Roland Boer
In the light of the renewed interest in the nature of market reforms within socialist systems, I offer a systematic comparative analysis of Eastern European and Chinese experiences. Some Eastern European countries – especially Yugoslavia and Hungary – undertook such reforms in the 1960s, whereas China launched its reform and opening-up in 1978. They had very different results, with Eastern Europe (apart from Belarus) devolving into capitalist ‘shock therapy’ while China has taken its reforms to a point where we are now entering yet a new stage in socialist construction. Along the way, many lessons have been learned, concerning planning, markets, ownership and liberation of productive forces, and how the relations and forces of production interact with one another during socialist construction. In the light of these experiences a systematic comparison becomes possible. The comparison that follows has four main steps: 1) the de-linking of a market economy from a capitalist system, and the concomitant de-linking of a planned economy from a socialist system; 2) whether a market economy is a neutral instrument that can be used in any system, or whether it is a component that is shaped by the system of which it is a part; 3) planning and markets within a socialist system; 4) the relationship between ownership of the means (and forces) of production and liberation of productive forces, and thus the interactions between relations and forces of production. While the first three items concern the specific question of markets and planning within a socialist system, the fourth topic opens up the comparison to the more foundational question of the relations and forces of production. Foundational, since on this matter the very definition of socialism turns, specifically in terms of economic matters.
Background to economic reforms
We begin with a brief summary of the historical background. Many of the countries in the Council of Mutual Economic Assistance (CMEA) began experimenting with market reforms in the 1960s. Initially, the new communist governments had seized control of production from the former ruling class and instituted old-style centralised planning. However, by the 1960s the early breakaway economic growth began to falter, and new contradictions emerged. A range of reforms began, entailing elements of market relations. Some went cautiously, maintaining a predominance of centralised management, such as the Soviet Union, Bulgaria, Romania, and – after an initial burst of more far-reaching reforms – Czechoslovakia. The GDR (East Germany) also had a period of reform in the 1960s, drawing lessons from the practice so as to enhance its centralised planning in the 1970s., Most significant were the reforms in Yugoslavia and Hungary. The specific steps differed due to local conditions, but they shared an overall framework in terms of the scope of reforms, institutional adjustments, planning and market incentives.
Yugoslavia made its initial moves early (due to expulsion from the Comintern in 1948) and eventually developed a decentralised system of self-managed worker enterprises in a “labour-managed market economy.” They felt their way forward, since this was a new path. By the 1960s, Yugoslavia had largely ended central planning, permitted worker-managed enterprises to determine what would be paid as salaries and what would be retained, transferred money from “social investment funds” to the banks, and sought integration with capitalist countries. Decentralisation was the watchword, moving ever outward to the republics, the banking sector and basic organisations of associated labour (BOALs). While Yugoslav economists spoke of moving from political to economic determination of the economy, from the state owning the means of production to workers doing so, questions remain as to how far they went.
In Hungary, the major step was the New Economic Mechanism (NEM) of 1968, which took on the dialectical challenge of improving planning by stepping back from direct planning. The approach was described as ‘indirect centralisation’, preferring indirect economic levers. In place of centrally determined input and output, state-owned enterprises (SOEs) were to compete, establish supply chains, set prices in the light of material needs and production, be sensitive to consumer demands and be driven to innovate. The result was a growth of worker cooperatives and a substantial non-state sector of the economy. While Hungary sought a fine balance between planning and a market, it experienced swings back and forth between what they saw as the centralising tendency of planning and the decentralising pull of markets.
China stuck to a centrally planned economy longer than the countries of Eastern Europe (although not the Soviet Union), but it has also taken the process of reform much further. The first thirty years saw an acceleration of socialised ownership of the means of production and a planned economy. This was necessary at the time, not merely in terms of overcoming the devastating effects of semi-colonialism, feudal relics and comprador capitalism, but also to get the economy moving from decades of revolutionary struggle and war. The results were stunning for a time, outstripping any other developing country,, but they eventually faced mounting contradictions, leading to the launch of the reform and opening-up in 1978. At first tentative, drawing on farmer experiments in household responsibility and on market economic mechanisms in the light of the overall planned economy, soon the reforms gathered speed. The ‘four modernisations’ took off, the drive to prosperity became a major focus, and a socialist market economy became a foundational feature of logistics and distribution, albeit always coupled with a planned economy. It is constantly emphasised that all these developments have been undertaken for the purpose of socialist construction in the light of the ‘Four Cardinal Principles’, so as to avoid rightist (bourgeois liberalisation) and leftist (an over-hasty leap to communism) deviations. We are now at a recognised point that China is moving into yet another stage, but I will say more in the comparative material to follow.
De-linking
In the light of this background, we move to comparing Eastern Europe and China. To begin with, both Eastern European and Chinese approaches assume the necessity of de-linking: a ‘market economy’ is not by definition a capitalist market economy; and socialism is not exclusively defined by a planned economy. This de-linking has a long history, from Marx’s observations concerning the ancient Roman slave market economy, through ancient military market economies and feudal markets, before we arrive at the possibility of markets within a socialist system. Thus, market economies have existed throughout human history, but only one form has become a capitalist market economy. As for the theoretical possibility of a market economic form within socialism, this emerged in an explicitly Marxist framework in the proposals of Oskar Lange, and became a given position in Eastern Europe.,, By the 1970s in China, we find that Deng Xiaoping and his circle began to reaffirm this insight from Eastern Europe, now developed in the light of Chinese conditions.,, Clearly, we are on common and uncontroversial ground on the question of de-linking.
Mechanism or institutional form
Given that a market economy is not coterminous with capitalism and can be deployed within other systems (including socialist ones), the next question concerns how one is to define a market economy. In Eastern Europe it was proposed that a market is an “economic mechanism”., A market was seen as a neutral economic instrument or tool that could be used within different systems. For example, Kornai had already argued that a market economic mechanism could be deployed in a socialist system through direct and indirect levers. The direct levers should be centralised through the state: direction of production, allocation of production materials, regulation of foreign trade, and managerial appointments. For Kornai, the problem thus far had been over-centralisation and the dominance of direct levers, so he proposed a greater role for some indirect levers, specifically investment, monetary system, prices and wages.
Some of the earlier Chinese material – especially from the 1980s – used similar terminology: we find “method [方法fangfa]”, “means [手段shouduan]” and “mechanism [机制jizhi]”., The early tendency was to see a market as a neutral instrument, which could be deployed to “serve [服务fuwu]” the community and the common good. However, by the early 1990s specific terminology began to be used, distinguishing between an overall socialist system [制度 zhidu] and the specific institutional forms or structures [体制 tizhi and at times 体系 tixi] within such a system.,
In economic matters, there are two main institutional forms: a market economy and a planned economy. The institutional form of a market economy organises the forces and relations of production in a particular way, allocating resources and distributing products by means of the law of value, price signals, and competition. A planned economy organises the forces and relations of production by means of regulation, long-term calculation of means and ends, dealing with challenges, and setting perimeters for what can and cannot be done. Crucially, these institutional forms are not necessarily antagonistic, since they may also enhance one another within an overall system.
The specific terminology and the conclusions reached were the result of considerable debate in the late 1980s and into the 1990s. Why make this crucial distinction? It steps beyond the instrumentalist position, in which a market is a neutral tool that can be deployed in different social systems. Instead, the institutional forms of market and planned economies are shaped, are determined in their nature, by the system in question. Thus, if one has a foundational or “basic socialist system [社会主义基本制度shehuizhuyi jiben zhidu]”, then the institutional form of a market economy becomes not “market socialism” (which assumes an instrumentalist position), but a “socialist market economy.”
We may also speak of universal and particular: a market is a universal or commonality that may be deployed in the particularity of different systems, whether ancient Rome, feudal Europe or China, Western capitalism or socialism. As Peng Lixun points out, the difference between a socialist market economy and a capitalist market economy is “not the generality of the market economy, but the particularity of combining it with the basic socialist system”.25,27 Thus, to confuse an overall system with an institutional form is a category mistake. One final step: lest one still entertains the illusion that a market economy is an independent entity (“the market” as the neoclassical ideologues would have it), Huang Nansen observes: “There is no market economy institutional form that is independent of the basic economic system of society.” One cannot have the market institutional form separate from the system of which it forms a part.
Plan and market
The third comparison concerns how market-plan relations were and are understood in Eastern Europe and China.
Eastern Europe: the limit of hard budget constraints
In Eastern Europe, they struggled to move past the either-or opposition between planning and markets. The opposition took a number of forms, such as centralisation and decentralisation, state control and worker (economic) democracy, or vertical and horizontal relations. Much turned on whether one valued market relations or the state’s role. For some, the state was a hindrance, blocking a ‘proper’ market;, for the majority, the state was seen in a positive light, especially since a strong and efficient state was the initial means for transforming economy, society, education and culture in a socialist direction.,, The ideal became “central planning with a regulated market”, with market relations functioning in many areas while the state oversaw the whole process and ensured equity. These remained ideals: often planning and markets were seen in opposition to one another. There were starts and stops, two steps forward and then a step back, as well as the differences between Hungary and Yugoslavia (which went much further) and other CMEA countries that retreated to central planning after tentative experiments.
How far did they go? How many market mechanisms could one use? As many Eastern European economists argued, market socialism includes market choices by individuals and enterprises, supply-and-demand price mechanisms, ‘profit’ as a necessary bottom line for an enterprise’s viability, division of labour, and wage differentials. However, they stopped short in three crucial areas: hard budget constraints (‘entry’ and ‘exit’) for enterprises; pricing determined fully by market dynamics; and the law of value.
Let me use the example of budget constraints in Yugoslavia. Despite the complexity of ‘soft’ budget constraints, with the need for perpetual bargaining and elements of ‘hard’ constraint where the state enforced reforms to ensure economic viability, the Yugoslav government was ultimately not willing to allow enterprises to ‘exit’ if they failed to be financially viable.,, Thus, the state continued to ‘underwrite’ enterprises so as to avoid bankruptcy. As for prices, these were always regulated in some way, and they were never really able to tackle the law of value.
China: reshaping the law of value
The contrast with China is notable, with implementation of all the crucial common features of a market institutional form. This includes market pricing for most goods, hard budget constraints and thus ‘entry’ and ‘exit’ for many enterprises (including inefficient SOEs in the 1990s), and the law of value. Notably, the key SOEs that emerged from reforms of the late 1990s have been subjected to ongoing reforms so as to learn from market efficiencies, ensuring the economic success, and so emerging as hubs for innovation and expansion.
The law of value requires some further attention. As a basic principle of Marxist political economy, it is not ossified and unchangeable: basic principles need constant deepening and development in light of the theoretical implications of specific solutions for particular problems. The initial Marxist law of value, in terms of the distinction between use value and exchange value, and the identification of surplus value produced by workers as the key to capitalist exploitation, arose through analysis of a capitalist system. But does the labour theory of value also apply to socialist construction? There are many statements to the effect that one must have a law of value if one has a market institutional form.,,,, But how does it work in a qualitatively different socialist system?
Cheng Enfu and his colleagues have been foremost proponents for reworking this basic principle.,, Cheng defines Marx’s theory as follows
“[A]ll labour that directly produces material and immaterial goods for market exchange, as well as labour that directly serves the production and reproduction of labour goods, including the internal management labour of natural and legal entities and scientific and technological labour, is value-creating labour or productive labour.”
Already there is the effort to develop the theory beyond Marx’s focus on:
- production of material goods in industry, agriculture, construction, and so on; and
transport or circulation of goods.
- Cheng and his colleagues go much further, arguing that value is also produced in:
- “intangible spiritual [无形精神wuxing jingshen]” goods, which are activities that contribute to cultural vitality, such as education, research, art and literature, media;
- “service labour [服务劳动fuwu laodong]” involved in activities such as medical care, health, and sports;
- management and direction of enterprises, in the sense that such labour involves the management of socialised labour, along with the surplus value that arises from private ownership; and
- changes in the objective and subjective conditions of labour (leading to complex outcomes depending on where changes are located), with the main trajectory of such changes being the increase in the complexity, proficiency, and intensity of labour so as to improve the total value of goods and the total social value.
This summary indicates the effort at reworking the labour theory of value, although Cheng adds wealth and distribution, in terms of the “total factors involved in wealth production” (land, resources, finance, ecology) and “distribution according to work [按劳分配anlaofenpei]” (along with other forms of distribution). Together, these three – living labour, wealth, and distribution – form a whole, with labour at the core.
The outcome of this proposal concerning the “creation of value by living human labour [活劳动创造价值huolaodong chuangzao jiazhi]” is as follows. First, the theory of value applies not merely to the industrial worker (工人gongren) but to all forms of labour (劳动laodong) – of which there are hundreds recognised in China. Second, this proposal emphasises the social production of value: it takes place not merely through the selfish individual producer seeking self-aggrandisement (as assumed by neoclassical economics), but is a social reality. Third, the theory of value applies not merely to the socialist market economy, but to the whole of socialist society. Thus, Cheng Enfu speaks of the increase in “total social value [社会价值总量shehui jiazhi zongliang]”; or, as he proposes elsewhere, the “Gross Domestic Welfare Product [国内生产福利总值guonei shengchan fuli zongzhi],” or GDWP, which draws together the areas of economy, nature, and society in order to determine a comprehensive “final gross welfare product [最终福利总值zuizhong fuli zongzhi]”.9,
Plan and Market – again
To return to the question of relations between plan and market, Chinese scholarship provides a number of formulations, although they are not mutually exclusive: fairness of planning and efficiency of a market; benefits for all and innovation; public economy and non-public economy; regulation according to proportion and regulation according to value; and so on. Through such formulations, the emphasis is on seeking ways for the two institutional forms to enhance one another, with planning focused on improving conditions for market mechanisms and ensuring that they work for the public good, and markets providing insight into improved efficiency and functionality for planning. While these proposals move within the zone of a “golden mean”, of more interest are those that speak of a dialectical transcendence [超越chaoyue] or qualitative transformation [扬弃yangqi, a translation of the German Aufhebung] of the old opposition of planned and market economies to the effect that a qualitatively new form is emerging.,,
Ownership and Liberation of Productive Forces
The question of plan and market leads to the wider question of the relationship between ownership of the means of production and liberation of productive forces, which is a specific manifestation of the foundational dialectic of relations and forces of production. Since this topic is a basic principle of Marxist analysis and takes us to the heart of the economic definition of socialism, I begin with some texts by Marx and Engels that will enable a framework for identifying the historical emphases and shifts in Eastern Europe and then China.
Marx and Engels
In the Manifesto of the Communist Party, Marx and Engels look forward to the exercise of power by a communist party after a successful proletarian revolution for the sake of socialist construction:
“The proletariat will use its political supremacy to wrest, by degrees, all capital from the bourgeoisie, to centralise all instruments of production [Produktionsinstrumente] in the hands of the State, ie of the proletariat organised as the ruling class; and to increase the total of productive forces [Produktionskräfte] as rapidly as possible.”
There are two main parts in this sentence. The first concerns the gradual – “by degrees” – seizure of capital and the centralisation of all the instruments or means of production in the hands of a proletariat that now controls the reins of power. In short, this is the centralised ownership of the means of production by the proletariat embodied – at this point – in the state. The second part concerns the accelerated increase of productive forces, or what we may call, following standard Chinese practice, the liberation of productive forces [解放生产力jiefang shengchanli]. Clearly, for Marx and Engels both ownership of the means of production and liberation of productive forces are needed for the process of socialist construction. In the light of other texts by Marx and Engels,,, the relationship between ownership and liberation is a dialectical one: at times the two aspects work together and at times they are in tension with one another, requiring reform of the laggard.
First Stage: Emphasis on Ownership
In the light of this framework, we may distinguish initially between two periods of economic reforms in Eastern Europe and China. To begin with, there was a common assumption that the emphasis immediately after a revolutionary seizure of power should be radical changes in the relations of production, manifested specifically in terms of the seizure, ownership and thus control of the means and indeed forces of production. The logic was that the way to overcome the capitalist contradiction of socialised labour and private ownership of the means of production is to socialise ownership. This move was also necessary to prevent counter-revolution and instigate the economic structures needed both to overcome the previous system and begin the process of socialist construction – abolition of bourgeois private property, industrialisation in light of ‘backward’ economic conditions, collectivisation of agriculture, and a fully planned economy.
This initial move led to an intense focus on production relations, with the belief that eliminating private ownership would produce equality and social justice. In Eastern Europe, it was soon assumed that production relations constituted the main subject of Marxist political economy and thus policy-making. Sometimes this focus became volitional, assuming that human beings could create, amend, and abolish economic laws. In China we do not find such extreme expressions. Already from the time of Mao’s lectures on dialectical materialism, the dialectical interaction of the forces and relations of production was central to analysis. While Mao did seek to overcome the contradiction inherent in capitalism through socialised ownership, he saw this as a means to liberate productive forces.,
The productive forces were indeed liberated. In both Eastern Europe and China economic production leapt ahead. For example, the Soviet Union, Czechoslovakia, and East Germany became highly industrialised economies, and the other countries of the CMEA saw significant growth., In China, the “first economic miracle” included significant developments in science and technology, an independent industrial and national economic system, development of education, culture and health, population growth (in numbers and life expectancy), great improvement in socioeconomic well-being, and China’s emergence in international affairs, all the way from the United Nations to increased appeal in and engagement with developing countries.9
Second Stage: New Means of Liberating Productive Forces
Nonetheless, internal contradictions began to mount. In Eastern Europe, the almost exclusive public ownership (through the state) and fully-planned economy was reaching a limit-point, with supply-side structural blockages, rapid and uneven development over a relatively short period, tensions between expanding or modernising production, risks of overspending national incomes for the sake of production and to meet consumption demands, and decline in creative solutions. Economies began to stagnate, leading to increasing tensions in production relations., In China problems became apparent. Despite all of the initial achievements, mounting contradictions included persistent poverty in regional and rural areas, the wayward emphasis on class struggle in the 1960s, and a focus on liberating productive forces through sheer volitional effort. By the 1970s, intractable contradictions in China’s economic development had become apparent.,
The response was to seek alternative ways to liberate productive forces, and this took the form of developing a market institutional form within a socialist system. As noted, Eastern European efforts were tentative: they were feeling their way along a new path and never resolved many questions in the time remaining. China managed to avoid the snares that caught Eastern European countries, leading to its status today as a global economic power. While nominally the ‘second largest economy’ in terms of GDP, on other measures it contributes more than any other country to the global economy (more than 30%), its industrial output and foreign exchange reserves are the highest in the world, it has the largest internal market, it is constantly improving a comprehensive system of quality education, health, and welfare, and it has seen Hong Kong and Macao return.9,10,
How do we assess the shift to a second stage of economic development? In terms of the dialectic of forces and relations of production, the initial period entailed radical transformations in the relations of production, focused on ownership of the means of production and control over productive forces, so as to spur economic development. Over time, the relations of production became a drag on productive forces, since the latter had leapt ahead and the former had not kept pace. Hence the reforms in Eastern Europe of the 1960s and the reform and opening-up in China from 1978. However, this was not necessarily the way such developments were perceived on the ground. As noted earlier, in Eastern Europe there was a tendency to focus on the tensions between planning and market, with questions turning on the nature of ownership. By contrast, in China the key was liberating productive forces: the question concerned the best means to enable such liberation. Was it to be accelerated ownership of the productive forces, which was the emphasis of the first stage? Or was it to be a socialist market economy in conjunction with planning, as in the second stage?
In answering the second question, Deng Xiaoping pointed out that while Mao Zedong had also wanted to develop productive forces, “not all of the methods Mao used were correct”. For Deng the “development of the productive forces … is the most fundamental revolution from the viewpoint of historical development”. “Poor socialism” is not socialism; instead, socialism should seek to develop productive forces, improve the country’s strength and the lives of the people.,
A New Stage: Dialectical Transformation
Thus far, I have outlined two main stages in the path of socialist construction. With varying emphases and time-frames, we can see these stages in both Eastern Europe and China, albeit with vastly different outcomes. At this point Eastern Europe drops out of our analysis, but we need to ask: why did Eastern Europe – with the notable exception of Belarus – devolve into ‘shock therapy’ capitalism? Many are the potential answers, but I propose two reasons. First, they did not embrace the dialectical need to develop a full market institutional form for the sake of the socialist road. Instead, it was precisely the half measures, the swerving this way and that, that set up a capitalist turn. Second, they lacked the strong state structures – a crucial feature of socialist systems since the Soviet Union in the 1930s – to enable such a dialectic. On both counts, China has succeeded.
As a result, a new and third stage is now well underway. This stage is usually dated from the 18th National Congress of the Communist Party of China (CPC) although signs were already evident from 2008 and China’s response to the global financial crisis. In order to understand this new era, we need to consider the new contradictions that arose as a result of the second stage’s resolute emphasis on liberating productive forces. In the midst of China’s stunning economic success, a spate of widely-studied problems became apparent during the ‘wild 90s’ and into the early 2000s: declining conditions for workers and consequent unrest; illegal appropriation of collectively owned village lands; a growing gap between rich and poor regions; environmental degradation; ideological disarray, with proposals ranging from the recovery of Confucianism to bourgeois liberalisation; and a rift between the CPC and the common people, leading to corruption and lack of knowledge of Marxism even by leading cadres.
In the light of these new contradictions, two core questions arose. First, were they systemic to the reform and opening-up, as a few too many misguided Western observers assumed, or were they contingent and incidental to the overall process? The answer comes from Marxist dialectical analysis: they were incidental to the larger process of socialist reform. Second, what was to be the solution? Here the answer too is dialectical: the way to solve these internally generated contradictions was to deepen the reform process itself.,,
This process of deepening reform is comprehensive, from the economic base to superstructural components. We can already see clear results: about 800m rural and urban workers have been lifted out of poverty, with almost 500m now in a “middle-income” group (and not a “middle class”);,,, the gap between rich and poor has been decreasing now for about a decade; rural and urban workers are engaged in all aspects of China’s ever-strengthening socialist democratic system; in the light of ecological civilisation, China has become a world leader in ‘green growth’; and the almost 100m-strong CPC is more united, more knowledgeable about Marxism, and more focused on the task ahead than at almost any time in its past. Analysts speak of the “third economic miracle”9 or the emergence of a qualitatively “new projectment economy”.,
Conclusion
In comparing Eastern Europe and China, I began with the specific question of market and planning institutional forms within a socialist system. On this matter, I found common ground on the question of de-linking, and in terms of the underlying dynamics that led to reforms in Eastern Europe in the 1960s and China from 1978. Differences also emerged: in seeing a market as a neutral “economic mechanism” or as an institutional form that is shaped by and inseparable from the system of which it is a part; in a tendency to see plan and market in an either-or tension and thus seeking a delicate balance, or in seeing them in a both-and relation, with the one enhancing the other in terms of non-antagonistic contradictions.
The treatment of plan and market led me to address the foundational question of ownership of the means of production and liberation of productive forces, and thus the dialectic of relations and forces of production. There is no need to repeat the detail of that discussion, so let me conclude with a more philosophical observation concerning the approach to contradictions. Eastern Europe reveals some influences from the Western philosophical tradition’s emphasis on either-or, or zero-sum. This either-or approach was manifested in a series of related oppositions: centralisation and decentralisation, state control and economic democracy, or vertical and horizontal. By contrast, in China the emphasis has been on finding the best way to liberate productive forces. Undeveloped economic conditions, as well experiences of European imperialism, play a significant role in this emphasis, but there is also a cultural and philosophical emphasis on both-and, in the sense that ‘what is contradictory is also complementary’. In Marxist terminology, we may speak of non-antagonistic contradictions in socialist construction. So the key question was: how to enable such liberation? Through radical transformation of the relations of production, characteristic of the first thirty years? A resolute emphasis on productive forces, as we find with the reform and opening-up? Or a people-centred approach, as a dialectical transformation of the first two stages? Historically, the answer is obviously affirmative for all three questions. That there will be new contradictions that will require innovative solutions goes without saying.
■ Abbreviated by the author from his article of the same title at https://socialistchina.org/2022/09/06/from-belgrade-to-beijing-comparing-socialist-economic-reforms-in-eastern-europe-and-china/. NB Although citations to Chinese authors are given in English, most of those publications are in Chinese.
Notes and References
1 See also a couple of earlier works: R Boer, ‘Socialism and the Market: Returning to the East European Debate’ in New Political Economy, Vol 28, 2021, pp 1-12; R Boer, Socialism with Chinese Characteristics: A Guide for Foreigners, Springer, Singapore, 2021, pp 115-138.
2 H-J Wagener, ‘Between Conformity and Reform: Economics under State Socialism and its Transformation’ in H-J Wagener, ed, Economic Thought in Communist and Post-Communist Europe, Routledge, London, 1998, pp 1-32.
3 Country by country economic surveys may be found in A Nove, H-H Höhmann, and G Seidenstecher, eds, The East European Economies in the 1970s, Butterworths, London, 1982; and H-J Wagener, ed, Economic Thought, op cit.
4 M Melzer, ‘The GDR – Economic Policy Caught between Pressure for Efficiency and Lack of Ideas’ in Nove, Höhmann, and Seidenstecher, op cit, Butterworths, London, 1982, pp 45-90.
5 G Kraus, ‘Economics in Eastern Germany, 1945–90’ in Wagener, Economic Thought, op cit, pp 264-328.
6 On Yugoslavia there is a wealth of material: J Vanek, The Economics of Workers’ Management: A Yugoslav Case Study, Allen and Unwin, London, 1972; V Dubey, Yugoslavia: Development with Decentralization: Report of a Mission Sent to Yugoslavia by the World Bank, Johns Hopkins University Press, Baltimore, 1975; D Rusinow, The Yugoslav Experiment, 1948-1974, C Hurst for the Royal Institute of International Affairs, London, 1977; S Estrin, Self-Management: Economic Theory and Yugoslav Practice, Cambridge University Press, Cambridge, 1983; H Lydall, Yugoslav Socialism: Theory and Practice, Clarendon, Oxford, 1984; W Brus and K Laski, From Marx to the Market: Socialism in Search of an Economic System, Clarendon, Oxford, 1989, pp 87-101; A Nove, The Economics of Feasible Socialism Revisited, 2nd edn, HarperCollins, Hammersmith, 1991, pp 175-184; V Gligorov, ‘Yugoslav Economics Facing Reform and Dissolution’ in Wagener, ed, Economic Thought, op cit, pp 329-361; J Mencinger, ‘Uneasy Symbiosis of a Market Economy and Democratic Centralism: Emergence and Disappearance of Market Socialism and Yugoslavia’ in V Franičević and M Uvalić, eds, Equality, Participation, Transition: Essays in Honour of Branko Horvat, Macmillan, Houndmills, 2000, pp 118-144.
7 There are many studies of the Hungarian experience: Brus and Laski, From Marx to the Market, op cit, pp 61-72; Nove, The Economics, op cit, , pp 162-175; N Swain, Hungary: The Rise and Fall of Feasible Socialism, Verso, London, 1992; L Szamuely and L Csaba, ‘Economics and Systemic Changes in Hungary, 1945-96’ in Wagener, Economic Thought, op cit, pp 158-212.
8 L Szamuely and L Csaba, op cit.
9 E Cheng and L Cao, ‘How to Establish an Accounting System for the Gross Domestic Welfare Product’ in Economic Review, No 3, 2009, pp 1-8.
10 E Cheng, ‘Ten Major Points of View of Marxism in the Context of an Academic Career’ in Research on the Theories of Mao Zedong and Deng Xiaoping, No 5, 2020, pp 97-107.
11 K Marx, Das Kapital: Kritik der politischen Ökonomie, Dritter Band, Hamburg 1894, in Marx Engels Gesamtausgabe, Vol II:15, Dietz, Berlin, (1894) 1983, pp 583-599.
12 O Lange, ‘On the Economic Theory of Socialism: Part One’ in The Review of Economic Studies, Vol 4, 1936, pp 53-71.
13 A Bajt, ‘Socialist Market Economy’ in Acta Oeconomica, Vol 40, 1989, pp 180-183.
14 B Horvat, ‘What is a Socialist Market Economy?’ in Acta Oeconomica, Vol 40, 1989, pp 233-5.
15 X Deng, ‘Socialism Can Also Develop a Market Economy (1979.11.26)’ in Selected Works of Deng Xiaoping, Vol 2, People’s Publishing House, Beijing, (1979) 2008, pp 231-6.
16 See also J Yang, ‘The Historical Significance of the Combination of Socialism and the Market Economy’ in Science and Society, Vol 73, 2009, pp 170-6.
17 The issue was initially raised by Yu Zuyao (Z Yu, ‘Concerning a Socialist Market Economy’ in Review of Economic Research, Vol 50, 1979, pp 1-7) and soon picked up by Deng Xiaoping and others.
18 L Szamuely, ‘The First Wave of the Mechanism Debate (1954-1957)’ in Acta Oeconomica, Vol 29, 1982, pp 1-24.
19 L Szamuely, ‘The Second Wave of the Mechanism Debate in Hungary and the 1968 Reform in Hungary’ in Acta Oeconomica, Vol 33, 1984, pp 43-67.
20 J Kornai, Overcentralization in Economic Administration: A Critical Analysis Based on Experience in Hungarian Light Industry, Oxford University Press, Oxford, 1959.
21 X Deng, ‘Take Advantage of Opportunities to Solve Development Problems (1990.12.24)’ in Selected Works of Deng Xiaoping, Vol 3, People’s Publishing House, Beijing, (1990) 2008, pp 363-5.
22 X Deng, ‘Talks during an Inspection Tour of Shanghai (1991.01.28-02.18)’ in Selected Works of Deng Xiaoping, Vol 3, People’s Publishing House, Beijing, (1991) 2008, pp 366-7.
23 Given its very specific use in this context, I translate 体制tizhi as “institutional form”, a term drawn from R Boyer and Y Saillard, eds, Régulation Theory: The State of the Art, Routledge, London, 2002. An “institutional form” is a specific building block or component of a larger system.
24 X Deng, ‘Essentials from Talks Given in Wuchang, Shenzhen, Zhuhai and Shanghai (1992.01.18-02.21)’ in Selected Works of Deng Xiaoping, Vol 3, People’s Publishing House, Beijing, (1992) 2008, pp 370-383.
25 N Huang, ‘Philosophical Foundations of the Theory of a Socialist Market Economy’ in Marxism and Reality, No 11, 1994, pp 1-6.
26 Only B Horvat, ‘What Is a Socialist Market Economy?’ in Acta Oeconomica, Vol 40, 1989, pp 233-5 makes this point.
27 L Peng, ‘The Philosophical Foundations of Deng Xiaoping’s Theory of the Socialist Market Economy’ in Academic Research, No 2, 1994, pp 11-16.
28 Note: “The term ‘socialist’ is the key descriptor, and this is something that we must never lose sight of. We call our economy a socialist market economy because we are committed to maintaining the strengths of our system while effectively avoiding the deficiencies of a capitalist market economy”. J Xi, ‘Opening Up New Frontiers for Marxist Political Economy in Contemporary China’, in Qiushi (CPC Central Committee Bimonthly), 8 November 2020, at http://en.qstheory.cn/2020-11/08/c_560906.htm.
29 Huang, ‘Philosophical Foundations’, op cit, p 5.
30 J Kornai, The Socialist System: The Political Economy of Communism, Oxford University Press, New York, 1992.
31 J Kornai, ‘Market Socialism Revisited’ in Market Socialism: The Current Debate, edited by P Bardhan and J Roemer, Oxford University Press, New York, 1993, pp 42-68.
32 W Brus, The Economics and Politics of Socialism: Collected Essays, Routledge & Kegan Paul, London, 1973, p 65.
33 W Brus and K Laski, From Marx to the Market, op cit.
34 F Kozma, Economic Integration and Economic Strategy, G Hajdu and A Bródy, transl, Springer, Dordrecht, 1982, p 94.
35 W Brus, The Economics and Politics, op cit, pp 1-20.
36 J Kornai, ‘The Soft Budget Constraint’ in Kyklos, Vol 39, 1986, pp 3–30.
37 J Kornai, The Socialist System: The Political Economy of Communism, Oxford University Press, New York, 1992, pp 487-496.
38 A Nove, The Economics, op cit.
39 E Jabbour, A Dantas and C Espíndola, ‘On the Chinese Socialist Market Economy and the ‘New Projectment Economy’ in World Review of Political Economy, Vol 13, 2023a, pp 503-530.
40 E Cheng, ‘Ten Major Points of View of Marxism, op cit, p 102.
41 X Yang, ‘The Theoretical Starting Point of Historical Materialism and the Thinking Method of Dialectical Unity: On the Philosophical Basis of the Theory of a Socialist Market Economy’ in Theory Research, no. 5, 1994, pp 6.
42 H Zhang and Z Zhuang, ‘Concerning the Philosophical Basis of the Theory of the Socialist Market Economy’ in Economy and Management, no. 1, 1994, pp 3–7.
43 J Gao and M Zheng, ‘The Philosophical Foundations of Ch Xiaoping’s Theory of a Socialist Market Economy’ in Journal of the Xinjiang Institute of Education, Vol 31, no. 12, 1996, pp 1–4.
44 B Huo, ‘A Discussion of the Law of Value and Macro-Control under the Conditions of a Socialist Market Economy’ in Capability and Knowledge, no. 27, 2011, pp 226–227.
45 The necessity of a law of value was already emphasised by Mao Zedong in the late 1950s, and came to the fore again in the 1980s with Deng Xiaoping: Z Mao, ‘The Law of Value Is a Great School (1959.03-04)’ in Collected Works of Mao Zedong, vol. 8, People’s Publishing House, Beijing, (1959) 2009, pp 34-7; X Deng, ‘The Reform and Opening-Up Is a Great Experiment (1985.06.29)’ in Selected Works of Deng Xiaoping, Vol 3, People’s Publishing House, Beijing, (1985) 2008, p130; X Deng, ‘Rationalise Prices and Accelerate Reform (1988.05.19)’ in Selected Works of Deng Xiaoping, Vol 3, People’s Publishing House, Beijing, (1988) 2008, pp 262–263.
46 E Cheng, G Wang and K Zhu, A Normative and Empirical Study of the Value Created by Labour: A New Wholistic Theory of the Value of Living Labour, Shanghai University of Finance and Economics Press, 2005.
47 E Cheng, G Wang and K Zhu, The Creation of Value by Living Labour: A Normative and Empirical Study, A Freeman, ed, L Hui and Y Sun, transl, 2 vols, Canut, Berlin, 2019.
48 E Cheng, ‘Four Theoretical Hypotheses for Contemporary Marxist Political Economy’ in Social Sciences in China, No 1, 2007, pp 16-21.
49 Ibid, p16.
50 Ibid, pp 21-24.
51 E Cheng, ‘Ten Major Points of View of Marxism’, op cit, p 101.
52 X Zhang, ‘Three Propositions concerning the Philosophical Basis of Combining a Market Economy and Socialism: Reflections on the Economic Philosophy of 30 Years of Reform and Opening-Up’ in Social Science Research, No 3, 2009, p 139.
53 J Fang, ‘Major Developments in the CPC’s Theory of Economic Well-Being since the Beginning of the Reform and Opening-Up: Deploying the Marxist Philosophical Method as the Main Line of Inquiry’, in Studies on Marxism, No 10, pp 58–67 (2014).
54 Z Zhou and X Wang, ‘An Exposition of the Philosophical Foundation of Political Economy with Chinese Characteristics for a New Era’ in Journal of Zhejiang Normal University (Social Sciences), Vol 44, 2019, p 41.
55 E Jabbour, A Dantas, C Espíndola and J Vellozo, ‘The (New) Projectment Economy as a Higher Stage of Development of the Chinese Market Socialist Economy’ in Journal of Contemporary Asia, Vol 53, 2023B, pp 767-788.
56 Marx and Engels, Manifest der Kommunistischen Partei, in Marx Engels Werke, Vol 4, Dietz, Berlin, (1848) 1974, p 481.
57 Engels, ‘Karl Marx’ in Marx Engels Gesamtaugabe, Vol I.25, Dietz, Berlin, (1877) 1985, p 109.
58 See also Engels, Grundsätze des Kommunismus, in Marx Engels Werke, Vol 4, Dietz, Berlin, (1847) 1972, p 377.
59 See also Engels, Herrn Eugen Dührings Umwälzung der Wissenschaft (Anti-Dühring) in Marx Engels Werke, Vol 20, Dietz, Berlin, (1894) 1973, pp 263-264.
60 I V Stalin, Ėkonomicheskie problemy sotsializma v SSSR, in Sochineniia [Works], Vol 16, Izdatel’stvo ‘Pisatel’, Moscow, (1952) 1997, pp 196-205.
61 Engels, Anti-Dühring, op cit, p 260.
62 G Kraus, ‘Economics in Eastern Germany’, op cit, p 286.
63 Z Mao, ‘On Dialectical Materialism’ in Mao Zedong Works, Supplements, Vol 5, T Minoru, ed, Sōsōsha, Tokyo, (1937) 1984, pp 187-280.
64 Z Mao, ‘On Contradiction (1937.08)’ in Selected Works of Mao Zedong, Vol 1, People’s Publishing House, Beijing, (1937) 2009, p 318.
65 Z Mao, ‘On Coalition Government (1945.04.24)’ in Selected Works of Mao Zedong, Vol 3, People’s Publishing House, Beijing, (1945) 2009, p 1079.
66 Z Mao, ‘The Goal of the Socialist Revolution Is to Liberate the Productive Forces (1956.01.25)’ in Collected Works of Mao Zedong, Vol 7, People’s Publishing House, Beijing, (1956) 2009, pp 1-3.
67 H-H Höhmann, ‘Economic Reform in the 1970s: Policy with No Alternative’ in Nove, Höhmann, and Seidenstecher, The East European Economies, op cit, pp 1-2.
68 Kozma, Economic Integration, op cit, pp 99-104.
69 Kozma, op cit, pp 172-176.
70 G Kraus, ‘Economics in Eastern Germany, op cit, pp 315-316.
71 B Lin, ‘Report to the CPC’s Ninth National Congress (1969.04.14)’, http://cpc.people.com.cn/GB/64162/64168/64561/4429445.html, 1969.
72 X Deng, ‘In the First Decade, Prepare for the Second (1982.10.14)’ in Selected Works of Deng Xiaoping, Vol 3, People’s Publishing House, Beijing, (1982) 2008, p 16.
73 Y Wang and Y Yang, ‘Reform is to Liberate and Develop Productive Forces’ in Shanghai University Journal (Social Sciences), No 6, 1994, pp 102-7.
74 See also E Cheng, ‘The Significant Achievements of Marxism and the Theory of Sinification: On Xi Jinping’s Economic Thought on Socialism with Chinese Characteristics for a New Era’ in Southeast Academic Research, 2018 (5), pp 1-8.
75 X Deng, ‘Develop Democracy in Terms of Politics, Implement Reform in Terms of the Economy (1985.04.15)’ in Selected Works of Deng Xiaoping, Vol 3, People’s Publishing House, Beijing, (1985) 2008b, pp 115-8.
76 X Deng, ‘Socialism Must First Develop the Productive Forces (1980.04-05)’ in Selected Works of Deng Xiaoping, Vol 2, People’s Publishing House, Beijing, (1980) 2008, pp 311-4.
77 X Deng, ‘Replies to the US Journalist Mike Wallace (1986.09.02)’ in Selected Works of Deng Xiaoping, Vol 3, People’s Publishing House, Beijing, (1986) 2008, pp 167-175.
78 X Deng, ‘Essentials from Talks Given in Wuchang, Shenzhen, Zhuhai and Shanghai (1992.01.18-02.21)’ in Selected Works of Deng Xiaoping, Vol 3, People’s Publishing House, Beijing, (1992) 2008, pp 370-383.
79 Y Li and E Cheng, ‘Market Socialism in Belarus: An Alternative to China’s Socialist Market Economy’ in World Review of Political Economy, Vol 11, 2020, pp 428-454.
80 C Lo, Understanding China’s Growth: Forces that Drive China’s Economic Future, Palgrave Macmillan, Houndmills, 2007, pp 120-1, 129.
81 CPC Central Committee, ‘Decisions by the CPC Central Committee concerning Several Major Issues on Comprehensively Deepening Reform’, http://politics.people.com.cn/n/2013/1115/c1001-23559207.html, 2013.
82 J Xi, ‘Explanatory Notes to the ‘Decisions of the Central Committee of the Communist Party of China on Some Major Issues concerning Comprehensively Continuing the Reform (2013.11.09)’ in The Governance of China, Vol 1, 2nd edn, Foreign Languages Press, Beijing, 2018, pp 76-100.
83 J Zan, ‘Basic Social Contradictions and Comprehensively Deepening Reform’ in Theoretical Exploration, No 4, 2015, pp 42-5.
84 W Cai, ‘Be Wary in Using Concepts Like ‘Middle Class’ in Leading Journal of Ideological and Theoretical Education, No 8, 2018, pp 93-8.
85 W Li, ‘Values and Social-Political Attitudes Among the Middle-Income Group’ in Journal of Huazhong University of Science and Technology (Social Science Edition), No 6, 2018, pp 1-10.
86 W Li, ‘Differentiating Between Middle Class and Middle-Income Group’ in Social Sciences Digest, No 1, 2021, pp 56-8.
87 Z Liu and H Liu, ‘Measurement Criteria and Changes in Size of the Middle-Income Group: An Analysis Based on CHNS’ in Journal of Hebei University of Economics and Business, 2021 (6), Online pre-publication.
88 E Jabbour, A Dantas and C Espíndola, ‘On the Chinese Socialist Market Economy and the ‘New Projectment Economy’ in World Review of Political Economy, Vol 13, 2023, pp 503-530.
89 E Jabbour, A Dantas, C Espíndola and J Vellozo, ‘The (New) Projectment Economy as a Higher Stage of Development of the Chinese Market Socialist Economy’ in Journal of Contemporary Asia, Vol 53, 2023, pp 767-788.
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