution could be achieved through political education without altering the basic structure of administration. For those industries which had been socialized (i.e., jointly or state-owned), i t was officially assumed that the interests of the workers and managers were one. The 'dictatorship of the proletariat' had already been established, and hence i t would be redundant to set up the unions as special representatives of workers interests. It was the state itself which represented their interests. Thus, union participation was restricted to political education and promoting production. By 1951, however, union participation through the workers representative conferences was siding with workers interests against the authority of management. The ACFTU under Li L i San argued that since there existed a division of labour and interest between workers and administrators, trade unions should represent workers interests specifically. Further that the present period was not just a 'dictator-ship of the proletariat' but a 'peoples'dictatorship' representing a coalition of classes each with separate class interests; hence 'contra-dictions' did exist between workers and administration even in state 19 socialist enterprises. This argument went directly opposite the Party line at the time and the unions were charged with seeking autonomy and 20 trending towards economism - emphasis on material incentives. In 59 1952, Li L i San was removed as the ACFTU chairman and replaced by Lai Jo-yu. From 1952 until 1956 union activities were less concerned with workers interests specifically than in working with management to increase production. In the private industrial sphere capitalists had been allowed, even persuaded to stay and run their own factories through China's policy of "... develop(ing) production and bring(ing) about a prosperous economy through the policies of taking into account both public and pri-21 vate interests of benefiting both labour and capital." Since the Party did not have sufficient personnel to replace a l l managers and staff throughout the industrial sector, i t found i t necessary to utilize some of the existing personnel. However, two basic checks were made to their power. Firstly, a few C.C.P. cadres were placed in management positions to watch over the operations; and secondly, the workers, through union representation, were given more effective power than their counterparts in joint and state enterprises. The interests of workers and capitalists were not assumed to be one, and hence in the private enconomy, unions were designed to represent the special interests of workers. The government in 1950 issued a "Directive on Establishing Labour Capital Consultative Conferences in Private Enterprises" which applied to a l l private enterprises of fi f t y persons or more and was to be composed of equal numbers of representatives from the union and from 22 the owners and management. This conference was not chaired solely by the factory manager as was the case with the 'workers-representative coimiittees' (the standing body of the workers representative conference) under state ownership, but alternated between the union and the management. 60 Together they would hash out disputes even though they had no "business, . . 23 management or administratxve responsibility." If a dispute arose, however, the case was referred to the local labour bureau for arbitration where the management would get " l i t t l e sympathy." So, while these labour capital conferences had no legal authority, workers through the union's participation in them had much more real control over administrative 24 decision making than their counterparts in the public enterprises. More and more private entrepreneurs were brought under the control of the state. In 1952 the Five-Anti Campaign "... was directed against industrialists and businessmen who, i t was alleged, were guilty of breaking the law by spreading 'five poisons'; "bribery, tax evasion, theft of state property, cheating on government contracts and stealing 25 state economic information." In this campaign the trade union attained the peak of their influence in leading workers denunciations and attacks 26 on their employers. By 1955 - 1956, however, most of the private enterprises had been nationalized and the role of the trade union as a vehicle of workers' participation became less and less important. The period of industrial reconstruction lasted until 1952. The form of factory organization employed was an interim form that varied with the classification of the factory. Joint and state owned factories were under the control of the government, the army and the Party. To-gether their representatives formed the 'factory administrative com-mittee' which directed the factory manager. In the division of duties the administrative cornmittee made policy decisions and the manager looked after operations. The 'Party ccsnmittee1 and the unions on the other hand, were strictly relegated to doing political and educational work. They played no role in making either policy or operational de-61 c i s i o n s . What t h i s approach ref l e c t e d was the assumption by the Party that p o l i t i c a l control could be separate from administrative control and that the goals of the revolution could be achieved through p o l i t i c a l education without a l t e r i n g the basic structure of administration. 62 Chapter II, Section I Industrial Reconstruction, 1949-1952 FOOTNOTES ^Andors, "Modernization...", p. 396 2 This slogan was probably never used during the actual period, but rather afterwards when looking back distainfully at a time when production goals prevaled. 3 Richman, Industrial Society and Schwartz, Rise of Mao. 4 Andors, "Modernization...", p.. 396-397. 5Cited by Andors, ibid, p. 425. 6D.J. Waller, "China: Red or Expert", China Quarterly (C.Q.) 38, 2 (Apr./June, 1967) p. 123. 7 Andors, "Modernization...", p. 396 Katie Curtin, Women in China (New York and Toronto: Pathfinder Press, 1975) p. 53. 9 Peter Schran, "Economic Management", China: Management of a Revolutionary  Society, ed. by J.M. Lindbeck (Seattle: U. of Wash. Press, 1971) p. 63 "^Franz Schurmann, "The Dialectic in Action Vicissitudes in Industrial Management in China", Asian Survey 1, 3 (May, 1961) pp. 5-6. "^ranz Schurmann, Ideology and Organization in Communist China (Berkeley and Los Angeles: U. of Calif. Press, 1968) p.223. 1 o Gerth and Mills, From Max Weber, Chap. VIII, "Bureaucracy" (New York: Oxford U. Press, 1967) pp. 197-266. 13 Schran, "Economic Management", p. 198. ^Schurmann, Organization, p. 308. 15 Schurmann, Vicissitudes, p. 6. 1 fi Paul Harper, "Workers' Participation in Management in Communist China", Studies in Comparative Communism 4, 3/4 (July/Oct.,1971) p.115. 17 Cited by Harper, ibid, p.112. 1 8Ibid, p. 115. 19 Cited by Harper, ibid, p.119. Ibid. 2 1Cited by Harper, ibid, p.119 22 Ibid. 2 3Lbid, p. 120 Ibid. 64 John Gardner, "The Wu-Fan Campaign i n Shanghai", i n Chinese Communist  P o l i t i c s i n Action, ed., by A. Doak Barnett ( : 1969), p. 478. Harper, "Workers' P a r t i c i p a t i o n " , p. 122 65 Political - Military Administration, 1949 - 1952. Direct control Educational and/or political duties only.— 66 Section II: ONE-MAN MANAGEMENT, 1953 - 1955 By 1953 Soviet influence was exerting itself strongly. The Soviets were not only giving the Chinese material support in the form of factories, etc., but were also sending along great numbers of technical and administrative advisors. They were brought in to supervise the installation of equipment, run the plants and train the Chinese in 'ad-vanced' methods of production organization. Unfortunately, Soviet methods were accepted with l i t t l e critical evaluation. Suggestions by the Soviet advisors were "generally accepted" although each individual proposal was discussed at factory meetings. These new factories came complete "down to the smallest operational details" and were, in fact, almost exact duplicates of the Soviet plants. Soviet influence was not just limited to the micro-level of industrial organization, but exerted itself on the macro-level as well. The similarities between China's First Five Year Plan (F.F.Y.P.) and Russia's f i r s t five-year plan are striking; and the new heavy industrial plants that China was receiving were the cornerstones of that plan. Thus on both the micro and macro-levels, the Soviet way had become the Chinese way. On the micro-level, the organizational systemthat the Chinese adopted had two basic aspects; the 'responsibility system' and the system of 'one-man management'. The essence of the Soviet system is "... a highly technical organization of production, based on product 6 7 • specialization. Central planning gives the. manager a complex set of targets to achieve; and one-man management gives him the power to mob-il i z e its resources to achieve its target. Soviet managers and workers are held individually responsible for work performance; thus,; technical management and individual responsibility may be regarded as key charact-eristics of Soviet industrial management."''" The cal l for the introduction of responsibilities systems had actually begun as early as 1948. One writer in the 'Tungpei Jenmin jihpao' of November 2nd, 1948, wanted a responsibility system that "... demands that each worker assume a defined responsibility for production in a defined work post, that he adopt to a high degree his creativity and positivism, thereby doing away with a disorderly phenonema 2 of non-individual responsibility." The writer quotes Stalin as saying that, "The phenomena of lack of individual responsibility is not assuming any responsibility for the work for which one is entrusted, for one's 3 machines, apparatus and tools." Later, in January of 1950, another writer listed five basic reasons for this lack of individual responsibility. Firstly, "informal work habits" made planning and operations difficult; secondly, the new cadres were "arrogant and distrustful of the workers" and failed to properly supervise or check up on assignments; thirdly, the workers and managers needed adequate "ideological preparation" to accept responsibility in a situation where no one wanted i t ; fourthly, work discipline was relaxed and many involved themselves in "cultural and recreational work" but few in "practical work;" and fifthly, the 4 "division of labour was vague and authority unclear." The introduction of the Soviets 'scientific' rational work order was held up as the best means for correcting these tendencies. 68 Under the Soviet system each enterprise (ch'iyeh) was divided into 'specific production sectors', from the individual factories (kung ch'ang) to shops (ch'echien) down to the smallest work sections (kung-tuan). Production teams were to be assigned to a specific place and 5 function where the tasks were to be "minutely and carefully defined." Schurmann gives us an example of the further application of the new system as i t was applied to a small farm machinery factory. The engineering section was divided into two main work groups, one for production and manufacturing, the other for planning and study. V7ithin the production and manufacturing group, three shops and two sections were set up. Each shop was further divided into teams on the basis of specific production tasks. Each work team was led by a 'democratically elected' team chief. Within the team, specific work tasks were assigned to each worker. Thus a rational division of labour was established... monthly production plans were drawn up... specifying the tasks of each work team. Each work team discussed a section of the draft plan which applied to i t . The production and manufacturing group then called a meeting of a l l work team chiefs, and agreement was reached on the final plan. The plan was then posted for a l l to see, and for a l l to understand g their own individual role in the plan. On July 10th, 1953, the !>rLnistry of Heavy Industry officially implemented the responsibility system. To ensure that the workers did work in a rational, planned manner, work teams were to be led by an ex-perienced workerforeman. While many difficulties arose, s k i l l was s t i l l the fundamental criterion of leadership. It was the most extreme form of 'production takes command' that the Chinese ever experimented with. 69 While the directive of the Ministry of Heavy Industry had officially instituted the responsibility system, its actual introduction varied from enterprise to enterprise. The most rigorous forms were found in the joint Sino-Soviet enterprises, the least rigorous in the Chinese state-owned enterprises, and in many cases i t was never instituted at a l l . 7 One of the great advantages of the responsiblity system was that i t made centralized planning much simpler. Production quotas and norms were set on each level which were then held responsible for their attainment. A detailed system of production logs (paopiao) was introduced that recorded the production of both the work team and of the individual. The logs then became the basis of the piece-work wage system. However, the system also had to have the force to "compel compliance;" just as channels of information were important, so were channels of (command. To develop these channels two new Soviet systems were introduced. These were the 'production territorial system' and one-man management. This enlargement of the responsibility system f i r s t became apparent in a publication of December 31st, 1953. Here responsi-bi l i t y was defined as having three basic aspects. Firstly, "management according to production areas,." secondly, "sole responsibility by manage-ment;" and thirdly, "work post and technical responsibility.'.! The fi r s t two were the recent enlargements introduced as the Five-Year Plan began. They were aspects of the Soviet model and were regarded by them as the 8 basic parts of a planned economy. The fir s t , the production territorial system was characterized by product specialization within a given area. Every factory that 70 produced a particular product was to be located within a designated area. The second system of one-man management was then designed to compliment the production territorial system. Each enterprise, on each level down to the level of the work team, had a single individual who was in control. Commands were to be passed from individual to individual down a vertical chain of command. The 'one-boss1 system with so much power vested in individuals created l i t t l e enthusiasm so amendments were added to the system to generate greater mass support and participation; "important work problems" were to be "collectively discussed" by the workers, and managers were not supposed to "arbitrarily act or decide," but rely on the democratic participation of the masses. However, the onus was on the individual manager to listen to suggestions "open-mindedly" to ensure support for 9 the system. The criticism voiced by the workers of a lack of democracy within the factory also led to the creation of small "speak out one's itiind meetings" that put workers and technicians together to work out problems. One of the biggest reasons for this dissatisfaction Schurmann suggests i s that the bureaucratic structure which "vigorously defined each man's task" was totally contrary to the policy and practice of team flexibility that had evolved in the Yenan Period."^ Under the system of one-man management, the factory manager replaced the factory administrative committee. The manager now held effective control of both policy and operations while the role of the Party through its representative, the Party Committee, was restricted to one of largely 'moral leadership'. This created antagonism between the two. The Party Committee felt that personnel represented the human aspect of administration which they felt was within their jurisdiction; 71 yet, on the other hand, managers had within their power the right to take "independant action to guarantee plan fulfillment" which could include hiring and firing personnel at their will. Hence the Party Coitmittee soon found itself completely removed from important decision making within the factory.1"'" The fate of one-man management and its other aspects and that of Kao Rang were closely tied together. Kao Rang held the highest political post in the People's Government of the Northeast, which of a l l the regions was the most closely tied to Russian influence and hence had 12 developed the system of one-man management the furthest. Kao Kang was also head of the State Planning Commission and the Chief of the F.F.Y.P.. Thus the growing struggle over the adopted organizational structure was reflected in not only Sino-Soviet relations, but intra-Party relations as well. At the Fourth Plenum in February of 1954 the decision was made to return the factories to collective party leadership. This was the fi r s t o f f i c i a l announcement that a struggle was under way. By 1955, however, with the suicide of Kao Kang and the expulsion of a number of Party members in Manchuria i t became apparent that the Party was more or less unified in i t s ' intent to drastically change the system of one-man management and strengthen the power of the Party through the Party Com-mittee. 1 3 The basis of remuneration in China during this period as well as today i s the principle of "from each according to his ability, to each according to his work.'.' This principle corresponds to the period 72 of the 'dictatorship of the proletariat'; that transitory period after the i n i t i a l 'democratic revolution' has been achieved but before the completion of the final 'communist revolution', . In this hitherto un-reached stage of coitimunism the principle remuneration will be "from each according to his ability, to each according to his need." Non-material 14 incentives wi l l be used as the "sole motivating force." What changes the theoretical transition to communism will make in terms of distribution of income and organization of economic l i f e is difficult to say. Certainly the Chinese have not published a proposed outline of its practical implementation, hence l i t t l e more can be said. What this theoretical policy states is that the Party believes that the final transition to a communist state is s t i l l in the future and that when i t is attained individual remuneration will be on a basis of personal need rather than accounted work. During the transitory stage of the 'dictatorship of the proletariat', however, the form that remuneration takes is determined by the Party's analysis of the stage of communism. The achievement of the final communist revolution is a process, not an act, and as such the transition from material rewards to non-material rewards must develop slowly over time according to the institutional and organizational changes that have taken place. Therefore during this transitory stage we find material and non-material incentives being used in conjunction, with their relative emphasis dependent on the stage of organizational change. 73 During the period from 1953 to 1955 where China saw the adoption of the responsibility system and the system of one-man management, China also saw the development of its logical counter-part, a material incentive system whose stress lay in rewarding individual effort and innovation with individual material rewards. It is my intention to suggest that the iitplementation of the responsibility and one-man management systems and the use of individualized material rewards were functionally comple-mentary. That is, this system necessarily required the use of material incentives and largely precluded the use of non-material incentives. With the First Five Year Plan, China attempted to develop forms of remuneration that were consistent with its new industrial structure; they had a number of goals in mind which they wished to effect with altered forms of remuneration. They wanted to stimulate technical innovations and inventions, they wanted to relocate the work-ing force to where they were most needed, and they wanted to eliminate "irrational and equalitarian" wage systems by more closely linking wages 15 to actual productivity. Most of these goals involved sharpening material and wage differentials. Prior to the major wage reform of June, 1956, the form of remuneration was the standard wage-point system. This system was based on an eight-grade s k i l l hierarchy with each level having a corresponding number of wage points; the number depended on the ascending levels of s k i l l . The number of points was constant for an industry across the country but the commodity value of the points varied from area to area according to the local cost of living. The average differential between the highest and the lowest levels was a ratio of three to one but the 74 ratio between top and bottom and between the separate levels varied according to the relative needs of the s k i l l levels of the industry. In 1956 the wage-point system was replaced with the straight wage-grade system that eliminated wage points and replaced them with straight wages. It was felt that the old system obscured the direct relationship between work and wages. The new system substituted wage co-efficiencies that were used in calculating the actual wage in a given area, again according to the local cost of living. Both systems were closely geared to the requirements of the First Five Year Plan. Growth priorities of heavy industry were high in the. F.F.Y.P. and were correspondingly reflected in the ratio of lowest to highest in heavy industry. Likewise, differentials were greatest in remote areas short of skilled labour and were used to move workers to desired areas. The use of piece-rate mechanisms at this time also figured prominently. The new system had a built-in emphasis on over-fu l f i l l i n g production quotas. The general policy towards remuneration Hoffman states "... called for eighty per cent of wages to be base pay with the remaining twenty per cent used to spur extra output through a 17 piece-work or bonus remuneration." This contrasts sharply with the Soviet Union in 1955 where over thirty-five per cent of the workers regularly received five times their basic pay in piece-work pay. On each level quotas and norms were set. If the individual worker produced beneath that level then he received less than the standard wage. If he produced above the quota then he received additional piece-work pay equal to a fixed percentage of its value. Piece-rate mechanisms were favoured at this time because they most closely followed the tenet of 75 18 "... to each according to his work." In 1952 34.5% of industrial workers in state enterprises were piece-workers. This increased to 19 41.9% in 1956 and thereafter declined sharply. Quality of output was also controlled through wage manipulation. Three classes were established; i f both quantity and quality were up to the norms then the worker received 100% of his basic pay and i f the quality was not up to standard, but s t i l l satisfactory, then the worker received between 92% and 94% of his basic pay. If, however, the work was totally unsatisfactory the work was returned and no payment was made 20 until the niinimum standards had been met. Many variations were necessarily worked out according to the specifics of the work situation. In many cases i t was not possible to measure individual output so an indirect method was used. Everyone in the production group received wages above or below the standard accord-ing to the measured production of the unit. Likewise, i t was not possible to measure the output of clerks or managers so they too were necessarily 21 tagged in with the production of the unit. Managerial motivation was solved within the system by "pro-viding administrative sanctions (demotion, dismissal or even imprisonment) or by offering specific material rewards (managerial bonuses or premiums) or status benefits (power, promotion, office space, etc.") The-inevitable outcome of this was a basic reluctance on the part of management to in-corporate the lower levels into any of the key decision making processes because i t was the individual managers at each level who had ultimate 22 responsibility. 76 Bonus payments were also used in situations where the use of piece-work mechanisms were not possible. The attainment of bonus payments was usually tied to four criteria; "over-quota production, outstanding economy and use of materials, achievement of high safety levels and 23 superior product quality." A number of different techniques such as "direct limited awards", "direct progressive awards" and "direct unlimited and contractual awards" were also used. However, since they were a l l related to production only production employees were eligible. It should not be readily obvious why a system of responsibility with its clearly defined roles and enhanced channels of cormonication was absolutely necessary before a complex system of piece rates with its norms and quotas could be established. Without the clear assigning of responsibility and the means for taking and transmitting the necessary data, remuneration according to individual production was precluded. A large number of other awards and benefits were also available which can be equally considered here as material incentives because they directly affected the physical existence of the individual worker. Since the relocation of workers often resulted in the dislocation of families, employees who were so affected were generally given time off with pay to v i s i t their families. The holiday was usually for two or 24 three weeks plus travel time. Workers who worked overtime at night, during holidays or were engaged in difficult or dangerous work were given wage supplements. Awards and bonuses were also given to workers who had made inventions or innovations in technical production. Scientific research that applied to production was also rewarded. Rensselaer, W. Lee-III 77 thinks that this aspect of the "Chinese participatory style" is of great inportance. He writes: Possibly the most significant expression of the Chinese participatory style is in the technical sphere, where the Communist leadership has sought to promote the application of mass creative intelligence to improving the nation's productive capacity. Opportunities for innovation, which in industrialized countries are the preserve of technical and managerial elites, are shared 25 in China by broad segments of the working class. The origin of this policy he partially attributes to Marx's "theories of cognition and alienated labour" and partially to "China's 26 specific historic circumstance as a late comer to industrialization.!' Lee cites three assumptions on which the policies are based; firstly, that technology should be subordinated to politics because the workers were "masters and not the slaves of their machines"; secondly, that practical experience i s the best source of scientific theory; and thirdly, that China should follow a "uniquely national course of industrial and technological development." In 1954 the M l China Federation of Trade Unions began a nationwide technical innovation movement modelled on the successes of the Anshan Iron and Steel Works. The overseeing of the movement on the enterprise level was done by the Party and union organizations who made sure that the workers' proposals were given adequate consideration. The movement, however, soon came into trouble. Criticisms were made that innovations tended to have no bearing on key production problems, as 78 well that workers were not studying 'advanced Soviet techniques' carefully enough, but were concentrating on their own innovations. Lee suggests that, "A contributing factor to the above tendencies may have been the system of grading and rewarding innovation, announced in August, 1954, which unambiguiously favoured technical over non-technical forms of 27 innovation." The system of rewards was divided into two sections; one for technical invention, the other for improvements and rationalizations. Awards for inventions were paid as a percentage of cost savings over a period of three to five years. The percentage varied from thirty per-cent of the savings under one hundred yuan per year to two percent of the savings over one hundred thousand yuan per year. Awards for improvements and rationalizations were paid as a percentage of savings over one year only. Improvements on the same savings as above were awarded twenty percent and .5 percent and rationalizations were awarded just ten percent 28 and .25 percent. This movement was halted in March of 1955 and replaced with a new three-point policy of "learning and grasping Soviet advanced experience, popularization of indigenous experiences that are proved effective, and 29 stimulating rationalization proposals from the masses." Lee suggests there were three basic reasons for this policy shift. Firstly, they needed to consolidate the innovations of the early movement; secondly, the technical level among the workers was quite low (so promoting rationalizations more closely matched their abilities); and thirdly, China s t i l l maintained a "general posture of dependence upon Soviet assistance" and there was l i t t l e room or desire to tinker 79 with methods at this time. The campaign for innovation gradually faded into the background and i t was not until 1958 and the birth of the Great Leap Forward that worker innovation became an important movement again.3^ Social insurance programs are administered by the M l China Federation of Trade Unions and cover most workers and their families in most enterprises. Article 93 of the constitution (1951) and the amendments 31 of 1953 form the basis of these non-contributory programs. They are similar to their Russian counterparts in that payments are related to work performance, conditions, difficulty and duration of the job. The separate benefits themselves I will only mention briefly as the specifics are of l i t t l e importance to this thesis. They include benefits for death, maternity, sickness, injury, disability, retirement, as well as the provision of "nurseries, sanatoria, rest homes, homes for the aged persons, orphanages and homes for disabled individuals". Again these establishments are a l l under the control of the local labour union and 32 "managed much as in the USSR." Non-material incentives have also been used since 1953 and as Hoffmann states have "clearly affect(ed) the quantity and quality of 33 labour input... ." However, during this period, from 1953 to 1955, they were used secondarily to the material incentives that I have just reviewed. It was not until 1958 and the Great Leap Forward that the use of non-material incentives clearly took a leading role in stimulating industrial production. Hence I wil l discuss them in the section, The Great Leap Forward, 1958 - 1960. Of the many new organizational and adrtunistrative techniques begun in this period many were later discarded but many were maintained 8.9 and became standards in Chinese industry. The shops system, defined and co-ordinated according to certain functional criteria was one. The 'production team' with i t s specificity of tasks was another. A third was the 'work teams' role in determining their own production plans, a fourth was the continuing close contact between the workers and the managers, the latter who had to make regular visits to the production area to personally acquaint themselves with the productive process. This aspect later developed into the policy of requiring a l l managers to labour on the production line. Fifthly, the unions' role in maintaining the welfare of the masses through its administration of the social insurance program was also carried on.~^ The systems of individual responsibility and one-man management were instituted in conjunction with the development of a functionally complementary system of remuneration based largely on material incentives. When looking at the various aspects of this particular system, one realizes the degree to which they are interdependent. Its logic has internal coherence. This system relies on and rewards individual effort. The incentives are money, power and prestige, and i t assumes that a l l men can best be motivated by them. The model is a logical development of these assumptions. To reward individual effort, job functions must be specialized and clearly delineated so that both quantity and quality can be measured. Likewise, clear-cut chains of command must be established. If an individual's remuneration is dependent on the success or failure of his own efforts, his responsibility must be clearly separated from the responsibilities of others. The necessity of keeping production logs on virtually every employee led to a large increase in the size of the departments dealing 81 with worker supervision, quality control and accounting. It also led to an increasing number of conflicts between those who supervised and those who produced. Collective decision making was made far more difficult because work done collectively was difficult to reward. But perhaps most important-ly the impetus to make decisions collectively, that is, not on the basis of individual monetary reward, was gone. It was no longer officially or socially sanctioned. Hence, i t is not surprising that the use of a l l non-material Incentives virtually died during this period. This had not been the case in Yenan. Fighting units and local government organizations, etc., were based on a collective interest. Social and military warfare are necessarily group concerns. Thus, motivation could be stimulated by collective decision making and action. However, the Russians had adopted a system of factory aclministration based on individual motivation. The characteristics of this system were logically coherent but based on one basic assumption: that men would rationally seek to itiaximize personal (monetary) ends. The Chinese by 1949 had already developed expectations about the organization of a l l human activity. Expectations about how organiza-tions were to be run; about the proper relations between cadres and workers, and about the responsibilities of each group to the other. As Schumann notes, dissatisfaction with this system of one-man management soon grew and many newspaper articles were written "cautiously" suggest-ing improvements or alternate methods. Perhaps most importantly, the 'whole' of the Chinese experience in the pre-49 years negated the basic assumption on which this system was built; that individual monetary stimuli was the best form of work incentive. 82 The organization of industrial enterprise in pre-revolutionary Russia was governed by a mix of feudal, pre-capitalist and modern notions. With the revolution the Russians looked to the West in search of a 'modern, scientific, rational work order 1. In 1916 Henri Fayol, perhaps the most famous theorist on 'scientific' management, had published his "five elements and 14 principles of management.!' There is every indication that the model the Russians borrowed from the West was deeply influenced by the work of Fayol and his contemporaries. A comparison of the "Five elements and..." with the system of enterprise management that the Chinese adopted from 1952 until 1956 reveal no major differences. From highly specialized job functions and 'one-man management' to the heavy emphasis on wage incentives, the two systems were practically identical. It is ironic that the system of management that Russia s t i l l employs and which the Chinese adopted for 4 years, was the best that the capitalist West could offer. It is ironic because there exist basic contradictions between the assumptions of this 'modern, scientific work order', and the basic tenets of Marxist thought that deal with the nature of human conscious-ness. While the Chinese experience in the pre-49 period had provided a model against which they measured and finally rejected the adopted system, i t did not provide a complete alternate model because the organiza-tion of large-scale industrial enterprises had no precedent in the pre-49 period. Chapter II, Section II. One-Man Management, 1952 - 1956 FCXXTNOTES Schurmann, Ideology & Organization, p. 243 2 Cited by Schurmann, Ibid. 3Ibid, p. 244. 4Ibid, pp. 245-246. Schurmann, "Vicissitudes", p. 7. Schurmann, Ideology & Organization, pp. 247-248. 7 Ibid, p. 253. 8Ibid, p. 254 9Ibid, p. 256 10Schurmann, "Vicissitudes", p. 11Schurmann, Ideology & Organization, p. 258. 12 Ibid, p. 267. 1 3 Schurmann, "Vicissitudes', pp. 7-8. 84 14 Charles Hoffman, Work Incentive Practises and Policies in the People's  Republic of China, 1953 -1965 (New York: State U. of N.Y.,1967) p. 14. 1 5Ibid, p. 82. Peter Schran, "Instituitional Continuity and Motivational Change: The Chinese Industrial Wages System, 1950 - 1973." Asian Survey, Vol. XIV, 11 (Nov. 1974) pp. 1016-1022. See also Charles Hoffman, The Chinese  Worker, (Albany: State U. of N.Y. Press, 1974) pp. 94-103. 17 Hoffman, Work Incentive, p. 19 18Schran, "Wages System", p. 1022. 1 9Ibid, 1023 20 Hoffman, Work Incentive, p. 23 2 1Ibid, p. 24 22Andors, "Modernization", p. 399. 23 . Hoffman, Work Incentive, p. 26. ?4 • Ibid, p. 28 25 Rensselaer W. Lee III, "Ideology and Technical Innovation in Chinese Industry, 1949 - 1971", Asian Survey Vol. XII, #8, p. 647. 2 6 I b i d 2 7Ibid, 651 28 Hoffman, Work Incentive, p. 32 85 Lai Jo-yu, "Report to the 6th Meeting of the 8th Session of the ACFTU Executive Committee", King Jen Jih Pao, March 11, 1955, p. 1. Cited by Lee, "Technical Innovation", p. 651. 30 Lee, "Technical Innovation", p. 651. 31 Hoffman, Work Incentives, p. 35 3 2Lbid, pp. 35-41 33 Hoffman, Work Incentives, p. 58 34 Schurmann, Ideology & Organization, p. 250. One-Man Management, 1952-1956. 86 Government Party 87 Section III: FACTORY-MAISIAGER RESPONSIBILITY UNDER THE LEADERSHIP OF THE PARTY COMMITTEE, 1956 - 1958 The Eighth Party Congress of September 1956 o f f i c i a l l y announced the end of one-man management. The new system to replace i t was called "factory-manager (director) responsibility under the leadership of the Party Committee." As a system i t was a hybrid combining both individual responsibility with collective Party leadership."'" L i Hsueh-feng, director of the Industry and Communications Work Department wrote, the Party "... had decided to put into effect the system whereby the director (or the manager) takes the responsibility of the enterprise under the leadership of the Party committee - that i s , a system of leadership which combines 2 collective leadership of the Party with individual responsibility." The announcement of the demise of one-man management was anti-climactic. Two months previously, an ar t i c l e had already appeared i n China's leading theoretical journal, the Jenmin jihpao describing the experiences of a factory i n Manchuria that had already abandoned one-man management i n favour of 'collective leadership by the Party Committee'. This a r t i c l e was of special significance because of the "close association 3 of one-man management and Manchuria." The system of one-man management had never been universally carried through i n China. There were a number of enterprises that had been under Party leadership since before 1949. It was to the experiments 88 of these units that the Party now turned in re-organizing the structure of enterprise administration. The system of management under collective leadership created 4 what Schurmann refers to as 'functional dualism'. That is , there now existed two separate command structures, two structures of authority. The factory manager was s t i l l responsible for 'operational adniinistration', but control of 'policy' was now passed from the manager into the hands 5 of the Party committee. Andors describes the role and duties of the Party committee as; ... communication of planned targets to the manager... assuming leadership in formulating the plans of the enterprise and communicating them to the next higher controlling authority ... deciding questions of capitol investment, construction, and personnel assignments within the factory ... (and) responsib(ility) for politics, eg., ensuring that management actively contributed toward the realization of revolutionary goals. The basic criticisms of one-man management had been that many directors had ignored the policy of mass line and had disregarded sug-gestions and criticisms of the workers. In the new system this was to be improved. Managers were compelled to accept criticism from below and the whole process of criticism and self-criticism was to be strengthened. It was the beginning of the new approach of 'politics in command'. In the new system under collective leadership, the former unity of 'policy' and 'operations' under the sole leadership of the manager was changed. A l l policy decisions were now to be made by a 89 collective decision of the Party committee. The Party (committee also had the responsibility of maintaining close contact with the workers and soliciting their opinions and suggestions on a l l aspects of production. Operational decisions, on the other hand, were s t i l l to be made by the manager. In this way a division between policy and operation was clearly made. However, as they were soon to discover i t was often difficult to 7 distinguish between these two and conflicts began to arise. This, however, was by no means the only change that took placef More than just a change in upper-level management, i t represented a whole new approach to relations within the enterprise. As Schurmann writes; If the change represented a shift from individualism to collectivism, i t also reflected a swing from "centralism" to "democracy." "Democracy" meant not only that the Cadres must now move into the front line of production but that information from below was to flow up faster than be-fore. "Democracy" meant more meetings, more talks, more shangliang. So during this period two basic shifts took place; a lateral shift from individual to collective management, and a vertical shift or de-centralization of decision making power. Under the new system not only were the workers more consistently encouraged to participate, but control was generally de-centralized from higher level cadres to lower level ones. The period from 1954 to 1956 was one in which changes were occur-ring rapidly in a l l sectors of the economy. The political unity of the 90 Party achieved in 1954 made a great number of changes possible. In 1955 plans were drafted for agricultural collectivization to be carried out in the following year. A new campaign was also launched to speed up completion of the F.F.Y.P. By 1956, almost a l l of the remaining private industry had come into the public sector. The theme of "attacking production" appeared and everywhere changes were occurring at a rapid rate. However, in early 1956, the rapid industrialization and col-lectivization was called to an abrupt halt and China entered a period of consolidation. This period, often associated with Mao's famous 'hundred flowers' speech brought about a general loosening of Party 'reigns'. The "Let a Hundred Flowers Bloom and a Hundred Schools of Thought Contend" speech opened up the path for free discussion and criticism of government and Party. Party control of many organizations was loosened; one such organization was the A l l China Federation of Trade Unions (ACFTU) which 9 since 1952 had had the scope of its activities sharply curtailed. In May of 1957, however, the system of workers representative congresses was reinstituted. Drawn up by Lai Jo-yu, Chairman of the ACFTU and successor to the purged Li Li-san, this system was reintroduced by an article in the People's Daily entitled, "Gradually Introduce the System of Workers' Congresses in State Cwned Enterprises.""'"^ "Workers representative congresses" (Kung-jen tai-piao ta-hui) were to be elected by the workers, meet regularly, and make proposals and decisions that would be carried out by the enterprises' already existing trade union committee between congresses. Managers would be required to report to the congresses, which would have the right to criticize and make proposals on production plan. Fur-ther ... the congresses "would have powers to decide matters 91 concerning the workers interest and benefits as to the use of factory bonuses and state appropriation for labour safety. The congresses could also resort to appealing to superior levels of management to veto decisions or appoint or dismiss factory 12 officials. These congresses were merged with the basic level trade union to eliminate the possibility of jurisdictional disputes. M l workers' participation through trade union activity was to be carried on under these congresses. The new freedoms of special interest groups to dissent and work openly against the Party amazed many Party members. The 'intel-lectuals' in particular now openly worked at toppling Party authority. The unions, while being staunch Party defenders against the attacks of the intellectuals, were trending more and more towards 'economism'. That is, moire and more, unions were working for the special interests of the workers; for wage reform and for greater union autonomy from Party control. These general trends led to a new campaign against these groups that the Party felt were misusing the new freedoms. Following the Anti-Rightist Campaign of June 1957 and its attack on 'economism', the use of union 'workers congresses' as a vehicle of workers' partici-pation was once again curtailed. The unions were placed under tighter Party committee control, and again became more closely involved in "aid (ing) production and support (ing) the administration.!,' While the formal powers of the workers congresses remained the same until the 92 Cultural Revolution, they played only a small role as an avenue of workers' participation in management. More and more, participation in management was to take place on the production level through collective 13 decision making. By 1958 the Party had developed a hybrid system of 'factory-manager responsibility under the leadership of the Party corimittee'. This system combined individual responsibility with collective Party leadership. Under the previous system the 'one-man manager1 had control of both policy and operations, a situation that left the Party virtually powerless in trying to achieve political goals. Under the new system the representative of the Party, the Party committee, now took over the role of policymaker leaving the manager control over operations. This created a system of 'functional dualism' whereby commands now came from two sources. In taking over the reins of policy, the Party committee now shifted towards a collective approach to decision making. Discussions between workers and managers were now more frequent and taken more seriously. Cadres were likewise compelled to participate in labour more frequently and more seriously. While the system of individual responsi-b i l i t y was maintained, the emphasis on piece-wages and material bonuses was removed, and once more collective decision making was taking place. More and more, workers' participation in management was taking place through collective decision making on the production level, and less and less through 'workers congresses'. 93 Chapter II, Section III Factory-Manager Responsibility Under The Leadership of the Party Committee, 1956 - 1958 FOOTNOTES Schurmann, Ideology &^  Organization, p. 285. 2 Harper, "Workers' Participation," pp. 124-125. • 3Schurmann, Ideology & Organization, p. 285 4Ibid, p. 292. 0For a definition of the use of the two terms 'operations' and 'policy' see Chapter II, Section I. 6Andors, "Modernization," p. 402. 7 Schurmann, Ideology & Organization, p. 402. 8Ibid, p. 291. 9Ibid, p. 284. 10Harper, "Workers' Participation", p. 126-131. i : LCited by Ibid. Ibid 1 3Ibid, p. 130. 94 Factory-Manager Responsibility under the Leadership of the Party Committee, 1956 - 1958 C^ernment Management Operations -avenue of workers' participation in management Party Party Committee <^""~~1 Union _Committee Workers Policy 95 Section IV: THE GREAT LEAP FORWARD 1958 - 1960 Up until 1957, western-trained economists had given their approval implicitly, i f not explicitly, to China's strategy of economic development."'" However, with the Great Leap Forward (G.L.F.) that approval vanished. The G.L.F. was a campaign cross-cutting a l l sectors of the economy designed to increase agricultural and industrial production. In the agricultural sector, the means toward increased production was the 'cammunization' of the existing co-operatives. These new 'communes' ranged in size from 5,000 to 100,000 people and were not just new units of agricultural production, but governmental units as well, responsible for education, defense and health. The policy throughout China during the G.L.F. was the policy of "walking on two legs," which meant "... the sinnultaneous development of medium, small and large industry, and the 2 simultaneous use of indigenous techniques and modern methods." The communization of the rural co-operatives was designed to facilitate the tapping of easily mined minerals and encourage the growth of small and medium-size industry within the corrmune and without large scale labour transfers to the urban areas. In the large-industry sector of the economy, radical changes were being made in the organization of production. The Great Leap Forward's conception of management was an extension of the 'management 96 under collective leadership' concept of 1956 and 1957 and an almost com-plete turn-about from the 'one-man management' of 1953 to 1955. If one-man management had seen the implementation of 'production in command' the Great Leap Forward's conception of management had swung f u l l way to 'politics in command', Mao Tse-tung's slogan epitomizing this conception was "Concentration Of The Great Authority, and Dispersion of The Small Authority" or "Concentrated Leadership and Divided Management." During the period of 'management under collective leadership' the avenue of workers participation had been through workers' congresses under the leadership of the Party committee. During the G.L.F. the avenue of workers participation was radically changed to direct participation in 3 collective decision making on the production team level. One of the features of the bureaucratic division of labour within operational adnunistration is the distinct status separation be-tween productive and administrative roles. Those involved with admini-stration s i t behind desks in offices doing mental work while those out in the work areas do manual work. During the G.L.F. this status distinc-tion which had been very strong in traditional China was seen as a major obstacle to political and motivational change. Breaking down these distinctions was seen as an important means of generating the participation of cadres in the productive process and of workers in the administrative 4 processes, together conceptualized in the term, "two participations." Under the old system cadres had been encouraged through their leadership of basic level production units to participate in production and gain a first-hand knowledge of production problems, while at the same time involving the workers in administrative and managerial duties. 97 However, since very l i t t l e real authority was de-centralized to workers' control, this system only led to the workers' increased suspicion and resentment. Cadres sent down to the production level to labour were suspected of being company spies and were resented because they saw the labour of the cadres as usurping their potential bonuses for quota over-fulfillment.. The systems of individual responsibility and individual material incentives did not lend themselves to the collective participation of cadres and workers. On the other hand, attempts at eliciting workers' participation in decision making were equally suspect because workers' decision making had existed previously in l i t t l e more than name only. The bodies to make decisions had been set up, but the power to do so had not. To rectify these problems the system that evolved during the Great Leap Forward was called the "two participations, one reform, and triple combination," or "two-one-three" system. Andors describes its meaning: The two-one-three system meant that Cadres would participate in manual labour and that workers would participate in ad-ministrative and technical management. Rules and regulations incanpatible with these "two participations" would be re-formed or eliminated and workers, technicians and admini-strative cadres, would form "triple combination teams" for purposes of control, technical innovations and reforms, and other decisions connected with factory operations. This new system "... was designed to reduce the difference in lifestyle and educational level among people in the factory to strengthen the capabilities of the basic level units and cadres in the performance of their duties."' 98 I have mentioned previously that one of the problems of management under collective leadership had been the difficulty and hence conflicts that arose in separating operations from policy. During the Great Leap Forward i t was recognized that politics was integral to both and hence led to their unification under Party leadership. The system of "factory manager responsibility under the leadership of the Party committee" was maintained to assure stabi-lized de-centralization. The Party, through the Party committee, was to act as the oo-ordinating and policy-making body while the manager was s t i l l to have control of operational matters. Effectively, however, once power had been de-centralized the leadership of the Party over operational matters became increasingly strengthened as the tasks of the 9 basic-level cadres increased. The means of de-centralizing control during the G.L.F. was largely by eliminating the middle ranks of the organizational structure. As D.J. Waller points out, a Chinese factory can be viewed as a; ... three-tier structure. The top level is the Party committee in charge of the enterprise. In the middle are the bureaucrats, the economic managers and administrators; and at the bottom, the workers.10 Within the middle level two distinct groups can be found. One group which Waller calls the 'staff men' work out operational details. As a group they are generally well educated and have a high degree of theoretical expertise. The other group the 'line men' are composed of those cadres who head the various shops or units and are responsible for 99 carrying out operational work. As a group they originated from a different social strata (many were promoted workers) and derived their prestige not from their education but from their 'political power'Between these two groups, and arising from the above factors, staff-line conflicts have developed. Staff-line conflicts within middle management are also 12 well known to western industrial sociologists. During the G.L.F. the resolution of the question "red or expert" strongly favoured the 'revo-lutionary' line cadres. Consequently, many staff cadres were sent down to the production line. Their former duties were now to be carried out by workers, technicians and cadres organized into "triple combination" teams. Once the Party committee had made its decisions on the production targets the production teams were responsible for carrying them out through whatever means they could devise. There was l i t t l e concern over operational details. Blueprints, in some cases, were reduced to just a "few lines." Planning and balance sheets went from 150 pages to a 13 single page. Production teams were responsible for "... f juiding con-struction materials, making their own tools, and doing their own accounting. Since there was l i t t l e left for managers and technicians to do they were 14 sent down to the production floor to labour alongside the workers." Previously the higher authorities had sent down twelve mandatory planned targets to each enterprise. During the Great Leap Forward this was reduced to just four; "... total quality of output, total wage b i l l , total number of employees and profits." In effect i t gave the enterprise tremendous leeway in determining "quality, labour utilization, cost reduction, experimental manufactures and total value of output," which were handed down as suggestive, not mandatory, quidelines. 1 5 100 This system of "two participations, one reform, and triple combination" was in widespread use throughout China by October of 1959. However, before its implementation could be carried out a new system of work incentives had to be implemented. The existing remuneration policy was in basic conflict with the new system. As noted previously, cadres working on the production line were resented by the workers because they were usurping their potential bonus pay for overfulfillment of production quotas. Thus the systems of piece wages and 'two participations' were in basic contradiction. As well, the 'triple combination' system was to involve the workers in planning the norms and quotas and inspecting their own products; thus creating another conflict of interest situation. The solution to these problems came in the rolling back and de-emphasis of material rewards; especially piece work and bonus payments which went from between 6-12% to a maximum of 5% of the total wages bill."*"^ In place of these, a new system of non-material incentives was to be worked out. This decision reflected a basic change in the Party's outlook that was being manifested in a l l aspects of society throughout this period. From the philosophy of 'production in command', which even i f by default had been operational from 1951 through 1956, the Party now unambiguously followed the course of 'politics in command'. The f i r s t priority of factory organization was now the attainment of revo-lutionary goals. In the work-place, this meant the elimination of alienation in the work process. And as Andors states, "... i f participa-tion was not possible, then how were workers eventually to overcome the 17 alienation that developed in the process of mass production?" 101 While many of the forms of non-material incentives had been evolving since 1953 i t was not until the latter half of that decade, and especially during the Great Leap Forward period, that these incentives came into their position as a dominant force of worker motivation. Their goal was to make material rewards less essential by encouraging the effort of the workers through political, ideological and moral sub-stitutes. The crucial factor in making this type of work incentive effective was, of course, the workers' 'outlook'. As Hoffman states; The success of most non-material incentives thus depends on the participant's outlook - how "patriotic" he i s , how much he seeks the social esteem attached to honourary awards, how strongly he identifies with the group as i t strains for greater achievement, how much he wishes to avoid low status in the eyes of his peers ... Thus non-material incentives may not work effectively unless they are accompanied by effective political indoctrination and education...aimed at heightening personal awareness, (and) putting a particular campaign or drive in proper perspective ... 1 8 The implementation of non-material incentives was carried out in two basic ways: Firstly, through political education stressing the role of the individual in collective action, emulation drives, the selection of model workers, individual and collective competitions as well as the rewards of "participating in the management of one's own 19 unit;" and secondly, by the readjustment of norms and quotas to com-plement the emulation drives and co-operative competitions. The 102 increasing use of non-material incentives during this period warrants a closer look at some of their forms. Hoffman suggests that non-material incentives can be divided into two basic types; one, an individual or group motive based on com-20 petition; and two, an individual or group motive based on co-operation. Individual competitions have generally been linked to production per-formance. Those selected were awarded titles of "labour hero/" "model," "advanced" or "outstanding" worker, in that order depending on their feats. As receivers of such rewards, they often attended special con-ferences as representatives, were received by high Party officials, or 21 given other special privileges, etc. The rewards were generally either titular, status or honourary with few of any material value. However, very often they did open up opportunities for social, educational and political advancement. The publicity surrounding the various campaigns was an important aspect. Hoffman gives an example of one lathe turner, Wei Ue-Hai, who was given wide publicity in his attempts to complete his yearly production quota in just six months. The publicity given him Hoffman suggests "... took on the earmarks of a vital struggle of man to break through a long 22 standing hurdle - like overcoming the four-minute mile barrier." Another example that Hoffman gives was an emulation contest in a steel mill. Competing on the basis of six work criteria the workers selected were appropriately called "six-good-workers." Each day each worker who met a l l the six criteria was given a red flag. At the end of the month those who had accumulated twenty-five flags or more were given the honourary t i t l e of "Standard Bearing Six Good Soldiers," those with 103 twenty to twenty-four flags were titled "Red Standard Bearers" and those with fifteen to nineteen flags were entitled "Reserve Red Standard 23 Bearers." Barry Richman visited a factory in 1966 that was awarding the t i t l e of "Five Good Worker." The criterion of awards in this particular case, as in most 24 earlier ones, were these: (1.) Competence in his job and in performing his tasks. (2.) Attitude of co-operation. (3.) Political study and overall correct ideological attitude. (4.) Regular study and self-improvement. (5.) Observance of regulations pertaining to attendance. Group competitions have utilized many of the same forms but between production teams or between enterprises of the same size and type. They are based on; ... challenging another unit to a production contest, attempting to surpass the unit's previous record, trying to exceed a quota, and working with a backward unit to 25 raise its levels of performance. Again the competitions were well publicized, often providing a 'running commentary' on the details of the contest; who was ahead, how close each competitor was to fu l f i l l i n g the unit's quotas, problems encountered, etc.. 104 Hoffman gives us an example of an "emulation battle" between train units in 1959. In this contest there were five different hierarchi-cal levels, each with a different dragon name. The top 'Great Dragon' award was given to the crew of each train that "completed scheduled runs on a l l five days; attained a specific speed index; safety and economy record clear; (and) reached a l l intermediate stations one minute ahead of schedule." The next 'Large Dragon' award went to those units that met the above standards for a single round trip. The 'Medium Dragon' award was awarded for a one-way trip. The 'Red Dragon' was for shunting and boosters engines on locomotives or on short runs whose work was "marked with good co-operation." The last award, the 'Wind Dragon' applied to passenger trains that were safe, punctual, and smooth. The most successful and spectacular examples of non-material incentives have been in the mass mobilization of people in building roads, dams, irrigation, and land reclaimation projects. The Chinese believe that this form of incentive more closely embodies the spirit of Communist man. Their ability to mobilize large groups of voluntary labour over a sustained period is a perfect example of the successful use of non-material incentives. Felix Greene, author of Awakened China, believes that the Chinese in this respect have made a social-psychological break-through. Hoffmann suggests that the Chinese motivational itethods have been substantiated by contemporary western social-psychological theory. The manner in which co-operative incentives appear to be structured i s not inconsistent with what contemporary social-psychological theory prescribes for increasing psychic productivity. The effective operation of certain types of group decision making, criticisms (confessional) and goal-oriented mass movements is 105 predicated on fundamental psychological needs being met. The individual's needs for affection, for a sense of being included in important affairs, for feeling some control or influence over events which shape his l i f e may be positively carried out through some or a l l 27 of these co-operative incentives. Hoffmann gives us a general idea of how this has been carried out on some of the massive water projects that have been undertaken. In the organization of such projects the usual material incentive has to be de-emphasized and the enthusiasm of large numbers of peasants aroused through political in-doctrination, mass discussion of the needs and effects of water conservancy on the group and its neighbours, an 28 identification of everyonels interests with the project. The mechanics of this type of mobilization, political education, identification of the individual with the group and the basic mass control of the activity are also the basic motivational tenets of in-dustrial non-material incentive systems. One such industrial movement, the "evaluate-rectify work-style" (Cheng-tun tso-feng) involved the evaluation and self-evaluation of work styles and techniques. It functioned co-operatively with ' c r i t i -cism, self-criticism' meetings held to discuss and rectify problems. In this way the problem of work discipline was handled co-operatively and 29 not by administrative sanctions. The use of group decision making, especially during the Great Leap Forward where workers participated in both policy and operational decisions was a key aspect of non-material incentives. The Party committee which since 1956 had been set up to 106 make policy decisions, was comprised of Party members within the factory and included workers, technicians, engineers and administrative cadres. The production teams at a l l levels in the factory that had assumed operational control in the Great Leap Forward were comprised of workers, technicians and cadres who made collective decisions about operational work. Together their positive influence in motivating workers, while i t can't be quantified, must have been significant. It reflects a recogni-tion on the part of the Party that the attainment of political goals in the factories must be based on real changes in the production process. The individual worker's desire to work other than for maximizing personal ends must be based on a real appreciation of the importance of his role in the production process. The ability to utilize non-material incentives resulted not from just political indocrination, but primarily from changes in the structure of enterprise management. During the G.L.F. managers became workers and workers became managers, and on the produc-tion level, cadres, technicians and workers combined to form "triple combination" teams to make most of the decisions concerning 'operations'. The Great Leap Forward was the most extreme form of 'politics in command1 that the Chinese ever experimented with. The new approach to management was sloganized, "two participations, one reform and triple combination•" What i t meant was that firstly, workers would participate in management and cadres would participate in labour; secondly, that a l l necessary reforms were made so that this was possible; and thirdly, on the production level, cadres, workers and technicians would form '3 in 1' teams to make collective operations decisions. Thusly, with the 107 Party committee now having unified control of operations and policy and the '3 in 1" teams running the day-to-day operations, the need for the iniddle-management was sharply reduced. The excess cadres now found themselves 'sent down' to the production level to engage in a more participatory style of leadership. Their duties were now taken over by groups of workers, in some cases whether qualified or not. Consequently, the vestiges of the piece-wage system had to be eliminated, lest the workers be placed in a situation where they both set and supervised their own norms and quotas. 'Two participations' also meant that job distinctions were becoming less clearly defined and hence, the wage differentials were becoming increasingly meaningless. Indeed, during the G.L.F. wage differentials were reduced. The emphasis on collective decision making was also accompanied by an increase in political education in the factory and an increase in the importance of non-material incentives. New individual, group, competitive and collective rewards were offered to stimulate worker motivation in the absence of material bonuses. But perhaps most im-portant of a l l was the intrinsic satisfaction of self-management within a collective community of workers. 108 Chapter II, Section IV The Great Leap Forward, 1958 - 1960. FOOTNOTES and McFarlane, Road to Socialism,, p. 43. Schurmann, Ideology &^  Organization, p. 293. Widors, Modernization, p. 401. Andors, Decentralization, pp. 435-436. Andors, Modernization, p. 406. Widors, Decentralization, p. 435 Andors, Modernization, p. 405. "°Waller, "Red or Expert?", p. 127. 3, 5Ibid, p. 403 6. 11. Ibid See for eg. M. Dalton, "Conflicts Between Staff and Line Managers," in Industrial Man, Tom Burns, ed., 1969, pp. 265-280. 109 13 Schuritiarin, Ideology &^  Organization, p. 295. Ibid. 15 7Andbrs, Modernization, p. 398. 16Schran, "Industrial Wage(s) Systems," p. 1025. 17 Andors, Modernization, p. 408. 18 Hoffman, Work Incentive, p. 61. 19 Andors, Modernization, p. 408 - 409. 20 Hoffman, Work Incentive," p. 61. Ibid. 22 Ibid, p. 64 2 3Ibid, p. 64-65. 24 Richman, Industrial Society, p. 815. 25 Hoffman, Work Incentive, p. 67. Ibid. 2 7Lbid, p. 70. 2 8Ibid, p. 71. 29 Ibid, p. 72. 110 The Great Leap Forward, 1958 - 1960. Government Party ittee I l l Section V: AFTERMATH OF THE GREAT LEAP FORWARD, 1960 - 1963 Many writers have concluded that the Great Leap Forward was an unmitigated disaster born out of sheer "madness." Many others do not agree. On this question I do not intend to comment other than to quote what Andors has to say. ... to emphasis "madness" in the Great Leap is really to miss the point. For the Great Leap as a whole wasn't madness, even i f parts of i t were; rather, i t was revolutionary, motivated as much by an assessment of the present as by a vision of the future. If some assess-ments proved wrong, there is ample evidence that many were effective in developing a strategy to radically change the future."*" Many of the experiments of the Great Leap Forward created imbalances that needed to be rectified. The importance of technical and co-ordinating roles had been underestimated and organizational breakdowns had occurred. As well, too great a stress on political incentives had "led to workers fatigue and the breakdown of machinery, or to disinterest 2 and absenteeism." The problems associated with the G.L.F. were centered in three areas; severe natural disasters, organizational problems of the new rural communes and organizational problems within the factories com-pounded by the total withdrawal of Soviet aid. 112 In the middle of the summer of 1960, the Soviet Union voiced its disapproval of China's organizational experimentation in the strongest possible terms; by totally withdrawing a l l aid. The suddenness of Russia's decision created severe problems. 150 enterprises had been under construction and now a l l of these projects came to an abrupt halt. The technicians, materials and even the construction blueprints were withdrawn. The crisis precipitated by this led to sharp ideological-planning questions which were ultimately resolved in favour of strengthen-ing the policy of 'self-sufficiency and self-reliance 1. The disappoint-ments of the G.L.F. did not lead to a retrenchment of the policy of 'walking on two legs', but rather led its strengthening. The systems of 'two participations, one reform and triple combination' and the functional dualism of factory manager respons-i b i l i t y under the Party coninittee, had by 1960 been firmly established 3 as the general policy of industrial organization. However, modifi-cations had to be made to foster better overall co-ordination of the enterprise. To bring this about, the change was not back to one-management but rather, to increasing Party control through the Party committee. The experiences of the Great Leap Forward had not negated Party control, but rather had intensified i t . This policy became of f i c i a l at the Ninth Plenum of the Eighth Central Committee (January 1961). However, i t also became obvious that the Party itself was divided over a number of basic issues. One such issue that divided the Party was centered on the role of profits. This problem was not just a question of operations or policy, but a question of politics. It was felt by many that profit 113 could be used as the major target of the enterprise, "... for achieving economic integration and to have a motive force for managerial decision 4 making." Others felt that while profit could be used to guarantee 5 "efficiency, variety, quality and quantity," i t was necessary to combine them with other targets. The needs of other units and consumers determined by market surveys and communicated as part of the planning process should also be taken into consideration. The rationale of those who advocated the former position was that profit was a self-regulating mechanism that took a l l of the above into consideration. However, this position ultimately threatened the very existence of the 'planned economy' because fixed prices could not fluctuate to reflect consumer needs or choices. Rather the prices only reflected the choice of the planning authorities. The profit mechanism could not function effectively until the system of fixed prices was abolished and with i t ultimately, the planned economy. Hence, i t was not just a policy decision, but a p o l i t i -cal one, a question of 'two roads.' In short, the pursuit of profit as the major goal of the enterprise carried with i t the need to create a mark-et mechanism to obtain price flexibility and reliance on a market mechanism means that overall economic coordina-tion and integration are decided by individuals or groups on the basis of their own interests ... Thus, the mark-et system stands in direct opposition to planning which sees collective interests as primary and as the basis 7 of individual choice. This question would ultimately have to wait until the Cultural Revolution before being resolved. 114 worker participation in management was s t i l l a firmly established principal; however, because of the economic dislocation arising out of the G.L.F. new arrangements were needed to nationalize and coordinate their efforts. During the G.L.F. production team leaders had been given increased responsibility and power to organize and coordinate the vari-ous production and managerial functions. The individual tasks of "ac-counting, planning of operations, distribution, inspection, repair and Q maintenance,... (had been) assigned to the production team. " Con-sequently, the power of the lower-level cadres had increased vis-a-vis higher level cadres. However, from 1961 to 1963 the increasing rationalization of the production and managerial processes began "undermining* the system of 'two participations, one reform and triple combination.' Lower-level control of accounting gave way to a system of 'three-level accounting' that placed stricter controls on the team leader. Lower-level power was replaced with an increasing emphasis on the co-ordinating functions of the middle level, especially those units dealing with wages, inspection, repair and maintenance. On the question of technical matters, the 'triple combination' was de-emphasized and replaced with tighter control from the middle and upper levels, again increasing the power of those 9 cadres vis-a-vis lower-level cadres. As a result of the rationalizations and the centralization of decision-making powers, the avenues of worker's participation shifted from direct self-management on the production level to, once more, 115 participation in 'worker's congresses' on the factory level. By October, 1961, " ... the workers' representative conference..(was).. an important system for promoting democracy within an enterprise and for encouraging the worker masses to participate in enterprise management and admini-strative supervision.""'"^ The powers of these congresses were the same as they were during the earlier period. These were: the power to "listen to and discuss" the work of the factory manager, to "investigate and discuss" enterprise bonus and reward system, welfare and labour insurance programes and, providing direct-ives of higher organs were not contravened, to "make decisions" about expenditures on these items."1""'" This general transformation of the avenue of workers participa-tion meant in effect that both the degree and frequency of participation 12 declined. There were fewer avenues of workers' participation, and work again was dictated by directives descending down the enterprise hierarchy. Hence, a heavier emphasis was applied to material incentives to compensate for the lack of worker's enthusiasm that the non-material 13 incentives of the Great Leap Forward had been tapping. However, stress was placed on collective piece-work incentives as opposed to "bourgeois" individual piece work, and the system of material incentives 14 was never redeveloped to its f u l l extent. By 1961, as Richman states, a "... renewed emphasis on piece rates, became quite widespread, and by the end of 1961 the use of material incentives in industry was in f u l l swing. The overwhelming majority of enterprises were under a system of some type of piece rate 116 or hourly wage, plus reward; the straight hourly wage without possibility of an added bonus was seldom used. Refinements were made, however, so that, in many cases where feasible, wages were based on team rather than 15 individual piece rates." Up until 1963 this created a system of "political ambiguity'*""'"^  Factory organization was based on a three-level, (upper, middle and lower) hierarchial system, functionally divided (functional dualism) by a clear distinction between policy and operational control. Yet while the Party had effective control over both policy and operations, the primacy of politics as formulated in the concept of "two participations and triple combinations" had been compromised. What the Party now seemed to realize, and beginning in 1963 acted upon, was that policy and operations could not be administratively divided without compromising political goals. 117 Chapter II: Section V Aftermath of the Great Leap Forward, 1960-1963 FCIOTNOTES Andors, Modernization, p. 400. 2Ibid. 3Ibid, p. 410. 4Lbid, p. 412. 5Ibid. 6Ibid, p. 412. 7Ibid, p. 414. g Ibid, p. 415. 9 "Ibid, p. 416 10Stephen Andors. "Factory Management and Political Ambiguity, 1961-63." GQ, 59 (July/Sept.1974), p. 457. Ibid. 118 1 2Tbid 13Schran, "Industrial Wages System," p. 1026. 14 Ibid, and Andors, "Decentralization", p. 458. 15Richman, Industrial Society, p. 316. Andors, "Political Ambiguity." Aftermath of the G.L.F., 1960 - 1963 Government Management Party Party Cfammittee^^^i 0 1 1 Committee Operations^ _ 'Workers Policy of f i c i a l avenue of workers' participation in management: but of reduced significance. 120 Section VT: THE PRELUDE TO REVOLUTION, 1963 - 1966 In June of 1963 editorials began appearing advocating the revitalization of functional dualism. The three main approaches were firstly and secondly, increased cadre participation in labour and in-creased basic level participation in management,1 and thirdly, increased weight on political education carried out through the "Socialist Edu-cation Campaign" of that year. As in the Great Leap Forward the "... key to enterprise management was a direct link between the basic levels and the factory 2 level." The result of the renewed attempts at uniting top and bottom through cadre participation in labour and worker participation in manage-ment was the increasing alienation of middle-level cadres. The basic level cadres were not just increasing their power vis-a-vis the middle levels, but the actively productive cadre whose new status and prestige related largely to his ability to inspire and lead was becoming the new 'model' to be emulated. Less and less did he rest on the authority of his position or the status of his qualifications. Thus, both an organi-zational and an 'attitudinal' split arose. The basic level line cadres were once again challenging the 'vested interests' of the middle level staff cadres through a shift of power. But as well, there was a renewed emphasis on changing the basic concepts of status and prestige which had 3 been defined in terms of job, salary, t i t l e , dress and speech. These 121 organizational and attitudinal contradictions which Andors states had become quite clear by the Spring of 1964 were to later resurface during the Cultural Revolution in open conflict. Pre-Cultural Revolution attempts to re-organize the factory were taken through various modifications of the existing system of func-tional dualism. The two main approaches both utilized forces outside of the Party. The f i r s t was the "... establishment of political works departments ... to parallel the Party's organizational structure in th(is) field down to the enterprise level." The second " involved a mass, national-wide campaign to "learn from the People's Liberation Army; to learn essentially how the P.L.A. in its everyday routine com-4 bined politics, economics and technology." Yet both of these changes were attempting to function within a strict organizational hierarchy. In other words, there was a contradiction between the existing organi-zational structure and the political and revolutionary goals. While cadres were encouraged to participate in labour the practical methods and measures to institute i t were lacking. Industry was s t i l l "... characterized by production continuity, fixed production posts, complex 5 techniques, strict management, and other features." Two years prior to the Cultural Revolution, these conflicts had been partially resolved and again China saw the re-emphasis of "two participations and triple combination." Cadres were to spend a fixed amount of time on the production level and workers were to be re-involved in management. As well, on the production level, the use of collective 122 operational decision making with workers, cadres and technicians forming teams was given new emphasis. The best source of information on this period is Barry Richman's book, Industrial Society in Ccmmunist China, written from data collected on a tour of 38 factories in 1966. It would be useful to look at some of his findings for this period. Cn a l l levels, this period saw a basic decentralization of control. The top authority in the factory would receive certain directives from the state such as what variety of products are needed, how much is needed and where they should be sent. These directives were then com-municated down the line to the various levels involved. Once the directive had been sent down, however, there was l i t t l e or no involvement with the operations of production. "... higher-level Chinese executives ... were not generally inclined to seriously undermine or usurp the authority of lower-level managers who were typically permitted to direct their operations within the limits set by the plan and the firms' basic organi-zational structure.^ Instead, the top management typically spent its time on "broad planning and control, major problems involving resources, informal com-7 munication and other managerial and administrative activities ..." By 1966, upper-level managers, party executives and chair people, etc., had to work from lh to 2 days a week at the production level. Lower-level managers and line staff had to work on the average of 3 days a week. 123 In 1966, the range of wages over thirty-eight enterprises surveyed by Richman, was from 30 yuan to 400 yuan per month. The actual wage level of the individual was determined by many factors such as regional economic differences and the type of job and level of s k i l l required. Generally, the lowest paid were unskilled workers, both manual and clerical. Salaries were increased commensurate with experience. New graduates had to spend at least several years working before being en-titled to more pay. At the majority of enterprises surveyed by Richman, the ratio between top pay and average pay was less than 2.5 to 1. In his entire sample, the highest paid employee was seven times as high as the lowest paid worker; 210 yuan versus 30. ... income differentials in Communist Chinese industry, and in other sectors as well, are probably significantly smaller than any other country in the world (...) This i s an amazingly small differential compared with what would be probably found in a roughly similar sample of firms in g virtually any other country. . : Wage distribution was also of significance by the fact workers were the top paid employees at eight enterprises and shared the slot at two. The director alone was the top paid at only two in the thirty-eight enterprises. On the average the director's salary over the workers' 9 salary was only two to one. At least equally unusual was that workers were the top-paid employees. (...) In no case was, or is a worker the highest paid person in any of the Indian, Soviet or U.S. firms or factories that I know about. And in virtually a l l cases the top level enterprise executives in these countries are the highest paid employees."1"0 124 Wage scales and distribution were clearly being used as a vehicle of social change. The breaking down of the traditional wage structure and its inherent implications of status and prestige were necessary to break-ing down class distinctions and generating mass participation. However, differential wages were s t i l l used as a form of recruitment to high-s k i l l or authority jobs. The role of bonus payments to managers and workers alike had been reduced or eliminated. Previously, bonuses went to managers who could show a profit or meet production targets, or to workers who were innovative or especially diligent. At a l l of the firms surveyed by Richman, none of the top-level executives could receive bonus payments. In most, no one could receive bonuses, while in the enterprises where one could get a bonus i t was never related to attainment of production targets. 1 1 To replace their declining use, they made more extensive use of non-material incentives, of which a great deal depended on mass participation in, "... special campaigns, slogans, wall posters, motiva-tional sessions, discussion and the awarding of titles such as 'model-worker' and 'five-good-worker1." Yet by the end of 1964 i t had become obvious that the Party had openly split into two camps divided on a number of issues. The issues a l l centered around the forms that modernization should take. One approach associated with Liu Shoa-Chi, called for the creation of a market-type economy that would be self-regulatory. Profit would be used as the primary motive of the enterprise in decision making. To complement i t , there would be an increasing division of responsibilities in an hierarchical system of individual decision making. The middle 125 level control functions of accounting, inspection, repair, and maintenance would play increasing importance. Conversely, basic team participation in managing their own affairs, meeting targets and technical norms, and inspection and supervising work assignments, discipline and attendance would be de-emphasized. As a result of the lessening participation of cadres in productive labour, the former status and prestige differences would be allowed to reappear as well as a widening of wage differentials. And as a result of the lessening participation of workers in management, non-material incentives would increasingly be replaced with material incentives. "*"2 The other position, one that Mao himself supported, was fundamentally opposed to this approach. Economic co-ordination was to be achieved through the use of production contracts and based on the primary criteria of service and consumer needs, not on the auto-regulatory mechanism of profit, and secondarily on the criteria of cost and efficiency. The dispersion of authority would lead to basic level control over most of i t s activities. Cadre participation in labour and worker partici-pation in management would be key aspects of this approach to reduce the former status and prestige difference and ultimately the gap between mental and manual labour. Material incentives would be used secondarily to non-material incentives, primarily based on the worker's participation 13 in the direction of his own Life. In short, the Party was divided in a most fundamental way. It was not just a question of policy or operations, but one of the direction of the whole revolution itself. This period was characterized by a swing back to the priorities established during the Great Leap Forward. This was effected through the revitalization of functional dualism. New 'political works departments' 126 were established which paralleled the Party's organizational structure. This new department attempted to institute political change while s t i l l maintaining a separation between the structures of operational and policy control. These changes concerned the concepts of status and prestige within the hierarchy. Yet while the '2-1-3' system was officially encouraged the organization of the factory was s t i l l characterized by production continuity, fixed production posts, complex techniques and strict management. Conflicts of interest existed within the factory structure between the political goals of the Party and the established interests of the upper and middle-level cadres. The political goals of the Party could never be achieved as long as the managerial elites main-tained control over operations. While the Party could exhort cadres to labour on the production line and institute collective decision making, i t had no method of effecting actual concrete changes. And without these changes, political goals could not be realized. Nevertheless the 'two participations, one reform and triple combination' once more became the avenue of worker's participation, 'worker's congresses' having again been limited to education and 'pro-, mbting production!. . Piece wages were almost entirely eliminated by 1966 and non-material incentives were once again being used extensively. 127 Chapter II Section VI The Prelude to Revolution, 1963 - 1966 FOOTNOTES Andors, Modernization, p. 419. 2Ibid, p. 420. 3Ibid, p. 421. 4Ibid, p. 422. 5Ibid, p. 423. 6Richman, 1969, op. c i t . , p. 767. 7Ibid. 8Ibid, p. 805. g *Ibid. Lbid. n i b i d , p. 751. 12 Andors, Modernization, pp. 425-431. Ibxd. 128 Prelude to Revolution, 1963-1966. 129 CHAPTER III ** THE GREAT PROLETARIAN CULTURAL REVOLUTION AND BEYOND, 1966 - 1975 The Great Proletarian Cultural Revolution was the ultimate confirmation of the policy of mass-line. Building up to that point and culminating in the Cultural Revolution was an increasing tendency within the factories, government and party itself towards the formation of a new e l i t e . 1 Part of this can be attributed to the policies arising out of the post-Great Leap Forward period designed to rectify the imbalances of the G.L.F. The pragmatic approach of the recovery period, including it s private plots, its free market and its material in-centive for workers and management alike, necessarily led to uneven improvement in economical well-being and 'class 2 distinctions'* 1 This new elite had support from very high within the party itself. Liu Shao-ch'i, heir-apparent to Mao Tse-tung, was accused of advocating a 'revisionist' line creating new privileged elites and in-creasingly taking the 'capitalist road'. Regardless of whether he was 'scapegoated' or not the charges were empirically valid and a split had developed in the party. Aspects of that split appeared in many 130 different forms and places. The conflict was characterized in the industrial economy with questions of whether or not to use enterprise profits as a motive force.for managerial decision making; .questions of a planned economy versus a free market economy; questions of the 'two participations, one reform and triple combination'; and questions of 'expert' versus 'Red'. Two years prior to the Cultural Revolution 'politics in command' had been firmly established as the f i r s t priority of industrial management yet the split between the adnunistrative and party structures, 'functional dualism', had remained. The separation of policy and operational control had compromised the revolutionary goals on two basic levels; firstly the bureaucratic structure of factory administration had led to the creation of firmly established 'interest groups' that were an obstacle in themselves to the implementation of revolutionary policies. Their attitudes to the 'two participations' was one that reflected the elitism of their positions. . Secondly, the system of 'functional dualism' presupposes that each group can function as an entity in itself and especially that the goals of revolution implemented through policy control can be obtained without substantially altering the system of operational administration. Hence the administrative structure often worked against the implementation of revolutionary policies. Thus the Cultural Revolution in the factories sought to combat these two problems, to unify the administrative and party struc-tures and to stop the growth of the new elite that was inhibiting the implementation of revolutionary priorities. Beginning at Peking University the personal lives, attitudes and policies of a great number of leading cadres were examined and 131 discussed by growing numbers of peasants, workers, students and soldiers, what followed was a mobilization minutely examining every cadre and every policy. Then Mao stepped into the conflict and in a very short big-character poster stated that rebellion was justified. The t i t l e of the poster was "BOMBARD THE HEADQUARTERS." .... in the last f i f t y days or so some leading comrades from the central down to the local levels have acted in a diametrically opposite way. Adopting the reactionary stand of the bourgeoisie they have enforced a bourgeois dicta-torship and stuck down the surging movement of the great cultural revolution of the proletariat. They have stood facts on their heads and juggled black and white and circled and suppressed revolutionaries, stifled opinions differing from their own, imposed a "White Terror," and felt very pleased with themselves (...) shouldn't this 4 prompt one to deep thought? The significance of this poster and of the mass action that followed cannot be understated. It.gave to the Chinese people the u l t i -mate right to determine their own lives even against the Party itself by stating that there was no area or persons 'off limits' to the masses. Mao's ca l l helped arouse a tremendous political storm-demonstration and counter-demonstration, strike and counter-strike, sit-in and counter-sit-in, organization and counter-organization, poster and counter-poster. ( ) I think i t is safe to say that the world has never wit-nessed anything to approach, not to mention equal, this mass mobilization. As i t progressed, as rebel organizations merged and consolidated in schools, factories, communes and municipalities, they subjected every leader and every policy-maker to minute examination, knocked down 132 "capitalist readers", reformed middle-roaders, and chose "socialist-roaders" as new leaders and then chose again...5" In December of 1966, the Cultural Revolution led by the Red Guards moved into the factories. The Resolution of the Eleventh Plenum warned against its interruption of productive activities and in its early stages, production was not affected. Hcwever, by the summer of 1967, the conflict had become so intense that many disruptions and work stoppages were reported. The Anshan Iron and Steel Works, for example, a 'model1 factory which had been one of the first to develop the system of "two participations, one reform and triple combination," had its g furnaces damaged and production ground to a halt. By 1968 the fac-tional disputes within the factories had subsided, in many cases with the intervention of the People's Liberation Army (PLA) who stayed on to help make subsequent organizational changes. In the vast majority of industrial organizations "... the Cultural Revolution resulted in remarkably few permanent dismissals of cadres or 7 expulsion of Party members." In fact, those dismissed from the entire g Party organization amounted to only one percent of the total. Most of those upper level administrative cadres who came under attack were subjected to intense "criticism - self-criticism" sessions and i f they corrected their "evil ways" were restored to their position. If they didn't, they were generally demoted but s t i l l subject to further "criticism - self-criticism" sessions. Consequently, the Cultural Revo-lution saw the promotion of large numbers of workers and cadres who had 133 demonstxated their leadership ability and political correctness. The demotion of "revisionist" cadres and their replacement with "revolutionary" ones helped to change the basic nature of authority relationships more than just the structural changes would suggest. This circulation of 'new blood' into factory management stunted the growth of the new mana-gerial elite that had grown accustomed to the benefits and status of their positions. It also served as a warning that they, too, could be replaced should they grow into a position where self-interest became a serious motivating force. Hence the implementation of "two participations, one reform and triple combination" was more easily facilitated. The argument has been made that the 'rehabilitated' cadres exerted a conservative influence and may have compromised the above gains. However, as Teiwes states, "While the rehabilitation of cadres definitely restored aspects of the old system, lasting changes in the distribution of power are 9 s t i l l apparent in various basic level units." On the macro-organizational level in the post-Cultural Revolu-tion period administrative flexibility was sought through increased decentralization while at the same time maintaining a balance with central controls. For important commodities such as grain, steel, cot-ton, iron and coal the production targets are centrally controlled while other commodity targets are set by the province or city. 'Dual rule', which was eliminated on the micro-level s t i l l exists on the macro-level for those factories led by both the local Party committee and a central ministry. Hence the authority over an individual factory could come from a number of different administrative levels. 1 0 A good example of the division of responsibilities between the plant and higher level(s) 134 is illustrated by the process of drawing up the annual production plan. First the responsible higher level body draws up a draft plan which is sent to the factory where i t is divided up and distributed to the various workshops according to their role in i t . Here i t is discussed and altered up or down according to the workers' appraisal of the target. It then returns to the upper-level body for approval. When i t is returned i t goes to the Revolutionary committee at the workshop level which is responsible for its implementation.11 The Plan, "specifies quantity, quality, variety, cost relation-12 ships, labour productivity, profits and funding>" under the slogan, "Maintain Quality - Raise Quantity.'.' Once the state plan has been agreed upon, the individual enterprise has leeway to set monthly priorities and to organize production. Unlike during the Great Leap Forward period, sources of materials and the destination of the finished product are pre-arranged by the upper-level body before the Plan is implemented. This three-way relationship between production, supply, and sales is 13 termed, "playing the chess game as a whole," and illustrates the co-ordinating and control functions of centralized planning. It also makes obvious why efficient channels of communication are needed. Hence the closer integration of cadres with the productive processes facilitates the flow of more accurate information from the work groups; the level 14 that the plan will be implemented and fulf i l l e d on. The mass discus-sion of the Plan has a dual purpose; firstly, i t informs the workers of what is wanted; and secondly, gives them a chance to reorganize produc-15 tion and add innovations that its iitplementation would require. 135 Since the Cultural Revolution China has closely followed the policy of "walking on two legs," that i s , simultaneous development of large, medium and small scale industries. During the decade under Rus-sian influence large scale heavy industry had been emphasized. This type of development well suited Russia's highly centralized style of government. However, once the Russian model was rejected, China had to balance the scale of her industrialization to better suit a more decen-tralized, locally autonomous, style of government. The promotion of small and medium scale industries has the advantage of "making f u l l use of the local material resources and relying 16 on ... (the units) own efforts." It's also in accord with Mao's dictum on "being prepared against war, being prepared against natural disaster and doing everything for the people." Small industries have an inherent military advantage and are better suited to satisfy local 17 needs. Small industries, however, have been closely integrated so that they "carry out production in close co-operation" with larger 18 units. For example, small local industry might be producing parts for a larger scale unit nearby. The relationship between agriculture and industry is summarized in the two slogans, "Take Agriculture as the Foundation and Industry as the Leading Factor," and "The Fundamental Way Out for Agriculture Lies in Mechanization." Hence, local industry has been primarily connected 19 with the technical transformation of agriculture. Small chemical fertilizer plants, plants producing 'walking' tractors, cement plants, etc., are examples. Thus small-scale industries rely on local initiative 136 and resources to produce according to local needs but are closely inte-20 grated with large-scale industry. This policy remains unchanged today. The promotion of small-scale industries ties in with the policy of self-reliance and independence from foreign technology by better utilizing indigenous materials and methods. Hence the campaign for worker innovations and incentives has been especially pronounced in the small, relatively labour intensive industries, rather than the large, relatively capital intensive ones. The method of enterprise management is that outlined in the "Constitution of the Anshan Iron and Steel Company," which had been drawn up and personally signed by Mao in 1960. Its implementation had been sporadic, however, until the Cultural Revolution, when i t became 21 widely adopted as the guideline for enterprise management. It lay down five basic principles; Stick to putting politics in command; strengthen Party leadership; go in for the mass movement in a big way; institute the system under which functionaries take part in productive labour and workers take part in management, revise irrational and outdated rules and regulations, and functionaries, workers, and techni-cians work in close co-operation; and vigorously car-22 ry out technical revolution. Thus the core of the Anshan constitution consists of "two participations, one reform and triple combination1.." The concepts out-lined in the Constitution of the Anshan Iron and Steel Company are s t i l l those guiding factory management today, and there is no indication 23 that this will change. 137 Comterposing to the above policy was "Seventy Regulations Governing Industry" which had been adopted by the Central Ccranittee in 1961 and was designed to rectify some of the problems arising from the Great Leap Forward. These regulations, "... stressed material incent-ives, piece work, regular schedules, careful experimentation, mainten-ance of quality, responsibility for experts, and similar professional non-mass movement techniques, while emphasizing the welfare aspects, the 24 trade union relationship to the workers." The "Seventy Regulations..." of 1961 had displaced the Anshan Constitution of 1960 and guided indust-r i a l management until 1964. However, the Anshan Constitution was not fully implemented until after the Cultural Revolution, when Liu Shao-ch'i, the principal opponent of Mao, and force behind the "Seventy 25 26 Regulations..." had been dismissed from the Party. On January the 11th, 1967, the Chinese Communist Party published a "Notice on Opposition To Economism" which unambiguiously stated its position in relationship to the above "two roads." In the following months a number of other notices also appeared that were aimed at de-nouncing Liu Shao-Ch'i, consolidating the gains of the Cultural Revo-27 lution and stemming some of its chaos. .The mistakes of. the Great Leap Forward were not to be repeated. The need for "politics in command" was not to be at the expense of the technical requirements of production. The new slogan was "Grasp Revolution and Promote Production.!' At the Ninth Party congress, Lin Piao stated, "The guideline of 'Grasp Revo-lution and Promote Production' answers the question of relations between revolution and production, spirit and matter, the superstructure and the 28 economic base, and production relations and productive forces." 138 As a result of the Cultural Revolution a number of basic changes have been made in management structure. As I have discussed previously, one of the basic problems had been that the administrative and Party structures were separate and hence, revolutionary goals were being coinpramised. This problem was rectified by placing operations under the control of a new "Revolutionary committee" and by uniting both structures through the direct subordination of one to the other 29 through overlapping memberships. Previously the Party and Management structures were separate. Now they are closely united. It is a l -most universal for the secretary of a Party committee at a given level to be director of the Revolutionary committee at the same level, thus the Party committee 30 controls the Revolutionary committee. The Nanking Chemical Fertilizer Plant in April of 1971 is typical of the general structural organization of industrial enterprises. The Revolutionary committee here is comprised of "... Party members, cadres and representatives of the masses," and was a "general controlling 31 body." It was responsible for a wide variety of tasks that included " research, investigation, planning and statistical work, a political works department for controlling propoganda, a production group for con-trolling a l l production activities and a rear services department for welfare, personnel and so forth." This committee existed on every level down to the workshops where i t was replaced by "revolutionary leading 32 groups." 139 The Party committee and the Revolutionary committee were 33 closely unified as is generally true throughout China. In the Shenyang Transformer Factory, Meisner reports, "the Party committee was described explicitly to us as the political or policy making au-thority and the Revolutionary coitmittee as an administrative body which 34 implements the Party's line in running the factory." Importantly, as was noted, before, i t was very common, i f not universal, to have an overlapping of chairman and secretary between the two committees on each level. Thus, politics, policy and operations are to be united in one administrative structure, replacing the dictomy of the Party ccmmittee responsible for politics and policy, and the factory director responsible for operations Decision-making and responsibility for operations will be under centralized co-ordination at the factory level, but based on a foundation of "multi-layer and multi-stage management" with significant powers of operations and planning and production control appropriately disbursed to 35 the levels concerned. Within the Shenyang Transformer Factory, the PIA was s t i l l present and worked collectively under the Party committee. Their exact duties were hard to determine but generally they worked to maintain correct ideological attitudes within the factory as well as exchanging experiences two ways between Army and industry. In this way, not only are the Party and administrative structures united, but the Army i s linked as well through a continuing process of interchange. 140 Cadre participation in collective productive labour was re-emphasized and reorganized after the Cultural Revolution. I suggested before that one of the difficulties of its implementation was the separa- \ tion of operational and political control. Hence, while the Party committee had attempted to promote cadre participation in labour there were no administrative measures to regularize i t . Thus in many instances there was l i t t l e or no continuity. In which case, "... they were like duck weed floating on the water and having no roots i f they did not 36 labour together with the masses." Therefore, once the Revolutionary (committee had taken over operational control, i t began looking for effective measures to ensure that cadre participation became regular and continuous. Many different ways of 'sending down' cadres developed ac-cording to the specifics of the situation. One system for 'leading' (upper-level) cadres, was termed the "three thirds" system because what i t did was divide the group of leading cadres into three groups. One group did manual labour, another made investigations and studies, while 37 the third did routine work, and at fixed intervals they rotated. Another system was termed the "two-group rotation system." Here leading cadres were divided into two rotating groups, one doing manual labour while the other did routine administrative work. Hence in this 38 system cadres worked a f u l l three days a week on the production line. whatever the system, and there are undoubtedly many, i t had to provide concrete measures which can be checked on. As the editorial in the Jen-min Jih-pao stated; 141 Whatever ways are being adopted, each unit should, according to its own conditions, work out concrete and effective measures for cadre participation in manual labour, which must be adhered to and checked on. Some units propose that cadres participating in manual labour should work on fixed jobs and should f u l f i l l fixed work days and fixed quotas of products of specified quality. This proposal i s workable and has the approval 39 of the masses. Six days later in the same paper another article appeared entitled, "We Approve of the 'Four fixed' System,'.' written by the Capital Worker Commentary Group of the Machine Works of the Capital Steel Company. This system called for cadres to be set "... fixed jobs, fixed time for labour, fixed quantity and fixed quality," and was des-40 cnbed as effective and practical. However, other obstacles had f i r s t to be removed before i t could be implemented. The number of concurrent posts a cadre held was cut back to give him more time to labour. For the same reason, the number and length of meetings was cut back and cadres were urged not to participate in upper-level meetings that they were not required to attend. So i t becomes obvious that one of the reasons behind the campaign for simplified administration was to increase the cadres' rate of labour participation. As well, regular "struggle, criticism, transformation" meetings were held to commend or criticize cadres for their labour 41 . . participation or lack of i t . In this way, both negative or positive peer pressure could be applied to encourage or discourage certain be-haviours. Hoffmann makes an interesting observation about these sessions regarding the evolution of thought on positive as opposed to negative reinforcement. He writes; 142 In the 1950's, the emphasis was on criticism and self-criticism; in the 1960's the meetings stressed praise rather than criticism; since the GPCR, the two are combined in mass struggle-criticism-trans-formation sessions. The f i r s t method was supposed to improve individual performance positively through intensifying identification with the group or nega-tively through fear of lowered status. The second method aimed at better individual work habits 42 through closer group integration. The policy of cadre participation in labour has not changed since the Cultural Revolution. In an ore-dressing reagent plant in northwest China in April of this year (1975) leading or factory-level cadres were working seventy-five f u l l days a year while workshop-level 43 cadres worked two hundred days. Generally, however, leading cadres were spending an average of one day a week in production, while workshop-level cadres often spent the greater part of their time alongside the 44 workers. The post-Cultural Revolution method of leadership was in many ways a return to methods evolved during the Yenan period. One obvious example was a renewed emphasis on 'better troops and simpler administration'. Chairman Mao wrote: The Revolutionary committee should exercise unified leadership, eliminate duplication in the administrative structure, follow the policy of 'better troops and 45 simpler adniinistration' ... A number of methods were used to simplify the administration. Duplication between committees was eliminated with a concurrent reduction of the size of leading groups and a reduction in the size of their 46 memberships. For example, the Revolutionary committee in the Peking 143 General Knitwear Mill, which had been founded in November of 1967 by a PIA unit, reduced the administrative staff of over two hundred full-time 47 cadres by two-thirds. Formerly this mill had been run on five levels; "factory, branch factory, workshop, section and group level/" now i t is 48 run on just three levels. The number and length of meetings held were reduced to just the essential mLnimum under the policy of "short meet-49 ings and... short speeches." One particular Revolutionary committee adopted a three-point meeting methodology. Firstly, meetings were publicized well in advance and the leading members meanwhile did the necessary investigative prep-arations. Secondly, small-scale meetings were preferred over large-scale ones, grass root meetings were preferred over higher-level ones, joint meetings were preferred over separate ones, and necessary meetings were preferred over unnecessary ones. Thirdly, the number of levels involved in a meeting were to be reduced to "exercise face-to-face 50 leadership" with the masses. The purpose of a simplified administrative structure was not just decreased costs and increased efficiency, but also to increase cadre participation in labour. By reducing the time spent in official duties, i t increased time available for labour and hence attacked the 51 problem of the role and status separation between workers and cadres. This campaign has been continuous and is s t i l l evident at the moment in 52 the mainland press. In fact, Article II of "The Constitution of the Peoples' Republic of China" adopted in January of last year, states: "... combat bureaucracy, maintain close ties with the masses and whole-heartedly serve the people. Cadres at a l l levels must participate in 144 collective, productive labour." So there is evidence that both simplified administration and cadre participation in labour have become basic continuing aspects of policy. During the Cultural Revolution and the factional disputes within the factories, the trade union sided once again with workers welfare and once again they were accused of 'economism'. Liu Shao-Ch'i was closely associated with the A l l China Federation of Trade Unions (ACFTU) and was accused of promoting the idea that, "trade unions should be an independent structure and an economic organization established for the sole purpose of solving the personal interests and struggling for 53 the livelihood of workers and peasants." The specific charge against "China's Khrushchev" was that he advocated "Three Kinds of Trade Unions and One Syndicalism." "Trade unions for production", "Trade Unions for Welfare", "Trade Unions for the Whole People," and "Syndicalism" which advocates transferring the means of production and distribution to 54 unions of workers. In short, Liu and the unions were accused of giving "...priority to "money, welfare, production, experts and tech-niques" instead of class struggle, ideological education and "Grasping 55 Revolution to Promote Production." The Kung-jen Jih-pao, the organ of the ACFTU was consequently closed in April, 1967, and signalled the beginning of tighter control over its role and activities by the reunited Party. Post Cultural Revolution union activities are restricted to the Workers Representative 145 Congress (Kung-jen tai-piao-hui) which operates on the plant level. The role of the Workers Representative Congress has changed very l i t t l e since 1968. In April of 1972 the Shenyang Transformer Factory Congress was comprised of twenty-three workers of which nine were on the Standing Committee. Established in 1969, i t was composed solely of workers, and met several times a year. It had five main functions. Firstly, to organize political study groups; secondly, to carry out revolutionary mass criticism; thirdly, to provide an upward channel of technical suggestions, criticisms and discussions from the workers to the ap-propriate bodies; fourthly, to "organize workers recreational and cult-ural activities, look after workers livelihood;" and fifthly, to act as a special representative body of womens' particular needs.5^ Its role was quite clearly as "... an assistant to the Party committee," and was 57 under its unified leadership. To ensure the unification of this body with the others operating in the plant its membership was overlapping 58 with both the Revolutionary committee and the Party committee. The fourth mass organization operating on the plant level is the Communist Youth League Representative Committee, which similarly to the Workers Congress and Revolutionary Committee is organized and lead by the Party committee. Similarly, i t acts as an assistant to the Party committee and engages in political education and promoting production. However, its membership is specifically limited to those between the 59 ages of 15 and 25. On the workshop level each of the above organizations has a representative unit: "the Party branch, the "office," the Ccmmunist Youth League basic unit, and the Workers Representative Congress Workshop Branch." 146 The Party Branch has the task of carrying out Party policy on the workshop level, leading political education and helping to f u l f i l l production quotas as set out in the Plan. The election of representatives of the Branch Committee is made among Party members on the Branch level and ratified by the Party committee. As on the Party level, this com-mittee i s the leading group and is closely linked with the other three organizations. In one workshop noted by Meisner, there were 218 workers, cadres and technicians, of which 36 were Party members. These 36 were represented by a seven member Branch Committee which included "... two directors of the shop office, the Party Branch secretary, three Party members who are rank and f i l e workers, and one who is chairman of the workshop branch of the Workers Representative Congress."^1 As well, the Party Branch Committee was responsible for leading the Communist Youth League and maintained the leading position with the other organi-zations taking subordinate or assistant roles. The Revolutionary Committee which was responsible for operations had the "office" as its basic level administrative unit. The Anshan Constitution's call for "two participations," workers partici-pation in management, and cadre participation in labour, was implemented through the basic level unit of the Revolutionary Committee. In the 62 same shop, or company (lien), as above, the workforce was divided into 63 two shifts of nine 'work groups' or platoons (p'ai). These groups met and nominated three persons, two vice-directors and one director. Again their decisions had to be approved by the Party coirmittee. In this particular case of the three that were elected, one was a cadre, two were workers. While the number of staff in the office varied from two 147 to five depending on the size of the workshop, a l l were required to 64 labour "some of the time." The functions of the office were a l l related to production and included administration, technical work, and 65 production (• which included 1 safety'). The Workers Representative Congress Workshop Branch is under the direction of the Plant Branch Congress and ultimately the Party committee. This body i s responsible for organizing and reporting on a number of kinds of "mass criticism" that take place within the factory. For each 66 variety, the method is "struggle-criticism-transformation." The basic form is the "mass criticism meeting" which is held on the workshop level to solicit the suggestions and opinions of the workers as they relate to the general question of the "two roads." Their criticisms may focus on aspects of "the bourgeoisie, revisionism and various erroneous ideas of the Right or the ultra-Left which ... (runs) counter to Chairman Mao's proletarian revolutionary line." Another popular form of criticism with the same focus is the "tap'i-p'an" or "great criticism." This involves drawing up and posting on the factory walls large "tatzu-pao" or "big character posters." These generally make specific charges and usually provide collaborating evi-dence to back them up.^8 Criticism of specific individuals takes place in one of several ways. Probably the most common way is direct confrontation with the in-dividual. Hence there are no specific rules or regulations to govern its implementation, but evolves out of the specifics of the time and 148 69 situation. In some places, however, the 'criticism meetings' are convened to commend or criticize the participation of cadres in labour. Thus i t regularizes not just criticism of recalcitrant cadres but 70 regularizes the commendation of 'model' ones. These forms s t i l l exist and the right to use them is now guaranteed by the Constitution of the Peoples' Republic of China. Speaking out freely, airing views freely, holding great debates and writing big-character posters are new forms of carrying on socialist revolution created by the masses of the people. The State shall ensure to the masses the right to use these forms to create a political situation in which there are both centralism and democracy, both 71 discipline and freedom ... One problem encountered, possibly stemming from the decreased authority status of the cadre and increased worker supervision, had been a tendency towards "anarchy," especially among younger workers. Con-sequently, increased worker discipline has been a concurrent theme to combat the influence of "petty bourgeois liberalism." The primary method has been a heavier emphasis on ideological education, especially 72 as i t relates to self-discipline. Other subgroupings of the plant level Workers Representative Congress also existed at the workshop level in the Shenyang Transformer Factory. One was the representative delegation that was responsible for electing the plant level Congress. In one workshop of 274 workers (of which 74 were women), they had a delegation of 27 members, (of which 7 were women). The total number of delegates on the Plenary body that 149 73 elects the factory-level congress was 456 (of which 107 were women). The other subgrouping was the Workers Representative Group (Kung-tai hsiao-tsu) which was responsible for political education. Throughout the factory the workshops were organized in groups of "20 to 70, meeting 74 for 1 to lh hours, twice a week." In each workshop as well, under the general supervision of the office, there existed a 'triple combination' "technical innovation committee" composed of workers, technicians and cadres elected by the workshop. This committee was responsible for soliciting, collecting, 75 evaluating and implementing suggestions of technical innovation. In the Shenyang Transformer Factory this committee consisted of seven persons, four were workers suggested by the workers through a workshop meeting on the basis of technical ability; one was the office director and two were selected by the office. As well on each shift, there was a worker responsible for collecting and transmitting suggestions. Once suggestions had been received and evaluated as useful, the cxxnmittee would form a 'triple combination' team that would work together to implement i t . In an example given by Meisner of the Shenyang Transformer Factory, one such team consisted of twelve members: Eight workers, two engineers and two cadres. This team laboured collectively for four 76 months on one suggestion and presented i t as a gift to the factory. Since the Cultural Revolution mass technical innovation has been explicitly regarded as a key feature of socialist industrial develop-77 ment, even more so than during the Great Leap Forward. Prior to the Cultural Revolution there existed a strong identification between 'expert-ness' and reliance on foreign techniques and models. This phenomena can be 150 easily understood given China's early reliance on Russian technology and expertise. Following the Cultural Revolution this re-established mass technical innovation as the means for breaking the bonds of dependence 78 on foreign technology. Especially in labour intensive and small and medium scale industries 'unleashing the creativity of the masses' has 79 been a key aspect of policy. The promotion of mass technical innovation has varied inversely with the policy towards 1expertness1 and directly with the policy of 'politics in command'. During the post-Cultural Revolution period a 80 renewed campaign grew to criticize the role of experts. As the role of the experts declined so the role of the masses had to replace them. A basic tenent of the 'politics in command' approach to government has been not only does i t better serve the revolution but in the long run i t better serves production. As well that the unleashed potential of the masses i s the best source of technical innovation. Lee suggests that "... integration of technology and labour is "Marxist" because i t raises 81 the worker above the level of an appendage of a machine..." Clearly, i t does and just as clearly, the Chinese have used i t as one means of combatting the alienation that is inherent in the bureaucratic organization of productive enterprises. In fact the stress on the development of in-dependent and self-reliant industry through mass technical innovation is 82 s t i l l a key aspect of policy today. The Marxian concept of alienation has obviously been a key concept given the number of policies designed to reintegrate workers with the work processes in a meaningful way. The breaking down of class and job related status distinctions has been advanced by post-Cultural Revolution policies. Clearly defined roles of worker and manager no 151 longer exist, but are meshed together each overlapping the other. Andors writes; As a result of the stress on more personal and direct communications between upper and lower levels, and the emphasis on the triple combination the living styles, dress, and manners of speech of workers, technicians, and managers, have become remarkably similar. Fancy office space and status symbols of dress and living quarters are more discouraged than ever before. The daily routine of workers and managers is becoming 83 less and less different. Since the Cultural Revolution new forms of "worker-technicians" and "adnrbiistrative workers" have evolved. Since Mao published on July 21, 1968, his directive "Take the Road of the Shanghai Machine Tool Plant In Training Technicians From Among the Workers" the primary source of technicians has been from among the workers. The Shanghai Machine Tools Plan now operates a "July 21st workers college" which takes workers with an average of 12 years' experience out of production for a "few years," trains them, then returns them to the production line where they work 84 and direct alongside the workers. In this way, the new worker-technicians have both the practical and technical skills as well as being imbued with the correct ideological attitudes. Thus, they are increasingly producing technicians who are both 'expert and red'. During the Kiangsi Soviet Period, Mao had personally lead a training class for land revolution cadres. Now that period is serving as a model epitomizing the training of young new cadres more thoroughly imbued with the 'correct' revolutionary attitudes. In the Hsing Kuo 152 Hsien prior to the Cultural Revolution only seven percent of the cadres were young cadres. By September 1971, however, they constituted f i f t y percent. 8 5 The "May 7th" cadre schools have been changed since the Cultural Revolution to more closely reflect the changes in revolutionary think-ing. 8^ Clearly, the massive input of young cadres each imbued with a new revolutionary perspective on their role will have a lasting effect on relations within the factory. The post-Cultural Revolution policy towards wages and wage distribution is s t i l l "from each according to his ability, to each ac-87 cording his work." However, the emphasis has clearly swung to "serv-ing people." Material incentives linked with Liu Shao-ch'i's 'capitalist road' have been denounced as "sugar-coated bullets" aimed at "subverting 88 the dictatorship of the proletariat." To counter the influences of material incentives their role has been greatly reduced and replaced 89 with an emphasis on man's "ideological revolution;" hence, non-material incentives. The system of eight wage grades s t i l l exists, but the differen-90 t i a l between highest and lowest has been reduced. In 1971 and again in 1973 wage increases were given to the bottom "two or three labour grades" while the rest of the wage grades were held constant, which has the effect of compressing the scale, thereby reducing differentials 91 between the top and bottom. However, this eight grade wage system applies only to workers. Cadres and technicians have their own separate wage grade scales. At the Shenyang Transformer Factory in 1971, cadres 153 were paid according to a twenty-four grade national system and engineers were paid on a four grade system according to their t i t l e of either practising technician, assistant technician, technician or engineer. In this factory the ratio of highest to lowest on the workers wage scale was 33 to 104 yuan per month with the average earnings at 64 yuan. On the cadre scale, the highest was 180 yuan per month with an average of 60 yuan, and on the technicians scale i t went from 34 to 230 yuan with an average wage of again 60 yuan. So while the potential salary between workers and cadres and technicians was differentiated, their average salaries were remarkably close, with the workers actually receiving the 92 higher average salary at this factory. This seems logical given the interchangeability of roles between workers, technicians and cadres. Given the system of "two participations ..."rwide differences in average 93 wage would be meaningless. The promotion of individual workers up the wage scale at the transformer factory was done by collective discussion and evaluation on the work group level. Their recommendations are then passed on to the work team and ultimately the Plant level for approval. Five basic c r i -teria were looked for in their evaluations of each other; (1) Skill level. (2) Perfection of Task. (3) Size of contribution. (4) Length of service. 94 (5) Amount of work experience. The continuance of differential wages is one indication that the transitory period to Communism is not complete. Higher skills are 154 s t i l l rewarded with higher wages. Presenting the question at the Shen-yang Transformer Factory of when wage differentials would be eliminated 95 the guide succinctly replied, "you know, even Marx couldn't say when!" However, piece work pay, bonuses, premiums and financial 96 awards of a l l descriptions have been abolished. Schran suggests that the abolition of these monetary rewards affected the old and new 1bourge-97 oisie' more than i t did the masses, because many of those whose skills were "badly needed" had been given wage supplements which had effectively doubled their salary. These " t a l l poppies" and their wage supplements 98 became a target of the Red Guards during the Cultural Revolution. Overtime pay has been abolished as well. If overtime is needed to complete the Plan quota, the work is expected to be done for 99 free and as part of a socialist consciousness. Up until this point I have not examined the differential participation of men and women within the factory. This has been largely due to the lack of sexually differentiated material. However, i t is clear that sex i s an important factor in the division of labour. V7ithin the last few years, however, more information has become available. Largely because of the Party's increased awareness of sexual constraints on labour participation and the increasing flow of foreign visitors, we can now make a cursory examination of the role of women in the factory. In any individual factory women and men receive equal pay for equal work and women are found in a l l areas of production and management. However, women have tended to predestinate in light rather than heavy industry where the average wage is somewhat smaller. In most cases both the husband and wife work.''"00 The involvement of women in production 155 has followed the tides of political change. The "socialist high tide" of the Cultural Revolution has seen the increasing integration of women into the productive economy, ..."visitors to China indicate that the vast majority of women now are working.""'"^ According to a press report of April 1975, the figure is approximately 93 percent for the entire 102 productive economy. However, as of 1972 the proportion of women to men in industry was s t i l l only 17 percent.- the same level acheived in 103 1957 prior to the Great Leap Forward. The proportion of women in management positions is difficult to ascertain because, as in general employment, i t varies between in-dustries. One traveller to a Peking textile factory in 1965 that em-ployed a majority of women found that every single member of management 104 was a woman. On the other hand Barry Richman reports from the same year that "I did not come across any (female directors or chief engineers) in Chinese industry ... I was introduced to six or seven female vice-directors - out of a total of about eighty or ninety - in Chinese in-105 dustry, and only one of them was employed by a heavy-industry plant." However, of the department heads, fifteen percent were female and of the workshop directors, ten percent were female; the proportion decreasing as the level of the position rose. In a number of light industrial plants 106 the floor foreman and group leaders were fift y percent or more female. The high proportion of females in the lower ranks in light industries is not difficult to understand given the high degree of sexual stereotyping that has been officially promoted at various times 107 and which s t i l l exists. Since the Cultural Revolution, however, tra-ditional stereotyping of sex roles has been blamed on the reactionary 156 policies of Lui Shao-ch'i, especially during the period following the Great Leap Forward. Consequently, much effort has been applied to breaking the traditional roles since 1967, and judging from Edgar Snow's interviews with six female engineering students at the Chinese Academy of Sciences Iron Institute in Peking, these barriers are rapidly dis-, • 108 solving. However, the process of being promoted up the industrial grade ladders takes time, and the success of the current incorporation of women into industry can only be measured after they have time to work their way into upper-level positions. The road to liberation for women is seen at present to be through family planning. However, this attitude belies a stereotyping of sex roles evidenced by an article published in April of this year (1975). "After the implementation of family planning, many women have been liberated from the shackles of their children and household chores and energetically participated in the three great 109 revolutionary movements." The interesting aspect of this quote, is the assumption that caring for children and doing chores are the womens' responsibility; hence, liberation comes through lightening their burden. In some respects the 'sexual revolution' has yet to come. The post-Cultural Revolution period saw campaigns of "increasing production and strictly practising economy," that i s , using a l l available materials to their fullest and combatting wastage. The Revolutionary Committee at the Chu'u Hsien Cotton Mill set up a system of "three meet-ings, three displays, and one bulletin" for practising economy.""'""'"0 The three meetings were fi r s t l y an "old workers informal meeting," secondly, 157 a "meeting to exchange experiences in increasing production and practising economy" and thirdly, a "mass criticism meeting." The three displays were firstly, a "display of good personalities and good deeds" (as they related to practising economy), secondly, a "display and exhibition of real things," (such as displays of formally wasted materials now con-verted to good uses), and thirdly, a "special display of mass criticism." The one bulletin referred to a printed news sheet entitled "Bulletin of Economic Supervision. To implement this system, an Economic Supervisory Group was created which recognized the need for both workers participation and supervision. Composed of eleven workers, a Revolutionary Committee member and a financial worker, i t was responsible for organizing worker participation in the "three meetings, three displays and one bulletin" as above. ' In the Fushun Number One Petroleum Plant, they instituted a "workers finance supervisory group" at the plant, shop, team and group levels. Under the direction of the Revolutionary Committee this group would receive the financial reports from the finance sectors and study and discuss them to discover i f a l l expenditures were necessary ones. If the group felt that some expenditures were wasteful or unnecessary, . . . . 113 they had the power to make criticisms or counter-suggestions. In both these fashions a more realistic appraisal of actual needs was made available to the middle-level finance sectors who might not be as well acquainted with the needs at the production level. The aftermath of the Cultural Revolution has, as I have suggested in a number of places, been marked with a high degree of 158 continuity. Unlike the preceding periods, there have been very few basic shifts of policy. This is not to say, however, that there have been no fluctuations, but rather that the basic industrial program had, as far as can be observed, taken no major deviations. Howe suggests that one fluctuation has been towards tighter planning and disciplinary controls. Certainly this is true. The exhilaration of the Cultural Revolution did lead in some cases to a breakdown in order which required rectification. Yet part of New China's growing heritage is its ability to use fluctuations in a flexible, constructive manner. The "dialectic in action-vicissitudes," has been part of China's approach to resolving contradictions arising from syst-emic polarities. Frequent policy changes have always been motivated by pragmatic considerations and have proven to be both rigid and flexible. In the words of Schurmann, they have created an "organizational weapon." The post-Cultural Revolution period has seen some fluctuations, yet their amplitude has decreased; certainly we have not seen such violent fluctuations as witnessed during the period from 1957 through 1961 for example. Perhaps as time goes on we can gain more perspective on this period to bring i t into better relief. For the moment, however, the post-Cultural Revolution period seems to have been one of relative continuity. In China today, the system of 'two participations, one reform, and triple combination' f i r s t instituted during the G.L.F. has been uni-versally established. In order to do so a number of changes were f i r s t necessary. The system of 'two participations' had to be instituted in such a way that i t could be both checked and enforced. The majority of 159 middle and lower-level cadres work an average of 3 f u l l days on the pro-duction line. Likewise, worker participation on both the Party and Revolutionary committees is assured. Reforms have been made to ensure their implementation. The systems of individual responsiblity and rigidly defined job roles have been eliminated because they were not compatible with collective decision making and the elimination of status and prestige differences between mental and manual work. Similarly, '3 in 1' innovation committees have been established and are seen as a basic part of the new approach. Mass technical innovation is regarded as the necessary alternative to foreign technical expertise which China has rejected. As during the Yenan period, the Chinese place the highest importance on self-sufficiency and self-reliance. One means to this end has been the integration of labour and technology. Clear-cut distinc-tions between workers and cadres and between workers and technicians no longer exist. New forms of 'worker-technicians' and 'administrative-workers' are now evident. The similarities between the Yenan and the contemporary period are striking. The simplification of administration is one aspect of that similarity. The levels of control have been reduced from five to three and large numbers of cadres have been de-centralized. More decisions are being made on the lowest levels. Material incentives are now widely regarded as "sugar-coated bullets." Nowhere can anyone receive piece wages, bonus payments or even overtime pay. The wage differentials of the wage-grade system have been further narrowed to a point where, even prior to the Cultural Revolution, they were the smallest of any country in the world. In China today non-material incentives have become a major source of motiva-tional stimuli. 160 Yet most importantly what China has now returned to are the politics of Yenan or the 'Yenan way'. It is an approach that dictates that organizational structure must be in harmony with political goals. Politics cannot be subordinated to production. Nor, stemming from the experience of the Great Leap, can production be subordinated to politics. Rather, each must be in harmony with the other, each working toward both goals. 161 Chapter III The Great Proletarian Cultural Revolution and Beyond, 1966 - 1975 FOOTNOTES XSee William Maiden, "A New Class Structure Emerging, in China." In CQ, 27, (Apr./June 1965) pp. 83-88. ^Yuan-Li Wu, "Economics, Ideology andrthe Cultural Revolution." In Asian Survey, Vol. VIII, .-No. 3 (Mar., 1968). 3 For a detailed examination of the 'two roads' see, Jack Gray, "The Two Roads: Alternative Strategies of Social Change and Economic Growth in China." In Authority, Participation and Cultural Change in China, (Cambridge University Press, 1973). ^William Hinton, China's Continuing Revolution. (pamphlet), The China Policy Group, 1969, p. 35. 5Ibid, p. 23. Harper, "Worker's Participation", p. 133. 7 Frederick C. Teiwes, "Before and After the Cultural Revolution." In CQ, 58, (Apr./June, 1974) p. 333. Edgar Snow, "Talks with Chou En-Lai: The Open Door." The New  Republic, 27 (Mar., 1971) p. 21. g Teiwes, p. 334. Ibid, p. 336. 162 ^Andrew J. Watson, "The Guiders and the Guided." In 02, 49, (Jan./Mar., 1972) pp. 148-150. ^ 2Mitch Meisner, "The Shenyang Transformer Factory - A Profile." In CQ, 52, (Oct./Dec, 1972) p. 721. 1 3Ibid, p. 720. 14 Ibid, p. 721. 15 Ibid, p. 722. "A Hsien in Honan Province Self-reliantly Sets Up Small But Complete System of Local Industries," JMJP, Dec. 15, 1969, as translated in SCMP, No. 4564, Dec. 24, 1969, p. 1. Hung Che-wen, "In Praise of Local Small Industries," JMJP, Dec. 15, 1969, as translated in SCMP, No. 4564, P. 4. -^ SCMP, No. 4654, Dec. 24, 1969, op. cit . , p. e. 19 "Local Industry Developes Rapidly m Shantung Province," NCNA -English, Tsinan, Dec. 5, 1969, in SCMP No. 4555, p. 12. 20 See for examples, "China's General Principle for National Economic Development,", NCNA - English, Peking, Mar. 25, 1975, In SPRCP 75-15, p. 20. Also see, "China Walks on Two Legs in Industrial Construction," NCNA - English, Peking, Mar. 20, 1975, in SPRCP, 75-14, p. 56. 21Harper, "Worker's Participation," p. 135. 22 People's Daily, 25 August, 1967, quoted by Paul Harper, "Party & Unions," p. 116. 163 Z JSee "Advance Under the Glorious Banner of the Charter of the Anshan Iron and Steel Company," JMJP, Mar. 22, 1975 as translated in SPRCP, 75-17, p. 136. See Also, "Study Well the Theory of the Dictatorship of the Proletariat and Consciously Implement the "Anshan Steel Constitution," JMJP, Mar. 20, 1975, as translated in SPRCP, (75-15) No. 5827 Apr. 8, 1975, p. 40. 24Harper, "Party and Unions", p. 117. 25 E.L. Wheelwright and Bruce McFarlane, The Chinese Road to Socialism, (Modern Reader, Monthly Review Press, New York and London, 1970) p. 154. 26 See for example, "The Fallacy Advocated by the Top Ambitionist in Economic Work Refuted," Peking Kuang-ming Jih-pao, Apr. 22, 1967, as translated in SCMP, No. 3928, p. 21. 27 See for example, "Notice From CCP Central Committee, State Council, Central Military Commission and Central Cultural Revolution Group on Dealing Further Blows to Counter-Revolutionary Economism and Speculative, Profiteering Activities," Canton Kuang-t'ieh Tsung-ssu, No. 28, 1968, as translated in SCMP, No. 4129, Mar. 1, 1968, p. 11. 28 Quoted in "Firmly and Unwaveringly Carry Out Great Guideline of "Grasp Revolution and Promote Production," in JMJP, Nov. 12, 1969, as translated in SCMP, No. 4542, Nov. 21, 1969. 29 "Workers Revolutionary Mass Organizations Must Consciously Obey Party's Leadership," In JMJP, August 19, 1969, as translated in SCMP, No. 4548 (Sept. 2, 1969) p. 1. 30Watson, p. 147. 164 Ibid. 3 2Ibid. 33Marianne Bastid, "Levels of Economic Decision Making," In Authority, Participation and Cultural Change in China, Stuart Schran (ed.), (Cambridge University Press, 1973) p. 185. 34Meisner, "A Profile," p. 725. 35 Andors, "Modernization," p. 434. 36JMJP_, Dec. 12, 1969, as translated in SCMP, No. 4561, p. 6. 37 . . . . . See, "Cadres Should Persist in Taking Part in Collective Productive Labour," In JMJP, Nov. 20, 1969, as translated in SCMP, No. 4545, P. 14. 38-Ibid. 3 9Tbid. 40 JMJP, Nov. 26, 1969, as translated in SCMP, No. 4553, p. 6. 41 • . . . See, "Representatives of Revolutionary Masses on Penhsi Municipal Waterworks Revolutionary Ccranittee Take Root at Basic Level," In JMJP, Dec. 10, 1969, as translated in SCMP, No. 4561, p. 6. 42 Hoffman, Chinese Worker, p. 119. 43 "Factory Cadres Take Regular Part in Physical Labour," In NCNA -English, Lanchow, April 9, 1975, in SPRCP, 75-17, p. 18. ^"China's System of Cadre Participation in Collective Productive Labour," In Peking Review, 15, (Apr. 11, 1975) p. 17. 165 45Quoted by Yu Wen, "Resolutely Taking the Road of Better Troops and Simpler Administration as Pointed Out by Chairman Mao," In JMJP, Dec. 11, 1969, as translated in SCMP, No. 4565, Dec. 29, 1969. 46T, • , Ibid. 47 "Peking General Knitwear M i l l Simplifies Administration," NCNA -English, Peking, July 28, 1968, in SCMP, No. 4231, p. 16. 4 8Lbid. 49 Chu Hung-Ch'i, "Meetings Must Be Fewer But Essential" m Peking JMJP, November 7, 1969, as translated in SCMP No. 4539, P. 8. 50 "Revolutionary Committee of Kuant'ao Hsien, Hopei Province, Reduces Number of Meetings and Improves Style of Leadership," in JMJP, November 25, 1969, as translated in SCMP, No. 4548, p. 4. 51 "Cut Down and Simplify Meetings and Reduce Redundance and Concurrent Posts," in JMJP, December 10, 1969, as translated in SCMP, No. 4561, p. 4. CO "Maintain Better Staff and Simpler Administration and Consolidate the Dictatorship of the Proletariat," in Kuang-ming Jih-pao, (Shanghai) March 24, 1975, as translated in SPRCP, 75-18, p. 156. Harbin Radio, 4 August 1967, quoted by Harper, "Party & Unions," p. 116. 54 "Thoroughly Criticize and Repudiate China's Khrushchev's Counter-Revolutionary Revisionist Line in the Workers' Movement Based on "Three Kinds of Trade Unions and One Syndicalism." In JMJP, May 27, 1968, as translated in SCMP, Nb. 4214, July 10, 1968, p. 1. 55People's Daily, 1 December, 1967, Quoted by Harper, "Party & Unions," p. 116. 166 56Meisner, "A Profile," p. 726. 5 7Lbid. Ibid. 5 9Ibid, p. 727. I b i d . Ibid. ^^Watson, p. 148. Ibid. 64 Meisner, "A Profile," p. 727. 6 5Ibid. ^"Cadres and Masses of Shenyang Glass Factory Continuously Raise Their Understanding of the Mass Criticism," in JMJP, October 24, 1970, as translated in SCMP, No. 4774, p. 237. Ibid. 68 See "Shanghai's Wall Newspapers Display Fighting Power in Revolutionary Mass Criticism" in NCNA - English, Shanghai, November 4, 1960, as translated in SCMP, No. 4535, p. 13. 69 Meisner, "A Profile" p. 728. 7 0 S e e , "Shanghai's Wall Newspapers Display Fighting Power in Revolutionary Mass Criticism," in NCNA. - English, Shanghai, November 4, 1960, as translated in SCMP, No. 4535, p. 13. 167 Article 13, The Constitution of the P.R.C. adopted on January 17, 1975, by the 4th National People's Congress of the P.R.C. 72 Chang Ching-yang, "Educate Young Workers More Intensively in Discipline," In JMJP, August 21, 1969, as translated in SCMP No. 4406, p. 11. 73Meisner, "A Profile," p. 728. Ibid. Ibicu Ibid. 77 Lee, "Technical Innovation," p. 659. 78 See for example, Yeh Ch'ing-pu, "Should We Rely On Our Own Efforts or rely on Foreign Countries?" JMJP, Nov. 18, 1969, as translated in SCMP, No. 4551, Dec. 5, 1969, p. 5. Also see, "Over 4,000 Major Technical Innovations Made in Tientsin," NCNA - English, Tientsin, Dec. 23, 1969. In SCMP, No. 4567, p. 12. ^Lee, "Technical Innovation," pp. 658-660. O f ) See, "Criticize "Experts Run Factories" T i l l i t Sinks, Great Upsurge of New Leap Forward," In Peking Kuang-ming Jih-pao, Jan. 29, 1970, as translated in SCMP, No. 4599, Feb. 18, 1970, p. 96. 8 1Lee, "Technical Innovation," p. 660. See for example, "China Developes Science and Technology Independently and Self Reliantly," Peking Review, 46, Nov. 15, 1974. See also, "Taking the Road of Self-Reliance," Peking Review, 42, Oct. 18, 1974. 168 83 /Andors, "Modernization," p. 435. 84 "The Growing up of a New Type of Worker-Technician," Peking, Kuang-ming  Jih-pao, July 22, 1972, as translated in SPRCP, 72-39, p. 193. 85 "A Generation of New Model Administrative Workers is Growing Up," In JMJP, August 18, 1971, as translated in SCMP, 71-35, No. 4967, Sept. 2, 1971, p. 83. 86 Hsia Fang-hao, "Far-Reaching Significance of May 7 Cadre Schools," Peking Review, 24, June 13, 1975. 87 Article 9, January 17, 1975, Constitution, op. cit. 88 See for example, "The Fallacy Advocated by the Top Ambitionist in Economic Work Refuted," Peking, Juang-ming Jih-pao, Apr. 22, 1967, as translated in SCMP, No. 3928, p. 21. 89 Wang Te-fu and Jen Ta-ts'ai, "Socialist Construction Depends on Man's Ideological Revolutionization," Peking Kuang-ming Jih-pao, Nov. 25, 1969, as translated in SCMP, No. 4554, p. 5. 90 Jan S. Prybyla, "Income and Prices in China," In Asian Survey, Vol. XV, No. 3, p. 267. (Mar., 1975). 9 1Yale Notes, p. 19, Quoted by Peter Schran, "Industrial Wages System," p. 1029. Also, Teiwes, p. 338. Meisner, "A Profile," p. 731. 93 Christopher Howe, "Labour Organization and Incentives in Industry, Before and After the Cultural Revolution," In Authority, Participation and Cultural  Change in China," Stuart Schran, (ed.) (Cambridge University Press, 1973) p. 247. 169 94 Meisner, "A Profile," p. 731. 9 5Ibid, p. 717. 96Wheelwright and McFarlane, Road to Socialism, p. 19. Q7 Schran, "Industrial Wages System," p. 1028. 98Wheelwright and McFarlane, Road to Socialism, p. 135. 99 Prybyla, p. 263. 100- ., o c c Ibid, p. 266. ^^Curtin, Women, p. 63. 1 0 2"Do a Good Job in Family Planning and Liberate the Labour Force of Women," JMJP, Apr. 14, 1975, as translated in SCRCP 75-18, No. 5841, April 29, 1975, p. 39. 103 Curtin, Women, p. 64. 104- . , r o Ibid. p. 68. 105Richman, Industrial Society, pp. 302-305. 1 0 6 I b i d , p. 306. 107 Curtin, Women, p. 64. 1 0 8Edgar Snow, Red China Today. (Random House, New York, 1971 ed.), pp. 249-250. 1 0 9"Do a Good Job in Family Planning and Liberate the Labour Force of Women," JMJP, Apr. 14, 1975, as translated in SPRCP, 75-18, No. 5841, Apr. 29, 1975, p. 39. 170 1 1 U"Setting Up an Economic Supervisory Group in a Factory Is a Good Method," JMJP, Mar. 4, 1970, as translated in SCMP, 70-10, No. 4615, Mar. 13 1970, p. 120. ^^Ibid, p. 121. Ibid. 113 "Northeast Qiina Petroleum Plant Revolutionary Committee Relies on Workers to Supervise Enterprises Finances," In NCNA - English, Shenyang, Apr. 18, 1970, SCMP, 70-17, No. 4644, pp. 69-71. 171 The Cultural Revolution and Beyond, 1966 - 1975. Government Party Unions Party CommittcG Revolutionary Committee Operations Policy Workers Direct control and overlapping membership. 172 CONCLUSION The focus of my thesis has been fairly broad. I have written a rather long chapter on the early development of the C.C.P.'s political philosophy with special reference to the Yenan period. I have also examined the oscillating course of change of the Party in the micro-organization of China's industrial enterprises, from 1949 up to 1966. As well, I have examined the Cultural Revolution, some of its probable causes and some of i t s effects on factory organization. Finally, I have attempted to put together as recent a model of factory micro-organization as possible. The time span of this thesis has been over 55 years and has concerned itself with many aspects of communist Chinese society, from agriculture to education, from piece wages to '3 in 1' innovation committees. Any number of conclusions might be made from i t , each varying with the concerns of the author. Hence before making any conclusions I would like to re-state the purpose of this thesis. My primary sociological interest is in the social organization of productive enterprises, of how work is organized and carried out. My interest in this particular subject stems from my intellectual-political orientations, but has been reinforced by personal empirical observation. The organization of western-type factories has had a long and intensive scrutiny. From this scrutiny, the observation that is made repeatedly i s the alienation of the worker from the work-place. My own experience verifies this observation. In the western, capitalist world, alienation 173 i s generally held to be an inescapable cost of 1modern1 production, inescapable because of the incompatibility of the 'nature' of man with the 'intrinsic' requirements of production. In examining this position, however, we should note two tilings in particular, one are its assumptions; and two, its context. The assumptions in Western organization theory relate generally to what i s termed the 'nature of man'. That i s , man is assumed to be pre-disposed towards certain sorts of behaviour, and hence, can only function in certain organizational settings. The context that we must keep in mind is that these assumptions and theories have been developed in a capitalist economic setting. The two are related. Without going into an examination of these assumptions and of their historical-economic context, a task that could never be done justice to in so short a space, we can reject the universality of these theories by one simple empirical observation. Other forms of factory organization have proven themselves successful. One such example exists in China today. China has rejected western models of factory organization and developed a unique model of her own with immense implications for other societies. Material incentives are not seen as the only or necessarily the best form of motivational stimuli. Rather, they see people as capable of responding to a wide range of stimuli. These include moral, political and ideological incentives. The Chinese do not assume that social production is contrary to human nature. Nor do they assume that an individual would inherently prefer a specific clearly defined task and role. Rather, the Chinese assume that men value freedom in determining their own approach to prob-lems and further that collective decision making in social production can be both efficient and intrinsically satisfying. 174 Most importantly, perhaps, the Chinese do not assume that economic success can only be measured in terms of productivity and profitability. Rather, they assume that participant satisfaction is of equal importance. The organization of industrial enterprises must not only be economically acceptable but i t must be socially acceptable as well. Economic goals must be integrated with social goals. This question of the relationship between economics and politics i s an important one. As I have noted previously, a number of critics of China's political system have accused the Party of subord-inating economics to politics. I think we are in a position now to see that this has not been the case. Nor is i t true that politics have been subordinated to economics. Economic expediency has not been the primary determining factor of organizational change. Rather the goal has always been to maintain a harmony between politics and economics that would maximize both goals. The Chinese do not feel that the inclusion of po-l i t i c a l goals compromises economic efficiency, but rather that only through the attainment of their political goals can productive efficiency be freed from the bonds of alienated labour. The history of the organi-zational change of China's productive enterprises has been the history of China's search for such a model. Some examples would serve us well at this point. In 1955 the Party became (officially) disillusioned with the system of 'one-man management' as i t stood. Judging by the consistent and substantial increases in production that had occurred over the preceeding four years there is no reason to believe that this disillusionment was based solely 175 on poor economic success. Rather the commonest complaint of the period seems to be that i t totally violated the policy and practise of team collectivety that had evolved during the Yenan period. To rectify this situation the Party felt compelled to increase its own power within the factory. The Party committee, the lowest representative body of the Party, now assumed control over policy matters. The extension of the power of the Party over factory management was virtually synonomous with increasing political rule. This trend continued and culminated during the G.L.F.. During this period, the dominance of political rule now severely threatened production. Yet during this period many politically motivated changes, changes that were to later reappear permanently, ap-peared for the f i r s t time. The system of 'two participations, one-reform and triple combination' was one important example. Yet, the changes effected during the G.L.F. had to be retrenched to counter the economic breakdown they were helping to create. Economics and politics were no longer in balance and that equilibrium had to be restored. Consequently, during the aftermath of the G.L.F., technical and co-ordinating roles were re-emphasized and the power of economic management was enlarged. By 1963, however, this trend was again reversing. New stress was being placed on the importance of political goals. Cadres were being exhorted to labour.on the production line on a regular basis. This was part of a new approach, fi r s t begun during the G.L.F., of changing the nature of status and prestige within the factory. During the period then, from 1952 until 1963, the balance between political and economic oriented organization swung back and 176 forth a number of times. At some points economic efficiency was compromised by politics, as during the G.L.F.. At other points, po-l i t i c a l considerations were compromised for the sake of economic ef-ficiency, as during the recovery period immediately following the G.L.F., but the goal through both of these periods seems to have been the same - the formulation of a model that would satisfy both economic and political considerations. However, the amplitude of the policy oscillations also serves as an indicator that a more basic problem needed rectification. That problem was with the increasing bureaucratic rigidity of the growing managerial elite and with the Party itself. But perhaps most import-antly i t came down to a choice of models, or as Mao Tse-tung called i t , a choice of "two roads." In practise, the problems revolved around the difficulty in implementing revolutionary changes within a basically bureaucratic structure. While many political changes were vigorously encouraged their implementation was being blocked by the new managerial elite who had a vested interest in maintaining the status quo. This group also had support from within the Party itself. Thus, without a unaniminity of the Party, decisive action could not be taken. It was this crisis situation which precipitated the Cultural Revolution, a revolution which ended decidely in favour of "Mao's revolutionary line." The choice between returning to a bureaucratic organizational form or advancing to a 'revolutionary' form had been made. The post-Cultural Revolution's organizational model has been marked with relative stability and continuity. It is a model that 177 carefully integrates some of the production oriented components of 'one-man' management with the politically oriented components of the G.L.F. into a single unified model of production organization. Whether this is a climactic model or not is difficult to say. The observation that can be made however is that by relative comparison i t appears to satisfy both the Party's economic and political expectations. The second question that I wish to address in this conclusion i s that of the model's applicability to other social settings. While these would be conjectural, I think some generalizations can be made. If a hypothetical society sought to adopt the Chinese model they would have to understand the economic, social and ideological systems in which i t is situated. While i t would not be necessary to recreate Chinese social l i f e to make the model work, a number of its aspects are important prerequisites. The most basic prerequisite is that economic decision making is not controlled by and for a capitalist class. Both the desire and the power to revolutionize the organization of production must coincide. In capitalist society this could not occur without critically changing the nature of capitalism itself. The desire to make revo-lutionary changes occurs only in small pockets in society at large and very rarely in government or business. Even assuming a fully motivated government, change could s t i l l not be made as long as business main-tained its operational autonomy. Thus, i t would f i r s t be necessary to consolidate business and government under the control of a body rep-resenting the working class. In short, in China the revolution itself was the necessary prerequisite of the model. Also of importance, perhaps more than I have accorded i t in the body of the thesis, has been the development of methodologies of * The author notes the contentiousness of t h i s argument. 178 collective decision making and action. In China's case this began during the earliest periods. Guerrilla warfare necessarily required collective action and the methodologies evolved over a long but fruitful course. These methodologies cannot be taken for granted; they arise out of the social and organizational needs of the new emerging order and uniquely satisfy her particular needs. Red Army units, mutual-aid teams, co-operatives, communes, Revolutionary Committees, and '3 in 1' technical innovation committees are just some examples of collective organizations that have arisen over the course of China's revolutionary history and satisfy her particular needs. Likewise the methodology of creating and sustaining these organizations lias evolved over time ac-cording to China's given set of historical conditions. To some degree at least, each new society intent on revo-lutionizing its social order must develop its own particular methodology. In so doing, i t seems to me that a society with a long historical tra-dition of co-operative or collective organization could accomplish this more easily than societies without such traditions. China had such traditions in co-operative agricultural work and she utilized those traditions as a basis from which to expand. On the other hand western society has few comparable traditions and on the contrary, has a strong traditional ethos of individual responsiblity and enterprise. Thus in this and many similar ways some societies are more or less predisposed towards the development of a collective social order than others. What I think the preceding two examples serve to illustrate is that while the Chinese model may be attractive to those in western society whose lives involve productive labour, the chances for even a modified adaption of 179 this or similar models seems limited. The interests of capital and labour do not frequently coincide. However, some changes similar to aspects of the Chinese system have appeared in western factories. Both Volvo and Ford Motor Co. have experimented with team as opposed to line assembly of cars. Similarly, a growing number of corporations are promoting employee ownership as a means of increasing employee co-operation. Other opportunities for changing the nature of industrial production also exist within government owned or controlled industry. However, in both privately and publicly owned industry, the interests of capital remain unchallenged. Changes in the organization of productive enterprises will invariably be made on the basis of increased profits. Thus the one open avenue for adopting aspects of the Chinese system in western society is through a demonstration of their effectiveness in the interests of capital. On the other hand the Chinese model might be more easily adopted by non-western, particularly peasant societies without a long, bureaucratic-capitalist tradition. Certainly their existing set of conditions and needs would more closely match the ones that led to the creation of the Chinese model. In the introduction I stated that one of my goals was to provide an understanding of the evolutionary process of the Chinese model from its general historical framework to the particular contemporary model. In chapter one I attempted to provide an understanding of the existing set of conditions and circumstances that the movement faced during its early formative years. These to a large extent shaped the political philosophy that was later to direct changes in factory organi-zation. The particular set of policies which constitute the micro-level 180 model of factory organization do not exist in isolation from the larger, more general body of political philosophy. Rather they exist as only one aspect of the overall philosophy. The ability to revolutionize one segment of society is often dependent on the ability to revolutionize other segments as well. No single segment of Chinese society can be studied and understood without at least a general knowledge of the economic, social and ideological setting in which i t exists. Thus, to a large extent the successful use of China's revolutionary model of fac-tory organization was dependent upon the successful revolutionary trans-formation of a l l of society. In seeking to adapt the Chinese model, other societies must appreciate the social context in which i t operates. Yet equally as valuable as the final model is the course of experience of the Chinese. Problems were met, discussed, experimented with and solved. By carefully following the course of the model's evolution and change, this experience can be gained by other revolutionary movements in same or similar situations. For different societies, different aspects of the Chinese experience will prove to be useful. 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