55 East Asia: Economic Geography – Mao’s Communist China

Background

In 1949, the Chinese Communist Party, led by Mao Zedong, seized control of mainland China. Communism is an economic system based on the writings of the German philosopher Karl Marx. Marx believed that capitalism was an inherently flawed system in which a wealthy ruling class eventually controls all means of production (such as farms, mines, factories, shops, etc.), leaving the impoverished masses to toil for wages that undervalue their labor. Marx advocated replacing capitalism with an egalitarian society in which workers share what they produce out of a commitment to the common good.

Although Marxism certainly set the philosophical goals of Mao and the Chinese communists, their actual economic policy might better be described as Stalinism – the economic model established by Joseph Stalin in the Soviet Union, the world’s first communist state. The Stalinist model is based on the idea that the government represents the people, and therefore the government should seize control of all real estate and means of production to ensure the equitable distribution of wealth. Under a Stalinist economic system, government bureaucrats control all economic activity – they determine what is produced, where it’s produced, and how much is produced. Since everyone works for government-controlled institutions, the government sets all wages, and since the government controls the distribution of goods and services, all prices are controlled by the government as well. Mao launched what he described as a “Great Leap Forward,” a program to modernize China and place it on an equal footing with the great economic powers of the world.

Traits

Under Mao and the communists, rural China was reorganized under the Commune System. All agricultural land was seized from landlords, and farmers were banded together into cooperative farms. These communes would become the basis for rural political organization and the provision of education and healthcare. Those living on communes shared the task of farming, ran small-scale cottage industries, and built public works projects such as transportation networks and irrigation systems. In urban China, the focus was on industrialization. State-owned factories prioritized the production of heavy industrial goods – such as agricultural, transportation, and construction equipment – to power Mao’s Great Leap Forward. Light consumer goods – such as clothing and household items – were a secondary priority, and were always scarce and of poor quality.

Successes

The commune system would, eventually, improve conditions in rural China. Prior to 1949, the majority of China’s rural laborers lived short, miserable lives in abject poverty. Famine and disease were always a problem in rural China, as were the age-old curses of flooding and droughts. In any given year, it seemed that some part of rural China was dealing with a lack of water, while another part of rural China was dealing with too much water.

Under Mao’s program, modern health care and education were provided to China’s rural masses for the first time. In 1949, the life expectancy in rural China was a mere 35 years. By the time of Mao’s death in 1976, it had increased to 55 years. In 1949, China’s adult literacy was 20%. In 1976, it was 93%. Mao’s massive public works projects – hundreds of reservoirs and thousands of miles of canals – both mitigated flooding and supplied water during droughts. Under Mao, China expanded industrial production and, remarkably, became a self-sufficient food producer by the 1970s. Mao frequently spoke of the “iron rice bowl.” He acknowledged that communism would never produce the decadent wealth associated with capitalism, but it would guarantee that everyone in the country was provided with the basics – food, shelter, health care, education, and employment.

Failures

As was the case in the Soviet Union, the success of communism was accompanied by some disastrous shortcomings. Mao’s complete lack of environmental safeguards and conservation efforts continue to threaten the long-term well-being of the country’s citizens. And China’s agricultural self-sufficiency took decades to achieve. To begin, farmers were required to spend so much time on the construction of massive public works projects that they often had little time to farm. More importantly, rural communist officials, anxious to impress their superiors in Beijing, would often overinflate harvest reports. Beijing, in turn, required greater food shipments to China’s cities, creating dire food shortages among the farmers themselves. Between 1958 and 1961, nearly 30 million people starved to death in rural China – a number equivalent to the current population of Texas.

In urban China, Mao’s industrialization scheme was plagued by problems inherent to state-driven economies. The workers’ wages were set by the government, and always kept extremely low. Knowing that they were guaranteed employment, but also given little chance for advancement, workers had little incentive to perform, and productivity in Mao’s China was always substantially lower than in neighboring capitalist countries like Japan. Because all companies were state-owned, there was no competition in the country. As a result, China’s industrial products during the Maoist era were always of high cost and poor quality. China was effectively sealed off from foreign investment, giving the country little opportunity to tap into the world’s resources and markets.

Perhaps most importantly, Mao was rigidly authoritarian. He had total, unquestioned authority over politics and the economy. When some leaders suggested reforming elements of the communist system, they were purged by Mao’s loyalists. These purges peaked in the late 1960s during the so-called Cultural Revolution, a campaign that targeted scholars, scientists, reformers, and religious leaders. Millions were killed or sent to die in labor camps.

It is notable that countries with the highest standards of living – such as the United States, Japan, South Korea, and the members European Union – are all democracies. While democracy can be a messy process, it is absolutely vital to a country’s long-term economic success that people have the ability to think and speak freely, to offer constructive criticism to their political and economic leaders, and to elect politicians that promote their economic interests. The sense of political paranoia instilled during the Mao era always limited the country’s economic prospects.

Paradoxically, Generation Z in China has some fondness for Mao.

Cited and additional bibliography:

Yuan, Li. “‘Who Are Our Enemies?’ China’s Bitter Youths Embrace Mao.” The New York Times, 8 July 2021. NYTimes.com, https://www.nytimes.com/2021/07/08/business/china-mao.html.