January 7, 1999

Detour on Capitalist Road: Die-Hard Maoist Collective

By ERIK ECKHOLM

ANJIE, China -- In the center of this well-kept community stands a giant statue of Mao Zedong, complete with honor guard, that was erected only in 1993 -- well after many places had torn down monuments to the late chairman. Along the surrounding avenues stand tidy apartments and humming factories. Nearly every wall is freshly painted with slogans from the 1960s like "Put Ideology First" and "Let Chairman Mao Thought Radiate Forever."

In an age often marked by an economic free-for-all, the village of Nanjie is a dinosaur: Its farm, its factories, its housing are all collectively owned and managed. Residents must attend regular study sessions of Mao's teachings, and their take-home pay does not exceed $30 a month. But each family receives the needs of life free, including identical homes, television sets, flour and eggs, busts of Chairman Mao and a daily bottle of beer per person.

Billed as a socialist success, Nanjie, in the central province of Henan, is often cited as a paragon by China's "leftists" -- the dwindling, old-guard Communist critics of China's rush from ideology and state planning. As one admirer recently wrote, Nanjie is a place of "truly shared prosperity," where people "uphold what is public and spurn what is private."

But the very fame of this strange showcase suggests just how anomalous it is today -- and how far those leftists have fallen as President Jiang Zemin leads the country toward a market economy. China remains under authoritarian one-party rule, led by people who do not hesitate to arrest anyone who threatens the primacy of the Communist Party, but who have jettisoned most of Communism's economic principles, leaving the remaining "leftists" in despair. "The fundamentalist left has lost any influence over Chinese politics and society," said Xiao Gongqin, a historian at Shanghai Normal University. Unlike the case in Russia, where the economy collapsed and nostalgia for the cocoon of Communism is powerful, China's economic boom has largely diluted popular demands for old-line solutions.

But even as the old left fades, new social critics are emerging who are more democratic in their politics but share many of the left's social ideals and are appalled by the inequalities and corruption of China's "market socialism." Unlike the beleaguered democracy dissidents, these new critics, sometimes called "new populists" or "new leftists," have not run afoul of the law. They spend more time dissecting the economy than political trends, and they are more suspicious of free markets and global capital.

But if the rapid growth that has been China's universal solvent should stall for long, these critics believe, their ideas -- speaking to everyday complaints of the common people -- could have a broad and explosive appeal.

The Old Left: Marxist Elders Vs. Bourgeoisie

The old leftists, in Chinese terms, are a mostly elderly group of Marxist intellectuals and retired officials who remain deeply committed to state ownership of key sectors and strong party control over society. They still worry about threats like "bourgeois liberalization" and China's "peaceful evolution" into a capitalist society -- code phrases for a steady erosion of Communist principles, abetted by the West. From the beginning of the reform period started by Deng Xiaoping in 1978 until recently, the leftists' influence undulated, but they remained a key balancing force in Beijing politics, supported by powerful party elders. A powerful leftist bloc came in handy for Deng, for example, when he felt he had to squelch the rising liberal tide associated with the Tiananmen Square demonstrations in 1989.

Now those elder patrons have mostly died. The current leadership, led by Jiang, is certainly committed to the Communist Party's monopoly on power. But especially with the program to drastically reshape or sell off state industries, party leaders have abandoned key tenets of socialism, the leftists charge. The left's chief patron in recent years has been Deng Liqun, a once-powerful confidant of Mao and then Deng Xiaoping who broke with the latter over ideology. Deng Liqun is now 83 and in poor health, and the Contemporary China Research Institute he founded in Beijing to propagate leftist views is kept at arms length by a wary government. A journal associated with the institute, Trends in Contemporary Thought, remains a leading leftist forum, and its editor, Duan Ruofei, has gamely tried to carry on the battle.

In a rare interview at the institute, Duan was careful to couch his objections to China's path in terms of the so-called Deng Xiaoping Theory -- the same vague catch-all that is used by Jiang to justify his new directions -- and did not attack leaders directly. "We are the real reformers," Duan said. "The problem is that the upholders of Marxism have a different understanding of reform than certain liberals, who are trying to transform the defining role of public ownership. "A capitalist class has re-emerged in China," threatening to undermine socialist achievements, he said.

Duan and his colleagues suffered a major rout in late 1997, at the 15th Communist Party Congress, when Jiang formally embraced the wholesale restructuring of state industries. Over the previous two years, in a last-ditch effort to drum up concern, Duan and other leftists had circulated four unsigned essays exposing the dire threats to socialism. The essays showed the anguish of people who felt their deepest beliefs were being betrayed. One, for example, complained of a "new-born capitalist class that has been raised on the blood and sweat of four decades of tireless labor by the whole people."

The New Left: Cultural Revolution has Mixed Reviews

Today, there is a broad consensus among senior officials and intellectuals that the path toward market economics is China's best hope. Many of these senior officials, Western-influenced economists and others accept that some hardships and growing inequality may be a necessary price. Corruption is seen as an unfortunate side effect that must be fought.

But a growing minority, part of a new populism, assert that China's current course is inherently corrupt, enriching the powerful against the interests of workers and peasants. It is not a unified movement. Some have styled themselves part of a "new left," but many others resist being pigeon-holed. Some say there are positive lessons to be gleaned from the disastrous Mao years -- and have even made pilgrimages to Nanjie in search of inspiration -- while others abhor that era. But they share many socialist ideals, and argue that capitalism and the opening to the global economy, as practiced here, have allowed an alliance of privileged officials and business executives to get rich at the expense of the little guy.

"In the 1990s the economy has grown rapidly, but in terms of morality, things are really rotten," said Yang Fan, an economist at the Chinese Academy of Social Sciences. Yang considers himself part of a growing "moderate left" movement, led by intellectuals in their 40s and 50s who spent time in the countryside during Mao's Cultural Revolution of 1966 to 1976 and share a special concern for workers facing layoffs as state industries are pruned and peasants whose incomes have lagged. He said in an interview that the country is in the grip of "closet rightists" whose aim is "to convert political power into personal wealth."

Similar concerns have even been voiced by an outspoken senior economist at the central government's think tank, the Development Research Center. In a recent newspaper article, the economist Wu Jinglian said China could be in danger of developing "crony capitalism" like that in Indonesia and Malaysia. While they call for stronger regulation of business, genuine worker participation in company management and greater sharing of wealth, these critics seldom offer detailed plans for curing the ills they describe. By and large, they have not delved deeply into strategies for political change, at least in public.

But the potentially broad appeal of their critique, especially if the economy stalls, has been suggested by the attention given to a recent book, "China's Pitfall," by economist He Qinglian, who says economic reforms have been warped by the plundering of a new bureaucratic and financial elite. "The real struggle today is between reformers out for the people as a whole, and reformers out for themselves," said Cui Zhiyuan, a political scientist at the Massachusetts Institute of Technology who remains active in intellectual debate inside China. Cui has been described as a "new leftist" in part because he has tried to find positive aspects of Mao's Cultural Revolution of 1966 to 1976 -- putting off many readers. He has also, like the old leftists, been entranced by Nanjie. In a 1997 book, Cui noted that most socialist experiments have foundered on the problem of incentives. But "the practice of Nanjie village shows it can be overcome," he wrote, so "the superiority of cooperation in a collective economy can be given free rein."

The Collective: A Model at Risk From Free Markets

Nanjie itself claims to combine the best of both worlds. Its relative prosperity appears to reflect the astute exploitation of market opportunities opened in the 1980s: The village now runs 26 factories, including printing, plastic wraps, snacks and one of China's biggest producers of instant noodles. The farming that brings a poor living to neighboring villages has nearly disappeared.

To run its factories, Nanjie employs thousands of outsiders as workers. Like the village's permanent residents, these workers must study Mao texts. They are paid a modest salary and given free housing in neighboring areas, though not the handsomely equipped apartments and lifetime benefits given to Nanjie's 3,100 official residents. "We were able to grab hold of the express train of economic reform, and at the same time adhere to the construction of socialist spiritual civilization," said Wang Hongbin, 47, who has been party secretary of Nanjie since 1977.

From a guided tour it was impossible to determine how Nanjie may have avoided the usual pitfalls of collective enterprise. Wang said only that proper ideological study and the leadership of party cadres "encouraged the enthusiasm of the masses." Wang also said the village -- which has spacious, well-equipped schools and gives its model workers free vacation trips -- receives no subsidies, only loans as needed. There is no way to verify the village's finances.

The leftists who praise Nanjie seldom mention aspects that would be unacceptable to many Chinese today: the lack of opportunity to amass wealth, the rigid requirements for ideological study, the required group critiques of neighbors' behavior that are right out of the Cultural Revolution. Still, it appears that many residents are willing to trade certain freedoms for a modest prosperity.

Yao Tonglin, 63, who has lived in Nanjie for 40 years and now shares an apartment with her husband, daughter and son-in-law, remembers how poor the village used to be. "Our men couldn't even find a bride who would marry them," she said, standing in front of the giant Mao poster on her living room wall. "Now, outsiders come running to marry the local people."

Village officials admit that the national economic slowdown may hamper its industries. But as the rest of the country struggles with unemployment and debates the ethics of the free market, Wang, the village chairman, casts his eyes on the horizon. "What we hope for in the future is that the quality of our Communist neighborhood will be raised to ever greater levels," he said. "Material conditions will be extraordinarily prosperous and in terms of spiritual civilization, life will be equally rich."