San José State University
Thayer Watkins
Silicon Valley,
Tornado Alley
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The Profound Economic
Lessons of Maoist China

The Great Leap Forward

In January of 1958 in Nanjing Mao Zedong announced that China was going to undergo a program of self-industrialization which in ten years would have steel production in China exceeding that of Great Britain. Nikita Khrushchev had previously asserted that in a similar period the steel production in the Soviet Union would exceed that of the United States.

What ensued in China was one of the most catastrophic disasters in human history. Mao first gained the allegiance of the peasants by confiscating the land of the large estates and distributing it to the peasants who farmed it. But after only a few years Mao and the central planners in Beijing forced the Chinese farmers into communes where they had to follow the dictates of Beijing. In the communes not only were lost the incentives of families producing for their own benefits but workers were taken away from agricultural production to engage in steel production in so-called Backyard Blast Furnaces. The steel produced in those backyard blast furnaces was largely useless. Nevertheless Beijing was calling for the reporting of record high production. That led to the commune workers throwing useful tools and utensils into the blast furnaces. False record-high productions were also reported in agriculture and then the central governments took their shares based upon those falsely high production figures. That resulted in the communes not being left with enough to feed their populations.

The Great Famine

There were shortages of food throughout China but in the north central region the food shortage was so severe some people died of starvation. When the problem began to develop the government prevented people from migrating out of the areas of starvation.

When analysts examined the population census figures from before and after the famine they concluded that tens of millions of people had died of starvation in the period from 1958 to 1962. The figures varied from 18 to 55 million. Reasonably it can be said that 40+ million people died in The Great Famine. It was the worst famine in human history.

Did It Have to Happen?

Clearly the insanely foolish programs of the Great Leap Forward did not have to happen. But even with the reduced agricultural production of that disaster the famine did not have to happen. The government took an excessive share of production to the cities. The cities did not have a famine. The famine occurred in the agricultural areas where the food was produced. What happened to the excessive share the government took? Some of it went payoff loans made to China by the Soviet Union. The loans were made in industrial resources and were to be repaid in agricultural products. Those loans did not have to be repaid at that time. It was pure chauvinistic pride that led Mao Zedong to make those repayments.

Most of the government's share went to feed the people in the cities. Some of it went into warehouses to store in cases of harder times in the future.

But even with all of the mistakes and foolishness the famine did not have to have happened. The outside world would have come to China's aid if only the government had revealed the problem. It was again just chauvinistic pride that prevented Mao from letting the world know of the problem of famine.

After the Famine

For five years Mao Zedong stayed out of politics to allow Zhou Enlai, Liu Shaoqi, and Deng Xaoping to bring about the recovery of China. After five years Mao wanted absolute power again. For him the danger was that the authorities would isolate him and rule in his name.

Mao was a disaster at ruling the country but the one thing he was good at was guerilla warfare. He proceeded to create such social turmoil that his competitors for leadership would have no choice but to call upon him to resume power and settle the turmoil.

He called upon students to form the Red Guard and criticize and protest against local Communist Party leadership. Schools were closed so they would have nothing to do except to engage in revolutionary politics. They raged about the country trying to destroy elements of history and noncommunist ways of thinking.

The leadership was deposed. Liu Shaoqi was the legal head of the Government of China but he was imprisoned, beaten and tortured. He died in prison. His wife was publically humiliated. No one but Mao had any real political power no matter how high was their formal political position. It was totally a totalitarian system.

The movement was given the lofty name of The Great Proletarian Cultural Revolution. In reality it was nothing more than The Movement to Restore Mao Zedong to Absolute Power.

When it was successful Mao demobilized it and sent the young people to live work with the peasants of China in the communes. The students who not proletarians originally became common laborers in those communes.

What is the lesson to be learned from this episode? The stark reality is that most young people are: 1. Inexperienced, 2. Naive, 3. Gullible, 4. Self-righteous. Because of this they are easily led by ruthless individuals who promise utopia but lead them into Hell. It is worth noting that in Judeo-Christian theology Hell is created by demons who were once purported to be angels.

In the so-called Cultural Revolution the young people were led to fight against the one thing that would solve the problem of China's poverty; i.e., the abandonment of central planning and the adoption of market enterprise. When Deng Xiaoping initiated this change in 1978 China began to grow at about ten percent per year. China is or soon will be the largest economy in the world.

What we see in the photgraphs made during the Cultural Revolution is the young people of China earnestly and eagerly working to promote a system and its leader who were responsible for upwards of forty million Chinese people starving to death. They could not have been more misguided, ignorant and gullible.


The lessons of the Mao era in China were

  1. Central planning beyond the enterprise level does not work.
  2. Control of enterprises by politically appointed managers with no experience or demonstrated talent for management does not work.
  3. Giving any one person total control does not work.
  4. Young people are generally without life experience and therefore do not have very much sense. They are easily led into supporting foolishly utopian plans by charismatic individuals.

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