The political and institutional origins of the Great Leap Forward

In the late 1950s, China embarked itself in one of the most colossal social engineering projects in contemporary history. Millions of individuals were shifted from agriculture to industry from 1958 to 1961 and communes were implemented in the countryside with the purpose of increasing agricultural production. The results of such enterprise, the Great Leap Forward (GLF), were catastrophic: according to Yang (2008), estimates suggest that between 16.5 and 30 million individuals starved to death between 1958 and 1961. This essay argues that the causes behind the GLF lay not only in politics and ideology but also in institutional factors. To prove this claim, this paper (i) contextualizes the discussion by exploring the heritage left by Soviet development model and its discontents, assesses the (ii) political and (iii) institutional origins of the GLF and then (iv) concludes.

The Soviet heritage

According to Naughton (2007), with the implementation of the first 5-Year Plan (5YP), China incrementally adopted a Soviet-inspired command economy model that had a strong focus in heavy industry. Almost completely deployed in 1957 after the virtual extinction of private proprietorship and the further progress of collectivization in agriculture[1], it featured (i) government ownership of all large factories and communication firms and the collectives as the production unit of the economy in the countryside, (ii) the assignation of production targets to firms and allocation of resources among producers by planners, (iii) the use of planner-set prices to channel resources from agriculture to industry[2] and (iv) reinforcement of the Government’s grip on the economy through a hierarchical personnel system in which the Communist Party (CCP) controlled managerial career paths. Naughton (1991) argues that the interaction of this set of characteristics endowed China with two major features: (i) a mechanism to increase savings and investment - in particular, the monopoly control over the commercial system and the price distortions that punished agriculture were equivalent to a form of forced savings from farm activities. And (ii) institutions that had both the capacity to make resource allocation decisions and a strong bias towards physical capital. These elements resulted in high growth rates for the industry while did little for agriculture. Collectivization, the policy expected to increase production in the countryside, failed to improve productivity. Agricultural output and incomes in rural China, therefore, remained relatively depressed.

Politics: contradictions, disenchantment with the Soviets and radicalisation

In September 1956 and following the implementation of the 5YP, the CCP held its 8th National Congress in Beijing. Being the first meeting of its kind since the seizure of power in 1949, it concluded that the nature of the contradictions present in the Chinese society had changed: after the establishment of an essentially socialist system, the traditional class struggle between the proletariat and the bourgeoisie was not anymore the main challenge that China faced. Concretely, and according to Bachman (1991), the coexistence of an advanced political superstructure with a backwards-economic structure was the principal problem that the Chinese society would have to deal with in the following years. This notion was augmented by the –almost- completion of collectivization, which –as MacFarquhar (1974) argues- was a key milestone in the revolutionary path as showed the consolidation of the CCP as the ultimate ruler of China and the eradication of exploitive relations in the countryside. Simultaneously, the need for transformation was particularly clear in rural areas, where the implementation of collectives –although ideologically satisfying- did not bring the material benefits expected by the party leadership and living standards remained unacceptably low. There was, therefore, a clear call to develop the country’s productive forces to guarantee that the most relevant contradiction and obstacle to communism would be overcome. 

The economic modernization plea emerged in the context of a growing disenchantment with the Soviet Union. This disillusionment can be traced back to several factors. First, political differences between Mao Tse Dong and Nikita Khrushchev arose relatively quickly. According to Luthi (2010) and MacFarquhar (1974), the latter infuriated the former by denouncing Stalinism in a speech privately read in the 20th Party Congress of the Communist Party of the Soviet Union (CPSU) in February 1956. Concretely, Mao’s bitterness had origins in at least two issues: (i) the denunciation itself took him completely by surprise, which implies that he was not consulted in the elaboration of a statement that eventually would mark a departure from Stalin, which was arguably the most important individual in the communist sphere until his death. This pictured the CCP’s Chairman as a second-tier leader in the world of international communism. Also, (ii) the content of speech, which criticized Stalinism’s emphasis on the cult of personality, could be interpreted as an indirect criticism to Mao –who was the center of the CCP’s image and its face to the people. In the same page, and as Luthi underlines, there were increasing differences between the CCP and CPSU leaders regarding the way that communism should deal with imperialism. In particular, Mr. Khrushchev believed in the possibility of peaceful coexistence with the capitalist West while Chairman Mao was skeptical of such strategy, favoring a more frontal confrontation and interpreting the Soviet’s stance as a potentially dangerous revisionism. Finally, the disillusionment was also a problem of dissatisfaction with the Soviet development model after the implementation of the 5YP: as Bachman (1991) suggests, bureaucratic Stalinism was increasingly seen as too rigid to deal with the contradictions mentioned beforehand and excessively focused in heavy industry, which could be a problematic approach in an eminently rural country like China. The relative lack of dynamism of economic activity in the countryside after collectivization led to a very unbalanced growth that was undesirable in the eyes of the CCP leaders. Thus, the conjugation of political differences regarding imperialism and Stalinism –both as a political standing and a development strategy- led to a retreat from Soviet-originated policies. 

As Zhu (2012) suggests and was previously argued in this essay, the state of the Chinese economy in 1956 called for a transformation of economic realities that would allow the overcoming of the contradictions. A new development strategy that answered to China’s characteristics, as MacFarquhar (1974) suggests, was needed. It was not clear, however, which one should be implemented. In the context of the Hungarian riots of 1956 which highlighted the risks of a party disconnected from the people and following Liu Shaoqi’s advice on the need for experimentation with ‘limited democracy’[3], Chairman Mao launched the Hundred Flowers campaign (HF), which was an attempt to find ways to transcend those contradictions through dialogue between the party and the intelligentsia. This liberalization strategy should not only lead to Chinese ways to overcome the country’s problems but also to a further legitimization of the regime as it would bring the non-Communist groups closer to the CCP[4]. Furthermore, incorrect thinking and ideas would perish when confronted with socialism and communism due to ideological superiority. Unfortunately for those who raised their voices, such was not the case: dialogue allowed for the ventilation of discontent among elites regarding CCP policies and criticism reached a level that was higher than the expected and tolerated by the Chairman. As Bachman (1991) argues, this led to Mao’s disappointment of the elites, a return to the party as the leader of social transformation and a rejection of the moderate reformism that was preferred by the intelligentsia. If there were to be a new development strategy for China, it would be a radical one.

Institutions

As has been argued in this essay, politics are central to understand why China decided to look for (i) a different development model and (ii) a non-moderate reform program in the late 1950s. However, as Bachman (1991) argues, institutional considerations are necessary to rationalize the choice of policies that later made the GLF. In particular, Bachman suggests that bureaucracies had an essential role in determining the specifics of the policies implemented as they determined the choices available to CCP leaders. Although the Chairman was an extremely powerful individual and the ultimate decision maker, his actual power was constrained as (i) technical staff from different ministries restricted the policy menu that was made available him and (ii) his inputs and explicit preferences were, sometimes, overridden at the time of discussion. In the case of the GLF, the policy menu was restricted to an impossible trilemma that featured markets and price incentives, industrial aid to agriculture and mass mobilization. According to Bachman, the leadership had to choose out of the options presented by a moderate “financial coalition” –which essentially was made of officials working for the Ministries of Finance, Trade and Agriculture– and the “planning and heavy industry coalition” –which consisted of bureaucrats with strong ties to heavy industry and central planning agencies. In the context of the political radicalization that emerged after the failure of the HF campaign, the latter group was able to push the policy discussion towards a big-push, planned development effort as the measures proposed by the former were seen as too timid and close to the ideas of the intelligentsia. Furthermore, the aggressive industrial policies proposed by the heavy industry coalition promised to do more with less, faster and better –which was an appealing message in an environment that was looking for rapid progression towards communism- and were made compatible with the political desire of mass mobilization. All these developments led, again, to a growth strategy that over-relied in heavy industry, continued to exploit the countryside systematically and ended increasing China’s dependence on trade with the Soviet Union[5]. Therefore, if politics explain why the GLF was launched, institutions are essential to understand its specifics, which exacerbated the economic disproportions it was supposed to correct.

Conclusion

In the late 1950s, China embarked itself in the GLF, one of the vastest social engineering projects in recent history. Conceived as a Chinese answer to the contradictions and flaws left by the Soviet-Stalinist development model, an attempt to mark distance from the Soviet Union and an answer to a failed dialogue with the intelligentsia, the political origins of the GLF are undeniable. However, as has been argued in this essay, institutional aspects are critical to rationalize the specific shape that the GLF took. Concretely, bureaucracies with strong ties to the industrial sector were central to define the specifics of the policies implemented between 1958 and 1961. Those details were not irrelevant and can explain differences between the ex-ante motivations of the GLF and its ex-post results.

References
Bachman, D. (1991). Bureaucracy, economy, and leadership in China: The institutional origins of the great leap forward. Cambridge: Cambridge University Press.

Luthi, L. (2010). Sino-Soviet Relations during the Mao Years, 1949-1969. In T. P. Bernstein & H. Li (Eds.), China learns from the Soviet Union, 1949-present. Lanham: Lexington-Books.

MacFarquhar, R. (1974). The origins of the cultural revolution. Contradictions among the people 1956-1957.

Naughton, B. (1991). Pattern and Legacy of Economic Growth in the Mao Era. In K. Lieberthal (Ed.), Perspectives on modern China: Four anniversaries. Armonk: M.E.-Sharpe.

Naughton, B. (2007). The Chinese economy: Transitions and growth. Cambridge, MA: MIT-Press.

Yang, D. T. (2008). China's Agricultural Crisis and Famine of 1959–1961: A Survey and Comparison to Soviet Famines. Comparative Economic Studies, 50(1), 1-29.

Zhu, D. (2012). The Hungarian revolution and the origins of China's Great Leap policies, 1956–57. Cold War History, 12(3), 451-472.

Footnotes

[1] Collectivization in China was incrementally progressive: Naughton (2007) suggests that by 1954 just 2% of the households were involved in cooperatives or collectives. By the end of 1957 and after the acceleration of social transformations with the Socialist High Tide, the figure reached 98%.

[2] This implies that prices lost relevance as the signalization tool to allocate resources in the economy and became instrumental to a forced saving strategy, which aimed to transfer agricultural surpluses to the industrial sector.

[3] This concept can be associated with a form of restricted popular participation where the party’s ideological and directional role was not questioned. Dialogue was open to find answers in terms of organizational and economic methods or details, but the principle of ideological purity of the CCP and its eminence in the political system was not object of debate.

[4] This integration would be the consequence of both the elimination of capitalist elements -the intelligentsia’s source of power and a task that was already accomplished- and, at the same time, the willingness of the Communist center to integrate it.

[5] According to Bachman (1991), the GLF years were characterized by record levels of Sino-Soviet trade.