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Chuang, "The petty private economy in China: Capitalism within a socialist system," 1989

USC dissertation in Political Science.
August 27, 2009

Suo-Hang Chuang, Ph.D

Abstract (Summary)

This dissertation reviews the socialist transformation and development in China with the focus on the individual economy. After the 1949 revolution, the Chinese Communist Party sought not only to rid the People's Republic of China of all vestiges of feudalistic capitalism but to institute permanent economic reform and achieve a total socialist transformation of China. But between destruction of feudalism and achievement of the socialist ideal lay Marxist stage theory, and the PRC has been unable to escape Marx's dictum that authentic socialism derives from a mature capitalistic society that collapses of its own weight. The best efforts of the CCP could not change the fact that prerevolutionary China was hardly at mature capitalist stage, the Great Leap forward and Cultural Revolution notwithstanding.

So far from a 20th-century economy was the PRC that the CCP wrestled with competing demands of pure socialism, residual Asian feudalism, and incipient capitalism, and for 40-odd years private enterprise has persisted in China in some form. This presents a challenge for the communist system, which is offically antithetical to private enterprise. Official deviations from communist theory in favor of "the tail of capitalism" demand ideological inflection, but China's often bleak economic reality suggests that the market-driven economy, particularly at the smallest unit of entrepreneurship, can serve as a mechanism of economic reform. Ironically, evidence also indicates that stage-theory socialist progress has been most successful when the private economy has had some discretion. A key question for China's future is therefore whether economic transition out of a nexus with capitalism, and into pure socialism, is either useful or desirable.

Ideological socialism in China is mediated by several types of ownership--state, collective, individual, or some combination thereof--which sometimes fuse. But development of private economy, if not interrupted by political authority, may create a new economic structure in Chinese society, including a new bourgeoisie. Alternatively, confrontation between private interests and socialist ideology may (as it has in the past) ensue. The vicissitudes of the private economy, inflected by national ideology or local-level CCP cadre-bureaucracies, therefore act as a gauge of economic reform, public economy, and public policy as a whole.

Advisor: Rosen, Stanley