A planned economy has been tried. However, even after removing all market mechanisms, corruption amongst the party managed to shatter the union.
As much as Deng is hated, he managed to set the foundation of a mixed economy, which, as we can see by the great growth of China, was probably the correct thing to do.
Later adaptations by the CCP managed to incorporate precautions to prevent internal corruptions, and furthermore, bourgeoisie corruption to avoid the dissolution of China and shock therapy.
Furthermore, after the dissolution of the USSR, many communist parties followed China in pursue of a mixed economy, leading to growth and the betterment of society as a whole.
That’s not to say that China doesn’t have its flaws. Particularly in its neutrality and lack of action internationally.
The problem with the Soviet economy wasn’t simply because it was planned, but because the way it was planned it led to a very centralized command structure with little flexibility, accountability and transparency.
I’d rather not speak what would be the ideal system, but I rather argument in favor of adjusting the economic management through trial and error, in a scientific way. And that market should be gradually replaced, and the way planning is made needs to be revised, to avoid inefficiencies and concentrations of power.
By the way, China’s mixed economy does not exist simply because of efficiency reasons, but because it chose to open the market for foreign investors. Because of this, China couldn’t exercise control anymore over its own industries, but the CPC used this opportunity to close the technology gap between their economy and the West.
In my view every industry goal should be to produce as much as possible, as efficiently as possible, with the best quality possible. Having access to a world market where you can allocate your production and have access to inputs really helps this goal. Limiting industries to a certain threshold of production dictated by a planned economy kinda hinders the development of production.
Until there is a global communist goverment that could plan the needs of the global population, a planned economy only hinders development.
This is my general view of things, but of course there are some nuances here and there, strategic industries should not operate by the same standards of a civil industry, etc…
Mixed economy is necessary in the first stage of socialism. Here’s how China’s academy of science sees it:
Engels was already saying as much in Principles of communism:
Will it be possible for private property to be abolished at one stroke?
No, no more than existing forces of production can at one stroke be multiplied to the extent necessary for the creation of a communal society.
In all probability, the proletarian revolution will transform existing society gradually and will be able to abolish private property only when the means of production are available in sufficient quantity.
Earlier socialist experiments had periods of mixed economies too, for example the USSR with Lenin’s NEP(new economic policy). However, these early socialist experiments made the mistake of ending this phase way too early, including China under Mao. It’s only after the Khrushchevist opportunists took over the Soviet Union that China realized the soviet approach was misguided on multiple points and decided to start over this early phase of socialism under Deng Xiaoping, with the intention to let it run its course to the end this time.
One major flaw of the Soviet way of ending the mixed economy phase as soon as possible and directly switching to a nationally owned command economy is that it forced them in a position of constantly butting heads with a capitalist world at the peak of it’s power with a primitive, still burgeoning socialism (remember that the USSR and Mongolia had been the only socialist countries in the world until the end of world war 2).
The fact that the world’s bourgeoisie wouldn’t be able to access the soviet market regardless of what they did meant there was little downside for the capitalists to impose full embargo on the Soviets and refuse to share technology. Not only did this severely curb the Soviet’s ability to get anything from foreign countries (which really didn’t help during the famine), it meant the USSR was constantly on the back-foot trying to re-invent technologies that had already been invented in the west, causing Soviet technology to be perpetually behind despite the high quality of their science. Plus, being denied access to such a huge market made the capitalist world especially mad and warmongering, particularly since, with capitalists being denied access to the Soviet market, bombing the USSR wouldn’t destroy any private property belonging to any capitalists nor disturb any of their businesses.
With its Socialism with Chinese characteristics model, China use capitalism’s own contradictions against it. When China opened it’s market to foreign investment, the huge potential market and cheap labor pool was just too much too pass up, the capitalists probably knew that China was still socialist and that implanting these humongous manufacturing capabilities in China with all the technical knowledge this imply would strengthen China at their expense no less, but whether they knew that or not didn’t matter, the capitalists needed to go to China to maximize their profits. This also works to temper western aggression, with so much of the capitalist’s manufacturing capabilities based in China and so much of their business and supply chains going through China, including the ones allowing them to arm their military, the capitalists are quite reluctant to go to war against China despite all their warmongering rhetoric, that’s also both why they’re so desperate to get their businesses out of China and why they can’t do it: they need to get out of China so that they can bomb China without breaking their own toys, but none of them want to be the first to get out of China because they know that if one gets out but the others stay, the one who got out is gonna get out-competed by the ones who stayed.
and yet liberals argue that a planned economy is just intrinsically worse than neoliberalism…
Very educational.
You mentioned that the PRC under Deng learned after the failiures of the USSR when Khrushchevist opportunists took over. However, I don’t see the correlation between that and a rushed transition into a planned economy.
From my understanding, the accession to power of Khrushchev was a wake up call that prompted the Chinese to examine not only Khrushchev’s revisionism but earlier mistakes from before Khrushchev as well. Before that, China had a tendency to just do what the USSR recommended them to do with minimal consideration like most of the socialist block was doing.
But someone more read than me on the PRC’s history would be better able to tell you about these events than I can.
As long as this is no substitute for the planned sector of the economy; in fact, I want the planned sector to benefit from this, and establish further its economic hegemony and, by proxy, the proletarian state, by learning the lessons of the market economy while keeping separate from it
This should be fine
The extent depends on the existing level of development. If there is already a large and developed industrial base, then it may make more sense to go with a more heavily planned economy than one that also implements market forces. Further, it wasn’t strictly necessary in China’s case, merely the correct choice to make in the given circumstances, but certainly not a hard requirement. The DPRK grew 3.7% last year as estimated by the ROK despite being overwhelmingly publicly owned and planned, and under intense sanctions. Moreover, even under Mao and later the Gang of Four, there were still markets and private property. Economic growth and development was still positive pre-Deng, just unstable:
You’ll find that those of us on Lemmygrad are generally supportive of Deng Xiaoping, Socialism With Chinese Characteristics, and Reform and Opening Up. Deng Xiaoping Theory correctly applied Marxism-Leninism to the conditions of China, and as such appears to have paid off extremely well. I would say this was the correct course of action, as would most here.
Secondly, I think it’s important to understand that all economies are mixed forms of ownership, with the exception of tribal communalism and eventually late-stage communism. Even the DPRK has special economic zones like Rason. Socialism is not defined by its purity, but just like all other modes of production, by its principle aspect. In the PRC, public ownership governs the large firms and key industries, while diverse forms of ownership exist in the medium and small firms, such as private, joint-stock, cooperative, and sole-proprietorships. By controlling the key industries and large firms, the CPC and the working class as a whole has the real power in the economy, the one who controls the rubber controls the rubber ball factory.
Over time, this form of ownership changes. Public ownership becomes economically compelled as firms grow in scale, and class conflict rises. Not everyone will chart the same course China has, because not everyone will come from the same semi-feudal, post-colonial background. The west will have a very different approach, most likely, as will countries in South America and Africa, Southeast Asia, etc. This is why the CPC calls their model “Socialism With Chinese Characteristics,” in anticipation of “Socialism With Mexican Characteristics,” “Socialism With Kenyan Characteristics,” etc.
One final thing, I recommend looking at Cheng Enfu’s model of the “stages of socialism.” This best helps contextualize the course China is taking, and where they are at in this course. The PRC is currently in the “primary stage” of socialism, which is why they have the structure they presently do. Over time, they are developing more and more, allowing them to advance to higher stages of socialism.
By becoming an alternative to the US Empire, the PRC is positioning itself to better help those that also cross the river and join their comrades in building socialism without fear of being isolated. China is playing a major role in fighting imperialism through multilateral development, which is essential at this point in time for the global south to be liberated from the global north.
Hope this helps!
I think it’s necessary in the context of a stable global hegemon, because capitalism is so organized and centralized under a single imperial power. We have to identify the primary contradiction and struggle against it, which can make for strange bedfellows.
In previous eras it was possible for revolutionaries to play the imperial powers off against each other, like the Haitians playing the British off against the French and the Russian revolutionaries playing the Germans off against the Tsar. Today, the West is unified and so playing them off against each other isn’t going to work. This limits revolutionary possibilities strictly within nationalism, which means collaboration with the national bourgeois forces against imperialism.
That means appeasing bourgeois patriots in national liberation struggles and in the ongoing struggle against imperial hegemony.
For now.
Brillantly put! Thank you. Thoughts like this are why I love grad. Reading theory and studying history is important but having comrades to talk to who provide insights of their own beats pure theory any day.
Aw shucks 😳
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I think, ongoing disintegration of the world order and deepening crisis of capitalism will make planned economy preferable anyway.
Great insight
As much as Deng is hated,
Who? where? If they don’t like Deng I’ll show them Tito.
I don’t think a mixed economy is necessary but it sure was a good move for China in its time and place. I think that is the most important lesson to take from Deng. There is no answer that is always right. Each situation requires its own analysis.
